Caesars to Empire State; Colony to Chapter 11

Posted on November 7, 2013 by David McKee

IMG-20130507-00006When Caesars Entertainment made a discreet donation to the pro-casino campaign in New York State, we should have known that something was up. Sure enough, state Sen. John Bonacic (R) says Caesars is interested in a Sullivan County casino. Then again, Bonacic says Boyd Gaming, MGM Resorts International, Las Vegas Sands and Foxwoods Resort Casino are all in the hunt, too, among others — and there are only four casino licenses to go around. Even high tax rates on slots, perhaps as much as 45%, are no deterrent. (Foxwoods has already identified a site, Grossinger’s.) Unlike any of those companies, Caesars is heavily invested in both Atlantic City and Philadelphia, but logic like that never stopped Gary Loveman before. Also, “the company has plenty of cash from its asset sales and the Las Vegas operations to make strategic investments in the future,” writes The Motley Fool. So it could roll the money from its recent Claridge Hotel and Macao sales into an Empire State play. An existing racino, Tioga Downs, isn’t even waiting for a license to break ground on an expansion, so confident is it.

Some would say that Atlantic City operators (of which Caesars is the biggest) should be preparing for the worst. Analyst Chad Mollman says the resort town should be Continue reading →

Posted in Atlantic City, Boyd Gaming, Colony Capital, Current, Dan Lee, Donald Trump, Foxwoods, Harrah's, MGM Mirage, New York, Pennsylvania, Pinnacle Entertainment, Racinos, Sheldon Adelson, Wall Street | 1 Comment

Big score for Station, little one for Caesars

Posted on November 7, 2013 by David McKee

GratonStation Casinos has a big hit on its hands in the form of Graton Resort & Casino. So many customers turned out for opening day that the doors swung wide an hour early. Ninety minutes later, admittance was being rationed and at 20 past noon, the doors were closed altogether, so crowded was the casino. It didn’t hurt (or help?) that 20 tour buses showed up, loaded with patrons — and completely to Station’s surprise. There were the expected glitches: long waits at the players’ club booth, malfunctioning player cards, etc. But “[a]side from complaints of poor organization, lack of planning and the opening-day kinks, most customers said they were having a good time and some came from as far away as Sacramento and San Jose.” It’s so popular that it’s jamming the highways with would-be gamblers. California Highway Patrol Officer Jon Sloat called it “pretty much the worst case scenario we expected, with just the sheer volume of vehicles coming in.”

Not that we’re blaming Station. Open a casino only 48 miles from San Francisco and you’ll be lucky if Continue reading →

Posted in California, Cordish Co., Economy, Harrah's, Macau, Maryland, MTR Gaming, Ohio, Penn National, Pennsylvania, Station Casinos, Tourism, Tribal, Wall Street, West Virginia | Comments Off on Big score for Station, little one for Caesars

Election Special: No surprise in New York, big surprise in Massachusetts

Posted on November 6, 2013 by David McKee

Massachusetts may not be ready for casino gambling (unless Steve Wynn is building it). Voters said no and again no yesterday, in a series of referendums. Mohegan Sun is — quite understandably — asking for a recount. Its casino proposal lost by 93 votes out of roughly 5,200 cast. It’s citing problems with a voting machine in one precinct and wants votes retabulated by hand. Said one supporter, “I wouldn’t put it past Palmer to screw up like that with faulty equipment.”

Considering the generosity of Mohegan Sun’s deal with Palmer, this is a stunning setback. Now MGM Resorts International has the western region of Massachusetts all to itself, depending on Continue reading →

Posted in Atlantic City, Current, Election, Foxwoods, Massachusetts, MGM Mirage, Mohegan Sun, New York, Politics, Regulation, Steve Wynn, World Series of Poker | 2 Comments

Quote of the Day

Posted on November 6, 2013 by David McKee

Burnett“We understand transactions and licensing agreements. We understand how the [Caesars Entertainment–Gansevoort Hotel Group] relationship worked. Regulators need to be both reasonable and intelligent.” — Nevada Gaming Control Board Chairman A.G. Burnett, criticizing the Massachusetts Gaming Commission for “gotcha gaming regulation.” It says much of Caesars’ clout that it can get the head of Nevada’s primary investigative body to act as a Caesars surrogate, criticizing another state’s regulatory system.

Posted in Harrah's, Massachusetts, Regulation, The Mob | Comments Off on Quote of the Day

Sheldon covets Florida … again

Posted on November 5, 2013 by David McKee

Florida.jpgIt wouldn’t be a week in the gaming industry if Sheldon Adelson didn’t manage to bigfoot one issue or another. This time it’s Florida, where the Legislature is in the preliminary throes of grappling with casino expansion once again. Adelson surrogate Nick Iarossi suggested a one-casino monopoly for South Florida. (I can’t imagine who he has in mind for it.) He also proposed an East Coast-low 10% tax rate — a steep reduction from the 35% that the state’s parimutuels currently pay. It’s not a bad idea in theory, although Sunshine State solons are loath to leave money on the table. They’re more apt to fix upon what they’re giving up than what they’re gaining. It’s why they stalemated last year and are odds-on favorites to do so again.

S&G is a longtime advocate of low-tax jurisdictions but we’ve got to call bullshit on this bit of revisionist history purveyed by Iarossi: “The higher the tax the less you can spend on the facility. The less you spend on the facility the less iconic the structure is and the less people want to jump on an airplane or drive a long distance in a car to come see it.” Tell that to Macao, where Continue reading →

Posted in Florida, Macau, MGM Mirage, Neil Bluhm, Pennsylvania, Politics, Problem gambling, Sheldon Adelson, Taxes | Comments Off on Sheldon covets Florida … again

CityCenter 1.5; Casinos vs. Atlantic City, Round Two

Posted on November 5, 2013 by David McKee

web1_ARENA-NOV05-13-balcony_0MGM Resorts International and Anschutz Entertainment Group have unfurled the big- and small-picture details of their 12-acre, 20,000-seat arena. For an in-depth description, I direct you to Alan Snel‘s excellent account. The announcement refuels speculation that AEG (operator of the Staples Center) and MGM will make a play for an NBA or NHL franchise. From an architectural standpoint, it’s appropriate that the arena is going onto land occupied by leftover CityCenter office space, for it is clearly an attenuated continuation of Jim Murren‘s vision for CC. The sharp-angled, canted, glass-walled planes of the design evoke Crystals, Aria and Veer Towers alike.

web1_ARENA-NOV05-13-west-view_0The sandstone-colored western facade looks like a continuation of CityCenter’s spa and convention spaces. From I-15, it will present a harmonious front — CityCenter being the first Vegas resort to put nearly as much concern into the “curb appeal” of its backside as its Las Vegas Strip front. (Actually, I find the I-15 side more appealing, but that may be a minority view.) In any event, Murren has not given up on his New Urbanism, as he tries to create an arena that is of CityCenter rather than on it, to paraphrase Frank Lloyd Wright, who knew a thing or two about design.

Desperation mounts. For the Menominee Tribe, that is. They’re volunteering to pay more and yet more tax money, all so they can get a Continue reading →

Posted in Architecture, Atlantic City, Boyd Gaming, CityCenter, Colony Capital, Current, Economy, Hard Rock International, International, Japan, Macau, MGM Mirage, Politics, Sports, Taxes, The Strip, Tourism, Tribal, Wall Street, Wisconsin | Comments Off on CityCenter 1.5; Casinos vs. Atlantic City, Round Two

Election Day!; Mad Max; Deadpan humor in Wisconsin

Posted on November 5, 2013 by David McKee

Andrew_CuomoToday’s a big day for casino-related votes in New York State and Massachusetts. In the former, New York City holds the key to the outcome. The Five Boroughs are expected to represent for 42% of statewide voting. Mind you, NYC wouldn’t get a casino until 2020 at the soonest if Proposal One passes (good news for Atlantic City), which it is expected to do, 60/40. So Manhattan holds in its hands the fate of little burgs like Nichols, home to would-be racino Tioga Downs. Sitting on the Pennsylvania border, Tioga Downs theoretically could claw back some business from Mohegan Sun at Pocono Downs but probably not much. Owner Jeff Gural has big plans for Tioga Downs, nonetheless, including a luxury spa and upscale entertainment.

There’s support for Proposal One even in areas where the question is moot, due to previous accords with Gov. Andrew Cuomo (D, above). In the Catskills, abandoned resorts that have “has all the makings of a scene from The Shining” Continue reading →

Posted in Atlantic City, Current, Economy, Election, Foxwoods, Harrah's, history, Horseracing, Marketing, Massachusetts, MGM Mirage, Mohegan Sun, New York, Pennsylvania, Politics, Racinos, The Strip, Tourism, Tribal, Wisconsin | Comments Off on Election Day!; Mad Max; Deadpan humor in Wisconsin

Suffolk Downs postscript

Posted on November 4, 2013 by David McKee

lovemanCaesars Entertainment being out of the Suffolk Downs equation, the would-be racino has been dubbed “a headless horseman” by opponents and faces an uncertain fate at the ballot box. One might well question Suffolk owner Richard Fields on why his due diligence regarding Caesars was apparently so slap-happy that the Massachusetts Gaming Commission‘s strictures took him by surprise. But Fields wasn’t taking questions from Wall Street analysts last week. Caesars CEO Gary Loveman was and what was failed to be asked of him was more illuminating that what was. In reading the transcript, one cannot help but be struck by the subservience of the stock pickers, who fairly prostrated themselves at Loveman’s feet.

One begged the question of the timing of Caesars’ severing its ties to Gansevoort Hotel Group. Loveman waited until after the Massachusetts debacle to cut Gansevoort loose. Why so? The issue had Continue reading →

Posted in Colorado, Current, Harrah's, Massachusetts, Problem gambling, Regulation, Wall Street | Comments Off on Suffolk Downs postscript

Penny Lane is in your ears and in your eyes

Posted on November 4, 2013 by David McKee

Although I don’t play them, I’m well aware of the appeal of penny slots. In hopes of upping play and helping customers find their favorite machines, Boyd Gaming has created “Penny Lane.” It seems like good slot-floor strategy … and took up a big chunk of Boyd’s most recent conference call. Some of my most faithful readers were taken aback by that and by the “Honest Abe” marketing campaign. (Trust me, it’s not as weird as the disembodied Cheers one.) He looks a shifty fellow to me. Where’s Big Al when you need him?

Posted in Boyd Gaming, Marketing, TV | Comments Off on Penny Lane is in your ears and in your eyes

What makes a ‘surrounding community’?

Posted on November 1, 2013 by David McKee

Google Maps, that’s what. The Massachusetts town of Bolton wants “surrounding community” consideration from Leominster, where Cordish Gaming hopes to built a $203 million slot parlor. As with many towns across the state, Bolton’s concerns center upon traffic. Cordish maintains that most punters will arrive via I-190. However …

The slot parlor would sit near a popular Walmart, which draws most mboltlgof its patronage from Route 117, which traverses Bolton. And if you plan your trip to the casino site via Google Maps, the travel planning software defaults to Route 117, not I-190. Bolton wants more than the $5K in mitigation that Cordish is offering surrounding communities. But first it needs to be recognized by the Massachusetts Gaming Commission as a surrounding community. If it gets Continue reading →

Posted in Cordish Co., Massachusetts, New Hampshire, Regulation | 1 Comment

Big win for Wynn; Murren in the spotlight; Lies, damned lies and Sheldon Adelson

Posted on November 1, 2013 by David McKee

In a disappointing but entirely predictable result, the Nevada Supreme Court ruled that Nevada law permits employers to confiscate and redistribute tips received by employees (euphemistically referred to as “tip sharing”). Now, if a I stuck a gun in your face and took all your money, is that “income sharing,” even if I gave some of it back? The Supremes placed their stamp of approval upon Labor Commissioner Michael Tancheck‘s specious reasoning that, since Wynn Resorts confiscated the money but didn’t keep it, that was A-OK. However, since the redistributed tips were used in lieu of giving pit bosses a pay raise, one can argue that the money was indeed “kept” and put to a different use.

Anyway, the bulk of this endless litigation has been remanded to district court for resolution of two other aspects of the suit. The salient issue is Continue reading →

Posted in Atlantic City, Boyd Gaming, Election, Florida, Harrah's, Marketing, Massachusetts, MGM Mirage, New York, Palms, Pennsylvania, Revel, Sheldon Adelson, Sports, Steve Wynn, The Mob, Tourism | 3 Comments

Quote of the Day

Posted on October 31, 2013 by David McKee

jimmurren_t652“Obviously, there’s been an awful lot of activity and drama there. But we like the process, it’s been very transparent to us, and we believe there’s no reason why we will not be found suitable.” — MGM Resorts International CEO James Murren, on the Massachusetts regulatory regimen, during today’s analyst call.

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Falling upward in Nevada; MGM: The Lion meows

Posted on October 31, 2013 by David McKee

Helped by a wee bit of late-August slot revenue, Nevada posted a 7% revenue gain this month, for a $959 haul. The Strip performed spectacularly, up 13%, and Downtown edged 2% higher. Lake Tahoe vaulted 23% but Reno fell off 2%. Nor did Laughlin (-5%) or Mesquite (-2% and with 100% less Randy Black) fare especially well. On the Las Vegas Strip, baccarat win rose 49%, with the house playing very lucky, as baccarat drop was but 8% higher. Warned casino analyst Steven Wieczynski, “The positive baccarat volume performance was offset by generally underwhelming slot volumes.” Blackjack also provided a $29 million boost and $337 million was bet on Continue reading →

Posted in Boulder Strip, CityCenter, Current, Downtown, Lake Tahoe, Laughlin, Macau, Mesquite, MGM Mirage, North Las Vegas, Reno, Sheldon Adelson, The Strip, Tourism, Transportation, Wall Street | Comments Off on Falling upward in Nevada; MGM: The Lion meows

Good news, bad news for Suffolk Downs; Wynn shaken down

Posted on October 31, 2013 by David McKee

suffolk downsCongratulations, Suffolk Downs. You’ve been approved as a casino bidder — but the voters might nix the whole shebang. Although Suffolk Downs is bereft of an operator, having given Caesars Entertainment the heave-ho. (The latter remains in deep water, financially, making noises about bankruptcy.) The Massachusetts Gaming Commission says that Suffolk can keep looking for a replacement, even as a Nov. 5 referendum looms. The MGC chided Suffolk Downs for its naivete regarding Caesars and it’s a point well taken. How far does one’s head have to be in the sand to have missed the Terrance Watanabe scandal, for instance? It cost Caesars a $225K fine in Atlantic City, after all.

Leaving that aside for a moment, whoever teams with Suffolk — be it Hard Rock International or Rush Street Gaming — will have to abide by the compact that Suffolk crafted in tandem with Caesars. They’ll have to render like Caesar, you might say.

Unfortunately for Suffolk, all this moving and shifting may be moot: A WBUR-FM poll, shows voters Continue reading →

Posted in Foxwoods, Hard Rock International, Harrah's, Horseracing, Internet gambling, Massachusetts, Mohegan Sun, Neil Bluhm, Oklahoma, Problem gambling, Regulation, Sheldon Adelson, Steve Wynn, Tribal | Comments Off on Good news, bad news for Suffolk Downs; Wynn shaken down

Breaking Boyd

Posted on October 31, 2013 by David McKee

Boyd Gaming missed Wall Street expectations last quarter, posting negative earnings of eight cents a share, compared to the $0.01/share samstown-pic2profit the Street was anticipating. Deutsche Bank‘s Carlo Santarelli blamed “softer-than-expected net revenues … below the low-end of management’s guidance.” Las Vegas-area cash flow was up almost 9% and revenue +1% but offset by higher operating expenses. “Given we believe a key component of the bull case story of the stock has been a LV Locals recovery buoyed by operational efficiency improvements, we believe today’s results will cause many to revisit this thesis,” wrote Santarelli. Borgata cash flow exceeded management’s guidance, but Midwest and Southern properties took a 14% plunge.

The Peninsula Gaming-derived properties also undershot expectations. Joseph Greff of J.P. Morgan said the results “aren’t Continue reading →

Posted in Atlantic City, Boulder Strip, Boyd Gaming, Current, Downtown, Environment, Greenwood Racing, history, Iowa, Louisiana, Maryland, MGM Mirage, Ohio, Penn National, Wall Street | Comments Off on Breaking Boyd

Let us now praise Scott Walker

Posted on October 30, 2013 by David McKee

For someone often regarded as brash and confrontational, Wisconsin scott-walker1Gov. Scott Walker (R) has been mediating an intrastate tribal dispute in a judicious, deliberative fashion. He’s extended the timeline on his yea-or-nay decision, the better to sort through varying figures (including some fuzzy math) submitted by the tribes in dispute. The Menominee Tribe wants to invest $808 million to create a racino at Kenosha‘s Dairyland Greyhound Park. Gargantuan Potowatomi Bingo in Milwaukee says that would cost it $158 million in lost revenue in Year One alone. The Ho-Chunk Nation would lose a smaller chunk of revenue: $19.5 million over the same time period.

(The Menominee would partner with Hard Rock International and the design rendering looks suspiciously like it was hastily repurposed from Hard Rock’s rejected Massachusetts casino.)

“The Menominee estimate the Milwaukee losses, in a report filed with Walker’s office, to be about $62.6 million over four years while suggesting no Ho-Chunk losses,” reports the Milwaukee Business Journal. Walker is skeptical that a comparable threat would emerge from Continue reading →

Posted in Dining, Economy, Illinois, The Strip, Tribal, Wisconsin | Comments Off on Let us now praise Scott Walker

Case Bets: New York, Wynn, Packer, Atlantic City & Reno

Posted on October 30, 2013 by David McKee

In a positive omen for Tuesday’s casino vote in New York, shares of Castkills-based Empire Resorts (NYNY) leapt 29%, closing at $5.30/share. The company hopes to bring casino gambling to the Concord Hotel, although jostling for the probable two Catskills resorts is expected to be fierce. Even rival developer Louis Cappelli is hedging his bet, holding onto a million shares of Empire, which is majority owned by Kien Huat Realty III Limited, a Malaysian company … better known to some as Genting Group.

Steve Wynn won a round with Kazuo Okada when Continue reading →

Posted in Atlantic City, California, Current, Genting, Harrah's, Illinois, International, James Packer, Melco Crown Entertainment, New York, Reno, Slot routes, Station Casinos, Steve Wynn, Tribal | 4 Comments

Quote of the Day

Posted on October 30, 2013 by David McKee

Loveman fluffy“After we received a report from the [Massachusetts] Gaming Commission staff that said we had not demonstrated Caesars’ suitability, our parents in the project — our parents, that’s some deep psychological issue, I suppose — our partners in the project asked us to withdraw, and we agreed.” — Caesars Entertainment CEO/Chairman/President Gary Loveman, during yesterday’s 3Q13 earnings call.

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

Loveman must go

Posted on October 30, 2013 by David McKee

Suffolk Downs executives are trying to move on after severing ties with Caesars Entertainment. At their suitability hearing with the Massachusetts Gaming Commission (which is expected to approve them), they played dumb. They not only pleaded ignorance of Arik Kislin‘s dubious business ties, they claimed ignorance of the Terrance K. Watanabe scandal. The latter not only made national headlines, it earned Caesars a $225,000 fine in New Jersey, even though the events in question took place on the Strip.

suffolk-downs-casino-thumb-520x301-92384jpg-7517a160501587b8Suffolk Downs is also sticking to revenue projections of $1 billion/year, of which Boston mayoral candidate Bill Walczak scoffingly said, “This casino will have to clear more revenue than any casino in the Western Hemisphere.” Be that as it may, voters will almost certainly have to vote on Suffolk Downs without knowing who will be running its casino. Whomever it turns out to be will be bound to Continue reading →

Posted in Colorado, Maryland, Massachusetts, Regulation, The Mob | 1 Comment

Fail, Caesar!

Posted on October 29, 2013 by David McKee

IMG-20130507-00006In ancient Rome, if you’d lost the equivalent of three-quarters of a billion dollars (worse: $761 million and change, plus flat revenues), you’d swig some hemlock, open a vein or maybe fall on your sword. But the only thing more alien to Caesars Entertainment than atonement is accountability. So CEO/President/Chairman Gary Loveman proclaimed, “We made considerable progress on the execution of our strategy and achieved key milestones on many projects during the quarter despite continued softness in the domestic gaming business.” You’d think Caesars had improved business when its losses actually widened from a trifling half-billion dollars a year ago.

On the Las Vegas Strip, Caesars really did do better (up 5%), but many of its gains were already cannibalized by Continue reading →

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