Quote of the Day

Posted on June 27, 2014 by David McKee

CAESARS-ENTERTAINMENT-LOGO“Even with $23 billion in debt, Caesars [Entertainment] feels that they will have no problem raising another $5 billion to build a world-class facility [in] Japan, the world’s latest emerging market, even though they will be competing against better-financed rivals with considerably more Asian gaming experience in an untested market with yet-to-be discussed licensing procedures. (Only three years ago, Massachusetts appeared to be an exciting new market.)” — casino consultant Jeffrey Compton, on Caesars’ recent spate of troubles.

Posted in Harrah's, Japan, Massachusetts | Comments Off on Quote of the Day

Boffo May in Vegas; The power of convenience

Posted on June 27, 2014 by David McKee

Wall Street was pleasantly surprised by May’s gambling numbers from Nevada and especially the Las Vegas Strip, which was up 17%. Statewide, revenues rose 8%, reflecting the dilutive effect of an 8% decline in locals liongaming revenue. A 3% dip in Strip slot play was far more than offset by heavy baccarat action (up 26%). There’s a day of slot revenue that will be counted as part of June’s revenue, but the numbers are still in line with the year to date. Casinos played very lucky at the tables, as players losses rose 38% from May 2013, on a 15% increase in play. Non-baccarat win for the casinos was up 9%. Baccarat players really lost their shirts, with casinos raking in an astronomical 89%, year over year. Laughlin was down 5% and locals jurisdictions had an even tougher time of it, with Downtown -8%, North Las Vegas -10% and the Boulder Strip -11%.

* To get into Ohio, both Caesars Entertainment and Penn National Gaming made a Faustian pact that allowed Continue reading →

Posted in Boulder Strip, Downtown, Economy, Election, Hard Rock International, Harrah's, Illinois, Laughlin, Massachusetts, MGM Mirage, Mohegan Sun, North Las Vegas, Ohio, Penn National, Problem gambling, Racinos, Regulation, Slot routes, The Strip, Wall Street | 3 Comments

So long, Showboat

Posted on June 27, 2014 by David McKee

Normally, when a federally mandated WARN Act notice goes out to casino employees, executives downplay as a mere formality. Not so for Showboat_Atlantic_CityShowboat Atlantic City where theoretical closure became actual shutdown in less than 24 hours. Despite having recently posted an operating profit for Caesars Entertainment, Showboat will be sacrificed to prop up Harrah’s Resort, Caesars Atlantic City and Bally’s Wild Wild West. The move comes at a time when Caesars has been tipped as a suitor for Revel Casino Hotel, is blithely talking about borrowing $5 billion and throwing it into Japan and is bidding for a New York State casino. The latter involves a certain amount of realpolitik (if Empire State money is going to flow upstate and away from Atlantic City, it makes sense to be positioned to get at it) but Continue reading →

Posted in Atlantic City, Harrah's, Japan, Massachusetts, New York, Regulation, Revel, Taxes | 1 Comment

Sticky moment in Macao; Debt? What debt?

Posted on June 26, 2014 by David McKee

Macao CathedralMacao continues to be a large blessing and a small curse upon the U.S. casino industry. Earlier this month, the Internal Revenue Service acknowledged ramped-up scrutiny of the enclave, where money laundering is a persistent fear — especially in Washington, D.C.: “It was unclear if IRS-CI was probing the operations of one or more U.S. casinos in Macau for possible criminal prosecution for failing to police transactions for money laundering activity, although former federal law enforcement officials with experience conducting such investigations said earlier this week that that was a possibility.”

Macau_Hotel_Casino_Lisboa_MacauScarcely had FinCEN boss Jennifer Shasky Calvery vocalized the peril of dealing with junket operators in Macao than they had a scandal of their
own. Junketeer Kimren Group is short $1.3 billion after shareholder Huang Shan disappeared with the money. Shan had been promising junket backers a 2.5% ROI — very high for Macao — if they invested with Kimren. Junketeers have consequently seen a big drop in their valuation. “Investors started to think — ‘maybe this isn’t worth all the brain damage,'” investment expert Jason Ader told Business Insider.
 Continue reading →

Posted in Harrah's, Japan, Macau, Regulation, Sheldon Adelson, Wall Street | Comments Off on Sticky moment in Macao; Debt? What debt?

Massachusetts: A call to action

Posted on June 26, 2014 by David McKee

MathisCasino companies in Massachusetts “could” or “may” team up to fight the repeal effort currently underway. How about “must” or “should”? If ever there were an imperative for joint action, this is it. Perhaps even Wynn Resorts and Mohegan Sun could bury the hatchet. (This presumes that the eternally unpredictable Steve Wynn won’t erupt and storm out of the Bay State altogether.) MGM Springfield President Michael Mathis (above) promises joint action, adding, “there is a real sense that we all need to work together to educate the Commonwealth about all the benefits of the gaming law.”

(Perhaps this explains the American Gaming Association‘s blunderbuss lobbying effort; see “Freeman’s strange plea.”)

SchippersThe Boston Globe describes the major players — including Penn National Gaming — as “highly motivated.” “It would not surprise me if $10 million is spent on media ads,” forecasts gaming regulation scholar Paul DeBole. “If
we see money coming in from competing interests from out of state, that certainly is going to change things and may escalate things,” adds Penn spokesman Eric Schippers (right). That would be karmic payback for Penn, which hasn’t hesitated to sandbag business competitors with vicious and misleading ad campaigns in the past. But do Mohegan Sun, Foxwoods Massachusetts, MGM and Wynn deserve to pay for Penn’s sins? Continue reading →

Posted in Economy, Election, Foxwoods, Geoff Freeman, Horseracing, IGT, Internet gambling, Massachusetts, MGM Mirage, Mohegan Sun, Penn National, Politics, Steve Wynn | Comments Off on Massachusetts: A call to action

Freeman’s strange plea; Aristocrat on the move

Posted on June 26, 2014 by David McKee

This morning, a strange letter landed upon my cyber-desk, signed by American Gaming Association Senior Vice President of Public Affairs Sara Rayme. However, it’s perfectly congruent with the aggressive tendencies of AGA President Geoff Freeman, so I look upon him as at least the spiritual author of this plea. In its structure and tone it is not unlike (albeit shorter) something you might get from the World Wildlife Fund or Americans for a Conservative Direction … although I never particularly regarded casinos as an endangered species, except for those with bad business practices.

Geoff_FreemanThe letter leverages the recent Get to Know Gaming study as a lobbying tool. “Join us in sharing this information by sending a letter to policymakers and enclosing an overview of the survey’s key findings and the positive national media coverage generated … Adapt this sample letter and include the following enclosures to begin to ask policymakers to think about the gaming industry with a renewed perspective … The survey results have generated national media coverage. Share these positive stories along with your letter … Boiled down into a two-sided one sheet are the survey’s key findings on the profile of the casino goers and voters’ attitudes towards gaming – just the right amount of information to inform policymakers.” Continue reading →

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The ultimate irony; No luck for Argosy; Borgata lawsuit tossed

Posted on June 26, 2014 by David McKee

markellStates have, one after another, approved casino gambling to help prop up their own finances. Now, with crushing irony, Delaware is going from being subsidized by racinos to subsidizing them. Gov. Jack Markell (D) still can’t drum up the support for reducing the tax rate from a hefty 29% to a more-bearable 15%, but he’s getting a compromise package through the Legislature without much difficulty. “Senate lawmakers against the bill, while in the minority, were vocal, chiding the seemingly magical appearance of nearly $10 million during tough budget times to hand over to the casinos,” reported Jon Offredo.

Sen. Harris McDowell III (D) scoffed that “failing companies” were being rescued, but paying the state nearly one dollar in three doesn’t augur success. However, since Delaware’s three racinos still had $6 million unspent from last year’s bailout, you have to wonder how urgently Continue reading →

Posted in Atlantic City, Boyd Gaming, Current, Delaware, Harrah's, Iowa, Maryland, Penn National, Racinos, Regulation, Taxes | 2 Comments

Massachusetts: The morning after

Posted on June 25, 2014 by David McKee

Although Wynn Resorts is keeping mum on this week’s Massachusetts Supreme Judicial Court ruling, others are not taking it lying down. Faced with a do-or-die referendum on casino gambling in the Bay State,
MGM SpringfieldMGM Resorts International promised it was “fully prepared to extend this message to a larger audience through a statewide campaign to educate the voters on the enormous economic benefits that would be lost to the taxpayers.” “We’re in this for the long haul,” added Mohegan Sun CEO Mitchell Etess. “We’re a part of a campaign that will be fighting to vote down that referendum to make sure that gaming in Massachusetts and all of the jobs and development that are associated with it take place.”

The American Gaming Association will be weighing in, too, promising to campaign alongside the affected casino companies. Penn National Gaming decided to take a gamble on Continue reading →

Posted in Atlantic City, Election, Geoff Freeman, Harrah's, Internet gambling, Macau, Massachusetts, MGM Mirage, Mohegan Sun, Penn National, PokerStars, Politics, Regulation, Sports, Steve Wynn | Comments Off on Massachusetts: The morning after

Case Bets

Posted on June 25, 2014 by David McKee

Delaware leg-hallLook what they found. Legislators in Delaware have “found” money to aid the state’s ailing racinos and, surprisingly, no sofa cushions were involved. $10 million will be used to help reduce the racinos’ costs to slot machine vendors by 75%. Explained reporter Jon Offredo, “The money to bail out the casinos would comprise of $5 million leftover from last year’s bail out of the casino, $3.2 million associated with the Kent County Sports Complex, and the remainder, like the Continue reading →

Posted in Delaware, Harrah's, history, Louisiana, Maryland, MGM Mirage, Racinos, Regulation, Taxes | Comments Off on Case Bets

The great horse robbery

Posted on June 25, 2014 by David McKee

horsePennsylvania‘s horse tracks are on the brink, not from the usual reason — bad business — but due to state malfeasance. According to the State Racing Fund, it’s been sucked dry by the Department of Agriculture, including undocumented personnel costs. The Ag Department has been evidently been dipping into the Racing Fund whenever it had a financial hole to plug. Its dubious expenditures including hiring a Special Agriculture Advisor to the Governor, on a six-figure salary, and billing it to the Racing Fund.

The money in question is supposed to be going toward Continue reading →

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Mississippi bogged down; How much for Revel?

Posted on June 24, 2014 by David McKee

HarrahsTunicaExteriorStill further evidence of gaming saturation comes from the Bayou State, where revenues have declined in 21 of the last 23 months — an Atlantic City-like declivity. Last month, the last full month of operations for Harrah’s Tunica, statewide revenues were down 11%. The coastal casinos did incrementally better than river-based ones but we’re splitting hairs. “Revenues in Arkansas increased almost seven-fold from 2007 to 2013, rising by more than 10 percent from the year earlier for 55 straight months,” reports The Associated Press, reflecting the impact of ‘instant racing’ at Arkansas tracks.

* Elsewhere in the state, somebody had the bright idea of putting a casino in an area zoned as residential. Community activist Nicole Boisdore fumed, “There’s a large group of us that Continue reading →

Posted in Atlantic City, Economy, Hard Rock International, Maryland, MTR Gaming, Ohio, Penn National, Racinos, Regulation, Revel, West Virginia | Comments Off on Mississippi bogged down; How much for Revel?

Wynn wins again; LVH sale near

Posted on June 24, 2014 by David McKee

steve-wynnSteve Wynn‘s $19 million libel award against sleazebag Joe Francis, former purveyor of Girls Gone Wild, has been upheld. The appeals court also imposed a gag order on Francis, enjoining him from ever repeating his claims that Wynn threatened to have him killed. Or, more explicitly, Wynn allegedly said he’d have Francis hit over the head with a shovel and buried in the desert (thereby improving civilization in the process) unless he paid his gambling debts. Francis not only made the assertion under oath but on Good Morning America and to TMZ, creating the potential for much damage to Wynn’s reputation.

Or maybe not. Francis is so disreputable that it would probably Continue reading →

Posted in Entertainment, Goldman Sachs, Harrah's, Illinois, LVCVA, Steve Wynn, The Strip, Wall Street | Comments Off on Wynn wins again; LVH sale near

Casinos get November surprise

Posted on June 24, 2014 by David McKee

CoakleyIn news that Deutsche Bank analyst Carlo Santarelli called a “fiasco,” the Massachusetts Supreme Judicial Court has decided to allow Bay State voters to decide whether or not to repeal the state’s casino law. Hardest-hit in a worst-case scenario would be Penn National Gaming, which paid $25 million for a licensing fee (likely to be refunded) and $60 million on its Plainville slot parlor. To recap, state Attorney General Martha Coakley (D, left) had opposed the ballot question as an uncompensated taking of property. Initiative backers favored it because, well, they don’t like casinos. In a shameless reversal, Coakley — who is running for governor — gave the court’s decision the thumbs-up: “Now, with today’s decision, voters will have the final say.”

Explained reporter Bob Salsberg, “Arguing to get the repeal question on the ballot, casino opponents said Continue reading →

Posted in Atlantic City, Internet gambling, Massachusetts, MGM Mirage, Mohegan Sun, Penn National, Reno, Sports, Steve Wynn | 1 Comment

Goodbye, Harmon, we never knew ye

Posted on June 23, 2014 by David McKee

Harmon wrapIt’s that long-awaited time: The demolition of the Harmon Hotel, which holds the ignominious distinction of the first Strip hotel demolished without ever hosting a single guest. This $11.5 million sidewalk show will leave an awkward void next to Crystals. However, contractor — and alleged corner-cutter — Perini Tutor didn’t oppose the demolition, saying that MGM Resorts International‘s evidence-gathering had hopelessly compromised the structure. At least architect Sir Norman Foster will soon be able to pretend the whole thing never happened. (Whoever thought it would outlast Fontainebleau?)

So unnerving where the structural lapses attributed to Perini (severed rebar, for one) that it didn’t matter if Continue reading →

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Et tu, Thrillist?; Bed-hopping in N.Y.

Posted on June 23, 2014 by David McKee

web1_cromwell_rendering_web_1Poor Sam Nazarian. He’s still two months away from opening SLS Las Vegas and Thrillist has gone and jumped the gun. It’s crowned The Cromwell “already Vegas coolest hotel.” Not even an unfinished parking garage could dampen their enthusiasm, motivated by things like a Playboy Playmate-inspired cocktail, a free-champagne happy hour, celebrity restaurant Giada, champagne in the rooms (do you sense a theme emerging?) and the Drai’s al fresco nightclub/pool deck … although from the descriptions, I wonder if Thrillist actually just read about that last item: The place must be a pretty hot ticket. Well done, Caesars Entertainment.

(Not so well done: Continue reading →

Posted in Churchill Downs, Cordish Co., Hard Rock International, Harrah's, Iowa, Massachusetts, MGM Mirage, Neil Bluhm, New York, Penn National, Racinos, The Strip, Tribal | Comments Off on Et tu, Thrillist?; Bed-hopping in N.Y.

New York, worker’s paradise; Tough call in Iowa

Posted on June 23, 2014 by David McKee

Casino workers in New York really can be assured of good-paying jobs. According figures released by the New York Hotel & Trades Council, a starting salary of $40,000 is quite plausible. Resorts World New York employees landed a contract last year whereby they went from $10-$12 an hour to $20. The same union signed a pact for Gotham hotel employees whereby annual salaries will go from $50,000 this year to $59,000  in 2019 and escalate to $69,000 by 2024.

All casino applicants have to show progress on something called a “labor Seal_of_New_York.svgpeace agreement” in order to be considered. Surprisingly, casino interests aren’t making a squawk about this. Neither is the Trades Council expecting Manhattan-sized wages in the boondocks. “The cost of living is higher in New York City than it is upstate. While the blueprint is the same. We understand the reality A living wage is different in Saratoga County than it is in Queens County,” said the union’s political director, Josh Gold.

In return, Gold’s union lent its muscle to a bill favored by Empire State racinos. It gives them Continue reading →

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Atlantic City: Game over?

Posted on June 23, 2014 by David McKee

Atlantic City‘s last, best hope — sports betting — was swatted away by the U.S. Supreme Court. While keeping mum on its reasoning, the Supremes chris-christie-cnbclet stand a federal ban on sports wagering. Found at a charity softball game, Gov. Chris Christie (R-N.J.) took the news philosophically: “So you know, that’s the way it goes. Nothing more I can say. They said no so we have to move on.” State Sen. Raymond Lesniak (D) will, however, continue with his efforts to have the ban repealed at the state level, damn the torpedoes and full speed ahead. He noted the discrepancy between federal and state laws on marijuana use in Colorado and Washington State by way of precedent. The prevailing federal verdict is Continue reading →

Posted in Atlantic City, Economy, Harrah's, International, Internet gambling, Japan, Lawrence Ho, Mohegan Sun, Sports, Tourism, Transportation | Comments Off on Atlantic City: Game over?

Gentlemen, grab your joysticks; Massachusetts: Another day, another poll

Posted on June 20, 2014 by David McKee

Oregon TrailVideo-game/slot hybrids have been licensed by the Nevada Gaming Commission and will be on display for your entertainment at the next Global Gaming Expo. The lucky winner was Gamblit Gaming, which is owned by American Capital by way of Hard 8 Games. We think the game product will be more sophisticated than The Oregon Trail or Space Invaders, but you never know. Gamblit will supply the game content, based on ones current popular on mobile devices, and is looking for a slot-making partner to supply the boxes.

Gamblit CEO Eric Meyerhofer is talking up a go-slow strategy, with game rollout dictated by Continue reading →

Posted in Election, G2E, Hard Rock International, Harrah's, Internet gambling, Massachusetts, New York, Regulation, Technology, Uncategorized | Comments Off on Gentlemen, grab your joysticks; Massachusetts: Another day, another poll

Revel bankrupt … again

Posted on June 20, 2014 by David McKee

Owned by former creditors, Revel Casino Hotel is dropping a bankruptcy on newer creditors. Hopefully this move will stave off the Aug. 18 closing (perhaps as late as Sept. 1.) that was threatened in a letter to Kreegeremployees yesterday, although the company say it’s a WARN Act formality. According to Revel President Scott Kreeger, $125 million has been borrowed to nurse the resort through this latest Chapter 11. (The Book of Revel has few chapters to date but many Chapters 11.) The property listed $1 billion in assets and another billion in debt. The bankers who extended Revel extra credit last November must feel like schmucks. It’s a classic case of good money flung after bad.

State Sen. James Whelan was rather understating matters when he said, “It’s not a good day for Atlantic City. I feel very badly for Continue reading →

Posted in Atlantic City, Delaware, Dining, Economy, Entertainment, Foxwoods, Harrah's, Maryland, Pennsylvania, Racinos, Revel, Rhode Island, Taxes | 1 Comment

Revel to close, barring a miracle; Gaughan memorialized

Posted on June 19, 2014 by David McKee

revel-get-it-all-back-600That’s the message coming from top Revel Resort brass, who sent a letter to casino employees cautioning them that — unless the property can be sold by Aug. 18 — they all may be out of jobs: “If Revel is unable to complete such a sale promptly, Revel expects to close its entire facility.” That would make Revel, next to Fontainebleau, the biggest megaflop in casino history.

Revel’s owners, who obtained in a debt-for-equity swap, appear to be trying to shop it around for $300 million — at a time when Atlantic City casinos are going for Continue reading →

Posted in Atlantic City, Downtown, Economy, Fontainebleau, Hard Rock International, Harrah's, history, Massachusetts, Tribal | 1 Comment