Late last night the news broke that Churchill Downs has purchased 50.1% of Rivers Casino in Des Plaines from a consortium headed by Rush Street Gaming. The company 
is paying $326 million for a slight majority in an asset valued at $1.45 billion, with the option to pay another $174 million over time. What went unsaid was that Churchill Downs has tapped a huge cash spigot, as Rivers Casino is far and away the dominant casino in Illinois, month in and month out. No competitor has ever come close. It also means that Churchill Downs will probably be shopping some 336 acres at Arlington Racetrack, which it had been keeping in its pocket as a potential casino site. JP Morgan analyst Joseph Greff theorizes that the value of such a transaction could be worth as much as $18/share.
Otherwise it was pretty much business as usual for CHDN: A soft 3Q18 at Continue reading
week. Early polling had it down, 41% to 48%, but it’s now turned the tide, 49% to 43%. Issue 4 would convert Oaklawn Jockey Club and Southland Racing Corp. into racinos, and open the path for bidding on casinos on as-yet-undecided sites in Jefferson County and Pope County. Just for the record, S&G favors a “yes” vote on the issue. Financial projections — always to be taken with a gran of salt — have the four casinos producing $12o million in annual tax revenue, 55% of which will be dedicated to the state general fund.
Greff admitted as much, while saying that Las Vegas Strip cash flow beat the Street’s projections by 5%. Looking ahead, “2019 expectations are reasonably set.” The full half of the glass includes better group business next quarter, increasing revenue from Park MGM and continuing recovery at formerly hexed Mandalay Bay. Greff tried to reconcile MGM’s stated goals of reducing leverage with a New York Post report that it covets Caesars Entertainment (which would create no end of redundancies, but let’s save that for another time). The glass is perhaps half-empty due to much-lower-than-expected Macao cash flow, thanks to a “very slow” (Greff) ramp up of MGM Cotai. Also, sadly, fourth-quarter comparisons will be easier in part because MGM business slackened notably after the Mandalay Bay Massacre late last year. This translated into $40 million less cash flow, lower room revenues, and weaker table game and slot handle.
Cameron McKnight to call them “better than expected.” Meanwhile, Nevada as a whole was up 1% and locals revenues rocketed 16% into the stratosphere. The prior-year comparison on the Strip was hardly a difficult one: +4.5%. So what went wrong? Baccarat win fell through the floor, down 27.5%, with play 15.5% lower than 2017. That negated a 5% gain in slot win and accompanied a 4.5% drop-off in non-baccarat table games, despite almost 5% higher wagering. “In a 3Q that should be forgotten, LV Strip [gross gaming revenue] declined 7.2% Y/Y, while statewide GGR declined 2.2%,” wrote JP Morgan‘s Joseph Greff. Take baccarat out of the equation and, thanks to slots ($285 million), Strip gambling revenues were actually 1% up. Nothing about which to get excited but a silver lining in a rather dark cloud. (Airline passengers coming into Las Vegas were down 1%, by the way.)
daily fantasy sports. Credit Suisse analyst Cameron McKnight writes that this ruling means “sports betting legislation could be similarly challenged in NY.” Gov. Andrew Cuomo‘s office is still mulling the potential ramifications of Connolly’s ruling and presumably brainstorming an appeal. Plaintiffs’ attorney Cornelius Murray is pressing for an immediate shutdown of all DFS sites in New York State. DraftKings and FanDuel, meanwhile, are conducting business as usual.
autumn to mid-winter). The MGC is looking into sexual-misconduct allegations against Steve Wynn and, mainly, the concealment of a $7.5 million paternity settlement from Bay State regulators. The MGC has 
$1.79/share. That’s $132.5 million for five casinos. CEO Dan Lee (left), in tandem with board chairman Brad Tirpak, 
of [concession] renewal, it has had no communication with the government on the issue.” Sands’ $1 billion capex reinvestment in Sands Cotai Central (soon to be The Londoner) is deemed a “sensible allocation of capital as it proves LVS’s commitment to help develop the Macau market, and reorients an asset whose brand and market position has struggled since opening.” More ominously, McKnight cites a study that says the Chinese public displays “a growing reluctance to spend suggests 
the quarry. There’s plenty of time to speculate upon who will get the former Illiniko airport site, all 1,532 acres of it, since the final award will probably not be announced 
seven years, during which time the company’s titular property in Atlantic City rose to the second place in the market, a status to which it firmly grips. “Tony is one of the top executives in the gaming industry and I’m confident that he is the right person to drive Affinity’s continued growth and enhanced commitment to the player experience,” said Z Capital Partners CEO James Zenni, who made the hire. Without casting any aspersions on his predecessor, Rodio will be a shot in the arm for Affinity and somebody who can lead it into a new, bigger era.
market win was up 1% and VIP gross gaming revenue fell 22%. CEO Sheldon Adelson also consolidated his control of the company, which bought back $300 million worth of LVS stock. The company also made capital investments, both in converting Sands Cotai Central into The Londoner — up from $700 million to $1.35 billion — and adding casino space to St. Regis Macao, up to $400 million from $275 million (too bad Sands can’t or won’t finish its St. Regis in Las Vegas). The Londoner will have a staggered opening, spread across 2020-21. “There wasn’t much, if any, cautious 
to make the half-hour run, compared to the hour it takes to ferry to the gambling capitol from Hong Kong. Ironically, the ceremonial first bus will leave from Macao, specifically from Hotel Grand Lisboa, in a nod to former casino monopolist Sociedade de Jogos de Macau. Peninsula casinos to enjoy bus service include MGM Macau, StarWorld Hotel (Galaxy Entertainment) and Sands Macao. Primary stops on the Cotai Strip™ will be Venetian Macao, Galaxy Macau and MGM Cotai, which could use some extra business. Casino shuttles will not be allowed on the new bridge. Rather, city hall is trying to get the enclave’s six concessionaires to consolidate and cooperatively run shuttle serves. Good luck with that.
while Hard Rock is partnering with (new to me) GiG. At present, the Trop and HRH are asking for transactional waivers, which would permit six months of operation while the formal licensing process moves through channels. The Division of Gaming Enforcement, meanwhile, is 
play, McKnight doesn’t think this is the end of the story, mentioning activist shareholders, presumably ones who don’t feel like scoffing at $13/share offers while CZR is trading at $9.77. Global Gaming Business adds that “Fertitta is a cousin to Frank and Lorenzo Fertitta, who own and operate Red Rock Resorts (formerly Station Casinos), based in Las Vegas. The relationship between the cousins has reportedly been tense for years.” That’s putting it nicely.