Sahara misbehavior; Tilman Time; Culinary caves to Big Gaming

We miss the old Sahara.

Alex Meruelo has new troubles. He’s in deep fertilizer with the Nevada Gaming Control Board over safety violations at the Sahara. Meruelo’s facing a two-part disciplinary complaint. In one instance, the Sahara hosted a 153-person convention when state rules explicitly ban gatherings of over 50 people. Evidently somebody at the Sahara has trouble with math. Then there’s this, as reported by Howard Stutz, “On June 16, the Sahara is alleged to have allowed four patrons to stand on the side of a craps table when only three of the customers were playing in the game. The same day, state gaming agents said they witnessed a person standing between two players at a blackjack table and not participating in a game. Also, the agents said they witnessed five patrons surrounding a slot machine player and not participating in gaming activity.” Sahara management chalked up the trouble to a “misunderstanding” and said they’ve cracked down on the misbehavior on the casino floor.

Posted in Alex Meruelo, Caesars Entertainment, Cretins, Culinary Union, Donald Trump, Economy, Health, MGM Resorts International, Ohio, Politics, Real Estate, Regulation, Reno, Sahara, Sports, Station Casinos, Tilman Fertitta | Comments Off on Sahara misbehavior; Tilman Time; Culinary caves to Big Gaming

Quote of the Day

“In general, our core customers have not been deterred by the social distancing measures, limited amenities or masking requirements … We intend to keep this philosophy in place after the crisis is over. We think largely that many of the costs will stay out. [Boyd] will not simply return to the old way of doing business.”—Boyd Gaming CEO Keith Smith.

Posted in Boyd Gaming, Economy | 5 Comments

New hope for Station; Raider Nation exiled

Station Casinos reported second-quarter results yesterday and JP Morgan analyst Joseph Greff came away “encouraged” and “impressed.” He wrote of “less bad results in April and May and much better positive [cash flow] generation in June.” How so? In its first month of resumed operations, Station generated $100 million in net revenue. Closed properties were only a “modest” drag on the numbers. “July is reported to be similar to June (though seasonally July is not as strong as June) with revenues benefitting from being ‘one of the only games in town,’ with limited national sports to watch and closed bars, theaters and nightclubs in LV.” Marketing is down, as are salaries (7K fewer employees). Greff predicts a “leveling off” in the second half of 2020, explaining, “Some of the positive spend and visitation activity in June and July is likely not sustainable (think of recent unemployment benefits, which is probably one of the reasons why younger versus older casino patrons were stronger).” On the other hand, lower levels of casino employment cut into Station’s player base.

The Wildfire properties are on hold, according to Greff, given Gov. Steve Sisolak‘s policy on bars. But most other Station casinos are back on line. Visitation is trending down but individual spending is up, as is coin-in. Las Vegas operations suffered 78% compared to 2Q19 and Native American management income was down to $6 million, a 75% slippage. Oh, and CEO Frank Fertitta III floated the possibility that the Palms, Texas Station, Fiesta Henderson and Fiesta Rancho might never reopen, just en passant. Greff didn’t see fit to mention it but, if economists like John Restrepo are right, the Las Vegas economy is headed for a major realignment.

Posted in China, Economy, FanDuel, Golden Gaming, Health, IGT, Las Vegas Sands, Macau, Massachusetts, MGM Resorts International, Penn National, Politics, Sports, Sports betting, Station Casinos, Terry Caudill, The Strip, Tourism, Wall Street, Wynn Resorts | 1 Comment

Quote of the Day

“Many on the right are enraged at any suggestion that their actions should take other people’s welfare into account … What the coronavirus has revealed is the power of America’s cult of selfishness. And this cult is killing us.”—Paul Krugman

Posted in Current | Comments Off on Quote of the Day

Cuomo stiff-arms casinos; MGM’s blame game

Tioga Downs owner Jeff Gural was able to get some face time with Global Gaming Business … which is more than he’s been able to do with New York State Gov. Andrew Cuomo (D), much to Gural’s chagrin. He’s chafing at the uneven playing field whereby the Empire State’s tribal casinos are back to business as usual but his and other private-sector ones remain closed. “We’ve been unable to convince the governor that it’s actually safe. We don’t disagree with the governor’s concern about not having a spike in opening things up, but as you know, we have not seen that elsewhere—including in New York City,” Gural told GGB. “[Cuomo] has full control over what we’re doing, and no control over the Indian casinos. I’m fully convinced we’re safer, but haven’t been able to convince the governor, who has gotten the numbers down. It’s problematical.” Promising strict safety protocols, should he be allowed to reopen, Gural added, “It seems hard to say it makes any sense when Vernon Downs is closed and [tribal] Turning Stone, which is five miles away, is open.”

Posted in Caesars Entertainment, Churchill Downs, Economy, Full House Resorts, Genting, Health, Illinois, Indiana, International, Kentucky, Las Vegas Sands, Massachusetts, MGM Resorts International, New York, Politics, Rush Street Gaming, Sports betting, The Strip, Tribal, Wynn Resorts | Comments Off on Cuomo stiff-arms casinos; MGM’s blame game

Big Gaming declares war on employees

With Big Gaming’s generals itching to sell out their foot soldiers (i.e., employees), it’s interesting—to say the least—that we’ve heard nothing from the Culinary Union or Unite-Here President D. Taylor except a loud chorus of … crickets. They’re rolling over and playing dead for the HEALS Act, which would grant blanket immunity to corporations against Covid-19-related carelessness, and it’s difficult to see the realpolitik at work. Incidentally, in addition to American Gaming Association President Bill Miller bashing away on Capitol Hill, the industry has opened up a second front in the Nevada Lege. The Nevada Resort Association is shrieking like an old maid about “frivolous litigation” (translation: any lawsuit that is filed against you) and seeking “targeted and limited safe harbor from liability for companies that implement strict public health guidelines related to the transmission of COVID-19.” Failure to accede “threatens the resort industry’s continued operations.” Yes, it’s Doomsday for Nevada casinos, according to the NRA. Wailed one (wisely) anonymous Strip exec, we face “disaster for the economy and Nevada’s workers, if businesses—large or small—were faced with the choice of operating responsibly or having to close in the face of litigation.” Since, in the words of the Las Vegas Sun, Gov. Steve Sisolak (D) has said the upcoming special session “will include measures to prevent businesses from taking further economic hits during the pandemic,” we can presume he’s already in the bag.

Posted in AGA, Caesars Entertainment, Conventions, Culinary Union, IGT, International, M Resort, Marketing, MGM Resorts International, Nevada, Politics, Unite-Here | 2 Comments

Quote of the Day

“I don’t think he plans to leave the White House. He doesn’t plan to have fair and unfettered elections. I believe that he plans to install himself in some kind of emergency way to continue to hold onto office.”—Rep. James Clyburn (D) on Donald Trump.

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

Devil in the details

Gaming & Leisure Properties Inc. held a conference call with stock analysts and it revealed more about Caesars Entertainment and, to a lesser extent, Penn National Gaming than the companies themselves were saying. Rents and income were described as “better than expected” and GLPI used the present crisis to its advantage to “strengthen its relationship” with Caesars in return for “increased near-term flexibility” on its leases, which GLPI extended by five years. No more variable rent, though. In other news …

Posted in Caesars Entertainment, Conventions, Dining, DraftKings, Economy, GLPI, Japan, Massachusetts, MGM Resorts International, Oklahoma, Penn National, Politics, Problem gambling, Real Estate, Sheldon Adelson, Sports betting, The Strip, Tribal | 1 Comment

Quote of the Day

“As the technology improves and convention and trade show attendants get younger, meaning they’re very comfortable doing business remotely, we expect the industry to fundamentally change. Anyone who thinks Las Vegas will return to a pre-Covid convention and trade industry is not being realistic.”—economist John Restrepo.

Posted in Conventions, Economy, Nevada | Comments Off on Quote of the Day

Watching between the lines

MGM Resorts International CEO Bill Hornbuckle (rightly) brags on the company’s regional properties but subtly refrains from mentioning MGM Springfield. Is the groundwork being laid for a sale? We think so. Also, MGM Grand Detroit‘s long-awaited reopening comes Wednesday and Bet MGM has a free-play contest going during the NBA finals, a not-so-subtle hook to create a new generation of sports bettors.

Posted in Detroit, Massachusetts, MGM Resorts International, Sports betting, TV | Comments Off on Watching between the lines

Quote of the Day

“And if the virus comes back, I don’t see us shutting down our economy anymore. We’ve got to figure out how to live with the virus.”—Gov. Brian Kemp (R) of Georgia, where death tolls are rising.

Posted in Economy, Georgia, Health | 1 Comment

MGM: The lion mews; AGA: Betrayal by Miller

Second-quarter results for MGM Resorts International are in and the company got hammered pretty badly. Las Vegas Strip revenues fell 90% to $151 million, regional operations dropped 90% to $89 million and Macao grossed a feeble $33 million, down 95%. “Expecting a long recovery” was JP Morgan analyst Joseph Greff‘s understated response. Noting that the Strip is “critical” to MGM and that “a market where state/nation-wide COVID-19 spikes have outsized impacts on its fundamentals (particularly on 4Q20 and 1Q21 conventions and tradeshows, which have recently been cancelled and/or delayed),” Greff pointed out that MGM’s regional operations likely do not possess the same increasingly favorable operating efficiencies that more core/middle market consumer regional casinos possess,” citing Boyd Gaming and Penn National Gaming as exemplars. He stuck with his $17/share price target, cheap as gaming stocks go.

Looking for a silver lining, Greff wrote, “The good news is that MGM over the past few years has recognized the underlying value of its hard assets/real estate and has monetized this to make meaningful improvement to its capital structure, resulting in low domestic net leverage, and importantly, a solid liquidity position. However, the only hard assets left, at least domestically, are its 50% stake in Aria/City Center and the relatively small MGM Springfield in Massachusetts.” Not much to draw upon. On the plus side, there’s $4.8 billion cash on hand. Less sanguine, there is also $11.4 billion in long-term debt. For Greff, the quarter was a write-off: “In Macau, operations were essentially halted for the full quarter, only recently receiving some positive news with the potential reissuance of visas to Macau. In Las Vegas, all casinos were closed in mid-March, with a handful reopening in early June — Bellagio, MGM Grand, and New York New York re-opened June 4th, Excalibur on June 11th, and Luxor on June 25th.” Still, recovery is a 2022 proposition, with Las Vegas cash flow predicted to be 80% of last year’s and regional casinos back to 90% of 2019 levels. It’s not all bad: MGM figures it is saving $450 million in costs rendered moot by the pandemic-related shutdowns.

Posted in AGA, Boyd Gaming, Caesars Entertainment, Churchill Downs, CityCenter, Conventions, Cordish Co., Culinary Union, Downtown, Economy, Golden Nugget, Health, Horseracing, Illinois, Macau, Massachusetts, MGM Resorts International, Nevada, Ohio, Penn National, Pennsylvania, Racinos, Real Estate, Sahara, Sports betting, The Strip, Tribal, Wall Street | 1 Comment

Chilly June in Las Vegas

June revenue on the Las Vegas Strip plunged 61% to $238 million. Locals revenue was down 28% (those stimulus checks only go so far). Statewide, it wasn’t quite so bad, off 46% to $567 million. Casinos reopened June 4, which explains the declivity a little bit, and were operating at half-capacity, which explains a lot more. On the brighter side, locals’ slot handle was only off 16%, “which we view as a positive given properties did not open until June 4th and consistent with [Boyd Gaming’s] commentary last night re: a stable LV Locals market,” wrote JP Morgan analyst Joseph Greff. “Similarly, we believe these results reflect LV Strip traffic coming from mostly, if not all, drive-in visitors, operating with limited amenities (F&B, no shows, nightclubs, etc.), and the staggering of reopenings.” Bottom line: buy Boyd and Station Casinos (RRR), sell everybody else.

Posted in Boulder Strip, Boyd Gaming, Downtown, Economy, International, Lake Tahoe, Laughlin, Mesquite, North Las Vegas, Reno, Station Casinos, The Strip, Tourism, Transportation, Wendover | 4 Comments

Churchill Downs, Boyd impress analysts

Churchill Downs‘ second quarter was “solid” (Daniel Politzer) to say the least. Revenue shot past Wall Street‘s consensus expectation of $132 million to ring the bell at $185 million. Credit goes to a 27% increase in Internet-gaming revenue, including $100 million in handle despite horse races yet to be run. Casino revenue is also up 9% at CHDN properties since they have reopened. So confident is management that it has upped its capital commitment to Turfway Park from $150 million to $200 million. Historical horse racing was the bomb, generating $521/slot/day at Derby City last month, numbers that would make most casino executives swoon with bliss. Today should bring further revelations regarding the fate of the Kentucky Derby, of 670 new gaming positions at Rivers Casino Des Plaines and the $300 million hotel slated for CHDN’s titular raceway.

Posted in Boyd Gaming, Churchill Downs, Downtown, Economy, FanDuel, Horseracing, Illinois, Internet gambling, Kentucky, Slot routes, Sports betting | Comments Off on Churchill Downs, Boyd impress analysts

MGM: Meet the new boss, same as the interim boss

After suffering the indignity of a “thorough national search” to find a possible replacement, interim MGM Resorts International CEO Bill Hornbuckle has been named to the position on a permanent basis. This should have been a no-brainer for MGM, especially given Hornbuckle’s experience with (22 years’ worth) and intimate knowledge of the company. Who better was out there? Gary Loveman? Sheesh. After the ouster of Jim Murren, Hornbuckle has provided a steadying presence at a company that needed one to weather the Covid-19 pandemic. We congratulate him on an honor well-deserved.

Posted in Caesars Entertainment, Carl Icahn, Downtown, Economy, Jim Murren, Las Vegas Sands, MGM Resorts International, Palms, Sheldon Adelson, The Strip, Wall Street | 1 Comment

Paying the price: Sports after Covid-19

Guest opinion by Jeff Goldberg

Of all of the industries affected by America’s COVID-19 pandemic, the sports sector was among the hardest hit. With the U.S. forced into lockdown, almost all sporting competitions were suspended and it’s only now that they’re resuming again, leaving us sports betting fans without anything to wager on for months on end. But, as the country still grapples with the health crisis, it looks like sports are going to be played in a crowdless environment for the foreseeable future. Considering how much teams rely on matchday revenue, the ensuing financial impact could devastate the industry. Can the sector survive, and what does this mean for sports betting, one of the industries that most depends on it?

Empty stadiums leave sports teams in the mire: No crowds means no money coming in from fans on game days. It also means empty stadiums, which will be highly costly for all professional leagues. For example, it’s estimated that NFL sides will lose a staggering $5.5 billion if the 2020 season is played entirely behind closed doors. Of course, this will affect some teams worse than others, like the Dallas Cowboys, who will miss out on over half their revenue. There are also fears that fans won’t feel comfortable returning to these venues, even when they’re able to. For instance, a CivilScience poll found that one in five fans would never return to their local sports venues due to safety fears. This reduced interest would likely have a knock-on effect on broadcast and sponsorship deals too, especially among a probable economic depression.

Posted in Economy, Health, Sports, Sports betting, TV | 3 Comments

Election special

Good news! The word “casino” is no longer toxic in politics. Why do we say that? Because Montana Gov. Steve Bullock (D), a U.S. Senate aspirant, merely describes Sheldon & Miriam Adelson as “this billionaire couple” in a fundraising e-mail slamming the left’s new bogeyman, the Las Vegas Sands CEO. Sheldon makes a big and inviting target but now it’s for size of his largesse and not from where that wealth was derived. Speaking of the Senate, opinion polls are all over the place so we went to a reliable source, futures market PredictIt.

Sen. Mitch McConnell (R) needn’t worry about involuntary retirement, being favored over challenger Amy McGrath, 81 cents to 20. Sen. Lindsey Graham (R) is getting a stiff challenge from Jaime Harrison but PredictIt has the incumbent pulling it out, 79 cents to 25. Goodbye and thanks for playing, Sen. Susan Collins (R). She’s a 31-to-70 underdog against Sara Gideon. Also on the Endangered Senators List is Alabama‘s Doug Jones (D), down 19-to-85, while Georgia conservatives are expected to boot Sen. Kelly Loeffler (R) in favor of Rep. Doug Collins (R), 86 cents to 17 in a special election. Dems in Massachusetts are anticipated to dump Sen. Ed Markey (32 cents) in favor of Rep. Joe Kennedy (66 cents). Congressional Gaming Caucus member Sen. Martha McSally (R) of Arizona also might want to update her resumé. PredictIt has Mark Kelly winning her special election 84 cents to 16 cents.

Posted in Alabama, Arizona, Colorado, Donald Trump, Election, Georgia, Health, Kentucky, Maine, Massachusetts, Politics, Regulation, Sheldon Adelson, South Carolina, Sports, Sports betting | 1 Comment

MGM: No shows for you!; Cromwell aims for the gutter

Yesterday the axe fell on MGM Resorts International‘s sports and entertainment division with the announcement that all shows and events scheduled between now and August 31 were canceled. Worse still, any support personnel for shows canceled after August 31 would be pink-slipped. Quoth the Lion, “MGM Employees who were not recalled on or before August 31, 2020 will be separated from the company on that date and it now looks like that will unfortunately include the large majority of our employees working in our [sports and entertainment] division. We remain committed to reopening all of our entertainment venues when it is safe to do so and our plan is to call back as many of the division’s employees as possible, as quickly as we can. The decision … will continue to be driven by health and safety mandates and guidelines established by government agencies and by business demand.” (emphasis added)

Posted in Caesars Entertainment, California, Cirque du Soleil, Conventions, Economy, Entertainment, Florida, Health, Las Vegas Sands, Marketing, MGM Resorts International, Real Estate, Seminole Tribe, The Strip, Tribal, TV | Comments Off on MGM: No shows for you!; Cromwell aims for the gutter

Quote of the Day

“The one thing that will dramatically slow the spread of Coronavirus is for every single one of us to wear a mask. I couldn’t agree more with President Trump: Wearing a mask is the patriotic thing to do. Wear a mask to protect lives.”—Idaho Gov. Brad Little (R).

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

It’s Coronavirus’ world, we just live in it

Some days it just doesn’t pay to be Oklahoma Gov. Kevin Stitt (R). He’s lost authority over the eastern half of the Sooner State. How? The U.S. Supreme Court—hardly a hotbed of bleeding-heart liberals—ruled that historical claims by the Muscogee Creek Nation take precedence over state rule, turning eastern Oklahoma into one giant reservation, including Stitt’s home base of Tulsa. We’re still waiting to see how this shakes out for tribal gaming but it looks like a win-win. Then the Oklahoma Supreme Court voided Stitt’s new gaming compacts, siding with Attorney General Mike Hunter and lawmakers who said that Stitt overstepped his authority by unilaterally authorizing sports betting, among other (expensive) sins. If that weren’t enough to put Stitt in a sickbed he contracted Coronavirus, mainly through his own careless behavior, having made a point of mingling, maskless, in public as much as possible. Oklahoma, in fact, has some of the laxest social-distancing rules in the nation. And it’s paying the price. Stitt might just want to pull the blanket over his head and wait until his term is over.

Even worse than Oklahoma in the spread of Covid-19 is our beloved Nevada, ranked fifth by the Centers for Disease Control in rising death rates. (Alabama is #1, followed by Florida.) Last Wednesday, 1,100 new cases were reported, along with 28 deaths. In the meantime, the Babylon Bee directly skewered Gov. Steve Sisolak‘s hypocrisy about Big Gaming (which holds the purse strings) and Coronavirus. It reported that the (fictive) Calvary Chapel of the Desert had gotten around restrictions on social gathers by installing slot machines. Throw open the doors! “Plus, it’s making up for all the lost tithing over the last few months,” said Pastor Chuck Carver, quoth the Bee (the conservative version of The Onion).

Posted in Arizona, Baseball, Caesars Entertainment, Economy, Election, Health, Internet gambling, Iowa, Marketing, Nebraska, Nevada, North Carolina, Oklahoma, Politics, Racinos, South Carolina, Sports betting, Taxes, Tribal | Comments Off on It’s Coronavirus’ world, we just live in it