Snake Eyes, Again
Another quarter, another series of lousy reports from the casino sector:
Shares of casinos and gaming companies dropped Tuesday as various companies reported disappointing quarterly earnings, showing gaming continues to be pressured by a weak environment. The sector saw quarterly results from casino operators Wynn Resorts Ltd. (WYNN) and Boyd Gaming Corp. (BYD), lottery systems provider Scientific Games Corp. (SGMS) and gaming device maker WMS Industries Inc. (WMS) ...
... In recent trading, Wynn dropped 8.6% to $57.67, and Boyd fell 12% to $9.35. Scientific Games lost 26% to $13.11, and WMS declined 8.1% to $43.58. Other casinos trading lower included MGM Mirage (MGM), down 8.6% to $10.05, and Las Vegas Sands Corp. (LVS), down 6.9% to $14.96. Pinnacle Entertainment Inc. (PNK) dropped 3.7% to $10.32, while Penn National Gaming Inc. (PENN) declined 3.2% to $26.43. Gaylord Entertainment Co. (GET), which operates the Grand Ole Opry, fell 4.7% to $16.48. Gambling device and technology maker Bally Technologies Inc. (BYI) lost 5.1% to $40.90, and slot-machine maker International Game Technology (IGT) slid 5.6% to $19.39.
... Seems like a bad time to be getting into the casino business -- see Rivers Casino and its lackluster handle -- but Ohio seems bent on it. And much like Pennsylvania's casinos had to promise jobs to local residents, Ohio's casino backers are making the same pitch:
"Backers of the proposed constitutional amendment to allow casinos in Cleveland, Columbus, Cincinnati and Toledo on Tuesday, Oct. 27, pledged that 90 percent of all jobs in the casinos would go to residents of the four host cities and the surrounding metropolitan areas. That would amount to about 6,750 jobs, according to Bob Tenenbaum, spokesman for the pro-casino Ohio Jobs and Growth Committee."
Ohio gets to vote on the casino issue in just a few days, which means foes will be taking out all the stops:
"A new television ad tries to persuade Ohio voters to defeat a Nov. 3 ballot issue legalizing casinos by saying one of its operators was arrested for illegal bookmaking 28 years ago. TruthPAC, a group financed in part by Mountaineer Casino in West Virginia and horse tracks, discredits Cleveland Cavaliers' owner Dan Gilbert by publicizing a felony charge. Gilbert is the leading partner of casinos proposed at Cincinnati's Broadway Commons and in Cleveland. He was a freshman at Michigan State University at the time; the charge was removed from his record after he paid an unspecified fine and completed 100 hours of community service, according to newspaper accounts. At a Cleveland City Club Forum on Monday, Gilbert downplayed the arrest, saying the case was dropped 'a few months later and no money was ever exchanged.' USA TODAY identified it as a $114,000 ring."
Ooooh ... Michigan State. I wonder how Buckeye Nation feels about that?:
"Former Ohio State quarterback Art Schlichter says a November ballot proposal to build casinos is bad for the state. Schlichter, who played for the Buckeyes between 1978 and 1981 and whose career in the NFL was derailed by a gambling addiction, said Tuesday he wants Ohioans to consider how the state will handle an increase in crime and addictions if the casinos are built. ... Schlichter, who spent 10 years in prison for gambling-related crimes, said it's probably inevitable that Ohio will someday have gambling."
... After three weeks of ticking upward, revenues at Rivers Casino dipped down again last week. See Chris Briem's chart for all the visuals.
... Does it matter that the Flying Zappalas hold posts at a casino association?:
"During the final days of state budget negotiations, a flurry of press releases was sent to media, letters were sent to lawmakers and radio ads were sent over airwaves, all advocating low tax rates and license fees for casino table games. One statement threatened that four large casinos would sue the state if smaller ones were allowed to increase the number of slot machines at their locations. The communications all emanated from The Pennsylvania Casino Association, which has been run for the last two years by former state Supreme Court Chief Justice Stephen A. Zappala Sr. and his daughter Michele Zappala Peck, who is running for Allegheny Common Pleas Court."
Odds and ends
An ATM malfunction sends gamblers at The Meadows home unhappy, and without any bus fare ... And speaking of buses, seniors aboard a bus bound for The Meadows in Washington County had a surprise in store for them ... More smoke signals from the Bay State on a proposed casino ... Ditto from Kansas City ... The Morning Call's ace gambling reporter is subpoenaed in the ongoing Louis DeNaples saga (partly because of stories like this: "Reputed mobster William D'Elia gave prosecutors documents and photos that showed 'conclusive evidence of a long-standing relationship' with Scranton businessman Louis DeNaples, according to federal authorities.")
The Las Vegas Review calls table games in Pennsylvania "the golden goose":
"Pennsylvania's Legislature is considering adding table games to the state's slots-only casinos. This growing, expedient interest in expanding American gaming is a mixed bag for Nevada. If millions more Midwestern and Eastern residents have convenient, increasingly local options to gamble, they're less likely to hop on a plane to Las Vegas. That affects the profitability of airlines and Strip hotels, the income of tens of thousands of tip earners and the state's room, gaming and sales tax collections. However, these states present Nevada-based gaming companies with new opportunities. The chance to expand into new areas with limited competition can help them remain profitable even when their Nevada numbers are falling through the floor."