{"id":7878,"date":"2011-11-08T17:42:19","date_gmt":"2011-11-09T01:42:19","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=7878"},"modified":"2024-02-03T10:06:33","modified_gmt":"2024-02-03T18:06:33","slug":"rule-or-ruin-in-illinois-a-new-deal-in-detroit","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/rule-or-ruin-in-illinois-a-new-deal-in-detroit\/","title":{"rendered":"Rule or ruin in Illinois; A new deal in Detroit"},"content":{"rendered":"

\"\"State Rep. Lou “Death Wish” Lang<\/strong> (D, right<\/em>) continues to dare, then double-dare Gov. Pat Quinn<\/strong> (D) to veto what’s now a 2.6X expansion of the number of gambling positions in the state of Illinois<\/strong>. Lang has offered a few relatively meaningless concessions (such as: no slot routes at airports) but his demands still far exceed his compromises: five racinos and four outstate casinos, plus one in downtown Chicago<\/strong>. In keeping with his “screw you” attitude toward existing operators, Lang would curb the number of slots they are allowed to add by 20%. Somebody needs to smack Lang upside the head with the latest set of monthly revenue reports from the Land of Lincoln’s already embattled casino industry. First the good news<\/em>: Gross receipts have risen for five months straight, with only a hint of imminent decline.<\/p>\n

Now the bad news<\/em>: Those gains have been driven almost entirely by Rivers Casino<\/strong>, which opened last July in Des Plaines<\/strong>. In October, the only other casino posting a gain was Jumer’s Casino Rock Island<\/strong>, while Casino Queen<\/em>, moored in East St. Louis<\/strong> was flat.<\/p>\n

\"\"To put it bluntly, Neil Bluhm<\/strong>‘s Chicagoland casino ($31 million last month, right<\/em>) is kicking the crap out of its immediate rivals. Harrah’s Joliet<\/strong> ($18 million) and MGM Resorts International<\/strong>‘s Grand Victoria Elgin<\/em> (ditto) are feeling the worst of it but Penn National Gaming<\/strong>‘s Hollywood Aurora<\/em> ($13 million) and Empress Joliet<\/em> ($10 million) are hardly getting off unscathed. Penn can take consolation in the smaller percentage rate of its declines compared to the big boys. Over the past two months Empress Joliet<\/em> is -1% and Hollywood Aurora<\/em> is -10.5% (but still above Deutsche Bank<\/strong> analysts’ expectations). Rounding out a full year<\/em> of declining revs, the worst such streak in the state, Harrah’s Joliet is -12.5% in September and October, while Grand Victoria<\/em> is being decimated, -27% over the same 60-day period.<\/p>\n

\"\"Take Rivers Casino out<\/strong> of last month’s picture and the Chicago market was down 17%, St. Louis<\/strong> was -5% and the statewide average was -13%<\/strong>. Compare that to a year ago, when Chicago revenues were flat — as were statewide ones overall. Only two casinos showed double-digit declines in October 2010, compared to five<\/em> this year (Penn’s Alton Belle<\/em> -12%, Harrah’s Metropolis -19%, Harrah’s Joliet -11%, Hollywood Aurora<\/em> -11% and Grand Victoria<\/em> -29%). That’s scarcely a propitious climate for casino expansion. Rivers Casino has already grossed far more than did either Alton Belle<\/em> or Jumer’s Rock Island in all of 2010 and it’s within a couple of million of the entire 2010 grosses of Boyd Gaming<\/strong>‘s Par-A-Dice<\/em> (above<\/em>) and Harrah’s Metropolis.<\/p>\n

Facts may be stubborn things, pace<\/em> John Adams<\/strong>, but Lang is even stubborner. It’s an unfortunate reality that operators can’t hoist anchor and move their riverboats to Iowa<\/strong>, Missouri<\/strong> or Indiana<\/strong>. Instead they have to watch the sausage-making process in Springfield<\/strong> with what can only be great trepidation. If “Death Wish” Lou had set out to destroy Illinois’ casino industry on purpose, he could have hardly chosen a better time to administer the killing blow.<\/p>\n

\"\"Workers win one<\/strong>. It was bad timing for MGM in Detroit<\/strong>. One can’t very well ask the workforce for major concessions when you’re reporting an improved third quarter plus continuing upward trends<\/a> on the Las Vegas Strip<\/strong>. True, the company finished 3Q11 some $124 million in the red but two-thirds of that came from a writedown of Circus Circus Reno<\/strong> (highly symbolic, you might say). Without skyrocketing<\/a> MGM Grand Paradise<\/strong> in Macao<\/strong>, gross revenues were up still 3% and even CityCenter<\/strong> is showing much improved numbers. In view of MGM’s $1.2 billion borrowing capacity, it got into the driver’s seat of Dan Lee<\/strong>‘s Mojito Pointe<\/strong> for pocket change: $30 million, or what could Louisiana<\/strong>‘s best bargain play since Thomas Jefferson<\/strong> bought the place.<\/p>\n

\"\"Down there amidst all the other good news was $139 million in net revenue and $38 million in cash flow at MGM Grand Detroit<\/strong>, better than the company’s two Mississippi<\/strong> properties combined and superior to most of its manifold Strip properties, too. MGM Motown also reported some of the highest cash-flow margins in the company. All of this conspired to undercut the poor-mouthing that both MGM itself and a coalition of labor unions had been laying on Detroit employees. MGM Detroit — knowing how good its performance was — smartly sweetened the pot just in the nick of time.\u00a0 The day after MGM reported its 3Q11 numbers<\/a>, casino workers at MGM Grand Detroit voted three-to-one in favor of an improved contract offer. Signing bonuses were boosted to offset higher premiums and co-pays, and a proposed annual deductible was thrown out altogether.<\/p>\n

Unlike their nominal representatives<\/strong>, MGM employees knew they were in a stronger bargaining position than their MotorCity<\/strong> and Greektown<\/strong> colleagues, and accordingly hung tough. Congratulations to all sides on reaching a speedy resolution which allows both sides to claim the PR victory of having the best-paid casino employees in Motown.<\/p>\n","protected":false},"excerpt":{"rendered":"

State Rep. Lou “Death Wish” Lang (D, right) continues to dare, then double-dare Gov. Pat Quinn (D) to veto what’s now a 2.6X expansion of the number of gambling positions in the state of Illinois. Lang has offered a few … 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":[60,56,28,145,44,14,7,140,58,68,22,86,84,11,35,39,91,69,33,111,79,92,9,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/7878"}],"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=7878"}],"version-history":[{"count":10,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/7878\/revisions"}],"predecessor-version":[{"id":33022,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/7878\/revisions\/33022"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=7878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=7878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=7878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}