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MGM posts best quarter since 2008!

Discussion in 'Casino Industry & Development' started by smartone, May 2, 2013.

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  1. smartone

    smartone VIP Whale

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    Now I know this comes as a terrible shock to the many "doomsdayers" who post regularly here on VMB, though most of them have now focused their efforts on their once beloved downtown, but there's some good news outta sin city!

    Remains to be seen if it's an anomaly, or if a corner has indeed been turned... but it's good news none the less. Unless you don't like good news, then spin it how you will... and I'm sure they will.


    http://www.reviewjournal.com/business/casinos-gaming/mgm-resorts-reports-best-quarterly-report-2008
     
  2. FountainFiend

    FountainFiend Low-Roller

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    How is this possible... I've never understood this in earnings statements:

    "At CityCenter’s Aria, table game hold percentage was 28 percent, compared to 16 percent a year ago, while hotel room occupancy was 89 percent with an average daily room rate was $209."


    How in the world is table hold 28%? Even 16%?

    Even the 'bad' bets in the Casino aren't 28% HA!
     
  3. mike_m235

    mike_m235 Tourist

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    The stock is up nearly $1 today and $2 in the run up to earnings, so regardless of how anyone here is taking it the market sees it as good news.
     
  4. Kickin

    Kickin Flea

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    That's not what table hold represents. Table hold is simply the casino's win / cash collected.

    If you played a 1% HA game and bought in for $1000 betting $100/hand for 100 hands and lost EXACTLY the HA you would lose $100. But the hold for the casino would be 10% ($100 win / $1000 buy-in).
     
  5. FountainFiend

    FountainFiend Low-Roller

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    That makes a ton of sense. Thank you, I've always been curious about that.
     
  6. VegasBJ

    VegasBJ VIP Whale

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    good variance for the casino / bad variance for the gambler = higher hold

    no matter what the HA is, if there are a lot of gambler losses during the quarter / gamblers running bad, the hold / take will be a higher % than what should be normal or standard. There are numerous times when a casino's whole quarter is make or break on just one whale-type gambler. Their $4m + win or loss can make or break the whole quarter's earnings.
     
  7. Viva Las Vegas

    Viva Las Vegas Ramblin' Gamblin' Man

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    Usually casinos tout EBITDA (Earnings before actual expenses - Interest, Taxes, Depreciation and Amortization) after a net loss. MGM has a net gain including all expenses.

    MGM earned $23M for the quarter. Interest expense ($225M) was 75% of Operating Income, $301M. MGM was also able to come close to break even with their ownership share of City Center ($61.5M loss 2012, $168K loss in 2013), though they are still well behind covering their City Center related interest expense for the quarter ($67.7M).

    More detail can be found at the link below.

    Link

    NYNY is consistently the top hotel in terms of occupancy rate (95-97%) which was a surprise to me. The bottom two were not a surprise (Circus Circus and Excalibur).
     
  8. shifter

    shifter Degenerate Gambler

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    Guess all their nickel and diming us has paid off in their bottom line like they'd hoped.
     
  9. earth-3

    earth-3 High-Roller

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    I found the article by Wynn listed under "most read" to be more interesting. You can find it in the same link. Warning the legislators that gambling is seeking opportunities elsewhere, he may be either leveraging against paying higher taxes, or he and Sheldon think Macao and other markets are going to eventually eat away and overshadow Las Vegas. Wynn has made several negative comments about Las Vegas, ever since the economy went bad.
     
  10. JimboS

    JimboS Low-Roller

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    I wonder how Hakkasan will do for MGM and if it will steal gamblers from other properties like Wynn.
     
  11. Boogaloo

    Boogaloo Low-Roller

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  12. oc_guy

    oc_guy Low-Roller

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    For those who haven't followed it yet, Caesars is getting a cash infusion from some Private Equity. They're creating a new company that, in addition to other things, will own Planet Hollywood, Horseshoe casinos, WSOP brand, and future real money online gaming operations. Caesar's will maintain a majority stake (~65%), as well as continue to manage PHO + HS as part of the Total Rewards network.
     
  13. Someone

    Someone High-Roller

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    so they are basically selling off part of the operations that have future profit potential to "outside" (see insider) investors while leaving the average common stock holder with the garbage.....nice :rolleyes2:
     
  14. Someone

    Someone High-Roller

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    I read an article the other day (can't remember how old it was) where he was talking about possibly moving the headquarters there

    I think what he is really trying to prepare legislators and regulators for is the reality that the Asian market operates in a different fashion than the USA with "junkets" and the like and that if the USA regulators keep insisting on holding the foreign operations of casinos to the same standards of USA casino operations at best they can expect USA based casino operations to slowly go broke as operators from other countries that are not subjected to those same regulations and rules move in and at worst they can expect some USA based operators to fire sale their USA properties to underfunded and virtually bankrupt operators while he and others that are still solvent leave the USA entirely and move to Asia and no longer repatriate Asian profits to the USA in order to keep USA operations afloat and the cities, states and government agencies here in the USA can deal with another round of layoffs and declining properties and properties closing and laying off masses of workers and a further erosion of their tax base



    they might steal some of the club kiddies, but I don't think the target demographic of Hakkasan is gambling much anyway (see Cosmo) and instead they are standing in long lines vomiting and waiting to pay way inflated prices for bad quality drinks poured with attitude and delivered with bad service....something most of the gamblers and those that actually stay at the Wynn properties have rapidly grown tired of
     
  15. nostresshere

    nostresshere Mr. Anti Debit Card

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    Easy. I sat down at Aria to play BJ, started with $500 and left with $100. Pretty much an 80% hold right there!
     
  16. smartone

    smartone VIP Whale

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    While your analysis is well thought and may indeed have merit, Steve Wynn's trip to Carson wasn't trying to "prepare legislators" for anything IMHO. It was his usual, "show-up to get his ring kissed, remind folks who's really in charge and demand he get his way." He gets a private room in the building and has leadership come to him.

    Kudos to our Speaker Kirkpatrick for getting up, when he slammed his fist on the table chastising her for her proposed admissions tax, which seeks to eliminate all the loopholes currently being exploited in the live entertainment tax. She reportedly got up and said, "I don't need to be treated like this and left." That's what you do with a bully, walk away.
     
  17. shifter

    shifter Degenerate Gambler

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    the easiest way to understand it is that you play each of your $1 more than once. the HA is calculated off of each time you put $1 into play. so if you sit down with $1k and play 100 hands at $100/hand, you played through $10k even though you only had $1k cash. so lets say the HA on the game is 1% (and it held true) you lost $100 on a $1k buy-in. that's a 10% hold.

    then you have to add in the fact that so many people play for the entertainment value and will just play and play and play until they lose their entire buy-in and that's how you can get extremely high hold percentages.
     
  18. DeMoN2318

    DeMoN2318 The DERS

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    Ahhh yea thats true!! Probably a ton of 100% holds that boost that figure way up!

    So if I walk away with a win then thats a negative hold right?
     
  19. Fafa2e

    Fafa2e Low-Roller

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    Hold

    Although I do not mention hold percentages on my site the term is worth defining because it comes up a lot. The hold percentage is the ratio of chips the casino keeps to the total chips sold. This is generally measured over an entire shift. For example if blackjack table x takes in $1000 in the drop box and of the $1000 in chips sold the table keeps $300 of them (players walked away with the other $700) then the game's hold is 30%. If every player loses their entire purchase of chips then the hold will be 100%. It is possible for the hold to exceed 100% if players carry to the table chips purchased at another table. A mathematician alone can not determine the hold because it depends on how long the player will sit at the table and the same money circulates back and forth. There is a lot of confusion between the house edge and hold, especially among casino personnel.

    From www.wizardofodds.com

    Gaming revenue indicators: table games drop and slots handle (volume indicators); "win" or "hold" percentage, which is not fully
    controllable by us. Our normal table games hold percentage is in the range of 19% to 22% of table games drop and our normal slots hold
    percentage is in the range of 7.5% to 8.5% of slots handle

    From MGM Resorts 10-K
     
    Bonus Money to Burn
  20. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

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    I have to be the first to eat my words and admit these MGM guys are pure genius. How else can one explain their impeccable timing in alienating me just before back-to-back winnings trips?!?!?!
     
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