Stiffs & Georges by David McKee | A Las Vegas Advisor Blog
David McKee has been covering the casino industry for over 12 years. He is a three-time Nevada Press Association award-winner, including “Best Investigative or In-depth Story” for his coverage of the downtown Las Vegas casino scene. Former news editor of the Las Vegas Business Press, McKee has also been managing editor of Casino Executive Magazine and Casino Journal.
Only Mohegan Sun at Pocono Downs and Lady Luck Nemacolin saw revenue declines at the slot machines last month. All other Pennsylvania casinos were revenue-positive, especially Parx Casino, up 10.5% to $35 million. Another overachiever was Valley Forge Resort Casino, vaulting 18% to $7.5 million (incoming owner Boyd Gaming will be happy to see those numbers). Pocono Downs was down 3%, grossing $16 million. Regional competitors Sands Bethlehem (+3%) and Mount Airy (+5.5%) pulled in $25 million and $13 million respectively. Third in the state in slot revenue, with $23 million, was Rivers Casino in Pittsburgh, up 7%. Parx’s domination of the crowded Philadelphia market didn’t come at the expense of Valley Forge, nor of Harrah’s Philadelphia ($17 million, +4%) or of SugarHouse ($15 million, +5%).
Presque Isle Downs banked $10 million, up 10%, which will be music to buyer Churchill Downs‘ ears. Penn National‘s titular racino and The Meadows did not perform quite so impressively. The Hollywood Casino at Penn was up only 1.5%, to $17.5 million, and Meadows eked out a 2% improvement to $17 million. No sweeping conclusion can be drawn other than, when it comes to slot play, Sands Bethlehem is feeling no ill-effects for Resorts World Catskills‘ presence on the scene.
* Slot routes continue to eat casinos’ lunch in Illinois, having grossed $4.8 billion since 2012. Five video-poker machines have made a big difference for Effingham American Legion Post 120. Before that “We were holding raffle after raffle just to keep afloat,” recalled finance manager Bill Copple. The slot revenues are keeping the flag flying at veterans’ posts that are otherwise seeing little interest from younger veteran demographics. It doesn’t hurt that you have to have a liquor license to qualify for the slots. What is surprising is how few major casino operators have tried to crash the party, with only Penn National and Boyd having bought any slot routes in the Land of Lincoln.
Former New York Knicks great Charles Oakley fouled out big-time at The Cosmopolitan of Las Vegas. The veteran roundballer, who made $46 million during his playing career, wound up in the clink over a $100 casino chip. Oakley tried to withdraw said chip from play when it became clear that he was going to lose a hand of blackjack. Unfortunately for him, his hand was not as quick as the eye in the sky and Oakley finds himself facing charges of attempted fraud. Although Oakley could, if convicted, wind up serving as much as six years in the pokey (an extreme scenario), attorney Alex Spirotried to whistle past the graveyard, saying, “This is not a significant matter, and we expect it to be resolved quickly.”
Given that the likes of Steve Wynn have extended massive lines of credit to gamblers with millions of dollars in dishonored markers trailing behind them, Spiro may be right, although Cosmo management appears to be playing hardball. Oakey himself responded to the whole kerfuffle with an ambiguous query: “The truth always comes out, right?” In this case, the truth will emerge when the surveillance tape is introduced in court and Oakley may not like the result. Given that Oakley recently beat the rap with regard to a brawl at Madison Square Garden, luck might still be on his side.
* Guess what? Long-suffering Resorts World Las Vegas is “a candidate for delays.” Knock me over with a feather. The other slowpoke is Fontainebleau/The Drew. No surprise there. “However, both properties recently came out and said they expected openings in 2020,” wrote gaming analyst Bruce McGill. Had Genting Group held to its initial deadline, Resorts World LV would have been long since open by now. Instead, the company fiddled around with (underperforming) Resorts World Catskills and some white-elephant acquisitions in Miami while blowing hot and cold on the gambling capital of America. According to McGill, those most likely to be inconvenienced were slot manufacturers: “As a rule of thumb, it is expected that slots will ship into [a] property 60 to 90 days ahead of the opening. This is when the manufacturers will recognise the sale typically.”
* While the Culinary Union continues to be coy about just how much in raises it is achieving for its members, 730 Tropicana Las Vegas employees will be seeing more in their paychecks. Penn National Gaming has also committed to (unspecified) sexual-harassment protections for its employees. Good on them.
* Casino workers in Macao are less fortunate. A bill on the verge of passage will ban them from gaming floors outside of work hours (the only hitch is that the bill, as written, could also keep them out of adjacent restaurants, etc.). Stiff fines accompany the legislation, which is intended as a forcible curb on problem gambling.
Atlantic City is already feeling the benefits from the double-barreled openings of Hard Rock Atlantic City and Ocean Resort. While June’s gambling revenues were up 1.5% on a same-store basis, add the newcomers and the increase is 5%. (Both casinos opened a day early, helping their tally.) Ocean Resort recorded an impressive $3 million in four days, rivaling Hard Rock Atlantic City’s $4 million clip. Borgata needn’t lose any sleep but if Hard Rock can maintain its initial tempo it will rival Tropicana Atlantic City for the #2 spot, while Ocean Resort will be on pace to gross $270 million in its first 12 months of operation, very strong if short of Bruce Deifik‘s $292 million prediction, occupying a solid, middle-of-the-pack niche.
Harrah’s Resort took a 6% dive (to $30 million), indicating just who has the most to fear from the new kids on the block. Oddly, the only other casinos to lose business were low-rollers Bally’s ($17.5 million, -3.5%) and Resorts Atlantic City ($16.5 million, -2%), tightening its stranglehold on last place. Borgata shrugged off the new competition, grossing $61 million, a 2% gain, while Tropicana, with $31 million (an 8% gain) was the undisputed runner-up. Caesars Atlantic City was utterly flat at slightly under $25 million, while Golden Nugget vaulted 14% to $20.5 million. Slot revenues were up 7% (mainly at the debutants) while table winnings were basically flat. Sports betting was no panacea: Borgata grossed just shy of $1 million in 16 days, while Ocean Resort averaged $48K/day.
PR man Zack Hall rather defensively wrote that “the best is yet to come.” When Monmouth Park is added, the tally rises to $3.5 million in revenue on $16.5 million wagered. Hall called this “better than expected.” Predicted sports-betting analyst Dustin Gouker, “Total amount wagered and revenue will increase exponentially as more casinos and racetracks begin to offer wagering, and as online betting kicks off later this summer and into the fall.” In other words, punters aren’t beating a path to the few places where they can have a fiddle on sports. Gouker rightly stressed the importance of mobile betting (still under regulatory quarantine) to the total picture, urging a wait-and-see attitude until NFL season enters the picture … which won’t be long now.
Among those yet to enter the fray is Meadowlands Racetrack, which will put the brand equity of FanDuel to the test in a new partnership. The former is rolling out a FanDuel-run sportsbook with 10 tellers and 27 TVs. The hope of track owner Jeff Gural is that New York Giants and New York Jets fans will cut short their tailgating to stop by the book and lay down some bets. He’s even offering shuttle service to MetLife Stadium for free. The NFL wouldn’t comment on the deal but stadium officials may try to impose some conditions on Gural and FanDuel. The acid test will come August 9 when the woebegone Giants host the even more hapless Cleveland Browns in an otherwise meaningless preseason game.
“It’s clear sports betting is a pretty big hit off the bat for New Jersey,” Gouker insisted. “The initial numbers show bettors are turning up in droves to try out legal sports betting options in the state. And while the bottom-line revenue is good, this also means more people are and will be visiting the state’s tracks and casinos, which will obviously be a boon for their businesses.”
Internet casinos continued to pull their weight, grossing almost $23 million last month. Perhaps with a nod to the two newcomers in Atlantic City, columnist Steve Ruddock wrote, “Milestones such as $30 million in monthly revenue and $1 billion in lifetime revenue are within reach. The online gambling industry remains a growing force in New Jersey.” Trenton will be happy to hear that, having banked over $24 million in ‘Net-driven tax revenue by mid-year. Golden Nugget continues to dominate the scene, grossing $8.5 million in ‘Net winnings in June.
* Detroit casinos grossed $120 million last month, with MGM Grand Detroit up 11% to $52 million, MotorCity and Greektown each gaining 4.5%. The former grossed $39 million and the latter $28 million. That’s pretty impressive for a market that was not so long ago being written off as doomed.
Call it a day for another Wayne Newton business venture. Mr. Las Vegas is closing Casa Shenandoah to the public, no reason given (although a recent break-in might have influenced the decision). “It is the Applicant’s intent that the property revert back to a single family residential use,” said Newton lawyer Jay Brown. As for “Applicant,” he told John Katsilometes, “As of now, we are just taking a breather and deciding what we want to do in the future. We have not wanted to make any rush decisions.” What will become of the offsite theater, gift shop and shuttle area is anybody’s guess. Newton can get back to nursing a hand injury and resuming his on-again/off-again war with his neighbors, who have not taken to the influx of tourists very kindly.
* Add the Tropicana Las Vegas to the list of casinos that have reached a labor pact (still to be ratified) with the Culinary Union. As the dominoes topple, next on the list are Binion’s Gambling Hall, the Four Queens and Margaritaville. Negotiations at the latter and at The D must not be going well: “Informational picketing” has been scheduled for tomorrow, never a propitious sign. For reasons best known to themselves, Culinary management is promoting media attendance at the Margaritaville picketing but *not* at The D. Other casinos who the Culinary is now shouting out for not having signed contracts are SLS Las Vegas, Treasure Island, Westgate Las Vegas, the Downtown Grand, El Cortez, Fremont Hotel, Golden Gate, Golden Nugget and Main Street Station.
* Las Vegas brings out the crazy in drivers. Case in point, the speeding motorist in the white car who ran a red light at Sahara Avenue and the Las Vegas Strip, hit two vehicles and one pedestrian, then wiped out near Walgreens. It’s one more argument for why the Strip should be closed to all vehicles save RTC buses and taxicabs. (The taxi union wouldn’t mind that.)
* Treasure Bay Casino in Biloxi is feeling its oats. It’s purchased four acres for the expansion of surface parking and will add a parking garage to the east of the casino. All of this is prologue to a two-story enlargement of the casino (plus restaurants), a project expected to wind up late next year. Sports betting, meanwhile, is getting in on the ground floor — literally. Treasure Bay used to be known for its iconic pirate ship but said vessel was sent to Davey Jones’ Locker by Hurricane Katrina. The onshore version looks perfectly handsome and will doubtless be even better when the additions are complete. As for the post-Katrina era, it’s sobering to see how much of Biloxi has been completely eradicated.
* Historical racing has made it onto the November ballot in Idaho. Backers of the VLT-style gambling needed 56,192 and got more than double that. The initiative could mean new life for defunct Le Bois Park, which closed after the Idaho Legislature outlawed historical racing in 2015. VLT supporters have the backing of Gov. Butch Otter, who said, “Horse racing has a long and storied history in Idaho. It’s a big business and important to our state.” By current slot-machine standards, the instant-racing machines don’t look like much but you’ve got to start somewhere.
We’ve warned against turning the tribal-recognition process over to Congress and a bill singling out a California tribe for special treatment would seem to be an object lesson in the “Why.” Rep. Doug LaMalfa (R) wants to reinstate Ruffey Rancheria, formerly the reservation of the Siskiyou County American Indians, created in 1907, taken away from the landless tribe in 1957. Since LaMalfa’s bill would constitute an end run around the land-into-trust process used by the Bureau of Indian Affairs, especially with regard to approval of gaming, it’s stirring some ire in the Etna area, along with criticism of setting a precedent that would turn the Indian Gaming Regulatory Act on its ear. LaMalfa has already smuggled a land-into-trust bill for the Chumash Indians through the House and into the Senate. (LaMalfa, pictured, bears an unfortunate resemblance to the proverbial used-car salesman.)
Ruffey Rancheria attorney Tahj Gomes tried to strike a bipartisan note before Congress. “For us, restoration is not a political issue. It is not a partisan issue, it is a question of justice.” That may well be, but if so what is it doing in the most politicized forum in America? Justice or not, the rancheria is not playing by the rules abided by every other casino-aspiring tribe in America. LaMalfa’s argument is that only Congress can undo what Congress did to the Ruffey Rancheria. Again, we disagree. One hates to go along with tiresome anti-gambling groups like Stand Up for California but such is our position. SUC is contending that the rancheria was terminated because, at the time, the land was abandoned.
Even other tribes are lining up against LaMalfa. Seventy of them have done so, and counting. “Why the rush, and why so much secrecy?” asked Karuk Tribe Chairman Russell “Buster” Attebery. As to LaMalfa’s motives, follow the money: 28 of his top donors are either gambling interests and Native American tribes, two groups that intersect to form a powerful set.
* Casinos could be coming to India in earnest. That country’s Law Commission has concluded that the only way to combat problem gambling in the subcontinent would be to legalize casinos, sports betting and Internet gambling. “Many countries that prohibit gambling have not been successful, particularly with regard to online gambling,” the commission argued in a hefty report. The commission was basically holding its nose with one hand and issuing the report with the other, saying that gambling was “not desirable.”
However. “Incapability to enforce a complete ban has resulted in rampant increase in illegal gambling, resulting in a boom in black-money generation and circulation. Since it is not possible to prevent these activities completely, effectively regulating them remains the only viable option.” The commission’s work was prompted, in part, by a recent match-fixing scandal that rocked the cricket world. “Match-fixing and sports fraud should be specifically made criminal offences with severe punishments,” sternly noted the commissioners, making it clear that point shaving was, well, just not cricket.
But before U.S. gaming companies begin to salivate at the prospect of Indian gaming of an entirely different sort, note this: “Gambling and betting, if any, should be offered only by Indian licensed operators … possessing valid licences granted by the game licensing authority. For participants, there must be a cap on the number of transactions an individual can indulge in these activities in a specific period, i.e., monthly, half-yearly or yearly.” Investors will have to weigh those downsides against an unknown upside, although Global Market Advisors pegs at $10 billion, peanuts compared to what Japan is expected to generate.
* Speaking of Internet gambling, the Supreme Court may have cleared the way for interstate sports betting, via its interpretation of the federal Wire Act. Read the fascinating details here.
As of today, Hard Rock Rocksino, in Ohio, is official part of MGM Growth Properties. However, until MGP finds a new tenant, Hard Rock International will continue to run the place. It’s a win-win for Hard Rock and MGP. For the latter it’s $1 billion well spent.
Regarding MGM Resorts International, stock-picker Joseph Greff at JP Morgan thinks it’s time to buy, despite an “uninspiring” investor presentation, along with “disappointing” Macao revenue. “We would characterize sentiment as bouncing along the bottom here, with expectations also reasonably/incredibly low.” However … “We believe most of the issues that have caused 2018’s underperformance are transitory, and the picture is bright(er) heading into 2019,” thanks to the debut of Park MGM and projected improvement in MGM Cotai numbers, among other factors. “Mandalay Bay also has easy comparisons in 2019 and therefore should experience some growth.” Greff has set a target of $130 per available room for Park MGM (we think MGM expects higher) and sees “stable LV Strip fundamentals” next year.
As for the Las Vegas Strip in general, Greff describes the fundamentals as “generally sound” and attributes “flattish visitation” on a preoccupation with “profitable customers rather than simply filling rooms, in our view.” As for ever-vexing Resorts World Las Vegas he reports “not much progress.” With Resorts World Catskills struggling, Genting Group badly needs the ‘win’ that Las Vegas could give it.
* If you haven’t made it to Hard Rock Atlantic City, here’s what you can expect to see. “The collection of rare memorabilia items that are displayed throughout Hard Rock Hotel & Casino Atlantic City is tied to musicians from New Jersey, along with those who have a history of performing in our area,” said President Matt Harkness. That — of course! — includes a bandana and denim jacket formerly worn by homeboy Bruce Springsteen. There’s everything from junk mail sent to Kurt Cobain to Roy Orbison‘s sunglasses (I wouldn’t mind having those). But for many, the icon of icons will be Michael Jackson‘s famous, bejeweled glove, a donation from Jackson himself. It’s not only rock ‘n roll: A piano formerly belonging to Frank Sinatra is on the way.
* It takes 84,859 signatures from registered voters to get an initiative on an Arkansas ballot. Promoters of a pro-casino initiative, Driving Arkansas Forward, who have already been bombarding the airwaves with ads, got 96,170. They’re pushing a constitution amendment to create four casinos, one each in Pope and Jefferson counties, along with parimutuels in West Memphis (just what Tunica needs) and Hot Springs. Driving Arkansas Forward credits its media campaign with accelerating the signature-gathering, as its canvassers had less ‘splainin’ to do.
* If you’re missing the fine-dining option provided by Smith & Wollensky steakhouse, fret not: The Vegas institution will be relocated to Venelazzo, where it will be part of Grand Canal Shoppes. S&W is characterizing it as a right-sizing. “The casinos [in 1998] really didn’t have those 11 or 12 dining options they all have now, so building 30,000 square feet with those immense private dining spaces was the right thing to do at that time,” said Smith & Wollensky Restaurant Group CEO and President Michael Feighery, who opened the restaurant as general manager. S&W will be moving into the space formerly occupied by Zefferino. Feighery is looking forward to capitalizing on the critical mass created by two hotels and Sands Expo Center to drive foot traffic into the restaurant’s new location.
Monty pythons, Mr creosote, Full version, - YouTube
However, Wolfgang Puck is already on the scene with one steakhouse, Cut, but another potential rival, Carnevino, is biting the dust. Feighery’s will be the bigger venue, though, filling two stories and able to seat 444 diners. (Fewer if Mr. Creosote shows up.) Said Feighery, “You’re going to be familiar with a lot of the elements and notice the changes, but we also love to pay homage to the city and be part of the community we’re in. This will be a bit lighter and more accessible, a little less like the masculine steakhouse of the past.” But if you’re at Venelazzo and have an appetite for steak, Cut will be your short-term option: S&W doesn’t reopen until March 1, 2019.
If toupée-collecting Sheldon Adelson were offered the chance to build Venetian Tehran he’d immediately become a peacenik regarding Iran, a country he lusts to nuke. Instead of making nice with mullahs, he’s doing the next best thing, warbling sweet nothings to Kim Jong-un. Citing his service in the Korean War, Adelson called for detente between the two Koreas so that he could get down to “open up business,” preferably in the north. (He can’t build — feasibly — in South Korea because a tourists-only policy makes the cost of investment prohibitive. South Korean casino revenues are small potatoes compared to other markets.) North Korea has been putting out feelers to the U.S. for help in establishing a casino resort in the Wonsan-Kalma region. Hmmmm. Starving native populace … concentration camps … 180th out of 180 on the Heritage Foundation‘s human-rights index? Nope, I can’t see anything wrong with doing business in North Korea.
Elsewhere in Adelson Country, a new report by Steve Vickerswarns of collateral damage to casinos in Macao from the current U.S.-China trade war. “The gaming sector in Macau is highly exposed. Any significant slowdown or fall in the yuan’s value may lead to Beijing’s further curbing of capital outflows, so dampening casino revenues,” wrote Vickers, who also wrote the current hostilities could imperil concession renewals for Wynn Resorts, Las Vegas Sands and MGM Resorts International: “These companies now sit on a geopolitical fault line. Their Macau concessions can therefore be on the line.” Vickers deemed the deprival of concessions “brutal” but also unlikely.
He did, however, advise, “Companies might consider restructuring joint ventures, so as to invest alongside partners deemed ‘neutral’.” Galaxy Entertainment‘s purchase of a 5% stake in Wynn was cited as one example of this strategy. Concluded Vickers, “the harsh reality is that strategic decisions are not made in Macau but rather in Beijing: this is because of the huge scale of the gaming operations in Macau and the political sensitivities of U.S. businesses being allowed to repatriate very significant amounts of Chinese money back home.”
Speaking of Wynn Resorts, Elaine Wynn‘s newfound clout only extends so far. The board of directors has ashcanned her choice for chairman, “identified only as a former Fortune 500 chief executive officer with extensive experience in the casino business.” (Let the speculation begin!) The person in question “wasn’t a close associate of hers,” so that rules out nephew Andrew Pascal. Elaine hasn’t quit flexing her muscles: She’s seeking to have General Counsel Kim Sinatrafired for cause. Jefferies analyst David Katz applauded the Sinatra ouster, writing,“We view the announcement of Wynn general counsel as anticipated and reflective of the pressure the company’s management team is facing in the near term from regulators and shareholders.” The company continues to be investigated in Massachusetts, Nevada and Macao for Steve Wynn‘s sexcapades. (Since Sinatra was a key player in the hush-up of a $7.5 million paternity settlement paid by Wynn, she may be the latest human sacrifice on the Massachusetts Gaming Commission‘s altar.)
* MGM and Caesars Entertainment can openly gloat that they outfitted workers with ‘panic buttons’ voluntarily. In Chicago, a law had to be passed to get it done. A Unite-Here spokeswoman said “49 percent of hotel workers surveyed said they had seen a guest naked or had a guest flash them.” Worse yet, “58 percent of employees said they were sexually harassed while working at hotels, particularly at night.” Human nature being what it is, one can only assume that similar statistics (at minimum) apply to Las Vegas. The era of #MeToo and #TimesUp has not arrived a moment too soon.
* Daredevil Travis Pastrana will pit himself against the Las Vegas Strip for a three-hour History Channel special. First, he will attempt to jump a motorcycle over 50 crushed cars, then over 16 Greyhound buses. These stunts will be performed on empty land behind Planet Hollywood and Paris-Las Vegas. Then Pastrana, whose first two jumps will rival the greatest feats of Evel Knievel, will try to do what Knievel couldn’t: Jump the Caesars Palace fountain. Of course, if Stunt #1 or Stunt #2 goes awry, the History Channel will have a lot of airtime to fill (cue standby Hitler footage) and Pastrana will be looking at a big hospital bill, assuming Caesars doesn’t pick up the tab.
“If something happens on Sunday morning, a weather system moves in and the Broncos are going to be playing in 6 inches of snow, the line’s going to move. It would be unrealistic to expect somebody to drive up to Black Hawk or Central City and change that bet that they made a couple of days before.” — Colorado state Rep. Alec Garnett (D), arguing in favor of mobile sports wagering in the state.
Illinois‘ casino industry has never recovered from the Great Recession. We’ll never know if it would have done so but the inception of slot routes has basically nipped any recovery in the bud. As such, the Land of Lincoln will have to be content with small gains, such as last month’s 2% uptick in gambling revenues, $116.5 million. Players were spending 5% more but were 3.5% fewer in number. Penn National Gaming-run casinos were flat for the month, with a stagnant performance at Hollywood Aurora ($10 million) to some extent negating a 3% gain at Empress Joliet ($15 million), while Argosy Belle grew business 2.5% for $4 million. Boyd Gaming‘s Par-A-Dice had an unwontedly good month, up 3.5% ($6.5 million). It should be noted that Penn and Boyd have the best of both worlds, since they also own slot routes.
Devouring 31.5% of the state’s market share, Rivers Casino jumped 5% to $37 million. Grand Victoria, however, slumped 9%, to $13 million. No problem at the two Caesars Entertainment properties, however, up 5% for an aggregate $22 million (despite a modest decrease at Harrah’s Metropolis). GLPI‘s Casino Queen was flat at $8.5 million and Jumer’s Casino Rock Island was up 4% to $6 million. An extra weekend day may have helped.
Over in Indiana, growth was more robust, up 5% ($182 million), mainly driven by improved business in the southern tier. An 8% dropoff in foot traffic was nullified by a 12.5% increase in betting. Despite being down a percentage point, Horseshoe Southern Indiana almost led the pack with $20 million, eked out by soon-to-be-Caesars Indiana Downs with $20.5 million. Centaur Gaming‘s other racino, Hoosier Park, raked in $16 million, an 8% gain. Hollywood Lawrenceburg grossed $14 million, a 4% improvement, while Rising Sun posted an eye-catching 27% gain, to $4.5 million. Not to be outdone, Tropicana Evansville was up 16.5% to $12 million. Business was also very good for French Lick Resort, up 15% to $8.5 million. Belterra rose 5% for a $10 million gross.
In the northern tier, Horseshoe Hammond was flat but still dominant with $32 million. Four Winds Casino continues to chip away at Blue Chip‘s business, down 3% to $13 million. Ameristar East Chicago did fine, up 8% to $19 million, while the two Majestic Star boats grossed $7.5 million (+1%) and $5 million (+6.5%) between them.
In Missouri, gambling revenue rose 6% to $148 million. According to Deutsche Bank analyst Carlo Santarelli, “outperformance in the table segment” at Penn and Pinnacle Entertainment properties drove the results. Foot traffic was flat but visitor spend rose 5.5%. River City grossed $19 million, up 8%, while Ameristar St. Charles pulled in $22 million (+4.5%) and Ameristar Kansas City‘s $16 million was a 7% gain. Harrah’s North Kansas City was flat with a $14.5 million gross. Tropicana Entertainment‘s Lumiere Place continues to be a comeback story, revenue leaping 21% to $15 million. Eldorado Resorts‘ four small casinos grossed $21 million, flat year-over-year, while numbers for Affinity Gaming‘s Mark Twain Casino were $3 million, up 7%. Penn National gained 11% at Argosy Riverside ($14 million) and 3% at Hollywood St. Louis ($19.5 million).
The most dramatic results hailed from Ohio, where gaming revenues grew 8.5% ($155.5 million). With $22 million and a 13% gain, Hard Rock Rocksino led the Buckeye State by a comfortable margin. The only revenue-negative casino was Jack Cincinnati, down 2% to $15 million. In the Cleveland area, Jack Thistledown blossomed 18% to $11 million, while Jack Cleveland was up 9.5% to $16.5 million. Hollywood Columbus‘ $19 million represented a 7.5% gain while Hollywood Toledo rose 4% to almost $17 million.
Among the other racinos, Scioto Downs jumped 15% to $15 million, Belterra Park gained 4% to $7 million and Miami Valley Gaming was up 9.5% to $13 million. Hollywood Dayton sprang 12.5% to $8.5 million and overachieving Hollywood Mahoning Valley grossed $10 million for a 7% increase.
Early yesterday, Churchill Downs and Eldorado Resorts announced that they were deep-sixing the sale of Eldorado’s Lady Luck Vicksburg, although Churchill Downs’ purchase of Presque Isle Downs remains in play. Evidently, Churchill Downs was uncomfortable with Federal Trade Commissioninquiries regarding its ownership of Riverwalk Casino, a property adjacent to Lady Luck. According to Deutsche Bank analyst Carlo Santarelli, the switcheroo was “resulting in CHDN choosing instead to acquire [Lady Luck] Nemacolin than spend time/money associated with higher FTC scrutiny.” It’s not a bad outcome for Eldorado, as Nemacolin has been a real lemon but Churchill Downs forfeits access to the Mississippi market just as sports betting is coming on line.
Churchill Downs is out a $5 million termination fee for nixing the Vicksburg deal but only has to pay $100K to take over the Nemacolin management contract. It will also be purchasing the casino’s 600 slots and 27 tables. Churchill Downs will have until 2023 to get Nemacolin turned around. “While it’s unfortunate ERI was unable to complete the sale of a smaller/non-core asset, we view the result as a net positive for ERI as the company will likely have an easier time selling Vicksburg (we assume they’re still a seller) than the EBITDA neutral/slightly positive Nemacolin management contract,” wrote Santarelli. While the termination of the Vicksburg half of the deal essentially means that the cost of buying Presque Isle Downs goes to $184 million, Santarelli opines that this is “immaterial” and that Presque Isle remains “the principal reason it undertook the transaction, in our view.”
* Proving once again that casinos and loco weed don’t mix, World Series of Poker player Michael Mizrachi, a three-time winner, was told to remove a hat sporting the logo of Blüm, the cannabis dispensary that was sponsoring him. The incident went down on July 5 at “Ceasars [sic] Palace,” according to Mizrachi’s PR firm (never mind that the event is held at The Rio). “Players often wear logos of their sponsors while at the table, and legal cannabis businesses should not be treated differently,” wrote Mizrachi flack Kyle Del Muro. Oh, yes they should — so long as Nevada casinos are directed to steer clear of any tang of Mary Jane.
* In a move to heighten security, Pechanga Resort Casino has deployed two robots, “one that stands motionless in the valet parking area and a mobile rocket-shaped automaton that patrols the lobby area” to augment its 300-man security patrol. The move is an explicit reaction to the Mandalay Bay Massacre, which was made possible by incredibly lax security. (Mandalay Bay now posts security guards at its elevators around the clock.) “I’m always looking for new technologies. I’m always looking for new ways of preventing crimes,” Pechanga security chief Robert Krauss told the Los Angeles Times. Krauss settled upon hardware developed by Knightscope that has already been put to use in stadiums and malls. (A third, infra-red-equipped robot will patrol the Pechanga pool to ixnay after-hours swimmers.)
Reports the LAT, “security experts can either direct the mobile robot to move closer to a suspicious person or object or simply zoom in with their high-definition cameras.” Knightscope robots have not been without their mishaps but the company holds that it has worked out the kinks and Pechanga’s ‘bots should be state of the art.
* “We are so glad that the dust has settled, and the building phase is over,” said Chairman Norman Deschampe of the newly enlarged Grand Portage Lodge & Casino, in Minnesota‘s “Arrowhead” region. The formal reopening takes place on Thursday, when guests will undoubtedly stream through the new, three-story atrium en route to 425 more slot machines and additional table games. (Blackjack and three-card poker are the big draws.) Island View Dining Room and Antlers Lodge have been redone, the latter now sporting big-screen TVs and eight beers on tap. Hoist one on us.
* Las Vegas‘ water supply could get curtailed, what with Lake Mead being only two feet away from hitting the low-water mark at which federal cutbacks in H2O use would kick into gear. So far California, Nevada and much-maligned Mexico are on board with a contingency plan. The wrench in the works is Arizona, which is not being amenable. It’s not an interstate problem but rather a squabble between two Arizona bureaucracies, the Department of Water Resources and the Central Arizona Project. According to the Wall Street Journal, the “Colorado River, which supplies water to 40 million people from Denver to Los Angeles, has been gripped in the driest 19-year period on record, according to officials from the Bureau of Reclamation, a multistate agency that manages water and power in the West.”
There’s no cause for immediate panic: The reallocation threshold probably won’t be crossed until 2026. However, due to the geography of Lake Mead, still-lower water levels (and new cutbacks) will be reached sooner and sooner. The real estate industry, currently booming in Las Vegas, could take a hit, “because the cutbacks could result in less replenishment of groundwater basins they rely on to ensure future water supplies for subdivisions.” That’s not news anybody wants to hear right now.