David Mckee's Stiffs & Georges - Harrah's

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?

Eight Vegas shows reviewed

Mon, 19 Oct 2009 18:10:00 -0700

As promised, Mike Shackleford's WizardOfVegas.com site has launched. It took a while to get the bugs worked out, hence my review of Scarlett & her Seductive Ladies of Magic didn't appear until after the show had closed. However, to the best of my knowledge, you can not only read about but still see all of the following ...

• Amazed

• Anthony Cools

• Gordie Brown

• Marriage Can Be Murder

• Matsuri

• Sin City Bad Girls

• V - The Ultimate Variety Show

Sample line: "Yes, Marriage can be murder ... and so is the food." Enjoy!

Aria drives prices ... down

Fri, 16 Oct 2009 16:23:00 -0700

Contrary to repeated assertions by J.P. Morgan, it would appear that MGM Mirage is putting out promotional specials for Bellagio ... and very aggressively so. Note however, that Steve Wynn's masterpiece is maintaining its price point and Aria is the one having to come down to meet it.

Also, an unscientific survey of mid-week rates parallel to Aria's opening shows that what the CityCenter flagship is doing is sucking the air out of the rest of the Strip, especially other MGM properties. Even Wynn Las Vegas is down to $159/night that week (quotes were predicated on a three-night stay).

The absolute bargain was Downtown's Golden Gate ($12.71) and unless you count Hooters and fellow bottom-feeder Wild Wild West, the lowest on-Strip price was $21.21 at MGM's Circus Circus. The Sahara ($22.40) and Imperial Palace ($25) were close behind. They were ever-so-slightly outpriced by the Riviera ($27) and Tropicana ($29.33).

As for other properties in the lion's den: Excalibur ($31), Luxor ($48.37), New York-New York ($50), Monte Carlo ($58.62), the Green Monster (aka MGM Grand, $70), Mandalay Bay ($72.55), The Mirage ($76.50), THEhotel ($93.29), Vdara ($109) ... with only the Green Monster's Sky Lofts ($600) outpricing Aria.

So, MGM, are you sure this oligopoly business model is the way you want to go? I'm just askin'.

<crickets>

F'bleau: Wait 'til 2012; Satre returns

Fri, 16 Oct 2009 13:33:00 -0700

That's basically the message coming out of bankruptcy court, where Fontainebleau ownership requested permission to scrap all conventions and meetings through October 2011. Among many other disclosures in the fast-moving Chapter 11 was the sacking of seven top executives. (A well-kept secret, seeing as the septet had been let go last May.)

At the top of the list was F'bleau President Audrey Oswell. Since being forced out of Caesars Atlantic City by Park Place Entertainment, Oswell's resumé has taken a pummeling. She left Resorts Atlantic City just as Colony Capital was beginning to mismanage it into insolvency, then leapfrogged to Cosmopolitan (foreclosed) and then from the deck of that sinking ship to F'bleau. If it weren't for bad luck, she'd have no luck at all.

Here's hoping Oswell's next employer has steadier financial underpinnings than her last three. (Question for Resorts A.C. lenders: If you give Colony the boot but leave casino boss Nick Ribis in place, have you really solved the problem?)

Matthews out, Satre in: The much-admired Philip G. Satre has taken over as chairman of IGT, where he will no doubt act as a valued counselor to CEO Patti Hart, vouchsafing an insider's perspective on the casino companies with whom she must deal. Satre's ascent could also make for an interesting turn in the war of words between IGT and Harrah's Entertainment, whose CEO and CFO have made it a pastime to trash-talk the slot giant. Will Gary Loveman be so bold in slamming IGT now that his Harrah's predecessor chairs its board?

Bad timing? Despite the Chinese government's speedy flip-flop on access to Macao, the dynamic duo of MGM Mirage and Pansy Ho are mulling both an IPO on the Hang Seng stock exchange and further expansion in the casino enclave. But is this the moment for such aggressiveness? MGM Grand Macao is only beginning to perform up to expectations and the parent company is having to push a $5.6 billion debt payment into 2015.

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.

East Coast antics

Mon, 12 Oct 2009 13:55:00 -0700

Wrong again. There I was, thinking the proposed $10 million upfront fee for table games in Pennsylvania was a done deal when the GOP-controlled state Senate upped it to $15 million (and if you don't pay by June 1, it goes to $20 million). Chalk that up as a "loss" for casino owners.

The latter did, more or less, get what they wanted on taxes, where they'll pay an aggregate state/local rate of 14%. Despite publicly requesting a 34% tax rate, Dems in the lower house are muttering that one in the "high teens" might be acceptable. The question is: In return for what?

Casinos also banked a "win" when the state Senate ashcanned an amendment that would have tripled the slot base at "resort" casinos. Since this amounted to preferential treatment for a tiny percentage of the Keystone State casino industry, it's good to see it get the back of Lege's hand.

Power play in New York. In the competition for the racino contract at Aqueduct Race Track, those in the hunt include MGM Mirage, Penn National Gaming, Harrah's Entertainment and Seminole Tribe-owned Hard Rock Entertainment, along with numerous and sundry joint-venture partners.

But none of the seems to have the juice of Larry J. Woolf's Navegante Group. After the New York Lottery Division had deemed Aqueduct Entertainment Group (in which Navegante is a partner) unqualified, Gov. David Patterson's underlings put the word out that the five-member consortium is indeed qualified. Somebody in Aqueduct Entertainment's got pull, that's for sure.

A win for Adelson. While no casino company was remotely near the top of Newsweek's ranking of the 500 greenest companies, Las Vegas Sands can claim a victory of sorts. Sheldon Adelson's firm clocks in at #128, well ahead of MGM Mirage (#164) and Wynn Resorts (#176). Given the extent to which MGM has publicized its green-friendly initiatives, particularly with regard to CityCenter, finishing so far behind LV Sands is tantamount to a smackdown by proxy.

Several years after the publication of Beneath the Neon (now available in e-book format) publications are still shocked -- shocked! -- to learn of Las Vegas' large (and growing) subterranean community. Alas, we no longer have the Hooverville that had sprouted about a half-block north of LVA HQ. Those hobos were a tidy bunch and made our street seem halfway populated.

Marie Osmond pix. I'm just sayin'.

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.

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

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

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

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

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

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

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

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

Quote of the Day

Tue, 06 Oct 2009 12:32:00 -0700

"The industry is seeking a new equilibrium. The last period was one where people were drunk on the use of capital and used it to solve every problem. Clearly that can't continue." -- Harrah's Entertainment CEO and newly minted fiscal-temperance crusader Gary Loveman.

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.

The casualties mount

Thu, 01 Oct 2009 14:54:00 -0700

Just yesterday I was lamenting the dearth of possible fallback positions for entertainers bounced from this or that casino. Heck, even the formerly volatile V Theater is enjoying its first stable lineup of shows since forever.

Sadly, we can add Scarlett and her Seductive Ladies of Magic (aka Abraca-Sexy) to the casualty list. With Charo literally and figuratively ailing, the Riviera's formerly robust lineup of shows is getting Slim-Fasted in a hurry.

Hopefully, somebody else can find a spot for Scarlett and her red bikini. Or she might take a cue from Bobby Slayton, who's literally getting out of town. So might Barry Manilow. However, we ran this down for a Question of the Day last week and the smart money has him taking up residence at the long-empty Paris-Las Vegas showroom. If Manilow can't break the jinx on that theater, nobody can.

I hope WizardOfVegas.com gets my Vintage Vegas review up before the show becomes history, because this Zowie Bowie extravaganza is an act of the so-bad-it's-good variety. It has the potential to go into posterity as one of the great Strip trainwrecks of all time.

Despite not having seen Vintage Vegas, Steve Friess channels the experience uncannily well: "I missed, for instance, what must have been a pretty disastrous opening night at the Monte Carlo for Zowie Bowie and its Vintage Vegas act ... even our most obsequious of entertainment scribes trashed them ... the idea here is that a major theater on the Strip is now given over to the alleged romance of Old Vegas. When it fails, I wonder, will anyone (else) suggest that maybe it wasn’t the execution that flopped, but the fact that people are bored with the effort to relive a bygone era?"

Having witnessed the completely pointless Rat Pack covers of spicy-as-mayonnaise Matt Goss, I'm inclined to agree. The 'retro' shows that work best -- like Rick Faugno's once-a-month showcase at South Point -- are ones in which the artist takes familiar material and makes his/her own. For Faugno, the songs associated with Frank Sinatra or Fred Astaire are as fresh and vital today as 50 years ago, and it comes through in his performance.

Much the same could be said for the Motown covers of Human Nature, a fantastic act that's literally crimped by management's determination to pack the absolute maximum number of tables into the Imperial Palace showroom. Memo to Rick Mazer: If you take 8-12 tables out, people will actually get up and dance, instead of merely wishing they could.

Speaking of showrooms, is there a smaller, crappier one than that at O'Shea's? You have to feel sorry for the performers who are relegated to this broom closet. Given the general disrepair evident at the Irish-themed casino, my best guess is that Harrah's Entertainment has decided to just let the place to go to hell until such time as they're ready to gut it and make it an anchor of their proposed off-Strip retail/restaurant mall.

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.

From the mailbag #7

Wed, 30 Sep 2009 13:47:00 -0700

Presumably foiled once again by the Comment-Eating Server, reader kerr_mudgeon writes:

From the article about the A.C. contract settlement: "In his praise of the deal, Don Marrandino, the Eastern Division president of Harrah's, appeared to refer indirectly to tortured negotiations with the United Auto Workers involving dealers, which have degenerated into a costly, bitter fight that is scaring away customers.

Two and a half years after the union won representation elections at four Atlantic City casinos, it has yet to sign a contract with any of them.
"Harrah's is proud of its record as a responsible union partner as further evidenced by this contract which was developed and agreed to in just a few short weeks and without disruption to the business and employees," he said."

- Is Harrah's equally proud that, after 2 1/2 years, it can't negotiate a first contract with the other union?
~~~
As for the hotels' prices for sheets, towels, etc., other posters' comments are correct: these are long-standing inflated charges intended to deter theft by room guests - and yes, I read of cases where guests stole the (unusable) TV remotes... and even the pictures on the walls.*

(By the way, I bought a $10 3-cup coffee maker at Walgreen's Drugstore, downtown LV, on my last trip to use in my room; I'll buy another next trip.)
There is a new revenue stream that David alludes to: High-end resorts selling robes, mattresses, wine glasses, etc. to hotel guests who appreciate the supposed superior quality of those goods - and are willing to pay inflated prices to own them.

* -- Editor's note: The pictures in the hotel rooms at Casino X were the only things looked to be worth stealing -- but they weren't for sale.

Give that man a blue ribbon: State Senate President David Williams of Kentucky may not be a friend of racinos but he hit the nail on the head recently. In a multi-point statement outlining his opposition to slots at Bluegrass State tracks, he said that horseracing was beset by "endemic" problems. He's the first public official that S&G can recall stating an overdue truth: that the ailments afflicting the horsey set can be temporarily soothed by slot revenues, but not cured.

Buy our casino, please!

Tue, 29 Sep 2009 14:11:00 -0700

Any well-furnished casino that doesn't try to monetize its fine appointments is missing a revenue opportunity. However, it's one thing to covet the lovely furnishings of, say, the Sky Lofts at MGM Grand. It's quite another to check into a hotel room in a struggling Nevada market (hint: think blood-red aluminum siding) and see the following:

"Take A Little Something Home With You"

... followed by a list of prices for virtually everything that isn't nailed down. At the high end, you could pay $175 for a bed spread or $100 for a phone, while hand towels ($10), washcloths and pillow cases ($5) occupied the bargain end of the spectrum.

In between, you could drop $45 for a Lilliputian coffee maker or $25 for the TV remote. Since the TV was not for sale and remotes tend to be brand- and model-specific, you wonder who'd be fool enough to spring for that last item.

Not only is Casino X clearly desperate for anything on which it can turn a buck, it also has rather inflated ideas of the value of its appurtances. I can see paying $175 for an Encore bedspread, but Steve Wynn doesn't operate out in the sticks, if you get my drift. Oh, and Casino X might want to think about staffing up its players' club and check-in windows, if the length of the lines at both is a telling metric.

Harrahs' new BMOC. The incoming president of Harrah's Entertainment's Flamingo-centered bloc of casinos departs Indiana to rave reviews. Philanthropic, community-oriented and socially aware, Rick Mazer sounds like just what the doctor ordered for Vegas -- to say nothing of being someone upon whom we should keep close tabs.

Justice delayed. Employees of Station Casinos who may (or may not) have been short-changed in their paychecks, will just have to bloody well wait for their day in court, if Clark County District Court grants Station's request for "breathing room." Station is pleading hardship due to its current bankruptcy. Since the company has no one but itself to blame for being in Chapter 11, it's difficult to muster sympathy. But perhaps the judge will be of a more forgiving nature.

Don Marrandino's first coup. The newly installed boss of Harrah's Atlantic City casino quartet inks a new labor pact with Unite-Here. That was a piece of cake. Now, about those dealer-contract talks with the UAW ...

Meanwhile, back in Gary Loveman's 'hood ... You know those on-again, off-again Massachusetts casinos? Well, they're "off." Again. Not that there's any reason to rush, especially as the repeated delays lend additional borrowed time to struggling Foxwoods Resort Casino and Mohegan Sun.

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.

From the mailbag #5

Wed, 23 Sep 2009 12:26:00 -0700

Our Comment-Eating Server has been at it again, so here are a few reader remarks that got devoured in cyberspace (where no one can hear you scream at your computer) ...

With regard to "Gambling Scandal Ensnares Eight More":

This is disgraceful! How dare the Federal government interfere with private enterprise like this? Undoubtedly the casinos' self-government practices would have detected these infractions, right?

If -- and I'm not sure about this -- you're referring to tribal casinos, all generalizations are false, including this one. The Tran Organization took down 26 scores that ran the breadth and depth of casino industry: Strip resorts, locals casinos, backwater Isle of Capri operations, U.S. ones and Canadian ones, the smallest tribal casinos and the biggest, too. Even Barona Casino & Resort, which prides itself on being ahead of the industry, technologically speaking, got taken. The moral I draw from this is that too much stock is being put in game-protection technology and not enough in the human component. All the king's PTZ cameras and all the king's digital scratch pads don't know what a "false shuffle" is.

Another reader caught a hasty slip-up I made, when I wrote that Harrah's Entertainment's "$10 million a year for energy conservation isn't even 'a blimp on the radar' when it comes to Harrah's gargantuan annual budget. Heck, it's less than 2/3 of CEO Gary Loveman's compensation package for 2008 alone."

Maybe his compensation has gone down since 2002? I don't think so:

"Loveman, himself, is doing a bit better too: His business school professor's salary, approximately $120,000 (before consulting fees), is now well over $3 million, including stock options. He shuttles between his Boston-area home and Harrah's casinos around the country in a corporate jet. He has long since traded in his professorial Honda Accord for a Ferrari F-355 Spider. After 12 years in the same house, the Lovemans are currently building what neighbors describe as 'a very large' house in the Boston suburb where they live."

Maybe he's riding in a "green" corporate jet now?

Good point. What I was trying to compare was Harrah's $60 million in energy savings over six years. That is less than 2/3 of Loveman's $92 compensation for 2008. (His base salary for '09 is $1.9 million.)

And with regard to labor strife at Trump Plaza:

"While the casino's latest appeal is tied up in federal court, Trump Plaza management has refused to bargain at all.

"Trump Entertainment Resorts Inc., which owns Trump Plaza, has said it expects to win in court. The case was first filed in September 2008.

"The court could side with the casino or uphold the National Labor Relations Board's ruling requiring the casino to bargain.

"'Throughout this entire process, it has not been our intention to attack any dealers who have chosen to support the union,' Juliano continued."

... David, you said "Kudos to Trump Entertainment Resorts CEO Mark Juliano for going out of his way to soothe potential animosity between labor and management."

- I would say: Kudos to Juliano if Trump would bargain in good faith with the union that won the election. As it is, Trump Entertainment Resorts owns & controls Trump Plaza and refuses to dignify their employees with negotiations that they voted for.

That's a major reason that we need passage of a "card check" law, which includes heavy fines against employers like this who refuse to negotiate (for years) with their workers' duly elected representatives.

Fair enough. And finally:

I don't gamble on the Internet because of security concerns with unregulated offshore sites, but I agree with this comment [same blog entry, under ["Health care reform + Internet gambling?"]: This is great! Ron Wyden is an innovative and responsible law maker. As an Internet gambler, I'd be happy to support American-based companies, and pay my patriotic taxes, instead of sending my "business" to Costa Rica.

Thanks to everyone for corresponding.

Gandhi, Mandela ... Loveman?

Tue, 22 Sep 2009 13:53:00 -0700

A reader drew my attention to this:

Or as the official Harrah's Entertainment press release reads:

"There have been more than 100 major conservation projects across Harrah's properties, from installing energy efficient indoor and outdoor lighting to reducing water consumption by hundreds of millions of gallons every year. In the past six years, the company has spent $60 million on energy conservation projects alone, averting more than 230 million pounds of carbon dioxide emissions annually ... Harrah's is the only major casino entertainment company to join EPA's Climate Leaders and Waste Wise programs, and the only company in the industry to win an EPA Environmental Quality Award."

Congratulations. Here's wishing that other casino companies follow Harrah's lead vis-a-vis Team Earth and other energy-saving, sustainable-development initiatives. However ...

... $10 million a year for energy conservation isn't even "a blimp on the radar" when it comes to Harrah's gargantuan annual budget. Heck, it's less than 2/3 of CEO Gary Loveman's compensation package for 2008 alone. Also, the message rings just a teensy bit hollow when it's delivered by a CEO who not only insists on living in Massachusetts -- and can become quite belligerent when the subject is raised -- but must therefore commute to and from Harrah's HQ by transcontinental jet. Kinda undercuts that energy-conservation thing, y'know.

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.

Gambling scandal ensares eight more

Mon, 21 Sep 2009 18:32:00 -0700

It's not quite on the global scale of the Ultimate Bet brouhaha, but the Tran Organization's conspiracy to fleece dozens of U.S., Canadian and tribal casinos is racking up an amazing head count. To date, federal prosecutors have already nailed 31 scalps to their wall, not counting three other individuals to who pled out to related charges (including one in Canada).

If you thought this was the end of the Tran Organization ... surprise! The feds unsealed another set of indictments this month. Eight more individuals were hit with various counts of "conspiracy to steal money and other property from Indian tribal casinos, and conspiracy to travel in interstate and foreign commerce in aid of racketeering."

At the core of the Tran Organization's scam was the execution of "false shuffles," whereby "slugs" of unshuffled cards were insinuated into blackjack and mini-baccarat decks. This required the cooperation of corrupt casino employees and, from the looks of the Department of Justice's announcement, the core Tran Organization members must be rolling on their casino-employed helpers.

The Tran gang managed to take no fewer than 26 casinos during the life of its scheme, which is a very black mark against the industry's standard of game protection. The dishonor roll is as follows:

1) Beau Rivage Casino, Biloxi, Miss.
2) Casino Rama, Orillia, Ontario, Canada
3) Foxwoods Resort Casino, Ledyard, Conn.
4) Gold Strike Casino, Tunica, Miss.
5) Horseshoe Casino, Bossier City, La.
6) Horseshoe Casino & Hotel, Tunica, Miss.
7) Isle of Capri Casino, Westlake, La.
8) Majestic Star Casino, Gary, Ind.
9) Mohegan Sun Resort Casino, Uncasville, Conn.
10) Palace Station Casino, Las Vegas, Nev.
11) Resorts East Chicago Hotel & Casino, East Chicago, Ind.
12) Sycuan Casino, El Cajon, Calif.
13) Cache Creek Indian Bingo & Casino, Brooks, Calif.
14) Emerald Queen Casino, Tacoma, Wash.
15) Imperial Palace Casino, Biloxi, Miss.
16) Argosy Casino, Baton Rouge, La.
17) Trump 29 Casino, Coachella, Calif.
18) Isle of Capri Casino, Bossier City, La.
19) Agua Caliente Casino, Rancho Mirage, Calif.
20) Spa Resort Casino, Palm Springs, Calif.
21) Pechanga Resort & Casino, Temecula, Calif.
22) L'Auberge du Lac Casino, Lake Charles, La.
23) Nooksack River Casino, Deming, Wash.
24) Barona Valley Ranch Casino & Resort, Lakeside, Calif.
25) Caesars Indiana Hotel & Casino, Elizabeth, Ind.
26) Monte Carlo Resort & Casino, Las Vegas, Nev.

Penn hearts F'bleau ... maybe

Thu, 17 Sep 2009 21:24:00 -0700

So the much-bruited suitor for stalled, bankrupt Fontainebleau has been "outed" and it's ... Penn National Gaming. Ace reporter Alexandra Berzon, late of the Las Vegas Sun, broke the story. However, she notes that Penn and F'bleau have been dickering for three months: "Talks could still fall apart at any moment."

Given the criteria that Penn CEO Peter Carlino has been citing for any major casino purchase, F'bleau is an illogical choice. It's expensive, it's unfinished, it's location-challenged, it's a high-end property in a depressed market, it has a problematic condo component (read: units that will never sell) and, most of all, it's a snakepit of litigation. Plus, the cost of completion seems to escalate by the hour and is currently pegged at $1.5 billion.

Remember, Penn balked at paying $1 billion-plus for The Mirage, a turnkey, trouble-free resort. Meanwhile, Harrah's Entertainment is snatching Planet Hollywood right out from under Penn's nose and the company whiffed on a chance to acquire newly ascendant Greektown Casino in Detroit. Go figure.

A Penn spokesman "could not confirm or deny" the Wall Street Journal story. We'll take that as a "yes."

Aubrey has landed. As in "O'Day." Webmistress Jessica has forwarded the following from Holly Madison's Twitter feed: "@hollymadison123 Damn! I can't take one day off work without everything going to hell in a handbasket! Back to spreading the positive energy!" Like I said, word from the wise is that Madison and new Hitler-lovin' co-star Aubrey O'Day are anything other than BFFs.

'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.

Harrah's buying spree

Tue, 15 Sep 2009 17:33:00 -0700

Thanks to reader Todd Bristow, who tipped me to Harrah's Entertainment's $89.5 million purchase of Thistledown Race Track, near Cleveland. Thoroughbred Times reports that over half of that amount ($47 million) is a "contingency" payment. The extra 47 mil would kick in if legislation is upheld that would allow conversion of Thistledown to a racino. The track is one of several assets being disposed of by bankrupt Magna Entertainment. If Harrah's can't step up to the plate, Penn National Gaming and Pinnacle Entertainment are in the on-deck circle.

As you've probably heard, Harrah's is also gobbling up the debt carried by Planet Hollywood. It's a strategic move, considering that Harrah's already owns acreage that extends back from Bally's and Paris-Las Vegas to Koval Lane and then wraps south around Planet Ho. It's also been posited that this could be a "passive investment," a gamble that Planet Ho will come back in a big way in the future. Sounds rather iffy to me but stranger things have happened.

Mind you, this is also the same Harrah's that has been buying back its own debt at distressed rates (most recently at 67 cents on the dollar) and restructuring payment schedules like mad to stay ahead of an avalanche of $19 billion-plus it owes on its LBO. Harrah's creditors, are you feeling like suckers yet?

Or perhaps the money is coming from sugar daddies Apollo Management and Texas Pacific Group. Apollo has already been kicking the tires of Fontainebleau and may well be the "potential buyer" who's poised to take the keys to that Edsel. Even with Harrah's skill set, a high-end condo-hotel like F'bleau would be new business model with which to tangle.

At least the likely scenario is that Harrah's would be merely the mechanic, pocketing a fee for trying to get F'bleau up and running. Gives new meaning to "cash for clunkers," no? (Then again, Penn Nat'l may be smarting so much from that thwarted breakup fee in Ohio that it decides to buy F'bleau as a bank-shot means of getting back at Harrah's. Who knows, when CEO's egos have been bruised.)

As the cherry on top, Harrah's furtive move on Planet Ho inspired the following "No shit, Sherlock" headline, courtesy of the Las Vegas Review-Journal: "Harrah's debt purchase could lead to takeover, analyst says." Gee, ya think? I look forward to, "Beginning of autumn could lead to lower temperatures."

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?

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.

Green $hoots?

Tue, 08 Sep 2009 18:22:00 -0700

There's nothing like the approach of 2010's Global Gaming Expo to make Las Vegas hoteliers rethink their rates. For instance, if you want to stay at that palace of pleasure and plushness, the Plaza downtown, it'll run you $55 a night. Even the somewhat seedier Vegas Club will set you back $52/night.

Elsewhere in downtown, troubled Binion's may not be able to pay its landlords, but that's not stopping it from charging $172.62 during G2E Week. Even the clown house is cheaper: $142 gets you a Circus Circus room. That's a bargain when you consider that Stratosphere wants $164 per night.

As for the dubious privilege of hanging your hat at Imperial Palace, that'll cost you $189, bub. But the nerviest of the bottom feeders has to be Hooters. As of Sept. 4, it wasn't blushing to demand $192 per evening. Trust me when I say Hooters ought to pay you to stay there.

Then again ... I know of someone who got six nights at Imperial Palace -- during New Year's Eve -- for $16.65/night. So, rumors of Las Vegas' imminent recovery are probably premature.

"Viva Elvis"

Wed, 02 Sep 2009 01:38:00 -0700

Obssessed? Moi?

Yes, Viva Elvis will be the long-awaited, enshrouded-in-secrecy title of the Cirque du Soleil show scheduled to debut this December at CityCenter.* Wow, they must have had to really burn the midnight oil in Montreal to come up with that one ... Speaking of name changes, Scarlett and her Seductive Ladies of Magic (at the Riviera) is now Abra-Ca-Sexy. Well, it's catchier ... The wheels continue to fall off the Riviera train: An Evening with Dean and Friends has closed, as has the dinner buffet (again) ... Lost in the bankruptcy tumult at the Greek Isles was the opening of a new show. Its cumbersome title is Chinaman: A Rock & Roll Comedy Experience. Moving right along ... By the time you read this, Rockstar: The Tribute should have reopened at the Harmon Theater after a disastrously short stint at the Wyrick Entertainment Complex (aka, "the Venue of Death") in Planet Hollywood. However, the Harmon has given it as much advance publicity as an IRS raid on a Vegas nightclub, so that's not a promising start ... In like manner, Beatles tribute Penny Lane tiptoed into the Tropicana without so much as a 'by your leave' ... Back at Planet Ho, Tony 'n Tina's Wedding evidently isn't performing up to expectations. Ticket prices have been reduced 13%-30%, although they're still steep ($63-$143) ... It looks like Deutsche Bank is going to wait a spell and open the Cosmopolitan in Sept.-Oct. 2010. Which, given that the Strip's been strangling on a glut of high-end rooms, is probably the wisest course of action. Wall Street's former Holy Grail, "another wave of megaresort openings," has become a phrase to be dreaded.

Ready for some good news? The most remarkable dancer of the late, lamented Sin City Kitties, Koree Kurkowski, is now part of the ensemble of Bite. The show is kitsch to the nth degree but it's entertaining in its own so-bad-it's-good fashion. The Stratosphere casino floor was pretty dead for a Friday night last weekend, but Bite was definitely packing them in. It's not as good as Sin City Bad Girls (at the Las Vegas Hilton) but way better than forgettable X Burlesque (at the Flamingo).

* -- the Viva Elvis revelation was let slip during last weekend's Michael Jackson festival at The Palms. I learned of it after being invited -- on 75 minutes' notice -- to co-host an episode of Steve Friess' The Strip Podcast, in which I am teased for being "obsessed" with Carmen Electra. I'll link to the edited version once it's available, so you can hear me date myself with a Barbi Benton shout-out.

This isn't Photoshop but an ad clipped from a Michigan newspaper, I kid you not:

The things you can find at the grocery store these days ...

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

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

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

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

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

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

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

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

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

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

Marrandino: going but not forgotten

Fri, 28 Aug 2009 19:00:00 -0700

Don Marrandino may be Atlantic City-bound but here's how S&G will always remember the Harrah's Entertainment exec, with the Alizma triplets close at hand. For all our ribbing of Marrandino's high-profile lifestyle, he did preside over a much-praised revamp of the Flamingo, and kept the Imperial Palace alive and busy long after it was supposed to have bit the dust. If you need lemons made into lemonade, he's your guy.

Marrandino also seriously rethought the entertainment offerings at the five casinos within his purview. Just in the last couple of years, he's brought on board Donny & Marie, Human Nature, Matsuri and Nathan Burton. Not every one was a jackpot, but the Osmonds and Human Nature were pure gold, and Matsuri has possibilities. I'd love to have that track record.

Replacement Rick Mazer looks promising, not least because he's a Jack Binion protégé, not one of the "propeller-heads" of which Harrah's CEO Gary Loveman is famously fond. The Strip could use some Binion-like thinking right now and S&G fervently hopes Mazer is bringing some of that Horseshoe luck with him.

Fun with math, "Jubilee!" style

Thu, 27 Aug 2009 12:55:00 -0700

Does anybody know the maximum number of bared female bosoms that can be seen at any one point in Donn Arden's Jubilee!? I'm reviewing the show for a new Web site and have most of the mind-boggling statistics at hand. The mammary-count, however, is not among them. I lost track at 50, myself, though I know it's more. Anybody care to take a shot at this?

Bueller? ... Bueller?

Jackson for kids. No jokes, please. A concert tribute to the music of sometime Vegas resident Michael Jackson will raise money for the cash-strapped music programs of the Clark County School District. Besides, who can resist the prospect of what Terry Fator will do with "Ben"? It could be twisted, in a very good way.

Soulless impotence. A belated afterbirth of When We Were Kings arrives in the form of Soul Power, a title as yesterday as polyester jackets with wide lapels. The move is as underwhelming as its moniker. Or, to quote Cleveland from Family Guy, "The noise was good but I thought they phoned in a lot of the funk."

A reader responds: "David, re your blog on the R/J economics and Mr. [Sherman] Frederick's not-so-full flight from Austin [Tex.]: I live in Austin and continue to fly to Vegas three or four times a year. Although I usually fly on Thursday, Friday, or Saturday, I've never seen any flight that had more than a handful or middle seats not occupied. Further, the only airline I know of that flies directly (i.e. not stop or one stop w/o change of planes) is Southwest. They have about 8 flights a day that connect to Vegas from Austin. So, yes, I can see how one flight on a Tuesday might not be full. But Austin is a great market for Vegas. Every year Harrah's gives me a handful of coupons for two free nights that I can hand out to friends and people at work. These coupons disappear by 7:00 a.m. when I send out my email to the folks at 6:30. And this is only one office."

Chintz thy name is ...

Sat, 22 Aug 2009 00:40:00 -0700

... Harrah's Entertainment. We've just returned from the formal opening of Matsuri. The 8 p.m. show started at 8:16, due in no small part to the fact that the Imperial Palace had one usher working the entire showroom. One showroom. One usher. By the time a reinforcement showed up, the damage had been done. (Oh, and the cocktails there are awful. It's enough to give temperance a good name.)

The new Imperial Palace bartender.

Matsuri itself is very good, that rare show which gives real meaning to the baneful phrase, "high energy." It's like all the fun, acrobatic parts of a Cirque du Soleil spectacle minus the fey pretentiousness. Or, as the saying goes, "All killer! No filler!" (Really.) The only regrettable element is Matsuri's playing in a venue that's badly understaffed.

Harrah's Entertainment: Where the customer almost matters.

Colony Capital comedy

Fri, 21 Aug 2009 13:29:00 -0700

Having borrowed money to buy the Las Vegas Hilton five years ago at a dirt-cheap $200 million, Colony Capital -- those financial wizards -- borrowed $250 million more to retire the first loan. (Does Colony intend to pay off the second loan by taking out a third?)

At some point, Colony may have to start like, you know, paying down these loans ... but not yet. It's extended the maturity on Loan #2 into 2011. The story (second item) is somewhat confusingly worded, but it sounds like Colony is down to its last extension. And the LVH is now losing money. Perhaps Colony should ring up Penn National Gaming and see if CEO Peter Carlino wants to talk "flip." It's still a classy property with a wealth of history and unbeatable proximity to the Las Vegas Convention Center. There are much worse deals to be had out there (*cough* Fontainebleau *cough*).

Also: LVH headliner Barry Manilow is reportedly mulling a leap over to Paris-Las Vegas, another augury of trouble for Colony. Manilow's departure would leave the LVH with some tight trousers to fill.

Another setback for Ed Ad. Its attempt to lease the southeast portion of its ex-New Frontier acreage to a "Dinner in the Sky" outfit (complete with a 160-foot crane) got the back of the hand from the Clark County Commission. Both Boyd Gaming and Wynn Resorts balked at the prospect of diners dangling high above Echelon and Wynn Las Vegas. However, there's some pretty freaky shit on the Strip already and this seems tame by comparison. God knows, it couldn't be worse than the lametastic "Sirens of T&A" or whatever Phil Ruffin's nautical titty show is called.

Just what the doctor ordered

Wed, 19 Aug 2009 14:29:00 -0700

With Eastern Division President Carlos Tolosa calling it a day, Harrah's Entertainment is dispatching Atlantic City native Don Marrandino to try and turn things around out there. (No word on whether the Alizma triplets will accompany him eastward.)

Marrandino's portfolio will encompass far more than Harrah's quartet of A.C. properties but his entrepreneurial flair is something that the Boardwalk and Marina districts could sorely use. Gross profits were down 20% in 2Q09, with only Boyd Gaming's Borgata (+8%) bucking the trend.

S&G wishes Marrandino luck in his new assignment. He'll certainly be missed back here. One doesn't know what to expect from successor Rick Mazer, currently Harrah's top man in Indiana. Following an exponential expansion of Horseshoe Hammond, it's become The Casino That Ate Everybody's Lunch. However, the re-branded Horseshoe Indiana, at the southern end of the state, has been losing market share. Maybe taking the Caesars name off the place wasn't such a good idea, after all? Harrah's bought a brand (Horseshoe) with great equity but has mostly bumbled thereafter.

Did you know that the Greek Isles is a gold mine just waiting to tapped? So says a flack for the new owners, who enthuses, "Although the current environment in Las Vegas is challenging, the property’s exceptional location, as evidenced by its proximity to the proposed Convention Center expansion and recent hotel/casino developments on the north end of the Strip, should provide the new owners with significant upside potential through a redevelopment or repositioning of the hotel as the market recovers."

Yup, between stalled, bankrupt Fontainebleau and a proposed Convention Center addition (unlikely under current austerity budgets), the Greek Isles is a can't-miss investment. Where else can you see so many parking lots and garages from the comfort of your hotel room?

But seriously, folks ... how did anyone ever get a $120 million appraisal (or an $83 million purchase price) on a hotel-cum-slot route that's losing over $1 million a year? If the Greek Isles were a dog, somebody would have put it down by now.

That half-assed wrap on the would-be-classy Mandarin Oriental has also drawn the attention of Steve Friess. And it turns out that The Rio isn't the only Harrah's property in Vegas badly needing a paint job, either. The Paris-Las Vegas balloon has seen better days, too. This sort of chintziness was only to be expected once Texas Pacific Group and Apollo Management got their claws into Harrah's, but nobody wanted to hear about it back in the day when the words "private equity" sent analysts and regulators into a delirious swoon.

Reality check

Tue, 18 Aug 2009 20:10:00 -0700

It's sackcloth-and-ashes time at the Las Vegas Review-Journal, which ran another "The end is nigh" story about falling gambling revenues. (The Aliante Station Effect appears to have petered out in North Las Vegas.)

Yes, we're all the way down, down, down ... to 2004 levels. If we take the Wayback Machine five years into the past, we find the Nevada Gaming Control Board reporting a 6% increase in revenue from June 2003. And June '04 was an "off" month for a year that was distinguished by double-digit growth in casino revenue.

Aliante Station: played out?

That same August, the cost of the MGM Mirage takeover of Mandalay Resort Group inched past the $8 billion mark. "[B]ut Wall Street analysts ... said the merger still makes sense for investors and the combined company," wrote the R-J's Rod Smith. Weeks earlier, regulators signed off on the $1.3 billion Boyd Gaming/Coast Casinos merger; Station Casinos, Las Vegas Sands and MGM were all recording record-setting financial performances, and Harrah's Entertainment was girding itself for the conquest of Caesars Entertainment. Heck, the industry was feeling sufficiently bullish to absorb a 0.5% hike in the privilege tax. Read one headline, "State gaming revenue on a roll."

Had the industry lived within its means, today's narrative would be quite different. The Las Vegas Sun helpfully charts the inflation and collapse of the casino bubble, which lasted a good three years, peaking in October '07.

Unfortunately, when what went up eventually had to come down, some companies discovered themselves overexposed and with no margin for error. The likeliest victims, though, are the marginal, standalone properties which might find themselves squeezed out of existence as aggressive discounting by MGM and Harrah's brings quality Strip hotel rooms into the "affordable" realm (Or, as Phil Satre puts it, when the A-level product is priced below the B-level product.)

Valuable perspective is to be had by reading (or watching) this roundtable discussion with three men who dominated much of the gaming industry in the Nineties and early into the new century. Ex-Harrah's CEO Satre has earned the right to be a Monday morning QB. After all, he never did anything so stupid as strapping $30 billion in debt onto his company's back.

Former Station CFO Glenn Christenson seems deeply in denial at many points, though even he concedes, "It wasn’t so long ago that we hated conventions as an industry and now it’s critical to our operations. We’re severely damaged by that loss." But ex-Boyd prexy Don Snyder nails it when he describes "a false sense of security" pervading the industry, adding "I think we all got caught up in that."

2004, meet 2009, where "up" is the new "down."

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 ...

Quote of the Day

Mon, 17 Aug 2009 14:21:00 -0700

"For the next 10 years, I don’t see the upscale customer coming back with the discretionary income we saw two years ago. The economy can recover, jobs can recover, but the customer’s sense that he will have as much wealth and access to credit as before, that’s gone. If there is anything new built in this market and they revise their cost structure, they are not going to go up but down. They’re going to cater to customers who want to spend less for a room, food, drink and entertainment even if they have the money." -- former Harrah's Entertainment CEO Phil Satre on the future of Las Vegas.

Kitty rescue at Caesars; Stingy Station

Fri, 14 Aug 2009 13:43:00 -0700

As we were driving to LVA HQ this morning, we spotted a disoriented-looking little cat running through the Flamingo Rd./I-15 interchange, across from Caesars Palace. We were in a quandary about what to do until it turned and started ambling down the I-15 "on" ramp, heading straight for certain death. I ran down the ramp after it (the kitty's a fast little bugger), scooped it up in one hand and ...

Well, what to do? I am now the custodian of a small, tuxedo-patterned kitten who may be carrying God knows what infections. It's too docile to be a feral cat but it's definitely going to need a new residence. So if anybody reading this can lend a helping hand to a homeless kitty, contact me at dmckee@huntingtonpress.com. I could just plop the wee bairn out in the LVA parking lot, along with our resident strays, but they're all massive and it would be a very Darwinian situation, I fear.

Cheesparing at Station: The formidable Jean Scott has news of some recent and untoward developments at Station Casinos, as the bankrupt company resorts to new "economy" measures. While the Fertitta clan sinks approximately $90 million into Orange County mansions, they're recouping the cost of their poor business decisions out of their customers' hides.

Random observations: Last night, we celebrated my Better Half's birthday, partly at Cadillac Ranch, which seems to have an identity crisis. Its menu is slightly countrified (in a C&W sense), its walls are covered with photos of Baby Boomer rock stars (think Steven Tyler) and the video feed is heavy on hip-hop. Go figure. The root beer float is very good, though. At 10:30, as though by prearranged signal, an incoming tide of douchebags flooded the joint and we split ...

... the classy southern façade of Mandarin Oriental has now been marred by a building wrap, high up on one corner. It's small by building-wrap standards, managing to both spoil the view and look like a timid half-measure ...

... speaking of building wraps, Criss F. Angel has long since been evicted from the eastern façade of Luxor. A new wrap was placed on the northeast corner of Luxor's ancillary hotel, but it's also smallish and -- due to way the hotel's buttresses jut forward -- hard to see if you're driving into Vegas from the south. Then again, if I were MGM Mirage, I'd probably want to downplay with association with the widely ridiculed Mr. Angel, too.

I was just saying ...

Wed, 12 Aug 2009 12:55:00 -0700

... to a colleague that, given Atlantic City's dismal July numbers, a plea for governmental assistance had to be just 'round the corner. Well, whaddya know? In at least five instances, Atlantic City's casinos are run by companies that just reported profitable quarters, while four more just changed hands for pennies on the dollar. Not to mention that Colony C(r)apital, owner of the remaining two, supposedly was willing to put some or all of $244 million into bankrupt Station Casinos.

I don't mean to sound unsympathetic, but ... considering that Garden State citizens are being asked to tighten their belts, forego tax rebates and the like, if the casino industry needs $20 million to market itself then it can damn well pass the hat and raise the cash in-house. Besides, there's something unseemly about "pull yourself up by your bootstraps" capitalists clamoring for guvmint subsidy, especially in a state filled with people who are in much greater need. (Yes, I know these are interconnected issues but we're talking casinos that gross hundreds of millions of dollars every month. They're not exactly paupers.)

The article's final paragraph (misleadingly) implies that Trump Entertainment's three casinos, the Tropicana Atlantic City and the two Colony properties are all in danger of closing. But might Atlantic City be better off with five -- or six, if Revel can be finished -- strong casinos, whilst the sicklier ones are put out of their misery?

A reader posed that question to me ... and now I pass it along to you.

Quote of the Day

Tue, 11 Aug 2009 14:21:00 -0700

"If you did not have a good time tonight, my name is Criss Angel." -- closing remarks by Anthony Cools, who recently unveiled a revamped version of his hypnosis show.

When hackers attack

Fri, 07 Aug 2009 15:35:00 -0700

Unlike the now-debunked ATM scams at the Riviera and The Rio, this is the real deal, as it played out at Mount Airy Casino in the great state of Pennsylvania:

Case Bets: Ohio, Trump, Fahrenkopfian outrage

Thu, 06 Aug 2009 18:33:00 -0700

With racinos a done deal in Ohio, a suddenly frisky Harrah's Entertainment is shopping around for a Cleveland-area track. If anything, I'm surprised competing companies haven't beaten Harrah's to the punch, but it seems to have sucker-punched its rivals. Good on it.

Donald Trump's fire-sale acquisition of Trump Entertainment Resorts is far from a done deal, according to the Wall Street Journal. Bondholders who stand to have $1.25 billion flushed away in the Trump/Mark Juliano sweetheart transaction may be able to throw in a spanner in the works.

Casinos spread the wealth -- or do they? A Journal of Economic Studies report queries the premise, saying casino expansion dilutes local wage bases. However, casino companies -- and some academic allies -- aren't taking this lying down. Both Penn National and Cordish Gaming are making vigorous arguments to the contrary, as is one Frank J. Fahrenkopf.

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.

"You can't bring that sword in here!"

Thu, 06 Aug 2009 16:49:00 -0700

Some do-it-yourself ninja got busted sneaking a samurai sword into Casino Rama, in Ontario. As far as exotic weaponry on the casino floor, S&G thinks this takes the prize.

The not-so-great ATM caper. Both Wired.com and the Christian Science Monitor have been carrying stories on sinister ATM-alikes positioned to capture conventioneers' cash at the Riviera. Since the alleged scam occurred during DefCon, a conclave of hackers, you wouldn't be much of a criminal mastermind if you thought such a scheme would go undetected.

Expanding on the story, the CSM reports that the not-ATM was stationed across from the Riv's security office -- a brazen move, if true, and that a similar scheme was unmasked at The Rio. However ...

Riviera brass say it was a mixture of hoax and misunderstanding. It was their ATM, they say, and they were the ones who took it offline in anticipation of DefCon. Because, gosh, you wouldn't want operational ATMs in your convention area when it's aswarm with conventioneers, would you? People might actually, like, use it.

Finally, some good news: The video speaks for itself ...

Douchebags on parade

Mon, 03 Aug 2009 16:06:00 -0700

With a crowd like this ...

... is it any wonder that The Rio's Sapphire Pool became a PR catastrophe (complete with rogues' gallery)?

Too bad that Bloomberg News doesn't permit its video reports to be embedded. Credit Suisse analyst Gabriel Chan gives an interesting, fact-packed report on Macao. It's a somewhat long interview segment, but stay with it because the good stuff comes near the end. That's where Chan explains why Stanley Ho is able to build a new casino for only $200 million and how come the much-hyped relaxation of visa restrictions is still at least four months away.

Harrah's little oopsie

Fri, 31 Jul 2009 18:23:00 -0700

Looking for the Sapphire Pool at The Rio, perchance? Well, if you're Web surfing, surf's out:

Nicht gefunden? That's right: No blow, pot or meth, no hookers and no stripper poles. Truth be told, what's been alleged to have gone down at Sapphire Pool is as nothing compared to the reputation The Rio had prior to Harrah's Entertainment's 'geriatrification' of the property -- one of then-CEO Phil Satre's worst business decisions. However, if that's as bad a calcutation as Satre made, it shows how poorly his successor has done in comparison.

(Hey, Harrah's ... two meth scandals in a week? You're leaving the competition in the, uh, dust.)

From the mind of Madison ...

How did we ever get by before the advent of Twitter? Without it, we might never have been vouchsafed the following pensées of Peepshow headliner Holly Madison, rendering Western Civilization that much the poorer:

getting McDonald's before tattoo removal . . ouch!11:19 AM Jul 29th from mobile web
i had a hamburger with Big Mac sauce and fries with bbq sauce. now i am at dentist1:26 PM Jul 29th from mobile web

Bare-knuckle Boardwalk brawl

Fri, 31 Jul 2009 16:26:00 -0700

"Leaky windows. Broken air-conditioning. Missing kitchen equipment. A weather-beaten building ... It also has missing kitchen equipment and broken air-conditioning units that have left guest rooms hot and unrentable. Further, it is plagued by a leaky roof, windows and skylights ..."

Is this the Tropicana Atlantic City we're talking about? Heck no, it's Trump Marina, as described the attorneys for all-hat, no-cattle buyer (wannabe) Richard Fields. His Coastal Marina LLC is accusing Trump Entertainment Resorts of blowing off Marina maintenance and siphoning away players. There's more -- much more. Fields' suit charges Trump (the company) with doing a chop-shop job on the hotel-casino and The Associated Press' story implies it may have been a Donald Trump "screw you" to Fields, a former courtroom adversary.

Assuming for a moment that the allegations are true (Trump's CEO says they're not) ... that's the way the game is played, dude. Just ask Ed Roski about his abortive acquistion of the Las Vegas Hilton or former Mandalay Resort Group employees about the dilapidation places like Luxor and Circus Circus fell into while the MGM Mirage takeover went through its paces. It's standard industry procedure. You don't spiff up a place you're selling; you leave that for the next guy.

In Fields' defense, the Marina's devolution into one of Atlantic City's three lowest-grossing casinos seemingly gives the lie to CEO Mark Juliano's, "We did the opposite by directing customers back to the Marina in order to maintain it." And if Juliano's accurate, then his people did a right rotten job of propping up Marina traffic, especially if Trump stood to suffer financial penalties if business cratered (which it did).

As to the promised repairs that Fields says went unmade, Juliano flatly denies the accusation, saying the work was indeed performed. Given Trump's parlous financial condition, if Juliano is correct, it was costing his company a pretty penny to be rid of the Marina at a rug-bazaar price ($270 million, marked down from $316 million).

Elsewhere on the Boardwalk, dealers and slot techs were lent some extra muscle by the UAW. "Harrah's Entertainment continues to question the UAW's insistence on interfering with customers who come to Atlantic City for relaxation and entertainment, particularly during these challenging economic times," harrumphed the company after workers had the temerity to stage a march.

Damn that First Amendment! Then again, what did Harrah's expect to happen as contract talks crept toward their third year?

Headline of the Week

Thu, 30 Jul 2009 13:12:00 -0700

"Get Chlamydia! Win an iPod!" Seriously.

Beyoncé is mad sexy but she doesn't make as much as Gary Loveman (who has 92 million-plus reasons to flash those pearly whites).

Case Bets: Hard Rock, Puck, Station, Greek Isles

Wed, 29 Jul 2009 18:55:00 -0700

Morgans Hotel Group has never seemed able to make up its mind about what to do with the Hard Rock Hotel & Casino (one of the stranger acquisitions of recent years). Then-CEO Ed Scheetz came in talking big about classing the place up and raising ADRs. Fast-forward to '09 and the HRH is staking everything on its skanky Rehab parties (does the staff have to don hazmat suits when cleaning up afterwards?) and going for the mid-price market midweek.

One can't fault the latter half of that strategy, especially if you're in an off-Strip location and could use the traffic. However, if Morgans goal was to increase Hard Rock ADRs, perhaps it shouldn't have embarked on a ginormous expansion that practically obliterates Peter Morton's original hotel and dilutes the asking price per room. Also, I don't know whether to praise Morgans for doing the impossible and completing (sort of) its Paradise Tower well ahead of schedule ... or criticize it for being in such a hurry to churn some EBITDA that it's opening it in an unfinished state.

But here's hoping the business model works. The HRH is one of the few places in town that's hiring, not downsizing. At lot of people's jobs are riding on its success.

One less Wolfgang Puck restaurant on the Strip? That's hardly a culinary tragedy, given that he's still got -- what? -- five other places in town and has become the Ronald McDonald of haute cuisine. A laughable poster in McCarran International Airport uses Puck's visage to push the message, "Less celebrity, more chef." Uh, better put that the other way 'round.

The real tragedy here (aside from the loss of jobs) is the temporary demise of Poetry, one of the few venues in town to cater to an upscale African-American clientele. Harrah's Entertainment and the Forum Shops went out of their way to put the dagger in Poetry. Now they congratulate themselves on a job well done. Thanks for nothing, fellas.

Bondholders finally lost patience with Station Casinos, tripping the bankruptcy lever. Interestingly, all Station casinos (small "c") are shielded -- which implies that it's Station's imperial expansion plans which are are shot and that its considerable real estate holdings could be up for grabs. It looks like über-resort Viva, long-suffering Durango Station, Losee Station and umpteen other projects are kaput.

Too bad for Station partner Colony Capital; if the latter goes forward with its Neverland Ranch tourist-trap plans, it may have to disassemble the old Michael Jackson Xanadu and relocate it, lock, stock and menagerie. And what does/did Station have in abundance? Raw land. It was a marriage made in businss heaven but it surely won't reach the altar now.

Speaking of suffering, what's back on the auction block but the Greek Isles, which is $23 million underwater. Even at a revised valuation of $44 million, isn't that far too much to ask for this unremittingly unsuccessful property, the second coming of the Castaways? Perhaps it's time to exorcise this ghost which haunts the dead zone that is Convention Center Drive.

Strange happenings at Penn Nat'l, Harrah's

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

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

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

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

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

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

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.

A Trop by any other name

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

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

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

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

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

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

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

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

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

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

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

Nothing says "Sheraton" like crystal meth

Fri, 24 Jul 2009 11:33:00 -0700

A big bust went down at Harrah's Entertainment's Sheraton Tunica after four guests were found running a meth lab in one of the hotel rooms. According to the ABC-TV affiliate, hotel security only tripped to it after a fire alarm went off, while the Fox local says it was other guests who alerted security, which then whistled in the police.

Best line of the ABC story? "The Sheraton plans to completely renovate [the] room where meth lab was found." What? They're not gonna rename it "The Meth Suite"? How un-Vegas of them. Imagine the marketing possibilities: "Kids, don't try this at home ... Do it at Harrah's."

No word on whether the meth-making foursome had any Total Rewards points revoked.

Signs of the Times

Wed, 22 Jul 2009 12:27:00 -0700

Caesars Palace's jumbotron was hawking a poker "tournement [sic]" as of last night. Having an ex-Harvard boffin at the helm evidently doesn't raise a company's I.Q. level. You half-expect that sort of spelling gaffe on the marquee at Terrible's; at Caesars, not so much.

It was wall-to-wall people at the Golden Nugget last night. Which goes to show that a scarifyingly depopulated Riviera on Monday night was not indicative of some citywide malaise. (What it bodes for the Riv is less than reassuring, however.) Nugget owner Tilman Fertitta is really packing them in -- at least in terms of bodies, if not dollars -- particularly the retirees. If Anthony Newley shout-outs are your thing, you'll love headliner Gordie Brown.

Thumbs down, however, to some price-gouging we encountered at The Grille, the Nugget's fast-food joint. Two bucks gets you a soda -- in a thimble. And don't be goin' askin' fer no refills, buckaroo, 'cause they're ain't none. Just skedaddle now afore somebody takes a brandin' iron to yer hide, tenderfoot.

Harrah's reveals A.C. strategy

Tue, 21 Jul 2009 18:30:00 -0700

View more news videos at: http://www.nbcphiladelphia.com/video.

In a word, scabs. But who in their right mind expects Harrah's Entertainment to meekly shut down its table game pits and surrender that business to the competition?

"Link" to Nowhere

Tue, 21 Jul 2009 13:49:00 -0700

On and off, over a four-year period, Harrah's Entertainment teased journalists (and, by extension, the public) with hints of a really big project to be announced really soon ... whenever they got around to it, that is. Well, the Harrah's mountain hath labored and produced ... a mouse.

"Project Link" isn't without virtues, even if they're largely negative ones. It isn't another high-end, multi-billion-dollar megaresort. It's not a budget-buster, period. It's not über-expensive food and retail. And it does entail giving modest facelifts to a couple of Harrah's tattier Strip properties: O'Shea's would lose its faux-Dublin façade and the Imperial Palace's Strip frontage (and pagoda roof) would be supplanted with what appear to be enormous LED screens.

It also acknowledges what's long been one of the problems of Harrah's consolidation of the east side of the Strip into one ginormous province. Namely, that to redevelop it in any significant way would involve taking one or more of a string of multi-story cash registers out of business. True, you could start from the back, maybe knock down the IP first, but at some point push comes to shove and a major cash-flow-producing Strip casino (most likely Harrah's Las Vegas) would have to give way. In a sense, the real estate was already too lucrative to be redeveloped.

Arrival at this plan involved acknowledging certain factors that should have been obvious long before CEO Gary Loveman went on a buying spree. For instance, that MGM Mirage/Wynn Resorts-scale megaresorts are a low-ROI proposition. Or that such a creation might impinge on business at ever-growing Caesars Palace. (It never ceases to amaze me that Harrah's spends hundreds of thousands of dollars to determine what, say, Hunter Hillegas could tell them for free.)

Of course, any new resort built in Lovemanville wouldn't have to be high-end/low-return. That's just the industry group-think of our day; that you "justify" the land's cost by superimposing a hella expensive megaresort atop it, then justify that outlay by charging prices that relatively few can afford.

The notion of luring pedestrians off the Strip and down a multi-dogleg side street is an untested notion. Give Harrah's points for thinking outside the box here. It'll mean getting Vegas visitors to break ingrained habits but it could eventually stimulate further off-Strip development.

For all I know, it could be Gary Loveman's longstanding fantasy to own a 600-foot Ferris wheel with an (at least) 200-foot "HARRAH'S" logo lighting up the night sky. But do I believe this is what he had in mind when he supervised the purchase of vast tracts of Koval Lane real estate at top dollar? Not for a moment. Especially not when you consider he's been sweeping it clean of low-rise housing developments that might otherwise have been of income-producing use.

Now, like Gershwin's Porgy, he's got plenty of nuhtin' and nuthin's plenty for him. His projected Ferris wheel will be sitting (as you can see from the rendering) smack in the middle of a wasteland, a void, a whole lotta nowhere. At least the circus can pitch its tents there the next time it comes to town.

It's harder still to believe that this (mini-)master plan was concocted two years ago and kept under wraps until now ... unless it was a before-the-fact, low-budget, "Well, we've got to do something" concession to the development-crippling effect of the LBO. Even so, secrets just aren't that well kept in this town.

Then again, it often seems if Loveman himself does not know what Loveman has in mind. Take for instance, his recent contention that building a Strip megaresort was too big a risk for Harrah's. Not compared to taking on $24 billion in LBO debt it wasn't. And you could build a megaresort and a half for the $5 billion in company value Loveman recently wrote off.

The biggest threat to Project Link may be Loveman -- or rather his short-attention-span style of leadership. While some cunning master plan may be apparent to his inner circle, the leitmotif of Loveman's tenure as CEO has been to jitterbug spastically from one short-lived initiative to another.

Having gotten right up to the threshhold of having to decide what to do with Lovemanville, his trigger finger grew weak. He pulled a U-turn and flung Harrah's into the arms of Texas Pacific Group and Apollo Management, a move with disastrous consequences. (Especially for the consumer, as TPG/Apollo's plan was to gut the company all along.) At least it had the short-term benefit of sparing beloved local institution Battista's Hole in the Wall from Loveman's bulldozers. As with his jihad against revenue-participation games like Wheel of Fortune, Loveman often seems oblivious or (far more likely) indifferent to what customers like or want.

In the two years or so it will require for Project Link to obtain startup capital, the odds are considerably better than 50-50 that Loveman will have lost interest and moved on to something else. If he doesn't, it would be a very pleasant surprise.

The dream is dying

Mon, 20 Jul 2009 16:07:00 -0700

Just last week, UNLV's historical sage, Dr. Eugene Moehring, was taking a dim view of the fate of Las Vegas' working class. Now comes the Wall Street Journal to back him up with some sobering reportage.

Even at union salaries, Culinary Union-represented employees are hardly living on Easy Street. According to the WSJ's Tamara Audi, a hotel maid can expect to make slightly under $30K/year. She also finds a fry cook who was pulling in $36K annually, before he was laid off. (He's now making much less at union-free M Resort.) This goes to show not only the importance of union representation but also how close many of these people are to the economic precipice.

Many of the causes of our current plight (like real estate speculation) are outside my remit. However, a great deal of the blame falls upon casino CEOs who -- encouraged by banks that pushed too-easy credit like "happy dust" and by cheerleading Wall Street analysts -- succumbed severally and variously to a collective psychosis.

The Plaza: Rooms available, starting the 12th of Never.

The hyper-optimistic mentality that produced a rapid-fire succession of (in no particular order) CityCenter, Cosmopolitan, Fontainebleau, Echelon, Palazzo, Encore, the Hard Rock Hotel acquisition/expansion, and even will o' the wisps like Crown Las Vegas and Viva, rested upon a bizarre assumption. Namely, that the Las Vegas Strip could not only absord literally thousands upon thousands of new rooms (preponderantly at the high end) but could do in a compressed time frame.

A few companies even thought this could be done even after they'd glutted themselves with LBO debt. (True, Harrah's Entertainment now says it never intended to go the metaresort route but the available evidence testifies otherwise.) As I've written before, a bubble was mistaken for a baseline, thereby magnifying the consequences when the economic fundamentals began to crumple.

Distance evidently lends clarity, at least to Harvey Perkins of East Coast-based Spectrum Gaming Group. He calls for a complete rethinking of the luxury-based Vegas business model, repositioning the Strip's posh palaces slightly downmarket. It'll mean eating a lot of pride but what alternatives are there?

It's a glass half-full perspective, which is preferable to the overdose of gloom quaffed by MGM Mirage CEO Jim Murren. He darkly prophesies, "There won't be another property built in Las Vegas for a decade."

Just wait 'til the next economic upturn and see if Murren is still saying kaddish. There will be new casinos in Las Vegas before 2019, I'm fully confident -- but they'll be ones positioned around affordability and (hopefully) generating double-digit ROI. Because, frankly, Las Vegas isn't the investment it used to be.

The St(ump) Regis, as it was to have been.

Then there's the schizoid-sounding Sheldon Adelson, who harrumphs, "I don't see any opportunities for any development in Las Vegas." Emphasis added; the Las Vegas Sands CEO seems to swing from bullish to bearish by the day.) It'd be nice for Sands if Adelson had been vouchsafed this insight before he started work on the St(ump) Regis in the midst of a condo-market meltdown. Now it's big bloody nose right betwixt the eyes of the Venetian and Palazzo.

The polar opposite of Adelson is Culinary Union boss D. Taylor who sounds like a flack for the Las Vegas Convention & Visitors Authority, so giddy is his optimism. Hey, D., have you talked to your workforce lately -- you know, the ones who just had to defer a $710/year pay bump?

At least some amusement is to be had from the Strip map prepared for the WSJ by Bill Lerner's new outfit, Union Gaming Research:

I don't think I'd take investment advice from a firm that doesn't know the correct spellings of "Echelon" or "Caesars." City Center seems to fallen off the map entirely. It'd also take issue with the classification of many sites (like the in-foreclosure FX Real Estate plot) as "ceased or delayed" as there was never any work to cease or delay at, say Elad Properties' "Plaza" site or Crown Las Vegas (aka "Archon"). Ditto MGM/Kerzner, Africa Israel, etc. However, the Cosmo, which really is in limbo, doesn't make onto the map.

At any rate, as land prices on the Strip continue to return to earth, there's going to be plenty of prospective acreage for the company that's ready, willing and able to build a mid-market casino on the Strip.

Case Bets: M Resort, bad debt, Wall Street's bomb

Mon, 20 Jul 2009 14:26:00 -0700

After fairly flying out of the gate, M Resort has hit the wall. Unfortunately, CEO Anthony Marnell III's response to economic adversity has been to sweat the value propositions. Not only is M fretting about card counters (hands down, the silliest preoccupation in the casino industry), it's yanking full-pay video poker machines.

“We are in business to have an edge and these games are nearly break-even,” Marnell tells Liz Benston. Give him points for candor ... but if you didn't want players to have a 50-50 shot, you should never have installed the machines in the first place, fella. This reeks of bait-and-switch. The video poker community is tightly knit; word of this stuff gets arounds fast and will undoubtedly redound to Marnell's disadvantage.

Another thing that might be working against Marnell are M's distinctly underwhelming coupon offers -- far inferior to those from Station Casinos, for one. The Significant Other and I tend to forward our M "offers" straight into the WPB (waste paper basket). I'd also respectfully dissent with Benston re M's casino design: It's a throwback to the old "disorientation" days. For ease of navigation, M's not a patch on Eastside Cannery, to say nothing of Wynn Las Vegas. Heck, even the venerable Sahara isn't the rat maze that is M's gambling floor.

When "whales" attack. Indicted high roller Terrance K. Watanabe is taking on Nevada's casino-debt-collection machine and his lawyer is making some interesting legal arguments. Basically, he's contending that markers are loans, not checks (as longstanding Nevada precedent would have it). Should this argument prevail at trial, it could have far-reaching consequences.

Since markers could no longer be booked as income, Nevada would no longer be able to tax uncollected markers, as it currently does. Since enforcement of the debt is funded by assessing a 10% penalty on the debtor, Clark County couldn't afford to go after delinquent whales, either. And casinos themselves might have to think even harder before (in effect) lending money to players like Watanabe who, his attorney says, accounted for a fifth of The Rio's and Caesars Palace's casino revenue in a two-year period.

Hoist on its petard. In his latest Las Vegas Business Press column, Dr. David G. Schwartz explains how the consolidation mania of the 1990s (spurred by manic Wall Street analysts) came back to bite the casino industry in its ass when times were tough. So tell us, Nevada Gaming Commission, why was it such a good idea to have an oligopoly on the Strip (and in Lake Tahoe ... and ... )?

Wynn goes to Monaco

Mon, 20 Jul 2009 13:20:00 -0700

Maybe this just goes in the "pipe dream" category, but a Culver City architectural firm has posted renderings that indicate Steve Wynn is/was thinking of extending his brand to Monaco. A description is said to be "coming soon." In the meantime, enjoy the view(s):

Will we be seeing Wynn's new "Old World" style in Las Vegas when he re-redevelops the Desert Inn golf course? The site also has renderings of a "Wynn Singapore" that looks like a Marina Bay-site pitch that was abandoned somewhere in the design process.

You can also see how the Bahamar project might have been, at least before Harrah's Entertainment walked away from the table. Very Bellagio-esque, don't you think? (Thanks to VegasTripping.com and Two Way Hard Three for putting myself and others onto the trail of these images.)

Strike!

Mon, 20 Jul 2009 11:47:00 -0700

Under CEO Gary Loveman's leadership, Harrah's Entertainment keeps tripping over its own feet. In the latest development, management's foot-dragging approach to negotiating with Atlantic City casino dealers and slot technicians has resulted in pro-strike votes at two casinos. Caesars slot technicians, in fact, voted unanimously in favor of striking (at some undetermined future date). The dealer votes were 92% in favor at Bally's Atlantic City and 97% "aye" at Caesars Atlantic City. Legislation currently before the U.S. Senate could turn up the heat under Harrah's considerably.

Closer to Harrah's HQ, this morning's drive-by of The Rio suggests that the corporate motto is, "Maintenance? What's that?" Not only does the paint continue to peel off the older Rio tower, which is starting to look outwardly seedy, but a big sign for Fuego continues to adorn the marquee, even though the club closed weeks ago. Expect giant cobwebs to cover the property any day now.

Jeff Beacher and his crazy critters are making trouble again, this time in Florida. Seems cops had to take down an Oompa Loompa in Beacher's employ.

Quote of the Day

Fri, 17 Jul 2009 11:49:00 -0700

“The most important learning ahead of you is self-reflective, not based on books and disciplines. And self-reflective learning is essential to the sustenance of your most personal assets – personal integrity and responsibility.” -- Gary Loveman, Ph.D, addressing the graduating class of The Richard Stockton College of New Jersey. The Harrah's Entertainment CEO also bestowed a $175,000 endowed scholarship upon the school, on behalf of his company.

To blog or not to blog?

Wed, 15 Jul 2009 13:52:00 -0700

That is the question for today. It's not the larger, existential question of whether the opinions of one curmudgeonly blogger amount to a hill of beans in this world, especially when even the village idiot has a cyber-soapbox.

No, it's a more practical quandary. My cup runneth over with prospective topics -- and with pending deadlines. To wit, a theatre review and a news story for the July 23 CityLife, reviews to stockpile for Mike Shackleford's forthcoming WizardOfVegas.com Web site, three Question of the Day topics, and a revision of an old article I wrote for Washington National Opera in the wayback.

Say ... one of the QoDs upon which I'm working asks for instances of complaints about Harrah's Entertainment. Care to chip in? You'll be duly credited (or not, if you prefer). Actually, the back pages of S&G have been a marvelous source of information on this topic, due in no small part to your contributions. Actor Ben Browder (Stargate SG-1) says that the most important element of any story is the audience. That goes double for S&G.

Also, in the (I hope) very near future, there will be some original S&G reportage on labor negotiations at Caesars Palace, among other topics. In the meantime, I have a week of GamingFloor.com to catch up with, plus wrapping my brain around LinkedIn and Facebook, when there's a moment to spare. Given the exponentially faster advance of technology (compared to say, 1965), I can but conclude that it's a Star Trek world and we're just living in it ... long and prosperously, one hopes.

In the meantime, if the blogorrhea is less generous than average, I beg your indulgence.

All-Star Game: Not much to say about it, other than its relative brevity was merciful. (Never saw so much first-pitch swinging in my life.) Contrary to expectation, the most interesting aspect was the usually tiresome pre-game extravaganza. Sheryl Crow gave a master class in how the National Anthem should be sung and President Obama threw a rainbow curve the likes of which I haven't seen since the heyday of Sid Fernandez.

And it did bring a lump to my throat to see our nation's first black president shaking hands with Bob Gibson and Lou Brock, venerated figures in the Cardinal-worshiping McKee family and two players whose prime coincided with the apex of the Civil Rights movement in the U.S. I'd love to know how much Brock and Gibson think our country has advanced since then. Oh, and Tim McCarver was actually bearable. Wonders never cease.

Quote of the Day

Tue, 14 Jul 2009 20:38:00 -0700

“Did these companies come in and make Harrah’s and Station better companies? Not really. In the case of Harrah’s, they have made things worse.” -- T. Rowe Price portfolio manager Joe Fath on the effects of private equity buyouts on the casino industry.

Competition forces sanity

Mon, 13 Jul 2009 18:50:00 -0700

While the Bible Belt may hold out until the bitter end, we may finally be seeing the demise of the "boats in moats" arrangement, a fig leaf that enabled Midwestern states to blushingly accept casino money. Illinois has started phasing it out. Ohio Gov. Ted Strickland's decree today that seven Buckeye State racetracks can go to racino status may be a real game-changer for neighboring Indiana.

First, a word on the Strickland move. It anticipates legislative passage of a package deal that would require tracks to pay $65 million upfront and the usual usurious tax rate (48-50%). However ... slot machines would be purchased by the state (and run under the auspices of the Ohio Lottery), which softens some of the pain. Racino facilities would have to be periodically upgraded, too, at an average of $16 million/year.

All this has spurred (well, slowly prodded) Indiana's Lege to take a second look at the Hoosier State's riverboat regime. This could mean everything from on-land casinos to free drinks for players. There's also talk of "simplying" taxes and admission fees. How about simply eliminating the latter? It's a paternalistic anachronism that needs to go away.

Don Barden's two Majestic Star boats will likely prove an impediment. Some solons want any arrangement to include moving one of them out of Gary, Ind., to better the chances of both. Whatever the case, don't expect any action until next year.

The recession is catching up with regional casino markets. Even the loosening of operating rules in Missouri wasn't enough to stave off a slippage in revenues. Chrysler and Hummer plant shutdowns might explain a -1% shift in St. Louis, but what about a -2.5% June in Kansas City? A 2% drop in statewide slot win was almost countered by an 8% jump at the tables, where higher betting limits are now in force.

Ameristar Casinos took the hit in K.C., down 12%. All other three major boats posted growth, led by Isle of Capri, up 5%. With a $19 million June, the Ameristar boat still led the market in dollar volume but both Harrah's Entertainment and Penn National are closing the gap.

In the greater St. Louis area, both Harrah's and Ameristar fell by an average of 5%, while Pinnacle Entertainment's Lumiere Place gained almost 6%, really starting to give the two older casinos a battle. Even the snake-bitten President had a good month, chipping in nearly $2 million to Pinnacle's kitty.

Further good news came in the form of the bulletin that Isle of Capri had eked out a month in the "plus" column. So even an outwardly disappointing June in the Show-Me State cosseted some significant tidings of comfort and show.

Rough trade

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Harrah's goes to the dogs

Tue, 30 Jun 2009 13:49:00 -0700

A future Harrah's employee?

Harrah's Entertainment is poking its snout into the prospect of obtaining a management contract at bankrupt Twin River Casino, a dog track with VLTs in Rhode Island. The paraphrase of the explanation given by Harrah's senior veep Jan Jones seems fairly counterintuitive: "the state might be motivated now to give the company a shot because Massachusetts was on the brink of legalizing casinos."

OK, so Massachusetts is likely to legalize casinos, which makes this the perfect time to expand into ... Rhode Island? With its 60% tax rate? The part of Jones' explanation that makes more sense is that Harrah's would be able to tap into its New England base of Total Rewards players much closer to home (the nearest Harrah's outposts being Chester, Pa., and Atlantic City).

This could all be moot if the R.I. Lege scuppers a gubernatorial compromise that would can the dog racing and keep the casino open 'round the clock. Greyhound racing is a sport that really needs to be put out to pasture. Besides, it's only in place at Twin River because of a Byzantine legislative arrangement that Steve Friess rightly calls "a very weird deal," much of which involves propping up the dog-race union. (I never knew there was such a thing, but there is.)

So it's a win-win, right? A corporate savior for Twin Rivers and no more suffering doggies, yes? Well ... no, not if you're a nearby homeowner like Hal Perry, whose semi-rural lifestyle has been impinged upon by creeping incrementalism at Twin Rivers. Rather than lower the usurious tax rate, the state (which is seriously hooked on VLT revenue) simply keeps moving the goal posts -- longer hours, more machines.

Here comes Harrah's and, if you're a Twin Rivers neighbor worried about your property value, the noises are ominous indeed. As Jones tells Friess, "you couldn’t build a hotel right now ... So all of this is a process. But it's the beginning of the process and the point is that it's an excellent opportunity."

"Right now ... process ... beginning." In other words, Mr. Perry: Sell! Sell now! Get out before Harrah's drives you out.

Harrah's wins one. Sort of by default, but a win is a win. Dissident bondholders S. Blake Murchison and Willis Shaw had a shyster for an attorney. Case dismissed. Clearly, their due diligence with regard to lawyers was even worse than that they displayed as investors.

Gunshot? What gunshot? Although the Las Vegas Hilton was able to keep an on-property suicide out of the local papers, the news eventually surfaced via the Louisville Courier-Journal.

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!

Don't do it, Alex!

Thu, 25 Jun 2009 18:29:00 -0700

Noooooooo!

That was my reaction upon reading the Mike Weatherford shocker that the Tropicana Las Vegas may be putting many of its future entertainment eggs in the basket of Anthony Cools. The latter produced an ultra-craptacular topless show, Ooh La La at Paris Las Vegas.

Shoehorned into a large, low-ceilinged banquet room, Ooh La La had terrible sightlines (kind of a problem for a T&A show), pushy ushers and charmless performers. Were it not for Raw Talent Live, it would have been the worst show I've ever seen in Las Vegas. Cools has been threatening to bring it back ... please, Alex Yemenidjian, stop him before he "presents" again.

Our long civic nightmare continues. Five more years! Five more years! Yes, Luxor has extended Carrot Top to 2015. Mr. Top accepted the honor in typical family-friendly style.

While I'm under the knife at the dentist next Tuesday, Lance Burton will be fielding questions at Monte Carlo. The venue alone makes the nature of the announcement self-evident. Three cheers to MGM Mirage for pulling back from the brink and not evicting Burton at a time when he's been getting some of the best reviews of his career. There was nothing like the fumbling Criss F. Angel to make people appreciate just how much better Burton seems to be.

Reading Room axed. You know those three cheers for MGM? Make them three Bronx cheers. "Literature? Pah! We no like! Make way for shiny trinkets!"

Why launder money in Las Vegas or Macao when there's ... the Dominican Republic?

Peepshow 2.0 tonight. The pain of yesterday's dental procedure is likely to be but a gentle zephyr compared to the near-certain ordeal that lies ahead. For reasons too convoluted to explain, my review won't appear in CityLife until July 9. With luck, the show won't have closed by then.

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.

Seven essential Web sites ... and other news

Thu, 25 Jun 2009 12:23:00 -0700

Yes, you too can can be a gaming-industry blogger, with the help of but a few absolutely indispensable Web sites. The ones that I check Monday-Friday without fail (and, as they say on Dancing with the Stars, "in no particular order") are:

GamingFloor.com: The best aggregator of casino news from around the globe, especially since Editor Ian Sutton has an eye for the bizarre. Tons of eye-catching video, too, plus Ian's own on-the-spot reporting from far-flung venues like G2E Asia.

DieIsCast.com: Very eclectic but Dr. David G. Schwartz pounces on fascinating (and not very obvious) stories, often making droll pop-culture connections ... which frequently involve Star Trek.

TwoWayHardThree: Terrific discussions of casino architecture, intermingled with scoops that eagle-eyed moderator Hunter Hillegas snaps up -- not infrequently beating the local papers to the punch. His readers/forum contributors are some of the best-informed you'll encounter.

Las Vegas Sun: You're not going to find better gaming coverage this side of the Wall Street Journal and labor reporter Michael Mishak is one of the finest in the business. (The R-J's pathologically anti-union stance is probably to blame for its feeble coverage of workplace issues, as that paper's editorial-page psychoses leach into its news priorities.) Unlike its cross-town rival, the Sun doesn't take its marching orders from the Chamber of Commerce, either.

Press of Atlantic City: In the land of the blind, the one-eyed paper is king. Oh, and Press: Your new "reader-friendly" redesign blows donkeys. But if there's news a-brewin' on the Boardwalk, this is the first place to look. For more selective -- but in-depth-- coverage, Suzette Parmley in the Philadelphia Inquirer is tops in the region.

Vegas Happens Here: No morning is complete without a jolt of news from the indefatigable Steve Friess. His blog isn't casino-centric but he's quick to spot a breaking story or one that might fly under the radar ... and his Min-and-Bill relationship to Steve Wynn makes for tremendous ongoing fun. Lots of pictures, too.

Las Vegas Review-Journal: Only because it exists (which, existentially, is open to debate). Like the elephant in your parlor, it must be acknowledged and sometimes its slave-driven reporters turn in exceptional work, despite their editors' best [sic] efforts to beat them down. (Inexcusably, last week the entire gaming staff was detailed to chronicle seemingly every hand played at the World Series of Poker.) The paper's shining achievement was Joan Whitely's exposé of dangerous corner-cutting at Harrah's Entertainment. Relative newcomer Arnold Knightly has ferreted out some laudable scoops, too. Howard Stutz, look to thy laurels!

Honorable mentions go to three sites that I can't always check on a daily basis, but which should not pass without notice ...

Pechanga.net: An exhaustive (and sometimes exhausting) aggregration -- but it's a sieve which captures many tribal and regional gaming stories that would otherwise escape notice.

VegasTodayandTomorrow.com: Anybody -- and I mean anybody -- interested in the history and future of Sin City should have this site bookmarked. Mark Adams pores over the Web and any other source at his reach, presenting what bids fair to be the definitive online museum of Las Vegas' evolution. Our "Question of the Day" about the never-built Conrad was greatly aided by Adams' preexisting work. And the Coke-vs.-Pepsi map is must-see Internet.

The Movable Buffet: More showbiz- than bidness-focused. However, in a Vegas blogosphere infested with sycophants, Richard Abowitz provides a needed corrective to the local fawning over the celebutard of the moment. If you wish to following the continuing meltdown of Criss F. Angel step by step, Abowitz is your man. He even makes a colloquy with Holly Madison interesting. The chap's a miracle worker!

Farrah Fawcett, R.I.P.: One of the greatest of Seventies icons has died, at age 62. I was always more of a Cheryl Ladd fan myself, but Fawcett showed herself to be seriously "misunderestimated," especially in her Oscar-worthy turn as Robert Duvall's adulterous wife in The Apostle. Haven't seen it? Rent it! Ditto the severely underrated See You in the Morning, a still from which graces the Los Angeles Times obituary. Speaking of movies ...

Scott Walker 30 Century Man: A rock-and-roller who draws frequent comparisons to Samuel Beckett? Meet reclusive American expat Scott Walker and discover that the analogy has surprising validity. His handsome baritone is also one of the most compelling singing voices to emerge from the U.S. And speaking of singing ...

Patti LuPone's Orleans gig last weekend may just be the downpayment on a long-term deal. If so, it'd be one of the best shows in town and it fits the Orleans Showroom hand in glove. If only LuPone would drop from her set list that anthem to codependency, Oliver!'s "As Long As He Needs Me." She unloads so many mannerisms upon it that it's like Bill Sikes pummeling Nancy. Still and all, I'd take it over a second visit to American Superstars (also reviewed). Aaaaaaaaaaannndddd speaking of shows ...

I've received a critique of the Harmon Theater's new Monday-night, witching-hour potpourri, After the Show. While I'm not at liberty to quote any of it, suffice it to say that After the Show is described in such hallucinatory and pejorative terms that the bottom line is, even if you're a local resident and thus get in free, you've still paid too much. Better we should stay home and watch Jon Stewart, with a Conan O'Brien chaser.

Danny Gans: Still dead -- but not yet resting in peace. For the truly morbid, the R-J has published the 911 call made by his widow (as did the Sun). Listen if you care to; I didn't.

By request ...

Wed, 24 Jun 2009 13:40:00 -0700

'Tis another day of hopscotching betwixt the doctor and the dentist, which sure cuts into quality blogging time (as did a nasty attack of fibromyalgia yesterday). However, by reader request, we present this special, (not) exclusive S&G photo of a special plenepotentiary Apollo [Mis]Management representative -- perhaps Leon Black himself ...

... contemplating piling additional money into Fontainebleau.

Serously, overspending -- not lack of business -- is what really got this town into its present pickle. Profligacy and/or dangerous incompetence at the highest levels are the true culprits for the Vegas meltdown. Yet it is people like maids, cocktail servers, security staff and -- by extension -- customers who are literally paying the price for clownery in the executive suites.

F'bleau and Cosmopolitan need to take a page from the Echelon playbook: Say "that's a wrap" and wait 'til the economy improves, attendant litigation is settled and the tsunami of new hotel rooms that is CityCenter has ebbed a bit. We don't need multiple new megaresorts now for the simple fact that the market will not support them.

Then again, if Harrah's Entertainment or Wynn Resorts wants to sail its luxury liner straight into the Big Bleau iceberg (or the Cosmo) ... it's their money. Just don't complain to the press when you can't get triple-digit room rates, 'kay?

F'bleau: 'But who would want it?'

Tue, 23 Jun 2009 20:11:00 -0700

No sooner had I -- perhaps foolishly -- posed that question than the Las Vegas Review-Journal answered it. Top dogs from both Wynn Resorts and Harrah's Entertainment had been given tours of Fontainebleau, as had sundry other potential investors.

You've got to wonder how this news is playing with two constituencies: Harrah's bondholders and Wynn employees. Both have been poor-mouthed of late, with the latter absorbing severe pay and benefit cuts for the company's sake. As for Harrah's debtors, they're probably long since resigned to taking a bath on their investment, since the timeline for repayment already stretches far into the next decade. In other words, it's not the best moment to be seen out shopping.

Also, there's the small matter of cost. F'bleau's official budget has now crept up to $3.1 billion and -- if its bankers are right -- the completion money needed is close to $1 billion. (Insert Dr. Evil inflection here.) Steve Wynn might have enough socked away to swing that. Gary Loveman, on the other hand, says his company doesn't even have enough scratch to change its letterhead to "Caesars Entertainment."

Theory: Perhaps Loveman's sugar daddies at TPG Capital and Apollo Management underwrite the completion of F'bleau, maybe more -- but as a separate entity. Harrah's is then jobbed in to run the joint. It'd mean some administrative headaches for Loveman but nothing compared to those involved with being the out-and-out owner. Personally, I'd give Wynn better odds of actually getting this Spruce Goose into the air, but it's liable to be a charity case, whoever inherits it.

There's another reason for Wynn and Harrah's to approach F'bleau as they would a live grenade: the morass of litigation that surrounds Big Bleau. The latest batch of lawsuits alleges diversion of funds. Any casino company riding to F'bleau's rescue is going to want to be well indemnified against being dragged into this nightmare. No, Turnberry West and Fontainebleau will surely have to sort this out themselves.

Out of danger: That's where MGM Mirage says it is, largely by dint of mortgaging several key properties. CEO Jim Murren, meanwhile, complains that offfers for MGM assets aren't "close to what we believe the values are worth. The multiples are low. It seems like the wrong time."

Damn that free market! S&G humbly suggests that the low multiples are a reflection of the parlous state of the industry. Seven times cash flow just ain't what it used to be. Agree about the "wrong time" thing, though. Few are buying and even fewer banks are lending, so it's a heckuva juncture to be peddling one's wares.

Ensign concubine unmasked! He two-timed his wife with her? Beauty comes in many forms, but I'm thinking "lox," not "fox." As for well-remunerated cuckold Doug Hampton, he looks big enough to clobber the Nevada senator. Instead, he wrote a whiny letter to Fox News.

Despite his primitive spelling, grammar and punctuation, Hampton parlayed his husband-of-mistress status into a high-ranking sinecure at Allegiant Air. The latter says Hampton's employment was based on "his credentials and experience" ... not his education. Still, I feel as though my B.A. in English ain't worth the sheepskin upon which it's printed.

You go, Gaughan

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

South Point Hotel and Casino from Motionbug on Vimeo.

South Point owner Michael Gaughan demonstrates yet again why he's part of that noble but vanishing breed: the casino executive who realizes that you have to spend money in order to make money. Gary Loveman could learn a lot from this guy.

Update: Harrah's nixes Azov

Thu, 18 Jun 2009 18:46:00 -0700

Harrah's Entertainment just responded, quashing the Bloomberg News Harrah's-in-Russsia report. A Harrah's spokesperson wrote, "although we have talked with the economic development department for Azov, we currently have no plans for [a] casino in Russia."

Given everything S&G has already reported about this project, it's no surprise Harrah's is giving it a wide berth, at least for the time being. Besides, the company is the butt of enough snobbery about its mid-market roots. Running a casino in a glorified tent wouldn't exactly provide an image boost.

Harrah's Azov?

Thu, 18 Jun 2009 16:23:00 -0700

Bloomberg News reports the following: Harrah's Entertainment, the world's biggest casino company, may build a resort on the Azov Sea, Vedomosti reported Tuesday.

Harrah's may join U.S. construction company Asati in building a complex in Azov-City, one of four gambling zones planned in the country, Vedomosti said, citing Asati founder Alex Kogan.

The resort, which will include a casino, hotels and conference centers, will cost between $50 million and $100 million, Kogan said.

Wow! Try building a U.S. resort -- or even a Macanese one -- for so little money. I've asked Harrah's for confirmation but have yet to hear back. Although several overseas ventures have gone belly-up, the company continues to persist.

However ... despite the Russian government's decree that all casinos be moved to special zones, scattered around the far reaches of the empire, little headway has been made: "One Russian publication sent a reporter to check out progress on one of the zones, who discovered open fields filled with grazing cows." The Azov-City project, for one, has a long way to go.

And how is ~~Harrah's/~~Asati going to build a casino for $100 million or less? One word: tents. "Several foreign investors have begun preparatory work, including the Austrian company Asati. The company plans to build on the 20 hectares of inflatable structures, area of 100 thousand square meters," explains one investment site, "... the inflatable structure can be a casino and a water park and the congress hall. In addition to inflatable structures Asati company intends to build a 17-storey hotel and 34 bungalows."

If there's to be gambling under a big top, I'd suggest they call the place Circus Circus, but Jay Sarno got there first. Potential feeder markets for "Harrahs' Azov" would include Kiev and Odessa, but the closest major city appears to be Stalingrad ... er, Volgograd.

Yung & the restless: Closer to home, in Kentucky, the grand vizier of Columbia Sussex, CEO William J. Yung III, is loaning out the corporate locomotive for charitable causes. Company locomotive? No, we're not making this up.

Restiveness marks the labor situation at one of the distant outposts of Yung's hotel empire. Both in the slow pace of negotiations and the demand for employee give-backs, it's very reminiscent of the scrumdown that was the Culinary Union/ColSux stalemate of two years back. At least Scott Butera intervened to make peace before it reached the point of a Tropicana Las Vegas boycott.

Small beer? Just what Resorts International in Atlantic City needs ... more regulatory problems. C'mon, guys. We hook up beer kegs all the time here at LVA. It's not rocket science. Then again, it's difficult to "misunderestimate" Colony Capital.

Land of the Pharaohs

Tue, 16 Jun 2009 15:49:00 -0700

My attempt to answer a reader's question about MGM Mirage's franchise deal in Gaza, Egypt, fell victim to LVA's Comment-Eating Server, so here goes ...

Unlike Station Casinos shopping for dog tracks in Massachusetts while it's poor-mouthing employees and investors alike -- or Harrah's Entertainment batting its eyelashes at Stanley Ho -- MGM is doing the right thing, IMO. It's diversifying a revenue stream that's overly reliant on Las Vegas.

True, the official phrase "will provide ... brand fees" is rife with ambiguity (and I've got a query out to New Giza). Obviously, it's a better deal if MGM is the fee collector. Beyond that, I can't see a downside to hiring out the company's considerable hotel experience and pocketing a management fee in return. MGM is being strategically creative and I applaud them for it.

Loveman in denial

Mon, 15 Jun 2009 16:36:00 -0700

Harrah's Entertainment CEO Gary Loveman continues his media-availability tour. In today's installment, he grants an audience to the Las Vegas Business Press and insists that not only is everything as right as rain at Harrah's but that the LBO he steered the company into is really "an ability to focus on long-term viability and the health of the business." (Bond analysts remain skeptical.)

Despite bragging on the vast "resources and ... expertise" (like these?) of Apollo Management and TPG Capital, Loveman doesn't have any new strategems or projects to offer. The overwhelming consensus of stock analysts and customers nowadays is that Less = Less at a Harrah's-owned property. Meanwhile, the debtholders who bankrolled the buyout are asked to take haircut after haircut, and could be forgiven for thinking they've been played for suckers. Is anybody benefiting from this deal? Oh, I forgot.

One could go on but the story's mostly a rehash of old Loveman platitudes, plus another refrain of "We Love Macao." Harrah's management has been warbling that tune incessantly of late -- so much so that it sounds like an overt courtship of Pansy Ho, should she and MGM Mirage get a divorce.

The most newsworthy aspect of the story is the accompanying photo, in which the former Harvard prof appears to gotten a deep chestnut-brown dye job. If indeed that's the case, Loveman should ask for his money back: It's not only undignified, it's inept.

Gordie Brown goes down: If you think Loveman gets a bad review, you should read about the Golden Nugget's star attraction, who inhabits "a place where pop culture pressed 'pause' at about the time of 'Achy Breaky Heart,' Hootie & the Blowfish and Forrest Gump."

Then again, there must be people who groove to Hervé Villechaize jokes. Trouble is, they're all going to be down at the Riviera, watching Charo. And when you're described as a poor man's Danny Gans ... well, do the blows land any lower than that?

Great news for slot players: Seven more years of Clue and Battleship. Give Hasbro credit for knowing a good thing (in this case, its alliance with WMS Gaming) when it saw it. And, just because we can't say it enough, WMS' Star Trek machines are the cat's pajamas. Just for the record, you know.

Scratch one Europoseur

Mon, 15 Jun 2009 14:49:00 -0700

Hot off the wire from Harrah's Entertainment: "The visionary force behind Club Fuego, ND, has opted to close the nightclub in order to pursue future projects in other formats. The closure is effective today [June 15]."

Durr: Friends don't let friends become Europoseurs

This mouthful of fulsome flattery requires a bit of translation. "ND" is the pretentious moniker chosen by Nicole Durr. The German impresario garnered a small but fawning following during her latest Vegas stint. She also was credited with conception, creation, writing, direction, producing, musical conception, co-composition, costume design, co-choreography, co-program design and photography for Raw Talent Live.

The latter was a mercifully short-lived Cirque du Soleil wannabe that ran at the Sahara and looked like what you'd get if you let Franco Dragone run riot with a budget of $17.95. Centering upon "The Laptop of Life" (don't ask), this incomprehensible mishmash -- I believe the operative German word is Scheisse -- featured among its dramatis personae one "Miss Conscience Guilt," who presumably was dropping in from The Land of Babelfish.

Not only did Raw Talent Live have the miniscule distinction of being the single worst Vegas show I have ever seen, it was memorable in another respect: It used prerecorded applause. Either that or the theater was full of invisible people the night I saw Raw Talent, because there were probably fewer spectators than cast members.

In an effort to keep this Esperanto-flavored flub afloat, it was renamed Fuego Raw Talent Live, then just Fuego. But adding or subtracting words from the marquee provided no solution to an addle-pated concept.

That lesson went unlearnt when Ms. Durr set up shop over at The Rio. Posters on the property gaseously proclaimed: "ND's Fuego • The Club • Evolution of Nightlife." Now, if Steve Wynn were to announce that henceforth he was to be addressed and mentioned exclusively as "SW," and marketed his new property as "SW's Encore • The Resort • Evolution of Las Vegas" ... well, we'd all think El Steve had jumped the shark, to put it politely.

Before long, "Fuego" was doused and the Rio room became "ND's The Club." (Judging by its use of "Club Fuego," Harrah's Entertainment was as confused by the name-of-the-week as anyone.) All of which presumes that there's some brand equity in those two initials. Honestly, does anyone not on the Las Vegas Weekly's nightclub beat lie awake nights, tormented by the question, "What, oh what will ND do next?"

Durr earned herself a place in the Vegas history books when she helped spirit 50 Cuban artists to freedom. But of late she's drunk rather too deeply of her own bathwater. The ensuing cult of personality will not be missed.

OK, Durr is "develop[ing] the various elements of the brand." Guy Laliberté is being sent into outer space (meaning he's got 10 weeks to kick his nicotine addiction). So when will Christian Audigier take the hint?

Farewell to a legend. Europeans -- as opposed to transplanted Europoseurs -- remembered and revered saxophonist Sam Butera even after many in Vegas had forgotten him. Amidst the ongoing fuss over the demise of Danny Gans, the departure of Louis Prima's legendary sideman might have gone unnoticed were it not largely for the dedicated reportage of Cult Vegas author Mike Weatherford. Opportunties to hear Butera in Vegas were, in the past decade, few and fleeting ... but I wish I hadn't passed them up. That'll be something I regret.

Train to Nowhere II

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

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

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

Sunday night with Bette

Fri, 12 Jun 2009 15:01:00 -0700

Here's another item off the blotter, as we continue with S&G housekeeping ...

Last Sunday night marked Bette Midler's 100th performance of The Showgirl Must Go On at Caesars Palace. In what should be an object lesson to every other Vegas headliner, Midler (who is also the show's director) has kept the extravaganza up-to-date and tight.

The contemporaneity is reflected in her patter, which zings Octomom, Gov. Sarah Palin and Fannie Mae, among other targets. (The biggest laugh line, though, remains her diss of Cirque du Soleil; there's palpable "Cirque fatigue" in town and Midler taps right into it.)

As for spic-n-span production values, when you see dozens of wheelchair-bound mermaids moving in synchrony that Busby Berkeley might envy, it's no mean feat of stagecraft. Midler's brilliance is, I would say, her ability to shape -- with inestimable help from choreographer Toni Basil -- the ultimate Vegas variety show ... and yet affectionately tease its inherent campiness more than a little -- not to mention having a healthy sense of humor about herself. The production manages to both own what it is and yet lovingly comment upon it, too. No slumming here.

Showgirl is high heavens above Franco Dragone's stultifying A New Day, which broke a fundamental showbiz commandment, "Thou shalt not upstage the headliner." As for the eponymous Cher thingamajig, it rests upon the blissful assurance that the only prerequisite for succcess is the physical manifestation of Her Cherness in as many different costumes as is practicable. Then again, that near-trainwreck has been remunerative enough to constitute an argument for the virtues of resting upon one's laurels.

Such coasting is beneath Midler, obviously, for whom no holds are barred, especially in "When a Man Loves a Woman." For many revues, that torchy tour de force would suffice to cap the evening, but in Showgirl it's merely a preface for still bigger things to come.

While AEG continues to price its Colosseum shows absurdly high -- as attested by acres of empty seats -- Showgirl is the most Vegas razzmatazz you can get for your dollar. With fewer than 100 performances remaining, if you haven't penciled this one in on your itinerary, you ought to give it some thought.

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.

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.

Margaritaville wastes away

Tue, 02 Jun 2009 12:20:00 -0700

In an utterly (not) shocking development, the interminably protracted sale of Trump Marina has given up the ghost. This deal was on life support for months, so today's bulletin merely ratifies the inevitable. The would-be reinvention of the Marina as "Margaritaville" has exhausted its last shaker of salt.

While it goes against the grain to give Donald Trump the benefit of the doubt, buyer Richard Fields' accusation of "fraudulent activity" sounds like a big stretch. The supposedly heinous deed was Trump Entertainment Resorts' movement of players from the Marina to Trump Taj Mahal and Trump Plaza.

Big whoop. Not only was this the obvious explanation for Trump Marina's plunge to the bottom of the Atlantic City food chain, it's what casino companies do. You don't sell a casino and leave your hard-earned customer base in place for the next guy's benefit. (Readers with long memories will recall that a deal by Park Place Entertainment to sell the Las Vegas Hilton to Silverton owner Ed Roski fell apart over the exact same issue.)

Had Trump CEO Mark Juliano not moved prime players to his two remaining properties, he'd have been derelict in his duty to the shareholders. Unfortunately, now he may have to build that customer base back up. I don't envy him the task.

It also strikes an odd note that Fields' lawyer accuses Trump of fraud and then Fields' spokesman has the brass to say Coastal Marina still might deign to buy the Marina -- at an additional discount. Juliano had already knocked 15% off the sticker price. Perhaps Fields is feeling emboldened by Carl Icahn's impending $200 million acquisition of the Tropicana Atlantic City and is attempting brinksmanship. Fields is making some big noises about shopping around Atlantic City for a different casino, describing the town as "the perfect market for a Margaritaville project."

Good luck with that, unless he's willing to settle for one of Colony C(r)apital's two near-death properties. Harrah's Entertainment is carrying at least one casino too many on the Boardwalk but there's no way in hell that CEO Gary Loveman parts with Bally's or the Showboat for a measly $270 million or so. Harrah's current reporting method really muddies the waters but the cash-flow numbers still imply an asking price well in excess of what Fields can afford.

Raymond Kot, 1952-2009

The accused killer of Trump Taj shift manager Raymond Kot is one messed-up motherfucker, and that's as gently as I can describe Mark Magee, who appears to have stalked and killed Kot in very cold blood indeed. Taj game-protection veteran Dr. David G. Schwartz offers some expert-witness testimony, if you will. Kot's only crime was to achieve the American Dream ... until his assassin decreed otherwise.

By request ...

Mon, 01 Jun 2009 18:42:00 -0700

A reader from the heartland of this great country wanted to know whether LVA HQ provided a good vantage point for a United Way car wash at The Rio last Friday. Since I have but an obstructed view of The Rio, the answer is "no," I'm afraid, although perhaps Anthony Curtis could see it from his southeast-looking office.

Also, I had business at Scoot City (of which more later), so I wasn't around for the festivities. However, since Harrah's Entertainment sent over some snaps, I'll let you evaluate the event for yourself:

If the United Way raised $1,700-plus at $5 per car wash that means that ...

... these seasonally attired young ladies -- drawn from the terpsichorean talents of Sapphire -- washed a minimum of 340 cars. With results like those, you can't fault the marketing angle.

Harrah's giveth and Harrah's taketh away, especially if you happen to be an 83-year-old porter at Showboat Atlantic City. The 21-year Showboat veteran got eight weeks' pay and no benefits. Way to reward employee loyalty, Harrah's! Murray Freedman, God bless him, is fighting back. That's not how you treat a guy who says he offered to take a pay cut but instead was shown the door, and not nicely.

Here's hoping the court system shows him more compassion than did his former employer. The casino industry would survive quite nicely without Gary Loveman but of Murray Freedmans there can never be enough. Customer service is the industry's bedrock and Freedman's work ethic is an example to us all.

A great day for Nevada

Mon, 01 Jun 2009 18:19:00 -0700

As an otherwise abysmal 2009 Legislature wound down, solons earned congratulations for doing right by Nevadans in one respect. Thanks are also in order to MGM Mirage and Harrah's Entertainment, which both lent high-profile support to the measure, tirelessly championed by state Sen. David Parks. He -- and the supporters he pulled out of the woodwork -- chipped away until all the votes were in place to override the benighted veto of Gov. Jim Gibbons.

(Even the Las Vegas Review-Journal sides with Parks ... much to the dismay of the knuckle-draggers and mouth-breathers who constitute its core readership.)

Of 41 Gibbons vetos (a record), his opposition to domestic partnerships seemed among the surest to stand. While at least 22 of Midnight Jim's vetos have been overriden (another record -- and the first time it's happened in 20 years), this one was the sweetest of all.

Midnight Jim can now return to demonizing his own employees and to his divorce proceedings, which are taking unimaginably tawdry turns.

As for toxic marriages, the gold medal still goes to the Medea/Jason nuptials-from-Hades, which played out recently here in Vegas. Your humble theatre critic had a look-see. In the editing process, "shaving the dice" somehow became "shaving the device," which conjures up some pretty strange imagery, lemme tell ya.

How not to promote?

Tue, 26 May 2009 11:18:00 -0700

Credit for this Strip vignette goes to reader mike_ch, who writes:

Saw this linked to on Twitter by Brian Fey on TwoWay[HardThree]:

Not sure this is the most sound marketing strategy ever:
"At O'Sheas Casino, the president of five Harrah's Entertainment Inc. hotel-casinos on the Las Vegas Strip is poking fun at the economic downturn and the excesses that built Sin City's anything-goes reputation. Don Marrandino points at a sign pushing $45 bottles of Jack Daniels whiskey or Smirnoff vodka, and says the promotion parodies the not-too-distant past when the gambling resorts marked up liquor by hundreds of dollars a bottle and patrons couldn't empty them fast enough."

I don't know if you find the same feeling in that which I do, but I can't help but wonder how effective "remember when you got gouged?" is as a marketing tool. Especially at a moment when the rocket has only just begun to lift on room rates and even some lower market owners are scoffing at what they're getting for a room.

Don would probably be wise to put away the gag hooch and keep being photographed with pretty ladies.

Like so many recent promos (remember, "Shut up and play"?), this one could be accused of tone deafness but Marrandino's head is in the right place. And he shows a firm grasp on reality when he says, "[Las Vegas] went from bargain to high end really quickly. Now it's going back to that middle market." I'm still not sure that message has truly sunk in elsewhere on the Strip.

Update: For those who follow Twitter, our in-house tweeter par excellence deems Luxor's Twitter feed to be far and away the best of the MGM Mirage feeds, with MGM Grand's bringing up the rear. Kudos for Luxor prez Felix Rappaport for stealing a march on the competition.

Under Attack II

Fri, 22 May 2009 13:50:00 -0700

Aside from being the title of ABBA's final single (and lamest music video), it's also the status of our Web site. Which means precious little blogorrhea, I fear. In the interim, experience an absolutely mind-boggling interview with Harrah's Entertainment CEO Gary Loveman, then take a sanity break with this:

Since the music video (one of the few not directed by Lasse Hallstrom) is such a non-event, I opted instead for ABBA's last-ever appearance in Germany, an emotional occasion where the audience swarmed the stage during the final credit roll.

Oscar Goodman, Voice of Reason

Thu, 21 May 2009 18:15:00 -0700

Even as MGM Mirage CEO Jim Murren and Treasure Island owner Phil Ruffin are preparing to stomp out any incipient recovery in Las Vegas by jacking up room rates, words of restraint are coming from the unlikeliest of sources: Mayor Oscar Goodman. Quoth Hizzoner: "There are a lot of people [here] now; I understand they may not be spending as much as they have in the past."

(And if Ruffin really doesn't want $50/night customers, as he's said, I can inform him that Harrah's Las Vegas would be very happy to take them off his hands this very evening. As for Columbia Sussex's Westin Casuarina, those guys are living in a f***ing dream world, demanding $109 for a room on a night when I can get one at Caesars Palace for but a dollar more. Hmmmm ... Westin Casuarina, Caesars Palace ... Casuarina, Caesars ... such a tough choice.)

Goodman was counseling moderation in the context of praising what he called "very conservative" projections by the Las Vegas Convention & Visitors Authority. The recent double-whammy of low occupancies and ADRs obviously sucks, but if occupancy truly is beginning to ramp back up, there'd be no better way to nip that in the bud than by repricing as though a full-blown recovery were underway.

As for the LVCVA, it sure didn't waste any time ditching the "bargain destination" message in favor of the same old "Party like it's 2006" crap. Do you get the feeling that selling a message of affordability really chaps the LVCVA's ass? (That band of brothers and sisters from Cranfils Gap, Tex., seems to have done a quick disappearing act. Anybody seen them lately?)

The indiscreet charm of the douchebagerie appears more to the LVCVA's liking. According the authority's guru-on-retainer, Billy Vassiliadias, customers seek "some comfort that this is the Vegas they've always known and loved." You mean that high-end-centric, $500-for-a-bottle-of-Absolut-and-some-cranberry-juice Vegas? Yeah, that's the ticket.

Goodman gets it. Too bad Vassiliadias apparently doesn't.

Brooks: Steve Wynn sucks

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

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

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

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

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

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

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

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

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

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

Brilliant idea, stupid headline

Wed, 20 May 2009 13:21:00 -0700

Tamara Audi of the Wall Street Journal is one of the two best gaming reporters in the U.S. (The Las Vegas Sun's Liz Benston is the other.) Too bad her story on MGM Mirage's global extension of its brand(s) got slugged with this idiotic faux-clever headline: "MGM Mirage Gambles on Hotels in Mideast, Asia."

Yuk yuk. WSJ headline writers must have really had to put on their thinking caps to come up with one. Except ...

There's no "gamble" here: As long as MGM does its spadework, and budgets so that management fees - costs + franchising fees = profitability, where's the problem? This is a brilliant low-exposure move by a company that's far too vulnerable to the vagaries of one (market) right now.

Both the Sun and the Las Vegas Review-Journal chimed in on this story already, but Audi has far more detail than either. Already, MGM's plan embraces such far-flung and exotic locales as Sharm El Sheikh (Egypt) and Tientsin (aka Tianjin, China), and a stateside push is under discussion.

Kudos to both CEO Jim Murren and MGM Mirage Hospitality supremo Gamal Aziz for devising a means of broadening the company's revenue stream that entails comparatively few upfront costs. MGM may be in stormy weather roughly comparable to what's being experienced by Harrah's Entertainment and Station Casinos. Unlike those two, it's going to have something to show for its troubles when it comes out on the other side of the typhoon.

Surrender in Atlantic City?

Wed, 20 May 2009 12:20:00 -0700

Yesterday, I mis-reported New Jersey state Sen. James Whelan's proposal for downsizing the state's regulatory apparatus. He didn't call for elimination of the New Jersey Casino Control Commission in favor of the Division of Gaming Enforcement, merely an unspecified removal of what he perceives as a redundancy.

(Such are the perils of working from memory. Mea culpa, mea culpa, mea maxima culpa.)

Today's paper has a longer clarification of Whelan's position. He'd like to see a DGE/NJCCC merger, although Gov. Jon Corzine sounds strongly resistant to that and other aspects of Whelan's plan. And, after hearing for years that one of Atlantic City's problems is that it has too few hotel rooms to be destination resort, it's quite a turnaround to hear Whelan advocate a 200-room minimum (like Nevada's), a ~~150%~~ 60% reduction from the current mandate.

What's certain to paint a target on Whelan's back is his endorsement of aggressive employment of eminent domain to clear out distressed properties and encourage development. That's a real sore point in Atlantic City, where Donald Trump once tried to use eminent domain to push an elderly woman out of her home. (He lost.) Also, imagine how confrontational matters might have become if Pinnacle Entertainment had eminent domain in its holster when it was trying to expand its 'sphere of influence' around the old Sands site and was trying to berate the local real estate market into acquiesence.

But ... we're talking about a casino market where emergency measures are required. Would the city be using eminent domain to obtain property and then offer it around? Or would the city be taking sides, using eminent domain to pressure Citizen X on behalf of Casino Z? As craptastic an idea as eminent domain is, generally speaking, it's a good thing Whelan's put it into play, because this looks like a debate that has to be conducted as Atlantic City decides what its future is going to resemble.

However, Penn National Gaming COO Timothy Wilmott is welcome to put a sock in it, at least as regards his own aggressive eminent-domain advocacy. Penn has basically given Atlantic City the finger, bypassing several opportunities to get into the market, so who cares what its braintrust thinks? I dare them to operate there. I double dare them!

Aw hell, I dare them to do anything besides sit on their $1.5 billion hoard of gold and bemoan the fact that they can't obtain Tiffany properties at Walmart prices. Wilmott probably didn't mean to come off sounding like, "Kick some old folks and small businesses out and maybe we'll build something," but Penn needs to clearly state its intentions in re Atlantic City and stop playing subtextual footsie. Otherwise, any further discussion is meaningless.

But the Missing the Boat Award goes to Casino Reinvestment Development Authority boss Thomas D. Carver. OK, he's probably right when he says, "I don’t think we’re going to see $2.5 billion casinos anymore." The market's not going to support and, at those prices, you're not building for the ROI but the bragging rights.

But then we get: "We may see $400 million facilities."

No, no, no, no, no! Four hundred million smackeroos is roughly half -- I repeat, half -- the budget for a Pennsylvania slot parlor. It's a locals-casino budget ... and not a top-of-the-line locals place, either. Maybe some of those creaky old monoliths along the Boardwalk need to go away but replacing them with a bunch of Aliante Stations is likely to hasten Atlantic City's decline.

What do the city's three top performers -- Borgata, Harrah's Marina and Trump Taj Mahal -- have in common? Significant capital reinvestment, that's what. The numbers do not lie: Customers are not flocking to the places that are run on the cheap. If Carver's line of thinking gains currency, Atlantic City can forget about competing with Pennsylvania and just run up the white flag. What he advocates is tantamount to unilateral disarmament.

The MGM/Pansy Ho verdict: It's in and it's bad

Tue, 19 May 2009 11:15:00 -0700

After nearly four years of investigation, the New Jersey Division of Gaming Enforcement has released its long-awaited "suitability" findings on MGM Mirage joint-venture partner Pansy Ho. As MGM itself reported to the SEC yesterday, "While the report itself is confidential, at the conclusion of the report, the DGE recommended, among other things, that: (i) the Company’s Macau joint venture partner be found to be unsuitable; (ii) the Company be directed to disengage itself from any business association with its Macau joint venture partner; (iii) the Company’s due diligence/compliance efforts be found to be deficient; and (iv) the New Jersey Commission hold a hearing to address the report."

The grinning ghost of MGM Grand Macau

While the reason for the DGE's disapproval isn't given, it's also not difficult to guess. When someone with the sleazy reputation of Stanley Ho has an interest in your casino -- by dint of loans to two of his daughters -- a jurisdiction that takes probity as seriously as New Jersey is unlikely to give its benediction.

Slightly further down in its SEC bulletin, MGM offers one of the most Pollyanna-ish statements of recent memory: "The Company does not believe that the report will have a material adverse effect on it."

Let's back up a second. The matter of Ms. Ho now goes to the New Jersey Casino Control Commission for adjudication. The NJCCC is not obligated to act on the DGE's findings. However, the last time it exercised such discretion, it was to override the DGE's recommended probation for Columbia Sussex in favor of kicking ColSux out of the Garden State forthwith.

So the likelihood is that MGM will be faced with a choice between liquidating its New Jersey holdings or its Macao ones. The latter include a 50% stake in Borgata (and Boyd Gaming can afford to buy its partner out), plus some undeveloped land, which will be a much tougher sell.

As for MGM Grand Macau, it would revert to the Ho family. MGM could still, in all probability, count on an ongoing stream of revenue by leasing out the brand name or even by negotiating a management contract for itself (although management is rumored to have been the casino's Achilles heel).

Unless the NJCCC grants clemency (in which case, MGM loses face but nothing more, as one analyst puts it), "material adverse effect" is inevitable. But there may be a silver lining for CEO Jim Murren. He was able to get debt-covenant violations waived in return for an accelerated repayment of the company's whopping debt load. The diñero from a Borgata or MGM Grand Macau sale would come in mighty handy as the company tries to de-leverage itself.

Walking (out) in Memphis. A 21-year veteran of the Harrah's Entertainment hierarchy resigned last week, another casualty of the company's downsizing.

And then there were 135. It used to be the execs jumping from the sinking Cosmopolitan ship reached for a lifeline from Fontainebleau. Now they'll be looking for another rescue vessel. (Hey, the Tropicana may be hiring soon.) A F'bleau spokesman says negotiations with Deutsche Bank are continuing, in a notable ratcheting-down of the bellicose rhetoric that's been lobbed to and from F'bleau of late.

Heard last night as part of an act at Sin City Comedy, re the Vegas Trop: "A $20 bill and all my teeth -- I'm a whale!" Conclusion: Alex Yemenidjian cannot arrive soon enough.

"Peepshow" buys a clue

Mon, 18 May 2009 14:56:00 -0700

"Peepshow" prime donne Kelly Monaco & Mel. B

By now it's old news that Planet Hollywood's new resident spectacle, Peepshow, has gone topless for real. Though some question the move, to me it always seemed retrogressive and counter-intuitive to present a T&A show in contemporary Las Vegas that had scarcely a nipple in sight. That's so 1956.

What's newsworthy is the co-producer's rationalization for not daring to bare: "All of the other shows in this genre play to a smaller house. What we didn't want to do is alienate what could be 50 percent of our audience. We wanted to do a show both men and women are comfortable seeing."

In this context, "smaller" is anything less than 1,400 seats. By that Double-D measurement, Cirque du Soleil's nudity-friendly Zumanity plays to a "smaller" (i.e., 1,256-seat) house, but we're hardly talking Crazy Girls-cozy there, now are we? Jubilee! over at Bally's, seats 1,040. The sight of literally scores of bare breasts hasn't kept that show from racking up a quarter-century run.

If Jubilee! "alienate[s] ... 50 percent of [its] audience" -- which is very unlikely -- it's done no evident harm at the ticket window. (For that matter, I know some women who wouldn't mind seeing Peepshow's Mel B. in her knickers ... )

So you have to ask, "What were the Peepshow peeps thinking?" They evidently came in not knowing the market and seem only now to be getting up to speed. Fig-leaf prudishness and the Las Vegas Strip just don't mix.

"Another one bites the dust"

Fri, 15 May 2009 11:15:00 -0700

That's how a reader informed me of Las Vegas-based Golden Gaming's decision to bail on Wyandotte County in Kansas. Considering that you've got Harrah's Entertainment, Ameristar Casinos, etc. firmly entrenched across the state line in Kansas City, Mo., and Isle of Capri making a comeback over there, I don't blame Golden for its hesitation.

Penn National remains in the Wyandotte running but it found no support for its last bid and previous winner Cordish Co. withdrew amicably from its Kansas Speedway project so that it could be downsized. Casino-enabling legislation in the Sunflower State didn't allow Cordish to revise its proposal once it had been accepted by the Lottery Board. But Cordish promised it would be back, and it was.

Lottery Executive Director Ed Van Petten told media Golden wanted to conserve its assets, adding, "They are being conservative and playing it smart. I hate to see it, but I fully understand." Golden executive veep Rod Atamain's diplomatically phrased withdrawal alluded to preserving liquidity, among other motives:

"While we believe in the long-term viability and appeal of our site and project, we are not confident in making such a commitment on our own in the current environment." That's tantamount to an admission that Golden couldn't find lenders, especially considering Atamain's previous reference to "ongoing turmoil in the financial markets."

It would have been a tough call for Kansas. The Cordish and Golden projects were comparable in budget ($700 million vs. $662 million). As appealing as a Tom Watson golf course might be, Cordish's promise of a 50% larger slot base than Golden's would have been sweet music to state officials weathering a deep recession and counting the gambling receipts before even one handle is pulled.

In the meantime, Golden still has that liquidity it wants to preserve -- and its cash flow will improve this summer as liberalized casino rules in Colorado (Golden's primary market) take effect. It could always spend some of that dough close to home: Golden CEO Blake Sartini is the brother-in-law of Frank & Lorenzo Fertitta. What are the odds the Fertitta clan might try to spin off assets to Golden? It would enable Station Casinos to sweeten the offer it's making to bondholders and keep Boyd Gaming at bay, all in one fell swoop.

Just a thought.

Perp Show

Thu, 14 May 2009 12:38:00 -0700

If you're bald, weight 285 lbs. and have one arm in a cast, you're not exactly inconspicuous. So how was it that that such a hefty man was to infiltrate a VIP area of Planet Hollywood and bust into Peepshow headliner Kelly Monaco's suite? It gets weirder: Merrill Wetter was a long-term denizen of Planet Ho and had been 86'd last month for following a money cart around. And yet his reappearance on the 50th floor didn't raise any alarms, literally or otherwise. This new information suggests a serious lapse of security at Planet Ho, something that the Nevada Gaming Control Board might want to investigate.

April in Atlantic City. The numbers are out and they suck. Again. Unless you're Borgata, which was basically flat with April '08 -- a veritable triumph in this context. The Showboat didn't do too badly (-7%), pushing ahead of the larger Tropicana Atlantic City (-21%). However, another Harrah's Entertainment property, Bally's Atlantic City is way off last year's pace (-19% YTD) and risks joining the Dead Man Walking quartet of Trump Marina, Trump Plaza, the Hilton and Resorts.

The partial reinvention of Trump Taj Mahal continues to pay off, with gaming win down less than 1% through the first four months of the year. Don't you wish we had this kind of reporting transparency in Nevada?

Reid's smooth ride: Would-be GOP challengers to Sen. Harry Reid (D-NV) are not only thin on the ground they're probably hearing casino-industry check books slam shut after the Senate Majority Leader jawboned banks on behalf of CityCenter and Fontainebleau. (It was a futile effort but, at this particular moment, that says more about the lending-averse banking industry than Reid.)

Party leaders say a "highly motivated" "strong GOP challenger" is out there and will emerge ... in five months or so. The only person shaking the money tree so far is former state legislator Sharron Angle. She'd rough Reid up, to be sure, but has an Achilles heel or two. To date she's been a single-plank candidate -- property taxes; not what you'd call a senatorial issue. Also, state GOP chairwoman Sue Lowden doesn't want a divisive primary ... and Angle was very divisive when she ran against Dean Heller (R-NV) three years ago for the congressional seat Heller now holds. She even tried to have the primary results overturned in court. But for now she's the only game in town.

Double duty: For the unforeseen future, I'll be spelling the estimable Dave Surratt as CityLife's theatre critic. First up is a show directed by Zumanity emcee Christopher Kenney. Called The Facts of Life: The Lost Episode it's ... it's ... well, it's different.