Adelson vs. Loveman: Splitting the difference

Posted on May 30, 2014 by David McKee

Loveman speaks“One of the things I’ve learned in this industry is we are extraordinarily competent at shooting at one another.” So said American Gaming Association President Geoff Freeman after getting caught in the crossfire over Internet gambling. So, as the industry collapses into opposing factions, a bill draft is making the rounds on Capitol Hill. One step forward and two back, it would reiterate the federal ban on sports wagering and ban all forms of Internet wagering except poker, lotteries and horse racing (the horsey set is sacrosanct).

Now, one of these things is not Continue reading →

Posted in Geoff Freeman, Hard Rock Hotel, Harrah's, Internet gambling, Macau, Politics, Sheldon Adelson, Technology, The Strip, Warner Gaming, World Series of Poker | 1 Comment

Massachusetts: Pay the man; Robbing Peter to wager on Paul

Posted on May 30, 2014 by David McKee

If casino gambling is outlawed in a November referendum, MGM Resorts International and Wynn Resorts want their money back. After all, they’ll be out the $85 million application fee and that’s just for starters. They’d also like to be reimbursed for slot machine fees ($600 per slot), a “gaming assessment fee,” a minimum Public Health Trust Fund fee, design and construction costs and sundry other levies.

massachusetts_flagThem’s a lot of nickels. Unfortunately, there is no legislative mechanism at present whereby they could get that money back. To that end, the Massachusetts Gaming Commission is urging the Legislature to put into law a refund of the $85 million, should casino gambling come to grief on the November ballot. MGM, for one, finds itself in limbo. The MGC is expected to vote on its application on June 13 but a Supreme Judicial Court ruling on the validity of the repeal provision (which the state holds to be an unconstitutional taking of property) won’t come until July 9, leaving MGM with a month to swing in the wind. Penn National Gaming, meanwhile, forges stoically ahead with Plainridge Park Casino as though nothing were amiss, hoping to open in little over a year.

Almost full or slightly empty? Gaming revenues rose 2% from 2012 to 2013, the fourth consecutive year of growth. “Revenue growth has largely been attributed to market expansion; as states continue to legalize gaming and more tribes enter the gaming industry,” reports Casino Journal. However, it’s not straightforward growth. In an ever-larger tribal market, “existing operators have seen declining revenues from the increased competition.” Continue reading →

Posted in Delaware, Economy, Japan, Maryland, Massachusetts, MGM Mirage, New York, Ohio, Penn National, Pennsylvania, Regulation, Singapore, Steve Wynn | Comments Off on Massachusetts: Pay the man; Robbing Peter to wager on Paul

Beso of death; Atlantic Club reborn

Posted on May 30, 2014 by David McKee

Eva LongoriaEva Longoria‘s SHE byMorton’s (formerly Beso) has closed for the second — and presumably final — time. This time we can only put so much blame on Longoria and focus instead on owner Tilman Fertitta. This rare misstep by Fertitta proves he’s only human after all. COO Scott Marshall attributed SHe’s demise on an inability to reach terms with CityCenter over how to repurpose the defunct nightclub portion of the two-story venue. A temporary closure by the Southern Nevada Health District can hardly have helped, either. SHe gets credit for trying to vary the Las Vegas steakhouse experience, “with smaller portion sizes for female customers. Mirrors on the back of the dessert menus were designed for patrons reapplying lipstick after their dinner.” But there just doesn’t seem to have been a market for that and an experiment launched with great fanfare exits quietly stage left. Continue reading →

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Station’s waning clout; Off the rez with SCOTUS

Posted on May 29, 2014 by David McKee

HorneStation Casinos‘ insistence on re-litigating the issue of slot parlors in Nevada seems to have finally driven some officials to the end of their patience. Assembly Majority Leader William Horne (D, right), the industry’s primary water carrier, tried to plump for a bill to define how much gambling is or isn’t “incidental” to a tavern’s revenue stream — an issue that had been thrashed out during the 2013 Legislature, at least to the extent of requiring Dotty’s-style operations to make more than a pretense of offering food and drink.

Noting the recency of that law, tavern owner Randy Miller sensibly suggested that the lawmakers give it time to take effect. Station ally Steve Sisolak painted a picture of Continue reading →

Posted in Boyd Gaming, Election, history, Missouri, Politics, Regulation, Slot routes, Station Casinos, Tribal | Comments Off on Station’s waning clout; Off the rez with SCOTUS

Penn, Cordish, Foxwoods all quit

Posted on May 29, 2014 by David McKee

Despite having missed — by several days — the deadline for getting their $1 million application fee refunded, Penn National Gaming and Cordish Gaming want their money back from New York State. Why? Because they penn-national-gaminghave belatedly decided to scrap their Rensselaer County project and concentrate on their proposal for (more lucrative) Orange County. It remains to be seen whether the Empire State will allow Penn and Cordish to play by a different set of rules than all other applicants.

Ever-fickle Foxwoods Massachusetts, meanwhile, reportedly has jilted Fall River in favor of New Bedford. This move puts them in head-to-head competition with KG Urban Enterprises, which has been trying to crack Continue reading →

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Pacquiao impact punchless

Posted on May 29, 2014 by David McKee

Cards 2April’s gaming numbers from Nevada were received with varying degrees of gloom. Not even a Manny Pacquiao fight could drive up the revenue figures, generally speaking. Baccarat, it goes without saying, was a different story, with 40% more revenue and 20% more wagers. Opined Stifel Nicolaus Capital Markets analyst Steven Wieczynski, “By and large, we suspect evidence of strong baccarat play disproportionately benefited the operators with established Asian sourcing channels.” (No shit!)

Otherwise, table game revenue and play on the Strip were flat. Deutsche Bank analyst Carlo Santarelli wrote that the baccarat result “masks Continue reading →

Posted in Boulder Strip, Downtown, Economy, Laughlin, North Las Vegas, The Strip, Tourism, Tribal, Wall Street, Wisconsin | Comments Off on Pacquiao impact punchless

The SLS saga

Posted on May 29, 2014 by David McKee

This is all very well and good — but enough with that “north is the new south claim.” It’s presumptuous and (let’s face it) SLS Las Vegas is no Bellagio.

Posted in Architecture, MGM Mirage, Sam Nazarian | Comments Off on The SLS saga

Caution at MGM, audacity at Caesars; Cortez crumbles

Posted on May 28, 2014 by David McKee

As the line continues to blur between social gaming and real-money gambling, MGM Resorts International continues to hang back from the latter and favor the former. It’s putting its efforts into a free-play site that offers M Life rewards, as U.S. Internet gaming has proven to be small potatoes so far. As Macquarie Securities analyst Chad Beynon puts it, “a lack of progress keeps us concerned.”

Not so social gaming, which has proven to be a bonanza for Caesars Entertainment. It was prescient of Gary Loveman to Continue reading →

Posted in Culinary Union, Downtown, Harrah's, Internet gambling, MGM Mirage, Tamares Group, Terry Caudill | Comments Off on Caution at MGM, audacity at Caesars; Cortez crumbles

Tug of war in Massachusetts; Lee ousted … again; Gilbert’s Greektown struggle

Posted on May 27, 2014 by David McKee

massachusetts-quarterEach with a casino nearly in the bag, both MGM Resorts International and Wynn Resorts want some legislative concessions from Massachusetts. Mohegan Sun is standing pat. MGM and Wynn want their $85 million licensing fee and a number of related statutory expenses refunded, should voters outlaw casinos in a November ballot question (still hypothetical at this point). Bay State casinos are required to report all comps. MGM and Wynn wanted that  provision struck but the Massachusetts Gaming Commission wasn’t having it. More equivocal was the non-solution to an absurd requirement that the casinos vet winners for unpaid child support. Aside from the onerous policing requirement, Massachusetts has no database the casinos could consult, so the MGC put the issue on hold.

The commission was more tractable to putting in a 10-year sunset period on Continue reading →

Posted in Dan Gilbert, Dan Lee, Detroit, Downtown, Economy, Election, Massachusetts, MGM Mirage, Mohegan Sun, Ohio, Palms, Problem gambling, Regulation, Steve Wynn | Comments Off on Tug of war in Massachusetts; Lee ousted … again; Gilbert’s Greektown struggle

Internet gaming: More light than heat; Fieri in your face

Posted on May 27, 2014 by David McKee

“We are absolutely shocked by the slowness of the market.” Those are the words of 888.com CEO Brian Mattingley, with regard to Internet gambling in New Jersey. How slow is it? So much that 888 is shifting ad dollars from poker promotion to slots. Boyd Gaming is cutting back on advertising, thanks to operating losses in the cybersphere. As Mattingley says, “We’ve got to think again, the way we market.” Some of the potential cures (allowing unlicensed operators into the market) could be worse than the disease.

Internet gambling has found a champion in Massachusetts, gubernatorial Grossmancandidate Steven Grossman, who says of the brick-and-mortar industry, “They can have their squabbles out there all they want. We’ll continue to move forward … to study this issue and how it can potentially affect us, one way or another. Any smart business of any kind, public or private, would study that. You have to change to survive and flourish.” Grossman’s plan would administer online gambling through the state lottery and bar the use of credit cards (which haven’t proven a very successful method of Internet-gambling payment anyway). Grosssman, who is also state treasurer added “We’ll simply study and be very careful with any approach to online gaming that doesn’t protect the people of this commonwealth appropriately.” Continue reading →

Posted in Atlantic City, Boyd Gaming, Dining, Economy, Harrah's, Internet gambling, Marketing, Massachusetts, Mississippi, Politics, Regulation, Sheldon Adelson, The Strip | 1 Comment

Quote of the Day

Posted on May 27, 2014 by David McKee

Pennsylvania 064“Pennsylvania charges the highest tax rate on slot machine revenue in the country — about 55 percent — meaning the state has been racking up tax proceeds like T-shirt sales at a rock concert. But the golden age of gambling growth may have peaked in the Keystone State, and casinos will have to look for new ways to attract guests just to hold their own. Homeowners looking to gaming for property tax relief, take note: This is about as good as it’s going to get.” — Howard Frank, in the Pocono Record, on casino-revenue stagnation.

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Massive tribal victory in SCOTUS; Bad day at Hard Rock?

Posted on May 27, 2014 by David McKee

We should probably brace ourselves for dramatic new interpretations of the Indian Gaming Regulatory Act, following a surprising Supreme Court Courtdecision. The State of Michigan had been trying to get rid of a Bay Mills Indian Community casino that was 90 miles from reservation land. No go, says SCOTUS: “Michigan argued that the Bay Mills tribe opened the casino in 2010 without permission from the U.S. government and in violation of a state compact. The tribe had purchased land for the casino with earnings from a settlement with the federal government over allegations that it had not been adequately compensated for land ceded in 1800s treaties.”

Writing for the majority, Justice Elena Kagan opined that Continue reading →

Posted in Boyd Gaming, Culinary Union, Downtown, Hard Rock Hotel, Tribal, Warner Gaming | 1 Comment

Leven leaving, Adelson staying

Posted on May 23, 2014 by David McKee

Leven 2In a less-than-shocking turn of events, Las Vegas Sands President Michael Leven has announced his retirement, effective the end of this year. Let the speculation over his successor commence! President of Global Gaming Operations Rob Goldstein would seem the obvious choice and he would ensure continuity in a company that has more than its share of executive turnover. Whoever is chosen can expect to report to Sheldon Adelson, who has made it clear — more with humor than wrath — that you’ll have to pry the CEO title from his cold, dead fingers. Leven’s tenure was ultimately a distinguished one, calming a company that was roiled with infighting and teetering on the brink of insolvency. True, he never found a solution to the unfinished stump that is the St. Regis tower and he finished Sands Bethlehem in quick and dirty fashion (although only after being shamed into it by Sheldon). But, with Adelson often seeming more preoccupied with politics than business, Leven provided a steady hand on the tiller.

“It’s the first time we built a building just to hold up a nightclub.” That’s Victor Drai, referring to the cantilevered structure that supports the pool deck atop The Cromwell. Some of us were skeptical that the former Barbary Coast wouldn’t buckle under all the extra weight. It’s a butt-ugly solution, one that suggests that the pool was Decision A and actually engineering it was a distant afterthought. Otherwise, Drai is mostly preoccupied with ripping Steve Wynn a new one, claiming to have hung up on the mogul recently. He says Wynn is overpaying the people who run his nightclubs, depressing profit margins from 69% to 17%.

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Gunga Geoff; Massachusetts split

Posted on May 21, 2014 by David McKee

Sands Macao logoSome casino industry bigwigs continue to view Macao as a Chinese-flavored version of Las Vegas, an industry fallacy you would think had been outgrown. Take American Gaming Association President Geoff Freeman, who told a Macanese audience that their city needs to become more like Las Vegas, in which gambling only represents 35% of overall revenue. That didn’t happen overnight, although Freeman makes it sound that way, and — unlike the U.S., in China there is no place else to gamble legally. You wouldn’t think it would be necessary to point out such things.

During a somewhat patronizing media briefing, Freeman said it might be a “sign of maturity” that Geoff_Freemancasino revenue is growing at a slower rate this year. He advocated a Vegas-style curve: “You don’t want to be on an upward trajectory like this all the time because, at some point, you are going to fall down. What you need is to go up and plateau, up and plateau. That’s a safe place to be. I think the fact that Macao may be slowing a bit is actually a sign of maturity. As the market diversifies as new products come online, then you will see that growth pick up again.” More constructively, he identified the convention-and-meeting business as an area that could be targeted for growth.

* Massachusetts voters want a November say-so on casino gambling in Continue reading →

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Skepticism in Atlantic City; Hope in Schenectady

Posted on May 21, 2014 by David McKee

Hard Rock International has decided to stop being coy about its interest in Revel Resort. It wants it … if the price is right. “We certainly looked at it. We low_revelparticipated in the process,” said Hard Rock CEO James Allen. “The question is not whether Revel will be operating. The question is what will you have to put into a property that’s negative” on the balance sheet. He’s not overawed by the $2.4 billion megaresort, saying it needs considerable work: “There are issues with the design.” (Revel tucked its casino away upstairs, for instance.) There are issues with the finances, too: It’s estimated to be losing as much as $80 million a year. Considering that Hard Rock pulled out of a $465 million casino in 2012, that should give you some idea of its appetite for risk on the Boardwalk.

Joel Simkins, analyst for Credit Suisse had some cautionary words for Allen: “My advice to someone who’s thinking about taking on one of these properties, that thinks they can build a better mousetrap is: Don’t do it. It’s very, very difficult.”

caputo_color“All indicators point to Showboat being closed or sold,” UBS Fixed Income Research Director Srihari Rajagopalan told an East Coast Gaming Congress audience, part of a panel discussion in which it was agreed that Atlantic City needed to downsize before it could get healthier. (Trump Plaza was also on the death watch.) Assemblyman Ralph Caputo (D, left) minced even fewer words, accusing Caesars Entertainment of hypocrisy in “the highest sense of the word” for seeking an Orange County, New York casino despite having fought against a Meadowlands one for years. (Gov. Andrew Cuomo looks askance at Orange County, period.) “I’m not talking about closing down Atlantic City. I’m talking about assisting Atlantic City,” Caputo added, somewhat implausibly. Continue reading →

Posted in Ameristar, Architecture, Atlantic City, Hard Rock International, Harrah's, Louisiana, Neil Bluhm, New York, Pinnacle Entertainment, Revel, Tribal, Trump Entertainment Resorts | 1 Comment

Freeman defeated; Caesars renders unto Maryland

Posted on May 21, 2014 by David McKee

In a stunning reversal — and a major victory for Sheldon Adelson — American Gaming Association President Geoff Freeman is ending the lobbying group’s support for Internet gambling. Freeman calls it “an issue that the association cannot lead on,” so the AGA is advancing to the rear. “One of the things I’ve learned in this industry is we are extraordinarily competent at shooting at one another,” ran Freeman’s mea culpa. “The snipers in this industry are of the highest quality, and if you let that be the focus, we’ll kill each other.”

While Adelson tap dances on Freeman’s skull, it falls to individual companies to continue the fight. At Caesars Entertainment, CEO Gary Loveman has been Continue reading →

Posted in Economy, Geoff Freeman, Harrah's, Internet gambling, Macau, Maryland, Regulation, Sheldon Adelson, Steve Wynn, Taxes, Wall Street | Comments Off on Freeman defeated; Caesars renders unto Maryland

Quote of the Day

Posted on May 21, 2014 by David McKee

“The people who say it’s not doing well enough are like the two parents who look at their five-month-old and say, ‘It doesn’t speak any languages!’ Let’s get our expectations in line.” — California Gaming Control Commissioner Richard Schuetz on early over-analysis of Internet gambling’s performance.

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More states covet Internet lucre; Steeplechase in New York

Posted on May 20, 2014 by David McKee

Pennsylvania is keeping a  close eye on Internet gambling in New Jersey. That much is clear from recent testimony before the House Democratic Policy Committee. “It can be regulated and controlled and … the existing technology can accurately locate players to prevent out-of-state players from participating. The technology can also prevent minors from playing. There are also provisions for preventing money laundering.” Those were the conclusions of Pennsylvania Gaming Control Board Executive Director Kevin O’Toole. As in Atlantic City, he would have the Internet licenses restricted to existing casino owners.

Caesars Entertainment Senior Vice President David Satz told lawmakers that the addition of Internet gaming raised attendance at its casino properties by 11%. (If only it did the same for revenue.) Predictably, there was a knot of naysayers, sent by Sheldon Adelson. “I want to make money from those who can afford it,” ran a recent Adelson stemwinder. “But I can’t tell over the internet who is underage. I can’t tell who’s got financial difficulties. I can’t tell who is not gaming responsibly. I can’t tell if money is being laundered. I can in the casino.” Uh, your FinCen-compliance record suggests otherwise, sir. Continue reading →

Posted in Atlantic City, Cannery Casino Resorts, Churchill Downs, Harrah's, Horseracing, Internet gambling, Neil Bluhm, New York, Penn National, Pennsylvania, Sheldon Adelson, Texas, Tribal, Wisconsin | Comments Off on More states covet Internet lucre; Steeplechase in New York

After Adelson … what then?; Hope in Springfield

Posted on May 20, 2014 by David McKee

Sheldon pashaOne of the issues that has buzzed around Las Vegas Sands like a shoo-fly is the lack of a line of succession. President/COO Michael Leven was superannuated when he took the job at, at age 76, isn’t getting younger. According to the Wall Street Journal, CEO Sheldon Adelson is contemplating a magnanimous gesture: To attract a quality replacement for Leven, he might cede his own CEO title. That would still leave him chairmanship of the board … hardly out of the picture, especially since he controls most of the company’s stock. (A post-Adelson Sands is difficult to envision.) Sands spokesman Ron Reese, however, was quick to shoot the WSJ report down. But it’s Continue reading →

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And then there were fewer; The Culinary’s empty threats

Posted on May 20, 2014 by David McKee

Scratch two names from the mad scramble for a New York State casino. The vaguely interested Rolling Hills Entertainment is out but it was a long shot. Of Pinnaclegreater consequence is Pinnacle Entertainment‘s abandonment of its pursuit of the Albany area. Don’t worry: Both companies get their $1 million deposit back and there are still 20 companies jostling for four licenses. Today’s news comes as a boost to the Albany-area E-23 project, and perhaps the Saratoga Casino & Raceway/Churchill Downs joint venture in East Greenbush. Even so, competition for Albany is relatively light and Pinnacle has been aggressive of late, so I wouldn’t have picked it to be one of the dropouts.

Surprise of surprises, a bill to vastly expand gambling in Illinois is running out of gas in the waning days of the Legislature. By permitting Continue reading →

Posted in Boyd Gaming, Churchill Downs, Culinary Union, Derek Stevens, Downtown, Harrah's, Illinois, Maryland, New York, Pinnacle Entertainment, Racinos, Tamares Group, Taxes, Terry Caudill | Comments Off on And then there were fewer; The Culinary’s empty threats