Caesars postpones casino sale; D.C. sports betting bombs

Posted on August 17, 2020 by David McKee

One Caesars Entertainment casino of many on the Las Vegas Strip remains theoretically for sale … but put your checkbooks away for the time being. While new CEO Tom Reeg has to make good on his promise to realize hundreds of millions of dollars in savings, he has decided now’s not the time to go to market with a Strip casino. What’s more, he’s right. The fizzled Tropicana Las Vegas sale and Skyvue auctions are clear indicators that this is a terrible juncture to be hawking Strip real estate, especially when you’re looking for at least a $500 million payday.

“As soon as we get to the other side of the virus and to more normal business levels, you should expect we’ll be thinking about that,” Reeg told investors, pushing the timeline of the sale out as much as 18 months. This must have greatly disappointed companies like Twin River Holdings that were all in a lather about having a Las Vegas Boulevard address. While hinting at further job cuts, Reeg said hotel occupancies were around 50% midweek and 70% on weekends (which are going to become even more important in the Las Vegas economic picture). Perhaps the best news of all for Caesars was that it only lost $100 million in the second quarter, an achievement bordering on the miraculous.

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Posted in Architecture, Arkansas, Atlantic City, Caesars Entertainment, Election, Full House Resorts, Genting, Health, history, Las Vegas Sands, Mississippi, Movies, Ocean Resort, Oklahoma, Penn National, Real Estate, Regulation, Reno, Sahara, Singapore, Sports betting, Tribal, Unite-Here | 1 Comment

Miller dares Adelson; Room rates reel

Posted on August 17, 2020 by David McKee

Late last week American Gaming Association President Bill Miller did something radical about Internet gambling. He discussed it. On a conference call. With reporters. Unprompted. You have to understand that ‘Net betting has been a no-fly zone for the AGA for years, ever since Miller’s predecessor, Geoff Freeman, was chastised by Sheldon Adelson. However, gaming’s present economic calamity means all options are on the table, especially with more Americans turning to the Internet as attendance at physical casinos is either A) impossible or B) a hassle. It’s only legal in six states, if you count poker-only Nevada, but others are looking at it—as is Wall Street.

“Online betting in the U.S. is in the first chapter—maybe even just the foreword—in terms of the growth story,” said Chris Grove, analyst with Eilers & Krejcik Gaming. “There simply aren’t as many opportunities for growth on the retail casino side.” Both Rush Street Gaming and Tilman Fertitta are preparing to go public with their online-gaming operations. “We realized that we have an online gaming business that is worth a lot more than we thought it was worth,” Tilman told the Wall Street Journal and even Tom Reeg is making noises of a similar ilk. Meanwhile, Penn National Gaming‘s Internet-gambling revenue kept going up even after its terrestrial casinos reopened.

It’s a growth economy and the AGA can hardly keep its head in the sand any longer. When the market cap of DraftKings ($12 billion) exceeds that of the two largest casino companies, people are bound to take notice. Miller was careful to avoid any outright endorsement, saying the issue should be “decided on a state-by-state basis.” But who ever thought the AGA would go that far again? Adelson may be the 800-pound gorilla of the AGA but Internet gambling is the elephant in the middle of the room and can no longer be ignored … and Adelson, for all his billions, is only one dues-paying member of the association. The Internet genie is out of the bottle and Miller is to be commended for tacitly acknowledging that fact.

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Posted in AGA, Caesars Entertainment, Card rooms, Economy, Geoff Freeman, Internet gambling, Las Vegas Sands, Maverick Gaming, MGM Resorts International, Mohegan Sun, Penn National, Rush Street Gaming, Sheldon Adelson, The Strip, Tilman Fertitta, Wall Street, Washington State, Wynn Resorts | Comments Off on Miller dares Adelson; Room rates reel

Quote of the Day

Posted on August 17, 2020 by David McKee

“The success of the influenza campaign depends upon your co-operation. Intelligent people will—but others MUST co-operate. Remember that one person can do more damage who does not observe the rules than 20 who do; hence see to it that they are observed.”—The Age newspaper, Las Vegas, 1918. Sound familiar?

Posted in Health, history | Comments Off on Quote of the Day

Quote of the Day

Posted on August 16, 2020 by David McKee

“We’re in the middle of a historic pandemic and as many as 40 percent of Americans plan on casting their ballot by mail. If we can’t rely on those ballots getting to where they need to go, we’ve got a serious problem with democracy.”—Patrick Young, leader of a protest at Postmaster General Louis DeJoy‘s house.

Posted in Election | 5 Comments

Storm warnings

Posted on August 14, 2020 by David McKee

Our beloved Postal Service has advised people (quietly) that it may not be able to continue as a going concern: “However, the Postal Service remains concerned that this measure will be insufficient to enable the Postal Service to withstand the significant downturn in our business that could directly result from the pandemic. Under a worst case scenario, such downturn could result in the Postal Service having insufficient liquidity to continue operations.” In addition, postage on mail-in ballots has been hiked from 22 cents to $0.55 AND, in a policy dictated by Postbungler General Louis DeJoy, election ballots will be treated as bulk mail, i.e. very low priority.

What has this to with gambling? Sports ballot is on the ballot in Maryland (definitely) and California (probably). Remember how it just squeaked through by the very slimmest of majorities in Colorado two years ago? A USPS collapse or suppression of vote-by-mail could damn gaming ballot measures in multiple states, risking a reprise (or worse) of the Colorado situation. Speaking of which … the Rocky Mountain State has a ballot question coming up which would raise loss limits (the lowest in the U.S.) and allow new games. We don’t want to see that going down to defeat, do we?

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Posted in California, Colorado, Economy, Election, Entertainment, Health, Maryland, Sports betting, The Mob, Transportation, TV | 3 Comments

The big enchilada

Posted on August 13, 2020 by David McKee

“The Biggest Gaming Opportunity Since Riverboats in the Early ’90s.” That’s how JP Morgan gaming analyst Joseph Greff, a man not given to hype, characterized i-gaming and sports betting today. He described them as “as an emerging and exciting area of growth within US Gaming, with potential to drive significant multiple expansion and value creation for operations within our coverage universe.” How much value? Greff ascribes $17/share of Caesars Entertainment‘s worth of sports betting and Internet wagering. It’s even better for Penn National Gaming: $18/share. Sports betting “is highly competitive and should have a longer road to profitability, while iGaming is generally profitable for operators right now.” Furthermore, “near-term success drivers include brand recognition/customer engagement, first mover advantages, willingness to spend on marketing/customer acquisition, and media/league partnerships.” Said Greff, “the potential growth of this industry should result in emerging companies seeking access to capital … and online/digital companies entering the gaming industry.”

Sports betting currently reaches 41% of Americans, being legal in 23 states and operational in 19 of those. In states where it is online, sports betting via the Internet is overwhelmingly dominant in market share. Greff projects $7.6 billion in sports-betting revenues by 2025 (it was $900 million last year, with four states accounting for almost all the action). “Our $7.6b forecast assumes 13 additional states legalize sports betting over the next several years, bringing the total to 35 (~70%+ of US adult population), though we note this is highly subjective.” Part of that assumption is dysfunctional California, so that’s a mighty big ‘if.’

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Posted in Caesars Entertainment, California, Colorado, Cosmopolitan, DraftKings, FanDuel, Golden Nugget, Illinois, Indiana, Internet gambling, Iowa, Isle of Capri, Las Vegas Sands, MGM Resorts International, Michigan, MTR Gaming, Palms, Penn National, Regulation, Rush Street Gaming, Silverton, Sports betting, The Strip, Tropicana Entertainment, Wall Street, William Hill | 2 Comments

Atlantic City impresses in July

Posted on August 13, 2020 by David McKee

It reopened in somewhat raggle-taggle fashion but Atlantic City is back and did rather better in July than Las Vegas in June (the last month for which we have data, see video below). Borgata made a very delayed re-entry into the market, so we will discount its performance for now. Trends at the Caesars Entertainment quartet were a 31% slide in gross gaming revenue (and slots) and 27% less won at the tables. It outperformed the Atlantic City market as a whole, which was down 47%. But wait, the glass is even more half-full: Sports betting leapt 65%, led by Meadowlands with 48% of market share and Resorts Digital with 28%. Revenues were a very impressive $29.5 million. Internet gambling may be a hard habit for the Garden State to break: Online revenues vaulted 123% to $87.5 million. No prizes for guessing the dominant performer: Golden Nugget with 36% of market share, followed by Resorts Digital again. Remarked analyst Eric Ramsey, “Especially after the last few months, it’s a sobering thought to imagine where the state’s gaming industry would be without online gambling.”

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Posted in Caesars Entertainment, Charity, Economy, Entertainment, Golden Nugget, Hard Rock International, Internet gambling, MGM Resorts International, Mohegan Sun, New Jersey, Ocean Resort, Sports, Sports betting, The Strip, Tourism, Transportation, Virginia | 2 Comments

Vegas, we have a problem

Posted on August 13, 2020 by David McKee

Las Vegas lives and breathes corporate travel and, according to the Wall Street Journal, the post-Coronavirus picture “looks scary … While tourism is making a timid comeback, business travelers are still nowhere to be seen. In the last week of July, itineraries purchased by corporations were down 97% from a year earlier.” No wonder American Gaming Association President Bill Miller is lobbying so hard for a taxpayer bailout of the three-martini lunch. The Global Business Travel Association has crunched the data and reckoned that we’re looking at $2 trillion in lost business worldwide, with little evidence of a comeback in 2021. Meanwhile, Zoom and other online-meeting technologies are making some aspects of business travel redundant, if not obsolete.

“It’s probably a permanent 10%-to-15% impact in the medium- to longer-term,” Sébastien Bazin, CEO of Accor hotel group said. But, as the WSJ notes, business travelers are the high-profit ones for both hotels and airlines: “Corporate fliers make up only 15% of passengers, but 40% of revenues and as much as three-quarters of airline profits in some flights.” And Bazin is, if anything, an optimist. Others are predicting an even deeper falloff in business travel. “In the past three months, 81 earnings calls have referenced a fall in travel expenses and none mentioned an increase, according to transcripts compiled by FactSet.” And, as the conventioneer and trade showman goes, so goes Las Vegas.

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Posted in Uncategorized | 1 Comment

Quote of the Day

Posted on August 13, 2020 by David McKee

“If they don’t give you a seat at the table, bring a folding chair.”—Shirley Chisholm, first Black presidential candidate in American history.

Posted in Diversity | Comments Off on Quote of the Day

Experiencing technical difficulties

Posted on August 12, 2020 by David McKee

We’re experiencing technical issues with S&G. There’s fresh content we can hardly wait to bring you but must ask your indulgence. Thank you.

Posted in Uncategorized | Comments Off on Experiencing technical difficulties

Quote of the Day, revisited

Posted on August 12, 2020 by David McKee

“We have contained [coronavirus]. I won’t say airtight but pretty close to airtight.”—administration official Lawrence Kudlow, on CNBC, February 25, 2020. 164,329 deaths later …

Posted in Health, history | 1 Comment

Indiana, Missouri, Ohio rebound, Illinois not so much

Posted on August 11, 2020 by David McKee

It was back to business as almost normal in Indiana last month. The Hoosier State was only 5.5% 0ff its July 2019 pace, grossing $171 million. (They’ve been open since June 15.) The relative novelty of table games—$5 million—at Indiana Grand and Hoosier Downs didn’t hurt. Nor did an extra weekend day. A rising tide did not lift all riverboats. For instance, Blue Chip (pictured) slid 30.5% to $9 million. Top performer by far was Horseshoe Hammond ($30 million), down 7.5%. The biggest recovery—27%—was at Ameristar East Chicago, which brought in $21 million. The two Majestic Star boats did quite respectably: $7 million (-11%) at Majestic Star I and $4.5 million (-6.5%) at Majestic Star II. Down at French Lick Resort, receipts were $5.5 million, a 34% tumble.

In the southern tier, Indiana Grand led with $23 million, up 6.5%. Caesars Southern Illinois followed with $18 million, off only 2.5%. Belterra Resort slipped 15% to $8.5 million, Tropicana Evansville was down 13% to $11 million, Rising Star‘s $4 million was a 7% slippage while Hoosier Downs grossed almost $18 million, just 2.5% off the pace. Hoosier sports betting was at its best since March, with $71 million in handle. That’s despite only eight days of major-league sports. Had their been a full month of play, books would easily have met or exceeded the expected $90 million. Revenue came in just under $7 million. DraftKings (Ameristar) led online wagering with $33 million, followed by FanDuel (Blue Chip) with $24 million and everybody else very far behind.

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Posted in Boyd Gaming, Caesars Entertainment, Century Casinos, Churchill Downs, Dan Gilbert, DraftKings, FanDuel, GLPI, Hard Rock International, Illinois, Indiana, MGM Resorts International, Missouri, Ohio, Penn National, Sports betting | 1 Comment

Culinary booted from Boulder

Posted on August 11, 2020 by David McKee

We have obtained a memo on Boulder Station letterhead that reads, in part, “Yesterday [August 6] we learned that a majority of Culinary Team Members signed a petition saying they DO NOT wish to be represented by the Culinary Workers Union Local 226 and Bartenders Union Local 165 any longer. We have informed the Union that, in accordance with our Team Members’ wishes, we will no longer recognize or bargain with the Union. We respect the decision of our Team Members and we certainly appreciate the confidence the Team Members have shown us. We look forward to having the same direct relationships with this group of Team Members as we have had with other Team Members.” The letter is signed by General Manager Alan Trantina. What the Culinary Union did to merit this kick in the pants from its constituents is unclear but something severe would appear to be in order.

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Posted in Architecture, Culinary Union, Derek Stevens, Downtown, Health, Las Vegas Sands, Macau, MGM Resorts International, Sports, Station Casinos, Tourism, Wall Street | 1 Comment

Quote of the Day

Posted on August 11, 2020 by David McKee

“There is clearly blatant discrimination taking place in the gaming industry against women. The men that lead can tell story after story of how enlightened and fair they are all day in speeches and at conferences, yet in action after action they will continue to appoint and reward people who are basically just like them.”—former gaming executive and regulator Richard Scheutz.

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When Saharas attack; Trump blasts Adelson

Posted on August 10, 2020 by David McKee

Don’t get on Sahara owner Alex Meruelo‘s bad side. That seems to be the moral of a saga unfolding on the Las Vegas Strip. VitalVegas author Scott Roeben is being sued for $15,000 in lost business, punitive damages, attorneys’ fees plus a gag order after reporting scuttlebutt that the Sahara was gone to close for good this autumn. Meruelo’s suit alleges malice aforethought, always difficult to prove, asserting that “Mr. Roeben, through Vital Vegas, seemingly takes joy in continuing to make false claims.” Meruelo was also irked at a Roeben report that high-roller perks at the Sahara had been revoked. However, he must think the VitalVegas closure report was well-sourced, since 10 John Does (Sahara employees perhaps?) are cited as codefendants. An investigation into their identities is implied to be ongoing. (Roeben attributes his information to “industry sources familiar with the long-troubled casino.”)

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Posted in Alex Meruelo, Donald Trump, Health, Lucky Dragon, MGM Resorts International, Politics, Sahara, Sheldon Adelson, Transportation | 3 Comments

Quote of the Day

Posted on August 10, 2020 by David McKee

“I have become my own version of an optimist. If I can’t make it through one door, I’ll go through another door—or I’ll make a door. Something terrific will come no matter how dark the present.”—Indian poet Rabindranath Tagore.

Posted in Current | Comments Off on Quote of the Day

Quote of the Day

Posted on August 9, 2020 by David McKee

“We wouldn’t be in this mess of uncertainty about the coming school year if the federal government had managed to control the virus; any glimmer of leadership from the president would have gone a long way. Grievances and fear are understandable … When some of my husband’s students told him that they had continued working as cashiers throughout the spring and summer, he said, ‘Wow, that’s so courageous of you.’ He feels that he doesn’t really have anything to show for himself, and he looks forward to the time when he will. Now, contemplating the possibility of teachers striking, he says, ‘Bowing out wouldn’t be a good example to set for our students.'”—ICU nurse Kristen McConnell.

Posted in Health | Comments Off on Quote of the Day

Pinching pennies at Caesars; Glitters at Golden

Posted on August 7, 2020 by David McKee

Anthony Rodio‘s multi-million-dollar revamp of Bacchanal Buffet may well have been for naught. On yesterday’s earnings call the Tom Reeg administration floated the idea of closing all buffets at Caesars Entertainment properties. Expect comps to be sweated until they bleed and to get fewer promotions. Reeg promised that, too. Reported 8 News Now, “Caesars says it has learned lessons that some of its competitors seem to want to ignore. Some things may never return, because in an uncertain future, resorts cannot afford any part of a business that doesn’t turn a profit.” Increases in convention business were described as strong (six months out), including a number of new customers. Caesars is still operating at semi-skeletal levels, with 42% of the workforce idled and three Strip resorts dark. $14.7 billion in debt is offset by $7 billion in liquidity, so Caesars can eke out this pandemic a good while longer.

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Posted in Arizona, Caesars Entertainment, Colorado, Dining, Donald Trump, Economy, Election, Florida, Golden Gaming, Hard Rock International, Health, International, Internet gambling, Louisiana, Marketing, Mississippi, Nevada, Penn National, Pennsylvania, Problem gambling, Seminole Tribe, The Strip, Tourism, Tribal, Wall Street, Wynn Resorts | 1 Comment

Quote of the Day

Posted on August 7, 2020 by David McKee

“At the risk of sounding overly stern: When more than 32,000 of your fellow citizens have died over the course of a single season, you have not won any sort of ‘victory.’ All you have done is come out the other side of a devastating tragedy. Instead of boasting, you ought to be figuring out what you could have done better so that you can do better in case—God forbid—there is a next time.”—Noah Rothman on New York Gov. Andrew Cuomo‘s management of the Covid-19 pandemic.

Posted in Health, New York | Comments Off on Quote of the Day

Maryland rebounds; Penn wows Wall Street; Trump to play Lucky Dragon

Posted on August 6, 2020 by David McKee

In a near-miraculous development, Maryland gambling revenues were only 6% off the pace last month. Between cabin fever and the belated delivery of those $1,200 stimulus checks, we’re not entirely surprised that Free State punters had both the desire and the money to have a flutter. An extra weekend day didn’t hurt either. MGM National Harbor grossed $52 million (-14%) with slots down 15% and tables off 12%. Since table games are taxed at a far lower (and fairer) rate, MGM execs aren’t exactly crying in their beer. Even though it finished second, Maryland Live was the real winner, up 4.5% to $51.5 million. Other beneficiaries of the July breakout were Hollywood Perryville (+7.5%, $7 million) and Rocky Gap Resort (+6%, $5.5 million). Hard-luck Horseshoe Baltimore plunged 18.5% to $16 million—even desperate gamblers have standards. That leaves Ocean Downs, down 5% to $8 million.

Over in West Virginia, July numbers were unavailable for breakout but the state’s casino business is down 24% over the past four months, evenly divided between tables and slots. Charles Town Races had a slightly harder time of it, seeing a 25% erosion at slots and 29% at tables.

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Posted in Alabama, Arizona, Boyd Gaming, Caesars Entertainment, Churchill Downs, Cordish Co., Donald Trump, Election, Florida, Georgia, Golden Gaming, Health, Internet gambling, Lotteries, Lucky Dragon, Maryland, MGM Resorts International, Mississippi, Nevada, New Mexico, New York, North Carolina, Penn National, Pennsylvania, Racinos, Sports, Sports betting, Texas, The Strip, Tilman Fertitta, Tribal, TV, Wall Street, West Virginia | 2 Comments