Park MGM reopens early; Power play at Scientific

The news broke so late it didn’t make the “MGM Minute” …

If you’re seeking a Las Vegas Strip bargain, better hurry, albeit in time for a Park MGM reintroduction. A JP Morgan survey of Strip hotel rooms shows rates shallowing for the period of October 4-10. They’re down 34% (making for an average $110/night room rate) but improving for weekdays to -31%. Weekends are close behind at -34%. Even with a larger compliment on rooms on line during weekends, Venelazzo is only 6% off last year’s pace, compared to -27% weekdays, when Palazzo is dark. Wynncore fares best (-18%) midweek and not at all badly (-25%) on weekends. MGM is 26% off the midweek pace but takes a -42% lump on weekends while the Roman Empire brings up the rear, averaging -34.5% across the week.

In a sort of palace coup, a consortium of institutional investors headed by Caledonia has announced the acquisition of 35% of Scientific Games at $28/share from MacAndrews & Forbes. This marks the end of the Ronald Perelman era at SGMS, as he gets the boot, along with two other directors. The new executive chairman is Jamie Odell, late of Aristocrat Technologies, joined by sidekick Toni Korsanos, former Aristocrat CFO. The stated goal of the takeover was to make Scientific more attractive to other institutional investors. While we wait to see how that is made manifest, company President Barry Cottle assures the market that  “Scientific Games is well-positioned for future success given our industry leading portfolio of products and technologies, loyal customer base and talented leadership team. We are pleased to have the support of our refreshed Board and new investor base as we continue to execute on our strategy to drive meaningful long-term growth and shareholder value creation.”

Odell made no bones about Job One. “We will be highly focused on rapidly de-leveraging the balance sheet and creating a flexible, agile company that is poised to capitalize on evolving industry and macroeconomic trends to deliver outsized returns to investors.” Sounds like a radical diet may be on the horizon. The official announcement gave some further hints as to what goals might lie ahead, by pointing to Odell and Korsanos’ exponential increase of market capitalization at Aristocrat. It also implicitly dinged the outgoing board members, saying the new directorship would bring “a deep and diverse mix of gaming industry, financial, strategic and operational experience.” Nothing wrong with that. Quite the opposite.

Disney is tipping even deeper into gambling. Its ESPN mega-subsidiary has inked a deal with William Hill and Caesars Entertainment for Hill to provide sports-betting services to the TV network. “Link integrations to William Hill’s sports betting apps, geo-targeted to legalized sports betting states, will appear on ESPN.com web and mobile web and the ESPN Fantasy app. As part of the new agreement, Caesars Sportsbook by William Hill will also become a sponsor of ESPN’s Fantasy products, deepening an existing relationship as ESPN’s exclusive odds provider,” explains the official announcement, which just dropped. ESPN already has a studio at The Linq. Executives from the three companies were chary with further specifics, opting for PR blather but expect the new Caesars logo to become a familiar sight on ESPN streams, perhaps as early as next week’s Las Vegas Raiders home opener, carried on Monday Night Football.

Jottings: Nothing comes easily for the nascent Virgin Hotel chain. A Palm Springs project has been postponed, at minimum, thanks to Coronavirus-related delays. Now there’s talk of a 62-unit condo project in its stead … PointsBet will be the mobile sports-betting provider for Hawthorne Race Course in Illinois. It will also operate OTBs in Prospect Heights, Oakbrook Terrace and Crestwood in Chicagoland. PointsBet is also the official partner of NBC Sports, giving it access to the Latino community through Telemundo and Telemundo Deportes … For those of you following the election, the Covid-19 pandemic seems to have paralyzed—if not neutered—the Culinary Union‘s political machine in Nevada. Just ask Jon Ralston … Wynncore is filing suit over a weekend brawl that broke when somebody ‘made it rain’ in the lobby. As you might expect, “chaos ensues.” Wynn Resorts‘ imposed a guests-only admission policy and jacked up room rates to pre-Covid levels. Labor Day weekend saw dozens of violence-related arrests and citations, and the video footage is not to be believed. As in Boston, Wynn seems to have a magic talent for bringing in the riffraff.