Kentucky Derby fallout continues to reverberate around Churchill Downs, leading to a 2Q23 earnings miss. A mass die-off of horses during the Run for the Roses caused the flagship track to be closed and races shifted to Ellis Park. Cash flow for the company slipped to $364 million, 4% under Wall Street‘s consensus forecast. Net revenues ($769 million) were comparably down. All that being said, live and “historical” racing were the least off-pace, down 3%, versus online TwinSpires‘ 13% and casino gambling’s 4% declivity.
Shifting racing operations from Louisville cost CHDN $9.5 million upfront, a worse hit than Truist Securities analyst Barry Jonas was expecting. This more than offset gains made in the historical-racing sector (read: slot routes). Casino cash flow of $134 million was dented by declines in Louisiana (down 9%), nullifying improvements in New York State and Iowa. Meanwhile, TwinSpires took a bath on the Churchill Downs-to-Ellis Park move, as well as from outright race cancellations. Not even a record Derby Week could salvage quarterly results that Jonas rightly called “weak.” Execs get to spin-doctor the numbers today.
After a few rudderless months following Richard Bosworth‘s resignation, Virgin Las Vegas has a new president. It’s Cliff Atkinson. If the name sounds familiar it’s because Atkinson was (briefly) prexy of Fontainebleau before unceremoniously getting shown the door. Before that he was Luxor‘s COO. Mind you, Atkinson is unlikely to have any impact on casino operations, the province of Mohegan Sun. As long as there are more chiefs than Indians at Virgin LV, its struggle is certain to continue. “The iconic off-Strip property is a legendary resort with a rich history and bright future,” Atkinson said, referring unwittingly to Virgin’s previous incarnation as Hard Rock Hotel. And what happened to that rich and legendary past? Virgin rebranded it right out of existence. Good luck, Cliff. You will need it.
Speaking of reinvention, the new-look Mirage is trying to appeal to locals. Early indications are that the unlikely strategy is actually bearing fruit. Illusionist Shin Lim‘s weekend performances are deeply discounted to Las Vegans. Ditto Mondays through Thursday at the spa. (Sounds good to us.) By Las Vegas Strip standards this is pretty George. Especially the restoration of free parking. Credit Mirage President Joe Lupo, one of the sharpest (if not the sharpest) property execs in gaming. “There’s always been this real perception that Strip properties can be more expensive than some of the local properties, so offering happy hours and specials like that have been really helpful,” he told the Las Vegas Sun, adding that bringing back free parking was “was to just be more accessible.” Noting the preponderance of casino workers in the local populace, he said, “Our employees, their friends, their children, their parents, their loved ones—many of our customers live in this community. So, it’s really important to be a part of that.” Bravo, Lupo.
As many as three new, private-sector casinos—plus a tribal one—are being contemplated by the North Carolina Lege. One proposal would juice a single company into three $500 million casinos. This sounds like the handiwork of Las Vegas Sands. But it’s not. The fine hand of Cordish Cos. is believed to be behind it. However, Cordish may have scored an own-goal with its lavish legislative generosity. Eight lawmakers have seen their nests feathered with $34,400 in gifts from Cordish-linked donors. The dark-money scheme isn’t illegal but it certainly raises pay-to-play concerns at the state capitol. The runaround wasn’t particularly subtle, what with Cordish CEO Joseph Weinberg crossing the palm of Senate Majority Leader Phil Berger to the tune of $5,600, the legal limit.
The donations are laughably clumsy sometimes, with “homemaker” Rhonda Smith (apparently the wife of Cordish COO Zed Smith) somehow coming up with $2,500 for an obscure GOP solon. Casino proponents are pitching the gambling houses as tourism magnets for economically depressed areas, mostly along the state border. Expect the issue to hang fire for another three weeks and be resolved at the last possible moment.
Moving (belatedly) with the times, the American Gaming Association is to be congratulated for finally acknowledging the elephant in the smoky room. This October’s Global Gaming Expo will feature a roundtable discussion of smoking in casinos. ‘Bout time! Participants will include slot influencer par excellence Brian Christopher (who boycotts smoking-enabled casinos), Greenwood Racing CEO Eric Haulser, the supremo of Parx Casino, Andrew Klebanow of C3 Gaming and Americans for Nonsmokers Rights President Cynthia Hallett. Expect the assembled industry figures to hear a lot of things they’d rather not. As Hallett says, “some in the industry continue to peddle misinformation as a scare tactic meant to maintain the dangerous status quo.” Preach it, especially to the unconverted.
Jottings: Century Casinos has closed on its purchase of the operations of Rocky Gap Resort. It remains to be seen whether Century will get into the online-sports-betting business, which it is eligible to do … The Pamunkey Tribe is having trouble delivering on its promised casino (above) in Norfolk. Three years after signing a development agreement with the city, the tribe hasn’t gotten past the drawing board. It’s feared the Pamunkey may try to downsize, which Mayor Kenneth Alexander opposes … We’ve long been wondering how long Las Vegas casino companies will put up with being soaked. It looks like the latest round of parking fees may be the breaking point … It’s finally over for Atlantic City‘s long-forgotten Playboy Casino. The New Jersey Division of Gaming Enforcement has announced it is going to close the Playboy account, which contains $875,000 in unredeemed chips. Perhaps the money could go toward paving A.C.’s streets, our Boardwalk correspondent suggests … In South Korea, the aftereffects of the Covid-19 pandemic include more illegal gambling and less revenue for Koreans-only Kangwon Land casino. High-roller play at Kangwon Land has been halved since Covid struck.