Park MGM re-closes; Gaming’s 2020 mandate

Posted on November 4, 2020 by David McKee

No, it’s got nothing to do with the smoking ban. Well, maybe. MGM Resorts International, as we mentioned yesterday, has decided it has too much hotel-room inventory going to waste on the Las Vegas Strip. As part of an austerity move, Park MGM is the first casualty, going dark (except for restaurants) from noon Mondays to noon Thursdays. Why Park MGM? It’s the only MGM Strip property to be operating in the red, making it a natural and inviting target for cutbacks. “While we do not currently expect the mid-week closures to remain in effect past December, we will continue evaluating business levels to determine how long Park MGM’s mid-week hotel closures remain in effect,” said marketing viceroy Anton Nikodemus. Interesting that MGM is, in effect, writing off New Year’s Eve, traditionally a booming period for business. But these are not traditional times in which we live.

Now that gaming has run the table of every single referendum in yesterday’s election, the question becomes: Who benefits? Well, consumers obviously. But what’s Wall Street‘s take? JP Morgan analyst Joseph Greff burnt some midnight oil and came to the following conclusions …

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Posted in Caesars Entertainment, Churchill Downs, Colorado, Dining, Economy, Election, Golden Gaming, Hard Rock International, Iowa, Louisiana, Maryland, MGM Resorts International, Nebraska, North Carolina, Penn National, Racinos, Regulation, Rush Street Gaming, Taxes, The Strip, Tourism, Tribal, Virginia, Wall Street | 1 Comment

Election Special: “The biggest political event ever”

Posted on November 4, 2020 by David McKee

An anonymous British financier will have to wait another 24 hours to find out if his $5 million bet on Donald Trump comes up a winner. He’ll pocket $15 million from Curaçao bookies if it does. The flutter, made after consultation with Trump insiders (who had better crystal balls than Biden ones) is said to be the largest political bet ever made. What’s more, there was heavy movement toward Trump (75% of bets at Ladbrokes) in the waning days of the presidential campaign. Paddy Power did even more: 93% pro-Trump bets. Ladbrokes’ Jessica O’Reilly said, prior to the vote, “[Joe] Biden looks home and hosed according to the bookies and pollsters, but even at the eleventh-hour punters are continuing to back Trump at the odds on offer.” Bets on Biden wouldn’t yield much if he won: $1,986,903 on a $1.3 million wager, so the ‘red wave’ makes sense. GVC‘s supremo of political betting, Matthew Shaddick said, “It is twice as big as 2016, easily making it the biggest political event ever.”

We spoke recently with BetMGM Vice President of Trading Jason Scott and he thinks the U.S. gaming industry is missing out on something huge: “I’d love to see the first [state] to allow betting on elections. The 2016 U.S. presidential election was the largest betting event in the world, ever, and it will get doubled next week by the 2020 election … Those like us that are doing the right thing, betting in a regulated market, in a way we’re disadvantaged, so I’d love to see elections get regulated.”

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Posted in Arizona, Colorado, Culinary Union, Donald Trump, DraftKings, Election, FanDuel, International, Internet gambling, Louisiana, MGM Resorts International, Nebraska, Nevada, Politics, Racinos, Sheldon Adelson, South Carolina, South Dakota, Sports, Tribal, Virginia | 2 Comments

Baker’s casino crackdown; NFL playoffs diluted

Posted on November 3, 2020 by David McKee

No more all-night gambling for you, Massachusetts! Seeing a rise in Covid-19 cases, Gov. Charlie Baker (R) has curtailed casino hours. They have to close by 9:30 p.m. until further notice. If you’re buying booze (essential for Election Night) or reefer, you also have to have your transaction wrapped up by 9:30 p.m. One retailer welcomed the moderation of Baker’s action, saying, “We have perishable produce and staff holding on by their fingernails.” Another two- to three-week shutdown would have been fatal to many businesses. It can also be expensive to stay open: A restaurateur who had a Coronavirus-positive result among her staff had to have everyone tested, a $12K cost.

Encore Boston Harbor responded by shutting down its hotel. Wynn Resorts said “The resort will adjust its operating hours to be in compliance with new regulations. We are currently analyzing the impacts of these new directives on our operations and are making adjustments accordingly.” (Similar sentiments were uttered at MGM Springfield.) Calling the Baker edict “another setback” for casinos, the Boston Globe elaborated, “The facilities are already facing limits on their capacity and the types of games they can offer, and the industry’s workforce has declined markedly over the past several months. Now, the casinos, which are designed as 24-hour attractions, will have to figure out new protocols to help them open and close securely each night.”

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Posted in DraftKings, Economy, FanDuel, Health, International, Massachusetts, MGM Resorts International, Regulation, Rush Street Gaming, Sports, Sports betting, Wynn Resorts | Comments Off on Baker’s casino crackdown; NFL playoffs diluted

VOTE!

Posted on November 3, 2020 by David McKee

It’s the most important thing you’ll do all year. ‘Nuff said.

Another item from the Too Much, Too Soon file: MGM Resorts International is mulling partially re-closing hotels at some of its Las Vegas Strip properties. The company is heavily exposed in terms of room inventory and CEO Bill Hornbuckle seems to be having second thoughts about that ‘cheaper to reopen’ strategy after third-quarter revenues cratered, resulting in a $535 million loss. Speaking to investors, Hornbuckle played his cards close to the vest. “There are certain amenities, certain towers, certain brands potentially that could face closure from mid-November—give or take—through the holiday season.” He added “We’re keeping a close eye on it as we go forward.” The likeliest scenario would be midweek shutdowns like those at Encore and Palazzo. No specific MGM properties have been nominated but shuttering hotels would be one way to tip the laws of supply and demand in your favor.

Posted in Economy, Election, Las Vegas Sands, MGM Resorts International, The Strip, Wynn Resorts | 1 Comment

Macao gets a boost; Sisolak’s October surprise

Posted on November 2, 2020 by David McKee

“Encouraging” isn’t what you usually say about a 75% plunge in revenue. But in Macao, where casino win has been virtually nonexistent this year it’s cause for dancing in the streets. To be pedantic, revenues were down 72.5% but an improvement on the -90% metrics of recent months. It is, said JP Morgan analyst Joseph Greff, “an encouraging sign that China’s easing of prior travel curbs and visa pause is starting to generate improving visitation and revenue recovery.” Premium-mass play is said to have been strong, “meaningfully” better than VIP action, good news for Sands China and Melco Resorts & Entertainment, not so much for VIP-centric Wynn Resorts. “We’d note that this performance is consistent with recent positive earnings conference call comments from LVS and MGM,” Greff wrote, adding that casinos are reaching the cash flow break-even point. While the market is down 81.5% year to date, the consensus estimate for October was slightly worse than the final result.

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Posted in Architecture, Caesars Entertainment, China, Economy, G2E, Hard Rock International, Health, International, Japan, Las Vegas Sands, Macau, Melco Resorts & Entertainment, Nevada, New York, Oklahoma, Real Estate, Regulation, Sheldon Adelson, Taxes, The Strip, Tribal, Wall Street, Wynn Resorts | Comments Off on Macao gets a boost; Sisolak’s October surprise

Quote of the Day

Posted on November 2, 2020 by David McKee

“He has three areas he makes money, Las Vegas, Singapore and Macao. If I have to sell an asset to pay for supporting the other two, if I have three horses and I need to kill one to feed the other two, it would be Las Vegas. It just doesn’t generate as much.”—former Sheldon Adelson consigliere Alidad Tash, on the decision to sell the company’s Las Vegas Strip assets.

Posted in Economy, Las Vegas Sands, Macau, Sheldon Adelson, The Strip | 1 Comment

United States of Adelson

Posted on November 2, 2020 by David McKee

If you put your money on a Donald Trump upset special, you might still cash in big. Bloomberg reports that the Biden-Harris campaign is blowing it in battleground states like Pennsylvania and Florida. The short version is that black and Latino voters are staying home in droves, little has been done in the form of old-fashioned retail politics and the Biden team is relying on the discredited Hillary Clinton playbook. Hopefully vote-counting will be relatively swift and we’ll be put out of our uncertainty in 48 hours or so. (Axios reports that Trump plans to declare victory regardless of the ultimate outcome.) If you’ve been inundated with pro-GOP campaign commercials, you can thank Sheldon Adelson, who is richer than God. It must be nice to be able to simply buy a government of your own choosing, right Shel? We’d all do it if we had that kind of diñero. ($32 billion net worth.) As Center for Responsive Politics director Sheila Krumholz told the Guardian, “Somehow, promises to change the culture in Washington or ‘drain the swamp’ fade away when the usual mega-donors line up to throw millions at the election. It’s a seasonal amnesia.”

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Posted in Atlantic City, Cretins, Culinary Union, Donald Trump, Election, Golden Nugget, Hard Rock International, Health, Internet gambling, Marketing, MGM Resorts International, Mohegan Sun, Nevada, Ocean Resort, Politics, Sheldon Adelson, South Carolina | 2 Comments

Sean Connery, 1930-2020

Posted on October 31, 2020 by David McKee
James Bond (Sean Connery) at the Chemin de Fer table at the ‘Le Cercle’ casino.

Sir Sean Connery, the man who did more than anyone to raise awareness of baccarat, has died in his sleep at age 90, in the Bahamas. That’s the way to go. In death, as in life, Connery was the epitome of savoir faire. Nobody dealt cards from a baccarat shoe with more cool authority and Connery’s blend of elegance, watchfulness and suppressed violence was unique. Just look at his performance as a rebellious coal miner in Martin Ritt‘s underrated The Molly Maguires and marvel at how much Connery’s eyes say in a largely silent role. Connery may have won the Oscar for The Untouchables but he’d already earned it many times over, especially for his collaborations with director Sidney Lumet, particularly The Hill and The Offence. But it is as James Bond that Connery will be best remembered, especially since he defined our perception of the spy-about-town. As Pierce Brosnan (my second-favorite 007) put it, “Connery was always my favorite Bond, and I’d be lying if I said I didn’t feel the pressure to measure up to him.” Have a Covid-safe Halloween by turning off the lights, drawing the shades, and programming a double-feature of Goldfinger and Thunderball. (Or, for a fix of classic Las Vegas, try the otherwise disappointing Diamonds Are Forever.) As Connery said of Ian Fleming’s secret agent persona, “It’s with me ’til I go in the box.” And for far longer, sir.

Posted in Current, history, Movies | 1 Comment

Quote of the Day

Posted on October 31, 2020 by David McKee

“There’s no place to hide.”—Ohio Gov. Mike DeWine (R) on Covid-19.

Posted in Current, Health, Ohio | 1 Comment

MGM “unsurprising”; Penn outperforms

Posted on October 30, 2020 by David McKee

Analysts at JP Morgan were blasé about MGM Resorts International‘s 3Q20 report, setting their price target at $22/share. Wrote Joseph Greff, “We remain Neutral rated as we continue to see a slow recovery on the LV Strip, a market that is dependent on both airlift (still down significantly y/y) as well as convention and group-related travel, which will likely be weak for the next several quarters and whose recovery is dependent—like everything else in our coverage universe—on COVID-19 therapeutics.” That’s no small problem, as MGM relies on the Las Vegas Strip for 55% of its cash flow. As Greff elaborated, “the pandemic has had an outsized impact on its fundamentals, particularly on 2020 and 1H21 conventions and tradeshows that have recently been cancelled and/or delayed, resulting in upper-30% mid-week occupancies.” That’s a lot of empty rooms and goes toward supporting our too-much/too-soon hypothesis.

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Posted in California, Charity, Churchill Downs, Colorado, Conventions, Detroit, Dining, Economy, Illinois, Indiana, Internet gambling, Kentucky, Macau, MGM Resorts International, Penn National, Pennsylvania, Slot routes, Sports betting, The Strip, Tribal, Virgin Hotels, Wall Street | 2 Comments

Quote of the Day

Posted on October 30, 2020 by David McKee

“The 2020 election is the most bet-on event in history. It surpassed the 2016 election earlier this month. There’s been over $260 million, so far, laid down. Again, for scale, that exceeds what was wagered on the last Super Bowl, Kentucky Derby, NBA Finals, and the Mayweather-MacGregor fight, put together. It’s absolutely remarkable given that betting activity is only going to increase with just five days still to go. With such a huge amount already laid down, it would take a monumental bet or a monumental series of bets to really shake up these odds with just over 100 hours to go.”—OddsCheckerUS spokesman Pete Watt.

Posted in Election, Internet gambling | Comments Off on Quote of the Day

At long last, Circa; Las Vegas Strip, empty city

Posted on October 29, 2020 by David McKee

Yesterday was Circa Day, the opening of the most-anticipated Las Vegas casino in a long time (yes, even before Aria). Much of that buzz was due to owner Derek Stevens‘ canny mastery of PR but a spiffy new Downtown casino is an event unto itself. Between Global Gaming Expo and three feature assignments for Casino Life (plus a lingering flu) we’ve been too slammed to stay on top of matters Circa, so we’re hoping Vital Vegas will have an on-the-scene report later today. Reporter Susan Stapleton took the three-story escalator to Stadium Swim, part of a picture-laden tour of the new resort. Hotel rooms aren’t open yet but there’s plenty to see, including the monster sports book, the casino (of course) and Stevens’ pride and joy, Garage Mahal, the first such structure in Las Vegas designed with taxis and ride-sharing vehicles in mind.

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Posted in Architecture, Boyd Gaming, Derek Stevens, Donald Trump, Downtown, Downtown Grand, DraftKings, Economy, Entertainment, FanDuel, Golden Nugget, Health, Illinois, Las Vegas Sands, Law enforcement, MGM Resorts International, Penn National, Pennsylvania, Sports betting, Terry Caudill, The Strip, Tourism, Vdara Death Ray, Wall Street | 1 Comment

National Cat Day

Posted on October 29, 2020 by David McKee

Whenever I’m stumped for content I can always count on our kitten Cupid, a little Miss Know-It-All, for input, often unsolicited. Here’s to your friendly felines this National Cat Day.

Posted in Animals, Pets | 1 Comment

Buy, sell, lease, buy, sell, lease …; Election: What’s at stake

Posted on October 28, 2020 by David McKee

In an elaborate transaction, Caesars Entertainment sold Tropicana Evansville to Gaming & Leisure Properties Inc. for $340 million, after which the lease on the casino will revert to Twin River Holdings, which will pay $28 million a year for the privilege in addition to the $120 million it paid Caesars for the operating agreement. Caesars gets the cash, Twin River the casino. This presumably will begin to assuage the concerns of Indiana regulators over the fact that CZR controls 60% of the gaming revenue in the state and must divest assets accordingly. CEO Tom Reeg whined recently that this was unfair and there was nothing wrong with an oligopoly—understandable, as his company gets to pocket all that money. Anyway, Caesars got an excellent price for its asset, boding well for future Hoosier State sales, especially if it puts its lucrative racinos on the market.

Not done with buying and selling, Twin River unloaded Dover Downs to GLPI for $144 million. Considering that Twin River paid $120 million for a dog like Jumer’s Casino Rock Island, we think it could have held out for a better price for Dover Downs. At least Twin River got a break on the rent, only $12 million/year. Caesars also quietly transferred leases of Isle of Capri Bettendorf and Isle of Capri Waterloo to GLPI for $6 million in cash and a negligible increase in rent. So there’s been a lot of shuffling of the CZR deck. GLPI’s two owned-and operated casinos beat expectations, generating $34 million in revenue and $11 million of cash flow. The REIT reported that its collecting 99% of its rents, despite the economy, and that its casinos are seeing a “strong rebound,” as well as cash-flow generation higher than pre-pandemic levels, presumably due to cuts in operating costs.

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Posted in Caesars Entertainment, Colorado, Cretins, Delaware, Donald Trump, Downtown, Election, GLPI, Indiana, Louisiana, Maryland, Racinos, South Dakota, Sports, Sports betting, The Strip, Twin River, Virginia | 2 Comments

Strip drags down Nevada; Station, MGM upgraded

Posted on October 28, 2020 by David McKee

Gambling revenue in September on the Las Vegas Strip plunged 39% to $355 million, driving the worst of a 22% decline in Nevada win. By contrast, Reno and Lake Tahoe were beacons of hope, up 3.5% and 36% respectively. Downtown fell 21.5% to $52 million and most locals markets still looked dicey. North Las Vegas tumbled 27% to $20 million, the Boulder Strip edged up 2% to $76 million, miscellaneous Clark County nosed upwards 2% to $114 million, while Laughlin ceded a mere 3% to $39 million. Utah giveth and Utah taketh away: Mesquite leapt 11.5% to $11.5 million, while Wendover slipped 11% to $17 million. That’s the raw data we have at this point.

As for the Strip, slot win was down 27% on 25.5% less coin-in, and 35% less table game wagering led to a 30% revenue drop (a bit of luck for the house). Baccarat was another story. The house got absolutely clobbered. Wagering could be said to be strong, only 11.5% less than the year previous. But players took the casinos for an 88% obliteration of revenue. As the old adage goes, one bad month at baccarat can ruin your whole quarter.

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Posted in Boulder Strip, Colorado, Cretins, Downtown, DraftKings, Economy, Indiana, Lake Tahoe, Laughlin, Law enforcement, Mesquite, MGM Resorts International, Nevada, New Jersey, North Las Vegas, Reno, Sports betting, The Strip, Wall Street, Wendover | Comments Off on Strip drags down Nevada; Station, MGM upgraded

Vegas: Too much, too soon?

Posted on October 27, 2020 by David McKee

Did Las Vegas reopen too swiftly and too soon? Has it, in fact—as we asked and Las Vegas Sands President Rob Goldstein heavily implies—jumped the shark? It has for 1,200 Las Vegas Strip workers. In addition to 828 already-reported sackings at the Tropicana Las Vegas, another 180 at Park MGM Theater and 164 at MGM Grand Garden have been pink-slipped. Bottom line: Big events aren’t coming back anytime soon. Put those Lady Gaga tickets back in the drawer. If you think we’re pessimistic, try Trop GM Mike Thoma for a dose of doom and gloom. “Significant drags on our business will likely continue for the foreseeable future,” he wrote. “We could not have anticipated when our properties would be allowed to reopen and how restrictive the new operating conditions would be, and the negative impact this would have on business volumes.”

We’re not sure we buy that. Manager Penn National Gaming, by waiting until September to reopen the Trop, should have had a good picture of the competitive landscape. And if didn’t now what conditions would be and how they’d impact business, Penn just wasn’t paying attention. 236 M Resort employees will get a Penn Christmas present in the form of termination on Dec. 21 or within the following fortnight. Help us through the holiday season and then out the door with you. About the only good news is that 17 Trop dealers marked for termination got an extension, presumably because business improved.

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Posted in Caesars Entertainment, Donald Trump, Economy, Full House Resorts, Health, Las Vegas Sands, M Resort, Marketing, MGM Resorts International, Movies, Penn National, Sheldon Adelson, Sports betting, William Hill, Wynn Resorts | 1 Comment

Quote of the Day

Posted on October 27, 2020 by David McKee

“Donald [Trump]—I appreciate the free publicity for Borat! I admit, I don’t find you funny either. But yet the whole world laughs at you. I’m always looking for people to play racist buffoons, and you’ll need a job after Jan. 20. Let’s talk!”—in which POTUS learns not to pick fights with Sacha Baron Cohen of Borat Subsequent Moviefilm. Cohen always gets the last word.

Posted in Donald Trump, Movies | Comments Off on Quote of the Day

Adelson abandons Vegas; Boyd salvages bad quarter

Posted on October 27, 2020 by David McKee
Quitter.

Sheldon Adelson may have flung $75 million at deciding who’s going to run the country for the next four years but he’s giving up on America. News broke yesterday that Las Vegas Sands is shopping Venelazzo for six billion. We’ve thought many unflattering things about Sheldon over the years but we never figured him to cut and run when the going got tough. At least he made shareholders happy: LVS stock hopped 5% on news of the sales feelers being put out. “Investor attention has focused on its Macau operations of late, but a sale in Nevada may point to trouble for Las Vegas casinos,” reported Seeking Alpha.

According to Credit Suisse‘s Ben Chaiken, the $6 billion price tag implies a 12X cash-flow multiple, steep for a Las Vegas Strip megaresort in these economically straitened times but not unreasonable. Added Chaiken, “this could make sense given [the] portfolio was trading below this even pre-Covid-19. Not clear who would buy,” he understated. Ah yes, there’s the $6 billion question. “These properties are trophy properties, they’re in great locations, there’s a lot of development going on so whoever buys the properties will have something great to work with,” said one pundit. But who has the big bucks to spare? And what will Sheldon do with the $6B if he gets it, “Macow [sic] is coming back, Singapore is coming back, maybe they’re looking into other Asian countries, and this sale will generate cash that will allow them to do that,” speculated one spelling-challenged analyst.

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Posted in Boyd Gaming, Conventions, Current, Downtown, DraftKings, FanDuel, G2E, Las Vegas Raiders, Las Vegas Sands, Macau, Marketing, MGM Resorts International, Rush Street Gaming, Sheldon Adelson, Singapore, Sports, Sports betting, The Strip, Wall Street | 3 Comments

Carrot Top returns …

Posted on October 26, 2020 by David McKee

… and there’s some good news, too. Other, better shows are reopening on the Las Vegas Strip, including David Copperfield and Jabbawockeez. (MJ Live resumes at The Strat on Nov. 4, a day we’ll need something to take our mind off the news.) Of course, there’s being done in anti-Covid bubble and here’s what that will look like:

Borgata has reopened its poker room and, from the looks of things, business is booming, and plexiglas dividers are masks are omnipresent. Mind you, some players are observing the mask mandate only nominally, as shown in The Press of Atlantic City but we’re counting on President Melonie Johnson to crack down on the scofflaws.

Posted in Atlantic City, Entertainment, Golden Gaming, Health, MGM Resorts International, The Strip | 1 Comment

Sands: “Awful and apathetic”; Sheldon’s deep pockets

Posted on October 22, 2020 by David McKee

Despite ” taking into account a slower than anticipated rebound during the Golden Week period earlier this month and a generally slow visitation boost and revenue recovery from the (still early) resumption of the” Individual Visa Scheme in Macao, analysts at JP Morgan are sticking by Las Vegas Sands. In a pre-earnings note, Joseph Greff did concede a $7 reduction of the share price target to $50. However, “From here, we see year-over-year market-wide growth accelerating and showing sequential improvements (and, honestly, not much has to happen for this to occur)” in China. Basically, Greff is saying things have gotten as bad as they’re going to, Sands will bottom out soon, and everything will start getting better.

That said, Greff had a sheaf of questions for LVS brass, including: “Why isn’t Macau benefitting from Beijing forbidding travel to foreign gaming markets? How bad is VIP junket liquidity? What are the latest trends in mass vs. VIP, during Golden Week … and since? Is one segment meaningfully outperforming the other?” He characterized investor sentiment toward Sheldon Adelson‘s company as “awful and apathetic,” adding, “We get it. Numbers coming down is frustrating and causing incremental investor fatigue … All we need is investors to feel that less bad trends will continue and stocks could move higher against sentiment that is negative to apathetic. Macau is the one subsector that really hasn’t bounced from the bottom.”

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Posted in Australia, China, Donald Trump, Economy, Election, International, Las Vegas Sands, Macau, MGM Resorts International, Politics, Singapore, The Strip, Tourism, Wall Street, Wynn Resorts | 2 Comments