Third degree for Cantor; Suffolk moves ahead

Cantor Gaming finds itself in the midst of a giant pincer movement, under investigation by at least five federal agencies and the Nevada Gaming Control Board. When ex-bookie-in-chief Colbert got a slap on the wrist from the feds, I figured he was singing like a canary and, sure enough, he’s giving a stool pigeon serenade, according to the Wall Street Journal. The federal action appears to be part of a rolling crackdown on money laundering on the Las Vegas Strip. (Don’t forget that Cantor affiliate Las Vegas Sands settled with the G-Men for a relatively modest fine and was praised for its cooperation, to boot.)

Cantor’s attitude is not unlike that of the Warren Commission: Colbert acted alone. But there’s always been a filmy coating of sleaze surrounding Cantor, which got into Nevada action via a self-penned bill that got through the Lege without sponsorship. The conception of Cantor may have been immaculate but its cleanliness is very much in doubt these days.

We’ve had a Neil Bluhm sighting at Suffolk Downs, meaning that Rush Street Gaming is in the hunt to supplant Caesars Entertainment as the neil-bluhmracino’s operator (if Suffolk gets the nod from the Massachusetts Gaming Commission). Emissaries from Hard Rock International have also been seen at the track. But whereas Rush Street is fully vetted and approved, Hard Rock would have to resume the approval process that was so rudely interrupted by West Springfield‘s rejection of the casino company.

It’s not believed that the Downs itself will have any trouble getting licensed, with Gary Loveman out of the picture, which Continue reading

Posted in Cantor Gaming, Economy, Hard Rock International, Harrah's, Macau, Massachusetts, Neil Bluhm, Regulation, Sheldon Adelson, Steve Wynn | Comments Off on Third degree for Cantor; Suffolk moves ahead

MGM: A class act in Maryland; Sands’ convenient poll

MGM MD 1MGM Resorts International‘s presentation last week to the Maryland Video Lottery Terminal Location Commission  lacked the smell of fear that Penn National Gaming exuded last week. Alluding to Penn’s offer to forfeit all profits and to creative accounting, MGM CEO Jim Murren called it “a very clever headline. But I spent too much time on Wall Street to be snookered by that one.”

His jibe drew laughs from the commissioners, which doesn’t bode particularly well for Continue reading

Posted in Cordish Co., Greenwood Racing, Internet gambling, Maryland, MGM Mirage, Penn National, Regulation, Sheldon Adelson, Uncategorized | Comments Off on MGM: A class act in Maryland; Sands’ convenient poll

Positive auguries in New York

Seal_of_New_York.svgSupporters of more casinos in New York State have been a little anxious about sentiment in New York City, where the fate of the constitutional amendment is expected to rest. They may be breathing a sigh of relief today after a New York Times poll showed that 60% of Gotham voters favored the measure. It was helped by a considerable NIMBY factor: When asked if they wanted a casino in the Five Boroughs, support fell to 50%. And only 13% considered themselves “very likely” to visit one of the upstate casinos. Support for Proposal One was thought to be softest in New York City (and the Times had editorialized against it), but this poll makes the well-funded campaign look like an Election Day shoo-in.

Those with a sentimental attachment to the Borscht Belt — such as New York Gov. Andrew Cuomo (D) — should be pleased, as that’s one of the areas targeted for casino-fueled renewal.Two of the would-be players are Continue reading

Posted in Dining, Downtown, Economy, Election, Foxwoods, Macau, Mohegan Sun, New York, Sheldon Adelson, Tamares Group | Comments Off on Positive auguries in New York

MGM’s, Wynn’s odds worsen in Massachusetts

MACAU-HO/

Did anyone envision a scenario whereby all three of Massachusetts‘ casinos could be tribally owned? It could happen. Leaving aside the chance of expanded gambling in Connecticut, the prospect that MGM Resorts International will be weighed in the balance and found wanting now seems very real. I could make the case for why MGM deserves a second chance (and have done so vis-a-vis New Jersey) but Pansy Ho is still a minority shareholder in MGM Grand Paradise and isn’t going anywhere anytime soon. That alone could sink MGM’s chances, never mind how MGM got into the Macanese market. Neither it nor Wynn Resorts is going to give up Macao for Massachusetts, although the metaphorical dossier against either company is slimmer than that against Caesars Entertainment was.

Bay State regulators’ goal is to have scrutiny “more rigorous at every level than any other jurisdiction in the United States,” according to Massachusetts Gaming Commission Chairman Stephen Crosby, challenging the regulatory cojones of Nevada and New Jersey. Now, while it is sadly unrealistic to expect driven-snow purity in the business world, it’s a vexing question at just how much misbehavior one should wink. (Asked Crosby, “What if the laws in Macao permit things the laws in Massachusetts would not permit?“)

Wynn Resorts would seem to have the least — some squabbles with Kazuo Okada excepted — to fear. Yet Steve Wynn has already publicly bridled at the scrutiny and gotten Crosby’s back up: “The law makes it clear the burden is their burden to prove that they are suitable. That’s the world Steve Wynn lives in. He is going to have to comply with our standards and he is entitled to his own opinions about what we are doing.”

By comparison, Mohegan Sun‘s biggest issues are traffic volume and water usage. Neither Crosby nor his fellows on the MGC are supposed to Mohegan Palmer 2have a dog in the fight. However, if MGM is disallowed, the commission could always choose Cordish Gaming‘s Leominster slot parlor — on the grounds that it will yield the greatest tax benefit, as appears will be the case — opening the door for Penn National to resume its courtship of Springfield, then choose between it and the Mohegans in April. The southeast region, meanwhile, has yet to draw a marquee-name developer. There are certain to be jilted suitors in Massachusetts, but I see no reason that state-approved players like Penn, Mohegan, Cordish and Greenwood Racing should be left on the outside looking in.

Although MGM and Foxwoods are not directly competing in Massachusetts, the MGM moniker is coming off Foxwoods Resorts Casino. CEO Scott “Woody” Butera had to go out and spin this as a positive development. Uh huh.

I don’t know if Caesars’ Britney Spears production show will be a success. But it’s certain to drive off Planet Hollywood‘s vast Somali player base.

Posted in Cordish Co., Entertainment, Foxwoods, Greenwood Racing, Harrah's, Macau, Massachusetts, MGM Mirage, Mohegan Sun, Pansy Ho, Penn National, Regulation, Steve Wynn, The Strip, Tourism, Tribal | Comments Off on MGM’s, Wynn’s odds worsen in Massachusetts

Isle gets some love; Second chance in New York

A great pick.” That’s what Seeking Alpha says about Isle of Capri Casinos. Like so many regional operators, it hasn’t been posting lights-out islelogonumbers lately but its 16-casino portfolio makes it a bargain play for some. “It’s hard not to love the simplicity of the business mode,” writes Seeking Alpha, noting that the stock has been “essentially flat” after a steep plunge in 2011. Heavily invested in riverboats, Isle is especially vulnerable to seasonal disruptions from flood waters. A combination of heavy promotional allowances in a weak economy are also blamed for Isle’s lack of Wall Street curb appeal.

Profit margins at Isle Cape Girardeau, though, are on a two-quarter growth spurt and Lady Luck Nemacolin is well positioned between the Pittsburgh and Morgantown markets. Seeking Alpha deems Isle’s debt Continue reading

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Boyd gets ‘F’ on report; Disney’s double gamble

“Boyd is a highly leveraged casino play that has no exposure to high growth Asian markets.” With those words, Seeking Alpha concludes a severe assessment of Boyd Gaming, an investment upon which it frowns, boyd-gaming-200despite being at a five-year high. Wall Street is not fond of Boyd and Seeking Alpha‘s analysis makes it clear why. It cites 1) “its high level of indebtedness,” which leaves it vulnerable to economic adversity; 2) a 13:1 debt-to-equity ratio*; 3) “interest payments [that] have more than consumed operating income”; 4) a 2018 “maturity wall” on its debt; 5) a “simply ugly” balance sheet, “forcing it to operate solely to pay back creditors”; 6) forward trading that is too far out of alignment with the company’s rate of growth (58% vs. 2%); 7) “Online gaming continues to be an area of high potential that has been slow to materialize.”

New Jersey sports betting is, best-case scenario, two years away. And Boyd’s devaluation of Borgata to $880 million is described as Continue reading

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Quote of the Day

Wynn_BG1“They’ve got a piece of property that they can’t use. Massachusetts has got a piece of property that’s dirty and they can’t use. I’m the damn fool that wants to come and spend a billion and two or three hundred million dollars, paying the state money, giving jobs to people in town. Whose career is dependent on what is a mystery to me. All I know is I work for this company and I only give a damn about this company.” — Steve Wynn, on his obligations — or lack thereof — to Everett.

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The importance of being Steve Wynn; Sheldon’s fan club

steve-wynn“Even the Red Sox aren’t that popular in Everett,” says Steve Wynn, alluding to recent poll numbers. Heady stuff. So, while he comes down off Cloud Nine, let’s look at a pretty impressive 3Q13 — if not as boffo as Las Vegas Sands‘ — for Wynn Resorts. Revenue from Macao rose 10%, while the Las Vegas Strip resorts eked out a 1% increase. Wynn had an interesting explanation for the latter phenomenon. Competition for DJ talent is stiff, he said, driving up the price of talent (J.P. Morgan analyst Joe Greff pointed the finger of blame at Hakkasan). I wonder if that’s the first time high-priced DJs have ever factored in a Wall Street conference call.

Wrote Deutsche Bank‘s Carlo Santarelli, ” we think the results were modestly better than expected, though no true surprise,” adding that the door was still open for a year-end dividend. Still, he liked what he saw enough to Continue reading

Posted in Economy, Entertainment, Hard Rock International, Macau, Massachusetts, Pennsylvania, Regulation, Sheldon Adelson, Steve Wynn, The Strip, Wall Street | 2 Comments

Quote of the Day

“[B]asically these states are asking us to come and spend billions of dollars. Now if we were any other business, they would stand on their head and spit steve-wynn-1wooden nickels to get billions of dollars invested from any other business. But we find ourselves being treated in many respects as if they’re doing us a favor. … If I was any other businesses and I was willing to spend the kind of money, create the kind of jobs that these states have requested, we would have the red carpet rolled out for us and the governor and everybody else would be delighted to talk to us. But if you are in the gaming business, there’s sort of a crummy presumption that you might be unsavory. And that burns me up, I tell you the truth … Being an investor in America today is tough.” — Steve Wynn, railing against East Coast regulators in his latest conference call.

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New casino in Alabama; Potential new scrutiny for Caesars; Second thoughts for Walker?

Alabama Attorney General Luther Strange is throttling the life out of the Cotton State’s electronic bingo industry. But, thanks to tribal sovereignty, the Poarch Band of Creek Indians has been able to this to its advantage. When Wind Creek Wetumpka Casino & Hotel opens, the tribe will have 6,620 VLTs scattered across three facilities (one of which will be retired eventually), over a third of them in its impressive-sounding new casino, which comes complete with a shark tank. (Default on that marker at your own peril!) Meanwhile, Strange hasn’t given up on trying to put the Creek out of business. He’s pursuing a lawsuit that was moved to federal court, a venue traditionally sympathetic to tribal interests.

As unlikely as it would have seemed a week ago, Caesars Lovemans big diceEntertainment‘s precipitate withdrawal from Massachusetts is setting off a muted domino effect. While Baltimore Mayor Stephanie Rawlings-Blake still has full confidence in the company’s ability to finish and open Horseshoe Baltimore, the Boston debacle and a Treasury Department investigation could complicate matters. “We are gathering information and will give these matters the attention they deserve,” ominously stated the Maryland Gaming Control Agency. At least Gary Loveman (pictured) can say he’s got the biggest pair of dice in town. (Suffolk Downs, meanwhile, is moving forward as though it had never heard of Caesars.)

Perhaps the Menominee Tribe made its case after all. Today was the date appointed for Gov. Scott Walker (R) to rule on the tribe’s casino application. But Walker Continue reading

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War of words in N.Y.; Double standard in Illinois

After keeping a low profile for most of election season, pro-casino forces sprang into gear, rolling out a bevy of TV ads. In an attempt to neutral Lhotapotential hostility downstate, one commercial points out that New York City‘s two mayor candidates, Bill de Blasio (D) and Joe Lhota (R, left) both favor gambling expansion. Gov. Andrew Cuomo (D) continues to distance himself from the campaign, “taking an extremely quiet stance,” as the Buffalo News puts it. When confronted on it, he said, “You can’t be any more linked to it than I am.” Good on you, guv, but it would be better if you didn’t have to be practically coerced into giving public statements of support. But, as he said, “This is about television commercials. This is about direct mailings, and that’s how this campaign is going to be run and won or lost.” Opponents are financially outgunned by are hitting back hard with anecdotal evidence of rampant pathological gambling and overstated economic benefits.

And in the newspaper pages. That gray eminence, The New York Times, weighed in this week with a predictably anti-casino editorial. Its arguments were so rote that the author could have penned them in his sleep. Legalized casinos are bad economic policy was the editorial’s case, using Continue reading

Posted in Atlantic City, Current, Detroit, Economy, Election, Illinois, New York, Politics, Problem gambling, Regulation, Slot routes, Taxes | Comments Off on War of words in N.Y.; Double standard in Illinois

Quote of the Day

gansevoort-lv-exterior-rendering-4_3_rx512_c680x510“Interesting time for joke-telling, given the fact this deal fell through because of a Gansevoort partner being tied to Russian organized crime. But, hey, what’s a little underworld connection between friends.” — Vital Vegas, commenting on Gansevoort Hotel Group‘s official — and oddly lighthearted — announcement of its divorce from Caesars Entertainment.

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Slots and torts; Menominee don’t quit; Caesars scapegoats Suffolk

Geoff_FreemanIf you’ve probably seen, if there’s anything the manufacturing sector of the gaming industry likes to do better than make new slot games is to sue one another for patent infringement. The fun may be coming to an end. Rep. Bob Goodlatte (R-VA) has introduced legislation intended to deter patent litigation. It already enjoys the endorsement of American Gaming Association President Geoff Freeman (left), who’s clearly going to be a more high-profile figure than was Frank Fahrenkopf. What’s in the bill? Losing litigants would have to pay court costs — a big deterrent right there. Vendors could also take on the defense of third-party customers who get sued for using Brand X. So-called “low quality patents” would be nixed, broadening rules already applied to the financial-services industry, and all the parties standing to benefit from a patent would have to be disclosed. Google and Yahoo are in favor of the bill but Microsoft and Apple are against it. It will interesting to see where gaming’s tech players fall in line.

The Menominee Tribe keeps trying for that casino compact in Wisconsin and its promises are getting richer and richer. Now it would pay the state 7.5% of gross revenue, so that the Potowatomi and Ho-Chunk tribes could pay less — and offset revenue declines suffered by 0ther tribes. That could get pretty expensive. In return for Continue reading

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Has Sheldon Adelson lost it?

Sheldon pashaLast night, Sheldon Adelson went to mind-boggling extremes and into the realm of the sort of rhetoric one associates with some of the worse regimes of modern history, advocating a unilateral, first-strike, nuclear attack on Iran. “Then you say,See! The next one is in the middle of Tehran. So, we mean business,” he (or that thing on the back of his head) crowed. “‘You pick up your cell phone and you call somewhere in Nebraska and you say, ‘OK let it go.’ So there’s an atomic weapon, goes over ballistic missiles, the middle of the desert, that doesn’t hurt a soul.”

(At least Sheldon has the foresight to spare potential customers of Venetian Tehran.)

Executives at Las Vegas Sands weren’t long to see that Continue reading

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Caesars tries to change the subject; Penn makes its case

Loveman speaksAs Caesars Entertainment skulks away from Massachusetts, tail between legs, a campaign of manufactured outrage continues to be mounted on its behalf. At its baseline is an attempt to minimize the reasons why the Massachusetts Gaming Commission was poised to drop-kick Caesars. Ken Adams parrots the agreed-upon narrative in a new column. To hear people from Gary Loveman to Adams tell it, it was a capricious decision made on the basis of a gossip column item about the suddenly infamous Arik Kislin, nothing more.

It’s quite a bit more, as John L. Smith explains, than a boldfaced item amidst society chatter. Kislin was a problem waiting to happen and Caesars was too arrogant to see otherwise. But then there’s Continue reading

Posted in Harrah's, Horseracing, Internet gambling, Maryland, Massachusetts, MGM Mirage, Penn National, Problem gambling, Regulation, Stanley Ho, The Mob | Comments Off on Caesars tries to change the subject; Penn makes its case

Parx: Pay as you go; Muted rapture in California

Parx Raynham 1Parx Casino in Raynham, Massachusetts, will cost $277 million. Parx has $231 million in the kitty. How does the company propose to make ends meet? It will erect a temporary slot facility while the permanent one is built. This temporary slot parlor will have to generate $46 million, so that Parx numbers pencil out and possibly to cover any cost overruns.

And then there were two. Only tail-dragging Revel Resort and the Atlantic Club Hotel have now failed to sign up with an Internet gambling provider. Even Atlantic City‘s worst-performing casino, Continue reading

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One scandal in 141 seconds

For those of you who want to catch up quickly on the Florida dragnet that snared dozens of Internet betting parlors in a scandal, here’s a one-shot primer.

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Case Bets: Caesars, Ceylon, Cosmo and clubbing

CAESARS-ENTERTAINMENT-LOGOIt’s G-Day plus four and questions continue to mount about Caesars Entertainment‘s partnership with the Gansevoort hotel chain. In particular, what didn’t the company’s compliance not know about Arik Kislin and when did they not know it? Suffolk Downs might be excused for not performing its due diligence but what’s Caesars reason? How couldn’t they have seen this problem coming?

In the meantime, Caesars is making nice with a federal grand jury that is investigating potential improprieties at Caesars Palace. The Financial Crimes Enforcement Network seems to be working its way down the Strip, having exacted a $47 million fine from Continue reading

Posted in Cosmopolitan, Culinary Union, Entertainment, Harrah's, International, James Packer, Macau, Sheldon Adelson, The Mob, The Strip | Comments Off on Case Bets: Caesars, Ceylon, Cosmo and clubbing

Santa Claus smiles upon Borgata; No reprieve for Suffolk

kris-kringle-and-sidekick-rudolphChristmas came early for Boyd Gaming and Kris Kringle wore the judicial robes of the Tax Court of New Jersey. “A silver lining to Atlantic City‘s fall from grace for casino operators: the tax bills are lighter when the going gets tough,” Seeking Alpha wrote. Borgata had been seeking a writedown in its assessed value to $870 million, but was taxed at $2.26 billion. Yesterday’s ruling means that Boyd is due nearly $49 million in refunds for 2009-10, although whether Atlantic City can pay is an open question. “Devastating” boyd-gaming-200was a well-chosen characterization of the effect on Atlantic City’s finances, especially with Boyd and MGM Resorts International gearing up to revisit their 2011-12 valuations, too. As Deutsche Bank‘s Carlo Santarelli wrote, “Where the money will come from however is anyone’s guess.” He did think the revaluation could retroactively add another $14 million a year to Borgata’s cash flow.

Suffolk Downs didn’t get its wish for a mulligan on the Nov. 5 ballot question that polls East Boston on its preference for a casino (or not). Unsurprisingly, Secretary of State William F. Galvin said that Continue reading

Posted in Atlantic City, Boyd Gaming, Hard Rock International, Harrah's, Maryland, Massachusetts, MGM Mirage, Mohegan Sun, Neil Bluhm, Penn National, Taxes, Wall Street | 1 Comment

Newton’s ship sinks; A land (of plenty) Down Under

Wayne+NewtonBad things have a way of happening to Wayne Newton‘s property. Most recently, his yacht sank at its Lake Mead berth. This inspired the Las Vegas Review-Journal to lead its story with, “Mr. Las Vegas’ yacht sleeps with the fishes.” His 65-foot houseboat was observed to be down by the stern last Friday and sank within 20 minutes. The news undoubtedly cast a pall over Newton’s Bora Bora vacation. Throw in financial disputes involving his Cadillac and private jet, and Newton just doesn’t have good vehicular karma.

Cairns, the resort capital of the Australian state of Queensland is slumping badly in terms of hotel occupancy. Developer Tony Fung‘s counterintuitive solution is to flood the market with Continue reading

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