{"id":23482,"date":"2019-02-07T11:32:43","date_gmt":"2019-02-07T19:32:43","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=23482"},"modified":"2019-02-07T11:52:10","modified_gmt":"2019-02-07T19:52:10","slug":"maryland-booms-illinois-frozen-out-resort-fees-to-rise-again","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/maryland-booms-illinois-frozen-out-resort-fees-to-rise-again\/","title":{"rendered":"Maryland booms, Illinois frozen out; Resort fees to rise … again"},"content":{"rendered":"

Business continues to boom for MGM National Harbor<\/strong>, which raked in $57 million last month, 12% growth and 41%\u00a0of the Free State’s $137 million gross gaming revenue. \"\"Maryland Live<\/strong>‘s 34% market share translated into a gross of $46 million. Horseshoe Baltimore<\/strong> was flat, with a 15% market share and $20 million gross. The only revenue-negative casino was Hollywood Perryville<\/strong>, down 4% to $5.5 million. JP Morgan<\/strong> analyst Joseph Greff<\/strong> estimates it will remain flat for the rest of the quarter, Golden Entertainment<\/strong> and Churchill Downs<\/strong> had good Januarys. Rocky Gap Casino<\/strong> was up 9% to $4 million and Ocean Downs<\/strong> climbed 6% to $5 million.<\/p>\n

In West Virginia<\/strong>, gambling revenues were down 2%, driven by 4% lower slot winnings. At Penn National Gaming<\/strong>‘s Charles Town Races<\/strong> an 11% increase in table win couldn’t head off an 8% slot decline, bringing the racino 5% down.<\/p>\n

Illinois<\/strong> gambling revenues got walloped, down 10% to $95 million. Not even a neutral calendar nor an easy comparison (-5.6% in January 2018) could help, especially not when heavy snow and record cold temperatures evidently scared gamblers into seclusion. Two casinos were revenue-\"\"positive: Harrah’s Metropolis<\/strong> was up 17% to $5.5 million and Argosy Belle<\/strong> gained 4.5% to end with $3.5 million. Harrah’s Joliet<\/strong> ($13 million) suffered least of the losers, down 4%. Empress Joliet<\/strong> fell 14% to $7.5 million, Hollywood Aurora<\/strong> was down 10% to $8 million and Eldorado Resorts<\/strong> had its first taste of adversity at Grand Victoria<\/strong>, tumbling 11% to $11 million. I doubt they appreciated the symmetry of that figure. Rivers Casino<\/strong> plummeted 12.5% to $30.5 million.<\/p>\n

Downstate, Casino Queen<\/strong> plummeted 14% to $6.5 million, Par-A-Dice<\/strong> spiraled 16% earthward, to less than $5 million and Jumer’s Casino Rock Island<\/strong> shed 20.5% for a $4 million take. \u00a0Incidentally, Penn National met analyst forecasts and exceeded its own \"\"guidance, posting 4Q18 results of $1.1 billion net revenue and cash flow of $324 million. Greff opined that the “upside was entirely driven by PENN\u2019s legacy properties (mostly operating upside, some benefit from lower corporate expense) while the newly acquired [Pinnacle Entertainment<\/strong>]\u00a0assets were modestly below our projection,” probably driven downward by poor performance in Louisiana<\/strong>. One item that exceeded expectation was Penn’s expenditure on maintenance ($188 million), never a bad department in which to overshoot.<\/p>\n

Traffic bridge construction in Lake Charles<\/strong> and expansion of Monarch Casino<\/strong> in Black Hawk<\/strong> should negatively impact 1Q19 results, balanced by the addition of the Margaritaville<\/strong> revenue stream from Shreveport<\/strong>. Penn has a lot on its plate. In addition to closing the Greektown Casino<\/strong> acquisition it is starting construction of Hollywood Casino York<\/strong> ($120 million) and Hollywood Casino Morgantown<\/strong> ($111 million), both in Pennsylvania<\/strong>. Judging by the company’s ongoing silence about Phase II of the Tropicana Las Vegas<\/strong> we’re convinced Penn’s decided to stand past on that asset.<\/p>\n

* Would you believe that resort fees comprise as much as 25% of Las Vegas<\/strong> room rates at MGM Resorts International<\/strong> and Caesars Entertainment<\/strong> properties? You probably would. So it \"\"comes as no surprise that the giants are looking out to whale on the little guy with another round of fee increases, per Credit Suisse<\/strong> analyst Cameron McKnight<\/strong>. “We are surprised operators are considering an increase, given some indications the leisure customer is more price sensitive, very shaky 3Q:18 results, and no shortage of negative online commentary on ancillary fees,” he wrote. With early year room revenues at MGM properties tracking 10% higher than last year, you have to wonder: Why the push?<\/p>\n

In the meantime, despite poor attempts to include the community in the Las Vegas Raiders<\/strong> push, seats for the vagabond football team are selling well.\u00a0McKnight elaborates that “personal seat license sales at the new Raiders Stadium<\/strong> are running ahead of their \"\"$250mm budget, with the stadium now selling the lowest priced licenses. The most expensive tier is sold out and the second tier is 90% sold, with licenses offered to existing Oakland Raiders<\/strong> season ticket holders, then Las Vegas residents, and others. We estimate the opening of Raiders Stadium in the 2020 season could boost fall\/winter visitation by 3.3%, and is generally considered a key medium term catalyst.” We’d be curious as to how many Oakland<\/strong>-based fans are going to make the trek to Las Vegas eight times a year, especially after having their fandom raped by the Davis family.<\/p>\n

In other Vegas news, McKnight reports:<\/p>\n