David Mckee's Stiffs & Georges - California

Quote of the Day

Tue, 13 Oct 2009 12:05:00 -0700

“Chickens gained valuable rights in California on the same day that gay men and lesbians lost them.” -- Ronald M. George, chief justice of the California Supreme Court, on the caprices of the state's initiative-and-referendum system. A ballot measure regulating chicken coops was passed in the same election cycle that saw Proposition 8 overturned.

Oh me of little faith

Sat, 10 Oct 2009 16:40:00 -0700

Pardon a smallish digression from the world of games to something truly important ... baseball. With painful memories of the '04 and '05 postseason meltdowns acid-etched into my mind, I've not been able to summon the intestinal fortitude to watch either of the first two Red Sox/Angels games. (And postseason Angels games really take a toll on one's stomach.)

Now, with the Halos up 2-0, I'm wondering if it's safe to peek between my fingers as the series repairs to Fenway Park. My gut-twisting gut-level feeling is that this series goes the full five games, which is my recipe for pure torture. But ... Angels pitchers seemed to have conquered their fear of BoSox hitters and shut them down.

Besides, I've been wrong before about this team -- 1,000% wrong about Bobby Abreu, who's been a tremendous influence for the better. His superb plate discipline has been worlds away from the bizarre flailing of Vladimir Guerrero (which you can only get away with if you're Vlad and can lift a far-outside pitch over the fence in straightaway center). Patient at-bats were the key to the Angels' '02 World Series run, which made up for less-than-dominant starting pitching. If there's an Angels/Yankees ALCS, it'll be a contest to see who can take more pitches: a real tortoise-and-hare match.

At least the Angels and BoSox share a common adversary: the umpires. "Country" Joe West and C.B. Bucknor are showing yet again why they are two of the worst in MLB ... although seemingly every American League playoff game this year (including the Metrodome miniseries that finished the Detroit Tigers) has been plagued by truly craptacular umpiring and amazingly poor calls. If this were the NFL, these clowns would be relegated to working late-season Rams/Raiders games or some purgatorial equivalent.

Speaking of the Yanks, I can't hold out much hope for my old home team, the Minnesota Twins. All the Homer Hankies in the world aren't going to do it for a pitching staff that can't hold a lead against the Bronx Bombers, and it pains me to type that.

Thanks for your indulgence. We now return to our irregularly scheduled blogging. As soon as I find my Rally Monkeys, that is.

P.S.: It's a damnable shame that our server won't load previously unused images into the blogs. 'Cuz I've got a great Philly Phanatic photo that would be perfect should they make it to the Fall Classic.

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.

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

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

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

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

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

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

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.

The Apocalypse is nigh!

Thu, 17 Sep 2009 14:04:00 -0700

Las Vegas to Nowhere, all aboard!

Oh.My.God. Both Gov. Jim Gibbons (R-NV) and I are in agreement on something: Sig Rogich's Choo-Choo to Nowhere blows donkeys and that maglev (aka, "The Sin City Express") is the way to go. CityLife Editor Steve Sebelius has the shocking news from Carson City.

Admittedly, $45 million is a drop in the bucket -- if that -- and Midnight Jim may be piqued to see Rogich in the embrace of new Desert Xpress supporter Sen. "Hapless Harry" Reid. Gibbons and the Sigmeister used to have a steamy bromance going ... at least until Midnight Jim got a little too friendly with a cocktail waitress, whereupon Mrs. Gibbons gave Rogich the boot. And lastly, by waiting until after Reid switched his support from maglev to Sig's choo-choo, Gibbons may be doing too little, too late.

But I give Gibbons credit for bucking GOP orthodoxy, which holds that a train "from Las Vegas to Disneyland"* is Evil Incarnate. Besides, nobody -- and I mean nobody -- with whom I have discussed the Great Train Debate, whether they're from Nevada or California, has the slightest intention of driving to some big-ass Park 'N Ride in Victorville, Calif., just so they can hop a train to Vegas (or rent a car to L.A.). Might as well drive the whole way.

As for Midnight Jim's belated epiphany: Welcome aboard, Guv.

(* -- The smarmy hypocrite who coined that phrase later backtracked on his own high-speed rail request after it made him a further target of public ridicule.)

Blast from the Past

Fri, 11 Sep 2009 20:09:00 -0700

Rock A Hoola, the freakish subject of this 1998 promotional film, is to be the topic of a forthcoming Question of the Day, so keep your eyes peeled. In the meantime, enjoy this slide down Memory Lane:

We drove past Lake Dolores last weekend and there sure isn't much to see now, sadly. And it's still in the middle of nowhere. That definitely hasn't changed in the intervening 11 years.

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

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

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

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

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

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

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

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

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

A one-ton horse

Wed, 09 Sep 2009 17:56:00 -0700

If giant equestrian statuary isn't enough to make you pass up Las Vegas for a vacation in Chandler, Ariz., I don't know what will do the trick.

Not impressed. One reader wasn't bowled over by Commerce Casino's largesse to a group of Bay Area firefighters who are battling nearby blazes. Informed that the firemen were being fed on Commerce's dime, aforesaid reader laconically replied, "Hopefully they're feeding them better than they feed their customers." Ouch!

Optimism in Macao, euphoria at CityCenter

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

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

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

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

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

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

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

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

Quote of the Day

Thu, 23 Jul 2009 13:30:00 -0700

Sig Rogich's choo-choo to nowhere. Some parts of Sig sold separately.

"Even with the Victorville-Palmdale link, which is not a dead certainty, a Las Vegas rider who wanted to see the Magic Kingdom would have to travel from Sin City to Victorville to Palmdale to Sylmar to Burbank to Los Angeles to Norwalk to Anaheim.

"Start early if you want to see the fireworks." -- CityLife Editor Steve Sebelius on the Harry Reid/Sig Rogich juice train. Speaking of "juice," über-lobbyist (and Reid crony) Harvey Whittemore has prevailed again in one of the greasiest juice jobs I've ever seen. Poor John Ascuaga's Nugget; it never stood a chance.

Fertittas reinvest ...

Tue, 07 Jul 2009 16:22:00 -0700

... not in Station Casinos but in Orange County real estate, it would seem. The neighborhood is popular with casino moguls who have run their companies into the ground: A nearby, $35 million crib is a domain whose master is Jerry Herbst, late of Herbst Gaming, recently surrendered to its creditors.

At least Frank J. Fertitta III can argue that he was bargain-shopping, as his Emerald Beach pied-a-terre was purchased for 24% off list price. Station employees, however, aren't likely to be house-hunting anytime soom.

I'm reminded of something Transport Workers Union representative Joe Carbon said last week: "That's what it's about ... the CEOs making their $25 million and the workers having their health plan cut." He wasn't speaking of Station or Herbst specifically but the consequences of poor leadership at both redound primarily to the workforce -- and the creditors.

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

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

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

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

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

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

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

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

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

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

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.

Train to Nowhere II

Mon, 15 Jun 2009 13:59:00 -0700

Sig Rogich's choo-choo to nowhere won't really be the privately funded enterprise that it's being sold as, the Las Vegas Sun helpfully explains. Bottom line: Rail transportation is inherently unprofitable, so you and I will be ponying up for the R&R Express (as in Rogich & Reid) sooner or later.

Vegas on TV: Our fair city is showcased on Dateline NBC tonight, but not in a nice way. Look for the cameo appearance by Bally's Las Vegas in the pimp-daddy segment. Judging by the brazen attitude of the miscreants shown in this morning's preview on Today, they've taken that "What happens here, stays here" bromide for gospel truth.

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?

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.

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.

Sludge Report

Wed, 18 Feb 2009 12:37:00 -0700

Kudos to the Las Vegas Review-Journal's Howard Stutz for keeping an eye on an especially skanky provision of the economic-stimulus package, a sweetheart provision engineered by Sen. Harry Reid (D-NV). It awards companies -- like vocal supporter MGM Mirage -- a tax deferral, followed by a drawn-out payback of taxes on gains recognized from buying back distressed debt. (At least in contains a measure to incentivize capital improvements and technological upgrades.)

Don't you wish the IRS was this understanding when your tax bill is due? There is an argument to be made that this encourages companies to at least make partially good on their debt instead of just walking away. However, there's a much stronger case that Reid's Rescue rewards the sort of foolhardly borrowing that now sees Las Vegas Sands, Station Casinos and Harrah's Entertainment, all wheezing from overextended bank covenants or paying the light bill from revolving lines of credit, trying to buy out bondholders at a pittance and fending off investor lawsuits. The lesson learnt, if any, will be that it doesn't matter what trainwreck you get your company into, Washington will gladly step over the bloodied bodies of your debtors so that it can grace you with a tax incentive.

This is a disgrace and it rewards the very companies who were the prime architects of our current mess. But it's great for Harry Reid: Now when potential GOP challengers seek casino industry support in 2010, the Majority Leader can simply remind the normally rightward-leaning casino CEOs just who crossed their palms with silver when times were bad.

Final score: Reid 1, Investors 0.

Stutz is certainly smarter than his boss, who brays anachronistic nonsense about a much-needed rail link to Orange County. (Reid giveth ... then giveth again.) While auto traffic to Las Vegas from SoCal hasn't suffered notably (yet), some forward thinking would be welcome, instead of putting most of the city's eggs in the already congested I-15 basket. The convenience appeal of a high-speed link to the greater Los Angeles area is (or should be) obvious and this is a field in which other nations have made far greater advances than have we. (It would also facilitate my access to Los Angeles Angels of Anaheim games but I don't think that's clouding my judgment. Not much, anyway.)

As for the notion that high-speed rail to Las Vegas is "unproven at best," so was the concept of the casino megaresort 20 years ago, the Las Vegas Strip 60 years ago and the automobile itself ... well, you get the idea. Heck, the printing press was an "unproven" concept once upon a time, as R-J editors may recall from the carefree days of their youth.

Rogues' gallery

Thu, 15 Jan 2009 13:08:00 -0700

After a fitful start, blogorrhea is sweeping the business desk of the Las Vegas Review-Journal, resulting a veritable flood of news nuggets today ...

Planet Hollywood prexy Michael Mecca has resigned to pursue the proverbial "other opportunities" at a time when revenues have been up. On the next Vegas Gang, Jeff Simpson predicts -- with unassailable logic -- that Mecca is going over to Crown Ltd. to head up James Packer's North American gambling operations (in which case Mecca will have his work cut out for him, but congratulations all the same).

A less-charitable alternative theory would be that Mecca has been scapegoated by Planet Ho for having been in charge when it got dragged into the Omar Siddiqui scandal. (The indicted ex-Fry's Electronics exec lost $9 million there in one gambling session alone.) Planet Ho's lawsuit against Siddiqui got tossed last month.

"No more wire hangers!" Whatever the case, somebody leaked Siddiqui's player profile to the San José Mercury News and, geez, this "whale" sure is a whiny little bitch. (Sorry, I meant that to read, "a high-value, loyal customer and a good friend of our casino staff, who look forward to his every visit.")

Good news for visitors: The Nevada Department of Transportation is at least talking about widening I-15 south of Tropicana Ave. Whether NDOT can get the money from Gov. Jim "Scissorhands" Gibbons is another matter, but it can at least remind Midnight Jim that he himself identified California as Nevada's Numero Uno tourism priority in the course of disparaging Asian marketing as "a waste of taxpayer money."

And who knew that the Circus Circus RV park was the new "in" place to stay?

Randy Black, aka Mr. Thrift. Many of his employees are out of work, the former Si Redd's Oasis may be a hollow sepulchre these days and his Black Gaming has defaulted on debt. But we don't need to pass the hat for the self-aggrandizing Black Sr. quite yet.

Seeing financial havoc all around him, Black decided that austerity measures are for other people (like his employees) and awarded himself a nearly 4% raise for this year, escalating to 5% for each year afterwards. Whatever meagre EBITDA Black's Mesquite casinos achieve, 5% of that will be redirected into Black's pockets as a "management fee," on top of $21,200 in other goodies.

At a time when Nevadans from all walks are being asked, or sometimes told, to accept wage freezes and outright reductions, Black's greed is a disgrace to the state. R-J reporter Arnold Knightly is to be commended for keeping tabs on SEC filings and ferreting out not-so-niceties like this.

In other news ...

Folies Bergere: 49 is the new 50.

From showgirls to no-girls: What's Ron Thacker's first official act as president of the Tropicana Las Vegas? What else but shut down Folies Bergere well shy of its 50th anniversary? The no-frills spirit of Columbia Sussex remains, protestations to the contrary, clearly alive and well [sic] at the Trop.

Thacker's press release made noises implying that the Trop had a replacement for Folies waiting in the wings but, when pressed by Norm(!) Clarke, a Trop flack could only weakly respond that it was "exploring options" and was "definitely not closing up shop." (The Trop gave the Las Vegas Sun a different, more definitive story, saying it does have a new show en route.) Unspecified property improvements are also promised. Pardon my skepticism, but we've heard that before -- and are still waiting.

Geez, first Titanic and Bodies take a hike over to Luxor (where they're doing even bigger business). Now this. Since it's a just a wee bit too cold for swimming right now, is there any reason left to visit the Tropicana? Bueller ... Bueller?

Harmon blame game: It looks as though the truncation of The Harmon into a 25-story stump is ultimately the fault of the same people who overlooked scofflaw remodeling jobs at sundry Harrah's Entertainment properties: Clark County's ever-(not)-vigilant building inspectors. "What? Fifteen floors of deficient rebar you say? Gosh, I guess I missed it. My bad. When's lunch?"

The Las Vegas Sun's story comes with a helpful graphic that shows how Perini Building Co. and its subcontractors ineptly installed and then further compromised the rebar that ultimately turned the (would-have-been) 49-story Harmon into what we might call The Half Harmon. In the accompanying video, Clark County's Ron Lynn threatens the culprits with a "potential disciplinary hearing." Oh, they must be quaking in their boots.

Peppermill exec in line for state job. No, not the beloved Peppermill restaurant on the Strip but rather Reno's Peppermill Resort Casino. Director of Marketing Kim Stoll is one of six finalists for the job of Nevada's tourism czar. Not making the cut was underqualified Gibbons crony Kirk Montero. Then again, Gibbons wants to eliminate the selfsame job that he tried to gift-wrap for Montero, so maybe the also-rans in this competition are its real winners.

Merry Christmas

Wed, 24 Dec 2008 20:33:00 -0700

LVA's Stiffs & Georges bureau is on holiday in Cameron Park, Calif., for the remainder of the week. As I write this, I'm only four miles or so from the new Red Hawk Casino (which looks to present as much of a competitive danger to Lake Tahoe that Thunder Valley did for Reno) but our schedule of family activities hasn't included a swing past Red Hawk ... especially not when one's eight-year-old nephew and six-year-old niece are in tow.

Regardless of whichever late-December holiday (if any) you observe, may it be joyous and bountiful, and may it augur more of the same in the coming year.

Harrah's honored

Thu, 11 Dec 2008 12:00:00 -0700

Harrah's Entertainment can use any business leverage it can get these days and it just received the endorsement of Stand Out for Equality, an opposition movement spurred by the passage of Proposition 8 in California (where Harrah's Rincon has been hosting same-sex nuptials). Harrah's is the only casino company listed on The Gay-Friendly List, save for the small (but enlightened) Eldorado Casino in Henderson.

The good news for every other casino is that none of them made The Blacklist, which targets businesses and (in an ethically questionable move) individuals -- including several judges and lawmakers -- for boycott or "buycott," as Stand Out is calling it, laying particular emphasis on the holiday season. If you're in Vegas this weekend and feel strongly about the issue, there'll be a march from the Gay & Lesbian Community Center of Southern Nevada (953 E. Sahara Ave.) at 3 p.m. on Saturday, ending at the Flamingo Road/Maryland Parkway intersection. Meaning you can A) make a political statement, B) get some exercise and C) ferret out Christmas bargains at Target, near the terminus of the march.

If MGM Mirage would like to carve out a bigger share of the gay dollar, it might rethink its plan of fobbing Luxor off on LGBT patrons as the "gay ghetto." (What, Circus Circus wasn't available?) Seriously, it sounds like one more "try anything" non-solution to the Strip's most identity-crisis-plagued property. It's a lovely thought, too: Give 'em the "death-themed" resort, the one that's home to Bodies and the Titantic exhibit, to say nothing of being designed in the shape of a tomb, fer crissakes. Oh, and it's home to the most reviled show in Cirque du Soleil history.

With Bellagio, The Mirage and Mandalay Bay (home to Broadway on the Strip) from which to choose, why Luxor? But it could have been far worse: MGM could have tried to steer the gay crowd to Excalibur instead ... though the exterior does resemble a Village People iteration of Camelot.

Fire sale at Harrah's, MGM?

Mon, 17 Nov 2008 13:10:00 -0700

That was one of the bombshells dropped this morning at Global Gaming Expo. According to a member of a "state of the industry" panel of G2E's Casino Design track, Harrah's Entertainment has several unprofitable properties that were for sale. "Now I believe any of [Harrah's casinos] are on the block," he said, adding that similar things could be said of MGM Mirage.

Architect Joel Bergman revealed that he'd laid off 29% of his staff last week: "Work has simply dried up." Perini Building's Dick Rizzo added that Kerzner International is still "bullish" on City Center II, at the north end of the Strip and its centerpiece will be an exact reproduction of the company's Atlantis Dubai resort (plus casino, presumably).

Dubai and Abu Dhabi were identified by Rizzo as two of the main growth pipelines that continue to flow. So does the California tribal-casino market, along emergent casino markets in New York State and Pennsylvania. He's also working with the Seminole Tribe in Florida, where two Hard Rock-branded casinos will double in size, starting next spring.?

As for job cutbacks in the tribal market, Rizzo doesn't think those are economy-driven but "an excuse to get leaner." He defended MGM Foxwoods as a victim of poor timing, saying it can't be judged on current performance. He pointed out that the soft debut of MGM Foxwoods prompted the mothballing of a similar expansion at nearby Mohegan Sun.

Rizzo shrugged off the implications of server-based gambling: "The public sees the casino the same way." And while he saw no prospect of non-gaming Strip resorts, off-Strip ones are conceivable. Given the current condo glut, Trump International and others are looking to convert those properties to pure hotel plays, at least until the market takes a more propitious turn.

Recently, MGM Mirage spokesman Alan Feldman took up President Jim Murren's contention that we may not see new construction on the Strip for a decade (does that make it a "meme"?). Panelist John Restrepo interprets that as a way of saying, "We don't know" where the world is going and "a bit of an overstatement," reflecting what Donald Rumsfeld infamously called "known unknowns."

Per S&G prediction, we're seeing a market correction in the prices paid for land on the Strip. Restrepo says the value per acre has readjusted -25% to -30% and even more so elsewhere in Las Vegas, including the corridor south of Mandalay Bay. Still, lenders are now requiring as much as 50% equity before they'll commit to a project, Restrepo notes

Restrepo also doubts the viability of the "If we build it they will come" paradigm that has so long served Las Vegas. Besides, it still remains to be seen whether Joe the Player is tapped out ... and Restrepo hears that a wave of car repossessions is imminent.

That being said, his company is performing feasibility studies for new projects, even if those developments are going to have be put on ice until a few years hence.

Winners & Losers

Wed, 05 Nov 2008 13:52:00 -0700

And now the obligatory post-Election, What's-it-all-about-Alfie roundup ...

Culinary Union 1, Casino CEOs O: True, the Culinary tripped all over its own feet in the early going, leading to Democratic caucuses that weren't so much "Barackular" as "debacular." But D. Taylor & Co. backed the winning horse and did it early, which earns some chits down the road, plus they have a new Capitol Hill friend in Rep.-elect Dina Titus. Messrs. Lanni, Loveman, Wynn, Adelson and Trump made a variety of presidential wagers, losing every one.

Ameristar Casinos/Pinnacle Entertainment: They wanted a protected oligarchy in Missouri and now they've got it -- and at relatively little additional tax burden to them.

Slot manufacturers: OK, so Ohio and Maine didn't come through and the Missouri market is frozen. But 15K new slots in Maryland ain't chicken feed. Plus a West Virginia casino expansion that flew under the radar got voted in. Inexplicably, slot stocks traded downward. Stupid Wall Street.

Colorado casinos: They didn't so much "win" as get a hefty lifeline thrown to them by Rocky Mountain State voters who approved 20X higher betting limits, 'round the clock operations, and roulette and craps. (No Sen. John McCain sightings in Cripple Creek yet, though.)

Freedom's Watch: So far F-Double-U is 6-9-1 (with Sen. Gordon Smith [R] of Oregon momentarily in the "tie" column) in its top-priority races. I'm feeling generous and crediting the Adelson front group with "wins" in the case of self-destructing Rep. Tim Mahoney (D-FL), who continued the scummy tradition of predecessor Mark Foley, and in that of Sen. Saxby Chambliss (R-GA), who faces a December do-over, thanks to Georgia law. And veering off at the last minute to spend money attacking not-up-for-reelection Sen. Chuck Schumer (D-N.Y.)? Adelsonian political acumen at its finest. Winner? Loser? Let's call it a draw.

Poker: Just when it looked like the poker phenomenon was about to jump the shark, we've got a poker-playing president-elect. I dunno if Ms. Pelosi and Messrs. Reid, McConnell and Boehner cotton to hashing out legislation over cigars, booze and a deck of cards, but they'd better get ready for a whole new kind of "smoke-filled room."

Online Poker: Chances for a repeal of the UIGEA suddenly look a lot better.

Karma: Bearing false witness and serial adultery remain very uncool. But multiple felony counts and assorted other financial malfeasances remain A-OK with voters of both parties. (Hint: If Ted Stevens has to be forcibly removed from office, start practicing the phrase "Senator Palin." Kinda trips off the tongue, don't it?)

Gays & Lesbians: Voters in California stuck it to one of Vegas' most loyal constituencies big-time, passing the hateful Proposition 8. Were Nevada not so socially conservative (although compassionate enough to have legalized medical marijuana a ways back), I'd say we should vote for gay nuptials here, then sit back and gloat as the bucks roll in.

Tom Tancredo and ilk: Even if you abhor George W. Bush, you've got to give it up for his ability to rally Hispanic voters to the GOP standard. (I can't speak for Biloxi-Gulfport or Atlantic City, but Las Vegas can't function without its Latino labor base and casino CEOs know this; that's why immigration is their "third rail" of politics.) I always thought the immigration issue would be a non-starter in this election -- and it was. But the Tancredos of the GOP, by ginning it up in both '06 and early '08, antagonized Latinos, scored an own-goal and eradicated the gains Bush made with this voting bloc. So, in lieu of a prolonged post-mortem, maybe Republicans should just burn Tancredo in effigy and then turn the page.

Gaming's GOP influence: The annihilation of GOP moderates at the national level is largely complete, leaving an electoral map that looks a lot like the Confederacy, plus a horseshoe-shaped chunk of the West. Subtract Mississippi, Louisiana and tribal casinos and you've got slim pickings there. Gambling-friendly Republicans like Govs. Haley Barbour (MS) and Charlie Crist (FL) have made progress, but not easily and not without much expenditure of political capital. It's difficult to see where American Gaming Association boss Frank Fahrenkopf goes within his own party when he needs its support. The casino industry's investment in the GOP has yielded scant ROI.

Gov. Jim Gibbons: With state Sens. Joe Heck and Bob Beers, and Rep. Jon Porter all packed off to early retirement by their constituents, Gibbons suddenly has much less to fear from within his own party two years hence. (Ditto Porter's designs on Sen. Harry Reid's [D-NV] seat.)

Rep. Dean Heller (R-NV): If he opts to challenge Reid -- or Gibbons -- he's now the presumptive frontrunner. (I still think "Gov. Oscar Goodman" has a nice ring to it.)

North Las Vegas Mayor Michael Montandon (R): He's laying the groundwork for an intra-party challenge to Gibbons. Montandon's ably managed growth in NLV and would easily trump Gibbons on the "competence" front. The sudden political demise of Beers, Heck and Porter gives him a clear field of fire.

Tourists: Ever hospitable, Clark County voters gave them the finger, by endorsing a 2%-3% hike in the hotel tax. Thankfully, it's just an advisory vote.

Joe the Player: Winner. Clinton-era tax rates are coming back, which may hurt the "whales" but should be good for the rest of us. The Clinton administration coincided with halcyon years of casino growth, especially in Vegas and on the Gulf Coast. The succeeding eight years were dominated by M&A binges, condomania and a narrowing of the Strip's economic appeal toward the monied elite -- the latter being a very sore point among casino consumers. Vegas-wise, which eight years would you choose?

Jon Ozark: This cardboard dummy was wheeled into Nevada Assembly District 21 by local monied interests, to knock off Asm. Bob Beers -- not be confused with the less-hirsute state Sen. Bob Beers -- for having the audacity to stand up against Steve Wynn, he whose name dare not be pejoratively uttered in Carson City. That much having been accomplished, in the general election Ozark discovered once again that it takes more than a pretty face to win. Good luck in your next district, Mr. Ozark. They say the third one's the charm.

Case Bets: Sands bankruptcy?; California spite, Ted Binion still dead, etc.

Fri, 24 Oct 2008 17:52:00 -0700

The 'B' word. Yup, somebody finally said it. Stifel Nicolaus & Co. analyst Steven Wieczynski blames The Big Sands Sell-off on fears that "Las Vegas Sands is in jeopardy of running out of cash and going bankrupt." Sands stock closed the week at a dismal $6.32 a share, 96% off its 52-week high.

The Adelson family, meanwhile, plans to turn its pockets inside out, looking for money.

Gary Jacobs is a good guy. The MGM Mirage executive veep is among the donors supporting California's Proposition 2, which would ban certain forms of cruelty to farm animals. Which earns him this animal lover's vote of thanks.

Other Nevadans are really motivated to donate to Proposition 8. Steve Friess has all the details. Having shot Nevada's economy in the leg with their opposition to gay marriage, some of the same folks may inflict similar economic damage on California. Which is their First Amendment prerogative and amen to that, but I'm not of the misery-loves-company persuasion.

Nevada's casino resorts have been cut out of on a lucrative market segment, although Harrah's Rincon has been among the California ones benefiting from Silver State prudishness, which Harrah's Entertainment has cannily leveraged into some Vegas-honeymoon promotions. If tribal sovereignty doesn't shield Harrah's Rincon and other gay-friendly casinos from Prop 8, I guess that Prop 8 donors from economically blighted Nevada can congratulate themselves on having lopped off their nose to spite their face yet again. Anyway, kudos to Harrah's execs Michael Weaver and Gwen Migita for contributing to the anti-Prop 8 campaign.

Marker for murder? Back where I come from, we call this "motive."

Time Tunnel. How drastically has the Vegas Strip changed since 1992? Follow this awesome photo stream and find out.

This just in: Made-for-cable movie about Lonnie "Ted" Binion stinks. Hey, it's a Lifetime Channel production. What else would you expect?

Case Bets: Meow!; Dr. Death; Spineless Dems

Tue, 29 Jul 2008 12:43:00 -0700

Diss of the Day. "Having just raised the newsstand price for weekday and Saturday editions by 50 percent, the Las Vegas Review-Journal announced Monday it has eliminated sections of the paper as a cost-cutting measure." -- lead sentence of the Las Vegas Sun's coverage of cutbacks at its crosstown rival.

No tears for Desai. The doctor whose reckless methods put thousands of people -- including our own beloved Jean Scott -- at risk has suffered a stroke. I'm not going to be needing any crying towels and, judging from the all-schadenfreude "Comments" thread to that story, neither is anyone else in town. My favorite comment was also the shortest. It reads simply, "Karma." (Although, "Lets [sic] hope that this is nothing trivial" is almost worthy of Oscar Wilde.) As ever, brevity is the essence of wit.

Harry Reid (D-Invertebrate). Sometimes -- actually, very often these last seven years -- it's embarrassing to be a Democrat. Party "leadership," as constituted by the likes of our own Sen. Harry Reid, desperately needs a spinal infusion. The ceaseless capitulations to a mostly reviled administration are difficult to stomach: Patriot Act, FISA telecom immunity, Iraq War funding and now this (I'd be less opposed if Big Oil was actually using all the leases it already has; this smells of corporate welfare to me).

The dead giveaway is buried at the end of the story, where a lobbyist displays unusual candor and says: “We never presented this as going to have an immediate impact on lowering the price of gasoline.” Ah, truth in Washington -- now there's a precious natural resource.

As usual, Hugh Jackson says it best, with accompanying Photoshop drollery. At least Hapless Harry can take solace in the news that the Justice Department says it has caught yet another GOP lawmaker with his hand in the cookie jar. I don't agree with Rep. Dean Heller (R-Nev.) about much, but he's right that there's a culture of corruption that needs to be blown away by winds of change come November.

Occupancy rate or price point? Which is more important? Michael Gaughan has decided it's the former, which is why he's discounting room rates as deeply as 40% to amortize the extra cost of gas to get from SoCal to South Point. Liz Benston has more on it, plus a prognosis on the future of the cell phone ban in Nevada sports books. Forecast: still cloudy.

Gambling > Gas Prices

Tue, 08 Jul 2008 20:37:00 -0700

Although a new Precision Opinion study of consumer attitudes vis-a-vis Las Vegas concludes that there's "a direct correlation between rising gas prices and reduced Las Vegas visitation," the news may not be as bad as it appears at first blush.

Whereas 79% of players surveyed in 2005 said they would stop driving to Vegas if gas prices hit a 'drop dead' point of $3.62/gallon, only 67% would do so now -- and even then gas would have to hit $5.73/gallon. (And when it does, they'll still keep coming.) The real disenchantment is with airfares: Over twice as many now would take the bus to Las Vegas.

That's no small statement if you've ever endured the living Hell that is a Greyhound Bus ride. Instead of mocking the charter buses that are the mainstay of Atlantic City, we may soon be emulating them on an even grander scale.

Precision's data shows that 57% of California gamblers still haven't altered the frequency of their Vegas trips -- and 69% have maintained or increased their gambling budget, compared to 50% of locals players. That's even though comparable numbers of both groups say that gas prices have had "some" or "a great deal" of impact on their personal budgets.

And, while I don't endorse this personally, more (47% in SoCal/49% locally) are reducing what they're putting into their savings accounts than are cutting back on weekend getaways and/or vacations. Finally, the older you are, the less inclined you are to curb those Vegas-visitin' urges. That may be the only truly bad news for Vegas, at least to the extent that it's put its eggs in the basket of the 21-30 crowd.

Bargains? Shhhhhhhhhhhh!

Wed, 28 May 2008 13:24:00 -0700

Liz Benston takes a look today at the newest message from the Las Vegas Convention & Visitors Authority and finds the LVCVA "thinks it's bad form to make references to 'affordable' and 'cheap.'" Oh yes, God forbid anybody should think there are deals to be found here (though there are) when they could spend that money closer to home, perhaps at one of the finer tribal casinos. Harrah's Entertainment has a nice one in SoCal, I hear.

UNLV's Prof. Jeff Voyles, says (in Benston's paraphrase) that "it would be disingenuous for Las Vegas to market itself as a bargain because room rates will bounce back and the Strip will be punctuated by expensive, high-rise hotels bargain seekers can little afford."

Yes, but that's partly how we got into our present pickle: by creating both the perception and the reality that the Strip isn't meant to be affordable anymore (which may account for the newfound market strength in Downtown, especially as Strip bargain plays bit the dust).

Las Vegas' newest bargain joint

Also, I don't mean to disrespect an academic -- the parlor sport of choice among the low-forehead types at the Dogpatch Daily -- but Voyles seems off base when he says, "We can't change our market segment based on a dip in the economy." Seems to me these are precisely the circumstances that would dictate a change in positioning. Principled talk of "sustaining the growth that we have" is fine (even though recent declines in gambling revenue and visitation make me want to ask, "What growth?"), but the bottom line -- so to speak -- involves putting fannies on slot stools and in poker chairs, to say nothing of hotel beds.

(MGM Mirage would seem to tacitly disagree with Voyles, seeing as it's just created the position of "President of Marketing-Customer Development. It'll be filled by Joe Brunini, whose brief will be to "identify emerging customer markets and create methods of attracting new audiences." My congratulations to Mr. Brunini, who started in the business as a dealer in Atlantic City 28 years ago.)

In this respect the Bad Timing Award goes (with our sincere condolences) to Sheldon Adelson, who unleashed 3,443 hotel rooms and suites on the Strip, in the Godzilla-size form of Palazzo. Now weekend rooms at Palazzo are going for $219/night. Adelson could scarcely have chosen a worse moment to flood the market with new capacity if he'd had a crystal ball.

While we're on the subject of marketing messages, what the heck went through the LVCVA's mind when it dreamt up the final panel of this:

"In crowd," "velvet ropes", "bottle service," "intrigue"? Isn't that the Pure Management Group scam-dal in seven words? Do these people read the papers or "the Internets"?

Nostradamus Dept.: In this little blast from the past, various prophetic utterances are made regarding the effects of an orgy of private-equity buyouts in the gaming sector, such as: "My fear is that they're going to look at casinos as an aggregate bunch of transactions and start coming up with proposals such as reducing labor on the F&B side or reducing marketing, or taking other steps to squeeze out more profitability." (Dennis Conrad)

Then there's, "Industry sources said that, if Station is purchased, the new company ... likely would put expansion projects on hold for at least 18 months until it paid down debt significantly." (author Bob Shemeligian)

Flash forward 18 months from the date of the article and all Station Casinos projects are on hold -- until early 2010, at least. That might not have been necessary if Station's top honchos hadn't insisted in lugging away over $420 million in swag as part of buying out their own company. As for the Conrad quote, it's a prescient précis of what customers say is going on at Harrah's.

Train to nowhere

Wed, 27 Feb 2008 13:26:00 -0700

Just when it looks like the long-discussed magnetic-levitation train from Anaheim to Las Vegas (circumventing the parking lot that is I-15) is finally picking up steam -- there's an obstacle. Seems that bothersome local influence peddler Sig Rogich is throwing his weight behind a rival project, a diesel train that would run from Vegas to Victorville.

Woo-hoo! Can't you feel the excitement? Las Vegans can hop aboard and make tracks for ... outlet malls and car dealerships (two things which Vegas has in abundance). Californians, for their part, can eagerly look forward to driving in from L.A. or San Diego and then leaving their cars at what had better be the world's largest Park-and-Ride.

On the other hand, a train to/from Anaheim would bring us that much closer to Disneyland, Knott's Berry Farm and more thrill rides than you can shake a dipstick at. It would also enable my masochistic relationship with the Los Angeles Angels of Anaheim, who continue to raise my hopes every September, only to dash them in October, when their pitchers turn into quivery heaps of Jell-O or human piñatas.

As for Rogich, when he's not providing rhetorical cover for LVCVA screw-ups, he's carrying water for the vagabond Voyager Wheel. I hope he has better luck with the train than he's had with the Ferris wheel.

Case Bets: Macao, California

Mon, 04 Feb 2008 12:11:00 -0700

According to Bear Stearns, higher VIP play and increased tourism pushed Macao's December gambling revenues above the $1 billion mark for the month -- a 38% increase from last December.

California may be too close to call for Super Tuesday but the polls are trending favorably for a quartet of initiatives that would expand the slot base by 17,000 machines for select tribal casinos. Field Poll results show Initiatives 94-97 ahead 47% to 34%. Anti-initiative forces would have win over virtually all of the undecided voters, an unlikely occurrence given that the initiatives have consistently picked up steam in the polls.

A favorable vote tomorrow renders the accidental federal approval of these compacts moot (the compacts went missing for such a long time that they automatically went into effect). Even so, it would be pleasantly surprising if this matter still didn't somehow wind up in the courts.

In other news, Shawnee District Court has given the thumbs-up to Kansas' casino-expansion law. However, the state Supreme Court has yet to weigh in on the matter.