David Mckee's Stiffs & Georges - Australia

Quote of the Day

Thu, 27 Aug 2009 15:25:00 -0700

"It’s a bit disappointing to see that after months of work they come up with a new strategy which is a bit like the old strategy." -- Fortis Investment Partners fund manager Theo Maas on Aristocrat Leisure, which continues to flounder. The company recently wrote down its stake in fading PokerTek, primary supplier of robo-poker technology.

Adelson bombing in Pennsylvania; RoboPoker returns; Dissent over Wynn

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

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

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

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

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

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

Packer steps in it again

Fri, 24 Jul 2009 12:02:00 -0700

After frequent demurrals, the Victoria government has 'fessed up that it was on the receiving end of ham-fisted lobbying by Crown Casino owner James Packer. A delicate quid pro quo (higher taxes in return for more table games) was being negotiated. But, not wanting to leave anything to chance, Packer personally besieged both Victoria's premier and treasurer in re Crown.

The state comes out of this looking worse than Packer, though, as witnessed by this weaselly attempt at damage control: "The Government is adamant that any expansion of Crown's gaming tables was under discussion for a long time and that poker was a less addictive form of gambling than poker machines." [Emphasis added] So I guess that makes it all copacetic, right?

Lawrence Ho & James Packer: less to smile about these days

Hammered in Macao. Packer's new City of Dreams is getting stomped by nearby Venetian Macao. VIP baccarat play for Melco Crown Entertainment properties was off 19% -- which is even worse than its sounds when you count on it for 60% of your total gambling revenues. Mass-market baccarat play was 12% up, so there's some consolidation. (Meanwhile, in some parallel universe, the Wall Street Journal is nattering on about a "brighter outlook" for Macao, even as revenue continues to decline and City of Dreams flops. Visitation was -16% in June and the Mainland China subset of that was -22%.)

A good thing for Sheldon Adelson that Venetian Macao's play is so strong. Bloomberg News reports that 85% of Las Vegas Sands' Macanese revenue is casino-derived ... which ought to raise serious questions about Adelson's hotel-, retail- and convention-premised Cotai Strip™ business model.

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.

Stormy weather

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

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

City of Dreams: a flop

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

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

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

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

Sands Macao: Adelson's best-ever investment

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

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

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.

Packer gets a discount; solving the I-15 problem

Mon, 16 Mar 2009 15:50:00 -0700

Though it can't seem to settle on a dollar figure for James Packer's renegotiated Cannery Casino Resorts purchase, this story makes one salient point: A $1.7 billion-plus acquisition could be converted into a 25% stake for $370 million-$390 million. That effectively reprices 100% of Cannery at $1.48 billion-$1.56 billion. Which enables Packer to save face on what is described as an "increasingly onerous deal." Or it could be a graceful way of bowing out of further U.S. casino adventures in favor of a renewed Down Under focus.

A reader writes ...

I know that you are a big fan of a high-speed rail system to Vegas, and I do see the need to increase the traffic flow from SoCal to Vegas.

But I wonder if anyone has run the numbers to compare adding an additional highway lane or two (and even expanding any bridges) from the north edge of the LA area to Vegas? And how that figure compares to the cost of a high-speed rail.

Again, I'm not an opponent of rail lines (in fact, my wife comes from a long-line of train-employed relatives), but I wonder where the best "bang for the buck" would come from.

From some VERY basic numbers on the web, I'm getting estimates of about $1 million per mile per lane for highway building in the desert. Even with adding a lane in each direction, that's about $2 million per mile, or around $400 million for the approx. 200 miles from the north edge of metro LA to Vegas. Even if you more than double that figure for bridge expansions, etc., you still only end up with a cost of $1 billion. Compare that to the $8 billion in the stimulus package for high-speed rail (although I'm not sure how much of that $8 billion goes to the Vegas rail, or what the total cost of that project would be).

As you can tell, I am NO expert on this, but it might be interesting to hear from some experts (and who don't have a dog in the hunt).

You make good points, Kemosabe.

Cannery sale on ice?

Wed, 25 Feb 2009 15:41:00 -0700

Nevada Gaming Control Board Chairman Dennis Neilander was kind enough to ring up pesky old NGCB detractor S&G today and provide some clarification on why Crown Ltd. and its supremo, James Packer, passed muster in the Silver State but have run into heavy weather in Pennsylvania.

"When we first started ... the Packer shares are held in a variety of trusts," controlled by Packer himself, Neilander explained. NGCB representatives met with trust counsel and "pored through all of the trusts," concluding that Packer was the controlling shareholder. "We have no concerns about it here. It was all disclosed to us."

(A government source adds that trustees fear Keystone State confidentiality provisions are less airtight than Nevada ones and information provided to regulators would become public. Which is why three Crown Ltd. participants are suing -- under aliases -- for declaratory relief, in a Delaware court.)

As for a spate of recent developments, Neilander said that Gretel Packer (above) -- who's suddenly gotten cold feet about Pennsylvania licensure -- didn't reach the 10% ownership threshhold necessary to mandate Nevada scrutiny. "We did" have contact with gambler Harry ~~Kanavos~~ Kakavas, Neilander added, saying that at the time there was no indication that Kanavos had tapes of Crown executives allegedly making illegal overtures to him. (Pennsylvania has sent an investigator Down Under to hear the recording.) And with regard to bribery allegations connected to Melco Crown Entertainment's City of Dreams project, those arose late in the proceedings, the chairman said, and there was not enough evidence from which to reach a conclusion as to their validity.

Neilander added that the NGCB is monitoring both the Kanavos and Macanese situations for potential post-licensure action. But with Cannery Casino Resorts bosses William Paulos and William Wortman accusing the Packers of colluding to scuttle the sale, these questions may soon be extremely moot.

Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

Sat, 21 Feb 2009 15:05:00 -0700

Phil Hevener, the guy who was onto the Imperial Palace sale before anyone else, says Penn National pitched offers for not only The Mirage but also Caesars Palace ... at insultingly low EBITDA multiples (see bottom of story). The Strip has seen much better days but it's not a flea market.

Et tu, F'bleau? It hasn't even opened and already Fontainebleau's viability as a going concern is in doubt. Those thousand condos represent a giant millstone around the resort's neck; the relationship between Vegas casino operators and the condo business has been akin to that between lemmings and the sea. Already, it's looking like a rerun of the Harrah's/Station scenario: Partial recovery for senior debtors and a dime on the dollar for junior ones.

See no evil, speak no evil. A robbery was committed at a casino "in the 4000 block of West Flamingo Road," an address that just so happens to exactly coincide with the Gold Coast. (The Palms is in the 4300 block.) This is at least the third time that I can recall offhand in which the location of a casino robbery was obfuscated by local law enforcement -- nor the first time that Las Vegas Metro has placed a higher priority on protecting casinos' images than on solving crimes. It might be easier to find witnesses if you told the public where the crime took place, no?

I got a horse right here, his name is not Paul Revere and if you backed this horse you had quite a lot to fear. A quarter-century ago, literal also-ran Fine Cotton wound up at the center of a bizarre racing-fraud scandal involving a -- get this -- impostor horse. Could Dick Francis have dreamt up a better yarn than this?

Station to the rescue. With Thunder Valley execs given the chop and new managment parachuting in from Station Casinos, work has resumed at the Sacramento-area casino-resort -- after some downsizing of the original expansion plans. Kudos, Station.

Packer steps in it again

Thu, 19 Feb 2009 18:50:00 -0700

Now aren't you glad that the Nevada Gaming Control Board and Gaming Commission were so quick to give James Packer the green light to own Cannery Casino Resorts? Not only is he facing an unfolding scandal in Australia, two casinos he co-owns in Macao have been tied into a high-profile bribery case. Whoops.

When asked for comment, Packer's Crown Ltd. passed the buck ($1AU) to Melco Crown Entertainment, in effect dumping the matter in the lap of Packer partner Lawrence Ho. Considering that Packer/Ho's City of Dreams was built on land earmarked for an institution of higher learning -- without even waiting for formal rezoning approval -- this could stir serious backlash in Macao. Foreign-born casino owners are the villain of choice this season, perceived to have their thumbs on the scales of justice.

Who knows? Maybe the younger Ho or one of his associates did grease somebody's palm. However, the casino career of the Packer scion continues to be a catalogue of missteps and misfortunes. Vegas will make short work of him ... if he's still allowed to set up shop here.

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.

Case Bets: Seminoles, Tropicana, Shuffle Master, Stanley Ho

Tue, 03 Feb 2009 14:12:00 -0700

Seminoles offer to lay $288 million and 12,000 new jobs on the table, for starters. Sunshine State Republicans blow them a raspberry. Constitutional or not, Gov. Charlie Crist's compact put a good deal in place for both sides. (It wasn't so good if you were a non-tribal casinos, but they'd been underperforming even before Crist gave the Seminoles table games.) Unfortunately, Florida solons seem bent on pissing it away for a variety of reasons, spite -- mainly toward Crist -- not least among them.

Good news at Trop(s). It's a rare and welcome day for Tropicana Entertainment when it can announce not one but two pieces of good news in the same day. At the Tropicana Las Vegas, a marketing firm has been retained to try and reposition the LV Trop as a service-and-value-oriented property. TropEnt promises "to elevate its service and value standards,” in a slap at Columbia Sussex, its nominal parent company.

Out East, you can stick a fork in the Cordish Co. purchase of the Tropicana Atlantic City, now that the former has missed the deadline for reaching an agreement. What's the response from hapless Trop trustee Gary Stein? Why, to extend the sale another three months, of course. His Plan B would involve dropping any minimum-bid requirement from the bankruptcy auction.

Sending the Trop to Chapter 11 auction without a stalking-horse bidder hardly looks like a strategy that will drive the price up. ColSux was a lousy owner but neither it nor its creditors deserve to be ripped off like this.

As for Cordish, Stein is playing the role of battered spouse in a co-dependent/abusive relationship. Cordish, he coos, is still "actively engaged ... They have certainly not withdrawn." Why anybody would still listen to Stein, whose credibility is somewhere south of zero by now, is a mystery for the ages. Enough! It's well past time that the New Jersey Casino Control Commission sacked this sorry excuse for a trustee. These monkeyshines aren't remotely funny anymore and the vaudeville hook is way overdue.

Unless the NJCCC knows something the rest of us don't, there's no longer any viable excuse for not giving TropEnt at least a probationary interval as owner/operator. Its creditors have every incentive to make revenue grow there if they're to see their money again -- unlike ColSux which was acted as though it was perfectly happy to drive financial performance straight into the ground so long as the Trop was run on the cheap.

At least one Wall Street analyst likes Shuffle Master's choice of CEO better than I do. Timothy Parrott is a great guy for all I know, but there's little in his recent background to suggest that he's the turnaround specialist Shuffle Master needs.

Stanley Ho, sugar daddy. The godfather of Macanese gambling has shown a sudden upsurge of interest in the fortunes of Australia's Labor Party, funneling $587,000-plus into its coffers. As though to prove it isn't completely Dr. Ho's bitch, the ALP returned $326,000 from Angela Leong (aka Mrs. Stanley Ho). Because, you know, they've got standards. Yeah, that's it. (It's not unlike the Obama administration's exception-proves-the-rule attitude toward appointing lobbyists to critical guvmint jobs. Plus ça change and all that.)

Seems the ALP has been talking a good game about cleaning up campaign finance -- and the conservatives who've been resistant -- while raking in beaucoup HoBucks, even if they say they returned two-thirds of the money. Because $195K is totally cool but $587K would be de trop, I guess.

Or was the total extent of ALP-accepted Ho largesse even larger still ... like $912,000 maybe? The numbers are all over the one place but one thing is for sure: In the words of Opposition parliamentarian Michael Ronaldson, "The whole deal simply doesn't pass the sniff test."

Head-scratcher at Shuffle Master

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

Come March 15, Shuffle Master CEO Mark Yoseloff finally gets to leave the company -- something he's wanted to do for a while but which has been stymied by the difficulty of replacing him. Just how difficult was it? So much so that Shuffle Master's board settled on a relative lightweight: Timothy Parott, who was Aristocrat Technologies' CEO of American operations for 2006-08. Prior to that, Parrott -- a newcomer to the manufacturing side -- had been out of day-to-day casino operations for eight years. To make a bad slot-machine pun, it was a move from well outside "the box."

Industry scuttlebutt had it that subsequently discredited Aristocrat Leisure CEO Paul Oneile wanted to exert more direct control of Aristocrat's North American operations and that the Parrott appointment furthered that brief. (Parrott's exit from Aristocrat Technologies roughly coincides with the appointment of Jamie Odell to succeed Oneile.) It looks like the power behind the Shuffle Master throne will be board chairman and former Greenspun Corp. President Phil Peckman, who steered the Greenspuns into the casino business but subsequently fell from favor.

You've been served. Can a casino be held responsible for being in receipt of (allegedly) ill-gotten gains? The Venetian gets to be a guinea pig. Lucky them.

"An instructive example of Murphy's Law." That's the verdict from Liz Benston on the botched, bungled and increasingly beleagured Tropicana Atlantic City sale process. If anything has gone right in that snipe hunt, it's escaped my notice.

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.