Las Vegas casino companies, suppliers have promising outlook

Executives in boardrooms across the gaming industry had to be smiling when first-quarter results began rolling in. Shareholders, too.

The final earnings reports for the three months that ended March 31 were filed with regulators last week.

The reports revealed that casino companies and their suppliers got off to good starts in 2018, and that the outlook for the rest of the year is promising.

The reasons?

The economy is cruising along.

People have jobs and are spending more on leisure.

Mergers and acquisitions have given some companies new revenue generators.

Casino revenue from Macau is returning to levels seen three years ago.

New and refreshed properties are online or close to it.

Companies are investing in facilities to take advantage of a robust convention calendar.

And now that it appears lawful, regulated sports wagering is on the near horizon nationwide, manufacturers are ramping up to supply the anticipated growth and angling for new markets.

A few companies suffered through some bad weather typical of the winter season, but they all know summer is coming.

And Wynn Resorts, a company rocked by scandal during the quarter, is thriving when it easily could have cratered.

Analysts are posting or reiterating “buy” recommendations, seeing opportunities to invest in the future.

Macau soars

Two of the three U.S. companies operating in Macau reported double-digit revenue growth rates.

Las Vegas Sands Corp. saw revenue climb 16.7 percent from a year earlier to $3.58 billion, thanks mostly to its success in Macau, where the company is transforming an existing property into the Londoner to match its European-themed Venetian and Parisian resorts.

Sands President and Chief Operating Officer Rob Goldstein was asked during an April 25 conference call with investors why the market has broadened in Macau.

“The way it’s described to us is that the acceleration of younger people who are very affluent bring their families, want to stay as much as four nights. They want to see Bruno Mars or whoever the star is that weekend. They want to shop at the stores. They want to go to the spa, and they like to gamble,” Goldstein said. “It’s quite a great combination. So they stay longer, they gamble more and have more time to spend in our shops.”

Sands is paying a dividend of 75 cents a share this month, and its stock price has climbed more than 9 percent since the April 25 earnings announcement, closing Friday at $79.37.

Wynn Resorts’ 20.5 percent increase in revenue to $1.72 billion also can be attributed to Macau, where the company’s sweet spot is the high-end market.

New Wynn CEO Matt Maddox spent much of his company’s April 24 call dispelling rumors of a sale of the company or its under-construction Boston Harbor project. He explained how he is working to stabilize the company amid accusations that Steve Wynn sexually assaulted and harassed employees. (The former CEO has denied those allegations.)

“The future is better than the past, no matter what the media likes to say,” Maddox said at one point in his call with analysts.

He seems to be right. On May 10, Wynn stock closed at $201.51, its highest level in nearly four years. Profit-takers have since moved in, and the stock closed Friday at $194.21. Still, after the scandal broke, the stock dropped as low as $156.54.

MGM lags in Las Vegas

The third company with a Macau presence, MGM Resorts International, didn’t fare as well as its competitors, with revenue rising 3.9 percent to $2.82 billion.

MGM’s stock price plunged 8.6 percent to $32.29 on April 26, the day of the company’s earnings announcement. The decline occurred after CEO Jim Murren said it’s taking longer than expected for the company to recover from the Oct. 1 mass shooting from Mandalay Bay, an MGM property, that left 58 people dead and hundreds injured.

Since then, the price has fallen even further. It closed Friday at $31.45 a share.

But MGM sees brighter times on the horizon. Its MGM Cotai property in Macau opened during the first quarter, and MGM Springfield in Massachusetts is scheduled to open its doors by the third quarter. Park MGM — the Strip property formerly known as the Monte Carlo — is expected to be fully renovated by the end of the year. The company’s retail and hotel revenue should get a bump from the unexpected success of the Golden Knights, which has played seven home postseason games so far and could play as many as four more in the Stanley Cup Final.

Gaming analyst Joseph Greff of J.P. Morgan said in a report to investors this month that he remains confident in MGM’s convention traffic and gaming revenue.

“Las Vegas convention visitation trends remain strong, increasing by 6 percent in 2017,” the report said. “Convention visitation is tracking down 3.9 percent year to date, but we note this is attributed to the convention calendar shift (with the triennial ConExpo-Con/Agg show rotating out this year).

“Convention visitation was (down) 16.7 percent in January, but up 11.3 percent year over year in February,” Greff said in his report. “On the gaming front, Las Vegas Strip gross gaming revenue excluding baccarat comparisons get easier as the year progresses, having increased 3.2 percent in 2017.”

MGM also is well-positioned to take advantage of the anticipated wave of sports gambling.

Caesars plans growth abroad

Caesars Entertainment Corp., the largest Las Vegas gaming company without a presence in Macau, is in an international growth spurt in its first full quarter since escaping bankruptcy protection.

In its May 2 earnings call, CEO Mark Frissora noted better-than-expected revenue and cash flow and highlighted plans for two Caesars Palace-branded resorts in Dubai and Mexico. The company is looking to break ground next month on its planned Caesars Forum Convention Center.

Las Vegas’ two other big operators — Boyd Gaming and Red Rock Resorts — didn’t fare as well for different reasons.

Boyd’s revenue declined 0.7 percent to $606.1 million for the quarter. The company cited bad weather at its Midwestern regional casinos and a downturn for its downtown Las Vegas properties. It said reduced access from the $1 billion Interstate 15 highway reconstruction project hurt its downtown operations, and higher jet fuel prices affected its business from Hawaii.

Red Rock Resorts, operator of the Station Casinos properties, has seen revenue decline at Palace Station and its newly acquired Palms property as it invests hundreds of millions of dollars into renovation projects.

Red Rock revenue fell 1.1 percent to $421 million.

The company expects the picture to improve with the Palace Station work nearly complete, but it says it’s going to take until the end of the year for the Palms to get to where executives want it.

Locals market thriving

Executives for Boyd and Red Rock say their hopes are resting on the Las Vegas economy continuing to thrive.

“In our view, the regional consumer is very healthy, and we expect better trends are ahead as winter concludes,” said analyst John DeCree of Las Vegas-based Union Gaming. “The first quarter is always choppy as the unfavorable weather moves around, ultimately impacting one or two markets; this year for Boyd, it was the Midwest, which was also impacted by a new competitor” near its Blue Chip property in northwest Indiana.

Manufacturers with a strong presence in Las Vegas thrived in the quarter, with London-based IGT revenue up 5.2 percent to $1.21 billion, Las Vegas-based Scientific Games up 11.9 percent to $811.8 million and Everi Holdings up 9.9 percent to $111 million.

IGT and Scientific see big opportunities with their technology being used for new sports-betting products in other states. Executives for both companies said when that occurs will depend on the speed at which states begin opening outlets and whether they’ll allow wagering from mobile devices.

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

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

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)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
Casinos to be penalized for allowing drug-impaired customers to gamble
Nevada Gaming Commission Chairman Tony Alamo talks about an amendment making casinos subject to the same disciplinary standards of preventing people to gamble if impaired by drugs as they are for letting them play while intoxicated by alcohol.
Terrible Herbst to open large travel center in Southern Nevada
The 50,000-square-foot commercial travel center will include 96 fuel pumps and the third White Castle restaurant in Southern Nevada. Wade Tyler Millward reports.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
News Headlines
Local Spotlight
Home Front Page Footer Listing
You May Like

You May Like