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Case Bets: Sands' future; Gibbons' lack of same; Hard Rock woes

Posted At : March 16, 2009 10:00 AM | Posted By : D McKee
Related Categories: International,Sheldon Adelson,Politics,Wall Street,Taxes,Morgans Hotel Group

An "Adelson dictatorship" no solution: With Las Vegas Sands brought to the precipice of utter ruin, this post-mortem on the William Weidner ouster hits a series of nails square on the head. Only the accompanying poll seems daffy: Given Weidner's mammoth self-regard, it's impossible to conceive of him being taken onboard at any gaming company except one that's otherwise bereft of casino expertise (like the Cosmopolitan, say) or one whose CEO suddenly gets the chop.

Weidner fallout continues: The palace coup that toppled Weidner was conducted by a rump faction of the LVS board. This minority-led putsch has prompted yet another board member to tender his resignation. In the meantime, I want some of that top-flight crack the analysts at Sanford Bernstein must be smoking, as they continue to give Sands rave reviews.

Bad Day at Hard Rock: Even without the help of one-time charges, the Hard Rock Hotel & Casino lost $101 million last year. Not only did the HRH choose a fiendishly bad time to expand (if a 130% increase in your room base can euphemistically be called "expansion"), the construction disruption has driven customers away. Having marched itself and banker/hostage DLJ Merchant Partners into this quagmire, Morgans Hotel Group really needs a 4Q09 economic turnaround or it's screwed.

The jacked-up hotel tax that Gov. Jim Gibbons alternately did and didn't support has motivated yet another challenger for the GOP nod in 2010. Former state Sen. Joe Heck, M.D., cleared his guns last year -- from the front lines in Iraq, no less (Dr. Heck was doing a brief tour of duty) -- when he called out Midnight Jim for his catastrophic lack of leadership during the hepatitis C crisis. So his announcement comes as a less-than-complete surprise.

This is good news for Sen. Harry Reid (one more potential challenger removed from a thinly populated chessboard), not so good for son Rory Reid, who's thought to be the Democratic frontrunner for Gibbons' seat. As for that room tax, not only would Gibbons not sign that tax increase whose revenues he covets, he actually went into hiding. Really.

If this doesn't end the political career of Midnight Jim, nothing will. Never mind the lost productivity that will be entailed if all DMV visits have to be made during the normal work week. For a Nevadan, a visit to the DMV is more dreaded than root canal without anesthetic. And a DMV with fewer hours and fewer workers? You do the math.

WTF?!?!? "Local media has speculated that the world's casino giants would pour money into Penghu [Taiwan] having suffered a hammering elsewhere in the global financial crisis." Local media needs to get a grip.

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