{"id":10001,"date":"2012-11-02T10:17:13","date_gmt":"2012-11-02T18:17:13","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=10001"},"modified":"2022-06-24T05:34:14","modified_gmt":"2022-06-24T13:34:14","slug":"third-quarter-blahs-ameristar-boyd-mgm","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/third-quarter-blahs-ameristar-boyd-mgm\/","title":{"rendered":"Third-quarter blahs: Ameristar, Boyd, MGM; Crackdown in Alabama"},"content":{"rendered":"

\"\"While nobody quite matched the $221 million loss posted by Caesars Entertainment<\/strong>, the gaming industry didn’t lack for underachievers in 3Q12, thanks largely to softness in domestic casino markets. Ameristar Casinos<\/strong> reported a $16 million profit, despite a 2% revenue decline. Slightly improved performance in Colorado<\/strong> was offset by new competition in Kansas City<\/strong> (-7%) and the road-construction issues to that continue to bedevil Ameristar East Chicago<\/strong> (-8.5%).<\/p>\n

J.P. Morgan<\/strong> analyst Joseph Greff<\/strong> praised Ameristar’s ability to generate cash flow (“yields among the strongest in the sector”) but advised caution in “no-to-slow-growth” markets such as \"\"those which are Ameristar’s bread and butter. His colleague at Deutsche Bank<\/strong>, Carlo Santarelli<\/strong>, applauded Ameristar’s cost-control methods but also worried that “a soft domestic consumer, new competition, and limited near-term growth … largely offset potential upside stemming from a long-term growth driver in Lake Charles<\/strong> and less cannibalization fears than regional peers<\/em>.” CEO Gordon Kanofsky<\/strong> talked up a pair of big-ticket new projects<\/a>, only one of which is a certainty: $570 million, 7,000-room (!) Ameristar Casino Lake Charles<\/strong>, opening in late-summer 2014. In Massachusetts<\/strong>, Kanofsky hopes to knock ’em dead with a $910 million (!!), 3,300-slot Springfield casino, but he’ll have to outdo presentations from Penn National Gaming<\/strong> and MGM Resorts International<\/strong>, too.<\/p>\n

\"\"A modest loss<\/strong>, some $16 million, dimmed Boyd Gaming<\/strong>‘s luster, as it came in well below analyst expectations. Greff noted that the company is heavily exposed in markets with limited growth prospects (like Atlantic City<\/strong> and … Las Vegas<\/strong>) and 4Q12 will probably be no better. A strong marketing push in Hawaii<\/strong> lifted Boyd’s Downtown<\/strong> performance but Hurricane Isaac<\/strong> inflicted worse-than-expected damage on the company’s Dixie numbers. CEO Keith Smith<\/strong> tried to push back by highlighting improvement<\/a> in net revenue (up 24%) in the Midwest and deep South, as well as the capital infusion that is expected to follow closure of the $1.45 billion Peninsula Gaming<\/strong> purchase, which opens Iowa<\/strong> and, more importantly<\/a>, Kansas<\/strong> to Boyd.<\/p>\n

\"\"MGM let forth a deluge<\/strong> of red ink, $181 million<\/a>. CEO Jim Murren<\/strong> (left<\/em>) had the usual spiel about “accelerating” recovery and emphasized a “record third quarter” at CityCenter<\/strong>, which is a bit like saying you’ve got the tallest building in Mogadishu<\/strong>. Cash flow at the $8.5 billion metaresort is on pace for a 3% ROI, which tells you why there’s no new resort development on the Las Vegas Strip<\/strong>, no matter what Atlas Shrugged<\/em> nonsense Steve Wynn<\/strong> bellows at Jon Ralston<\/strong>: There’s no return in it. Isn’t. Hasn’t been. Won’t be for years yet. End of story.<\/p>\n

It’s no mystery<\/strong> why MGM had such a poor quarter. It’s lumbered with $13.5 billion in long-term debt and continues to borrow. So you might say the jockey (Murren) is carrying the horse (debt service.) Business at MGM Grand Paradise<\/strong> in Macao<\/strong> was up substantially, $42 million for the quarter, while Las Vegas<\/strong> properties suffered a 2% decline. Business was flat at MGM Grand Detroit<\/strong> — feeling new competitive pressure from Ohio<\/strong> — but modestly up in Mississippi<\/strong>. That Macao casino is a powerhouse: All by its lonesome it generated 56% as much revenue as MGM’s huge Strip portfolio combined<\/em>. Too bad that Cotai Strip<\/strong> expansion is unlikely to be completed before 2017. MGM sure could use the patacas.<\/p>\n

\"\"“Bingo Bob” Riley<\/strong> (left<\/em>) may be long gone from the governorship of Alabama<\/strong> but his crusade to extirpate electronic bingo continues, now under the stewardship of state Attorney General Luther Strange<\/strong>. He’s conducted the latest in a series of raids, this one targeting Southern Star Casino<\/strong>. The mere threat of approaching lawmen was enough to put Victoryland<\/strong> and Center Stage<\/strong> out of business … again. The current administration came into office promising to put electronic bingo up to popular vote. If the existence of a “Governor’s Illegal Gambling Task Force” doesn’t put the lie to that rhetoric, try this baleful blast from Strange: “Until the Alabama Legislature<\/strong> acts to create an effective deterrent for large scale illegal gambling, individuals will continue to engage in illegal gambling activity and openly defy the law … The Legislature must change that weakness in our law and create a badly needed deterrent for large scale illegal gambling by increasing the penalty for operating an illegal slot machine casino to a felony<\/em>.”<\/p>\n

Politicians come and go in the Cotton State but piety remains.<\/p>\n","protected":false},"excerpt":{"rendered":"

While nobody quite matched the $221 million loss posted by Caesars Entertainment, the gaming industry didn’t lack for underachievers in 3Q12, thanks largely to softness in domestic casino markets. Ameristar Casinos reported a $16 million profit, despite a 2% revenue … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[135,40,23,60,56,27,28,44,51,117,7,144,58,86,45,84,62,53,112,11,35,39,71,69,32,9],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10001"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=10001"}],"version-history":[{"count":4,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10001\/revisions"}],"predecessor-version":[{"id":31313,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/10001\/revisions\/31313"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=10001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=10001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=10001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}