Quarterly earnings are the best and worst at the same time. They often have interesting information. The earnings calls are another level. They often have additional commentary that isn’t in the reports and press release. Let’s explore more in Vegas News.
Earnings reports and calls can also be incredibly boring for someone not financially invested. The documents and calls are filled with financial mumbo jumbo.
We can read all we want but the audible tone of the casino corporation reps often sets the tone for the call. Remember that time when Jimbo needed a hug? The tone of Jim Murren from MGM Resorts International said more than an earnings presentation or press release.
Jimbo’s tone on this week’s MGM Resorts earnings call was indifferent but he had a lot of news about the future of some MGM properties. So did the reps on the Penn National Gaming earnings call. The latter only owns two Las Vegas casinos…for now. Enough teasing let’s get into it!
MGM Resorts Plans To Sell More Casinos
MGM reported third quarter earnings this week. The hot topic from the earnings call is that they shared more details about recent and future real estate deals.
MGM Grand is on the market and a deal should be announced by the end of the year. Once MGM Grand is sold, MGM Resorts will look to sell other real estate assets. In Las Vegas, that means MGM Resorts might sell Aria and Vdara next year. MGM Resorts is also considering a partial or full sale of its REIT, MGM Growth Properties, as well as MGM Springfield.
The upcoming real estate deals will be similar to the Bellagio sale. MGM Resorts will sell the real estate, lease the casino, and continue to operate the properties. They’ve switched to this “asset-light” business model to generate income to pay shareholders and decrease debt. The latter should increase share prices.
These deals are fairly meaningless to casino patrons until MGM Resorts uses the money to reinvest in its properties. It doesn’t seem like that’s part of the plan. Most of the MGM Resorts Las Vegas properties have been renovated and they don’t see any major spending on the horizon. This is one way they plan to increase profits.
MGM 2020 Phase 2 – Vegas News
MGM 2020 phase 2 will take place much of next year. Any major spending will be on items that have a high return on investment. MGM Resorts plans to invest in tech/sports betting (see yahoo deal info here) along with the M Life loyalty club.
There wasn’t much more discussed on the call of interest to anyone who isn’t a shareholder. They did mention that December is the 10th anniversary of City Center. Corporate casino business. Catch the fever!
Penn National Gaming Will Likely Sell Tropicana
Penn National Gaming (PNG) had a doozy of an earnings call this week. And by doozy, I mean it was at 6 am local time and I was still half asleep. Seriously though, since they’re a national casino operator with only two Las Vegas properties there wasn’t much pertinent Las Vegas info on the call.
I guess if there was any major news, it was that PNG confirmed receiving unsolicited offers for the Tropicana. They’re listening to offers and will consider deals. Judging the tone of the reps, it seems as if selling Tropicana is likely but a deal doesn’t appear imminent.
When PNG purchased the Tropicana, they thought it was important to have a Vegas Strip property. The thought was that regional properties around the country could feed Las Vegas. Things have changed since purchasing the Trop.
The expansion of sports betting has the company focusing more on its local properties. PNG wants to focus on these properties as sports betting is bringing in new customers. These guests eat, drink, and play table games. (Interesting note, these sports bettors don’t play slots)
One thing that stands out for PNG customers. They’re seeing success by reducing offers to low-profit customers. The company is also increasing offers to high-profit customers. The tactic seems to be working for the company even if it doesn’t make customers all that happy.
Lower spenders are making fewer trips but each trip is more profitable for PNG. At the same time, big spenders are big spenders. Expect this to continue at PNG and with other casino operators.
Bobby Baldwin Is CEO At Drew Las Vegas
Remember Drew Las Vegas? That’s the big blue building near Sahara on the Vegas Strip. At one time was going to become Fontainebleau Las Vegas. You can read all plans for Drew Las Vegas here. Well, the casino is staffing up and making a push to be open by 2022. Now, that’s some Vegas News!
Bobby Baldwin is now the CEO of Drew Las Vegas. If the name sounds familiar that’s because he helped open CityCenter. He also consulted Steve Wynn when he opened the Golden Nugget. You can read more about Baldwin and Drew Las Vegas here.
Quick Hits
Not everything happening in Las Vegas needs extra analysis or snark. Here are some more Las Vegas News nuggets that might interest you.
- Kelly Clarkson announced her first Las Vegas residency. She’ll be performing at Planet Hollywood in 2020. Read more here.
- Chubby Cattle is coming to The Palazzo. There will be robots! Read more here.
- Live with Kelly and Ryan (what happened to Regis?) will be recording 4 shows at Paris Las Vegas in November. Read more here.
- It’s never too early for holiday season planning. Here are college football bowl projections. The Las Vegas Bowl is in early December. Read more here.
- Kesha will be performing a free concert for anyone running the Las Vegas marathon. Read more here.
- Caesars is offering some discounts for veterans and active military personnel. Read more here.
- Virgin Hotels Las Vegas will keep Nobu, MB Steak and Pizza Forte from the restaurants now open at the Hard Rock. Read more here.
- Vesper at the Cosmopolitan is closed for renovations. It should be open before winter.
- 2019 will be the year that I had my first vegan doughnut. Turns out people go out of their way for these things. The new Pinkbox location on Tropicana now sells vegan doughnuts. Read more here.
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