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Economic recovery in sight?

Posted At : August 19, 2009 02:24 PM | Posted By : D McKee
Related Categories: Taxes,MGM Mirage,CityCenter,Dining,Entertainment,Economy,Monte Carlo fire,Boyd Gaming,Station Casinos

Vegas casino F&B directors seem to think so. From our trusty LVA research department comes word that The Orleans and Mandalay Bay are ending their one-price-all-day buffet specials. Better/worse still, Palace Station is hiking the price of its buffet -- by four bucks. One doesn't know whether to applaud this apparent harbinger of better times ahead or deplore the swift yanking of the "Welcome" mat out from under customers' feet.

Contract talks with magician Lance Burton, you'll recall, went right down to the wire. One possible sticking point? Burton has lost his 10 p.m. slot, which as of today belongs to Frank Caliendo, who'll be doing a 9:30 p.m. show four nights a week.

Good move. Burton's family-friendly act seems an odd fit with the late-show crowd. Besides, Caliendo is on network TV regularly, which Burton isn't. Between this, recruiting musical act Zowie Bowie and rolling out Hotel32, Monte Carlo is making a spirited attempt to stay in the limelight, even as CityCenter looms larger and larger next door.

Study Hall. Just what Nevada needs, another "study" of the tax structure. What's to study? At least 27% of the tax base comes from gaming revenues, which have been in decline for 18 months. A comparable portion comes from retail sales, which have been down two entire years and counting. The problem is obvious but the will to rethink it is rather less in evidence. Here's a hint: We need a plan which is not simply another variant of "Soak the tourists."

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Burn Monte Carlo, pay $3,500

Posted At : December 30, 2008 12:14 PM | Posted By : D McKee
Related Categories: Monte Carlo fire,MGM Mirage,Politics

That's the determination of the state's testicularly challenged OSHA Review Board. It chose to discredit testimony by the Clark County Fire Department and state OSHA, siding virtually without exception with the guilty party, United Erectors. The latter's 'erectile dysfunction' set the Monte Carlo ablaze in dramatic and unforgettable fashion last Jan. 26. The fire wasn't as bad as it looked -- but it looked very bad indeed.

Never mind that United Erectors was working -- as ace reporter Tony Illia uncovered -- under a window-washing permit. Nor that two review bodies found the company's safety methods rather cavalier. The review board essentially decided that, if United Erectors says so, that's good enough for them.

So the company the inflicted roughly $100 million of damage on the Monte Carlo and paralyzed a major MGM Mirage property for weeks on end gets away with a $3,500 slap on the wrist. Heck, even I could afford that. I dunno if United Erectors has any juice with the review board but they sure could get it up this time.

As for Nevada OSHA, it's going to have get its act together and present stronger cases to the review board, given the latter's 'the defendant is (almost) always right' track record. But with Gov. Jim Gibbons seeking to drown Nevada state guvmint in a bathtub, via a 34% budget reduction, that's not a likely prospect. Welcome to Nevada, where it's every man for himself and devil take the hindmost.

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Case Bets: South Point, Gustav, Monte Carlo, Gold Spike, Excalibur, etc.

Posted At : September 2, 2008 12:15 PM | Posted By : D McKee
Related Categories: Wall Street,Taxes,Animals,MGM Mirage,The Strip,Tamares Group,Current,Mississippi,Michael Gaughan,Sheldon Adelson,Monte Carlo fire,Downtown

Why does a holiday weekend suck? Because it means that instead of having to dig through three days' worth of the Las Vegas Review-Journal on Monday (a depressing task under the best of circumstances), a Tuesday start means at least four days of windfall from what Hugh Jackson calls "the dead tree of record" through which one must cut brush. Solution? Chop it up into Insta-Blog fodder! Like ...

Horse dies at South Point, in front of 500 undoubtedly traumatized spectators. Leaving aside the equine tragedy, if South Point can only rustle up 500 attendees for a Friday-night event, its equestrian center may be even more of a gold-plated albatross than was originally thought.

Gulf Coast casinos ordered to close. Good grief, has common sense taken a leave of absence down there? Why was Mississippi required to force the issue?

Monte Carlo not up to code, says Clark County. Whereupon neither the county nor MGM Mirage takes responsibility for remediating the situation, each putting the onus on the other.

Wall Street comes around. The Street has a manic-depressive attitude toward gaming stocks and is coming out of its latest episode of depression. Even so, some of these stocks look ridiculously undervalued, especially Las Vegas Sands, which The Street used to think was worth three times as much.

Speaking of Sands, there's confidence and then there's foolhardiness. Then again, given the company's genius at protracting litigation to superhuman lengths, its sanguine attitude may be born of experience.

Somnolent editors awake from nap, find that Nevada's economic model isn't working, call for more of the same, go back to sleep. (BTW, here's one of those "Nevada Democrats" the editorial reflexively derides.)

First Nevada Palace fell and now the Gold Spike is half-renovated. We're going to have to come up with a new shorthand for "bottom-of-the-barrel casino" now that we won't have the Spike to kick around anymore. Stephen Siegel has done more with the place than his predecessors, absentee owners Tamares Group, accomplished in three years (unless you count the offerings they took out, like table games).

Still, Siegel's being a wee bit charitable when he says "most people underestimate the Gold Spike." Stephen, it is impossible to underestimate the Spike, the only Nevada casino for which I would have used "vile" as a description, back in its Tamares days.

Comment threads in newspapers can be a very mixed blessing, but much of the back-and-forth that follows this story about electronic poker at Excalibur is well worth reading, as it provides a great deal of hard information and a player's-eye perspective on the experiment.

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MGM's quarter: Not as bad as it sounds

Posted At : August 5, 2008 04:22 PM | Posted By : D McKee
Related Categories: Wall Street,Macau,Steve Wynn,MGM Mirage,The Strip,Sheldon Adelson,Monte Carlo fire,Stanley Ho,Movies

Although MGM Mirage's latest earnings report inspired some apocalyptic headlines, William Spain of Marketwatch has ferreted out numbers that put MGM's earnings announcement into a less-sensationalized context. True, any profit falloff in 2Q08 was cushioned by the insurance payout from the Monte Carlo fire.

But ... we're also measuring last quarter against an aberrant 2Q07 because, as Spain points out, it was a year ago that MGM booked $264 million from the sale of its Primm, Nev., properties to Herbst Gaming. (Which proved to be Herbst's near-undoing, but that's a story for another day.) Besides, if your occupany fell to "only" 97%, you're clearly doing something right. I can vividly remember a period, during the pre-9/11 boom, when 89-92% occupancy was a sign of vitality.

Headline to the contrary, the Sun story paints a fairly reassuring picture of MGM's health, except for the fact that -- as company execs freely admit -- the company is having its ass kicked in Macao. MGM's business model over there is clearly a dud if Steve Wynn is pulling down 6.7X as much operating profit. Even Las Vegas Sands, which went into a panic shortly after Venetian Macao opened, is doing six times as well as the MGM/Pansy Ho operation. (The Wynn metric is more impressive because it's being achieved with only one casino vs. Sheldon Adelson's two.) Geez, if the numbers get any worse, Stanley Ho will be too embarrassed to keep referring to MGM Grand Macau as "my casino." Maybe MGM's plan to add more VIP-play capacity will start to turn things around.

The shoe's on the other foot in Vegas, where Bellagio is walloping "Megacenter," posting $7 more operating profit than the undynamic duo of Venetian and Palazzo combined. MGM may be reaping the fruits of Steve Wynn's labor (or Glenn Schaeffer's, in the case of Mandalay Bay) but it's also displaying the power of something Sands evidently lacks: brand equity.

Other interesting footnotes, courtesy of Liz Benston: While MGM CEO J. Terrence Lanni acknowledged getting clocked by Wynn in Macao, Adelson seems to have gone unmentioned. Is this Lanni's payback for Adelson trash-talking MGM not so long ago?

And while you'd expect big-ticket entertainment to be an expendable expense right now, Cirque du Soleil's box office is actually up. Which means two things: A) The producers of Believe can heave a sigh of relief, and B) a recession makes people seek the comfort of French-Canadian clowns. Which is the really scary part, if you ask me.

ABBA > Coldplay. So say British pop fans, judging by the fact that a long-available compilation CD has evicted Coldplay from the #1 spot on the best-selling album chart. Couple this with a $200 million-plus worldwide gross for the Mamma Mia! film, and Benny & Bjorn are enjoying sweet revenge on all those people -- like me -- who made fun of them 30 years ago. Now we're doing penance by learning that while "Waterloo" phonates beautifully in French, it sounds bloody awful in German.

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Monte Carlo: What the f...?

Posted At : April 2, 2008 05:07 PM | Posted By : Administrator
Related Categories: MGM Mirage,Monte Carlo fire,The Strip,Downtown

You know those fellows who set the Monte Carlo on fire? Well, it seems they were working under a window-washing permit. I kid you not. Tony Illia ran down this gem, which adds to the tragi-comedy of how Union Erectors turned a Strip resort into a big-ass Roman candle.

As for the non-response of the Clark County Fire Department, which declared that since the fire was unintentional no one was to be held accountable, Illia notes that this was supposed to be the new, improved Clark County and its 20-man special-investigation unit, adding "Well, it's certainly off to a bad start."

Illia, one of the best journalists with whom I've had the privilege to work, has some strong words for Clark County. Nor do the private-sector players get off the hook: "One suspects this isn’t the first time that MGM Mirage, Monte Carlo’s owner, has taken short cuts to get things done. Union Erectors has worked on other MGM Mirage properties including the MGM Grand and CityCenter. It has also done work at the Paris Las Vegas and Caesars Palace (both owned by Harrah’s) as well as The Venetian."

Speaking of fires ... Arson victim the Moulin Rouge got the go-ahead from the City of Las Vegas to demolish everything save its marquee and brick tower. A new, Ed Vance-designed hotel-casino is slated to break ground next year and open in 4Q10 (which usually means, "As late in December as possible without forfeiting New Year's Eve").

Project approval and rezoning approval have already been granted for what's drawn up as a 700-room hotel, plus at least two nightclubs, four restaurants and a spa, among other amenities. It might seem small-scale by Palazzo standards, but remember that we're talking about something way off-Strip (but very close to the freeway) in a dodgy neighborhood, so it's what you might call a "marketing challenge." I'm assured that Republic Urban Properties has deep pockets (as in $4 billion deep), so it looks as though the long-promised, oft-deferred rebirth of the Moulin Rouge will finally occur.

Real Hollywood disses Planet Hollywood. Someone from the film industry strolled past Trader Vic's recently during the wee hours and was subjected to a limp rendition of "Let's Go Crazy" by Prince, played to a crowd of maybe 20 souls. The verdict? "It wasn't exactly LAX."

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Monte Carlo: No harm [sic], no foul

Posted At : March 26, 2008 10:13 AM | Posted By : D McKee
Related Categories: Riviera,Regulation,MGM Mirage,Monte Carlo fire,Harrah's,Steve Wynn,The Strip

A major Strip hotel put out of commission for weeks, thousands evacuated, 13 injured and $90 million in damage? No big deal, says the Clark County Fire Department. You see, Union Erectors didn't intend to set the Monte Carlo on fire, so it's all good, per impeccable Fire Dept. logic. Ergo, not even a fine for Union Erectors, even though the company merely assumed it had a valid permit and its fire watch was "ineffective." (Let's see: You're on duty to watch out for risk of fire and a massive conflagration breaks out? Yeah, I'd call that ineffective.)

Move along, folks. Nothing to see here. Just like ...

The spreading stain of renegade remodeling jobs is fanning out beyond Harrah's Entertainment and into some of the companies it has gobbled up, either in whole or in part. First up is the former Caesars Entertainment (née Park Place Entertainment, née Hilton Gaming), which built Paris-Las Vegas, site of some do-it-yourself sauna installation.

Perhaps this one can be traced all the way to the grave of Arthur Goldberg, on whose watch Paris-LV was built. Such a control freak was Goldberg, he was notorious for insisting on signing all checks of $5,000 or more. Casinos formerly owned by the late Ralph Engelstad (what else but Imperial Palace?) and by Boyd Gaming (the Barbary Coast) are also on the inspection list, which gets longer by the week.

Which means it's a very ill-chosen time for Harrah's CEO/President/Chairman/Grand Pasha Gary Loveman to try and push whistleblower Fred Frazzetta under the bus, but a Mar. 18 press release did just that, terming Frazzetta "irresponsible" and lacking in credibility. (If anybody's credibility is eroded at this point, it's not Frazzetta's.)

"The company has not suggested that any of the terminated employees," of shuttered Harrah's subsidiary Roman Empire Development, "were responsible for the improper renovation work," reported the Las Vegas Review-Journal. Which is interesting, because -- back in my days at the Las Vegas Business Press -- one of the first tips we got about the evolving private-equity buyout of Harrah's was that its in-house design operation would be scrapped and outsourced.

So the high-profile sacking of 200 Roman Empire employees may have been a pre-planned cost-cutting move masquerading, at the time, as a forceful response to the Rio/Harrah's LV/Flamingo renegade-renovations debacle. That shiny halo that Gary Loveman wears in Christina Binkley's otherwise excellent Winner Takes All has gotten a mite smudgy of late.

No slam-dunk for Wynn dealers. Liz Benston guides readers through the whys and why-nots of whether a recent California ruling against tip confiscation at Starbucks will have any effect on a similar regime at Wynn Las Vegas. "[D]ealers say Wynn is using the tips to supplement supervisors’ salaries," writes Benston. Hell, that was Wynn's own justification at the time: That he couldn't get any good pit bosses because there was better money to be had by being a dealer. Rather than raise the bridge, Wynn chose to lower the river and you all know how well (or badly) that has gone.

On the move. Another high-ranking Strip exec has "ankled" over to Fontainebleau. First, the Cosmopolitan's Audrey Oswell, now Riviera Holdings CFO Mark Lefever. Glenn Schaeffer is building himself quite a braintrust.

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Always look on the bright side

Posted At : March 25, 2008 10:42 AM | Posted By : D McKee
Related Categories: Monte Carlo fire

"If anything, the fire did move the process ahead." -- Monte Carlo Resort & Casino President Anton Nikodemus, explaining that the Jan. 25 fire has caused MGM Mirage to start remodeling the hotel rooms nine months earlier than planned.

Should an earthquake strike Las Vegas, it'll probably happen at the intersection of Tropicana and Decatur avenues. So maybe it's just as well that a high-rise condo project slated for the immediate vicinity didn't happen after all, doncha think?

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Just when you try to cut Gibbons some slack ...

Posted At : March 10, 2008 12:15 PM | Posted By : D McKee
Related Categories: Monte Carlo fire,Taxes,Politics,Problem gambling,Election

See what I mean about how The Gibber governs best when governs least? Not only is he uttering an empty call to employ all available resources (emphasis mine) in the current hepatitis/HIV scare, it turns out he may have unwittingly -- some would say "half-wittingly" -- made matters worse by keeping the Bureau of Licensure & Certification deliberately understaffed. And with that bureau, like all other state agencies, having to prune its budget to comply with Gibbons' mindless, spineless, simplistic mandate for 4.5% budget reductions across the board, it doesn't look as though the situation is bound to improve anytime soon.

By the way, Gov. Gibbons, shouldn't state-funded programs for treating pathological gamblers be exempted from your "off with their heads" budgetary edict? Since the money provided is entirely derived from slot fees (which are subject to fluctuations in slot capacity but not in revenue) remain solely dedicated to the purpose dictated by the 2005 Lege and not be raided to cover a shortfall in revenue projections? And if that's what is happening, what's to prevent the fund from being siphoned for other purposes, too. After all, Nevada politicians had to be dragged kicking and screaming into recognizing problem gambling as a public policy issue in the first place.

It's over for New York Gov. Eliot Spitzer. Already on track to be a one-term governor, today's bombshell makes you wonder if he'll even be able to finish his term. Which is tragic, because Spitzer was a great public servant as NY's attorney general and as a D.A. Unfortunately, he's evidently been undone by intrinsic character flaws, in classic Greek tragedy fashion. Expect a massive, Schadenfreude pile-on.

But then I thought it was curtains for Sen. David Vitter (R-La.) a while back. Wrong again.

Profiles in Cowardice, Chapter II: The Gibber, emerging from his new bachelor pad in Reno, played to a packed house over the weekend and uttered what must be one of the most invertebrate endorsements ever:

"[McCain] is the most qualified individual that I can support based on his military background, his leadership ability, his understanding of the United States and most importantly, he's a Westerner."

Geez, what a mix of shilly-shallying and classic Gibbonsian hoof-in-mouth syndrome. The fact that McCain is "a Westerner" is more important than leadership ability and an understanding of the U.S.? I hope that was a joke. If so, it's right up there with Gibbons' infamously insensitive jape about the Monte Carlo fire. ("I couldn't find my bucket.")

I'll skate past the xenophobic gibes of Utah Attorney General Mark Shurtleff and just note the patronizing tone adopted by state GOP chairwoman Sue Lowden, addressing Ron Paul supporters: "I welcome you to join our Republican party ..." (emphasis added).

What, is there another Republican Party we didn't know about? By supporting Ron Paul, were these voters somehow excommunicated? I didn't know political parties belonged to anybody, let alone Sue Lowden. Whatever happened to "the Big Tent"?

P.S.: The Nevada Democratic "It's All Good" Party has been doing such a good job of self-destructing this year, surely it doesn't need me to give it an extra kick in the shins right now, no matter how well deserved. But I'm serenely confident that the opportunity will arise again, and soon.

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Why TV news shouldn't cover gaming

Posted At : February 22, 2008 11:09 AM | Posted By : D McKee
Related Categories: TV,MGM Mirage,Monte Carlo fire,The Strip

Today, on the local Fox affiliate's morning news show, besieged anchor Monica Jackson reported that MGM Mirage's excellent 4Q07 results were achieved by buying half of CityCenter. Uh no, Monica, that was accomplished by selling 50% of CityCenter to Dubai World. Slight difference there.

Really, if you follow the casino industry it's almost impossible to watch TV news organizations' fumbling attempts to cover it without wanting to crawl under your sofa. This is yet another case in point

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It's not always good to be Lanni

Posted At : February 15, 2008 04:29 PM | Posted By : Administrator
Related Categories: MGM Mirage,Monte Carlo fire,Sheldon Adelson

It's got to be bad enough for MGM MIrage CEO J. Terrence Lanni that his unflagging support for Nevada Gov. Jim Gibbons was repaid with Lanni being frozen out in favor of rival Sheldon Adelson. It's worse when people make pitying jokes about it in the newspaper.

On the other hand, that MGM Mirage/Dubai World tender offer wasn't such a bad idea. They only needed 15 million shares and were offered 101 million. And the Monte Carlo reopened. So maybe it's not such a bad day, after all.

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