David Mckee's Stiffs & Georges - Steve Wynn

Adieu F-bleau, hello Hollywood?

Mon, 26 Oct 2009 13:37:00 -0700

Look what just fell into the S&G mailbag:

Beginning January 1, 2010 Penn National Gaming will partner with RPM Advertising to develop and execute a brand identity for Hollywood Casinos. The full service assignment will incorporate research, brand development, media planning/buying, creative execution, production services and direct marketing. Penn National, one of the top five gaming companies in the world, owns and operates seven Hollywood Casinos across the country including facilities in Aurora, IL; Bangor, ME; Baton Rouge, LA; Grantville, PA; Lawrenceburg, IN; Bay St. Louis MS; and Tunica, MS.

Forgive me if I have a coughing spasm after reading Penn National describe itself as "one of the top five gaming companies in the world." I suppose it would depend on your definition of "top" (number of facilities and/or employees, market cap, etc.) but in an industry that contains MGM Mirage, Harrah's Entertainment, Wynn Resorts, Las Vegas Sands, Boyd Gaming, Station Casinos and even woebegone Trump Entertainment Resorts, the best Penn could hope for in terms of name recognition would be eighth place. (Enter RPM, stage right.)

As for the marketing alliance, given the timing of the belated decision to try and unify the brand, it looks like Penn is going to attempt a Harrah's in reverse: acquire a Strip property (Fontainebleau) and then create a company-wide brand-loyalty program to incentivize customers to visit its shiny new megaresort.

Sounds a bit cart-before-horse to me but, after today's bulletin, it's no stretch of the imagination to suggest that F-bleau could soon become Hollywood Las Vegas or some close variant thereof. At least in terms of brand equity, it would represent a step or two up from F'bleau, whose name recognition factor is now entirely negative.

Green shoot? Weekday room rates for early December at Vdara have nudged upward to $145/night (from $129) according to J.P. Morgan analysts.

What's wrong with this picture? The media night for Wayne Newton's new Tropicana show, Once Before I Go (could we have that in writing?) looks more like a Dancing with the Stars tour stop. In addition to former contestants Sabrina Bryan and Jennie Garth, four DWTS regulars -- including Cheryl Burke and Kym "Tina Sparkle" Johnson -- will be on hand.

Except for Ms. Johnson, who's presumably in town to rehearse current partner Donny Osmond, the quartet is available because they've all been eliminated. (For instance, Alec Mazo helped Olympic swimmer Natalie Coughlin dance her way to a premature exit.)

Trouble is, they'll be in the audience and the Wayner will be onstage. Wouldn't you prefer the reverse proposition? And since Newton is strictly a short-term proposition for the Trop (six months and out), would it be too much to hope for a Vegas offshoot of DWTS as his successor?

Quote of the Day

Fri, 23 Oct 2009 17:46:00 -0700

"Steve Wynn was the worst offender on that score. Last year, he used his aircraft for a $1 million of personal travel, which Wynn [Resorts] shareholders paid for. To do $1 million worth of travel, I worked it out that you’d have to fly to Hawaii and back every week for a year to rack that kind of a cost up." -- investor activist Eric Jackson, founder of Ironfire Capital, on the subject excessive perks in the casino industry.

Aria drives prices ... down

Fri, 16 Oct 2009 16:23:00 -0700

Contrary to repeated assertions by J.P. Morgan, it would appear that MGM Mirage is putting out promotional specials for Bellagio ... and very aggressively so. Note however, that Steve Wynn's masterpiece is maintaining its price point and Aria is the one having to come down to meet it.

Also, an unscientific survey of mid-week rates parallel to Aria's opening shows that what the CityCenter flagship is doing is sucking the air out of the rest of the Strip, especially other MGM properties. Even Wynn Las Vegas is down to $159/night that week (quotes were predicated on a three-night stay).

The absolute bargain was Downtown's Golden Gate ($12.71) and unless you count Hooters and fellow bottom-feeder Wild Wild West, the lowest on-Strip price was $21.21 at MGM's Circus Circus. The Sahara ($22.40) and Imperial Palace ($25) were close behind. They were ever-so-slightly outpriced by the Riviera ($27) and Tropicana ($29.33).

As for other properties in the lion's den: Excalibur ($31), Luxor ($48.37), New York-New York ($50), Monte Carlo ($58.62), the Green Monster (aka MGM Grand, $70), Mandalay Bay ($72.55), The Mirage ($76.50), THEhotel ($93.29), Vdara ($109) ... with only the Green Monster's Sky Lofts ($600) outpricing Aria.

So, MGM, are you sure this oligopoly business model is the way you want to go? I'm just askin'.

<crickets>

Great O'Day in the morning

Fri, 16 Oct 2009 14:15:00 -0700

Peepshow star/trainwreck-in-progress Aubrey O'Day likes to speak her mind, for whatever it's worth. Evidently the recklessly candid utterances of Ms. O'Day were worth not one, not two but, yes, three dispatches by Richard Abowitz.

The fascination is understandable, given an interview subject who readily owns up to being unhappy and describes her demi-celebrity as "fame-ish-ness." O'Day's costar, Holly Madison may have been dubbed "Queen of Vegas" but when Las Vegas Weekly tried to wrest similar prose mileage out of her, the result was better than Sominex. Strangely, I find myself rooting for the id-on-the-loose that is O'Day to go the distance here in Vegas.

A Bronx Tale. Kudos to Sheldon Adelson for rolling the dice on Chazz Palminteri's virtuosic one-man show, whose run has been extended for another week. Yours truly finds it a rather warm-and-cuddly depiction of Mob life but both Mike Weatherford and Joe Brown express nearly unmitigated enthusiasm. Whichever way you slice it, it's still three thumbs up for Palminteri.

Wynn still happy. If the Chinese government's aim in applying further curbs to Macao is to "tamp ... down" the Cotai Strip™, where Sheldon Adelson™ aims to build "Asia's Las Vegas™" no wonder Steve Wynn is a happy camper. Anything that handcuffs main rivals Las Vegas Sands and Stanley Ho is good news at Wynn HQ, especially with Encore Macau coming on line soon. How boring life would become if Wynn and Adelson ever suspended their running verbal gunfight.

Signs of the Times

Thu, 15 Oct 2009 14:08:00 -0700

In less than an hour, Steve Wynn is going to make an extra-special, triple-secret, top-hush "entertainment announcement" via a Wynn Resorts Web-cast. Don't tell anyone but ... he's going to reveal that Garth Brooks will be playing Encore.

Which we know partly because it's been the worst-kept secret on the Strip and even more so because it was announced today in Nashville at 7 a.m. Vegas time. But we're all s'posed to pretend that we didn't hear anything and it's all going to be a big-ass surprise and whatnot. Yeah, that's the ticket.

This underscores how ill-tuned the casino industry is to the news business -- and furthermore, how it still hasn't made the adjustment to the global village of online media. People like Wynn (or Jenn Michaels over at MGM Mirage) continue to operate as though the daily newspaper were the only game in town and people's primary source of information.

Sorry, but what happens in Nashville no longer stays in Nashville until the next news cycle. It makes it to Vegas in the blink of a Tweet.

Vintage Vegas/Matt Goss. Both are reviewed by Richard Abowitz, who makes a number of thoughtful observations re lounge acts in general. He's a bit lenient on both Zowie Bowie and the Gossmeister, IMO. Vintage Vegas is so bad you'll want to see it so you can talk about it at parties. Goss is just bad and in a very uninteresting way. If a yawn could wear a white suit, it'd be Matt Goss.

Macao giveth, Macao taketh away

Tue, 13 Oct 2009 17:41:00 -0700

Casino operators in Macao better make the most of the recent relaxation of visa quotas into the enclave. What the government gives with one hand, it partly reclaims with the other. Casino expansion remains out of the question and the minimum age for gambling would go up to 21, from 18, under a bill draft soon to be put forward. (Steve Wynn can afford to be sanguine, as it's far more likely to impact his mass-market-oriented competitors. Investors didn't share his enthusiasm.)

If Wynn -- who continues to toe the Peking party line -- comes out a winner, facing negligible "obstacables," Lawrence Ho is the presumptive loser. As best S&G can ascertain, the curtailment of gambling in residential areas is aimed at his Mocha slot routes, one of the younger Ho's bread-and-butter enterprises.

Another proposal awaiting action by the Macanese Lege would cap table-game inventory. Writes J.P. Morgan analyst Joseph Greff, "we believe the Macau government believes the timing is right to implement these initiatives given the completion of the commission cap rule and the resumption of growth in the industry ... if the number of tables will be limited to 1,000 per operator, [Las Vegas Sands] may need to modify its future expansion plans, as it is already over the limit, while SJM will need to close down some of the older tables operated by the third parties, as it too is already over the limit."

None of this appears to bode especially well for Sands' long-in-coming IPO, although it remains to be seen whether this is a bonafide legislative agenda or simply a warning to inhibit growth. The news, however, managed to cast a pall over Sheldon Adelson's planned resumption of his Cotai Strip™. Also, it's not as though the Macanese government and its casino-owning subjects don't have to worry about an upsurge in gambling back on the Mainland.

Detroit, briefly. The depression continues to eat into Detroit's casino revenues, -2% last month. Despite a -6.5% drop, MGM Grand Detroit remains the big cat, grossing $42 million. Second place is up for grabs, though, as MotorCity continues to fall back (-7%) toward upstart Greektown (+12%), which is closing the gap, grossing $28.5 million against $33.5 million for MotorCity.

Why does Steve Wynn hate America?

Tue, 13 Oct 2009 14:31:00 -0700

Or maybe the question should be, What was Steve Wynn smoking before he told CNBC "Money Honey" Maria Bartiromo that Wynn Macau was making more than all other 30 Macao casinos combined? Perhaps he meant his joint is the single-highest-grossing casino in the Chinese protectorate, but his phraseology is misleading:

Wynn's remarks on the importance of staffing and customer service are, as usual, on point. However, he starts sounding like a puppet of Peking ("One thing about the Chinese government, I think they get it right."), praising the steadiness and thoughtfulness of its policies. Here's an example of Peking's steady, thoughtful policymaking in action:

Wynn's comments that infrastructural improvements don't help at tourism-dependent (casino) industry make him sound naive -- doubly so if aforesaid projects put disposable income into consumers' pockets. Still and all, Wynn is far more reasonable on CNBC -- and immeasurably less obnoxious -- than during his obstreperous Fox News Sunday rants.

Although Wynn clearly fancies himself the new political pundit on the block, he's got but one string to his bow: bellowing "Tax policy" over and over. Which translates as "Tax cuts (for me)!" Yup, if Big Guvmint would just stop collecting taxes from Big Bidness, everything would be hunky-dory, economically speaking. We'd have new jobs coming out the ass.

Here's the problem with that line of argument: We're fresh off eight straight years of tax cuts, tax holidays and corporate loopholes big enough to encompass every square foot of CityCenter. How did that work out for us?

More to the point, given a tax-averse administration and Congress, how did Wynn's casino colleagues handle their newfound largesse? Did they invest it responsibly? Hell to the no! That "bundling of the Strip" which Wynn has decried is the poisoned fruit of companies that were awash in capital and easy credit, who then used it to try and eradicate the competition. (Similar phenomena occurred in the regional casino markets and in the slot industry.)

Having cannibalized their main rivals, casino companies then began to devour themselves, in the form of insupportable debt levels and insane LBOs. And if Wynn really believes that government spending has never improved anyone's lot in life (he must have forgotten the New Deal, for starters), then how many standards of living are raised by merger-and-acquisition orgies? For the average worker, it means jobs are "consolidated" out of existence. Heck, not even executives are immune. Just ask some of the Mandalay Resort Group or Park Place Entertainment higher-ups who are now enjoying involuntary retirement.

Should the current administration hand out the kind of tax vacation Wynn is demanding, would the casino industry A) buy new and shiny objects, B) retire debt or C) create jobs? B & C would probably finish a distant second and third to A.

Just look at Harrah's Entertainment: It can't repay its creditors dollar for dollar but thinks nothing of snapping up 16% of Planet Hollywood. If there's degenerate gambling going on in the casinos, the worst of it can be found in the executive suites. If these guys ever took to playing Russian roulette, they'd probably leave at least five bullets in the revolver.

Wynn is probably feeling his oats, given the bullish, odds-defying early performance of his Hong Kong IPO. The real story may be that gains realized in the Hang Seng will be used to prop up Wynn's Las Vegas operations rather than to expand in Macao.

This just in: The two-week run of A Bronx Tale at the Venetian has been extended to a third weekend. A spoken-word play in a Strip theater seemed like a dicey prospect so this is very good news indeed.

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'.

Quote of the Day

Mon, 12 Oct 2009 13:42:00 -0700

"[Steve] Wynn, however, has a slowly worded belief that it's time for people to stop listening to economists and start listening to throaty casino owners, and their astounding oversimplifications. Create jobs and we'll give your business $40,000! Please? Maybe? Please?" -- Huffington Post's Jason Linkins, panning the casino mogul's bombastic and condescending performance on Fox News Sunday. Wynn did, however, succeed in coining a catchy new word: "obstacables."

Story of the Year

Thu, 08 Oct 2009 17:14:00 -0700

I want the movie rights to this. 'Nuff said.

We're #1! For an overdue change, Nevada leads the nation in a good category (first item). And, if you scroll waaaaaaaaaaaay to the bottom, there's an interesting bit about and airfare-and-room deal from Wynn Resorts. (Way to bury it, R-J.)

Update: The Sun has a better report in re Wynn. I shoulda known.

What's a Trump casino worth?

Thu, 08 Oct 2009 15:07:00 -0700

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?

$300 mil for F'bleau?

Tue, 06 Oct 2009 13:10:00 -0700

That's the latest; namely, that Penn National Gaming will put down less than $300 million as a "stalking horse" bid on Fontainebleau. Penn would also be on the hook for the costs of the project's bankruptcy proceedings. Potentially getting a Strip resort for less than 10% of its cost sounds like a good deal for Penn ... until you think about the hundreds of millions of dollars (possibly as much as $2 billion) that stand between F'bleau and the finish line.

Sue Lowden evidently didn't get the memo that Mike Ensign is no longer writing fat campaign checks at Mandalay Resort Group. How else to explain the Archon Corp. treasurer's loud and frequent fealty to Ensign fils, the ethically challenged junior senator from Nevada? Lowden's proclamations provided an irresistible temptation for Democratic Senatorial Campaign Committee spokesman Ed Schultz, who sniped, "Sue Lowden's support of John Ensign may have fundraising value to her, but it is a reflection of her own character and fitness for office. She has shown more fidelity to him, than he has shown to his own wife." (Lowden is gunning for Sen. Harry Reid's seat.)

In her capacity at Archon, Lowden could line the younger Ensign up with a dandy post-senatorial job as a casino greeter at her Pioneer Gambling Hall in Laughlin. (As for Lowden, at least she's off Jon Ralston's "Chicken List," after gracing the Face to Face set. Your turn, Sheldon Adelson. Does Sue Lowden have more huevos than you?)

The perils of Packer. Reeling from a $1 billion loss on his overseas casino misadventures, James Packer and his Crown Ltd. are putting some of their Melbourne land on the block.

Not buying it. Although MGM Mirage CEO Jim Murren may have predicted that CityCenter's premiere would increase Vegas visitation by 10%, but gaming analysts aren't having any of it, especially when all the new room capacity is at the high end. Also, it's remembering that the 1998-2000 roll of megaresort openings and the 2005 debut of Wynn Las Vegas coincided with robust U.S. economies. Andrew Zarnett advises casino bosses to look at current numbers as the new baseline -- which sure beats pining for the vertiginous and unsustainable levels of two years ago.

Macanese machinations. Conventional wisdom on the advisability of floating IPOs in Hong Kong continues to seesaw. The Wall Street Journal runs the numbers and finds gaming stocks defying the market's downward trend. Which is good news for Steve Wynn and possibly even Las Vegas Sands' public offering, which is taking forever to reach the launch pad.

Macao's blockbuster month

Fri, 02 Oct 2009 18:23:00 -0700

A flurry of good news to end the week, starting in Macao:

September, the first month affected by a relaxation of severe visa restrictions imposed on the mainland, saw a 53% jump in Macanese gambling revenues. In terms of market share, Stanley Ho opened a big lead on Sheldon Adelson, 30% to 20%, with Melco Crown Entertainment close behind with 16%. The remainder of the market was divvied between Wynn Resorts (14%), MGM Mirage (10%) and Galaxy Entertainment (8%).

Is Melco's City of Dreams (above) eating into nearby Venetian Macao's business? On the surface, it certainly looks plausible. Given the immensity of the facilities he's building on the Cotai Strip™, Adelson ought to be getting more bang for his pataca.

Vegas hearts gays. Earlier today, I was asked to reflect on my nearly 11 years in Las Vegas. It's been full of surprising twists of fate -- who ever thought Steve Wynn would be forced out of the Mirage brand he'd created, just for starters?

But I sure as heck never imagined I'd open my e-mail box at work and find the following casino promotions, all keyed to National Coming Out Day (Oct. 3):

"Two Queens Beat a Straight" (New York-New York)

... or the slightly more innocuous ...

"COME OUT and Celebrate at Luxor"

(Luxor was smart and didn't offer Criss F. Angel tickets as part of the, uh, package)

In the Vegas of even a few years ago, "Boys' Night Out Package at Excalibur" would have had more of a frat-party connotation. MGM Grand plays it safe with a "His or Her Getaway" which sounds like a generic singles-oriented deal. Even so, we're actually seeing progress from the days when Vegas marketed itself as a synonym for a very debauched and jaundiced vision of male heterosexuality.

There's nothing like a depression to make this a party town of equal-opportunity decadence. After all, LGBT dollars spend just as fast as straight ones.

$545 a night. That's what Mandarin Oriental is asking. If you read the fine print, you'll note that (through March 31), if you buy a room night at that rate, you'll get a comped night, too. Which makes the effective rate $272 and change. By current standards, that's still steep ... but maybe staying in a 392-room hotel instead of a 4,000-room behemoth is an intangible added value. What do you think?

Case Bets: P'mousse, Wynn vs. Francis, Natole, etc.

Thu, 01 Oct 2009 13:53:00 -0700

Tucked away around the corner from the Sahara is local institution Pamplemousse. While there wasn't room for describing the massive crudité basket or the alleged "Mob booth," hopefully this chronicle captures some of the preserved-in-amber ambience of P'mousse.

Steve Wynn, house hunter. What could the casino mogul want with a mansion in Bel Air? Well, if it belongs to celeb-stiff Joe Francis, seizing the house could bring Wynn Resorts one large step closer to settling Francis' $2.9 million gambling debts.

Just for the record, casino treasurer Sue Lowden has officially elbowed her way into the crowded field of potential GOP challengers to Sen. Harry Reid (D-NV). S&G is looking for a replay of 1996's bruising clash between then-state Sen. Lowden and the Culinary Union.

In the wake of the Great Trop Show Massacre comes word from multiple sources that impressionist Rich Natole won't be venue-less for long. Could be he doesn't even have to leave the intersection of Tropicana Ave. and the Strip.

Mommie Queerest. At the risk of praising with faint damns, if you like this sort of thing then this is the sort of thing you'll like. Does the general public have even a dim recollection of Joan Crawford anymore?

Case Bets: Wynn in Macao, "Peepshow" strips down

Tue, 29 Sep 2009 15:30:00 -0700

• Steve Wynn is accelerating his timetable for developing on the Cotai Strip™. If Wynn continues to learn from his early miscalculations (and I see no reason to expect otherwise), a gaming-centric Wynn Resorts property on Cotai is a far better bet than Sheldon Adelson's retail- and hotel-heavy business model.

• While the unpredictable Aubrey O'Day is the ostensible focus of this Peepshow update, she's not the main point of interest. Rather, it's the spate of cheesparing moves made by BASE Entertainment.

The show's band has been thrown overboard and the cast has been reduced, requiring some performers to double in other roles. This explains the disappearance of Katie Webber, a strong vocalist whose big number has now been reassigned to Ms. O'Day. At some point, I'm going to be obliged to revisit Peepshow but I can tell you right now I'm not looking forward to it.

• Despite Sen. Harry Reid's juice job on the Sig Rogich Victorville Flyer (aka Desert Xpress), backers of an alternative maglev project are fighting back. Given that the most difficult part of the SoCal-to-Vegas drive is past once you reach Victorville, why anybody would park their car in the broiling sun and hop aboard Sig's Choo-Choo to Nowhere remains a mystery.

Buy our casino, please!

Tue, 29 Sep 2009 14:11:00 -0700

Any well-furnished casino that doesn't try to monetize its fine appointments is missing a revenue opportunity. However, it's one thing to covet the lovely furnishings of, say, the Sky Lofts at MGM Grand. It's quite another to check into a hotel room in a struggling Nevada market (hint: think blood-red aluminum siding) and see the following:

"Take A Little Something Home With You"

... followed by a list of prices for virtually everything that isn't nailed down. At the high end, you could pay $175 for a bed spread or $100 for a phone, while hand towels ($10), washcloths and pillow cases ($5) occupied the bargain end of the spectrum.

In between, you could drop $45 for a Lilliputian coffee maker or $25 for the TV remote. Since the TV was not for sale and remotes tend to be brand- and model-specific, you wonder who'd be fool enough to spring for that last item.

Not only is Casino X clearly desperate for anything on which it can turn a buck, it also has rather inflated ideas of the value of its appurtances. I can see paying $175 for an Encore bedspread, but Steve Wynn doesn't operate out in the sticks, if you get my drift. Oh, and Casino X might want to think about staffing up its players' club and check-in windows, if the length of the lines at both is a telling metric.

Harrahs' new BMOC. The incoming president of Harrah's Entertainment's Flamingo-centered bloc of casinos departs Indiana to rave reviews. Philanthropic, community-oriented and socially aware, Rick Mazer sounds like just what the doctor ordered for Vegas -- to say nothing of being someone upon whom we should keep close tabs.

Justice delayed. Employees of Station Casinos who may (or may not) have been short-changed in their paychecks, will just have to bloody well wait for their day in court, if Clark County District Court grants Station's request for "breathing room." Station is pleading hardship due to its current bankruptcy. Since the company has no one but itself to blame for being in Chapter 11, it's difficult to muster sympathy. But perhaps the judge will be of a more forgiving nature.

Don Marrandino's first coup. The newly installed boss of Harrah's Atlantic City casino quartet inks a new labor pact with Unite-Here. That was a piece of cake. Now, about those dealer-contract talks with the UAW ...

Meanwhile, back in Gary Loveman's 'hood ... You know those on-again, off-again Massachusetts casinos? Well, they're "off." Again. Not that there's any reason to rush, especially as the repeated delays lend additional borrowed time to struggling Foxwoods Resort Casino and Mohegan Sun.

Hell no, they won't; Penghu punk'd; Barbarians at the gates (again)

Mon, 28 Sep 2009 19:12:00 -0700

Pay taxes, that is. Two Indiana racinos are pushing back against a tax rate that averages 38%. Considering that the two tracks -- one run by Cordish Gaming -- are the newbies on the Hoosier State scene, one could fairly ask them, "Didn't you know what you were getting into?" As the article notes, neither Harrah's Entertainment and Boyd Gaming -- both which recently heavily reinvested in Indiana -- aren't whining about their tax rates.

But the racinos have a point. In states where the number of casinos is artificially capped by the Legislature, solons become the custodians of the industry's economic future, like it or not. And it only stands to reason that if the market is going be diluted, tax relief is in order. Considering that same-store revenues in Indiana have been nothing but down since the racinos opened, some push-back on the tax front was probably inevitable.

Hell no, they won't either. Allow casinos in Penghu, that is. Voters on the Taiwanese island voted against gambling expansion there, putting the issue off-limits for three years. The notion of planting mega-million-dollar casinos in remote, hard-to-reach parts of Taiwan never made that much sense to S&G, but big industry players like Sheldon Adelson and Gary Loveman have kicked Taiwanese tires in the recent past.

Did Adelson and Steve Wynn mistime their leap into the Hong Kong stock market? One Wall Street Journal columnist thinks so. Bad timing isn't the exclusive province of the public sector, though: A Washington State tribe borrowed $375 million on the strength [sic] of revenue forecasts that proved grossly over-optimistic. Percentage-wise, neither Harrah's nor Station Casinos missed the mark this badly.

Bob Stupak, R.I.P. The penultimate Vegas maverick is gone, having spent much of the last decade as a recluse. One especially thorough obit contains a quote by former Klondike owner John Woodrum that ought to be engraved on Stupak's gravestone (or at the base of that now-vanished Stupak statue): "If ever there was a guy beyond the rim of reality, there was Bob. But somehow he made reality happen."

Just what we don't need. They're baaaaack. Never mind the smoking wreckage they've made of Harrah's and Station, private-equity firms are rooting amidst the flotsam, looking to extend their morbid clamp on the casino industry. Leading the pack is Leon Black's inaptly named Apollo Management. Both indirectly (Planet Hollywood by way of Harrah's) and directly (Cosmopolitan, Fontainebleau), Black is reported to be scarfing up what few independent properties remain, raising the prospect of a Total Rewards oligopoly stretching from just above CityCenter to the southern frontier of the The Mirage.

There are also a few bottom-feeders in play. Hooters hardly seems worth buying unless Onex Corp. wants to do a tear-down and extend the Tropicana Las Vegas eastward. Current ownership of the Riviera is tapped out but the place still has prospects as a fixer-upper (not something that fits with Apollo's sack-and-pillage business model). If non-bottom-feeder Green Valley Ranch is really on the bubble of insolvency, then Penn National Gaming ought to quit chasing F'bleau, and try to drive a wedge betwixt Station and its Greenspun family partners. Penn would stand to inherit a beautiful property with far fewer problems than Big Bleau.

Robo-poker reprieved ...

Mon, 28 Sep 2009 18:08:00 -0700

... 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.

Quote of the Day

Thu, 10 Sep 2009 17:16:00 -0700

"I don't really care what they do with the entrance. If they keep the rooms up to snuff and keep the atrium, they can build a sodomy lounge, it wouldn't matter to me a bit." -- Two Way Hard Three (www.ratevegas.com/blog) reader "John" on the proposed beach club at Encore.

From the mailbag #4: California, tech troubles & 'resort fees'

Thu, 10 Sep 2009 13:02:00 -0700

Reader Kerr Mudgeon is less than amused by a recent dig at the cuisine offered by Commerce Casino to California firefighters. He writes: "The firefighters can go to numerous other nearby eateries if they don't like the FREE meals offered by the Commerce Casino -- same as paying casino customers can eat at other places if they choose. Sound like 'looking the gift horse in the mouth.'"

Good news from IT: Our "austerity regime" of no photos and no links will, it is promised, be ended today. I can think of several potential blog entries yesterday that went unwritten because no linking capability was available, so this should put some wind back in S&G's sails ... although some might say a lack of wind is the least of this blog's problems.

It's absolutely imperative that you read our 9/10/09 Question of the Day. No, I didn't write it. Our hard-working research duo of Jessica & Tanya did. (Also, Steve Friess recently mis-credited me with the Today's News column; that's a J&T Production, too, along with the occasional assist from Anthony Curtis himself.)

Aaaaaaaaannnnyyyyy-way, today's topic (and it's only online for one day) is the pernicious Vegas phenomenon known as the "resort fee." The winner of the Sustained Greed Award goes to longtime gouger Station Casinos. Station's Green Valley Ranch is also the premier resort-fee offender ($25).

Others who provide optional amenities -- of varying desirability -- in return for the fee include Bellagio ($25), The Mirage ($15), Planet Hollywood ($5) and Gold Coast ($3, which actually buys you quite a lot). The geniuses at Morgans Hotel Group get the Steal the Stripes out of Your Socks Award for charging you $7 for "in-room safe, parking, minibar (but not its contents), bath products, and a plasma TV."

There's a word for that Hard Rock Hotel & Casino practice and the word is "chintzy." As our researchers note, "For hotels to presume to charge guests for amenities that they have no intention of availing themselves of, but cannot avoid, seems a very counter-productive measure that can only generate ill-will."

Kudos to the following fee-eschewing properties: Venetian, Palazzo, Wynn Las Vegas, Encore and anyplace owned by Harrah's Entertainment. Yes, Harrah's. I tip my fedora to you, Gary Loveman.

Quote of the Day

Wed, 09 Sep 2009 15:26:00 -0700

"I can't personally say whether or not I believe there's any skimming going on, however, a large number of dealers suspect that it is." -- Wynn Las Vegas dealer Daniel Baldonado, to the Las Vegas Tribune, about closed-door reallocation of tokes. Lemme get this straight: Baldonado doesn't know whether he believes tip money is going missing but he does know that other dealers are of that opinion? Puh-leeze!

Of course, by locking the toke committee out of the counting process and only making it belatedly reviewable on videotape, Steve Wynn is leaving himself wide open to such quasi-accusations. The story itself is nothing new: I've been hearing it for years. But, were I a dealer at Wynn LV and my tips were being counted and divvied up by management, I might be suspicious, too.

Stat of the Day

Mon, 31 Aug 2009 13:43:00 -0700

Beloved by critics and bloggers, Encore is proving to be something of a millstone around the neck of Wynn Resorts. Average daily rates at 'Wynncore' are down 39% for the year to date, compared to a "mere" -25% at neighboring archival Palazzo-Venetian. Unlike Wynn, however, Las Vegas Sands does not seek to be King of the Price Point.

Wholesale revision of Encore is in the works after only eight months, which if nothing else proves that Steve Wynn is at least tacitly willing to admit that it's time for Plan B. If his nightclub expansion translates into the imminent demise of Switch, tant pis. That gimmick-driven restaurant has been Encore's inarguable flop. Possible loss of the conservatory-like atrium would be a more serious worry: Without it, Encore would become a considerably darker and more claustrophobic casino -- as though it weren't having foot-traffic problems already.

Bounce-back for Macao?

Fri, 21 Aug 2009 17:17:00 -0700

Remember how gambling revenues in Macao during July were up 3% from last year (the first positive comparison this year)? That was soon followed by the news that numbers for the first half of August are even more encouraging still (+20%). Though Macanese casinos are on track for a $1.5 billion August, analysts urge caution, noting that the first half of August '08 was exceptionally weak.

Still: Wherefore this sudden resurgence?

Perhaps it's the delayed effect of a February loophole that allowed Guangdong Province residents to circumvent a ban on travel to Macao on Hong Kong visas. Whatever the case, business should get better still on Sept. 1 when, the Macau Tourism Council says, restrictions on Guangdong Province will be loosened even further. That's music to the ears of every casino boss in Macao, needless to say.

Sheldon Adelson, in particular, has fallen in clover. This revelation comes just as he's putting the finishing touches on a planned IPO on the Hong Kong stock exchange (with Steve Wynn following suit). The stock offering, it is hoped, will generate sufficient liquidity to finish a quartet of stalled hotels on the Cotai Strip™ (with five more to come). Right now, the area looks like an outsize version of Miss Havisham's wedding, "leaving swaths of the nascent Cotai Strip covered by steel and concrete skeletons," in the words of Bloomberg News. Macao doesn't need more rooms right now. However, Adelson sure could use the lucre from the casinos onto which the hotels are piggybacked.

But what of Stanley Ho? While the casino baron ails, Bloomberg has unpacked Dr. Ho's June address to G2E Asia, in which he laid into his U.S.-based rivals. “The success of one market model cannot be migrated to another ... Ignoring Macao’s special characteristics and duplicating a Las Vegas or an Atlantic City would not be a successful strategy.” (The article also minces few words about the elder Ho's triad associations.)

Those of us who scoffed at Ho's antediluvian casinos are finding that the comparably ancient oligarch is having the last laugh, even if it may be from his deathbed. “The Macao audience is less focused on the ancillary things around gambling. Stanley, with his wealth of experience, understood that better," says Thornburg Investment Management analyst Alex Motola.

Meanwhile, various Ho clan members may be at daggers drawn. Favorite wife Angela Leong is the perceived successor, but daughters Pansy, Daisy and Maisy Ho (no, I didn't make that up) aren't going to step aside quietly, from the looks of things ... especially since Leong is only two years Pansy's senior. SJM CEO Ambrose So is also being tipped as a potential dark-horse heir to King Stanley's throne.

Business as usual at Hotel Lisboa.

But how would the Macanese government cotton to the notion of Pansy Ho controlling both the SJM concession and half of the MGM one? A third concession could be up for grabs if City of Dreams fails to perform, thereby becoming what Melco Crown Entertainment CEO Lawrence Ho calls his "endgame."

His father's death could also set off a philosophical war between the tried-and-true Stanley Ho business model, time-worn though it may be (and likely to be championed by Leong and So), and the Vegas Lite approach in which Lawrence and Pansy have dabbled. But with the Ho family having its fingers in three casino pies (MGM, Melco, SJM) simultaneously, they'll come out winners no matter which way the pie is sliced.

Stanley Ho's newest and oldest progeny: Grand Lisboa and Hotel Lisboa.

From Malaysia to Monticello. Do you recall those stock sales by Genting Bhd insiders a while back? At the time, it looked as though the money would go toward an acquisition of MGM Grand Macau. However, it now appears the lucre will purchase a stake in struggling Empire Resorts. That's the company whose executives were luxuriating in the low-tax suburbs of Las Vegas -- even though Empire's sole gaming asset was a racetrack in Monticello, N.Y., a full continent away.

Colony Capital comedy

Fri, 21 Aug 2009 13:29:00 -0700

Having borrowed money to buy the Las Vegas Hilton five years ago at a dirt-cheap $200 million, Colony Capital -- those financial wizards -- borrowed $250 million more to retire the first loan. (Does Colony intend to pay off the second loan by taking out a third?)

At some point, Colony may have to start like, you know, paying down these loans ... but not yet. It's extended the maturity on Loan #2 into 2011. The story (second item) is somewhat confusingly worded, but it sounds like Colony is down to its last extension. And the LVH is now losing money. Perhaps Colony should ring up Penn National Gaming and see if CEO Peter Carlino wants to talk "flip." It's still a classy property with a wealth of history and unbeatable proximity to the Las Vegas Convention Center. There are much worse deals to be had out there (*cough* Fontainebleau *cough*).

Also: LVH headliner Barry Manilow is reportedly mulling a leap over to Paris-Las Vegas, another augury of trouble for Colony. Manilow's departure would leave the LVH with some tight trousers to fill.

Another setback for Ed Ad. Its attempt to lease the southeast portion of its ex-New Frontier acreage to a "Dinner in the Sky" outfit (complete with a 160-foot crane) got the back of the hand from the Clark County Commission. Both Boyd Gaming and Wynn Resorts balked at the prospect of diners dangling high above Echelon and Wynn Las Vegas. However, there's some pretty freaky shit on the Strip already and this seems tame by comparison. God knows, it couldn't be worse than the lametastic "Sirens of T&A" or whatever Phil Ruffin's nautical titty show is called.

Privé: behind the juice; Chucky vs. Jaws; Wynn pages Scalia

Wed, 19 Aug 2009 12:46:00 -0700

Had the Nevada Gaming Control Board not come down upon Planet Hollywood like a hod of bricks, it's entirely probable that Privé would still be up to its scofflaw antics. That's because Clark County has a long history of looking the other way or, at most, administering the occasional love-tap on the wrist. But when Gaming Control lays down a half-million-buck fine, it's kind of hard for Clark County Manager Virginia Valentine's crew to keep their heads in the sand, pretending to be invisible.

Hence the revocation of Privé's license, quickly restored once the Titanic deck chairs were rearranged and the vessel rechristened the Lusitania. I feel much better now, don't you? (It should be noted that there's a sizeable constituency in Las Vegas that thinks the county and NGCB should turn a blind eye and laissesz les bon temps roulez. Hey, why don't we bring back bribery, too? If those officials are going to be ignoring the laws they're charged with enforcing, shouldn't they be compensated for it?)

Kudos to the ever-clever management of Cannery Casino Resorts. They've struck a deal with ESPN to allow simulcast of Monday Night Football on Galaxy Theaters' giant DMAX screen at the original Cannery. The festivities begin on Sept. 14 with a Bills/Patriots and Chargers/Raiders doubleheader. (OK, the nightcap sounds like a real dog, but MNF doesn't get the pick of the litter since moving to cable.)

A 60-foot-tall Terrell Owens? Scary! More worrisome still: Will egomaniac Jon Gruden hog the mike this season, elbowing aside co-analyst Ron Jaworski? Nobody breaks down a play like "Jaws" but will "Chucky" let him get a word in edgewise?

Steve Wynn must be getting a little apprehensive about how Labor Commissioner Michael Tanchek's long-running hearings on tip confiscation will play out. Wynn's benched the able Gregory Kamer, as well as Wynn Resorts' in-house counsel, in favor of Beltway attorney Eugene Scalia. And, yes, his dad is that Scalia. (Does anybody else think the Bush administration passed over Scalia Sr. for Chief Justice in favor of John Roberts because he -- unlike Roberts -- was too contentious to forge majority rulings? Just me? OK.)

Wait Until Dark (@ CSN) obtains tepid praise from the R-J. I saw it last Friday. What's my verdict? Tune in tomorrow!

There's only one Native American currently serving on the federal bench. Might Nevada make it two? Vito de la Cruz, S&G hopes you receive due consideration.

Economic parable: Once upon a time there were two thrift stores in my neighborhood. One, run by Catholic Charities, sold good merchandise. The other, Goodwill, peddled garbage. Guess which one went out of business? It's like the nonprofit version of the Walmart saga.

Colony Capital strikes (out) again; Big Bleauh

Mon, 17 Aug 2009 17:02:00 -0700

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 ...

City of (better) Dreams

Mon, 17 Aug 2009 11:19:00 -0700

J.P. Morgan has raised its 2010-11 cash flow estimates for Melco Crown Entertainment's $2.4 billion City of Dreams megaresort, bringing projected return on investment into the 11%-11.5% range. That comes in the wake of good news that gambling revenue in Macao was $1.2 billion in July, up 3% from last year. That's the first positive comparison of 2009.

What's still more stunning is July's sudden parity between Macanese operators. Stanley Ho commanded 23% of market share but Las Vegas Sands was nipping at his heels with 22%, followed by Melco Crown (18%), Wynn Resorts (15%) and MGM Mirage, leapfrogging past Galaxy (10%) into fifth place with 12%.

Adelson wins one. Sands CEO Sheldon Adelson has vanquished at least one litigant. A federal district court judge scotched former Adelson flunky Moshe Hananel's claim on a share of Sands' Chinese revenues. The former Interface Partners International exec sought credit for having the Sands-in-Macao idea first and laying the groundwork for Adelson's Chinese overture. Adelson recently paid off one trio of claimants and is still battling former associate Richard Suen after losing badly in court.

Quote of the Day

Fri, 07 Aug 2009 18:37:00 -0700

"There is a very surreal question here: Is it intelligent to ruthlessly grind every last dime out of this place when it involves dislocating groups of your employees? Oh yes, the quarter looks better and you have one of these fancy phone calls. But is that good business? I think not." -- Steve Wynn, during Wynn Resorts' 2Q09 earnings call.

Casino wars in Macao

Fri, 07 Aug 2009 16:25:00 -0700

Bloomberg's interview with Credit Suisse's Steven Chan is now online and is must-see TV:

Adelson bombing in Pennsylvania; RoboPoker returns; Dissent over Wynn

Thu, 06 Aug 2009 17:26:00 -0700

Both the opening of Sands Bethlehem, and recent expansions of Meadows Racetrack & Casino (+29%) and Mohegan Sun at Pocono Downs (+21%) drove an 18.5% increase in slot revenue this July. With $19.6 million in gross revenue, Sands was only good for fifth place, barely behind Mohegan Sun ($19.8 million).

Adelson's new slot parlor was well off the pace set by Philadelphia Park Casino & Racetrack ($30.8 million) and The Meadows ($29.9 million). Harrah's Chester didn't perform too shabbily, either, pulling in $27.3 million from the one-armed bandits. Both it and Philadelphia Park were less than 2% down from their July '08 revenues, putting paid to the theory that Sands Bethlehem would draw -- at least in any significant degree -- from the Philadelphia area. Only nearby Mt. Airy Resort & Casino is taking a serious hit.

Downtown Reno's nicest casino, the spacious Silver Legacy, is taking a big step downmarket by succumbing to the cheesy allure of RoboPoker. Even that bit of good news for PokerTek wasn't enough to keep Aristocrat Leisure from writing down its share of the company.

Steve Wynn is The Man, at least in Macao, according to the controversial Jim Cramer. I agree.

Why then, is Wynn Resorts COO Marc Schorr cashing out at a time when the stock is arguably undervalued? Maybe he's just one more American who got overextended in the go-go Bush Era.

Quote of the Day

Wed, 22 Jul 2009 12:59:00 -0700

“Wynn is simply much cleaner, safer and a smarter play [than Las Vegas Sands] on gambling in Macau.” -- CNBC Mad Money host Jim Cramer, warming toward potential Wynn Resorts and Sands IPOs on the Hong Kong stock market. What's not to like about Wynn when you consider its uncanny streak of luck in Macanese baccarat play?

"Link" to Nowhere

Tue, 21 Jul 2009 13:49:00 -0700

On and off, over a four-year period, Harrah's Entertainment teased journalists (and, by extension, the public) with hints of a really big project to be announced really soon ... whenever they got around to it, that is. Well, the Harrah's mountain hath labored and produced ... a mouse.

"Project Link" isn't without virtues, even if they're largely negative ones. It isn't another high-end, multi-billion-dollar megaresort. It's not a budget-buster, period. It's not über-expensive food and retail. And it does entail giving modest facelifts to a couple of Harrah's tattier Strip properties: O'Shea's would lose its faux-Dublin façade and the Imperial Palace's Strip frontage (and pagoda roof) would be supplanted with what appear to be enormous LED screens.

It also acknowledges what's long been one of the problems of Harrah's consolidation of the east side of the Strip into one ginormous province. Namely, that to redevelop it in any significant way would involve taking one or more of a string of multi-story cash registers out of business. True, you could start from the back, maybe knock down the IP first, but at some point push comes to shove and a major cash-flow-producing Strip casino (most likely Harrah's Las Vegas) would have to give way. In a sense, the real estate was already too lucrative to be redeveloped.

Arrival at this plan involved acknowledging certain factors that should have been obvious long before CEO Gary Loveman went on a buying spree. For instance, that MGM Mirage/Wynn Resorts-scale megaresorts are a low-ROI proposition. Or that such a creation might impinge on business at ever-growing Caesars Palace. (It never ceases to amaze me that Harrah's spends hundreds of thousands of dollars to determine what, say, Hunter Hillegas could tell them for free.)

Of course, any new resort built in Lovemanville wouldn't have to be high-end/low-return. That's just the industry group-think of our day; that you "justify" the land's cost by superimposing a hella expensive megaresort atop it, then justify that outlay by charging prices that relatively few can afford.

The notion of luring pedestrians off the Strip and down a multi-dogleg side street is an untested notion. Give Harrah's points for thinking outside the box here. It'll mean getting Vegas visitors to break ingrained habits but it could eventually stimulate further off-Strip development.

For all I know, it could be Gary Loveman's longstanding fantasy to own a 600-foot Ferris wheel with an (at least) 200-foot "HARRAH'S" logo lighting up the night sky. But do I believe this is what he had in mind when he supervised the purchase of vast tracts of Koval Lane real estate at top dollar? Not for a moment. Especially not when you consider he's been sweeping it clean of low-rise housing developments that might otherwise have been of income-producing use.

Now, like Gershwin's Porgy, he's got plenty of nuhtin' and nuthin's plenty for him. His projected Ferris wheel will be sitting (as you can see from the rendering) smack in the middle of a wasteland, a void, a whole lotta nowhere. At least the circus can pitch its tents there the next time it comes to town.

It's harder still to believe that this (mini-)master plan was concocted two years ago and kept under wraps until now ... unless it was a before-the-fact, low-budget, "Well, we've got to do something" concession to the development-crippling effect of the LBO. Even so, secrets just aren't that well kept in this town.

Then again, it often seems if Loveman himself does not know what Loveman has in mind. Take for instance, his recent contention that building a Strip megaresort was too big a risk for Harrah's. Not compared to taking on $24 billion in LBO debt it wasn't. And you could build a megaresort and a half for the $5 billion in company value Loveman recently wrote off.

The biggest threat to Project Link may be Loveman -- or rather his short-attention-span style of leadership. While some cunning master plan may be apparent to his inner circle, the leitmotif of Loveman's tenure as CEO has been to jitterbug spastically from one short-lived initiative to another.

Having gotten right up to the threshhold of having to decide what to do with Lovemanville, his trigger finger grew weak. He pulled a U-turn and flung Harrah's into the arms of Texas Pacific Group and Apollo Management, a move with disastrous consequences. (Especially for the consumer, as TPG/Apollo's plan was to gut the company all along.) At least it had the short-term benefit of sparing beloved local institution Battista's Hole in the Wall from Loveman's bulldozers. As with his jihad against revenue-participation games like Wheel of Fortune, Loveman often seems oblivious or (far more likely) indifferent to what customers like or want.

In the two years or so it will require for Project Link to obtain startup capital, the odds are considerably better than 50-50 that Loveman will have lost interest and moved on to something else. If he doesn't, it would be a very pleasant surprise.

The dream is dying

Mon, 20 Jul 2009 16:07:00 -0700

Just last week, UNLV's historical sage, Dr. Eugene Moehring, was taking a dim view of the fate of Las Vegas' working class. Now comes the Wall Street Journal to back him up with some sobering reportage.

Even at union salaries, Culinary Union-represented employees are hardly living on Easy Street. According to the WSJ's Tamara Audi, a hotel maid can expect to make slightly under $30K/year. She also finds a fry cook who was pulling in $36K annually, before he was laid off. (He's now making much less at union-free M Resort.) This goes to show not only the importance of union representation but also how close many of these people are to the economic precipice.

Many of the causes of our current plight (like real estate speculation) are outside my remit. However, a great deal of the blame falls upon casino CEOs who -- encouraged by banks that pushed too-easy credit like "happy dust" and by cheerleading Wall Street analysts -- succumbed severally and variously to a collective psychosis.

The Plaza: Rooms available, starting the 12th of Never.

The hyper-optimistic mentality that produced a rapid-fire succession of (in no particular order) CityCenter, Cosmopolitan, Fontainebleau, Echelon, Palazzo, Encore, the Hard Rock Hotel acquisition/expansion, and even will o' the wisps like Crown Las Vegas and Viva, rested upon a bizarre assumption. Namely, that the Las Vegas Strip could not only absord literally thousands upon thousands of new rooms (preponderantly at the high end) but could do in a compressed time frame.

A few companies even thought this could be done even after they'd glutted themselves with LBO debt. (True, Harrah's Entertainment now says it never intended to go the metaresort route but the available evidence testifies otherwise.) As I've written before, a bubble was mistaken for a baseline, thereby magnifying the consequences when the economic fundamentals began to crumple.

Distance evidently lends clarity, at least to Harvey Perkins of East Coast-based Spectrum Gaming Group. He calls for a complete rethinking of the luxury-based Vegas business model, repositioning the Strip's posh palaces slightly downmarket. It'll mean eating a lot of pride but what alternatives are there?

It's a glass half-full perspective, which is preferable to the overdose of gloom quaffed by MGM Mirage CEO Jim Murren. He darkly prophesies, "There won't be another property built in Las Vegas for a decade."

Just wait 'til the next economic upturn and see if Murren is still saying kaddish. There will be new casinos in Las Vegas before 2019, I'm fully confident -- but they'll be ones positioned around affordability and (hopefully) generating double-digit ROI. Because, frankly, Las Vegas isn't the investment it used to be.

The St(ump) Regis, as it was to have been.

Then there's the schizoid-sounding Sheldon Adelson, who harrumphs, "I don't see any opportunities for any development in Las Vegas." Emphasis added; the Las Vegas Sands CEO seems to swing from bullish to bearish by the day.) It'd be nice for Sands if Adelson had been vouchsafed this insight before he started work on the St(ump) Regis in the midst of a condo-market meltdown. Now it's big bloody nose right betwixt the eyes of the Venetian and Palazzo.

The polar opposite of Adelson is Culinary Union boss D. Taylor who sounds like a flack for the Las Vegas Convention & Visitors Authority, so giddy is his optimism. Hey, D., have you talked to your workforce lately -- you know, the ones who just had to defer a $710/year pay bump?

At least some amusement is to be had from the Strip map prepared for the WSJ by Bill Lerner's new outfit, Union Gaming Research:

I don't think I'd take investment advice from a firm that doesn't know the correct spellings of "Echelon" or "Caesars." City Center seems to fallen off the map entirely. It'd also take issue with the classification of many sites (like the in-foreclosure FX Real Estate plot) as "ceased or delayed" as there was never any work to cease or delay at, say Elad Properties' "Plaza" site or Crown Las Vegas (aka "Archon"). Ditto MGM/Kerzner, Africa Israel, etc. However, the Cosmo, which really is in limbo, doesn't make onto the map.

At any rate, as land prices on the Strip continue to return to earth, there's going to be plenty of prospective acreage for the company that's ready, willing and able to build a mid-market casino on the Strip.

Case Bets: M Resort, bad debt, Wall Street's bomb

Mon, 20 Jul 2009 14:26:00 -0700

After fairly flying out of the gate, M Resort has hit the wall. Unfortunately, CEO Anthony Marnell III's response to economic adversity has been to sweat the value propositions. Not only is M fretting about card counters (hands down, the silliest preoccupation in the casino industry), it's yanking full-pay video poker machines.

“We are in business to have an edge and these games are nearly break-even,” Marnell tells Liz Benston. Give him points for candor ... but if you didn't want players to have a 50-50 shot, you should never have installed the machines in the first place, fella. This reeks of bait-and-switch. The video poker community is tightly knit; word of this stuff gets arounds fast and will undoubtedly redound to Marnell's disadvantage.

Another thing that might be working against Marnell are M's distinctly underwhelming coupon offers -- far inferior to those from Station Casinos, for one. The Significant Other and I tend to forward our M "offers" straight into the WPB (waste paper basket). I'd also respectfully dissent with Benston re M's casino design: It's a throwback to the old "disorientation" days. For ease of navigation, M's not a patch on Eastside Cannery, to say nothing of Wynn Las Vegas. Heck, even the venerable Sahara isn't the rat maze that is M's gambling floor.

When "whales" attack. Indicted high roller Terrance K. Watanabe is taking on Nevada's casino-debt-collection machine and his lawyer is making some interesting legal arguments. Basically, he's contending that markers are loans, not checks (as longstanding Nevada precedent would have it). Should this argument prevail at trial, it could have far-reaching consequences.

Since markers could no longer be booked as income, Nevada would no longer be able to tax uncollected markers, as it currently does. Since enforcement of the debt is funded by assessing a 10% penalty on the debtor, Clark County couldn't afford to go after delinquent whales, either. And casinos themselves might have to think even harder before (in effect) lending money to players like Watanabe who, his attorney says, accounted for a fifth of The Rio's and Caesars Palace's casino revenue in a two-year period.

Hoist on its petard. In his latest Las Vegas Business Press column, Dr. David G. Schwartz explains how the consolidation mania of the 1990s (spurred by manic Wall Street analysts) came back to bite the casino industry in its ass when times were tough. So tell us, Nevada Gaming Commission, why was it such a good idea to have an oligopoly on the Strip (and in Lake Tahoe ... and ... )?

Wynn goes to Monaco

Mon, 20 Jul 2009 13:20:00 -0700

Maybe this just goes in the "pipe dream" category, but a Culver City architectural firm has posted renderings that indicate Steve Wynn is/was thinking of extending his brand to Monaco. A description is said to be "coming soon." In the meantime, enjoy the view(s):

Will we be seeing Wynn's new "Old World" style in Las Vegas when he re-redevelops the Desert Inn golf course? The site also has renderings of a "Wynn Singapore" that looks like a Marina Bay-site pitch that was abandoned somewhere in the design process.

You can also see how the Bahamar project might have been, at least before Harrah's Entertainment walked away from the table. Very Bellagio-esque, don't you think? (Thanks to VegasTripping.com and Two Way Hard Three for putting myself and others onto the trail of these images.)

Vegas needs Carmen Electra

Tue, 14 Jul 2009 11:10:00 -0700

There's a sentence I never thought I'd live to type. But after seeing Ms. Electra bumping and grinding, and generally giving her all to a pair of solo turns in MGM Grand's otherwise fembot-oriented La Femme aka Crazy Horse Paris ~~Crazy Girls~~, this woman definitely deserves a modest venue where she can bring the raunch to the Strip on a regular basis. True, her routines were not always spot-on and her dirigible-size funbags could use some deflation (although we're not quite in the Holly Madison league of grotesquerie). But she's got animal magnetism that would have been wasted as Mel B.'s sidekick or Hans Klok's beard.

As The Sun chronicled: "Carmen's naked antics make MEL B's appearance in rival Vegas burlesque revue, Peepshow, look tame in comparison."

That they did.

Wynn degraded. Analysts at J.P. Morgan are downplaying their expectations for Wynn Resorts, particularly in Macao. There, Morgan has shaved $11 million off its cash flow projections for 2Q09. Slipping REVPAR (if -28% is a "slip"), low slot handle and "flat table volumes" are blamed.

On the Strip, Morgan only expects minor softness (to the tune of -$4 million) in Wynncore business. Cash flow projections for next year have been trimmed by $9 million in Vegas and $30 million, as the analysts have modest expectations of Encore Macau. The Morgan analysands remain bullish on Las Vegas Sands, though. Somewhere, Sheldon Adelson is having a moment of gless.

Back from Michigan

Mon, 13 Jul 2009 01:25:00 -0700

With the cats fed and their indiscretions cleaned up, I can report that I have just returned from the Upper Peninsula of Michigan, land of indescribable scenic beauty and intermittent Internet access. I spent the better part of five days in the bosom of a truly wonderful -- and big -- family, and only one did I hear the dreaded words, "Michael Jackson." And, lemme tell ya, the annual Pioneer Days fireworks display in Negaunee, Mich., put Las Vegas' most recent Fourth of July shoot 'em up to shame.

Along with souvenirs, I also brought home a nasty cold, so I beg your indulgence as a I get back up to speed. While on the subject of bacteria, I see that "Johnny Casino" has dragged his dad, ex-Circus Circus coporate ringmaster Mike Ensign, into his increasingly sordid sex-fund scandal. Oh, and S&G was way ahead of Huffington Post on this angle. As my U.P. pal Sydney Dorow would say, "Score!"

Wynn vs. Dealers: The final (?) round of the tip-confiscation controversy played out last week. The Transport Workers Union is right about one thing for sure: If Wynn Resorts prevails, its policy will spread like wildfire throughout the state.

Peepshow 2.0: The second time's the charm. As for nearby After the Show, how much you like it will probably be in direct proportion to how many drinks you've had.

Blood: The Last Vampire: Internet responsive to this Chinese-Argentinian-French sanguinary spectacle has been universally derisive. So, wouldn't you know, I liked it.

It's Wynn + Laughlin

Wed, 08 Jul 2009 08:19:00 -0700

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

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

Moulin Rouge: Whoops!

Tue, 07 Jul 2009 14:27:00 -0700

The Moulin Rouge development that will never be.

Oh dear, oh dear. Seems like the City of Las Vegas unwittingly obstructed its own arson probe into the demise of the Moulin Rouge when it allowed the property to be immediately demolished. Sloppily, the actual tearing-down was farmed out to the property's former owners, who happened to have a demolition contractor on site during the blaze.

The fire's cause remains speculative and no finding of arson has been made -- and now perhaps never will. But the city's decision not only looks overhasty, it was (at the very least) cavalier to entrust it to dispossessed Moulin Rouge Development Corp. and not new owner Olympic Coast Development. The latter's prexy, John Hoss, told the Las Vegas Sun he found the chain of events "a little odd" and "a weird coincidence." Since Hoss is only trying to corral a $100,000 insurance claim, the city could get stuck with an asbestos-removal tab as high as $1.1 million.

Can they screw this up any further? Is the Pope Catholic?

F'bleau-minus. The bankrupt resort's developer, Jeffrey Soffer, proposes some unspecified corner-cutting to get the project back on budget. ("On budget" being a very relative term where Fontainebleau is concerned.) Combine this with the allegedly secret "Enhanced" costs for F'bleau's highly touted amenities and the moral of the story is that what you see on the Web site or in the design renderings has a tenuous relationship to what you'll actually get.

At least Soffer is offering to chip in some equity, unlike former investor James Packer, who scuttled away from F'bleau the moment the chips were down.

Gator on the loose. One of Las Vegas' larger parks got a lot more interesting yesterday when a 42-inch-long alligator turned up. Instead of entrusting the spunky fellow to a local zoo or perhaps one of our local casino-based wildlife habitats, the Wildlife Dept. killed him. Bastards. I hope they never get their mitts on our beloved Mojo ...

Mojo, the monarch of Huntington Press.

Speaking of James Packer ... griefs are arriving in battalions (thanks, Mr. Shakespeare) for City of Dreams. In terms of mass-market business, Venetian Macao is eating City of Dreams' lunch. "Despite 41,000 people walking through City of Dreams every day since it opened in the first week of June, most of the visitors were just admiring the decor instead of sitting down at its tables for a game of baccarat," reports The Age.

Not only is one analyst projecting a 15% earnings shortfall for Melco Crown Entertainment, another has tripled his loss-per-share projection. J.P. Morgan is also revising its 2010 cash-flow projections on the $2.1 billion megaresort to 13% ROI, down from 17%. (That's still a better return on investment than you can get on the Las Vegas Strip.)

Did Steve Wynn take Packer to the cleaners when sold him 37% of a casino concession for $1 billion? Wynn had a chance to size up Packer and deemed him not yet ready for the big leagues. Score another one for El Steve.

Case Bets: CityCenter, W, Bernie Goldstein, Roger Thomas

Tue, 07 Jul 2009 13:15:00 -0700

Some rueful condo buyers are probably calling MGM Mirage's ultra-mega-super-duper resort "ShittyCenter," judging by their ire. It's difficult to know with whom to sympathize in this ongoing dispute. Condo depositors want to renegotiate prices (which range all the way up to $9.4 million/unit) while MGM -- though not unsympathetic -- maintains buyers got a special deal going in and therefore have relatively little cause for complaint.

Good luck trying to renegotiate the price of that Saturn on which you just made a downpayment. MGM needs those condo purchases if CityCenter is to remain in balance (look what happened to Fontainebleau, which has sold nary a timeshare). And it really can't afford to start refunding some of that $313 million that depositors have already placed in the kitty.

However ... there might be a pragmatic argument to be made for MGM bending to pressure. Condo sales in the valley haven't been robust -- a mere 1,172 units in 2007-08 and a measly 52 closings this year. Scarier still, the Wall Street Journal notes that 7,000 more luxury condo units are under construction as we speak.

There's basically no market remaining for high-end condos and every unit that goes on sale dilutes the value of a CityCenter aerie just a little bit more. MGM hasn't been ashamed to offer discounts to players and vacationers. Maybe it's time to extend that philosophy to condo buyers. If CEO Jim Murren has to sell a few casinos to make up the difference ... well, so be it.

Not everybody is having a hard time moving property in this market. J.P. Morgan reports that Starwood Hotels & Resorts Worldwide just sold its W San Francisco for 14X cash flow. Geez, try to get half that multiple for a Strip property and watch potential buyers yawn in your face.

Bernie Goldstein, R.I.P. Not only are there second acts in American lives, the late Mr. Goldstein proved there are third acts as well. The granddaddy of Midwestern riverboat gambling, Goldstein built Isle of Capri Casinos into the first company of its ilk with a recognizable brand identity and saw it outlive several of its rivals. If the company's business plan went astray in recent years, that doesn't diminish the scope of Goldstein's achievement. Thankfully, the gallus-snapping Goldstein was inducted into the American Gaming Association's Hall of Fame just in the nick of time.

Congratulations to Roger Thomas for being named the next recipient of the Jay Sarno Award from Casino Design and G2E. While I'm not sure it's flattering to receive an award named after the man who covered Caesars Palace with unsightly cement mesh and gave the world Circus Circus, it's the sentiment that truly counts.

Basically, Thomas (and architect DeRuyter Butler) set the template for the last two decades on the Strip and everybody else has been tinkering around the edges. Thankfully, he's rescinded his retirement from Wynn Resorts, so we can look forward to years more of standard-setting design work.

Laughlin to rescue Wynn?

Mon, 06 Jul 2009 17:02:00 -0700

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

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

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

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

Quote of the Day

Thu, 02 Jul 2009 12:10:00 -0700

"We’re not going to destroy one of our towers." -- Wynn Las Vegas President Andrew Pascal's retort to a dealer who complained that, post-9/11, Asian gamblers view Wynn's twin towers as bad luck and wear crystals to ward off the evil vibes.

Stormy weather

Wed, 01 Jul 2009 12:40:00 -0700

It may be monsoon season in Las Vegas but there's a typhoon blowing through Macao's casino economy. A series of bulletins from J.P. Morgan outline a worrisome trajectory for China's gambling enclave.

City of Dreams: a flop

June 23: The South China Morning Post reports service cutbacks in Macanese air traffic during January-March. Low-cost carrier Air Asia held steady, but China Eastern Airline scrapped all flights, Xiamen Airline slashed service by 59%, followed by Malaysia Airlines (-38%). Single-digit declines were noted at Air Macau (-9%) and Viva Macau (-4%). Although recently de-licensed carrier East Star had been shedding flights (-40%), competitors did not appear to be moving to fill the void.

June 24: Macao's Special Administrative Region Statistics & Census Service reports a 20% visitation decline in May, to 1.6 million tourists. Of those, fewer than half were from the mainland (-27%) and 55% were day-trippers. Only 13% are coming from outside Hong Kong, Taiwan or the mainland.

July 1: News agency Lusa has preliminary revenue numbers for June (the first month for City of Dreams) and the comparisons, by Macao standards, are terrible: -17%, for $1.05 billion. So far, the casinos are tracking ahead of the government's revenue projections -- which were pretty dire ($892K/month) already.

There's a silver lining for Sheldon Adelson, whose Sands Macao and Venetian Macao rebounded, running Stanley Ho's myriad casinos a close second in market share, 26% to 30%. Wynn Macau fell toward the pack, which was as follows: Wynn 14% (a humiliating setback; it had been only three points behind Las Vegas Sands in May), Galaxy 12%, Melco Crown International down a point to 9%, and MGM Mirage bringing up the rear, as always, with 8%.

Sands Macao: Adelson's best-ever investment

Buoyed by Sands' Macao numbers, Morgan analysts are bullish on Adelson, mainly because of "reasonable near-term and achievable expectations for its LV Strip properties and our belief that its LV properties are outperforming its peers." Just when you think Sheldon's painted himself into a corner, he seems to find a means of escape ... which may be why some of us were less skeptical of the financial hurdles facing Sands Bethlehem and the Cotai Strip™ than we should have been.

There seems to be a school of belief that if one keeps saying that visa restrictions from mainland China to Macao are about to be relaxed, it will miraculously happen. Not if Peking muckety-mucks keep seeing headlines like this. More to the point, bailout money that was intended to induce Chinese banks into writing more loans, thereby stimulating production, is flowing to the casino tables instead. That's a scenario highly reminiscent of the circumstances that led Peking to crack down on Macanese traffic several times already.

Seven essential Web sites ... and other news

Thu, 25 Jun 2009 12:23:00 -0700

Yes, you too can can be a gaming-industry blogger, with the help of but a few absolutely indispensable Web sites. The ones that I check Monday-Friday without fail (and, as they say on Dancing with the Stars, "in no particular order") are:

GamingFloor.com: The best aggregator of casino news from around the globe, especially since Editor Ian Sutton has an eye for the bizarre. Tons of eye-catching video, too, plus Ian's own on-the-spot reporting from far-flung venues like G2E Asia.

DieIsCast.com: Very eclectic but Dr. David G. Schwartz pounces on fascinating (and not very obvious) stories, often making droll pop-culture connections ... which frequently involve Star Trek.

TwoWayHardThree: Terrific discussions of casino architecture, intermingled with scoops that eagle-eyed moderator Hunter Hillegas snaps up -- not infrequently beating the local papers to the punch. His readers/forum contributors are some of the best-informed you'll encounter.

Las Vegas Sun: You're not going to find better gaming coverage this side of the Wall Street Journal and labor reporter Michael Mishak is one of the finest in the business. (The R-J's pathologically anti-union stance is probably to blame for its feeble coverage of workplace issues, as that paper's editorial-page psychoses leach into its news priorities.) Unlike its cross-town rival, the Sun doesn't take its marching orders from the Chamber of Commerce, either.

Press of Atlantic City: In the land of the blind, the one-eyed paper is king. Oh, and Press: Your new "reader-friendly" redesign blows donkeys. But if there's news a-brewin' on the Boardwalk, this is the first place to look. For more selective -- but in-depth-- coverage, Suzette Parmley in the Philadelphia Inquirer is tops in the region.

Vegas Happens Here: No morning is complete without a jolt of news from the indefatigable Steve Friess. His blog isn't casino-centric but he's quick to spot a breaking story or one that might fly under the radar ... and his Min-and-Bill relationship to Steve Wynn makes for tremendous ongoing fun. Lots of pictures, too.

Las Vegas Review-Journal: Only because it exists (which, existentially, is open to debate). Like the elephant in your parlor, it must be acknowledged and sometimes its slave-driven reporters turn in exceptional work, despite their editors' best [sic] efforts to beat them down. (Inexcusably, last week the entire gaming staff was detailed to chronicle seemingly every hand played at the World Series of Poker.) The paper's shining achievement was Joan Whitely's exposé of dangerous corner-cutting at Harrah's Entertainment. Relative newcomer Arnold Knightly has ferreted out some laudable scoops, too. Howard Stutz, look to thy laurels!

Honorable mentions go to three sites that I can't always check on a daily basis, but which should not pass without notice ...

Pechanga.net: An exhaustive (and sometimes exhausting) aggregration -- but it's a sieve which captures many tribal and regional gaming stories that would otherwise escape notice.

VegasTodayandTomorrow.com: Anybody -- and I mean anybody -- interested in the history and future of Sin City should have this site bookmarked. Mark Adams pores over the Web and any other source at his reach, presenting what bids fair to be the definitive online museum of Las Vegas' evolution. Our "Question of the Day" about the never-built Conrad was greatly aided by Adams' preexisting work. And the Coke-vs.-Pepsi map is must-see Internet.

The Movable Buffet: More showbiz- than bidness-focused. However, in a Vegas blogosphere infested with sycophants, Richard Abowitz provides a needed corrective to the local fawning over the celebutard of the moment. If you wish to following the continuing meltdown of Criss F. Angel step by step, Abowitz is your man. He even makes a colloquy with Holly Madison interesting. The chap's a miracle worker!

Farrah Fawcett, R.I.P.: One of the greatest of Seventies icons has died, at age 62. I was always more of a Cheryl Ladd fan myself, but Fawcett showed herself to be seriously "misunderestimated," especially in her Oscar-worthy turn as Robert Duvall's adulterous wife in The Apostle. Haven't seen it? Rent it! Ditto the severely underrated See You in the Morning, a still from which graces the Los Angeles Times obituary. Speaking of movies ...

Scott Walker 30 Century Man: A rock-and-roller who draws frequent comparisons to Samuel Beckett? Meet reclusive American expat Scott Walker and discover that the analogy has surprising validity. His handsome baritone is also one of the most compelling singing voices to emerge from the U.S. And speaking of singing ...

Patti LuPone's Orleans gig last weekend may just be the downpayment on a long-term deal. If so, it'd be one of the best shows in town and it fits the Orleans Showroom hand in glove. If only LuPone would drop from her set list that anthem to codependency, Oliver!'s "As Long As He Needs Me." She unloads so many mannerisms upon it that it's like Bill Sikes pummeling Nancy. Still and all, I'd take it over a second visit to American Superstars (also reviewed). Aaaaaaaaaaannndddd speaking of shows ...

I've received a critique of the Harmon Theater's new Monday-night, witching-hour potpourri, After the Show. While I'm not at liberty to quote any of it, suffice it to say that After the Show is described in such hallucinatory and pejorative terms that the bottom line is, even if you're a local resident and thus get in free, you've still paid too much. Better we should stay home and watch Jon Stewart, with a Conan O'Brien chaser.

Danny Gans: Still dead -- but not yet resting in peace. For the truly morbid, the R-J has published the 911 call made by his widow (as did the Sun). Listen if you care to; I didn't.

By request ...

Wed, 24 Jun 2009 13:40:00 -0700

'Tis another day of hopscotching betwixt the doctor and the dentist, which sure cuts into quality blogging time (as did a nasty attack of fibromyalgia yesterday). However, by reader request, we present this special, (not) exclusive S&G photo of a special plenepotentiary Apollo [Mis]Management representative -- perhaps Leon Black himself ...

... contemplating piling additional money into Fontainebleau.

Serously, overspending -- not lack of business -- is what really got this town into its present pickle. Profligacy and/or dangerous incompetence at the highest levels are the true culprits for the Vegas meltdown. Yet it is people like maids, cocktail servers, security staff and -- by extension -- customers who are literally paying the price for clownery in the executive suites.

F'bleau and Cosmopolitan need to take a page from the Echelon playbook: Say "that's a wrap" and wait 'til the economy improves, attendant litigation is settled and the tsunami of new hotel rooms that is CityCenter has ebbed a bit. We don't need multiple new megaresorts now for the simple fact that the market will not support them.

Then again, if Harrah's Entertainment or Wynn Resorts wants to sail its luxury liner straight into the Big Bleau iceberg (or the Cosmo) ... it's their money. Just don't complain to the press when you can't get triple-digit room rates, 'kay?

F'bleau: 'But who would want it?'

Tue, 23 Jun 2009 20:11:00 -0700

No sooner had I -- perhaps foolishly -- posed that question than the Las Vegas Review-Journal answered it. Top dogs from both Wynn Resorts and Harrah's Entertainment had been given tours of Fontainebleau, as had sundry other potential investors.

You've got to wonder how this news is playing with two constituencies: Harrah's bondholders and Wynn employees. Both have been poor-mouthed of late, with the latter absorbing severe pay and benefit cuts for the company's sake. As for Harrah's debtors, they're probably long since resigned to taking a bath on their investment, since the timeline for repayment already stretches far into the next decade. In other words, it's not the best moment to be seen out shopping.

Also, there's the small matter of cost. F'bleau's official budget has now crept up to $3.1 billion and -- if its bankers are right -- the completion money needed is close to $1 billion. (Insert Dr. Evil inflection here.) Steve Wynn might have enough socked away to swing that. Gary Loveman, on the other hand, says his company doesn't even have enough scratch to change its letterhead to "Caesars Entertainment."

Theory: Perhaps Loveman's sugar daddies at TPG Capital and Apollo Management underwrite the completion of F'bleau, maybe more -- but as a separate entity. Harrah's is then jobbed in to run the joint. It'd mean some administrative headaches for Loveman but nothing compared to those involved with being the out-and-out owner. Personally, I'd give Wynn better odds of actually getting this Spruce Goose into the air, but it's liable to be a charity case, whoever inherits it.

There's another reason for Wynn and Harrah's to approach F'bleau as they would a live grenade: the morass of litigation that surrounds Big Bleau. The latest batch of lawsuits alleges diversion of funds. Any casino company riding to F'bleau's rescue is going to want to be well indemnified against being dragged into this nightmare. No, Turnberry West and Fontainebleau will surely have to sort this out themselves.

Out of danger: That's where MGM Mirage says it is, largely by dint of mortgaging several key properties. CEO Jim Murren, meanwhile, complains that offfers for MGM assets aren't "close to what we believe the values are worth. The multiples are low. It seems like the wrong time."

Damn that free market! S&G humbly suggests that the low multiples are a reflection of the parlous state of the industry. Seven times cash flow just ain't what it used to be. Agree about the "wrong time" thing, though. Few are buying and even fewer banks are lending, so it's a heckuva juncture to be peddling one's wares.

Ensign concubine unmasked! He two-timed his wife with her? Beauty comes in many forms, but I'm thinking "lox," not "fox." As for well-remunerated cuckold Doug Hampton, he looks big enough to clobber the Nevada senator. Instead, he wrote a whiny letter to Fox News.

Despite his primitive spelling, grammar and punctuation, Hampton parlayed his husband-of-mistress status into a high-ranking sinecure at Allegiant Air. The latter says Hampton's employment was based on "his credentials and experience" ... not his education. Still, I feel as though my B.A. in English ain't worth the sheepskin upon which it's printed.

MGM: Deal or no deal?

Wed, 17 Jun 2009 17:55:00 -0700

MGM Mirage CEO Jim Murren is re-mulling asset sales of MGM Grand Detroit, Gold Strike (Tunica, Miss.) and Beau Rivage. But all Strip assets are definitively off the market (yes, even Slots A Fun). Since the Detroit and Tunica casinos are already encumbered with CityCenter-related debt, presumably Murren would transfer those mortgages to some or all of the "Mandalay mile." As far as I know, those three casinos are still unencumbered. The Detroit resort would be a real "trophy asset" for any potential buyer ... presuming that banks are more inclined to lend than they were(n't) the last time Murren shopped this trio around.

The Las Vegas Review-Journal took a good look at MGM's Giza deal -- and it's even better than initially thought. Not only will the company collect management and franchise fees, it also gets a cut of any profits. If there's a downside here, I'm too myopic to see it.

MGM wouldn't sell Monte Carlo when Jack Binion came calling. One presumes this had more to do with potentially being able to extend CityCenter into Monte Carlo, rather than Jack's money not being good enough for MGM. However, if the company really cares about the property, why are they slowly letting it go to seed? The Brew Pub will close on July 12.

Also ... our LVA research team has discovered that no further Lance Burton performances are scheduled. This seemingly writes finis to his long relationship with Monte Carlo. Is it just an expedient way to save money or was Burton's unpardonable sin to get very good reviews from the local dailies right after Criss F. Angel laid an $85 million egg with Believe? Burton out and Angel in? That's just not right.

"IUER"? WTF? Don't call Melco Crown International's new City of Dreams a "casino." Melcospeak for the new pleasure place is "integrated urban entertainment resort." At least Steve Wynn's "casino-based destination resort" coinage rolled off the tongue a little more felicitously. On second thought, just call it "a casino."

Holy cow! The husk of the late, lamented Holy Cow Brew Pub & Casino (home of the best beer in Las Vegas) is proposed for redevelopment -- again. It was briefly the site-to-be of the phantom Ivana condo tower, one of the more egregious examples of condo "vaporware" during the recent bubble. Arizona- and New Mexico-based developers intend to tip the old Cow and replace her with a low-rise, low-cost (no hotel) casino.

The Strip needs some fresh mid-market casinos and this one could be it. But why make your anchor tenant a Walgreens when it's the flagship retailer ... of Palazzo. We sure could use the jobs, too, what with unemployment hitting record levels in Nevada. A good thing that Gov. Jim Gibbons was shamed into accepting federal funding for the jobless.

No Surprise Dept.: So the Moulin Rouge is (literally) toast and arson is suspected. The fire happened the day after a bankruptcy auction found no takers for the property.

Obama backpedals (sidepedals?) on gay rights. If he wants to give the country change it can believe in, how about revoking the profoundly un-American policy of throwing our LGBT brothers and sisters out of the military? If they've volunteered to lay down their lives for Old Glory, they're better people than me. And if Harry Truman is remembered for nothing else, he'll always be the president who integrated the military with a stroke of a pen. Does President Obama have Truman-like intenstinal fortitude?

One of the vilest of major-league baseball players back in the Eighties was slow-moving, philandering, showboating slugger Mel Hall. But we never knew just how loathsome he was. Good luck in the slammer, Mel.

Scratch one Europoseur

Mon, 15 Jun 2009 14:49:00 -0700

Hot off the wire from Harrah's Entertainment: "The visionary force behind Club Fuego, ND, has opted to close the nightclub in order to pursue future projects in other formats. The closure is effective today [June 15]."

Durr: Friends don't let friends become Europoseurs

This mouthful of fulsome flattery requires a bit of translation. "ND" is the pretentious moniker chosen by Nicole Durr. The German impresario garnered a small but fawning following during her latest Vegas stint. She also was credited with conception, creation, writing, direction, producing, musical conception, co-composition, costume design, co-choreography, co-program design and photography for Raw Talent Live.

The latter was a mercifully short-lived Cirque du Soleil wannabe that ran at the Sahara and looked like what you'd get if you let Franco Dragone run riot with a budget of $17.95. Centering upon "The Laptop of Life" (don't ask), this incomprehensible mishmash -- I believe the operative German word is Scheisse -- featured among its dramatis personae one "Miss Conscience Guilt," who presumably was dropping in from The Land of Babelfish.

Not only did Raw Talent Live have the miniscule distinction of being the single worst Vegas show I have ever seen, it was memorable in another respect: It used prerecorded applause. Either that or the theater was full of invisible people the night I saw Raw Talent, because there were probably fewer spectators than cast members.

In an effort to keep this Esperanto-flavored flub afloat, it was renamed Fuego Raw Talent Live, then just Fuego. But adding or subtracting words from the marquee provided no solution to an addle-pated concept.

That lesson went unlearnt when Ms. Durr set up shop over at The Rio. Posters on the property gaseously proclaimed: "ND's Fuego • The Club • Evolution of Nightlife." Now, if Steve Wynn were to announce that henceforth he was to be addressed and mentioned exclusively as "SW," and marketed his new property as "SW's Encore • The Resort • Evolution of Las Vegas" ... well, we'd all think El Steve had jumped the shark, to put it politely.

Before long, "Fuego" was doused and the Rio room became "ND's The Club." (Judging by its use of "Club Fuego," Harrah's Entertainment was as confused by the name-of-the-week as anyone.) All of which presumes that there's some brand equity in those two initials. Honestly, does anyone not on the Las Vegas Weekly's nightclub beat lie awake nights, tormented by the question, "What, oh what will ND do next?"

Durr earned herself a place in the Vegas history books when she helped spirit 50 Cuban artists to freedom. But of late she's drunk rather too deeply of her own bathwater. The ensuing cult of personality will not be missed.

OK, Durr is "develop[ing] the various elements of the brand." Guy Laliberté is being sent into outer space (meaning he's got 10 weeks to kick his nicotine addiction). So when will Christian Audigier take the hint?

Farewell to a legend. Europeans -- as opposed to transplanted Europoseurs -- remembered and revered saxophonist Sam Butera even after many in Vegas had forgotten him. Amidst the ongoing fuss over the demise of Danny Gans, the departure of Louis Prima's legendary sideman might have gone unnoticed were it not largely for the dedicated reportage of Cult Vegas author Mike Weatherford. Opportunties to hear Butera in Vegas were, in the past decade, few and fleeting ... but I wish I hadn't passed them up. That'll be something I regret.

Quote of the Day

Fri, 12 Jun 2009 14:08:00 -0700

“We understand the economy has had a severe impact on the gaming industry. The [casino] companies have asked for temporary economic relief. And we’re asking for a variety of things too. Whether the two minds meet, we’ll see. But we’re not there yet.” -- Culinary Union boss D. Taylor on Strip and downtown operators' request for postponement of raises that are part of the current collective bargaining agreement. I think we all knew this moment was coming and it was only a question of when and how much.

Photo © Sparky Goldstein

Quote of the Day

Thu, 04 Jun 2009 12:28:00 -0700

“People don’t want high-end these days, certainly not from this place. We’re getting all kinds of business from the Venetian, the Wynn, [T]he Mirage, from people who don’t want to pay $15 for orange juice.” -- Treasure Island owner Phil Ruffin, on the changes he's making to the pirate place.

Rumble in Macao

Tue, 02 Jun 2009 17:34:00 -0700

Although an oft-promised loosening of visa restrictions by Peking stubborny refuses to materialize, an air of cautious hopefulness has crept back into Macao now that City of Dreams has opened on schedule -- and it looks dazzling. Aggressive revenue projections have literally reversed the fortunes of co-owner James Packer, whose disastrous venture into the U.S. casino industry is now seen by some as a blessing in disguise.

At $2.4 billion, City of Dreams rivals the cost of Venetian Macao and is hoped to equal or surpass the latter's 20% return on investment. One projection has it leapfrogging Wynn Macau into third place, with 20% of the Macanese market.

It also represents a double-edged sword for Sheldon Adelson's mammoth casino-resort. If it draws more punters to the Cotai Strip™, good. If it dilutes Adelson's customer base, not so good, obviously. In comments to the Wall Street Journal, Adelson seemed at pains to temper some headstrong pronouncements he'd offered to Steve Friess. As expected, an Adelson without the restraining influences of William Weidner and Brad Stone, is a pedal-to-the-metal Sheldon, saying Las Vegas Sands should have gone faster, faster, faster with its Cotai Strip™ projects, not slower. (The mind reels.)

"I just came back from Macau and we have five or six different options that we can pursue, each one of which would solve our liquidity problems," the Venetian's doge proclaimed ... which doesn't sound a lot different from what he's been saying for months. That is, until he contradicted himself by buying up a truckload of LVS stock -- something he wouldn't have done were a major deal in the offing.

Adelson predicts all his suspended Macao projects will be back in gear by year's end. He's on the curve in one respect, suggesting that his aborted St. Regis condo-hotel on the Strip could be revived by Sands' acting as lender to prospective unit buyers. Palms Place just started doing that very thing.

Sheldon's Commissariat for Optimism never closes, so one tends to grow skeptical of each new variant of "Victory is mine!" Anyway, Adelson was just off the plane from China, so perhaps jet-lag accounts for this reality-challenged assertion: "Our numbers have been going up and the [Macau peninsula] have been going down."

'Fraid not. Scarcely had that Adelsonian utterance made print than Lusa reported May's revenue numbers. If April had seen Wynn Macau falling back toward the pack, with 13% of market share, it returned with a vengeance in May. Steve Wynn's 18% market share -- with far less capacity than Adelson -- put him only three points behind LV Sands and came at the latter's expense. Stanley Ho still leads everybody with 30% -- as much as Galaxy Entertainment, Melco Crown Entertainment and MGM Grand Macau combined.

A few days earlier came news that visitation from Mainland China to Macao had been -43% in April ... hardly propitious conditions for flooring the Cotai Strip™ gas pedal. Ditto a 10% drop in May gambling revenues. Until that much-mooted visa liberalization actually happens, going apeshit with casino-hotel construction makes no sense whatsoever.

Nor did Adelson do his public image any favors with a gratuitous slam against jilted sidekick Weidner. (The latter, given the opportunity to respond, took the high road.) This 'hit 'em when they're down' move will accrue exactly zero sympathy for Adelson -- and it might have some nasty repercussions should it hamper Weidner's attempts to find another job. Then again, he's as rich as Croesus, so he can probably spend the next few decades on the golf course, should he so desire.

There's been no additional movement on the rumored Genting Berhad offer for MGM Grand Macau. However, even in a $13.8 billion/year casino market, the numbers don't look great for MGM. After it splits its 8% market share with partner Pansy Ho, it would have $55 million from which to pay an onerous tax bill, plus operating expenses. (The ROI must be dismal.)

Borgata, in Atlantic City, does $55 million a month -- in a bad month -- and MGM basically cashes a check from Boyd Gaming. So if MGM elects to stay in Macao and vacate Atlantic City, it won't be because the Chinese enclave is contributing more to the bottom line. Who ever thought MGM Grand Macau would function as a glorified "loss leader"?

Steve Wynn has a dragon ... and now Lawrence Ho does, too.

Back home, MGM is going downmarket at The Mirage. And they didn't even have to sell the place to Penn National in order to get there.

Strangely enough ... Penn's recent expression of interest in both Planet Hollywood and Station Casinos passed with scarcely a murmur of comment locally. You'd think that a well-capitalized company like Penn's hanging of a target on Robert Earl's or Frank Fertitta III's back would make headlines -- or maybe Vegas journos have tired of Penn's endless feints and tuned the company out. Well, almost all of them, anyway.

Planet Hollywood, at least, is acting far more aggressively than one would expect from a property that is contemplating a sale. So perhaps Earl is more pursued than pursuer. However, his conversion of Desert(ed) Passage into Miracle Mile appears to have run out of steam -- or money -- at the halfway point. Try as he might, Earl is never going to completely de-Aladdin-ize that place. A magic lantern and three wishes would come in real handy down there.

Also flying under the radar was former Planet Ho boss Michael Mecca's enlistment with Galaxy. Mecca jumped -- or, more likely, was pushed -- from the Planet right when the Omar Siddiqui scandal was at its height. Informed speculation had it that Mecca was thisclose to being tapped to head up James Packer's projected North American gambling empire. Crown Ltd. CEO Rowen Craigie was noncomittal, though, and Crown's big Cannery Casino Resorts acquisition fell through soon thereafter, leaving Mecca hanging.

Success being the best revenge, Mecca not only landed a prestigious new gig -- it's with one of Packer's direct rivals in Macao. Mecca shoots, he scores!

Which brings us full circle to Macao. That worked out tidily, didn't it?

Report from the Strat

Tue, 02 Jun 2009 11:12:00 -0700

A reader asked (possibly in jest) how the Hard Rock Hotel was vis-a-vis the Stratosphere. While I don't have the basis for an A:A comparison, I can comfortably say that if you can afford the Hard Rock, it's no contest. Under new owner Goldman Sachs, the Strat appears to have -- if you'll pardon the expression -- passed its peak and begun a slow descent into seediness.

The slot mix is very "blah" and decidedly third-tier, with lots of generic machines and ones you've probably never heard of before. And while the HRH's casino floor is designed so that it contains and heightens the energy, it's the opposite case at the Strat. The latter is an anachronism: a post-Mirage casino designed with a pre-Mirage "capture" mentality.* It's absurdly strung out, as though intentionally diffusing and minimizing the energy of the play that's taking place. The amount of action looked pretty respectable for a Monday night but was muted by the immensity and sparseness of the space itself.

It's like MGM Grand without any of the upside. If you're heading to the showroom be sure and pack water and provisions (or hire a rickshaw) because you're in for a long hike. While Goldman Sachs may have been cutting back on staff, the timeshare barkers -- a holdover from the Carl Icahn era -- continue to accost customers at will. By what twisted logic do casino executives convince themselves that allowing their patrons to be hassled in this fashion is actually good for business?

* -- for this we have Lyle Berman and Bob Stupak to thank, but they've long since left the building.

Quote of the Day

Thu, 21 May 2009 18:09:00 -0700

A certain casino.

"The old timers will remember the time, and not that long ago, when casinos just looked at your action and rewarded you accordingly. They figured everyone wins at least part of the time, and they knew that if they cultivated the customer and encouraged him to continue to play, they would usually still make money on him in the long term. Bean counters are big on looking at the short term!" -- Jean "Queen of Comps" Scott on certain casinos that are sweating slot-club points and bounce back something fierce.

Brooks: Steve Wynn sucks

Wed, 20 May 2009 14:10:00 -0700

State of the art Las Vegas ... if you're David Brooks.

OK, so David Brooks didn't go that far in his latest New York Times think piece, but if you applied his nostrums to the casino industry, Las Vegas would still look a heckuva lot like it did in 1988.

"The methodical executives at successful companies just make the same old four-door sedan, but they make it better and better," he writes. Then, further down: "The C.E.O.’s that are most likely to succeed are humble, diffident, relentless and a bit unidimensional. They are often not the most exciting people to be around. ... the virtues that writers tend to admire — those involving self-expression and self-exploration — are not the ones that lead to corporate excellence."

Hmmmmm. Steve Wynn can be egotistical, assertive, self-contradictory, multifaceted, expressive and reflective -- often all of the above in the space of a few sentences. His business track record must be a complete train wreck, mustn't it?

So hit the bricks, Wynn. You too, Anthony Marnell II & III, Glenn Schaeffer and Jim Murren, you art-collecting college-boy snobs. (They probably sip wine too, doncha bet?) We don't need none of yer out-of-the-box, smarty-pants thinking. Just give us the next iteration of the Boardwalk or Bingo Palace and make it snappy, OK?

The sound of obsolesence: The next time Review-Journal Editor Thomas Mitchell pens one of his endless series of musings wherein be strokes his moustache and is mystified by the decline of the newspaper bidness, he might ask himself this: Why did his paper run this wire-service story when the Sun had gotten to it two days earlier and in far greater detail?

The sad saga of Terrance K. Watanabe is rife with disturbing moral, ethical and regulatory questions. About the only clear-cut conclusion is that Watanabe's defense is a non-starter. (Harrah's Entertainment may be in trouble, but that's a separate issue.) Former Philadelphia Eagles owner Leonard Tose tried the same thing and had even less luck in court than at the tables. Fortunately, David G. Schwartz is right here to provide us with the relevant history and the precedent that augurs so poorly for the luck- and sobriety-challenged Mr. Watanabe.

It must be frustrating to keep trying to influence events and yet events refused to influenced, mustn't it? Let's ask this guy. He doesn't have a Puliztzer Prize, 'tis true. (Running stories two days after the Sun does might have something to do with it.) But some guy in Cedar City, Utah (who apparently couldn't find a copy of the Deseret News) is a big fan.

This just in: Schwartz also has the early word on a proposal to legitimize Illinois' gray-market slot route business. At first blush, this looks like a really good way to drive a dagger into the heart of the state's already-struggling casinos. Maybe Neil Bluhm should rethink that Chicagoland casino he's planning.

Diversity initiative at MGM Mirage

Tue, 19 May 2009 16:43:00 -0700

As in revenue diversity. Just when it looked as though CEO Jim Murren was getting locked into a Vegas-(almost)nothing-but-Vegas strategy, he busts out a couple of initiatives that would further expand and diversify his company's global reach and revenue stream.

After getting out two years back, MGM has quietly gotten back into the running for a 4,500-machine racino in Queens, N.Y. The company also has Florida-based developer R. Donahue Peebles in its corner. Others in the field for the Aqueduct contract include discrete bids by Steve Wynn and Penn National Gaming.

The latter is the only one currently involved in racinos and would seem like the logical choice, but observers seem to favor MGM's bid. If it goes through, the Aqueduct racino would pose a serious threat to other casinos in the region -- even MGM's own joint venture at Foxwoods Resort Casino. At least Foxwoods has table games, whereas slots-only Sands Bethlehem could see a huge chunk of its projected customer base gravitate back to the five boroughs.

In a low-risk deal, MGM is also franchising its MGM Grand, Skyloft and Bellagio brands to a trio of boutique hotels in Dubai. Developed by Dubai Pearl FZ, the threesome comprises a grand total of 630 rooms. Back here, that wouldn't add up to one wing of an MGM Mirage resort hotel. Otherwise, the Dubai Pearl project sounds awfully familiar: "an 'integrated city' with 5-star hotels, apartments, condominiums, retail and convention space." Kinda like ... oh, what's that big place down on the Strip? Yeah, CityCenter, that's it!

Exit the king? He's not quite off the stage, but in an event of historic proportions, Kirk Kerkorian's stake in MGM has fallen to 39%. Holy King Lear's abdication, Batman! Does this simply presage another Kerkorian comeback ... or the end of an era?

Poker > Gas mileage

Tue, 19 May 2009 14:22:00 -0700

Americans have voted with their mice and declared repeal of the odious UIGEA a top policy priority. Legalizing online poker outpolled increasing fuel-efficiency standards by nearly 2,000 mouse clicks ... but still finished way behind getting the U.S. out of the torture business. (Amen to that.)

In related news, an American Gaming Association study that's generating a flood of news stories all over "the Google" found that 81% of Americans surveyed thought gambling an acceptable form of entertainment. Seeing how AGA prez Frank J. Fahrenkopf was a soldier in the Reagan Revolution, he might want to share those numbers with some of his fellow Republicans. I doubt it will nudge them back into the mainstream on this issue (they're still too much in thrall to Dr. James Dobson) ... but there's always hope.

Wynn vs. Muth: Though he must have better things to do, Steve Wynn has lowered himself to siccing his legal beagles on conservative watchdog Chuck Muth. The latter assesses Wynn's threat as all bark, no bite.

S&G has no dog in this fight. But anything Muth does has to be read closely, since he doubles as Nevada GOP Chairwoman Sue Lowden's ghostwriter (despite having re-registered as an independent to great [self-generated] fanfare). Muth may be the one gnawing at Wynn's ankles but Lowden's probably still got a firm grip on the leash.

Bad news for the R-J: Despite its free-market posturing, the newspaper has long (and quietly) benefited from a state law that requires the publication of property-tax information at public expense. Well, that gravy train is about to run off the rails. Only a Gov. Jim Gibbons veto can keep it on the tracks.

Correction: No, he can't. The bill passed with veto-proof majorities. Other public subsidies of Nevada newspapers, however, remain in place.

In other news ...

A tax is a tax except when Midnight Jim says it isn't. On the other hand, Gibbons hid behind "the will of the people" when raising taxes on hotel rooms (i.e., on you, the tourist) but now decrees Nevada counties can't raise their own taxes -- no matter how much they may want it. So let me get this straight: Nevadans are competent to raise taxes on non-Nevadans who visit here but not on themselves? Yeah, got it.

Case Bets: B'way in Vegas; Trump bloviates

Wed, 13 May 2009 15:48:00 -0700

Opening night for The Lion King is three days away. Which means the New York Times is right on schedule with another hand-wringing piece about whether Broadway-style shows can succeed in Las Vegas. By now it should be obvious that it's a strictly case-by-case proposition. In the instance of Spamalot, Steve Wynn maintained that the show was profitable; he just wanted more profit. (Enter Danny Gans ... briefly.)

Could six -- soon to be seven -- Cirque du Soleil shows coexist on B'way? Most Vegas shows certainly wouldn't last there. Comparisons of the Strip and the Great White Way are apples and oranges, and always will be. At least the NYT piece has a colorful slide show. That Mel B. has quite the gams, doesn't she?

Ticker symbol: BHO. Even if Donald Trump couldn't keep pace with the casino industry and can't get anyone to buy his condos anymore, he'll always have the Miss USA pageant, over which he presides in a manner best described as "papal." He's also sufficiently astute to know that when your own brand equity is in the tank, latch onto a stronger brand, specifically President Obama's. The full video of the press conference is not for the squeamish, mainly because very unfortunate lighting made it seem as though Trump's hair color had leached into his skin, turning him completely orange.

Since what happened at Planet Hollywood didn't stay there and simply refuses to go away -- has, in fact, turn into the PR equivalent of a Megabucks jackpot -- it's time to roll out the heavy artillery. Ladies and gentlemen, I yield the floor to Mr. Keith Olbermann ...*

* -- including an extra-special cameo appearances by anti-casino nabob Dr. James Dobson and even Satan, disguised (?) as Perez Hilton.

Case Bets: Caesars, Criss Angel, Lance Burton, Earl & Lani and Trent

Wed, 13 May 2009 14:44:00 -0700

Seen last night by an S&G source, Pit One at Caesars Palace empty save for one or two baccarat players. It's just a small indicator of a larger disconnect that I hope to address later.

PR flack Robin Leach has been transcribing more of the gospel according to Criss Angel, the latest being that Cirque du Soleil's wunderkind "will juggle his schedule" of Believe dates to make room for filming the next season of Mindfreak. Do you think this might be a face-saving way to cut back on performances of a show that's already having to be deeply and frequently discounted? Naaaaaaaaaaaaah!

And is MGM Mirage really content to let Lance Burton walk, as appears to be the case? With only a month remaining on Burton's contract, no extension has been signed and MGM punted our query to Burton's manager.

Two of the Strip's major showrooms are currently vacant. Burton's act is probably too downmarket for Wynn Resorts' tastes (or pretensions, if you prefer) but Alex Yemenidjian could steal a march on his former employer by bringing Burton back to the Tropicana. Lord knows, the place could use him and Dirk Arthur is working on a short-term contract now -- a stopgap arrangement made when interim Trop management screwed up and came within days of having no shows at their property.

Value for the $$. Last week's adventures included checking out Voices at the Las Vegas Hilton, which gives the LVH a long-needed shot in the arm. Stars Earl Turner and "the beautiful Lani Misalucha" (as she is always introduced) wisely minimized expectations prior to opening. For one thing, their energetic, caution-to-the-winds revue features far more interaction than they led people to expect. Who knew if these two very different singers would "jell" ... but they do.

It's a rouser and -- at an $80 top -- a considerably better value than Elvolution, starring Trent Carlini. Eighty bucks at Voices gets you two headliners and a six-piece band. A $92 top at Elvolution buys you an Elvis Presley impersonator ... singing to backing tracks. That takes some nerve, I tell ya.

Quote of the Day

Tue, 12 May 2009 12:30:00 -0700

“‘That’s a little out there, that’s a little fey, maybe I won’t do that, maybe I’ll butch that one up.’ I think I might have done that.” -- Roger Thomas, about second-guessing himself on the designing of The Mirage and Treasure Island. Thomas, inarguably the most influential designer in Vegas history, is profiled in the new issue of The Advocate.

Quote of the Day

Thu, 07 May 2009 11:50:00 -0700

"When the Fertitta family started spending Bellagio-size money to create neighborhood casinos, they’d officially drunk their own bath water." -- John L. Smith, bemoaning some of the more self-aggrandizing and pretentious aspects of the casino industry.

Quote of the Day

Wed, 06 May 2009 15:10:00 -0700

"While some operators claim to see a faint light at the end of the tunnel, Steve Wynn remains somewhat more guarded [in] outlook. We won't attempt to judge who is right or wrong ... we would note that, in our experience, Mr. Wynn has been honest in his quarterly assessments ... and generally quite accurate." -- BMO Capital Markets analyst Jeffrey Logsdon reacting to Wynn Resorts' most recent earnings call.

Irony is Dead Dept. III

Tue, 05 May 2009 18:05:00 -0700

On Monday, Gov. Jim Gibbons (R-NV) proclaimed this to be "State Employee Week," complete with flowery script and many a preambulatory clause. That'd be the same Jim Gibbons who, the week before, vowed to cut those same employees salaries even further than the -6% he'd already proposed. No word yet on whether aforesaid employees think having a whole, entire week designated in their honor makes up for a decrease in their take-home pay. (Nevada has the fewest state employees per capita in the U.S., so it's not like they're underworked ... just pay a visit to the DMV sometime.)

Sic transit gloria Gans: Singer/actress Beyoncé Knowles (above) will be playing a short run at Wynn Encore this summer. Reports a source who keeps tabs on casino Web pages, "she was selling tix on what was formerly Danny Gans' 'page' before he was even cold." Lest we need reminding, this is not a sentimental town.

The 'CityCenter effect.' Although MGM Mirage estimates it's had 110,000 applications for a maximum of 12K jobs at CityCenter, it transpires that 17K of those came from within MGM Mirage. While that may give you a 70/30 shot at a CityCenter job if you're already with the company, the rest of us might as well forget it and scan the job listings for vacancies at other MGM Strip casinos. If a Bellagio slot attendant gets a job at Aria, that promotion should manifest itself all the way down to food chain. On other words, this is your big chance to work at Slots A Fun, the casino of which MGM is so ashamed it doesn't list it as a discrete property on its Web site.

Rising above the fray. Confronted with a classless gesture in front of his casino -- and I say that as somebody who saw the protest-like promotion with his own eyes -- Palms owner George Maloof responded with class. By the way, those weren't just 40 guys with signs, they were wearing illuminated, sandwich board-sized placards on their backs. It made quite a startling sight late on a Friday evening, one of the tackiest things I've seen in Vegas (and we write the book on "tacky" here). The Hard Rock Hotel & Casino, meanwhile, continues its downward mobility.

Murren talks smack re: Wynn, Schaeffer

Fri, 01 May 2009 15:39:00 -0700

"No one has proven, by the way, that they can operate properties better than us, so ...uh ... and there's a mountain of information to show that we operate properties better than anybody. Everything that we've acquired is making more money under us than anyone else." -- MGM Mirage CEO Jim Murren. That's a mighty forceful statement when the operators you've superseded include ex-Mandalay Resort Group's Glenn Schaeffer and ex-Mirage Resorts' Steve Wynn. Murren goes on to say, "We have market leadership in every market in which we operate."

... but what about a little place by the name of Macao? The last anybody heard, MGM was sixth out of six operators over there (and, yes, it's lagging far behind a casino run by -- you guessed it -- Steve Wynn).

Almost as an aside, the Las Vegas Sun's Liz Benston reveals that one of the two chunks of Strip land that MGM used as collateral was not the "Project Z" site south of Mandalay Bay (as S&G erroneously deduced) but a smaller, less strategic site across the Boulevard from Luxor. So far, with the exception of MGM Grand Detroit, the company has been able to avoid pledging any of its flagship properties.

Though Murren is willing to peddle MGM's regional casinos, he balks at downsizing its already vast Strip presence. We'll see how that strategy pays off when the "CityCenter six pack" opens for business, starting in October.

Danny Gans, R.I.P.

Fri, 01 May 2009 11:25:00 -0700

Words are always inadequate on tragic occasions like this. (Both daily papers have more pro forma obituaries.) Unfortunately, the late Mr. Gans hadn't been gone from this vale of tears even four hours when the mythmaking machinery kicked into gear. A KVVU-TV anchor informed viewers that it was Steve Wynn who put Danny Gans on the map.

Now, if there's one current Vegas figure whose resumé needs no inflation, it's Steve Wynn. His accomplishments are many but Gans was firmly affixed to aforesaid map well before he signed with Wynn ... nor, I hasten to add, has the Wynn family been responsible for putting this urban legend into motion.

Gans was an established, hot-ticket act at The Rio when Wynn lured him to The Mirage. Unfortunately for Gans, Wynn was soon elbowed out by Kirk Kerkorian and it would be nearly a decade before the two were reunited at Encore. Gans found himself working for a different set of bosses than he'd anticipated and an occasionally stormy relationship ensued -- much as he'd bickered with Rio ownership (not without justification) towards the end of his tenure there.

From a business standpoint, Wynn is left with the burdensome task of having to find a new resident act for the Encore Theater for the third time in as many years. To compound the burden, the room had recently been extensively reworked to suit Gans' show, so that's a "given" when contemplating possible successors.

Bottom line, Wynn's got a customized showroom and no one to fill it. That's scarcely at the collective forefront of Wynn Resorts' mind today, but it soon will be.

Wynn, unplugged

Thu, 30 Apr 2009 18:27:00 -0700

"Wynncore"'s boss has been all over that series of vacuums and tubes which some call "the Internet" this week. He did Kirk Kerkorian a favor by suggesting that he, Steve Wynn, would be tractable to buying anything the aging aviator had to sell ... even Circus Circus.

While Wynn may have been merely being playful, enjoying how much the worm has turned since then-MGM Grand forced him out of then-Mirage Resorts, his expression of interest helped goose MGM Mirage stock by 5%. Holders of Wynn Resorts shares, however, may have emitted a collective "Eek!" at the thought of Wynn buying yet another clown-themed casino (don't forget that he once owned the Boardwalk). WYNN shares slipped 3%.

If Steve Wynn on 60 Minutes is good, then 69 minutes with Steve Wynn must be better, right? Either way, here he is at the Milken Institute's Global Conference 2009. What's inarguable is that there is no other CEO in the gaming group -- no, not even Sheldon Adelson -- to whom people would listen for anywhere near that amount of time. True, many Americans do watch an hour-long TV show starring ex-casino mogul Donald Trump, playing a parody of CEO (or could it really be a cunningly disguised Alec Baldwin in the role of Old Fish Lips?) ... much as they do When Animals Attack! or World's Scariest Police Chases.

Bloomberg News cornered Wynn for a few minutes and the unscripted result was better than any televised fender-bender. [Warning: The audio is subject to frequent dropouts.] Wynn began by acknowledging that, times being what they are, Americans are scarcely obligated to visit Las Vegas.

One wishes certain umbrageous local figures would get that memo.

He also notes that Wynncore is cheek-by-jowl with "all the convention centers." So I take it that proposed Wynn Las Vegas/Encore convention center is now off the drawing board. Strip land acquisitions are flatly ruled out -- no doubt causing some long faces at Elad Properties, Triple Five and other companies that bought acreage at the top of the market (i.e., $33 million-$36 million/acre) and can't do squat with it now. Uncle Steve is not coming to their rescue, I'm afraid ... and why should he? As Wynn obliquely acknowledges, he's got plenty of land of his own, fully amortized but not developable in these tight-credit days.

But it's when the conversation turns to politics that things get well and truly interesting. Starting with an observation that the government is too fixated on infrastructure improvements, Wynn gradually works himself up into an fine rage. His description of President Obama's policies runs the gamut of "naive ... doesn't have much credibility ... unimpressed ... ridiculous shopping list ... the right ideas at the wrong time ... shotgun approach." He faults the current administration for lacking "experience and priorities" and -- in a somewhat ironic choice of analogy -- says that when a patient is undergoing major surgery, "you don't give 'em advice on a nose job."

You want must-see TV? This is it!

Unfortunately, Wynn is somewhat hamstrung when pressed for constructive alternatives. His one substantive answer is a proposal that Uncle Sam subsidize new hires if the employer provides health benefits. Beyond that, he falls back on a broad-brush invocation of tax policy (which "incentivizes people to do what the government wants them to do"). Wynn thumps the "tax policy" tub so relentlessly that he starts to sound like a personality-implanted version of Rep. John Boehner, pining for the return of the previous administration's economic policies as fiscal Viagra.

Give the man credit. He's got strong opinions and no fear about voicing them. He's a cheerfully impolitic figure in word-parsing times and the casino industry might be unbearably dull without him.

"Ugly Americans"?

Tue, 28 Apr 2009 11:15:00 -0700

G2E Asia has announced its keynote speakers and it's looking like a family affair. If you're up bright and early on June 3, you'll be treated to the insights of Stanley Ho, recipient of this year's "Visionary Award." The keynote address proper, the day before, goes to son -- and Melco Crown Entertainment CEO -- Lawrence Ho (above) who should be flush from the opening of City of Dreams.

So who's not on the roster of headliners? Ohhhhh ... anybody from Las Vegas Sands, Wynn Resorts, MGM Mirage. You know: all the capitalist running dogs. They can take comfort in the fact that no keynoters have been invited from Hong Kong-based Galaxy Entertainment. That company just imported two new top execs from the U.S., so maybe it will be a proxy recipient of some of the anti-Americanism that's currently en vogue in Macao. At least, since G2E Asia is being held at his Cotai Strip™ CotaiExpo, CEO Sheldon Adelson will be crying all the way to the bank.

If you've ever been curious as to what LVA HQ looks like, here it is in all its glory. Be it ever so humble, there's no place like Huntington Press. No Stella Artois beer on tap these days, though. Darn that recession.

Oops, they did it again

Thu, 23 Apr 2009 14:27:00 -0700

Back when Art Marshall was still on the Nevada Gaming Commission, he warned against the dark prospect of "corporate arrogance." Unfortunately, when MGM Mirage proposed to devour Mandalay Resort Group and Harrah's Entertainment followed with a "me too" takeover of Caesars Entertainment, Marshall opposed neither. He was far from alone in assenting to this anti-competitive duopoly on the Strip but he and others might do well to observe how the chickens have come home to roost.

For instance, according to a report in this morning's Las Vegas Review-Journal, if you're Harrah's Las Vegas and you've applied for a permit to overhaul the second floor, you don't actually have to wait for approval. You just go ahead and do it.

Never mind that Harrah's was caught red-handed by the R-J engaging in this sort of mischief over and over, something county authorities were either too lazy or disinterested to notice. (To its eternal credit, the R-J did ... and paid a terrible price.) There's still an outside chance that Harrah's will get a few light wrist slaps for its previous corner-cutting -- but that's obviously not been any great deterrent. Heck, even after Harrah's had been nabbed the first time, gaming regulators said everything was A-OK. Move along, folks. Nothing to see here.

The jury's still out on whether Harrah's is too big to fail, although MGM Mirage clearly is -- if recent intercessions by Sens. Harry Reid and John Ensign hold any significance. However, Harrah's has clearly gotten too big for its britches, as its cavalier attitude towards following the building code indicates. Congratulations to Leon Black and CEO Gary Loveman for having brought a once-admired company to its present state.

(Say, Gary, whatever happened to that remodeling/retheming of Bally's Las Vegas you promised the world 46 months ago? Just wondering.)

In one particularly tart mini-essay, Steve Friess identified the two mega-takeovers as the point where Las Vegas began to go off the rails. Except for interested bystander Steve Wynn, there are still too few people willing to say it was a mistake -- and fewer still back then. Between the anti-regulatory fervor of the Bush II administration and a Vegas ethos that what's good for Kirk Kerkorian is good for everybody, a once-competitive Strip got steamrolled into an oligopoly.

And the market did sustain it ... for a time.

Morrison counsels MGM

Wed, 22 Apr 2009 14:39:00 -0700

Why keep making fun of the Las Vegas Review-Journal? Because the R-J persists in making it so easy, that's why. For instance ...

Call the Sun. Columnist Jane Ann Morrison has some deep thoughts on MGM Grand Macau. Namely that co-owner MGM Mirage should consider "a reasonable offer" from partner Pansy Ho. Gadzooks! With that kind of insight, it's a wonder Morrison isn't running MGM in lieu of CEO James Murren.

Actually, she might want to put in a call to Las Vegas Sun/In Business Las Vegas veteran Jeff Simpson, who'd explain to her -- as he did to fellow panelists on a "Vegas Gang" podcast -- that Macanese subconcessions can only be sold back to their original concession-holder ... in this case paterfamilias Stanley Ho. Which would be one reason why "Morgan Stanley hasn’t been asked to screen offers for the [sic] MGM Grand Macau." But, hey, if Dr. Ho comes knocking, make sure it's with "a reasonable offer," 'kay?*

R-J to Sun, "Nyah-nyah!": Yeah, so what if the Sun won a little old Pulitzer Prize. The R-J nabbed a "Best of the West" from Arizona-based First Amendment Funding. So there! That Sun is, like, so totally spanked.

On the upside, today's R-J has a good exposition of why banks and other lenders are exercising so much forbearance (in both senses of the word) when confronted with insolvent casino companies. Money quote, as it were: "... the creditors are thinking the way things are now, we just might as well string them along for a little while thinking you'll get more of a return on the bonds that way." Forced asset sales will probably be remunerative a ways out, too ...

* -- Morrison is at least in good company here. Charlie Rose's recent 60 Minutes piece on Steve Wynn repeatedly committed the solecism of referring to Wynn's newest pleasure palace as "The Encore." If you see Rose, be sure to tell him how much you enjoyed his The 60 Minutes segment on The Steve Wynn, which you watched on The CBS.

Exit, pursued by a bear market

Fri, 17 Apr 2009 17:39:00 -0700

Aside from the occasional murmur by Wynn Las Vegas prexy Andrew Pascal, executives at Wynn Resorts keep a low (read: invisible) profile. Even the most assiduous follower of the casino industry would have trouble naming Wynn's CFO off the cuff. If you answered, "David Sisk," as of last Monday you'd be wrong. The contours of his golden parachute strongly suggest an involunatry exit, softened by at least $767,000 worth of severance pay, plus a limited-time offer of stock options.

One can't fault the generosity of Mr. Sisk's deal: He's to be paid a year's salary at pre-rollback rates and, from what little information is disclosed, it doesn't appear that he's bound to a non-compete clause. Odd that Wynn would do this without having a successor in the wings. Of course, there are more than a couple of ex-Las Vegas Sands and Harrah's Entertainment executives updating their resumés these days.

"Encore, me no like!" According to Majestic Research analyst Matthew Jacob, customers are having a tizzy over Encore's "chambered" casino layout and gravitating back to more traditional Wynn LV. So what plays in Macao may flop in Vegas, huh? You can't fault El Steve for trying. Jacob is predicting a squishy 1Q09 for Wynn Resorts, compounded by a first-ever patch of adversity at Wynn Macau.

Jacob is also the star of this CNBC segment on the gaming group, politely wiping the floor with Gabelli Global Multimedia Trust's Larry Haverty. The latter's declaration that resiliency in regional casino markets bodes an imminent recovery of Las Vegas, though we all wish it were true, is a textbook instance of 2+2=5.

Barring Atlantic City and the wholly aberrant phenomenon that is Illinois, regional markets have never slumped as badly as Vegas is doing and were much quicker to recover. Regional diversification is a double-edged sword for gaming: It's a valuable hedge against a wipeout in one key market, but it also gives customers that much less incentive to travel to Vegas or the Boardwalk when big-budget casino properties are coming closer and closer to home.

Haverty also goes off the rails vis-a-vis MGM Mirage's Aria and server-based gaming, predicting successful adoption at CityCenter will spur a wave of emulation. Yes, but ... not so fast. First, the economy will have to come firmly out of its present nosedive before casinos contemplate capex spending of that magnitude. Secondly, some of SBG's largest potential consumers -- like Harrah's Entertainment, Station Casinos, Las Vegas Sands and even MGM are so badly in hock that they're in no position to participate in a major replacement cycle. Furthermore, I don't believe International Game Technology expects more than, at most, an initially slow and incremental adoption of SBG -- an infiltration of casino floors, not a blitzkrieg. But if you're looking at IGT as a long-term investment, a drawn-out replacement cycle would probably be a more desirable scenario anyway.

There's nothing in exceptionable in Jacob's half of the interview. His more finely shaded and detailed observations contrast favorably with Haverty's scattergun generalizations. And while I agree with the latter's enthusiasm for Boyd Gaming, it's a mite premature to be toasting Pinnacle Entertainment. If Pinnacle hadn't gotten bogged down in Atlantic City and were making a more appreciable dent in the St. Louis market, then I'd raise my glass without reservation. When Pinnacle was in acquisition mode there were few assets for the taking. By the time that buffet was replenished, Pinnacle's plate was full to overflowing.

Icahn vs. Kerkorian II; Ho hearts Adelson

Fri, 17 Apr 2009 11:18:00 -0700

Yesterday saw some intemperate spluttering in newspaper comment threads, along the lines "How dare the Wall Street Journal report the news? It might damage stock prices!" (One hothead even bruited the possibility of a libel suit.) All of which was predicated on the assumption -- and we know what happens when we assume -- that the WSJ was merely chasing rumors when it reported that Carl Icahn and Oaktree Capital Management were putting the squeeze on MGM Mirage, trying to steer it into bankruptcy. (Some -- including The Economist -- think a CityCenter-driven bankruptcy is inevitable, regardless.)

Undeterred, the WSJ is back with the full story today and it's the real deal. Icahn and Oaktree are not acting in concert and their agendas are different. Icahn is thought to be angling for a piece of the company while Oaktree likes MGM the way it is, if only it could "clean up its balance sheet." Were they able to force the bankruptcy issue, their rights would supersede owner Kirk Kerkorian's and regime change would surely follow.

But that presupposes a great deal ... not the least the 'great deal' MGM got from its bankers when it was able to borrow $7 billion unsecured. Also, crunch time is still a long way off. Icahn and Oaktree's best chances for bending MGM to their will won't come until July or October, when an aggregate $1.5 billion in bonds must be repurchased. In order to prevail, either Oaktree, Icahn or both would have to thwart that repurchase, presumably by refusing to tender their bonds. But MGM still has a few cards to play in the meantime.

Across the Pacific, Bloomberg has the skinny today on what went down at Sheldon Adelson and Stanley Ho's secret lunch at Venetian Macao earlier this week and a subsequent summit meeting yesterday. (Melco Crown Entertainment CEO Lawrence Ho joined the oligarchs, as did MGM Grand Macau co-owner Pansy Ho, along with a local proxy for Wynn Resorts).*

It seems that detente is the word for the day, with the two ancient enemies agreeing to forego their arms race in favor of cooperation. Or, as the 87-year-old Ho put it, “Everyone agreed not to compete, to have enough rice to eat and to get more taxes for the government." (Adelson was uncharacteristically mum.)

... where the elite meet.

Considering the "cutthroat competition" (as Ho once put it, shortly after some junket operators had their throats slashed) that's prevailed so far in Macao, this new entente cordiale sounds like something that's going to be far easier said than done -- especially when the market begins to rebound. The latter already shows signs of bottoming out. MEAG Hong Kong Ltd. Investment Director John Koh speculated prior to Thursday's superpower meeting that the Adelson/Ho accord would mandate:

• one standard rate for junketeer commissions

• a salary freeze

• a hands-off policy toward one another's VIP ~~players~~ hosts and/or key executives

Since Adelson has several Cotai Strip™ projects -- including a St. Regis and a Shangri-La -- gathering rust, could his sudden amity with the Ho clan be a means of courting bailout money? And how would the Macanese government -- to say nothing of Steve Wynn -- react to the prospect of a polyamorous alliance betwixt SJM, Las Vegas Sands, Melco International and Ms. Ho's Shun Tak Holdings, say? Such a hyrda-headed oligopoly would give competitors a great deal to worry about and seems far from inconceivable, given the desperate circumstances of certain of the parties involved.

*--Galaxy Entertainment seems to have been conspicuous by its absence, but that underachieving company has other Koi fish to fry. The fact that Galaxy is writing down the value of its license, though, says less about the Macao market than about Galaxy and its failure to make substantial inroads, despite being one of the first companies on the scene.

Grab your ankles, casinos

Wed, 15 Apr 2009 18:05:00 -0700

Nevada lawmakers' revenue model.

There's one industry that does far and away more than any other to pay the bar tab for the State of Nevada and it's probably about to be mandated to pay even more. That's because even though we're suffering through, proportionally speaking, the worst budget deficit in the U.S. and the methodology underlying Nevada's general fund is incredibly flawed, other industries will be allowed to continue shirk their share of the load.

How do we know this? Because invertebrate gubernatorial wannabe Barbara Buckley (D-[Your logo here]) flat-out won't support a corporate income tax. Which might be all right if she had a viable alternative, other than a pie-in-the-sky suggestion that Nevada diversify its economy.

Heck, people more serious than Buckley have been calling for such diversification for years and it still hasn't happened (in part because the wretched state of Nevada education -- about to get worse -- scares companies away). And it's sure as shooting not going to magically happen in the scant few weeks the Lege has to cobble together something resembling a budget.

Sales taxes and gaming taxes each represent roughly a third of the state's revenue base. The former is regressive both by definition and in practice, while the latter discriminates heavily against one industry, while letting all others pretty much off the hook. For instance, the state's two most lucrative mines paid $13.3 million in taxes to Nevada in all of 2007 -- on $436 million in taxable revenues. Casinos, however, paid $65 million in taxes on $840 million in revenue last February alone.

Were Nevada's gaming industry not in freefall, that disparity would be more glaring still. But Silver State solons would rather jam hot needles into their eyes than ask the sacrosanct extractive industries for one thin dime more. (Boy, they'll be sorry when those mines are tapped out.)

Heck, our legal brothels have actually offered to be taxed but our maidenly lawmakers demurely proclaimed, "No, no, a thousand times, no! You cannot buy my caress." How come? It would create -- get this -- image problems for a state that got on the map as the divorce capitol of America. Prostitutes are showing themselves more civic-minded that our ostensible "leadership" ... but the profession known as prostitution has always been considerably more honest than the prostitution known as politics.

Given the ramshackle history of Nevada's tax structure and some hints dropped by Buckley and crony Morse "Moose" Arberry, we've got a pretty good idea of what to expect from their Secret Budget Plan (under wraps until next month): More of the same. As in higher sales taxes, state fees ... and, yes, gaming taxes. Steve Wynn's warning about the catastrophic effect of the latter is apparently going to fall upon deaf legislative ears. Wynn's said he's "the most powerful man in Nevada." Now would be a good time to prove it.

On another note ...

God forbid, you need to answer the call of nature during the playing of a mediocre Irving Berlin song, at least when you're at Yankee Stadium. Support freedom -- or else! That good old George Steinbrenner spirit remains alive and well, I see.

Quote of the Day

Fri, 10 Apr 2009 18:50:00 -0700

“I know that if they go after the gaming industry we will have massive, unbelievable cutbacks. The unemployment rate will go to 15 percent." -- Steve Wynn, stating his opposition to another increase in the Nevada privilege tax, as opposed to instituting taxes on other businesses which, he says, are “as selfish people who have refused to take up one speck of their fair share.”

A too-florid 'Aria'

Tue, 07 Apr 2009 16:47:00 -0700

As MGM Mirage winds the clock toward Aria's Dec. 16 debut, it's launched a Web site to showcase the resort's restaurants. The over-the-top verbiage was too much for one LVA staffer, who annotated it thusly:

AMERICAN FISH by Chef Michael Mina

Is that like "American Gangster"?? And how do you truly tell the nationality of a fish?

SIRIO RISTORANTE by Restaurant Legend Sirio Maccioni

Oh, so no longer do we have "celebrity chefs"; now we have "restaurant legends"???

AND;

"Ingredients from the earth, sea and air …"

As opposed to??

JEAN GEORGES STEAKHOUSE by Chef Jean-Georges Vongerichten

"The expected becomes unexpected"

Haha!! So when you order a steak, we bring you a cauliflower!!!!

OH!OH!OH!, and this one's my favorite:

"Green pastures, cows and the theory of human vanity"

This is a description of the decor?? HAHA!!!

Inside the wizard's lair: If they sold tours of Steve Wynn's office, it'd be the hottest attraction on the Strip. Steve Friess got the next best thing -- a peek behind the curtain of Wynn's design nerve center. More accurately, he was able to tour the office of Roger Thomas, the aesthetic guru of Encore (above) and many another Wynn property, and take copious photographs. Love or hate Thomas' work, it's set the trends that the rest of the Strip follows.

Leper Colony

Fri, 03 Apr 2009 17:05:00 -0700

Or, in lieu of "Atlantic City Death Watch VII," maybe "Colony Death Watch." Scarcely had S&G dubbed Colony Capital's East Coast casino portfolio "Colony Crapital" than came affirmation in the form of the latest set of numbers from the Boardwalk.

First, the good news. Everyone in Atlantic City reported a profitable operating margin last year as well as a gross operating profit. As the Press of Atlantic City explains, "Net income, however, is not considered as important as gross operating profit, which is seen as the best way to measure a casino’s financial strength."

For instance, Harrah's Entertainment had the two best operating margins in the city (at Caesars A.C. and Harrah's Marina) and four of the top five. In gross operating profit, the Harrah's-owned quartet held the #2-3 and #6 spots, bested only by Borgata (#1, of course) and Trump Taj Mahal. However, thanks to some accounting jiggery-pokery back at corporate HQ, all four posted year-end losses -- some of them gargantuan, like the -$355 million charged against Caesars. Only Boyd Gaming's Borgata reported a profitable 2008. In terms of revenue, it was so far ahead of everybody else -- by $280 million -- it's not even funny.

For Harrah's Marina, the good news was triplefold. Not only did it have the smallest diminution of gross operating profit (-1%), it was also the sole casino to record an increase -- 8.5% -- in revenue.

Harrah's operational skill aside, UNLV's David Schwartz found another silver lining. To wit, "I’m surprised that gross gaming revenues fell by only 7.1%. For all of the belly-aching about the partial smoking ban and competition from Pennsylvania, Atlantic City’s gaming win actually declined less than Nevada’s, which shrank by about 10%. People are still willing to come to Atlantic City; they are just gambling less." [Emphasis added.]

Now for the bad news. The two lepers in the A.C. colony are -- you guessed it -- Resorts Atlantic City and the Hilton. Those two Colony Capital casinos posted extraordinarily dismal numbers, even by last year's low standards. Their operating profit margins were less than 2%, against a market average of 21%, and their gross operating profit was $6.3 million ... combined. In a year when the average Atlantic City casino saw a gross operating profits fall 25%, Colony's duo crash-dove -88% and -89%, respectively.

Compare this to Trump Marina. Even in a semi-orphaned state, as its sale dragged on (and on), the future Margaritaville garnered superior operating profit margin -- 7.5% -- and a far bigger operating profit on the smallest revenue base in the market. It reported gross operating profit of $15 million on revenues of $195 million. Somebody's doing something right and it's not Colony's Atlantic City braintrust.

Does Colony know how to pick 'em or what? And is MGM Mirage sure it wants to get into bed with these guys? They're starting to make James Packer look like a sagacious casino mogul. As for the Hilton, which used to be Steve Wynn's Atlantic City Golden Nugget, suffice to say it's seen better days.

Quote of the Day

Thu, 02 Apr 2009 12:16:00 -0700

"What's awesome about XS though is that it's overbuilt even by the economic standards of two years ago. That means that there are always tables available and as long as you're ordering drinks from the bar to bring back, they won't give you a hard time for sitting in them. In fact, on a beautiful night like ours, I'd say a good 10% if the tables inside the club were available and every single one of the 30 or so cabanas out by the pool were unoccupied." -- "Mike E," reviewing Encore, including a rare glimpse of its Sky Casino.

Case Bets: Wynn, Adelson, casino closings & Number One

Mon, 30 Mar 2009 18:45:00 -0700

Last winter, I got a break on my rent -- but not nearly as good as the one Steve Wynn did. That's a nice deal, if you can get it.

Las Vegas Death Watch: In the latest "Stripper Poll" posted by Steve Friess, he asks which Strip casino should close first "if economic conditions warrant it." Through some glitch, the Tropicana was listed twice, so voters may be using two of their three votes on it. Either way, it's out in front with 40 votes, with hanging-by-a-thread Hooters second (31 votes) and Circus Circus, the casino people to hate -- and patronize -- third with 29, as of this writing.

The fourth-place showing by the customarily derided Imperial Palace counts, in this context, as good news for the IP. As for the Tropicana's prospects, I'd still count them better than Riviera's ... assuming Trop management gets its act together, which it shows few signs of doing.

Good news for Adelson: An analysis of the East Coast casino market finds Sands Bethlehem relatively sheltered from strong competition and likely to swipe business from two rival Pennsylvania slot parlors.

Whatever service workers get paid, it's not enough, as this story demonstrates. The indignity alone is impossible to quantify.

The Unlucky Club & other Case Bets

Thu, 26 Mar 2009 14:40:00 -0700

Did somebody build the inaptly named Lucky Club (above) over an Indian burial ground? A deprivation of access is but the latest indignity suffered by this North Las Vegas grind joint. While it was still the Speedway Casino, it was ravaged by fire. Years earlier, it was the Cheyenne, most famous for having its bookeeping described as "smoke and mirrors" by then-Nevada Gaming Control Board Chairman Bill Bible. That rumpus -- and a few others like it -- would dog casino speculator Shawn Scott for the rest of his spotty career. Last we heard, Scott had hunkered down in the Virgin Islands.

Better fortune was in store for the long-on-the-market Ritz-Carlton Lake Las Vegas, which couldn't find any takers not so long ago. I'm guessing "undisclosed price" is code for "fire sale."

(Update: It sold for $98 million.)

At least I'm not alone in thinking that Las Vegas Sands is headed over the brink. So does John L. Smith who has more bad news for Sheldon Adelson.

Need to raise awareness of your bookmaking service? Hire a gambling addict as your pitchman! The surprise isn't that this, er, novel marketing initiative was ashcanned but that it got as far as it did. Earth to Better Bet, Earth to Better Bet ...

Earth to Wynn ... Weather forecasters have been predicting high Thursday gusts of wind all week long. But Wynn Resorts must not have paid its cable TV bill because it sent window-washers up Encore anyway. Not surprisingly, something went wrong and they had to be rescued. Now that everybody in Vegas is on a curtain-wall craze, expect crises like these to multiply exponentially.

Going out on a limb, the Las Vegas Sun says that Sens. John Ensign and Harry Reid were doing the right thing ... now that a consensus has formed and the story has faded, making it safe to take a stand.

Wendover: Casinos, yes; mental health care ... not so much.

If you're going to lose your marbles in Nevada (some would say I already have), don't do it in Wendover. It's still OK to lose money there, though. Wendover Will approved this message.

On second thought, you might not want to bring your money here, either. At least not if you use debit cards. Where do I sign the petition to abolish the Nevada Legislature? They don't need any stinking due process, do they?

MGM bailed out, slightly

Thu, 19 Mar 2009 18:03:00 -0700

Phil Ruffin is a true "george." He kicked up the cash portion of his Treasure Island purchase by 20%: to $600 million. That extra 100 million clams is manna in the desert for MGM Mirage, which was just downgraded again by Moody's, partly due to a shortage of cash in the till.

Incidentally, Ruffin says he's having trouble getting lenders to pony up the $175 million he needs to pay off the balance on the pirate place. It just so happens that $175 million is the amount Steve Wynn hopes to raise through his new stock offering. It's probably just a coincidence ... but Ruffin and Wynn do constitute a mutual admiration society.

"And so the curtain falls. I said, 'And so the curtain falls!'" Back in D.C., Sen. Harry Reid (D-NV) does his best "Move along, nothing to see here" shtick. Unlike Harry, I think this is a splendid time for finger-pointing.

Casino apocalypse

Thu, 19 Mar 2009 13:08:00 -0700

I'm deeply imbedded in other projects today. In the meantime, by way of In Business Las Vegas and GamingFloor.com (source of yesterday's Harrah's Entertainment time warp, too) here's the answer to the question, "How many casino failures can you pack into nine minutes?" Watch it and weep.

Death, taxes and Station Casinos

Wed, 18 Mar 2009 14:39:00 -0700

It's all but certain that the unenviable steeplechase to be the first major gaming company to declare bankruptcy in 2009 will be won by ... Station Casinos!* (On Tax Day, no less.) None of the company's three rescue scenarios does not involve some form of bankruptcy.

(* -- Unless Trump Entertainment Resorts still counts as "major" operator, but I strongly doubt it.)

Potential runner-up MGM Mirage is at least a month behind. Coincidentally or otherwise, mid-May would also mark the point at which the maw of CityCenter devours the $500 million realized in the Treasure Island sale (leaving approximately $600 million in the kitty), should that close on schedule.

Which might be A Good Thing: Another razor-sharp analytical piece from the Las Vegas Sun efficiently lays out the reasons why Chapter 11 is the worst option -- except for all the others. Not only does it keep the companies in one piece, it reduces the incentive to cannibalize capex dollars for debt servicing. Also, the prospect of facing regulatory scrutiny is daunting enough to bankers that they're inclined to keep the status reasonably quo.

Although MGM Mirage has one of the best debt-to-earnings ratios on what I'll call the Benston-Velotta Scale, short-term debt has pushed it far closer to the brink that Wynn Resorts or Boyd Gaming, both of whose ratios look slightly worse on paper ...

But not nearly as bad as the nearly 15:1 debt-to-earnings imbalance under which Las Vegas Sands is crumbling. It really makes you wonder what the Sands-loving analysts at Sanford Bernstein have been putting in their coffee. Running a close second at 13:1 is bankruptcy-bound Station, the victim of cash-flow projections that were extraordinarily far from the mark.

Taxing problems: More numbers are available on the proposed cigarette and liquor tax hikes. They're ugly but I did get a chuckle from the R.J. Reynolds lobbyist who floated the solicitous argument that tobacco taxes are bad because they're regressive. Nice try. (Altruism is not Big Tobacco's strong suit.)

I've also shamelessly swiped these market-cap comparisons, which Hugh Jackson posted today:

Barrick Gold: $27.5 billion

Newmont Mining: $18.72 billion

Wynn Resorts: $2.37 billion

Las Vegas Sands: $1.46 billion

MGM Mirage: $959 million

That's $46.2 billion for just two mining firms vs. less than $5 billion for three of the most significant casino companies. Which of these industries is in the cross hairs for an imminent Nevada tax increase? I'll give you a hint: The answer does not contain the word "mining."

Wynn(ing) Scenario: No matter what he says, people love to speculate that Steve Wynn's going to use his new stock offering to buy another casino. I'm not saying he won't ... but $175 million won't get him far, even in this market. Unless he's got a sudden hankering for the Tropicana or Riviera, that is.

Case Bets: MGM Mirage, Harrah's, Wynn, Shuffle Master, Taxes

Tue, 17 Mar 2009 15:05:00 -0700

As we wait for the MGM Mirage earnings report, signs of desperation mount. If the company is willing to cast away a pearl like new, costly and high-yielding MGM Grand Detroit, what isn't sacred? Not even the corporate jet, provided the buyer doesn't welsh on the deal. (Guess those high rollers won't have to fly commercial for a while yet.) Whoever made that offer for MGM Detroit, though ... (s)he's one smart cookie, methinks.

Dumping regional properties at a time when that's where the strength of the casino industry is just doesn't make sense -- although you could probably make a case for ditching the already written-down Gold Strike in Tunica or the Grand Victoria riverboat in casino-killing Illinois. Actually, getting the hell out of the hellacious Illinois market seems like the best idea since forever.

Congratulations, Gary Loveman! You took home $39.6 million last year, while your company was crashing and burning -- not to mention pink-slipping 8% of your workforce. Don't say Loveman isn't feeling Harrah's pain: He's forfeiting a whole $100K in salary for 2009. There goes the college fund!

The casino giant is one step from the bottom of the Moody's bond-rating ladder. In a memo to the SEC, Harrah's Entertainment announced that managers were taking a 5% pay cut and that "it might have to delay expansion, sell assets or restructure debt." Delay expansion? No! Really? That was off the table the minute the ink was dry on the LBO. Refurbishment is also a low priority, as capex costs will be trimmed by as much as 59%.

Meantime, the guessing game begins over which assets might be on the block. In one of the busier threads over at Hunter Hillegas' Two Way Hard Three, fellow blogger Chuck Monster synopsizes the reshuffling of Harrah's properties between various holding companies, which includes a possible abandonment of the volatile (read: shaky) Lake Tahoe market. Sometimes I think Harrah's does this jiggery-pokery just to amuse itself watching the blogosphere try to determine What It Really Means.

In a regional update, most Lousiana markets were slightly down last month -- except Lake Charles, which Harrah's pulled out of, leaving Pinnacle Entertainment in possession of the field. Oops.

Pssst! Don't tell anyone! It's stashed as the second item of "In Brief" but Wynn Resorts is floating a stock offering to the tune of over nine million shares. (Other sources say seven million.) Wall Street had an understandably adverse reaction -- at first blush -- to this 7% dilution of Wynn stock, which closed up $1.07 today. Given that it's a proactive move to retire debt, it's tough to quarrel with Wynn.

Update: Clarification of the Wynn stock float comes by way of Forbes.

As for the undying speculation that Steve Wynn might want to buy back Bellagio or golden oldie The Mirage, one analyst -- Goldman Sachs' Steven Kent -- says he "would be surprised to see Wynn pursue this," given that Wynn is a builder, not a buyer.

Parenthetically, in the above-mentioned blog thread, Brian Fey makes the following, extremely trenchant observation: "Its pretty bad, that here we are almost 10 years later [following Wynn's ouster from Mirage Resorts], and Steve's biggest competition is still Steve's old properties. Just shows you how far behind everyone else is when it comes to the game."

Shuffle Master wins? Rival company Elixir Gaming settled litigation by selling its Asian shuffler business. The Las Vegas Review-Journal sees it as a win for Shuffle Master, while the Las Vegas Sun takes the opposite take, implying that Shuffle Master got its pockets picked -- which could mean an ignominous curtain for just-departed CEO Mark Yoseloff, if that's indeed the case. They report, you decide.

More of the Same Dept.: Democratic leadership in the Nevada Lege is going to do exactly what (little) is expected of them -- jack up existing taxes to onerous levels as a cop-out solution to our budgetary crisis. Booze and cigarettes are the low-hanging fruit of taxation but Nevada casinos better get ready to bend over and grab their ankles, as they're probably the next target of opportunity. Oh, and brace yourself for a much bigger beer-and-wine tab at the casinos if this goes through ... as though casino booze wasn't costly enough already!

Never let it be said that S&G didn't at least once have a kind word for Columbia Sussex. The former Tropicana owner is reducing its carbon footprint. Amen to that.

Destroying the MGM Mirage village to save it

Mon, 16 Mar 2009 13:39:00 -0700

Over the weekend, several quasi-apocalyptic scenarios have arisen vis-a-vis how MGM Mirage could extricate from its enormous debt burden and liquidity crisis. The direst of the lot has the company shopping around two of its top performers -- Bellagio and comparably profitable MGM Grand Detroit -- to prospective acquirers. MGM is trying to dictate sale prices but that may no longer be a viable option.

MGM is at a dire pass if it's really peddling its Strip crown jewel, Bellagio, in order to preserve that X factor (or albatross, as some would have it) that is CityCenter. A ways back on the Vegas Gang, we saw auguries that any and all of MGM might be put on the CityCenter sacrificial altar. I daresay we hoped that day wouldn't come. CityCenter is going to be the company's defining achievement ... but perhaps not in the manner intended.

Several alternate possibilities are marginally less catastrophic and sometimes considerably more convoluted. These include A) simply pledging existing MGM properties as collateral against CityCenter; B) an outright swap of casinos for debt cancellation; C) offloading casino-hotels to third parties who then reimburse bondholders at above-market rates. Third-party buyers wouldn't qualify for the new tax deferral on distressed-debt buybacks, though.

Almost every one of those hypotheticals would accelerate the "unbundling" of the Strip that Steve Wynn predicted last winter. It'd be a buyers' market for healthy mid-cap gaming companies (though even they are struggling) and a bonanza for management companies whose expertise would come in handy for casinos that are in receivership and suddenly rudderless.

What with a seemingly unhinged (but actually Machiavellian) Stanley Ho railing against foreign devils in Macao, perhaps this is the moment for MGM to challenge old Stan to put his money where his mouth is: Buy back MGM's subconcession or loan daughter Pansy Ho the patacas to take the other 50% of MGM Grand Macau private.

After witnessing slow-motion traffic stretching several miles up I-15 from the California border yesterday, I'm prepared to say that the necessity of high-speed rail service to SoCal is beyond debate. Not so Rep. Mike Simpson (R-ID) but at least his "sin express train" japery makes it clear that his agenda is a moral one. It's damn near refreshing to have someone express his opposition honestly, instead of mincing about in fiscal-conservative drag.

Quote of the Day

Sat, 07 Mar 2009 10:49:00 -0700

"... why not use elegant? The truth is that when [Steve] Wynn gathers more than a billion dollars to sink into his vision, you can be sure that at this point he is building from knowledge, sure, but he's also building with love. And elegance definitely is a characteristic he has been striving for since Bellagio." -- Richard Abowitz, taking issue with Time Magazine's review of Encore.

Wall Street Hearts WYNN

Mon, 02 Mar 2009 14:05:00 -0700

"Buy Wynn!" is the bottom line of James Dobosz's unqualified endorsement of the stock. He especially likes the recent volte-face that saw Steve Wynn abandon an occupany-driven strategy in favor of high ADRs, on the theory that customers who can afford top-dollar hotel rooms can spring for like-priced spa treatments and restaurant offerings.

Putting a "buy" rating on a casino stock is akin to placing one's head on the chopping block these days. Consider Bernstein Research, which initiated ratings of Wynn Resorts and -- get this -- Las Vegas Sands at "outperform." Bernstein's rationale for the Wynn rating is persuasive, but anybody who writes blithely that Sheldon Adelson's company will "find its way out of its liquidity bind and emerge with a stellar portfolio of assets centered in Asia and including a crown jewel in Singapore," hath quaffed a dram too many of the LVS Kool-Aid, methinks.

The next day brought this "Oh shit!" bulletin from Singapore. A 13% drop in tourism is nothing to downplay, considering that both Marina Bay Sands and Genting's Sentosa Island megaresort will live and die on international business.

Bernstein's $8-a-share bullishness on Sands drew a withering blast from CNBC's James Cramer that began, "All right, you just rolled a seven in craps. That is, if you own the crap known as Las Vegas Sands!" His volcanic tirade is not for the faint of heart ... but Cramer was prescient when he frog-marched gaming stocks off to his "Sell Block" 14 months ago. Read the latest LVS financials and see what you think.

And even if LVS has held the Marina Bay Sands budget down to its $3.2 billion starting point, $300 million in cash flow is but a 9% ROI. We're looking at 5.5% if the worst-case scenarios are accurate. The $1 billion-plus megaresort epoch that kicked off with Bellagio and Mandalay Bay may someday be known as The Era of Diminishing Returns. If you want to buy casino stock, God bless you. Just don't expect the double-digit returns of yore.

Quote of the Day

Mon, 02 Mar 2009 12:17:00 -0700

Steve Wynn, back in his Mirage Resorts days.

"There’s an exact-a-pound-of-flesh mentality that we’re seeing in the new administration that I hope is misleading as we go forward. But, it’s caused us some trouble here and we have hundreds of thousands of employees in this industry, more than the automobile industry and I hope that Uncle Sam recognizes that and that the rhetoric that is used is more considerate in the future because it has been demonstrated to us that it can have unintended consequences." -- Wynn Resorts CEO Steve Wynn, during his 4Q08-results conference call, referring to the recent Wells Fargo farrago. The transcript makes excellent reading since Wynn -- as is his wont -- minces few words.

Wynn: now we know

Fri, 27 Feb 2009 15:53:00 -0700

When Steve Wynn laid out a draconian set of wage, benefit and schedule cutbacks at Wynn Las Vegas and Encore, his rationale could only be conjectured ... until now. What was clear was that Wynn was staring into some manner of abyss, not merely flipping out because of the now-infamous Wells Fargo cancellation.

An occupancy rate a hair under 80% is a good way to motivate stringency measures, as is a 20% drop in revenue per room. And if a -43% tailspin in casino revenue doesn't make you want to man the lifeboats, nothing will. No wonder Wynn's moves were so severe -- the starkest in Vegas. Besides, those occupancy numbers don't look to strengthen appreciably now that Wynn had done an abrupt about-face, dropping "fill the rooms" in favor of chasing $399/night ADRs. So REVPAR ≥ occupany, it would seem. Of course, when you have a two-hotel megaresort to keep bustling, a sniper-rifle approach to marketing is going to have its limitations.

Pulling its weight is Wynn Macao (the sole bulwark between a bad quarter and outright calamity). Ergo, it was spared from the thrift regimen. Rival executives who swing the scythe indiscriminately when overall business is down might learn from Wynn's case-by-case example.

Vdara, Aria previewed

Wed, 25 Feb 2009 14:18:00 -0700

Disclaimer: All of the images below were shamelessly snurched from Steve Friess' blog. If you want to see them in higher resolution and read his entertaining critique, I heartily urge that you pay a visit to Vegas Happens Here.

A 582-square-foot "suite" at Vdara.

Austerity kick: an 809-square-foot suite. Unfortunately, the "subliminable" advertising isn't discernible at this resolution.

Vdara Penthouse Suites come in two sizes, this one encompassing 948 square feet. While high roller at Wynn Las Vegas and Caesars Palace have been so overfurnished they feel enervating, Vdara is going a bit too far toward monasticism, don't you think?

Here's the plus-sized (1,316 square feet) Penthouse Suite, not quite so monkish.

Toward the smaller end of the room spectrum is the 836-square-foot Panoramic Suite. It doesn't stint on the view although, as Friess points out, certain other amenities are AWOL.

A standard room at Aria. How much would you pay for this midweek? One might say that's the $229 Question.

Aria's version of MGM Grand's Sky Lofts (currently the standard-setter for high-roller living). Judging from the furniture, I have an uneasy feeling that somebody has decided the Eighties are "in" again.

Postscript: It's a cold day in Hell when I find myself in full agreement with GOP Assemblyman Tyrus Cobb, but his comments about the impending room-tax hike -- as cited by Friess -- are spot-on. Be sure to read the burgeoning reader-comments thread, too, as it provides an excellent sense of how this will play in Peoria (i.e., not well).

Irony is Dead Dept. II

Thu, 12 Feb 2009 12:38:00 -0700

Our local newspaper has dispatched its resident anti-union correspondent to gnash out more propaganda about "forced union membership." Had this person any sense, they might realize that, were the Las Vegas Review-Journal a union shop, its employees wouldn't have been summarily subjected to a 401(k) suspension ...

... just like non-union employees at Harrah's Entertainment. As with their opposite numbers at Station Casinos, leaders of Harrah's probably wouldn't have gotten into this pickle were it not for a near-insane LBO. At the time of both management-led buyouts, the question of how these companies were to exponentially increase their indebtedness, pay it down, build all the new projects they were touting and generate positive ROI was simply begged. We were loftily assured that it could be done, although in my head I could always hear my Mom's voice, asking her favorite rhetorical question: "Using what for money?"

At least some of that "what" is now going to come from the 401(k) kitty. Oh, there'll be some give-backs at the managerial level, too. (Update: Said to be numbering in the "thousands." At least Harrah's did the right thing and told workers first, then the media -- unlike Wynn Resorts, which did it the other way around.)

CEO Gary Loveman made out like a bandit on the LBO, to the tune of nearly $100 million. So perhaps he could emulate Chuck Mathewson's old example at IGT and work for a dollar a year, plus performance-based bonuses. I'll even donate the dollar. Just tell me where to send the check.

At least I'm not enough of a cynic to think that Harrah's and Station screwed the pooch deliberately. Not yet, anyway.

Wells Fargo: Block that myth!

Fri, 06 Feb 2009 14:58:00 -0700

A spirited debate on the Wells Fargo-at-Encore brouhaha is playing out at The Movable Buffet. The "pro" side is gaining the upper hand -- offering better-reasoned arguments will do that for you.

Let's accept for the moment that the junket was highly justifiable (as increasingly appears to be the case) and that Vegas is a highly affordable convention market (opinions differ). Was Wynn Las Vegas/Encore a bargain in and of itself? Compared to the rest of the Strip, no. Is it a bargain compared to the price niche Steve Wynn coveted? Yes ... dependng on when Well Fargo booked the trip. Is it preferable for Wells Fargo to hold this event in the good old U.S. of A., as opposed to such previous locales of Cancun or the Bahamas? Mais oui, bien sur, which I believe is French for "Like, duh!"

What's disturbing is the emerging tendency to link the cancellation of the Wells Fargo event with coinciding salary and benefit cuts at Wynn Resorts. First the Las Vegas Review Journal's more-clownish-than-usual editorial did it. So did the same paper's "Business Matters" blog, which one holds to a higher standard than the R-J editorial page. So too has Richard Abowitz. Neither he nor anyone else is making an explicit linkage between the two stories but we're seeing the coalesence of a new urban legend.

To wit: Steve Wynn got the cancellation notice from Wells Fargo, flew into a panic and imposed a wide-ranging series of stringency measures. Is that possible? Yes. Is it either plausible or likely? Not in the slightest, IMO. But it's certain to become the new received wisdom if this implied causal relationship keeps being floated in the media.

A penny for your thoughts, Steve? No fool he, Steve Wynn loves free media. But I'd pay (well, a buck or two anyway) to know how he feels about being at or near the center of this particular story. Since it's his property they're talking about and not, say, Sheldon Adelson's, he's probably remembering the old saw that there's no such thing as bad publicity.

You know you're in trouble when there's turmoil at your casino and you look for rescue from Station Casinos. That's like sacking the captain of the Titanic in favor of the skipper of the Exxon Valdez.

What's the sound of stale?

Fri, 06 Feb 2009 13:12:00 -0700

It'd probably be very much like the dulcet tones of Danny F. Gans (pictured), who reassures prospective attendees to his Encore show not to worry: It'll be the same old same-old. Or, as he rationalizes it, "I'm trying to give [audiences] exactly what they want." (Which seems to be the problem with most Hollywood movies, too, but I digress.)

I'm only slightly younger than Gans and if a graying head like mine thinks that, say, doing a George Burns impression marks you as badly out of touch, what are the 35-45-somethings Gans claims to be targeting going to think? Heck, the recent Cirque du Soleil fiasco, Believe, didn't tank because it was too new, too risky but because -- by an overwhelming consensus -- it was too derivative, too Cirque de Yesterday.

"I feel like I'm kind of the Rocky of this town," Gans declares. Given that Sylvester Stallone looks ossified and does the same thing over and over, that analogy may be unwittingly apt. Gans' reputation is that of a performer whose act fossilized somewhere back in the Clinton administration and he seems determined to validate the perception. But Steve Wynn is wagering that there's money to be made off predictable mediocrity and he's likely to be proven right.

Weeping for Wells Fargo

Thu, 05 Feb 2009 17:59:00 -0700

Everybody seems to have an opinion on the Wells Fargo-in-Vegas imbroglio but me. No, the propriety of such an indulgence by a taxpayer-supported financial institution is dubious and, yes, I am genuinely concerned that the Las Vegas Strip lost some sorely needed business, even if cancellation fees will partially -- but not adequately -- soften the impact.

As it its wont, the local paper went straight into its default setting of Hysteria Mode in a tortured defense of Wells Fargo's abortive junket. Some of the better laugh lines include: "Are they supposed to hand out toasters to the associates charged with generating enough business to repay the U.S. Treasury?" Well, if your fiscal mismanagement has forced you to supplicate Uncle Sam for TARP money, even getting a free toaster might be excessive bonus compensation. (I speak somewhat in jest ... but not much.)

Then there's this Message from Our Sponsor: "It's worth noting that an extended stay in Las Vegas is nowhere near as costly as it was even a year ago. Many of the Strip's most opulent resorts are offering bargain prices for rooms, plus credits for meals, entertainment and, yes, gambling. Right now, Las Vegas and its first-class amenities are a bargain." Thank you, Las Vegas Convention & Visitors Authority. Who knew you were masquerading as the Las Vegas Review-Journal, too? And that spin ... Wells Fargo was coming here because they were savvy bargain hunters. Aha!

That certainly explains the choice of Wynn Las Vegas/Encore for the big corporate shindig. Of course, I'm not suggesting that Wells Fargo should have felt compelled to stay at Circus Circus or Hooters -- not that I begrudge them the business -- and Imperial Palace might have constituted "cruel and unusual punishment" under our Constitution.

But ...

For a genuinely thoughtful and persuasive apologia pro Wells Fargo, read David G. Schwartz instead.

Steve Wynn has a dragon -- and you don't

Thu, 05 Feb 2009 16:35:00 -0700

???? Wynn casino dragon (macau) from raychan on Vimeo.

The "Tree of Prosperity" at Wynn Macau has been supplanted by this awe-inspiring dragon, Steve Wynn's newest version of the Mirage volcano and Treasure Island pirate show (and way better than the wall-changing folderol at Switch). Too bad he didn't put a sacred monster like this in at Wynn Las Vegas or Encore. Because, in the immortal words of Peter Griffin, it'd be freakin' sweet.

Wynn: an afterthought

Thu, 05 Feb 2009 11:15:00 -0700

What was initially most striking about Tuesday's "orange alert" at Wynn Resorts -- and what got crowded out of my mind while I was writing -- was the irony of it. Prior to Encore's opening, Steve Wynn was telling anyone who would listen how financially sound his company was, had money in the bank, had fully financed its projects, etc., etc.

Now this: A belt-tightening regimen more draconian even that ones we've seen at Station Casinos or Trump Entertainment Resorts, two companies that are -- unlike Wynn's -- mired in deep mierda.

Que pasa, Steve? The saving grace, of course, is that the loss of full-time jobs has been avoided. There have been allegations of extra boards and part-timers being let go, but no official confirmation. It wouldn't be at all surprising: With non-union hourly employees seeing their work week shrivel from 40 hours to 32, it shouldn't be difficult for Wynn's managers to find full-timers willing and able to fill the odd, suddenly vacant shift here and there. And even if fewer lights are on or the floral arrangements are thinned out, Encore will still be the premier resort on the Strip.

There remains a disconnect between exuberant Steve Wynn's pre-opening rhetoric and the dose of cold, hard reality that was dispensed on Tuesday. Unless he had no idea what was coming at him, Wynn probably should have toned down the opening-week verbal bravura. Whatever the actuality inside Wynn HQ, the company looks like it got caught unawares. Which isn't a good perception to have out there when you've been lecturing the rest of the Strip on the error of its ways.

Station afterthought: It looks as though the Fertitta clan and Colony Capital may have backed their bondholders into a corner, at least for the moment. The latter group is stuck between a variety of rocks and hard places, and a dime on the dollar might actually look good to them. Should the matter go to bankruptcy court -- and once the secured creditors have cherry-picked all the goodies from the Station tree -- what guarantee exists that the bondholders will wind up with anything?

Black Tuesday: Wynn

Wed, 04 Feb 2009 15:42:00 -0700

With the aforementioned exception of Penn National and that of Bally Technologies, Feb. 3 was a wretched day to be in the casino industry, with most attention going to Wynn Resorts.

The company had to good grace to hold a conference call to announce what it was doing, in detail, resisting the obvious temptation to put out a press release and then just clam up. Steve Wynn lavished considerable praise on his employees and came across as sincerely concerned with keeping people employed, albeit in reduced circumstances. Contrast this with certain casino operators (coughColumbia Sussexcough) who have seemed to positively enjoy putting people out on the street, the more the better.

Encore: caught napping?

Wynn (the company or the person, take your pick) is also to be commended for graduating the pay reduction on salaried employees so that the lower-tiered ones face "only" a 10% cutback, as opposed to the -15% that will be suffered in the higher ranks. However, losing as much as $15K in annual income isn't chump change and life will be even rougher for the hourly employees, who are looking at 20% less pay. (Social Darwinians will doubtless adopt the Pollyanna-ish view that the hourly employees now have the "opportunity" to take on additional, part-time jobs ... in a state where unemployment exceeds 9%.) However, unless you're making peanuts to begin with or are independently wealthy, a 10%-20% pay cut isn't "a little less," as Wynn defensively phrased it, it's a lot less. Let's just be clear on that.

During the conference call, Wynn said that the cutbacks had been in the works for five-six weeks, which would place their inception somewhere between Dec. 23-30 ... the first week that Encore was open. That's interesting timing. Perhaps management was too preoccupied with opening the property to see this crisis coming, but whatever the reason, both bosses and employees have been sandbagged.

Given the severity of the economy measures and the fact that, according to Wynn himself, the company is sitting on $900 million in "free cash," as they put it, why were such drastic actions necessary? Especially when the maximum saving is pegged at $100 million? Better too much prudence than too little, of course, but it seems like we're not getting the full picture here. If I had to surmise, I'd say Wynn must be looking at some very dire -- but undisclosed -- 2009 business models and bracing for impact.

Pilar Weiss of the Culinary Union told S&G she wasn't sure where the Review-Journal got its 9,500-affected-employees figure, as roughly half (5,000-plus people) of Wynn Las Vegas/Encore's workforce is Culinary-repped and therefore immune to the unilateral pay and benefit reductions (partly because they don't participate in Wynn's 401[k] plan). "He can do unilateral whatever he wants" to non-Culinary employees, Weiss said, adding that the union hasn't had and doesn't intend to have meetings with Wynn to discuss concessions.

"I don't see any defections," Wynn predicted of his workforce and one can't argue with the implicit logic, even if a Wynn LV/Encore job might not be the highest-paying gig on the Strip now. Most of his competitors are in even worse straits and any Strip job opening draws a hefty surfeit of applicants. Wynn knows his people will stay put because the chances of landing a better job elsewhere are closer to "none" than "slim."

On other topics, Wynn was pretty sanguine, saying that Encore Macau is being financed out of free cash flow and belt-tightening isn't needed over there: "Our business in Macao is at levels that don't dictate that sort of measure." Having almost a fifth of the Macanese market with just one casino is nice, isn't it?

"I don't really feel like sweating the stock price" was another Wynn-delivered bon mot, as he implied he might be in the mood to take advantage of the swooning market and accrue more WYNN shares.

The assembled stock analysts were respectul but not fawning, with the exception of Larry Klatzkin, who coyly wafted softballs for Wynn execs to swat out of the park. Joseph Greff asked the once-unthinkable: Could Strip resorts become irrelevant and go dark? Wynn didn't answer directly but noted that the pressure was greatest on the bargain-tier properties: "Where do you go from 29 [dollars a night]?" Added one of his lieutenants, any darkness "will come from the bottom up."

Quote of the Day

Mon, 02 Feb 2009 15:42:00 -0700

"There are no plans for [Steve Wynn] to have a relationship while Mrs. Wynn is in Las Vegas." -- unnamed Elaine Wynn flack, to Norm! Does this mean there are plans for Mr. Wynn to have a relationship when the missus isn't in Las Vegas? Curious syntax, that.

Stanley Ho's comeback

Mon, 02 Feb 2009 12:48:00 -0700

Citing the Lusa news agency, J.P. Morgan says that Macao casino revenues for January came in higher than expected, at $1.1 billion. The shocker, though, is the revision of market-share figures, which previously had shown Stanley Ho and Sheldon Adelson each holding a quarter of the market. Lusa's revised numbers show Ho thrusting Adelson firmly into second place -- 28% to 22%. This is a sobering setback for Las Vegas Sands, whose CEO had forecast the demise, at least a dramatic downsizing, of Ho's casino empire.

Let this also be a lesson to those us (present company included) who thought Vegas swankiness would trump customer loyalty to Ho's older -- some would say seedier -- product. The "B" plotline is that Wynn Macau's market share is 17%, only five points behind Sands Macao and Venetian Macao despite far less capacity. Galaxy Entertainment (13%), Melco Crown Entertainment (11%) and MGM Mirage (9%) divvy up the remainder, with the latter paying the price for being last into the market and a reportedly disadvantageous location. This is one race where those who bet on the tortoise over the hare will be chagrined.

Speaking of Stanley Ho, he and an associate have dropped $284,000 into the coffers of the New South Wales branch of Australian Liberal Party. This is significant because Ho made a run at a New South Wales casino years ago but was deemed "unsuitable." Don't be surprised if the Liberals suddenly discover him to be cleaner than a hound's tooth.

Shakeup at Sands. With its Macao and Singapore projects lagging badly, Las Vegas Sands has tasked a new executive team for its Asian portfolio. Senior Vice President Leonard DeAngelo comes by way of Penn National and, before that, a different kind of Sands -- the vanished Sands Hotel & Casino in Atlantic City. Former Langham Hotels & Resorts executive Nigel Roberts has been named president of behind-schedule Marina Bay Sands.

Executive VP Brad Stone has been promoted to the newly created role of president of global operations and construction, which puts him in charge of design and building for all Sands projects worldwide. It's a thankless task but expectations for Sands have fallen so low that if Stone effects even a modest improvement it will seem a triumph.

Adios, Harrah's Hotel College

Wed, 28 Jan 2009 13:34:00 -0700

We never knew ye. It's not the fault of Harrah's Entertainment, either, but of Gov. Jim Gibbons, who proposes to eliminate funding. That'll teach those snooty eggheads who voted against him! And should the casino industry have to look outside Nevada for prospective managerial talent? Well, that's just too damn bad, I guess. This is, after all, the same governor who recently accused Nevada students of having Rodeo Drive tastes when they ought to be shopping at Wal-Mart. Why strive to be first rate when being third rate is so much easier, huh?

Oh, and it's also the same Midnight Jim who said we were wasting money by marketing Las Vegas to China. Too bad that Wynn Las Vegas, Encore, Bellagio, MGM Grand, Venetian and Palazzo didn't get the memo. Silly casino executives; what do they know?

(Incidentally, we toured the topiary display in the Bellagio Conservatory last Friday and it is quite spectacular. MGM really did itself proud on this one.)

Not only is Harrah's an innocent bystander in the impending collapse of UNLV's mooted Hotel College, it notched a perfect score in the Human Rights Campaign's "Corporate Equality Index." Also-rans include MGM Mirage, which says it'll show those upstarts at Harrah's who's their daddy next time 'round. Or words to that effect.

Seriously, our warmest congratulations to both companies. May many others follow your example.

Bargain$ tonight in Vega$

Tue, 27 Jan 2009 11:37:00 -0700

Suppose that you got a sudden urge to visit Vegas on a Tuesday night ... tonight, to be specific. You'd find that the customer is king, at least as far as pricing goes. A few minutes spent browsing Travel.Ian.com yielded the following revelations.

The exception that proves the rule is Red Rock Resort, which is advertising rooms at $160/night. Better you should drive the extra couple of miles to Suncoast, where they're charging half as much.

• Downtown, believe it or not, is commanding a slightly higher price point that some well-regarded off-Strip and near-Strip locals casinos. Rooms at Boyd Gaming's California Hotel and Fremont are going for $40 while The Orleans is fetching but $34.67. The "Off-Strip Bargain" award has to go to Boyd, which can put you up at Sam's Town for $21. True, you can stay at Fitzgeralds for $22 ... but it's Fitzgeralds. 'Nuff said.

• Honorable mention goes to Palace Station, where $29.99 gets you a room, just a walk (admittedly a rather hazardous walk) from Rat Pack hangout The Golden Steer.

• Conversely, the "Don't They Know There's a Recession?" award goes to our old friends, Columbia Sussex, who obliviously charge $159* at the Westin Casuarina at a time when you might stay at adjacent Platinum or nearby Paris-Las Vegas for $129, Bill's Gamblin' Hall or Bally's for $69, or even the Flamingo for $50. Then there's the "On-Strip Bargain" winner ...

• Caesars Palace at $90. The Caesars price was hardly the lowest one found on the Strip, but if you were graphing room rate vs. quality of property, the two lines would intersect fortuitously at Caesars. It sure beats ...

• Staying at Circus Circus for $24.95 (assuming you're not going the Airstream trailer-in-the-RV park route; $45 a night in the depths of winter -- such a deal!). Though Harrah's Entertainment is, in our one-night snapshot, getting clobbered by MGM Mirage in terms of price points, it can at least take bragging rights in the "For the Truly Desperate" award category, offering Imperial Palace for $32.53/night. Clowns or bad karma: The choice is yours.

Without belaboring the exercise any further, there is one lesson to be drawn ...

Where Steve Wynn goes, the money follows. The rising tide that lifts all nearby boats is called "Encore." While Encore itself is a relative bargain at $169 tonight, Wynn Las Vegas is listing rooms at $299 (surpassed only by the Four Seasons, $319 at the other end of the Strip), Palazzo/Venetian is up to $199, as is Treasure Island, while even Trump International is able to eke out $109.33/night. And despite being the oldest of the Wynn-authored properties, The Mirage is kicking butt at $229 tonight. If it's true that MGM Mirage CEO Jim Murren is driving a hard bargain for that place, can you blame him?

* -- The local papers are constantly filled with rants about how much more affordable Vegas would be if got those damn unions out of here. Odd then that the Westin, a non-union shop, has some of the highest rates on or near the Strip, huh?