Gaming’s 1st-quarter earnings season full of intrigue

Four times a year, publicly traded gaming companies open a tiny window into their financial world.

Sometimes, quarterly earnings reports are enlightening. Sometimes, they’re snoozefests.

Analysts and journalists nationwide, including my colleague Todd Prince and I, listen intently, hoping to glean some clue into what makes companies and their top executives click.

Every once in a while, the planets align and multiple calls have a common thread.

That’s what happened last week when three of the four big dogs on the Strip — MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp. — served up an earnings-call trifecta.

The timing of last week’s first-quarter calls couldn’t have been better with all the drama and intrigue within the industry. Is Wynn going to stick with its Boston project, or will Massachusetts gaming regulators hold the alleged sins of Steve Wynn against the company and give it the boot? Could MGM take on Wynn’s $2.5 billion Boston Harbor project? If so, what does that do to MGM Springfield in western Massachusetts? Unlike Nevada, Massachusetts allows its licensees to run only one casino, and MGM is counting down the days to Aug. 24, when the doors of its $960 million hotel and casino complex open.

One of the common threads of MGM, Wynn and Sands is that all of them do business in Macau, which is experiencing a cyclical business resurgence after a two-year slump.

Sands, the market leader in Macau, reported revenue from Macau hit $2.16 billion for the quarter. It wasn’t that long ago that hitting $1 billion for a whole year was a big deal.

MGM, which partners in a joint venture in Macau with entrepreneur Pansy Ho, reported net revenue of $596 million in China. The significant news there is that the company got its first glimpse of revenue generation from its new MGM Cotai property — one month of activity totaling $85 million.

Wynn also performed well in Macau, but what might have been most impressive was the 99 percent occupancy rate at Wynn Macau and the 96.8 percent rate at Wynn Palace. Pair that with the $291 average daily room rate, and you get an idea of how astounding that market is. Wynn’s occupancy and room rates in Las Vegas were 83.9 percent and $340, respectively.

While Wynn has capitalized on its Macau accomplishments, and CEO Matt Maddox has hinted at a reinvestment strategy there, the outlook on the Strip is far different than it was 2½ months ago.

Steve Wynn, in the company’s fourth-quarter earnings call on Jan. 22, said he wanted to press ahead with the Paradise Park lagoon project and start preliminary work on land across from Wynn Las Vegas acquired by the company in December.

Wynn is no longer calling the shots, having stepped down as chairman and CEO of the company on Feb. 6 after being accused of sexually harassing employees over three decades.

Maddox, in Tuesday’s first-quarter call, said the plan was financially “unsustainable” and indicated the company would go forward with one or the other. Bet on Paradise Park, which has a head start and which Maddox now says would be accessible only to hotel guests, to be the next project.

Meanwhile, MGM shared in its call that the negative impact of the Oct. 1 shooting and disruptions at Park MGM/Monte Carlo have been more detrimental to the company than initially thought. It would be interesting to hear MGM executives’ thoughts on those challenges and other potential influences, but they’ve rejected interview requests since the shooting tragedy.

All of these financial questions are swirling at a time when the next big international play is waiting in the wings: Japan.

Sands expects to be be one of the chosen developers there. MGM has lobbied long and hard in Japan and has rolled out a responsible-gambling program that could have major appeal with the Japanese public. Wynn is in the mix, too, and it has an important new investor, Hong Kong-based Galaxy Entertainment, which is well-respected in Japan.

And let’s not forget that Caesars Entertainment Corp. wants to be in Japan, too. Maybe we will hear more about that from that company when it reports earnings Wednesday.

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

ad-high_impact_4
Business
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like