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  • Sept 8: China/Macau - Mid-Autumn Festival
  • Sept 8: MAR Analyst Meeting 10 am start
  • Sept 9: 
    • BofAML Gaming & Lodging Conference
    • GLPI & HPT at Wells Fargo Net Lease REIT Forum
    • EXPE & OWW at DB Technology Conference


CZR – the newly developed and opened, Horseshoe Casino Baltimore, generated nearly $6 million in its first six days of operation - that compares to just over $80 million for Maryland's statewide August reported gaming revenue.

Takeaway: Very strong early results from this property. Maryland continues to outperform.

CZR (NY Post) Apollo Management, is in talks to restructure most of the senior debt in its Caesars Entertainment casino company and has recently bought up much of the rest of the debt as well — except for that owned by David Tepper’s Appaloosa Management. Tepper’s $4.5 billion in junior debt has fallen in value to just over 25 cents on the dollar from 58 cents in the last year.  Tepper will have to decide whether to sell the bonds to Black at a loss — or stand firm against the PE mogul and risk losing the full value of his bond investment in a Chapter 11.

Takeaway: A battle of the titans in the making.

MGAM – announced today that it will be acquired by Global Cash Access Holdings, Inc. for $36.50 per share, for an aggregate purchase price of approximately $1.2 billion in cash with an expected closing date in early 2015.  According to the press release, the merger is expected to achieve about $30 million of synergies as a combined entity; and, on a pro forma basis, is estimated to generate about $800 million in revenues and $217 million in Adjusted EBITDA based on the last twelve months results as of June 30, 2014. The transaction has been unanimously approved by the boards of directors of the two companies. 

Takeaway: Slot supplier consolidation continues but this one is strange. Why would a ATM servicer buy a slot manufacturer?

MGM – selling the Railroad Pass casino in Las Vegas to real estate developer Joe DeSimone’s First Federal Realty for an undisclosed price and the sale should close by year end 2014. Railroad Pass has an 11,000-square-foot casino with 324 slot machines and six table games. It also has 120 hotel rooms, a steakhouse, buffet, coffee shop, a sports book and sits on 24 acres near U.S. Highway 95/93 near the Boulder City border.

Takeaway:  The first small asset sale by MGM and there could be other such sales coming.

PNK – disclosed entered into a Separation Agreement and General Release with Michelle Shriver, the Company's Executive Vice President, Operations. Under the Separation Agreement, Ms. Shriver shall be entitled to an aggregate cash severance payment equal to $1,329,300, of which $787,500 shall be payable in accordance with the Company's regular salary payment schedule through February 29, 2016 and $541,800 shall be paid in two equal annual installments on September 4, 2015 and September 4, 2016

Takeaway: Expect another special, one-time but seemingly recurring corporate re-alignment/reorganization charge during the quarter.

WYNN – Boston Globe has voiced its support for WYNN over Mohegan Sun regarding the Boston area casino license.  The Globe said that Wynn comes closer to meeting the casino law’s primary objective of creating jobs and economic development, that it has demonstrated much greater public support and that it has better financial strength to deliver on its promises.  The commission starts its final hearings on the license today with the intention of deciding by Friday.

Takeaway: An important supporter for WYNN.  The race will be a close one.

WYNN – offered $6 million cash to the Massachusetts Bay Transportation Authority for the purchase of three parcels of land on Lower Broadway that would allow the potential casino the ability to create an access road from Rt. 99. The two-acre parcel is within the MBTA’s large maintenance facility on Lower Broadway and would allow for an access point that doesn’t cross Boston land. It also would allow for traffic signalization improvements to benefit the MBTA’s remaining pieces of land.

Takeaway: A unique solution to avoiding any traffic overlap with the City of Boston.

MTN – Judge Ryan Harris ruled Park City Mountain Resort (PCMR) must post a $17.5 million bond by this Friday in order to avoid eviction and operate the full resort for the 2014/15 ski season.  If PCMR fails to post the bond, the judge is likely to enforce his eviction notice. While the $17.5 million is more than the $6.6 million PCMR argued for during the hearing two weeks ago, it is well below the $124 millon sought by Vail.

Takeaway: An expected result

Genting – beginning October 14, Resorts World Bimini plans to add three weekly sailings between Fort Lauderdale and Bimini via its Bimini SuperFast vessel. 

Takeaway:  These are gaming-centric vessels on its way to a casino

Insider Transactions:

PNK – EVP John A. Godfrey acquired 25,000 shares through the excercise of options at $16.92/share and then sold the same 25,000 shares of stock on Friday, September 5th at an average price of $26.25. Following this transaction, Mr. Godfrey owns 141,722 shares of the company’s stock and 75,000 additional stock options. The transaction was effected per a 10b5-1 trading plan adopted on March 13, 2014. 

LHO – EVP and COO Alfred Young sold 10,000 shares of stock on Wednesday, September 3rd at an average price of $37.0921 and now directly owns 60,696 shares in the company.

Takeaway: Both executives selling near 52-week high prices.


Government moves to regulate remote gambling in Singapore Channel News Asia

The remote gambling bill, introduced in Parliament, will help define and prohibit gambling activities via communication platforms.  There will, however, be exemptions to the Bill that was described as a "tightly controlled regime".

Gerald Singham, a member of the National Council on Problem Gambling, said he believed that exemptions would apply to current activities like horse racing, F1 and football betting.  Observers say it is very likely that operators like Singapore Pools and the Turf Club, which both offer telephone betting services, will apply for the exemption. 

Takeaway: Small positive for the Singapore casinos

Japan Gaming Expansion (Japan Times) It was former Tokyo Gov. Shintaro Ishihara who first proposed it back in 1999 when he invited Diet members to a special promotional event he had set up in the Tokyo Metropolitan Government Building, complete with slot machines. His successor, Naoki Inose, was also quick to jump on the casino bandwagon. But not Inose’s successor, Yoichi Masuzoe, who assumed the post in February.  Masuzoe’s approach is more “cautious,”  and seems pretty determined to keep casinos out of the capital. Earlier this year, the Tokyo Metropolitan Government leased a large tract of public land on the waterfront to BMW for a test-drive course and showroom, land that had previously been set aside for an integrated resort that included a casino. When the metropolitan government was reorganized in July, the division that was nominally in charge of the casino plan was practically made irrelevant. Masuzoe’s most blatant show of opposition was an Aug. 17 appearance on a Fuji TV talk show, in which he talked about not wanting casinos in Tokyo. Members of the press duly noted the choice of medium, since Fuji TV, in collaboration with Mitsui Real Estate and Kashima Construction, had submitted a casino resort plan last September to the Diet committee in charge of special economic zones, one of the pillars of Prime Minister Shinzo Abe’s economic recovery plan.

Takeaway: Like all processes in Japan, the timeline is slow and thoughtful.

Macau MICE (GGRAsia) Assistant Professor in Gaming and Hospitality Management at the University of Macau, Glenn McCartney suggested Macau needs a government master plan for tourism as well as an independent commercially focused MICE promotion agency able to make quick decisions on behalf of the sector. Without such an agency, he suggested, the MICE portion of the tourism industry will continue to be shaped by the commercial needs of the gaming operators, some of whom focus primarily on gambling tourism.

Takeaway: The delicate balance between gaming vs. non-gaming remains very topical in front of the gaming concession renewal commentary. 


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.