MGM-Resorts 3rd Quarter
EBITDA is way down in almost every single resort.
Management operations -689%
Other operations -122%
Monte Carlo -66%
Luxor -65%
Mandalay Bay -64%
MGM Grand Las Vegas -59%
The Mirage -57%
Circus Circus Las Vegas -46%
Excalibur -23%
Beau Rivage -15%
Gold Strike Tunica -3%
MGM Grand Detroit 72%
Bellagio 76%
New York-New York 111%
Revenue managed to drop by 5% in the old resorts in Las Vegas Something that seemed almost impossible considering how bad earnings were in 2009.
The Mirage -16.49%
MGM Grand Las Vegas -13.04%
Excalibur -8.15%
Luxor -8.01%
Circus Circus Las Vegas -5.32%
Mandalay Bay 0.32%
Bellagio 2.64%
New York-New York 6.05%
Monte Carlo 9.97%
It's hard to imagine that ARIA would do so badly. Revenue is below MGM Grand, or Bellagio. Hell, it's almost as low as Luxor & Excalibur & Circus Circus combined.
It does not bode well for the new Cosmopolitan resort.
Timing can be everything, huh? City Center was just not built at a good time!
That is correct but there is more than just construction, there is also operation. They did not want to bite the bullet. They assumed that they could market "newness" and "upscale" and somehow pull the rabbit out of the hat. Well, with everyone in town discounting hotel rooms City Center opened with hotels that did not want to discount their rooms for fear it would tarnish their upscale brand names. City Center desperately wanted to be an upscale market rather than a flea's grind joint. Oh okay, there downside would not have been quite that bad, but in so desperately trying to avoid the downside they placed themselves separate and apart from the real-world Vegas market. Maybe they can somehow hang on but it seems unlikely.Quote: ElectricDreamsTiming can be everything, huh? City Center was just not built at a good time!
Quote: ElectricDreamsI think this, combined with the amount of debt MGM is in to pay for City Center, is not a good sign. The CEO is absolutely convinced Aria is going to turn around and become one of the more profitable casinos on the Strip, but I guess since he's the CEO and all he does have to go by the party line...
Timing can be everything, huh? City Center was just not built at a good time!
Every interview I've seen with Jim Murren he's come across as deluded and out of touch with Vegas casino operations. Not that I am an expert, but he seems to subscribe to the Field of Dreams approach to casinos. I'm hoping more MGM properties get spun off and create a little more competition in Vegas (I'm hugely disappointed by P-Ho becoming Harrah's... not for anything against Harrah's, I just like a variety of owners, as they then have to compete for my flea dollars)
Quote: thecesspitQuote: ElectricDreamsI think this, combined with the amount of debt MGM is in to pay for City Center, is not a good sign. The CEO is absolutely convinced Aria is going to turn around and become one of the more profitable casinos on the Strip, but I guess since he's the CEO and all he does have to go by the party line...
Timing can be everything, huh? City Center was just not built at a good time!
Every interview I've seen with Jim Murren he's come across as deluded and out of touch with Vegas casino operations. Not that I am an expert, but he seems to subscribe to the Field of Dreams approach to casinos. I'm hoping more MGM properties get spun off and create a little more competition in Vegas (I'm hugely disappointed by P-Ho becoming Harrah's... not for anything against Harrah's, I just like a variety of owners, as they then have to compete for my flea dollars)
I stick with my prediction that half of the casinos in Vegas will be closed by 2015. They are being run delusionally, and propped up by unsustainable debt.
The survivors will be the ones that do cater to the "fleas". That approach is what built up the Strip in the first place. The glamorous high roller stepping out of a limo with a silicone bimbette on his arm may have been the icon, but what really got all the megatoilets built was Ferd and Betty stepping out of their 1973 Ford to go play the nickel slots. Now that everybody's been kicked back a couple of decades financially, the $12 grilled cheese sandwich, the $299 room, and the $25 minimum table just won't fly any more. I doubt that Harrah's, MGM, and the other big players will admit that in time to save themselves, though--the only chance they have would involve admitting that their business model is a failure, which would, in turn, involve dozens of men in fancy suits admitting that they were wrong. Not gonna happen. I am amazed by the fact that they all plowed ahead as if nothing was wrong, right through the Second Great Depression. You've got to be blind, incredibly arrogant, or both, to run your company the way these people did.
Quote: mkl654321
I stick with my prediction that half of the casinos in Vegas will be closed by 2015. They are being run delusionally, and propped up by unsustainable debt.
The survivors will be the ones that do cater to the "fleas".
I just don't see this happening. I spend a lot of time looking at data, and the places that are doing the best are like the Venetian, Bellagio, MGM Grand, and the Mirage. A mix of cheaper places like NY/NY and Excalibur are also doing well.
The bargain places catering to fleas (Circus Circus, Sahara, Riviera, Stratosphere, and Hooters) are invariably falling off the map.
Now as a corporation it is difficult to see MGM Resorts recovering. If they sell properties it will be at bargain rates, well below the level that they can make a dent on their long term debt.
I think if one of their executives suggested that ARIA would be doing worse than Bellagio after one year, he would have been thrown out of the boardroom. If anything, i think their biggest concern was that ARIA would steal customers from the Bellagio.
The probable worst case scenario is that no one builds a casino for more than a decade.
The Cosmopolitan will probably be devastating for ARIA. Why would you stay in the ARIA if you can get one of these huge apartment style rooms right next door.
Quote: mkl654321Quote: thecesspitQuote: ElectricDreamsI think this, combined with the amount of debt MGM is in to pay for City Center, is not a good sign. The CEO is absolutely convinced Aria is going to turn around and become one of the more profitable casinos on the Strip, but I guess since he's the CEO and all he does have to go by the party line...
Timing can be everything, huh? City Center was just not built at a good time!
Every interview I've seen with Jim Murren he's come across as deluded and out of touch with Vegas casino operations. Not that I am an expert, but he seems to subscribe to the Field of Dreams approach to casinos. I'm hoping more MGM properties get spun off and create a little more competition in Vegas (I'm hugely disappointed by P-Ho becoming Harrah's... not for anything against Harrah's, I just like a variety of owners, as they then have to compete for my flea dollars)
I stick with my prediction that half of the casinos in Vegas will be closed by 2015. They are being run delusionally, and propped up by unsustainable debt.
I think about a third will close, its inevitable. The rest will have to scale back to 1995, way less employees and reasonable minimums. Let the slots start paying again and word will get out. Right now the word is the slots have been screwed down so tight they are unplayable.
Quote: EvenBobQuote: mkl654321Quote: thecesspitQuote: ElectricDreamsI think this, combined with the amount of debt MGM is in to pay for City Center, is not a good sign. The CEO is absolutely convinced Aria is going to turn around and become one of the more profitable casinos on the Strip, but I guess since he's the CEO and all he does have to go by the party line...
Timing can be everything, huh? City Center was just not built at a good time!
Every interview I've seen with Jim Murren he's come across as deluded and out of touch with Vegas casino operations. Not that I am an expert, but he seems to subscribe to the Field of Dreams approach to casinos. I'm hoping more MGM properties get spun off and create a little more competition in Vegas (I'm hugely disappointed by P-Ho becoming Harrah's... not for anything against Harrah's, I just like a variety of owners, as they then have to compete for my flea dollars)
I stick with my prediction that half of the casinos in Vegas will be closed by 2015. They are being run delusionally, and propped up by unsustainable debt.
I think about a third will close, its inevitable. The rest will have to scale back to 1995, way less employees and reasonable minimums. Let the slots start paying again and word will get out. Right now the word is the slots have been screwed down so tight they are unplayable.
Do casinos close that often, though? Honestly it mostly just seems like they change hands, especially if it's Las Vegas. If a company on the Strip can't handle the heat, then there's always a Penn National or someone to buy the casino at bargain prices.
Okay, maybe not always.
There is a bit of a time lag but The Word on slot win comes from the Gaming Commission and its not really any more tight now than in the last few years.
Quote: FleaStiff"the word" ?
There is a bit of a time lag but The Word on slot win comes from the Gaming Commission and its not really any more tight now than in the last few years.
I live in the midwest and thats the word on Vegas from everybody I know who goes there, nobody is winning on the slots. People who have gone for years and came back winners sometimes, are never coming back winners now. I hear it over and over. Even my local casinos are losing business over tight slots. I know a lady in IN who went for years, at least twice a week and now she never goes because she never leaves a winner anymore.
Quote: EvenBobI live in the midwest and thats the word on Vegas from everybody I know who goes there, nobody is winning on the slots. People who have gone for years and came back winners sometimes, are never coming back winners now. I hear it over and over. Even my local casinos are losing business over tight slots. I know a lady in IN who went for years, at least twice a week and now she never goes because she never leaves a winner anymore.
Isn't slot hold % reported in states like NV and IN? It should be objectively provable that the hold percentages have increased, shouldn't it?
Quote: rdw4potusIsn't slot hold % reported in states like NV and IN? It should be objectively provable that the hold percentages have increased, shouldn't it?
Somebody posted an article here a couple weeks ago that said its gone to over 7% in Vegas, which makes it almost impossible to win. The difference between 6% and 7% is tremendous.
Wait, that was ME that posted it, LOL. Its by a professor at UNLV, its in here somewhere.
Quote: EvenBobSomebody posted an article here a couple weeks ago that said its gone to over 7% in Vegas, which makes it almost impossible to win. The difference between 6% and 7% is tremendous.
Wait, that was ME that posted it, LOL. Its by a professor at UNLV, its in here somewhere.
I agree that 1% is a big difference. But compared to other jurisdictions, 93% or 94% payback is HUGE. I am not aware of any jurisdictions with better payback percentages. Iowa's casinos are required to post and report payback percentages, and their casinos are all around 90%. Indian casino compacts set floors at 75% or 80% with no reporting requirements.
Quote: rdw4potusI agree that 1% is a big difference. But compared to other jurisdictions, 93% or 94% payback is HUGE. I am not aware of any jurisdictions with better payback percentages. Iowa's casinos are required to post and report payback percentages, and their casinos are all around 90%. Indian casino compacts set floors at 75% or 80% with no reporting requirements.
Well, one of the reasons that people come out to that Godforsaken blast-furnace ugly sinkhole in the desert, even if they had a nice shiny Injun casino just an hours' drive away, is that they felt they had better chance to win in Sinkhole, er, Vegas. If Vegas tightens up its gambling much more, it'll start losing Ma and Pa Fish, who will discover on their next, and final, trip there that they are getting raped just as thoroughly as they normally are at Big Heap of Wampum Casino and Bingo Resort, so why pay $299 each to fly to Sinkhole any more? The Vegas casinos don't seem to realize just how quickly their customer base can evaporate.
Quote: rdw4potusI agree that 1% is a big difference. But compared to other jurisdictions, 93% or 94% payback is HUGE.
Actually, its not. As I recall, the article says that at 95% you can play with $100 for about 4 hours. Where they have it set now, $100 lasts about 1 hour. Thats a huge and very real and noticable difference to the customer.
Quote: EvenBobActually, its not. As I recall, the article says that at 95% you can play with $100 for about 4 hours. Where they have it set now, $100 lasts about 1 hour. Thats a huge and very real and noticable difference to the customer.
That's true. But there is nowhere in the USA where you can play at a 95% payback. So what's the point?
Quote: rdw4potusThat's true. But there is nowhere in the USA where you can play at a 95% payback. So what's the point?
Actually, the locals' casinos in Vegas report that level of return on dollar slots.
Quote: mkl654321Actually, the locals' casinos in Vegas report that level of return on dollar slots.
Maybe other places around the country are different but the last time I was in a few casinos in WI, 99% of the dollar slots were empty, and on weekends it was hard to get on the penny slots.
I just don't see the mom and pops going to vegas to play $1 machines. They are there for the penny/nickel slots.
Quote: mkl654321Actually, the locals' casinos in Vegas report that level of return on dollar slots.
Actually, the Boulder Strip and NLV return percentages for $1 machines are more like 97%. I was talking about the average over all denominations, though I could certainly have made that more clear. Even across all machines, the 2010 ACG lists a 94.96% return for the boulder strip casinos. Looks like I was wrong in either case...
It is difficult to determine the setting since the stats only report win percentage and not the house average. As we have discussed many times before they are not identical, since if you play a machine for a long time you win percentage would be expected to grow.
| http://www.lasvegassun.com/news/2010/mar/16/slots-have-gotten-looser-not-average-gambler-can-t/ ' rel='nofollow' target='_blank'> Slots have gotten looser, not that the average gambler can tell | 16-Mar-10 | Liz Benston | Las Vegas Sun |
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If possible I would like opinions on this threat about MGM Resorts. I think that it is serious that a year after gaming revenue bottomed out on the Vegas strip, most of the MGM resorts are still dropping, both in total revenue and in EBITDA. The company still has not found it's bottom for the older resorts. On top of that there is the horrible mess that is ARIA and City Center.
I have said earlier that a breakup doesn't seem likely given the huge debt load. I think a buyout or a merger is the most likely solution (an idea which is generally greeted with ridicule).
