I’m digging the architecture but what’s with the softcore-porn music?
MGM Resorts Internationalhas released a new tranche of details on The Park, its mega-project (and substitute for extending CityCenter) that seems to progress in almost imperceptible steps. While CEO Jim Murren sometimes seems to be overthinking the reimagination of the Strip, he’s definitely moving with the times — and the economy — when he says, “We’re not putting in one new slot machine or one new table game.”
Favored shortcut for local drivers Rue de Monte Carlo will be torn up and relaid as a Continue reading →
Caving to opposition forces, the government of Sri Lanka has reversed course and nixed casinos from three planned resorts. The most prominent was a $550 million Crown Resorts project. Now James Packer has to decide whether it’s worth the investment to proceed sans gambling. “We will not allow casinos. That we say very clearly,” Economic Development Minister Basil Rajapakse said in his weekend bombshell. Parliamentary opponents like Buddhist monk Athuraliya Rathane were able to play upon fears of increased prostitution to get the casinos scrubbed not just from Packer’s project but from ones by John Keells Holdings ($650 million worth of development) and Dhammika Perera ($300 million). Now it’s back to the drawing board for them and Packer, or at least time for an agonizing reassessment. Packer had already said that specific approvals would govern whether he proceeded or not. (A 10-year tax holiday was passed, preserving one incentive.)
Someone “close to the negotiations” for a new tribal gaming compact in Florida tells The Associated Press the Gov. Rick Scottis feeling out legislative leaders about holding a special session in May. The reason: A new state/Seminole Tribe deal. We’re told something’s on the table because Lt. Gov. Carlos Lopez-Cantera (R) met with state Senate President Don Gaetz (R) about a mooted Seminole agreement. Gaetz, however, is in the dark as to the compact’s particulars. Scott’s spokesman, however, flatly says, “There is no deal,” and the Seminoles are keeping mum. A May special session would come at a tricky time because that is also when Scott will be picking and choosing those parts of the Florida budget of which he approves. An expanded Seminole contract would Continue reading →
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Karl Henkel of the Detroit Newsmakes a close analysis of the market situation in Detroit and sees portents of what has been happening in Atlantic City and Tunica. His analysis doesn’t just focus on gross revenues but, for instance, their failure to keep pace with inflation. Boston College‘s Richard McGowan says the unthinkable: “I can’t imagine the three Detroit casinos are all going to survive. I’d be really surprised. I think one will eventually go because the owners are going to say that it is just not worthwhile.”
Having posted a healthy profit of $156 million last year, MGM Grand Detroit appears impregnable. (Revenue figures for privately owned MotorCity are unavailable.) Greektown Casino is definitely a Continue reading →
Posting a 21% increase in revenue, Las Vegas Sands reported 97 cents/share in earnings (Wall Street had expected $0.94). No surprise, Macao was the primary driver. Analysts were also pleased by a $810 million buyback of Sands shares, bolstering the stock price. Profitably also grew at Marina Bay Sands, in Singapore, up 10% ($435 million). Overall profitability rose 36%. Net revenue was down 7% at the company’s Las Vegas properties and Sands Macao was flat. But Venetian Macao reported 36% growth and Four Seasons Macau & Plaza Casino was up 66%, while Sands Cotai Central made do with 41% growth. Revenue growth — as opposed to profit — was relatively modest at Marina Bay Sands, up 5%. Red-headed stepchild Sands Bethlehem was down 6%.
“From the time of Confucius … nobody has been able to Continue reading →
Caesars Entertainment‘s sudden romance with New York State is getting the company some grief, although not from the usual defenders of Atlantic City. Assemblyman Ralph Caputo (D) is among those who want to put a casino at the Meadowlands and racinos at the Garden State’s horse tracks. Caesars has understandably opposed those moves, provoking Caputo to lash out at its New York state of mind. “Caesars has been a major roadblock for the state over the past few years. They are our main opposition to growing the gaming industry in the state and have not supported any opportunity to increase gaming revenue if it meant earning it outside of Atlantic City,” Caputo growled. “For Caesars to impede the progress we could have made in New Jersey, then go to New York to build is plain hypocrisy. This new move to build a casino resort in New York adds insult to injury.”
The Empire State certainly got what it bargained for an then some, inundated with 22 applications. They break down as follows … Continue reading →
Just the prospect of a James Packer-owned casino was enough to spur a Buddhist-driven protest march in Sri Lanka. Packer’s Crown Resorts has concessions to develop three resort properties and the Sri Lanka government has been talking out of both sides of its mouth as to whether they’d have gambling or not. The country already has gambling, albeit on a small scale. That could change. Between them, Sri Lankan entrepreneurs Ravi Wijeratne and Dhammika Perera have been granted five casino concessions. Whether they are successfully developed remains to be seen: Although the current government holds a two-thirds majority, opposition to casinos cuts across party lines.
“We’ve done some research out there with regard to these consumers. And clearly, we’ve talked about a new norm. The customers are saying that they’re not fully employed. They don’t have the discretionary budget that they had either because they have made large ticket purchases last year or they’re not getting enough employment. I think households under $75,000 out there in our regional markets are still hurting and making a conscious decision not to engage in our products for budgetary reasons.” — Penn National Gaming CEO Timothy J. Wilmott, on current market trends among his bread-and-butter players.
Penn National Gaming lowered estimates for cash flow and other metrics today, as well as releasing 1Q14 results that J.P. Morgan analyst Joseph Greff wrote were “generally in line with our … estimates.” According to Penn, player spending has been generally consistent, though its lower-income players are “challenged.” (I would imagine so.) Full-year revenue and cash-flow projections were lowered, partly to take in a worst-case scenario for Argosy Sioux City, which could be forced to close July 1 — not likely, but it’s best not to assume. The difference was not enormous: Morgan had projected $2.6 million in revenue for the year, which Penn has marked down to $2.5 million.
Carlo Santarelli of Deutsche Bank characterized the first-quarter results as “in line.” Sioux City aside, he attributed some of the forthcoming writedown to Continue reading →
Twenty-two. That’s how many applicants paid a $1 million application fee to vie for four casino licenses in upstate New York. That’s more than Massachusetts, far more than Kansas, neither of which matches the allure of the Empire State (to cite two recent examples). ““This isn’t going to be a conversation about whose neon sign is bigger. This is going to be about creating the attractions that is going to drive tourism from downstate to upstate,” said Empire Resorts spokesman Charles Degliomini, in a dig at Las Vegas. (Empire parent Genting Group isn’t exactly a blushing violet.)
A 66% drop in profits for International Game Technology was one of yesterday’s headline events. Net revenues were off 15%. That $30 million in workforce cuts didn’t come soon enough to save the quarter, evidently. Wall Street analysts were remarkably further sanguine, even when IGT said it was trimming earnings projections still further. Instead of a year-end range of $1.28-$1.38, they’ll be $1-$1.10 or thereabouts. IGT isn’t just losing floor space to smaller competitors. it’s also seeing inroads made in progressive games. IGT CEO Patti Hart, however, continues to be vindicated by her acquisition of DoubleDown Casino. It drove 86% of IGT’s comparatively measly revenue growth and will shortly be augmented with the ever-popular Wheel of Fortune game. Hart also did a virtuosic job of managing Wall Street‘s expectations.
Noting the 20 cents per share earnings, Deutsche Bank‘s Carlo Santarelli was unfazed: “The result compared favorably to our and Continue reading →
New York resort developers may be reeling from the sudden entry of Caesars Entertainment into the picture, but that doesn’t mean they’ve given up the fight. After all, Caesars’ move only impacts the Catskills region, not the Capital one nor the Southern Tier. A direct Caesars rival, Genting Group stalking horse Empire Resortshas sent its $1 million in earnest money to the state. Several other groups, including Foxwoods Resort Casino, could do so before the end of business today. The owners of the Nevele resort are reported as having sent in their check, too. Two Southern Tier contenders, Tioga Downs and Traditions at the Glen Resort are getting into it, too. Not doing so are the Visram Brothers, whose Vista Hospitality Group was flirting with two sites in Binghamton. The Visrams have thrown their support to Continue reading →
Former Florida Lt. Governor Jennifer Carroll‘s troubles with the law haven’t ended with her resignation from public office. Tens of thousands of dollars of unreported income from Internet-cafe casino operators went unreported and now Carroll has some explaining to do. She’s already refunded some “overpayment” to Allied Veterans of the World, the controversial gaming operator she represented. She also threw an aide under the bus for submitting a “placeholder” legislative bill that would have redounded to Allied’s benefit. The legality of Carroll’s activities now goes to the Sunshine State’s ethics commission, which may be able to shed some sunlight into her murky dealings.
Nevada‘s casino industry is still in the Great Recession, if profits and losses are anything by which to go. Posting their fifth consecutive year of losses, they were $1.35 billion in the red, on $24 billion in revenues. No surprise, slots and tables produced a two-to-0ne mix of revenues. The losses themselves may be explicable by the Strip’s drift away from gambling as a revenue generator, down to 37% of the total. Downtown’s $18 million loss was chicken feed compared to the $1.4 billion in red ink on the Strip. The big winner was Laughlin, whose profits shot up 289%. Profits in “rest of Clark County” were down 100% but still $120 million. Reno also had a 100% revenue decline but eked out the tiniest of profits (less than $1 million). Lake Tahoe was not so fortunate, as casinos there lost $90 million.
Scarcely had Penn National Gaming and Cordish Gaming decided to bury their differences and work together when their party was crashed. Who else could it be but ubiquitous Caesars Entertainment? The company has written a check for $1 million (refundable) and gotten into the hunt. Caesars has identified a 120-acre site next to the Metro-North Railroad station in Harriman, near the Penn-Cordish site, putting it within 50 miles of Manhattan. It must be chagrining not just for relative newcomers like Penn and Cordish, but especially for all the resort owners who have been pining for a casino for years, only to be carpetbagged on the day before applications were due. They’ll be doubly chagrined since the ostensible aim of casino expansion was to help the upstate economy, and here’s Caesars sitting athwart one of the main routes to New York City, poised to suck all the oxygen out of the room.
Although would-be Albany casino developer David Flaum seemingly ought to be chagrined, it’s a coup for him: Continue reading →
Saratoga Springs Mayor Joanne Yepsen (below) must be the optimistic politician alive. She’s not only OK with Saratoga Raceway & Casinotaking its expansion plans elsewhere, she actually gave it her blessing, boasting of her city’s “thriving downtown, successful city center, two horse race tracks and a wealth of natural beauty and cultural assets.”
What Saratoga Raceway owners propose to do is build an offsite casino in East Greenbush, a town that voted favorably in last November’s casino referendum. This would give Saratoga Raceway a satellite facility in the Albany area, just across the Hudson River. To this end, Saratoga investors have bought 72 acres in East Greenbush — chosen from among 15 sites — and are prepared to invest $300 million in a casino. They’ve optioned another 380 acres for a spa and golf course. Praising his “spectacular” new view of Albany, lead investor James Featherstonhaugh said “Our decision there is final: We’re going to bid from East Greenbush … I’m really excited about the location and what we can do there.”
East Greenbush officials are on record as supporting “reasonable” casino development, although what is reasonable Continue reading →
Casinos in Ohio are already becoming a veritable laundromat of money laundering. The practice, called “smurfing,” calls for one person — or a group of conspirators — to buy casino chips, then redeem them, “washing” their cash by those means. Ohio lawmakers are trying to crack down on the practice, at the behest of regulators. They’d be the first to do so. But the process is hung up on a difference of philosophy. The state Senate has already passed the law but its House equivalent is hamstrung by a well-meant amendment introduced in the upper house by state Sen. Larry Obhof (R). It would further shrink the loopholes whereby Internet cafes function as de facto casinos, limiting their revenue from sweepstakes games to 5% or less. The House GOP, however, favors a clean bill, so the future of smurfing hinges on their ability to get one.
MGM Resorts International has solved the problem of what to do with its north-Strip acre on the corner of Sahara Avenue. The land will become the site of a 33-acre concert venue that can host 80,000. It will be the North American home of biennial Continue reading →
When it comes to the U.S. gaming market, there’s nothing that can stand between James Packer and a bad investment, it seems, common sense least of all. According to Australian media reports, Deutsche Bank wants $1.5 billion-$2 billion for The Cosmopolitan of Las Vegas and Packer intends to “lodge an expression of interest” today. Howard Stutzprovides a partial litany of Packer’s missteps in the U.S. gaming market, which also include duff investments in Fontainebleau, Station Casinos and then-Harrah’s Entertainment. If it was a bad idea, Packer was all in.
Today’s news reminds us how much we’ve missed Packer. Making fun of his terrible investments was great sport. Maybe his Crown Entertainment casino chain and Melco Crown Entertainment partnership can bring in whales from Australia and Macao, respectively, and get some action going on The Cosmo’s anemic casino floor. Because, let’s face it, The Cosmo has a busted business model and it will take all of Packer’s ingenuity to turn it back into a casino, not a restaurant row with slots on the ground floor. However, with casino projects going in Brisbane, Sri Lanka, the Philippines, plus the promise to build a $5 billion megaresort in Japan, Packer may be starting to stretch himself pretty thin.
Further up the Strip, casino action is already happening at Continue reading →
“Iowa and Illinois are two sides of the same coin; both states have had gaming for over 20 years. The casino industry in each is mature and probably saturated; the gaming industry in each state has suffered any time new casinos appear along its borders. And each has considered expanding gaming numerous times. For whatever reason, cooler heads seem to prevail in Iowa. They consider the evidence and the current state of the gaming industry in Iowa and move to protect the existing industry rather than allow any further expansion.” — Ken Adams, on the free market and casino expansion in the Midwest.
That’s the message from Crimea‘s puppet leader, Rustam Temirgaliyev, who claims that Crimea could outdo Monaco, Las Vegas and even Macao. (It is not recorded whether anyone laughed at his assertion.) “Our task is to create a tourist cluster, which will operate year-round, using a gambling zone as an advantage,” Temirgaliyev said. “We have been considering construction of a gambling township on Crimea’s southern coast and have been considering several more sites. At issue is a territory of around 100 hectares directly on the seaside.”
Casinos are presently illegal in Crimea but a bill has been introduced in the Russian Duma to change that. It’s got the parentage of chest-baring despot Vladimir Putin, so I guess it’s a done deal. Bad Vlad’s exile of the casino industry to remote provinces has been a flop, undoing a $5.5 billion industry. Crimea offers relative convenience of proximity and, evidently having decided that casinos Continue reading →
