While we wait for own interview with Circa owner Derek Stevens to appear in Casino Life magazine (soon, we promise), we’ll shamelessly piggyback off David Ross‘ excellent Stevens profile in Global Gaming Business. Ross digs up some interesting architectural details about Circa. Like Aria before it, it will have its HVAC system under the floor, rather than in the ceiling. This saves both BTUs and money, as it requires a lot more energy to push conditioned air down than to let it emerge from beneath you. Stevens was also ahead of the Covid-19 curve when he planned an intensive UV-filtration system for Stadium Swim, which promises some of the cleanest pool water in Las Vegas (a relative compliment, we fear, standards being so low, but we praise Stevens for his initiative).
“And to those who say we don’t need this stuff and we should leave people to take their own risks, I say these risks are not our own. The tragic reality of having Covid is that your mild cough can be someone else’s death knell.”—British Prime Minister Boris Johnson, on having to reimpose Coronavirus-related restrictions. (And just when the U.K. casino industry thought it was over the hump …)
Vital Vegas author Scott Roeben made big news over the weekend with a countersuit against the Sahara for attempting to stifle freedom of the press. If you have a few days to spare, you can read the 111-page filing in its entirety. To cut to the chase, attorney Marc Randazzo (a seasoned First Amendment warrior), writes that “Sahara is here on the novel theory that even though Vital Vegas stated this [“rumor is unconfirmed”] in its article, since it stated it in paragraphs following a photograph, that changes the otherwise non-defamatory article into a defamatory one. This theory is so novel and strange that it does not appear to have ever been brought in the United States before.” Indeed Sahara owner Alex Meruelo may have really stepped into a bear trap because Roeben is now free to unleash all manner of damaging information he had previously kept on the Q.T. (see page 5 of the lawsuit for a damning example, with even worse in the “Exhibits” section).
“[P]eople used to look to the United States with a degree of reverence. For democracy. For our moral leadership in the world. Supporting science and using technology to travel to the Moon. Instead, what’s really been exposed is how anti-science we’ve become.”—Baylor College of Medicine emergency physician Dr. Cedric Darkon the Covid-19 pandemic.
Global Gaming Business, hardly a canary in a coalmine, must think the Covid-19 pandemic is pretty horrendous for it to blast a special report today that Las Vegas Strip casinos are “barely surviving” at the moment. No conventions, scant air traffic, no shows = trouble. Or, as the headline puts it, the Strip is “battening down the hatches.” Global Market Advisors economist Steve Gallaway minces no words: “until airborne tourism and the convention trade return to something like pre-pandemic levels, the market will remain a shadow of what it was.” Pre-pandemic levels? That could be quite a wait. It took over a decade to regain what was lost in the Great Recession of 2008. Currently, tourism is 40% of what it was before we heard the word ‘Coronavirus.’
Visitor volume did ramp up significantly from June to July (August numbers are not available yet) and gaming win is at 52% of pre-virus levels. “The people we’re seeing come to Vegas are your core gamers,” says Gallaway. “Counts are down, but they’re getting good revenue out of those gamers. It shows that operators are working their databases and it shows that gamblers want to gamble.”
No surprise, the Culinary Union has endorsed the Joe Biden/Kamala Harris ticket. Now we’ll see what shape the Culinary political machine is in after being depleted by Coronavirus. The union is boasting that it “drove turnout” during the 2020 Nevada primary—and never mind that it got totally skunked by the forces of Bernie Sanders. No U.S. Senate seats are up for grabs for this year but the Culinary is backing an all-incumbent ticket in the House, save for rural District 2, where it’s asking voters to depose Rep. Mark Amodei (R) in favor of Patricia Ackerman. Not gonna happen. Meanwhile, Reps. Dina Titus (D), Susie Lee (D) and Steven Horsford (D) continue to enjoy the Culinary’s fealty. The union is also backing all Silver State ballot questions this year, along with an extensive litany of legislative and judicial candidates. Whether you take the Culinary’s advice is, of course, your decision—but get out and vote. As the late John Lewis said, it’s the most powerful nonviolent weapon in democracy.
“It’s more striking what hasn’t changed—the hyper-nationalism, the leader cult, the idea that this is a leader who is going to save us, the fear of white population decline, anti-feminism, anti-left, things like that. None of those things have changed.”—New York University history professor Ruth Ben-Ghiaton the persistence of fascism.
Wanna catch Covid-19? Head for the Cosmo. “The Cosmopolitan of Las Vegas topped reported locations of possible COVID-19 exposures in June, July and August in Southern Nevada, according to state disease investigation analyses,” reported the Las Vegas Review-Journal. The renegade resort ranked #1 in five discrete studies. Said Northeastern University‘s Samuel Scarpino, “Clearly the data paint a picture of hotels and casinos being high risk for transmission.” Perhaps fearful for tourism, the Nevada Department of Health & Human Services‘ Shannon Litz rushed to spray the fire. “This is more a reflection of general community spread than a specific issue with the employer or business,” she told the R-J. The resort itself sent out a cloud of PR blather, displaying no contrition for its poor showing. Basically, if you’ve caught Coronavirus, there’s a 1-in-4 chance in Las Vegas you got it at a casino. How do you like those odds?
“You have good genes, you know that, right? You have good genes. A lot of it is about the genes, isn’t it, don’t you believe? The racehorse theory. You think we’re so different? You have good genes in Minnesota.”—Donald Trump
Slammed by a double-whammy of hurricanes, Louisiana was accordingly unfortunate in gambling revenue, which plunged 32% to $148.5 million. The only market spared was Baton Rouge (-12%). Lake Charles bore the brunt of Hurricane Laura and the numbers reflected it. Golden Nugget and L’Auberge Lake Charles both grossed $18.5 million, down 37.5% and 34% respectively. Delta Downs‘ $11 million was a 23% and Isle Grand Palais, which was ripped from its moorings by the storm, sank 44% to $4.5 million. New Orleans casinos took it pretty hard, too, with Harrah’s New Orleans clinging to its top spot with $12 million, plummeting 49.5%. Boomtown New Orleans was 21% off the pace with $8 million and Treasure Chest grossed $7 million for a 26% slippage. Amelia Belle was down 29.5% to $2.5 million but Fair Grounds racino was only 17% lower, albeit at $3 million.
Faced with evidence of money laundering at Marina Bay Sands, CEO Sheldon Adelson is being proactive and hiring a local firm to investigate $1 billion in fund transfers from high rollers to third parties. It’s frankly in Adelson’s interest to do so, as he got zapped with a combined $11 million in state and federal fines for AML violations at The Venetian, back in mid-2016. True, that was during the Obama administration and Sheldon now has friends in high places who can quash investigations—but the Singapore government might be quite a different animal and their cops are already on the case. Las Vegas Sands was already being sued by a Marina Bay Sands customer who says that almost $7 million of his money “was transferred to other gamblers without his knowledge.” Sands reimbursed him and everybody agreed not to say anything more. As for the other transfers, Sands says they were conducted in accordance with clients’ intent.
Sands has been cleared by Singaporean authorities in one AML case, although “there were weaknesses in MBS’ casino control measures pertaining to fund transfers.” You’d think Sands would have learned after the 1986 imbroglio. The new affair will surely spark scrutiny of junket operators, the primary beneficiaries of the controversial transfers. Sands’ own investigators have caught junketeers with their hands in the cookie jar before. Adds Bloomberg, “The client lawsuit sparked scrutiny by a slew of authorities into how Marina Bay Sands handled and monitored third-party transfers. The transactions, when authorized, are legal and used by groups of wealthy gamblers in Asia to pool winnings and losses at different casinos.”
“You have to be the lion in the path of anarchy. See, I’m not going to submit to racism, I don’t care whose version of it I happen to come in contact with; I’m not going to submit to superficial thinking about people; I’m not going to submit to any ideas that reduce the rich possibility of human life.”—Stanley Crouch, jazz critic and all-around contrarian, who died yesterday at age 74.
Gambling win was down only 17% in Massachusetts last month for a statewide gross of $71 million. Plainridge Park posted $10 million for an average of $273/win/slot/day (it was $325 the previous August), dropping 16% on 16% less coin-in. So far it’s tracking down 27% for the year, versus JP Morgan analyst Joseph Greff‘s -35% projection. MGM Springfield slipped 12% to $18.5 million, with slots down 10% ($178/win/slot/day) and tables off 17%. Encore Boston Harbor, gobbling up the Bay State with 60% market share, grossed a whopping $42.5 million, threatening Plainridge Park with $238 win/slot/day for a $23 million haul, while tables won $4,301/table/day. Slot handle was $305 million, down 15%. Considering all the hurdles Massachusetts casinos have had to overcome we’d say these results are better than expected.
The American Lung Association was quick to praise MGM Resorts International for its smokeless Park MGM and up the ante: “We applaud the decision of MGM Resort [sic] International for adopting a smokefree workplace policy for Park MGM and NoMad Las Vegas. This policy will protect the health of workers and customers from dangerous secondhand smoke and e-cigarette emissions. Most of MGM Resort [sic] International’s U.S. properties are now at least temporarily smokefree, and we encourage them to make all U.S. properties smokefree permanently.” We can hope, can’t we?
“The evidence and the science show that Donald Trump has badly damaged the U.S. and its people—because he rejects evidence and science. The most devastating example is his dishonest and inept response to the COVID-19 pandemic, which cost more than 190,000 Americans their lives by the middle of September.”—Scientific American, endorsing a presidential candidate for the first time ever in its 175-year history.
Internet gambling stole the spotlight in Atlantic City last month, as it shot up 114% from August 2019. Even with the renewed option of brick-and-mortar play, New Jersey punters are clearly enamored of online action and it’s here to stay. The i-gaming haul was $88 million, dominated by Golden Nugget‘s 32% market share, with Borgata a plucky second at 23%. Terrestrial casinos grossed $199 million last month, 31% off the previous year’s pace. With no poker available, table revenues were still down only 28%, compared to -31% at the slots. Borgata may be back, baby, but it was singularly unfortunate where Lady Luck was concerned: Slot win plunged 44% and the tables tumbled 38%. The Caesars Entertainment quartet was pretty average, with tables -26% and slots down 26%. That said, CZR properties are tracking down only 28% against JP Morgan analyst Joseph Greff‘s -45% forecast.
Star performer was Ocean Casino Resort, beating the crowd-limit odds with a 1.5% increase to $24.5 million. The Golden Nugget may have cleaned up online but it was taken to the cleaners terrestrially, plummeting 55% to $9 million. Borgata was, as usual, the top grosser with $40.5 million but that was a 44% dive. Second-place Hard Rock was off only 14.5% for $33 million. Resorts Atlantic City grossed $14 million, a 26.5% declivity. Getting back into the Caesars foursome, Harrah’s Resort was down 31% to $21.5 million, company favorite Caesars Atlantic City grossed even less—$21 million in a 31.5% slippage, Bally’s Atlantic City ground out $15.5 million for a better than average -17.5% and Tropicana Atlantic City notched an even $20 million, falling 37%.
Yesterday it was Las Vegas Sands‘ turn with JP Morgan gaming analysts and the company was full of surprises. Little of its commentary had to do with the Las Vegas Strip, about which it was “downbeat,” what with conventioneers and high rollers being in short supply. “LVS hasn’t pursued the relatively less profitable drive-in customer, and doesn’t look to pivot from its group/convention focus as management still expects a full recovery here,” wrote analyst Joseph Greff, adding that layoffs had nonetheless been “limited.” Off the burner entirely is Sands’ planned U.S. shopping spree for casinos. This was “made under the presumption that assets would be deeply mispriced during the crisis, but at this point, they look to have largely recovered.” (Good news if you are a holder of said assets.) Instead Sands will look to pick up additional properties “where it already has a presence,” i.e., Asia.
The company’s focus was mainly on Macao and Singapore. In the latter, it expects recovery to be “gradual” rather than dramatic “as China will be prudent in allowing the number of visas to increase gradually over time.” As with MGM Resorts International, customer interest is said to be strong, especially in premium mass-market play, although Sands hopes its bread-and-butter players return in time for the rollout of the Londoner and Four Seasons Tower Suites. The company actually expects better cash flow in Macao this year than last. Locals and their slot play are keeping Marina Bay Sands “on the road to profitability,” despite zippo overseas patronage. But it won’t be business as usual until Malaysia and Japan reopen themselves to Singaporean traffic.
Caesars Entertainment CEO Tom Reeg sat down with JP Morgan analysts to discuss the state of the Roman Empire. In a sentence, better than you might expect. On the Las Vegas Strip “weekend demand has been strong, but weekday demand remains a challenge,” reported analyst Daniel Politzer. Labor Day was good for business, with 95% occupancy. Meeting restrictions and “slowly grinding” air traffic impede midweek business for the moment. The revenue mix is normalizing, with gambling down from 50% during summer toward the usual 35% or 40%. Sports betting is bringing in a different-from-usual customer, and both terrestrial sportsbooks and online betting are profitable. Still, Reeg seems to have few illusions as to what he’s up against. “Management sees its most formidable competitors as FanDuel and DraftKings (proven ability to convert DFS into sports betting customers), PENN/Barstool (strong/engaged Barstool audience), and possibly MGM/GVC … CZR feels good about its market access, will continually be upgrading/improving its technology, and aims to give more detail on its plan for its brand/unlocking value by year-end.”
MGM Resorts International had mooted as late as an end-of-the-year target for resuming business at Park MGM. However, the date has been advanced to Sept. 30 and, yes, Park MGM will be smoke-free. In a subplot, Four Seasons reopens five days earlier. MGM is neither making heavy weather of the smokeless-casino novelty nor playing coy about it. Says Anton Nikodemus, prexy of the company’s Las Vegas casinos, “As we looked toward our reopening, we identified an opportunity to be responsive to recurring guest demand for a fully non-smoking casino resort on The Strip.” We don’t know how heavy the demand was but reckon it must have been substantial for MGM to respond in this fashion. It also gives Park MGM a truly unique market niche, an appealing one for many of us. The proof won’t be in the pudding for a few quarters but we’re keeping our fingers crossed and wishing Park MGM the best in its new incarnation. No word on the Park Theater yet but casino executives are probably having the existential discussion of whether to bring back entertainment as a loss-leader or not at all … until Covid-19 is vanquished.
