Looking back at Station Casinos’ 2Q17 results, Deutsche Bank analyst Carlo Santarelli noted that the picture was clouded by construction activity at Palace Station and the Palms. But, while short-term 
investors would likely have their patience tested, he wrote, “we think long term oriented investors will be rewarded by a heavily invested management team which has generated strong returns historically.” In other words, Red Rock Resorts (Station’s nom de voyage on Wall Street) is still a “buy.” Management has pitched another $76 million into the Palace Station capex budget — for a $226 million total — as they continue to reinvent the property. As for the Palms, Phase One of reinvestment is a hearty $146 million.
JP Morgan analyst Joseph Greff was less supportive of Station, noting that it missed expectations on several fronts, including Native American gaming management and corporate expenses, among others. He termed the Palms’ performance “relatively unexciting.” The huge reinvestment at Palace Station will yield “luxury movie theaters, a third new restaurant concept, a resort-style pool complex, a casino bar, new race and sports bar, renovated poker room and a fully renovated casino floor.” All of will take a while, with completion expected in late 2018. (No mention of convention space or of a rumored second hotel tower.)
Station obviously believes in the Palms because they will have committed $460 million to it once revisions have been completed. 
The checklist for capex reinvestment there includes “complete renovations to the casino floor, a new café and buffet, two new restaurant concepts, upgraded luxury movie theaters [overdue, in our opinion], renovated meeting and convention space, a rooftop open allowance and a new high-limit area/lounge, new hotel registration and VIP check-in areas, low exterior façade, porte cochere, and landscaping improvements.” For Greff, RRR was also a “buy,” albeit due to its current weakness, as he perceives it.
“While this quarter was nothing to write home about … we are willing to be patient here, to a degree,” Greff wrote, “given … our positive view of the [Las Vegas] Locals market, with an attractive macro of Clark County population growth, job growth, and wage growth driving solid demand.” So, all in all, Station is a good bet in the current economy.
* It’s difficult to get all het up about a 2% dip in Indiana gambling revenues, especially given the one-less-weekday variable thrown into 
the mix. Spending by players was incrementally higher but foot traffic declined 3%. Horseshoe Hammond ($34 million) continued to dominate the state, despite flat revenues. Northern-tier results included a 6% decline at Blue Chip (pictured, $14 million), an 8% tumble at Ameristar East Chicago ($18 million) and a really schizoid performance at the two Majestic Star boats. Majestic Star I bucked the statewide trend with a 2% increase ($8 million) but Majestic Star II sank 11.5%, taking in only $5 million.
The Hoosier State’s raciness can usually be counted on to perform strongly but not last month, Indiana Downs grossed $23 million, a 4% slip, and Hoosier Park won $18 million, down 4.5%. French Lick Resort reported $8.5 million (down 3%). Along the Ohio River, Belterra was flat at $10 million, as was Tropicana Evansville ($12 million). Rising Sun had a good month, up 3% for $4.5 million — still the lowest in the state; you can see why Dan Lee wants to partially relocate to Indianapolis — and Hollywood Lawrenceburg had a really good month, all things considered, up 6% to $16 million.
* Fewer weekend days sure didn’t cool gamblers’ ardor in Ohio, where casino revenues rose 6% during July. To pluck one number out of 
many, table win at Hollywood Columbus was up 15%. With Jack Cincinnati, up 8.5% to $17 million, Dan Gilbert‘s casinos had one of their better months. Thistledown racino dipped 1.5%, grossing $10 million, while Jack Cleveland was up 9% to $17 million. No surprise, Hard Rock Rocksino led the state, winning $22 million for an 8% gain. (It cannot be overemphasized that this is being done without table games.)
Eldorado Resorts was up 9% at Scioto Downs, grossing $14 million. Although Hollywood Columbus was flat at $19 million, the Gaming & Leisure Properties/Penn National Gaming portfolio performed well. Hollywood Toledo gained 6% for an $18 million gross while Hollywood Dayton gained 7% for $8 million and Hollywood Austintown leapt 11.5% to $10 million, outperforming the market with $305 win/slot/day. There has to be an explanation for why Ohio defied to probabilities but … no, I got nothing.
