Hobbling back onto the Web today, MGM Resorts International offered a limited version of its normal Internet service. You can do research for your next MGM stay but you can’t book it directly or access MGM Rewards, as of 10 a.m. Our man in Atlantic City confirms that, at noon, he found Borgata‘s reservation system to still be defunct. Borgata was able to contact customers to inform them that four promotional events were being postponed. During yesterday’s edition of State of Nevada, someone identifying themselves as an MGM employee called into say that direct deposits of worker paychecks (due Wednesday) were two days overdue and if there was further delay there would also be “trouble.” (A walkout?) Either CEO Bill Hornbuckle or one of his lieutenants evidently was listening, as Hornbuckle contacted the local dead tree of record to say that paychecks would be issued today. As of lunchtime nobody has made a liar of him. (Speaking of the Las Vegas Review-Journal, it duly tried to spin the crash of Las Vegas Grand Prix hotel rates as nothing much.)
Endeavoring to derive a silver lining from the recent misfortunes of MGM and Caesars Entertainment, analyst David Katz of Jefferies Equity Research said now’s the time to buy their stock. Katz sniffed that the mega-millions cyber terrorism was to be “taken as long-time, largely insurable events that should not have long-lasting impacts on the businesses, assuming that the event is short-lived.” He continued, “Our sense is that MGM’s impact could potentially be material, but moderate near term, while Caesars should see no meaningful impact. The question of whether any business is displaced among operators near term is fair.”
Considering the drivers’ licenses and Social Security numbers were among the items pilfered from Caesars (and not necessarily returned, for all the good that would do), customers are unlikely to be as sanguine as Katz. The latter says that convention business should be particularly affected by the cyber-debacles. He wrote, “group and transient business in the near term could be impacted by about 10% to 20% for the days that the current conditions exist.” Katz added that MGM throws off $42 million of revenue on an average day. That would cover a lot of ransom. Just ask Tom Reeg.
On a happier note, gambling revenues rose 4.5% last month in Massachusetts, hitting $98 million. The bulk—$61 million—came from Encore Boston Harbor, which was up 5.5%. MGM Springfield sped up 7% to reach $23.5 million whilst Plainridge Park jumped 9% to $13 million. Sports betting brought in $23.5 million on handle of $315 million. DraftKings led its home state with a 48% market share, dueled by FanDuel (26%), BetMGM (10.5%), Caesars Sportsbook (2.5%), Barstool Sports (2%) and WynnBet (1.5%).
On the subject of sports betting, Illinois finally reported its July numbers. Books in the Land of Lincoln grossed $60.5 million on $611 million in handle. FanDuel bested DraftKings, $25 million to $19 million. Trailing were BetRivers ($6.5 million), Fanatics ($3.5 million), BetMGM ($3 million), Caesars Sportsbook ($2.5 million) and doomed Barstool ($1.5 million). Can Fanatics’ controversial business model leapfrog it into the top three? It’s much too soon to say.
While the jury is still out on whether the Culinary Union will picket the Las Vegas Strip this fall, one property has come to terms, as well it should. Obviously hoping for a smooth opening, Fontainebleau Las Vegas has announced the signing of a labor pact today. It’s not a done deal, merely an accord whereby F-blue will permit a card check, which is certain to go the Culinary’s way. We prefer secret-ballot elections but F-blue clearly wanted to put this issue behind them and get on with business. F-blue officials had no comment but the Culinary wasted no time in taking a victory lap.
Our East Coast correspondent is in rare form these days. He informs us that mobster Michael Franzese will play Caesars Atlantic City on the 23rd. The former crime family underboss was sentenced to 10 years following a Rudy Giuliani prosecution but only served three. While we are unamused about casinos lionizing old mobsters, who would ever have thought that Franzese would be headlining a showroom and Giuliani would be the one facing potential imprisonment?
Slim profits at Bally’s Atlantic City are making themselves felt. Our guy visited on a Saturday night and found that the usual bar band had been replaced by a “sad sack” DJ (seen above) “whose ‘set list’ left a lot to be desired.” Meanwhile, ultra-profitable Ocean Casino Resort could stand to be a little more George: Its big offer for this month is $5 free slot play, once a week. Really now?
It must be cheering to the 2-0 Philadelphia Eagles that murderer Danelo Cavalcante is such a fan, to the extent that he was wearing an Eagles shirt when the constabulary finally caught up with him this week. ICYMI, our man has a rundown: “The escaped murderer, in the last two weeks, stole an unlocked commercial van (with the keys inside). He was able to shave, changed clothes, steal boots, etc. He was seen on Ring door bells and went to the area where his sister lived. His sister did not give police any info, and will be deported back to Brazil. More recently, he stole a rifle from a garage where the property owner was right there. The owner fired several shots at the thief, but missed.
“Last night, they used a Federal thermal drone operated from an aircraft, that located him in a wooded area, but had to leave due to heavy rain. This morning a police dog from the U.S. Border Patrol tracked and located him. The Belgian dog disabled him. He was transported back to Southern Chester County [home of Harrah’s Philadelphia] in an armored vehicle. There were hundreds of police from Pennsylvania, New Jersey, New York, plus the various Federal people, plus six Pennsylvania state trooper horses, plus the trained dogs.”
Tiny Eureka Casino Resort, which has one property in Mesquite and another in Seabrook, New Hampshire, is ponying up $30,000 for Red Cross relief of the victims of wildfires on Maui. The gesture is especially meaningful as Eureka is wholly employee-owned. The funds were raised via a combination of a benefit concert and a $25-a-head buffet. “The recent fires in Maui have had a devastating impact, and our core values guide us to contribute to these essential efforts and provide relief and assistance,” said CEO Andre Carrier. If little Eureka can come up with $30K, which can’t giant Boyd Gaming do better than $100,000?
Jottings: Laying out elaborate cases for both the bull and bear markets, Deutsche Bank analyst Carlo Santarelli makes a balanced argument for and against Penn Entertainment. Of the ESPNBet partnership, he writes, “it will take at least a year from launch to determine whether the customer-acquisition strategy has been successful or whether the early promotional spend simply rented customers who were lured by free money” … Wall Street gave a thumbs-up to International Game Technology, as stock prices shot 10% higher. Truist Securities analyst Barry Jonas was also pretty enthusiastic … A recent typhoon put a wet blanket on Macao projections for Las Vegas Sands. Analyst Joseph Greff of J.P. Morgan suggested that Sands counterattack with stock repurchases.
