{"id":11208,"date":"2013-07-30T10:14:51","date_gmt":"2013-07-30T18:14:51","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=11208"},"modified":"2013-07-30T10:14:51","modified_gmt":"2013-07-30T18:14:51","slug":"a-tale-of-two-cities","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/a-tale-of-two-cities\/","title":{"rendered":"A tale of two cities …"},"content":{"rendered":"

… and both of them are Las Vegas<\/strong>. Last week, Sheldon Adelson<\/strong> pitched a fit about how he thought MGM Resorts International<\/strong> and Caesars Entertainment<\/strong> were driving down his room rates (as though it were \"\"the job of Jim Murren<\/strong> or Gary Loveman<\/strong> to protect Adelson’s ADRs). He also included Steve Wynn<\/strong> in his “woe is us” monologue — quite erroneously, it turns out. Wynn Resorts<\/strong> released its 2Q13 figures yesterday and they reflected “strong LV Strip … performance,” propelled by high-end customers<\/a>, according to J.P. Morgan<\/strong>‘s Joseph Greff.<\/strong> While Macao numbers “were below our fairly low expectations,” Wynncore more than made up for it, including $12 million in bad-credit redemption. Strip metrics met or exceeded Greff’s expectations, with net revenues up 16% and revenue per room up 9%, despite lower occupancy. The house was lucky at the slots, increasing win 10% despite flat coin-in.<\/p>\n

About the closest thing to a cloud on the horizon is the cost of Wynn Cotai<\/strong>, which is creeping up toward $4 billion. No wonder, what with a Bellagio-style lake and an aerial tram, whose cars will be modeled upon smoke-breathing dragons<\/a>. Topiaries galore will also stud the property. Never underestimate Steve Wynn’s capability to surprise.<\/p>\n

Down the street<\/strong>, at Caesars Entertainment, things were not looking so hot. Friendly media outlets were \"\"quick to spin it as They Didn’t Lose As Much Money This Year<\/a>. Even Deutche Bank<\/strong>‘s Carlo Santarelli<\/strong>, one of Caesars’ few enthusiasts on Wall Street,<\/strong> could only muster muted enthusiasm for the numbers if that. Visibility into Caesars data will be cloudier going forward, as Loveman will be slopping llinois<\/strong>, Indiana<\/strong>, Iowa<\/strong>, Louisiana<\/strong>, Mississippi<\/strong> and Missouri<\/strong> under the category “Other U.S.” (Got something to hide, Gary?) Net revenue and cash flow undershot Santarelli’s expectations in nearly every category. Gaming revenues were off $117 million (or $63 million in \u00a0Vegas, -15.5%), prompting Loveman to blow the following smoke up The Street’s ass: “Food and beverage revenues were up very meaningfully<\/em> [i.e., 9%] in a year when gaming revenues were weak, and we do think that trend is with us for a long time to come. We have visitors that are coming to Las Vegas principally for nongaming activities, though they may gamble a little while they\u2019re here<\/em>.\u201d<\/p>\n

\"\"Gamble “a little”?<\/strong> Well, I guess Caesars can save money by closing down a few casinos, what? Caesars lost ‘only’ $212 million on the quarter. Thanks to the resort fees which Loveman once loudly eschewed, room revenues were up 6%, with occupancy down a wee bit, to 95%. Wrote Santarelli, “revenues were impacted by softer gaming volumes year over year, a weaker hold percentage year over year, and closure of certain properties due to renovations<\/em>.” (Emphasis added.) As I’ve asked before, with Caesars at the edge of a chasm, was this the time to rip apart two casinos when the company needs every one-armed bandit it can muster?<\/p>\n

Even as his company goes to Hades<\/strong> in a handbasket, Loveman sees no shame in flaunting his wealth<\/a>. (His shockingly gaunt appearance may give investors a fright, though.) “Fail to the Chief” would be a more apt title but\u00a0Haute Living<\/em> plays along, applauding Loveman’s aversion to actually living in Las Vegas — despite his company’s preponderance of properties along the Strip — and never, ever being so indiscreet as to mention the the $20 billion-plus in long-term debt that is the anchor around Caesars’ neck.<\/p>\n

Better Mousetrap Dept<\/strong>.: OK, once you’ve gotten the Asian VIP player into your Macao casino, how do you get them to play at your casino on the (much lower-taxed) Las Vegas Strip<\/strong> instead? More high-roller suites and better retail<\/a> are the surprisingly simple answers. according to Business Week<\/em>. And don’t forget: Nevada<\/strong> casinos are allowed to extend credit, something they’ve been constrained from doing in Macao. Collecting from a bad debtor who’s absconded to China<\/strong> … well, that’s still an impossible mission.<\/p>\n","protected":false},"excerpt":{"rendered":"

… and both of them are Las Vegas. Last week, Sheldon Adelson pitched a fit about how he thought MGM Resorts International and Caesars Entertainment were driving down his room rates (as though it were the job of Jim Murren … 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":[28,18,14,7,11,12,32,31,9,19,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/11208"}],"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=11208"}],"version-history":[{"count":1,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/11208\/revisions"}],"predecessor-version":[{"id":11209,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/11208\/revisions\/11209"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=11208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=11208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=11208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}