David Mckee's Stiffs & Georges - The Mob

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.

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.

Quote of the Day

Thu, 30 Jul 2009 14:08:00 -0700

"Privé. Gibbons. Ensign. Rampant foreclosure. Half-built, hubristic casinos. Record unemployment. UFC. Mob Museum. Maybe Las Vegas 2009 is just Tom Wolfe's next novel." -- Las Vegas Weekly Editor Scott Dickensheets, from Facebook.

Case Bets: Our LVA mascot; Menopause; Mob museum

Thu, 18 Jun 2009 15:19:00 -0700

Woe betide anyone who dares to plunder LVA HQ, for we are under the protection of a fierce -- but beautiful -- watch iguana. Mojo, as she is named, is at this moment sunning herself on the balcony of my office. The photo above shows Mojo in her customary habitat: a massive iguana "condo" that takes up nearly half of one of the downstairs offices.

As cushy as her lifestyle may be, Mojo occasionally gets cabin fever and either rampages around the research department or attacks her "evil twin" in the mirror. Watch your head if you're coming in the front door; Mojo recently leapt off the second-floor balcony in pursuit of (we presume) some fat, juicy pigeons and suffered no injury whatsoever. She's one tough little hombre.

Menopause The Musical: I don't mean it pejoratively when I say that if you like this sort of thing, then this is the sort of thing you'll like. Either you get the joke(s) or you don't. It's that simple.

Oscar Goodman's pet project, the so-called "Mob museum" just got whacked, albeit not fatally ... we think.

Stanley Ho's comeback

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

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

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

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

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

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

Quote of the Day

Thu, 30 Oct 2008 13:02:00 -0700

"[Frank Rosenthal] has evidenced the highest integrity and his reputation for truth and veracity in the Las Vegas community is unexcelled. Mr. Rosenthal is among the most respected persons in the Las Vegas gaming community." -- then-Clark County Sheriff Ralph Lamb, in 1975, apostrophizing the virtues of casino-skimmer extraordinaire and stool pigeon "Lefty" Rosenthal.

Case Bets: Bugsy, Terry & Meryl

Tue, 21 Oct 2008 17:18:00 -0700

If you still harbor a belief in the urban myth that Bugsy Siegel "founded" Las Vegas or "created" the Flamingo (or was anything like the cartoonish version propounded by Warren Beatty on film), UNLV has the thing for you. It's a presentation entitled, “There Were Few Solid Facts to Get in the Way: Popular Perceptions of Bugsy Siegel as Founding Father of Las Vegas.”

Dr. Larry Gragg of the Missouri University of Science & Technology will separate myth from fact in re Bugsy. Says David G. Schwartz, director of the Center for Gaming Research at UNLV, "this guy has done way more serious research into Bugsy Siegel than anyone else I've heard of." It's at 7:30 p.m., Thursday night at Lied Library's Extended Study Lounge. Better still, it's free. Check it out. This may be the best "comp" of the year.

Terry Fator, ventriloquist and puppet proctologist.

Terry Fator gets props from one of our spies, who caught him at the Las Vegas Hilton and thinks "Mirage might have a winner, especially since he still has that thrill of performing going for him." Besides, the casino will be able to boast a headliner whose name recognition actually extends past the borders of Clark County. (LVA readers give Fator five stars out of five.)

Only 11 more weeks to dig these dancing queens.

It's illogical compensation for the imminent demise of Mamma Mia! at Mandalay Bay (the only event that could depress me remotely as much as Sarah Palin in the White House). But ... the Belfast Telegraph reports that the Meryl Streep-starring movie version is setting pre-release DVD sales records in the U.K. It's already outstripped sundry Harry Potter titles, is about to deliver a Bourne Ultimatum and may even topple Star Wars IV-VI (i.e., the ones with Jar-Jar Binks).

Speaking as someone who was born in Lexington, Virginia (y'know, Nancy Pfotenhauer's "real Virginia") and grew up in lovely Midwestern towns that probably qualify as Gov. Palin's "pro-America" parts of the U.S., I have but one thing to say about this current epidemic of more-American-than-thou rhetoric and I shamelessly stole it from Jon Stewart: "Pfuck you!"

Sorry, but I just had to get that off my chest. All better now.

Goldstein makes Hall of Fame

Fri, 05 Sep 2008 14:24:00 -0700

Having spectacularly blown it last year with its ill-advised election of Clifford Perlman to the Gaming Hall of Fame, the American Gaming Association did a good deal better this time around. It chose Bernard Goldstein, an important transitional figure in the casino industry.

Let's get the obvious out of the way: Goldstein's Isle of Capri Casinos didn't keep pace with the times (eventually earning the company the nickname "Pile of Debris"); ventures into international waters -- including a truly baffling run at the Singapore market -- were an outright flop; and Goldstein and his executive team were too slow to relinquish power.

Bernard Goldstein, pioneer

But credit Goldstein with having the grace to step aside in favor a strong successor, James Perry. The latter brought Argosy Gaming to the forefront of the "second wave" of Midwestern riverboat casinos, capitalizing on the markets Goldstein was instrumental in expanding, taking the product to the next level.

Midwestern casinos used to be pretty rudimentary (some probably still are) and Isle made its reputation on its amenities and decorative flourishes -- including the ubiquitous water features that came to define "Isle style'. It also spotlit them in marketing campaigns that made Isle one of the stronger brand identities of the Nineties.

What makes this more impressive still is that Goldstein did this starting at the same AARP-ready age at which Aztar Corp.'s top honchos were looking for a cushy payout en route to the golf course (leaving the company in hands that would prove its ruination). The former scrap-metal dealer parlayed a Bettendorf, Iowa riverboat into a 17-year career as a casino mogul. Few of us will be so enterprising at age 62, I daresay.

As for the other inductees, one of the poster children of the post-Mirage wave of "affordable elegance" was Emeril Lagasse. Since the Nineties' reinvention of Las Vegas can't be discussed without mentioning Emeril's name, he was a natural choice. Not being a student of the sweet science, I will leave the merits of Bob Arum and Don King elections to others better versed in the subject.

If mob ties are no barrier to admission to the AGA's HoF, then why not induct the recently deceased Allard Roen? At least he did good things (like help desegregate the Strip) and his influence on Las Vegas' development extended well beyond Las Vegas Boulevard, something that could not be said for casino moguls more famous than he.