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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... change the rules of the game (literally). After opening-week results from Sands Bethlehem were softer than expected, Sands supremo Sheldon Adelson now wants table games. Without even waiting for all of the state's allotment of slot parlors to open -- and, given the situation in Philadelphia, that could be long wait -- the Pennsylvania Lege is contemplating going to full-bore casinos. That's a development which would be absolutely catastrophic for Atlantic City, which has suffered aplenty.

Danny Gans must have been in unimaginable pain to use a substance two to eight times the strength of morphine. I've had morphine and it'll put you down for the count (or make you wish you were). If Dilaudid has at least double the potency, I wouldn't go anywhere near the stuff. Gans would have had to have, as his manager claims, the constitution of an ox to take a Mickey Finn like that and remain functional. Steve Friess seems to find the whole thing a mite fishy.

Having left one sinking ship (the administration of Gov. Jim Gibbons) for another (Black Gaming), former Midnight Jim advisor Grant Hewitt has found yet a third vessel. Only time will tell if the Dr. Joe Heck gubernatorial bid is a more seaworthy barque than were Hewitt's last two.

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For at least the last four weeks, Silverton Casino Lodge has been conducting a hit-and-run campaign of "Livin' Lodge" TV spots. These polished 15-second vignettes concentrate on delivering one message and doing so with humor. That's a refreshing contrast to the now-familiar image barrage (of which both Green Valley Ranch and M Resort have been guilty) which attempts to cram approximately 273.86 discrete ad messages into your cranium in 30 seconds or so. Then there's the CasaBlanca ad which vouchsafes us the sight of Randy Black giving himself a pedicure. My girlfriend's two-word review: "It's disgusting!"

Of course, nobody trying to pass themselves off as a Daddy Warbucks would be caught dead at the Silverton ... but that's an inherent part of the jest.

Enjoy! There are plenty more from whence this came:

Express delivery: It seems like just yesterday I was touting the upcoming release of Arnold Snyder's Topless Vegas. (Oh wait ... it was yesterday.) Well, it's gone from a "Coming Attraction" to "Now Playing" in the blink of an eye.

Due to its file size, Topless Vegas can't be e-mailed, but if anybody is having problems ordering it, please let us know and we'll work out an alternate method of delivery. It's copiously illustrated (hence the hefty megabytage) and Snyder isn't the least bit shy with color commentary or opinions. You'll love it or hate it but you won't be bored even for a moment.

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In a refreshing change of pace comes news of a casino that's on schedule for its opening. OK, so it's in Dodge City, Kansas, but we'll take good news wherever we can get it these days. Whoever thought avionics firm Butler National would be the sole casino bidder to make good on its Sunflower State commitment?

How quickly we forget that the original plans for Red Rock Resort called for three condo-hotel towers. Station Casinos was feeling its oats back then, thinking big even as it projected only single-digit ROI at Red Rock as far out as 2011 or longer. Overconfident much?

They like us. They really, really like us. Casinos in Southern Nevada feeling the recession's pinch are suddenly overflowing with newfound lurve for area customers, long taken for granted. Here's what's on offer so far. Satellites like Primm and Mesquite weren't any great shakes during Vegas' halcyon years. Why you'd go out there now when oligopolists Herbst Gaming and Black Gaming have helped run their respective markets into the ground is difficult to fathom. (Primm, at least, has a good outlet mall. Mesquite ... not so much.) Oh, and what's wrong with this "Stay and Play Here" graphic?

Goodman one-ups Adelson. Although he's never exuded warm fuzzies toward the Culinary Union, neither has -- to my knowledge -- Sheldon Adelson called his longtime adversary "evil." So Mayor Oscar Goodman stepped into the breach -- or stepped in something. As for the Culinary, it's got much bigger problems to worry about.

Any company that planned an ultra-high-end Elvis Presley-themed resort (a conceptual disconnect if ever I heard one) doesn't have both oars in the water. This one doesn't have money in the bank, either, and may soon have its Strip parcel sold right out from under it.

Las Vegas' best low-cost attraction is on the move, down the road to 1610 E. Tropicana Ave. If there's a guest list for the grand reopening, Elton John isn't on it.

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When I picked up the latest LVA and read that Xtreme Magic was getting ashcanned by the Tropicana Las Vegas, effective April 2, I began to wonder if CEO Scott Butera's promised new-look Trop was ever going to manifest itself. Because, whether the place was run by Columbia Sussex or Tropicana Entertainment, management had evinced three basic strategies: 1) subtract, 2) subtract again and 3) subtract some more.

However, the Great Amenity Massacre has finally come to a halt. The former Comedy Stop will become the new den of "Pitbull of Comedy" Bobby Slayton, making a step up for Hooters Casino Hotel. I've not seen Slayton in action but people whose opinion I trust say he's very good. He should give the Trop a much-needed infusion of personality. Welcome to the Strip, sir.

A colleague also informs me that the much-traveled Soprano's Last Supper will alight at the Trop, too. Surely this isn't the long-hinted-at successor to Folies Bergere? Say it ain't so, Scott!

In a break with tradition, neither of the two Arizona Charlie's hotels is taking bookings past May. Goldman Sachs' third wholly-owned Vegas casino, the Stratosphere, is continuing to accept reservations into the summer months, however.

Mehtinks the hotel-closings virus is spreading from Primm and Mesquite. Besides, with so much downward pressure on hotel rates even at the top-notch off-Strip hotels, the customers who'd normally gravitate to AZ Charlie's can afford to "trade up."

Liar, liar, pants afire: Remember the hotel room-tax increase, Nevada's "fuck you" to its tourism base? Seems that Gov. Jim Gibbons was for it on at least 10 occasions before he was against it. (Or maybe he was against it, then for it, then against it again).

Of course, Midnight Jim can always wriggle out of this on the technicality that he never said he'd actually, physically sign the bill. Also, his staff issued a bizarre locution that the guv was against "putting new taxes directly on the people." So does that mean he's in favor of indirectly instituting new taxes? And how, precisely? (Well, actually we know, at least as it concerns gaming: Accelerate tax collections on bad markers and tax comped meals.)

Considering that reality and Jim Gibbons normally intersect to form a null set, it's probably just another sample of the meaningless verbiage Nevadans have come to know and love. It'd go right down there with "stirring up the bottom of the bathtub," of which no one was ever able to make sense.

Update: At least Gibbons has the virtue of providing amusement, unlike the disgraceful and equally spineless Lege, whose fiddling while Nevada burns is too depressing to contemplate more than briefly.

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Gov. Jim Gibbons has scuttled away from one of his several proposals to jack up taxes on the only segment of Nevada that's carrying its own weight -- the casino bidness. He's retreating from a demand that casinos pay taxes on uncollected markers (which, in turn, would be certain to cause a tightening of casino credit). Midnight Jim continues, though, to support raising hotel-room taxes in Clark and Washoe counties, and taxing comped meals. The casino industry's love affair with Gibbons -- which helped get him into office -- has so far proven a one-way romance.

Worries about Boyd. Here's why I resist the occasional invitation to give stock picks: No sooner have I sung the praises of Boyd Gaming's sound fundamentals, its diversified casino portfolio and its (Echelon excepted) aversion to risk, comes news that analysts have the heebie-jeebies in re Boyd. A slow-ramp-up at Water Club in Atlantic City and weakness in the Las Vegas locals market are the primary worries.

Advertising during the Oscars: Casinos that ran ads during last night's interminable Academy Awards snoozer included M Resort (twice), Encore, the CasaBlanca in Mesquite and Green Valley Ranch, which has suddenly discovered a great lurve for the local clientele. The latter is quite a turnaround for a property that used to tout its high-end cachet. Oh, and Mickey Rourke got totally, utterly and criminally screwed. Which ruined the evening right then and there.

Atlantic City Death Watch, cont. After taking a long gander at the market, Macquarie Securities analyst Joel Simkins had this to say: “In our view, there is a distinct possibility that one to three casinos could be permanently closed in the next few years, particularly when many older locations are barely breaking even and, we believe, cannot be rehabbed to be economically viable.” [emphasis added]

Anybody care to speculate which casinos Simkins has on the "do not resuscitate" list? Resorts Atlantic City is a no-brainer for the "one." As for the "to three," we could toss in the Atlantic City Hilton and Trump Marina, where the news comes in two flavors -- Bad and Worse.

The Tropicana might also be on the bubble, partly because it's not performing up to its preponderant size and also on account of interim management's inability to restore the business that was lost during the Columbia Sussex reign of error. A veteran Trump-watcher has another suggestion, writing that"his decision to abandon and bad-mouth the company suggests that this may not be the routine Chapter 11 bankruptcy from which the company eventually emerges. Indeed, I wouldn't be surprised if this is the last gasp for Trump's three Atlantic City casinos."

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Foxwoods Casino Resort's Philadelphia beachhead is financially beleagured by problems on the home front. Says one economist of the Connecticut metaresort, "Their plan for growth was built on an economy that no longer exists and is not coming back."

A glimpse of Greektown:

Blackout? Casino oligopolist Randy Black is contemplating ditching his three Mesquite casinos (one of which is barely operational). Considering that the bottom has fallen out of the Mesquite market, it's difficult to imagine who'd buy.

Own-goal for Control Board: An overreaction by the Nevada Gaming Control Board to an iPhone card-counting program has sent the latter's sales to stratospheric levels. Silver State regulators have unwittingly made Travis Yates the entrepreneur of the year.

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Mesquite casino oligopolist Randy Black bought himself some TV ad time during the Super Bowl to tout his latest value proposition (starring one Randy Black). His opening gambit: "Everybody's cutting back." Uh no, not if you're Randy Black and just served yourself a nice pay increase while skipping loan payments and sacking the help. But we digress ...

What's Randy's big value message? A midweek rate of $99/night, which gets you either a free spa treatment or a round of golf. The prospect of a $99 golf game or spa visit had better be pretty strong, because there's certainly no point in hauling ass out to Mesquite for a $99 hotel room, not when you can stay at Planet Hollywood this week for that little -- or for even less at The Rio or the Flamingo, to name two of the nicer propositions. (If your standards are more flexible, you can stay on or very, very near the Strip for $20.)

Columbia Sussex continues to live in a dream world, demanding $249/night midweek for the Westin Casuarina. Heck, you could stay at Trump International for less than half that amount. Donald Trump and Phil Ruffin really let both the condo market and the budget get away from them on the latter, whose budget quadrupled to a final $1.2 billion. But it's not one of those properties (I'm looking at you, Aladdin) where you walk around and wonder, "Where did the money go?"

The recent discounting binge on the Strip may have done its job. J.P. Morgan reports "we are finding that casino operators are reducing the number of promotions that are available by and large" and theorizes, "operators have built up a book of occupancy that enables them to not have to rely on a promotional environment." If that's the case and promotional-rate offers continue to dwindle, it's a classic case of gather ye rosebuds while ye may.

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When I wrote yesterday that the spirit of Bill Yung still seemed to be afoot at the Tropicana Las Vegas, I didn't know the half of it. Mike Weatherford has the skinny on the shuttering of Folies Bergere and it boils down to a payroll dump. Folies performers were Trop employees and Raw Talent Live or whatever show with whom Trop President Ron Thacker is dickering would 'four-wall' the Tiffany Theater, placing Thacker in the role of landlord: collecting the rent and doing maintenance as needed.

Combine this with projected capex spending of about $6 million a year (some of which may be coming from money budgeted for Folies) for the next five years -- at a time when the Trop is falling further and further behind the competition -- and a prolonged Scott Butera regime is beginning to look like a bleak prospect. Here's hoping the bankruptcy court clears the way for an asset sale and soon. What the Trop needs is someone who can do a reverse-Yung: Buy it at a depressed price and use the money thereby saved to spruce the old gal up or, better yet, do a partial tear-down-and-rebuild job on her.

You came to Nevada but it was closed. Not surprisingly, Gov. Jim Gibbons' new budget would balance the ledger by socking it to visitors and literally stealing from the indigent. As for casinos that haven't collected on dishonored markers -- too bad. Gibbons wants them to pay taxes on the duff debts forthwith. If all that doesn't work, Midnight Jim could take a cue from Circuit City and hold a 'going out of business' sale. Speaking of which ...

Progressive Gaming, R.I.P.: The phone is off the hook and the vultures are circling Progressive's corporate HQ. It appears that Progressive's debts will be settled, to some extent, by holding a fire sale of its best intellectual property to "a major slot machine manufacturer." Could it be minority owner IGT? Naaaaaaaaaaaaaaah!

In a sidebar, it's reported that Black Gaming has one month to avoid defaulting on nearly $200 million in debt. It appears that CEO Randy Black Sr. was so busy shoveling money into his own pockets that he missed an interest payment yesterday. Say what you will about Black, he's definitely got his priorities. The "unbundling" of the Strip shows every sign of trickling down to markets like Primm and Mesquite, where Black has enjoyed a near-monopoly for most of the past decade (Mesquite, not Primm).

Prospective buyers could include guys like Stephen Siegel. Snicker if you like at his plan to create "synergy" between the Gold Spike downtown, the obscure Barcelona and the Mt. Charleston Hotel. But Siegel Group Nevada has been quietly rolling up a sizeable bundle of assets, has a reputation for reinvestment and, as I've said before, has done more with the Gold Spike than Tamares Group ever did with it or any of Tamares' other Downtown properties. It also sounds like Siegel's got a knack for marketing, itself no small asset in this economy.

Harrah's LV renews Rita Rudner's contract ... signaling the Apocalypse?

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