Saturday, March 30, 2019
The Hot Clicks of the Week
It doesn’t sound like the tension between slot machine manufacturers and casinos over hold percentages is ending soon. That was a takeaway from an educational conference last week in Las Vegas about making peace between the sides. Panelists at the University of Nevada, Las Vegas-sponsored event made their points during the discussion. Casino operators say manufacturers build expensive games and the slot developers say operators set the payback percentages too high for players to reach bonus levels and have a better experience.
Steve Wynn’s sudden exit a year ago from the casino company he founded was the first chapter in what turned out to be a series of shake-ups in the leadership of the Las Vegas casino industry. Four major Strip casino companies – encompassing 23 of the boulevard’s most recognized resorts and 63 percent of its hotel rooms – are facing varying degrees of uncertainty that have caught the attention of gaming industry followers. Two companies – MGM Resorts International and Caesars Entertainment – are dealing with issues related to investment community backlash.
One More from Howard Stutz
Howard says: The final session at the American Gaming Association’s Sports Betting Executive Summit should have been at the MGM Grand Garden in Las Vegas. MGM National Harbor in Maryland hasn’t hosted championship fights. Honestly, I didn’t think my question to DraftKings CEO Jason Robins would set off a verbal donnybrook between him and William Hill US CEO Joe Asher. I asked Robins if DraftKings would apply for a Nevada gaming license since the company operates a New Jersey sportsbook and has an agreement with Caesars Entertainment. DraftKings quit doing business in Nevada in 2015 after the Gaming Control Board said daily fantasy sports was gambling and the company would have to be licensed. Robins said “no” because Nevada was never that large of a daily fantasy market, but he wants to see how the agreement with Caesars moves forward. He then turned attention on Asher, who he claimed was “running around telling people that we’re bad and need to be shut out.” That set off Asher, who stuck to his long-standing belief that daily fantasy sports was gambling. The two shouted over each for the final few minutes. I will admit to being pleased my question caused a memorable moment. I only apologize to moderator Darren Rovell of Action Network for putting him in the role as referee, although he seemed to enjoy the banter. “Best panel of conference? Right?” he asked the audience.
Curious Las Vegas visitors may still wonder what happened to the once-sparkling Lucky Dragon, the diminutive Asian-themed casino on the edge of the north Strip at 300 West Sahara Avenue. The operating history was remarkably brief: It opened in December 2016 and almost immediately nosedived toward bankruptcy. Financing, construction and market challenges were many and obvious from the start. By the time the Lucky Dragon’s doors opened, according to published reports, it had cost $165 million to build – by one informed estimate, nearly 47 percent over its original budget.
REITs – real estate investment trusts – have grown into an important gaming industry business model. However, don’t look for another REIT to join Gaming and Leisure Properties, MGM Growth Properties and VICI Properties, all three of which were active in 2018’s casino consolidation activities, particularly in the regional markets. Union Gaming Group analyst John DeCree said last week he expects MGM Growth and VICI to have roles in the current upheaval involving MGM Resorts International and Caesars Entertainment.
International
Melbourne’s Crown Casino has been banned from handing out special plastic picks used by punters to bypass poker machine rules because their use increases the harm from gambling, the industry’s Victorian regulator has said. Whistleblowers told the ABC in 2017 that Crown Casino was handing out specially branded plastic picks, which punters would jam into poker machine buttons. The picks, similar to guitar picks, were jammed into the buttons, allowing the poker machine to play continuously.
This report is edited by Howard Stutz .