Tidal Wave in Atlantic City; FanDuel hits paydirt

Is Ocean Casino Resort‘s new leadership sweating comps? Our East Coast correspondent tried to score two for a Boz Scaggs concert, couldn’t, but paid anyway. What did he see? “The concert was far from being sold out. Do you think they could have given away ‘comp’ tickets for at least some of those empty seats?” Even so, the casino floor “was still very crowded” at 11 p.m. He did spot a construction flaw in the ultra-popular casino: “The other photo is in the self-park garage. I’m not an engineer, but isn’t the concrete supposed to meet the metal? The light you see is from the garage level below.”

Not surprisingly, Bally’s Atlantic City and Golden Nugget couldn’t quite match Ocean’s level of business, or that of sold-out Borgata (this was the weekend before last), but were doing better this past weekend … and the slots were good and loose: $1,717 won on a 40-buck pay-in. “On the beach, was the three-day ‘Tidal Wave‘ Country music festival. For the three days, it’s quite expensive, as much as $750 per person if you want a place to sit down.” Biz on the Boardwalk must be pretty good if it can support those kind of prices.

On an unhappier note, we are told, ‘If the “merger’ of Jet Blue and Spirit goes through, the (rumored) basis of the merger is Jet Blue wants: a) all of their pilots, and b) all of their airplanes. Jet Blue won’t continue to operate a ‘low cost’ airline and Atlantic City will lose its only scheduled airline.” That’d be a damned shame.

Casinos in Massachusetts won $99 million last month, a 3% increase over last year. Encore Boston Harbor was way out in front with $65 million, a 9.5% gain. MGM Springfield had a pretty terrible July, slipping 9% to $21.5 million (and to think the Massachusetts Gaming Commission believes MGM should add staff). Plainridge Park racino dipped 3.5% to $12.5 million but was flat with 2019, which marks it as a pretty consistent performer.

From the distant past (otherwise known as June) come Illinois‘ sports betting numbers, with $41 million in revenue generated upon $628.5 million. As usual, FanDuel was first with $18 million, then came DraftKings‘ $9 million and BetRivers‘ $5.5 million. The only other performer of consequence was Barstool Sports, which garnered $3 million.

Speaking of FanDuel, it broke the cone of silence last Friday to announce its first-ever quarterly profit, proving that there is indeed money to be made in OSB. Said CEO Amy Howe, who earns a gold star, “what we’re seeing candidly coming out of the Super Bowl, is if you look at the relationship between our player values and customer acquisition costs, that formula was great.” These were same-store results (meaning that no new states came into the fold) and were further improved by paring back marketing spend. FanDuel is also the preferred provider in all but two of the 15 states in which it is operational.

This doesn’t necessarily point to a profitable year for FanDuel, given the huge ramp-up in campaign spending in California. Howe was, however, unworried about the larger economy, noting that the bulk of her customers were “casual” bettors, wagering relatively small sums. “Customers are viewing this as a form of entertainment,” Howe said. “If we keep giving a great proposition, we feel confident we’ll maintain the fundamentals. It’s something we’re keeping our eye on.”

In the meantime, FanDuel continues to move closer to Nevada licensure, in tandem with Boyd Gaming, which has been promoting a soon-to-come FanDuel sports book at the Fremont Hotel, part of a major capex reinvestment in the property. The Nevada Gaming Control Board has tentatively approved the deal and we can’t think of one reason why it shouldn’t have. Boyd will do the hands-on operation of the book, splitting the revenue with FanDuel, a risk/reward scenario that has worked out plenty well for Boyd: $30 million anticipated cash flow this year with more expected in 2023. “Stay within the confines of your licenses,” warned NGCB Chairman Brin Gibson vis-a-vis forbidden DFS and any FanDuel-run OSB. Howe demurred about opening a Nevada office, although Gibson urged her to do so.

Nipping a scandal in the bud, Resorts World New York has cut ties with ex-security boss Timothy Pearson, freeing the latter up to continue advising New York City Mayor Eric Adams (D) on megaresort selection. According to the New York Post, “Pearson, who worked with Adams during their days at the NYPD, never informed his bosses that he was moonlighting and getting paid by [New York City Economic Development Corp.].” That being the case, the opprobrium falls upon Adams and not Genting Group. Adams is waxing defiant about the Pearson hire and it remains to be seen if we’ve heard the last of the matter.

Jottings: Construction began last week on $650 million Caesars Virginia (above), in Danville, a joint venture with the Eastern Band of Cherokee. When finished in two years, Caesars Virginia will sport 1,300 slots, 85 table games, 24 electronic table games, a 500-room hotel and a 2,500-seat event center … Hollywood York, in Pennsylvania, is officially a success, having grossed $77 million in Year One. It has gone to ’round-the-clock operations and will be adding 70 slot machines shortly … Last month, Macao hit an all-time low in gambling revenue, with the city’s casinos grossing a collective $49 million. Players can go back to the casinos—if they can produce a negative Covid-19 test … Warhorse Casino in Lincoln, Nebraska, should open a month from now in the form of a temporary facility with 400 slot machines. Things are not proceeding so smoothly in Omaha, where constricted road access is delaying a Warhorse-branded casino … Shares of slot-maker Play AGS jumped like a pogo spring (up 31%) upon news of a takeover offer by Inspired Entertainment to the tune of $370 million. Venelazzo owner Apollo Management is a not-disinterested party, as it owns a stake in AGS … In a non-responsive response to rival Stacey Abrams‘ call for casinos and sports betting in Georgia, Gov. Brian Kemp (R) said only, “It’s gonna take a constitutional amendment,” passing the buck to the electorate.

Quote of the Day: “Never give up, for that is just the place and time that the tide will turn.”—abolitionist Harriet Beecher Stowe