MGM Mirage has announced that it's writing off approximately $1.3 billion (i.e., taking an "impairment charge") against CityCenter, with $348 million of that chalked up to falling real estate values. (Some $174 million of that will apparently be fobbed off on MGM's partners, bringing MGM's writeoff down to $1.1 billion.) The value of MGM's half-share of the project has been restated at $2.44 billion (a 31% decline). No word yet from Dubai World as to what it thinks its half of CityCenter is worth.

Kirk Kerkorian's Tracinda Corp. shook a rhetorical fist at Wall Street, stating in a press release that there is "substantial unrecognized value in MGM and CityCenter that is not reflected in the market value of MGM’s stock." It's nice to know that even mega-corporations can feel underappreciated.

Bottoming out? Air traffic into and out of Las Vegas was almost flat, year over year, -1.2% in September, helped by passenger-load increases -- and I don't mean those hefty people who take up two seats -- on nearly every domestic carrier not named US Airways (-26%). Considering that international traffic was -21%, this is augurs well for a return of domestic consumer confidence in Sin City. And, yes, flat is the new "up."

Pennsylvania: Rendell intervenes. Never accuse the Keystone State Lege of acting in haste. The table games bill is still mired in conference committe, prompting Gov. Ed Rendell (D) to wade into the fray. Rendell's magic number for the amount of revenue table games must yield in fees and taxes is $200 million. To get there, the guv believes the tax rate must be 16%. But he's closer to the GOP position, warning that the higher levies favored by Dems would "kill the golden goose" and deprive Little Johnny's school of needed funding. Meanwhile, Rivers Casino continues to disappoint, with the lowest revenue-per-slot in the state.

Finally, a taker! Out of left field, a contender has emerged for the orphaned casino license in Cherokee and Crawford counties in Kansas. You'll recall that it was awarded to Penn National Gaming, seemingly ages ago, but Penn -- spooked by nearby tribal competition -- all but spat on the license before leaving in a huff.

Enter Ozark Trail Gaming, a consortium of Kansas businessmen, offering to build a $225 million, 900-slot, 30-table casino. After some bad experiences with carpetbagger casino developers trying to dictate terms to the Sunflower State, you have to think the Kansas Lottery Board will look kindly upon this native-son effort.

ColSux loses again. A $41.5 million summary judgment has been slapped on Columbia Sussex for abrogating its purchase of the President riverboat in St. Louis (now the property of ColSux arch-foe Pinnacle Entertainment). Regulators for Missouri didn't like the looks of ColSux and its CEO, William J. Yung III (above). The latter pulled his license application and used that as an excuse to void the President purchase, but a federal district judge wasn't buying it.

The former President owners were also suing ColSux for jacking up parking rates for casino patrons by 560% (no, that is not a typo), a truly Yungian move. If poetic justice were served in this case, the court would award the ship to ColSux. Since the President's days on the water are numbered and Yung will licensed in Missouri only in his wildest dreams, trying to dispose of that near-worthless asset might be the aptest punishment of all.

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As you know, S&G puts more stock in year/year comparisons than sequential ones, but the most recent set from Atlantic City affords a slender reed of hope. With the help of tighter slots, A.C. held its September decline to 6%, the lowest of 2009 and the smallest drop in over a year. Even perpetual dog Resorts International had a good month, up 4% y/y.

Both in dollar volume ($63 million) and growth (6%), the leader was -- no surprise -- Borgata. In fact, the Boyd Gaming property made more than the four lowest-grossing properties (Resorts, Atlantic City Hilton, Trump Plaza, Trump Marina) combined. The two lesser Trump properties slipped below the Colony Capital ones, so one doesn't know whether to feel good for Colony or sorry for Trump Entertainment Resorts. The handover of Resorts Int'l continues to proceed slowly, as regulators enter uncharted waters with understandable caution.

Percentage-wise, Showboat, the Hilton and the Plaza had the worst of it, while gainers included Harrah's Atlantic City (3%) and even the Tropicana (1%). But the bloom is off the Trump Taj Mahal rose; it fell back to the middle of the pack, grossing $36 million.

One unexpected factor in the city's bump was a late-September, gay-themed promotion at the four Harrah's Entertainment properties. For all the lip service paid, year after year, to diversifying Atlantic City's appeal, Don Marrandino and his Harrah's colleagues backed up the talk with meaningful action.

Dead casino walking: Trump Marina

Back at Trump, its CEO, Mark Juliano declares "The real question is how long until we get back to the results we saw in past years, which is the question everyone in every business has." No, the real question is: On what planet is Mr. Juliano living? And: Do they have oxygen up there?

The math is inexorable. Excluding three months of sub-2% growth, Atlantic City's revenues have going one way -- down -- for the last seven quarters, often by double-digit margins. Casinos in Pennsylvania continue to ramp up, Delaware is talking very seriously about casino expansion, slot parlors in Maryland are in train and then there's prospect of additional competition from the greater New York City area.

Instead of asking "Where are the snows of yesteryear," S&G modestly suggests the Boardwalk's casino braintrust ought to be thinking about how to move forward into a future of diminished (i.e., more realistic) expectations.

Up the road, now that the novelty factor has worn off of Sands Bethlehem (above), the $724 million casino remains mired in fifth place. The solution? More and bigger promotions, it would appear. Judging by the lukewarm response to Sands and to Rivers Casino, the Pennsylvania market isn't big enough to support casinos built with Vegas-sized budgets.

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Either rumors of Stanley Ho's death, three weeks ago, were greatly exaggerated or the elderly casino magnate has made the most remarkable recovery since Jesus Christ. (I'm put in mind of a favorite bit of Babylon 5 dialogue in which Capt. Sheridan [Bruce Boxleitner] confirms that he indeed died, adding, "I'm better now.")

Today, Bloomberg News reports Lawrence Ho says dear old Dad is "looking better every day" and making a good recovery from -- as best we can conjecture via published reports -- a subdural hematoma brought on by a nasty fall. The younger Ho says his father's SJM has no plan of succession in place. Boy, when the Grim Reaper eventually comes for old Stan, the fight for control is going to make King Lear look like a tea party.

A compromise is shaping up in the Pennsylvania table-games wrangle and casinos won't like it one bit. According to J.P. Morgan summary, while the Dems in the lower house haven't budged off their preferred $20 million upfront fee/34% tax equation, the GOP-led state Senate has blinked.

The Senate's proposal would set the license fee at $15 million (a 50% increase) and the taxes at 14%, up from 12%. Casinos might be able to swallow that, on the presumption that the tax increase is small and the extra $5 million in fees can be quickly recouped. Even at $20 million, a bigger upfront hit can be regained by operators off the back end -- provided that the tax rate stays relatively low. Doubtless that's the lesser of two evils, from their perspective.

Bluhm: $45 million saved is $45 million earned.

On the money-saving front, the budget for the initial version of Neil Bluhm's SugarHouse casino is now announced at $310 million: a -$45 million shift. Considering that Bluhm's Rivers Casino and Sheldon Adelson's Sands Bethlehem came in at a staggering $1.5 billion-plus (combined), this new dollar figure suggests a welcome return to fiscal restraint. Your turn, Foxwoods.

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Only $14 million in cash (plus a $100 million equity infusion), according to The Donald. Bondholders say, we'll see your $115 million and raise you $100 million. The latter would recoup at least some -- but not very much -- of their $1.25 billion debt under their plan, while Das Trump would send them away virtually empty-handed. (Moral: When Donald Trump asks you for a loan, take a page from Nancy Reagan and Just Say No.)

The bondholders' assignment of a $75 million valuation to Trump Marina seems awfully optimistic for what is, in essence, a corpse that can't be sold. In essence, the real value proposition is resurgent Trump Taj Mahal, with the other two casinos scarcely better than throw-ins. The Marina is, if anything, an albatross around the company's neck. Still, given that CEO Mark Juliano is going to exceptional lengths to champion the Trumpster's bid, which is a big "screw you" to the debtholders, here's hoping Judge Judith H. Wizmur holds firm for a more responsible solution.

Ho: No! "I don't see major resorts opening for the next couple of years now," says Lawrence Ho. thereby raining pessimism on the expansion plans of Las Vegas Sands, Wynn Resorts and Galaxy Entertainment. The younger Ho also speculates upon the Chinese government's motivation for throttling, then somewhat relenting upon travel to Macao. Interesting tidbit: Marketwatch.com reports that "Venetian Sands" [sic] has cut its number of table games by 25%.

Nevada revenues in. And yeah, they suck. They're much less sucky than usual (-9%), showing an upward trend in baccarat plus two locals-oriented bright spots in the form of Aliante Station and M Resort. It's unclear, though, how much of the growth generated by the last two is new business vs. redistribution of dollars from elsewhere in the valley. The Sun's analysis is far more informative than that found in the R-J.

Wait 'til next year. That's the timeline for casinos in Massachusetts. Even though western Mass looks like slim pickings, lawmakers will probably have to put a casino there just to get the bill onto the floor.

Penn bid falls. Lenders to bankrupt Fontainebleau won a small victory or two, as the judge overseeing the case seems determined to keep lead developer Jeffrey Soffer as far from the disposition of F'bleau as possible. (Soffer is both a debtor and creditor on the project.)

F'bleau, for its part, revealed that Penn National Gaming's offer is now "substantially less" than $300 million, but would include money to replace the windows that are reportedly falling off the building. (One more reason not to build a Strip megaresort tower flush against the "pedestrian realm.")

Groundbreaking today for the long-awaited SugarHouse casino in Philadelphia, under the shadow of a stick-it-to-SugarHouse tax that's been proposed in the Lege. Table games, meanwhile, might be off the table in the face of a $200 million lawsuit. You see, non-racino casinos are allowed to have 5,000 slots (in return for a $50 million fee). Small "resort" casinos -- known as "Category 3" -- only have to $5 million and get 500 slots (accessible only to guests). That's proportional, obviously, and seems fair.

However ... lawmakers want to tilt the playing field by giving Category 3 casinos 30% as many slots as, say, Rivers Casino or SugarHouse, instead of 10% ... and open those games to the general public, not just guests. Of course, the state can't go to the one existing Category 3 casino and ask for another $10 million -- can it? Casino operators are also solidly behind the GOP position on table games: $10 million upfront plus a 12% tax. But, unless House Dems completely capitulate, the gaming bosses are unlikely to get what they want, at least where the tax rate is concerned.

Penn whiffs again. Although Penn Nat'l was supposed to be a bidder in the bankruptcy auction for the Lone Star Park racino, it evidently didn't get into the action and the track went to the Chickasaw Nation for $27 million. (A lot less than Harrah's Entertainment paid to get into Ohio.)

Which means that if/when gambling is legitimized in Texas, the Chickasaws will have a double advantage (parimutuel + tribal status), while Penn will be looking at yet another missed opportunity. Penn's corporate strategy is a baffling alternation of rashness and hyper-caution.

In other tribal news, much-criticized National Indian Gaming Commission Chairman Phil Hogen is gone, thank God, and with him his new, more-restrictive Class II rules. Hogen was justly pilloried for attempting a rollback of hard-won gains in what games tribes could offer. His new rules reflected Bush administration paternalism toward tribes and while they're officially postponed for a year, I think it's safe to say they're dead.* No wonder Rep. Dan Boren (D-OK) is smiling. Watch out for that doorknob, Mister (Ex-)Chairman.

(* It's probable the same thing would have happened under a President McCain, as either candidate would have brought a more enlightened attitude to D.C.-tribal relationships.)

Supporters of video gambling are starting to push back in Illinois, at least in rural, conservative McHenry County. So far it's been the urban areas where this expansion of gambling hasn't been gaining traction.

A repeal of UIGEA continues to gain ground in the House of Representatives, even if it got pulled off the floor in the Senate. (Thanks for nothing, Harry Reid.) The money quote, literally, is a reference to an amendment Rep. Jim McDermott (D-WA) which would would specify that "corporate taxes owed on regulated Internet gambling activities are collected, as they currently are from the land-based casino industry." [emphasis added]

If that means what it implies, it would remove the spectre of industry-wide federal gambling taxation from the discussion and leave taxation to the states. If not, then the nose of the federal casino-tax camel is still sticking through the legislative tent. And you know where that leads.

We've seen a nationwide gaming tax get shot down during the Clinton administration but there are desperate times, obviously. Republicans like Mike Huckabee and Rep. Steve King (R-IA) have been looking to sock it to casinos at the federal level for some years now, so I fear it could have bipartisan support, should such a debate come to pass.

It's playoff time. A tired, flat-footed Minnesota Twins squad looked positively dreaful last night, flailing at outside pitches from C.C. Sabathia (if you couldn't reach that slider in the first inning, your arms aren't going to be any longer in the seventh, son). Cliff Lee made short work of the Colorado Rockies (besides, Jim Tracy can't win in the postseason), the St. Louis Cardinals look set to continue their tradition of postseason underperformance and my Anaheim Angels are forever reduced to a quivering heap of Jello in playoff games against the Boston Red Sox. Why am I having visions of brooms? 

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Regarding the punting of casinos from Penghu, the great minds of Wall Street put on their thinking caps and came up with the following, as paraphrased by the Las Vegas Review-Journal: "analysts said the vote could be a viewed as a positive indicator for Macau's gaming market, eliminating a source of competition."

Gee, ya think?

Actually, Union Gaming Group's Bill Lerner adds a dash of sanity, rating the Taiwanese market as "marginal" and raising the hitherto-unasked question: Just what's the likelihood Peking would allow Chinese citizens to start hopping planes and ferries to Taiwan, to fritter away Mainland currency?

Too bad, though, for Navegante Gaming Group founder Larry J. Woolf, who bet heavily on Penghu and lost at the ballot box. Having taken the proactive (or rash, according to one's perspective) step of cobbling together beachfront acreage, Woolf has the unenviable choice of trying to sell it -- in which case, he's dealing from a weak hand -- or trying to make lemonade by building a non-casino resort. That way, he can at least bide his time until the '12 elections come around.

Even before the wheels started coming off the casino industry in earnest, there were portents that it was reaching a saturation point in the U.S. It was inevitable. New jurisdictions were steadily opening, established ones became thicker with competition and the average American's income hasn't been rising at a level that would keep pace with galloping casino growth.

There's only so much discretionary income to go around and the industry was bound to hit the wall. The current depression merely accelerated and amplified the resultant "Thud!"

One casualty of this collision is Rivers Casino in Pittsburgh, whose slot revenues are running 22% below projections. That's causing Standard & Poor's to hint darkly at default, maybe even bankruptcy. Despite being in a prime market, Rivers Casino is performing seventh among Pennsylvania's nine casinos, which means fifth-place Sands Bethlehem has to be upgraded from "flop" to "mild underachiever."

One can't really blame current Rivers ownership. It inherited the $800 million (!) project after original owner Don Barden ran way over budget, then ran dry. However, it's a good thing the local property-tax assessor is currently undervaluing the Rivers site because Neil Bluhm (who breaks ground in Philadelphia next week) needs those extra $$ far worse than we thought.

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... but maybe not long for long. A momentary uptick in the price of PokerTek stock temporarily rescued it from penny-stock status. But after decisive rejections of dealer-less poker in both Las Vegas and Atlantic City, the future of PokerTek as anything other than a marginal supplier looks bleak.

Vegas casino operators continue to learn that you can't export the Strip business model to Macao (our over-optimistic expectations to the contrary). Case in point: Wynn Macau, which is cannibalizing restaurants, kitchens and even a showroom to make room for more gambling positions. A sanguine-sounding Steve Wynn, meanwhile, yawns in the face of competition from Singapore and tries to spin his Macanese IPO as a philanthropic gesture.

Neil Bluhm's big break. Although $800 million Rivers Casino in Pittsburgh maybe up and running, the county assessor continues to tax the site as though it were empty land. As the bureaucrats let tens of millions of property-tax dollars slip through their fingers, casino owner Neil Bluhm has a chance to bank some serious coin here. That'll take a little of the sting out of Pennsylvania's 55% gross-revenues tax rate.

A Texas track that's now come into tribal hands may hold the key to the future (if any) of limited Vegas-style gambling in Texas. The Lone Star State's gubernatorial aspirants are all over the map. Sen. Kay Bailey Hutchison (R) has cozied up to the Stone Age anti-gambling crowd, making Gov. Rick Perry's (R) qualified pro-gambling position preferable ... even though Perry would still relegate Indian tribes to the back of the bus.

S&G likes candidate Kinky Friedman best on this issue (the Kinkster is pro-casino, period), while Tom Schieffer (D) is back in the Dark Ages somewhere with Hutchison. Hank Gilbert occupies a wussy, "let's take a poll" middle ground somewhere between Perry and his GOP rival.

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Five dimes worth of damage, $40,000 bail -- and all to wrest a measly two grand from some vending machines at Harrah's Atlantic City. That's the losing bet made by two security guards. Couple this with the floormen who destroyed their careers for a comparably picayune sum of money they allegedly scammed from Planet Hollywood, and we're seeing a level of desperation in casino crime the likes of which I can't recall.

City of Dreams. Voters in Ohio haven't approved casinos in any form yet, but that's not stopping Cleveland Cavaliers owner Dan Gilbert, who's already had a design executed. Gilbert has lined up critical support by promising to forego hotel rooms and restaurants (though he's left himself a little wiggle room there).

But don't be fooled: Phil Satre used the same Trojan Horse strategy to get an onshore casino in the heart of New Orleans. A few bankruptcies and legislative showdowns later, Harrah's N.O. has a hotel and a couple of restaurants. (Like it or not, Satre was brilliant.) I'll be so not surprised if Gilbert gets his casino, then discovers the numbers don't pencil out at a 33% tax rate, and starts waffling on his non-aggression pact with hoteliers and restaurateurs.

Damn that vox populi! Seems that Harrah's Entertainment had a bit of contractual noblesse oblige written into its pact to purchase Thistledown Racetrack. If the issue of racinos has to be put to a vote of the people, all bets -- so to speak -- are off. Which means that Harrah's can take its $89 million and skedaddle, leaving bankrupt Magna Entertainment holding the bag. For the moment though, Harrah's is playing the issue down, saying talk of a pullout is "premature" and hasn't been given much thought.

Even Las Vegas Sands appears to be feeling disappointed with early results from Sands Bethlehem. A massive, 2,000-slot expansion, slated for November, has been scaled back by 88%. Even so, Pennsylvania casinos are busy planning for the addition of table games (although the Lege hasn't approved it yet). The price of table games will probably be higher (18% tax + $15 million upfront) than casinos want, but at least they've been successful in battling back an expansion-sapping 34% tax rate on tables. For slots, they still have to pay a usurious 55%, one of the worst rates in the nation.

But if Sands wants to maximize its drawing power, it might want to think about finishing the hotel and other amenities that got shoved onto the back burner when Sheldon Adelson's coffers began to run dry. At least Sands has gotten a temporary reprieve from sliding to sixth place because -- even with financing in place -- Neil Bluhm is taking a go-slow approach to his $355 million Philadelphia casino, out of deference to historical preservations. (Funny how Bluhm can build a Philly casino complex for half of what Adelson blew on his unfinished Bethlehem resort.)

Fortune favors the bold, which means it won't smile upon Sen. Ron Wyden (D-OR), who apparently caved to pressure from increasingly useless and counterproductive Sen. Harry Reid (D-NV). It looks like Hapless Harry is behind Wyden's craven withdrawal of an amendment that would have taxed Internet gambling to help pay for health care reform.

Incidentally, an amendment that would have authorized $100 billion to close the infamous Medicare "doughnut hole" was voted down yesterday. Jeez, those 'Net-bet taxes could have come in handy as an alternative means of plugging the hole. (Oh, and fuck you too, Max Baucus.)

And that goes double for you, stock-picker Jim Cramer, whose spam rips through our LVA filters like Japanese torpedoes through the hull of the U.S.S. Oklahoma. It makes me sorry I ever said anything nice about you, Jimbo.

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Now that you can play the slots in Pittsburgh, just what's on tap? J.P. Morgan has published the slot inventory of brand new Rivers Casino and the slot floor (which is 55% reel-spinning) breaks down by denomination as follows:

Pennies: 973

Two-cent: 320

Nickels: 348

Quarters: 673

50-cent: 38

$1: 351

$5: 85

$100: 4

$500: 1 (plus sundry $2, $10, $15 and $25 slots)

Electronic roulette: 26

Electronic blackjack: 70

Three-card poker: 10

Interesting to see how penny slots, despite being a poorer value play, are now dominant over quarter machines and have thoroughly routed nickel slots. Congratulations to Neil Bluhm and his executive team for getting Rivers Casino up and running in what seems like no time at all, especially after initial developer Don Barden had left it stuck in the mud. Thankfully, the only lasting damage will be to Barden's ability to get future casino licenses.

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May wasn't great for Las Vegas, to say the least, with hotel occupancy -6%, a figure somewhat amplified by the presence of 3% more hotel rooms. The local ADR of $96.96 would have been regarded as real money back in the day. Hoteliers now are more likely to look at it in the context of the -28% shift from last year's rates. More worrisome is that convention attendance (-33%) outslid the number of conventions held (-26%), whereas it used to be the reverse.

Indiana has absorbed the effect of its two new racinos. Casino revenues were flat in June, a decline at most boats offset by the extra dollars generated at Harrah's Entertainment's Horseshoe Hammond (+13.5%) and Boyd Gaming's Blue Chip (+4%), both of which recently expanded. Penn National was hurt by the switchover to Hollywood Casino Lawrenceberg, its new vessel, and Ameristar East Chicago (-15%) withered under the glare of Horseshoe Hammond.

Illinois is scraping along, having evidently struck bottom ... for now. Once the impact of a fire-closed Empress Joliet was backed out, Illinois was down a mere 3%. That's practically a moral victory. Of course, with the institution of slot routes en route and the Lege contemplating a huge casino expansion in the state, any celebration will be short-lived. Harrah's Joliet was the logical beneficiary of the Empress Joliet shutdown (+5%), while MGM Mirage's Grand Victoria spiraled -17%.

There were a few gainers, ranging from miniscule (Boyd's Par-A-Dice) to massive (+109% at independent Casino Rock Island). East St. Louis-based Casino Queen finally lost a significant chunk of business (-11.5%) to its augmented Missouri rivals, while Penn's Alton Belle kept its leakage to -3%.

It's not a free market. Lawmakers in the Land of Lincoln have not only introduced slot routes, they may add four more casino licenses to the state. Factor in Neil Bluhm's casino project in Des Plaines (license #10), and the gambling market in Illinois becomes seriously diluted. However, no compensatory tax reduction is on the table.

When it comes to casinos and taxes, solons think simply that more = more. However, in a state where competition is limited by statute, not only does guvmint control the levers of the market place it has an obligation to take the economic consequences of its actions into account. This is not being done and the repercussions are likely to be severe.

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As the media rages down Memory Lane, here's one from the Strange But True file: Michael Jackson partnered with Detroit entrepreneur Don Barden in a scheme to gerrymander a Motown casino into Barden's hands. I covered the story for Casino Executive at the time but have no recollection of the Jackson angle.

Allah stands on soft 17: These guys are so busted. Eighteen Muslims got nailed for gambling in Java. Guess they couldn't wait for those Singapore casinos to open.

What does a bankrupt casino look like? Sort of like this. If you watch the full video, you'll see that Twin River Casino is literally going to the dogs.

Slots soaked. Heavy storms claimed 75 one-armed bandits at Rivers Casino, in Pittsburgh, a trouble-plagued project from Day One. A four-day delay of the opening is the result. I hope they've got a rainy-day fund.

Bad news for Sands and Genting: Potential Singaporean high rollers are fewer in number these days. The island-state is also in a tourism slump of unpredictable duration. Not only are Marina Bay Sands and Resorts World Sentosa hoped to turn that around, they'll have to. So, no pressure there.

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