Vegas News August 9, 2020
This was a wild week in Las Vegas. Well, maybe not so wild but very newsy. This might be the last heavy news week for a while. Multiple casino operators released second-quarter earnings. Earnings season is done for casinos so there may be a lack of news for the next few weeks. We also touch on something we are all well aware of: Las Vegas visitation is down.
A lot of the information from the earnings calls is repetitive because the casinos have been facing the same issue – coronavirus. Let’s start with a quick update and move onto the fun stuff happening with your favorite casino companies and around Las Vegas.
Las Vegas COVID Update
Like many people, I’ve pretty much been cooped up in my abode. Frankly, besides the lack of casino gambling life is kind of normal with the return of sports since I can wager on games from on my phone. The big difference is that I’m just watching multiple screens somewhere in my house than in a sportsbook.
Having said that, the COVID-19/coronavirus news is all starting to look the same. Some numbers are up, others are down, and everything is just blending together. Excuse me if some of this is repetitive I’m just having a little COVID fatigue if that’s a thing.
The Nevada Independent not only has a good dashboard for COVID data in the state but they also do a great job of covering the news. You can see their latest report on how Governor Sisolak is dealing with the situation.
Jeff Hwang over at Motley Fool has a pretty strong take on the situation in Las Vegas. He has a lot of valid points but I’ll let you decide for yourself. I need a break from the topic.
Vegas Visitation Down
The spread of coronavirus is obviously affecting travel. One thing we know for sure is that visitation to Las Vegas is down. Overall travel in June was “only” down 70% from the same period last year. Convention and meeting travel is down 100%. Business travel not existing isn’t a surprise as there are no conferences. SEMA is the latest conference to be canceled in Las Vegas. It appears as though the SHOT Show is the only large conference that hasn’t been being canceled yet.
MGM Resorts is trying to get business travelers to visit Las Vegas so they can work in a casino. I’d say this is a good idea as someone that’s worked in casinos off and on for almost 10 years. However, I haven’t worked inside of a casino for 5 months now. I’m not sure that taking an airplane just to have a different zoom background from a hotel room is worth the time and money. That said, you can read about the deal here if you feel differently. Related, Wynn rolled something like this a couple of weeks ago with JSX.
Vegas Visitation Down but….
Highway Traffic to Las Vegas is Only Down 13.6% to 16%
For some reason, the mainstream media decided to overlook that highway traffic to Las Vegas is only down 13.6% to 16%. This isn’t great news but frankly, it’s not awful. You can see the raw data here.
I’ll have more on this when we get to second quarter casino earnings…
Short Casino Earnings Recaps
We normally take a deep dive on earnings but this week I’ll take a shorter look since four companies reported and there’s a lot to get to. Instead, I’ll share a highlight or two from the calls that you won’t read in the actual earnings reports.
In general, casinos in Las Vegas are seeing 50% capacity on the weekends and 30% during the week. As mentioned in previous weeks, the casino corporations are all streamlining and cutting back wherever they can.
@JustWonOne had a good take on twitter mentioning the companies are cutting costs, increasing margins, offering fewer amenities, and making fewer marketing offers. He failed to mention they’re also reducing staff and automating as much as possible. This will affect casinos in Las Vegas and all around the country.
I’ll deal with the bigger picture another time because the virus is the excuse a lot of businesses (casino and otherwise) a chance to reinvent themselves. On to highlights from specific companies.
Red Rock Resorts
Red Rock Resorts (AKA Station Casinos) seemed to surprise a lot of people during the earnings call this week. The numbers were bad but so are second-quarter earnings for every company. The big takeaway from this call was that the company said it will not consider reopening closed casinos until they have a better idea of revenue from open properties and the overall economy.
The open Station Casinos properties generate 80% of the revenue for the company. That means Palms Casino Resort, Texas Station, Fiesta Rancho, and Fiesta Henderson generate 20% of revenue. This was the big takeaway for most people from this earnings call. You can read more about this here.
Wynn Resorts also reported low second-quarter earnings. The non-press release info that I found interesting was that the company currently sees Wynn Las Vegas as a “super-regional” casino since few if any, guests are flying in.
Like MGM Resort (see promo above) Wynn is focusing on clients within driving distance. Guests in Arizona, California, and Utah should see solid offers.
Penn National Gaming (Tropicana)
Penn National Gaming (PNG) earnings aren’t usually a big deal here since the company only owns two properties (Tropicana and M Resort) in Las Vegas. Having said that, the big news besides their Barstool sports betting app (PA only in Sept.) was about the Tropicana.
The company could delay the opening of the Tropicana that’s currently scheduled for Sept. 1. During the call, it sounded like PNG will consider selling the casino. They’ve already sold the land and appear happy with the performance of regional properties. If I had to guess, I’d say Tropicana will reopen under new management someday. That’s not a prediction but just a hunch from the tone of the call.
Caesars reported earnings for the first time since the merger. It’s adorable how the mainstream media is now calling the company #NewCaesars. I think we started calling the company that last year but maybe it was earlier this year. It’s also cute that they’re just getting around to how much new CEO Tom Reeg hates buffets.
Anyway, Reeg might be at the top of my CEO earnings call list. He’s fun, fairly transparent, and sharp. The new information he shared is that Caesars will be ready for entertainment sooner than other companies on the Vegas Strip (he mentioned Cirque so I assume he specifically meant MGM Resorts). This seems to be true. Johnny Kats from the Las Vegas Review-Journal tweeted that Ballys Las Vegas and Paris Las Vegas have opened small entertainment venues. Similarly, Absinthe at Caesars Palace Las Vegas is getting ready for reopening.
SLS Becomes New SAHARA Las Vegas
“There’s nothing wrong with the new Sahara but there’s nothing particularly amazing. I’ll take you on a tour and a look at some of the particulars. I’ll explain what the conversation means later but I’ll drop some hints along the way.”
Wow, even with Vegas visitation down there are still a lot of Quick Hits this week! I shared some thoughts on a few of the topics.
- Rumor of the week: SAHARA Las Vegas is not being imploded for a baseball stadium! Okay, that’s not really a rumor and neither is this – read about Sahara’s lawsuit against Vital Vegas here. Everyone’s pal, John Mehaffy read the suit because he likes this kind of thing. He has some educated thoughts here.
- Speaking of SAHARA Las Vegas, the Nevada Gaming Control Board filed a complaint against the casino for allowing a conference to take place. Tsk tsk. Read more here.
- Oh yeah, you can read about more on SAHARA Las Vegas violations here.
- Target on the Vegas Strip is opening next week! See the details here.
- The Fremont has a new selfie wall! Welcome to 2012! Read more here.
- Love this…Circa will offer cashless gaming. The D Las Vegas already uses this tech. Read more here.
- NV Gaming control will review William Hill taking over CG Technology sportsbooks (The Venetian, Cosmo-Vegas, etc.). Read more here.
- EDC is sold out for 2021. Check the tweet here.
- It’s your bi-monthly train update from the other newspaper. Read more here.
- This week’s Boring updated reaches over to Resorts World. Read more here.
- Blackstone, owner of the Cosmopolitan and Bellagio (real estate) now owns Ancestry. I’m surprised people concerned about privacy haven’t freaked out about this. Read more here.
- There’s a pretty thing being built by the pot store on the Vegas Strip and The Strat. It will be blocked by a traffic light when you drive north so make sure you get out of the car to snap an unobstructed view. Also, there’s going to be lots of traffic in the area during construction. Read more here.
- The Las Vegas Raiders will play in a pretty new stadium but nobody will be allowed to watch the game inside. Read more here.
- Vegas visitation might be down, but the new tower at Downtown Grand opens on September 22 and is taking reservations now. Read more here.
- Don’t forget to register for ZorkCastLive on August 12th!