Arkansas Racino Revenues – First Half 2017

Year-Over-Year Net Revenues (Net Wins) increase significantly again

Arkansas has two licensed gaming facilities, Oaklawn Racetrack and Casino in Hot Springs, and Southland Park Racetrack and Casino in West Memphis. Each one continues to appreciate significant increases in Net Revenues as a result of their 2015 – 2016 expansions.  

Table 1 : 2017, 2016, 2015 Comparison – Arkansas Racino EGS Net Revenues     

JAN-JUN		Net Revenue*		Y-o-Y		%Win**
2017	$180,563,640		8.5%		6.82%
2016	166,441,566		35.9%		N/A
2015	122,455,761		27.9%		N/A

*Net Revenue is designated as ‘Net Win’ by the Arkansas Racing Commission.  It is the dollars wagered minus the payouts.

  **  “% Win” is defined as Net Win as a percentage  of dollars wagered.

         

  Table 2:  2014 - 2017 EGS Net Revenues for the two facilities first six months of each year

	2014	2015	2016	2017
Oaklawn	$33,792,897	$47,094,323	$62,180,146	$68,164,609
Southland	$61,914,065	$75,361,438	$104,261,420	$112,385,031
Total	$95,706,962	$122,455,761	$166,441,566	$180,549,640

Source:  February through July 2017 Electronic Games of Skill Revenue Reports, Arkansas Racing Commission

Something Old, Something New, Something Broken, Something Blue: Part 1

Something Old, Something New

Good News! Something New is the largest category. Bad News! There is a lot of Old, Broken and Blue News too!

Our notes and comments are based on our ongoing research including annual visits to each of the 74 casinos/racinos in the nine southeastern states.  Some of the revenue numbers are good, a few are very good.  Some of the revenue numbers are not so good, some are bad and very bad.  So, here goes:

Some Things Old – After visiting casinos and racinos for the past three years, first-hand views tell us a lot. Yogi Berra summed it up well: “You can observe a lot by just watching.”  What is becoming old at a number of facilities is the same old slot machines with worn gaming floor carpets, grumpy looking employees, being greeted with a grunt, table dealers with an empty table standing with their arms crossed…nothing cheerful. This gets old to patrons and it shows on their faces too. Then there’s the food: nothing has changed except the prices, and yes, the prices are up. We’ll get into a few good examples of food and drinks pricing and quality along with some sketchy rooms in the Broken and Blue sections of this note. Far too many of the casinos and racinos we visited last year gave the appearance of Some Things Old. 

Some Things New – We’re delighted to point out the New. Many of the older facilities had a cheerful staff, great crowds enjoying their visit to the gaming floors, restaurants and hotels. In a number of cases this was an upgrade. In addition to the operations displaying a good attitude toward the facility and patrons, the number and quality of new facilities and additions was a good surprise. New facilities and major expansions in 2015 include:

• Harrah’s Cherokee Valley River Casino Hotel in Murphy, North Carolina which opened in September. The complex includes a 300-room hotel, five food areas, and a gaming floor with 1,000 slots and 100 table games. Murphy, North Carolina is in the western N.C. area near the Great Smokey Mountains National Park.
• The Scarlet Pearl in D’Iberville, Mississippi opened for business in December. This facility includes a 300-room hotel including suites and penthouse rooms, six food and bar areas, a gaming area with 1,300 slots and 45 table games and a poker room. It features a 36-hole miniature gold the grounds. The complex sits on the waterfront in the Biloxi Back Bay area.
• The Island View Casino Resort in Gulfport, Mississippi added an 18 story beach front tower hotel which opened in April. The new addition includes 405 rooms, a spa, gulf-front pool area and food areas including a beach grill and other casual dining.  
• The Silver Slipper Casino and Hotel at Bay St. Louis, Mississippi opened its new 90-room Gulf front hotel in May.
• Beau Rivage owners added to their complex in Biloxi, Mississippi with a 5,000 seat MGM baseball park in June. The new facility directly across the boulevard from Beau Rivage, is home to the Biloxi Shuckers, a AA Southern League team.
• Boomtown, New Orleans, Louisiana opened their new 120-room hotel in June adjacent to their riverboat casino facility.
• Arkansas – Oaklawn Park in Hot Springs and Southland Park each expanded its gaming facility to include new food areas along with table games and poker rooms in early 2015.
• The Seminole Tribe of Florida Immokalee facility opened its new 90-room hotel and expanded the food and gaming areas in mid-2015.

We also saw significant changes in several of the gaming floor make-up, including new slots and slot arrangements, more table games and reconfigurations of slots and tables on gaming floors.

Some things new had a very good year in Southeastern gaming!

Casino/Racino Revenues up through June

Arkansas

Significant revenue increases at both facilities resulting from additional gaming space and gaming units.

Arkansas	2014	2015	YoY Change	% Change
Oaklawn	$33,792,897	$47,094,323	$13,301,426	39.3%
Southland Park	$61,914,095	$75,361,438	$13,447,343	21.7%
Total	$95,706,992	$122,455,761	$26,748,769	27.9%

Source:  Electronic Games of Skill Revenues, Arkansas Racing Commission

Florida

Pompano Park continues to lead with gaming revenues up 12.6 % year-over-year and a market share of 28.9% of the 7 Racinos' total slot revenues.

Florida	2014	2015	YoY Change	% Change
Total of 7 Racinos	$264,334,231	$280,464,109	$16,129,878	6.1%

Source: Florida Racino Monthly Slot Revenues, UNLV Center for Gaming Research

Louisiana

Baton Rouge market – Gaming revenues for the overall market was + 4.4 % year-over-year with L’Auberge up 8.9%.

Bossier City/Shreveport market – Margaritaville continues to capture market share with gaming revenues + 17.1 % year-over-year, Harrah’s Louisiana Downs (-) 24.3 % year-over-year.  Overall market was up slightly at +.74% for the first 6 months.

Lake Charles Market – The Golden Nugget posted gaming revenues of $122,701,596 for the six month period. The facility opened in December 2014 so year-over-year was 100 %.  The overall market was up $119,692,398.

New Orleans Market – Gaming revenues for the three facilities outside New Orleans City limits, Amelia Belle + 2.0%, Treasure Chest + 5.9%, and Boomtown + 5.7% were all up for the six months. The two within New Orleans City limits were down: The Fairgrounds (-) 1.7 %, Harrah’s (-) 13.7 %, evidence that the non-smoking law in New Orleans is having a negative effect on gaming revenues.

Louisiana	2014	2015	YoY Change	% Change
Baton Rouge Region	$189,200,581	$197,480,175	$8,279,594	4.4%
Bossier City/ Shreveport	$370,744,041	$373,489,563	$2,745,522	0.7%
Lake Charles Region	$340,048,609	$459,741,007	$119,692,398	35.2%
New Orleans Region	$334,538,170	$316,479,286	($18,058,884)	-5.4%
Total Louisiana	$1,234,531,401	$1,347,190,031	$112,658,630	9.1%

Source:  Louisiana Gaming Control Board, Revenue Reports

Mississippi

The Mississippi gaming revenue trend continued with the Gulf Coast market up 6.8% and the Mississippi River Counties down 7.3%.

Mississippi	2014	2015	YoY Change	% Change
Gulf Coast Region	$542,999,109	$579,641,580	$36,642,471	6.8%
Mississippi River Region	$538,567,706	$499,421,901	($39,145,805)	-7.3%
Total Mississippi	$1,081,566,815	$1,079,063,481	($2,503,334)	-0.2%

Source:  Mississippi Gaming Commission Revenue Reports

Tamales, T-Bones, Tunica and Tough Love

Our most recent tour of casino and racino tour covered Mississippi, Louisiana and Arkansas:

Tamales and T-Bones  – The tamale trail is a part of the Mississippi Delta Blues country where the blues and tamales are a part of the culture. So in addition to a review of casinos and racinos, we decided to take in some of the culture and history of the area between Tunica and Vicksburg, Mississippi. From An Introduction: Hot Tamales and the Mississippi Delta: “Many hypothesize that tamales made their way to the Mississippi Delta in the early 20^th century when migrant laborers were brought in from Mexico to work the cotton harvest.  The African Americans who shared the fields easily recognized the basic ingredients: corn meal and pork.”    

Traveling from the Tunica casino area south, a visit to the Tunica Museum will get you off to a good start. Following our tour of the museum we asked for their recommendation for a good local restaurant and were directed to the Blue and White, a converted Pure Oil gas station.  Originally built in 1937.  Tamales - ok; catfish sandwiches - outstanding; atmosphere - local.  Next stop heading south on Highway 61: Clarksdale and the Delta Blues Museum.  Across the street from the museum is the Ground Zero Blues Club, co-owned by Morgan Freeman.  The Club features performances by both local and national blues bands….and great hot tamales.  Be sure to ask the waitress for the real, corn husk tamales, not the appetizer tamales.  

Our next stop was in Greenville at Harlow’s Casino and Hotel for an overnight stay.  We had dinner at the famous Doe’s Eat Place a few miles from Harlow’s.  Best to dress in your flannel shirt, jeans and baseball cap.  Be prepared to order steak, although they do have tamales on the menu. But you should really be ready to order their large T-Bone steak. They have beer available, but if you want wine, you can bring your own. We were seated in the kitchen area overlooking the preparation of fries and pounding of salad lettuce.  It’s definitely worth the experience. Harlow’s was a great stay, a very clean hotel with a well-managed and lively casino owned by Churchill Downs.

Tunica and Tough Love – Everyone following the casino world is aware of the decline in casino and hotel revenues in the 9 casino Tunica area.  Each time I review the area we stay at one of the nine. This time it was the Roadhouse Casino and Hotel -- a confusing mix of an old English Tudor exterior design with a Willie Nelson interior with whiskey barrels and barn wood walls. It was a cold February night when we arrived, wind blowing…quite miserable.  Parking was a mess so you couldn’t park near the place.  Once inside the casino area we discovered quiet.  Their motto is “If you don’t like noise, come on in.”  But the quiet was a result of few patrons, other than a handful of slot players and one blackjack table active.  The restaurant was closed. The only food available was microwaved chicken wings and frozen burgers.  Even more depressing was the hotel room.  A nice bathroom and jacuzzi area surrounded by a filthy carpet with 3-foot diameter stains. The crown moulding above the curtain was falling down from water leakage. The dresser and cabinet drawers were wide open and wouldn’t close. In simple terms, a dump. I provided the check-out hostess with my feelings and business card, but haven’t heard from anyone.  So here’s my tough love to the Roadhouse: It’s frankly an embarrassment to the Tunica Casino industry. Note: We’ll see if it's still open at the end of 2015.