TICKERS: CZR, MGM, LVS, SGMS, LHO, RCL
EVENTS TO WATCH: UPCOMING EARNINGS / CONFERENCES / RELEASES
Monday, April 7
- Las Vegas - National Association of Broadcasters six-day convention and trade show with more than 90,000 people from 156 countries attending.
Tuesday-Thursday, April 8-10
- Mid-America Gaming Congress (Columbus, OH)
Wednesday, April 9
- SHO Investor Day
Thursday, April 10
- HST Investor Day
CZR - the Caesars Windsor casino shut down Thursday night as a result of a labor disruption - all gaming ceased at 8 p.m.
TAKEAWAY: A stroke of bad luck for Caesars.
MGM – will now charge a $10 service fee when booking a room over the phone with an MGM Resorts hotel. According to MGM Resorts International “modernized its policy, implementing a small fee on bookings utilizing the personalized, one-to-one customer service offered by our trained phone agents.”
TAKEAWAY: Another way to drive incremental room revenue without raising actual room rates.
LVS – is increasing scrutiny of Macau junket operators according to comments made by LVS Company spokesman Ron Reese.
TAKEWAY: Sheldon appears to be placating demands by the US Department of State and Treasury. The Asian based operators might have a leg up here not having to face the same scrutiny as the US companies.
LVS - recently acquired a G450 to make a 17 aircraft fleet. Las Vegas Sands Corp. now operates 17 luxury jets, used primarily for transportation of the company’s executive officers and VIP guests of its properties. Most of the aircraft in the Las Vegas Sands fleet are owned by and registered to Las Vegas Sands Corp., and a few are registered to Interface Operations, LLC, a Massachusetts-based company owned by Sands CEO Sheldon Adelson
TAKEAWAY: The fleet of aircraft both in the US as well as Southeast Asia continues to increase to meet the growing VIP segment demand.
SGMS – inked a three year contract extension, beginning in February 2015, with the Delaware Lottery to provide lottery and central monitoring systems as well as a minimum 450 WMS VLTs at charitable gaming organizations across the state.
TAKEAWAY: Synergy deal for SGMS
Stations Casino – today kicks off its $ 1million scratch & win promotion, which runs every Friday and Saturday in April. According to their campaign, “Every scratch card wins. Guaranteed!” Prizes range from cash, free slot play, bonus points, free buffets and more.
TAKEAWAY: The competition for Las Vegas locals is fierce and we expect will increase as Stations Casino likely positions itself of an IPO. We'll have more commentary on this market next week when we're in Vegas.
LHO – acquired the 200-room Hotel Vitale, located in San Francisco, for $130 million. The 200-room hotel is the sixth San Francisco property acquired by LaSalle.
TAKEAWAY: Growth in occupancy and average daily rate across California (San Francisco) continues to outpace other markets.
RCL – while disembarking from St. Kitts, Independence of the Seas reported that two dock worker were killed when the ship was disembarking. According to local reports, the wake from the ship’s azipods swamped a small tender and threw the two dock workers into the water.
TAKEAWAY: Another mishap for RCL, but not likely to have any impact given the nature of the accident.
Singapore Tourism – Following the negative publicity from the missing Malaysia Airlines flight 370, Asia Travel Group is reporting a 40% drop in the number of Chinese group tours for Singapore. SIngExpress Travel is reporting an “obvious drop” in their sales of Malaysia/Singapore tour packages whiles Super Travels Agency also reported a very sudden 20% decline versus last year.
TAKEAWAY: A decline in Chinese tour travel to Singapore would be troubling, particularly for Genting Singapore
Online Poker - Global online poker traffic has fallen 15% on a year-on-year basis during the first three months of 2014 despite the introduction of new regulated markets in the US, according to the latest set of figures from the PokerScout website. The lower first-quarter figures have also been accompanied by results that show global poker traffic has now fallen for seven weeks in a row, although the latest drop was reported to be less that the 3% and 4% declines recorded over the past two weeks. PokerStars continues to lead the market with a seven-day average of 21,000 cash game players, while 888poker (2,300), PartyPoker (2,000) and the ipoker network (2,000) accommodate the next top positions. Full Tilt Poker completed the top five with 1,900 cash game players.
TAKEAWAY: Could online poker interest be waning?
Fight Night – the much awaited Pacquiao-Bradley rematch bout scheduled for April 12 at the MGM Grand is drawing near.
TAKEAWAY: Interesting to us, rooms are still available at the MGM for Saturday, April 12th with rates starting at $260.
Eastern Massachusetts License Delayed - The state gambling commission will undertake a nearly month long process to determine how much influence the City of Boston will have over two casino proposals on the city’s border, potentially pushing the awarding of the Greater Boston resort casino license back to August or later. Yesterday, the commission scheduled a hearing for May 1 on Boston’s status. At stake is whether Boston qualifies under the 2011 casino law as a “host community” to a Wynn Resorts casino plan in Everett and a Mohegan Sun casino proposal at Suffolk Downs in Revere. Host communities have the power to decide the fate of casino projects through binding referendum.
TAKEAWAY: Delays probably good for PENN.
Kentucky – The Kentucky Horse Racing Commission unanimously approved applications by both Keeneland and the Red Mile to operate Instant racing (slot-like) devices at separate facilities at their Lexington locations. Keeneland’s application requested permission to operate 600 devices while Red Mile petitioned for 500 machines.
TAKEAWAY: The Kentucky legislature continues to show no support for giving racetracks the authority to operate slot machines. These machines are the same ones at Kentucky Downs and Ellis Park.
Iowa Gaming Expansion – the Iowa Racing and Gaming commissioners visited Cedar Rapids Iowa on Thursday to hear the pitch by local developers for the proposed Cedar Crossing Casino. The Iowa Racing and Gaming Commission recently received two studies both of which recommended the IRGC not issue any additional gaming licenses. Iowa currently has 18 commercial and 3 tribal casinos operating across the state. Both IRGC studies indicated ISLE’s Waterloo property would experience GGR cannibalization of between $9.2 million and $10 million.
TAKEAWAY: In our opinion, Iowa does not need an additional casino; however, this is politics and we have not idea how to handicap this outcome given the Argosy Sioux City events.
Hedgeye remains negative on consumer spending and believes in more inflation. Following a great call on rising housing prices, the Hedgeye Macro/Financials team is turning decidedly less positive.
TAKEAWAY: We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the US.