David Mckee's Stiffs & Georges - CityCenter

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?

MGM: CityCenter worth $4.88 billion

Tue, 20 Oct 2009 15:37:00 -0700

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

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

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

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

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

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

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

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

A deal @ Vdara

Mon, 19 Oct 2009 11:32:00 -0700

Just as I said, CityCenter is becoming the mid-market epicenter of Las Vegas. Today's mailbag yielded a $129/night offer for Vdara, plus $50 in amenity credits -- more evidence of the downward pressure CityCenter is exerting on the Strip. But anything that means greater affordability for John Q. Public is A-OK with S&G. Besides, having bunched as much as 85% of the new room product at the upper end of the market, companies like MGM Mirage were bound to have this come-to-Jesus moment sooner rather than later.

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>

Night of the living dead

Thu, 15 Oct 2009 13:06:00 -0700

Will the last person leaving the Riviera please take down the Charo in Concert, Abra-ca-Sexy! and Tom Stevens posters? Everything about last night's visit to the casino suggested a business that's died but doesn't realize it. Not that it helps to be literally in the shadow of the rotting whale carcass that is Fontainebleau. Between it, Echelon and the apparently defunct Plaza project, that neighborhood is one giant buzz-kill.

Still, even on a Wednesday night one does not expect to see such a thinly populated casino floor. There were more players around the electronic table games than the real ones. In the parking-garage elevator, one of the braille "3" panels was missing from the keypad. Management's solution? Scrawl "3" in red ink where the braille pad should be. (ADA non-compliance much?) If the Riviera is blowing off its interest payments in order to use the money on operating costs, it's not going very far, from the looks of things.

The moribund feeling extended to the upstairs showroom, where Charo has given way to Andrew Dice Clay (or, as the Riv bills him, "Andrew DICE Clay"). Even with a 90-minute cocktail party as an inducement, Clay rolled snake eyes in terms of media turnout. It was a small crowd [sic] and even ~~some~~ many of the local bloggers blew it off, so scant was the event's cachet.

Maybe they were at the Tropicana, checking out Wayne Newton, whose new show ...

Features Rich Natole. This confirms well-sourced reports LVA had been receiving that the impressionist would land a new gig at the Trop and it was merely a question of when. Natole, who was subletting a time slot from Anthony Cools, got caught in the crossfire between Cools and Trop CEO Alex Yemenidjian. When Cools, Bobby Slayton and the Penny Lane show were sent packing, Natole found himself briefly at loose ends, too. The Natoles are nice people, so I'm glad this Vegas saga has a happy ending. On a sadder note ...

Lanni ailing. Former MGM Mirage CEO J. Terrence Lanni has an undisclosed form of cancer. The news comes almost a year to the month since he abruptly resigned from the gaming giant. At the time, Lanni denied that health problems were involved but he also said it had nothing to do with a resumé-inflation scandal that threatened to bring him under investigation in New Jersey, Illinois and Nevada. (Another possible motive for Lanni's abrupt departure: MGM stock had just sunk below $10/share.)

S&G sends wishes for a speedy and full recovery to Lanni, and to his family. I've lost a couple of friends to cancer, so I can imagine the ordeal the Lannis are experiencing. And, if it's not inappropriate, a tip of the Panama hat to low-budget broadsheet Gaming Today, which beat all major news outlets to this sad story.

Reality bites. At least if you're trying to maintain your price point at Aria. The megaresort has cut rates to $159 -- and thrown in a $75 amenity credit -- to entice two-night stays, through April 1. Wouldn't it be ironic if, instead of cannibalizing Bellagio, as feared, Aria wound up gravitating toward the mid-market crowd?

Please spare a thought for the Queen of Comps, the beloved Jean Scott, who's in her sixth week of convalescence from the flu. First, a hepatitis scare, now this. Let's hope LVA's most popular blogger catches a break -- and soon.

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.

Leaving Las Vegas

Mon, 12 Oct 2009 18:17:00 -0700

At least 28,000 have done so over the two years-plus (probably more when you allow for the people still moving here). What are the likely consequences of Las Vegas' pegging its future on a one-trick economy? And is it going to be like one of those Rust Belt cities (like Pittsburgh) that turned it around or one of those (say, Detroit) that continues to decline?

Those questions and others are posed in a splendid article that connects most of the dots regarding Vegas' economic plight. One of the most disturbing points raised by Las Vegas Sun reporter J. Patrick Coolican is that cities doing well at present tend to be ones that possessed robust institutions of higher learning -- and invested in them. Neither can be said of Nevada's dismal education system, the recipient of savage budgets, thanks to our governor and the ever-feckless Lege.

If Las Vegas' future hinges on well-funded and -respected academic institutions, then the near-term prognosis is grim.

Speaking of Detroit, casino owners and politicians there may be casting a wary eye on rising pro-casino sentiment in Ohio. In whichever form casino gambling is legalized by Buckeye State voters, it stands to take a big bite out of Motown casino receipts -- and sap state and local revenue collection, too. A helpful Detroit News map shows precisely which Detroit, Indiana, Pennsylvania and West Virginia casino operators have reason to be fretful about the emergence of a casino industry next door.

Like their Strip brethren, tribal powerhouses Mohegan Sun and Foxwoods Resort Casino went all-in ... into debt, that is. Now that it's time to pay the piper, they find themselves in binds comparable to those facing non-tribal casinos. However, they have fewer options for relief, as they discover the downside of being a tribal operation.

Dog's breakfast at Tiffany's. Few readers of this column can probably afford to buy anything at the Tiffany mega-boutique that will be part of the Crystals mall at CityCenter. However, it will make for some lovely window-shopping. (Click on the pictures to see them in a larger size.)

Atlantic City reprieve. Although New Jersey's three-way gubernatorial race is up for grabs, casino owners can take one consolation. Whichever of the two leading candidates is elected, continued opposition to racinos is promised.

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'.

$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?

Trop, Sands purges continue

Wed, 30 Sep 2009 17:36:00 -0700

It's official: "Pit Bull of Comedy" Bobby Slayton has snarled his last at the Tropicana Las Vegas. Thus endeth a brief, inauspicious reign by Anthony Cools over the Trop's upstairs showroom. A well-placed source advises LVA that Beatles tribute show Penny Lane was pulled after EMI hit it with a cease-and-desist letter. In any event, it left as invisibly as it arrived.

Trop CEO Alex Yemenidjian still has three shows he inherited from predecessor Scott Butera but it's pretty clear that he's going to put his own stamp on the property. As for Cools, well, he'll always have O'Shea's.

Movement at Cosmo. Buried in the Review-Journal (six items deep) is the news that the Cosmopolitan has wooed ~~John~~ Marshall Andrew away from Las Vegas Sands to be its CFO and hired Station Casinos refugee Marshall Andrew as chief information officer. Deutsche Bank looks serious about making that September '10 opening date.

Will the economy have improved sufficiently to have absorbed most of the CityCenter rooms and the Planet Hollywood Westgate ones by then (and maybe, but not very likely, Fontainebleau)? Boyd Gaming is betting otherwise. The Echelon cranes have been seen coming down, marking an additional hiatus in the project, which reportedly will not be resumed until 2012.

Las Vegas Sands: Execs overboard!

Andrew is just the latest exec lured -- or chased -- away from Sheldon Adelson's employ. Former Venetian veep Paul Pusateri (who helped launch Paris-Las Vegas back in the day) was just nominated as president at The Palms and ever-helpful Sands spokeswoman Mindy Eras has gone to Preferred Public Relations. Whether these moves are part of Adelson's promised cost reductions or are a winnowing out of perceived William Weidner loyalists, it must be getting lonely at the top.

There's quite a debate going on at the Las Vegas Sun on the rise and fall of themed resorts on the Strip. Surf over, check it out, maybe weigh in, if the spirit moves you.

Adelson's rescuer?

Wed, 30 Sep 2009 14:01:00 -0700

Meet Wilbur Ross. He's an investor of all trades with an appetite for distressed assets. And he's turning his sights to the casino industry. In particular, he's drawn a bead on "companies [who] are also looking at selling assets in the Chinese gambling enclave of Macau to support struggling operations in Las Vegas."

That means either Las Vegas Sands or MGM Mirage, and it's old news that Sheldon Adelson has been peddling a couple of retail malls and the non-casino aspects of Sands Macao (above). MGM is attempting a reboot (successful so far) of MGM Grand Macau but still might come up short on completion money for CityCenter, especially if condo prices have to be reduced. And it doesn't take a rocket scientist to figure out that one Macanese casino beats any number of hotel rooms or retail outlets.

Un-Trumped? Thwarted Trump Marina suitor Richard Fields is making another run at the property, which he's been trying to buy since Homer was a pup. Better still for him, he could get it for as little as $75 million. However, he's got dark-horse competition from a Maryland-based private equity fund that's making a play for all three of the Trump Entertainment Resorts casinos.

Notorious for mainly hanging its corporate shingle in tax-haven Green Valley, would-be casino operator Empire Resorts is not only re-headquartered in New York State, it's got new partners. Some of them bring checkered pasts to the table.

Also, Empire's hopes hinge upon the current administration reversing an especially paternalistic ruling from the George W. Bush years: namely, that casino sites must be within commuting distance of the tribal owners' -- in this case the St. Regis Mohawks -- reservations. If economic self-sufficiency is the endgame of federal/policy, Uncle Sam needs to loosen the apron strings.

Unready for some football. The unceremonious scrapping of Monday Night Football events at The Cannery is explained (second item). Magic word: clearance. Columnist John Katsilometes also notes that the second weekend of Zowie Bowie's Vintage Vegas was better than the first. Which would mean it's graduated from "bad" to "mediocre."

New England moralists are apparently OK with slot machines in Rhode Island, so long as they're covered by the fig leaf of mandatory greyhound racing. At least the slot players have a chance of actually catching the rabbit, metaphorically speaking. Animal cruelty is bad enough but when it's enshrined in state law it's even more objectionable, if such a thing is possible.

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.

Blimps on the radar

Thu, 10 Sep 2009 14:03:00 -0700

Dipping into the dispatch box, S&G finds the following tidbits, courtesy of the nice people at J.P. Morgan:

Alex Yemenidjian is serious about revamping the Tropicana Las Vegas. He's just inked a contract with Bally Technologies for a player-tracking system and other BYI goodies ...

... fading interest in MGM Grand Detroit has caused MGM Mirage to take it off the market. Also, with the company looking at price concessions to its CityCenter condo buyers (i.e., forfeiting money it was counting on to finance CityCenter), it may need to borrow against its Detroit palace, one of the few MGM properties still unencumbered ...

... Atlantic City, like Macao, is and will probably always be essentially a daytripper market. So there's symmetry in the fact that China State Construction Engineering Corp. has been signed to finish the stalled Revel project on the Boardwalk, to the tune of $1.7 billion. A July 11 opening is predicted. This is the best news to emerge from Atlantic City in quite a long while.

Speaking of good news, gaming revenues for Nevada's July are in and, basically, they don't suck. Yes, the Silver State was down 8% and the Strip was 11%. But June's year/year comparisons were far suckier (-15% on the Strip), so there's some consolation to be had. In fact, compared to a series of truly craptacular year/year comparisons -- all in double digits, except for last May -- it's darn near cause for celebration.

Table game drop was down overall but the casinos played lucky, particularly at baccarat. (Watch the first-season Mission Impossible episode "Odds on Evil," if you need a quick primer on this game. You'll get scintillating performances by Martin Landau and Barbara Bain in the bargain.)

Slot play is way down (-17.5% win on -15% handle) and North Las Vegas, bouyed by Aliante Station, was the only part of Clark County to have a positive month. Laughlin got hammered pretty badly (-19%) and neither Reno (-21%) nor South Lake Tahoe (-33%) seems likely to ever fully recover from tribal competition across the border, Tahoe especially. If there was a moment for some "unbundling" by overexposed companies, this is it.

Didn't get the memo. Would somebody break into the R&R Partners biosphere and let oxygen into the office of Billy Vassiliadis? "Billy V" was the author of this boneheaded pensée, which he shared with the Los Angeles Times:

"You've got to drop your rates, but you don't want to create a sense that this is a discount experience or that the experience itself has been diminished."

What the ... ? Las Vegas' recent success was built on the perception (and actuality) of a "discount experience," and lower prices are unlikely to "diminish" a tourist destination that is now synonymous with exclusivity and unaffordability. Vassiliadis, like Sheldon Adelson and the Las Vegas Convention & Visitors Authority, seems convinced that the current doldrums are -- to use my favorite Internet-board gaffe -- "a blimp [sic] on the radar."

They need to wrap their heads around the reality that 2004-like levels of business were damned good at the time (superb, in fact) and that Vegas needs to get back to the value-based messages that fueled the preceding 15 years of growth. Or, as David G. Schwartz writes in a particularly trenchant DieIsCast.com entry: "Of course, unpredictable events can make a hash of any predictions, so it’s possible that five years from now the casino industry will be employing 100,000 more people than it does today. That would be after the federal government offers Americans a $10,000 annual tax credit against travel to Las Vegas, and Las Vegas alone."

Seems like some folks in the marketing bidness should be taking Dr. Schwartz's classes.

Optimism in Macao, euphoria at CityCenter

Tue, 08 Sep 2009 17:33:00 -0700

Relaxation of stringent visa restrictions from Guangdong Province came a full four months sooner than expected, starting Sept. 1. Now, residents will be able to visit Macao once a month instead of quarterly. While this has prompted J.P. Morgan to raise its price target on Las Vegas Sands stock, analysts also fret that Sands may overreact and go pedal to the metal on its unfinished Cotai Strip™ hotels.

Those same analysts are bullish on the manufacturing sector, though. They think casinos will be more willing to reinvest in the slot base as 2009 draws to a close. Also, the onward march of casino expansion means more jurisdictions and facilities to whom IGT, Bally and WMS can peddle their products. They're 'meh' on regional casino operators like Penn National, Ameristar Casinos and Pinnacle Entertainment, due to flattish performance. (Penn could catch a break in Kansas, though I still think Cordish Gaming has that sewn up.)

But that's a rave notice compared to the long face Morgan analysts pull when pondering Boyd Gaming's prospects. They cite the slow-to-recover, promo-driven locals-casino market in Las Vegas ("trickle-down" economics of the worst sort); Atlantic City's critical condition -- "the best-case scenario here is that [Borgata] would do less bad" than most of A.C. -- those blah regional metrics and new competition for the Blue Chip riverboat in Indiana, which had been looking like 2009's feel-good story.

Intriguingly, the prospect of a Strip acquistion is floated in lieu of a 'stalking horse' bid for floundering Station Casinos. Boyd's still got enough unused borrowing capacity it could even swing an acquisition of The Mirage (with money to spare), not to mention some of the lower-hanging fruit, which now includes Planet Hollywood. But if the J.P. Morgan guys are gun-shy concerning Boyd ...

They're over the moon about MGM Mirage's CityCenter: "we are increasingly under the belief that City Center will be a new must-see property for both domestic and international gamers/travelers that should drive solid visitation volumes to the Strip in 2010. We were impressed with the massive 18m-square-foot complex ... a new type of high-end product for the Strip that should garner increased trips. It has a very contemporary feel that is different than anything else on the Strip, with lots of natural light and high ceilings, interesting room product and, for a massive property, ease of getting around from one 'neighborhood' to the next."

More good news comes in the form of a press release from Commerce Casino (in Commerce, Calif.), which rolled out the welcome mat for a group of undoubtedly weary firefighters. A strike force of 30 Bay Area-based firemen is being housed in the casino's hotel, with the casino comping all meals and picking up most of the hotel tab. Let's hope that such civic-mindedness spreads through the industry like -- if you'll forgive the analogy -- wildfire.

In case it matters, "super-starlet" (yes, that's the official term) Holly Madison has been given a 12-month contract extension at Peepshow, so she's obviously earning her pay. Also, I've heard through the grapevine that she and incoming Aubrey O'Day do not get along, so the timing of the Madison announcement should make clear who's got the upper implant in this situation.

"Viva Elvis"

Wed, 02 Sep 2009 01:38:00 -0700

Obssessed? Moi?

Yes, Viva Elvis will be the long-awaited, enshrouded-in-secrecy title of the Cirque du Soleil show scheduled to debut this December at CityCenter.* Wow, they must have had to really burn the midnight oil in Montreal to come up with that one ... Speaking of name changes, Scarlett and her Seductive Ladies of Magic (at the Riviera) is now Abra-Ca-Sexy. Well, it's catchier ... The wheels continue to fall off the Riviera train: An Evening with Dean and Friends has closed, as has the dinner buffet (again) ... Lost in the bankruptcy tumult at the Greek Isles was the opening of a new show. Its cumbersome title is Chinaman: A Rock & Roll Comedy Experience. Moving right along ... By the time you read this, Rockstar: The Tribute should have reopened at the Harmon Theater after a disastrously short stint at the Wyrick Entertainment Complex (aka, "the Venue of Death") in Planet Hollywood. However, the Harmon has given it as much advance publicity as an IRS raid on a Vegas nightclub, so that's not a promising start ... In like manner, Beatles tribute Penny Lane tiptoed into the Tropicana without so much as a 'by your leave' ... Back at Planet Ho, Tony 'n Tina's Wedding evidently isn't performing up to expectations. Ticket prices have been reduced 13%-30%, although they're still steep ($63-$143) ... It looks like Deutsche Bank is going to wait a spell and open the Cosmopolitan in Sept.-Oct. 2010. Which, given that the Strip's been strangling on a glut of high-end rooms, is probably the wisest course of action. Wall Street's former Holy Grail, "another wave of megaresort openings," has become a phrase to be dreaded.

Ready for some good news? The most remarkable dancer of the late, lamented Sin City Kitties, Koree Kurkowski, is now part of the ensemble of Bite. The show is kitsch to the nth degree but it's entertaining in its own so-bad-it's-good fashion. The Stratosphere casino floor was pretty dead for a Friday night last weekend, but Bite was definitely packing them in. It's not as good as Sin City Bad Girls (at the Las Vegas Hilton) but way better than forgettable X Burlesque (at the Flamingo).

* -- the Viva Elvis revelation was let slip during last weekend's Michael Jackson festival at The Palms. I learned of it after being invited -- on 75 minutes' notice -- to co-host an episode of Steve Friess' The Strip Podcast, in which I am teased for being "obsessed" with Carmen Electra. I'll link to the edited version once it's available, so you can hear me date myself with a Barbi Benton shout-out.

This isn't Photoshop but an ad clipped from a Michigan newspaper, I kid you not:

The things you can find at the grocery store these days ...

Electra-fying news bulletin

Fri, 28 Aug 2009 22:51:00 -0700

You asked, MGM Mirage listened. No, they're not offering free rooms at CityCenter but something much better: a 20-performance return engagement by Carmen Electra, who will put some spice back into Crazy Horse Paris in October. At $75 a seat, that sounds like a good deal to me. Make your travel plans now.

Don't you wish all news coming out of Vegas was this good?

Illinois does it again; Storm over CityCenter

Thu, 20 Aug 2009 15:07:00 -0700

A new law in Illinois that legalizes video poker statewide may have some unforeseen consequences. Namely, video gambling at truck stops throughout the Land of Lincoln. This represents a much bigger expansion than was originally sold to the public. Whenever you think Illinois' casino industry has finally hit bottom and might begin to recover from previous legislative sabotage, it gets pushed off yet another cliff. New casinos licenses may soon be available in Missouri (1) and Iowa (4-5). Riverboat operators in Illinois should seriously consider hoisting anchor and moving across the river.

CityCenter suit. This one alleges basically that MGM Mirage pumped and dumped its stock, and misrepresented its chances of funding CityCenter. The allegations may prove more entertaining than true but they will certainly make lively reading.

Wait Until Dark. If you prefer an evening at the theater to curling up with a lawsuit, you can't go wrong with CSN's presentation of Frederick Knott's 1966 thriller.

Economic recovery in sight?

Wed, 19 Aug 2009 16:24:00 -0700

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

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

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

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

Just what the doctor ordered

Wed, 19 Aug 2009 14:29:00 -0700

With Eastern Division President Carlos Tolosa calling it a day, Harrah's Entertainment is dispatching Atlantic City native Don Marrandino to try and turn things around out there. (No word on whether the Alizma triplets will accompany him eastward.)

Marrandino's portfolio will encompass far more than Harrah's quartet of A.C. properties but his entrepreneurial flair is something that the Boardwalk and Marina districts could sorely use. Gross profits were down 20% in 2Q09, with only Boyd Gaming's Borgata (+8%) bucking the trend.

S&G wishes Marrandino luck in his new assignment. He'll certainly be missed back here. One doesn't know what to expect from successor Rick Mazer, currently Harrah's top man in Indiana. Following an exponential expansion of Horseshoe Hammond, it's become The Casino That Ate Everybody's Lunch. However, the re-branded Horseshoe Indiana, at the southern end of the state, has been losing market share. Maybe taking the Caesars name off the place wasn't such a good idea, after all? Harrah's bought a brand (Horseshoe) with great equity but has mostly bumbled thereafter.

Did you know that the Greek Isles is a gold mine just waiting to tapped? So says a flack for the new owners, who enthuses, "Although the current environment in Las Vegas is challenging, the property’s exceptional location, as evidenced by its proximity to the proposed Convention Center expansion and recent hotel/casino developments on the north end of the Strip, should provide the new owners with significant upside potential through a redevelopment or repositioning of the hotel as the market recovers."

Yup, between stalled, bankrupt Fontainebleau and a proposed Convention Center addition (unlikely under current austerity budgets), the Greek Isles is a can't-miss investment. Where else can you see so many parking lots and garages from the comfort of your hotel room?

But seriously, folks ... how did anyone ever get a $120 million appraisal (or an $83 million purchase price) on a hotel-cum-slot route that's losing over $1 million a year? If the Greek Isles were a dog, somebody would have put it down by now.

That half-assed wrap on the would-be-classy Mandarin Oriental has also drawn the attention of Steve Friess. And it turns out that The Rio isn't the only Harrah's property in Vegas badly needing a paint job, either. The Paris-Las Vegas balloon has seen better days, too. This sort of chintziness was only to be expected once Texas Pacific Group and Apollo Management got their claws into Harrah's, but nobody wanted to hear about it back in the day when the words "private equity" sent analysts and regulators into a delirious swoon.

Kitty rescue at Caesars; Stingy Station

Fri, 14 Aug 2009 13:43:00 -0700

As we were driving to LVA HQ this morning, we spotted a disoriented-looking little cat running through the Flamingo Rd./I-15 interchange, across from Caesars Palace. We were in a quandary about what to do until it turned and started ambling down the I-15 "on" ramp, heading straight for certain death. I ran down the ramp after it (the kitty's a fast little bugger), scooped it up in one hand and ...

Well, what to do? I am now the custodian of a small, tuxedo-patterned kitten who may be carrying God knows what infections. It's too docile to be a feral cat but it's definitely going to need a new residence. So if anybody reading this can lend a helping hand to a homeless kitty, contact me at dmckee@huntingtonpress.com. I could just plop the wee bairn out in the LVA parking lot, along with our resident strays, but they're all massive and it would be a very Darwinian situation, I fear.

Cheesparing at Station: The formidable Jean Scott has news of some recent and untoward developments at Station Casinos, as the bankrupt company resorts to new "economy" measures. While the Fertitta clan sinks approximately $90 million into Orange County mansions, they're recouping the cost of their poor business decisions out of their customers' hides.

Random observations: Last night, we celebrated my Better Half's birthday, partly at Cadillac Ranch, which seems to have an identity crisis. Its menu is slightly countrified (in a C&W sense), its walls are covered with photos of Baby Boomer rock stars (think Steven Tyler) and the video feed is heavy on hip-hop. Go figure. The root beer float is very good, though. At 10:30, as though by prearranged signal, an incoming tide of douchebags flooded the joint and we split ...

... the classy southern façade of Mandarin Oriental has now been marred by a building wrap, high up on one corner. It's small by building-wrap standards, managing to both spoil the view and look like a timid half-measure ...

... speaking of building wraps, Criss F. Angel has long since been evicted from the eastern façade of Luxor. A new wrap was placed on the northeast corner of Luxor's ancillary hotel, but it's also smallish and -- due to way the hotel's buttresses jut forward -- hard to see if you're driving into Vegas from the south. Then again, if I were MGM Mirage, I'd probably want to downplay with association with the widely ridiculed Mr. Angel, too.