David Mckee's Stiffs & Georges - Aristocrat

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

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

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

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

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

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

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 They have certainly not withdrawn."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

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

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

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

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

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

Head-scratcher at Shuffle Master

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

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

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

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

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

The prodigal son

Mon, 19 Jan 2009 18:03:00 -0700

Poor Kerry Packer; the late Australian mogul and famous high roller must be doing all his rolling in the grave now. Reputed for being daring at baccarat and cautious in business, the media baron is at least spared the indignity of seeing son James Packer blow through his patrimony at a record pace.

Going is the $33 million yacht; on hold is the $40 million corporate jet. Even work on the $2.5 million backyard swimming pool has been suspended. (Don't you hate it when that happens?) At least the pin placements on Packer's Greg Norman-designed golf course are still "changed every day at massive expense," reports Rupert Murdoch's News.com.au.

More seriously, Packer is reported to be suffering from depression, though other media reports dispute this. Given the debilitating, even paralyzing nature of the disease (something for which I can vouch firsthand), it puts a potentially very different cast upon Packer's December no-show for a Nevada Gaming Control Board hearing.

When Packer did turn up, Chairman Dennis Neilander admitted to being somewhat foxed by Packer's acquisition of Cannery Casino Resorts (for $1.8 billion). "You and me both," I thought. As Packer seemingly played Pin the Tail on the Donkey, buying not only Cannery but positions in Fontainebleau, Station Casinos, Harrah's Entertainment and the flaccid Crown Las Vegas 'failsino'-tower, I tried to convince myself that an overarching strategy was at work. In retrospect -- especially after the writedown of the Station and Harrah's investments -- what we were witnessing was James Packer, Shopaholic. (How did he manage to miss out on the Cosmopolitan?) One begins to see why Steve Wynn steered clear of Packer, back when the talk of a Wynn-Packer joint venture was the buzz du jour on the Strip.

Even the Crown Macau cash spigot has been sputtering, although Melco Crown CEO Lawrence Ho keeps insisting that Chinese access to Macao will improve in time for the City of Dreams opening. (Either he's whistling past the graveyard or he knows something for which others would pay a very great number of patacas.) Market share is down at Crown Macau and the Macanese government is predicting a serious diminution of gaming revenue for for the overall market in 2009, placing it somewhere near $10.7 billion.

Plus, the ripple effect doesn't stop there. Aristocrat Leisure, which could really stand to have some good news, had been hoping for a fivefold increase in its installed slot base in Macao over the next two years. Not only is that unlikely, operators are trimming their existing slot inventory.

Underscoring their pessimism regarding reduced visa restrictions, Macanese tourism officials are turning their gaze at least partly away from China. Among the newly coveted markets are Singapore's presumed feeder markets -- India, Indonesia, Malaysia, the Philippines, Thailand, and even Australia and New Zealand -- to say nothing of Singapore itself. It's long been presumed that Singapore's got a tough row to hoe when its casino megaresorts come on line and it just keeps getting tougher.

Aristocrat @ G2E

Tue, 11 Nov 2008 18:12:00 -0700

Aristocrat Technologies previews its new slot products. Try not to get carried away by President Nick Khin's enthusiasm.