Weekend edition

Internet gambling produced more than Detroit‘s casinos did for Michigan last month, $131 million to $104.5 million. Unsurprisingly, BetMGM was dominant with $49 million. Thence came DraftKings ($26.5 million) and FanDuel ($19 million). Smaller fry included BetRivers ($9 million), Caesars Entertainment ($6 million), and WynnBet and Barstool Sports at $4 million apiece. Sports betting was not nearly so lucrative, with $24 million realized on $218 million in handle. A third of that went right back out in the form of promotions, with Barstool engaging in significantly less promo activity than its rivals, per Penn Entertainment CEO Jay Snowden‘s rationale for buying Barstool in the first place. As for revenue, FanDuel (32% of market share) outdueled DraftKings (21%), while BetMGM was close behind at 21%. Caesars and Barstool each accreted 7%.

Sticking with i-gaming, Deutsche Bank analyst Carlo Santarelli issued a report this week that asked, “Is it good for everyone?” (Answer: Yes) He wrote, “As we have long said, we find the iCasino vertical to be a very good business, at scale, with healthy margins associated with it, assuming a reasonable tax regime, like those in New Jersey and Michigan.” He found that Internet gambling is “undoubtedly an expansionary force,” albeit at the cost of some degradation of terrestrial casino revenue. Online sports betting, by contrast, was viewed as having little or no impact on casino floor traffic.

In those states that have i-gaming, aggregate revenue has gone up 50% over the last three years, especially in Michigan, where it has added $1 billion. Cannibalization, Santarelli believes, is both ongoing and inevitable. This is despite the fact that GGR is up in six of the seven states sampled (Louisiana being the exception). Even adding new brick-and-mortar casinos doesn’t alleviate the cannibalization factor … we’d say it’s exacerbating it in Pennsylvania. Santarelli calculates that Michigan casinos would have made $253 million more without digital competition, New Jersey ones $181 million (basically a whole month of Atlantic City) and Pennsylvania $228 million. However, there’s no downside for a FanDuel or a DraftKings, operators without a terrestrial footprint. The risk-reward for brick-and-mortar operators is “more nuanced.”

Of those robbing Peter to make money off of Paul, MGM Resorts International has had the greatest success, leading the market and making $247 million online to more than offset a $168 million terrestrial shortfall. By contrast, it’s “a slow go” at Caesars Entertainment, “as limited product/content, limited functionality, and limited iCasino focused marketing has
CZR punching below their weight at present,” despite having many of the same marketing assets as MGM. Although there’s been a $61 million B&M shortfall, Caesars has raked in $196 million cybernetically.

Another disappointment was market-share-challenged Barstool Sports, “with technology lagging that of peers and the Barstool iCasino customer acquisition effort proving to be relatively insignificant. Without a willingness to endure losses from a ramp of marketing and customer acquisition offers, we don’t see many reasons why this dynamic would change materially looking ahead.” In Barstool’s case, less is being made digitally than is being lost terrestrially.

Maybe infamous Imperial Palace builder and skinflint Ralph Engelstad was merely before his time when he miserly stripped bathtubs out of hotel rooms. Bally’s Atlantic City is doing the same, according to our East Coast correspondent. Also, penny-pinching Bally’s charging guests a $78 “upgrade fee” if they don’t want to stay in the old Dennis Tower. Guess that’s how Soo Kim is going to pay for his $1.7 billion “flagship” casino in Chicago. Bally’s could also upgrade its casino-floor security. We received the following eyewitness account: “Last Thursday afternoon around 4:00 or so, we … were in Bally’s high-limit slot area. A young male was moving from one slot machine to three others without ever putting any $ in any of them, but pretending to count some pieces of paper. Then his female ‘partner’ appeared. I was looking directly at both of them. The female bailed and left the area. My wife said ‘Don’t worry, they have a “security” guard.’ My reply was ‘He’s retirement age and nowhere to be seen’ … The ‘perp’ left and we did soon after.”

Bally’s is also touting junkets to Biloxi and Lake Tahoe per “management approval” but, when pressed for details, said “It’s not been set up yet.” “That shouldn’t be a surprise,” writes our correspondent. “I think Twin Rivers/Bally’s has owned Bally’s A.C. for two years and never opened up the swimming pool.” Bally’s likes to posture that it’s a major gaming operator but it’s a claim that doesn’t stand up well to scrutiny.

Jottings: Casino gambling comes to Nebraska today, as Lincoln Race Course (aka Legacy Downs) opens its temporary racino. You’ll find 433 slot machines. We hope that will be enough to meet demand … Rivers Pittsburgh had to put its second, $60 million hotel on hold when Covid-19 struck. But it’s all systems go on it now, with an opening expected no later than Nov. 7. Rivers also got a five-year license renewal … Casinos proved to be a reliable investment for REITs during the pandemic. Now they’re excellent hedge against a sagging stock market. Vici Properties and Gaming & Leisure Properties complement each, too, the one being Las Vegas Strip-facing and the other being regionally focused … In a win for the rank and file, workers at casinos and hotels owned by the Blue Lake Rancheria Tribe have had their Unite-Here contract ratified with the tribe. “The Blue Lake Rancheria supports organized labor and a year ago readily agreed to a fair process under which employees could choose whether to unionize without interference,” said Tribal Administrator Jason Ramos. Would that more gaming executives thought that way.

Quote of the Day: “Whatever the present moment contains, accept it as though you had chosen it.”—Eckhardt Tolle

Source link

Mike McNamara

Mike McNamara

A Las Vegas Realtor since 2008. Mike has a wide range of knowledge around all things Las Vegas.

Las Vegas NV Weather
December 8, 2022, 7:51 pm

0 mph
real feel: 53°F
humidity: 39%
wind speed: 0 mph N
UV-Index: 0
sunrise: 6:39 am
sunset: 4:25 pm
Forecast December 8, 2022

Mostly sunny
wind speed: 2 mph NE
max. UV-Index: 3

Mostly cloudy
wind speed: 4 mph WNW
max. UV-Index: 3
Recent Posts
Willow Manor