{"id":27669,"date":"2020-08-03T07:14:21","date_gmt":"2020-08-03T15:14:21","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=27669"},"modified":"2020-08-05T03:03:10","modified_gmt":"2020-08-05T11:03:10","slug":"devil-in-the-details","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/devil-in-the-details\/","title":{"rendered":"Devil in the details"},"content":{"rendered":"\n<p class=\"has-drop-cap\"><strong>Gaming &amp; Leisure Properties Inc<\/strong>. held a conference call with stock analysts and it revealed more about <strong>Caesars Entertainment<\/strong> and, to a lesser extent, <strong>Penn National Gaming<\/strong> than the companies themselves were saying. Rents and income were described as &#8220;better than expected&#8221; and GLPI used the present crisis to its advantage to &#8220;strengthen its relationship&#8221; with Caesars in return for &#8220;increased near-term flexibility&#8221; on its leases, which GLPI extended by five years. No more variable rent, though. In other news &#8230;<\/p>\n\n\n\n<!--nextpage-->\n\n\n\n<ul><li>GLPI-owned <strong>Casino Queen<\/strong> is the only GLPI property to be delinquent on its rent. It will be made whole by new owner <strong>DraftKings<\/strong> by December 31.<\/li><li>&#8220;GLPI continues to evaluate inquiries for the <strong>Tropicana Las Vegas<\/strong> and is being patient as it waits for <strong>Las Vegas<\/strong> to return to some semblance of normalcy [<em>sic<\/em>].&#8221; Given the meager results generated by the recent <strong>Skyvue<\/strong> auction, will GLPI be able to recover its (discounted) $307.5 million price tag on the Trop?<\/li><li>If\u2014as probably will happen\u2014Caesars sells <strong>Tropicana Evansville<\/strong>, GLPI wants to hang onto the underlying real estate.<\/li><li>Caesars&#8217; riverboat in <strong>Greenville<\/strong>, <strong>Mississippi<\/strong>, may be for sale.<\/li><li>CEO <strong>Tom Reeg<\/strong> is welshing on a commitment to Louisiana regulators to revamp ancient <strong>Belle of Baton Rouge<\/strong> and is looking to sell Caesars&#8217; stake in it. Neat trick: Promise capex improvements to get approval of your merger, then go back on your word.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" width=\"1024\" height=\"775\" src=\"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1-1024x775.jpg\" alt=\"\" class=\"wp-image-25240\" srcset=\"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1-1024x775.jpg 1024w, https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1-150x114.jpg 150w, https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1-300x227.jpg 300w, https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1-768x581.jpg 768w, https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-content\/uploads\/2019\/10\/Bellagio-1.jpg 1283w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"has-drop-cap\"><strong>MGM Resorts International<\/strong> held its first investor call with <strong>Bill Hornbuckle<\/strong> as permanent CEO and was able to report positive cash flow at all <strong>Las Vegas Strip<\/strong> resorts except <strong>Mandalay Bay<\/strong> (despite cost cuts). &#8220;The properties have benefited from pent-up demand (particularly at the high-end\/<strong>Bellagio<\/strong>) following reopening, but there has been some deceleration in July,&#8221; reports <strong>JP Morgan<\/strong> analyst <strong>Joseph Greff<\/strong>. Midweek occupancy is described as &#8220;a challenge.&#8221; The company is leaning more heavily on <strong>Mlife<\/strong> to generate casino customers (30% of the mix instead of the usual 20%) and while occupancy has slipped, those who are renting rooms are spending 25% more than usual. &#8220;The short, one-week booking window in Las Vegas remains a challenge, and while bookings have been fairly steady, cancellations related to COVID-19 flare ups have made forecasting nearly impossible &#8230; and a lot of <strong>Mirage<\/strong> customers have shown willingness to stay at MGM\u2019s other properties.&#8221;<\/p>\n\n\n\n<p>Convention &#8220;leakage&#8221; is seeing into the first quarter of next year. The rest of 2021 looks better and convention planners tend to re-book rather than cancel outright. Most employees are still working part-time, with only 40% of the force full-time equivalents. Hornbuckle is sticking with <strong>MGM 2020<\/strong> and it must be awfully easy to save money when you&#8217;re running a quasi-skeletal operation. On a not-unrelated note, management is leery of comps and promotions for the time being. It is expecting a stronger result from its regional properties, where 70% of the revenue is gaming-derived, compared to 30% for Las Vegas (where <a href=\"https:\/\/ggbnews.com\/article\/las-vegas-faces-uphill-battle-to-recovery\/\">so many amenities are still dark<\/a> or going that way &#8230; adieu, <strong>Sage<\/strong>.) Overseas, MGM is experiencing 90% occupancy at its non-gaming hotel in <strong>China<\/strong> and is &#8220;optimistic&#8221; that <strong>Beijing<\/strong> will finally reinstate the (crucial) individual visa scheme &#8230; in September, but in time for Golden Week in <strong>Macao<\/strong>. (This all presumes no resurgence of Covid-19, in which case the government has promised to re-close the casinos.) Overall, we can see why management was upbeat.<\/p>\n\n\n\n<p>Speaking of Macao, <strong>Deutsche Bank<\/strong> analyst <strong>Carlo Santarelli<\/strong> projects a long\u2014but ultimately successful\u2014return to normality. Gaming revenues this year, he forecasts, will be 85% off the pace and 68% down next year. But casinos come roaring back in 2022, up 150%, leveling off in 2023 with a 9% increase. Pass the word.<\/p>\n\n\n\n<p class=\"has-drop-cap\">&#8220;I sold <strong>Skyvue<\/strong> and all I got was this lousy T-shirt.&#8221; That&#8217;s what <strong>Colliers International<\/strong> should be saying. After fielding 271 expressions of interest, the bottom fell out of the Strip property, most of which sold to <strong>Wayne Perry<\/strong> for less than $4\/acre. Worse still, he bought it with a &#8220;credit bid.&#8221; Which is to say he pledged $75 million that <strong>Howard Bulloch<\/strong> owes him against the acreage. It&#8217;s not <em>Monopoly<\/em> money but it&#8217;s close. Our best guess is that Perry will sit on the land until the Vegas economy improves, then flip it to someone with some real <em>di\u00f1ero<\/em>. Expect Bulloch&#8217;s two lonely pillars and mascot <strong>Tiny the Tumbleweed<\/strong> to remain in residence for the foreseeable future.<\/p>\n\n\n\n<p class=\"has-drop-cap\">Ownership of two Strip mainstays, <strong>Il Mulino<\/strong> and <strong>California Pizza Kitchen<\/strong>, <a href=\"https:\/\/vegas.eater.com\/2020\/7\/31\/21349191\/il-mulino-cpk-bankruptcy-protection-coronavirus-pandemic\">filed Chapter 11<\/a>. Il Mulino&#8217;s umbrella corporation is $36 million in debt and was in danger of having its restaurants seized. California Pizza Kitchen was even deeper in the hole\u2014$400 million\u2014having defaulted on rent payments during the <strong>Coronavirus<\/strong> pandemic.<\/p>\n\n\n\n<p><strong><em>Jottings<\/em><\/strong>: In <strong>Oklahoma<\/strong>, a big loss for Gov. <strong>Kevin Stitt<\/strong> (R). A federal district court has ruled that tribal gaming compacts rolled over last January 1, just as the tribes have been saying all along &#8230; Indecision is afoot in <strong>Japan<\/strong>. Now <strong>Sheldon Adelson<\/strong> may withdraw his withdrawal from the bidding, while MGM is having second thoughts about the ROI in <strong>Osaka<\/strong>, which we never thought would justify a $10 billion investment &#8230; The <strong>Massachusetts<\/strong> Lege has ash canned sports betting for the moment. As <strong>Boston Red Sox<\/strong> fans are already saying, Wait &#8217;til next year &#8230; Rep. <strong>Joe Kennedy<\/strong> (D), scrounging up votes in his bid to unseat Sen. <strong>Ed Markey<\/strong> (D), has introduced legislation to reinstate the <strong>Mashpee Wampanoag<\/strong> reservation. It may be a slam-dunk in the <strong>House of Representatives<\/strong> but such bills have always stalled in the <strong>U.S. Senate<\/strong>, where the Grim Reaper awaits &#8230; Pre-approved lines of credit straight from slot machines or table games? It&#8217;s a problem-gambling advocate&#8217;s worst nightmare. <a href=\"https:\/\/ggbnews.com\/article\/global-gaming-business-podcast-gary-ellis-owner-ellis-island-casino-hotel-tom-jingoli-evp-coo-konami-gaming-inc\/\">Listen<\/a> and decide for yourself.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gaming &amp; Leisure Properties Inc. held a conference call with stock analysts and it revealed more about Caesars Entertainment and, to a lesser extent, Penn National Gaming than the companies themselves were saying. Rents and income were described as &#8220;better &hellip; <a href=\"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/devil-in-the-details\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":26579,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[244,274,18,277,14,190,171,112,245,115,69,33,90,254,12,243,9,20],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/27669"}],"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=27669"}],"version-history":[{"count":2,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/27669\/revisions"}],"predecessor-version":[{"id":27673,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/27669\/revisions\/27673"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media\/26579"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=27669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=27669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=27669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}