{"id":9235,"date":"2012-06-15T10:35:41","date_gmt":"2012-06-15T18:35:41","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=9235"},"modified":"2018-05-04T10:15:58","modified_gmt":"2018-05-04T18:15:58","slug":"everythings-coming-up-penn","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/everythings-coming-up-penn\/","title":{"rendered":"Everything’s coming up Penn"},"content":{"rendered":"

\"\"As befits a proud papa, Penn National Gaming<\/strong> has been showing Wall Street<\/strong> analysts around its newest offspring: Hollywood Casino Toledo<\/strong>. The metrics are pretty awe-inspiring. Already the customer database is approaching 50,000 players and 47% of all slot play is rated — far more than at Penn’s Harrisburg<\/strong> racino in its early going. Good for Penn (and bad for Detroit<\/strong>) is the news that a third of all players at H’wood Toledo are from Michigan<\/strong>, and there’s been some seepage from northern Indiana<\/strong>, too. Restaurant covers are greater than expected. While the casino could increase its installed slot base (2,000 boxes) by 40%-50%, management is presently being a mite cautious, adding just 45 slots.<\/p>\n

\"\"Shortly after Deutsche Bank<\/strong>‘s Carlo Santarelli<\/strong> passed through, J.P. Morgan<\/strong>‘s Joseph Greff <\/strong>got the red-carpet treatment. He praises the casino-floor layout, likening the overall design to Penn’s Kansas Speedway<\/strong> casino.\u00a0Even though MTR Gaming<\/strong>‘s new Columbus<\/strong>-area racino at Scioto Downs<\/strong> has what Santarelli calls “first-mover advantage” on in-progress Hollywood Columbus<\/strong> (left<\/em>), he still predicts the latter will generate pre-tax ROI of 30% (!) when it opens in November. Interestingly, Penn built two Buckeye State casinos for $720 million combined, while some of its larger competitors don’t seem able to budget so much as a slot parlor for less than $800 million, then wonder why their return on investment is disappointing.<\/p>\n

\"\"Earlier, Greff sat down with Penn COO Timothy Wilmott<\/strong> (right<\/em>) and CFO William Clifford<\/strong>, and “came away feeling good” about his 2012-13 forecasts. Unlike MGM Resorts International<\/strong>, Caesars Entertainment<\/strong> and Las Vegas Sands<\/strong>, Penn is taking a pass on Canadian expansion, citing the high cost of admission and taxes too step for their liking. However, it’s not ruled out going for a second venue in the usurious Maryland<\/strong> market. No Massachusetts<\/strong> casino openings are expected until 2016, so possess your souls in patience, New Englanders. Penn may spend as much as $50 million to refresh its newest acquisition, Harrah’s Maryland Heights<\/strong>, which has a reputation for being stuck back in the Nineties. Even if that brings the purchase price effectively to $660 million, Penn has relatively little reason to fear a mass exodus of players. The nearest Caesars-owned property (Harrah’s Metropolis<\/em>) is 180 miles distant, meaning that Total Rewards<\/strong> members are S.O.L., left high and dry by an absconding\u00a0Gary Loveman<\/strong>. Evidently, nothing was said regarding the fate of Penn’s Alton Belle<\/em> but, considering the baleful situation in Illinois<\/strong>, where Penn is highly exposed, I expect that to go on the block as soon as Penn takes the keys to its new St. Louis<\/strong> riverboat.<\/p>\n

Gary has already left the building<\/strong> in Maryland Heights, where casino revenues took a prompt dive, down 5.5%. Pinnacle Entertainment<\/strong>‘s River City<\/strong> (+9%) also gobbled up business from Ameristar St. Charles<\/strong> (-3%) and Pinnacle’s own Lumiere Place<\/strong> (-5% and by the lowest-grossing casino in the market; a big miscalculation by ex-CEO Dan Lee<\/strong>). Statewide, Isle of Capri Casinos<\/strong> had the best month (up 7%), its boats performing steadily.<\/p>\n

\"\"What Wilmott and Clifford didn’t<\/strong> — and didn’t need to — tell Greff was that new gains in Kansas<\/strong> are coming primarily at the expense of its own Argosy Riverside <\/em>(right<\/em>),<\/em> in Kansas City<\/strong>, down an appalling 24%. Even with a 7% drop, Harrah’s North Kansas City<\/strong> is now well outpacing Argosy and closing the gap on Ameristar Kansas City<\/strong>, off 13% last month. Given its small revenue base ($7 million), a 2% slippage at Isle of Capri Kansas City<\/strong> is like losing a hangnail. But Argosy has been averaging a 25% falloff over the last three months, ever since Hollywood Casino at Kansas Speedway<\/strong> opened. If Penn doesn’t make a hard decision on the riverboat’s future, the market soon will.<\/p>\n

\"\"Perhaps feeling the hot breath<\/strong> of Penn (and MGM) on its neck in Massachusetts, Ameristar Casinos<\/strong> is upping the ante on its Springfield<\/strong> investment. The company is proposing to spend $50 million to create a new overpass<\/a> and exit lanes to its casino site. (Mohegan Sun<\/strong> has floated a similar offer to Palmer<\/strong>.) Lack of freeway access doomed MGM’s Brimfield<\/strong> proposal and the fly-by-night David Nunes<\/strong> project in eastern Massachusetts simply begs a similar question. City officials are already warming to the Ameristar pitch — which doesn’t exactly hurt the company’s chances with the Massachusetts Gaming Commission<\/strong>. Hey, when you can get 50 mil in new infrastructure (and jobs) on the private sector’s dime, what’s not to like?<\/p>\n

Men of privilege<\/strong>. Despite copious hand-wringing from Ira Schulman<\/strong> about what a wretched investment Rivers Casino<\/strong> was, that hasn’t stopped Neil Bluhm<\/strong>‘s minions from buying out what’s left of the late Don Barden<\/strong>‘s stake, giving them nearly 90% ownership. It also means that owning a casino in Pennsylvania<\/strong> is now entirely the province of rich, white men. As irrational and unlikely as R. Donahue Peebles<\/strong>‘ Philadelphia<\/strong> bid is, one almost feels like rooting for it on principle.<\/p>\n","protected":false},"excerpt":{"rendered":"

As befits a proud papa, Penn National Gaming has been showing Wall Street analysts around its newest offspring: Hollywood Casino Toledo. The metrics are pretty awe-inspiring. Already the customer database is approaching 50,000 players and 47% of all slot play … 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":[40,28,145,44,83,7,58,68,22,85,45,53,72,112,11,39,158,91,69,95,30,111,25,12,20],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/9235"}],"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=9235"}],"version-history":[{"count":4,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/9235\/revisions"}],"predecessor-version":[{"id":21633,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/9235\/revisions\/21633"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=9235"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=9235"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=9235"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}