David Mckee's Stiffs & Georges - Sheldon Adelson

Adieu F-bleau, hello Hollywood?

Mon, 26 Oct 2009 13:37:00 -0700

Look what just fell into the S&G mailbag:

Beginning January 1, 2010 Penn National Gaming will partner with RPM Advertising to develop and execute a brand identity for Hollywood Casinos. The full service assignment will incorporate research, brand development, media planning/buying, creative execution, production services and direct marketing. Penn National, one of the top five gaming companies in the world, owns and operates seven Hollywood Casinos across the country including facilities in Aurora, IL; Bangor, ME; Baton Rouge, LA; Grantville, PA; Lawrenceburg, IN; Bay St. Louis MS; and Tunica, MS.

Forgive me if I have a coughing spasm after reading Penn National describe itself as "one of the top five gaming companies in the world." I suppose it would depend on your definition of "top" (number of facilities and/or employees, market cap, etc.) but in an industry that contains MGM Mirage, Harrah's Entertainment, Wynn Resorts, Las Vegas Sands, Boyd Gaming, Station Casinos and even woebegone Trump Entertainment Resorts, the best Penn could hope for in terms of name recognition would be eighth place. (Enter RPM, stage right.)

As for the marketing alliance, given the timing of the belated decision to try and unify the brand, it looks like Penn is going to attempt a Harrah's in reverse: acquire a Strip property (Fontainebleau) and then create a company-wide brand-loyalty program to incentivize customers to visit its shiny new megaresort.

Sounds a bit cart-before-horse to me but, after today's bulletin, it's no stretch of the imagination to suggest that F-bleau could soon become Hollywood Las Vegas or some close variant thereof. At least in terms of brand equity, it would represent a step or two up from F'bleau, whose name recognition factor is now entirely negative.

Green shoot? Weekday room rates for early December at Vdara have nudged upward to $145/night (from $129) according to J.P. Morgan analysts.

What's wrong with this picture? The media night for Wayne Newton's new Tropicana show, Once Before I Go (could we have that in writing?) looks more like a Dancing with the Stars tour stop. In addition to former contestants Sabrina Bryan and Jennie Garth, four DWTS regulars -- including Cheryl Burke and Kym "Tina Sparkle" Johnson -- will be on hand.

Except for Ms. Johnson, who's presumably in town to rehearse current partner Donny Osmond, the quartet is available because they've all been eliminated. (For instance, Alec Mazo helped Olympic swimmer Natalie Coughlin dance her way to a premature exit.)

Trouble is, they'll be in the audience and the Wayner will be onstage. Wouldn't you prefer the reverse proposition? And since Newton is strictly a short-term proposition for the Trop (six months and out), would it be too much to hope for a Vegas offshoot of DWTS as his successor?

Only in Nevada

Fri, 16 Oct 2009 18:17:00 -0700

To end the week on a note of levity: For the second time this year, both Gov. Jim Gibbons and Lt. Gov. Brian Krolicki got it into their heads to be out of state simultaneously. (One senses that they don't consult each other about scheduling or much of anything else.) Which means that -- also for the second time this year -- the Silver State was briefly helmed by state Senate President Pro Tempore Mike Schneider. Let's just say that, given this opportunity, Acting Gov. Schneider didn't let it go to waste.

Elsewhere in the Silly File, we find New York-New York holding auditions for a spokesman. They're being politically correct and saying "spokesperson," but considering that aforesaid person is going to be dubbed Vinny "The Man," I have a faint suspicion that members of the gentler sex aren't going to be in the running. The winning candidate must "have the most New York swagger" and be adept at gluttony: Winning a hot dog-eating contest is a prerequisite for would-be Vinnys.

I love New York. Seriously, Manhattan is my favorite place on Earth. (However, it is a poor vantage point from which to write about the casino biz.) Which is why I think promoting its Vegas knockoff through the persona of a dese-dem-dose palooka is a notion so creaky and archaic it needs a walker. Not for nothing has a colleague already dubbed this "the dumbest promotion of the year." I concur.

Jim Murren to the rescue. The CEO of MGM Mirage is going to bat for Sen. Harry Reid. The latter's got the casino moguls (Sheldon Adelson, excepted) in his corner, if nothing else.

Great O'Day in the morning

Fri, 16 Oct 2009 14:15:00 -0700

Peepshow star/trainwreck-in-progress Aubrey O'Day likes to speak her mind, for whatever it's worth. Evidently the recklessly candid utterances of Ms. O'Day were worth not one, not two but, yes, three dispatches by Richard Abowitz.

The fascination is understandable, given an interview subject who readily owns up to being unhappy and describes her demi-celebrity as "fame-ish-ness." O'Day's costar, Holly Madison may have been dubbed "Queen of Vegas" but when Las Vegas Weekly tried to wrest similar prose mileage out of her, the result was better than Sominex. Strangely, I find myself rooting for the id-on-the-loose that is O'Day to go the distance here in Vegas.

A Bronx Tale. Kudos to Sheldon Adelson for rolling the dice on Chazz Palminteri's virtuosic one-man show, whose run has been extended for another week. Yours truly finds it a rather warm-and-cuddly depiction of Mob life but both Mike Weatherford and Joe Brown express nearly unmitigated enthusiasm. Whichever way you slice it, it's still three thumbs up for Palminteri.

Wynn still happy. If the Chinese government's aim in applying further curbs to Macao is to "tamp ... down" the Cotai Strip™, where Sheldon Adelson™ aims to build "Asia's Las Vegas™" no wonder Steve Wynn is a happy camper. Anything that handcuffs main rivals Las Vegas Sands and Stanley Ho is good news at Wynn HQ, especially with Encore Macau coming on line soon. How boring life would become if Wynn and Adelson ever suspended their running verbal gunfight.

Macao giveth, Macao taketh away

Tue, 13 Oct 2009 17:41:00 -0700

Casino operators in Macao better make the most of the recent relaxation of visa quotas into the enclave. What the government gives with one hand, it partly reclaims with the other. Casino expansion remains out of the question and the minimum age for gambling would go up to 21, from 18, under a bill draft soon to be put forward. (Steve Wynn can afford to be sanguine, as it's far more likely to impact his mass-market-oriented competitors. Investors didn't share his enthusiasm.)

If Wynn -- who continues to toe the Peking party line -- comes out a winner, facing negligible "obstacables," Lawrence Ho is the presumptive loser. As best S&G can ascertain, the curtailment of gambling in residential areas is aimed at his Mocha slot routes, one of the younger Ho's bread-and-butter enterprises.

Another proposal awaiting action by the Macanese Lege would cap table-game inventory. Writes J.P. Morgan analyst Joseph Greff, "we believe the Macau government believes the timing is right to implement these initiatives given the completion of the commission cap rule and the resumption of growth in the industry ... if the number of tables will be limited to 1,000 per operator, [Las Vegas Sands] may need to modify its future expansion plans, as it is already over the limit, while SJM will need to close down some of the older tables operated by the third parties, as it too is already over the limit."

None of this appears to bode especially well for Sands' long-in-coming IPO, although it remains to be seen whether this is a bonafide legislative agenda or simply a warning to inhibit growth. The news, however, managed to cast a pall over Sheldon Adelson's planned resumption of his Cotai Strip™. Also, it's not as though the Macanese government and its casino-owning subjects don't have to worry about an upsurge in gambling back on the Mainland.

Detroit, briefly. The depression continues to eat into Detroit's casino revenues, -2% last month. Despite a -6.5% drop, MGM Grand Detroit remains the big cat, grossing $42 million. Second place is up for grabs, though, as MotorCity continues to fall back (-7%) toward upstart Greektown (+12%), which is closing the gap, grossing $28.5 million against $33.5 million for MotorCity.

Hope for Boardwalk?

Tue, 13 Oct 2009 16:08:00 -0700

As you know, S&G puts more stock in year/year comparisons than sequential ones, but the most recent set from Atlantic City affords a slender reed of hope. With the help of tighter slots, A.C. held its September decline to 6%, the lowest of 2009 and the smallest drop in over a year. Even perpetual dog Resorts International had a good month, up 4% y/y.

Both in dollar volume ($63 million) and growth (6%), the leader was -- no surprise -- Borgata. In fact, the Boyd Gaming property made more than the four lowest-grossing properties (Resorts, Atlantic City Hilton, Trump Plaza, Trump Marina) combined. The two lesser Trump properties slipped below the Colony Capital ones, so one doesn't know whether to feel good for Colony or sorry for Trump Entertainment Resorts. The handover of Resorts Int'l continues to proceed slowly, as regulators enter uncharted waters with understandable caution.

Percentage-wise, Showboat, the Hilton and the Plaza had the worst of it, while gainers included Harrah's Atlantic City (3%) and even the Tropicana (1%). But the bloom is off the Trump Taj Mahal rose; it fell back to the middle of the pack, grossing $36 million.

One unexpected factor in the city's bump was a late-September, gay-themed promotion at the four Harrah's Entertainment properties. For all the lip service paid, year after year, to diversifying Atlantic City's appeal, Don Marrandino and his Harrah's colleagues backed up the talk with meaningful action.

Dead casino walking: Trump Marina

Back at Trump, its CEO, Mark Juliano declares "The real question is how long until we get back to the results we saw in past years, which is the question everyone in every business has." No, the real question is: On what planet is Mr. Juliano living? And: Do they have oxygen up there?

The math is inexorable. Excluding three months of sub-2% growth, Atlantic City's revenues have going one way -- down -- for the last seven quarters, often by double-digit margins. Casinos in Pennsylvania continue to ramp up, Delaware is talking very seriously about casino expansion, slot parlors in Maryland are in train and then there's prospect of additional competition from the greater New York City area.

Instead of asking "Where are the snows of yesteryear," S&G modestly suggests the Boardwalk's casino braintrust ought to be thinking about how to move forward into a future of diminished (i.e., more realistic) expectations.

Up the road, now that the novelty factor has worn off of Sands Bethlehem (above), the $724 million casino remains mired in fifth place. The solution? More and bigger promotions, it would appear. Judging by the lukewarm response to Sands and to Rivers Casino, the Pennsylvania market isn't big enough to support casinos built with Vegas-sized budgets.

Why does Steve Wynn hate America?

Tue, 13 Oct 2009 14:31:00 -0700

Or maybe the question should be, What was Steve Wynn smoking before he told CNBC "Money Honey" Maria Bartiromo that Wynn Macau was making more than all other 30 Macao casinos combined? Perhaps he meant his joint is the single-highest-grossing casino in the Chinese protectorate, but his phraseology is misleading:

Wynn's remarks on the importance of staffing and customer service are, as usual, on point. However, he starts sounding like a puppet of Peking ("One thing about the Chinese government, I think they get it right."), praising the steadiness and thoughtfulness of its policies. Here's an example of Peking's steady, thoughtful policymaking in action:

Wynn's comments that infrastructural improvements don't help at tourism-dependent (casino) industry make him sound naive -- doubly so if aforesaid projects put disposable income into consumers' pockets. Still and all, Wynn is far more reasonable on CNBC -- and immeasurably less obnoxious -- than during his obstreperous Fox News Sunday rants.

Although Wynn clearly fancies himself the new political pundit on the block, he's got but one string to his bow: bellowing "Tax policy" over and over. Which translates as "Tax cuts (for me)!" Yup, if Big Guvmint would just stop collecting taxes from Big Bidness, everything would be hunky-dory, economically speaking. We'd have new jobs coming out the ass.

Here's the problem with that line of argument: We're fresh off eight straight years of tax cuts, tax holidays and corporate loopholes big enough to encompass every square foot of CityCenter. How did that work out for us?

More to the point, given a tax-averse administration and Congress, how did Wynn's casino colleagues handle their newfound largesse? Did they invest it responsibly? Hell to the no! That "bundling of the Strip" which Wynn has decried is the poisoned fruit of companies that were awash in capital and easy credit, who then used it to try and eradicate the competition. (Similar phenomena occurred in the regional casino markets and in the slot industry.)

Having cannibalized their main rivals, casino companies then began to devour themselves, in the form of insupportable debt levels and insane LBOs. And if Wynn really believes that government spending has never improved anyone's lot in life (he must have forgotten the New Deal, for starters), then how many standards of living are raised by merger-and-acquisition orgies? For the average worker, it means jobs are "consolidated" out of existence. Heck, not even executives are immune. Just ask some of the Mandalay Resort Group or Park Place Entertainment higher-ups who are now enjoying involuntary retirement.

Should the current administration hand out the kind of tax vacation Wynn is demanding, would the casino industry A) buy new and shiny objects, B) retire debt or C) create jobs? B & C would probably finish a distant second and third to A.

Just look at Harrah's Entertainment: It can't repay its creditors dollar for dollar but thinks nothing of snapping up 16% of Planet Hollywood. If there's degenerate gambling going on in the casinos, the worst of it can be found in the executive suites. If these guys ever took to playing Russian roulette, they'd probably leave at least five bullets in the revolver.

Wynn is probably feeling his oats, given the bullish, odds-defying early performance of his Hong Kong IPO. The real story may be that gains realized in the Hang Seng will be used to prop up Wynn's Las Vegas operations rather than to expand in Macao.

This just in: The two-week run of A Bronx Tale at the Venetian has been extended to a third weekend. A spoken-word play in a Strip theater seemed like a dicey prospect so this is very good news indeed.

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.

Stanley Ho: I'm not dead yet!

Fri, 09 Oct 2009 13:15:00 -0700

Either rumors of Stanley Ho's death, three weeks ago, were greatly exaggerated or the elderly casino magnate has made the most remarkable recovery since Jesus Christ. (I'm put in mind of a favorite bit of Babylon 5 dialogue in which Capt. Sheridan [Bruce Boxleitner] confirms that he indeed died, adding, "I'm better now.")

Today, Bloomberg News reports Lawrence Ho says dear old Dad is "looking better every day" and making a good recovery from -- as best we can conjecture via published reports -- a subdural hematoma brought on by a nasty fall. The younger Ho says his father's SJM has no plan of succession in place. Boy, when the Grim Reaper eventually comes for old Stan, the fight for control is going to make King Lear look like a tea party.

A compromise is shaping up in the Pennsylvania table-games wrangle and casinos won't like it one bit. According to J.P. Morgan summary, while the Dems in the lower house haven't budged off their preferred $20 million upfront fee/34% tax equation, the GOP-led state Senate has blinked.

The Senate's proposal would set the license fee at $15 million (a 50% increase) and the taxes at 14%, up from 12%. Casinos might be able to swallow that, on the presumption that the tax increase is small and the extra $5 million in fees can be quickly recouped. Even at $20 million, a bigger upfront hit can be regained by operators off the back end -- provided that the tax rate stays relatively low. Doubtless that's the lesser of two evils, from their perspective.

Bluhm: $45 million saved is $45 million earned.

On the money-saving front, the budget for the initial version of Neil Bluhm's SugarHouse casino is now announced at $310 million: a -$45 million shift. Considering that Bluhm's Rivers Casino and Sheldon Adelson's Sands Bethlehem came in at a staggering $1.5 billion-plus (combined), this new dollar figure suggests a welcome return to fiscal restraint. Your turn, Foxwoods.

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

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

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

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

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

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

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

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

Quote of the Day

Wed, 07 Oct 2009 13:57:00 -0700

"Once the markets start believing our company won't go into bankruptcy, our stock will be up to $75 a share again." -- incurable optimist Sheldon Adelson, to Forbes magazine.

$300 mil for F'bleau?

Tue, 06 Oct 2009 13:10:00 -0700

That's the latest; namely, that Penn National Gaming will put down less than $300 million as a "stalking horse" bid on Fontainebleau. Penn would also be on the hook for the costs of the project's bankruptcy proceedings. Potentially getting a Strip resort for less than 10% of its cost sounds like a good deal for Penn ... until you think about the hundreds of millions of dollars (possibly as much as $2 billion) that stand between F'bleau and the finish line.

Sue Lowden evidently didn't get the memo that Mike Ensign is no longer writing fat campaign checks at Mandalay Resort Group. How else to explain the Archon Corp. treasurer's loud and frequent fealty to Ensign fils, the ethically challenged junior senator from Nevada? Lowden's proclamations provided an irresistible temptation for Democratic Senatorial Campaign Committee spokesman Ed Schultz, who sniped, "Sue Lowden's support of John Ensign may have fundraising value to her, but it is a reflection of her own character and fitness for office. She has shown more fidelity to him, than he has shown to his own wife." (Lowden is gunning for Sen. Harry Reid's seat.)

In her capacity at Archon, Lowden could line the younger Ensign up with a dandy post-senatorial job as a casino greeter at her Pioneer Gambling Hall in Laughlin. (As for Lowden, at least she's off Jon Ralston's "Chicken List," after gracing the Face to Face set. Your turn, Sheldon Adelson. Does Sue Lowden have more huevos than you?)

The perils of Packer. Reeling from a $1 billion loss on his overseas casino misadventures, James Packer and his Crown Ltd. are putting some of their Melbourne land on the block.

Not buying it. Although MGM Mirage CEO Jim Murren may have predicted that CityCenter's premiere would increase Vegas visitation by 10%, but gaming analysts aren't having any of it, especially when all the new room capacity is at the high end. Also, it's remembering that the 1998-2000 roll of megaresort openings and the 2005 debut of Wynn Las Vegas coincided with robust U.S. economies. Andrew Zarnett advises casino bosses to look at current numbers as the new baseline -- which sure beats pining for the vertiginous and unsustainable levels of two years ago.

Macanese machinations. Conventional wisdom on the advisability of floating IPOs in Hong Kong continues to seesaw. The Wall Street Journal runs the numbers and finds gaming stocks defying the market's downward trend. Which is good news for Steve Wynn and possibly even Las Vegas Sands' public offering, which is taking forever to reach the launch pad.

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.

From the mailbag #8

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

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

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

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

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

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

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

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

Macao's blockbuster month

Fri, 02 Oct 2009 18:23:00 -0700

A flurry of good news to end the week, starting in Macao:

September, the first month affected by a relaxation of severe visa restrictions imposed on the mainland, saw a 53% jump in Macanese gambling revenues. In terms of market share, Stanley Ho opened a big lead on Sheldon Adelson, 30% to 20%, with Melco Crown Entertainment close behind with 16%. The remainder of the market was divvied between Wynn Resorts (14%), MGM Mirage (10%) and Galaxy Entertainment (8%).

Is Melco's City of Dreams (above) eating into nearby Venetian Macao's business? On the surface, it certainly looks plausible. Given the immensity of the facilities he's building on the Cotai Strip™, Adelson ought to be getting more bang for his pataca.

Vegas hearts gays. Earlier today, I was asked to reflect on my nearly 11 years in Las Vegas. It's been full of surprising twists of fate -- who ever thought Steve Wynn would be forced out of the Mirage brand he'd created, just for starters?

But I sure as heck never imagined I'd open my e-mail box at work and find the following casino promotions, all keyed to National Coming Out Day (Oct. 3):

"Two Queens Beat a Straight" (New York-New York)

... or the slightly more innocuous ...

"COME OUT and Celebrate at Luxor"

(Luxor was smart and didn't offer Criss F. Angel tickets as part of the, uh, package)

In the Vegas of even a few years ago, "Boys' Night Out Package at Excalibur" would have had more of a frat-party connotation. MGM Grand plays it safe with a "His or Her Getaway" which sounds like a generic singles-oriented deal. Even so, we're actually seeing progress from the days when Vegas marketed itself as a synonym for a very debauched and jaundiced vision of male heterosexuality.

There's nothing like a depression to make this a party town of equal-opportunity decadence. After all, LGBT dollars spend just as fast as straight ones.

$545 a night. That's what Mandarin Oriental is asking. If you read the fine print, you'll note that (through March 31), if you buy a room night at that rate, you'll get a comped night, too. Which makes the effective rate $272 and change. By current standards, that's still steep ... but maybe staying in a 392-room hotel instead of a 4,000-room behemoth is an intangible added value. What do you think?

Trop, Sands purges continue

Wed, 30 Sep 2009 17:36:00 -0700

It's official: "Pit Bull of Comedy" Bobby Slayton has snarled his last at the Tropicana Las Vegas. Thus endeth a brief, inauspicious reign by Anthony Cools over the Trop's upstairs showroom. A well-placed source advises LVA that Beatles tribute show Penny Lane was pulled after EMI hit it with a cease-and-desist letter. In any event, it left as invisibly as it arrived.

Trop CEO Alex Yemenidjian still has three shows he inherited from predecessor Scott Butera but it's pretty clear that he's going to put his own stamp on the property. As for Cools, well, he'll always have O'Shea's.

Movement at Cosmo. Buried in the Review-Journal (six items deep) is the news that the Cosmopolitan has wooed ~~John~~ Marshall Andrew away from Las Vegas Sands to be its CFO and hired Station Casinos refugee Marshall Andrew as chief information officer. Deutsche Bank looks serious about making that September '10 opening date.

Will the economy have improved sufficiently to have absorbed most of the CityCenter rooms and the Planet Hollywood Westgate ones by then (and maybe, but not very likely, Fontainebleau)? Boyd Gaming is betting otherwise. The Echelon cranes have been seen coming down, marking an additional hiatus in the project, which reportedly will not be resumed until 2012.

Las Vegas Sands: Execs overboard!

Andrew is just the latest exec lured -- or chased -- away from Sheldon Adelson's employ. Former Venetian veep Paul Pusateri (who helped launch Paris-Las Vegas back in the day) was just nominated as president at The Palms and ever-helpful Sands spokeswoman Mindy Eras has gone to Preferred Public Relations. Whether these moves are part of Adelson's promised cost reductions or are a winnowing out of perceived William Weidner loyalists, it must be getting lonely at the top.

There's quite a debate going on at the Las Vegas Sun on the rise and fall of themed resorts on the Strip. Surf over, check it out, maybe weigh in, if the spirit moves you.

Adelson's rescuer?

Wed, 30 Sep 2009 14:01:00 -0700

Meet Wilbur Ross. He's an investor of all trades with an appetite for distressed assets. And he's turning his sights to the casino industry. In particular, he's drawn a bead on "companies [who] are also looking at selling assets in the Chinese gambling enclave of Macau to support struggling operations in Las Vegas."

That means either Las Vegas Sands or MGM Mirage, and it's old news that Sheldon Adelson has been peddling a couple of retail malls and the non-casino aspects of Sands Macao (above). MGM is attempting a reboot (successful so far) of MGM Grand Macau but still might come up short on completion money for CityCenter, especially if condo prices have to be reduced. And it doesn't take a rocket scientist to figure out that one Macanese casino beats any number of hotel rooms or retail outlets.

Un-Trumped? Thwarted Trump Marina suitor Richard Fields is making another run at the property, which he's been trying to buy since Homer was a pup. Better still for him, he could get it for as little as $75 million. However, he's got dark-horse competition from a Maryland-based private equity fund that's making a play for all three of the Trump Entertainment Resorts casinos.

Notorious for mainly hanging its corporate shingle in tax-haven Green Valley, would-be casino operator Empire Resorts is not only re-headquartered in New York State, it's got new partners. Some of them bring checkered pasts to the table.

Also, Empire's hopes hinge upon the current administration reversing an especially paternalistic ruling from the George W. Bush years: namely, that casino sites must be within commuting distance of the tribal owners' -- in this case the St. Regis Mohawks -- reservations. If economic self-sufficiency is the endgame of federal/policy, Uncle Sam needs to loosen the apron strings.

Unready for some football. The unceremonious scrapping of Monday Night Football events at The Cannery is explained (second item). Magic word: clearance. Columnist John Katsilometes also notes that the second weekend of Zowie Bowie's Vintage Vegas was better than the first. Which would mean it's graduated from "bad" to "mediocre."

New England moralists are apparently OK with slot machines in Rhode Island, so long as they're covered by the fig leaf of mandatory greyhound racing. At least the slot players have a chance of actually catching the rabbit, metaphorically speaking. Animal cruelty is bad enough but when it's enshrined in state law it's even more objectionable, if such a thing is possible.

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

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

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

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

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

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

Masters of the Obvious II

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

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

Gee, ya think?

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

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

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

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

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

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

Hell no, they won't; Penghu punk'd; Barbarians at the gates (again)

Mon, 28 Sep 2009 19:12:00 -0700

Pay taxes, that is. Two Indiana racinos are pushing back against a tax rate that averages 38%. Considering that the two tracks -- one run by Cordish Gaming -- are the newbies on the Hoosier State scene, one could fairly ask them, "Didn't you know what you were getting into?" As the article notes, neither Harrah's Entertainment and Boyd Gaming -- both which recently heavily reinvested in Indiana -- aren't whining about their tax rates.

But the racinos have a point. In states where the number of casinos is artificially capped by the Legislature, solons become the custodians of the industry's economic future, like it or not. And it only stands to reason that if the market is going be diluted, tax relief is in order. Considering that same-store revenues in Indiana have been nothing but down since the racinos opened, some push-back on the tax front was probably inevitable.

Hell no, they won't either. Allow casinos in Penghu, that is. Voters on the Taiwanese island voted against gambling expansion there, putting the issue off-limits for three years. The notion of planting mega-million-dollar casinos in remote, hard-to-reach parts of Taiwan never made that much sense to S&G, but big industry players like Sheldon Adelson and Gary Loveman have kicked Taiwanese tires in the recent past.

Did Adelson and Steve Wynn mistime their leap into the Hong Kong stock market? One Wall Street Journal columnist thinks so. Bad timing isn't the exclusive province of the public sector, though: A Washington State tribe borrowed $375 million on the strength [sic] of revenue forecasts that proved grossly over-optimistic. Percentage-wise, neither Harrah's nor Station Casinos missed the mark this badly.

Bob Stupak, R.I.P. The penultimate Vegas maverick is gone, having spent much of the last decade as a recluse. One especially thorough obit contains a quote by former Klondike owner John Woodrum that ought to be engraved on Stupak's gravestone (or at the base of that now-vanished Stupak statue): "If ever there was a guy beyond the rim of reality, there was Bob. But somehow he made reality happen."

Just what we don't need. They're baaaaack. Never mind the smoking wreckage they've made of Harrah's and Station, private-equity firms are rooting amidst the flotsam, looking to extend their morbid clamp on the casino industry. Leading the pack is Leon Black's inaptly named Apollo Management. Both indirectly (Planet Hollywood by way of Harrah's) and directly (Cosmopolitan, Fontainebleau), Black is reported to be scarfing up what few independent properties remain, raising the prospect of a Total Rewards oligopoly stretching from just above CityCenter to the southern frontier of the The Mirage.

There are also a few bottom-feeders in play. Hooters hardly seems worth buying unless Onex Corp. wants to do a tear-down and extend the Tropicana Las Vegas eastward. Current ownership of the Riviera is tapped out but the place still has prospects as a fixer-upper (not something that fits with Apollo's sack-and-pillage business model). If non-bottom-feeder Green Valley Ranch is really on the bubble of insolvency, then Penn National Gaming ought to quit chasing F'bleau, and try to drive a wedge betwixt Station and its Greenspun family partners. Penn would stand to inherit a beautiful property with far fewer problems than Big Bleau.

Crime doesn't pay; Wyden wimps out

Fri, 25 Sep 2009 14:19:00 -0700

Five dimes worth of damage, $40,000 bail -- and all to wrest a measly two grand from some vending machines at Harrah's Atlantic City. That's the losing bet made by two security guards. Couple this with the floormen who destroyed their careers for a comparably picayune sum of money they allegedly scammed from Planet Hollywood, and we're seeing a level of desperation in casino crime the likes of which I can't recall.

City of Dreams. Voters in Ohio haven't approved casinos in any form yet, but that's not stopping Cleveland Cavaliers owner Dan Gilbert, who's already had a design executed. Gilbert has lined up critical support by promising to forego hotel rooms and restaurants (though he's left himself a little wiggle room there).

But don't be fooled: Phil Satre used the same Trojan Horse strategy to get an onshore casino in the heart of New Orleans. A few bankruptcies and legislative showdowns later, Harrah's N.O. has a hotel and a couple of restaurants. (Like it or not, Satre was brilliant.) I'll be so not surprised if Gilbert gets his casino, then discovers the numbers don't pencil out at a 33% tax rate, and starts waffling on his non-aggression pact with hoteliers and restaurateurs.

Damn that vox populi! Seems that Harrah's Entertainment had a bit of contractual noblesse oblige written into its pact to purchase Thistledown Racetrack. If the issue of racinos has to be put to a vote of the people, all bets -- so to speak -- are off. Which means that Harrah's can take its $89 million and skedaddle, leaving bankrupt Magna Entertainment holding the bag. For the moment though, Harrah's is playing the issue down, saying talk of a pullout is "premature" and hasn't been given much thought.

Even Las Vegas Sands appears to be feeling disappointed with early results from Sands Bethlehem. A massive, 2,000-slot expansion, slated for November, has been scaled back by 88%. Even so, Pennsylvania casinos are busy planning for the addition of table games (although the Lege hasn't approved it yet). The price of table games will probably be higher (18% tax + $15 million upfront) than casinos want, but at least they've been successful in battling back an expansion-sapping 34% tax rate on tables. For slots, they still have to pay a usurious 55%, one of the worst rates in the nation.

But if Sands wants to maximize its drawing power, it might want to think about finishing the hotel and other amenities that got shoved onto the back burner when Sheldon Adelson's coffers began to run dry. At least Sands has gotten a temporary reprieve from sliding to sixth place because -- even with financing in place -- Neil Bluhm is taking a go-slow approach to his $355 million Philadelphia casino, out of deference to historical preservations. (Funny how Bluhm can build a Philly casino complex for half of what Adelson blew on his unfinished Bethlehem resort.)

Fortune favors the bold, which means it won't smile upon Sen. Ron Wyden (D-OR), who apparently caved to pressure from increasingly useless and counterproductive Sen. Harry Reid (D-NV). It looks like Hapless Harry is behind Wyden's craven withdrawal of an amendment that would have taxed Internet gambling to help pay for health care reform.

Incidentally, an amendment that would have authorized $100 billion to close the infamous Medicare "doughnut hole" was voted down yesterday. Jeez, those 'Net-bet taxes could have come in handy as an alternative means of plugging the hole. (Oh, and fuck you too, Max Baucus.)

And that goes double for you, stock-picker Jim Cramer, whose spam rips through our LVA filters like Japanese torpedoes through the hull of the U.S.S. Oklahoma. It makes me sorry I ever said anything nice about you, Jimbo.

Atlantic City sucks ...

Tue, 22 Sep 2009 18:05:00 -0700

... says the Motley Fool, in essence. Even Borgata, which posted a higher operating profit year/year, is deemed merely to suck less than everybody else. I'm not sure I'm with the Fools on this one. For instance, shouldn't Sands Bethlehem be doing better than fifth among Pennsylvania casinos, especially when you consider its proximity to New York City?

Elsewhere on the Boardwalk, the UAW is fighting Trump Plaza, the Plaza is fighting the National Labor Relations Board and Trump dealers are fighting amongst themselves. Since 32% of dealers initially voted against UAW representation, it should be a cinch to round up 30% to sign a decertification petition. Kudos to Trump Entertainment Resorts CEO Mark Juliano for going out of his way to soothe potential animosity between labor and management.

MILF convention in A.C.: On Oct. 3, former Bunnies and other veterans of the short-lived Playboy Hotel & Casino will return to the shore to relive the good old days. A few might even wriggle into their old Bunny costumes. Maybe a re-infusion of the Playboy brand is what Atlantic City needs. It can only help. Are you listening, Carl Icahn? Revel? Pinnacle Entertainment? Anybody?

Finally, a reason to visit Orlando ...

... or maybe not. And that dude from Scotland is in serious need of subtitles.

Resort-style casinos come to Colorado and doesn't Ameristar's new hotel look lovely? Now, if only somebody would build a mid-market property like this on the Strip. Why must average Americans settle for older, second-tier properties if they're to afford a Vegas vacation?

Health care reform + Internet gambling? Is it just me or is Sen. Ron Wyden (D-OR) onto something here? This may be just the carrot to dangle in front of legislators who still balk at allowing Americans to wager on the Web.

Creditors screwed again. How much is Greektown Casino worth? Is it the $725 million its creditors claim? Or the $540 million that Greektown asserts? Or maybe the lowball $485 million that lead bidder Tom Celani is willing to pay? Greektown's recent -- and well-publicized -- inroads into the market share of its Detroit rivals lend merit to the higher-end valuations. If the place was in the doghouse, I might sympathize with Celani (who's likely to boot the very management team responsible for Greektown's turnaround), but Fine Point Group has definitely enhanced a once-seedy casino's value.

It's official. VIP-player commissions in Macao will be capped. Since the war over junketeer commissions was threatening to make Macao a negative-revenue proposition, the new ceiling will greatly improve cash flow for Macanese operators. Middle-of-the-pack Galaxy Entertainment is expected to benefit the most (+27% EBITDA), followed at some distance by Stanley Ho (16%), with Las Vegas Sands and MGM Mirage bringing up the rear. Although the elderly Ho may be on his deathbed, he's lived long enough to broker peace in a potentially destructive situation where the only sure winners were the sought-after junket operators.

Bad bulletins for Sands & Strickland

Tue, 22 Sep 2009 12:03:00 -0700

Last week, Audit Integrity identified the 20 companies most at risk of bankruptcy (minimum market capitalization: $1 billion) and the lone gambling operator on the list was Las Vegas Sands. On Friday, Business Insider piled on. Pruning Audit Integrity's list of any firms with market cap below $3 billion, that still left nine companies ... and Las Vegas Sands.

Quoth the Insider: "Conditions in Las Vegas are horrible, Asian expansion isn’t enough, and if this lasts too long then LVS will end up in bankruptcy court looking like it bit off more than it can chew."

Marina Bay Sands: a megaresort too far?

No shit. With an unfinished casino-hotel in Pennsylvania and the abortive St(ump) Regis condo on the Strip, Sheldon Adelson has too many fingers in too many pies. Plus, his $5 billion Singapore albatross will get beaten to the starting line by subsequent entrant Genting. And even with a sudden easing of access from mainland China to Macao, it's too soon to be going pedal to the metal on the remainder of the Cotai Strip™, as Adelson would clearly like to do.

(As though to twist the knife in the wound, retail developer Taubman Cos. made a point -- in the course of reiterating its interest in a rival project -- of saying it wasn't in the market for the two shopping malls Adelson is desperately trying to unload.)

Ohio's supreme court delivered a swift kick to the groin of Gov. Ted Strickland (D) -- and to the casino industry's hopes for imminent expansion into Ohio. By a 6-1 vote, the high court ruled that addition of seven racinos needs to go before a vote of the people, throwing as much as a 14-month hitch into the process.

If that weren't enough, Strickland has to cope with the continued meddling of Sen. George Voinovich (R-OH), who seems to believe he still occupies the governor's mansion, too. Governors hate it when the congressional delegation bigfoots them on intra-state affairs. Such a clash led to a permanent rift between fellow Republicans then-Gov. Kenny Guinn and then-Rep. Jim Gibbons.

Strickland, meanwhile, is poring over the court's ruling in search of loopholes that might allow Class II gaming to go on line in December. It's that or cut $852 million from the state budget. If he can insinuate VLTs into horse tracks by May, then voters have a few months to get habituated to them before the 2010 vote.

For Harrah's Entertainment, the good news is that the court's ruling temporarily shaves $47 million off the sale price of Thistledown Park (the full $89 million tab is contingent on racino conversion). For seller Magna Entertainment, the bad news is that the deal may fall through entirely if Harrah's doesn't want to gamble on the outcome of further legal challenges and the tender mercies of the electorate.

'Phantom' fans hit Vegas

Thu, 17 Sep 2009 14:36:00 -0700

Heaven knows, there are conventions for soap operas, sitcoms and every iteration of science fiction (I've been to more than a few of the latter). But a fan convention for a Broadway show? That's unheard of.

Yesterday, fans of Phantom of the Opera hit town for the first-ever Phantom con, at the Venetian, where they'll score some face time with director Harold Prince and the Venetian's resident Phantom, Anthony Crivello. (You have to give Sheldon Adelson props: If Glenn Schaeffer had been running the Venetian, he'd have turned down Phantom on the grounds it was free publicity for Paris-Las Vegas. But Adelson knew a good thing when he saw it.) The Venetian has even rolled out a package of goodies to keep Phantom fans on-property. Smooth move there, Rob Goldstein.

Having recently passed its third anniversary, the Vegas-ized Phantom looks well on its way to blowing past Mamma Mia!'s six-year milestone. We could easily be celebrating its 10th anniversary come 2016. Yours truly gets name-checked in Steve Friess' interview with Prince. My only quibble with the story -- and it's a very minor one -- is that it doesn't mention Prince's original stagings of Stephen Sondheim's Company and Follies, two of the high-water marks in Broadway history. And if you think Phantom is a "downer," take Follies out for a spin sometime:

As for fan conventions, except for the annual Star Trek hootenanny at the Las Vegas Hilton, Vegas doesn't do such a great job of attracting them. We've got to work on that. And when Stargate SG-1/Stargate Atlantis/Sanctuary star Amanda Tapping graces a Vegas stage, we can say, "Job well done."

Deathtrap. Sometimes there are shows that warrant venturing away from the comfort zone of the Strip. Las Vegas Little Theatre's production of Ira Levin's Broadway hit is not one of them.

Salvation for Nevada?

Wed, 16 Sep 2009 15:59:00 -0700

Former Nevada Attorney General Brian Sandoval has made it official: He's stepping down from the federal bench to challenge incumbent Gov. Jim Gibbons. That means Midnight Jim can start packing up the governor's mansion. Maybe he already is. Whatever he's doing, he's not attending to the state's crumbling tourism infrastructure. This dereliction of duty is reprehensible at a time when Las Vegas, Reno and points beyond need all the traffic they can get.

I've dealt with Sandoval in the past and he's a class act. Heck, unless Oscar Goodman throws his martini glass into the ring on the Democratic side, I might have to re-register as a Republican to vote for Sandoval in the 2010 primary. Sandoval may be fairly conservative but he's capable and widely respected, two qualities one does not associate with Nevada's current governor.

Midnight Jim has given us nearly three years of unmitigated cronyism, scandal and incompetence, and Nevada cannot be rid of him and his do-nothing "leadership" soon enough, in my opinion. Thank you, Sheldon Adelson and especially J. Terrence Lanni, along with any other gaming CEO who helped foist this buffoon upon the Silver State.

If you've sent me an e-mail and haven't heard back, it's because our current e-mail platform is -- what's the technical term? -- fucked. So I apologize for my apparent bad manners. Also, we cannot upload new imagery into the blogs. Which means that, for instance, an extremely droll image forwarded by kerr_mudgeon cannot be viewed at this time. Which really sucks.

To make matters worse, some subscribers aren't receiving automatic notifications of new blog entries because these are being randomly kicked back by the dozen. So I apologize for that, too. Our LVA tech people are doing their best but they're fighting a multi-front war right now. Thanks for your patience.

Twitter, ergo sum

Thu, 10 Sep 2009 15:40:00 -0700

OK, so we still can't upload photos but we can sort of link, thanks to a workaround.

In the meantime, Las Vegas Advisor is plentifully available on Twitter. We have ...

LVA_Tweet (1,791 followers). "This one aggregates [Question of the Day], S&G, [Today's News], Spotlight, and then whatever I throw in there manually," writes Webmistress Jessica, who's also solely responsible for the following three:

SinCityAdvisor (766 followers). Sample entry:

RT @Inkedmag Voting closes today for the Inked Awards. Vote now for tattooer of the year -> http://ow.ly/oPX3 #tattoo #ink #inked

ToplessVegas (567 followers). Sample entry:

Big Booty Urban Nite tonite @ Palomino - only nude club in Vegas with liquor license. Say hi to Foreplay for us ; ) #vegas #stripclub #nude

GreenVegas (251 followers). Sample entry:

RT @HuffPostGreen PETA is at it again: Check out this banned ad with Pamela Anderson (NSFW) http://bit.ly/Qppfj

Personally, I Tweet not. For starters, I lack the manual dexterity of Gov. Jim Gibbons (a prodigy capable of writing hundreds of text messages per day, earning him the sobriquet "Governor Busythumbs"). If the meme of the moment is "I Tweet, therefore I am," I shall have to settle for nonexistence, as per this music video:

Yup, that's Twitter phenom Crystal Chappell delivering the tag line. As for 72-year-old Guiding Light, it will be extinguished on Sept. 18, to be replaced on Oct. 5 with a new incarnation of Let's Make a Deal, starring Venetian headliner Wayne Brady (something for the tired housewife) and being taped at the Tropicana Las Vegas.

(Kinda neat how I brought it back 'round to the the Strip there, huh?)

Considering the lengths people will go to in order to get on a game show (and the near-riot that occurred when The Price is Right staged an anniversary show at The Rio), I'd say a Brady-enhanced Let's Make a Deal is economic stimulus in which Las Vegas can finally believe. Bummer about "La lumiere que guide" (™ Will Ferrell), though.

Any readers who have Twitter accounts and wish to be followed, please post in the "Comments" thread. And if the Comment-Eating Server thwarts you, I'll do a special S&G post on your behalf. Is that a deal?

Blimps on the radar

Thu, 10 Sep 2009 14:03:00 -0700

Dipping into the dispatch box, S&G finds the following tidbits, courtesy of the nice people at J.P. Morgan:

Alex Yemenidjian is serious about revamping the Tropicana Las Vegas. He's just inked a contract with Bally Technologies for a player-tracking system and other BYI goodies ...

... fading interest in MGM Grand Detroit has caused MGM Mirage to take it off the market. Also, with the company looking at price concessions to its CityCenter condo buyers (i.e., forfeiting money it was counting on to finance CityCenter), it may need to borrow against its Detroit palace, one of the few MGM properties still unencumbered ...

... Atlantic City, like Macao, is and will probably always be essentially a daytripper market. So there's symmetry in the fact that China State Construction Engineering Corp. has been signed to finish the stalled Revel project on the Boardwalk, to the tune of $1.7 billion. A July 11 opening is predicted. This is the best news to emerge from Atlantic City in quite a long while.

Speaking of good news, gaming revenues for Nevada's July are in and, basically, they don't suck. Yes, the Silver State was down 8% and the Strip was 11%. But June's year/year comparisons were far suckier (-15% on the Strip), so there's some consolation to be had. In fact, compared to a series of truly craptacular year/year comparisons -- all in double digits, except for last May -- it's darn near cause for celebration.

Table game drop was down overall but the casinos played lucky, particularly at baccarat. (Watch the first-season Mission Impossible episode "Odds on Evil," if you need a quick primer on this game. You'll get scintillating performances by Martin Landau and Barbara Bain in the bargain.)

Slot play is way down (-17.5% win on -15% handle) and North Las Vegas, bouyed by Aliante Station, was the only part of Clark County to have a positive month. Laughlin got hammered pretty badly (-19%) and neither Reno (-21%) nor South Lake Tahoe (-33%) seems likely to ever fully recover from tribal competition across the border, Tahoe especially. If there was a moment for some "unbundling" by overexposed companies, this is it.

Didn't get the memo. Would somebody break into the R&R Partners biosphere and let oxygen into the office of Billy Vassiliadis? "Billy V" was the author of this boneheaded pensée, which he shared with the Los Angeles Times:

"You've got to drop your rates, but you don't want to create a sense that this is a discount experience or that the experience itself has been diminished."

What the ... ? Las Vegas' recent success was built on the perception (and actuality) of a "discount experience," and lower prices are unlikely to "diminish" a tourist destination that is now synonymous with exclusivity and unaffordability. Vassiliadis, like Sheldon Adelson and the Las Vegas Convention & Visitors Authority, seems convinced that the current doldrums are -- to use my favorite Internet-board gaffe -- "a blimp [sic] on the radar."

They need to wrap their heads around the reality that 2004-like levels of business were damned good at the time (superb, in fact) and that Vegas needs to get back to the value-based messages that fueled the preceding 15 years of growth. Or, as David G. Schwartz writes in a particularly trenchant DieIsCast.com entry: "Of course, unpredictable events can make a hash of any predictions, so it’s possible that five years from now the casino industry will be employing 100,000 more people than it does today. That would be after the federal government offers Americans a $10,000 annual tax credit against travel to Las Vegas, and Las Vegas alone."

Seems like some folks in the marketing bidness should be taking Dr. Schwartz's classes.

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

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

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

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

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

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

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

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

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

Optimism in Macao, euphoria at CityCenter

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

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

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

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

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

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

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

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

Many thanks ...

Tue, 08 Sep 2009 11:06:00 -0700

... to everyone who wrote in and overwhelmed us with messages of condolence regarding the late Shadow. Time doesn't permit writing individual replies to each and every one of you, although you have touched my heart deeply. So thanks go out to Steve Kallis (and I would imagine the Humane Society thanks you, too), Jeff in OKC, Jason the poolman, Richard Abowitz, arm53, detroit1051, Frank P., William Heckel (check out his Web site), Jinx (ditto), Aaron, Jim and smudger.

The apartment still seems very empty without Shadow's graceful -- if sometimes surprisingly obstreperous -- presence. Her brother, Mr. Bit, needs a lot of comforting. Fasolt is pretty much the same as ever.

Eventually the painful memories will recede and the good ones will take their place. Right now it's difficult to visualize Shadow other than as I last saw her, lying on the veterinarian's table, emaciated and misshapen, with her stomach bloated by the tumor. Her eyes seemed to say, "Let me go," but you're never adequately prepared for when they bring her back with a catheter sticking from her forearm, let alone for when you have to tell the vet it's OK to administer the lethal injection.

However, Shadow was in the extremely ethical hands of Mountain Vista Animal Hospital, one of Las Vegas' greatest assets. They could have strung me along with false hope and thereby milked my bank account dry, but they were most candid about the gravity of the situation. Thanks to them, Shadow's suffering was relatively brief. I hope I'm so fortunate when it's my turn to shuffle off this mortal coil.

In the meantime, it's a little difficult to give a rat's patootie about what's happening in the casino industry. I'm sure you understand why.

Besides ... the fallout from last week's blog meltdown continues to descend. Our linking capabilities are temporarily kaput and the photo library has vanished. Hence the somewhat gray and bare-bones look of S&G these days. Darn, and I have this great screencap of Edward Quartermain looking for all the world like Sheldon Adelson ...

Quote of the Day

Tue, 01 Sep 2009 18:57:00 -0700

"If you believe what you read in the newspaper about us, we have one foot in the pail of bankruptcy and the other foot on a banana peel, and there's a high wind. It's all wrong." -- Las Vegas Sands CEO Sheldon Adelson, being either highly prescient or in deep denial.

Stat of the Day

Mon, 31 Aug 2009 13:43:00 -0700

Beloved by critics and bloggers, Encore is proving to be something of a millstone around the neck of Wynn Resorts. Average daily rates at 'Wynncore' are down 39% for the year to date, compared to a "mere" -25% at neighboring archival Palazzo-Venetian. Unlike Wynn, however, Las Vegas Sands does not seek to be King of the Price Point.

Wholesale revision of Encore is in the works after only eight months, which if nothing else proves that Steve Wynn is at least tacitly willing to admit that it's time for Plan B. If his nightclub expansion translates into the imminent demise of Switch, tant pis. That gimmick-driven restaurant has been Encore's inarguable flop. Possible loss of the conservatory-like atrium would be a more serious worry: Without it, Encore would become a considerably darker and more claustrophobic casino -- as though it weren't having foot-traffic problems already.

Pinnacle meets karma

Thu, 27 Aug 2009 13:30:00 -0700

Plans by Pinnacle Entertainment to move its President riverboat upriver just hit a big snag. Taking the view that the President's license is portable, Pinnacle hoped to use either the vessel itself or the license to jimmy open a new market niche along the Mississippi River.

Seems the Missouri Gaming Commission doesn't hold with Pinnacle's logic. Move the ship, they say, and it's open season on that 13th (and last) license in the Show-Me State. Right now, Pinnacle's keeping the President operational as a charity case -- thereby preserving the license -- but the Coast Guard is likely to shut her down in 10 months, so decrepit is the vessel.

Not that I wish ill for Pinnacle, one of the classier outfits in the industry, but this here is what's called "karma." Both Pinnacle and Ameristar Casinos pushed hard for legislation last year that uncapped the state's loss limits in return for capping the number of licensees. It was an anti-competitive move that was inveighed against in these pages.

Ameristar and Pinnacle tried to lock up what was an open territory. Now, with the President's license skittering about the field like a wet football, Pinnacle's going to find itself having to grapple with the very competitors it thought it had excluded from the game. Which is as it should be.

There can be only one. Two casino proposals from Cordish Gaming and Penn National have been forwarded to the Kansas Lottery Gaming Facility Review Board (Uff da!) for final arbitration, Remember that the last time we went through this, Penn got a whopping zero votes (probably due to a series of peevish public pronouncements), but then Cordish wanted to resubmit its project in smaller form.

This time around, Penn execs have been playing well with others, rather than trying to dictate the process. They're promising a three-phase, $564 million casino-resort (subject to certain economic conditions). Cordish is choosing to under-promise, committing only to a $390 million casino, at least until bluer skies return. Partnership with the Kansas Speedway still gives Cordish an edge (as does the Hard Rock brand) ... but the Kansas-casino process has been long, tortuous and filled with reversals of fortune. (Mike Ensign, anyone?)

Speaking of Kansas ... shoo-in Foxwoods has announced that it's restructuring its debt and enlisting outside assistance, yet another victim of ill-timed expansion. Small wonder Foxwoods and Lakes Entertainment decided to pool their pennies on Chisholm Creek Casino (above) rather than duke it out for the Wichita market.

Compromise is near. Down in Florida, that is. A formula too complicated to summarize here would bring the Seminole Tribe and the Sunshine State's Lege into agreement. (The Seminoles took one look at the compact fashioned by the Lege last spring and spat it out like bad food.) In return for accepting some restrictions on game offerings at some casinos, the Seminoles get a complete exemption from paying taxes to the state -- if private-sector gambling spreads beyond Broward and Miami-Dade counties. And if existing non-tribal casinos get, say, blackjack the Seminoles' obligation to the state is halved.

So tell me, why does Sheldon Adelson seriously think Florida is a potential growth market?

Mena Suvari + douchebag = ...

Tue, 25 Aug 2009 15:00:00 -0700

... just another day at Palazzo. For all you aspiring members of the douchebagerie, study these men and their fashion statement carefully: This is the look-what-the-cat-dragged-in aesthetic that you seek to emulate.

Bounce-back for Macao?

Fri, 21 Aug 2009 17:17:00 -0700

Remember how gambling revenues in Macao during July were up 3% from last year (the first positive comparison this year)? That was soon followed by the news that numbers for the first half of August are even more encouraging still (+20%). Though Macanese casinos are on track for a $1.5 billion August, analysts urge caution, noting that the first half of August '08 was exceptionally weak.

Still: Wherefore this sudden resurgence?

Perhaps it's the delayed effect of a February loophole that allowed Guangdong Province residents to circumvent a ban on travel to Macao on Hong Kong visas. Whatever the case, business should get better still on Sept. 1 when, the Macau Tourism Council says, restrictions on Guangdong Province will be loosened even further. That's music to the ears of every casino boss in Macao, needless to say.

Sheldon Adelson, in particular, has fallen in clover. This revelation comes just as he's putting the finishing touches on a planned IPO on the Hong Kong stock exchange (with Steve Wynn following suit). The stock offering, it is hoped, will generate sufficient liquidity to finish a quartet of stalled hotels on the Cotai Strip™ (with five more to come). Right now, the area looks like an outsize version of Miss Havisham's wedding, "leaving swaths of the nascent Cotai Strip covered by steel and concrete skeletons," in the words of Bloomberg News. Macao doesn't need more rooms right now. However, Adelson sure could use the lucre from the casinos onto which the hotels are piggybacked.

But what of Stanley Ho? While the casino baron ails, Bloomberg has unpacked Dr. Ho's June address to G2E Asia, in which he laid into his U.S.-based rivals. “The success of one market model cannot be migrated to another ... Ignoring Macao’s special characteristics and duplicating a Las Vegas or an Atlantic City would not be a successful strategy.” (The article also minces few words about the elder Ho's triad associations.)

Those of us who scoffed at Ho's antediluvian casinos are finding that the comparably ancient oligarch is having the last laugh, even if it may be from his deathbed. “The Macao audience is less focused on the ancillary things around gambling. Stanley, with his wealth of experience, understood that better," says Thornburg Investment Management analyst Alex Motola.

Meanwhile, various Ho clan members may be at daggers drawn. Favorite wife Angela Leong is the perceived successor, but daughters Pansy, Daisy and Maisy Ho (no, I didn't make that up) aren't going to step aside quietly, from the looks of things ... especially since Leong is only two years Pansy's senior. SJM CEO Ambrose So is also being tipped as a potential dark-horse heir to King Stanley's throne.

Business as usual at Hotel Lisboa.

But how would the Macanese government cotton to the notion of Pansy Ho controlling both the SJM concession and half of the MGM one? A third concession could be up for grabs if City of Dreams fails to perform, thereby becoming what Melco Crown Entertainment CEO Lawrence Ho calls his "endgame."

His father's death could also set off a philosophical war between the tried-and-true Stanley Ho business model, time-worn though it may be (and likely to be championed by Leong and So), and the Vegas Lite approach in which Lawrence and Pansy have dabbled. But with the Ho family having its fingers in three casino pies (MGM, Melco, SJM) simultaneously, they'll come out winners no matter which way the pie is sliced.

Stanley Ho's newest and oldest progeny: Grand Lisboa and Hotel Lisboa.

From Malaysia to Monticello. Do you recall those stock sales by Genting Bhd insiders a while back? At the time, it looked as though the money would go toward an acquisition of MGM Grand Macau. However, it now appears the lucre will purchase a stake in struggling Empire Resorts. That's the company whose executives were luxuriating in the low-tax suburbs of Las Vegas -- even though Empire's sole gaming asset was a racetrack in Monticello, N.Y., a full continent away.

What the ... ?

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

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

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

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

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

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

Colony Capital strikes (out) again; Big Bleauh

Mon, 17 Aug 2009 17:02:00 -0700

Despite taking a 22% gouge out of expenses, Colony Capital and its Goldman Sachs sidekicks managed to convert a 2Q08 profit to a $10.5 million 2Q09 loss. Revenues were down $30 million (or 40%), half of that from diminished room bookings. Could the service cuts be driving the revenue plunge? It wouldn't be the first time we've seen "death spiral" management be a company's undoing.

It's certainly interesting to see the bracing effect the recession has had on Vegas casino execs. They, who once took convention business for granted and looked upon conventioneers as less desirable than gamblers, have had a salutary wake-up call ... hopefully not too late.

Colony also threw in the towel on Resorts Atlantic City, although it left CEO Nicholas Ribis behind to run the place. That means he will serve two Boardwalk masters: The Resorts mortgage holders and Colony, with whom he co-owns the Atlantic City Hilton and which Ribis has also been running (into the ground, some charge). What happens if it's in Resorts' best interest to steal business from the A.C. Hilton?

It's difficult to decide who was more foolish here: Colony, for borrowing 2.5X the value of a casino whose best days were behind it, or the bankers who secured $360 million in loans with a $140 million casino. Let the floggings commence!

Speaking of death spirals, when you can get an Imperial Palace room for $18 (as an acquaintance recently did), who'd stay in Mesquite? That exurb's travails continue drag Randy Black's oligopoly down with them. Scant competition appears to have bred slackness and complacency in the Mesquite and Primm markets. It may be mere coincidence that the competition-rich Laughlin market has suffered to a much lesser degree ... but I don't think so.

Defaulted interest payments, renegotiated loan covenants, drawn-out cash reserves ... these are some of the unappealing alternatives facing Planet Hollywood. No property's struggle is fun to watch but this one is sadder than most because there's been considerable reinvestment (and some stunning redesign) made to turn the ex-Aladdin into something viable. However, all Robert Earl's horses and all Robert Earl's men have come up a bit short.

Plummeting ADRs have precipitated this crisis and, although losses at Planet Ho have consistently narrowed (and continue to do so), this isn't the first time we've heard that Earl's place was really struggling. And, no matter what Earl does, his casino-hotel has intractable, customer-hostile design flaws that cannot be solved by any means short of implosion.

I've been given reason to believe that whoever ends up owning the physically and fiscally bloated ($4.4 billion, at latest count) Fontainebleau, it won't be Penn National Gaming (at least not unless it's free and clear, and presumably cheap -- a tall order). If Steve Wynn has indeed already spurned F'bleau that'd leave Apollo Management, which never saw a bad casino investment it didn't like, and this one's nearly $1.8 billion underwater.

F'bleau would also give Master of the Universe Leon Black a de facto Harrah's Entertainment property on the north Strip, although Harrah's needs to fill thousands more hotel rooms like it needs a gaping hole in the noggin. Considering that it costs Boyd Gaming $3 million a month to keep Echelon on ice, preserving the F'bleau monstrosity until such time as new rooms can be absorbed seems a better use of capital than trying to finish the accursed thing.

Shakeup at Sands. Geez, you don't think executives on the chopping block could have anything to do with Genting Bhd's rival project getting ahead of slow-moving Marina Bay Sands, do you? Naaaaah! After all, the executive situation at Las Vegas Sands has been so very tranquil this past year. Just ask William Weidner ... or Bradley Stone or ...

City of (better) Dreams

Mon, 17 Aug 2009 11:19:00 -0700

J.P. Morgan has raised its 2010-11 cash flow estimates for Melco Crown Entertainment's $2.4 billion City of Dreams megaresort, bringing projected return on investment into the 11%-11.5% range. That comes in the wake of good news that gambling revenue in Macao was $1.2 billion in July, up 3% from last year. That's the first positive comparison of 2009.

What's still more stunning is July's sudden parity between Macanese operators. Stanley Ho commanded 23% of market share but Las Vegas Sands was nipping at his heels with 22%, followed by Melco Crown (18%), Wynn Resorts (15%) and MGM Mirage, leapfrogging past Galaxy (10%) into fifth place with 12%.

Adelson wins one. Sands CEO Sheldon Adelson has vanquished at least one litigant. A federal district court judge scotched former Adelson flunky Moshe Hananel's claim on a share of Sands' Chinese revenues. The former Interface Partners International exec sought credit for having the Sands-in-Macao idea first and laying the groundwork for Adelson's Chinese overture. Adelson recently paid off one trio of claimants and is still battling former associate Richard Suen after losing badly in court.

Casino wars in Macao

Fri, 07 Aug 2009 16:25:00 -0700

Bloomberg's interview with Credit Suisse's Steven Chan is now online and is must-see TV:

Adelson bombing in Pennsylvania; RoboPoker returns; Dissent over Wynn

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

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

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

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

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

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

McKee vs. Lerner

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

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

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

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

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

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

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

Adelson's newest problem

Sun, 02 Aug 2009 16:31:00 -0700

If you're hiring for a Las Vegas (hell, any U.S.) casino right now, you're apt to face an embarrassment of riches. In Singapore, it's the other way around ... as Las Vegas Sands is finding out.

The most expensive casino resort ever? Train-able labor in desperately short supply? Prohibitive entrance fees for Singaporeans? An untested market? A(nother) soft opening? A weak global economy? Naaaaah, I don't see how this can be anything other than a slam dunk.

Aztar deal the worst ever: it's quantifiable

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

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

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

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

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

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

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

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

Packer steps in it again

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

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

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

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

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

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

Quote of the Day

Wed, 22 Jul 2009 12:59:00 -0700

“Wynn is simply much cleaner, safer and a smarter play [than Las Vegas Sands] on gambling in Macau.” -- CNBC Mad Money host Jim Cramer, warming toward potential Wynn Resorts and Sands IPOs on the Hong Kong stock market. What's not to like about Wynn when you consider its uncanny streak of luck in Macanese baccarat play?

$5 billion in two minutes

Tue, 21 Jul 2009 17:29:00 -0700

Construction of Marina Bay Sands in Singapore, as experienced when you've had too much caffeine.

MGM booting Midnight Jim?

Fri, 17 Jul 2009 16:56:00 -0700

Whilst Gov. Jim Gibbons is overseas, engaged in top-secret derring-do, there's bad news on the home front. News outlets are starting to report that MGM Mirage is directing all of its 2010 gubernatorial donations to Clark County Commissioner Rory Reid. (The Sun had the story first but good luck trying to find it with Greenspun Media's FUBAR search engine.)

Why does this matter? Because MGM was a veritable cash register for Midnight Jim during his '06 race. Gibbons was then-CEO J. Terrence Lanni's parting gift to the state of Nevada. Lanni doubled down on his support of Gibbons after the then-congressman was accused of getting frisky with a cocktail waitress after a boozy night out with influence peddler Sig Rogich.

Even with a ski-lodge pitchman running his campaign, Gov. Jim Gibbons is going to learn that his re-election bid won't be a run on the bunny slopes.

Lanni's boosterism toward Gibbons never made sense: Nevada's leading proponent of widening a gross-receipts tax onto non-casino business supporting a candidate whose entire platform boiled down to "No New Taxes. Period"? Does.Not.Compute.

Once elected, Midnight Jim showed his true colors, jilting Lanni for the cozy embrace of Sheldon Adelson and basically taking his marching orders from Las Vegas Sands HQ.

If MGM has crossed Gibbons off its Christmas list now, he might as well call it a day. This is the biggest footprint planted on his backside to date. True, Reid fils is no shoo-in, even for the Democratic nomination. Assembly Speaker Barbara Buckley is expected to put up a strong fight, although some of us wish she'd done the same in the '09 Lege, where she played the role of doormat to both the mining industry and the Las Vegas Chamber of Commerce.

As I said before of an Oscar Goodman "spoiler" candidacy, What's there to spoil? Run, Oscar, run!

Case Bets: F'bleau, Adelson, Oscar

Fri, 17 Jul 2009 14:03:00 -0700

Whether it's the banks or the subcontractors, somebody's going to take a big screwing at Fontainebleau. That's the nub of a new lawsuit, whereby developer Jeffrey Soffer asserts that Turnberry West Construction (which he also owns) has superior repayment rights to those of the project's backers.

I believe this is called, "One hand washes the other." However, the legal issues involved make fascinating reading. Some new-to-Vegas casino developers have screwed the pooch and eventually come out smelling like roses (Sheldon Adelson, for one). I don't Soffer's going to make into that elite club. And you can forget about Big Bleau opening before July 1, 2010, at the very least.

Speaking of Sheldon ... results at his new Sands Bethlehem continue to disappoint. Adelson's tradition of half-assing his casino openings, dribbling the product onto the market, may finally be catching up with him. Marina Bay Sands should be the acid test of this managerial style. (Personally, I believe it's going to be Adelson's Waterloo, at least to the extent that the casino is expected to drive everything else.)

Sands Macao: Sheldon's best bet

Ironically, it was the comparatively "quick and dirty" Sands Macao, built for considerably less than any other Adelson casino, that has been his biggest hit. The cost-to-date of Sands Bethlehem, by the way, has been revised downward to $675 million (from $743 million), which ought to help the ROI numbers. However, early predictions that Sands Bethelehem was going to siphon business from the Philadelphia area were clearly unrealistic and should have been reported with greater skepticism.

Berzon: caped crusader

Truth, justice and the American way have one less champion in the Las Vegas area now that Pulitzer Prize-winning Alexandra Berzon has been hired by the Wall Street Journal. Good for Berzon, better still for the WSJ. But who will keep a gimlet eye on OSHA enforcement and the CityCenter clusterfuck now? (And she was moving into gaming coverage, too ... the prospect of a Berzon/Liz Benston/Rick Velotta trifecta would have dwarfed all other casino reportage in this burg.) With the loss of Berzon and editor Drex Heikes, the Las Vegas Sun is suddenly in a world of hurt.

Oscar gets whacked. Somebody's fantasy, anyway. (Were there any thumbless graffiti taggers in the house? Homeless advocates? Civil libertarians?) Hizzoner was the celeb-victim at the reopening of Marriage Can Be Murder in its new digs at Fitzgeralds. MCBM recently left the Four Queens and a good move it was, seeing as the 4Q is at risk of being evicted. Movie veteran Goodman (Casino) evidently forgot whatever he learned from The Master (aka Martin Scorcese) and didn't hit his "mark."

As for MCBM, a dinner-theatre show, I can't say it compared favorably with the ones we did at Grinnell Community Theater. I was the "juvenile lead" in several shows there and humbly submit that our gung-ho amateur troupe could have done better. Hey, we "killed" with Ten Nights in a Barroom. That thing could have run for six months, easily.

Case Bets: Midnight Jim, Sands, "Peepshow", Hard Rock, Reid

Thu, 16 Jul 2009 12:50:00 -0700

Chronic ineptitude by Nevada's governor is endless fodder for comedy (like entrusting your re-election campaign to the former marketing director of a ski resort and political novice.)

But it also has perilous consequences. For instance, his thoughtless decision to pack the Nevada Gaming Commission with lawyers now threatens to hamstring the board. Jane Ann Morrison details how new Commissioner Joe Brown had to abstain from 24% of last month's votes. Seems he had conflict-of-interest issues with a couple of miniscule slot houses called Station Casinos and Harrah's Entertainment. Whoops. Brown's is the most egregious problem but it's hardly the only one.

Most of Jim Gibbons' appointments to the NGC and the Nevada Gaming Control Board have been solid but this was a real boner and somebody up in Carson City should have seen it coming.

Midnight Jim discovers Facebook. He also learns the need to think before you "friend." He sure won't be getting Bill Raggio's vote next year.

Rescue may be at hand for the beautiful and historic Boulder Dam Hotel, thanks to a mysterious benefactor. As for recent arrival Shear Madness, not so much. I hear that the "interactive" show may not have been interactive enough to ride the Vegas wave of Marriage Can Be Murder and Tony 'n Tina's Wedding.

In case you missed it ... Apparently eager to stanch the flow of exiting executives, Las Vegas Sands has given Rob Golstein a promotion to senior VP. The new title comes with a $535,000 raise. For those of you keeping score at home, that's $2,758 for each of the 194 workers Sands just pink-slipped.

Bean out, O'Day in: The producers of Peepshow are, more than anything else, great at generating publicity. It's official that Shoshana Bean will be supplanted in late summer by Playboy cover girl Aubrey O'Day. It sounds as though Bean was plugged into the cast on very short notice (with seven days or fewer of rehearsal), lending credence to the reports that Mel B.'s disappearing act came as an unpleasant surprise to the erstwhile Scary Spice. At present, Bean is the best thing Peepshow has going. How unfortunate it was but a brief fling. Shoshana, we barely knew ya.

Rushing in where angels fear to tread, Morgans Hotel Group will open 490 more Hard Rock Hotel rooms on July 27, well ahead of schedule. The timing seems odd but Morgans and financier/hostage DLJ Merchant Partners have to make their rash of expansions at the HRH start turning a buck.

Reid safe at home. The window of opportunity for unseating Sen. Harry Reid (D-NV) is closing fast. Thanks to Reid's support of assault weapons, the National Rifle Association has got his back. Avowed challenged Sharron Angle is woefully short of cash, while GOP dream candidate Rep. Dean Heller has even less financial traction. If Reid's unpopularity with the home crowd makes him a low-hanging piñata, the GOP just keeps flailing at empty air.

Vegas needs Carmen Electra

Tue, 14 Jul 2009 11:10:00 -0700

There's a sentence I never thought I'd live to type. But after seeing Ms. Electra bumping and grinding, and generally giving her all to a pair of solo turns in MGM Grand's otherwise fembot-oriented La Femme aka Crazy Horse Paris ~~Crazy Girls~~, this woman definitely deserves a modest venue where she can bring the raunch to the Strip on a regular basis. True, her routines were not always spot-on and her dirigible-size funbags could use some deflation (although we're not quite in the Holly Madison league of grotesquerie). But she's got animal magnetism that would have been wasted as Mel B.'s sidekick or Hans Klok's beard.

As The Sun chronicled: "Carmen's naked antics make MEL B's appearance in rival Vegas burlesque revue, Peepshow, look tame in comparison."

That they did.

Wynn degraded. Analysts at J.P. Morgan are downplaying their expectations for Wynn Resorts, particularly in Macao. There, Morgan has shaved $11 million off its cash flow projections for 2Q09. Slipping REVPAR (if -28% is a "slip"), low slot handle and "flat table volumes" are blamed.

On the Strip, Morgan only expects minor softness (to the tune of -$4 million) in Wynncore business. Cash flow projections for next year have been trimmed by $9 million in Vegas and $30 million, as the analysts have modest expectations of Encore Macau. The Morgan analysands remain bullish on Las Vegas Sands, though. Somewhere, Sheldon Adelson is having a moment of gless.

Quote of the Day

Wed, 08 Jul 2009 02:56:00 -0700

"Forget the Cirque du Soleil show Zaia, which was quite good but played in a theater that was approximately 30 percent full on a Thursday night. And forget those poor saps trying to sell one high-end watch per day. As long as those tables remain full, which they generally are in the world's largest casino, it would be inaccurate to describe business in Macau as truly slow." -- AGEM Executive Director Marcus Prater, in the new issue of Casino Executive Management.

Moulin Rouge: Whoops!

Tue, 07 Jul 2009 14:27:00 -0700

The Moulin Rouge development that will never be.

Oh dear, oh dear. Seems like the City of Las Vegas unwittingly obstructed its own arson probe into the demise of the Moulin Rouge when it allowed the property to be immediately demolished. Sloppily, the actual tearing-down was farmed out to the property's former owners, who happened to have a demolition contractor on site during the blaze.

The fire's cause remains speculative and no finding of arson has been made -- and now perhaps never will. But the city's decision not only looks overhasty, it was (at the very least) cavalier to entrust it to dispossessed Moulin Rouge Development Corp. and not new owner Olympic Coast Development. The latter's prexy, John Hoss, told the Las Vegas Sun he found the chain of events "a little odd" and "a weird coincidence." Since Hoss is only trying to corral a $100,000 insurance claim, the city could get stuck with an asbestos-removal tab as high as $1.1 million.

Can they screw this up any further? Is the Pope Catholic?

F'bleau-minus. The bankrupt resort's developer, Jeffrey Soffer, proposes some unspecified corner-cutting to get the project back on budget. ("On budget" being a very relative term where Fontainebleau is concerned.) Combine this with the allegedly secret "Enhanced" costs for F'bleau's highly touted amenities and the moral of the story is that what you see on the Web site or in the design renderings has a tenuous relationship to what you'll actually get.

At least Soffer is offering to chip in some equity, unlike former investor James Packer, who scuttled away from F'bleau the moment the chips were down.

Gator on the loose. One of Las Vegas' larger parks got a lot more interesting yesterday when a 42-inch-long alligator turned up. Instead of entrusting the spunky fellow to a local zoo or perhaps one of our local casino-based wildlife habitats, the Wildlife Dept. killed him. Bastards. I hope they never get their mitts on our beloved Mojo ...

Mojo, the monarch of Huntington Press.

Speaking of James Packer ... griefs are arriving in battalions (thanks, Mr. Shakespeare) for City of Dreams. In terms of mass-market business, Venetian Macao is eating City of Dreams' lunch. "Despite 41,000 people walking through City of Dreams every day since it opened in the first week of June, most of the visitors were just admiring the decor instead of sitting down at its tables for a game of baccarat," reports The Age.

Not only is one analyst projecting a 15% earnings shortfall for Melco Crown Entertainment, another has tripled his loss-per-share projection. J.P. Morgan is also revising its 2010 cash-flow projections on the $2.1 billion megaresort to 13% ROI, down from 17%. (That's still a better return on investment than you can get on the Las Vegas Strip.)

Did Steve Wynn take Packer to the cleaners when sold him 37% of a casino concession for $1 billion? Wynn had a chance to size up Packer and deemed him not yet ready for the big leagues. Score another one for El Steve.

House of wax

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

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

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

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

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

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

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

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

Atlantic City strip tease; Sheldon sacks the help, etc.

Thu, 02 Jul 2009 12:37:00 -0700

Unfortunately, it does not involve some Cinemax hottie like Kim Dawson but rather Mayor Lorenzo Langford, who's doing a fan dance involving Bader Field. He's had discussions with interested developers -- too interesting to discuss! He'll have "exciting" revelations -- too exciting to reveal! And it will -- brace yourselves -- "have some connection with casino gaming."

Why, you could knock me over with a feather.

Right-sized into oblivion. The workforce at Palazzo-Venetian has fallen below 7,000 with yesterday's purge of 194 employees. "It's an effort to continue to right-size our business," wailed the company. Geez, if they're so intent on trimming the ship, how 'bout asking for a give-back from their $2 Million Man, President Michael A. Leven?

Sands bombs in Bethlehem. Forget those roseate cash-flow projections Sheldon Adelson made when building Pennsylvania's second-most-expensive casino. Revenues at Sands Bethlehem have been in a steady decline since the place opened, reducing it to the #5 casino in the Keystone State.

Primm and proper. Although Sin City Kitties has closed (sniff!), there's still reason aplenty to visit the Herbst Gaming trio of casinos in Primm, Nev., Liz Benston contends. Most of those reasons entail copious freebies ... or at least bargain-basement prices.

The story doesn't mention the single most interesting phenomenon I've observed out there: a higher-than-[Strip]-average number of African-American and Latino players (it's the most integrated casino floor I've set foot upon). But Benston's look-in makes a strong case for those of us who think Herbst CEO Ferenc Szony is the man to turn these places around.

The money quote is from Szony's man in Primm, General Manager Michael Starr, who says, "I have yet to make money on a vacant room in this business." There's but a few CEOs in Vegas who couldn't stand to have that chiseled into their bedroom wall so that it's the first thing they see in the morning and the last thing at night. Those are words of wisdom, Mr. Starr. Long may you flourish.

There's theatre in Vegas. True, you have to poke around behind the dodgy Sportsman's Royal Manor on Boulder Highway to find it sometimes. But the trip to the dark side is definitely worthwhile.

Stormy weather

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

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

City of Dreams: a flop

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

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

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

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

Sands Macao: Adelson's best-ever investment

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

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

Michael Jackson, casino baron?

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

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

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

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

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

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

The Trop heist that wasn't

Fri, 26 Jun 2009 14:49:00 -0700

"An improvident indictment." That's what New Jersey officials are calling a case that was quietly quashed in May. Sacked Borgata veep John Conklin and two other men had been charged with plundering the Tropicana Atlantic City's database when they were in the Trop's employ (and when the Trop was still owned by Aztar Corp.).

Closer examination revealed that nothing had been purloined and the data in question was not particularly sensitive, either. All three indictees have been exonerated ... but where does John Conklin go to get his career back?

Phantom redux: Defying the odds, the Venetian's production of Phantom of the Opera celebrated its third anniversary Wednesday night. I jotted down a few observations for CityLife. (Tina Walsh fans, take note.) Having seen the Broadway production -- albeit many years ago -- I'll be the first to allow that it actually improves on the original in a respect or two. Oh, and my CityBlog entry misspells choreographer Gillian Lynne's last name. My apologies.

Two titans of American popular music "played Vegas" last weekend. Actually, Loretta Lynn was in North Las Vegas and Aretha Franklin all the way out in Primm ... not remotely near the Strip. What's wrong with this picture? Or this one ...

Midnight Jim: taking down Big Oil

It's summer and gas prices are -- like, duh! -- on the increase. Gov. Jim Gibbons doth suspect that dark, foul, untoward schemes are afoot. But Midnight Jim assures us he is on the case. I feel safer already.

Gay cowboys. They're queer, they're here and they're at The Rio specifically. A straight-gay coalition turned out in force last night to celebrate its victory over Midnight Jim's benighted opposition to domestic partnerships. (Because that's not how he rolls, y'see.) Speakers included Harrah's Entertainment Vice President Jan Jones, who led the charge on Carson City.

For all the failings of CEO Gary Loveman's stewardship of Harrah's, on his watch the company has expanded its already-enlightened attitude on social issues. It's not just a question of being gay-friendly; it's good business.

Worth -$23 million?

Isle of Blight. Is the woebegone Greek Isles casino-hotel worth less than nothing? In a sense, yes, since it owes $67 million on a book value of $44 million. Even a resale price at book value seems wishful thinking, considering the Isles' chequered history.

Asserts the Las Vegas Sun, "With its strategic location near the Las Vegas Strip and the Las Vegas Convention Center, the Greek Isles and its associated real estate are seen as having long-term value after the recession ends."

Yeah, but it's had that "strategic location" for as long as it's been in existence and the Isles' progress has been a steady one from Bad to Worse. I wouldn't give a plug nickel for the place -- not with Strip land prices in freefall and vast acreage there lying fallow.

Miracles are possible. Work on Marina Bay Sands is, believe or night, a fortnight ahead of schedule. Next step: Hold the line on that (already swollen) $5.4 billion budget.

The waiting continues in the great state of Kansas. Its lottery commission wants another two months to review applications for the Wichita and Kansas City markets. Considering the recent flurry of dropouts (including Vegas' own Golden Gaming), you'd think this would expedite the process. Instead, the coronation is six months away.

Squeeze play. No time is being wasted as Pennsylvania rushes toward expanding into Class III casinos. Two rival proposals to add table games are presently on the table. Casino lobbyist Steve Rittvo is forwarding a plan that would tax new games at 12%. This is projected to generate $165 million for the Keystone State (assuming that slot play concurrently increases sufficiently to generate a $61 million impost).

House Whip William DeWeese (D) counters with a 21% tax, combined with a one-time $10 million/casino fee, for a potential Year One windfall in excess of $300 million. I wish Rittvo luck but fear that solons will -- as they so often do -- gravitate toward the bigger dollar sign. It's an institutional failing.

Neil Bluhm, Philadelphia's Sugar[House] daddy

On a happier note, Neil Bluhm's revised design for his Sugarhouse Casino, on the Philadelphia waterfront, has received the green light from the City of Brotherly Love. Barring further legal mischief by sore loser Donald Trump, this means the project can finally move ahead, with a temporary, 1,700-slot casino slated for a Spring 2010 opening. Hallelujah!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Not what the doctor ordered

Tue, 23 Jun 2009 12:29:00 -0700

While the Better Half and I managed to quaff at least some of the infamous bacon martini w/o negative ramifications, we were not so fortunate with Sunday night's visit to a certain casino buffet. Suffice it to say that the carnitas cosseted a modest case of Montezuma's Revenge and that blogorrhea was KO'd by otherrhea.

So I'm taking advantage of a 20-minute lull between a doctors' visit and a trip to the dentist to bang this out. The big news in Vegas this morning is the collapse of a rebar column out at the McCarran International Airport expansion, injuring five. So far there have been no fatalities, thank God.

A Bataan Death March of shows continues tonight with Sin City Bad Girls at the Las Vegas Hilton. I wriggled out of seeing Todd Paul at Hooters last night, though I hear he was very funny. (Hooters scares me; is death contagious?) Wednesday brings yet another visit to Phantom of the Opera, followed on Thursday by Peepshow 2.0 and a Friday pair of one-acts featuring members of Insurgo Theater Movement. After which, I will not leave my apartment for a long, long time.

MGM: Deal or no deal?

Wed, 17 Jun 2009 17:55:00 -0700

MGM Mirage CEO Jim Murren is re-mulling asset sales of MGM Grand Detroit, Gold Strike (Tunica, Miss.) and Beau Rivage. But all Strip assets are definitively off the market (yes, even Slots A Fun). Since the Detroit and Tunica casinos are already encumbered with CityCenter-related debt, presumably Murren would transfer those mortgages to some or all of the "Mandalay mile." As far as I know, those three casinos are still unencumbered. The Detroit resort would be a real "trophy asset" for any potential buyer ... presuming that banks are more inclined to lend than they were(n't) the last time Murren shopped this trio around.

The Las Vegas Review-Journal took a good look at MGM's Giza deal -- and it's even better than initially thought. Not only will the company collect management and franchise fees, it also gets a cut of any profits. If there's a downside here, I'm too myopic to see it.

MGM wouldn't sell Monte Carlo when Jack Binion came calling. One presumes this had more to do with potentially being able to extend CityCenter into Monte Carlo, rather than Jack's money not being good enough for MGM. However, if the company really cares about the property, why are they slowly letting it go to seed? The Brew Pub will close on July 12.

Also ... our LVA research team has discovered that no further Lance Burton performances are scheduled. This seemingly writes finis to his long relationship with Monte Carlo. Is it just an expedient way to save money or was Burton's unpardonable sin to get very good reviews from the local dailies right after Criss F. Angel laid an $85 million egg with Believe? Burton out and Angel in? That's just not right.

"IUER"? WTF? Don't call Melco Crown International's new City of Dreams a "casino." Melcospeak for the new pleasure place is "integrated urban entertainment resort." At least Steve Wynn's "casino-based destination resort" coinage rolled off the tongue a little more felicitously. On second thought, just call it "a casino."

Holy cow! The husk of the late, lamented Holy Cow Brew Pub & Casino (home of the best beer in Las Vegas) is proposed for redevelopment -- again. It was briefly the site-to-be of the phantom Ivana condo tower, one of the more egregious examples of condo "vaporware" during the recent bubble. Arizona- and New Mexico-based developers intend to tip the old Cow and replace her with a low-rise, low-cost (no hotel) casino.

The Strip needs some fresh mid-market casinos and this one could be it. But why make your anchor tenant a Walgreens when it's the flagship retailer ... of Palazzo. We sure could use the jobs, too, what with unemployment hitting record levels in Nevada. A good thing that Gov. Jim Gibbons was shamed into accepting federal funding for the jobless.

No Surprise Dept.: So the Moulin Rouge is (literally) toast and arson is suspected. The fire happened the day after a bankruptcy auction found no takers for the property.

Obama backpedals (sidepedals?) on gay rights. If he wants to give the country change it can believe in, how about revoking the profoundly un-American policy of throwing our LGBT brothers and sisters out of the military? If they've volunteered to lay down their lives for Old Glory, they're better people than me. And if Harry Truman is remembered for nothing else, he'll always be the president who integrated the military with a stroke of a pen. Does President Obama have Truman-like intenstinal fortitude?

One of the vilest of major-league baseball players back in the Eighties was slow-moving, philandering, showboating slugger Mel Hall. But we never knew just how loathsome he was. Good luck in the slammer, Mel.

Macao" rises again?

Wed, 17 Jun 2009 16:11:00 -0700

Block out the shopworn, mostly useless generalities coming from Las Vegas Sands and groove to Macao's scintillating casinos, recoil from its thick blanket of smog, and take some heart from Credit Suisse's prediction of an upturn in VIP play in the Chinese casino protectorate.

A contemporaneous Australian TV report -- which can't be embedded, alas -- was even more striking, especially in the stunning contrast between the sleek architectural beauty of Melco Crown International's new flagship, City of Dreams, and the fugliness of Sheldon Adelson's nearby monoliths. Cheers to Melco Crown for bringing a needed infusion of taste to the Cotai Strip™.

If you're not winning ...

Tue, 09 Jun 2009 18:39:00 -0700

... change the rules of the game (literally). After opening-week results from Sands Bethlehem were softer than expected, Sands supremo Sheldon Adelson now wants table games. Without even waiting for all of the state's allotment of slot parlors to open -- and, given the situation in Philadelphia, that could be long wait -- the Pennsylvania Lege is contemplating going to full-bore casinos. That's a development which would be absolutely catastrophic for Atlantic City, which has suffered aplenty.

Danny Gans must have been in unimaginable pain to use a substance two to eight times the strength of morphine. I've had morphine and it'll put you down for the count (or make you wish you were). If Dilaudid has at least double the potency, I wouldn't go anywhere near the stuff. Gans would have had to have, as his manager claims, the constitution of an ox to take a Mickey Finn like that and remain functional. Steve Friess seems to find the whole thing a mite fishy.

Having left one sinking ship (the administration of Gov. Jim Gibbons) for another (Black Gaming), former Midnight Jim advisor Grant Hewitt has found yet a third vessel. Only time will tell if the Dr. Joe Heck gubernatorial bid is a more seaworthy barque than were Hewitt's last two.

Making out like bandits

Fri, 05 Jun 2009 13:05:00 -0700

In Business Las Vegas has crunched the numbers in its annual survey of Sin City's most highly paid executives. Not surprisingly, the list prominently features two companies -- Harrah's Entertainment and Station Casinos -- whose overpaid leadership has steered them into the ditch.

In terms of base salary, what's Station CEO Frank Fertitta III doing in the #2 spot, with $2.3 million? The guy must be a legend in his own mind if he thinks he warrants a higher wage than (then-) MGM Mirage CEO J. Terrence Lanni and Harrah's CEO Gary Loveman. (To say nothing of Las Vegas Sands doge Sheldon Adelson, a comparative pauper at $1.3 million.) You might question those gentlemen's business decisions, but they preside over companies far larger and more complex than Station.

Papa Frank belatedly realized he shouldn't have lent the boys the keys to the family car.

After stock-based compensation, bonuses, etc., were factored in, it was one big-ass payday at Harrah's, six of whose executives occupied the top 10. Even as their company groaned and crumpled under the weight of a spectacularly reckless LBO, and 9% of its workforce got the sack, these gentlemen carted home an aggregate $138.8 million. The dishonor roll includes CFO Jonathan Halkyard, regional presidents Carlos Tolosa, John Payne and Thomas Jenkin, and Vice Chairman Charles Atwood.

But even the best-remunerated of these (Tolosa, at $15.7 million) is a piker compared to Loveman's $92.3 million. They don't give pay packets like that at Harvard, do they? Loveman's tenure as Harrah's CEO looks increasingly like all-but-unmitigated reign of error but he's salting away enough wealth that his reputation need not concern him.

Former Harrah's exec John Boushy had a meeting of the minds (as in a head-butt) with colleagues at Ameristar Casinos, the result of which was that Boushy found himself on the street. But we should all be kicked to the curb so harshly: Boushy got $3 million -- including half a year's pay -- to take a hike. As walking-around money goes, that's not bad.

"Livestock exchange at Circus Circus soon to follow"

Thu, 04 Jun 2009 12:55:00 -0700

That was how Daily Fiasco tweeted (twat?) an amusing essay on the Mario Batali farmers' market at -- of all unlikely places -- The Palazzo. It begins: "If there’s one thing casinos have been missing, it’s bushels and bushels of fresh produce. Sometimes, when you’re sitting there pounding away on the max bet button at nickel slots, all you want is a cold beer and some just-picked arugula. Or do you have to be some kind of high roller ..."

Quote of the Day

Thu, 04 Jun 2009 12:28:00 -0700

“People don’t want high-end these days, certainly not from this place. We’re getting all kinds of business from the Venetian, the Wynn, [T]he Mirage, from people who don’t want to pay $15 for orange juice.” -- Treasure Island owner Phil Ruffin, on the changes he's making to the pirate place.

Reid rewarded, Trop rescued

Wed, 03 Jun 2009 15:47:00 -0700

... Sen. Harry Reid's (D-NV) efforts on behalf of the casino industry have not gone unrewarded. If you can follow this formatting garble, you'll see that his donors include not only Tim & Tom, late of the Golden Nugget, but also several reliably Republican casino CEOs.

Even the Fertitta Brothers have chipped in, which is the least they could do after the Senate Majority Leader shepherded a provision that incentivizes companies to buy back distressed debt ... which Station Casinos has in abundance. All of which means that Sharron Angle and any other GOP challenger will have to build up a war chest from other industries. The coffers of Big Gaming -- with possible exception of Sheldon Adelson's kitty -- are slamming shut. The industry has taken sides and put its money on Reid.

Yemenidjian is in the house. Pending the stamp of approval for the Nevada Gaming Commission, all systems are "go" for Alex Yemenidjian to take the reins of the Tropicana Las Vegas. The feeling at the Trop must be akin to that of a besieged garrison finally seeing a relief column marching its way.

The former MGM Grand boss is saying all the right things. His backer, Onex Corp., will invest $100 million (or more) in the property, which has suffered manifest neglect. Current operator Tropicana Entertainment's capex budget was fairly puny, symbolic of CEO Scott Butera's halfhearted commitment to the LV Trop.

Under Yemenidjian, the casino will be extended to encompass the ends of the two pedestrian bridges. Two new eateries and a nightclub are planned. No word yet about a new evening show (or about chasing the prostitutes, pimps and -- worst of all -- timeshare peddlers from the premises). But Yemenidjian has too much reputation at stake to simply continue the stagnation that has been the Trop's status quo for more years than I care to remember.

(Correction: Yemenidjian plans to lower the bridge, not raise the river. Which is to say that the pedestrian bridges will be extended to reach the casino, not the other way around.)

When Yemenidjian was (unsuccessfully) pitching an Illinois casino -- also backed by Onex -- his prospective management team included two Gulf Coast veterans: Joe Billhimer and Karen Sock, late of Hard Rock Biloxi and Harrah's Grand Biloxi, respectively. Both are heavy hitters and Sock, in particular, is overdue for a Vegas posting. Here's hoping Yemenidjian brings them here. Better late than never ... and the Trop needs some serious brainpower.

"We really mean it this time." Another day, another "Las Vegas Sands has the capital to restart the Cotai Strip™" story. Turns out it's the same old same-old. The prospect of asset sales, if not dead, isn't looking terribly hale. After all, who wants to buy a hotel in Macao if you must forefeit the casino action? Where's the fun in that (to say nothing of the money)?

Case Bets: Packer & Ho, Sands Bethlehem, MGM Mirage, Ameristar, Penn, Harrah's, etc.

Wed, 03 Jun 2009 14:40:00 -0700

• Smashing guitars -- but not over each other's noggins -- James Packer and Lawrence Ho christened City of Dreams. The younger Ho downplayed expectations of foot traffic, saying his $2.4 billion megaresort could get by on far fewer visitors than the nearby (and comparably expensive) Venetian Macao, which draws 70K visitors daily.

• After a record-setting opening, Sands Bethlehem fell into fourth place during last week's casino action in Pennsylvania. Not surprisingly, Philadelphia Park and Harrah's Chester led the state.

• Beau Rivage is safe. Although MGM Mirage was peddling several of its regional casinos, J.P. Morgan reports that "we have heard from some bidders that this process is close to dead, so we don’t expect to hear asset sales chatter in the near to medium term."

• While yours truly was critical of staffing cuts at Ameristar Casinos, they appear to be paying off. The company projects flat revenue comparisons in 2009 but better cash-flow margins, pegging the savings as $40 million-$48 million, annualized.

• When in doubt, Penn National Gaming falls back on what it knows: racinos. It's angling for the Laurel Park concession left on the table when Magna Entertainment collapsed. Both Penn and rival David Cordish appear to be trying to chisel a loophole into Maryland's slot-parlor law, which limits companies to one slot house apiece. Penn is already committed to Cecil County but wants Laurel Park ... as does Cordish, who has a pre-standing commitment to the Arundel Mills area. The latter project has run into serious opposition. Expect a nip-and-tuck fight for Laurel Park.

• Penn is evidently getting cold feet in Ohio, however.

• Casino expansion in Iowa will have to wait until 2010, at the earliest. This delay is a disguised blessing. The Hawkeye State market has been holding its own during the recession but the timing for diluting the market with four new casinos could scarcely be worse.

• If wishes were horses, Harrah's Entertainment would be galloping along the shores of the Yangtze River this very minute. Seriously, would you lend Harrah's more money? Would you give an alcoholic the keys to your wine cellar? Well, you might get the empties back so you could redeem the deposit on the bottle.

Rumble in Macao

Tue, 02 Jun 2009 17:34:00 -0700

Although an oft-promised loosening of visa restrictions by Peking stubborny refuses to materialize, an air of cautious hopefulness has crept back into Macao now that City of Dreams has opened on schedule -- and it looks dazzling. Aggressive revenue projections have literally reversed the fortunes of co-owner James Packer, whose disastrous venture into the U.S. casino industry is now seen by some as a blessing in disguise.

At $2.4 billion, City of Dreams rivals the cost of Venetian Macao and is hoped to equal or surpass the latter's 20% return on investment. One projection has it leapfrogging Wynn Macau into third place, with 20% of the Macanese market.

It also represents a double-edged sword for Sheldon Adelson's mammoth casino-resort. If it draws more punters to the Cotai Strip™, good. If it dilutes Adelson's customer base, not so good, obviously. In comments to the Wall Street Journal, Adelson seemed at pains to temper some headstrong pronouncements he'd offered to Steve Friess. As expected, an Adelson without the restraining influences of William Weidner and Brad Stone, is a pedal-to-the-metal Sheldon, saying Las Vegas Sands should have gone faster, faster, faster with its Cotai Strip™ projects, not slower. (The mind reels.)

"I just came back from Macau and we have five or six different options that we can pursue, each one of which would solve our liquidity problems," the Venetian's doge proclaimed ... which doesn't sound a lot different from what he's been saying for months. That is, until he contradicted himself by buying up a truckload of LVS stock -- something he wouldn't have done were a major deal in the offing.

Adelson predicts all his suspended Macao projects will be back in gear by year's end. He's on the curve in one respect, suggesting that his aborted St. Regis condo-hotel on the Strip could be revived by Sands' acting as lender to prospective unit buyers. Palms Place just started doing that very thing.

Sheldon's Commissariat for Optimism never closes, so one tends to grow skeptical of each new variant of "Victory is mine!" Anyway, Adelson was just off the plane from China, so perhaps jet-lag accounts for this reality-challenged assertion: "Our numbers have been going up and the [Macau peninsula] have been going down."

'Fraid not. Scarcely had that Adelsonian utterance made print than Lusa reported May's revenue numbers. If April had seen Wynn Macau falling back toward the pack, with 13% of market share, it returned with a vengeance in May. Steve Wynn's 18% market share -- with far less capacity than Adelson -- put him only three points behind LV Sands and came at the latter's expense. Stanley Ho still leads everybody with 30% -- as much as Galaxy Entertainment, Melco Crown Entertainment and MGM Grand Macau combined.

A few days earlier came news that visitation from Mainland China to Macao had been -43% in April ... hardly propitious conditions for flooring the Cotai Strip™ gas pedal. Ditto a 10% drop in May gambling revenues. Until that much-mooted visa liberalization actually happens, going apeshit with casino-hotel construction makes no sense whatsoever.

Nor did Adelson do his public image any favors with a gratuitous slam against jilted sidekick Weidner. (The latter, given the opportunity to respond, took the high road.) This 'hit 'em when they're down' move will accrue exactly zero sympathy for Adelson -- and it might have some nasty repercussions should it hamper Weidner's attempts to find another job. Then again, he's as rich as Croesus, so he can probably spend the next few decades on the golf course, should he so desire.

There's been no additional movement on the rumored Genting Berhad offer for MGM Grand Macau. However, even in a $13.8 billion/year casino market, the numbers don't look great for MGM. After it splits its 8% market share with partner Pansy Ho, it would have $55 million from which to pay an onerous tax bill, plus operating expenses. (The ROI must be dismal.)

Borgata, in Atlantic City, does $55 million a month -- in a bad month -- and MGM basically cashes a check from Boyd Gaming. So if MGM elects to stay in Macao and vacate Atlantic City, it won't be because the Chinese enclave is contributing more to the bottom line. Who ever thought MGM Grand Macau would function as a glorified "loss leader"?

Steve Wynn has a dragon ... and now Lawrence Ho does, too.

Back home, MGM is going downmarket at The Mirage. And they didn't even have to sell the place to Penn National in order to get there.

Strangely enough ... Penn's recent expression of interest in both Planet Hollywood and Station Casinos passed with scarcely a murmur of comment locally. You'd think that a well-capitalized company like Penn's hanging of a target on Robert Earl's or Frank Fertitta III's back would make headlines -- or maybe Vegas journos have tired of Penn's endless feints and tuned the company out. Well, almost all of them, anyway.

Planet Hollywood, at least, is acting far more aggressively than one would expect from a property that is contemplating a sale. So perhaps Earl is more pursued than pursuer. However, his conversion of Desert(ed) Passage into Miracle Mile appears to have run out of steam -- or money -- at the halfway point. Try as he might, Earl is never going to completely de-Aladdin-ize that place. A magic lantern and three wishes would come in real handy down there.

Also flying under the radar was former Planet Ho boss Michael Mecca's enlistment with Galaxy. Mecca jumped -- or, more likely, was pushed -- from the Planet right when the Omar Siddiqui scandal was at its height. Informed speculation had it that Mecca was thisclose to being tapped to head up James Packer's projected North American gambling empire. Crown Ltd. CEO Rowen Craigie was noncomittal, though, and Crown's big Cannery Casino Resorts acquisition fell through soon thereafter, leaving Mecca hanging.

Success being the best revenge, Mecca not only landed a prestigious new gig -- it's with one of Packer's direct rivals in Macao. Mecca shoots, he scores!

Which brings us full circle to Macao. That worked out tidily, didn't it?

Big Love: Sheldon + Unions

Tue, 26 May 2009 13:55:00 -0700

As best we can ascertain, Hell has not frozen over -- nor have we engaged in any clumsy Photoshop fakery. That is an actual newspaper ad, as photographed by Steve Friess, who's out East, covering the opening of Sands Bethlehem. Since he's there and I'm not, I refer you to his series of on-the-scene dispatches: The Exterior (he deems the casino "the least interesting part" of the whole shebang) ...

The Interior (copious imagery, including that creepy robotic blackjack you see at G2E); The "very, very soft opening" (by Las Vegas Sands? Shocking!); The Sudden Crime Wave (two careless people lose their wallets; clueless prudes vent outrage).

It's droll, there's lots of pictures and it's the first good news we've had out of Sands in what feels like forever. Go, read, enjoy.

Pansy Ho: time for Plan C

Fri, 22 May 2009 18:12:00 -0700

In my usual cart-first, horse-later fashion, I elicited a legal opinion regarding the scenario I postulated the other night: MGM Mirage spinning off either its Atlantic City holdings or MGM Grand Macau into a quasi-autonomous entity, much as Sheldon Adelson proposes to do with his Macao properties.

Well, unless Pansy Ho can sit down with the New Jersey Casino Control Commission and charm them into turning a blind eye to the penumbra of unsavoriness that surrounds her father, Stanley Ho, MGM is up against a wall. It could put MGM Grand Macau into a limited partnership in which it would have equity but no power.

Did MGM spend so much time and money getting into Macao just so it could be a passive investor? Probably not. So either MGM has to scrape together the cash to buy out the Ho family or Pansy and her sister can exercise their right of first refusal on the property.

Likewise, Boyd Gaming holds the prerogative of acquiring MGM's Borgata share, but of all the possible scenarios on deck, that appears the most unlikely. Here's why:

Borgata represents no ongoing cost to MGM. It can sit back and collect 50% of the profits in perpetuity, while Boyd does the heavy lifting. In Macao, not only does MGM have to run the place, it's in a market with narrower profit margins, thanks to a confiscatory tax rate and the commissions charged by junket operators -- to say nothing of the draconian meddling of the Chinese government. And if it's relying solely on mass-market play, it's not enough to get MGM out of single-digit market share.

MGM took too long and spent too much getting into Macao to be happy with being stuck in sixth place among operators. If it's going to have to amputate a limb, losing Macao may be the less painful cut.

It could also be the more lucrative one because, even in a down market, Macao has two very price-boosting qualities: a finite number of casino concessions and a comparable limitation on casino-zoned land. Neither freeze is likely to thaw anytime soon.

Macao is still a seller's market. But if Boyd were to decline its option on MGM's half of Borgata, other suitors are going to be very hard to find. Nobody wants in on Revel or Bader Field and the Tropicana is essentially being given away. The accomplished Ms. Ho could still pull MGM's chestnuts out of the fire but if she can't, her family could wind up with 2.5 of the six casino concessions in Macao.*

* -- slightly more, actually, as James Packer's stake in Melco Crown Entertainment is exceeded by that of Lawrence Ho.

In like a "Lion"

Fri, 22 May 2009 17:19:00 -0700

Are they feeling the love tonight?

It's too soon for the box office verdict but Mandalay Bay's production of The Lion King is hitting one home run after another with local critics. Joe Brown in the Las Vegas Sun pens an out-and-out rave, which the Las Vegas Review-Journal's Mike Weatherfor seconds -- with modest (and funny) reservations. CityLife Arts Editor Mike Prevatt deems it a "near slam-dunk" for long-term success.

Lion King predecessor Mamma Mia! set a daunting benchmark with its almost six-year run and Phantom of the Opera is closing in on the three-year mark, while Jersey Boys will probably be here as long as there are enough Four Seasons fans (Who isn't?) to fill a showroom. So Broadway-on-the-Strip is scarcely the bedridden invalid that is sometimes portrayed.

Las Vegas Weekly's John Katsilometes, like others, noticed a few longeurs but also gives The Lion King top accolades. But somebody had to be the spider on the valentine and that'd be me. At least my mixed feelings weren't the only ones: The R-J's Anthony Del Valle has a comparable set of "pros" and cons."

Best reason to get out of town this weekend: Malcontent-for-hire Terrell Owens ('Have bad attitude, will travel') is to be the celebrity du jour on Sunday night at Rok Vegas nightclub. Our condolences to Rok management in case it gets an up-close-and-personal experience of the pouting, whining, 'There is no "team" in "I"' mindset that has so endeared Owens to the San Francisco 49ers, Philadelphia Eagles, Dallas Cowboys and their respective fans. (Not to mention various pushed-under-the-bus QBs.)

Owens may have difficulty hanging onto a football but when it comes to "hosting" at a nightclub, if Spencer Pratt can do it how hard can it be?

Best reason to be in town this weekend: Two words -- Cheryl Burke.

Have a glorious holiday weekend.

Quote of the Day

Thu, 21 May 2009 18:09:00 -0700

A certain casino.

"The old timers will remember the time, and not that long ago, when casinos just looked at your action and rewarded you accordingly. They figured everyone wins at least part of the time, and they knew that if they cultivated the customer and encouraged him to continue to play, they would usually still make money on him in the long term. Bean counters are big on looking at the short term!" -- Jean "Queen of Comps" Scott on certain casinos that are sweating slot-club points and bounce back something fierce.

Solving the Pansy Problem

Wed, 20 May 2009 01:34:00 -0700

Amidst today's crush of news, I forgot at least one other potential solution to l'affaire Pansy. Perhaps MGM Mirage can have its cake and eat it as well, by taking a page from Sheldon Adelson's playbook. It'd be a transparent move, a change more cosmetic than substantive. But it also might be procedurally deft enough to sidestep a potential head-on collision with the New Jersey Casino Control Commission.

Were either the company's Macao or Atlantic City assets walled off from everything else stamped "MGM Mirage," it just might do the trick. It's at least worth trying and I'll bet the MGM legal team is burning the midnight oil right this very minute, working on some smooth move of that ilk.

Incidentally, former Atlantic City mayor -- and current state senator -- James Whelan has proposed removing one step from the Garden State regulatory process. Deeming the Division of Gaming Enforcement and the NJCCC to be redundant, he proposes eliminating the latter. Imagine the alternate reality in which Whelan's proposal had already become policy: Columbia Sussex would still be ensconced at the Tropicana Atlantic City but MGM would be metaphorically packing its bags. That just doesn't sound right.

Diversity initiative at MGM Mirage

Tue, 19 May 2009 16:43:00 -0700

As in revenue diversity. Just when it looked as though CEO Jim Murren was getting locked into a Vegas-(almost)nothing-but-Vegas strategy, he busts out a couple of initiatives that would further expand and diversify his company's global reach and revenue stream.

After getting out two years back, MGM has quietly gotten back into the running for a 4,500-machine racino in Queens, N.Y. The company also has Florida-based developer R. Donahue Peebles in its corner. Others in the field for the Aqueduct contract include discrete bids by Steve Wynn and Penn National Gaming.

The latter is the only one currently involved in racinos and would seem like the logical choice, but observers seem to favor MGM's bid. If it goes through, the Aqueduct racino would pose a serious threat to other casinos in the region -- even MGM's own joint venture at Foxwoods Resort Casino. At least Foxwoods has table games, whereas slots-only Sands Bethlehem could see a huge chunk of its projected customer base gravitate back to the five boroughs.

In a low-risk deal, MGM is also franchising its MGM Grand, Skyloft and Bellagio brands to a trio of boutique hotels in Dubai. Developed by Dubai Pearl FZ, the threesome comprises a grand total of 630 rooms. Back here, that wouldn't add up to one wing of an MGM Mirage resort hotel. Otherwise, the Dubai Pearl project sounds awfully familiar: "an 'integrated city' with 5-star hotels, apartments, condominiums, retail and convention space." Kinda like ... oh, what's that big place down on the Strip? Yeah, CityCenter, that's it!

Exit the king? He's not quite off the stage, but in an event of historic proportions, Kirk Kerkorian's stake in MGM has fallen to 39%. Holy King Lear's abdication, Batman! Does this simply presage another Kerkorian comeback ... or the end of an era?

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?

Wynn, unplugged

Thu, 30 Apr 2009 18:27:00 -0700

"Wynncore"'s boss has been all over that series of vacuums and tubes which some call "the Internet" this week. He did Kirk Kerkorian a favor by suggesting that he, Steve Wynn, would be tractable to buying anything the aging aviator had to sell ... even Circus Circus.

While Wynn may have been merely being playful, enjoying how much the worm has turned since then-MGM Grand forced him out of then-Mirage Resorts, his expression of interest helped goose MGM Mirage stock by 5%. Holders of Wynn Resorts shares, however, may have emitted a collective "Eek!" at the thought of Wynn buying yet another clown-themed casino (don't forget that he once owned the Boardwalk). WYNN shares slipped 3%.

If Steve Wynn on 60 Minutes is good, then 69 minutes with Steve Wynn must be better, right? Either way, here he is at the Milken Institute's Global Conference 2009. What's inarguable is that there is no other CEO in the gaming group -- no, not even Sheldon Adelson -- to whom people would listen for anywhere near that amount of time. True, many Americans do watch an hour-long TV show starring ex-casino mogul Donald Trump, playing a parody of CEO (or could it really be a cunningly disguised Alec Baldwin in the role of Old Fish Lips?) ... much as they do When Animals Attack! or World's Scariest Police Chases.

Bloomberg News cornered Wynn for a few minutes and the unscripted result was better than any televised fender-bender. [Warning: The audio is subject to frequent dropouts.] Wynn began by acknowledging that, times being what they are, Americans are scarcely obligated to visit Las Vegas.

One wishes certain umbrageous local figures would get that memo.

He also notes that Wynncore is cheek-by-jowl with "all the convention centers." So I take it that proposed Wynn Las Vegas/Encore convention center is now off the drawing board. Strip land acquisitions are flatly ruled out -- no doubt causing some long faces at Elad Properties, Triple Five and other companies that bought acreage at the top of the market (i.e., $33 million-$36 million/acre) and can't do squat with it now. Uncle Steve is not coming to their rescue, I'm afraid ... and why should he? As Wynn obliquely acknowledges, he's got plenty of land of his own, fully amortized but not developable in these tight-credit days.

But it's when the conversation turns to politics that things get well and truly interesting. Starting with an observation that the government is too fixated on infrastructure improvements, Wynn gradually works himself up into an fine rage. His description of President Obama's policies runs the gamut of "naive ... doesn't have much credibility ... unimpressed ... ridiculous shopping list ... the right ideas at the wrong time ... shotgun approach." He faults the current administration for lacking "experience and priorities" and -- in a somewhat ironic choice of analogy -- says that when a patient is undergoing major surgery, "you don't give 'em advice on a nose job."

You want must-see TV? This is it!

Unfortunately, Wynn is somewhat hamstrung when pressed for constructive alternatives. His one substantive answer is a proposal that Uncle Sam subsidize new hires if the employer provides health benefits. Beyond that, he falls back on a broad-brush invocation of tax policy (which "incentivizes people to do what the government wants them to do"). Wynn thumps the "tax policy" tub so relentlessly that he starts to sound like a personality-implanted version of Rep. John Boehner, pining for the return of the previous administration's economic policies as fiscal Viagra.

Give the man credit. He's got strong opinions and no fear about voicing them. He's a cheerfully impolitic figure in word-parsing times and the casino industry might be unbearably dull without him.

Macao in 7 minutes

Wed, 29 Apr 2009 13:00:00 -0700

Sands Macao: An offer you can refuse

Tue, 28 Apr 2009 12:02:00 -0700

For the present, Las Vegas Sands continues to keep mum regarding a South China Morning Post report that it's trying to sell Sands Macao. Does the old legal maxim, "silence gives consent," still apply? The lack of an outright denial leads me to believe this story is still very much alive. However, Sands' chances of swinging the deal described in the Post appear quite long indeed.

Sands Macao: Priced to stay put.

Sands is reportedly asking $1.3 billion for Sands Macao -- approximately 8X cash flow for a casino-hotel that has been a money spinner from the get-go. However ... Sands would continue to operate the casino and pocket the revenue therefrom, paying a rent that's pegged to the casino's performance. It'd scarcely be an unusual arrangement. Stanley Ho achieved his broad reach, in part, through pacts with other hotel owners who farmed their casinos out to his Sociedade de Jogos de Macau.

But $1.3 billion is pretty steep if you're looking at having to make your nut off of hotel rooms and restaurants. That's a ton of shark's fin soup you'd have to sell. Indexing the casino rent to gambling revenues hardly incentivizes Sands to drive up business at its original Macao casino.

Unless somebody at Sands is thinking way outside the box and offering to pay rent in inverse proportional ratio to what the casino rakes in, but that makes even less sense. Sheldon Adelson would have to be promising massive rents for his mooted sale to pencil out for the buyer. Owning a hotel in Macao without the casino is like getting kissed but not ... you know.

I've been expecting Adelson to float an offer like this for a few weeks now. He wouldn't do it with Venetian Macao unless he could somehow hang onto the convention center as well as the casino. But desperate times are at hand and, seeing as Sheldon's Cotai Strip™ malls aren't finding any takers, Sands Macao may well be expendable.

Ironically, Sands Macao, which was intended as an expedient, low-cost vehicle for getting into the Macanese market was the one opening that Adelson pulled off right. MGM Mirage would have done well to have following a similar route into Macao, instead of taking so long and spending so much money to get all its Peking duck in a row. What would happen if you built a megaresort and nobody came? It looks like MGM Grand Macau, the tail-end Charlie of the Macao market, answers that question.

Bad news for Pennsylvanians. The Associated Press reports that $743 million Sands Bethlehem "has put off finishing the restaurants, entertainment and other non-gambling elements planned there." Can you say "grind joint"? I thought you could. No wonder Sands is projecting such steep (17%) ROI if it's going to open the place as a slot house.

"Ugly Americans"?

Tue, 28 Apr 2009 11:15:00 -0700

G2E Asia has announced its keynote speakers and it's looking like a family affair. If you're up bright and early on June 3, you'll be treated to the insights of Stanley Ho, recipient of this year's "Visionary Award." The keynote address proper, the day before, goes to son -- and Melco Crown Entertainment CEO -- Lawrence Ho (above) who should be flush from the opening of City of Dreams.

So who's not on the roster of headliners? Ohhhhh ... anybody from Las Vegas Sands, Wynn Resorts, MGM Mirage. You know: all the capitalist running dogs. They can take comfort in the fact that no keynoters have been invited from Hong Kong-based Galaxy Entertainment. That company just imported two new top execs from the U.S., so maybe it will be a proxy recipient of some of the anti-Americanism that's currently en vogue in Macao. At least, since G2E Asia is being held at his Cotai Strip™ CotaiExpo, CEO Sheldon Adelson will be crying all the way to the bank.

If you've ever been curious as to what LVA HQ looks like, here it is in all its glory. Be it ever so humble, there's no place like Huntington Press. No Stella Artois beer on tap these days, though. Darn that recession.

Adelson in denial

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

"We don't have any intention now, and we have no intention of having an intention in the very near future. Right now, it's not necessary for us to do this." That's what Sheldon Adelson said back on March 24, regarding his newly gained flexibility to buy back debt.

Not necessary? Even when his Las Vegas Sands has a 15:1 debt-to-earnings ratio (worst in the industry)? When Sands Macao may -- in what would be a true desperation move -- be on the block for $1.3 billion? Adelson sounds like a man who won't know his company is falling off a cliff until after it hits the canyon floor ... and maybe not even then.

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.

Icahn vs. Kerkorian II; Ho hearts Adelson

Fri, 17 Apr 2009 11:18:00 -0700

Yesterday saw some intemperate spluttering in newspaper comment threads, along the lines "How dare the Wall Street Journal report the news? It might damage stock prices!" (One hothead even bruited the possibility of a libel suit.) All of which was predicated on the assumption -- and we know what happens when we assume -- that the WSJ was merely chasing rumors when it reported that Carl Icahn and Oaktree Capital Management were putting the squeeze on MGM Mirage, trying to steer it into bankruptcy. (Some -- including The Economist -- think a CityCenter-driven bankruptcy is inevitable, regardless.)

Undeterred, the WSJ is back with the full story today and it's the real deal. Icahn and Oaktree are not acting in concert and their agendas are different. Icahn is thought to be angling for a piece of the company while Oaktree likes MGM the way it is, if only it could "clean up its balance sheet." Were they able to force the bankruptcy issue, their rights would supersede owner Kirk Kerkorian's and regime change would surely follow.

But that presupposes a great deal ... not the least the 'great deal' MGM got from its bankers when it was able to borrow $7 billion unsecured. Also, crunch time is still a long way off. Icahn and Oaktree's best chances for bending MGM to their will won't come until July or October, when an aggregate $1.5 billion in bonds must be repurchased. In order to prevail, either Oaktree, Icahn or both would have to thwart that repurchase, presumably by refusing to tender their bonds. But MGM still has a few cards to play in the meantime.

Across the Pacific, Bloomberg has the skinny today on what went down at Sheldon Adelson and Stanley Ho's secret lunch at Venetian Macao earlier this week and a subsequent summit meeting yesterday. (Melco Crown Entertainment CEO Lawrence Ho joined the oligarchs, as did MGM Grand Macau co-owner Pansy Ho, along with a local proxy for Wynn Resorts).*

It seems that detente is the word for the day, with the two ancient enemies agreeing to forego their arms race in favor of cooperation. Or, as the 87-year-old Ho put it, “Everyone agreed not to compete, to have enough rice to eat and to get more taxes for the government." (Adelson was uncharacteristically mum.)

... where the elite meet.

Considering the "cutthroat competition" (as Ho once put it, shortly after some junket operators had their throats slashed) that's prevailed so far in Macao, this new entente cordiale sounds like something that's going to be far easier said than done -- especially when the market begins to rebound. The latter already shows signs of bottoming out. MEAG Hong Kong Ltd. Investment Director John Koh speculated prior to Thursday's superpower meeting that the Adelson/Ho accord would mandate:

• one standard rate for junketeer commissions

• a salary freeze

• a hands-off policy toward one another's VIP ~~players~~ hosts and/or key executives

Since Adelson has several Cotai Strip™ projects -- including a St. Regis and a Shangri-La -- gathering rust, could his sudden amity with the Ho clan be a means of courting bailout money? And how would the Macanese government -- to say nothing of Steve Wynn -- react to the prospect of a polyamorous alliance betwixt SJM, Las Vegas Sands, Melco International and Ms. Ho's Shun Tak Holdings, say? Such a hyrda-headed oligopoly would give competitors a great deal to worry about and seems far from inconceivable, given the desperate circumstances of certain of the parties involved.

*--Galaxy Entertainment seems to have been conspicuous by its absence, but that underachieving company has other Koi fish to fry. The fact that Galaxy is writing down the value of its license, though, says less about the Macao market than about Galaxy and its failure to make substantial inroads, despite being one of the first companies on the scene.

First, some good news

Thu, 16 Apr 2009 18:19:00 -0700

In a refreshing change of pace comes news of a casino that's on schedule for its opening. OK, so it's in Dodge City, Kansas, but we'll take good news wherever we can get it these days. Whoever thought avionics firm Butler National would be the sole casino bidder to make good on its Sunflower State commitment?

How quickly we forget that the original plans for Red Rock Resort called for three condo-hotel towers. Station Casinos was feeling its oats back then, thinking big even as it projected only single-digit ROI at Red Rock as far out as 2011 or longer. Overconfident much?

They like us. They really, really like us. Casinos in Southern Nevada feeling the recession's pinch are suddenly overflowing with newfound lurve for area customers, long taken for granted. Here's what's on offer so far. Satellites like Primm and Mesquite weren't any great shakes during Vegas' halcyon years. Why you'd go out there now when oligopolists Herbst Gaming and Black Gaming have helped run their respective markets into the ground is difficult to fathom. (Primm, at least, has a good outlet mall. Mesquite ... not so much.) Oh, and what's wrong with this "Stay and Play Here" graphic?

Goodman one-ups Adelson. Although he's never exuded warm fuzzies toward the Culinary Union, neither has -- to my knowledge -- Sheldon Adelson called his longtime adversary "evil." So Mayor Oscar Goodman stepped into the breach -- or stepped in something. As for the Culinary, it's got much bigger problems to worry about.

Any company that planned an ultra-high-end Elvis Presley-themed resort (a conceptual disconnect if ever I heard one) doesn't have both oars in the water. This one doesn't have money in the bank, either, and may soon have its Strip parcel sold right out from under it.

Las Vegas' best low-cost attraction is on the move, down the road to 1610 E. Tropicana Ave. If there's a guest list for the grand reopening, Elton John isn't on it.

James Dobson admits he's a loser

Wed, 15 Apr 2009 14:51:00 -0700

Whiny anti-gambling obssessive (and sometime pediatrician) Dr. James Dobson exited his Focus on the Family with an admission that he's on the losing side of the culture war. He blames it on the Nineties, Bill Clinton and that damned Internet. (A bit behind the times, isn't he?) At least Dobson needn't worry about "made fools for Christ." He's been doing a splendid job of making a fool of himself without any assistance whatsoever -- and shows every indication of continuing to do so.

Don't let the doorknob hit you on the way out, Jimbo.

Ader returns. Once the most-read (and arguably the most-feared) gaming analyst on Wall Street, Jason Ader is back in the picture as the newest board member of Las Vegas Sands. Here's hoping he'll have better luck than his predecessor at exercising a modicum of restraint upon CEO Sheldon Adelson, who's been in a pedal-to-the-metal frame of mind lately. Unlike the appointment of Michael Leven as Sands' new prez, this is one Adelson hire whose resumé won't be open to second-guessing.

Fun with numbers. Nevadans, apparently angry about having the day off or maybe irked from shouldering the second-lowest tax burden in the nation (Wyoming is #50) rallied in Carson City today. A Southern Nevada anti-tax newsletter estimates the crowd at 2,000. Local constabulary spotted only half as many, tops. (Subseqently revised to "more than 1,000.") I hope Stephens Media is better at bean-counting than head-counting.

Gibbons Follies. Having lain low for a few days, Gov. Jim Gibbons is back in the news with a vengeance. After saying he simply wouldn't sign a domestic-benefits law making its way through the Nevada Lege (about the only solid accomplishment emerging from that frivolous convocation), all it took was a quick chat with untiring homophobe Richard Ziser to make Midnight Jim wimp out completely. Now he says he'll veto the bill, thereby continuing to consign many Nevadans to second-class citizenship. (Supporters of the bill are trying to get Gibbons' ear but are more likely to receive the back of his hand.)

This is just plain wrong and a slap to a lot of hard-working, taxpaying citizens whose committed relationships might as well not exist, as far as the current law is concerned. "I just don't believe in it," sayeth Midnight Jim in re domestic-partner benefits for gay and lesbian citizens. Judging by his two divorces, Gibbons doesn't put great store in conventional marriage, either.

Jim Gibbons finds something he can believe in.

But alas, his latest strategem for meeting chicks laid an egg. Or did it? You be the judge. More seriously, Nevada can't afford to fill open Nevada Gaming Control Board positions but it can afford 5,000 gubernatorial eggs? Something's cracked here and it's not an eggshell.

Adelson meets Ho: Shall we dance?

Wed, 15 Apr 2009 11:17:00 -0700

It's appropriate that a top-hush luncheon between Sheldon Adelson and chief adversary Stanley Ho was held in a Venetian Macao ballroom: Even in such a spacious venue, it must have been a tight squeeze fitting both tycoons and their respective egos in there. A Las Vegas Sands mole told Macau Business it was a social encounter "with no particular business agenda."

"What a nice casino you have, Sheldon. I'm really going to enjoy owning it."

Perhaps the duo simply commiserated over the recent decimation of their personal wealth. If so, it was a waste of time because the two men have quite a lot else to discuss. Adelson, for one, has performed a volte-face on the issue of junket commissions. Sands used to be the worst obstructionist of Macao CEO Edmund Ho's commission cap, even when escalating commission wars threatened to render Macao casinos a revenue-negative venture.

Now Adelson and Ho are on the same page, wanting commissions to be lower still. (It's amazing what a little mutual adversity will do.) They also share a desire for a lower casino tax. Lotsa luck there, although they might be able to sell it to Peking as an palatable tradeoff for continued visa restrictions.

Perhaps a large heaping of crow -- a dish not customarily favored by CEOs -- was on Adelson's plate. According to Macau Business, "the SJM managing director [Ho] also said he would be interested in buying part of LVS business in Cotai." It would be the comeuppance to end all comeuppances if the price of keeping the Cotai Strip™ alive would be for Adelson to cede partial ownership to Stanley Ho. The latter's been Adelson's verbal whipping boy ever since the sultan of Sands vowed to reinvent Macanese casino industry. Which he did, but it's been a Pyhrric victory.

A grudging Adelson-Ho detente -- perhaps even alliance -- is no longer the preposterous scenario it would have been just six months back. Public pronouncements to the contrary, Sands appears nowhere near to landing equity partners for its frozen Cotai Strip™ projects and Adelson's recent stock purchase was regarded as a critical "tell" in this regard. Or, to put it another way, if a deal were in the offing and Adelson -- knowing that -- bought LVS low, he'd soon find himself spending quality time with the SEC. Adelson may be rash but he's nowhere near stupid.

It will be poetically apt if Tuesday's ballroom setting prefigures the emergence of Stanley Ho as Sheldon Adelson's dancing partner. The Sands CEO could do much worse. Dr. Ho is a trophy-winning terpsichorean tycoon, famous for cutting a stylish figure on the ballroom floor. An Adelson-Ho pas de deux would be the most fascinating Dancing with the Stars pairing yet.

P.S. Special thanks to GamingFloor.com Editor Ian Sutton for the heads-up.

How the Grinch Stole MGM Mirage

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

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

Until now.

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

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

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

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

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

Texas afterthoughts

Fri, 10 Apr 2009 14:52:00 -0700

My apologies for leaving regular readers high and dry on Thursday. I was KO'd by a viral infection of some sort. Between that and a couple of doses of Zicam, I spent most of the day drifting in and out of sleep. Amazingly, I managed to stay awake through the early part of a Dodgers/Padres game in which neither starting pitcher could find the strike zone with two hands and a flashlight (the first two innings took an hour to play), only to doze off as things became -- moderately -- interesting and each team overcame its aversion to scoring runs.

Wednesday's report on Sheldon Adelson's surprise appearance in Austin, prompted this reader reaction, posted here because it was devoured by LVA's Comment-Eating Server: Regarding Texas and Casino Gaming: IMO the reason North Texas and Oklahoma are so closely linked is because Texas has strong beer and strong porn, and Oklahoma has Casino Gaming, and both sides are more OK with it than they want to admit.

Having taken note of Adelson's Texas peregrination, the Las Vegas Review-Journal said to Las Vegas Sands, in effect, "Show me the money!" (Adelson is promising to spend $2 billion-plus on a Dallas-area casino.) The company's response was that its current troubles "wouldn't impair its ability to invest in Texas, in large part because even if gambling is legalized there licenses wouldn't be up for grabs until at least March 2011."

So is Sands promising to have its financial house in order 23 months from now? We'll take that as a "Yes." (Don't forget that Adelson is also courting Massachusetts legislators in hopes of landing a casino deal in his native state.)

The Dallas Morning News, to its credit, did a little number crunching and -- at the end of its story -- poked a big hole in the revenue projections being made by Texas casino proponents. In essence, they're promising 3X-4.5X the amount of casino-tax lucre that Nevada pulls in, with only double the tax rate and a tiny fraction as many casinos. Uh-huh.

Then again, the poster boy for a Lone Star casino industry is the man who once crowed, "We could build 10 Las Vegas Strips over here [in Asia], there’s so much demand!" How's that working out?

Where's Sheldon?

Wed, 08 Apr 2009 12:10:00 -0700

Down in the Lone Star State, where else? The Las Vegas Sands CEO was making some Texas-sized boasts to the Lege, trying to impress them with a show-and-tell presentation of "large glossy photos of his company's properties -- the Venetian and the Palazzo in Las Vegas, and a casino development in Macao that cost billions of dollars to build."

Never mind that Sands has an abortive condo project on the Strip (where its latest marquee retailer is ... Walgreens), has had to scale back Sands Bethelehem and the Cotai Strip™ has ground to an ignominious halt -- at least until equity partners materialize. No, Adelson says he's prepared to expand into Texas and the money will be there. Indeed, he says he'll spend "Whatever it takes."

The money certainly isn't there in Macao, where "there's nothing imminent," despite hopeful talk of two Chinese construction moguls vying for a piece of Sands' Macanese action. It wouldn't be the first time Adelson's crystal ball came equipped with a rose-colored filter.

The proposal before the Texas Lege appears doomed not only because of the fierceness of its opposition but due to its over-ambitious scale. Fifteen casinos (including three tribal ones), an unspecified number of racinos, a related push for legalized and regulated poker ... it's too much for such a profoundly conservative state to swallow in one great gulp.

Besides, there's a huge disparity in the proposed tax rate for casinos (15%) and that paid by tracks (35%), meaning the Lege would have to bite one or more bullets: Raise the casino tax, lower the parimutuel one, or do some combination of both that isn't revenue-negative. If the gaming industry wants to get its boot in the door, the competing racino-only bill looks like a more viable and incremental means of establishing a Texas footprint.

The current debate has also provided another excuse for Phyllis Schlafly's Eagle Forum to make a nuisance of itself. One of its harpies squawked, "Why in the world would we want our children to grow up to be card dealers and waitresses?" I presume she would prefer that they grew up to be unemployed.

The (real) Bridge of Sighs

Tue, 07 Apr 2009 17:36:00 -0700

... and if you look closely you can see Venetian Macao executives loyal to Brad Stone being led off to suffocate in the piombi or drown in the pozzi. OK, so I totally made that last part up; too many hearings of Ponchielli's La Gioconda will have that effect.

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?

Adelson in the details

Fri, 03 Apr 2009 12:39:00 -0700

Nearly lost amidst a flurry of news stories about Las Vegas Sands hoping to jump-start construction on its stalled Cotai Strip™ (with the help of new equity partners) was this snippet from Sands' president of Asian affairs, Stephen Weaver. Rents at the Marina Bay Sands shopping mall, still under construction in Singapore, are being “pulled down to adjust to the market.”

Lower projected rents? Just one more reason to curb the irrational exuberance with which some Wall Street analysts view this $5.4 billion project.

Under the radar: Remember how Columbia Sussex told the New Jersey Casino Control Commission, in effect, "put it on our tab," when hit with a $750,000 fine? ColSux's original plan was to just have the NJCCC skim the 750 large off the top of whatever it got from selling the Tropicana Atlantic City.

However, the NJCCC informs me that ColSux affiliate Adamar settled up with the state a ways back. Bravo to them. Besides, if Carl Icahn wins the Trop with a credit bid, the casino will change hands but no money will. So much for the windfall everyone was anticipating a year ago.

Case Bets: Wynn, Adelson, casino closings & Number One

Mon, 30 Mar 2009 18:45:00 -0700

Last winter, I got a break on my rent -- but not nearly as good as the one Steve Wynn did. That's a nice deal, if you can get it.

Las Vegas Death Watch: In the latest "Stripper Poll" posted by Steve Friess, he asks which Strip casino should close first "if economic conditions warrant it." Through some glitch, the Tropicana was listed twice, so voters may be using two of their three votes on it. Either way, it's out in front with 40 votes, with hanging-by-a-thread Hooters second (31 votes) and Circus Circus, the casino people to hate -- and patronize -- third with 29, as of this writing.

The fourth-place showing by the customarily derided Imperial Palace counts, in this context, as good news for the IP. As for the Tropicana's prospects, I'd still count them better than Riviera's ... assuming Trop management gets its act together, which it shows few signs of doing.

Good news for Adelson: An analysis of the East Coast casino market finds Sands Bethlehem relatively sheltered from strong competition and likely to swipe business from two rival Pennsylvania slot parlors.

Whatever service workers get paid, it's not enough, as this story demonstrates. The indignity alone is impossible to quantify.

Adelson says "Sell!"

Fri, 27 Mar 2009 17:54:00 -0700

... casinos, that is. In a once-unimaginable turn of events, Sheldon Adelson is openly discussing selling off chunks of his Macao triple crown: Venetian Macao, Sands Macao and the Four Seasons. For all of Adelson's brave talk about sunny skies ahead, the fact that he'd float such a scenario speaks to how Las Vegas Sands has fallen and can't get up unassisted.

Sheldon Adelson, meet your new business partner.

His improbable rescuer is ... Melco International, which raises the deliciously ironic prospect of Adelson going into business with the son of archenemy Stanley Ho. You can't script this stuff! The Lawrence Ho solution sidesteps the pesky question of how to bring in a third party, effectively creating a sub-sub concession. (Do you cut them out of the gambling revenue? Would Chinese authorities stay on the sidelines?)

However, it raises another conundrum: How is the Macanese government going to react to one subconcessionaire owning part of another concession? It should be fascinating to watch this unfold.

The Unlucky Club & other Case Bets

Thu, 26 Mar 2009 14:40:00 -0700

Did somebody build the inaptly named Lucky Club (above) over an Indian burial ground? A deprivation of access is but the latest indignity suffered by this North Las Vegas grind joint. While it was still the Speedway Casino, it was ravaged by fire. Years earlier, it was the Cheyenne, most famous for having its bookeeping described as "smoke and mirrors" by then-Nevada Gaming Control Board Chairman Bill Bible. That rumpus -- and a few others like it -- would dog casino speculator Shawn Scott for the rest of his spotty career. Last we heard, Scott had hunkered down in the Virgin Islands.

Better fortune was in store for the long-on-the-market Ritz-Carlton Lake Las Vegas, which couldn't find any takers not so long ago. I'm guessing "undisclosed price" is code for "fire sale."

(Update: It sold for $98 million.)

At least I'm not alone in thinking that Las Vegas Sands is headed over the brink. So does John L. Smith who has more bad news for Sheldon Adelson.

Need to raise awareness of your bookmaking service? Hire a gambling addict as your pitchman! The surprise isn't that this, er, novel marketing initiative was ashcanned but that it got as far as it did. Earth to Better Bet, Earth to Better Bet ...

Earth to Wynn ... Weather forecasters have been predicting high Thursday gusts of wind all week long. But Wynn Resorts must not have paid its cable TV bill because it sent window-washers up Encore anyway. Not surprisingly, something went wrong and they had to be rescued. Now that everybody in Vegas is on a curtain-wall craze, expect crises like these to multiply exponentially.

Going out on a limb, the Las Vegas Sun says that Sens. John Ensign and Harry Reid were doing the right thing ... now that a consensus has formed and the story has faded, making it safe to take a stand.

Wendover: Casinos, yes; mental health care ... not so much.

If you're going to lose your marbles in Nevada (some would say I already have), don't do it in Wendover. It's still OK to lose money there, though. Wendover Will approved this message.

On second thought, you might not want to bring your money here, either. At least not if you use debit cards. Where do I sign the petition to abolish the Nevada Legislature? They don't need any stinking due process, do they?

Venetian Macao rescued

Thu, 26 Mar 2009 11:53:00 -0700

The video, that is. (The future of Sheldon Adelson's folie de grandeur is anybody's guess.) Yesterday's jumble of embed code has been replaced with graceful imagery, thanks to the wizardry of our IT department. Happy viewing!

Hark the Adelson angels sing

Wed, 25 Mar 2009 15:29:00 -0700

World's Biggest Casino from Jonathan Schütz on Vimeo.

Seraphic choirs warble the praises of Venetian Macao in this promotional video (dug up by GamingFloor.com) which apostrophizes the $2.4 billion "spanking new behemoth" in reverential tones normally reserved for Vatican City or the Louvre.

Las Vegas Sands: Abandon ship!

Tue, 24 Mar 2009 18:18:00 -0700

"Another mutineer dispatched, Admiral Adelson sailed forth to do battle with the hydrofoil fleet of Stanley Ho."

As the gilded galley that is Las Vegas Sands slowly settled deeper and deeper into an ocean of red ink, Wall Street analysts held out a slim lifeline or two. Surely, they noted, LVS' overseas construction supremo, Brad Stone, and Venetian President Rob Goldstein were still with the ship. And then there was one.

There is also only one way that Stone's March 18 departure (disclosed today) will play on Wall Street. In a word, badly. Perhaps his leap overboard was inevitable, given his long ties to outsted Sands prez William Weidner. Or maybe he didn't cotton to answering to an overcompensated newbie gaming exec (Weidner successor Michael A. Leven, aka The $2 Million Man). Either way, Stone leaves asset sales in Macao hanging fire and Marina Bay Sands in Singapore well short of the finish line.

We are presumably meant to be reassured that Sands is pondering buying back $800 million in debt, bringing its leverage down to a mere $9.7 billion (or slightly less than 14X earnings). This sort of bucket-brigade move still might save the ship but Admiral Adelson's waited until the bilge water was lapping at his ankles.

Hey, Sanford Bernstein! Aren't you glad you rated this stock a "buy"? Construction at a standstill in both Macao and on the Strip ... unimaginable debt-to-earnings ratios ... a $5.4 billion megaresort coming online in an untested market ... what's not to love?

Casino apocalypse

Thu, 19 Mar 2009 13:08:00 -0700

I'm deeply imbedded in other projects today. In the meantime, by way of In Business Las Vegas and GamingFloor.com (source of yesterday's Harrah's Entertainment time warp, too) here's the answer to the question, "How many casino failures can you pack into nine minutes?" Watch it and weep.

Death, taxes and Station Casinos

Wed, 18 Mar 2009 14:39:00 -0700

It's all but certain that the unenviable steeplechase to be the first major gaming company to declare bankruptcy in 2009 will be won by ... Station Casinos!* (On Tax Day, no less.) None of the company's three rescue scenarios does not involve some form of bankruptcy.

(* -- Unless Trump Entertainment Resorts still counts as "major" operator, but I strongly doubt it.)

Potential runner-up MGM Mirage is at least a month behind. Coincidentally or otherwise, mid-May would also mark the point at which the maw of CityCenter devours the $500 million realized in the Treasure Island sale (leaving approximately $600 million in the kitty), should that close on schedule.

Which might be A Good Thing: Another razor-sharp analytical piece from the Las Vegas Sun efficiently lays out the reasons why Chapter 11 is the worst option -- except for all the others. Not only does it keep the companies in one piece, it reduces the incentive to cannibalize capex dollars for debt servicing. Also, the prospect of facing regulatory scrutiny is daunting enough to bankers that they're inclined to keep the status reasonably quo.

Although MGM Mirage has one of the best debt-to-earnings ratios on what I'll call the Benston-Velotta Scale, short-term debt has pushed it far closer to the brink that Wynn Resorts or Boyd Gaming, both of whose ratios look slightly worse on paper ...

But not nearly as bad as the nearly 15:1 debt-to-earnings imbalance under which Las Vegas Sands is crumbling. It really makes you wonder what the Sands-loving analysts at Sanford Bernstein have been putting in their coffee. Running a close second at 13:1 is bankruptcy-bound Station, the victim of cash-flow projections that were extraordinarily far from the mark.

Taxing problems: More numbers are available on the proposed cigarette and liquor tax hikes. They're ugly but I did get a chuckle from the R.J. Reynolds lobbyist who floated the solicitous argument that tobacco taxes are bad because they're regressive. Nice try. (Altruism is not Big Tobacco's strong suit.)

I've also shamelessly swiped these market-cap comparisons, which Hugh Jackson posted today:

Barrick Gold: $27.5 billion

Newmont Mining: $18.72 billion

Wynn Resorts: $2.37 billion

Las Vegas Sands: $1.46 billion

MGM Mirage: $959 million

That's $46.2 billion for just two mining firms vs. less than $5 billion for three of the most significant casino companies. Which of these industries is in the cross hairs for an imminent Nevada tax increase? I'll give you a hint: The answer does not contain the word "mining."

Wynn(ing) Scenario: No matter what he says, people love to speculate that Steve Wynn's going to use his new stock offering to buy another casino. I'm not saying he won't ... but $175 million won't get him far, even in this market. Unless he's got a sudden hankering for the Tropicana or Riviera, that is.