{"id":32798,"date":"2023-08-02T08:31:39","date_gmt":"2023-08-02T16:31:39","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=32798"},"modified":"2023-08-13T05:09:38","modified_gmt":"2023-08-13T13:09:38","slug":"afterglow-at-caesars-trouble-at-resorts-world-gridiron-goof","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/afterglow-at-caesars-trouble-at-resorts-world-gridiron-goof\/","title":{"rendered":"Afterglow at Caesars; Trouble at Resorts World; Gridiron goof"},"content":{"rendered":"\n
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Although Las Vegas<\/strong> numbers from Caesars Entertainment<\/strong> were modestly down in 2Q23, as people visit Sin City more but gamble less, analysts were largely pleased with the results. Why not? A robust, $64 million improvement in the digital sphere of the Roman Empire more than made up for any declivity on the Las Vegas Strip<\/strong>. Online operations even posted an $11 million positive ROI, a sign that Caesars has turned the corner on Internet wagering. True, Wall Street<\/strong> didn’t execute cartwheels in the aisles, indicating that the CZR numbers were in line with what was expected. But stock analysts seemed generally satisfied.<\/p>\n\n\n\n\n\n\n\n

As J.P. Morgan<\/strong> analyst Joseph Greff<\/strong> pointed out, even the Strip shortfall could be excused, attributable to poor baccarat play by the house. With Las Vegas<\/strong> hotel occupancies for CZR running between 96% and 98%, execs were happy, although they revised some received wisdom to say that Formula One<\/strong> weekend was “looking strong” but that advance bookings for the 2024 Super Bowl<\/strong> were “exceedingly strong.” We’re not the least bit surprised.<\/p>\n\n\n\n

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Caesars is more stressed than before in Chicagoland<\/strong>, Tunica<\/strong> and Council Bluffs<\/strong> (above<\/em>), thanks to new competition. But that was, Greff reported, more than offset by refreshed properties elsewhere in the regional chain. The digital division’s performance is expected to benefit further from restraint in marketing, as well as by a new, standalone i-casino app that debuted recently. The analyst predicts a $195 million online profit next year, and tweaked his Las Vegas cash-flow projections for the remainder of this year to $474 million (3Q23) and $540 million. Management has earmarked $1.6 billion for debt reduction over the next six quarters, aiming for a 3.5X cash flow ratio by the end of 2024.<\/p>\n\n\n\n

“In general, we don’t think the 2Q23 results are likely to move the needle much, in either direction, for investors,” shrugged Deutsche Bank<\/strong> analyst Carlo Santarelli<\/strong> of the third-quarter data. He noted that the Strip properties benefited in 2Q22 from the triennial State Farm<\/strong> convention and that some labor-related cost increases were baked into the 2Q23 numbers. Although he thought Harrah’s Council Bluffs<\/strong> and nearby assets were still in for rough sledding, he noted that regional numbers were boosted by the “stub periods” of new Caesars temporary casinos in Nebraska<\/strong> and Virginia<\/strong>.<\/p>\n\n\n\n

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And despite previous talk of retrenchment, there may be expansion fever within the Roman Empire. “Interestingly, management noted that it would soon be in a position to be more aggressive with respect to external opportunities,” Santarelli chronicled. He noted that, given how management “has been aggressive in the M&A arena for an extended period of time,” and that non-Caesars Vegas and regional assets would likely be coming onto the market next year (alas, no candidates were nominated), a move that would accrete cash flow by 10% or more was likely. Small-fry operators need not apply for acquisition and forget about stock buybacks: In Santarelli’s view, Caesars deems M&A a more prudent use of cash than stock repurchases or dividends.<\/p>\n\n\n\n

More optimistic of our analyst cabal was Barry Jonas<\/strong> of Truist Securities<\/strong>. He proclaimed, “All’s well at the Palace” and said the numbers were “In-line with growing confidence.” Jonas reiterated his “Buy” rating on CZR shares. He dismissed the overall result as “seasonally slow,” highlighting the online-earnings beat and the strength of the Vegas event calendar. “Mgmt was pleased given a seasonally slower quarter still delivered strong leisure and casino guest demand … a return of international guests, and continued success of group\/convention business,” Jonas wrote. <\/p>\n\n\n\n

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CEO Tom Reeg<\/strong> (above<\/em>) and other top brass expect a $25 million cash-flow boost from the Las Vegas Grand Prix<\/strong>, over and on top of any casino winnings, “which mgmt noted high-end player interest is very strong.” Jonas added, “We believe this could be conservative if booking pace picks up into the event, especially given the potential for robust gaming volumes and hold. In addition, mgmt noted booking demand for February’s Super Bowl is dramatically ahead at higher room rates.” As Reeg said on the earnings call<\/a>, “if you look anecdotally at who\u2019ll be getting our tickets, the average customer who comes to the games with us is substantially more valuable than prior Super Bowls.\u201d<\/p>\n\n\n\n

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Resorts World Las Vegas<\/strong> CEO Scott Sibella<\/strong> is back in the hot seat<\/a> after the Nevada Current<\/em> reported that federal agents are “investigating allegations that current and former Las Vegas hotel employees used casino assets to pay gambling debts and provided confidential customer data to an illegal gambling ring that operated for almost two decades, according to sources.” Nevada Gaming Control Board<\/strong> employees have been called on the carpet and Sibella is identified as a target of the probe. Sibella has been accused of improprieties in the past but has had his ass covered by that unguided regulatory missile, George Assad<\/strong>. We’ll see if it’s different this time around. One has to worry a lot more if its the feds than if it’s merely the Nevada Gaming Commission<\/strong>. They almost invariably get their man.<\/p>\n\n\n\n

The NGCB claims it was already on the case and that it’s perfectly aware of the federal investigation. Indeed, pressure from Washington, D.C.<\/strong>, might well prompt the (underfunded) Control Board to act. If there’s a villain in the saga, it’s former baseball pro and convicted felon Wayne Nix<\/strong>, who is identified as being associated with a shady sports betting syndicate. Why the bettors under investigation didn’t place their act with any of the myriad Nevada legal books boggles the mind. At any rate, gambling debts were retired by passing promotional casino chips and secondhand comps along. While promo chips are supposed to be nontransferable, “highly-placed executives often have the authority to override those limits.” Hmmm.<\/p>\n\n\n\n

Sibella and Sig Rogich<\/strong>‘s boys were among those circling the wagons when the Current <\/em>came calling. Small wonder. Among the alleged malfeasances was a kickback ring wherein casino employees steered gamblers toward betting illegally and getting payola for doing so, provided the gamblers lost. Perhaps the most sobering aspect of the saga is this remark from the Current<\/em>‘s blockbuster source, \u201cIt took the U.S. Attorney in California<\/strong> to finally look into this stuff that\u2019s been going on for decades.\u201d If that’s the case, Silver State regulators have a lot of explaining to do.<\/p>\n\n\n\n

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So does Georgia<\/strong> man Jason Gerald Shenk<\/strong>, who scared up $32 million<\/a>, ostensibly to distribute the Bible<\/strong> in China<\/strong>. Instead, the money evidently went into gold, diamonds and gambling. (How did he manage to omit hookers and blow?) Per the Daily Beast<\/em>, “Shenk allegedly spent about $1 million on diamonds and precious metals, $7 million on his family farm, $320,000 on real estate in Chile, $4 million on 16 life insurance policies, $850,000 on shares of a private U.S. nuclear company, $820,000 on credit card payments and $1 million deposited in an online sports betting site\u2014which was subsequently shut down for fraudulent activity.” God<\/strong> help the sheep who followed this shepherd right off a cliff. (We don’t disapprove of missionaries for nothing.)<\/p>\n\n\n\n

Shenk could rack up as many as 41 indictments<\/a> … if the feds can find him. They admit they don’t know where he is and Shenk’s cat’s cradle of overseas shell corporations may help to obfuscate his whereabouts. It’s the proverbial international manhunt. In the meantime we’ll take our chances with honest gamblers over charlatans of virtue like Shenk.<\/p>\n\n\n\n

Finally, a real stinkeroo for college sports. Iowa State University<\/strong> QB Hunter Dekkers<\/strong> has been indicted for tampering with records<\/a> pertaining to an investigation of betting scandals at Iowa State and the University of Iowa<\/strong>. Dekkers’ malfeasances also include using his Mom as a front for his own sports-betting activities via DraftKings<\/strong>. (More egg on face for the OSB giant.) It gives new meaning to the old saw that a boy’s mother is his best friend. Wasn’t it Norman Bates<\/strong> who came up with that one? Bates or Hunter Dekkers, take your pick.<\/p>\n","protected":false},"excerpt":{"rendered":"

Although Las Vegas numbers from Caesars Entertainment were modestly down in 2Q23, as people visit Sin City more but gamble less, analysts were largely pleased with the results. Why not? A robust, $64 million improvement in the digital sphere of … 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":[244,307,274,277,152,37,86,189,35,156,25,279,74,243,9,215,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/32798"}],"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=32798"}],"version-history":[{"count":1,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/32798\/revisions"}],"predecessor-version":[{"id":32800,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/32798\/revisions\/32800"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=32798"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=32798"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=32798"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}