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Illinois: No country for big casinos
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Quote of the Day

Posted At : April 8, 2009 11:26 AM | Posted By : D McKee
Related Categories: Lake Las Vegas,Dining

"WTF is up with the people who write about restaurants these days? After yesterday's Aria madness, now we get 'dining rituals' at the Ritz-Carlton. Are they sacrificing virgins out at the lake?" -- e-mail reaction to the Ritz-Carlton Lake Las Vegas' announcement of new "Weekly Dining Rituals."

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The Unlucky Club & other Case Bets

Posted At : March 26, 2009 12:40 PM | Posted By : D McKee
Related Categories: Lake Las Vegas,Steve Wynn,Architecture,Marketing,Politics,Problem gambling,Current,Encore,The Strip,Sheldon Adelson,Entertainment,Regulation,Economy

Did somebody build the inaptly named Lucky Club  (above) over an Indian burial ground? A deprivation of access is but the latest indignity suffered by this North Las Vegas grind joint. While it was still the Speedway Casino, it was ravaged by fire. Years earlier, it was the Cheyenne, most famous for having its bookeeping described as "smoke and mirrors" by then-Nevada Gaming Control Board Chairman Bill Bible. That rumpus -- and a few others like it -- would dog casino speculator Shawn Scott for the rest of his spotty career. Last we heard, Scott had hunkered down in the Virgin Islands.

Better fortune was in store for the long-on-the-market Ritz-Carlton Lake Las Vegas, which couldn't find any takers not so long ago. I'm guessing "undisclosed price" is code for "fire sale."

(Update: It sold for $98 million.)

At least I'm not alone in thinking that Las Vegas Sands is headed over the brink. So does John L. Smith who has more bad news for Sheldon Adelson.

Need to raise awareness of your bookmaking service? Hire a gambling addict as your pitchman! The surprise isn't that this, er, novel marketing initiative was ashcanned but that it got as far as it did. Earth to Better Bet, Earth to Better Bet ...

Earth to Wynn ... Weather forecasters have been predicting high Thursday gusts of wind all week long. But Wynn Resorts must not have paid its cable TV bill because it sent window-washers up Encore anyway. Not surprisingly, something went wrong and they had to be rescued. Now that everybody in Vegas is on a curtain-wall craze, expect crises like these to multiply exponentially.

Going out on a limb, the Las Vegas Sun says that Sens. John Ensign and Harry Reid were doing the right thing ... now that a consensus has formed and the story has faded, making it safe to take a stand.

Wendover: Casinos, yes; mental health care ... not so much.

If you're going to lose your marbles in Nevada (some would say I already have), don't do it in Wendover. It's still OK to lose money there, though. Wendover Will approved this message.

On second thought, you might not want to bring your money here, either. At least not if you use debit cards. Where do I sign the petition to abolish the Nevada Legislature? They don't need any stinking due process, do they?

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Nevada in October: It was the pits

Posted At : December 10, 2008 09:47 AM | Posted By : D McKee
Related Categories: Harrah's,Lake Las Vegas,Laughlin,Current,The Strip,Downtown,Economy,Boulder Strip,Station Casinos

Taken at face value, October's revenue numbers for Nevada casinos were calamitous. Looked at in context (i.e., coming off a 10% increase from October '06 to '07) they were ... still bad. But I'm going to resist the temptation to jump off my second-floor balcony at LVA HQ, especially since we're measuring the most anemic month of 2008 against the strongest second-strongest of 2007.

However: The next time somebody, anybody says the casino industry is "recession proof," they should be made to walk the plank straight into the new Mirage volcano, where their screams will mingle piquantly with the percussive stylings of Mickey Hart. Every day, I see more boarded-up store fronts and, last weekend, the Better Half and I were able to book a bargain-rate stay at Loews Lake Las Vegas. Talk about a ghost town: Other than the quacking of ducks, there was not a sound to be heard from our patio. (The casino across the lake at MonteLago wasn't quite dead, but they might want to keep those defibrillators handy.)

In an economy that has been brought to near-total ruination under the malign neglect of George W. Bush, it would be just plain unrealistic to expect people to gamble as they did during Vegas' halcyon years. We should have known this day was coming the moment we started reading about credit card and mortgage debt reaching unprecedented levels, as Americans lived off tomorrow to pay for today.

To the numbers ...

Again, remember that these declivities are magnified by being directly compared to a robust year-before performance. The big story appears to be quadruple-whammy leveled on the Strip, where table game drop was down (-20%), as was baccarat drop (-36%), ditto table hold, ditto baccarat hold. Less play + unlucky play goes a long way (as in $100 million-plus) toward explaining the wretched -26% overall comparison. A 17% slippage in slot handle didn't help, but the real damage was done in the table pits, which led the way to a 10th straight month of declines.

The locals market is still slightly (3%) up for the year, but October won't help, with Downtown (-20%), Laughlin (-15%), the Boulder Strip (-28%) and North Las Vegas (-35%) -- where Station Casinos was poised to open Aliante Station -- all taking it on the chin. Compared to those numbers, Reno's "mere" 7% dropoff looks like a moral victory or something.

After posting an anemic $475 $905 million for October '08 ($475 million on the Strip), was Nevada able to match the previous November's less-than-stellar $520 $981 million ($520 million " ")? The answer will tell us whether we've hit an extremely nasty pothole or been driven clear off the road.

Update: Table game play was extremely lucrative on the Boulder Strip, of all places, which means ... which means ... nah, I got nuthin'.

In fairness to Leon Black (see previous item), his new gambit of gobbling up $20 billion worth of devalued debt beats the heck out of, say, buying an already-debt-encumbered Harrah's Entertainment at a premium price. But, given the choice between investing one's money with Apollo Management and hiding it under the mattress, the mattress is looking awful good at the moment. At least money's not going to lose any value there.

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Vegas electoral oddity

Posted At : November 24, 2008 10:58 AM | Posted By : D McKee
Related Categories: MGM Mirage,Lake Las Vegas,The Strip,Downtown,Election

Today's Las Vegas Sun has a precinct-by-precinct breakdown of how President-elect Barack Obama won the Las Vegas metro area. In colorful map form, it shows Obama winning Downtown (handily) and most of the Strip ... save for MGM Mirage's string of properties from New York-New York northward through Bellagio. (Yes, you can tell your friends a Republican won "New York" this year.) I'm happy to report that my neighborhood went pretty gosh-darn "blue," while unassailable fortresses of support for Sen. John McCain included CityCenter, The Cosmopolitan and Monte Carlo, along with Summerlin, Boulder City, Southern Highlands and that hotbed of populism, Lake Las Vegas.

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Quote of the Day

Posted At : August 5, 2008 12:19 PM | Posted By : D McKee
Related Categories: Lake Las Vegas

"It would be smelly, and it would be mosquito-ridden." -- No, not a prospectus for a Stanley Ho casino but rather Dr. Steve Weber's description of Lake Las Vegas, were its titular lake allowed to spring a leak.

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Honey, I shrank Lake Las Vegas

Posted At : July 30, 2008 10:57 AM | Posted By : D McKee
Related Categories: Animals,Station Casinos,Herbst Gaming,Lake Las Vegas,Pets

Saying that a potentially ruptured pipe could drain Lake Las Vegas and turn it into one big-ass mud puddle in the desert conjures up quite an image. It's also effective rhetoric if you're trying to stampede the bankruptcy court into approving a $127 million loan, no questions asked (or at least answered). If asked to make a bet, I'd place my wager with the Nevada state engineer who puts the chances of a big sucking sound at Lake Las Vegas "way out there." (The big sucking sound that is the resort community's financial future is another matter entirely.)

And, if it does happen, the first thought that sprang to my mind was the same one that Steve Friess had, namely that the A-list likes of Celine Dion and Natalie Gulbis won't be any too thrilled "to live around a big, smelly pit full of stuff that reckless boaters have been pitching overboard for years." Heck, I tried wading out there recently and the lake water is pretty dodgy as it is.

Lake LV is starting to look like the second coming of The Resort at Summerlin, which some may remember as Swiss Casinos' vastly overbudgeted venture into the suburban Vegas market. (Its casino is now managed by the Cannery Resorts folks.) Problems like excessive cost and executive hubris aside, R@S failed in large part because it tried to create a market out of thin air: Palm Springs-style golf vacations which would involve coming to Vegas but staying well away from the Strip. As a business model, it didn't live up the hype.

I've held off saying this for a long time, but Lake LV displays some of the same symptoms. It's too close to the Strip to qualify as a getaway and yet far enough away to make it a real hassle if you want to stay out there and yet still experience Sin City at its finest. (The jury's still out on whether similar factors will dampen Red Rock Resort's high-end aspirations, making it "just" an extremely swanky locals casino with fantastic meeting facilities.)

Not to put too fine a point on it: It's a pain in the ass to get to Lake LV and some of that appears to be literally by design. Its landscaping and narrow, winding approach connote exclusivity, as does much else there (like the flighty retail offerings). You half-expect snipers hidden in the rocks to pick off vehicles deemed insufficiently chi-chi. So the local market is unlikely to embrace or even have much use for it. After all, you'd have to be a mighty hardcore player to drive all the way out to Casino MonteLago (above) when it entails bypassing numerous gambling options, including Fiesta Henderson, to get there.

Palms Springs is Palm Springs in large part because it is isolated. You couldn't achieve something like that, say, just 17 miles outside of San Diego. Same with Lake LV, R@S, etc. Being simultaneously of and yet slightly away from Las Vegas isn't working out so far. Lake LV wants to be a tourist magnet and a hideout for the super-rich, but having it both ways is proving a tightrope act without a net -- or maybe just without a lake, if that pipe doesn't hold.

Penitentiary Station. Did you know that inmates at the Nevada State Prison (the former site of the Warm Springs Hotel) used to be allowed to gamble? It's true (see sidebar). Then some spoilsport went and outlawed it in 1967.

Now, it seems to me that with the state facing a revenue crunch and a governor who'd rather close prisons than raise taxes, that our lawmakers have been overlooking an opportunity: Bring back the craps games in the Big House! Heck, throw in some slots while you're at it. Make the holds real tight, too, because it's not like your customer base can take its business elsewhere.

Besides, it might shut up all those soreheads who write to the newspaper to complain that prisoners get paid to make license plates, etc., instead of being used as slave labor or as fodder for medical experiments. Convicts' wages would just be going right back into the state treasury -- after United Coin or whomever takes its cut, of course. Maybe it'd be the business opportunity that snaps slot-route operator Herbst Gaming out of its doldrums. Why, it's a state/private sector win-win!

And I thought my cats were heavy. You could put my threesome on the scale together and they'd still be outweighed by 44-lb. Princess Chunk, found "waddling around" Voorhees, N.J., last weekend. Sounds like some feral cats -- well, one anyway -- have been eating even better than ones who have a predictable source of food and three squares a day.

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Terrible times for Terrible's, Lake Las Vegas

Posted At : April 2, 2008 11:57 AM | Posted By : D McKee
Related Categories: MGM Mirage,Lake Las Vegas,The Strip,Herbst Gaming

As the myth of the "recession-proof" casino industry continues to collapse, it's taking Herbst Gaming down with it.

OK, that's both true and false. The recession has taken a toll on its Midwest properties, one of which is already for sale. But it looks like a lot of the blame resides with ex-President Edward Herbst, who tried to grow the company too fast too soon, meaning that his eponymous company is seriously looking at bankruptcy. The decision to try and absorb both Sands Regent and MGM Mirage's Primm holdings simultaneously has left Herbst Gaming with a crippling debt burden.

The company blames its troubles on new restrictions on smoking in Nevada, which have taken a -19% toll on its slot routes. (Herbst tried to help push through a toothless version of the same initiative, one which would have actually allowed more public smoking, but voters weren't fooled.) But the smoking ban was a done deal when Herbst bought Sands Regent ($149 million) three months later, compounding that by paying almost $400 million for a ragtag trio of casinos at the California border.

Maybe Herbst (the person or the company) thought these acquisitions would act as a hedge against withering slot routes. Instead, slumping slot-route revenues combined with $553 million worth of new property constituted a life-threatening double whammy.

Oh, and Herbst is also blaming SoCal's tribal casinos for contributing to its plight but, again, it should have known and anticipated that when it put most of its chips on Primm. Then again, Herbst thought it could reverse a historical decline in Primm revenues (-$45 million between 2000-03), and the very well-sourced Review-Journal story indicates Herbst execs were aware they were swimming against the tide ... but overconfidently figured they could do what King Canute could not -- bid the tide to reverse itself.

This is the second time in a year (Columbia Sussex being the first) in which a casino company's eyes were bigger than its stomach -- or wallet, rather -- and it may have to ultimately dismantle the castle of cards for which it arguably overpaid. Now Herbst's bond debt is scarcely worth paper on which it's printed.

Over at perpetually struggling Lake Las Vegas, the owner of the Ritz-Carlton resort just made a dash for bankruptcy court, says Bloomberg News (sorry, no link), its creditors snapping at its heels. Almost literally. Village Hotel Investors, a half-billion in debt, had to file Chapter 11 lest its assets start going on the block.

Poor Deutsche Bank. The Lake Las Vegas Ritz-Carlton secures a $103 million loan to Village Hotel Holdings. Not only that, VHH tried to sell it in 2007 but found no takers. Deutsche Bank, you'll recall, is foreclosing on the Cosmopolitan project, now that developer Ian Bruce Eichner has turned out to be all hat and no cattle.

On the brighter side, the consortium owning Planet Hollywood is losing less money than ever. OK, that doesn't sound so great, but the former Aladdin hasn't had a profitable quarter since, oh, forever. Casino revenues are up 9% -- and no wonder, since the casino makeover has been a real triumph of design, making it one of the few on the Strip that looks as hip as it claims to be. And principal owner Robert Earl has done a terrific job of reintegrating the casino with the Strip. It's not 'the casino up on the hill' anymore.

But what's Earl smoking when he says 2007 "was the finish, the clean-out of the Aladdin"? I'm over there a lot (A. Lot.) and the endless retail mall is still one-half Miracle Mile, one-half Desert(ed) Passage. The re-theming isn't anywhere near finished. And that butt-ugly hotel tower will always be there to remind us of the tacky Arabian Nights theme that Jack Sommer and London Clubs jointly foisted upon the Strip.

Oh well. When Earl's people get around to removing the last vestiges of Olde Araby from Desert Mile or Miracle Passage, or whatever you want to call it, he can hold yet another "grand opening." He's done -- what? -- two, three already? What's a few more grand openings among friends?

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