Uneasy lies the head that wears Crown; IGT’s cautious future

Allowed Crown attorney Robert Craig, “Crown accepts that an inference can be drawn that in some point in time, deposits into the Riverbank and Southbank accounts were more probably than not part of cuckoo smurfing activity.” (Stock trading in the company was halted.) Bergin wasn’t impressed, asking, “What are you saying Mr. Craig, really, it’s either indicative of money laundering or it isn’t?”

“What I’m saying is, an inference can be drawn from this report that in some point in time deposits into those accounts were more probably than not cuckoo smurfing activity, a form of money laundering,” was Craig’s defense. “What can’t be done, based on this analysis, is an identification on whether any particular instance of a transaction is or is not money-laundering. One needs to be careful of the standard of proof one is applying as well.” Obviously, Crown would be more comfortable with a lenient interpretation of the facts. However, if Bergin is ultimately merciful, Crown will be moving forward in New South Wales under an electron regulatory microscope.

New Jersey Gov. Phil Murphy (D) says there is no connection between the Garden State’s Covid-19 positivity rate and Atlantic City‘s casinos. We’re inclined to believe him. The positivity rate among Boardwalk casino employees is 1%, compared to a statewide 11%, much of that concentrated in the northern counties. Contrast this to South Dakota, where Gov. Kristi Noem (R) presides over a 60% positivity rate, mocks science, does nothing and wiles her time away commissioning models for adding Donald Trump‘s noggin to Mount Rushmore. (We wish we were making that up.) Deadwood was never so aptly named. Back on Planet Earth, Ohio Gov. Mike DeWine (R) is imposing casino curfews for a three-week cooling off period. Since Ohio casinos are outperforming the rest of the nation the pain should be relatively slight.

International Game Technology got a modified vote of confidence from Credit Suisse analyst Ben Chaiken, who elevated the stock to “neutral” from “underperform.” He said he was “increasingly positive” about IGT although Wall Street had cooled to it even before Coronavirus. Chaiken’s prior caution was attributable to a slowing pace of casino openings (i.e., fewer product sales), loss of slot-floor space to sports books, pandemic-driven cost cuts among operators and lower lottery payouts in Italy amidst higher taxes. “Our position is that ’22 should be reasonably close to pre-COVID-19 gaming demand; as such, the decline in street estimates feels like structurally lower expectations vs. the tail of an extended recovery,” wrote Chaiken. He added that sales projections of slots are now 25% lower than before the pandemic. It’s not a great time to be in the slot biz but at $12/share IGT might be a low-risk play, provided you can wait until 2022 for it to pay off.