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Thread: MGM in discussion to buy Boston Encore

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    MGM in discussion to buy Boston Encore

    https://www.bostonglobe.com/metro/20...BmM/story.html

    The timing of the talks seems unusual, after the Wynn company wrapped up eight years of salesmanship, design, competition, environmental cleanup, and construction to bring the Encore to the eve of its opening. Along the way, there have been lawsuits, resignations, and the long investigation by state regulators into the accusations against Steve Wynn. Encore would be the first and, by law, the only Las Vegas-style casino in Greater Boston, the most lucrative casino market in the state.

    ďI think probably Wynn Resorts wants to wash its hands of Massachusetts and move on,Ē said Clyde Barrow, a casino specialist at the University of Texas Rio Grande Valley and former UMass professor.

    MGM holds the sole resort casino license for Western Massachusetts, and last August opened the MGM Springfield resort. It was everything the gaming commission hoped it would be ó a casino and entertainment center deftly integrated into the cityís long-moribund downtown, providing thousands of jobs and new revenue to the city, neighboring municipalities, and the state.

    Under Massachusetts law, no company can hold more than one casino license, which makes an MGM play for Encore Boston Harbor a tricky bank shot. The company would have to relinquish its Western Massachusetts license and presumably sell MGM Springfield, a project that took years to build, cost about $960 million, but so far has fallen short of projections in gambling revenue.
    Obv, MGM looking to upgrade here. Springfield is a shithole, it will continue to decline, and once Boston goes live its gonna be bumpin. I can see Mohegan buying Springfield. Also LOL that the MA gaming commission as corrective action for Wynn was to have the Wynn CEO Maddox get an "executive coach"
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    Plutonium Sanlmar's Avatar
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    Oh dear god this is one of my favorite topics and shorts

    Bumpin? I love ya man but “bumpin” is not gonna pay back 2.6b with increased competition to come. Boondoggle.

    You caught the delayed opening? I’m sure you did

    Did you see the Boston Globe article talking about salaries? If you have a pulse they are gonna throw you huge dollars. GBCP can hold a 101 about casino margins. Ridiculous and unsustainable. Boondoggle.

    As Everett casino hires many, other businesses feel a pinch
    https://www.bostonglobe.com/business...mlI/story.html

    MGM? The company that is laying off 1000? Yes, Springfield a little too big and after a few months there are already concerns.

    My domestic casino call has been amazing. I had a problem shorting again as Asia (Macau) was a reason for optimism. The Trump trade war with China has solved that. MGM, LVS, Wynn sucking air.

    Massachusetts online sports and lotteries coming soon. That’s another fascinating topic. Half of all convenience store business and often more is lottery. Small operators are shitting themselves.

     
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    Yeah online sports/betting and lottery will def crush some stores...although its those damn scratch offs that ppl are really addicted to

    I do know ARIA just laid off some VPs....mostly in finance, security, and food/beverage...usually means an acquisition maybe coming soon.

    The debt these casino companies rack up is just LOL
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    Quote Originally Posted by Sanlmar View Post
    Oh dear god this is one of my favorite topics and shorts

    Bumpin? I love ya man but ďbumpinĒ is not gonna pay back 2.6b with increased competition to come. Boondoggle.

    You caught the delayed opening? Iím sure you did

    Did you see the Boston Globe article talking about salaries? If you have a pulse they are gonna throw you huge dollars. GBCP can hold a 101 about casino margins. Ridiculous and unsustainable. Boondoggle.

    As Everett casino hires many, other businesses feel a pinch
    https://www.bostonglobe.com/business...mlI/story.html

    MGM? The company that is laying off 1000? Yes, Springfield a little too big and after a few months there are already concerns.

    My domestic casino call has been amazing. I had a problem shorting again as Asia (Macau) was a reason for optimism. The Trump trade war with China has solved that. MGM, LVS, Wynn sucking air.

    Massachusetts online sports and lotteries coming soon. Thatís another fascinating topic. Half of all convenience store business and often more is lottery. Small operators are shitting themselves.
    yup...

    here's the playbook and ill be very surprised if im wrong...

    encore hires all these people to massive salaries...things look rosey outta the gate...rich bostonites gamboooooooooooool their asses off at the new shiny toy...customers come from maine, new Hampshire, Vermont, Connecticut, and maybe even new York...gaming revenues look promising...time passes, maybe a year or two...gaming revenues in the hyper competitive east coast gaming market either stagnate or decline...looking for margin improvement those big salaries offered on open are either cut or positions will be eliminated...front line employees will be the first to go, we can get away with having 25% less housekeepers, etc...then once those changes work their way through the system it will be a year or two, gaming revenues will again stagnate or go down...margins need to be improved, then they start cutting the executive ranks to make the cuts actually matter....

    it was always thought to be a great thing to own a casino...wouldn't touch one on the east coast unless it was aimed at locals and didn't have a hotel...

     
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      Prodigal son:

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    customers come from maine, new Hampshire, Vermont, Connecticut, and maybe even new York...gaming revenues look promising.
    I think Encore will also draw in a lot of international money, FWIW

    but your overall point is correct: casinos are generally a losing business and it probably wont have the success investors think it will be in the end
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    Diamond Tellafriend's Avatar
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    Quote Originally Posted by Shizzmoney View Post
    but your overall point is correct: casinos are generally a losing business and it probably wont have the success investors think it will be in the end


    I certainly don't disagree; but why do you think that is?

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    Quote Originally Posted by Tellafriend View Post
    Quote Originally Posted by Shizzmoney View Post
    but your overall point is correct: casinos are generally a losing business and it probably wont have the success investors think it will be in the end


    I certainly don't disagree; but why do you think that is?
    ill speak from an east coast perspective...maybe if you can get a casino somewhere else where it's not so crowded it would be better...

    look at what you have here...just gonna go off the top of my head I might miss some...

    NJ: ocean, resorts, bally's, caesars, trop, Borgata, golden nugget, hard rock, harrah's
    Eastern PA: sands, sugarhouse, parx, harrah's philly, valley forge, live! (will be opened I think in 2020, right by the stadium complex in philly...they have already torn down the hotel where it will be constructed)
    MD: Live!, horseshoe, MGM, Hollywood
    DE: I don't know the names, but I believe they have 2-3 casinos in that state
    CT: Mohegan, foxwoods
    NYC: resorts world and there's another one I can't think of the name

    you could probably add upstate NY casinos in here too as they are probably close enough, but I think you get the point...look at the competition for gaming dollars in the most populous part of the country...it's fucking nuts...what are you going to do to differentiate yourself from the competition? blackjack is blackjack, craps is craps, slots for the most part are slots...how are you gonna get people to come to your place consistently? better offer some good deals, which cut into your margins...

    house always has an edge but when you have a lotta houses the edge starts to shrink...
    Last edited by GambleBotsChafedPenis; 05-27-2019 at 02:50 PM.

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    Quote Originally Posted by Shizzmoney View Post
    customers come from maine, new Hampshire, Vermont, Connecticut, and maybe even new York...gaming revenues look promising.
    I think Encore will also draw in a lot of international money, FWIW

    but your overall point is correct: casinos are generally a losing business and it probably wont have the success investors think it will be in the end
    no kidding? never thought of that angle...you think euro money is gonna travel to boston to gamble?

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    Quote Originally Posted by GambleBotsChafedPenis View Post
    Quote Originally Posted by Shizzmoney View Post

    I think Encore will also draw in a lot of international money, FWIW

    but your overall point is correct: casinos are generally a losing business and it probably wont have the success investors think it will be in the end
    no kidding? never thought of that angle...you think euro money is gonna travel to boston to gamble?
    Yes.....Boston has a lot of international banking folks here. I am a Spurs can...and when they played Ajax (Holland), I ran into a lot of Ajax fans at the Spurs bar who live here now that work for intl banks and firms like ING. Also, there is a ton of intl money at living here already for colleges...young trust fund kids from Saudi and Japan and
    India/UK with disposable income.

    Also, for the casino question in why they tend to fail: it starts at an executive level. Most of these places are horribly mismanaged. Foxwoods comes to mind....they shouldnt be that deep in the hole, but the tribe execs who run it pay themselves way too much money while slashing everything else for consumers and employees. They just announced they are gonna update the buffet....this after 15+ years of it being shitty. But we all know why they doing it (Encore) not because they are finally listening to the customers.
    http://www.miraclecovers.com

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    Plutonium Sanlmar's Avatar
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    International Banking.

    Yeah, the finance guy from Paris, Daly, is here discuss our next round.

    He’s staying at the Encore Casino. Lol

    He’s feeling lucky. It’s a also a bad look.

    Millenials & college kids don’t gamble. Not the way you need them to. They aren’t sitting at slots. They party. They are social. Vegas is learning that. They come from LA for the clubs etc. Gambling isn’t the destination for them. So Vegas builds sports stadiums and such to keep people out of casinos for 4 hours while they watch the Vegas Knights.


    If you had skill based video gaming in a college town we might have something to talk about but the casino corporations are too stupid to invest in development like their lives depend on it. Leave it up to the vendors.

    I think a history lesson is useful:
    In the old days casinos were designed to keep people at the games. You pass through the pits and acres of slots to get to the front desk to check in.

    The entertainment was of a defined length and the venue was close to the floor.

    Certainly, we are talking Vegas so there wasn’t really anything else to do in the desert. So you stayed and gambled. Consider every Indian casino you’ve been to. Middle of nowhere.

    In Boston, you gonna do the Freedom Trail and all that historical touristy stuff. You are leaf peeping. If you are from LA your watching some good sports teams for a change. You ain’t sitting at the blackjack table.

    Lefty Rosenthal would fire your fucking ass for being patently stupid.

    You are flying to Boston in the fall and then spending the day to look at the leaves in Vermont. You aren’t flying to Boston from anywhere for the 6 months of winter - period.

    Skip the hotel. Third the size and cost. Incremental revenue and a local corporate presence in a crowded casino market. Manageable expense. Think Twin River Shizz. It was a homerun. Twin River is losing focus but think about its origin story.

    Few off the cuff counter arguments.

     
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    Last edited by Sanlmar; 05-23-2019 at 09:55 AM.

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    I don't think anyone with a normal income will actually stay at Encore...the rooms are $600/night lol...but the good thing about Boston is, you don't need to.

    In terms of the International Banking angle I pitched...its also more of a personal note I pitched as well as I have 5 friends coming in from the UK for the UCL final and a friend's 40th bday. 2 of them work for Barclays and a London hedge fund, respectively. They really wanna gamble while they are here....one is a regular at Genting at Cromwell.....but the only option we considered for when they were here is Mohegan. The shit is too far and in the middle of fucking no where....we'll just get banged up in JP and at the Kinsale instead. But if there was a casino here, these guys are animals and that was kind of the type of tourist I was mentioning.

    Also, I will add that while I do agree that millennials and college kids aren't gambling like they used to....they still play cards and sports gamble. The home games I play are littered with em. Twin River's sports book and poker has doing well, from what I hear (I have never gone but I know guys who do).

    I do concur with you on the pits and such...that shit is waning. Slots kinda appeal to young women to a degree (I know a 33 yr old girl with a master's in psychology who loves the shit)...but they don't spend much when they do.

    I will say that one of Foxwoods' biggest consumer life rafts is the Asian community...they bus down from Dorchester and Quincy daily to get their fix. Once Encore opens however, I wonder if that wanes for Foxwoods as this community will likely gamble closer.

    I will add we maybe having a miscommunication in disagreement: I'm more bullish on the volume and traffic angle....but I do agree with you Sanlmar that there won't be as many high rollers and Lefty Rosenthals shooting off at the tables as the executives think there will be.
    Last edited by Shizzmoney; 05-23-2019 at 03:10 PM.
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    Plutonium Sanlmar's Avatar
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    will add we maybe having a miscommunication in disagreement
    Particularly of late, I pay rapt attention to your gambling posts. You are Steve-O’ish lately. You are not a journalist, right? I didn’t think so but you got a sharp perspective.

    I get a little excited. It’s a pending disaster. The morbid fascination. It’s not quite a school shooting... more like the Lawrence, Andover gas explosion.

    I also tend toward the “dump” cause I am short MGM, LVS, WYNN. It’s live bet and bad news is good news.

    The MGM deal is dead.

    There has been much speculation recently about the possible sale of the Encore Boston Harbor. As mayor of Everett, let me be clear: I will not allow the sale of the Encore Boston Harbor to another casino operator.

    If necessary, I will exercise the authority I have under the Host Community Agreement that I executed with Wynn Resorts in 2013, in order to block any sale attempt. The stakes are far too high for us here in Everett.
    Let ME be clear. Wynn’s recent public commitment to the project came about cause they HAD TO. They are stuck. The stock market is punishing them. Cratering isn’t too harsh a description.

    Wynn promised to much in jobs/wages and scale for a license. Steve Wynn is old and the market is entirely new (ex:PASPA) since he began development discussions. Beyond that he was a creature of another era. Think Treasure Island ‘93.

    See, I can’t make a 2 sentence post. Just love this disaster. It’s fascinating and easy to follow.
    Last edited by Sanlmar; 05-23-2019 at 04:46 PM.

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    Gold Shizzmoney's Avatar
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    I did not see this...holy shit haha

    https://www.bostonherald.com/2019/05...ugh-is-enough/

    This also goes to my "casinos suck because the executives" thing. Steve Wynn, always a critic of govt and a fan of the free market....well, the free market gonna run a train on his (old company...I know he had to sell the shares but his family is still involved its all bullshit) ass in the end. Esp since I think we hit recession after the 2020 election, effecting the majority of casino stocks.

    Sanlmar if I had the personal income, the thing I'd want to pursue..is to run/own a card room inside the Boston city limits that's T-accessible ...a la the Aviator in Paris. And shit, no liquor allowed....just weed and vaping (although weed patronage isn't legal yet anywhere, even in CO or NV...but they are getting close and so will MA). Hell even no BJ....although thats another externality Encore has to deal with (I work in pharma near MIT so I see these nerds everyday). But MA didn't want that. MA and Deval Patrick wanted "destination casinos" because that meant more building which means more jobs, which means consumers will eventually punt. IRL doesnt work like that. This isnt Field of Dreams.

    I also am not a journalist.....but did take classes in college. I didnt seriously pursue because I saw the biz going digital which would affect wages (Globe got more growth in digital subscribers than print for the 1st time in history in 2018).
    http://www.miraclecovers.com

    "Donk down, thatís what you say to someone after they have lost 28K straight?" - Phil Hellmuth, online

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    Plutonium Sanlmar's Avatar
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    Shizz’s Game (2019) IMDb


    Shizz (into the phone)
    Yes, who is this?

    MALE VOICE
    Mr Shizzmoney, this is Special Agent
    Delarosa of the FBI and we have a warrant for your arrest. We’re outside your door and we want you to come out here. Listen to me now. Make sure we can see your hands.


    North End
    One of those basement cigar bars.
    Close to financial district.

    Don’t take a rake.

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    Quote Originally Posted by Sanlmar View Post
    Shizzís Game (2019) IMDb


    Shizz (into the phone)
    Yes, who is this?

    MALE VOICE
    Mr Shizzmoney, this is Special Agent
    Delarosa of the FBI and we have a warrant for your arrest. Weíre outside your door and we want you to come out here. Listen to me now. Make sure we can see your hands.


    North End
    One of those basement cigar bars.
    Close to financial district.

    Donít take a rake.
    just do what they do in Texas...charge a "membership" fee lol

    I am surprised with the zealots in govt in Texas they allow those rooms (also great thread about Texas poker with the latest Houston bust for those who havent read it)
    http://www.miraclecovers.com

    "Donk down, thatís what you say to someone after they have lost 28K straight?" - Phil Hellmuth, online

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    Gold Shizzmoney's Avatar
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    http://www.miraclecovers.com

    "Donk down, thatís what you say to someone after they have lost 28K straight?" - Phil Hellmuth, online

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    Master of Props Daly's Avatar
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    Get called out as the international finance guy..... came in here to make a post on if there are poker rooms in Italy. Guess I’m guilty as charged.

    This place should have been built 25 years ago for a lot of reasons. Would have put Foxwoods out of business and would have made Boston one of the largest poker hubs of the world.

    First two months to stay here.

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    I’m not “Pooh Rich” and nowhere close to CMoney Rich but I get by. If I can’t afford to stay a weekend at this place than guess what. This shit ain’t going to work. $40 to park. Sure the bars are open until 4AM but at $10 a beer this place can fuck off.

    I think they know they will never get the revenue stream they need to make this work long term and are trying to sell out now and take the loss. The Place will make money and as said will probably do well the first 3-6 months while the new car smell is still on it. Beyond that forget it.

     
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      Shizzmoney: $875 a night? LOL

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    Wynn Resorts, the developer of the soon-to-open Everett casino, announced Tuesday that it had paid a $35 million fine imposed on the company by the Massachusetts Gaming Commission in the wake of sexual misconduct accusations against its former CEO and founder, Steve Wynn. The news came after two weeks of relative uncertainty about the stateís second full-scale resort casino.

    One more twist: MGM apparently wasnít the only potential buyer. On May 23, the Globe reported that John Henry, the principal of the Boston Red Sox and owner and publisher of the Globe and Boston.com, had looked into buying Encore with a group of investors last year, as well as again earlier this month. Henry told the Globe that an acquaintance raised the idea to him and then he checked with Maddox about the possibility. Each time, Maddox said Wynn Resorts was committed to moving forward with the casino themselves.

    DeSalvio says the eight-hour test openings are necessary to fine-tune service based on feedback from Gaming Commission officials, who observe the soft launches.

    ďBecause literally, once we open the door to the public, the place will be open 24/7/365 ó forever,Ē he told the Globe
    https://trib.al/752lxxQ
    http://www.miraclecovers.com

    "Donk down, thatís what you say to someone after they have lost 28K straight?" - Phil Hellmuth, online

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    Plutonium Sanlmar's Avatar
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    Cliffs:

    John Henry, the guy who bought a NEWSPAPER, saw value in the wretched excess that is the Encore.

    There is a reason nerds are celibate, John.


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    if he's tappin' that ass god bless him...

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