David Mckee's Stiffs & Georges - International

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.

Good times ahead?

Mon, 12 Oct 2009 14:58:00 -0700

New Yorker economic columnist James Surowiecki puts current consumer-spending strends in perspective -- and what he finds should gladden the hearts of casino owners. Basically, he finds historical evidence the current tendency toward thriftiness will soon pass. Of course, when Americans' savings rate (now 6%) dipped below 0%, that should have been a canary-in-the-coal-mine moment for heedlessly expansionist gaming moguls. But they'd probably laid off the canary in order to "maximize shareholder value."

If wishing made it so ...

... Chicago would have had a casino a long time ago. Some city parents think they've found the perfect site, but it's still a long shot. Just keep it out of the Loop, OK? Seriously, downtown Chicago is looking livelier than it has in a while and doesn't need a big-ass casino plunked in its midst. The likelihood that it would be Windy City version of, say, a classy anomaly like MGM Grand Detroit is pretty remote.

So much for speculation that Australian casino magnate James Packer would get into the running for Fontainebleau. Seems that Packer is buying up Crown Ltd. stock instead. (Indeed, why would Packer write off his F'bleau investment, then double down on the failing development?) Packer has raised at least $772 million by disposing of non-gaming assets and appears on course to make a takeover bid for Crown, of which he owns 40% at present.

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?

Nothing says Canadian Thanksgiving ...

Thu, 08 Oct 2009 12:33:00 -0700

... like a three-night stay at Monte Carlo. For $509, you get a trio of room nights and a prix-fixe meal at Brand. But the offer expires today, so take off, eh?

Case Bets: California crisis, M cutbacks, "Guiding Light" in LV, etc.

Thu, 08 Oct 2009 11:50:00 -0700

Ist California kaput? That's the question posed by the The Observer and it makes for troubling reading. If Gov. Jim Gibbons (R-NV) is right that tourism from California is the carotid artery of Nevada's economy, then the Silver State is -- to put it politely -- screwed. A good thing the Lege didn't follow Midnight Jim's advice and shut down Nevada's outreach efforts in China.

Speaking of which ... Amidst a flurry of economic developments and positive indicators in Macao, the casinos of Stanley Ho are backing off the expensive VIP trade and going mass-market. (Translation: "We're coming after you, Sheldon Adelson.") Thanks to reader mike_ch for the link.

Colossal buMMer. Breakfast has just been eliminated from the offerings at the M Resort buffet. Unless one lives nearby (a relatively small clientele), M is a heckuva long detour to make for breakfast, so this economy move is understandable ... but depressing all the same. No casino buffet gets higher marks from LVA readers.

That's a bit weird. Stay with me here, folks. CBS cancels Guiding Light, replacing it with Let's Make a Deal, which is shot at the Tropicana Las Vegas. So what should be coming to Vegas in December (at The Rio) but a Guiding Light farewell tour -- yes, Reva, Josh and the whole kit 'n kaboodle. How much you wanna bet they won't be taking in a LMaD taping at the Trop? The only way to make this scenario more Banquo's Ghost-ly would be for the soap convention to be held at the Trop, too.

P.S.: Better get your tickets now before the 'Otalia' fans scarf them all up.

Company. Performances resume at UNLV tonight and it's a must-see. Mind you, the Review-Journal praises the Stephen Sondheim revival with faint damns, while the Sun's review reverses that formula. But I'd pay to see it again, which I don't say about many shows in this town.

From the mailbag #8

Mon, 05 Oct 2009 15:08:00 -0700

"Doesn't the IOC realise it will be winter in Brazil in August, 2016?" -- comment Blackberried in by a reader, regarding the award of the '16 games to Rio de Janeiro. Y'know, I'd been wondering about that myself. The average August temperature in Rio hovers between 66 and 78 degrees. Not frigid but not exactly torrid, either. Meanwhile, the IOC promises to keep an eagle eye on the betting lines for the Vancouver games in 2010.

From Jeff in OKC, regarding the recent National Coming-Out Day promotions on the Strip: "Casino ads need a gambling reference in their marketing, I found it cute. If I want to offend easily, I would say that 'Two queens are more fun than a straight' suggests that straight people are inherently less enjoyable than gay people, and NY-NY doesn't want my money. I think we can always be offended, if we look hard enough."

From kerr_mudgeon, on the growing possibility that Las Vegas Mayor Oscar Goodman will tilt at the 2010 gubernatorial race: "I don't think he'll run because the odds are less than 50% in his favor as a non-partisan + he'd not want to disrupt his family by taking a job in Carson [City] - BUT if he runs and wins, he'll start pushing immediately to move the state capital to Las Vegas (maybe to take over one of the partly-built Strip complexes in/near bankruptcy)."

It's not the worst idea I've heard. Nor is this ...

Singapore is building an expansion of its ocean-liner terminal, enabling it to berth four cruisers at a time. The good news for Las Vegas Sands and Genting Bhd is, obviously, that this means more potential customers for their ultra-megaresorts. The not-so-good news is that the new berths won't be ready until late 2011, by which point both casino-based resort will have been open nearly two years.

Everybody's got a private equity fund these days, like the 21-year-old owner of a Persian resaturant in Maryland. Youthful Artin Afsharjavan claims he's got the scratch to buy Trump Entertainment Resorts, prompting Trump CEO Mark Juliano to reply, "Show me the money."

Hey, if some kid wants to throw as much as $500 million into acquiring five (mostly) bottom-of-the-barrel Atlantic City casinos, including Resorts Atlantic City and the A.C. Hilton, I'd like to see the color of his money, too. If it's for real, TER and the others ought to pluck the guy clean. You don't get a pigeon like this every day.

Masters of the Obvious II

Tue, 29 Sep 2009 13:36:00 -0700

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

Gee, ya think?

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

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

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

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

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

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

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.

Quote of the Day

Fri, 25 Sep 2009 19:12:00 -0700

"With his ruddy nose, droopy eyes and imposing belly, the mayor might not be much of a looker, but the middle-aged woman behind the counter blushes, and tattooed men jump up from their brown leather armchairs and grin like schoolboys. 'Hey Oscar,' yells one of them. 'Where’s your martini? Where are the showgirls?'" -- from a Times Online profile of Las Vegas Mayor Oscar Goodman and his impolitic utterances. Goodman is about to make his first-ever visit to London. Those Brits won't know what hit them.

From the mailbag #5

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

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

With regard to "Gambling Scandal Ensnares Eight More":

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

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

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

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

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

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

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

And with regard to labor strife at Trump Plaza:

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

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

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

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

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

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

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

Fair enough. And finally:

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

Thanks to everyone for corresponding.

Gambling scandal ensares eight more

Mon, 21 Sep 2009 18:32:00 -0700

It's not quite on the global scale of the Ultimate Bet brouhaha, but the Tran Organization's conspiracy to fleece dozens of U.S., Canadian and tribal casinos is racking up an amazing head count. To date, federal prosecutors have already nailed 31 scalps to their wall, not counting three other individuals to who pled out to related charges (including one in Canada).

If you thought this was the end of the Tran Organization ... surprise! The feds unsealed another set of indictments this month. Eight more individuals were hit with various counts of "conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering."

At the core of the Tran Organization's scam was the execution of "false shuffles," whereby "slugs" of unshuffled cards were insinuated into blackjack and mini-baccarat decks. This required the cooperation of corrupt casino employees and, from the looks of the Department of Justice's announcement, the core Tran Organization members must be rolling on their casino-employed helpers.

The Tran gang managed to take no fewer than 26 casinos during the life of its scheme, which is a very black mark against the industry's standard of game protection. The dishonor roll is as follows:

1) Beau Rivage Casino, Biloxi, Miss.
2) Casino Rama, Orillia, Ontario, Canada
3) Foxwoods Resort Casino, Ledyard, Conn.
4) Gold Strike Casino, Tunica, Miss.
5) Horseshoe Casino, Bossier City, La.
6) Horseshoe Casino & Hotel, Tunica, Miss.
7) Isle of Capri Casino, Westlake, La.
8) Majestic Star Casino, Gary, Ind.
9) Mohegan Sun Resort Casino, Uncasville, Conn.
10) Palace Station Casino, Las Vegas, Nev.
11) Resorts East Chicago Hotel & Casino, East Chicago, Ind.
12) Sycuan Casino, El Cajon, Calif.
13) Cache Creek Indian Bingo & Casino, Brooks, Calif.
14) Emerald Queen Casino, Tacoma, Wash.
15) Imperial Palace Casino, Biloxi, Miss.
16) Argosy Casino, Baton Rouge, La.
17) Trump 29 Casino, Coachella, Calif.
18) Isle of Capri Casino, Bossier City, La.
19) Agua Caliente Casino, Rancho Mirage, Calif.
20) Spa Resort Casino, Palm Springs, Calif.
21) Pechanga Resort & Casino, Temecula, Calif.
22) L'Auberge du Lac Casino, Lake Charles, La.
23) Nooksack River Casino, Deming, Wash.
24) Barona Valley Ranch Casino & Resort, Lakeside, Calif.
25) Caesars Indiana Hotel & Casino, Elizabeth, Ind.
26) Monte Carlo Resort & Casino, Las Vegas, Nev.

From the mailbag #5: Vegas Club, football, Atlantic CIty

Fri, 11 Sep 2009 14:07:00 -0700

Reader herbop reports on the latest thrift move by Tamares Group: "While other Downtown hotels are installing in-room safes, and removing complaint-causing daily fees for same, the Vegas Club Hotel has pulled out the installed safes from its rooms. When I inquired, they said it's 'policy.' Guests can still use the casino's safe deposit boxes.

"They left the four bolt-holes in the wall, unpatched. Classy, right?"

Geez, I hope those German G2E attendees opted for the Plaza over the Vegas Club. Nice work, Tamares. Why don't you strip the copper out of the place and sell it on the black market while you're at it? (Whoops, we probably shouldn't give Pojo Z. and his flunkies any ideas.)

Kickoff time. Since NFL season finally draws nigh (after what seems like five months of preseason games), it's probably worth mentioning LVA Sports. It includes a directory of football contests, pigskin parties and team bars in the Vegas area. There are no fewer than 12 watering holes allied to Da Bears but only half that number for Packer Backers.

Tennessee Titans fans will just have to drink their beer at home, because our staff couldn't locate any Titan-affiliated bars. Ditto Tilman Fertitta's Houston Texans. Even the ever-putrid Oakland Raiders have three bars to their credit -- but getting to last year's Super Bowl still only netted one Vegas hangout for Arizona Cardinals fans. Go figure.

Don't pop the champagne for stalled Boardwalk resort Revel just yet. The latter has issued a clarification stating that China Construction Engineering Corp. only has a potential agreement in place to finish Revel, for which the resort must drum up funding later this year. Also, yesterday I misstated the opening date as "July 11" when I meant to type "July 2011." I regret the error.

'Peepshow''s little Hitler problem

Tue, 08 Sep 2009 16:20:00 -0700

Congratulations (not!) to the producers of Peepshow, whose rent-a-headliner stratagem has finally blown up in their faces. They're replacing a Jew (Shoshana Bean) with a fan of the leadership abilities of -- I kid you not -- Adolf Hitler. Oh, and she's a googly-eyed admirer of Fidel Castro, who -- among other offenses against humanity -- ran the casino industry out of Cuba.

Of course, this town has a tycoon or two known for cozying up to the authoritarian regime of Singapore and the downright despotic one in Peking. So perhaps Ms. O'Day's pathetic excuse for a brain will just be a 48-hour story ... but that's what we thought about Sen. John Ensign's escapades, at least until Mike Ensign's role as payola daddy came into play.

(Thanks to Richard Abowitz for the heads-up on this one.)

A reader informs me that the site LasVegasDowntownNews.com appears to be defunct. I couldn't get it to load either and blogger Jeff Burbank's output was sporadic at the best of times. Has this site gone the way of all flesh? If anybody has the skinny on this, please let S&G know.

"Oh shit!" headline of the day: Seen at Huffington Post, "Harry Reid to take the wheel on health care." That's like finding out the one family member who's certifiably incapable of navigating the driveway is going to pilot the family car up Mount Charleston.

Cro-Magnon economics; Packer play?; Harrah's boycotted

Wed, 26 Aug 2009 13:57:00 -0700

Still snowed under with non-S&G commitments, but here's a brief dispatch. First, with apologies to Woody Allen ...

"The federal stimulus package is so bad"

"Yes, and such small portions."

That's the sum and substance of this diatribe, penned by the old biddies over at the Las Vegas Review-Journal. The federal stimulus dollars which the R-J opposed (as did its man-crush, Gov. Jim Gibbons) aren't trickling down in sufficient numbers for the editorialists' liking.

Ergo, 13% unemployment and a housing market that's "years away" from recovery are things from which Uncle Sam is meant to rescue us. Yes, and never mind that the real culprit is the overreliance of Nevada on a service economy, plus insane overexuberance in the real estate sector -- two phenomena for which the R-J has never had a discouraging word.

Mistaking one owl for a winter, R-J Publisher Sherm Frederick goes into full doom-and-gloom mode. His can't-miss economic barometer? A half-full flight into Las Vegas. (From Austin. On a Tuesday.) I've been flying into and out of this city for nigh upon 12 years and many's the half-full flight I've taken into McCarran International Airport. It's a side effect of Las Vegas being so liberally serviced by the major airlines.

Also, Frederick's half-baked "analysis" reeks of that local entitlement mentality whereby Americans are obligated to spend their money here -- during a recession, no less. (Maybe more of them would do so if we didn't continue to shift our tax burden onto their shoulders.)

We've got to take our lumps with the rest of the country and, as I've pointed out several times before, Southern Nevada would be weathering the current doldrums much better had it not been for an insanely euphoric attitude in our business community, with its pie-in-the-sky economic models. Harrah's Entertainment claims that, in the course of its mega-optimistic LBO, it projected a worst-case scenario in which revenue fell 30% and Harrah's came through just fine.

I don't believe it. Either that or Gary Loveman needs to sack his number-crunchers and find some ones who use real math.

Trouble at Cannery. Who knew? Things seemed to be going pretty well for them. But President Tom Lettero has been demoted from chief operating officer to CFO. His vacated portfolio will be taken up by Xavier Walsh, from Crown Ltd. Is minority shareholder James Packer flexing some muscle? Or has Cannery Casino Resorts decided that what works for Crown in Australia might be worth trying in Nevada and Pennsylvania?

Harrah's attempt to play hardball with its dealer unions has caromed off the company's noggin. The American Federation of Teachers is pulling its convention business from Harrah's-owned properties until contract negotiations with the dealers at Bally's Atlantic City and Caesars A.C. You might say that Caesar's fine Roman nose has been cut off to spite his face,

A provocative question is posed by Dr. David G. Schwartz. If there are fewer slots and table games on Nevada's casino floors, does this bode an ongoing decrease in casino revenue? Prof. Schwartz is far better educated than am I in these matters ... yet it seems that the proposition boils down to More gaming positions = More revenue.

But how many casinos are running at 100% game usage even a small part of the time? Also, with penny slots yielding higher hold percentages than their nickel and quarter brethren, denominations are trumping sheer numbers. Lord knows, people are drawn to those penny machines as though to a spider web because the (perceived) value overrides the (documented) less-favorable pay tables. In any event, Dr. Schwartz's in-progress study promises to be one of the most interesting casino-related documents emerging this year.

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.

What the ... ?

Wed, 19 Aug 2009 17:14:00 -0700

The following sounds like it was drafted by a Ministry of Propaganda somewhere but it is an honest-to-god Venetian/Palazzo* press release:

"On August 22, The Venetian and The Palazzo Las Vegas welcome the '2009 Miss Chinese Cosmos Pageant of the Americas.' Showcasing their beauty, compassion, vigor, fortitude, and intelligence, the 16 contestants will vie for the ‘Americas’ title to go on and compete in October 2009 for the worldwide competition of the '2009 Miss Chinese Cosmos Pageant.' Capture the excitement of the winner of the 2009 Miss Chinese Cosmos Pageant of the Americas following her crowning.

"The pageant will initially air on Phoenix Satellite Television throughout North America and South America then extended to Phoenix TV’s worldwide audience."

I see that "intelligence" takes a distant back seat to "beauty" among the criteria. Some things never change.

* -- The official stationery has been modified to include a subhead which spells out "The Venetian/The Palazzo®" in Chinese characters. (OK, it could be a recipe for all I know.) It will be interesting to see if this is the new "standard" look or just a one-off.

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.

Fun with geography

Wed, 12 Aug 2009 21:29:00 -0700

Is there no end to Middle Eastern perfidy? You turn your back for even a minute and gosh darn it all if Egypt hasn't snuck through Israel and moved its whole doggone country to the shores of the Persian Gulf.

Looking on the brighter side, you can now say that a certain news channel couldn't find Iraq on a map and have it be literally accurate. Also, I guess this means our long-suffering troops are no longer stationed "in Iraq." It's too good to be true!

Get 'em while they're young

Thu, 06 Aug 2009 15:04:00 -0700

One of the Atlantic City Hilton's most valued players was a 19-year-old from Brooklyn. This baby whale was sufficiently lucrative to the Colony C(r)apital property that he received a comped stay and qualified as a "rated player."

Better still, A.C. Hilton execs allowed him to keep playing even after they'd been tipped off to his juniority. Nice work! Step right up, Colony, and collect your reward -- a $115K fine from the New Jersey Casino Control Commission. Apparently the Hilton simply took the youngster's word that he was old enough to gamble before handing him the keys to kingdom.

Colony may be able to buy casinos but it sure as shooting can't run 'em. Frank Fertitta III may not have been the best monarch of Station Casinos but, compared to majority owners Colony, it's another case where the one-eyed man is king in the land of the blind.

One sings, the other doesn't (quite): Not only is Ali Spuck's new Liberace Museum show a real value proposition at $15/ticket but, hot damn, she's Spucktastic. As for Charo in Concert: A Musical Sensation, at the Riviera, it's something for everyone but not that much for anyone. Although Charo "goes to 11" on the Camp-o-Meter, gay audiences (and Baby Boomers, too) seem likelier to flock to Spuck.

Bleary blogger: My apologies for the disappointing blogorrhea of late. I've been immersed in a crash course on the crash-and-burn of Russia's casino industry (R.I.P.). Throw in some computer troubles and I'd conservatively estimate I'm three days behind the rest of the gaming world.

McKee vs. Lerner

Mon, 03 Aug 2009 20:01:00 -0700

Actually, the headline misstates what was a very collegial -- if occasionally dissenting -- exchange of views between Union Gaming Group's Bill Lerner and Yr. Humble Blogger on Jon Ralston's Face to Face show. It was only my second-ever gig as a talking head -- and it shows. (Note to self: Consider Botox injections to paralyze overactive facial muscles.)

The ostensible subject of discussion was newly bankrupt Station Casinos, but it ranged as far afield as Singapore and Macao. Actually, we probably could have taped an entire week's worth of shows without exhausting the topic(s).

Lerner was a perfect gentleman, despite all the snarky things I've written about him in S&G (assuming he even reads it, which I doubt). I could certainly learn a thing or two from his poised on-air demeanor. I also found that, if you're in the middle seat on Face to Face, you need to "cheat" a little to your right and downstage or else you'll be masked in all the wide shots. And, as Ira David Sternberg taught me, don't ever look at the camera.

My ex cathedra pronouncements were, however, overshadowed by my alarmingly jowly appearance. When the video is posted, you will see that I look every one of my 200 lbs. -- and quite a few more! Since the episode isn't available on the Las Vegas Sun Web site yet, here's a preview:

Oh, my brain and mouth parted company on at least one occasion. I thought I said MGM Mirage would probably offload The Mirage for "one and a half billion to two billion dollars." What emerged, though, was "a half-billion to two billion dollars." So Jim Murren, wherever you are, I do not think you'd part with The Mirage for a (comparatively) measly $500 million ... just so we're good on that.

At least the high-angle shot at the end missed my bald spot. Thank God for small favors. The rebroadcast is starting; time to find out if I still know how to operate a VCR.

Headline of the Week

Thu, 30 Jul 2009 13:12:00 -0700

"Get Chlamydia! Win an iPod!" Seriously.

Beyoncé is mad sexy but she doesn't make as much as Gary Loveman (who has 92 million-plus reasons to flash those pearly whites).

Aztar deal the worst ever: it's quantifiable

Tue, 28 Jul 2009 12:39:00 -0700

When he acquired Aztar Corp., back in 2006, Columbia Sussex CEO William J. Yung III also became one of the company's debtors. So what's his $36 million worth today? According to the Wall Street Journal, 100 grand or less. If that weren't enough to make the ColSux/Aztar deal the all-time biggest casino-sector wipeout of the last 15 years, consider that Carl Icahn's "$200 million" credit bid (i.e., no money down) was placed with debt acquired at 27 cents on the dollar. So Icahn has himself a new casino for a tidy $54 million outlay.

In a less-reported development, Icahn also gained a controlling position in Tropicana Entertainment. Without either its Atlantic City or Las Vegas Trops, it'd be a car without an engine, a gaggle of riverboats and motels. Exactly where this leaves CEO Scott Butera and what role he'll play remains an open question. Hopefully, either his or Icahn's first move in Atlantic City will be to replace floundering Trop General Manager Mark Giannantonio (a Yung crony) with someone more up to the job.

Movement at Cosmo: The GM of Caesars Palace, John Unwin, has resigned. He'll become CEO of the stalled Cosmopolitan in October. While it's still unclear under whose aegis the casino will be run, Unwin's hiring is the first concrete move to get some gaming expertise on board since Deutsche Bank seized the property.

Whining in Macao: Those two "integrated resorts" in Singapore haven't even opened yet and won't for another half a year, but Stanley Ho (whose venerable Hotel Lisboa is seen above) already has his panties in a bunch. According to Bloomberg News, the ancient casino oligarch has been wringing his hands about the burdensome, "serious issue" posed by Macao's 39% tax rate.

Boy, Singapore must be a more serious threat than I'd given it credit, if it's got a Communist Party suck-up like Dr. Ho all a-twitter and taking issue with the government. He's still in better shape than his American rivals; the attempt to graft Vegas-style megaresorts onto Macao has left them badly exposed to anemic market conditions. Ho's gambling-centric strategy gives him less cause for worry.

Today Singapore, tomorrow the U.S.? Even while lender's remorse has paralyzed American banks and stalled any hopes of "unbundling" the U.S. casino industry, diversification may be coming from an unlikely corner. Malaysia's Genting Bhd, riding a sustained runup in its stock, has $2 billion in the kitty, is raising more and could pump $7 billion into casino acquisitions.

That isn't to say there aren't a lot of "ifs" and "buts." Still, Genting's fundamentals appear far more sound than those of say, Las Vegas Sands. It's also in a position to deal a serious blow to Sands in Singapore. Not only will its Sentosa Island casino-resort open before Marina Bay Sands, but customers who "subscribe" to a $1,388/year entrance fee to one casino or another must play exclusively at that casino for the year. Once again, Sheldon Adelson's inability to finish a megaresort on schedule threatens to bite him in the butt.

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?

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.)

To blog or not to blog?

Wed, 15 Jul 2009 13:52:00 -0700

That is the question for today. It's not the larger, existential question of whether the opinions of one curmudgeonly blogger amount to a hill of beans in this world, especially when even the village idiot has a cyber-soapbox.

No, it's a more practical quandary. My cup runneth over with prospective topics -- and with pending deadlines. To wit, a theatre review and a news story for the July 23 CityLife, reviews to stockpile for Mike Shackleford's forthcoming WizardOfVegas.com Web site, three Question of the Day topics, and a revision of an old article I wrote for Washington National Opera in the wayback.

Say ... one of the QoDs upon which I'm working asks for instances of complaints about Harrah's Entertainment. Care to chip in? You'll be duly credited (or not, if you prefer). Actually, the back pages of S&G have been a marvelous source of information on this topic, due in no small part to your contributions. Actor Ben Browder (Stargate SG-1) says that the most important element of any story is the audience. That goes double for S&G.

Also, in the (I hope) very near future, there will be some original S&G reportage on labor negotiations at Caesars Palace, among other topics. In the meantime, I have a week of GamingFloor.com to catch up with, plus wrapping my brain around LinkedIn and Facebook, when there's a moment to spare. Given the exponentially faster advance of technology (compared to say, 1965), I can but conclude that it's a Star Trek world and we're just living in it ... long and prosperously, one hopes.

In the meantime, if the blogorrhea is less generous than average, I beg your indulgence.

All-Star Game: Not much to say about it, other than its relative brevity was merciful. (Never saw so much first-pitch swinging in my life.) Contrary to expectation, the most interesting aspect was the usually tiresome pre-game extravaganza. Sheryl Crow gave a master class in how the National Anthem should be sung and President Obama threw a rainbow curve the likes of which I haven't seen since the heyday of Sid Fernandez.

And it did bring a lump to my throat to see our nation's first black president shaking hands with Bob Gibson and Lou Brock, venerated figures in the Cardinal-worshiping McKee family and two players whose prime coincided with the apex of the Civil Rights movement in the U.S. I'd love to know how much Brock and Gibson think our country has advanced since then. Oh, and Tim McCarver was actually bearable. Wonders never cease.

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.

City of Nightmares?

Sun, 05 Jul 2009 17:29:00 -0700

Melco Crown International finds itself with the dubious distinction of having opened a megaresort and lost market share. The projected 7%, if accurate, would not only be 50% of what analysts expected, it could push Melco Crown behind MGM Grand Paradise and into last place in Macao. If I read Ian Sutton's footnotes correctly, Melco Crown is losing money on its VIP-player commissions at City of Dreams.

(Erratum: My mistake. City of Dreams is simply $40 million short of its projected rolling-chip play. The commission rate is a fixed cost.)

Meanwhile ...

The long arm of Stanley Ho reaches forth, extending his empire into the Pacific. Today Tinian, tomorrow ... ?

House of wax

Fri, 03 Jul 2009 13:05:00 -0700

I call your bluff, comrade. As you may have heard, casinos in Russia can stay open by converting to poker rooms. A tip of the fedora goes to reader mike_ch for pointing out this story, which delineates some of the pros and cons. In Vegas, even the strongest poker rooms don't generate nearly the body count that table games and slots do. But Russian casinos are much smaller and at least a few might be able to hang on, depending on the size of the rake.

It's mighty big of the Kremlin, by the way, to concede that poker is a sport, not a game of chance. Now if only Uncle Sam would do the same ...

Rescue the Riv! Random observation from driving down Las Vegas Boulevard last night: The Riviera suddenly looks so much better and more classic when juxtaposed with the incredible bulk that is Fontainebleau. Land values have fallen, RIV stock is worthless and the property itself provides ready access to the Las Vegas Convention Center.

Time, methinks, for Penn National to get off its duff and make an offer ... unless Penn CEO Peter Carlino is waiting for the Riviera to go into bankruptcy, so he can pluck the carcass at auction. Then again, if Carlino really thinks that Planet Hollywood and some or all of Station Casinos are low-hanging fruit, who am I to second-guess him?

Who's the dummy? The purpose of our excursion was to attend an incredibly pointless media event at Madame Tussauds at The Venetian. If there was a point, it was so that the assembled media hordes would serve as extras for yet another episode of Kathy Griffin: My Life on the D List. A waxwork of Ms. Griffin was being unveiled and suffice it to say that Wax!Griffin looks far better than Real!Griffin. (I must be Officially Jaded, for I scarcely gave the comedienne a second glance.) The various and sundry female impersonators on hand -- led by Frank Marino -- had clearly taken greater care of their appearances than Griffin had of hers. There was, in fact, just about every stripe of LGBT humanity on hand last night, so it was almost more Rainbow Coalition than media event.

What excitement there was went on outside, where a smallish crowd surrounded the Michael Jackson statue. Tributes were in evidence but everything was tasteful and no hysteria was to be seen. As for Mme. Tussauds itself, I've been to the original one in London, and I recall its wax figures as being more believable and the setting itself as more atmospheric (especially the tableaux of infamous British homicides and regicides) ... but that was 35 years ago this month.

Give Vegas Tussauds props for having a Joan Rivers dummy who looks more animated than her real-life counterpart, as seen on the NBC sitcom Celebrity Apprentice. All that's missing is to give the waxwork Rivers a voice box that periodically squawks, "A pokuh playah! A pokuh playah!" Still, we easily spent more time checking out the doodads and gizmos in Brookstone than we did in the wax museum.

Big Brother 1, Casinos 0: Round 2

Thu, 02 Jul 2009 14:47:00 -0700

Journalists are working gambling metaphors overtime as they chronicle Vladimir Putin's casino crackdown. Although my previous CNN link dead-ended (pun unintended) are yet more Michael Jackson necroph ... er, coverage, that proved a blessing in disguise. The best and most comprehensive short-form report on the situation in Russia comes from ...

... Al-Jazeera, believe it or not. If you've got a half-hour to spare, Russia Today goes in-depth on the situation. (Ian Sutton has been aggregating links with remarkable thoroughness over GamingFloor.com, if you want even more coverage of Boss Putin's power play.)

For an insight into the paternalistic mentality that led to the Putin Putsch, you can't do better than this:

Not that Americans can afford the luxury of smugness. Consider this Philadelphia TV station's condescending report on Atlantic City, with its snide, disparaging, cliché-ridden attitude toward both gambling and the players themselves:

Big Brother 1, Casinos 0

Tue, 30 Jun 2009 15:12:00 -0700

Gambling halls in Russia have fallen victim to Kremlin-led socio-economic engineering. Not only have 633 casinos in St. Petersburg and Moscow alone been forced to close, the cure may prove worse than the alleged disease.

Les jeux son fait

Mon, 29 Jun 2009 18:24:00 -0700

To end this day on an upbeat note, here's footage of Quebec's newest gambling resort, bucolic Casino du Mont Tremblant. However ...

... in light of the Shake-O-Vision footage, perhaps it should be called Casino de Main Tremblant (Casino of the Trembling Hand), non?

Michael Jackson, casino baron?

Fri, 26 Jun 2009 17:16:00 -0700

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

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

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

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

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

Case Bets: California, Packer pickle, Macao pix, Holy Cow!, Singapore, RoboPoker, etc.

Thu, 25 Jun 2009 16:24:00 -0700

Editor's note: An item involving Crown Ltd. contained factual errors, which have been corrected (as you'll see). I apologize for the misinformation. My thanks to the reader who pulled my head out of my @$$.

California gamblers stay and play ... at home. While the recession has made some inroads on tribal-casino revenue in the Golden State, it's losing less ground than Las Vegas. Some of those Vegas losses will eventually be recouped, but this day of reckoning was bound to come.

Unlike Las Vegas, which is arguably suffering from having too many competing profit centers within each resort, California casino bosses interviewed still view entertainment as either a loss leader or a one-off. I never thought I'd say this but Las Vegas could use a little more "old school" thinking right now.

James Packer, the guy who can't catch a break, is finds his casino company in even more hot water, in a case of the sins of the father being visited upon the son. The plot surrounding Crown Ltd.'s courtship of a self-banned high roller (and convicted felon) is thickening considerably. Seems paterfamilias Kerry Packer may have been pressuring crony John Williams to get pathological gambler Harry Kakavas back to the tables.

Williams, for his part, rolled on the late Mr. Packer, ~~who's now got some 'splainin' to do~~. ~~No wonder the young Packer's pursuit of Cannery Casino Resorts collapsed like a pup tent.~~ The money quote, if you will, is: "[Williams] said it was common for patrons to rip up [self-exclusion] cards and that, in his view, Mr Kakavas's loss of $2.3 million in 28 minutes was recreational gambling."

If you lose $82,000 per minute, it's not recreation. It's degenerate gambling.

Globe-trotting Ian Sutton is back from Macao and G2E Asia. The sights! The sounds! The smog!

(Update: Ian says it's not smog but mist, as forthcoming videos will show.)

Holy Cow II: GlobeSt.com, normally a continent source of business news, is shocked -- shocked! -- that Steve Johnson's proposed casino on the former Holy Cow site will include a Walgreens. Smelling salts, stat!

But there are some interesting revelations, For one, the reason that Palazzo's flagship retailer is also a Walgreens is that it was a compromise Sheldon Adelson effected with the landowner ... Steve Johnson. (The mere fact of Adelson compromising is newsworthy enough.)

Turns out, that purchase may set the record for an on-Strip acquisition, at an alleged $50 million per acre -- Phil Ruffin, eat your heart out! Johnson also paid through the nose for the Holy Cow site. The price? $23.5 million/acre for land north of Sahara Avenue. Egad!

Columbia Sussex's casino portfolio continues to crumble. Tropicana Entertainment parent Tropicana Casinos & Resorts is selling its Amelia Belle riverboat (thereby forfeiting the New Orleans market) barely two years after the ship was acquired. Amelia Belle is former Harrah's Entertainment vessel, having been Bally's Belle of Orleans.

It's a canny strategic move for new owner Peninsula Gaming, which now has a Louisiana riverboat as well as a racino and four OTBs, not to mention a small flotilla of Midwest riverboats. TropEnt CEO Scott Butera, meanwhile, has less and less over which to preside. At the moment, his ambit consists of four riverboats, mostly in tertiary markets, two casinos in Laughlin and one on Lake Tahoe. Is this TropEnt's future: A succession of piecemeal asset sales? Sure looks that way.

Bad news for Sheldon Adelson. Over in Singapore, rival Genting's mega-budget Resorts World at Sentosa is letting news outlets like Bloomberg know that 60% of the project will ready for a soft opening in early 2010 (i.e., February-March). Projected attendance figures have been revised 20% downward.

In a rapier thrust at Marina Bay Sands, a Genting exec said the company was having regular meetings to make sure it came in on its $4.5 billion budget. Full completion of Sentosa is projected for 2012. Sands is going to have a sufficiently tough time making its nut without Genting crashing the party so soon ... to say nothing of the fact that Genting enjoys much higher brand equity in that corner of the world.

RoboPoker has risen from the grave. Electronic table games have been OK'd for eight New York State racinos. Though the Lege hasn't signed off, the Empire State's lottery board is confident it has the authority to make this move unilaterally. Poor Atlantic City is dying the death of a thousand cuts.

Congratulations to Penn National. It's scheduled to inaugurate a new pavilion for Empress Joliet today. A March 20 fire resulted in a three-month closure of the boat and substantial fiscal hardship for Penn National. In a noble gesture, CEO Peter Carlino kept employees on the payroll even though his ship was hors de combat. Capt. Carlino, S&G salutes you.

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.

Update: Harrah's nixes Azov

Thu, 18 Jun 2009 18:46:00 -0700

Harrah's Entertainment just responded, quashing the Bloomberg News Harrah's-in-Russsia report. A Harrah's spokesperson wrote, "although we have talked with the economic development department for Azov, we currently have no plans for [a] casino in Russia."

Given everything S&G has already reported about this project, it's no surprise Harrah's is giving it a wide berth, at least for the time being. Besides, the company is the butt of enough snobbery about its mid-market roots. Running a casino in a glorified tent wouldn't exactly provide an image boost.

Harrah's Azov?

Thu, 18 Jun 2009 16:23:00 -0700

Bloomberg News reports the following: Harrah's Entertainment, the world's biggest casino company, may build a resort on the Azov Sea, Vedomosti reported Tuesday.

Harrah's may join U.S. construction company Asati in building a complex in Azov-City, one of four gambling zones planned in the country, Vedomosti said, citing Asati founder Alex Kogan.

The resort, which will include a casino, hotels and conference centers, will cost between $50 million and $100 million, Kogan said.

Wow! Try building a U.S. resort -- or even a Macanese one -- for so little money. I've asked Harrah's for confirmation but have yet to hear back. Although several overseas ventures have gone belly-up, the company continues to persist.

However ... despite the Russian government's decree that all casinos be moved to special zones, scattered around the far reaches of the empire, little headway has been made: "One Russian publication sent a reporter to check out progress on one of the zones, who discovered open fields filled with grazing cows." The Azov-City project, for one, has a long way to go.

And how is ~~Harrah's/~~Asati going to build a casino for $100 million or less? One word: tents. "Several foreign investors have begun preparatory work, including the Austrian company Asati. The company plans to build on the 20 hectares of inflatable structures, area of 100 thousand square meters," explains one investment site, "... the inflatable structure can be a casino and a water park and the congress hall. In addition to inflatable structures Asati company intends to build a 17-storey hotel and 34 bungalows."

If there's to be gambling under a big top, I'd suggest they call the place Circus Circus, but Jay Sarno got there first. Potential feeder markets for "Harrahs' Azov" would include Kiev and Odessa, but the closest major city appears to be Stalingrad ... er, Volgograd.

Yung & the restless: Closer to home, in Kentucky, the grand vizier of Columbia Sussex, CEO William J. Yung III, is loaning out the corporate locomotive for charitable causes. Company locomotive? No, we're not making this up.

Restiveness marks the labor situation at one of the distant outposts of Yung's hotel empire. Both in the slow pace of negotiations and the demand for employee give-backs, it's very reminiscent of the scrumdown that was the Culinary Union/ColSux stalemate of two years back. At least Scott Butera intervened to make peace before it reached the point of a Tropicana Las Vegas boycott.

Small beer? Just what Resorts International in Atlantic City needs ... more regulatory problems. C'mon, guys. We hook up beer kegs all the time here at LVA. It's not rocket science. Then again, it's difficult to "misunderestimate" Colony Capital.

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.

D'Amato shoots, he scores!

Wed, 17 Jun 2009 17:03:00 -0700

Former Sen. Alfonse D'Amato (R-NY) has become an energetic champion of the online-poker community. Enjoy his virtuosic and highly entertaining verbal blitzkrieg against the Obama administration's misguided continuation (nay, escalation) of Bush-era anti-casino prosecutions. I'm skeptical of his projection of $20 billion in annual tax revenues from regulated Internet gambling, but otherwise I'm with "the Fonz" all the way.

In case you're joining this story already in progress, here's some exposition:

Thanks to Fox Business News for latching onto this story and devoting so much airtime to it.

Land of the Pharaohs

Tue, 16 Jun 2009 15:49:00 -0700

My attempt to answer a reader's question about MGM Mirage's franchise deal in Gaza, Egypt, fell victim to LVA's Comment-Eating Server, so here goes ...

Unlike Station Casinos shopping for dog tracks in Massachusetts while it's poor-mouthing employees and investors alike -- or Harrah's Entertainment batting its eyelashes at Stanley Ho -- MGM is doing the right thing, IMO. It's diversifying a revenue stream that's overly reliant on Las Vegas.

True, the official phrase "will provide ... brand fees" is rife with ambiguity (and I've got a query out to New Giza). Obviously, it's a better deal if MGM is the fee collector. Beyond that, I can't see a downside to hiring out the company's considerable hotel experience and pocketing a management fee in return. MGM is being strategically creative and I applaud them for it.

Quote of the Day

Tue, 16 Jun 2009 12:44:00 -0700

"I guess the Luxor was just practice ... " -- Hunter Hillegas, on MGM Mirage's extension of its brand to Giza, Egypt, home of the Great Pyramids.

Case Bets: Colony Capital, Siegfried & Roy, Obama smacks poker players

Mon, 15 Jun 2009 12:24:00 -0700

"Bats hang over the doorway to the building that housed Mr. Jackson's private arcade; guano stains the threshold." That's how the Wall Street Journal describes Michael Jackson's decaying Neverland Ranch. It gets even freakier from there, with the WSJ receiving a tour of the compound that might be described as Charles Foster Kane meets Pennywise.

Neverland is the latest can't-miss investment play by Colony Capital, whose crackerjack CEO, Tom Barrack, says: "We think we made a very smart real-estate deal ..." Then again, that's probably how Barrack felt about his acquisition of Station Casinos, which just took a bath on some of its land holdings.

Even by Vegas standards, Neverland is way up there on the Bizarre-o-Meter. Too bad Colony can't find a Native American tribe that can claim it as their ancestral land and have it taken into trust. It'd make a casino-based destination resort so demented and perversely infantile, Sin City would be green with envy.

The most blackly funny line in the video comes when the narrator says Colony is taking steps "to remove the taint of scandal." Man, there's no bleach on Earth powerful enough to eradicate that stain. Infamy, like nuclear waste, has a half life of forever.

A Tiger's Tale: Those cats of Siegfried & Roy's were endangering life and limb almost 30 years ago. And gosh, whatever became of the Siegfried & Roy IMAX movie that never screened locally? CineVegas, how can you let this introuvable escape your programming grasp? Maybe Johnny Brenden will let you rent his IMAX screen ... provided you show the movie at 7 a.m. or thereabouts.

So much for the conventional wisdom that Internet poker, at the very least, might find a sympathetic hearing from our poker-loving POTUS. The Justice Department's jihad against online casinos has taken a particularly nasty turn. The DoJ is striking at the soft underbelly of the business, going after players. So if you won $$ fair and square on the 'Net, too bad: Uncle Sam is going to relieve you of your money and if you don't like it, it's not like you can call the cops.

As I. Nelson Rose points out, we're getting into a legal gray area here -- not least because the federal injunction was brought in New York State, where online wagering isn't illegal. Let's give the banks the benefit of the doubt: They probably had little choice to go along with this draconian and unconscionable action, yet another intrusion by Big Brother. Rep. Barney Frank's proposed UIGEA rollback can't happen soon enough.

Adding insult to injury, the Obama administration is going to the mat on behalf of one of Bill Clinton's worst mealy-mouthed compromises -- the Defense of Marriage Act. In doing so, it's resorting to some of the most troglodytic arguments imaginable. Like: Equal rights are bad 'cause they cost the guvmint money 'n stuff.

Heavens, yes, just imagine how expensive it would be if we'd given women and African Americans the vote. What ... we did? I need to read my memos more closely.

So culturally benighted am I that I had to have someone explain to me who this Jon & Kate are and why they are the object of so much fascination. Sometimes ignorance really is bliss. At least they haven't "hosted" at a Vegas nightclub yet ... have they?

MGM hedges China bet

Fri, 05 Jun 2009 15:32:00 -0700

It looks like MGM Mirage is exploring its options for a life-after-Macao scenario. It's not only keeping a watching brief on Japan and even contemplating the scandal-ridden Philippines market, it's making a full-court press in Taiwan. There are two interesting qualifiers to MGM's exploration of what we used to call Nationalist China.

One is that it'd be involved as a franchisor and operator-for-hire, not investing in the casino proper (an arrangement with more upside than what the company currently enjoys in Macao). The other is that among the potential stumbling blocks noted by MGM exec Lloyd Nathan is "whether mainland Chinese tourists would be allowed into the casinos." Intentionally or not, that certainly makes it sound like MGM is considering Tawain as a fallback position if it has to evacuate Macao.

Las Vegas nears bottom: Visitor numbers show some hope-inspiring metrics. If May numbers are as good as state officials are hinting, we may actually start to climb out of this trough.

Macao: Genting in, MGM out?

Fri, 29 May 2009 13:22:00 -0700

I've speculated elsewhere -- I believe it was on the TwoWayHardThree forum -- that Genting Bhd might be a logical, even inevitable successor, should MGM Mirage bail out of Macao. Seems that while I was laid up, news surfaced that Genting insiders are selling shares and rolling up a $425 million nest egg. They've also snapped up $100 million in secured MGM Mirage notes.

MGM Grand Macao co-owner Pansy Ho's dad, Stanley Ho, has played footsie with Genting in the past -- something the Singaporean government frowned upon fiercely. Hence the delicate footwork that key Genting players will have to execute if they're to convince Singapore (where Genting is building a multi-billion-dollar resort) that there's more than an arm's length between any potential dealings with the Ho family and Genting's investments on Sentosa Island.

That'll be a difficult minuet to dance but for what's been called "the golden ticket" -- entry to Macao -- Malaysian investors would surely find it worth twirling an ankle or two. Unless Boyd Gaming has waived its right of first refusal on Borgata, this sudden accumulation of Malaysian cash can have one purpose only.

Quote of the Day

Fri, 29 May 2009 12:56:00 -0700

"North Korea, meanwhile, warned it would retaliate if provoked." -- from an Associated Press story about the latest bout of saber-rattling from Stanley Ho's buddy, degenerate playboy and North Korean despot Kim Jong-Il. Seems to me that if you conduct a thermonuclear detonation and fire six missiles in one week, you're the one doing the provoking and it's the fired-at people who have the prerogative of retaliating. But that's just me.

Brilliant idea, stupid headline

Wed, 20 May 2009 13:21:00 -0700

Tamara Audi of the Wall Street Journal is one of the two best gaming reporters in the U.S. (The Las Vegas Sun's Liz Benston is the other.) Too bad her story on MGM Mirage's global extension of its brand(s) got slugged with this idiotic faux-clever headline: "MGM Mirage Gambles on Hotels in Mideast, Asia."

Yuk yuk. WSJ headline writers must have really had to put on their thinking caps to come up with one. Except ...

There's no "gamble" here: As long as MGM does its spadework, and budgets so that management fees - costs + franchising fees = profitability, where's the problem? This is a brilliant low-exposure move by a company that's far too vulnerable to the vagaries of one (market) right now.

Both the Sun and the Las Vegas Review-Journal chimed in on this story already, but Audi has far more detail than either. Already, MGM's plan embraces such far-flung and exotic locales as Sharm El Sheikh (Egypt) and Tientsin (aka Tianjin, China), and a stateside push is under discussion.

Kudos to both CEO Jim Murren and MGM Mirage Hospitality supremo Gamal Aziz for devising a means of broadening the company's revenue stream that entails comparatively few upfront costs. MGM may be in stormy weather roughly comparable to what's being experienced by Harrah's Entertainment and Station Casinos. Unlike those two, it's going to have something to show for its troubles when it comes out on the other side of the typhoon.

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?

El gringo Trump II

Tue, 05 May 2009 12:42:00 -0700

NBC-TV Sunday-night comedy star Donald Trump has always been promiscuous when it comes to slapping his name on anything this side of condoms. And why not? It gives him bragging rights to the drawing power of his moniker.

"My buildings sell out before they are built. People recognize the brand name and know what they will be getting: the best for their money," proclaimeth the orange-haired tycoon. For instance, a Baja California condo complex took reservations on 80% of its planned first tower in less than a day, so dazzled were buyers by the Trump brand. The latter may be mud in the casino industry but it's got power in real estate, at least for now.

Had Trump Baja been a roaring success, I'm sure we'd be hearing no end of it from Trump Himself. Now that the developers who sublicensed the Trump name have gone to ground, leaving a big hole behind, The Donald wants everybody to know it was no fault of his: Oh no! He's not responsible for the skanky things people do once they've bought the rights to that very recognizable brand. As a sales tool it means everything ... but in terms of standing behind one's product it's not worth a farthing. That's the ~~reductio ad absurdum~~ essence of the Trump Defense.

Technical difficulties, please stand by

Mon, 04 May 2009 16:48:00 -0700

As you've seen, we're having some problems with the embedding of the most recent Macao video montage. S&G apologizes for the temporary convenience. Trust me, it will be worth the wait ... but, if you're disinclined to wait, go to Ian Sutton's invaluable GamingFloor.com and watch it there.

What happens in Moscow ...

Thu, 30 Apr 2009 11:53:00 -0700

These days, one is constantly reading gripes that it's no fun to play in Las Vegas anymore. They sure don't have that problem in Russia, as this compilation of eye-in-the-sky footage proves. (Thanks to GamingFloor.com Editor Ian Sutton for the link.) True, the dealers can't deal and nobody can keep their hands to themselves -- but these comrades sure know how to party! Forget R&R Partners: This is the kind of promotional spot Rossi Ralenkotter needs.

Be sure to watch until the very end or you'll miss the best laugh in the entire reel.

Update: I don't think all the casinos are in Moscow, that's just a figure of speech. (I wanted to headline it, "What happens in Murmansk ..." but decided this blog was obscure enough already.) The locations are all identified at the end, I believe, but my Cyrillic is right up there with my Swahili.

CityCenter update

Thu, 30 Apr 2009 11:20:00 -0700

One not-so-small I detail that I omitted in my report on yesterday's declaration of detente between MGM Mirage and Dubai World: The latter is released from its completion guarantees. Which puts the onus for finishing the project squarely on MGM's shoulders. As we on the Vegas Gang collective (like the Borg, only nicer) predicted a good ways back, MGM's future is inextricably entwined with CityCenter.

From the glass half-full perspective, the mortgaging of MGM Grand Detroit and Gold Strike ensures at least a modicum of regional diversity in the lion's den. A week ago, it looked as though the company might very well circle its wagons around Las Vegas, while maintaining a small beachhead in Macao. But with the search for the last last, elusive $1.2 billion in bank loans having evidently been abandoned, asset sales are becoming imperative.

What a tragedy that, at the very moment the casino industry is ripe for "unbundling," reversing mega-consolidations that should never have been attempted, the banks are too afraid to part with their precious TARP money to help bring it about. Unless you can do a Phil Ruffin and basically pull $600 million in cash out of a drawer, it's no casino acquisition for you!

Dubai World wins, MGM doesn't lose

Wed, 29 Apr 2009 18:14:00 -0700

The "CityCenter six-pack" lives on, thanks to a late-breaking accord between MGM Mirage and bickering spouse Dubai World. It's a tactical victory for MGM, in that it -- among other things -- keeps the project moving forward and forestalls the prospect of bankruptcy. But it looks as though, when the points are tallied, Dubai World comes out ahead.

CityCenter: Is it too late to bring back the Boardwalk?

Dubai World's biggest concession is to drop its March 22 lawsuit against MGM, which was endangering completion of the metaresort. Lenders also yielded significant ground by agreeing to immediately release $1.8 billion in credit which had been heretofore contingent upon several hundred million dollars' worth of put-in by MGM and Dubai World. Both debtors agreed to a 2% interest-rate hike but MGM was able to gain a temporary waiver of certain debt covenants.

The days of getting $7 billion with no strings attached are over, though: Instead of selling its Gold Strike and MGM Grand Detroit casinos, the company is pledging them as collateral (along with unspecified raw land, probably the "Project Z" site south of Mandalay Bay) for its senior debt. Beau Rivage's fate remains unknown. Cost overruns at CityCenter will be collateralized by Circus Circus and "certain adjacent land" ... i.e., what was going to be the site of an MGM/Kerzner joint venture. MGM CEO Jim Murren had been maintaining that he wasn't going to tear down the clown castle -- and now he can't, even if he wished.

If condominium sales hit $250 million, that money can go toward construction costs. However, if they don't reach $243 million, then MGM is on the hook for the difference. It's also fully responsible for construction costs that push the price tag beyond $8.5 billion. As a consolation prize, it gets the $135 million that Dubai World should have paid toward the joint venture over the last five weeks -- a shortfall that MGM had to make good out of its own coffers.

As the Las Vegas Sun summarized the pact, "The bottom line is that the most important construction project in Las Vegas and the gaming industry will proceed and open as scheduled, with it likely boosting revenue for MGM Mirage but hurting competitors already suffering from an oversupply of hotel rooms in Las Vegas."

Everybody can now heave a giant, grateful sigh of relief and go back to business as usual, like ...

Look out below! Forty-seven stories of glass at CityCenter's Mandarin Oriental and not a one of them has been inspected. Sadly, that's become par for the course with this project: Another day, another graveyard-humor headline from the former site of the Boardwalk.

Said the MGM spokesman given the thankless task of handling this latest revelation: "In the end, we want to build a structure that's comfortable and enjoyable to the guests and beautiful to behold -- and also meets, to everyone's satisfaction, the highest safety criteria." Until then ... duck!

Case Bets: Isle exits U.K.; no room at the Trop; Carlino channels Astaire, etc.

Fri, 24 Apr 2009 17:22:00 -0700

Isle of Capri Casinos is coming up for air, literally extricating itself from underneath Ricoh Stadium in Coventry, U.K. As part of CEO James Perry's attempt to refocus a company that spread itself too thin under his predecessor, he's walking away from an ill-starred British venture. Rank Group not only assumes Isle's lease, it gets the casino itself for pocket change, by industry standards: $940,000.

Perry may also be preparing to unload Isle's Pompano Park racino in the disappointing Florida market. At least one analyst is now picking Isle, so recently stuck in the mud, as one of the better bets to emerge intact from the gaming group's crisis.

A house divided cannot flush. Staggering from miscalculation to mishap, the Tropicana Las Vegas has sustained another self-inflicted wound. But don't blame current steward Tropicana Entertainment, predecessor Columbia Sussex or even Aztar Corp. The non-kosher plumbing that got the Paradise Tower shut down dates back to the 1990s, when the Trop was under divided ownership (one of the many obstacles to its redevelopment). The scary part is that it took at least 10 years for the code violations to be discovered.

The real victims, of course, are the hotel guests who are getting bumped from their Paradise Tower rooms. Since it's far and away the nicest part of the Trop, by definition they'll be moving to less-desirable rooms, some of them in truly decrepit parts of the hotel. Given the condition of the Trop's physical plant when I made a "secret shopper" visit, today's news comes as less than a surprise. The resort's advancing years were bound to catch it out sooner rather than later.

Penn's fancy footwork. While not out-and-out denying an attention-getting New York Post story about a possible 'credit bid' play for The Mirage, executives of Penn National Gaming were at some considerable pains to imply that it was all smoke, no fire. CFO William Clifford put it thusly: "... there were quotes and things said that have been pulled all the back to the last year’s Gaming Conference ... I’m not quite sure that the Post article is a very good reflection of anything we’ve ever said at any point in time."

CEO Peter Carlino followed with, "Some of the most interesting quotes were made at a time when none of the stuff that you are all currently thinking about was out there so it’s unfortunate. It’s just a hodgepodge of things pulled together to make a story. We would have preferred not to have seen it that way. Look, common sense says if there’s an opportunity we’re going to follow it but it’s no more exciting than that; enough said." [Emphasis added]

A Bloomberg News report that Penn was pursuing Greektown Casino went unaddressed in yesterday's earnings call. To the extent that Carlino was willing to commit himself on Las Vegas, he said Penn wanted no more than a single property "if we can find one." The consensus of Penn execs was that Vegas would be a "viable" market for the company ... in five years. (The company's strategy is partially predicated on an exodus of Californians relocating to Vegas and jump-starting the local economy.)

Sadly, Atlantic City seems to have slipped off Penn's radar screen altogether. On a happier note, the company promises a new and "exciting" replacement for the Empress Joliet pavilion that was destroyed by fire -- which makes it sound like the previous Ye Olde Egypt theme is now history, so to speak.

Schreckliche Idee! At a time when institutions like Goldman Sachs and Deutsche Bank control ever-larger chunks of the Strip, the Nevada Gaming Commission is seriously considering lowering the threshold of scrutiny even further. (Because if there are any two words that instill confidence nowadays, those words are "Wall Street.")

The man fronting this idea, veteran gaming attorney Frank Schreck, argues that his proposed rule change wouldn't result in casinos ceding managerial or operational control. However, that's already happened at the Las Vegas Hilton, where a Goldman-owned stalking horse holds a sizeable minority interest. What he's proposing would take a bad precedent and codify it.

By linguistic coincidence, schreck is the German word for "fright" and the root of schrecklich or "horrible." Which is what this idea is. But Nevada regulators are already overburdened and about to become more so, once the next budget is enacted. Given that grim future, Schreck's proposed lightening of their workload will be probably be embraced.

Garber to Harrah's? Apparently not

Thu, 16 Apr 2009 11:35:00 -0700

So is former PartyGaming PLC supremo Mitch Garber going to Harrah's Entertainment or isn't he? As of yesterday, it appears that the company is denying [registration req'd.] a London Times report that it had signed Garber to head up a conglomeration of its online and World Series of Poker operations.

Or not. Asked for clarification, a Harrah's flack replied, "There is not a statement and we do not comment on mktplace rumor/speculation."

Since Garber joined PartyGaming in April 2006, several months prior to the odious UIGEA, a Garber-to-Harrah's move would raise some thorny questions for regulators. Following UIGEA's dead-of-night enactment, PartyGaming exited the U.S. market. However, up until that point it had been engaged in some slippery dealings to which it recently 'fessed up.

PartyGaming has put a brave face on its accord with the U.S. Department of Justice, saying it "had no intention of breaking any laws" but its allocution shows that it went to considerable lengths to circumvent American banking rules. The seven-month overlap between Garber's hiring and PartyGaming's cutoff of U.S. play would be certain to put the executive under a regulatory microscope and, at minimum, require some dextrous explanation by Garber.

The company's profession of quasi-innocence is further undercut by the fact that company co-founder Anurag Dikshit has copped a plea that included paying a $300 million fine. Garber's former employer holds that its own deal with the feds was "amicable" and who are we to argue? If somebody was willing to hand me $105 million in return for causing them no further grief, I'd be quite amicably disposed, too.

PartyGaming can't be feeling too much pain in the wallet, as it's talking about making acquisitions. Nor will Garber be on his uppers if a reported Harrah's job offer were withdrawn, considering the generosity of his pay package as an Internet gambling CEO.

S&G will try and stay abreast of this story as it continues to develop ... or unravel.

We can rule out the "Warren Buffet of the Gulf" as a possible rescuer for CityCenter, from the looks of it. Prince Alwaleed of Saudi Arabia is selling much of his hotel portfolio to shore up his sagging fortune, including several of the Fairmont Raffles Hotels he co-owns with Colony Capital. It was an acquisition so expensive that Colony and its princely partner had to turn right around and sell much of it in return for management contracts. Colony's luck in the resort sphere seems to come in two flavors, bad and worse.

How the Grinch Stole MGM Mirage

Mon, 13 Apr 2009 18:27:00 -0700

By george, the folks at MGM Mirage sure made a monkey out of me. There I was, believing the company had learned a lesson from the toxic PR it engendered back in the fall of '01. In a panicked overreaction to 9/11, the company savagely downsized its workforce, supposedly earning its then-CEO the in-house nickname "Osama bin Lanni." Since then, MGM has generally been more circumspect in its economy measures, leading one (well, me anyway) to believe it wouldn't make the same mistake twice.

Until now.

While MGM Mirage CEO Jim Murren and colleagues may be saying the right things for public consumption, their actions sometimes sound a jarring dissonance. For instance, at a time when the company is scraping from payment to payment on CityCenter, it suggests congenital tone-deafness to award Murren a $500,000 raise and $7 million severance package (just in case he has to take the fall for CityCenter, for instance) at this particular juncture.

In the abstract, MGM could justifiably ask, Why pay Jim Murren less than the $1.9 million with which Harrah's Entertainment is remunerating its CEO, Gary Loveman ... never mind the $2 Million Man, new Las Vegas Sands President Michael Leven, who's on pace to be the most over-compensated gaming executive of 2009. All things being equal, Murren and Loveman are grossly underpaid on the Leven Scale.

But there's the small matter of context ... as in, giving your CEO a 25% pay boost at the same time your rank-and-file employees are getting hit with a triple whammy: revoked COLA raises, an increase in health-care premiums and no 401(k) matches for 2009. It's like the Grinch stole Christmas, Easter and Thanksgiving for good measure. According to the Las Vegas Review-Journal, it was informed by an MGM spokesman that employees "will be allowed to keep the extra money earned in the quarter." Isn't that sweet?

Dubai World's big offer, at least as reported in the Wall Street Journal, appears to be less than meets the eye. It's premised on the project's lenders waiving a requirement that Dubai World and MGM chip in a required $730 million-$800 million en route to unlocking a $1.8 billion credit facility. In return, Dubai World will presumably quit sulking and resume its financial participation. It's a pretty audacious gambit but with CityCenter circling the Chapter 11 drain, bankers could well deem it the lesser of two evils.

Update: The YouTube video, posted earlier today, has been fixed and is now available for your viewing please. I apologize for the temporary inconvenience.

Quote of the Day

Mon, 13 Apr 2009 12:49:00 -0700

"Cocktail waitresses wore clear plastic outfits with strategically placed tags noting the project's environmental certification, and female performers descended from the ceiling on wires, according to a person who attended." -- description, in a Wall Street Journal report, of a party held at Bellagio last September "to celebrate a crucial financing that would help" MGM Mirage and Dubai World complete CityCenter.

The end of Viva

Thu, 02 Apr 2009 18:02:00 -0700

That's one of the implications of Colony Capital's potential cash infusion into CityCenter. Since Colony owns 3/4 of Station Casinos and might find itself with a big piece of CityCenter, it's an utter certainty that it wouldn't go along with the notion of Station building a fugly CityCenter knockoff on the other side of I-15. Of course, the Fertitta Bros. still control the Station board, so they could try and drag Colony down the Viva highway to hell if they want to force the issue.

But what does it say about CityCenter if Colony wants to buy in? The fund's track record in casino investing has been predominantly dreadful of late. A philosophy of acquiring "non-performing loans, distressed assets ... out-of-favor sectors," hasn't worked out so well. For instance, the REIT got a fire-sale price ($140 million) on Resorts Atlantic City, then saddled the dowager with a mortgage 160% excess of her market value.

When Resorts' sclerotic revenues caught up with Colony, it simply opted out of its "house payments." This nearly brought us the edifying spectacle of seeing a casino get repossessed by the bank. Between the venerable Resorts and the comparably ancient and non-performing Atlantic City Hilton, the fund's Boardwalk portfolio risks being dubbed "Colony Crapital."

Not only did Colony overpay (or, more accurately, over-borrow) for Station Casinos, it got further hornswoggled in the deal. Despite holding 76% of the equity, it only controls 40% of the board. Similarly, it let Goldman Sachs buy into the Las Vegas Hilton by dint of surrendering ultimate authority over capex decisions to Goldman.

It seems baffling from a common-sense standpoint that Colony could purchase a big stake in City Center, offer $850 million for the Tropicana Atlantic City (as it did last spring) or start a new fund to buy more yet distressed assets (as it's doing) when most of its casino properties are sucking wind. Shouldn't it be salvaging what it's already got?

Ethically, yes; realistically, no. For a fund like Colony, that'd be throwing good money after bad. ("Wanna buy a piece of this fund to bail out Resorts A.C.? No? How about putting some more into Station? Why not?!?") The way it's compartmentalized, Colony can keep buying shiny new silos, no matter how many of its existing silos are crumbling into barkdust, so long as there are takers for its fund offerings. Leave the bad investments to their fate and better luck next time.

One might be pardoned for thinking Colony couldn't run a lemonade stand profitably, as the company's gaming-sector strategy seems to consist of throwing money against a wall over and over again until some of it comes back. One of the questions raised by the CityCenter discussions is: How much control would Colony get in return for its money? Given that MGM Mirage is setting aside shutdown capital for the project, Colony appears to hold the leverage. It'd be smart to leave MGM in the driver's seat -- and besides, Colony is no stranger to dealing itself into a position of weakness.

Then again, Colony may well be a stalking horse for Saudi mogul Prince Alwaleed Bin Talal, one of its business partners. He's got deep pockets and grandiose plans ... just the sort of fellow who might fancy being the monarch of CityCenter.

Speaking of the Fertitta Bros. ... the president of their pride and joy, the UFC, a charming fellow by the name of Dana White is making headlines and not in a particularly good way.

Those [expletive] UFC [expletive] board meetings [expletive] must be [expletive] really something [expletive] else, [expletive]. Wouldn't you [expletive] want to [expletive] be a [expletive] fly on the [expletive] [expletive] [expletive] wall, mother[expletive]?

Should Colony take a stake in CityCenter -- thereby dooming Viva -- perhaps the Fertittas can send Mr. White to Colony HQ as their good-will ambassador.

Quote of the Day

Mon, 30 Mar 2009 14:58:00 -0700

"Candidly, it took me a while to wrestle with [the loss of friends in the 9/11 attacks]. It was the diversity program that ultimately got me through. I realized that there is hate in the world, but there is more love. There is anger in the world, but there is more compassion." -- former Wall Street stock analyst and current MGM Mirage CEO Jim Murren, on his company's industry-leading initiative.

Interesting facts: MGM's workforce is 57% Latino, Asian-American or African-American ... and who ever thought we'd see the day a high-ranking Strip executive (director of supplier diversity) was named after Jomo Kenyatta, the founding father of Kenya?

Sheiks of Araby

Fri, 27 Mar 2009 17:23:00 -0700

"At night while you're asleep/Out of your tent they'll creep."

In the old song, the titular "Sheik of Araby" was sneaking into your tent but, in the case of Dubai World, it's skulking away from the nuptial bed now that the Middle Eastern Midas is turning out to be all caftan and no camel. By a hairsbreadth catastrophe was averted but Dubai World has made it clear that it has no compunction about playing "chicken" with 8,500 construction jobs, not to mention saddling MGM Mirage with a financial burden that would not only drag CityCenter into Chapter 11 but might kneecap the casino giant in the bargain.

While MGM reiterates that it's got enough cash on hand to keep CityCenter going, a source close to the project tells S&G, "there seems to be significant question as to whether or not DW can [do] the same." Indeed, it looks like the sheikdom may soon face a debt-load whammy much like that confronting MGM. It's sitting atop a rickety economy, at the mercy of Abu Dhabi's purse strings

While uttering pious hopes for the successful completion of CityCenter, Dubai World has gone out of its way to sabotage the project and not just by precipitating today's crisis. In both its legal filing and an extraordinary open letter to Nevada lawmakers, Dubai World has trash-talked MGM so harshly that a reconciliation seems extremely unlikely. (An armed truce is the probable modus vivendi.) MGM management's basic competence was called into question, as Dubai World accused its partner of giving it less product for more money than was originally agreed.

One line of argument is that Dubai World is trying to wrest control of the project for itself, but most indicators point to a company that's overextended and looking to cut off any further exposure in Nevada. As Hugh Jackson found, Dubai World has its fingers in an expensive and astonishing number of pies, including "a 46-mile canal with a whole new city of 2.5 million people on its banks." Las Vegas casino moguls look like risk-averse brahmins, comparatively. As for CityCenter, Dubai World's conduct is little short of scurrilous.

The scandal that wasn't

Wed, 25 Mar 2009 18:38:00 -0700

Like a summer storm, the hoo-ha concerning the intervention of Sens. Harry Reid and John Ensign on behalf of troubled CityCenter, blew itself out in a hurry. Once the New York Times decided to spike a story on the ethical quandary, it was pretty much over and done. About the worst charge ethics watchdogs could level at the two lawmakers was "implied pressure" and the consensus was that both Reid and (especially) Ensign had been on the square in their handling of the matter.

Sadly, it says little for either's clout -- Reid's in particular -- that, after weeks of beavering away at the banking industry, financiers haven't budged. MGM Mirage says it can fund its half of CityCenter by diverting cash from other parts of the budget, but even that's not enough to loosen any purse strings. (Dubai World's de facto sabotage of the project is the subject for a whole 'nother post.)

Ensign and Reid were in a no-win bind: Come to CityCenter's aid and be accused of exercising undue influence or do nothing and get raked over the coals (or worse) if MGM Mirage collapses under the project's weight. Treasure Island owner Phil Ruffin was particularly pithy, telling Steve Friess, "I wouldn't jump all over them. That's exactly what your senators are supposed to do."

For my part, I received a valuable civics lesson from a reader, who wrote:

"You're amazed/outraged that Sen. Harry Reid is shilling for MGM Mirage. I'm here to tell you that's exactly what politicians are expected to do -- enthusiastically front for a) their constituents in general and b) the biggest, richest, most powerful constituents in particular.

"Are you also amazed/outraged that Sen. Carl Levin, Rep. John Dingell and other members of the Michigan congressional delegation continue to shamelessly promote the interests of GM, Ford and Chrysler -- all home state companies that can't really compete with their Japanese counterparts? That Sen. Charles Schumer of New York insists on defending that homestate financial services firms that have wrecked the nation's economy?"

Point taken. As I (prophetically?) wrote someone earlier this week, I'm not so proud I don't think I can learn from my readers.

Case Bets: Florida standoff; No Goa; "Good news"?

Wed, 25 Mar 2009 16:39:00 -0700

Legislators in Florida are occupying different sides of the planet when it comes to crafting a new casino compact with the Seminole Tribe. At the risk of being accused of giving the store away, the state Senate favors granting full Class III gambling to the Seminoles, in return for $400 million a year. The lower house, meanwhile, would roll the tribe back to slots-only parity with southern Florida parimutuels and charge tribes $100 million ... for games they're to which already entitled under federal law. In the unlikely event the Seminoles assent to Plan B, it will probably get a constitutional body-slam in court.

The upper house's proposal is also more "george" for private-sector casinos, as the Miami-Dade and Broward county parimutuels would get limited table games and all parimutuels statewide would be allowed Class II gambling. The stingier House bill is the Line of Death for anti-gambling forces, who'd prefer to cut off a $100 million-plus nose to spite their collective face. Even if it prevails, it's too late to do more than protract the agony of existing non-tribal casinos in Florida. This war is over and the Seminoles have won.

Oh, and revocation of the existing compact would deprive the state not just of money of hard-to-get (if limited) judicial purview over disputes that occur on tribal land. These sorts of exemptions to tribal sovereignty are rare as hen's teeth, so solons might want to ponder whether it's something they're willing to forfeit for the sake of striking a pious stance.

Slumdog customer relations: What do you do when one of your players wins big at the tables? Beat the living crap out of him, of course. Let's see if this innovative form of customer-relationship marketing catches on ... not!

Unclear on the concept: "Good news No. 3: As of January 2009, Las Vegas’ hotel room inventory was 140,729, and this number is expected to increase by 9.9% to 155,562 by the end of 2009. In comparison, Orlando, Florida has 111,700 hotel rooms and San Francisco a little over 33,300."

Uh, this guy obviously wasn't CC'd on the memo that an onrush of new hotel rooms at a time when visitation is in decline is not "good news."

(Quoth Andrew Zarnett of Deutsche Bank, "We view a CityCenter postponement as a net positive for the overall Strip demand and supply dynamics, which is currently lopsided towards oversupply.")

Taking a page from Red China, lawmakers in New Jersey propose "stopping payments to state prisoners who make license plates and do other work." I hold no brief for convicted felons but, the last time I checked, slave labor was illegal in this great land of ours.

Quote of the Day

Tue, 24 Mar 2009 15:39:00 -0700

"When you file a lawsuit that charges mismanagement and a breach of fiduciary duty, how do you have a refinancing discussion with that kind of talk?" -- Covenant Review founder Adam Cohen, on the vitriolic lawsuit filed by Dubai World against CityCenter cohort MGM Mirage.

Quote of the Day

Mon, 23 Mar 2009 14:35:00 -0700

“Our relationship with Dubai World is outstanding and has been since August of ’07 when we consummated the joint venture. They have been steadfast partners.” -- MGM Mirage CEO James Murren, in his most recent conference call, last week, lauding Dubai World. A Dubai World subsidiary filed suit today, asking to be let of out its CityCenter joint venture with MGM. Dubai World wants to see a clean bill of financial health from MGM before it proceeds any further with CityCenter.

Inside the Harrah's filing:

Fri, 20 Mar 2009 12:28:00 -0700

Hare 1, Tortoise 0: After reading through the March 13 Harrah's Entertainment 4Q08 filing this earlier this week (one of the benefits of using mass transit), I set it aside for a few days, enabling the Las Vegas Review Journal's Arnold Knightly to beat me to the punch. What caught both his eyes (presumably) and mine (definitely) was a line of copy in which Harrah's acknowledged that its poor Las Vegas Strip performance was partly driven by "fewer hotel rooms availabe due to room remodeling and remediation projects at three Harrah's properties [including The Rio]."

You will recall that, whether to save time or money (or both), Harrah's made an end run around the Clark County permitting process when it wanted to make changes to several of its hotels. In some instances, these alterations not only didn't match the blueprints submitted to the county, they also compromised fire safety. (Lax inspection on the county's part allowed the problem to mushroom.)

Harrah's is presently under indictment for these cheeseparing measures, which were uncovered by dint of a forceful R-J investigation. It was a rare instance of the R-J speaking truth to power and the paper has suffered mightily for it, as Harrah's has retaliated in measures both great (an advertising boycott) and petty, like banning the R-J from Harrah's Las Vegas properties.

Whatever punishment the judicial system may or may not levy upon Harrah's will be nothing compared to the dent this misadventure put in Harrah's balance sheet. (By the way, I should acknowledge that Knightly read the Tolstoyian 160-page version of the quarterly report, while I settled for the 34-page "Cliff's Notes" version.) Harrah's may have thought it was saving money by going rogue but that false economy has now come back to bite it in the ass, to the tune of $60.5 million.

Gargantuan writedowns swung income from positive to negative in almost every jurisdiction. The international sector has bled red ink for two years, as London Clubs has proven to be a money-loser. The venture, like the company's hapless flip-flopping in Kansas, is typical of the spasmodic decisionmaking that has characterized CEO Gary Loveman's stewardship. Seemingly random projects (Slovenia, Singapore, the U.K.) were lunged at and toyed with briefly, then ditched. Having settled for one of the smaller fry of the British casino industry -- London Clubs -- and then unable to swap it for a piece of the big boy, Rank PLC, Harrah's must settle for selling off a little bit of LCI here or there.

Harrah's Atlantic City numbers would look much worse if the company didn't cleverly roll its Pennsylvania competitor, Harrah's Chester, into the A.C. portfolio for reporting purposes. If you had to assign Harrah's Chester to a region (as opposed to "Other"), the only one that fits is "Atlantic City Region," though that's a bit like rolling Laughlin numbers into "Las Vegas Region."

Debt service is murder, up 2.7X from 2007. 'Nuff said.

If asset sales are necessary, a non-Total Rewards property like Bill's Lake Tahoe would be already positioned for spinning off. However, Harrah's would have difficulty justifying more than a $160 million average sale price for any of its outlying Nevada properties, where cash flow is comparatively small. If significant relief is to be achieved from unloading casinos, some trophy properties will have to be sacrificed. After all, why should the bondholders be the only ones taking a bath?

Case Bets: Sands' future; Gibbons' lack of same; Hard Rock woes

Mon, 16 Mar 2009 12:00:00 -0700

An "Adelson dictatorship" no solution: With Las Vegas Sands brought to the precipice of utter ruin, this post-mortem on the William Weidner ouster hits a series of nails square on the head. Only the accompanying poll seems daffy: Given Weidner's mammoth self-regard, it's impossible to conceive of him being taken onboard at any gaming company except one that's otherwise bereft of casino expertise (like the Cosmopolitan, say) or one whose CEO suddenly gets the chop.

Weidner fallout continues: The palace coup that toppled Weidner was conducted by a rump faction of the LVS board. This minority-led putsch has prompted yet another board member to tender his resignation. In the meantime, I want some of that top-flight crack the analysts at Sanford Bernstein must be smoking, as they continue to give Sands rave reviews.

Bad Day at Hard Rock: Even without the help of one-time charges, the Hard Rock Hotel & Casino lost $101 million last year. Not only did the HRH choose a fiendishly bad time to expand (if a 130% increase in your room base can euphemistically be called "expansion"), the construction disruption has driven customers away. Having marched itself and banker/hostage DLJ Merchant Partners into this quagmire, Morgans Hotel Group really needs a 4Q09 economic turnaround or it's screwed.

The jacked-up hotel tax that Gov. Jim Gibbons alternately did and didn't support has motivated yet another challenger for the GOP nod in 2010. Former state Sen. Joe Heck, M.D., cleared his guns last year -- from the front lines in Iraq, no less (Dr. Heck was doing a brief tour of duty) -- when he called out Midnight Jim for his catastrophic lack of leadership during the hepatitis C crisis. So his announcement comes as a less-than-complete surprise.

This is good news for Sen. Harry Reid (one more potential challenger removed from a thinly populated chessboard), not so good for son Rory Reid, who's thought to be the Democratic frontrunner for Gibbons' seat. As for that room tax, not only would Gibbons not sign that tax increase whose revenues he covets, he actually went into hiding. Really.

If this doesn't end the political career of Midnight Jim, nothing will. Never mind the lost productivity that will be entailed if all DMV visits have to be made during the normal work week. For a Nevadan, a visit to the DMV is more dreaded than root canal without anesthetic. And a DMV with fewer hours and fewer workers? You do the math.

WTF?!?!? "Local media has speculated that the world's casino giants would pour money into Penghu [Taiwan] having suffered a hammering elsewhere in the global financial crisis." Local media needs to get a grip.

El gringo Trump

Mon, 09 Mar 2009 18:38:00 -0700

What will $32 million and change buy you? In the case of Trump Baja Ocean Resort, a big-ass hole in the ground where your investment ought to be. Oh, and a billboard of Trump's mug, too. Would-be buyers are being told they're going to have to eat their entire deposit.

Contractual fine print gave the Trump Organization the right to go out and blow depositors' money before the project was finished. Then, employing what his company would call "characteristic Trump fashion," El Donaldo removed his name from Trump Baja, fobbing it off on Mexican company PB Impulsores. Despite having had his moniker all over the project and being "involved in every capacity," Trump cannily lent only his name -- not his capital -- to the condo project.

You can guess what comes next. That's right: Trump is suing former partner Irongate for having "violated an agreement to license the Trump name, missing deadlines to obtain financing and begin construction." Success has a thousand fathers; as for Donald Trump's disowned progeny, somebody should open an orphanage. I know where they could probably get some Mexican land for one, too.

(Extra thanks to the two readers who tipped me off to this saga. Where would I be without you?)

Case Bets: Taiwan, Texas, Tea & stockholder sympathy

Mon, 02 Mar 2009 17:50:00 -0700

Aside from being saddled with out-of-the-way locations, potential Taiwanese casinos will be verboten to visitors from China. Peking has made its feelings known in no uncertain terms. It's difficult to see the point of bothering with casino investment in Taiwan unless it's a meager consolation prize for missing out on Macao.

Besides, for Americans of a certain age, the notion of a casino on Matsu doesn't connote carefree resort living: Believe it or not, the U.S. and China seriously contemplated a shooting war over Matsu and sister island Quemoy. Those two little pieces of offshore real estate were a central issue in the 1960 presidential campaign, as John F. Kennedy and Richard Nixon tried to oudo each other in hawkishness.

Put down the crack pipe: Although Texas is a big state, the notion that casino revenues there could match at least five other states combined (including Nevada) is a tall tale indeed. But if one had to choose between developing in Las Vegas and trying to crack a new regional market, it's quantifiable that the latter is a far greater value proposition nowadays.

Levity is usually an alien concept to the Las Vegas Review-Journal (where the attempts at humor are usually of the "Yer mamma wears army boots" variety). However, Howard Stutz has an amusing take on what your casino stock will or won't buy you. Personally, I consider the box of peanut butter Girl Scout cookies I bought last Saturday a better investment of $3.50 than a share of MGM Mirage, even if the cookies won't appreciate over time. (They do taste much better than a stock certificate, though, and they make your girlfriend happier, too.)

One far-too-typical R-J reader, though takes great umbrage at the notion anyone would make light of the anemic value of the gaming sector. Oh, the effrontery! So bunched up are this guy's tighty whities, he actually threatens Stutz with physical violence. Yeah, everybody's Rambo ... so long they're safely behind a keyboard.

Speaking of MGM Mirage, members of its players club needn't worry about a scam that saw Southwesterners spammed with phony "sweepstakes" winnings from the casino giant. When S&G asked whether there was any correlation between its player database and the recipients of the letter, the reply was the essence of brevity: "No."

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.

Bonus quotes

Sat, 21 Feb 2009 16:32:00 -0700

"If there are meetings that you're having that are lavish and are boondoggles or that are no longer productive because of the expense, that have diminishing returns, then good companies should stop doing those things." -- Harrah's Entertainment Vice President of Meeting Sales & Operations Michael Massari, on the current kerfuffle over corporate meetings in Las Vegas.

"Sorry about all the dismal headlines. If someone finds some positive news about the casino industry please send it on!" -- GamingFloor.com Editor Ian Sutton, in an online apology to his readers last week.

Case Bets: James Packer, Isle of Capri

Mon, 09 Feb 2009 18:30:00 -0700

Geez, maybe the Nevada Gaming Control Board shouldn't have been in such a hurry to green-light James Packer's purchase of Cannery Casino Resorts. (In a bow to noblesse oblige, Packer wasn't even required to put in an appearance at the Nevada Gaming Commission's vote on the matter.) At least the NGCB might have wanted to see how the Harry Kakavas scandal plays out, especially when Kakavas purports to have Crown Ltd. execs committing improprieties on tape. And since one of the people in the hot seat is Crown CEO Rowen Craigie -- with whom Nevada regulators have become quite familiar -- close attention is warranted.

Regulators from Pennsylvania -- a state not heretofore known for the thoroughness of its casino due diligence -- are taking this matter a little more seriously. In fact, they're sending a deputy Down Under to hear Kakavas' sub rosa recordings in person. Having dropped the ball on Don Barden and Louis DeNaples, the Pennsylvania Gaming Control Board clearly doesn't want a third botched background investigation on its ledger.

Packer, money soon parted: A $300 million writedown of other stateside Packer casino investments is on the way. Reuters' dispatch implies that some of Packer's Fontainebleau stake may be written off. That's neither a vote of confidence for Packer or F'bleau, which looks more and more like the wrong project in the wrong place at the wrong time. At the time Packer bought in, it'd looked like he'd found a "steal" -- and that F'bleau had been hard up for investors. Well, the second part may still be accurate.

Update: Then again ... maybe both still hold water. All though all of Packer's U.S. casino holdings (exclusive of Cannery) may be only worth $65 million combined, getting 20% of F'bleau for 65 mil still qualifies as a steal.

Isle bags U.K. venture: Even had it stuck to its knitting (U.S. regional casinos), Isle of Capri Casinos would still be in the doldrums -- its revenues weren't growing on a same-store basis. A duff casino project in the bowels of Coventry's Ricoh Arena just made things worse and now its end is nigh. Perhaps, as Isle contends, Britain's regulatory regime is partly to blame, but that's an excuse which suggests Isle didn't quite know what it was getting into -- nor would a strong performance in Coventry have cured the company's underlying malaise. Couple this with a 'debacular' Bahamas venture and Isle can't come home soon enough.

Dancing Tsar? No, not he: Normally admitting to be an ABBA fan wouldn't be a problem ... unless you happen to be Vladmir Putin, that is. Bjorn Again probably never imagined they were onto the publicity coup of their careers.

Another Motown casino in trouble

Tue, 27 Jan 2009 13:19:00 -0700

A blipvert from the wire services says that MotorCity Casino, in Detroit, is in danger of being out of debt-to-cash flow ratio on a $606 million loan. Luckily, unlike bankrupt Greektown, MotorCity has a deep-pocketed owner, Marian Illitch, who is offering to kick in $20 million of her own money, if necessary.

(Update: Bloomberg has detailed background on the brewing brouhaha.)

All of which leads one to re-pose the question: Who in their right mind would sell MGM Grand Detroit when its two stateside competitors are lumbered with financial problems and Harrah's Entertainment's Caesars Windsor, over in Ontario, is still trying to rebuild a greatly diminished market share? Bailing out of a market MGM Mirage practically owns would simply defy reason.

Adelson ambushed?

Thu, 22 Jan 2009 17:46:00 -0700

That ostensibly grassroots movement to run Las Vegas Sands out of Macao looks suspicious-er and suspicious-er. So far Macau Residents has been fortunate to find journalists who are either downright gullible or at least credulous.

Any claim to be shocked -- shocked! -- by Sheldon Adelson's Singapore project, Marina Bay Sands, indicates either disingenuousness or remarkable incuriosity, seeing as how Marina Bay has been in train for nearly three years (longer, if you count the courtship process). Nor has Sands proposed to "abandon" its Cotai Strip™ projects but rather to indefinitely suspend them ... although if you're an unemployed Macanese or a expat construction worker, that's probably a distinction without a difference.

Saying that LVS "recovered its capital investment within the first year of operation of the Sands Casino in Macau" is true only insofar as it applies to Sands Macao. When it comes to Venetian Macao and everything else, Sands is nowhere near being out of the woods. (I've seen much worse business plans than rolling the proceeds from Casino A into the construction of Casino B, which in turn bankrolls Casino C, but I doubt this one will be emulated anytime soon.)

As for the contention, "there was no significant incremental foreign tourism as originally represented and no substantial increase in convention business," what's Chinese for "bullshit"? To cite but one of innumerable tourism metrics, Macanese officialdom recently announced that it was seeing double-digit increases in visitation from Great Britain. It may not be a stampede yet, but you've got to start somewhere. Nor are Venetian Macao's convention and meeting statistics anything at which to sneeze -- not even remotely.

Sheldon Adelson may have a remarkable facility for making enemies but that doesn't mean this isn't a put-up job. Irate guest workers might want to redirect some of their wrath toward Peking, which is conducting a purge of non-Macanese labor (and if there's one thing Communist China is exceptionally good at, by golly, it's purging).

Oh, where did Macau Residents stage its press conference? At the Grand Emperor Hotel. And who holds the Grand Emperor's casino concession?

Why, it's good old Stanley Ho, of course.

The plot thickens ...

Casino CEOs get religion?

Wed, 21 Jan 2009 13:45:00 -0700

Industry leaders have had a near-death experience and seen the light ... or so they say. Considering that I paid $12.50 for a (mediocre) Bloody Mary at Encore last week, I'm going to believe "a back-to-basics approach that focuses on delivering a quality at good prices" when it manifests itself on a widespread basis.

Also, the timing of this 'come to Jesus' moment is problematic, seeing as the vast majority of incoming room inventory -- one estimate puts it at 85% -- is aimed at the luxury market. It's difficult to contemplate the looming form of Big Blue (aka Fontainebleau) and not brace oneself for a grinding collision between Supply and Demand.

Big Blue: brace for impact.

To give MGM Mirage CEO Jim Murren his due, he's been walking the walk. Kirk Kerkorian's portfolio of Strip properties has a plethora of value-oriented messages streaming through cyberspace these days. Interestingly, the only non-participant as of this week is Bellagio, so one can surmise nothing other than that Steve Wynn's grand dame continues to do bang-up business.

What's more, Murren endeavors to drive a stake through the Bellagio-is-for-sale talk by telling AP reporter Oskar Garcia that the Bellagio "brand" is underemployed and he's considering sublicensing it overseas (Bellagio Ho Tram anyone?), along with the titular MGM brand. Having set the completion of CityCenter as a do-or-die proposition, Murren openly puts other company assets on the table, including not only the Atlantic City acreage Jeff Simpson recently characterized as "low-hanging fruit" but also undeveloped property in Vegas.

Could this be the end of "Project Z" or even "City Center North"? If anybody foresaw the announcement of CityCenter and its all-in-one-big-gulp development as the moment that would make or break MGM, please step up to collect your Nostradamus Award cum laude.

As for Harrah's Entertainment, when its CFO is saying the U.S. casino market has reached saturation point, I guess that makes it official. Jonathan Halkyard, however, somewhat undercuts his credibility when he decries a "shocking lack of innovation" in slot machines. That's not only deeply unfair, it's an affront to the slot makers, who I've always found to be trying quite hard to innovate. (OK, so there was that addiction to themed slots but it's behind us now, much like collegiate "experimenting" with LSD and lesbianism.)

"I mean if you look at the slot machine, it's basically the same as it was 75 years ago," says Halkyard. By that yardstick, so's the automobile. Ditto the airplane ... or just about any casino game you could mention. It's probably best to write Halkyard's comment off for the hyperbole it clearly is, perhaps meant as another poke-in-the-eye provocation toward IGT and other Harrah's nemeses.

At least Harrah's is trying to keep its marketing messages in step with the era. While I didn't see the magic word Twitter, I'm sure that's the sort of thing Halkyard has in mind. The one company refusing to adjust to the times is precisely the one you'd expect: Las Vegas Sands. Yup, just keep building those big boxes and hang in there until the economy conforms to your strategy, not vice versa.

Macao: Shooting dice with death

Tue, 20 Jan 2009 17:40:00 -0700

There's a bigger worry for casinos in Macao than whether the Chinese government eases visa restrictions: Some of the high-roller trade is dying -- literally. Macau Polytechnic Institute traced the fate of 99 VIP players who got into trouble with Chinese authorities. Not only were 15 facing death sentences, another seven had either killed themselves or been murdered. Two more had their death sentences commuted. And that's not counting an additional 20 in the hoosegow on lesser sentences. See what happens when you play too much Super Happy Fortune Cat?

Of course, it's easy to live the high-roller lifestyle when you're wagering with stolen money. Given that Chinese companies and governmental agencies were being sucked dry by kleptocrats with a gambling jones, Peking is understandably wont to tighten the screws on Macao. VIP-oriented operators like Melco Crown Entertainment and Wynn Resorts are most likely to feel the pinch, as we know is happening with Crown.

Ironically, for all its overreach in Macao, Las Vegas Sands made at least one sound decision when it targeted mass-market play. Too bad they proceeded to go and drink their own milkshake, as Venetian Macao sucks Sands Macao dry. (It's by now abundantly clear that it's no skin off the central government's nose if its effort to keep a close grip on where China's capital is flowing happens to throttle a few casino operators in the process.)

If Macao Chief Executive Edmund Ho (pictured) didn't have enough to worry about, a distant relative is wanted by Interpol. (Ian Sutton found the arrest warrant.) Even in American politics, the alleged misdeeds of your brother's brother-in-law might not arouse too much fuss and bother. But Chan Lin-ian and his missus are tied to the mega-scandal surrounding graft-meister Ao Man-long, who's currently doing 27 years' worth of hard time. If Sinologists are right that Peking wants to exert more direct control over Macao, this latest imbroglio would be useful leverage for pushing Edmund Ho out of office ahead of schedule, were it to suit the central government's motives.

The fine hand of Peking may be behind a newly organized and very umbrageous citizens group, Macau Residents, which has a Cotai Strip™-sized beef with Sheldon Adelson and his Las Vegas Sands.

Just for starters, the trademarking of "Cotai" (a conflation of Taipa and Coloane, Macao's two principal islands) sticks in the organizers' collective craw. Furthermore, the inevitable collision between the casino interests of Macao and Singapore has finally occurred. "We are hurt and angry that Sands Casino after making big monies from Macau had openly declared it will focus on Singapore instead of completing its unfinished works in Macau," rages the online petition. Taking as its pretext recent and massive layoffs at Sands' Macao properties, the group calls for the government to repatriate Adelson's land and casino concessions, and re-sell them to the highest bidder. (Oh, if only Gary Loveman could still borrow money!)

Macau Residents meet(s) the press, Jan. 19, 2009.

If I'm skeptical that this grassroots effort might be more like Astroturf, there are a few reasons. First, the group seems to be acting with a great deal of impunity, especially in deeply authoritarian China -- though the fine points of the Macanese/Mainland interrelationship may provide some wiggle room for those who want to take it to the streets of Macao.

Second, if the rift between Adelson and Chinese authorities is wide as has been speculated, what's the harm of ginning up an ersatz "people's revolution" to discomfit some capitalist running dogs (whose money just happens to have run out)? Perhaps you can even use it as a pretext to banish them in favor of somebody with greater solvency.

Third, the job cuts that "Macao Residents" is ostensibly protesting fell with greatest predominance upon guest workers, not Macanese citizens. Though, to be fair, a management-imposed workweek reduction hits very close to home indeed.

Sheldon Adelson™

Fourth, the threat from Singapore is not as severe as it's made out, seeing how the government down there has acceded to yet another Adelson-style soft opening, starting with the casino of course, with the rest of Marina Bay Sands' convention-oriented features eventually limping onto the scene. (Sound familiar?) It's an embarrassing climbdown for a government that had set as one of its goals making a high-impact splash in the international convention trade, not a dribbly "plop."

So these activists could be front men for Peking or they could be a bunch of Davids taking on Goliath. Either way -- and especially if some of the more attention-getting scuttlebutt proves to be true -- Sands' Macanese empire, its attempt to create Instant Vegas -- whoops, sorry, Asia's Las Vegas™ -- is presently being picked at like a beached whale during low tide.

The prodigal son

Mon, 19 Jan 2009 18:03:00 -0700

Poor Kerry Packer; the late Australian mogul and famous high roller must be doing all his rolling in the grave now. Reputed for being daring at baccarat and cautious in business, the media baron is at least spared the indignity of seeing son James Packer blow through his patrimony at a record pace.

Going is the $33 million yacht; on hold is the $40 million corporate jet. Even work on the $2.5 million backyard swimming pool has been suspended. (Don't you hate it when that happens?) At least the pin placements on Packer's Greg Norman-designed golf course are still "changed every day at massive expense," reports Rupert Murdoch's News.com.au.

More seriously, Packer is reported to be suffering from depression, though other media reports dispute this. Given the debilitating, even paralyzing nature of the disease (something for which I can vouch firsthand), it puts a potentially very different cast upon Packer's December no-show for a Nevada Gaming Control Board hearing.

When Packer did turn up, Chairman Dennis Neilander admitted to being somewhat foxed by Packer's acquisition of Cannery Casino Resorts (for $1.8 billion). "You and me both," I thought. As Packer seemingly played Pin the Tail on the Donkey, buying not only Cannery but positions in Fontainebleau, Station Casinos, Harrah's Entertainment and the flaccid Crown Las Vegas 'failsino'-tower, I tried to convince myself that an overarching strategy was at work. In retrospect -- especially after the writedown of the Station and Harrah's investments -- what we were witnessing was James Packer, Shopaholic. (How did he manage to miss out on the Cosmopolitan?) One begins to see why Steve Wynn steered clear of Packer, back when the talk of a Wynn-Packer joint venture was the buzz du jour on the Strip.

Even the Crown Macau cash spigot has been sputtering, although Melco Crown CEO Lawrence Ho keeps insisting that Chinese access to Macao will improve in time for the City of Dreams opening. (Either he's whistling past the graveyard or he knows something for which others would pay a very great number of patacas.) Market share is down at Crown Macau and the Macanese government is predicting a serious diminution of gaming revenue for for the overall market in 2009, placing it somewhere near $10.7 billion.

Plus, the ripple effect doesn't stop there. Aristocrat Leisure, which could really stand to have some good news, had been hoping for a fivefold increase in its installed slot base in Macao over the next two years. Not only is that unlikely, operators are trimming their existing slot inventory.

Underscoring their pessimism regarding reduced visa restrictions, Macanese tourism officials are turning their gaze at least partly away from China. Among the newly coveted markets are Singapore's presumed feeder markets -- India, Indonesia, Malaysia, the Philippines, Thailand, and even Australia and New Zealand -- to say nothing of Singapore itself. It's long been presumed that Singapore's got a tough row to hoe when its casino megaresorts come on line and it just keeps getting tougher.

Quote of the Day

Mon, 19 Jan 2009 14:09:00 -0700

"This would be a great case study for MBA students to have to study. You can't run a business expecting only the best. You always need a plan for what you will do if the unexpected occurs. These guys failed to do that, and it cost shareholders big time." -- Business blogger Steve Woda, on the risk-laden strategy pursued by Las Vegas Sands.

Buyers' remorse

Fri, 16 Jan 2009 15:36:00 -0700

Even if hotelier and Westin Casuarina (above) owner Columbia Sussex succeeds in extricating itself from Tropicana Entertainment, it's not out of the woods by a long chalk. It may have as little as nine months (or as many as 21) to pay off a $700 million loan -- or forfeit over a half-billion dollars' worth of hotel properties.

"Covenants are being triggered by those who have bought at high [long-term value] in 2006 and 2007," says Cedar Capital Partners veep Phil Golding, and Golding's time frame would coincide with the $3 billion-plus spending spree that netted ColSux CEO William J. Yung III not only Aztar Corp. but 14 Wyndham-flagged hotels when the seller's market was at its peak.

Judging by the tenor of the Property Week article, MGM Mirage also found an exquisitely inauspicious time to try and semi-reinvent itself as pure hotel operator (albeit so far only for the China and Dubai markets).

Case Bets: Chicago, Wyndham, Harrah's

Fri, 16 Jan 2009 12:37:00 -0700

Anybody who still frets about "criminal elements" in Las Vegas casinos ought to turn their gaze toward Chicago instead, where such issues continue to dog the state's 10th casino license. The citizens of Waukegan lost their shot at a casino because the would-be owners had juiced an indicted businessman into the deal, despite representations to the contrary.

And the winner is ... Des Plaines.

Also, the amounts of the various bids have been revised. Favorite son Neil Bluhm's winning offer was $272 million (quite a bit more than previously reported), while Waukegan Gaming brought up the rear with $216 million. Alex Yemenidjian's bid has been revised slightly downward, to a still eye-popping $406 million. Maybe Yemenidjian, who made one previous run at Tropicana Entertainment, ought to take that $406 million check to Scott Butera's office and ask for the Tropicana Las Vegas in return. And if were Butera, I'd have that check to the bank as fast as my legs could carry me.

Wyndham's latest Las Vegas project, just up the block from LVA HQ, has ground to either a halt or an extremely slow crawl. But Wyndham is going great guns in the Bahamas, where its Wyndham Nassau Resort & Crystal Palace Casino opened yesterday. Assuming Harrah's Entertainment can ever pull the trigger on a sale of The Rio, the latter has quite a bit of acreage (36.73 acres, to be pedantically precise) out back that's being underutilized as surface parking. Any prospective owner ought to consider cannibalizing that for additional casino/restaurant offerings, piggybacked onto the rear end of the existing Rio. It could synergize quite nicely with the Wyndham's timeshares, once they're eventually up and running just across the street, and capitalize on a steady stream of Twain Avenue traffic.

(Just for perspective, El Ad Properties only has clear title to 18.4 acres for its Plaza metaresort, although it may hold options on adjacent land; there's still $615 million in that acquisition that hasn't yet changed hands, judging from property records.)

Speaking of Harrah's, whether due to its new bean-counting ownership or a surfeit of other pressures, its media site has fallen into a state of semi-neglect. For instance, Harrah's southern Indiana casino hasn't been Caesars Indiana for some time now. The newly Caesar-ized Casino Windsor doesn't even merit a Web page of its own, nor do the oft-disrespected Imperial Palace and Bill's Gamblin' Hall on the Strip. The former Barbary Coast would have been a prime spot for reintroducing the Horseshoe brand to Las Vegas, but exploiting the power of the Horseshoe name is one of many ideas that have fallen victim to Harrah's ADD-afflicted corporate style in the post-Phil Satre era.

Weidner kowtows in Macao

Thu, 15 Jan 2009 16:46:00 -0700

A large serving of humble pie for Las Vegas Sands President William Weidner was on the menu as he handed over the keys to the University of Macau's new Adelson Advanced Education Center. No, he said, he didn't blame his company's financial problems on the Chinese government, as had been reported. Sands would be "less American" in its approach to developing Henquin Island. If people had misinterpreted Sands' confidence as an "over-direct, overpowering American attitude," it had been "humbled" now. (Topic for U of Macau students: "Las Vegas Sands as Metaphor for U.S. Foreign Policy, 2001-09." Discuss.)

Quoth Weidner, "all our earnings in Macao have stayed in Macao and were matched five times over by additional investments in Macao.” Ah, so they were cannibalizing Macanese revenue, rolling it into Cotai Strip™ expansion, after all.

Small wonder that Sands is resented within Macao if, as The Independent reports, it's been sweating employees' tips. Then again, the paper's report of $953 million in Macao casino profit last quarter is clearly out of wack. (The reporter himself seems unsure whether it's revenue or profit, though it's clearly the latter.)

As for the newly available Taiwan market, Weidner demurred. Finishing projects in Singapore (where the projections look inauspicious) and Macao are his priorities, he said. Given Sands' parlous financial state, it's now a moot point ... but did CEO Sheldon Adelson's comrades in Peking warn him away from Taiwanese expansion? Adelson had been sussing out casino prospects there.

Perhaps. After all, Melco Crown Entertainment CEO Lawrence Ho was quick to temper his own Taiwanese ambitions with the caveat, "we wouldn't want to do anything to piss [the Chinese government] off." Unfortunately for Melco Int'l and other Macao-centric gaming stocks, the market isn't buying the younger Ho's contention that visa expansion is just a few months away -- especially in light of recent gambling scandals that have led to, among other things, 15 executions [registration req'd]. Play too much Super Happy Fortune Cat and you might wind up in front of a firing squad, too, or at least doing a couple of dimes in the slammer.

Back home, the latest busted LBO play for the Golden Nuggets, combined with parent Landry's issuance of more debt, has knocked 48% off the stock price in less than a week. Considering that the last two tender offers for LNY shares went out at $21 and $13.50, respectively, that $7/share buyout offer should be coming along any day now.

Lanni: The official story

Mon, 12 Jan 2009 17:27:00 -0700

My favorite exchange in one of my favorite current TV series, Mad Men, takes place when weasel-like junior exec Pete Campbell (Vincent Kartheiser) goes to rat out his boss, Donald Draper (Jon Hamm), to company owner Bertram Cooper (the cunningly cast Robert Morse). "Draper" is, Campbell has discovered, a Korean War deserter who has risen to the upper reaches of Madison Ave. circa 1960 under an assumed identity.

Cooper takes all this in imperturably, bestows upon the youngster a pitying gaze and says, "Mr. Campell ... who cares? This country was built and run by men with worse stories than whatever you've imagined here. The Japanese have a saying: ‘A man is whatever room he is in' — and right now, Donald Draper is in this room."

Which was pretty much my reaction to the J. Terrence Lanni resumé-inflation flap (it came and went too quickly to qualify as a scandal). The casino industry was built by men who did far worse things than list a nonexistent MBA on their curriculum vitae. Heck, Harrah's Entertainment is operated by a Ph.D late of the Harvard University faculty and it's not exactly an advertisement for fiscal well-being these days ($415 million lost in 2008, and counting). For that matter, we've entrusted our country for the last eight years to men with MBAs who said they'd run it like a corporation. How'd that work out?

And even if Lanni deliberately padded his resumé to get ahead ... who cares, Mr. Campbell? At worst, the reins of MGM Mirage might have gone to somebody more obviously "qualified" ... like a Gary Loveman or a Frank Fertitta III. MBA or no, Lanni was good enough for owner Kirk Kerkorian, a man with a Ph.D from the School of Hard Knocks.

Simply put, at a time when Mob-tainted Clifford Perlman is in the American Gaming Association's Hall of Fame (presumably soon to be joined by the late Lefty Rosenthal) and when Columbia Sussex CEO William J. Yung III got run out of New Jersey for running a rogue outfit in Atlantic City, but retains casino licenses in Nevada, Louisiana and Mississippi, outrage is difficult to muster.

Which is not to excuse the whitewash (Steve Friess has an even harsher term for it) that ran in Sunday's Las Vegas Review-Journal. Basically, the story amounts to a regurgitation of MGM's company line, which boils down to, "We (sort of) planned it this way." Less charitably, the R-J lends its credibility to an attempt to sweep Lanni's speedy and inglorious exit under the nearest available rug.

"(T)here is never a perfect time" for MGM's CEO to step down, we are told. No, but ringing up Kerkorian on the evening of Nov. 12 and giving him two weeks' notice is something less than the "smooth transition" MGM and the R-J are trying to depict. CEO-in-waiting Jim Murren stepped gracefully into Lanni's shoes but the timing and alacrity of Lanni's departure leave many questions hanging.

Given the extreme proximity between the Wall Street Journal's exposé on Lanni's credentials and his resignation, the official stance that it was all just a big coinky-dink, while possible, is difficult to swallow. (After all, a plan for Lanni to remain on the MGM board was quietly withdrawn when casino-oversight three states, including Nevada, began to probe the academic-credential issue.)

But let's give everybody the benefit of the doubt on that one and consider what else might have propelled the CEO toward the exit:

Perhaps Lanni, a man well-served in Asian sensibilities, was falling on his sword for the good of the company. After all, Nov, 12 marked the first time in at least five years that MGM stock closed at $10/share. Maybe, as Jeff Simpson has suggested, Lanni placed a "sell" order on himself once the stock price hit that inauspicious threshold.

The massive Harmon screw-up was already known to him. Or perhaps the sale of Treasure Island and writedown of $1.2 billion related to the Lanni-supervised takeover of Mandalay Resort Group were already done deals, and Lanni foresaw himself presiding over the partial dismantling of an empire he'd helped build.

Or maybe he just woke up that morning and, channeling Danny Glover in the first Lethal Weapon movie, growled, "I'm getting too old for this shit." That, at any rate, is The Official Story (minus the scatology).

It appears we will never know what ultimately prompted Lanni's leap ... or at least not for a long time. I'm with those who say, "he will be judged on his leadership." He certainly did much more than any executive I can think of when it comes to making diversity a priority in a boy's-club industry. He extended the company's reach into new overseas markets. And if MGM's reach exceeded its grasp toward the end of the Lanni Era, it did not do so to the extent that has Harrah's, Station Casinos and several other companies presently skirting the edge of bankruptcy.

Heck, we only demand honesty from CEOs on a selective basis. On Oct. 29, Lanni said no asset sales were on the table at MGM. Two weeks after Lanni left, Phil Ruffn plunked down $775 million for Treasure Island. Perhaps that deal really did come together in a fortnight, although it's not been MGM's style to move so fast. If, for purposes of argument, Lanni had been in talks with Ruffin in late October and told the press that asset sales were being discussed, what would have happened? MGM stock might easily have dropped like a brick. So if Lanni did fib about the Ruffin talks, do we further discount his credibility or do we say that it was his fiduciary duty to fudge the truth every so often?

One could go further about Lanni's accomplishment (which also include the complete domination of the Detroit market and the development of a strong executive team), but let it suffice to say that J. Terrence Lanni was "in the room."

Nor did he deserve the non-person status he fell into upon his resignation. His name was scarcely even mentioned at the most recent G2E and, when it was, it was sort of muttered in the corners of the press room. Honestly, there was neither a death in the family nor anything about which to be embarrassed -- and casino regulatory bodies have matters more material with which to deal than with the occasional fudged resumé. The probity and financial solvency of the mergers and alliances they are asked to bless might be a good place to start.

The sky is (not) falling!

Mon, 12 Jan 2009 15:06:00 -0700

Another weak month for Nevada casinos, another "It's the end of the world" story. Revenues are regressing, we're told, to levels not since -- like, OMG! -- the dusty, ancient days of July 2004.

Yeah, those really were some parched, hard-up times. If we take the Wayback Machine out for a spin to that desolate era, we'll find that MGM Mirage is following up on a June takeover offer to Mandalay Resort Group that would eventually cost $7.9 billion. And on 7/15/04, we'd see Harrah's Entertainment -- in an apparent effort to keep up with the Joneses -- make a $9.4 billion takeover play for Caesars Entertainment. Yes, times were so lean in July '04 that the big boys on the Strip were feeling their oats, flush with liquidity and ready to expand in a big way.

Several years -- and a few over-optimistic decisions later -- MGM Mirage is applying an icepack to a $1.2 billion Mandalay-related hangover and Harrah's (by piling additional LBO-related debt onto an already encumbered balance sheet) would regard just staying out of Chapter 11 as a great victory. But it's worth remembering that both companies were riding high in mid-2004. Had they not gotten subsequently carried away, sailing atop what proved to be an economic bubble, they'd be weathering the present crisis much better, with scant talk of bankruptcies or asset sales.

You wanna talk "bad"? Atlantic City, now that's bad. Shockingly so, in fact. But, with Pennsylvania racinos up 21% in December, not entirely surprising.

Speaking of companies that took a ride on the crazy train, Isle of Capri Coventry is up for two design awards. Unfortunately, neither comes with a cash prize that would erase this writeoff from Isle's ledger of bad business decisions.

Not-so-Great White North

Fri, 09 Jan 2009 15:51:00 -0700

OK, so casino revenues are down in Nevada and Atlantic City. That's unfortunate, to say the least. But look on the bright side: You could be operating in Ontario, where the leading casinos aren't simply making less, they're operating in the red.

There's not much of a profit motive for operators in Ontario as it is, since all net income goes to the state, according to the Windsor Star. But the current situation isn't just bad for the tax-happy province but also for ...

Harrah's Entertainment: What is now Caesars Windsor is now grossing over 50% less than in it did in '99-00, when it was (under different ownership) Casino Windsor. By all accounts, it's much more of a hassle to get from Detroit to Windsor since 9/11 and the Motown-side casinos -- well, two of them, anyway -- have upgraded beyond recognition during that time. Windsor veteran Holly Ward invokes the trifecta of Total Rewards, a new showroom and a rebaptism under the Caesars name to implicity contend that her casino can turn things around. It will be interesting to see where Caesars Windsor stands when the '09 numbers come in.

Neil Bluhm: The Chicago-based developer's companies manage two casinos in the Niagara Falls area and they're both bleeding red ink. This economy probably entitles Bluhm to a mulligan but these aren't the kind of performance numbers you like to post when you've been positioned as the casino-powered rescuer of Philadelphia, Pittsburgh and Des Plaines, Ill.

Tribes: Profits from tribally owned Casino Rama are distributed to Canada's First Nations peoples. But when there are no profits to go around, hard times become that much harder.

Banned in Britain

Thu, 08 Jan 2009 16:20:00 -0700

From our Today's News page:

Ladbrokes' humorous "Quench Your Thrill Buds" TV spots didn't amuse Britain's advertising czars. The bluenoses at the Advertising Standards Authority have nixed airings of the commercials, one of which showed a risk junkie accidentally plunging to his death by attempting to use a potato chip bag as a parachute. The punchline: "If only he'd seen Ladbrokescasino.com his thrill buds would have been quenched."

After receiving one (yes, one) complaint, the ASA dropped the hammer on Ladbrokes, informing The Guardian that "while the TV ads would not be viewed as realistic or aspirational, it agreed with the complainant that the overall portrayal of gambling was in a context of toughness with links to excessive risk-taking and reckless behaviour." Ladbrokes responded that the ASA's prudishness was "political correctness gone too far."

And now, as an S&G public service, we present the ads that were too funny for the nation that gave us Monty Python and Eddie Izzard. The sun has well and truly set on the British Empire.

"Climber":

"Parachute":

and, best of all, "Shark":

More Macao madness

Tue, 06 Jan 2009 17:35:00 -0700

If you don't visit GamingFloor.com -- and if you don't, you really should -- you're missing out on some outrageous video shot by Editor Ian Sutton. The first montage showcases some of the over-the-top architecture and beyond-flamboyant neon signage of Asia's Las Vegas™ (as trademarked by Sheldon Adelson™). Compared to this, the Las Vegas Strip looks -- dare I say it? -- almost sedate.

Then there's the show floor of last year's G2E Asia. It features several games with U.S. punters will be familiar and a few more that will be decidely novel. (Sutton seems to have been every bit as fascinated by Royal Grand Prix as I was.) I don't think that slower-than-molasses baccarat-dealing robot is going to catch on, though. Anyway, it's an orgy of gadgets, girls and Frank J. Fahrenkopf. Enjoy. (Higher-quality versions are available via the GamingFloor.com YouTube channel, although they take considerably longer to load.)

If Asia isn't important ...

Tue, 06 Jan 2009 13:18:00 -0700

Smarter than Jim Gibbons.

... why was Gov. Jim Gibbons' handpicked choice to head the Nevada Tourism Commission touting his expertise in the Pacific Rim? (Expertise from 15 years ago, by the way.) The cover letter/resumé at least makes Kirk Montero look less like someone whose name was pulled out of a clear blue sky, but it also has the side effect of underlying the foolishness of Midnight Jim's outright dismissal of Asian marketing as "a waste of money."

Who lost China?

Mon, 05 Jan 2009 18:16:00 -0700

That used to be the rallying cry of hardcore Cold Warriors in the Fifties. Today we might ask that question and then point the finger of blame at Gov. Jim Gibbons (R-NV). At present, Midnight Jim is embroiled in a nasty feud with Lt. Gov. Brian Krolicki (R) over Gibbons' attempt to summarily install the crony of a crony atop the Nevada Commission on Tourism.

It's a sad day when you take the word of the indicted lieutenant governor over that of the unindicted but feloniously stupid governor. However, what else to make of Gibbons' imbecilic contention that, as reported by the Gibbons-friendly Las Vegas Review-Journal, "the agency is wasting money by targeting the Asian tourist market." The Gibber thinks the dough should be spent closer to home, specifically in California.

While the argument that California may represent a higher priority than China or Japan deserves a hearing, there's no denying Krolicki's rejoinder that, "The more Asian tourists we can bring to fill our rooms, fill our dinner tables, see our shows ... the quicker we will recover from our slowdown." And for Gibbons to write off the Pacific Rim as "a waste of money" is a breathtaking display of ignorance. Anybody who isn't aware of the importance of Chinese New Year to the economic health of Nevada has no business being the governor of the Silver State.

Macao may be eating some of Vegas' lunch but that's no excuse to run up the white flag of surrender, especially at a time when Peking is constricting its citizens access to the former Portugese enclave. Nor, with casinos ramping -- or likely to soon do so -- in the Philippines, Taiwan, Japan and Singapore, does it send a message of confidence when the sound emanating from the governor's mansion is the whelp of a beaten dog.

Compounding the inanity of Gibbons' behavior is his insistence on imposing the dubiously qualified Kirk Montero to a $117,000/year sinecure not only when Nevada is in dire straits financially but when Midnight Jim has proposed eliminating that very position roughly six months hence. It's practically a rerun of the Gibber's witching-hour revocation of Gaming Control Board appointments made by predecessor Kenny Guinn, only now in outright Keystone Kops style, proving yet again that history repeats itself, first as tragedy and then as farce. All that's missing to complete the picture would be for Gibbons' trousers to fall down around his ankles.

Leaving behind Gibbons and his "Forever say 'die'" spirit, Macau Business has a fascinating package of stories on the current employment woes in the Macanese casino industry. Some darkly mutter that Peking is conducting a pogrom against expatriate workers, in preparation for an imposition of direct rule. Interestingly, one businessman is quoted as saying that convention business in Macao had ramped up impressively, with hotel occupancy rates to match, so you'd think Las Vegas Sands' business model was paying off in spades.

However, Sands President William Weidner was reported elsewhere as blaming the company's troubles on its visa restrictions largely meant to stem gambling by Chinese citizens. Which is true, to some extent, but -- if reported accurately -- it would seem to contain the tacit admission that Sands was funding its Cotai Strip™ partly by cannibalizing existing casino revenues. If that was indeed Sands' strategy, when visa curbs went in then out went the rug from under CEO Sheldon Adelson's feet.

Quote of the Day

Fri, 02 Jan 2009 11:38:00 -0700

"Gov. Jim Gibbons reignited his criticism of the Nevada Commission on Tourism ... and said the agency is wasting money by targeting the Asian tourist market." -- Gibbons' latest broadside, as reported by The Associated Press. Nevada was a pioneer in both opening a tourism office in China and in placing ads in Chinese media.

21

Wed, 31 Dec 2008 11:39:00 -0700

That's the number of predictions for 2009 issued by Spectrum Gaming Group, an Atlantic City-based outfit. They are, in no particular order:

• Advancements in technology that impact revenues and cut costs will continue to be attractive to operators even in an economic downturn.

Continued ...

• ... conversion of racetracks to racinos, as well as non-gaming expansions to existing racinos.

• ... elimination of jobs, both through cuts and attrition.

• ... moratorium on development of big-box gaming resorts due to economic downturn.

• Convenience-based gaming continues to achieve better year-over-year results than destination-based gaming.

• Corporate and property debt restructuring in wake of declining revenues.

• Eastern European countries will increase their efforts to meet EU regulations, including smoking bans.

• Gaming companies increase efforts to export their brands globally.

• Gaming equipment manufacturers continue to invest in games that appeal to a younger demographic, including lotteries, bingo and server-based technology.

• Increased legislative acceptance of allowing the deduction of issued electronic promotional gaming credits from the gross revenue tax/fee calculation.

• Increased use of electronic games, including the emergence of scalable electronic table games in which players at different locations on the floor wager on a single outcome.

• Increasing alliances between commercial gaming operators and outside investors, as well as between commercial and tribal operators.

• Internet gambling in U.S. will be a hot federal issue for the new administration and Congress; gaming companies will fund lobbying efforts on both sides.

• Major gaming operators commence deleveraging by selling off properties to emerging operators.

• More pronounced shift in market share among suppliers as operators attempt to shift away from IGT participation games.

• Native American tribal gaming revenue estimates remain on track to surpass U.S. commercial gaming totals.

• Prices for hotel rooms, shows and food and beverage will return to lower levels at large gaming resorts as operators need to fill their properties.

• Slow but continual advancement toward server-based gaming, as operators remain skeptical as to the potential financial returns on investment.

• States consider expanding or legalizing casino-style gaming to help fill state budget gaps.

• Support from China to ease visa restrictions, increasing flow of visitors into Macau.

• Uncertainty in various European countries concerning regulation, thus increasing cases being referred to the European Court of Justice.

We'll have to check back in a year, God willing, and see how clear Spectrum's crystal ball proved to be. There's nothing on that list that strikes me as off the beam and much of its seems dead on target. The only "WTF?" comes courtesy of a Spectrum exec who told a reporter, "In times like this, it's not like these are company-specific problems that can be attributed to some glaringly bad decision by the company."

I respectfully beg to differ. Choosing unreliable and/or overcommitted business partners (Boyd Gaming) was a decision. Opening in far-flung markets while your core properties were losing market share (Isle of Capri) was a decision. Taking on preposterous amounts of debt (Harrah's Entertainment) or simply assuming more debt than your cash flow and lavish spending tendencies can support (Station Casinos) were decisions. Trying to build metaresorts all at once (Boyd, MGM Mirage) was a decision. Rashly demolishing the Atlantic City Sands and thereby leaving yourself with empty, non-revenue-producing land (Pinnacle Entertainment), that's a decision.

Launching major projects that aren't fully capitalized (Las Vegas Sands, Cosmopolitan, Majestic Star) is a decision. Stubbdornly jeopardizing the license of the property that generates 40% of your cash flow (Columbia Sussex) is a decision. Making not one, but two major acquisitions at a time when your cash cow -- slot routes -- is giving less milk and then overpaying for some of the new assets (Herbst Gaming) is a decision.

Opening a $2.3 billion, years-in-the-making megaresort at the nadir-to-date of the economy (Wynn Las Vegas)? Now that, that was not a decision. That's playing the hand you were dealt.

Pinnacle's Bahamas debacle

Fri, 19 Dec 2008 18:22:00 -0700

It wasn't so long ago that Pinnacle Entertainment was the fair-haired boy of the casino industry, especially after it hit a home run in the Lake Charles, La., market with tony L'Auberge du Lac. Then it nearly followed Columbia Sussex over the precipice in the crazy Aztar Corp. bidding war. Its much-anticipated Lumiere Place in St. Louis is now regarded as a succes d'estime, a budgetary overindulgence. (It's certainly failed to make any significant dent in proximate Ameristar Casinos and Harrah's Entertainment operations.)

Pinnacle paid a bundle to agglomerate land on Atlantic City's Boardwalk that it now can't afford to develop -- and may be regretting the precipitate fashion with which it shut down and demolished the Sands, which could have been generating a modest revenue stream all this time. A Baton Rouge riverboat project is behind schedule, and now ...

Isle of Capri Casinos and Harrah's now can welcome Pinnacle to the club of U.S. casino owners who have found nothing but a dead end in the Bahamas. (In fairness to Harrah's, it never got a chance to operate there, its Baha Mar project having fallen victim to internecine plotting and counterplotting that still haven't been sorted out.) The torrent of red ink from Exuma has done a number on Pinnacle's bottom line, which really doesn't need any more bloodletting right now.

It seems that Pinnacle decided last summer to either sell or outright close its casino on Exuma and will draw the blinds on Jan. 2 (which tells you just how bad business must be). Given that the Bahamas also turned out to be a fiscal graveyard for "Pile of Debris" (one of the bad decisions that ushered out the Goldstein Era), no wonder Pinnacle's Exuma casino is wanting for takers. Yes, they couldn't even get James Packer to take this turkey, so things must be very dire indeed. The ill-starred property has even been purged from Pinnacle's corporate Web site. "Bahamas casino? What Bahamas casino? No, we never had one of those. Where did you read that?"

I'm tempted to say this is the end of U.S. casino operators trying to reinvent the Bahamas as a market for Vegas-style gambling. But this is an industry with no shortage of persistence and optimism, mostly justified but sometimes not.

Last-minute reminder: The final episode, "Vegas" of Stargate Atlantis -- partly shot on the Strip -- airs tonight at 9 p.m. Eastern and Pacific. I'm just sayin'.

Shostakovich's latest opus

Thu, 18 Dec 2008 17:57:00 -0700

Dimitri Shostakovich (1906-75) was classical music's equivalent of a "five-tool" baseball player. He composed 15 greatly admired string quartets, two concerti each for piano, violin and cello, 15 symphonies (my personal favorites are the 8th, 11th and 15th), two of the 20th century's more important operas -- Lady Macbeth of Mtsensk and The Nose, after Gogol -- and a staggering number of film scores and incidental music.

He's also, posthumously, lent his name to a line of cruise ships. One of them, the Mikhail Suslov was doubling as a "cruise to nowhere" gambling vessel under the innocuous handle of Ocean Jewel, out of St. Petersburg ... Florida, that is. Faites vos jeux, Comrade!

Mikhail Suslov ...

Actually, if this were an operatic plot, while it has elements of the absurdism Shostakovich enjoyed, it's more like a remake of Richard Wagner's The Flying Dutchman. Having ceased operations in St. Pete in 2005, the Mikhail Sus ... er, Ocean Jewel plied its trade out of Tampa for a year. Now, flagged as the Omega Royale (an irony czarists are certain to appreciate), it's hoping to find a berth in Brevard.

... aka Ocean Jewel/Omega Royale/[your name here]

Gambling aboard an itinerant ship named for a Soviet icon?* If this isn't a metaphor for the collapse of Communism, then I don't know what is.

* -- Keeping with the musical motif, there's also a Shostakovich-class ship named after the noted bass Georg Ots.

Right from the beginning

Wed, 17 Dec 2008 17:57:00 -0700

Time Magazine, no less, has designated the LBO of Harrah's Entertainment by Texas Pacific Group and Apollo (Mis)Management the third-worst business deal of 2008. Harrah's CEO Gary Loveman sought out this deal -- and these particular buyers -- out at a time when it made precious little economic sense, so I guess he earns sole possession of this "award," having been the architect of the debacle. Those of us who were skeptical from Day One get a small measure of vindication to keep us warm on a day when the snowfall in Las Vegas is so heavy that I can't even see Harrah's The Rio, two blocks distant, from my office window.

Way to extend that brand! Moving from triumph to triumph, Harrah's has found a way to perfume the pig that is its $578 million golf course in Macao. It is now Caesars Golf Macau (y'know, for when Total Rewards members get a sudden golfing jones that can only be sated via a trans-Pacific commute). Yup, Harrah's sure is getting every inch of mileage out of its Caesars brand ... if you mean frequent-flier mileage, that is. At least Harrah's is maintaining its investment, not proposing to abandon it to the rough mercies of Mother Nature, like some.

Criss Angel goes to Disneyland, Hefbot in tow. Isn't that special?

Speaking of Mr. Angel (if we must), it's conventional wisdom to the nth power that Vegas isn't going to make it as "Broadway West." Of course not. If Cirque du Soleil opened an $85 million headliner show on the Great White Way to terrible reviews and -- if possible -- even worse word of mouth, we'd be talking about Believe very much in the past tense. Heck, it probably would closed after one performance, and all the king's "fixations" and all the king's clowns couldn't have put it back together again. So producers of half-assed shows like Fuego Raw Talent Live ought to thank their lucky stars they're not on Broadway West.

"Two years away."

Wed, 17 Dec 2008 13:32:00 -0700

Remember how server-based gambling (i.e., downloadable slots) has forever been "one year away"? Not anymore. From Monday's Las Vegas Business Press: "[Stiefel Nicolaus analyst Steven] Wieczynski said server-based gaming seems to be two years away from full commercialization."

Seems everyone's going to let MGM Mirage be the guinea pig with all-server-based Aria and then (maybe) take the plunge.

But, hey, they've gonna have it in Cambodia soon. Book your flight.

MGM's bum rap

Wed, 10 Dec 2008 17:18:00 -0700

Scroll through a "Comment" thread on a Las Vegas Review-Journal gaming story (if you're of a sufficiently masochistic disposition) and you're liable run across this sort of imbecility: "Mgm should be focusing on it's Vegas property's instead of pouring money in over sea's investment's."

The punctuation-challenged individual in question is railing uninformedly against MGM Mirage's licensing of its brand to a Ho Tram Strip hotel in Vietnam. (Similar fist-shaking by "ex gambler" can be found here.) If these persons would actually bother to read the stories they festoon with their cast-iron prejudices, they'd have noticed that MGM is getting paid to brand and manage a hotel. Which means that the company has devised a means of tapping an overseas revenue stream with minimal exposure, if any.

And guess what? A week after the MGM-Ho Tram story broke, developer Asian Coast was getting taken seriously by lenders, to the tune of nearly $800 million. Which may be coincidence, but I'd say it tells you a lot about the power of the MGM brand and the credibility of its management. I wouldn't call that "pouring money" overseas. It looks like astute and fiscally responsible leadership, at least from the peanut gallery.

LVCVA vs. NPRI. I don't want to open this can of worms now. I'll just say that I've covered the Las Vegas Convention & Visitors Authority long enough to say that skepticism of its spending practices is occasionally warranted and that, even if NPRI board member William Weidner has an ulterior agenda, that hardly invalidates the questions being raised. Weidner, in his capacity as president of Las Vegas Sands, has made little secret of his desire to de-fund the LVCVA. But while NPRI may be blowing a certain amount of smoke, there's some fire here, too.

Fear of flying

Fri, 05 Dec 2008 18:26:00 -0700

There may have been more to James Packer's inability to attend his scheduled Nevada Gaming Control Board appearance than not having a plane ticket (which was more or less the official excuse). Today's Sydney Morning Herald reports that Packer's Crown Ltd. can't close on its purchase of Cannery Casino Resorts until early '09. So, being unable to arrange a flight from Australia to Las Vegas works out rather conveniently, no?

Not coming soon to a theater near you: Macau Studio City.

Even so, Crown assures the investment community that, once some i's are dotted and t's crossed, it'll have $900 million for additional casino purchases. And if ever there was a buyer's market for casinos, we're entering it. Then again, Packer has a history of rolling snake eyes on casino investments (Station Casinos, Harrah's Entertainment, Crown Las Vegas, and the all-but-dead Macau Studio City. City of Dreams isn't looking too hale, either. Oh, and even employees at volatile Crown Macau are being furloughed; but management says they're really happy about it).

Meanwhile, let's hope that the next time Mr. Packer has an appointment with Nevada regulators the dog doesn't eat his homework the night before.

Server-based gambling takes off. See, you skeptics! You said it would never happen, didn't ya? The joke's on you!

Oh ... hold on ... what's that? The "high-potential gaming market of Cambodia," you say? To be followed by the cleaner-than-a-hound's-tooth Philippines?

On second thought, forget I said anything.

The Triads are back

Fri, 05 Dec 2008 17:30:00 -0700

Or rather, they never left, according to a lurid Daily Mail article, which casts Stanley Ho in the unlikely role of statesmanlike peacemaker. The story begins with the description of a suicide at Sands Macao and makes this prediction: "Next year we can expect the trials, executions and killings that will decide Macau’s future."

Other contentions include the prospect of a Triad war for control of the VIP rooms if and when Stanley Ho dies, as well as the allegation that his STDM corporation is under Peking's scrutiny for possible involvement in money-laundering. Also, Edmund Ho's provincial government is described as sitting atop a $6 billion budget surplus, thanks to casino taxes. If so, small wonder that the Chinese government feels no particular urgency to ramp up Macanese visitation and casino development at the speed Occidental moguls would prefer. (Melco Crown CFO Simon Dewhurst provided even better clarity in remarks given at G2E and reported by the Motley Fool.)

At best, the Daily Mail exposé provides insight into how Macao's Communist overlords look upon the situation there -- and why they're inclined to micromanage its economy. At worst, it raises the spectre of a Triad-related scandal having seriously regulatory blowback for U.S.-based casino companies. Several current Macao concession holders have also been kicking the tires of possible expansion into the Philippines, compared to which Macao is as squeaky clean as Singapore.

On the lighter side, if you're interested in decadent monarchs -- and have a generous amount of spare time -- at hand, Luchino Visconti's Ludwig is like a History Channel marathon with nudity. Or, if you're experiencing Jersey Boys withdrawal, Robert Davi's The Dukes might provide some succor ... provided you're feeling indulgent.

Collapse in Kansas; Herbst is toast

Fri, 05 Dec 2008 11:20:00 -0700

And then there was one.

A Cordish Co./Kansas Speedway joint venture has pulled the chicken switch on a $400 million casino project. This leaves avionics firm Butler National Service Corp., with its Dodge City concession, as the only company with an ongoing casino project in Kansas -- Penn National, Harrah's Entertainment and now Cordish having walked away from the other three concessions. Project head Joseph Weinberg wants to build a casino-first, amenities-later version of what had been proposed. Of course, in order to do that, the bidding process will have to be re-started from scratch. Also, Weinberg's plan assumes that Cordish gets the nod a second time and, were I a member of the Kansas Lottery's board, I'd be getting pretty fed up with the diva-dom displayed by some of the casino applicants.

On the other hand, if a company as well-regarded as Cordish can't get its Speedway casino financed, that makes it easier to excuse Harrah's exit from the Sunflower State. The Lottery says it is willing to"invite applicants to apply with proposals they feel fit the current economic climate." [read: "smaller budgets"]. That, combined with the sudden availability of Sumner County, opens the door wide for Penn National. If the Lottery's board wants to give Penn the Sumner/Cherokee County parlay it requested (and lower the budget for the latter), Penn is the one company that could execute the projects out of cash on hand. Or is it saving its pennies for a Vegas Strip property now?

Across the border, the clever chaps at Pinnacle Entertainment have found a loophole in Missouri law that might enable them to open yet another casino market. Revenues at the old President riverboat, on the St. Louis waterfront, are down somewhere in the bilge water. But Pinnacle has a discrete gaming license for the ship and an option on some land toward the northern end of St. Louis, near the Chain of Rocks Bridge. There, it proposes to essentially dry-dock the President.

Since Missouri law doesn't expressly forbid what Pinnacle is contemplating, the company could open a new market in the state, even though the number of licenses remains frozen at 13. Smooth move. But it's not one that's going to sit well with the backers of Sugar Creek and Cape Girardeau projects that were frozen out when Missourians voted for the license cap last month. And it underscores the perils of shutting the door to new competition, as Pinnacle and Ameristar Casinos are beginning to treat Missouri as their private fiefdom.

Already, Ameristar veep Troy Stremming -- the architect of the freeze -- is huffing that Missourians dare not let Sugar Creek get into the game: “We don’t want to get into a situation where we are over-saturating the market and cannibalizing existing destination facilities.” No, but it's hunky-dory to let Stremming's buddies at Pinnacle have three St. Louis-area locations instead of their current two. No oversaturation or cannibalization there, huh? At least Stremming won't have the casinos-in-Kanas bogeyman to brandish anymore, now that all but one of those projects has collapsed.

Hope for Harrah's. The Chinese government is experimenting with parimutuel wagering on horse races. If the ChiComms can be persuaded to extend the sport of kings to Macao, maybe Harrah's can make serious use of that golf course it purchased and which is now ineligible for casino development. Frank Fahrenkopf couldn't resist mentioning that white elephant during his joint appearance with Harrah's CEO Gary Loveman during G2E. Judging from some of Fahrenkopf's subtle rapier thrusts and Loveman's harrumphing response, there seems little love lost between the twosome.

Herbst Watch, Day Two. The Magic 8 Ball (in the guise of Liz Benston) says bankruptcy likely for Herbst Gaming, which is in default on $1.27 billion of debt. This has been in the cards for Herbst ever since it got taken to the cleaners by MGM Mirage for some Primm, Nev., casinos that had seen better days (like, maybe 10 years ago). Benston's description of the $394 million boondoggle is "ill-advised." Understatement doesn't get any better than that, my friends.

Case Bets: Harrah's, Penn Nat'l, Stanley Ho's truffles

Wed, 03 Dec 2008 18:34:00 -0700

Harrah's Entertainment Vice Chairman Charles Atwood is calling it a day. His stated reason for leaving -- to pursue philanthropic activities -- is the same one given by J. Terrence Lanni when he abruptly left MGM Mirage (after giving Kirk Kerkorian less than 24 hours' notice). But since Atwood isn't departing for another 10 days -- and apparently was beseeched by CEO Gary Loveman to stay on last January, for what proved to be one more year -- there's no reason to believe Atwood's departure is anything but on the up and up.

That said, Atwood is choosing a prudent time to step off the deck of the sinking Harrah's ship. A ways back, I asked if it was too soon to call for Loveman's resignation. Upon reflection I've decided that, no, it's too late. Much too late. Any successor would simply find him/herself rearranging deck chairs on the R.M.S. Titanic.

Remember Baha Mar? The lawsuit against Harrah's, filed after a resort project in the Bahamas turned turtle has been unsealed. It accuses the company and an affiliate of "secretly and improperly plotting to delay or pull out of the project and ... avoid contributing their $212 million share of equity." This promises to be juicy.

Money for nothing. It could be worse. You could be Penn National, which faces the best-case scenario of being out $5.5 million in free slot play, plus $770,000 in free buffets. See, this is what happens when you farm out your direct-mail marketing. An offer intended for 1,000 patrons was mistakenly mailed to 55,000 -- and they want their MTV, metaphorically speaking. If Penn -- which self-reported the goof to authorities -- is held to the full terms of the offer, it could be on the hook for a $29 million promotional allowance. Oy! If you're a recipient of the offer, the number to call is (717) 469-2211 to see if you can make a deal.

Life's good. If you're one Stanley Ho and can afford to spend $530,000 on truffles and tubers. Those better be some mighty good veggies. Then again, Dr. Ho -- who has proven Sheldon Adelson's (and my) reports of his imminent business demise to be greatly exaggerated -- surely knows that revenge is dish best eaten cold. With truffles. Cheers, Stan.

Case Bets: Hooters; Defection at Borgata; Yung vs. Butera

Tue, 25 Nov 2008 14:56:00 -0700

"All of the economists who gave us information predict 2007 is going to be a year where the economy slows throughout the country and Nevada. Then we will see a pickup in 2008-09." — Deborah Pierce, CFO, Hooters Hotel, Las Vegas, November 2006

With prognositication like that, no wonder Hooters has consistently fallen short of expectations.

Mullin mulls Oz offer. Shortly after he had to pink-slip several hundred employees, Borgata COO Larry Mullin relieved himself of duty. He's not falling on his sword but moving to greener pastures instead, becoming CEO of the casino division of Australian gambling firm Tabcorp. Which means he'll have four casinos to operate, not just one. Boyd Gaming's Bob Boughner, left twiddling his thumbs after Echelon's plug was temporarily pulled, will fill in at Borgata. Congratulations to Mr. Mullin on his new opportunity.

Leap of faith. Sure enough, it looks like any hopes Tropicana Entertainment CEO Scott Butera had of getting back into the good graces of the New Jersey Casino Control Commission took a massive hit below the waterline. They were torpedoed when Columbia Sussex CEO William J. Yung III unexpectedly paid a visit.

Why U-Boat Yung surfaced at the New Jersey Supreme Court hearing and where the heck Butera was is a good question -- as is how Butera managed to get blindsided by this PR disaster. Does Yung still fancy himself the string-puller at TropEnt? Was he trying to stick it to Butera somehow? Or was this merely another example of Yung's professed -- and sometimes demonstrable -- cluelessness about virtually everything on Planet Earth, up to and including documents he signs.

In any event, the sole shareholder of the company Butera ostensibly controls just trampled him like a rogue elephant. The odd Yung-Butera dynamic suggests conjoined twins who aren't on speaking terms but can't be surgically separated either.

If the NJCCC can somehow ignore the Yungian elephant in the middle of the room, there's a good argument to be made for letting Team Butera have a crack at the Atlantic City Tropicana ... especially after a state-appointed trustee left hundreds of millions on the table in a bungled sale of the property. But that's a mighty big "if" and the NJCCC probably hasn't the faith sufficient to make that leap.

Bush-Frist ban fisked

Fri, 21 Nov 2008 16:42:00 -0700

A pressing workload of late has muted me (mercifully, perhaps) on a number of issues, such as President George W. Bush's parting shot at online gamblers and offshore casinos: Ramming a last-minute codification of the UIGEA* up their tail pipes, thereby completing the damage set in motion two years ago by soon-to-be-ex-Sen. "Slick Billy" Frist (R-TN).

(In political fairness, it should be noted that Frist's co-conspirator, then-Rep. Jim Leach [R-IA], was one of President-elect Barack Obama's emissaries to the recent G20 summit -- which could have made for some awkward moments with representatives of the nations that UIGEA has inconvenienced.)

In lieu of an extended commentary on Bush the Second's underhanded stick-it-to-the-gamblers move, I present this video report, which does a virtuoso takedown of the situation in less than five minutes:

Additional delights include: Mr. Potato Head in the role of Hypocrite-in-Chief Steve Beshear (D-KY), a "smashing bird" named Kate, and the timeless music of ABBA. What more could you want?

APCW's latest report maybe? Filmed at G2E, it and oodles of other tasty reportage, satire and invective can be found on the APCWperspectives channel.

*--Thanks to Frank J. Fahrenkopf, I now know the correct pronunciation of this acronym: "WE-guh." Aptly enough, it onomatopoetically suggests the passage of something painful through one's digestive tract.