The gambling world has had a busy week since I last posted a monthly recap. We saw Las Vegas Sands
An old friend is back
Harrah's Entertainment is getting ready to become public again. The offering of 31.3 million shares will be priced between $15 and $17 per share, and proceeds will be used to develop a retail and entertainment complex on the Strip. And by the way, the company would now like to be called Caesars Entertainment Corp., thank you very much.
I used to be a shareholder of Harrah's back in the day, but the investment story has changed a lot since then. Harrah's used to be viewed as a diverse operator with a solid record of profitability. A leveraged buyout, years of losses, and debt shenanigans to stay out of bankruptcy have changed all that. If the debt load at MGM scares you, how about $20 billion of debt saddling Harrah's/Caesars and a quarterly loss of $164.8 million in the third quarter to boot. This IPO has me scratching my head already.
Macau shows aces; Las Vegas playing a draw
Las Vegas Strip gaming isn't exactly booming like Macau, but after jumping 21% in August gaming revenue was up a more modest 2.8% in September. This is probably closer to the rate of growth we will see going forward, and it looks as if we're seeing a little positive momentum.
Macau, on the other hand, can't seem to count money fast enough. October gaming revenue in Macau was up 49.8% from last year to a record $2.37 billion. We've seen most of that growth on the Cotai Strip, and with Las Vegas Sands opening Sites 5&6 in 2011, we should see that momentum continue.
Don't forget the little guy
Of course there were earnings from small casino operators who don't have flashy casinos in Asia or Las Vegas.
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An online gambling update
The hopes for an online gambling bill are in limbo after the Republicans won the House last week. But the good news (according to gaming executives) is Harry Reid will remain in the Senate. The Nevada Democrat has been a friend of the gaming industry and would be supportive if an Internet gambling bill moves forward in Congress. If nothing passes during the lame-duck session, I have my doubts we'll get online gambling legalized, but I've been surprised by Congress before. Let's keep our fingers crossed.
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