Nevada gambling revenues continued to climb in May, up 6% from last year, hitting $1.3 billion. The results were bifurcated, with tourist-dominated markets up and locals ones somewhat down. The Las Vegas Strip was the most obvious beneficiary, jumping 11.5% to $731.5 million, although Downtown also glittered to the tune of +5% and $79 million. Strip slot revenue vaulted 36% to $391 million on 34% more coin-in. Baccarat win rebounded dramatically—144%—to $131.5 million, despite only 10% greater wagering, while other table games rose 19% to $209 million on 21% larger betting. Numbers like those made up for the rest of the county. North Las Vegas waned 5% to $25.5 million and Laughlin slipped 3% to $47 million. At least the Boulder Strip was flat at $88.5 million while miscellaneous Clark County dipped a point to $140 million. Utah-fed border markets Mesquite ($15 million) and Wendover ($23.5 million) were flat and up 4.5%, respectively. Reno stumbled 4.5% to $63 million while Lake Tahoe wasn’t favored by the sunbirds, drawing $17.5 million for a 14% dive.
We don’t normally think of Gaming & Leisure Properties Inc. as a company that gets taken to the cleaners but Bally’s Corp. sure got the better of it in a $1 billion sale of its two Rhode Island casinos. It will only cost Bally’s $76 million a year to lease them back. The 15-year lease can be extended for an additional 20, in five-year increments at Bally’s discretion. If the deal somehow doesn’t pass regulatory muster, a fallback clause gives GLPI Bally’s Tiverton for $48.5 million, part of a $635 million contingent that would see the REIT get Hard Rock Biloxi instead. Bally’s also gets a $200 million deposit and $9 million closing fee. Considering that Bally’s is much in need of capital to fund its Chicago megaresort, we’re pleasantly surprised that it was able to drive such a hard bargain with GLPI for what are less than trophy assets.
Before CEO Lee Fenton pops the champagne cork, however, he’s got to contend with a potential strike at Twin River Casino in Lincoln. Workers there are fed up with their wages and with staffing levels they deem insufficient. Bally’s should have seen this coming but evidently thought a partial (and mostly toothless) smoking ban would call off the dogs. Luckily for management, the strike only would affect 200 employees in Lincoln and none of the Tiverton ones.
It’s hard to believe but yesterday marked four years of operation for Hard Rock Atlantic City. Time sure flies when you’re making money hand over fist. How long that continues remains open to question, with casino workers likely to walk off the job tomorrow as the major operators continue to play chicken with the Fourth of July weekend. Hard Rock prexy Joe Lupo, who won’t have to face picketers until Sunday, could afford to be at least somewhat upbeat. “We’re looking forward to a great July 4 weekend, and I don’t have any reason to believe otherwise,” he told reporters. “Obviously, high gas prices have impacted us a little bit, but I’m looking forward to a very positive July and a very positive summer.” Does he know something we don’t or is he just whistling past the graveyard?
As for a contingency plan, Lupo would only say that “We’ll have rooms every day. There’s no doubt that our rooms and our property will be open. I can assure you that our casino floor will be open, and our shows will go on.” Casino workers are far less sanguine. Said Caesars Atlantic City housekeeper Irina Sanchez, “I have to think about which bill to pay at the end of the month because I have to have the money either for the rent or for the bills and then I’ll pay the other with the next check.” And that’s on $16.25/hour, scarcely more than the new base wage Unite-Here is said to be requesting. “We sacrificed wages for a lot of years to secure our healthcare and pension,” added Caesars server Jeff Payne. “Casinos are doing very well. They’re making billions of dollars in profits and they don’t want to invest in the workers. It’s a struggle at this point and everyone is having a really hard time with everything going up, and the company is unwilling to put any wages on the table.”
Salaried casino workers are averaging $15.81/hour, subpar even by Atlantic County standards, where the living wage is $18.83/hour, per the Massachusetts Institute of Technology. Workers say the casinos have no one to blame but themselves for a shortage of employees, due to their unwillingness to pay decently. The casinos, for their part, are trying to get around this by dint of subcontracting, something Unite-Here wants to curtail. The union is clearly ready for battle despite (or perhaps due to) management’s complacency. Thanks to contingency agreements with Unite-Here, Bally’s Atlantic City and Ocean Casino Resort will be spared picket lines, good news for all concerned. Also reprieved are Resorts Atlantic City and the Golden Nugget, which have yet to sit down with the union, preoccupied with Caesars Entertainment and MGM Resorts International. As for the holdouts, some are scoffing at the idea they will be able to hire scabs. “I don’t believe in this day and age there are any workers out there to bring in,” said bartender Ruth Ann Joyce. If you can’t find anybody at $16 an hour, who’s going to take scab wages?
Despite the dire state of negotiations, Local 54 President Bob McDevitt counseled optimism, telling The Associated Press, “There’s ample opportunity for us to get momentum in negotiations and follow that to an agreement.” Even so, he made it clear where the blame lay: “This is the time where it’s really up to the companies. They know what our objectives are.” So if you’re going to the Boardwalk this weekend, patronize the Nugget, Bally’s, Ocean and Resorts. As Councilman Kaleem Shabazz said. “Atlantic City needs a peaceful summer free of strife and uncertainty.”
Jottings: More bad PR for gambling in Georgia—”charity” gaming outfit Little Kings & Queens has been seized for tax filings that were “extremely vague” and for running an illegal gambling enterprise. The card room somehow made $2 million in 2019 but can’t explain how … Disgraced celebrity horse trainer Bob Baffert makes a return to competition on Sunday. Churchill Downs CEO Bill Carstanjen put it best, “Mr. Baffert’s record of testing failures threatens public confidence in thoroughbred racing and the reputation of the Kentucky Derby.” The ultimate victim of Baffert’s chicanery, Medina Spirit, died of a heart attack last December … The future of two Macao casinos is in doubt. Legend Palace and Babylon Casino combined to lose $152 million last year. Deep layoffs are planned and former CEO Levo Chan faces money laundering charges … Despite prodding from Gov. Larry Hogan (R), regulators in Maryland are in no hurry to approve rules for sports betting, which is meant to launch on Sept. 8. The Sports Wagering Application Review Commission is at odds with itself over minority representation in the industry, and whether high scrutiny is required of restaurants and bars or whether it will be too discouraging … David Lee, a developer in the Los Angeles area, has been found guilty of bribing then-councilman José Huizar with casino chips. Huizar allegedly promised to make union opposition to a 77-story Lee project ‘go away’ if he received 500 grand, laundered naively and obviously through Las Vegas casino cages. (Of all places to launder money!) Lee could face 50 years in the slammer and a $1.5 million fine … Trouble in Laughlin? A top executive at Aquarius Casino Resort and Edgewater Casino Resort has abruptly quit. No further details are available on General Manager Sam Hammond‘s resignation.
Quote of the Day: “All you have to do is take a close look at yourself and you will understand everyone else.”—Isaac Asimov
