Casino news source: Sun Herald - http://www.sunherald.com
Scouts track casinos' play
Investors get early preview
By TOM WILEMON
BILOXI - Matthew Jacob of Majestic Research has a handle on how Coast casinos are divvying up the market, even though the data is not public information. His latest finding: the IP and Beau Rivage are running neck and neck.
Mississippi does not disclose financial reports from individual properties. Many of the casinos are privately held. And it's becoming increasingly difficult to track the properties of publicly held companies because of mega-mergers. They report revenue by regional totals, not by properties.
How does Jacob do it? The old-fashioned way. He sends out scouts to the casinos who track play at regular intervals to give investors a preview of what earnings reports are likely to say.
The Majestic Research third-quarter report for the Biloxi market through late September shows the IP has led the market with 26.8 percent average daily share, closely followed by Beau Rivage with 26.7 percent. The Isle of Capri has 14.2 percent; Boomtown, 12.2 percent; Grand Biloxi, 10.4 percent; Palace Casino 8.4 percent; and Treasure Bay, 1.4 percent.
Jacob said he's been surprised at the strength of the Coast market and that he believes Isle of Capri Casinos and Penn National Gaming, the parent company of Boomtown and Hollywood Casino, are poised to benefit more than other publicly traded companies.
"I think the primary beneficiary would be Penn National," Jacobs said. "They have two casinos and it's a much larger percentage of their revenue - and to a lesser extent the Isle of Capri as well."
As big as Beau Rivage is, the casino accounts for a small percentage, in the single digits, of MGM Mirage's revenue, Jacob said.
"Beau Rivage seems to be, in a sense, not necessarily stealing share from everyone else, but growing the market a little bit," Jacob said. "Maybe, that aspect is surprising to me. I think IP may not be losing share. If anything, Beau Rivage is potentially taking share from some of the other casinos, specifically some of the ones a little bit smaller right now.'
The 8.6 percent dip in casino revenue from July to August, which occurred as more casinos reopened, is not cause for alarm, Jacob said.
"It is tough to compare July to August and September to August," he said. "It's kind of an unfair comparison."
As school starts, people spend less time vacationing and gambling, he said. Even though there are fewer slot machines and table games now, the ones available are getting good play, according to the research.
"Overall, the number of gaming positions in the Biloxi market is 21 percent lower than in the prior-year period," the Majestic Research report states. "Gulf Coast game capacity usage has been 50.6 percent in the third quarter through last September, well ahead of capacity usage of 36.9 percent in the prior-year period." |
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