David Mckee's Stiffs & Georges - Environment

Case Bets: Reid, Goodman, Madison (Holly) & a kegger

Mon, 12 Oct 2009 16:06:00 -0700

As they say on Dancing with the Stars, in no particular order ...

Eight against Harry: For a speedy primer on the myriad challengers to Sen. Harry Reid (D-NV), you can't go wrong with Jon Ralston's droll and speedy primer. It even gets props from John Chachas (R-Central Park West), who recently tossed his homburg into the ring. At least one among the posse Ralston calls "Snow White [Archon Corp. Treasurer Sue Lowden] and the Seven Dwarfs" has a sense of humor.

Reason vs. rage: While Steve Wynn was ranting on the boob tube this weekend, Thomas Krugman's column offers an indirect rebuttal to Wynn's Johnny One-Note ("Tax policy!") table-pounding.

Run, Oscar, run! If these poll numbers don't nudge the World's Happiest Mayor into the 2010 gubernatorial race, perhaps nothing will. Oscar Goodman not only has the highest favorables among Nevada politicians included in the survey, he wins one theoretical electoral matchup and ties for first in the other.

Gov. Jim Gibbons' political future looks bleak (read: borderline nonexistent) and there's not much comfort for Hapless Harry, either. Just think how much worse it would be if Reid had an opponent possessing genuine gravitas. Besides, given the rising tide of discontent among Nevada's progressives, there's a good chance that much of Hapless Harry's old base will just stay home on Election Day.

In Oscar's domain, an architect suggests ways to revitalize Downtown by decreasing energy use, increasing sustainability and generally targeting long-term cost savings. The proposal makes a lot of sense -- a virtual guarantee it will be ignored.

Holly Madison tapped an Oktoberfest keg at Siegfried & Roy hangout Hofbrauhaus last Friday. [Your punchline here.]

"Serpent Head" Jr.: If CNN ever has to let James Carville go on vacation, don't worry ...

... SNL's Bill Hader can fill in and nobody will notice a difference.

East Coast antics

Mon, 12 Oct 2009 13:55:00 -0700

Wrong again. There I was, thinking the proposed $10 million upfront fee for table games in Pennsylvania was a done deal when the GOP-controlled state Senate upped it to $15 million (and if you don't pay by June 1, it goes to $20 million). Chalk that up as a "loss" for casino owners.

The latter did, more or less, get what they wanted on taxes, where they'll pay an aggregate state/local rate of 14%. Despite publicly requesting a 34% tax rate, Dems in the lower house are muttering that one in the "high teens" might be acceptable. The question is: In return for what?

Casinos also banked a "win" when the state Senate ashcanned an amendment that would have tripled the slot base at "resort" casinos. Since this amounted to preferential treatment for a tiny percentage of the Keystone State casino industry, it's good to see it get the back of Lege's hand.

Power play in New York. In the competition for the racino contract at Aqueduct Race Track, those in the hunt include MGM Mirage, Penn National Gaming, Harrah's Entertainment and Seminole Tribe-owned Hard Rock Entertainment, along with numerous and sundry joint-venture partners.

But none of the seems to have the juice of Larry J. Woolf's Navegante Group. After the New York Lottery Division had deemed Aqueduct Entertainment Group (in which Navegante is a partner) unqualified, Gov. David Patterson's underlings put the word out that the five-member consortium is indeed qualified. Somebody in Aqueduct Entertainment's got pull, that's for sure.

A win for Adelson. While no casino company was remotely near the top of Newsweek's ranking of the 500 greenest companies, Las Vegas Sands can claim a victory of sorts. Sheldon Adelson's firm clocks in at #128, well ahead of MGM Mirage (#164) and Wynn Resorts (#176). Given the extent to which MGM has publicized its green-friendly initiatives, particularly with regard to CityCenter, finishing so far behind LV Sands is tantamount to a smackdown by proxy.

Several years after the publication of Beneath the Neon (now available in e-book format) publications are still shocked -- shocked! -- to learn of Las Vegas' large (and growing) subterranean community. Alas, we no longer have the Hooverville that had sprouted about a half-block north of LVA HQ. Those hobos were a tidy bunch and made our street seem halfway populated.

Marie Osmond pix. I'm just sayin'.

Scarlett saved?!? & other Case Bets

Thu, 01 Oct 2009 16:28:00 -0700

Splendid news, lads (and lasses). Scarlett, Princess of Magic may return to the Riviera in nine months or a year ... that is to say, whenever the economy eventually rebounds. This comes straight from Riv management.

Of course, there's a good chance the Riv itself won't be around in nine months or so. It's miracle it's stayed out of Chapter 11 as long as it has. Then again, President William Westerman has an enviable track record when it comes to beating the odds. People were writing him off 11 years ago and he's still here.

Ah, the good old days. Remember when the Gold Spike was hands-down the scariest casino in Las Vegas? The Siegel Group has done a splendid job of spiffing the place up but a reminder of the Spike's dodgy not-so-distant past came in the form of a guilty verdict in a Nov. 17, 2008 shooting. According to the Pulitzer Prize-winning Las Vegas Sun, the attempted murder was a "grizzly homicide." Does that mean the assailant was firearm-proficient bear?

Now that autumn is here, get out and enjoy Lake Mead while you still can.

Investors may be tiring of endless debt swaps and postponements. A proposed 64-cents-on-the-dollar (at 10% interest) issuance of MGM Mirage debt laid an egg. When it took out $12 billion-plus, due next June, MGM must have been either high as a kite on CityCenter cash-flow projections when it agreed to that deadline or assumed that, when push came to shove, it'd just rejigger its debt load anyway.

A wise colleague of mine once said in re Donald Trump, "All he ever does is restructure his debt because that's all he can do!" That has now become the modus operandi of the casino industry at large -- except for Mr. Cash-and-Carry, Phil Ruffin. So I guess Trump can legitimately claim to have been ahead of his time.

Penn hearts F'bleau. Well, sorta. Penn National Gaming has acknowledged that it's been sniffing around bankrupt Fontainebleau but cites several disincentives to a deal. Penn's CFO even called F'bleau worthless (and few in town would give him an argument at this point). Penn's publicly stated criteria for a Las Vegas acquisition have included that it be affordable and unencumbered. F'bleau is neither. So if Penn can't make liens and litigants go away, perhaps it can trash-talk F'bleau's price down so far that completion-related headaches become grudgingly acceptable.

From the mailbag #5

Wed, 23 Sep 2009 12:26:00 -0700

Our Comment-Eating Server has been at it again, so here are a few reader remarks that got devoured in cyberspace (where no one can hear you scream at your computer) ...

With regard to "Gambling Scandal Ensnares Eight More":

This is disgraceful! How dare the Federal government interfere with private enterprise like this? Undoubtedly the casinos' self-government practices would have detected these infractions, right?

If -- and I'm not sure about this -- you're referring to tribal casinos, all generalizations are false, including this one. The Tran Organization took down 26 scores that ran the breadth and depth of casino industry: Strip resorts, locals casinos, backwater Isle of Capri operations, U.S. ones and Canadian ones, the smallest tribal casinos and the biggest, too. Even Barona Casino & Resort, which prides itself on being ahead of the industry, technologically speaking, got taken. The moral I draw from this is that too much stock is being put in game-protection technology and not enough in the human component. All the king's PTZ cameras and all the king's digital scratch pads don't know what a "false shuffle" is.

Another reader caught a hasty slip-up I made, when I wrote that Harrah's Entertainment's "$10 million a year for energy conservation isn't even 'a blimp on the radar' when it comes to Harrah's gargantuan annual budget. Heck, it's less than 2/3 of CEO Gary Loveman's compensation package for 2008 alone."

Maybe his compensation has gone down since 2002? I don't think so:

"Loveman, himself, is doing a bit better too: His business school professor's salary, approximately $120,000 (before consulting fees), is now well over $3 million, including stock options. He shuttles between his Boston-area home and Harrah's casinos around the country in a corporate jet. He has long since traded in his professorial Honda Accord for a Ferrari F-355 Spider. After 12 years in the same house, the Lovemans are currently building what neighbors describe as 'a very large' house in the Boston suburb where they live."

Maybe he's riding in a "green" corporate jet now?

Good point. What I was trying to compare was Harrah's $60 million in energy savings over six years. That is less than 2/3 of Loveman's $92 compensation for 2008. (His base salary for '09 is $1.9 million.)

And with regard to labor strife at Trump Plaza:

"While the casino's latest appeal is tied up in federal court, Trump Plaza management has refused to bargain at all.

"Trump Entertainment Resorts Inc., which owns Trump Plaza, has said it expects to win in court. The case was first filed in September 2008.

"The court could side with the casino or uphold the National Labor Relations Board's ruling requiring the casino to bargain.

"'Throughout this entire process, it has not been our intention to attack any dealers who have chosen to support the union,' Juliano continued."

... David, you said "Kudos to Trump Entertainment Resorts CEO Mark Juliano for going out of his way to soothe potential animosity between labor and management."

- I would say: Kudos to Juliano if Trump would bargain in good faith with the union that won the election. As it is, Trump Entertainment Resorts owns & controls Trump Plaza and refuses to dignify their employees with negotiations that they voted for.

That's a major reason that we need passage of a "card check" law, which includes heavy fines against employers like this who refuse to negotiate (for years) with their workers' duly elected representatives.

Fair enough. And finally:

I don't gamble on the Internet because of security concerns with unregulated offshore sites, but I agree with this comment [same blog entry, under ["Health care reform + Internet gambling?"]: This is great! Ron Wyden is an innovative and responsible law maker. As an Internet gambler, I'd be happy to support American-based companies, and pay my patriotic taxes, instead of sending my "business" to Costa Rica.

Thanks to everyone for corresponding.

Gandhi, Mandela ... Loveman?

Tue, 22 Sep 2009 13:53:00 -0700

A reader drew my attention to this:

Or as the official Harrah's Entertainment press release reads:

"There have been more than 100 major conservation projects across Harrah's properties, from installing energy efficient indoor and outdoor lighting to reducing water consumption by hundreds of millions of gallons every year. In the past six years, the company has spent $60 million on energy conservation projects alone, averting more than 230 million pounds of carbon dioxide emissions annually ... Harrah's is the only major casino entertainment company to join EPA's Climate Leaders and Waste Wise programs, and the only company in the industry to win an EPA Environmental Quality Award."

Congratulations. Here's wishing that other casino companies follow Harrah's lead vis-a-vis Team Earth and other energy-saving, sustainable-development initiatives. However ...

... $10 million a year for energy conservation isn't even "a blimp on the radar" when it comes to Harrah's gargantuan annual budget. Heck, it's less than 2/3 of CEO Gary Loveman's compensation package for 2008 alone. Also, the message rings just a teensy bit hollow when it's delivered by a CEO who not only insists on living in Massachusetts -- and can become quite belligerent when the subject is raised -- but must therefore commute to and from Harrah's HQ by transcontinental jet. Kinda undercuts that energy-conservation thing, y'know.

Macao" rises again?

Wed, 17 Jun 2009 16:11:00 -0700

Block out the shopworn, mostly useless generalities coming from Las Vegas Sands and groove to Macao's scintillating casinos, recoil from its thick blanket of smog, and take some heart from Credit Suisse's prediction of an upturn in VIP play in the Chinese casino protectorate.

A contemporaneous Australian TV report -- which can't be embedded, alas -- was even more striking, especially in the stunning contrast between the sleek architectural beauty of Melco Crown International's new flagship, City of Dreams, and the fugliness of Sheldon Adelson's nearby monoliths. Cheers to Melco Crown for bringing a needed infusion of taste to the Cotai Strip™.

Harrah's is right

Thu, 07 May 2009 12:25:00 -0700

Not only because it's putting some elbow behind Rep. Barney Frank's proposal -- finally unveiled yesterday -- to repeal the noxious UIGEA and replace it with a regulatory framework for Internet gambling in the U.S. The love child of former Senate Majority Leader Bill Frist and ex-Rep. Jim Leach, UIGEA has had deleterious effects on Harrah's Entertainment's online-recruitment efforts for the World Series of Poker. It's also taken a bite out of sponsorships generally and from trade-show attendance, so we'll all be grateful when this Rosemary's Baby is retroactively aborted.

Where Harrahs' really earned its kudos, though, was by permitting an on-site study of the effects of secondhand smoke on employees at three of its Strip properties. Not only did the Bally's, Caesars Palace and Paris-Las Vegas workers manifest health problems related to secondhand smoke, carcinogens turned up in their systems, too.

Smoking in casinos is the industry's devil's bargain. You gamble with the lives of your employees to -- among other reasons -- preserve their jobs. Eliminate smoking in one state's casinos and a mass exodus of players ensues. The example of Illinois could hardly be starker. All the same, cigarette smoke is foul, unhealthful stuff to which no one should be involuntarily subjected. (Two of my grandparents smoked so heavily it would drive you out of the room.)

As Harrah's Gary Thompson points out, the only economically viable solution would be a nationwide smoking ban applying to all casinos. Otherwise, if Harrah's went the clean air route, say, MGM Mirage would be able to use "smoker friendliness" to beat its competitor like a drum. Even a national ban isn't a complete solution, as tribal casinos would be exempt -- giving them a substantial competitive boost.

Whatever route is taken, there's going to "collateral damage," either in the form of lost revenues, lost jobs or, worst of all, lost lives. What's really not going to cut it are intelligence-insulting empty gestures like the "smoke-free corridors" at Palazzo: strips of carpet upon which you cannot light up ... but you sure can catch a lungful of cigar fumes at 20 paces. If that's your idea of a clean air "initiative," why bother?

New LVA feature

Thu, 26 Mar 2009 18:21:00 -0700

Thanks to the wonders of technology, LasVegasAdvisor.com is now able to host video. To kick off this feature, who more photogenic than Donny & Marie? Personally, I think Earth Hour is a silly idea, a near-meaningless "feel good" gesture that exculpates us from doing anything serious about climate change. But who am I to argue with the Osmonds? Besides, it makes for a short and snappy kickoff of our first LVA-hosted video. Enjoy!

Slumdog billionaires

Thu, 22 Jan 2009 13:00:00 -0700

Local publisher Sherman Frederick's man-crush on Frank III & Lorenzo Fertitta is taking on groupie-like proportions. He devotes today's edition of his blog to a gooey ode to les freres Fertitta and their UFC, "Las Vegas' No. 1 business success story." (For my own feelings about the UFC, I yield the floor to the senior senator from Arizona, the Honorable John McCain, who once described it unforgettably as "human cockfighting." And that guy knows a thing or two about brutality, having been an extended-stay guest of the Hanoi Hilton.)

"Even with the economy going to hell in a handbasket," Frederick swoons, "the guys at Ultimate Fighting Championship seem to have caught lightning in a bottle. While casinos, real estate and retail are on bended knees right now in Nevada, the business of mixed martial arts is jumping through the roof."

And you know whose casinos are among those "on bended knees" right now? The Fertitta Bros., that's who. An ill-advised LBO (~~at a mind-boggling 17X EBITDA, according to a Morgan Stanley research note~~ at 9.8X the company's 2007 EBITDA) has Station Casinos teetering on the precipice of Chapter 11. Reservationists have been sacked and their jobs offloaded to the Third World; 401(k) contributions have been halted; the company's revolving line of credit has been raided to pay operating costs; ownership's proposed rescue plan was so disadvantageous to debtholders that they all but spat upon it. Just part of "the biggest Las Vegas business success story" of the 21st century, I guess.

Kill Mojave Max! Who needs desert tortoises? Not Frederick's editorial braintrust (now there's a contradiction in terms), who ridicule attempts to preserve Nevada's second-most beloved species ... "whales" being the first, of course.

Preview of CityCenter II

Fri, 21 Nov 2008 14:10:00 -0700

Sol Kerzner's $1.5 billion Atlantis The Palm opened in Dubai last night, with Robert DeNiro, Charlize Theron, Michael Jordan, Shirley Bassey walking the red carpet, along with several lesser celebs who might pass for A-listers in Las Vegas.

Since the Dubai Atlantis is supposed to be the template for CityCenter II's centerpiece, this presumably means $25K/night suites with dining tables plated in 18-karat gold leaf. Hopefully we can do without the endangered whale shark (one of the gentlest giants of the deep, its name notwithstanding) and 24 bottlenose dolphins that Kerzner and his Dubai buddies abducted from their natural habitat and are imprisoning at Atlantis The Palm. Las Vegas has done animal habitats the right way (Mandalay Bay's Shark Reef, for one). Kernzer has taken the other path.

Up in smoke

Tue, 14 Oct 2008 18:21:00 -0700

Few issues involving the casino industry cause such a conflict between intellect and emotion as that of second-hand smoke. Personally, I think even manure is less offensive to the nostrils than cigarette smoke -- and it has fewer carcinogenic side effects. Exposing one's employees to a steady barrage of tobacco and nicotine means shooting dice with their health. And if your employees aren't aware of the risk they're running, you'd better bring them up to speed.

But ... banning smoking on casino floors is practically a suicide vow for a casino. We don't know just how bad the effect of Illinois' smoking ban has been on the state's casinos, as it's been coupled with the crash dive of the U.S. economy. However, gambling revenues were down 26% in the Land of Lincoln last month, far more than in any neighboring state.

Atlantic City seemed to have arrived at an acceptable compromise: Ban smoking on all but 1/4 of the casino floor and provide enclosed lounges (in which employees would not have to set foot) for those players who absolutely, positively have to light up. Unfortunately, with the notable -- and laudable -- exception of Harrah's Entertainment -- compliance was virtually nil, with Colony "Smoke Gets in Your Eyes" Capital being the worst offender. The city council became so miffed it decided to escalate to a 100% ban.

Then the bottom fell out. Caught in the pincers of a recession and swooning casino revenues (plus the threat of mass layoffs), the city fathers decided to lift their ban. However, they waited so long to come to a decision that it can't be ratified until Oct. 22. The real-world consequence is that, starting Oct. 15, there will be an odd, one-week interregnum [Correction: 12-day] in which Atlantic City casinos will be smoke-free. It will also provide a seven-day laboratory in which to find out what happens to traffic when a destination casino nixes smoking. Too bad the New Jersey Casino Control Commission doesn't measure gambling win in one-week increments or else we might have some mighty interesting concrete data. Will the smokers really stay home or is it all a lot of huffing and puffing (more huff than puff, perhaps)?

All of which is a rather windy way of saying that these events make an inauspicious backdrop for an Oct. 15 media event announcing the formation of Gamblers Against Secondhand Smoke (that's right, GASS). Player and second-hand-smoke victim Tom McEvoy is co-chair of the campaign, which kicks off at the American Lung Association's North Las Vegas HQ (3553 W. Cheyenne Ave., Suite 140, at 1 p.m., if you're interested).

The other speaker, Stephanie Steinberg, is an activist who helped push the Illinois and Colorado smoking bans across the finish line. So I doubt she'll find herself mobbed by thankful casino execs. Local 721 of the Transport Workers Union appears to be the moving force behind this.

However, if there's one issue where the Vegas casinos are likely to fight until the last dog is hung, it's smoking. After all, a smoking ban in Nevada translates into a steady stream of cars heading for the nearest tribal casino. (It's already decimated the revenues of some slot routes.)

At least some of the casinos here are trying to minimize the noxious effects of smoke. But others' gestures are so ludicrous -- like the "smoke-free" aisles criss-crossing the Palazzo's casino floor -- that there's no question that room for improvement remains.

Case Bets: Meow!; Dr. Death; Spineless Dems

Tue, 29 Jul 2008 12:43:00 -0700

Diss of the Day. "Having just raised the newsstand price for weekday and Saturday editions by 50 percent, the Las Vegas Review-Journal announced Monday it has eliminated sections of the paper as a cost-cutting measure." -- lead sentence of the Las Vegas Sun's coverage of cutbacks at its crosstown rival.

No tears for Desai. The doctor whose reckless methods put thousands of people -- including our own beloved Jean Scott -- at risk has suffered a stroke. I'm not going to be needing any crying towels and, judging from the all-schadenfreude "Comments" thread to that story, neither is anyone else in town. My favorite comment was also the shortest. It reads simply, "Karma." (Although, "Lets [sic] hope that this is nothing trivial" is almost worthy of Oscar Wilde.) As ever, brevity is the essence of wit.

Harry Reid (D-Invertebrate). Sometimes -- actually, very often these last seven years -- it's embarrassing to be a Democrat. Party "leadership," as constituted by the likes of our own Sen. Harry Reid, desperately needs a spinal infusion. The ceaseless capitulations to a mostly reviled administration are difficult to stomach: Patriot Act, FISA telecom immunity, Iraq War funding and now this (I'd be less opposed if Big Oil was actually using all the leases it already has; this smells of corporate welfare to me).

The dead giveaway is buried at the end of the story, where a lobbyist displays unusual candor and says: “We never presented this as going to have an immediate impact on lowering the price of gasoline.” Ah, truth in Washington -- now there's a precious natural resource.

As usual, Hugh Jackson says it best, with accompanying Photoshop drollery. At least Hapless Harry can take solace in the news that the Justice Department says it has caught yet another GOP lawmaker with his hand in the cookie jar. I don't agree with Rep. Dean Heller (R-Nev.) about much, but he's right that there's a culture of corruption that needs to be blown away by winds of change come November.

Occupancy rate or price point? Which is more important? Michael Gaughan has decided it's the former, which is why he's discounting room rates as deeply as 40% to amortize the extra cost of gas to get from SoCal to South Point. Liz Benston has more on it, plus a prognosis on the future of the cell phone ban in Nevada sports books. Forecast: still cloudy.

Where there's smoke ...

Wed, 13 Feb 2008 19:53:00 -0700

... there may be a whole lotta litigation, now that Judge Cosmo Giovinazzi ruled in favor of a baccarat dealer -- and against the erstwhile Claridge Casino Hotel -- in a lawsuit concerning the impact of second-hand smoke. Former dealer Kam Wong lost her entire left lung in a pair of surgeries and hasn't worked in eight years.

The judge agreed with Wong's attorney's contention that a decade of exposure to players' and colleagues' cigarette smoke had a causative effect. "Wong testified ... that six out of 10 people smoked in front of her and would exhale their smoke right in her face," writes The Press of Atlantic City.

Current Claridge owner Harrah's Entertainment was keeping its counsel as of press time, while a fellow defendant was mulling appeal. If Wong's claim holds up, look for it to be the thin wedge of more and more litigation on this issue. It could also provide additional ammo for those who argue that casinos have to carve out enclaves for non-smokers ... something other than putting ashtrays on one side of a narrow aisle and "No Smoking" signs on the other. (And I'm not making that example up, either.)

Steve Wynn tells it like it is and investors scatter in panic. Guys, if you're just in it for the short haul and sunshine every day, don't invest in Las Vegas, OK? Especially not in the era of the multi-billion-dollar megaresort. It's not for the fainthearted.

You have my sympathy, Steve. (So much so that S&G is inaugurating a "Steve Wynn" subject tag for the occasion.)

There's no doubt that a McCain administration would, from a tribal-issues standpoint, be a vast improvement on the current one, represented below by its two primary architects, here united through the apparent magic of Photoshop:

(OK, that's a relative compliment to McCain, but we didn't mean it that way). But one tribal advocate begs to differ and he's not mincing words.

Those wacky Clintons

Tue, 12 Feb 2008 17:23:00 -0700

They're playing the race card again, this time via a surrogate, Pennsylvania Gov. Ed Rendell. (Whose casino-regulatory system is crashing and burning, but never mind that.) Honestly, it's at times like this that I'm ashamed to be a Democrat.

Think green: Because the good times in Vegas may only last one decade more, climate study says.

Local Cro-Magnons plan to gather at Harrah's Las Vegas to rally against all things Mexican, especially President Calderon. It's certainly a new twist on rolling out the red carpet for a visiting head of state.