David Mckee's Stiffs & Georges - G2E

From the mailbag #5: Vegas Club, football, Atlantic CIty

Fri, 11 Sep 2009 14:07:00 -0700

Reader herbop reports on the latest thrift move by Tamares Group: "While other Downtown hotels are installing in-room safes, and removing complaint-causing daily fees for same, the Vegas Club Hotel has pulled out the installed safes from its rooms. When I inquired, they said it's 'policy.' Guests can still use the casino's safe deposit boxes.

"They left the four bolt-holes in the wall, unpatched. Classy, right?"

Geez, I hope those German G2E attendees opted for the Plaza over the Vegas Club. Nice work, Tamares. Why don't you strip the copper out of the place and sell it on the black market while you're at it? (Whoops, we probably shouldn't give Pojo Z. and his flunkies any ideas.)

Kickoff time. Since NFL season finally draws nigh (after what seems like five months of preseason games), it's probably worth mentioning LVA Sports. It includes a directory of football contests, pigskin parties and team bars in the Vegas area. There are no fewer than 12 watering holes allied to Da Bears but only half that number for Packer Backers.

Tennessee Titans fans will just have to drink their beer at home, because our staff couldn't locate any Titan-affiliated bars. Ditto Tilman Fertitta's Houston Texans. Even the ever-putrid Oakland Raiders have three bars to their credit -- but getting to last year's Super Bowl still only netted one Vegas hangout for Arizona Cardinals fans. Go figure.

Don't pop the champagne for stalled Boardwalk resort Revel just yet. The latter has issued a clarification stating that China Construction Engineering Corp. only has a potential agreement in place to finish Revel, for which the resort must drum up funding later this year. Also, yesterday I misstated the opening date as "July 11" when I meant to type "July 2011." I regret the error.

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.

It's Gaughan

Thu, 16 Jul 2009 11:53:00 -0700

Congratulations to South Point owner Michael Gaughan, the 2009 inductee to the American Gaming Association Hall of Fame. An industry "lifer" who worked his way up from the Royal Inn to the CEO's chair at Coast Casinos, Gaughan has been one of the most consistently successful operators in the business. After 9/11, when other operators were slashing jobs, Gaughan actually added employees. That practically qualified him for on-the-spot sainthood.

He briefly succumbed to the siren song of consolidation and merged Coast with Boyd Gaming. It was a rocky marriage and Gaughan soon decided that the world of publicly traded casino corporations was not his bag. But the "divorce settlement" gave him South Point free and clear, and he maintains a lucrative ancillary revenue stream through 1,308 slots (give or take) at McCarran International Airport.

Gaughan is a man of few words -- but many deeds -- so we hope he's not forced to make a speech. But S&G applauds the AGA's excellent selection of its '09 inductee.

(And there we thought they were going to give it to James Packer.)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

"Ugly Americans"?

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

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

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

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

Never a dull day in Nevada

Wed, 08 Apr 2009 16:56:00 -0700

At least one good thing happened today. In other news ...

"Infidelity is not relevant ... in Nevada": Faced with being all over the teevee and not in a good way, Gov. Jim Gibbons set off a series of distractions. First, he tried to score a photo op with the BMOC. (Midnight Jim's blustery public comments form a droll contrast to the obsequious tone of his letter to POTUS.) Then he managed to piss off the Armenian community. Whoops, there go those campaign contributions from MGM Mirage, governor.

Maybe those dollars will go to former casino owner and outgoing Reno Mayor Bob Cashell. He's the latest Nevada Republican to pass up the chance of taking on Sen. Harry Reid, preferring his odds against the decreasingly viable Gibbons. Cashell says he's got "well-connected" backers down here in Southern Nevada.

Ensign for President? Despite having been an ineffectual fundraiser and candidate-recruiter during his tenure at the RSCCC, Nevada's junior senator (and Circus Circus scion) appears to have his eye on the Oval Office. S&G encourages such presidential aspirations, if for no other reason than that all the other presumptive candidates for 2012 are from the anti-gambling subset of the GOP. Since Ensign's nickname on Capitol Hill used to be -- and perhaps still is -- "Johnny Casino," he can expect to hear a lot of that on the campaign trail.

Elsewhere ...

The chicken is back! The tic-tac-toe-playing chicken is the new star attraction at Greektown. When you're $777 million in the hole, a bit of fowl play can't hurt. The chicken is only playing Detroit through June 9 but an extended engagement would be advisable: With MGM Grand Detroit openly on the market, Greektown's chances of finding an interested buyer just took a mighty wallop.

St. Stanley. The benediction of the American Gaming Association will be bestowed upon Stanley Ho during G2E Asia. Quoth AGA President Frank Fahrenkopf, "we are excited to hear his thoughts during his keynote address.” Yes, Frank, especially the part where Stanley starts ranting about the pernicious effects upon Macao of American capital, as he is so wont to do these days.

Take that, Loveman!

Wed, 28 Jan 2009 16:42:00 -0700

In a resounding "ZING!" to adversary Harrah's Entertainment, its former CEO, Philip G. Satre, has been named to the board of International Game Technology. Harrah's has been trying to herd IGT revenue-sharing games off its casino floors, going so far as to make the preposterous claim that "Wheel of Fortune" lacked popularity. CFO Jonathan Halkyard piled on a few days ago, asserting that slot makers hadn't evolved their product significantly since, oh, about 1935.

Phil Satre, ca. 2003

On the one hand, this could be IGT's way of extending the olive branch to Harrah's. But that would be almost masochistic after Harrah's CEO Gary Loveman dissed IGT's product to IGT boss T.J. Matthews' face in a memorable exchange at G2E.

What's more plausible is that, by signing up with IGT -- upon which Harrah's has essentially declared war -- Satre is tacitly rebuking his former company and lending Matthews additional credibility (not that he needed any). Good luck to the Harrah's people when they try to spin this one.

Case Bets: CityCenter, Detroit, Boyd in Indiana

Mon, 19 Jan 2009 15:03:00 -0700

CityCenter: Cash cow or calf of gold?

It's received wisdom that, in its worship of the Golden Calf known as CityCenter, half-owner MGM Mirage is prepared to sacrifice some of its high-value properties, including MGM Grand Detroit, even in the face of numbers like these. Perhaps a history lesson is in order.

After the 9/11 attacks and the crippling blow they dealt to the Vegas economy, one of the ways companies like MGM stayed afloat (and, in MGM's case, profitable) was that their Vegas operations were backstopped by regional footholds in markets like Detroit and Biloxi. Now one keeps hearing that MGM is bent upon putting all its eggs in the Vegas basket, with even MGM Grand Macau possibly to be had.

(A moment of levity: A Dutch casino executive, speaking at G2E, suggested in all seriousness that MGM buy Station Casinos or Boyd Gaming and transplant their [locals] customer base to CityCenter. Which shows almost as little understanding of the Vegas market as I have of Holland's casino business.)

If this is an accurate reflection of the corporate thinking at MGM, shareholders should be alarmed, at the very least. A CityCenter-centric strategy concentrates risk, rather than spreading it across multiple markets. The kind of pullback that's being mooted in the blogosphere and podcast cosmos would be so irresponsible that it would call the judgment of MGM leadership into question. However, so long as said management is answerable only to Kirk Kerkorian, that question may never be called.

Don't look for rescue from Foxwoods or Mohegan Sun. Their slot revenues have been sucking wind this year. Also, salary cutbacks to 9,800 Mohegan Sun workers bode very poorly for further expansion by the casino, which was bullish on the Kansas market not so long ago.

Boyd fights back. The opening of nearby Four Winds Casino really did a number (as in approx. -40%) on revenues at Boyd's Blue Chip riverboat in northeastern Indiana. Watching double-digit revenue declines, month after month, might spur those of us with lesser intenstinal fortitude to cut and run.

Not Boyd. It's reinventing its business model for Blue Chip, in best "adapt or die" fashion. The three-pronged response of a new hotel, spa and concert venue is an aggressive pushback. It probably won't restore Blue Chip to former levels of glory, at least where gambling revenue is concerned (Four Winds still has the "convenience factor" going for it with Michigan punters). However, it does fling a strong challenge at its adversary. Four Winds, the ball is now your court.

More Macao madness

Tue, 06 Jan 2009 17:35:00 -0700

If you don't visit GamingFloor.com -- and if you don't, you really should -- you're missing out on some outrageous video shot by Editor Ian Sutton. The first montage showcases some of the over-the-top architecture and beyond-flamboyant neon signage of Asia's Las Vegas™ (as trademarked by Sheldon Adelson™). Compared to this, the Las Vegas Strip looks -- dare I say it? -- almost sedate.

Then there's the show floor of last year's G2E Asia. It features several games with U.S. punters will be familiar and a few more that will be decidely novel. (Sutton seems to have been every bit as fascinated by Royal Grand Prix as I was.) I don't think that slower-than-molasses baccarat-dealing robot is going to catch on, though. Anyway, it's an orgy of gadgets, girls and Frank J. Fahrenkopf. Enjoy. (Higher-quality versions are available via the GamingFloor.com YouTube channel, although they take considerably longer to load.)

Collapse in Kansas; Herbst is toast

Fri, 05 Dec 2008 11:20:00 -0700

And then there was one.

A Cordish Co./Kansas Speedway joint venture has pulled the chicken switch on a $400 million casino project. This leaves avionics firm Butler National Service Corp., with its Dodge City concession, as the only company with an ongoing casino project in Kansas -- Penn National, Harrah's Entertainment and now Cordish having walked away from the other three concessions. Project head Joseph Weinberg wants to build a casino-first, amenities-later version of what had been proposed. Of course, in order to do that, the bidding process will have to be re-started from scratch. Also, Weinberg's plan assumes that Cordish gets the nod a second time and, were I a member of the Kansas Lottery's board, I'd be getting pretty fed up with the diva-dom displayed by some of the casino applicants.

On the other hand, if a company as well-regarded as Cordish can't get its Speedway casino financed, that makes it easier to excuse Harrah's exit from the Sunflower State. The Lottery says it is willing to"invite applicants to apply with proposals they feel fit the current economic climate." [read: "smaller budgets"]. That, combined with the sudden availability of Sumner County, opens the door wide for Penn National. If the Lottery's board wants to give Penn the Sumner/Cherokee County parlay it requested (and lower the budget for the latter), Penn is the one company that could execute the projects out of cash on hand. Or is it saving its pennies for a Vegas Strip property now?

Across the border, the clever chaps at Pinnacle Entertainment have found a loophole in Missouri law that might enable them to open yet another casino market. Revenues at the old President riverboat, on the St. Louis waterfront, are down somewhere in the bilge water. But Pinnacle has a discrete gaming license for the ship and an option on some land toward the northern end of St. Louis, near the Chain of Rocks Bridge. There, it proposes to essentially dry-dock the President.

Since Missouri law doesn't expressly forbid what Pinnacle is contemplating, the company could open a new market in the state, even though the number of licenses remains frozen at 13. Smooth move. But it's not one that's going to sit well with the backers of Sugar Creek and Cape Girardeau projects that were frozen out when Missourians voted for the license cap last month. And it underscores the perils of shutting the door to new competition, as Pinnacle and Ameristar Casinos are beginning to treat Missouri as their private fiefdom.

Already, Ameristar veep Troy Stremming -- the architect of the freeze -- is huffing that Missourians dare not let Sugar Creek get into the game: “We don’t want to get into a situation where we are over-saturating the market and cannibalizing existing destination facilities.” No, but it's hunky-dory to let Stremming's buddies at Pinnacle have three St. Louis-area locations instead of their current two. No oversaturation or cannibalization there, huh? At least Stremming won't have the casinos-in-Kanas bogeyman to brandish anymore, now that all but one of those projects has collapsed.

Hope for Harrah's. The Chinese government is experimenting with parimutuel wagering on horse races. If the ChiComms can be persuaded to extend the sport of kings to Macao, maybe Harrah's can make serious use of that golf course it purchased and which is now ineligible for casino development. Frank Fahrenkopf couldn't resist mentioning that white elephant during his joint appearance with Harrah's CEO Gary Loveman during G2E. Judging from some of Fahrenkopf's subtle rapier thrusts and Loveman's harrumphing response, there seems little love lost between the twosome.

Herbst Watch, Day Two. The Magic 8 Ball (in the guise of Liz Benston) says bankruptcy likely for Herbst Gaming, which is in default on $1.27 billion of debt. This has been in the cards for Herbst ever since it got taken to the cleaners by MGM Mirage for some Primm, Nev., casinos that had seen better days (like, maybe 10 years ago). Benston's description of the $394 million boondoggle is "ill-advised." Understatement doesn't get any better than that, my friends.

Casino bailout no joke

Thu, 04 Dec 2008 15:53:00 -0700

American Gaming Association President Frank Fahrenkopf may have made light of it at G2E. But the days of joking about a federal bailout are officially over. New Jersey Gov. Jon Corzine (D), during an Atlantic City visit, made some vague rumblings about the necessity for aid which "stops this slide ... I mean, we don't need to wait until there's a 30% decline in revenues and there's another series of layoffs in Atlantic City or in the financial services industry that undermine the overall health and well-being of the American people."

So it begins; not with the ringing of a bell but the rattling of a tin cup. But remember, when federal business-relief money was being directed at the Gulf Coast in the wake of Hurricane Katrina, bluenoses in Congress made sure to 'redline' casinos out of the list of intended beneficiaries.

Isle slows down. Expansion of the Biloxi Isle of Capri Casino is on the backburner again, in another manifestation of the company's newfound prudence. Unfortunately, that wasn't enough to save Isle from having its credit rating cut.

Herbst Watch, Day One. Yesterday was D-Day for overextended Herbst Gaming. Still no word on what went down.

G2E scuttlebutt

Mon, 24 Nov 2008 15:56:00 -0700

Could Herbst Gaming President Ferenc Szony be headed to the Cosmopolitan? That was one of the rumors bruited about at G2E last week. It would make sense. Szony, one of S&G's favorite gaming executives, is no stranger to operating in difficult markets. Right now he's got the unenviable task of pulling the Herbst Gaming jalopy out of the deep ditch into which the Herbst brothers piled it.

Also, the Cosmo still has no gambling expertise on board, a glaring omission for a casino-based property that's already got more than a couple of strikes against it. In Reno, Szony's had to keep the Sands Regent afloat in an out-of-the-corridor location and a declining market ... and by all accounts, he's succeeded. He's got the right stuff, casino-wise, and should have been running a Strip property years ago. If the Szony-to-Cosmo rumor isn't true, it should be.

Fontaine-blown? While over at the Convention Center, I heard a dire forecast regarding the future of Fontainebleau Las Vegas. Namely, its splendid isolation, surrounded by various 'failsinos' like Crown Las Vegas and Echelon, may result in very attenuated business. One greatly hopes otherwise, but don't discount the James Packer Factor: The Aussie heir has displayed a reverse Midas Touch of late and he's a key Fontainebleau investor.

Not a Harrah's property.

The 11% Solution. More grim news from G2E -- Harrah's Entertainment is contemplating cutting its maintenance budget by as much as 89%. Considering the disgustingly filthy condition of the Harrah's Las Vegas parking garage last Thursday night, I believe it. That place looked like it hadn't been swept up in weeks, if not months (though the casino itself was quite spic-n-span). The hobo encampment near LVA HQ is quite tidy and well-policed by comparison.

So Frank P. in Negaunee, if you're reading this ... beware!

Mountain labors, brings forth mouse

Mon, 24 Nov 2008 13:14:00 -0700

Liz Benston has an excellent précis of the bells and whistles on display this year at G2E. The money quote is: Some Nevada casinos offer Bally’s iView — a small screen below the game that displays a gambler’s account and offers casino promotions — and will soon offer touch-screen games from IGT that allow players to order cocktails, view and print coupons and make show reservations.

Try to get a slot exec to tell you what server-based gaming has to offer the player and you can't much past this. (IGT's Ed Rogich, to be fair, went a bit further, but our conversation was off the record.) And the bad news for manufacturers is that these kinds of targeted convenience-and-marketing services are already being enabled without having to wait for networked gambling. (Four words: Las Vegas Gaming Inc.)

So, after years of server-based gambling being the Great & Powerful Oz, is this what it's come to be? (Remember how you had to sign away the movie rights to your first-born child to gain admittance to the triple-secret downloadable-slot booths at past G2Es?)

Call me crazy, but slot boffins need to talk less about how networked gambling is going to make life easier for casino owners -- who can't afford to go "all in" with the technology anymore -- and more about why John Q. Public should be wanting, nay, demanding it. Because, in an economy where casino companies are paralyzed by debt, significant implementation of server-based gambling isn't likely to happen without a big push from the players themselves.

The R-J's roster of reluctant bloggers is about to expand to include Howard Stutz. Or so it would appear. I came across a link to an alleged Stutz blog this weekend but only found a head shot and an otherwise blank page. Those crackerjack Stephens Media IT people must have errantly made a beta site "live." Meanwhile, the paper's answer to Harry Hope from The Iceman Cometh (and its newest blogger) used his Sunday column to -- you guessed it -- make fun of blogs. Darn those horseless carriages!

G2E: The Gong Show

Thu, 20 Nov 2008 17:56:00 -0700

Let's say you're a Columbia Sussex-type of company and you just can't make those pesky customers go away fast enough. Boy, have I found the product for you!

It's Ainsworth's Oriental-themed "House of Fortune" slot bank. Jackpots are signaled by a deafening crash that has been likened during G2E to: A) a cross between a grandfather clock and a gong; B) a banjo being dropped; and C) getting whacked over the head with a frying pan. (Imagine playing inside Big Ben while it's striking the hour.) Position a few of these puppies around your slot floor and your casino will empty out in record time.

In addition to being in questionable cultural taste (why not just produce a "Fu Manchu"-themed slot?), they're unbelievably disruptive, creating what is surely the most obnoxious sound yet heard on the casino floor. At least "House of Fortune" has the dubious distinction of being the one slot machine that is certain to be heard above the din of every other slot bank you've got.

The G2E press room is in its waning moments, so time forbids a more elaborate report today. Suffice it to say that the G2E watch word was "economy," both in the macro- and micro-senses. As for the former, things will get worse before they get better, we were told. Unfortunately, the same is likely to hold true for the player's experience. In other words, even if you don't like digital blackjack, video craps and electronic poker, too bad: You'd better get used to them ... and less.

G2E's most shocking sight

Wed, 19 Nov 2008 18:21:00 -0700

A chastened-looking Harrah's Entertainment CEO Gary Loveman, appearing haggard and grim at Wednesday's "State of the Industry" panel. More than that, he talked like a man who'd found religion: "We in the casino industry spend money like drunken sailors ... A billion dollars is a lot of money, after all." (Yeah, but not nearly as much as $27 billion.) As for Loveman's ashen aspect, if wire services had just reported that Apollo Management was at risk of defaulting on its Harrah's bonds, you'd probably look like you'd just had a close encounter with the Grim Reaper, too.

Left completely unmentioned were former panel regular J. Terrence Lanni and his newly crowned successor at the helm of MGM Mirage, Jim Murren. But, considering that my notes show no dropping of the names of Steve Wynn and Sheldon Adelson, either, it might be unwise to read anything into the lack of even a passing reference to the outgoing Lanni. But he deserved at least that much and surely more.

Where do we go from here?

Tue, 18 Nov 2008 13:08:00 -0700

Let's say, for purposes of argument, that the casino industry has supped full on meta-megaresort development and needs several years to digest the feast. What then?

The answer, to judge by yesterday's G2E panel of design, construction and development experts, is not to stand still. Rather it's to find the near future within the past.

"We have existing facilities that are allowed to get tired," said architect Joel Bergman. Anybody who visited Luxor at the time MGM Mirage took it over from Mandalay Resort Group knows exactly what kind of dilapidation he's talking about. Prudent operators, Bergman argues, will realize that have to have competitive, well-maintained facilities.

Perini Building's Dick Rizzo went one step farther, positing it as an absolute necessity: "You can't let them get tired or they'll lose business." With operators like Harrah's Entertainment and MGM Mirage cutting back maintenance, this thesis is about to be tested.

Besides, tribal casinos are running up Vegas' back, we were told. Bergman says they're not only becoming more resort-like but, "Vegas has, by participating in these, created its own competition." Since they cater to discrete, relatively isolated markets, Rizzo added, their only competition is the patron's amount of discretionary income.

He also had a CityCenter story. Namely, that even while the foundations were being poured, it was still but a nebulous concept and the decision as to what to build was still in flux. Its hotel, retail and convention components have doubled from the original conception, Rizzo disclosed.

That shift of focus is in line with Rizzo and Bergman's concept of the future. The former describes the current crop of casino designs as "all entertainment-driven" because that's the new profit generator. Atlantic City and Las Vegas, Bergman noted, are "going to have to expand what we do well," by dint of expanding retail and convention offerings.

He sees an early 2010 comeback for the casino industry. But Rizzo warned that things will get worse before they get better: "The best we have now is a bear market really and the bottom is yet to come."

Fahrenkopf upbeat re: UIGEA

Tue, 18 Nov 2008 11:49:00 -0700

True, the outgoing occupant of the White House engaged in a little "midnight rulemaking" to ram the Unlawful Internet Gaming Enforcement Act down the gullet of an unwilling world. But it's not Game Over.

"Most experts say [the George W. Bush-imposed regulations] don't solve anything," American Gaming Association President Frank Fahrenkopf told a morning press briefing at G2E. He said he's not sure what can be done to unravel Bush's rules under the Congressional Review Act of 1996 (which essentially gives the next Congress until the end of January to undo damage wrought by the exiting president), but guesses that efforts will be made to undo or modify the UIGEA rules.

He also hinted at a partial repeal, at least as far as online poker is concerned, saying, "I know personally that members of the Supreme Court, members of Congress and of the Cabinet love to play poker." Fahrenkopf also cited a Pricewaterhouse Coopers study that projected between $8 billion to $15 billion in federal tax revenues stemming from legitimized Internet gambling, 65% of those dollars coming from punters paying taxes on their winnings. (Guess we don't need that one-year, federally funded study now, huh?)

AGA membership, however, is splintered into three camps: Those who want in and would support a federally regulated regime; those who'd like to get in but want regulation at the state level (much as is done with parimutuel wagering, Fahrenkopf said, citing the Interstate Horseracing Act of 1978); and a third faction of brick-and-mortar casinos who see 'Net betting as a threat and want nothing to do with it.

Since everybody and his brother is getting a guvmint bailout today, Fahrenkopf was half-facetiously asked about going to Capitol Hill to get in on the gravy train. "I might suggest it, but dealing with Congress as I have, I don't think that's going to happen," he replied. The AGA prexy did note that the banking industry has done well from its association with gambling "and we hope that they would come back to the table." He also raised the prospect of even further expansion of the casino industry (despite current economic contraction) by reminding listeners that the riverboat-casino boom in the Midwest coincided with a recessionary period during the late 1980s and early 1990s.

Gosh, wouldn't that have been during the reign of Bush the First? The more things change ...

Butera up to old tricks; Dog days for Ruffin; Fowl play

Mon, 17 Nov 2008 18:07:00 -0700

Grasping at straws in his attempt to wrest control of the Tropicana Casino & Resort back from the New Jersey Casino Control Commission, the CEO of Tropicana Entertainment, Scott Butera, has seized upon a letter from state Sen. Richard Codey. In his Nov. 14, 2007 missive, Codey requests that Unite-Here Local 54 be allowed to intervene in NJCCC hearings against TropEnt owner Columbia Sussex (which, back home, was the beneficiary of some rare -- but no doubt welcome -- good news).

Codey's letter, Butera's lawyers contend, smacks of "political interference" and tipped the scales of justice against ColSux.

But Local 54 was only allowed to make a statement toward the proceedings' end, not be an active participant, as Codey wished. ColSux lawyer Paul O'Gara was given the opportunity to object to this at the time -- and didn't. TropEnt also revives the old Bill Yung whine that it doesn't understand what New Jersey law means when it requires every casino to have an independent audit committee.

Let's see ... Independent. Audit. Committee. Not a difficult concept to grasp, save possibly for ColSux, which ultimately formed a committee of one, that one person being a lawyer it already had on retainer (which shoots the "independent" requirement right in the ass). Sounds like the New Jersey Supreme Court isn't buying it, either.

Those must have been some NJCCC hearings, too. According to The Associated Press, they "presented evidence of roach and bedbug infestation in hotel rooms, floors and appliances caked with mud and dust, and long waits for slot jackpot payouts following massive job cuts ..."

Is that what Bill Yung meant about his being "ahead of the curve"?

Phil Ruffin is back in the news. Like other dog track owners -- and the State of Kansas -- he's in a financial bind. He contends it's not a viable economic proposition to run races at this two Kansas tracks. Ergo, he'd like his cut of the dog-running revenues upped to 58% from the current 40%. But a cash-strapped Kansas Lege may not want to dicker -- or, worse yet, Topeka-bound lawmakers may see this as opportunity to repeal Kansas' casino law. That alarming prospect alone should make gambling advocates wary of Ruffin's proposition, even if you don't think dog racing should be abolished.

Poultry in motion. In "I hate G2E," I sang the praises of the tic-tac-toe-playing rooster, late of Atlantic City. Seems he was furloughed a while back from the A.C. Trop (no, Bill Yung didn't fire the chicken). But Harrah's Entertainment was astute enough to snap up our feathered friend and install him at Tunica's Sheraton Casino Hotel. According to Raving Consulting, Harrah's staked $100K and sent out a "Chick Tac Dough" mailer, inviting all comers to try their luck against the mojo-bearing bird in the "Final Chicken Challenge."

No sightings of the rooster at G2E, though. I'll keep you posted.

Harrah's does it again

Mon, 17 Nov 2008 16:54:00 -0700

Attendees at G2E inform me that Harrah's Las Vegas is charging guests $0.84 for a 42-cent stamp. Yes, that's a 100% "service charge." Forget "maximizing shareholder value"; how about "maximizing customer value"?

Fire sale at Harrah's, MGM?

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

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

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

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

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

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

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

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

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

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

Quote of the Day

Mon, 17 Nov 2008 12:48:00 -0700

"We though we were recession-proof or recession-resistant. We found out we were neither." -- John Restrepo, of Restrepo Consulting Group, speaking this morning at G2E.

Overheard at G2E

Mon, 17 Nov 2008 12:42:00 -0700

"As far as I'm concerned, the guy ought to be teaching business." -- Global Gaming Expo attendee, referring to the kerfuffle involving MGM Mirage CEO J. Terrence Lanni's academic credentials.

(Nobody asked us, but S&G seconds the nomination.)

I hate G2E

Fri, 14 Nov 2008 11:35:00 -0700

Allow me to clarify.

The annual Global Gaming Expo is a great and good thing, bringing together industry members, vendors and academics from the four corners of the globe. You see the newest -- and oftimes the strangest -- products on offer. Many are all the more tantalizing for not having received regulatory approval -- placing them tantalizingly out of reach. I'll confess to a childlike fondness for the huge table game with the dome under which plastic horsies go 'round and 'round in a sort of mock Kentucky Derby. Silly, yes, and an absolutely pointless wager, but G2E doesn't stint on oddball entertainment value.

The sheer amount of brainpower that is directed into that outwardly frivolous activity known as "gambling" is an awesome sight to behold, especially when crammed into the Las Vegas Convention Center.

The conference tracks are an embarrassment of riches (especially when a speaker makes a particularly egregious faux pas). It's Sophie's Choice to the fourth power to have to select between panels sometimes. Heck, most times. And if there are any detractors of Native American casinos out there, if you subtracted the tribal attendance from G2E and many other industry conferences, they'd either be A) much smaller, B) ghost towns or C) defunct.

Then there's the yearly "State of the Industry" panel, which more recently has been "The Gary & Terry Show," with American Gaming Association President Frank J. Fahrenkopf serving questions to Harrah's Entertainment CEO Gary Loveman and MGM Mirage CEO J. Terrence Lanni. Except that Lanni canceled his 2008 appearance a short while back -- a harbinger of his resignation? IGT CEO T.J. Matthews will also be there, which should be, uh, interesting, especially with Loveman having launched a pogrom against "Wheel of Fortune" and other participation games.

However, there will be "added value" in the form of Ernest Stevens Jr., the Fahrenkopf of tribal gaming, taking his rightful place amidst the panel -- another sign that we've moved past the days when companies like Circus Circus Enterprises actively tried to suppress tribal gaming in neighboring states. (Speaking of Fahrenkopf, he had a cameo in this week's Frontline biography of GOP dirty trickster Lee Atwater, the man who brought you Willie Horton. It included a scene of Atwater spewing bile while Fahrenkopf stood at his left elbow. Whaddya wanna bet FJF wishes he could "disappear" that footage.)

Loveman gets all huffy if you challenge him about stuff (like why he lives in Massachusetts), so that can add to the fun. He's also very difficult to understand sometimes, because he's got the strange habit of swiveling his head constantly from left to right while answering questions, meaning that the microphone ... catches ... roughly ... every ... other ... word.

And yet ...

G2E is an ordeal. It's the Bataan Death March of the casino industry, as we haul ourselves from one end of the exhibit floor (which seems to extend beyond the curvature of the Earth) and back again, then repeat the exercise. Noise, crowds and the relentless pounding of one's feet on thinly-covered cement; it all takes a toll, especially for someone like myself who suffers from the triple whammy of fibromyalgia, osteoarthritis and recurring back trouble. The reams of paperwork one has to plough through beforehand can also drive you to despair.

In short, G2E is not for the faint of heart nor the frail of constitution. With that in mind, I offer 10 survival tips.

• The F&B Pavilion is your friend. Make liberal use of it, especially any free booze you can snag.

• The most important booth is not IGT's but rather the one where they sell the massaging insoles. I bought a pair last year and they were life savers.

• Chair massages. 'Nuff said.

• Sit down. As often as possible. You may not want to get up again, but duty calls.

• Cell phones. Set them on LOUD (as in jet-engine loud). In G2E, no one can hear your phone ring.

• Tchotchkes. The fewer you pick up, the better. The same goes for goodie bags. They'll just weigh you down and make your job harder. Travel light. Except for ...

• Business cards. Pack as many as you think you'll need. Then double it. At minimum.

• Downloadable slots. First, see if you can spot them (last year's bunch were indescribably bland). Then have a drink for every time somebody tells you they're "one year away" from deployment. Sort of like handheld gambling devices. (Remember them? They were The Next Big Thing ... three years ago.) For extra fun, use the term "vaporware" around the Cantor Gaming booth and see what kind of looks you draw.

• Don't play the slots unless you can get a sales rep to set them so they immediately trigger a bonus round. Otherwise you can waste a lot of time. Why they're not set to the bonus round as a matter of course remains a mystery.

• Fowl play. Remember the tic-tac-toe-playing chicken from Atlantic City? See if he has a booth this year. Then try to beat him. If you can, you're a true Master of the Universe 'cause that chicken's got game.

Get buzzed at the Trop. LVA just conducted a poll on casino smells, particularly the sort of piped-in aromas you'll encounter at The Palazzo. Which prompted a reader to ask, "So…… That moldy marijuana smell at the Tropicana is pumped in????? Interesting……"

Well, it'd be one way to get people to want to eat at that buffet.