One reader asks, regarding senatorial aspirant Sue Lowden's esteemed Pioneer Hotel & Gambling Hall:

I'm confused (as usual, but...) - Isn't the Pioneer NOT a gambling hall now, its shell hosting an ABC convenience store & various other small shops?
I don't remember if I ever patronized the place when it was a casino, but its stores are in a good location for the Downtown tourist crowd; the ABC Store is especially popular with our Hawaiian friends. That's good for sales taxes, right?

As for the Vegas Club, please don't vaporize it yet: We're going to stay there at the end of the month, mainly because it's free for me - and a separate free room for a friend of mine - allowing him to attend the Speedway races for that much less money.

You're thinking of the Pioneer on Fremont Street, while Ms. Lowden's establishment is down in Laughlin. And it very much has gambling. As for dematerialization, S&G did not nominate the Vegas Club for that dubious honor but suggested that, as long as Sen. Harry Reid's people are threatening to "vaporize" Ms. Lowden that they make themselves useful and turn their phasers on her grind joint, which is regarded as a bottom-feeder even by Laughlin standards.

The Vegas Club is very much on people's minds, as another reader asks:

How is it possible that TV series VEGA$ starring Robert Urich came out on DVD on October 20 and I saw nothing in the Las Vegas media celebrating the occasion. I saw an ad in Newsweek. They couldn't get something with Wayne F. Newton at the Tropicana or Phyllis Davis and Judy Landers in front of the Plaza or the Las Vegas Club? Sad, sad, sad.

Ah, a Phyllis Davis shout-out. You're speaking our language. And, yes, that VEGA$ release really snuck by, didn't it? In a classic case of the blind following the blind, local TV stations take their cues from the newspapers. The various Greenspun-owned organs have been slashing staff at a fearsome rate, so it's understandable that they'd miss it.

As for the Las Vegas Review-Journal, suffice it to say that staffers there, up to and including head cheese Thomas Mitchell, had to be told that the Moulin Rouge was burning down because -- even though it was happening across the street -- they work in a penetentiary-like building with no windows to the outside world (architecture as institutional metaphor).

So it's not the least bit surprising that our insular and rapidly declining local media would totally blow this one. As for Mayor Oscar Goodman, he had a previous commitment in London, but still ... no proclamation? No declaration that Oct. 2009 was hereby "VEGA$ Day"? Another missed opportunity for some free ink.

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As some may recall, the saga of Goliath, the LVA rescue kitten, had a happy ending. Not only has he found a new, loving home but the hyperactive little fellow (whose new owners renamed him "Murderface") has developed an interest in technology:

"Robin said he’s obsessed with the computer — he’ll shimmy up her leg or the back of the chair, then either perch on her shoulder or sit in front of the monitor and bat at the cursor on screen."

Since my two cats only acknowledge computers to the extent of sitting either A) on the mouse pad or B) in front of the screen, effectively blocking it, Goliath would appear to be part of that younger, techno-savvy generation.

Sue Lowden = Klingons? The senatorial candidacy of Archon Corp. Treasurer Sue Lowden is evidently being taken quite seriously by Sen. Harry Reid. So much so that Reid's office has threatened to "vaporize" Lowden, prompting some musings on the proper response to phaser fire. If Reid wanted to do Nevadans a service, shouldn't he instead vaporize Lowden's Pioneer Gambling Hall, a grind joint that's been likened to the barren, depressing, post-2004 Vegas Club downtown?

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Dipping into the dispatch box, S&G finds the following tidbits, courtesy of the nice people at J.P. Morgan:

Alex Yemenidjian is serious about revamping the Tropicana Las Vegas. He's just inked a contract with Bally Technologies for a player-tracking system and other BYI goodies ...

... fading interest in MGM Grand Detroit has caused MGM Mirage to take it off the market. Also, with the company looking at price concessions to its CityCenter condo buyers (i.e., forfeiting money it was counting on to finance CityCenter), it may need to borrow against its Detroit palace, one of the few MGM properties still unencumbered ...

... Atlantic City, like Macao, is and will probably always be essentially a daytripper market. So there's symmetry in the fact that China State Construction Engineering Corp. has been signed to finish the stalled Revel project on the Boardwalk, to the tune of $1.7 billion. A July 11 opening is predicted. This is the best news to emerge from Atlantic City in quite a long while.

Speaking of good news, gaming revenues for Nevada's July are in and, basically, they don't suck. Yes, the Silver State was down 8% and the Strip was 11%. But June's year/year comparisons were far suckier (-15% on the Strip), so there's some consolation to be had. In fact, compared to a series of truly craptacular year/year comparisons -- all in double digits, except for last May -- it's darn near cause for celebration.

Table game drop was down overall but the casinos played lucky, particularly at baccarat. (Watch the first-season Mission Impossible episode "Odds on Evil," if you need a quick primer on this game. You'll get scintillating performances by Martin Landau and Barbara Bain in the bargain.)

Slot play is way down (-17.5% win on -15% handle) and North Las Vegas, bouyed by Aliante Station, was the only part of Clark County to have a positive month. Laughlin got hammered pretty badly (-19%) and neither Reno (-21%) nor South Lake Tahoe (-33%) seems likely to ever fully recover from tribal competition across the border, Tahoe especially. If there was a moment for some "unbundling" by overexposed companies, this is it.

Didn't get the memo. Would somebody break into the R&R Partners biosphere and let oxygen into the office of Billy Vassiliadis? "Billy V" was the author of this boneheaded pensée, which he shared with the Los Angeles Times:

"You've got to drop your rates, but you don't want to create a sense that this is a discount experience or that the experience itself has been diminished."

What the ... ? Las Vegas' recent success was built on the perception (and actuality) of a "discount experience," and lower prices are unlikely to "diminish" a tourist destination that is now synonymous with exclusivity and unaffordability. Vassiliadis, like Sheldon Adelson and the Las Vegas Convention & Visitors Authority, seems convinced that the current doldrums are -- to use my favorite Internet-board gaffe -- "a blimp [sic] on the radar."

They need to wrap their heads around the reality that 2004-like levels of business were damned good at the time (superb, in fact) and that Vegas needs to get back to the value-based messages that fueled the preceding 15 years of growth. Or, as David G. Schwartz writes in a particularly trenchant DieIsCast.com entry: "Of course, unpredictable events can make a hash of any predictions, so it’s possible that five years from now the casino industry will be employing 100,000 more people than it does today. That would be after the federal government offers Americans a $10,000 annual tax credit against travel to Las Vegas, and Las Vegas alone."

Seems like some folks in the marketing bidness should be taking Dr. Schwartz's classes.

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Despite taking a 22% gouge out of expenses, Colony Capital and its Goldman Sachs sidekicks managed to convert a 2Q08 profit to a $10.5 million 2Q09 loss. Revenues were down $30 million (or 40%), half of that from diminished room bookings. Could the service cuts be driving the revenue plunge? It wouldn't be the first time we've seen "death spiral" management be a company's undoing.

It's certainly interesting to see the bracing effect the recession has had on Vegas casino execs. They, who once took convention business for granted and looked upon conventioneers as less desirable than gamblers, have had a salutary wake-up call ... hopefully not too late.

Colony also threw in the towel on Resorts Atlantic City, although it left CEO Nicholas Ribis behind to run the place. That means he will serve two Boardwalk masters: The Resorts mortgage holders and Colony, with whom he co-owns the Atlantic City Hilton and which Ribis has also been running (into the ground, some charge). What happens if it's in Resorts' best interest to steal business from the A.C. Hilton?

It's difficult to decide who was more foolish here: Colony, for borrowing 2.5X the value of a casino whose best days were behind it, or the bankers who secured $360 million in loans with a $140 million casino. Let the floggings commence!

Speaking of death spirals, when you can get an Imperial Palace room for $18 (as an acquaintance recently did), who'd stay in Mesquite? That exurb's travails continue drag Randy Black's oligopoly down with them. Scant competition appears to have bred slackness and complacency in the Mesquite and Primm markets. It may be mere coincidence that the competition-rich Laughlin market has suffered to a much lesser degree ... but I don't think so.

Defaulted interest payments, renegotiated loan covenants, drawn-out cash reserves ... these are some of the unappealing alternatives facing Planet Hollywood. No property's struggle is fun to watch but this one is sadder than most because there's been considerable reinvestment (and some stunning redesign) made to turn the ex-Aladdin into something viable. However, all Robert Earl's horses and all Robert Earl's men have come up a bit short.

Plummeting ADRs have precipitated this crisis and, although losses at Planet Ho have consistently narrowed (and continue to do so), this isn't the first time we've heard that Earl's place was really struggling. And, no matter what Earl does, his casino-hotel has intractable, customer-hostile design flaws that cannot be solved by any means short of implosion.

I've been given reason to believe that whoever ends up owning the physically and fiscally bloated ($4.4 billion, at latest count) Fontainebleau, it won't be Penn National Gaming (at least not unless it's free and clear, and presumably cheap -- a tall order). If Steve Wynn has indeed already spurned F'bleau that'd leave Apollo Management, which never saw a bad casino investment it didn't like, and this one's nearly $1.8 billion underwater.

F'bleau would also give Master of the Universe Leon Black a de facto Harrah's Entertainment property on the north Strip, although Harrah's needs to fill thousands more hotel rooms like it needs a gaping hole in the noggin. Considering that it costs Boyd Gaming $3 million a month to keep Echelon on ice, preserving the F'bleau monstrosity until such time as new rooms can be absorbed seems a better use of capital than trying to finish the accursed thing.

Shakeup at Sands. Geez, you don't think executives on the chopping block could have anything to do with Genting Bhd's rival project getting ahead of slow-moving Marina Bay Sands, do you? Naaaaah! After all, the executive situation at Las Vegas Sands has been so very tranquil this past year. Just ask William Weidner ... or Bradley Stone or ...

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Why should Nevada have only one former casino executive in the U.S. Senate when it could have two? Sen. John Ensign (R-Nevada Landing) might soon be keeping company with Sen. Sue Lowden (R-Santa Fe Gaming Corp.), if a poll commissioned by Lowden supporters is in any way indicative. Lowden, an ex-legislator who was drop-kicked by her constituents in '96, was co-owner of the Santa Fe Hotel until it was sold to Station Casinos in 2000. Station then did to the pro-union workforce what the Lowdens could not: sacked every last one of them. Business suffered afterward (customers didn't appreciate the disappearance of familiar faces) but Station has always liked to live dangerously.

Lowden currently sits on the board of Archon Corp., proud owner of the Pioneer Hotel in Laughlin, as well as of the Wet 'n Wild remnants that almost became the site of James Packer's Crown Las Vegas. Archon has a habit of turning up in the newspapers every now and again, sometimes when investors get riled up about dubious, insider-friendly stock moves. Sen. Harry Reid (D-NV) may not even have to unpack his heavy artillery; the Culinary Union will be only too happy to unleash its attack dogs on Lowden ... again.

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"As a result of [Tropicana Entertainment's] continued use of the Tropicana marks in interstate commerce, the Tropicana marks have achieved fame and notoriety and are associated in the minds of consumers nationwide with a consistent level of high-quality casino, entertainment and hotel and restaurant services." -- from court filings by Tropicana Entertainment, proud owner of the Tropicana Express in Laughlin, proprietor of the Horizon in Lake Tahoe (above) and evicted operator of the Tropicana Atlantic City. Uh, yeah, that "notoriety" part is right on the money. TropEnt is suing the Tropicana Las Vegas to enjoin it from using the "Tropicana" name.

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Despite rumors that it would be a no-show at Labor Commissioner Michael Tanchek's three-day hearing on Nevada's tip-pooling law, the company sent outside attorney Gregory Kamer for the first day of testimony. The Las Vegas Review-Journal reports that the witness list includes "Nevada Resort Association Chairman John Hinchliffe, and Steve Willett, assistant games manager at Don Laughlin's Riverside Resort in Laughlin," along with two other pro-Wynn witnesses.

So it's not to be eminence grise Don Laughlin himself but a relatively minor emissary. Due to Laughlin's late and shadowy emergence in thie hearing process, I didn't get a chance to find out why a tip-redistribution system that predates the 1971 law by five years has probative value. Meanwhile, an amicus curae brief written by the law's co-author (ex-state Sen. Donald Mello) has been deemed irrelevant by Tanchek. And, if Tanchek leans heavily on the Laughlin precedent rather than the law per se in his eventual ruling, does he reopen the door to litigation? In that case, the not-so-merry-go-round will just keep a-spinnin'.

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I've just returned from the Grant Sawyer Building, one of many seats of guvmint in Nevada. (Judging from some the makeshift signage in the building, money is super-tight these days.) While I was down there, a couple of people told me the strangest thing.

Seems Wynn Resorts isn't going to send any representatives to a series of hearings convened this week by Labor Commissioner Michael Tanchek ... or so the story goes. Since the hearings are for the purpose of interpreting Nevada law on tip-pooling and distribution, you'd think Steve Wynn would have a vested interest. But supposedly he's sending Don Laughlin, owner of the Riverside Resort to speak on Wynn Resorts' behalf.

That'd be strange but not crazy. Laughlin's been doing the same thing as Wynn (cutting management in on tips) for decades. So even with the firepower at his disposal, Wynn Las Vegas President Andrew Pascal, General Counsel Kevin Tourek, etc., Wynn would be effectively ceding the letter-of-the-law argument. By using Laughlin as a stalking horse, his case would boil down to: "It's OK for us to control the tips because, look, here's Don Laughlin and he's been doing it for ages. Tell 'em, Don."

There's no hope of confirming this from the Wynn side of the fence. They all figuratively dove under the table when CityLife came calling last week. I'm waiting to hear from Laughlin himself, who can clarify this bizarre potential turn of events. If true, it'd be a sad day for the Most Powerful Man in Nevada when he has to have a rural casino owner do his heavy lifting for him.

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Editor's note: An item involving Crown Ltd. contained factual errors, which have been corrected (as you'll see). I apologize for the misinformation. My thanks to the reader who pulled my head out of my @$$.

California gamblers stay and play ... at home. While the recession has made some inroads on tribal-casino revenue in the Golden State, it's losing less ground than Las Vegas. Some of those Vegas losses will eventually be recouped, but this day of reckoning was bound to come.

Unlike Las Vegas, which is arguably suffering from having too many competing profit centers within each resort, California casino bosses interviewed still view entertainment as either a loss leader or a one-off. I never thought I'd say this but Las Vegas could use a little more "old school" thinking right now.

James Packer, the guy who can't catch a break, is finds his casino company in even more hot water, in a case of the sins of the father being visited upon the son. The plot surrounding Crown Ltd.'s courtship of a self-banned high roller (and convicted felon) is thickening considerably. Seems paterfamilias Kerry Packer may have been pressuring crony John Williams to get pathological gambler Harry Kakavas back to the tables.

Williams, for his part, rolled on the late Mr. Packer, who's now got some 'splainin' to do. No wonder the young Packer's pursuit of Cannery Casino Resorts collapsed like a pup tent. The money quote, if you will, is: "[Williams] said it was common for patrons to rip up [self-exclusion] cards and that, in his view, Mr Kakavas's loss of $2.3 million in 28 minutes was recreational gambling."

If you lose $82,000 per minute, it's not recreation. It's degenerate gambling.

Globe-trotting Ian Sutton is back from Macao and G2E Asia. The sights! The sounds! The smog!

(Update: Ian says it's not smog but mist, as forthcoming videos will show.)

Holy Cow II: GlobeSt.com, normally a continent source of business news, is shocked -- shocked! -- that Steve Johnson's proposed casino on the former Holy Cow site will include a Walgreens. Smelling salts, stat!

But there are some interesting revelations, For one, the reason that Palazzo's flagship retailer is also a Walgreens is that it was a compromise Sheldon Adelson effected with the landowner ... Steve Johnson. (The mere fact of Adelson compromising is newsworthy enough.)

Turns out, that purchase may set the record for an on-Strip acquisition, at an alleged $50 million per acre -- Phil Ruffin, eat your heart out! Johnson also paid through the nose for the Holy Cow site. The price? $23.5 million/acre for land north of Sahara Avenue. Egad!

Columbia Sussex's casino portfolio continues to crumble. Tropicana Entertainment parent Tropicana Casinos & Resorts is selling its Amelia Belle riverboat (thereby forfeiting the New Orleans market) barely two years after the ship was acquired. Amelia Belle is former Harrah's Entertainment vessel, having been Bally's Belle of Orleans.

It's a canny strategic move for new owner Peninsula Gaming, which now has a Louisiana riverboat as well as a racino and four OTBs, not to mention a small flotilla of Midwest riverboats. TropEnt CEO Scott Butera, meanwhile, has less and less over which to preside. At the moment, his ambit consists of four riverboats, mostly in tertiary markets, two casinos in Laughlin and one on Lake Tahoe. Is this TropEnt's future: A succession of piecemeal asset sales? Sure looks that way.

Bad news for Sheldon Adelson. Over in Singapore, rival Genting's mega-budget Resorts World at Sentosa is letting news outlets like Bloomberg know that 60% of the project will ready for a soft opening in early 2010 (i.e., February-March). Projected attendance figures have been revised 20% downward.

In a rapier thrust at Marina Bay Sands, a Genting exec said the company was having regular meetings to make sure it came in on its $4.5 billion budget. Full completion of Sentosa is projected for 2012. Sands is going to have a sufficiently tough time making its nut without Genting crashing the party so soon ... to say nothing of the fact that Genting enjoys much higher brand equity in that corner of the world.

RoboPoker has risen from the grave. Electronic table games have been OK'd for eight New York State racinos. Though the Lege hasn't signed off, the Empire State's lottery board is confident it has the authority to make this move unilaterally. Poor Atlantic City is dying the death of a thousand cuts.

Congratulations to Penn National. It's scheduled to inaugurate a new pavilion for Empress Joliet today. A March 20 fire resulted in a three-month closure of the boat and substantial fiscal hardship for Penn National. In a noble gesture, CEO Peter Carlino kept employees on the payroll even though his ship was hors de combat. Capt. Carlino, S&G salutes you.

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Hare 1, Tortoise 0: After reading through the March 13 Harrah's Entertainment 4Q08 filing this earlier this week (one of the benefits of using mass transit), I set it aside for a few days, enabling the Las Vegas Review Journal's Arnold Knightly to beat me to the punch. What caught both his eyes (presumably) and mine (definitely) was a line of copy in which Harrah's acknowledged that its poor Las Vegas Strip performance was partly driven by "fewer hotel rooms availabe due to room remodeling and remediation projects at three Harrah's properties [including The Rio]."

You will recall that, whether to save time or money (or both), Harrah's made an end run around the Clark County permitting process when it wanted to make changes to several of its hotels. In some instances, these alterations not only didn't match the blueprints submitted to the county, they also compromised fire safety. (Lax inspection on the county's part allowed the problem to mushroom.)

Harrah's is presently under indictment for these cheeseparing measures, which were uncovered by dint of a forceful R-J investigation. It was a rare instance of the R-J speaking truth to power and the paper has suffered mightily for it, as Harrah's has retaliated in measures both great (an advertising boycott) and petty, like banning the R-J from Harrah's Las Vegas properties.

Whatever punishment the judicial system may or may not levy upon Harrah's will be nothing compared to the dent this misadventure put in Harrah's balance sheet. (By the way, I should acknowledge that Knightly read the Tolstoyian 160-page version of the quarterly report, while I settled for the 34-page "Cliff's Notes" version.) Harrah's may have thought it was saving money by going rogue but that false economy has now come back to bite it in the ass, to the tune of $60.5 million.

Gargantuan writedowns swung income from positive to negative in almost every jurisdiction. The international sector has bled red ink for two years, as London Clubs has proven to be a money-loser. The venture, like the company's hapless flip-flopping in Kansas, is typical of the spasmodic decisionmaking that has characterized CEO Gary Loveman's stewardship. Seemingly random projects (Slovenia, Singapore, the U.K.) were lunged at and toyed with briefly, then ditched. Having settled for one of the smaller fry of the British casino industry -- London Clubs -- and then unable to swap it for a piece of the big boy, Rank PLC, Harrah's must settle for selling off a little bit of LCI here or there.

Harrah's Atlantic City numbers would look much worse if the company didn't cleverly roll its Pennsylvania competitor, Harrah's Chester, into the A.C. portfolio for reporting purposes. If you had to assign Harrah's Chester to a region (as opposed to "Other"), the only one that fits is "Atlantic City Region," though that's a bit like rolling Laughlin numbers into "Las Vegas Region."

Debt service is murder, up 2.7X from 2007. 'Nuff said.

If asset sales are necessary, a non-Total Rewards property like Bill's Lake Tahoe would be already positioned for spinning off. However, Harrah's would have difficulty justifying more than a $160 million average sale price for any of its outlying Nevada properties, where cash flow is comparatively small. If significant relief is to be achieved from unloading casinos, some trophy properties will have to be sacrificed. After all, why should the bondholders be the only ones taking a bath?

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