Third quarter at PNK: 3Q09 numbers are out for Pinnacle Entertainment and the comparisons cover the spectrum from very good (Lumiere Place up 19%), good (+5% at L’Auberge du Lac) and lousy (-13% aboard Boomtown New Orleans). Once a free-spending company, Pinnacle is now demonstrating the virtues of thrift. The combined budgets for its River City (greater St. Louis), Sugarcane Bay (on Lake Charles) and Baton Rouge projects total $998 million … slightly more than Station Casinos spent on Red Rock Resort alone, which one S&G subscriber pithily dubbed, “a tourist property for locals.” Come to think of it, wouldn’t Station creditors be better served by a Pinnacle takeover than by further Fertitta Bros. stewardship? Pinnacle’s practices draw a rave review from J.P. Morgan‘s Joseph Greff: “We believe, at current levels, investors are getting River City (as well as its Sugarcane Bay and Baton Rouge projects, which we have not modeled) for free.”
Pinnacle is also patching up the hull of its President riverboat, hoping the old gal can eke out a few more years on the Big Muddy. (The President brings in so little revenue that Pinnacle’s we’re-staying-put-indefinitely explanation is difficult to accept at face value.) It’s a damn shame for would-be Missouri casino owners that they have to rely on Show-Me State regulators being able to wrest the President‘s license away in court — but that’s what was to be suspected when voters (unwittingly?) cast ballots that gave Pinnacle and Ameristar Casinos a protected oligopoly.
Do you write off your gambling losses on your income taxes? A proposal in Pennsylvania would have made that easier, in the form of monthly win-and-loss statements, issued at casino expense. Unfortunately, the idea’s backers are coming at it from a “pro-family”/anti-pathological gambling slant. Whereupon the casino industry got its dander up and raised all manner of semi-spurious privacy concerns. I strongly suspect the opposition is driven more by laziness and cheapness (imagine having to hire people to tally up and generate all those statements) than principle. Too bad, as it’s a practical idea that might make April 15 slightly less dread-ful.
Casino markers? Horrors! Keystone State moralists offer poorly reasoned opposition. That’s fine. Pennsylvania gamblers who can’t get casino credit can always go to Atlantic City instead. This is a rare win-win situation.
Harrah’s loses $1.6 billion and it’s just “another ho-hum event” to Forbes, even as it notes that Harrah’s Entertainment may soon be drawing down its cash reserves. It tells you how badly the casino sector is struggling when staying just one step ahead of the bill collector is a hailed as a triumph of ledger-demain. One of the beauties of being the CEO of a private equity-held casino company is you’re the only guy on the board of directors who knows where the car keys are kept. Thus, no matter how badly your LBO has turned out, you’ve got the Leon Blacks and David Bondermans of the world at your mercy.
Sands reports a loss. Missing analyst projections and losing $123 million was an unfortunate 0-for-2 for Las Vegas Sands. The company whined that it was impaired by $74 million in “increased income taxes.” Well, boo frigging hoo. When your two growth markets of choice are either steeply taxed (Macao) or usuriously so (Pennsylvania) and you seek even greater exposure there, this is inevitable. If Sheldon Adelson wants low taxes, maybe he should build in Atlantic City instead.
The upside of a recession. Following a doleful news bulletin about economic malaise at Caesars Windsor, here’s the flip side. The border-crossing hassles that have driven business away from Windsor are helping Detroit casinos ride out the recession. Value-oriented messages and new product don’t hurt, either. Given how badly the Michigan economy has been hammered, a 2% revenue decline constitutes a silver lining amidst a very dark cloud. When you consider the tax benefit to the state, then-Gov. John Engler‘s frenetic exertions to keep casinos out of Motown look doubly stupid in retrospect.
“It’s not legal, and anyone who thinks this is legal is wrong. They are guilty of a misdemeanor if they do this.” — Steve Wynn, who’s not a lawyer 
… here’s a foretaste of what we hope to see on the red carpet tonight. That, obviously, is Cheryl “The Body” Burke on the right, though Kym’s none too shabby in the curvature department, is she?
That’s clearly the best (and boldest) course of action when faced with a threefold threat: table games in Pennsylvania, work finally underway at SugarHouse (left) in Philadelphia, and slow-but-steady movement toward opening a racino at Aqueduct, near New York City. By the time the first of that trifecta comes into play, it will be too soon for some of Boyd’s Las Vegas properties to take up any slack from Borgata. Cash flow in the locals sector was -31% and net revenue -17%, driven down by decreased consumer spending, which had a concomitant effect on room rates, with August described as “incredibly slow.” Morgan expects an “elongated” recovery in this sector, whch translates as: not in 2010.
Back when Harrah’s Entertainment was surrendering to the cold, clammy embrace of Texas Pacific Group and Apollo Management, the bean counters assured CEO Gary Loveman that Harrah’s could carry almost $30 billion in debt and sustain a 20% revenue decrease. 
“The environment in China is much more free than here. Do they feel they are being deprived of their human rights? No.” — Steve Wynn, doing 
What’s wrong with this picture? (Well, there’s nothing wrong with that one.) The media night for Wayne Newton‘s new Tropicana show, Once Before I Go (could we have that in writing?) looks more like a Dancing with the Stars tour stop. In addition to former contestants Sabrina Bryan and Jennie Garth, four DWTS regulars — including Cheryl Burke (left) and Kym “Tina Sparkle” Johnson — will be on hand.
The Vegas Club is very much on people’s minds, as another reader asks:
Ah, a Phyllis Davis shout-out. You’re speaking our language. And, yes, that VEGA$ release really snuck by, didn’t it? In a classic case of the blind following the blind, local TV stations take their cues from the newspapers. The various Greenspun-owned organs have been slashing staff at a fearsome rate, so it’s understandable that they’d miss it.