David Mckee's Stiffs & Georges - Horseracing

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.

Leaving Las Vegas

Mon, 12 Oct 2009 18:17:00 -0700

At least 28,000 have done so over the two years-plus (probably more when you allow for the people still moving here). What are the likely consequences of Las Vegas' pegging its future on a one-trick economy? And is it going to be like one of those Rust Belt cities (like Pittsburgh) that turned it around or one of those (say, Detroit) that continues to decline?

Those questions and others are posed in a splendid article that connects most of the dots regarding Vegas' economic plight. One of the most disturbing points raised by Las Vegas Sun reporter J. Patrick Coolican is that cities doing well at present tend to be ones that possessed robust institutions of higher learning -- and invested in them. Neither can be said of Nevada's dismal education system, the recipient of savage budgets, thanks to our governor and the ever-feckless Lege.

If Las Vegas' future hinges on well-funded and -respected academic institutions, then the near-term prognosis is grim.

Speaking of Detroit, casino owners and politicians there may be casting a wary eye on rising pro-casino sentiment in Ohio. In whichever form casino gambling is legalized by Buckeye State voters, it stands to take a big bite out of Motown casino receipts -- and sap state and local revenue collection, too. A helpful Detroit News map shows precisely which Detroit, Indiana, Pennsylvania and West Virginia casino operators have reason to be fretful about the emergence of a casino industry next door.

Like their Strip brethren, tribal powerhouses Mohegan Sun and Foxwoods Resort Casino went all-in ... into debt, that is. Now that it's time to pay the piper, they find themselves in binds comparable to those facing non-tribal casinos. However, they have fewer options for relief, as they discover the downside of being a tribal operation.

Dog's breakfast at Tiffany's. Few readers of this column can probably afford to buy anything at the Tiffany mega-boutique that will be part of the Crystals mall at CityCenter. However, it will make for some lovely window-shopping. (Click on the pictures to see them in a larger size.)

Atlantic City reprieve. Although New Jersey's three-way gubernatorial race is up for grabs, casino owners can take one consolation. Whichever of the two leading candidates is elected, continued opposition to racinos is promised.

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: 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.

Adelson's rescuer?

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

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

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

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

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

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

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

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

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.

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.

Big Trop shakeup

Thu, 24 Sep 2009 17:16:00 -0700

During his absent-minded interregnum as Tropicana Las Vegas CEO Scott Butera nearly denuded the casino of on-property entertainment. Only the hasty re-signing of Xtreme Magic left the Trop with a show in the house. Over time, Butera's people added a slew of second- and third-tier acts.

"Too much," said some. Those "some" would appear to include new CEO Alex Yemenidjian. Virtually unpublicized Beatles tribute act Penny Lane? Gone. Impressionist Rich Natole? Going soon. Bobby Slayton? Going a little later, perhaps. (Anthony Cools' track record as a producer is looking dire.) Although I've heard good things about the new venue created for Soprano's Last Supper and Hypnosis Unleashed, apparently they will be relocated elsewhere within the Trop.

To no one's surprise, Dirk Arthur will yield the prime-time slot (where he was, in all honesty, a placeholder) to incoming Wayne Newton. The Wayner will keep the Tiffany Theater warm until a Trop-owned show replaces Newton's morbidly titled Once Before I Go.

The Harmon Theater's ill-publicized Tickled Pink has also closed and it sounds as though that place is experiencing cash-flow problems. Normally, I'd be sanguine that departing acts would soon find new homes elsewhere in town. However, in these desperate times, entertainment has been one of the first items on the chopping block, so the evicted performers can probably use all the positive vibes they can get.

Casino explosion in Ohio? Not only will Buckeye State voters get to say "aye" or "nay" to Gov. Ted Strickland's creation of racinos, the state could get as many as 11 gambling venues -- not the seven Strickland envisions. Another ballot measure (pushed by Penn National Gaming) would authorize four casinos in four major Ohio cities. Minimum capital investment will be $250 million and the tax rate would be set at -- Ouch! -- 33%. Somehow, I doubt that will scare anybody away.

And they're off! Congratulations to Ocean Downs, the first racino approved in Maryland. By June, reels should be spinning on the first 200 of an eventual 800 slots, to be fully phased in within 11 months.

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.

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."

Bounce-back for Macao?

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

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

Still: Wherefore this sudden resurgence?

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

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

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

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

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

Business as usual at Hotel Lisboa.

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

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

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

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

"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 ...

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.

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.

Diversity initiative at MGM Mirage

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

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

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

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

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

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

Case Bets: Seminoles, Iverson, Harrah's, PartyGaming, Station's luck, etc.

Wed, 15 Apr 2009 16:01:00 -0700

Down in Florida, the tide may be turning in favor of the Seminole Tribe. Both the Florida Retail Federation and Restaurant Lodging Association have thrown their support behind the status quo, as represented by Gov. Charlie Crist's Class III casino compact. Crist's unilateral gambling expansion has the not-so-small problem of being unconstitutional but this latest turn of events ratchets up the pressure on solons to pass a version of the compact that meets judicial muster.

That'll be no problem with the state Senate but the uptight House would like to roll back the Seminoles to slots-only status (and would get rid of the casinos altogether, if only they could in their benighted heart of hearts). The table-game genie isn't going back into the bottle -- at least not until the federal courts have their say -- so the Solomonic question at hand is how to level the playing field for private-sector racinos without sacrificing the Seminole tax revenue that Crist secured. Easier said than done, obviously.

"Is too!" "Is not!" Both MGM Grand Detroit and Greektown are refuting a report in the Detroit News (with which MGM has taken issue before) that they'd 86'd former Philadelphia 76er Allen Iverson from their casinos. Let's face it, the man is a boor but he's a wealthy boor, so neither casino is likely to turn him away as long as he only bounces basketballs, not checks.

Headless casino. Not only did Harrah's Entertainment sack the GM and five other execs at Harrah's Reno, it won't be replacing them. At almost any other company, running a casino by remote control would come as a surprise but Harrah's has the reputation of employing a ruthlessly standardized business model. Besides, the company has to free up some dough to pay its new Internet/World Series of Poker guru Mitch Garber, whose former employer, PartyGaming.com, just cut a deal with the feds.

The luck of the Fertittas. Dodging yet another bullet, Station Casinos extended negotiations with its debtors by another month. While some form of bankruptcy at Station is inevitable, the company continues to fend off a takeover attempt by Boyd Gaming. However, Station says that when it comes to the terms offered to unsecured creditors, it's hanging tough. If that's the case, what's to discuss? (Or is Station being more flexible than it's letting on publicly?) My money, so to speak, is still on Station brass and co-owners Colony Capital retaining possession of Station and at a substantial discount to its market value, too.

An obscure racino company is cleaning house and relocating from Las Vegas (where it had no logical business being headquartered) and back East, where all its business is. The board of Empire Resorts really wasn't minding the store, was it?

The company might at least saved a bundle on long-distance charges if it had condescended to have its corporate offices in New York State, where its physical operations were, and not in tax haven Green Valley. But don't cry for outsted CEO David Hanlon, who parachutes out with 100 grand and plus another hundred large for nine months of "consulting services." These days, nothing succeeds like failure -- provided it's done on a grand scale.

Update: These are the same clowns whose Maryland slot application got tossed because they didn't bother to include the mandatory application fee when they filed.

Pennsylvania's biggest gaming screwup is history ... sort of. Former Mount Airy casino owner Louis DeNaples is guilty as hell of hanging out with the wrong crowd but innocent of perjury and will maintain one degree of separation from the casino, which remains in the DeNaples family. The Pennsylvania Gaming Control Board can claim a semblance of victory but the four-and-a-half-year imbroglio is a lingering embarrassment to a body whose vetting process has been inarguably the sloppiest in the U.S.

The PGCB needs to pay more attention to background checks and less to "juice" (see Barden, Don) -- and also to develop questionnaires that aren't so "imprecise and potentially confusing" they could open applicants to charges of perjury. It would also behoove Pennsylvania to quit "stovepiping" PGCB and state police investigations. Were it not for a lack of information-sharing (prohibiting by Keystone Kop, er, State law), this whole mess would probably have been avoided.

Where's Sheldon?

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

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

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

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

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

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

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

Case Bets: Kansas update, Cordish's push, Penn's prudence, taxing sex

Fri, 03 Apr 2009 18:32:00 -0700

Details of Lakes Entertainment's just-under-the-wire entry into the Kansas casino derby are beginning to emerge -- and it looks a bit half-assed. Particularly non-confidence-inspiring was the admission, "We're going to go find the cash." If somebody as flush as Phil Ruffin can't scare up $175 million, what makes Lakes confident it can score $260 million? Demote this bid from "contender" to "also-ran" status.

Another Kansas applicant also is moving aggressively elsewhere. Cordish Co. is looking to snap up three tracks owned by bankrupt Magna Entertainment. Racino conversion, though is not on the agenda, according to Cordish.

No fools. It looks as though Penn National has sworn off the Strip and small wonder. If execs at Harrah's Entertainment or MGM Mirage say they want to deal but insist on 10X-12X cash flow as their asking price, they're not going to find takers. I presume that their rationale -- and it's hardly without merit -- is that if business returns to the levels it enjoyed four years ago those multiples will go down.

Whether that argument will fall upon receptive ears seems unlikely. But look on the bright side: You could pay 12 times EBITDA for the Tropicana Las Vegas and it would still only cost you $54 million.

Five bucks a f**k? Sure prostitution is legal in 10 counties of Nevada, a state whose economy is built on the perception of an anything-goes atmosphere. But tax bordellos by the lay? Horrors!

Elsewhere in the 'sell block'

Mon, 02 Mar 2009 15:44:00 -0700

Note: Parts of this were published earlier but got devoured by our resident Comment-Eating Server.

The Motley Fool paid another visit to the sickroom and found Las Vegas Sands even sicklier than it when it was first pronounced a "deathbed stock," $61.95/share ago. But despite being down 'merely' 58%, Isle of Capri Casinos was pronounced "gravely ill," following the announcement that it would be temporarily suspending racing at Pompano Park. (Yikes!)

Add that harness track to the list of Goldstein Era show horses that have turned out to be broken-down nags for current CEO James Perry. While the sport of kings is a terminal patient, nobody -- yours truly included -- foresaw that Florida racinos and slot-enhanced parimutuels would be a duff proposition. Even if the Seminole compact is revised to put parimutuels and tribal casinos back on a level playing field, the Seminoles' lead on the private-sector casinos is several furlongs and growing.

Not in Kansas anymore: The messed-up casino-development process in Kansas won't be Gov. Kathleen Sebelius' problem for much longer. But governor, how does it feel to have to take sloppy seconds from D.C. retread Tom Daschle?

Nevada's overreliance on casino taxes has caused yet another leak to spring in the state's budget, a thing of shreds and patches even in the best of times.

Poker: The Musical. At last, the problem of the Tropicana Las Vegas showroom is solved! (Although it would be pretty damn funny in an unintentional way if you booked a tuner called Poker playing a casino that closed its poker room.) The official site can't be bothered to host sound clips, so head on over to Napster for a sample or 10.

Another setback for Packer

Mon, 23 Feb 2009 14:57:00 -0700

Several potential owners of Cannery Casino Resorts want to withdraw from the process rather than disclose their identities to Pennsylvania regulators. In addition, Gretel Packer, sister to Crown Ltd. CEO James Packer, has asked to pull back her license application.

This development inspires no end of questions. If Pennsylvania holds its ground and the Crown affiliates who are insisting upon secrecy pull out, does the whole Cannery deal begin to unravel? (Crown says no.) Was a similar identity waiver granted in Nevada? If so, why? Who are these mystery investors and why is their anonymity so important?

Considering that a gaming license is a privileged and highly prized asset (to say nothing of a potentially lucrative one), there's no conceivable justification for the citizens of Pennsylvania to be kept in the dark about who's behind the Crown Ltd. bid. If the Pennsylvania Gaming Control Board accedes to Crown, its already shaky credibility will be shot.

Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

Sat, 21 Feb 2009 15:05:00 -0700

Phil Hevener, the guy who was onto the Imperial Palace sale before anyone else, says Penn National pitched offers for not only The Mirage but also Caesars Palace ... at insultingly low EBITDA multiples (see bottom of story). The Strip has seen much better days but it's not a flea market.

Et tu, F'bleau? It hasn't even opened and already Fontainebleau's viability as a going concern is in doubt. Those thousand condos represent a giant millstone around the resort's neck; the relationship between Vegas casino operators and the condo business has been akin to that between lemmings and the sea. Already, it's looking like a rerun of the Harrah's/Station scenario: Partial recovery for senior debtors and a dime on the dollar for junior ones.

See no evil, speak no evil. A robbery was committed at a casino "in the 4000 block of West Flamingo Road," an address that just so happens to exactly coincide with the Gold Coast. (The Palms is in the 4300 block.) This is at least the third time that I can recall offhand in which the location of a casino robbery was obfuscated by local law enforcement -- nor the first time that Las Vegas Metro has placed a higher priority on protecting casinos' images than on solving crimes. It might be easier to find witnesses if you told the public where the crime took place, no?

I got a horse right here, his name is not Paul Revere and if you backed this horse you had quite a lot to fear. A quarter-century ago, literal also-ran Fine Cotton wound up at the center of a bizarre racing-fraud scandal involving a -- get this -- impostor horse. Could Dick Francis have dreamt up a better yarn than this?

Station to the rescue. With Thunder Valley execs given the chop and new managment parachuting in from Station Casinos, work has resumed at the Sacramento-area casino-resort -- after some downsizing of the original expansion plans. Kudos, Station.

Empire State going all in

Tue, 30 Dec 2008 14:55:00 -0700

A tip of the green eyeshade to David G. Schwartz for pointing this story out:

New York Gov. David Paterson (D) would, if his proposed gambling expansion goes through, take the Empire State a long way toward becoming East Nevada. His proposals and Christmas wishes include ...

• Making Belmont Park a 5,000-slot racino.

• Going to round-the-clock hours at all New York racinos.

• Adding electronic table games to the (current) all-slots mix.

• Expand the hours and locations in which the state's Quick Draw lottery game is offered, and lower the eligibility age to 18. (Expect bar-top video poker to follow close behind -- just a hunch.)

• Link New York into at least two out-of-state lotteries.

• Eliminate the 2017 sunset provision on New York's current casino regime.

Wow. On top of all that, legislators have also put expansion of tribal gambling on the table. But if Paterson's going to push his chips into the middle like this, shame on him for keeping the lid on funding for compulsive gambling, currently a paltry $4.2 million. You don't need to be an Arnie Wexler to see that Paterson is shopping a plan that's going to have increased -- and largely unfunded -- social costs. It's the inevitable corollary to any gambling expansion.

I have no idea what Paterson's agenda would do for the New York State economy. But it'd be a shot in the arm for the manufacturing sector. Heck, I wouldn't even be surprised if Excalibur-style robo-poker makes its way into the mix before all is said and done.

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 Vote '08: Dan Lee's the big winner

Wed, 05 Nov 2008 16:36:00 -0700

JP Morgan has proclaimed Pinnacle Entertainment "the biggest winner this election day." By voting to both lift the cap on buy-ins and the close Missouri to additional casinos, Show-Me State voters delivered a gift to Pinnacle CEO Dan Lee, who has massively invested in the greater St. Louis market and can now reap the benefits of higher wagers and artificially limited competition. Anybody contemplating the investment risk that Pinnacle has been lately (with at least $2.85 billion in outstanding projects) can sleep a little more soundly tonight.

But, as Morgan analysts point out, the stomping of a pro-casino initiative in Ohio redounds to the benefit of Pinnacle's Belterra casino (and Penn National's Argosy Lawrenceburg riverboat). While the Ohio vote reflects a certain amount of anti-casino sentiment, this was one of those ballot measures where the devil was in the details. It polled well in the immediate region, which has been hard-hit with job losses (5,000 of which casino backers promised to replace) but it was "no sale" upstate. An otherwise leftward-trending electorate was unpersuaded.

Specifically, there was a "trap door" in the enabling language that might have let Lakes Entertainment slip its tax obligations if tribal casinos open in the Buckeye State (a long shot, but one voters weren't willing to hazard), not to mention that the casino was to be allowed to operate with scant oversight. Oh, and the license fee ($15 million) wasn't chicken feed, but it's considerably less than what casinos are ponying up elsewhere -- like Kansas -- where no monopolies are promised. The face-saving spin was that "misleading ads" were to blame -- like that's anything new in politics.

Details were the bane in Maine, too, where Olympia Gaming found itself on the losing end of a casino plebiscite. Maine voters have taken a go-slow approach to casino expansion in their state, also voting down a racino at Scarborough Downs. There also seems to have been some "payback" involved -- from Down Easters who had seen their own casino aspirations crushed five years ago. If they couldn't have a casino, those upstart resort communities were going to be SOL, too. So there!

Pat LaMarche expresses her considered opinion of Maine's electoral process.

Lowering the legal gambing age to 19 stuck in voters' craw, as did certain other special privileges which were to be extended to the Oxford County casino and to Gary Goett's Olympia. Project booster Pat LaMarche sniffed that folks in Maine were "very unfriendly" and says she's going to take her ball and LaMarche right next door to New Hampshire.

On the other hand, LaMarche is the bete noire of intolerant religious wack jobs, so that's something in her favor.

Having a win/win day, was also the good fortune of Ameristar Casinos, which will see some relief in Colorado, in addition to prevailing in Missouri. In return for helping the state's community-college system, Colorado casinos get some new goodies that -- we hope -- will ameliorate the effects of the state's smoking ban.

It's a mixed bag, albeit more positive than negative, for Penn National. It headed off the Ohio threat but finds its flagship property in West Virginia facing competitive pressure not only from Pennsylvania but soon from Maryland, even though the latter's ramp-up is roughly four years away. Penn astutely protected its flank by optioning strategically placed real estate near Baltimore, in its first move after its LBO imploded last summer.

(Amusingly, both sides in the Maryland fight used President-elect Obama as a "product placement" in their literature. They knew a good "branding opportunity" when they saw one.)

Hopefully the Maryland Lege will revisit (read: reduce) the confiscatory 67% tax rate. Otherwise, brace yourself for Ye Olde Shack O'Slots, as no sane businessman would invest heavily in a casino with such a narrow operating margin. By establishing a Maryland beachhead, Penn is probably thinking more in terms of capturing "leakage" from its other nearby properties, not having visions of $$$ dancing in its head.

Former governor, sometime racino proponent and "Casino Jack" Abramoff beneficiary Robert Leroy "Bob" Ehrlich Jr. (R) hoped to "see us kill this turkey," but that sounds like sour grapes from the one-term blunder, er, wonder. Gov. Martin O'Malley (D) moved the ball across the goal line with 59% support, whereas Ehrlich couldn't get it upfield in four tries -- even in the post-9/11 economy. It may nearly be Thanksgiving but the only turkey in sight is Ehrlich (or is that a thinly disguised Steve Carell?)

Speaking of "Casino Jack", add him to the "losers" column of our S&G "Winners & Losers" with a capital "L." From the jailhouse, convicted felon Abramoff tried to 'Swift Boat' his archnemesis, John McCain, but the effort sank without leaving the pier. What a schlemil.

Loose change: Voters also gave their assent to a lottery in Arkansas and expanded table games at Greenbrier Resort in West Virginia. So I'd score that as two lost battles (Ohio, Maine), one decisive victory (Maryland) and incremental wins in four other skirmishes.

On balance, a good day.

On the other hand ...

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

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

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

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

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

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

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

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

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

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

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

Quote of the Day

Tue, 01 Jul 2008 14:05:00 -0700

"I believe that single-handedly this project could evolve into one of the great revitalization opportunities that the state has ever experienced in its history." -- Developer Louis Cappelli, speaking of his $1 billion effort to convert a former Borscht Belt resort into a rural New York racino.

Meet Bill Yung

Wed, 19 Mar 2008 11:17:00 -0700

That preening Master of the Universe wannabe you see above is Columbia Sussex CEO William Yung III, subject of a lengthy (and deeply unflattering) exposé in the Louisville Courier-Journal. The article basically explains what Missouri Gaming Commission Director Gene McNary meant when he cryptically told the Kansas City Star's Rick Alm that "There were things turned up in the investigation that did not comport with law-abiding behavior."

On a more humorous note, the Courier-Journal article refers to Yung as a "gambling czar." In an industry dominated by the likes of Kirk Kerkorian, Sheldon Adelson, Steve Wynn, Gary Loveman, and various and sundry Fertittas, Yung is -- at best -- more like a minor aristocrat whose estates are slowly going to seed. (His casino employees could certainly identify with the serfdom.)

Put on a happy face: New Jersey authorities are doing the best they can to spin the paltry number of bids (at best, three) for the Atlantic City Tropicana as a big win. We still don't know if Colony Capital actually put in a formal offer, although this newspaper didn't get the memo about the Mohegans' high-profile pullout.

A casino that was projected as selling for in excess of $1 billion could now go for considerably less. "Given where they are [relative to the market], if you were a bottom-feeder, you'd wait 'til the last dog was hung," says a source familiar with the situation, adding that the condition of the Trop may have scared off buyers: "It's basically three crummy properties and one great one smushed together."

To nobody's surprise, the New Jersey Lege passed a $90 million, three-year subsidy for the Garden State's horse racing industry, to be funded by Atlantic City casinos. You might say that the casinos are the horse in this case, lumbered with an overweight jockey in the form of the state's struggling tracks.

Lousiana riverboat gets third chance. The Hollywood Shreveport riverboat casino couldn't make a go of it under the now-forgotten Hollywood brand and then turned turtle while under Penn National's stewardship. Now, Reno-based Eldorado, which has been running the place for three years, has been approved to take full control of the vessel, which is worth roughly $40 million.

BoSox take a stand. When there's a players' strike, managers and coaches have to toe ownership's line and work with the scabs. But when Boston Red Sox ownership tried to shortchange its coaching staff, the players threatened to boycott the season opener unless their coaches were properly compensated. Now that's team spirit.

On the other hand ...

Steroid-lovin' union boss Don Fehr is demanding -- nay, insisting -- that, by golly, somebody better hire "Balco Barry" Bonds or there'll be consequences 'n stuff. Hmmmm, let's see: a decrepit, 43-year-old, surly, steroid-using player who clanks up the plate wearing a veritable suit of armor, can't play defense and is under federal indictment? Nah, I don't see any problems there. No distraction whatsoever.

Henhouse, meet fox

Tue, 11 Mar 2008 18:36:00 -0700

Budgetary impasse in Trenton? Guvmint forcibly shut down? Nobody to keep an eye on casinos?

No problem!, says state Sen. James Whelan (former mayor of Atlantic City). His proposal would allow casinos to police themselves for the duration -- provided they were fined tenfold the usual amount for any hanky-panky. (Yes, but who is going to report the aforesaid hanky-panky? The casino that stands to pay 10X in fines? Methinks otherwise.) Oh, and the governor could "summarily suspend a casino license," too.

Food for thought, anyway.

Whelan's successor, A.C. Mayor Scott Evans found himself on the business end of a state house grilling yesterday. In light of past shenanigans involving city officials and former airport Bader Field, New Jersey solons aren't predisposed to sign off on what they perceive as a sweetheart deal between Atlantic City and Penn National, which wants Bader partly for a casino and mostly for a 'flip.'

If the "city officials" cited in the story are correct, Evans' proposed deal would leave at least $200 million on the table."You can slice this and you can dice this any way you want, but it looks bad," growled one legislator. It looks like a long spring (and summer, maybe) for Evans and Bader Field.

Finally! Somebody is taking on the question of why slot casinos should be subsidizing race tracks. I dig the romance of the "sport of kings" as much as anybody. But if it can't stand on its own four feet, why is the casino industry obligated to prop it up?

"Cruise to nowhere" indeed. Gambling ship Sun Cruz 9 looks like it has a date with Davy Jones' Locker. I can't say I ever fancied the idea of gambling out in international waters anyway. Props to the skilled Coast Guard crew that rescued the ship's crew in stirring fashion.

(Mind you, there was no gambling underway at the time nor any gamblers aboard; the ship was in transit from port to port.)

Organized crime in Macao's casinos is really a good thing. Yes, an academic actually said that, rationalizing that loan-sharking and God knows what else keeps Macao's criminal element gainfully employed and off the streets. Who knew that Stanley Ho's triad-infiltrated casinos were performing a public service all these years?

Those crooks had better make hay now because it's reliably predicted that the iron fist of Peking will descend upon them once the 2008 Olympics are over (and the world is looking the other way). Given how extremely unsavory Macao's reputation was prior to China's takeover, I doubt our casino barons will be complaining too loudly, either.

I'll be 83 before a bridge between Hong Kong and Macao breaks even. Yeah, but the Las Vegas Monorail will still be running in the red (and still be tax-exempted). So there.

Desperation in Florida

Wed, 05 Mar 2008 17:53:00 -0700

... and for once we're not talking about Sen. Clinton's attempts to seat a rogue slate of delegates.

Is Isle of Capri's racino a disappointment (especially for horsemen)? Is Boyd Gaming taking Florida expansion off the table? Is Magna Entertainment threatening to close overextended Gulfstream Park? What's a Florida lawmaker to do?

Why, legalize every form of gambling short of cricket fighting, of course. Statewide slots, a lottery, regulated "adult arcades," high-stakes poker -- it's all on the table as Sunshine State solons head back to Tallahassee, no doubt looking forward to two months of nonstop eye-poking and head-slapping between Gov. Charlie Crist (R) and archenemy House Speaker Marc Rubio (R), as they tussle over a shrinking state budget.

Rubio's still trying to rein in Crist's Class III compact with the Seminole tribes, but that horse may have long since left the stable. The Seminoles are proceeding as though they'd never heard of Marc Rubio. Should he get a court to overturn the compacts, Florida lawmakers who have had a taste of once-forbidden Seminole gambling lucre may already be hooked and repudiate Rubio (who's a lame duck, anyway).

As for the absence of cricket fighting from the list of proposed fiscal remedies, I'd guess that's just an oversight.

The Schmuck Report: On a humorous note, sports reporter Peter Schmuck takes a glance at the gleaming façades of Florida's racinos and declares that "the experiment with increased gambling in Florida appears to be a success." This is either disingenuous boosterism for bringing racinos to Maryland (an on-again, off-again quest) or else Schmuck is happily inhabiting a parallel universe.

Corzine opines. New Jersey's governor goes on the record as favoring smoke-free casinos. He also backs the Casino Reinvestment Development Authority in its quarrel with Atlantic City over whether or not to sell Bader Field to Penn National. (Turns out Penn wants additional land re-zoned for casinos, too.)

Financing is sufficiently concrete, Corzine says, for both Revel and MGM Grand Atlantic City, and he's bullish on Pinnacle Entertainment's postponed megaresort. And playing the stock market isn't gambling, he says: "We made probability judgments about the viability of assets."

Racinos a bum deal?

Mon, 25 Feb 2008 16:55:00 -0700

They are if you're a horse owner at The Isle Casino & Racing @ Pompano Park, which not only left trainers and owners out in the cold, as far as slot revenues are concerned, it just slashed purse amounts by 35%, reports the South Florida Sun-Sentinel.

Pompano Park, it should be noted, is an isolated case. The track, owned by Isle of Capri Casinos, argues in its own defense that slot revenues were lower than expected. But will racing be driven out in the process? Again we are faced with the question of how viable horse racing actually is (I'm looking at you, Kentucky) if massive subsidies from slot machines are what's needed to keep it alive. And while not contractually obligated to do more than it's done for the horsemen, at first blush it looks as though Isle of Capri has pulled a bait-and-switch here.

My 18-year-old son is in the news again. Oh wait, that's Florida House Speaker Marc Rubio, fighting a dogged rearguard action against Gov. Charlie Crist's gambling expansion in Florida. Rubio is arguing that A) Crist's revenue projections won't pencil out and B) "it is morally wrong to balance the budget on the backs of the poor and the working class."

It's a good day whenever a Grover Norquist-type conservative like Rubio comes out against regressive taxation. Unfortunately, Rubio's remedy is to dismantle the Florida state government. Also, he's made a habit of opposing fellow Republican Crist whenever possible (the two are vying for the mantle of Jeb Bush) and when Rubio says he's against "transferring" disposable income, it sounds to me like code for "By all means, let's keep it away from the Seminoles," whose Class III compacts Rubio is challenging in court.

So forgive me if I doubt Rubio's altruism just a bit. (And, no, I don't have an 18-year-old son.)

If he's lost Schwartz, he's lost Middle America. The lone media defender of Columbia Sussex CEO Bill Yung has left the building. UNLV's Dr. David Schwartz finally loses patience with the Kentucky hotel baron after reading about Yung bragging on his ability to fling $1 million at the feet of Kentucky's new governor in the same week that Columbia Sussex stiffed the state of New Jersey for 750 large. Is Yung's company really that hard up or is this a passive-aggressive way of getting back at the Garden State?

Excessive federal zeal in prosecuting gambling rings finds an unsympathetic ear at the Supreme Court. If there's a reason some Americans are distrustful of expanded federal law-enforcement powers, whatever the premise or the administration (the Clinton-Gore administration had its intrusive proclivities, too) it's because, inevitably, they will be pushed past the breaking point.