Summary

In this two-part episode, Nick & guest co-host, Dan Cherry, speak with Professor Anthony Lucas of UNLV’s William F. Harrah College of Hotel Administration. Tune-in as we discuss and debate some of Anthony's seminal, award-winning analyses, and chat about the status and future of gaming education & research. Also in this episode, growing concerns about economic headwinds.

Transcript

Nick Hogan:

Hello, everyone. Here we are in late August with summer pretty much wrapped. I’m fresh back in the saddle, following a brief break with a family, and I’m joined today by a guest co-host for whom I have limitless time. He’s a 21-year industry veteran who’s led corporate gaming ops for both Penn Entertainment and Bally’s Corp., and roughly three years ago, founded his own industry consulting firm, DC Gaming.

He was a guest here on Real Cast back in April of last year. He’s a razor-sharp guy with great ideas and insights, and, as such, someone with whom I always enjoy discussing industry topics. I’m referring, of course, to Mr. Dan Cherry.

Howdy, Dan, how’s the summer been treating you, sir?

Dan Cherry:

Hey, morning, Nick. It’s great to be here. Thanks for having me back on. Summer’s wonderful here in Vegas. We got a cool spell, college football right around the corner this weekend, everybody’s getting ready for G2E, so it feels like fall is on the way.

Nick Hogan:

Right on. Okay, so “cool spell,” in Vegas terms, means what?

Dan Cherry:

No, it was 70 this morning. It was amazing. Yeah.

Nick Hogan:

That’s legitimate… cool spell. Okay. So very good. So, Dan, now before we jump into the news and listener questions, I just wanted to take a beat to ask you a bit about what you’re up to professionally these days. So can you tell us a bit about DC Gaming and what you’re up to there?

Dan Cherry:

Oh, yeah, absolutely. So I’ve been on the operator side of the business effectively my whole career. So a little over 20 years, like you said, mostly in the regional markets. And really, what I’m doing is a lot of the same. I’ve always had a hankering of trying to explore the other side of the business, whether it’s the supplier side or start my own thing.

And so, with my company, really, what I’m trying to do is just help operators be as strong as they can be when it comes to gaming operations, but from outside the organization. And one thing I’m really interested in is, there’s so many new technologies that are out there coming to market, and a lot of times the suppliers may feel like they have a great idea but struggle a little bit on figuring out, “How do I get a seat at the table at these casino operators?” and, “How do I bring this product to market?” And that’s where I’m trying to… try to add some value, is connect suppliers, technology providers, with operators, and help figure out how to use the pathway to bring some of these products to the regulated markets and get them approved and add value for them.

Nick Hogan:

Yeah, fantastic. Yeah, it’s something I really do feel is fulfilling me, because we forget sometimes on the vendor side, that people in operations actually have day jobs.

Dan Cherry:

Yeah.

Nick Hogan:

They’re not just there to evaluate this stuff and play with the toys that we throw at them. So it’s definitely a legitimate need out there. Yeah. Well, fantastic. That’s great. I’m delighted that you’re out there doing this, and a very competent person to do it, without a question.

Okay. So, Dan, moving on to a bit of industry news. Like most in the industry, I’ve spent a good part of this year bracing for really ugly economic news. And I can’t say that the last couple of weeks have steadied my nerves much. Heading the news over the past week or so, we saw some pretty lackluster digits out of the Strip. First we see international visitation, which has been… from my understanding, is roughly around 15% of overall traffic, historically. It’s down around 13% year-over-year, with the sharpest declines coming out of Canada and Mexico.

I looked up just yesterday some of the airline data. And in terms of the Mexican carriers, Aeromexico’s volumes into McCarran are down 15.8%, Volaris 15.6, and Viva Aerobus down 14.8. Significantly worse were the Canadian carriers, with Air Canada volumes down 33%, WestJet down 31, and Flair down a whopping 62%. Yuck. Overall, Strip visitation is down 11.8% year-over-year. And on Tuesday, our friend Barry Jonas at Truist Securities issued an analyst note that was just loaded with double-digit drops in occupancy rates and room rates across the Caesars and MGM portfolios on the Strip.

And then, lastly, just prior to going on holiday with my family, I did take a look at the ReelMetrics 2025 new machine placements in our network, and that definitely spooked me. I am not going to name names, but absolutely everybody is down. And on a vendor-by-vendor basis, we see declines ranging from 9% year-over-year, to… brace for it, Dan… 78%. So, again, yuck.

So a couple of silver linings in there. Barry did note upticks at a few of the independent Strip properties, as well as some solid performance within the Vegas locals market. Also, I’m a bit guilty of mixing data sources here, but we have seen some 2020 gaming revenue upticks on the Strip, despite the drop-offs in visitation. Now, I think Don Retzlaff and I did about five episodes on precisely what that dynamic indicates, but we can leave that to the side for now.

So, Dan, I’m really hoping that you can help soothe my nerves here, buddy. I realize I’m fixing on Vegas here, but have you seen any indicators out there that suggests some potentially calm seas ahead?

Dan Cherry:

Yeah. I mean, that’s a big question, right? And I think it’s the question everybody’s talking about. And it seems like, for whatever reason, in the last couple of weeks, there’s all these kinds of industry publications, whether it’s local, or either international, that have picked up on this “Vegas is dead” narrative. And, obviously, it seems like that narrative is far beyond the reality