This week’s installment of Inside Gaming shares news of Boyd Gaming’s agreement to purchase one North Las Vegas casino and the company’s interest in acquiring more, notes Las Vegas Sands’ first-quarter decline, and passes on one investor’s thoughts about gaming growth perhaps occurring faster than it should in Manila.
Boyd Gaming to Buy Aliante, Reportedly Interested in Cannery Casino Resorts
Amid speculation that Boyd Gaming was primed to make a different acquisition, the company announced yesterday it had agreed to purchase the Aliante Casino and Hotel in North Las Vegas for $380 million, VEGASINC reports.
A statement from Boyd Gaming CEO Keith Smith expressed optimism about both the Aliante’s prospects and the company establishing a significant presence in an area many are targeting for near-term industry growth.
“Aliante is an asset without rival in the North Las Vegas market,” Smith said in a conference call announcing the agreement. “It will further strengthen and diversify our robust Las Vegas portfolio, which is the fastest growing segment of our business.”
The Aliante first opened in November 2008 as Aliante Station with Station Casinos and the Greenspun Corporation its first owners. Following Station Casinos filing for bankruptcy the following year, the Aliante eventually found its way into the hands of a group of private equity firms and banks.
The news of Boyd’s agreement to acquire the Aliante comes on the heels of a Reuters report on Wednesday that the casino operator has neared an agreement to buy Cannery Casino Resorts LLC, with knowledgeable sources citing a range of $225-240 million as the potential purchase price. That agreement is said to be imminent, perhaps to come within the next few weeks, although no one from either Boyd or Cannery offered any comment on the possible transaction.
Based in Spring Valley, Nevada, Cannery Casino Resorts was established in 2001 by Millennium Gaming, with Oaktree Capital Management and a subsidiary of Crown Resorts Ltd. also now part-owners. The Australia-based Crown Resorts had made a bid to acquire CCR back in 2007 for $1.75 billion, though ultimately only took a percentage stake in the company for $370 million.
Under the CCR aegis the Cannery Casino and Hotel opened in Las Vegas in 2003, with the Eastside Cannery Casino and Hotel on the Boulder Strip in Sunrise Manor, Nevada opening in 2008. CCR also had owned the Meadows Racetrack and Casino near Pittsburgh, though sold it in December 2015 for $440 million to Gaming and Leisure Properties Inc..
According to Reuters, the sale of the Meadows “simplified Cannery’s capital structure, paving the way for a potential sale of the Nevada properties.” Also noteworthy — and related to the Aliante deal — is the fact that CCR’s “Las Vegas locations would give Boyd a strong foothold in the fast-growing north area of the city, which is emerging as a hub for technology start-ups, attracting affluent professionals with money to gamble.”
Boyd Gaming currently operates 22 different casino and hotel properties in eight different states, including the California Hotel and Casino, the Fremont Hotel & Casino, and the Main Street Station Hotel and Casino and Brewery in Las Vegas, plus a half-dozen other properties in the surrounding area.
Visit VEGASINC for more about Boyd’s purchase of the Aliante and its prospects in North Las Vegas.
Macau Decline Affects Las Vegas Sands’ 1Q
This week the Las Vegas Sands Corp. reported its first-quarter numbers, showing a decline in both revenue and earnings over the first three months of 2016.
According to the Wall Street Journal, the company reported a profit of $320.2 million during 1Q 2016, down 37.5% from the $511.9 million of earnings during the 1Q 2015. Overall revenue for the period was down 9.8% year-over-year to $2.72 billion.
Given the Las Vegas Sands significant investment and presence in Macau, the decline in gaming revenue in the Special Administrative Region — now approaching two years’ long — has had its effect. First-quarter revenue at the Sands China, for example, was down 7.9% to $1.63 billion.
Referring to the situation in Macau, the company stated “we do see signs of stabilization, particularly in the mass market.”
Meanwhile U.S. properties were up during the first part of the year, with the Venetian in Las Vegas showing a 2.3% revenue increase while the Sands Bethlehem in Pennsylvania was up 8.6%.
For more on the LVS’s first quarter — including comment from CEO Sheldon Adelson — see “Las Vegas Sands Reports First Quarter Declines Despite Growth in the U.S.”
Reservations from Razon about Rapid Manila Casino Growth
The gaming industry has experienced notable growth in Manila over recent years. The opening of the Solaire Casino and Resort in 2013 and the City of Dreams Manila the following year — together with that aforementioned decline in gaming revenue in Macau — have caused some to speak of the capital city of the Philippines becoming a new gaming hub in the region.
Not everyone is sanguine about the rapid growth in Manila, however. This week Enrique Razon, Jr., chairman of the Bloomberry Resorts Corporation that owns the Solaire, earned notice by expressing unease about expansion coming too quickly to the Manila Bay area. The Philippine Daily Inquirer reports that on Thursday Razon “warned of an ‘oversupply of casinos” in Manila while commenting on plans for two more casino complexes to be built there over the next two years.
“It’s too many, too fast,” said Razon, who believes “the market is not growing as fast as the industry wants it to. Supply is growing faster than the market.”
Speaking to a group of reporters, Razon also indicated Bloomberry’s intention to pursue expansion in other areas, including building a casino in Cyprus this summer and advancing its proposal to build another in Argentina.
Gambling was first made legal in the Philippines in 1976 with the city’s first casino going up a year later. There are currently more than 20 casinos operating in the Manila Bay area and in nearby Parañaque.
Photo: Aliante Casino and Hotel.
Read more about Manila’s current and future gaming prospects according to one of the movers and shakers in the Philippine Daily Inquirer.