Continued strength in casinos was shown by Ohio, which posted $193.5 million in gambling revenue in June. That’s 2% higher than already-strong last year and a whopping 20% over 2o19, which was none too shabby either. Hollywood Columbus came out roaring, up 10% to $23 million, which still wasn’t enough to catch slots-only MGM Northfield Park, gaining 5% to almost reach $25 million. Churchill Downs‘ joint-venture Miami Valley Racing vaulted 12% and into second place among racinos with $19 million, besting Scioto Downs, down a point to $18.5 million. Other casinos not doing too shabbily were Jack Cleveland, flat at $22 million, and Hard Rock Cincinnati, off a point to $20 million. Hollywood Toledo was an also-ran with $18 million, minus 2.5%.
Jack Thistledown muscled up 3.5% to $16 million, while Belterra Park tumbled 9% to $7 million. Hollywood Dayton had an unaccustomed off month, down 2.5% to $12 million, while Hollywood Mahoning Valley, always an outperformer, was up 3.5% to $13.5 million. Sports betting engendered $32.5 million from $362 million of handle, less $15 million in generous promotional allowances. FanDuel was out front with $14 million, pursued by DraftKings with $9 million. It was essentially a two-horse race, with the market leaders distantly followed by Bet365 ($3 million), BetMGM ($2 million) and Caesars Sportsbook ($1 million), with Barstool Sports falling below our cutoff point.
Not even a special dividend could distract from what Deutsche Bank analyst Carlo Santarelli called a “tough” 2Q23 for Golden Entertainment. The excuse du jour was that construction disruption at The Strat was to be blamed for the earnings miss. But a look at the balance sheet tells a different story. True, Nevada casinos came in $5 million below 2Q22. However, Maryland operations and Golden’s slot routes were also down, while Las Vegas locals were flat. So even had The Strat equaled last year’s performance, Golden still would have not even been treading water. (The cash flow numbers look even worse.)
Santarelli wrote that “we feel as though GDEN delivered a reasonable 2Q23, into more tempered expectations, especially considering the disruptions at The Strat (completed at the end of June).” He added that the $2/share dividend would “soften” possible earnings weakness—i.e., buy off dissenting voices. Shareholders will be further palliated by a $100 million stock buyback. Santarelli excused the disappointing 2Q numbers by pointing to the first quarter, which enjoyed an easier year/year comparison. That’s because it was going up against Omicron-softened 2022, didn’t enjoy as robust an event calendar as last year and wasn’t a construction-afflicted as the second quarter. He pinned eventual improvement on the opening of Atomic Golf and the oncoming Las Vegas Grand Prix, which is boosting hotel rates through the roof, yes, even at the lowly Tuscany.
In the early innings of sports betting in Massachusetts, regulators were inclined to give mulligans to errant operators. Those complaisant days may be over. Last March, DraftKings took 864 unauthorized wagers on tennis games (and God knows what went down during Wimbledon). Basically, the left hand at DraftKings—the trading team—didn’t know what the right hand in compliance was doing. Or vice versa. Regulators were not mollified by the ‘splainin’. Although they would only “hint” at a firmer attitude, we don’t know what went down behind closed doors, where the testimony was taken. It would be inconceivable for DraftKings to escape without a substantial fine. Meanwhile, we continue to shake our heads at some of the unforced errors that characterize sports betting in the Bay State. Who, we ask, were the chowderheads at BetMGM who listed Harvard University as a Connecticut school? And what part of “Boston College” do the savants at Encore Boston Harbor think lies outside the state? D’oh!
Jottings: Remember that zoning change that the Nevada Lege gave Station Casinos so that it could build close to a Las Vegas school? It’s going over like a lead balloon. Even Global Gaming Business, no bunch of firebrands, razzed it in its latest issue … MGM Osaka will begin construction—someday. MGM CEO Bill Hornbuckle puts it in “middle to late” 2024, which is a great deal of wiggle room. The ultra-pricey megaresort will take six years to complete … Quebec casino workers are hanging tough. Their strike for better wages is going on six weeks now … The much-awaited United Kingdom gambling reform is said to be on schedule. Then again, one uses the word ‘schedule’ in connection with the White Paper very loosely indeed.