Philly Live shows signs of life; Sports betting no cure-all

Cordish Gaming‘s $700 million Philadelphia casino project (now with 100% less Watouche “Bob” Manoukian) has been postponed two years. However, in a sign of forward progress, Cordish has signed a general contractor and pledged “substantial completion” by 2020. It remains to be seen whether the Philly market is sufficiently resilient to support another casino, especially with so much action having been drawn out to the ‘burbs — where Boyd Gaming‘s Valley Forge Resort Casino just saw slot revenue vault 18% — but if anybody can do it, Cordish can, The design for Philadelphia Live, while comparable to other Cordish projects, is a big improvement on the sad, little Holiday Inn that currently occupies the site … though not for much longer. Although we have to frown upon Pennsylvania‘s use of slot taxes to prop up the horse racing industry, we applaud another employment of those dollars — reducing property taxes in the Keystone State.

* For those states thinking sports betting (and the taxes that come with it) will be a budgetary panacea, The Associated Press has a cold dose of realism. In Nevada, 0.5% of the state budget, which is heavily predicated on gambling, comes from sports betting. And we’re talking about the top sports-betting market in our great country. Even proponents of legalized sports betting like Ohio state Sen. John Eklund (R) say things like, “Everything I’ve seen so far suggests that this would not be what one would consider to be a pot of gold.” As many as 35 states could legalize sports betting this year, joining the seven where it is already enshrined in law. The AP makes the analogy to recreational marijuana, which has been no budgetary windfall: only 2% in mile-high Colorado. In New Jersey, sports-betting handle of $928 million trickled down to $8 million in tax revenue — though some states may kill the gilded goose with usurious tax rates.

The Garden State is aiming for $25 million in tax revenue this year: 0.1% of the state budget. Sports-betting booster Raymond Lesniak said he never intended it as a budgetary curative but as a way for horse tracks and Atlantic City casinos to make ends meet. Even so, New Jersey is operating on borrowed time as Pennsylvania gets into the game and New York State budgets for sports-betting-tax revenue even before legalizing it. If you’ve got a state project that needs a few million dollars (let’s say, treating problem gaming), sports betting taxes will be the way to go. Otherwise, not so much.

* MGM Resorts International booked $2 billion in profits last year but is too cheap to pay the people who helped make it happen. In true Grinch spirit, the company plans to axe $100 million in payroll through staff cuts. If the executives at the top really wanted to save money, they’d give back some of their inflated salaries, bonuses and stock options — but reducing the vast disparity between the casino floor and the executive suite would be un-American, wouldn’t it? The company’s new policy is in keeping with CEO Jim Murren‘s recent announcement that room revenues had(n’t) increased except through higher resort fees. That’s today’s Wall Street for you: It is no longer imperative to improve operation, merely to create the illusion of better business.

* One of Shreveport‘s most successful casinos just changed hands. Vici Properties is the new owner of Margaritaville Resort Casino, although it is farming out the operation not to Vici parent Caesars Entertainment but to Penn National Gaming. (Caesars would not want to compete with itself in a market dominated by its own Horseshoe Bossier City. Were Penn and Caesars to merge, the combined size of the companies would truly boggle the mind.) Vici put down $261 million for the physical assets and Penn kicked in $115 million for the operational contract. Vici gets 1,215 slots and 50 table games, in one of the most auspicious acquisitions of the last year.