David Mckee's Stiffs & Georges - Illinois

Night of the living dead

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

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

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

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

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

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

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

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

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

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

Case Bets: Net bets, Mohegan Sun & What's F'bleau worth?

Tue, 13 Oct 2009 12:46:00 -0700

You can't play poker for money on the Internet but you can now play the ponies in Illinois via the Web. This is yet another example of legally enshrined hypocrisy under UIGEA, the parting gift of "Slick Billy" Frist and Jim Leach to the American people. (Speaking of Dr. Frist, M.D., if we must, he just sat like a bump on a log when Bill Maher stupidly railed against the swine-flu vaccine last week. Thanks, doc.)

Setting Sun? The incoming chief of the Mohegan tribe is saying the right things about the imminent need for diversification. Specifics, however, are few on the ground. Mohegan Sun, meanwhile, finds itself between several rocks and hard places: potential competition from Massachusetts and Long Island, $1 billion in debt, falling revenues and the economic inability to finish planned improvements. Depending on how quickly Massachusetts gets its act together, Mohegan's moment in the sun could soon pass.

You've heard of "pocket pool," now the Review-Journal's intrepid Howard Stutz reaches deep into the demimonde of PocketCasino, the new, portable sports-betting technology in play at Venetian/Palazzo. No word yet on whether excessive play causes blindness or hair growth on one's palms.

(Seriously, as a longtime skeptic of Cantor Gaming's portable-gambling applications, I have to say it looks like the Cantor boys have come up aces this time. As for handheld substitutes for table games, the jury is still out on that, four years after their legalization.)

Fontainebleau Las Vegas from Running Bull Productions on Vimeo.

Pennies for F'bleau. What's Fontainebleau worth? Jack shit, according to Penn National Gaming (aka, 15 cents on the dollar). In return, Penn is willing to accept a 10% return on investment ... provided it can bring the project in a no more than $1.5 billion (not counting the billions already spent and written off).

This remains an iffy proposition, in part because it's predicated on increased profitability at Penn's patchwork assemblage of casino properties. Those have to be welded into a Harrah's Entertainment-like loyalty program that drives visitors to Las Vegas. This is a huge "if," as Penn currently has no casinos in major destination markets, unless you stretch that to include recently singed Empress Joliet. Bringing customers to Vegas or even Atlantic City is terra icongnita for Penn.

To put it bluntly, Penn was a third-tier operator -- mainly of racinos -- that "married up" by taking over Argosy Gaming, the classiest of the riverboat operators. However, the Vegas market is notoriously unforgiving of new-to-town operators and Penn will have a very steep learning curve. Also, Penn is not associated with upscale properties, so F'bleau will either have to be repriced downward to reflect the Penn customer base or may need to offer promotional allowances up the ying-yang (more likely both).

If that weren't sufficient cause for concern, Penn's oft-brandished $1.5 billion (the breakup fee from an ill-advised and abortive LBO) is covering multiple bets. Penn is the primary mover behind a pro-casino ballot initiative in Ohio -- partly to protect its Hollywood Lawrenceburg investment just across the border in Indiana. It also recently bought out Cordish Gaming in hopes of getting piggybacked onto the Kansas Speedway casino license, should the Sunflower State's lottery board approve.

At least Penn is working on ways to trim the completion price of F'bleau. Costs to date -- and projected ROI -- being what they are, it behooves Penn CEO Peter Carlino to get this rampaging beast under some semblance of control.

Good times ahead?

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

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

If wishing made it so ...

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

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

What's a Trump casino worth?

Thu, 08 Oct 2009 15:07:00 -0700

Only $14 million in cash (plus a $100 million equity infusion), according to The Donald. Bondholders say, we'll see your $115 million and raise you $100 million. The latter would recoup at least some -- but not very much -- of their $1.25 billion debt under their plan, while Das Trump would send them away virtually empty-handed. (Moral: When Donald Trump asks you for a loan, take a page from Nancy Reagan and Just Say No.)

The bondholders' assignment of a $75 million valuation to Trump Marina seems awfully optimistic for what is, in essence, a corpse that can't be sold. In essence, the real value proposition is resurgent Trump Taj Mahal, with the other two casinos scarcely better than throw-ins. The Marina is, if anything, an albatross around the company's neck. Still, given that CEO Mark Juliano is going to exceptional lengths to champion the Trumpster's bid, which is a big "screw you" to the debtholders, here's hoping Judge Judith H. Wizmur holds firm for a more responsible solution.

Ho: No! "I don't see major resorts opening for the next couple of years now," says Lawrence Ho. thereby raining pessimism on the expansion plans of Las Vegas Sands, Wynn Resorts and Galaxy Entertainment. The younger Ho also speculates upon the Chinese government's motivation for throttling, then somewhat relenting upon travel to Macao. Interesting tidbit: Marketwatch.com reports that "Venetian Sands" [sic] has cut its number of table games by 25%.

Nevada revenues in. And yeah, they suck. They're much less sucky than usual (-9%), showing an upward trend in baccarat plus two locals-oriented bright spots in the form of Aliante Station and M Resort. It's unclear, though, how much of the growth generated by the last two is new business vs. redistribution of dollars from elsewhere in the valley. The Sun's analysis is far more informative than that found in the R-J.

Wait 'til next year. That's the timeline for casinos in Massachusetts. Even though western Mass looks like slim pickings, lawmakers will probably have to put a casino there just to get the bill onto the floor.

Penn bid falls. Lenders to bankrupt Fontainebleau won a small victory or two, as the judge overseeing the case seems determined to keep lead developer Jeffrey Soffer as far from the disposition of F'bleau as possible. (Soffer is both a debtor and creditor on the project.)

F'bleau, for its part, revealed that Penn National Gaming's offer is now "substantially less" than $300 million, but would include money to replace the windows that are reportedly falling off the building. (One more reason not to build a Strip megaresort tower flush against the "pedestrian realm.")

Groundbreaking today for the long-awaited SugarHouse casino in Philadelphia, under the shadow of a stick-it-to-SugarHouse tax that's been proposed in the Lege. Table games, meanwhile, might be off the table in the face of a $200 million lawsuit. You see, non-racino casinos are allowed to have 5,000 slots (in return for a $50 million fee). Small "resort" casinos -- known as "Category 3" -- only have to $5 million and get 500 slots (accessible only to guests). That's proportional, obviously, and seems fair.

However ... lawmakers want to tilt the playing field by giving Category 3 casinos 30% as many slots as, say, Rivers Casino or SugarHouse, instead of 10% ... and open those games to the general public, not just guests. Of course, the state can't go to the one existing Category 3 casino and ask for another $10 million -- can it? Casino operators are also solidly behind the GOP position on table games: $10 million upfront plus a 12% tax. But, unless House Dems completely capitulate, the gaming bosses are unlikely to get what they want, at least where the tax rate is concerned.

Penn whiffs again. Although Penn Nat'l was supposed to be a bidder in the bankruptcy auction for the Lone Star Park racino, it evidently didn't get into the action and the track went to the Chickasaw Nation for $27 million. (A lot less than Harrah's Entertainment paid to get into Ohio.)

Which means that if/when gambling is legitimized in Texas, the Chickasaws will have a double advantage (parimutuel + tribal status), while Penn will be looking at yet another missed opportunity. Penn's corporate strategy is a baffling alternation of rashness and hyper-caution.

In other tribal news, much-criticized National Indian Gaming Commission Chairman Phil Hogen is gone, thank God, and with him his new, more-restrictive Class II rules. Hogen was justly pilloried for attempting a rollback of hard-won gains in what games tribes could offer. His new rules reflected Bush administration paternalism toward tribes and while they're officially postponed for a year, I think it's safe to say they're dead.* No wonder Rep. Dan Boren (D-OK) is smiling. Watch out for that doorknob, Mister (Ex-)Chairman.

(* It's probable the same thing would have happened under a President McCain, as either candidate would have brought a more enlightened attitude to D.C.-tribal relationships.)

Supporters of video gambling are starting to push back in Illinois, at least in rural, conservative McHenry County. So far it's been the urban areas where this expansion of gambling hasn't been gaining traction.

A repeal of UIGEA continues to gain ground in the House of Representatives, even if it got pulled off the floor in the Senate. (Thanks for nothing, Harry Reid.) The money quote, literally, is a reference to an amendment Rep. Jim McDermott (D-WA) which would would specify that "corporate taxes owed on regulated Internet gambling activities are collected, as they currently are from the land-based casino industry." [emphasis added]

If that means what it implies, it would remove the spectre of industry-wide federal gambling taxation from the discussion and leave taxation to the states. If not, then the nose of the federal casino-tax camel is still sticking through the legislative tent. And you know where that leads.

We've seen a nationwide gaming tax get shot down during the Clinton administration but there are desperate times, obviously. Republicans like Mike Huckabee and Rep. Steve King (R-IA) have been looking to sock it to casinos at the federal level for some years now, so I fear it could have bipartisan support, should such a debate come to pass.

It's playoff time. A tired, flat-footed Minnesota Twins squad looked positively dreaful last night, flailing at outside pitches from C.C. Sabathia (if you couldn't reach that slider in the first inning, your arms aren't going to be any longer in the seventh, son). Cliff Lee made short work of the Colorado Rockies (besides, Jim Tracy can't win in the postseason), the St. Louis Cardinals look set to continue their tradition of postseason underperformance and my Anaheim Angels are forever reduced to a quivering heap of Jello in playoff games against the Boston Red Sox. Why am I having visions of brooms?

Case Bets: Corzine, Penn vs. MTR, Pinnacle, Manilow & strippers

Wed, 07 Oct 2009 15:06:00 -0700

Forbidden by New Jersey law from directly contributing to political campaigns, casino companies are making an end run through Virginia. Harrah's Entertainment, Boyd Gaming and IGT are among those funneling campaign cash into a reverse version on the Underground Railroad. No wonder Gov. Jon Corzine (D) is able to carpet-bomb his opponents with advertising, if he so chooses.

Hey, big spender. The New Jersey gubernatorial race may be chump change compared to the cash being expended in the battle over Issue 3, which would permit four Vegas-style casinos in the Buckeye State. This is boiling down to a proxy fight between Penn National Gaming (pro) and racino specialist MTR Gaming (con). You'll recall that the Ohio Supreme Court nixed Gov. Ted Strickland's plan to unilaterally add slots to the state's horse tracks, which might have given MTR a level playing field with Penn.

While I can understand why Penn or Harrah's would be willing to pay 23% in taxes in Iowa or 27% in Kansas, it's mind-boggling that Harrah's would be chomping at the bit in Rhode Island, where the rate is 73%. Oy vey!

A green shoot. The Baton Rouge Business Journal reports that Pinnacle Entertainment is inking contracts to begin driving piles for its Lake Charles project. Called "Sugarcane Bay" and budgeted at $407 million, this is the first positive movement we've seen out of Pinnacle in a while (unless you count its hijinks with the President license up in Missouri). Good on them.

Manilow on the move. The Las Vegas Hilton has confirmed what all suspected: Barry Manilow's contract expires Dec. 30 and will not be renewed. As we reported in Question of the Day, it's nearly a done deal that he will now set up shop at Paris-Las Vegas, whose main showroom has gone long unused.

Good luck trying to get the Vegas constabulary interested if your car is stolen or your home burglarized. They're too busy going undercover to get lap dances. As Richard Abowitz notes, rampant prostitution on the Strip goes unchecked in the meantime. It's an open secret around here, although many of the "working girls" look downright scary, so you have to wonder how they turn tricks, especially in this economy.

Want your ass kicked?

Mon, 05 Oct 2009 17:16:00 -0700

Then go hang out at Stack. If they don't like your looks, the in-house goons will be sicced on you. And Las Vegans wonder at the schadenfreude so many people feel with regard to Sin City's current doldrums.

No magic bullet. Liberalization of casino rules in Colorado will raise considerably less revenue than expected. Whoever made the projections that are now coming up 60% short obviously didn't take the recession into account.

Opposition grows. An effort by Illinois Gov. Pat Quinn to saturate the state with video gambling devices is encountering widening opposition. Chicago suburbs Evanston and Naperville are among the areas that have nixed the prospect of slot routes.

Don't like our roads? Mail your thanks to Gov. Jim Gibbons, who just got his knuckles rapped by the chairman of the House Committee on Transportation & Infrastructure for laggard deployment of federal highway funds. It's pretty slow around Carson City once the Lege decamps, so what's Midnight Jim's excuse this time?

Sanity 1, Drunks 0. A trio of boozing bozos who rampaged through Buffalo Bill's before piling their car into a ditch can't sue MGM Mirage for their own asshattery, Nevada's high court rules. Since they were drunk off their asses and getting into fights, the trio of boozehounds maintained, casino management had an obligation to keep them on-property ... presumably so they could have continued terrorizing other patrons and otherwise letting the good times roll. In an unrelated victory for common sense, it is no longer a crime in South Carolina to play poker in the privacy of your own home.

Keystone stalemate. Casino owners like Las Vegas Sands who have gone ahead with preparations to add table games will soon be rewarded -- but not until endless legislative machinations play out. House Democrats appear to be backing off a 34% tax rate for tables (J.P. Morgan reports that leadership is now floating a 21% figure) and may even come down to the 12% rate favored by their GOP colleagues. The $10 million upfront fee, though, appears to be a done deal.

All that said, solons managed to spend much of a special weekend session dickering over matters that ought to be none of their business. Like: Should casinos be allowed to serve free drinks to their patrons? Or: Can they operate on Christmas? Now, nothing sounds more depressing than spending Christmas Day at Harrah's Chester, but aren't these matters that ought to be the prerogative of the individual casino owner? Also, ostensibly pro-business Republicans wanted to put table games before the voters, which could render the whole legislative exercise moot ... and relief can't come soon enough for racinos like Penn National Gaming's Hollywood Casino, which is starting to slash its payroll.

Go ask Alex

Wed, 23 Sep 2009 18:04:00 -0700

Without further ado, we present S&G's much-hyped interview with Tropicana Las Vegas CEO Alex Yemenidjian, a trim, nattily attired man of impeccable manners and refreshing directness, as you will see. I led off with questions from the readership ...

Nelson asks, “What’s your game plan for motivating the staff into offering quality service to your guests?”

First of all, we have a lot of staff that’s already very motivated. When I took over here, it was a very pleasant surprise to see that there is this reservoir of good will. Many of the employees have been here a long time. They love this place, it’s home for them, they are proud of it and they are happy to be part of the future of it, and they’re very excited because these changes that we are proposing is something that they have been waiting for for a very long time.

In addition to that reservoir of good will, we’re going to be implementing a new training program, a new guest-service-quality program to make sure we elevate the service to a whole new level. So I think the combination of those is going to do the trick.

The last time I walked the property, it was very lightly staffed. I saw two maids to a hotel floor, even on a floor with 44 rooms. Rockymet asks, “Will they staff a full size cleaning crew [and] will they spruce up what is/was one of the best pools in Vegas?”

The answer to the first question is, yes, we’re actually increasing our staff in many areas. We’re reducing in certain areas and increasing in others, as the particular area dictates – particularly in the area of guest-room attendants. One of our objectives is for our new rooms that we are designing to look perfect at all times. It’s a whole new image, it’s a whole new brand that we’re putting forward, so we want to make sure that service matches the new brand.

As far as the pool is concerned, [the question is] very timely. I just finished final touches of the design this morning. We will be getting permits by December 1 so that we can open the new pool area by April 1, which is the beginning of the next summer season. We recognize that the pool area is renowned and we want to make sure that we do it justice, so we’re going to be spending a little more money than we originally thought. [smiles] But it’s going to be wonderful.

Jeff in Oklahoma City wants to know if Onex Corp. “is keeping the property warm for MGM until [MGM’s] debt structure gets better” and if this your way back to MGM Mirage?

I can speak for Onex when I tell you that they are not in the business of keeping things warm for anybody.

Your proposed executive team for the Illinois casino you were seeking included Karen Sock and Joe Billhimer, a couple of heavy hitters in the business. Are they or any other well-known executives going to be joining you at the Trop?

At the moment we have an excellent team here. I am very proud of my team. I actually have a team that I wouldn’t trade for any other team in Las Vegas at the moment. As our company expands – and Onex and my intention is to expand by either acquiring new ones or building new hotels – hopefully we will have more openings and more opportunities to have people like Karen and Joe join the team.

Does that mean Trop President Ron Thacker is staying on?

Ron hasn’t been here. Ron decided to retire. He had actually come out of retirement to take this job as a favor to Tropicana Entertainment.

How serious are the deferred-maintenance issues you’ve had to address?

Well, we were spending a significant amount of money on the deferred maintenance that was left to us, courtesy of the previous owners. We addressing all issues, including roof, elevator, escalator – all items of deferred maintenance that have been ignored for a very long period of time, and we are spending whatever it takes to make sure that the property comes up to a top-notch level.

You’ve said that one of the priorities was redesigning the buffet, but what about the food itself? I’ve eaten there and it was one of the worst buffets in Las Vegas.

I agree with you. Lucky for us, you ate there with the previous chef. We have just hired a new chef. He is in the process of changing the quality of the food. He hasn’t gotten to the buffet yet; he is very busy right now in the new restaurant we just opened, an Italian restaurant called Bacio. Pretty soon he’s going to move from there to significantly improving the quality of food at the buffet.

The last I read, Dirk Arthur was on an interim contract, into the autumn. What’s his status going forward?

I think he had a six-month contract. I’m not quite sure when it expires. We’re really quite happy with Dirk Arthur. But we don’t have any particular plans one way or the other. We’re just happy to have him.

How are you able to incorporate Let’s Make a Deal without significant interruption? What kind of infrastructure is involved with having a TV show where Bodies and Titanic used to be?

That’s the pavilion space. It’s 55,000 square feet. It was really sort of custom-made for this kind of a production. We really don’t have much disruption. We have a really large property – 34 acres and we have plenty of space for the additional traffic that is being created.

We welcome the traffic. A little bit of commotion is fun in a casino. It’s actually funny because [contestants] come in these great costumes, walk in and out. We have some major events planned in the pavilion but it turns out that the taping of the first 50 shows will be complete by the time we need to [switch].

You’ve outlined a very ambitious, multi-phase program of changes. How are you going to execute all of that on $175 million, considering how expensive construction and renovation have become in Las Vegas?

Two things. One is, because of the current economic conditions, we are getting at least 30% discounts on all material and all labor. So we only pay $70 million for something that costs $100 million. If we were building this two years ago, it would have been a very different story.

The second aspect to that is that, as you undoubtedly know, a lot of construction projects here in Las Vegas are done with little regard for budget and sometimes people end up overspending. We can’t afford to do that, so we have to make sure that every dollar that we spend counts as $5.

So we are being very cautious and very smart and very careful about making sure that every dollar that we spend, we have an opportunity to impress the customer. And the combination of that and the fact that we’re getting unbelievable bids for the work means that if we announce a $150 [million]-$175 million project, it’s really equivalent to spending $300 million-plus.

Can John Ensign disown his dad?

Wed, 16 Sep 2009 13:39:00 -0700

Sen. John Ensign (R-NV) finally has achieved distinction within the Senate -- albeit in a manner of which he's surely never dreamt. Citizens for Ethics & Responsibility in Government* has named Johnny Casino to its Most Corrupt Members of Congress list. It's an elite club in which he'll find six fellow Republicans and eight Democrats.

This calls for an awards-acceptance speech and, like so many before him, Sen. Ensign couldn't have done it without Dad. CREW's citation reprises the role played by recent Kansas casino aspirant Mike Ensign, who once upon a time ruled Mandalay Resort Group: "Sen. Ensign’s parents paid Ms. Hampton and her family $96,000 after they had learned of the affair. Mr. Coggins [the senator's attorney] insisted the payments were not made from campaign or official funds, nor were they related to any campaign or official duties. Rather, he explained, the April 2008 payments were 'gifts made out of concern for the well-being of long-time family friends during a difficult time.' Each of Sen. Ensign’s parents made out four checks in the amount of $12,000 to Cynthia Hampton, her husband and two of their children. [emphasis added] Sen. Ensign’s office claimed the alleged $25,000 severance payment was part of his parents’ $96,000 'gift.'"

So, in case your son doesn't show appropriate gratitude, let me say, thank you, thank you, thank you Mike Ensign for smearing feces all over the casino industry's image at the precise moment that new (and very conservative) jurisdictions are opening to it. And if you're MGM Mirage CEO Jim Murren, you might want to have your accountants vet the old Mandalay corporate books, just to be doubly sure there weren't any "patterns of generosity" back around 2002, when Sen. Ensign is widely believed to have had a prior affair. (The identity of his alleged mistress is no secret around Vegas, by the way.)

For all the senior Ensign's labors in the gaming industry, he's likelier to go into the history books as the bagman and enabler for his son's sexcapades.

Sen. John Ensign believes out-of-wedlock births should be "somewhat stigmatized." But out-of-wedlock sex? His position on that is more "nuanced," shall we say.

(* Yeah, yeah, I know: Ethics + responsibility + guvmint often seems oxymoronic, especially in Nevada, but we're working on it. And the senatorial Twitter feed actually springs from the satirically fecund mind of Andrew Kiraly.)

Speaking of Mike Ensign, what the heck was Kansas Lottery Executive Director Ed Van Petten doing playing the role of media-shy Ensign's personal spokesman? In a literally incredible statement, as paraphrased by The Associated Press, Van Petten said of Ensign and ex-Mandalay sidekick Peter Simon: "they didn't like the fact that the Lottery owns the new gambling under Kansas law — or the 27 percent share of revenues reserved for state and local governments."

Bullshit. Casino ownership by the Lottery has been part of the deal from Day One. As for the tax-rate malarkey, Mandalay Resort Group co-owned the Grand Victoria riverboat in Illinois, which -- in 2003 -- became eligible for a top-tier tax rate of 70%. In Detroit -- again on Ensign's watch -- MotorCity's tax rate went to 24%. In neither instance did Mandalay stalk out of town in a state of high dudgeon.

So the notion of Ensign Sr. falling into a gentlemanly swoon at the prospect of a 27% rate just doesn't wash. Either he and Simon knew this going in and are now prevaricating -- via messenger boy Van Petten -- or they're doofuses who failed to perform due diligence on the Kansas market. Which reputation would they prefer?

The truly inexcusable Van Petten further went on to apologize for his own state's oversight apparatus, saying, "Basically, [Simon and Ensign] just didn't like the regulatory makeup." Well too bad for them. It comes with the territory. What Van Petten should be saying is that if a couple of unemployed ex-Strip casino executives don't like the way Kansas does business, they never ought to have set their Gucci loafers in the Sunflower State to begin with. Or, in the immortal words of Law & Order's Jack McCoy:

"If you're gonna play stickball in Canarsie, learn Brooklyn rules."

No more "free" play?; Sahara sleaze; Donny & Tina; Criss F. Angel

Mon, 31 Aug 2009 17:29:00 -0700

In a decision that could have wide-ranging implications, Foxwoods Casino Resort and Mohegan Sun have been ordered to count (and pay taxes on) "free play" coupons as though they were revenue. This isn't a sock-it-to-the-players move like the one the Hawaii Legislature just pulled, taxing any money won at a casino (even if it's lost right back and then some). However, the ramifications for consumers if free-play coupons are targeted for taxation are discouraging. Play 'em while you've got 'em.

That stale "sleeping giant" analogy has been dusted off (and I use that verb advisedly) for some pimpery of the Sahara. On the glass half-full side, classy and romantic dinner spot House of Lords has been revived. It used to be a perfect place to take your Special Someone and hopefully will remain so. It's just off the main casino floor -- the most Moorish-themed part of the Sahara and the best "retro" experience to be had in town. (Almost everything else of newer vintage is bland grind-joint crud that needs to go.)

As for the empty half of the glass, that'd be the news that owner Sam Nazarian continues to go downmarket with a vengeance. Because nothing says "classic Vegas" like a tattoo parlor and a biker convention. Worse still, the tramp-stamp place will be in the otherwise elegant main lobby, with extended weekend tattoo-ing times ... since you never know when you want to do something you'll regret the rest of your life.

This "desert jewel rich with history and nostalgia" will continue that tradition with "a wet wife-beater contest, bikini tricycle races, a bourbon paired beef dinner with leatherwear fashion show, and an all-you-can-eat beer fest BBQ with one lucky rider winning a 2009 Harley Davidson Cross Bones bike." It's probably just a matter of time before Nazarian converts the big rear parking lot to a trailer park, too. That's Sam Nazarian for you: "class" with a capital "K."

"Tina Sparkle," flanked by Donny Osmond (evidently still in his pajamas) and Marie, who's looking damn fine from here.

It's old news that Donny Osmond is going to be on the next season of Dancing with the Stars, but I hadn't known he was going to be paired with Aussie Kym Johnson. The latter is known to my Better Half and I as "Tina Sparkle" (it's a Strictly Ballroom thing), which would make for great DWTS levity next season, except ...

... for the soul-crushing news that the gorgeous and talented Cheryl Burke has been twinned with the repulsive (and potentially prison-bound) Tom DeLay, one of "Casino Jack" Abramoff's band of Beltway scoundrels. (Was scum-tastic sleazemeister Rod Blagojevich not available?) Bad luck for Cheryl, good news for DeLay because Ms. Burke could be matched with a tree stump and get aforesaid stump into the final three. If she could carry a woodpile like Cristian de la Fuente to the finale, DeLay should be easy lifting. It looks like he's got the requisite arboreal quality.

Does Criss Angel have compromising photos of high-ranking MGM Mirage executives? The company's "branding" him now, evidently having convinced itself that Believe is beyond wonderful ... and never mind that 11-year-old O regularly outdistances Believe in ticket sales by several country miles. Having sunk $85 million into this Cirque du Soleil turkey, MGM is evidently going to stick with it until the last dancing rabbit is hung.

Good luck for Illinois casinos

Thu, 27 Aug 2009 15:49:00 -0700

Turns out that it's not so easy to shower the Land of Lincoln with 45,000 video poker machines ... especially when no money has been allocated to regulate the process:

Illinois does it again; Storm over CityCenter

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

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

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

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

Saving money? Buy the Trop!

Fri, 14 Aug 2009 17:57:00 -0700

If you're looking for a bargain on the Strip, what about buying the Tropicana Las Vegas? The Las Vegas Review-Journal found that Onex Corp. got $440 million worth of equity (or a 61% share) for a Filene's Basement price of $137 million. That would make the "street value" of the whole Trop $228 million, or $6.7 million an acre -- a fifth of what Wall Street valued it at the peak of the Aztar Corp. feeding frenzy. Columbia Sussex won, Pinnacle Entertainment lost ... and Pinnacle wound up being the lucky one, as ColSux toppled under insupportable debt.

The Trop's "paper" value would put it in the Treasure Island class, at $733 million. But you'd need an electron microscope to find the Trop's recent EBITDA, so nobody's going to pay Phil Ruffin-sized dollars for the place now. New owner Onex is a private equity firm that dabbles in real estate and sundry other industries. However, unlike some recent bunglers in the casino industry, Onex had the smarts to hire Alex Yemenidjian to head up its casino efforts, first in Illinois and now on the Strip. Compared to those private equity confreres who bought into the industry at its apogee, Onex's Trop move looks downright brilliant.

Strange happenings at Penn Nat'l, Harrah's

Wed, 29 Jul 2009 18:31:00 -0700

While everybody's been focusing on the implosion of Station Casinos, the analysts at J.P. Morgan snuck out one of the more unusual (and entertaining) reports I've ever come across. They pored over Penn's 2Q09 filing and had some tales to tell.

The lead was that Penn was falling short of its cash-flow targets for the quarter. That musn't have been a complete surprise, given the incapacitation of Empress Joliet and the swapping out of one Lawrenceburg riverboat for another. However, there was trouble in River City, with Morgan analysts noting "an unexpected spike in large employee medical catastrophic claims at that [Lawrenceburg] property (bizarre), and 4) a less than productive new marketing program at Charlestown (marketing at Charlestown?) that did not produce incremental revs, but increased costs." The medical claims alone were a $1 million black eye.

They counseled against heading for the lifeboats, though, and pointed out that Penn has $795 million in cash in the till. (Do I hear an offer for Beau Rivage?) Morgan is also bullish on Penn's expansion prospects in Kansas (really?), Ohio and Maryland.

There was even some good news for competitor Ameristar Casinos, thanks to continued troubles at Harrah's Entertainment. Wrote the Morgans team: "Harrah's has not increased its promotional activity (comps, spending, reinvestment)," boding well for everyone else.

As Morgan reported earlier this month, Harrah's was -18% in Louisiana in June, by far the worst decline of any operator in the market -- while Boyd Gaming notched a slight gain (but a major victory in that context). Just as I've expected from the start, Texas Pacific and Apollo (Mis)Management are nickel-and-diming Harrah's into the poorhouse.

A Trop by any other name

Mon, 27 Jul 2009 17:05:00 -0700

Icahn Capital, which purchased the Tropicana Atlantic City for $54 million, effectively, is projecting a conservative course for the property. Any sort of expansion is being ruled out for now, due to skepticism about "green shoots" of economic recovery.

Speaking of distrust, the New Jersey Casino Commission still needs to be convinced that Icahn's preferred operator, Tropicana Entertainment, isn't a stalking horse for Columbia Sussex CEO William J. Yung III. (Both companies employ the same corporate mouthpiece, for instance.) Besides, if ties between TropEnt and Icahn are severed, what becomes of the "Tropicana" name?

(Also, calling TropEnt's eight raggle-taggle, non-Vegas/Atlantic City casinos an "empire" is pretty generous. A series of minor duchies and prinicipalities? Yeah, that's more like it.)

It doesn't look like a standalone A.C. Trop would have ownership of its name, as that remains with the "OpCo," that "empire" under which all the miscellaneous former Aztar Corp. and ColSux casinos are bunched. Tropicana Las Vegas boss Alex Yemenidjian apparently didn't read the fine print and may have to shell out $2 million a year to keep the name that is, along with its land, the LV Trop's main equity.

Would a Trop by any other name be just as marketable? One highly doubts it.

The Wild, Wild Midwest. Back in Illinois, the guvmint continues to take a "Ready, Fire, Aim!" approach to its management of the casino business. In his zeal to get slot routes up and running, Gov. Pat Quinn didn't appropriate extra moolah or manpower to ride herd on the influx of new gambling devices.

So, if you're a bar owner in the Land of Lincoln, it's a free for all. The state's casino owners, meanwhile, will probably have to wait until at least early next year before any financial relief makes its way through the Lege. Illinois isn't just killing the golden goose; it's serving it for lunch at the governor's mansion.

Suing the Chairman. One of the many interesting revelations in the Terrance K. Watanabe lawsuit is that Harrah's Entertainment created a special "Chairman" tier of players in his honor. (Take that, you Seven Stars members!) Watanabe's counterfilings against Harrah's also allege confidential agreements between the company and the high roller whereby he had a two-month (or greater) window of time to make good on his markers.

The documents further allege that Harrah's violated the agreement by cashing in the markers early. It sounds more and more like Watanabe has Harrah's CEO Gary Loveman by the short hairs. If the covenants can be substantiated, then Harrah's made a loan -- which is unenforceable -- and may have been in breach of contract. The company better get ready to eat $14.75 million. Compared to the nearly $300 million Loveman just wrote off, that's walking-around money.

Not that Watanabe is a pitiable victim in this drama. Seems he was rather a prima donna, dictating which employees would and would not dance attendance upon him. He was also able to have gambling tables and slot machines moved into special curtained alcoves, the bettter to squander his wealth in seclusion. To paraphrase Fitzgerald and Hemingway, the rich are not like you and I; they have more neuroses.

More Midwest notes

Tue, 14 Jul 2009 10:46:00 -0700

Continuing a trend of lower-than-projected returns across the Midwest, Iowa's riverboats were flat last month and racinos saw a 5% decline. All major operators lost ground but something is very wrong at Ameristar Casinos, whose Council Bluffs boat was way outside the margin, reporting a 15% decline from last year.

Over in Detroit, in the hardest-hit state in America, general economic collapse is finally eating into the casino bidness. With MGM Grand Detroit off 10% and Motor City down 3%, it took a 24% upward leap in revenues at recently expanded Greektown Casino (above) to keep the market on an even keel. With an 0.4% overall decline in dollars won, Detroit stays within the "flat" classification.

Good time to own IGT. Sitting upon Illinois Gov. Pat Quinn's desk is a bill that could swamp the state with as many as 77,000 video slot machines. As J.P. Morgan breaks down the particulars: "video gaming terminals may be placed in 1) licensed establishments (“any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on the premises”), 2) licensed truck stop establishments (“facility that is at least a 3-acre facility with a convenience store and with separate diesel islands and parking spaces for commercial motor vehicles”), 3) licensed fraternal establishments (“location where a qualified fraternal organization regularly meets”), and 4) licensed veterans establishments (“location where a qualified veterans organization regularly meets”)."

Morgan analysts take a less-alarmist position on this change, projecting that no more than 40,000 devices will be installed, over a two-year period starting next year. Still, they like the prospects of International Game Technology, which is predicted to snare 60% of the market, with another 30% equally divided between WMS Industries and Bally Technologies -- a bit of a snub to favorite son WMS, no?

Rough trade

Mon, 13 Jul 2009 18:09:00 -0700

May wasn't great for Las Vegas, to say the least, with hotel occupancy -6%, a figure somewhat amplified by the presence of 3% more hotel rooms. The local ADR of $96.96 would have been regarded as real money back in the day. Hoteliers now are more likely to look at it in the context of the -28% shift from last year's rates. More worrisome is that convention attendance (-33%) outslid the number of conventions held (-26%), whereas it used to be the reverse.

Indiana has absorbed the effect of its two new racinos. Casino revenues were flat in June, a decline at most boats offset by the extra dollars generated at Harrah's Entertainment's Horseshoe Hammond (+13.5%) and Boyd Gaming's Blue Chip (+4%), both of which recently expanded. Penn National was hurt by the switchover to Hollywood Casino Lawrenceberg, its new vessel, and Ameristar East Chicago (-15%) withered under the glare of Horseshoe Hammond.

Illinois is scraping along, having evidently struck bottom ... for now. Once the impact of a fire-closed Empress Joliet was backed out, Illinois was down a mere 3%. That's practically a moral victory. Of course, with the institution of slot routes en route and the Lege contemplating a huge casino expansion in the state, any celebration will be short-lived. Harrah's Joliet was the logical beneficiary of the Empress Joliet shutdown (+5%), while MGM Mirage's Grand Victoria spiraled -17%.

There were a few gainers, ranging from miniscule (Boyd's Par-A-Dice) to massive (+109% at independent Casino Rock Island). East St. Louis-based Casino Queen finally lost a significant chunk of business (-11.5%) to its augmented Missouri rivals, while Penn's Alton Belle kept its leakage to -3%.

It's not a free market. Lawmakers in the Land of Lincoln have not only introduced slot routes, they may add four more casino licenses to the state. Factor in Neil Bluhm's casino project in Des Plaines (license #10), and the gambling market in Illinois becomes seriously diluted. However, no compensatory tax reduction is on the table.

When it comes to casinos and taxes, solons think simply that more = more. However, in a state where competition is limited by statute, not only does guvmint control the levers of the market place it has an obligation to take the economic consequences of its actions into account. This is not being done and the repercussions are likely to be severe.

Brooks: Steve Wynn sucks

Wed, 20 May 2009 14:10:00 -0700

State of the art Las Vegas ... if you're David Brooks.

OK, so David Brooks didn't go that far in his latest New York Times think piece, but if you applied his nostrums to the casino industry, Las Vegas would still look a heckuva lot like it did in 1988.

"The methodical executives at successful companies just make the same old four-door sedan, but they make it better and better," he writes. Then, further down: "The C.E.O.’s that are most likely to succeed are humble, diffident, relentless and a bit unidimensional. They are often not the most exciting people to be around. ... the virtues that writers tend to admire — those involving self-expression and self-exploration — are not the ones that lead to corporate excellence."

Hmmmmm. Steve Wynn can be egotistical, assertive, self-contradictory, multifaceted, expressive and reflective -- often all of the above in the space of a few sentences. His business track record must be a complete train wreck, mustn't it?

So hit the bricks, Wynn. You too, Anthony Marnell II & III, Glenn Schaeffer and Jim Murren, you art-collecting college-boy snobs. (They probably sip wine too, doncha bet?) We don't need none of yer out-of-the-box, smarty-pants thinking. Just give us the next iteration of the Boardwalk or Bingo Palace and make it snappy, OK?

The sound of obsolesence: The next time Review-Journal Editor Thomas Mitchell pens one of his endless series of musings wherein be strokes his moustache and is mystified by the decline of the newspaper bidness, he might ask himself this: Why did his paper run this wire-service story when the Sun had gotten to it two days earlier and in far greater detail?

The sad saga of Terrance K. Watanabe is rife with disturbing moral, ethical and regulatory questions. About the only clear-cut conclusion is that Watanabe's defense is a non-starter. (Harrah's Entertainment may be in trouble, but that's a separate issue.) Former Philadelphia Eagles owner Leonard Tose tried the same thing and had even less luck in court than at the tables. Fortunately, David G. Schwartz is right here to provide us with the relevant history and the precedent that augurs so poorly for the luck- and sobriety-challenged Mr. Watanabe.

It must be frustrating to keep trying to influence events and yet events refused to influenced, mustn't it? Let's ask this guy. He doesn't have a Puliztzer Prize, 'tis true. (Running stories two days after the Sun does might have something to do with it.) But some guy in Cedar City, Utah (who apparently couldn't find a copy of the Deseret News) is a big fan.

This just in: Schwartz also has the early word on a proposal to legitimize Illinois' gray-market slot route business. At first blush, this looks like a really good way to drive a dagger into the heart of the state's already-struggling casinos. Maybe Neil Bluhm should rethink that Chicagoland casino he's planning.

Harrah's is right

Thu, 07 May 2009 12:25:00 -0700

Not only because it's putting some elbow behind Rep. Barney Frank's proposal -- finally unveiled yesterday -- to repeal the noxious UIGEA and replace it with a regulatory framework for Internet gambling in the U.S. The love child of former Senate Majority Leader Bill Frist and ex-Rep. Jim Leach, UIGEA has had deleterious effects on Harrah's Entertainment's online-recruitment efforts for the World Series of Poker. It's also taken a bite out of sponsorships generally and from trade-show attendance, so we'll all be grateful when this Rosemary's Baby is retroactively aborted.

Where Harrahs' really earned its kudos, though, was by permitting an on-site study of the effects of secondhand smoke on employees at three of its Strip properties. Not only did the Bally's, Caesars Palace and Paris-Las Vegas workers manifest health problems related to secondhand smoke, carcinogens turned up in their systems, too.

Smoking in casinos is the industry's devil's bargain. You gamble with the lives of your employees to -- among other reasons -- preserve their jobs. Eliminate smoking in one state's casinos and a mass exodus of players ensues. The example of Illinois could hardly be starker. All the same, cigarette smoke is foul, unhealthful stuff to which no one should be involuntarily subjected. (Two of my grandparents smoked so heavily it would drive you out of the room.)

As Harrah's Gary Thompson points out, the only economically viable solution would be a nationwide smoking ban applying to all casinos. Otherwise, if Harrah's went the clean air route, say, MGM Mirage would be able to use "smoker friendliness" to beat its competitor like a drum. Even a national ban isn't a complete solution, as tribal casinos would be exempt -- giving them a substantial competitive boost.

Whatever route is taken, there's going to "collateral damage," either in the form of lost revenues, lost jobs or, worst of all, lost lives. What's really not going to cut it are intelligence-insulting empty gestures like the "smoke-free corridors" at Palazzo: strips of carpet upon which you cannot light up ... but you sure can catch a lungful of cigar fumes at 20 paces. If that's your idea of a clean air "initiative," why bother?

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.

Pinnacle: the untold story

Tue, 21 Apr 2009 11:51:00 -0700

Is waxing and buffing the Pinnacle Entertainment limo a prerequisite for scoring an interview with its CEO? This small masterpiece of selective omission is more interesting for what it elides than what it says. The article parrots Dan Lee as saying Pinnacle believes "not to start building something without the money to finish."

That's an excellent precept but it would resound with greater authority had Pinnacle not gotten bogged down in Atlantic City by failing to practice what it preaches. It bought Carl Icahn's old Sands, razed it, cleared the land ... then found it couldn't raise the capital to build the megaresort Lee had envisioned. By that point, Pinnacle had exercised such a heavy hand in its attempts to acquire more acreage -- at prices it intended to dictate to the market -- that the project's subsequent collapse didn't even inspire much regret along the Boardwalk. Now Pinnacle's got money tied up in Atlantic City it could be using to go trophy hunting along the Strip.

Also, it's not a good sign that Pinnacle's half-billion-dollar Lumiere Place is finishing a very distant second in the company's portfolio, doing only 57% the revenue of L'Auberge du Lac, down in Lake Charles, La. True, L'Auberge owns a near-stranglehold on its market, while Lumiere Place has several competitors. But the latter has scarcely made a dent in rival operations by Harrah's Entertainment and Ameristar Casinos. Nor, despite being smack-dab in the middle of the St. Louis waterfront, has it pulled significant amounts of business away from Casino Queen, across the river in Illinois.

Pinnacle has overspent and overcommitted itself -- and don't forget it nearly followed Columbia Sussex over the precipice in the feverish bidding for Aztar Corp. To Lee's considerable credit (no pun intended): A) corporate debt is below $1 billion; B) Pinnacle completely outfoxed Harrah's in their Lake Charles-for-Biloxi property swap; C) that Houston-fed market is rich enough to carry Pinnacle for the time being, and D) a clever if anti-competitive ballot initiative (for which Ameristar's Troy Stremming gets most of the credit) will entrench Pinnacle's Missouri position.

As 2009's gaming group goes, Pinnacle is faring better than all but a few. But it's made its share of MGM Mirage-like mistakes, just on a smaller, more-affordable scale. Pinnacle wasn't the only irrationally exuberant casino company during the 2005-07 boom but let's not go paint it as a paragon of restraint, either.

Deep within the septic tank that is the Las Vegas Review-Journal's online-comments section one finds the (very) occasional fact. In the case of the gaping void left at the Tropicana Las Vegas by the peremptory closure of Folies Bergere, longtime Vegas observer Phil Hevener had the following scoop: "One of the issues at the Trop was that the owners decided to leave the matter of a show for the new operator (Alex Yemenidjian) since show creators and hotel builders alike are having trouble finding money these days."

Not only does that have the ring of plausibility but when Hevener's got a tip, chances are you can take it to the bank. As for CEO Scott Butera and his underwhelming LV Trop administration, do you ever get the feeling they're just making it up as they go along?

Exit, pursued by a bear market

Fri, 17 Apr 2009 17:39:00 -0700

Aside from the occasional murmur by Wynn Las Vegas prexy Andrew Pascal, executives at Wynn Resorts keep a low (read: invisible) profile. Even the most assiduous follower of the casino industry would have trouble naming Wynn's CFO off the cuff. If you answered, "David Sisk," as of last Monday you'd be wrong. The contours of his golden parachute strongly suggest an involunatry exit, softened by at least $767,000 worth of severance pay, plus a limited-time offer of stock options.

One can't fault the generosity of Mr. Sisk's deal: He's to be paid a year's salary at pre-rollback rates and, from what little information is disclosed, it doesn't appear that he's bound to a non-compete clause. Odd that Wynn would do this without having a successor in the wings. Of course, there are more than a couple of ex-Las Vegas Sands and Harrah's Entertainment executives updating their resumés these days.

"Encore, me no like!" According to Majestic Research analyst Matthew Jacob, customers are having a tizzy over Encore's "chambered" casino layout and gravitating back to more traditional Wynn LV. So what plays in Macao may flop in Vegas, huh? You can't fault El Steve for trying. Jacob is predicting a squishy 1Q09 for Wynn Resorts, compounded by a first-ever patch of adversity at Wynn Macau.

Jacob is also the star of this CNBC segment on the gaming group, politely wiping the floor with Gabelli Global Multimedia Trust's Larry Haverty. The latter's declaration that resiliency in regional casino markets bodes an imminent recovery of Las Vegas, though we all wish it were true, is a textbook instance of 2+2=5.

Barring Atlantic City and the wholly aberrant phenomenon that is Illinois, regional markets have never slumped as badly as Vegas is doing and were much quicker to recover. Regional diversification is a double-edged sword for gaming: It's a valuable hedge against a wipeout in one key market, but it also gives customers that much less incentive to travel to Vegas or the Boardwalk when big-budget casino properties are coming closer and closer to home.

Haverty also goes off the rails vis-a-vis MGM Mirage's Aria and server-based gaming, predicting successful adoption at CityCenter will spur a wave of emulation. Yes, but ... not so fast. First, the economy will have to come firmly out of its present nosedive before casinos contemplate capex spending of that magnitude. Secondly, some of SBG's largest potential consumers -- like Harrah's Entertainment, Station Casinos, Las Vegas Sands and even MGM are so badly in hock that they're in no position to participate in a major replacement cycle. Furthermore, I don't believe International Game Technology expects more than, at most, an initially slow and incremental adoption of SBG -- an infiltration of casino floors, not a blitzkrieg. But if you're looking at IGT as a long-term investment, a drawn-out replacement cycle would probably be a more desirable scenario anyway.

There's nothing in exceptionable in Jacob's half of the interview. His more finely shaded and detailed observations contrast favorably with Haverty's scattergun generalizations. And while I agree with the latter's enthusiasm for Boyd Gaming, it's a mite premature to be toasting Pinnacle Entertainment. If Pinnacle hadn't gotten bogged down in Atlantic City and were making a more appreciable dent in the St. Louis market, then I'd raise my glass without reservation. When Pinnacle was in acquisition mode there were few assets for the taking. By the time that buffet was replenished, Pinnacle's plate was full to overflowing.

MGM Mirage sells family jewels

Mon, 06 Apr 2009 17:39:00 -0700

Desperation has well and truly hit the fan at MGM Mirage. The company's Strip casinos may not be priced to move ... but it's said to be quite a different story where MGM Grand Detroit and Beau Rivage are concerned. (A Bloomberg report implies that Gold Strike in Tunica may be on the table, too.)

How desperate? We're talking about sacrificing $231 million in cash flow (in a down year) to keep CityCenter alive. Outside of Vegas, all the company would retain would be "halfsies" of Borgata, MGM Grand Macau and the Grand Victoria riverboat in Elgin, Il. We'd by definition be talking about considerably increasing MGM's Vegas exposure, especially since CityCenter would -- one hopes -- be mostly open for business by the time these potential sales cleared the regulatory process.

Strategically, it stinks. MGM would be putting nearly every chip it has on the Strip. At a time when regional markets are outperforming Las Vegas, MGM would be removing two of the most vital bet-hedges it has and doubling down on the Strip. With a $7 billion debt payment hitting shore in 2011 and MGM about to go into competition with its existing Strip properties on an undreamt-of scale, if CityCenter doesn't lift all MGM boats, it'll be curtains for the company.

True, that $7 billion balloon payment could be -- has to be -- restructured. That may have been MGM's thinking all along: Confronted with reality, lenders would become more flexible with the deadline. Or perhaps the company expected CityCenter to throw off sick amounts of cash flow, solving the problem at one fell swoop.

Time is of the essence. MGM still has three financing hurdles, at least, to surmount. A) It has to dig under the sofa cushions for as much as $800 million [assuming Dubai World continues to sulk and welsh on its financial commitments] to keep the project going; and to get to B) $1.8 billion in additional debt financing; which still leaves it short of C) $1.2 billion in completion money ... the capital that not even the combined efforts of Sens. Harry Reid and John Ensign could jawbone loose from a suddenly risk-averse banking industry.

By selling Treasure Island to Phil Ruffin for 7.75X cash flow -- and if we discount the theoretical premium that comes with being on the Strip -- MGM has put itself in a spot where the logical price for MGM Grand Detroit is $917 million and Beau Rivage fetches $700 million. If it could realize that $1.6 billion (or more), MGM would have its back-end costs on CityCenter covered. But that still leaves a short-term need for $800 million, which is where ...

Colony Capital comes in. Seems that the private-equity firm is thinking in terms of a secured loan rather than a piece of the action. Worst-case scenario, Colony walks away with one of MGM's better Strip casinos in lieu of repayment (or more than one). It makes a helluva lot more sense than the prospect being floated last week whereby Colony would take Dubai World out of the project -- an expensive proposition that would get MGM no closer to having the money it needs to finish what will be either its crown or its masoleum.

Stranger still was the here-today, gone-tomorrow story that James Packer would be teaming up with Colony to help rescue CityCenter. This popped up online in the wee hours of Saturday and was kiboshed on Sunday evening. Crown Ltd., for its part, helped keep the story alive through some semantic footsie. It said it wasn't in talks with MGM or Dubai World -- which left open the possibility it was dickering with Colony instead. A less-equivocal denial was several more hours in coming.

Having a flutter on CityCenter would provide a convenient explanation for Crown's drawdown of its acquisition of Cannery Casino Resorts. However, one can but imagine the displeasure that would have erupted up the street at Fontainebleau if it emerged that a key investor (Packer) was flirting with an archrival project. Besides, it's not as though Packer doesn't have other problems with which to deal.

MGM could really use some good news but it's not going to come from Macao. Shun Tak Holdings, steered by MGM Grand Macau partner Pansy Ho, saw its profits wither by 90%. With Pansy and father Stanley Ho going through hard times, if MGM entertains any hope of flipping its Macanese subconcession back to them, it'll surely be a good ways off.

Bridge of Sighs. It was across aforesaid Venice landmark that the condemned passed on their way to execution. Outsted Venetian Macao executives don't have to traipse over a replica Bridge of Sighs but there's been quite a doleful procession of late.

Last week, President Mark Brown made the trek, according to the Macau Daily Times. It also reports that casino boss Vince Mascio and international marketing director Ming Lien were close on Brown's heels. Thanks to his recent stock purchase, Las Vegas Sands CEO Sheldon Adelson is more in control than ever. Is this Macanese purge a sample of Adelson Unleashed?

Breaking News: Fire at Empress Joliet

Fri, 20 Mar 2009 16:27:00 -0700

Penn National Gaming's Empress Joliet riverboat complex was spewing smoke this afternoon as a construction-related fire consumed the pavilion area. The blaze was spotted around 10 a.m. Central time and was still belching thick, black smoke three hours later. Empress Joliet was evacuated without neither a hitch nor an injury. Thank god for that and here's hoping the blaze doesn't totally cripple a casino that was facing severe business challenges already.

Warning signs at Harrah's

Fri, 13 Mar 2009 14:28:00 -0700

Fourth-quarter and year-end numbers from Harrah's Entertainment are out and the report raises several red flags:

• Harrah's absorption of Park Place Entertainment has left the company seriously overexposed in Las Vegas, where revenue was down 20% in 4Q08, compared to much smaller declines in non-Nevada markets.

• Even though most regional markets showed or regained strength in the last quarter (Atlantic City and Illinois being notable exceptions), Harrah's remained weak. This trend continues to be confirmed by revenue reports from individual states. Last month, in Missouri, Harrah's was the only operator to register a decline -- even Isle of Capri is doing better. Something is very wrong here.

• One of the company's top cost-saving measures is to cut jobs. This was a foregone conclusion the moment the Harrah's LBO was consummated but, in such a customer-service-intensive industry, if the reductions are taking place in the front lines of the workforce, expect business to continue suffering.

• Another high priority for reduction: marketing expenses. There's a term for this and it's called "death-spiral marketing." That's where your revenues are down so you reduce your marketing outlays and if business continues to decline so does the marketing budget ... and so on. Which is too bad, because Harrah's has been launching some of the better casino ad campaigns I've seen in the past year. It would be a shame if all that creativity wasn't used to its full potential.

Harrah's: Wait 'til 2018

Thu, 05 Mar 2009 14:10:00 -0700

Details of Harrah's Entertainment's newest distressed-debt buyout are beginning to emerge. According to CNBC, the company intends to issue $2.8 billion worth of lower value/higher interest notes that will mature in nine years' time. And, if you get in on the ground floor (i.e., by March 18), you can convert your Harrah's debt at three cents on the dollar.

What's not to love?

Hail Mary pass in Illinois: Casinos in the Land of Lincoln are in such a world of hurt that comped drinks seems like a no-brainer and long overdue. We'll see if legislators give a fig or are content to let the riverboats keep sinking.

Raises at Falls: After gritting out a lean 2008, employees at Neil Bluhm-run Casino Niagara and Niagara Fallsview Casino Resort will receive raises and bonuses. While it's being speculated that this is management's "thank you" to workers for not unionizing, it would be a move worth emulating at the likes of Wynn Resorts, Harrah's, Station Casinos, ACEP, etc., when they emerge on the other side of the recession.

Skank Barbie: She'd fit right in with the Las Vegas nightclub scene. All that's missing is a Ken doll outfitted in Christian Audigier duds.

Going down in Illinois

Tue, 10 Feb 2009 17:56:00 -0700

When it comes to Upper Midwest casinos, there's Illinois and then there's Everyone Else. Except that, in this case, you want to be "Everyone Else." Being Illinois sucks.

January numbers for Missouri aren't out yet but Iowa is up 3%, Indiana is seeing a 12% surge ... and Illinois is -9%. That's on top of the -18% hammering the Land of Lincoln took a year ago, when smoking in casinos became a no-no. Whatever impact the recession is having on neighboring states' casinos, refugee players from Illinois riverboats are more than compensating.

The news isn't quite as good as it could be for Indiana, where the gain is more than offset on a same-store basis by the dilutive effect of two new-ish racinos and Harrah's Entertainment's Horseshoe Hammond behemoth. These ill-timed (for their competitors, that is) expansions have left everybody else slicing the ham thinner, in Fred Harvey's dying words. (The restaurant mogul's last utterance was alleged to be, "Slice the ham thinner." And, no, he wasn't an F&B executive at Station Casinos.)

Some salient Indiana facts ...

• Expansion of Horseshoe Hammond is not only a positive (+16%) in itself, it's more than making up for softening at Horseshoe Southern Indiana (-3%). Was taking the Caesars brand off the latter a good idea? Just asking.

• French Lick is licked (-14%). Somebody has to be in last place and Indiana's only land-based casino is "It."

• Ameristar East Chicago is feeling the Hammond Effect (-4%) but surpasssed analyst expectations nonetheless.

• Grand Victoria is in freefall -- eight straight months of double-digit declines, including last month's -26%. Will it hit bottom before it passes French Lick on the way down? Speaking of the bottom ...

• Congratulations to Boyd Gaming's Blue Chip (-2%), which is finally pulling out of a protracted skid. If Boyd can live with 65-70% of Blue Chip's pre-2008 performance, the future -- thanks to a newly augmented casino-hotel -- inspires hope.

• Majestic Star II needs to be moved (an idea that's getting kicked around by various governmental bodies). While its sister ship is hanging in moderately well, Majestic II's year/year comparisons are almost as dreadful as Grand Victoria's.

• The turnaround of Casino Aztar (off but three-tenths of a point) remains 2008's #1 success story in the industry.

Racinos were less of a factor in Iowa, were they were flat while riverboats nudged their revenue up 4%. The three tracks, though, do generate roughly a third of the state's casino revenue, while 14 riverboats divvy up the rest, not counting tribal casinos (which don't report revenue).

• Harrah's Council Bluffs (+4%) stole market share from Ameristar's rival facility (-6%), but the latter still does nearly double the business ($13.4 million to $7.7 million).

• Positive comparisons at two of Isle of Capri's four Iowa casinos were more than offset by declines at the other two, for an aggregate of -2%.

• Two smallish riverboats, Diamond Jo and Mississippi Belle, enjoyed spectacular improvements in January, +104% and +51%, respectively.

All generalizations about Illinois are false in the sense that there are exceptions that prove the rule. For instance, while the smoking ban has quantifiably been death for Illinois casinos, the first one to open as a non-smoking casino -- Casino Rock Island's new facility -- has been up 118% and 112% in the last two months. Is there something about not being able to smoke in a casino that still smells of cigarettes that's worse for business than not being able to smoke in a nice, fresh facility?

Another paradox is that the casino one would think most likely to feel the brunt of St. Louis-area competition, East St. Louis-berthed Casino Queen, was the last to experience the downturn that was sweeping the rest of Illinois and is now almost back (-3%) to year-ago figures, which themselves were only -2% from January '07.

With Boyd's Par-A-Dice (-5%), Harrah's Metropolis (-9%) and Penn National's Hollywood Aurora (-7%) decelerating from last year's precipitous declivity -- when they were -10%, -19% and -16%, respectively -- one would like to believe that the bottom is near for Illinois, but the Penn boat is the only bright spot in Chicagoland and the same company's Alton Belle (-15%) is still taking it on the chin from Missouri.

Hey, hey, goodbye

Thu, 29 Jan 2009 17:38:00 -0700

Covetous Rod Blagojevich has been returned to private life, by unanimous vote. Hurrah! Under Blagojevich's watch, Illinois went from being one of the best casino markets in the U.S. to one of the least hospitable -- damage that may be irreversible. So good riddance and don't let the doorknob hit you in the ass, Blago.

We'll miss his hair, though. I haven't seen anything like it since Jack Lord's rug on Hawaii Five-O.

Case Bets: Chicago, Wyndham, Harrah's

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

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

And the winner is ... Des Plaines.

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

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

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

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

'Gang' at Encore

Thu, 15 Jan 2009 11:49:00 -0700

Yesterday saw an unusual -- but altogether pleasant -- change in the Vegas Gang routine, as we taped "on location" from a seventh-floor room in Encore, overlooking Echelon and the increasingly ominous Fontainebleau (so disproportionately massive it looms over its neighbors like Godzilla or Gammera over mere mortals). Both David G. Schwartz and Jeff Simpson joined us by speakerphone, giving the conversation a certain Charlie's Angels vibe.

It's Fontainebleau ... coming to stomp us all! Run for your lives!

Spoilers ahead ...

I'm clearly very much in the minority on the likelihood of a Mirage or Bellagio sale. Cash cows they may well be, but there seems to be a strong consensus that their tires are being kicked and serious talks are underway, as well as that The Mirage has become a stodgy property.

Also that MGM Mirage is a Vegas-Vegas-Vegas-obsessed company and would be willing to sacrifice the Gulf Coast and Detroit markets -- the latter of which it utterly dominates -- to keep the CityCenter bucks a-flowin'. (And why would MGM bail on Detroit and not on the sickly Illinois market instead? Or Tunica? Or ... ? If Alex Yemenidjian would pay $435 million for an Illinois license, what might he put down on actual, operational asset?)

Such a strategy would fly in the face, if not of sense, at least of recent casino industry thinking, whereby you try to maintain strong footholds in the second-tier markets and not put all your chips on Vegas (unless you're Steve Wynn and even he tried it once). It would be like Harrah's Entertainment evacuating Atlantic City to raise money for its stalled Octavius Tower.

And you could knock me over with a feather if MGM sells its Macao demi-concession to partner Pansy Ho or back to her father Stanley, especially after all the hoops MGM had to jump through to get into Macao. Bailing on the world's #1 casino town would be an indicator of extreme desperation bordering on insanity.

Unfortunately, we weren't able to get into the provenance of the urban legend that Phil Ruffin's Treasure Island purchase was just a big-ass/short-term loan to MGM, with "T.I." serving as collateral -- and at 55% interest, no less.

Quote of the Day

Thu, 15 Jan 2009 11:29:00 -0700

"For a casino worker, every day breathing second-hand smoke in the workplace is one too many. Everyone has the right to breathe smoke-free air -- regardless of the color of their collar." -- Americans for Nonsmokers Rights Executive Director Cynthia Hallett, reacting to a resolution passed by the National Council of Legislators from Gaming States. The NCLGS resolution urges constitutent states to make all gambling venues smoke-free workplaces and that smokeless gambling be a mandatory part of future tribal-state compacts. States that require smoke-free casinos are, at present, Illinois, Colorado and Delaware.

Illinois: No country for big casinos

Tue, 30 Dec 2008 12:20:00 -0700

So Illinois had a casino license up for bid and the only pursuers were three no-name outfits (Canadian Trilliant Gaming, even more obscure Waukegan Gaming and Midwest Gaming & Entertainment -- one of Neil Bluhm's innumerable corporations)? Where were the big boys?

Hors de combat, it seems. A press release from 2004, when it looked like that 10th license might finally be back on the market, shows that Isle of Capri Casinos was kicking the tires and Harrah's Enterainment was pitching itself as the savior of Waukegan, Ill. (Home town of Jack Benny and now fallen on hard times.)

Flash forward to 2008 and it's unlikely -- more like impossible -- that either company could even scrape together the $125 million or so in front money that it would take to have been a serious contender for the license. Too much acquisition by Harrah's, too many irons in too many fires and then an almost insanely ill-advised LBO have left it teetering on the precipice. (Though it got good news this morning when S&P raised Harrah's credit rating.) Isle, for its part, would pursue an expand-expand-expand strategy that really did seem insane at times ... I mean, Coventry and Singapore?

MGM Mirage appears to have stuck to its guns re J. Terrence Lanni's vow not to expand in Illinois until Gov. Rod Blagojevich's (D-The Big House) punitive tax regime was relaxed. Besides, it's having enough trouble coming up with "end money" for CityCenter. All the other logical players are either equally strapped for cash or heavily committed in the Land of Lincoln -- usually both. Which leaves Steve Wynn and "Wynn Des Plaines" just doesn't have that certain je ne sais quoi, does it?

Treasure Island, updated

Tue, 16 Dec 2008 12:44:00 -0700

Never slow off the mark, Steve Friess has been digging into the Treasure Island deal and has found the following ...

Mystere stays. No surprise there, given Alan Feldman's comments about continued synergies between Phil Ruffin's newly acquired megaresort and MGM Mirage's other Strip properties.

17 acres. That, at most is what Treasure Island sits upon, but Ruffin won't be getting the whole enchilada. If we use Jake Fuller's $15 million/acre valuation from yesterday, we're looking at roughly $250 million for the land and $525 million for the hotel-casino, although I'm willing to bet it's closer to a 200/575 split.

What's next? On the auction block, that is. A strong and informed faction on the Internet argues that probably nothing more will be hawked, now that MGM Mirage is $775 million closer to putting the last few dollars into CityCenter -- the motivator that drove the deal. But we know that The Mirage was on the block and that Bellagio hasn't been.

Bill Lerner of Deutsche Bank suggests MGM Grand Detroit, which seems crazy to me, since MGM has absolutely owned that market since the place opened. (Only Penn National could afford to buy it, but Detroit hasn't been on Penn's radar.) As for the Elgin, Ill., casino being for sale, you'd have to be crazy to buy it, Gov. Rod Blagojevich (D-IL) having helped destroy the casino economy in the Land of Lincoln. But if Alex Yemenidjian is willing to pony up over $400 million just for a casino license alone, he could certainly scrape together the going price of MGM's Elgin riverboat.

Some of Lerner's other suggestions make sense, though. (He hints that the long-in-abeyance "Project Z," south of Mandalay Bay, may be toast.) I particularly latched onto his mention of MGM's 50% interest in Borgata. If MGM were shot of that, it would also not have to spend another minute worrying about how much longer the New Jersey Casino Control Commission was going to pore over the suitability of Pansy Ho. It looks like MGM has effectively given up on Atlantic City already and this would simply make it official. And if there's any casino in Atlantic City -- other than Harrah's Marina (or whatever they're calling it today) -- that has "curb appeal" in these straitened times, Borgata is It.

Quote of the Day

Thu, 11 Dec 2008 12:33:00 -0700

"I won't quote back some of the things that were said about me. This is a family program, I know." -- President-elect Barack Obama, referring to the thuggish and expletive-laden locutions favored by Gov. Rod Blagojevich (D-IL), whose crimes against humanity include shuttering Frank Lloyd Wright's Dana-Thomas House, along with many other Illinois landmarks.

Thanksgiving turkey

Mon, 01 Dec 2008 13:37:00 -0700

Who else but Donald J. Trump qualifies for that dubious honor? His Trump Entertainment Resorts celebrated the holiday by announcing that it plans to "forgo" (read "blow off") an interest payment in order to -- you guessed it -- "restructure the company's finances." Nothing would befit Mr. Trump's career in the casino industry so much as his leaving it. There's definitely a karmic injustice at work when Terry Lanni is a nonperson but Trump still owns a casino company.

Over in Chicago, Trump has been suing Deutsche Bank for having the effrontery not to extend a $640 million loan on Trump International Hotel & Tower. (Then again, why does anybody loan money to Trump anymore?) Now he's about to receive a dollop of his own castor oil, as Deutsche Bank is counter-suing to lay hands upon his $40 million personal guarantee. While the Trumpster may be good for the money, Deutsche Bank could always settle for his massive reservoir of orange hair dye.

Sally Rand has left the building

Wed, 26 Nov 2008 11:50:00 -0700

That corpse you may have stumbled across while strolling the riverbanks of Pittsburgh is Pennsylvania's 'one and one-third' rule. It was a legislative fig leaf whose ostensible purpose was to prevent the prime casino/racino opportunities in the state from being gobbled up by a couple of operators. It's what helped doom Harrah's Entertainment's bid for a Pittsburgh casino, as few seemed willing to believe Harrah's was merely the minority investor/advisor it said it was. (Since Harrah's was already the owner of a racino in Chester, Pa., that scotched its chances for more than a 33% share of anything else.)

So Pittsburghers got Don Barden instead. Didn't work out too well. (Then again, who could have predicted Harrah's would be in the parlous financial health from which it currently suffers?)

Anyway, earlier this month, Pennsylvania's Gaming Control Board bowed to the inevitable and transferred the Pittsburgh license to developer Neil Bluhm, owner of the as-yet-unbuilt SugarHouse Casino in Philadelphia. Which means that the Pittsburgh project will actually get done now. But ...

Although Bluhm technically holds only a small stake in the soon-to-be Rivers Casino, the license is in his name. And a Bluhm-controlled entity, Walton Street Capital, is one of the major stakeholders. And the CEO of the project is Greg Carlin, who also just so happens to be CEO of SugarHouse. (Lest it be unclear, in my opinon -- not that it matters -- Bluhm has an admirable track record as a developer and is the sort of corporate citizen the casino industry needs.)

So let's call out the 1.33 rule for the fiction it has become. If the PGCB isn't going to enforce it in other than the most cosmetic fashion, the Pennsylvania Lege should repeal it. This fan dance isn't fooling anyone.

Speaking of Neil Bluhm, he and Greg Carlin have turned up in Illinois, where they're amongst the bidders for the state's 10th and final casino license. The deleterious financial effects of the Illinois smoking ban and the state's staggering tax rates on casinos have scared off all but a trio of no-name outfits: Bluhm's Midwest Gaming & Entertainment, Waukegan Gaming and Trilliant Gaming, steered by the Flying Dutchman of the casino industry, Alex Yemenidjian.

The former MGM Mirage and film-studio exec tried to jimmy his way back into Vegas this year, asking a federal bankruptcy court to force Tropicana Entertainment to accept a loan from a Canadian firm with which Yemenidjian had become affiliated. Bluhm, whose base of operations is Chicago, might have a "home field advantage," but he's crying foul over Yemenidjian's opening gambit. The erstwhile casino executive is plunking down a whopping $435 million to, in effect, buy that 10th license. Crass? Yes. Persuasive? Undoubtedly.

Bluhm, by contrast, is offering only $100 million upfront, followed by a series of conditional $10/year payments. Waukegan Gaming effectively splits the difference, bidding $225 million for the license. If Yemenidjian is going to throw $435 million at the license alone, that raises the question of whether he's robbing Peter to pay Paul: i.e., Will commensurate capital be available to build the casino? (Magic 8 Ball says, "In this economy?!?")

Help the Neon Museum. All it takes is two clicks of your mouse. Just go to Hampton Inns' Nevada Landmarks page and click on the "Vote for this Landmark" link for the Neon Museum (or the Nevada Northern Railway Museum or Carson City's Children's Museum of Northern Nevada, if you're so inclined). The winner of the plebiscite will receive a donation from Hampton Inns at year's end. Thank you, Hampton. You're a class act.

Indiana: It's all relative

Tue, 11 Nov 2008 13:07:00 -0700

Sifting through my massive pile of unwritten Questions of the Day and unstudied analyst reports, we come to Indiana's October revenues. Ultimately, whether any particular metric is good or bad depends on context and perspective.

To start with the big number, revenue was up 14% from October '07. But that turned into a 1% decline once new racinos Hoosier Park and Indiana Park were sifted out, and goes even lower if you minimize the numbers from the recently augmented Horseshoe Hammond. So, whatever "bounce" Indiana is getting from the smoking ban in Illinois, it's being diluted by gambling expansion within the Hoosier State. So it's good for tax coffers, not so good for individual operators.

Harrah's killed with Horseshoe Hammond, which is more like an aircraft carrier with slots than a casino. But it proved a potent "one-ship task force" (a sometimes sacrcastic nickname given the U.S.S. Boise after it claimed to have sunk six Japanese ships at the Battle of Cape Esperance), more than making up for declines at Horseshoe Southern Indiana. Hammond revenues went up 52% and Harrah's overall take rose 20%.

Despite the panicky attitudes manifested of late at Ameristar Casinos, its East Chicago property was off but 3.5%, despite the Horseshoe Hammond factor, which ate far worse into Don Barden's Gary, Ind., flotilla.

What to make of Blue Chip? To see the glass as half-full, the double-digit revenue declines that began in August '07 are slowly starting to narrow. Business has been off as much as $10 million year/year, and October's 18% decline comes atop a 22% declivity the year before. But it looks like Blue Chip is going to bottom out at 60%-65% of its former market share. And it was Indiana's seventh-winningest casino in October, keeping Boyd Gaming out of the bottom tier.

Down south, only Casino Aztar showed revenue growth (5%), which continues to validate current management's aggressive mindset -- but business still hasn't returned to pre-Columbia Sussex levels. As for French Lick, so long hyped as a casino destination, so greatly anticipated, it has proven Indiana's most disappointing market. It's the least-lucrative in the state and continues to give indications of having peaked.

Slots are tight at Belterra. How else to explain a 10% win increase on -14% handle? The last time somebody managed a feat like that He fed a large crowd with but a few loaves and fishes.

Up in smoke

Tue, 14 Oct 2008 18:21:00 -0700

Few issues involving the casino industry cause such a conflict between intellect and emotion as that of second-hand smoke. Personally, I think even manure is less offensive to the nostrils than cigarette smoke -- and it has fewer carcinogenic side effects. Exposing one's employees to a steady barrage of tobacco and nicotine means shooting dice with their health. And if your employees aren't aware of the risk they're running, you'd better bring them up to speed.

But ... banning smoking on casino floors is practically a suicide vow for a casino. We don't know just how bad the effect of Illinois' smoking ban has been on the state's casinos, as it's been coupled with the crash dive of the U.S. economy. However, gambling revenues were down 26% in the Land of Lincoln last month, far more than in any neighboring state.

Atlantic City seemed to have arrived at an acceptable compromise: Ban smoking on all but 1/4 of the casino floor and provide enclosed lounges (in which employees would not have to set foot) for those players who absolutely, positively have to light up. Unfortunately, with the notable -- and laudable -- exception of Harrah's Entertainment -- compliance was virtually nil, with Colony "Smoke Gets in Your Eyes" Capital being the worst offender. The city council became so miffed it decided to escalate to a 100% ban.

Then the bottom fell out. Caught in the pincers of a recession and swooning casino revenues (plus the threat of mass layoffs), the city fathers decided to lift their ban. However, they waited so long to come to a decision that it can't be ratified until Oct. 22. The real-world consequence is that, starting Oct. 15, there will be an odd, one-week interregnum [Correction: 12-day] in which Atlantic City casinos will be smoke-free. It will also provide a seven-day laboratory in which to find out what happens to traffic when a destination casino nixes smoking. Too bad the New Jersey Casino Control Commission doesn't measure gambling win in one-week increments or else we might have some mighty interesting concrete data. Will the smokers really stay home or is it all a lot of huffing and puffing (more huff than puff, perhaps)?

All of which is a rather windy way of saying that these events make an inauspicious backdrop for an Oct. 15 media event announcing the formation of Gamblers Against Secondhand Smoke (that's right, GASS). Player and second-hand-smoke victim Tom McEvoy is co-chair of the campaign, which kicks off at the American Lung Association's North Las Vegas HQ (3553 W. Cheyenne Ave., Suite 140, at 1 p.m., if you're interested).

The other speaker, Stephanie Steinberg, is an activist who helped push the Illinois and Colorado smoking bans across the finish line. So I doubt she'll find herself mobbed by thankful casino execs. Local 721 of the Transport Workers Union appears to be the moving force behind this.

However, if there's one issue where the Vegas casinos are likely to fight until the last dog is hung, it's smoking. After all, a smoking ban in Nevada translates into a steady stream of cars heading for the nearest tribal casino. (It's already decimated the revenues of some slot routes.)

At least some of the casinos here are trying to minimize the noxious effects of smoke. But others' gestures are so ludicrous -- like the "smoke-free" aisles criss-crossing the Palazzo's casino floor -- that there's no question that room for improvement remains.

By the numbers

Tue, 30 Sep 2008 16:21:00 -0700

$800,000

That's how much it'll cost Penn National's Hollywood Casino riverboat for failing to check its direct-mail-promo list against Illinois' roster of self-banned gambling addicts (casinoholics?). That meant a 146-name overlap out of a mailing that blasted out to almost 16,000 people. The three managers responsible will be able to meditate upon the virtues of due diligence as they sit out their state-imposed suspensions.

29,000

That's how many fewer prospective customers Las Vegas Sands will have for its Marina Bay megaresort project in Singapore, thanks to that nation's aggressive problem-gambling prohibitions. Unlike U.S. states that have voluntary-exclusion policies, in Singapore it's sufficient if a member of your family drops dime on you as an alleged gambling addict.

Moral: Don't piss off anybody to whom you're related by blood (or marriage). "At this time, we cannot anticipate the volume of applications, but my concern as a social worker is that we should not take it as a punitive measure," says one regulator with masterly understatement.

Sands, meanwhile, having publicly identified Calcutta and Jakarta as target markets for the Cotai Strip™, not Marina Bay, has placed itself in the position of robbing Singapore to pay China.

$75 million

And that is the size of a lawsuit that pits Ultimate Bet and Absolute Poker against their software vendor, after a loophole in that software allowed some players to peek at others' hole cards online.

Value in free propaganda to Internet-casino-bashing Gov. Steve Beshear? Priceless.

Resistance not so futile

Mon, 08 Sep 2008 16:54:00 -0700

Lifetimes ago (i.e., the late 20th century), I recall reading an article about International Game Technology in which IGT executives expressed some frustration at having 'only' two-thirds of the Australian market and not the 75% they wanted. Then and more many years thereafter, it seemed as though IGT's Borg-like absorption of every company and market in its path was a pure inevitability.

Times sure have changed, as this analysis of IGT's current predicament makes clear. The only point that begs further elaboration is: Why is IGT having trouble selling replacement machines? If I had to make an educated guess, it's because IGT went whole hog into the themed-slot craze, licensing titles by the trainload. But, as manufacturers discovered, a themed slot with Joe Average game content is just another box on the floor, as far as players are concerned. IGT wasn't the only company that chased that elusive grail but nobody else did it with such gusto.

Small wonder, given IGT's current woes, that Harrah's Entertainment chose this moment to pick a fight over shared-revenue games, specifically "Wheel of Fortune." Even in early '99, when the casinos-vs.-slotmakers acrimony was at its height, nobody dared take on IGT so confrontationally as that.

Illinois casinos stink. Not the facilities, which are now smoke-free. No, it's the revenues which cause one to recoil, with August's year/year comparisons falling into two categories: Poor and Awful (except for tiny Casino Rock Island, just $100K off last August's pace -- tantamount to a triumph in this context). Since adjoining states aren't seeing any great uptick in casino business, one is forced to conclude that the true impact of the Illinois smoking ban is both obscured and exaggerated by the ongoing effects of the recession. Business is bad and there's no getting around it.

On the other hand ...

Mon, 25 Aug 2008 18:01:00 -0700

... if Illinois casinos are sucking wind (which they are), why hasn't this redounded more to the benefit of neighboring states? For instance, it looks like Indiana had a good July, but once you back out two new racinos, a 2% gain turns into an -11% retreat from last year's numbers.

And the northern Indiana boats ought to be doing better, even if Horseshoe Hammond's revenues (-18%) were depressed by a temporary closure and Boyd Gaming's beleagured Blue Chip (-40%) is a drag anchor on the regional average. Still, a -15.5% year/year comparison -- even with those two factors taken into consideration -- doesn't suggest floods of nicotene-deprived gamblers storming the gangways.

Only Majestic Star, of all unlikely vessels, had a revenue-positive July. Year to date, Ameristar Casinos is doing the best of any single company, which makes its recent decision to run up the white flag and sack 244 employees, fretful over a newly expanded Horseshoe Hammond, look doubly defeatist. Current Ameristar management just doesn't look like they're in it for the long haul (read "not cut out for it" or "lack the stomach for it").

A change of brand, to Horseshoe, isn't doing the trick -- yet -- for Harrah's Entertainment's Glory of Rome. The glamorously named Horseshoe Southern Indiana (formerly Caesars Indiana) is the only casino in the Hoosier State's southern reaches to post negative revenue comparisons for every month of 2008. The others either swing like weathervanes or, in the case of Casino Aztar, improved dramatically with a change in management.

If French Lick isn't licked, it appears to have crested. The turnaround at Casino Aztar (currently under state trusteeship) blunted its revenue growth, as did the debut of the Indiana Live and Hoosier Park racinos. Until the economy improves, it looks like it's maxed-out at $8.5 million-$9 million per month.

Missouri is another puzzle, down 3% once the effects of Pinnacle Entertainment's nascent Lumiere Place are subtracted. The St. Louis market, closest to Illinois, was -8%, while Kansas City -- the market with the least to gain from Illinois' troubles -- was up 2%. Go figure.

All companies except Harrah's had a revenue-positive July, even Isle of Capri Casinos. Harrah's lost market share in St. Louis and Kansas City, and Ameristar gained in both markets. (See previous comments about unwarrantedly panicky Ameristar execs.)

And see them again once we note that Ameristar had the best July of any publicly traded company in Iowa, +3%. (Harrah's and Penn were flat, Isle down almost 6%.) Ameristar had the third-highest performing casino in the market, trailing Harrah's Horseshoe-branded racino and the Prairie Meadows track. A good month at the tracks offset a flat one on the riverboat, making Iowa revenue-positive for the month.

This was the first full month of year-over-year comparisons for Isle's newest casino, in Waterloo, which was down over 13%. Wow. The bloom went off that rose fast. The previous Isle regime's business model of growing revenues by opening more and more casinos is well and truly out of gas.

Isle's Bettendorf casino, however, was the only one of the company's quartet of Hawkeye State riverboats to increase revenue in July. Could it be ... the Illinois smoking ban coming into play? I'm going to opt for Occam's Razor and say, "Yes."

Illinois: It's the smoking ban, stupid!

Mon, 25 Aug 2008 17:31:00 -0700

Chalk up another triumph for the blunder-prone administration of Gov. Rod Blagojevich. If, by the time he finally leaves office, Illinois still has a casino industry, he'll have to shake his fist and snarl, "Curses! Foiled again!"

Simply put, Illinois' casinos are choking on the state's smoking ban. There's no other explanation for seven straight months of double-digit revenue decline, of which July's 20% drop was the second-worst. When your best month (February) is "only" -13% in year-over-year comparisons, you've got a problem, to put it mildly.

For reasons not immediately apparent, the privately held Casino Queen in East St. Louis had a banner month, if by "banner" you mean down less than half a percentage point in July and 4% for 2008. (In this context, it was cause for rejoicing.)

But, as the saying goes, you should see the other fellas. Just up the river a piece, Penn National's Alton Belle, formerly one of the stars of the Argosy Gaming firmament, is having a sucktastic year, bringing in the second-lowest revenues in the state and down 29% in July. Most other boats in the Land of Lincoln fared only somewhat better.

Another privately held riverboat, Casino Rock Island, has been able to stem the bleeding to single-digit numbers the last three months. This is doubly impressive because even the smallest revenue fluctuation looks far worse, percentagewise, when measured against such a tiny revenue base (less than $3 million in July), and because it's in the Quad Cities market, highly vulnerable to competition from Iowa.

There hasn't been much good news beyond that. Both the Joliet and Aurora markets have been hammered pretty hard, and Harrah's Entertainment lost the most market share of any company in July. Along recent weakness by Harrah's in Louisiana and Missouri, that's got to be a mite worrisome for the Vegas properties, at the top of the Harrah's food chain.

Atlantic City, take note! Starting Oct. 15, you could be the next Illinois.

Case Bets: MGM Mirage, Ameristar, Penn Nat'l

Tue, 05 Aug 2008 11:20:00 -0700

It almost goes without saying right now that any earnings report is going to come in slightly below Wall Street's consensus. That's just the way the dice are bouncing these days. Such is the case with MGM Mirage, where Strip revenues are down 6% year/year, but JP Morgan finds some pleasant surprises in the Beau Rivage and MGM Grand Detroit numbers.

The Strip results also bear out what Majestic Research has been diligently reporting all along -- a separation between MGM's highest-tier properties, Bellagio and Mandalay Bay, which continue to ascend to the top (+14.4% at M'Bay) while the others lag, "especially the lower end." MGM's buyout of Mandalay Resort Group looked better on paper than the Harrah's Entertainment/Caesars Entertainment one because MGM's risk was spread between all price categories, including the bargain niche. Who could have foreseen this turn of events?

But there are glimmers of light at the end of the tunnel, particularly with regard to convention bookings. Also, CityCenter looks to be $1.65 billion closer to closing that $3 billion gap in its financing.

Ameristar cutting comps. It's hardly "death spiral marketing," but Ameristar Casinos' response to a below-expectations earnings report is to start whacking away at comps, "as they now believe incremental revenue growth via promotional expenses is no longer prudent." Expect to start feeling it this summer and even more so in Oct.-Dec., eventually returning to '07 levels. A big springtime promotional push (+30%) didn't produce significantly improved results, hence the rollback.

Still, with Harrah's rolling out a gargantuan new, $550 million riverboat in the Hammond, Ind., market this hardly seems the time for Ameristar to be playing possum, raising again the question of whether the fellows at the top are in it for the long haul. Also, Ameristar is holding the line (in terms of revenue, less so in cash flow) pretty well in all its markets except Black Hawk, Colo. (-10%), so why the apparent defeatism? The company was sufficiently aggressive to make capital improvements to several of its flagship properties. Ergo, the sudden volte-face comes as a surprise.

Management also says that $20 million in payroll, in the form of 394 jobs, has walked the plank. The brunt of the cuts fell upon Ameristar's East Chicago boat, yet another move that seems to wave the white flag. Heck, if you went by the Ameristar Web site, you'd be forgiven for thinking that property doesn't even exist.

A hotel tower in Black Hawk has also been moved to the back burner, but the Colorado market's future is so clouded that Ameristar's decision is prudence, pure and simple. While revenue and profit expectations have been revised downwards, increases of 3% and 11% respectively are expected next year.

JP Morgan analysts are also bullish on the stock because, as they note, Penn National has "dry powder" in the form of as much as $1.475 billion in breakup fees from its aborted LBO. The expectation that Penn has Ameristar in its sights "will likely drive ASCA higher as investors speculate on a potential transaction."

Speaking of Penn ...

Less room at the top. With former Harrah's COO Tim Wilmott aboard as president/COO of Penn, that left Leonard De Angelo, the company's executive VP of ops, on the outside looking in. Wilmott was quite a catch for Penn after he left Harrah's as part of an executive exodus. But it seems that, in order to give Wilmott a portfolio commensurate with his stature, De Angelo was rendered rendundant. Been there, done that. Mr. De Angelo, you have my sincere sympathies.

The Ameristar war begins

Thu, 17 Jul 2008 18:49:00 -0700

Just a quick hit on my way out the door to spend an evening prepping for The Dark Knight by watching Batman Begins ...

Ameristar's in play. No news flash there and, for the life of me, I can't figure out why the Motley Fool thinks MGM Mirage will be the ultimate acquirer. The company doesn't seem particularly interested in regional markets these days and has been pulling back from some of them -- the same outstate-Nevada kinds in which Ameristar currently operates.

On the other hand, as the article points out Crown Ltd. has $5 billion burning a hole in its pocket after the Las Vegas Tower deal went limp. I don't know offhand what the seven-times-cash flow number for Ameristar is, but $5 billion should cover it with room to spare. The Fool lays out a compelling case for how Crown could use Ameristar's properties to funnel customers to Fontainebleau -- much as Harrah's Entertainment did with The Rio, back in the Phil Satre era.

Then again, there's Penn National, which has about $500 million in mad money (after stock buybacks) right now, thanks to the breakup fee from its busted IPO. With another $775 million promised to Penn, it ought to be able to ante up the acquisition fee without breaking a sweat. Ameristar's Missouri properties have been money-spinners and, as the Fool points out, the acquisition of the Ameristar brand would enhance Penn's persistent second-tier image. A combined Penn-Ameristar would give Pinnacle Entertainment a run for its money in St. Louis, and could regain ground being lost to MGM and Harrah's in the greater Chicago market.

Whoever loses needn't feel too bad. The Atlantic City Tropicana is still out there and debtors will probably force a sale of the rag-tag remnants of Columbia Sussex's casino 'empire.' With its market cap languishing around $837 million, Boyd Gaming looks vulnerable and if you're in a thrift-store mood, Isle of Capri's fallen to near-micro-cap status, at $157 million. Then again, you have to figure out how to turn around 'Pile of Debris.' So maybe it's not such a bargain after all.

Just when you thought ...

Fri, 11 Jul 2008 15:25:00 -0700

... that "Midnight Jim" Gibbons was starting to turn things around, after the Nevada Legislature passed most of his budget cuts without a peep, a new scandal erupts.

At least he can derive comfort from the fact that Illinois Gov. Rod Blagojevich has an even lower approval rating, an unimaginable 13%. In addition to being the stick-'em-up governor who raised Illinois casino taxes to usurious highs, he's become a millstone around the necks of fellow Democrats. Oh, and he's a petty S.O.B., too.

With their revenues choking on the state's smoking ban and Blagojevich about as popular as bubonic plague, maybe this is an opportune moment for Illinois casino operators to push for some tax relief.

Not smoking stunts your (revenue) growth

Wed, 07 May 2008 16:53:00 -0700

Let's get one thing clear: Smoking is a noxious habit that's likely to kill you and certain to alienate other people, in my opinion. (I had two grandparents who smoked until the air turned blue, then smoked some more, which may explain my antipathy to the, uh, pastime.)

But ... not smoking appears to be bad for the health of casinos, at least in Illinois. April's numbers are out and they're down over 19% -- far more than can be plausibly blamed on the recession. For instance:

The biggest loser: It's Penn National's Alton Belle, off by 27%, with an $8 million gross. The rest of the results, as reported by Bear Stearns are as follows (with gross gaming $, when available) ...

Harrah's Joliet: -18% ($26.4 million)

Grand Victoria [MGM Mirage]: -18%

Hollywood Casino [Penn National]: -20%

Empress Joliet [" "]: -26%

Casino Queen: -5.3%

Harrah's Metropolis: -25.5% ($9.8 million)

Pair-A-Dice [Boyd Gaming]: -16% ($9.7 million)

Illinois' smoking ban went into effect Jan.1 and things clearly haven't been the same since.

This Just In ... Sheldon Adelson is stubborn. Who knew?

Gans + Wynn= Ho-hum; Toga party @ Caesars

Fri, 18 Apr 2008 17:48:00 -0700

Steve Wynn's signing of Danny Gans seems to be eliciting a vast yawn from the blogosphere, possibly because Gans' act is widely regarded as hopelessly stale. Unlike Rich Little, Gans doesn't have the excuse of being either A) a living legend or B) old enough to be forgiven for having a show that's out of step with the times.

At any rate, it will be interesting to see how Wynn spins it (or finds a way to make up the difference) if Gans doesn't increase his four-shows-per-week quota. Gans is a cinch to put more fannies in the seats than does the newly evicted Spamalot, but will that be enough to justify keeping the Encore Theater dark three nights a week, if Gans doesn't want to increase his workload or share the space with other acts?

After feeling "punk'd" by Wynn, Steve Friess files a series of dispatches on the Gans soap opera. He also takes time out from serious business to administer a pair of well-deserved smackdowns to the publisher of a senescent local paper with the world's butt-ugliest Web site, or as Hugh Jackson calls it, "a rag-tag pile of URLs."

As for Gans, the Wynn spin is "I don't think anything takes the place of the single performance artist." Translation: "We've tried Avenue Q, Spamalot and Cirque Lite. We might as well try Gans."

I'm too sexy for my skirt. Or maybe it's the other way around at soon-to-be Caesars Windsor. Says one online commentator who bills herself as "Waitress,": "I'm one of the waitressess that are expected to wear the atrocity the casino is calling a uniform ... What I don't understand is how it is that we're expected to show off our 'assets' and yet the male servers are covered-up [sic] like they're going to work in an office. If you ask me, we're being expected to sell our bodies for the sake of 'living the Caesars brand' and there's nothing right about that."

As for the Rush Limbaugh clones who post things like "Shut Up [sic] or find another job," I propose that they spend a few days wearing some of the more-revealing waitress outfits in the industry (like the "butt floss" that got nixed at MGM Grand several years back) and see how they like it. What a lot of rude comments on the thread, too! So much for Canadian politesse.

Smokers lose another one. Count Illinois among the states that won't allow you to light up on the casino floor. The institution of Illinois' smoking ban coincided with a 17% in casino revenues in the Land of Lincoln (at a time when Iowa and Missouri revenues were essentially flat). Things aren't so hot in Colorado, either.

Lizzie Borden took an axe ... and robbed a bookie. This may be the most low-tech gambling heist ever.

What, another Nigerian scam? You'd think people would learn by now. Somewhere, P.T. Barnum is smiling.

Well, he's half right: "We're not perfect, but we're also not stupid." -- Las Vegas Review-Journal Publisher Sherman Frederick, congratulating himself on his paper's Web site. He also refers to Steve Friess as "an idiot," in yet another display of the dignity that characterizes the R-J's editorial page on a daily basis. Adds Frederick, "The Review-Journal is looking at a redesign, but won't do anything until we fully understand all the dynamics." In other words, you can expect that redesign somewhere around the close of the 23rd Century.