David Mckee's Stiffs & Georges - Internet gambling

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.

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?

Crime doesn't pay; Wyden wimps out

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

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

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

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

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

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

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

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

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

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

From the mailbag #5

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

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

With regard to "Gambling Scandal Ensnares Eight More":

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

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

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

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

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

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

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

And with regard to labor strife at Trump Plaza:

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

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

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

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

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

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

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

Fair enough. And finally:

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

Thanks to everyone for corresponding.

Atlantic City sucks ...

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

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

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

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

Finally, a reason to visit Orlando ...

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

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

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

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

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

Gambling scandal ensares eight more

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

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

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

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

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

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

Penn finally makes a move

Tue, 14 Jul 2009 12:31:00 -0700

Well, let's not get all excited yet. Penn National has bought a puny stake in Morris Goldstein & Assoc., a slot distributor. It's a bit of kabuki theatre whereby Penn and executives CEO Peter Carlino, President Tim Wilmott, CFO Bill Clifford and veep Robert Ippolito can go through the licensing process now, just in case they feel like acquiring something significant down the road.

Mind you, Donald Trump did the same thing several years ago, by dint of a buying a stake in Rivieria Holdings. Nothing ever came of it.

Clouds over Macao. Hey, dictatorial Chinese Communist overlords in Peking, feel free to loosen up those visa restrictions to Macao anytime now. Visitation was down 42.5% in May. Hotel occupancy was also off 18%. One small bright spot was that Taiwanese visitation continues to ramp up, however modestly (i.e., 3%).

Don't do it, Alex!

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

Noooooooo!

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

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

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

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

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

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

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

Quote of the Day

Thu, 18 Jun 2009 13:02:00 -0700

“I worry Bush Administration holdovers ensconced at the Fed, Justice and Treasury [departments] will use the cover of much more pressing issues to step up enforcement action before either of the [Barney] Frank bills can work their way through Congress.” -- unnamed House Banking & Financial Services Committee staff member, on the prospects of UIGEA repeal in the current Congress.

D'Amato shoots, he scores!

Wed, 17 Jun 2009 17:03:00 -0700

Former Sen. Alfonse D'Amato (R-NY) has become an energetic champion of the online-poker community. Enjoy his virtuosic and highly entertaining verbal blitzkrieg against the Obama administration's misguided continuation (nay, escalation) of Bush-era anti-casino prosecutions. I'm skeptical of his projection of $20 billion in annual tax revenues from regulated Internet gambling, but otherwise I'm with "the Fonz" all the way.

In case you're joining this story already in progress, here's some exposition:

Thanks to Fox Business News for latching onto this story and devoting so much airtime to it.

Case Bets: Colony Capital, Siegfried & Roy, Obama smacks poker players

Mon, 15 Jun 2009 12:24:00 -0700

"Bats hang over the doorway to the building that housed Mr. Jackson's private arcade; guano stains the threshold." That's how the Wall Street Journal describes Michael Jackson's decaying Neverland Ranch. It gets even freakier from there, with the WSJ receiving a tour of the compound that might be described as Charles Foster Kane meets Pennywise.

Neverland is the latest can't-miss investment play by Colony Capital, whose crackerjack CEO, Tom Barrack, says: "We think we made a very smart real-estate deal ..." Then again, that's probably how Barrack felt about his acquisition of Station Casinos, which just took a bath on some of its land holdings.

Even by Vegas standards, Neverland is way up there on the Bizarre-o-Meter. Too bad Colony can't find a Native American tribe that can claim it as their ancestral land and have it taken into trust. It'd make a casino-based destination resort so demented and perversely infantile, Sin City would be green with envy.

The most blackly funny line in the video comes when the narrator says Colony is taking steps "to remove the taint of scandal." Man, there's no bleach on Earth powerful enough to eradicate that stain. Infamy, like nuclear waste, has a half life of forever.

A Tiger's Tale: Those cats of Siegfried & Roy's were endangering life and limb almost 30 years ago. And gosh, whatever became of the Siegfried & Roy IMAX movie that never screened locally? CineVegas, how can you let this introuvable escape your programming grasp? Maybe Johnny Brenden will let you rent his IMAX screen ... provided you show the movie at 7 a.m. or thereabouts.

So much for the conventional wisdom that Internet poker, at the very least, might find a sympathetic hearing from our poker-loving POTUS. The Justice Department's jihad against online casinos has taken a particularly nasty turn. The DoJ is striking at the soft underbelly of the business, going after players. So if you won $$ fair and square on the 'Net, too bad: Uncle Sam is going to relieve you of your money and if you don't like it, it's not like you can call the cops.

As I. Nelson Rose points out, we're getting into a legal gray area here -- not least because the federal injunction was brought in New York State, where online wagering isn't illegal. Let's give the banks the benefit of the doubt: They probably had little choice to go along with this draconian and unconscionable action, yet another intrusion by Big Brother. Rep. Barney Frank's proposed UIGEA rollback can't happen soon enough.

Adding insult to injury, the Obama administration is going to the mat on behalf of one of Bill Clinton's worst mealy-mouthed compromises -- the Defense of Marriage Act. In doing so, it's resorting to some of the most troglodytic arguments imaginable. Like: Equal rights are bad 'cause they cost the guvmint money 'n stuff.

Heavens, yes, just imagine how expensive it would be if we'd given women and African Americans the vote. What ... we did? I need to read my memos more closely.

So culturally benighted am I that I had to have someone explain to me who this Jon & Kate are and why they are the object of so much fascination. Sometimes ignorance really is bliss. At least they haven't "hosted" at a Vegas nightclub yet ... have they?

Poker > Gas mileage

Tue, 19 May 2009 14:22:00 -0700

Americans have voted with their mice and declared repeal of the odious UIGEA a top policy priority. Legalizing online poker outpolled increasing fuel-efficiency standards by nearly 2,000 mouse clicks ... but still finished way behind getting the U.S. out of the torture business. (Amen to that.)

In related news, an American Gaming Association study that's generating a flood of news stories all over "the Google" found that 81% of Americans surveyed thought gambling an acceptable form of entertainment. Seeing how AGA prez Frank J. Fahrenkopf was a soldier in the Reagan Revolution, he might want to share those numbers with some of his fellow Republicans. I doubt it will nudge them back into the mainstream on this issue (they're still too much in thrall to Dr. James Dobson) ... but there's always hope.

Wynn vs. Muth: Though he must have better things to do, Steve Wynn has lowered himself to siccing his legal beagles on conservative watchdog Chuck Muth. The latter assesses Wynn's threat as all bark, no bite.

S&G has no dog in this fight. But anything Muth does has to be read closely, since he doubles as Nevada GOP Chairwoman Sue Lowden's ghostwriter (despite having re-registered as an independent to great [self-generated] fanfare). Muth may be the one gnawing at Wynn's ankles but Lowden's probably still got a firm grip on the leash.

Bad news for the R-J: Despite its free-market posturing, the newspaper has long (and quietly) benefited from a state law that requires the publication of property-tax information at public expense. Well, that gravy train is about to run off the rails. Only a Gov. Jim Gibbons veto can keep it on the tracks.

Correction: No, he can't. The bill passed with veto-proof majorities. Other public subsidies of Nevada newspapers, however, remain in place.

In other news ...

A tax is a tax except when Midnight Jim says it isn't. On the other hand, Gibbons hid behind "the will of the people" when raising taxes on hotel rooms (i.e., on you, the tourist) but now decrees Nevada counties can't raise their own taxes -- no matter how much they may want it. So let me get this straight: Nevadans are competent to raise taxes on non-Nevadans who visit here but not on themselves? Yeah, got it.

Harrah's is right

Thu, 07 May 2009 12:25:00 -0700

Not only because it's putting some elbow behind Rep. Barney Frank's proposal -- finally unveiled yesterday -- to repeal the noxious UIGEA and replace it with a regulatory framework for Internet gambling in the U.S. The love child of former Senate Majority Leader Bill Frist and ex-Rep. Jim Leach, UIGEA has had deleterious effects on Harrah's Entertainment's online-recruitment efforts for the World Series of Poker. It's also taken a bite out of sponsorships generally and from trade-show attendance, so we'll all be grateful when this Rosemary's Baby is retroactively aborted.

Where Harrahs' really earned its kudos, though, was by permitting an on-site study of the effects of secondhand smoke on employees at three of its Strip properties. Not only did the Bally's, Caesars Palace and Paris-Las Vegas workers manifest health problems related to secondhand smoke, carcinogens turned up in their systems, too.

Smoking in casinos is the industry's devil's bargain. You gamble with the lives of your employees to -- among other reasons -- preserve their jobs. Eliminate smoking in one state's casinos and a mass exodus of players ensues. The example of Illinois could hardly be starker. All the same, cigarette smoke is foul, unhealthful stuff to which no one should be involuntarily subjected. (Two of my grandparents smoked so heavily it would drive you out of the room.)

As Harrah's Gary Thompson points out, the only economically viable solution would be a nationwide smoking ban applying to all casinos. Otherwise, if Harrah's went the clean air route, say, MGM Mirage would be able to use "smoker friendliness" to beat its competitor like a drum. Even a national ban isn't a complete solution, as tribal casinos would be exempt -- giving them a substantial competitive boost.

Whatever route is taken, there's going to "collateral damage," either in the form of lost revenues, lost jobs or, worst of all, lost lives. What's really not going to cut it are intelligence-insulting empty gestures like the "smoke-free corridors" at Palazzo: strips of carpet upon which you cannot light up ... but you sure can catch a lungful of cigar fumes at 20 paces. If that's your idea of a clean air "initiative," why bother?

Quote of the Day

Thu, 30 Apr 2009 13:42:00 -0700

"What are they going to do when this fails, ban poker books and burn our players at the stake? We see headlines like this coming from communist [sic] China but never expect that it could happen here in Minnesota." -- Matt Werden, Minnesota director of the Poker Players Alliance, reacting to an order from the administration of Gov. Tim Pawlenty (R-MN) to 11 Internet service providers, "demanding that these ISPs block access by Minnesotans to approximately 200 sites connected to online gambling."

Garber to Harrah's? Apparently not

Thu, 16 Apr 2009 11:35:00 -0700

So is former PartyGaming PLC supremo Mitch Garber going to Harrah's Entertainment or isn't he? As of yesterday, it appears that the company is denying [registration req'd.] a London Times report that it had signed Garber to head up a conglomeration of its online and World Series of Poker operations.

Or not. Asked for clarification, a Harrah's flack replied, "There is not a statement and we do not comment on mktplace rumor/speculation."

Since Garber joined PartyGaming in April 2006, several months prior to the odious UIGEA, a Garber-to-Harrah's move would raise some thorny questions for regulators. Following UIGEA's dead-of-night enactment, PartyGaming exited the U.S. market. However, up until that point it had been engaged in some slippery dealings to which it recently 'fessed up.

PartyGaming has put a brave face on its accord with the U.S. Department of Justice, saying it "had no intention of breaking any laws" but its allocution shows that it went to considerable lengths to circumvent American banking rules. The seven-month overlap between Garber's hiring and PartyGaming's cutoff of U.S. play would be certain to put the executive under a regulatory microscope and, at minimum, require some dextrous explanation by Garber.

The company's profession of quasi-innocence is further undercut by the fact that company co-founder Anurag Dikshit has copped a plea that included paying a $300 million fine. Garber's former employer holds that its own deal with the feds was "amicable" and who are we to argue? If somebody was willing to hand me $105 million in return for causing them no further grief, I'd be quite amicably disposed, too.

PartyGaming can't be feeling too much pain in the wallet, as it's talking about making acquisitions. Nor will Garber be on his uppers if a reported Harrah's job offer were withdrawn, considering the generosity of his pay package as an Internet gambling CEO.

S&G will try and stay abreast of this story as it continues to develop ... or unravel.

We can rule out the "Warren Buffet of the Gulf" as a possible rescuer for CityCenter, from the looks of it. Prince Alwaleed of Saudi Arabia is selling much of his hotel portfolio to shore up his sagging fortune, including several of the Fairmont Raffles Hotels he co-owns with Colony Capital. It was an acquisition so expensive that Colony and its princely partner had to turn right around and sell much of it in return for management contracts. Colony's luck in the resort sphere seems to come in two flavors, bad and worse.

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.

Are you there, God? It's me, BetOnSports.com

Mon, 13 Apr 2009 12:26:00 -0700

I'd like to think this portentous Conversations with God-style update on prosecutions of online casinos (with Special Guest deus ex machina Rep. Barney Frank) is all a big send-up. But I fear it's meant in deadly earnest. Either way, it must be seen to be believed.

21

Wed, 31 Dec 2008 11:39:00 -0700

That's the number of predictions for 2009 issued by Spectrum Gaming Group, an Atlantic City-based outfit. They are, in no particular order:

• Advancements in technology that impact revenues and cut costs will continue to be attractive to operators even in an economic downturn.

Continued ...

• ... conversion of racetracks to racinos, as well as non-gaming expansions to existing racinos.

• ... elimination of jobs, both through cuts and attrition.

• ... moratorium on development of big-box gaming resorts due to economic downturn.

• Convenience-based gaming continues to achieve better year-over-year results than destination-based gaming.

• Corporate and property debt restructuring in wake of declining revenues.

• Eastern European countries will increase their efforts to meet EU regulations, including smoking bans.

• Gaming companies increase efforts to export their brands globally.

• Gaming equipment manufacturers continue to invest in games that appeal to a younger demographic, including lotteries, bingo and server-based technology.

• Increased legislative acceptance of allowing the deduction of issued electronic promotional gaming credits from the gross revenue tax/fee calculation.

• Increased use of electronic games, including the emergence of scalable electronic table games in which players at different locations on the floor wager on a single outcome.

• Increasing alliances between commercial gaming operators and outside investors, as well as between commercial and tribal operators.

• Internet gambling in U.S. will be a hot federal issue for the new administration and Congress; gaming companies will fund lobbying efforts on both sides.

• Major gaming operators commence deleveraging by selling off properties to emerging operators.

• More pronounced shift in market share among suppliers as operators attempt to shift away from IGT participation games.

• Native American tribal gaming revenue estimates remain on track to surpass U.S. commercial gaming totals.

• Prices for hotel rooms, shows and food and beverage will return to lower levels at large gaming resorts as operators need to fill their properties.

• Slow but continual advancement toward server-based gaming, as operators remain skeptical as to the potential financial returns on investment.

• States consider expanding or legalizing casino-style gaming to help fill state budget gaps.

• Support from China to ease visa restrictions, increasing flow of visitors into Macau.

• Uncertainty in various European countries concerning regulation, thus increasing cases being referred to the European Court of Justice.

We'll have to check back in a year, God willing, and see how clear Spectrum's crystal ball proved to be. There's nothing on that list that strikes me as off the beam and much of its seems dead on target. The only "WTF?" comes courtesy of a Spectrum exec who told a reporter, "In times like this, it's not like these are company-specific problems that can be attributed to some glaringly bad decision by the company."

I respectfully beg to differ. Choosing unreliable and/or overcommitted business partners (Boyd Gaming) was a decision. Opening in far-flung markets while your core properties were losing market share (Isle of Capri) was a decision. Taking on preposterous amounts of debt (Harrah's Entertainment) or simply assuming more debt than your cash flow and lavish spending tendencies can support (Station Casinos) were decisions. Trying to build metaresorts all at once (Boyd, MGM Mirage) was a decision. Rashly demolishing the Atlantic City Sands and thereby leaving yourself with empty, non-revenue-producing land (Pinnacle Entertainment), that's a decision.

Launching major projects that aren't fully capitalized (Las Vegas Sands, Cosmopolitan, Majestic Star) is a decision. Stubbdornly jeopardizing the license of the property that generates 40% of your cash flow (Columbia Sussex) is a decision. Making not one, but two major acquisitions at a time when your cash cow -- slot routes -- is giving less milk and then overpaying for some of the new assets (Herbst Gaming) is a decision.

Opening a $2.3 billion, years-in-the-making megaresort at the nadir-to-date of the economy (Wynn Las Vegas)? Now that, that was not a decision. That's playing the hand you were dealt.

Castleman vs. UIGEA

Mon, 15 Dec 2008 11:30:00 -0700

Be sure to read today's Question of the Day, in which our editor, Deke Castleman looks at the future of Internet gambling in a post-Bush political environment. UIGEA, and George W. Bush's "midnight rulemaking to enforce it are, Deke writes, "no doubt, the final ignominy of an administration obsessed beyond all rationality with Internet gambling, to the extent that it would pound the banks over the head with a sledgehammer at the same time it’s pumping them full of painkillers to alleviate their migraines."

Deke also has some sobering thoughts on our current economy, which to his way of thinking resembles nothing so much as "a freight train full of dynamite crashing into a warehouse full of fireworks." As I said, must reading.

Bush-Frist ban fisked

Fri, 21 Nov 2008 16:42:00 -0700

A pressing workload of late has muted me (mercifully, perhaps) on a number of issues, such as President George W. Bush's parting shot at online gamblers and offshore casinos: Ramming a last-minute codification of the UIGEA* up their tail pipes, thereby completing the damage set in motion two years ago by soon-to-be-ex-Sen. "Slick Billy" Frist (R-TN).

(In political fairness, it should be noted that Frist's co-conspirator, then-Rep. Jim Leach [R-IA], was one of President-elect Barack Obama's emissaries to the recent G20 summit -- which could have made for some awkward moments with representatives of the nations that UIGEA has inconvenienced.)

In lieu of an extended commentary on Bush the Second's underhanded stick-it-to-the-gamblers move, I present this video report, which does a virtuoso takedown of the situation in less than five minutes:

Additional delights include: Mr. Potato Head in the role of Hypocrite-in-Chief Steve Beshear (D-KY), a "smashing bird" named Kate, and the timeless music of ABBA. What more could you want?

APCW's latest report maybe? Filmed at G2E, it and oodles of other tasty reportage, satire and invective can be found on the APCWperspectives channel.

*--Thanks to Frank J. Fahrenkopf, I now know the correct pronunciation of this acronym: "WE-guh." Aptly enough, it onomatopoetically suggests the passage of something painful through one's digestive tract.

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 ...

Winners & Losers

Wed, 05 Nov 2008 13:52:00 -0700

And now the obligatory post-Election, What's-it-all-about-Alfie roundup ...

Culinary Union 1, Casino CEOs O: True, the Culinary tripped all over its own feet in the early going, leading to Democratic caucuses that weren't so much "Barackular" as "debacular." But D. Taylor & Co. backed the winning horse and did it early, which earns some chits down the road, plus they have a new Capitol Hill friend in Rep.-elect Dina Titus. Messrs. Lanni, Loveman, Wynn, Adelson and Trump made a variety of presidential wagers, losing every one.

Ameristar Casinos/Pinnacle Entertainment: They wanted a protected oligarchy in Missouri and now they've got it -- and at relatively little additional tax burden to them.

Slot manufacturers: OK, so Ohio and Maine didn't come through and the Missouri market is frozen. But 15K new slots in Maryland ain't chicken feed. Plus a West Virginia casino expansion that flew under the radar got voted in. Inexplicably, slot stocks traded downward. Stupid Wall Street.

Colorado casinos: They didn't so much "win" as get a hefty lifeline thrown to them by Rocky Mountain State voters who approved 20X higher betting limits, 'round the clock operations, and roulette and craps. (No Sen. John McCain sightings in Cripple Creek yet, though.)

Freedom's Watch: So far F-Double-U is 6-9-1 (with Sen. Gordon Smith [R] of Oregon momentarily in the "tie" column) in its top-priority races. I'm feeling generous and crediting the Adelson front group with "wins" in the case of self-destructing Rep. Tim Mahoney (D-FL), who continued the scummy tradition of predecessor Mark Foley, and in that of Sen. Saxby Chambliss (R-GA), who faces a December do-over, thanks to Georgia law. And veering off at the last minute to spend money attacking not-up-for-reelection Sen. Chuck Schumer (D-N.Y.)? Adelsonian political acumen at its finest. Winner? Loser? Let's call it a draw.

Poker: Just when it looked like the poker phenomenon was about to jump the shark, we've got a poker-playing president-elect. I dunno if Ms. Pelosi and Messrs. Reid, McConnell and Boehner cotton to hashing out legislation over cigars, booze and a deck of cards, but they'd better get ready for a whole new kind of "smoke-filled room."

Online Poker: Chances for a repeal of the UIGEA suddenly look a lot better.

Karma: Bearing false witness and serial adultery remain very uncool. But multiple felony counts and assorted other financial malfeasances remain A-OK with voters of both parties. (Hint: If Ted Stevens has to be forcibly removed from office, start practicing the phrase "Senator Palin." Kinda trips off the tongue, don't it?)

Gays & Lesbians: Voters in California stuck it to one of Vegas' most loyal constituencies big-time, passing the hateful Proposition 8. Were Nevada not so socially conservative (although compassionate enough to have legalized medical marijuana a ways back), I'd say we should vote for gay nuptials here, then sit back and gloat as the bucks roll in.

Tom Tancredo and ilk: Even if you abhor George W. Bush, you've got to give it up for his ability to rally Hispanic voters to the GOP standard. (I can't speak for Biloxi-Gulfport or Atlantic City, but Las Vegas can't function without its Latino labor base and casino CEOs know this; that's why immigration is their "third rail" of politics.) I always thought the immigration issue would be a non-starter in this election -- and it was. But the Tancredos of the GOP, by ginning it up in both '06 and early '08, antagonized Latinos, scored an own-goal and eradicated the gains Bush made with this voting bloc. So, in lieu of a prolonged post-mortem, maybe Republicans should just burn Tancredo in effigy and then turn the page.

Gaming's GOP influence: The annihilation of GOP moderates at the national level is largely complete, leaving an electoral map that looks a lot like the Confederacy, plus a horseshoe-shaped chunk of the West. Subtract Mississippi, Louisiana and tribal casinos and you've got slim pickings there. Gambling-friendly Republicans like Govs. Haley Barbour (MS) and Charlie Crist (FL) have made progress, but not easily and not without much expenditure of political capital. It's difficult to see where American Gaming Association boss Frank Fahrenkopf goes within his own party when he needs its support. The casino industry's investment in the GOP has yielded scant ROI.

Gov. Jim Gibbons: With state Sens. Joe Heck and Bob Beers, and Rep. Jon Porter all packed off to early retirement by their constituents, Gibbons suddenly has much less to fear from within his own party two years hence. (Ditto Porter's designs on Sen. Harry Reid's [D-NV] seat.)

Rep. Dean Heller (R-NV): If he opts to challenge Reid -- or Gibbons -- he's now the presumptive frontrunner. (I still think "Gov. Oscar Goodman" has a nice ring to it.)

North Las Vegas Mayor Michael Montandon (R): He's laying the groundwork for an intra-party challenge to Gibbons. Montandon's ably managed growth in NLV and would easily trump Gibbons on the "competence" front. The sudden political demise of Beers, Heck and Porter gives him a clear field of fire.

Tourists: Ever hospitable, Clark County voters gave them the finger, by endorsing a 2%-3% hike in the hotel tax. Thankfully, it's just an advisory vote.

Joe the Player: Winner. Clinton-era tax rates are coming back, which may hurt the "whales" but should be good for the rest of us. The Clinton administration coincided with halcyon years of casino growth, especially in Vegas and on the Gulf Coast. The succeeding eight years were dominated by M&A binges, condomania and a narrowing of the Strip's economic appeal toward the monied elite -- the latter being a very sore point among casino consumers. Vegas-wise, which eight years would you choose?

Jon Ozark: This cardboard dummy was wheeled into Nevada Assembly District 21 by local monied interests, to knock off Asm. Bob Beers -- not be confused with the less-hirsute state Sen. Bob Beers -- for having the audacity to stand up against Steve Wynn, he whose name dare not be pejoratively uttered in Carson City. That much having been accomplished, in the general election Ozark discovered once again that it takes more than a pretty face to win. Good luck in your next district, Mr. Ozark. They say the third one's the charm.

Ultimate Bet claims another victim

Tue, 04 Nov 2008 17:28:00 -0700

Add Excapsa Software Inc. to the list of companies and individuals who are being dragged down by the undertow of the Ultimate Bet scandal. Shareholders of Excapsa have been ordered to pony up $15 million, in order to make players cheated by Ultimate Bet whole. Ultimate Bet owner Blast Off charges Excapsa with selling it corrupted software that made the cheating ring possible.

One can draw a couple of conclusions from these events. One, that the Kahnawake Gaming Commission, under whose "oversight" the Absolute Poker cheating scandal also took place, is a paper tiger. Two, that the sooner the kinds of online games are run from within the U.S., where they can be subjected to rigorous federal oversight, the better.

Would the last person to leave Nevada please turn out the lights? Revenue shortfalls continue and Gov. Jim Gibbons' peeps are now talking in terms of a 30% state budget reduction. Maybe they can sell pencils out of tin cups as passengers arrive and depart from McCarran International Airport.

McCain = more UIGEA; The Luxor chainsaw massacre, etc.

Mon, 03 Nov 2008 11:40:00 -0700

That's the conclusion of Steve Friess, who reads the cards on the Unlawful Internet Gambling Enforcement Act. The clincher, in Friess' analysis, is that John McCain has promised to bend to the wishes of Sen. Jon Kyl (R-AZ) with regards to the UIGEA. And Kyl has never been more consistent than in his efforts to outlaw Internet gambling, against which he's waged a protracted war.

Speaking of Friess, he's been to "The Weirdest House in Vegas" and filed multimedia coverage. I've seen the three-houses-merged-into-one Xanadu that is the home of Dr. Lonnie Hammergren and Friess' headline is no exaggeration. An accompanying New York Times piece captures the essence of the place, which is much like what might have happened had Charles Foster Kane moved into a quiet suburban neighborhood and let his outsized sense of fantasy run amok.

"For a reported $100 million, Cirque [du Soleil] has bought itself its first bona fide bomb." That's among the nicer things the Las Vegas Sun's Larry Brown has to say about "charmless mook" Criss Angel and his CdS vehicle, Believe. Even before opening night, CdS was in full damage-control mode. An eyewitness tells me the favored spin is that Angel is no mere magician. No, he is an artiste. No wonder full-of-himself Cirque founder Guy Laliberté runs and hides from reporters when his cohort is peddling such self-serving guff.

Personally, I thought from the get-go Believe was going to tank, for reasons upon which I'll expound later. There's only so much pastel-colored whimsy this town can handle. In any event, it sure sounds like the after-party was better than the show.

Finish line in sight. All right, I blew it. What I thought would be the most edifying presidential campaign in a generation has been one of the worst. (Better than '04 but still pretty bad.) It's made Bush vs. Gore look like My Dinner with André. At the state and local level here in Nevada, it's been worse still -- the scummiest scrumdown I can recall.

When a Freedom's Watch ad actually elevates the tone of discourse, you know we've sunk to lower-than-imaginable levels. The Sheldon Adelson-sponsored "operating room" spot (which I've linked on a previous occasion) was considerably more imaginative than anything put out by Rep. Jon Porter's own campaign, not least because it employed a seemingly novel concept: humor.

Quote of the Day

Wed, 01 Oct 2008 13:10:00 -0700

"WOW!! Thanx [sic] for setting poker back 25 years Russ." -- "seamarfan269" venting at CardPlayer.com after champion poker pro Russ Hamilton was named as the central player (literally and figuratively) in a byzantine online-poker scandal. Legislation to regulate Internet poker is expected to be introduced in the U.S. Senate today by Sen. Robert Mendendez (D-N.J.).

By the numbers

Tue, 30 Sep 2008 16:21:00 -0700

$800,000

That's how much it'll cost Penn National's Hollywood Casino riverboat for failing to check its direct-mail-promo list against Illinois' roster of self-banned gambling addicts (casinoholics?). That meant a 146-name overlap out of a mailing that blasted out to almost 16,000 people. The three managers responsible will be able to meditate upon the virtues of due diligence as they sit out their state-imposed suspensions.

29,000

That's how many fewer prospective customers Las Vegas Sands will have for its Marina Bay megaresort project in Singapore, thanks to that nation's aggressive problem-gambling prohibitions. Unlike U.S. states that have voluntary-exclusion policies, in Singapore it's sufficient if a member of your family drops dime on you as an alleged gambling addict.

Moral: Don't piss off anybody to whom you're related by blood (or marriage). "At this time, we cannot anticipate the volume of applications, but my concern as a social worker is that we should not take it as a punitive measure," says one regulator with masterly understatement.

Sands, meanwhile, having publicly identified Calcutta and Jakarta as target markets for the Cotai Strip™, not Marina Bay, has placed itself in the position of robbing Singapore to pay China.

$75 million

And that is the size of a lawsuit that pits Ultimate Bet and Absolute Poker against their software vendor, after a loophole in that software allowed some players to peek at others' hole cards online.

Value in free propaganda to Internet-casino-bashing Gov. Steve Beshear? Priceless.

Who's your GoDaddy now?

Mon, 29 Sep 2008 18:49:00 -0700

There are finally some roars of organized resistance to Gov. Steve Beshear (D-Ky.) and his unilateral war on Internet gambling. Both the Internet Commerce Association and the Poker Players Alliance have fired off salvos, and it that looks like just the beginning, especially once Bluegrass State taxpayers start getting hit with the legal bill for Beshear's tilt at the Internet windmill.

For all his moral posturing, Beshear looks like an arch-hypocrite with each new revelation. The best one yet comes from Beshear's hatchet man, J. Michael Brown, who -- as befits his name -- is doing a heckuva job. As he explained to the Louisville Courier-Journal, the gambit is to force the GoDaddy.coms of the world to surrender domain names of gambling sites to the State of Kentucky.

"Brown said the state's intention is to enter into settlement talks with the online casino operators, asking them to block Kentucky users from their sites and pay damages in exchange for the state returning control of the sites to them."

That's right: Beshear and Brown intend to take these sites hostage and hold them for ransom. This is a shakedown, pure and simple.

Happily, Judge Thomas Wingate got a glimpse of the enormity of the case and hit the brakes. Beshear had hoped to effect his money-grab last Friday, but he'll have to make a grudging concession to due process, looks like. Beshear may be an improvement on his corrupt predecessor in Frankfort but, in light of his continuing ass-clownery, that's the most relative compliment of 2008.

Beshear's War: This cracker's crazy (like a fox)

Thu, 25 Sep 2008 15:49:00 -0700

Kentucky Gov. Steve Beshear (D) is coming for your Internet casino, even if he has to pry it from your cold, dead fingers. No, the "D" behind Beshear's name doesn't stand for "demented," "deranged" or even "doofus," as there's a coldly pragmatic rationale behind his actions (which he lays out in rich, high-fidelity MP3 sound).

He's right upfront about doing this not to stop gambling per se but to ensure that Kentuckians who gamble do so at the Bluegrass State's horse tracks or in its lotteries (or maybe in those brick-and-mortar casinos he still dreams of building). Thus, any pieties the guv may utter about the social costs of gambling are at best mouthwash and more likely hypocrisy.

Steve Beshear, working on his "crazy" look.

Were Beshear's actions not so much in line with liberal do-gooderism (as well as with right-wing nanny-state-ism), casino detractors might point out that he's apparently hunky-dory with the "ease, availability and anonymity" of losing one's money playing the ponies or the lottery -- a notoriously regressive form of taxation.

When you come right down to it, Beshear's doing the dirty work of one branch of the gaming industry at the expense of another ... much as he carried water for Columbia Sussex oligarch William J. Yung III when he put casino legalization before the Kentucky Lege, in what became known as "the Bill Yung scandal."

Beshear's certainly right about this case being "unprecendented" and "potentially groundbreaking": Not even the U.S. Department of Justice has unleashed such a wide frontal assault on Web-based casinos. And, in his defense, he's enforcing laws already on the books in Kentucky. As for why enforcing aforesaid laws is suddenly such a priority, my colleague David Matthews has the answer: "He hopes to be able to have the state take over the domain names and then shut them down, or perhaps even use them for his own marketing purposes."

"In essence, this is a threat to national security." Yes, Beshear really says that. Before you stop rolling with laughter, know also that he brandishes the old "terrorism" and "money laundering" shibboleths that Slick Billy Frist used to help ram the UIGEA through Congress in the dead of night. Oh, and Internet casinos are not to be trusted, Beshear tells us, because they're "foreign," unlike wholesome American casinos in "Ne-vaahhh-da."

Mmmmmm ... xenophobia served between two piping-hot slices of fearmongering. Yummy! And, as Matthews points out, Beshear's on "a political crusade" that will please the churchy and horsey sets alike. It's a win-win for him.

"Don't gamble on the Internet, child. Do it at the track."

One of Beshear's lieutenants acknowledges that the domain-name grab could impact sites that have already blocked Kentucky users. Meanwhile, there's been no concerted response from Internet casino operators. Nevada's congressional delegation and über-lobbyist Frank Fahrenkopf, for their part, continue to promote a ridiculous resolution for a one-year study of Internet gambling, yet another indignity foisted upon long-suffering taxpayers.

Worse still, they oppose federal regulation in favor of a patchwork state-by-state approach. Faced with that potentially nightmarish crazy quilt of divergent regulatory regimes, overseas 'Net casino operators may decide that trying to do business in the U.S. is prohibitively expensive -- which may be Fahrenkopf's endgame and that of his patrons.

Bad day for 'Net gamblers

Thu, 04 Sep 2008 11:55:00 -0700

With "values voters" all fired up about Gov. Sarah Palin, who looks to be in demand on the campaign trail, she's predicted to pump up several heretofore sagging GOP congressional and senatorial campaigns. Which is good news if you're a Republican ... bad news if you're a GOP-er who likes to have what the Brits call "a bit of a flutter" on the Web.

As I. Nelson Rose put it a while back, "if John McCain wins, Republicans will take over the Senate, so nothing will change." (Our David Matthews gives McCain an "F" in gaming-friendliness, though I believe that's a mite harsh, just as I think a candidate who lists The Wire and Dexter among his favorite recent TV shows isn't as out of touch as many claim.)*

Which means resigning yourself to more Justice Department prosecutions of offshore Internet casinos and taking your chances with unregulated, often unaccountable operators. Especially when you consider that the Republican seats that are most likely to get peeled off this fall are those of moderates, the ones most likely to vote for UIGEA repeal.

Steve King: He loves casino taxes

Even if Republicans remain in the minority, the caucus will probably be even more dominated by cranky ideologues like Rep. Steve King (R-IA), who's long wanted to shove a 30% federal levy up the gaming industry's butt.** King had this brainwave while riding around on his tractor -- absolute proof that politicians should not be allowed to operate heavy machinery.

* -- the preferences of McCain's adversary, by contrast, sound like they emerged from a Bob Shrum-led focus group. Shrum, you may recall, was the 'strategist' who helped Sen. John Kerry snatch defeat from the jaws of victory in '04.

** -- it's all wrapped up in some creepy, paternalistic crap about using guvmint to change people's behavior ... a different flavor of the same Orwellian stew that produces laws which forbid restaurants from using trans-fats, etc.

That eeeeeeeeeeeeevil Internet gambling

Wed, 03 Sep 2008 12:59:00 -0700

From this year's GOP platform ...

"Millions of Americans suffer from problem or pathological gambling that can destroy families. We support the law prohibiting gambling over the Internet."

So, if you play online, or would like to, or if (like me) you want to see the UIGEA repealed just on principle, you should probably be hoping for some big Democratic gains in the House and Senate. Because, otherwise, it's not going to get past a President John McCain's desk. Rep. Barney Frank's been doing the best can, but he could use some help -- and Nevada's congressional delegation, Democrats and Republicans alike, hasn't exactly been a Profile in Courage on this issue. They either want to fritter away another year "studying" Internet gambling or they dive under the table altogether.

A pox on both your houses (of Congress)!

Alaska nixes gambling; Politics here, Harrah's there

Tue, 02 Sep 2008 20:41:00 -0700

With Alaska and its governor all over the news of late, I got to wondering what had become of that ballot initiative, backed by bar owners, to expand gambling in Alaska.

As it happens, the initiative was voted down, the most lopsided defeat for the casino industry in a year of setbacks, following legislative rebuffs in Kentucky and Massachusetts. It did, however, prevent discomfiture for one opponent -- Gov. Sarah Palin, who would have been required to appoint the members of the proposed Alaska Gaming Commission, had it been voted in.

If you're scoring at home, that's: Palin 1, Slot makers 0.

Politics Makes Strange Bedfellows Dept. Although the largesse of MGM Mirage tends to flow towards the GOP, one of its prime beneficiaries this year is Rep. Carolyn Cheeks Kilpatrick (D-MI). Meanwhile, the war chest of unopposed Rep. John Conyers (D-MI) has been swelled by donations from Phil Ivey and Doyle Brunson.

Conyers is seen as a critical ally in the move to overturn the UIGEA, that midnight raspberry blown to online poker players by then-Senate Majority Leader Bill Frist (R-TN) and Rep. Jim Leach (R-IA). Frist retired soon afterwards and voters -- probably including some pissed-off poker players -- sent Leach packing.

Swift Harrah's verdict? We may not have to wait long for a ruling on Harrah's Entertainment's legitimacy to build and run a casino in Kansas. There's the little matter of a disputed non-compete clause with the Prairie Band of Potawatomi Indians, who formerly made use of Harrah's managerial experience before the latter severed ties. However it comes out, a speedy resolution is to be hoped for. It's going to take the Sumner County casino two years to get up and running anyway, even without being ensnared in litigation.

I invade France

Tue, 02 Sep 2008 19:55:00 -0700

... or Gallic television sets, anyway. Last weekend, I had the decidedly surprising experience of being contacted by a reporter from French TV network Canal+. He was looking for someone to interview about the casino industry's role in the 2008 election.

Now, you're probably thinking that I wouldn't be your first (or even 10th) choice for this gig. I can tell you that the same thought crossed my mind several times over. But a friend in academe had put a kind word in for me and, besides, I'd never done the TV talking-head thing, so it looked like an adventure. Sort of like skydiving -- without the parachute.

Which is how I came to be pretending to casually stroll down Las Vegas Boulevard on a sticky Sunday evening, wearing a business suit. It's difficult not to feel like an idiot when you're doing that ... or when answering questions on camera and sensing that every fact you've ever known has just fled your brain. And that the further you bloviate, the more inflated with hydrogen you seem to become, ready to burst into a fireball -- a veritable Hindenblogger.

Filming almost came to a dramatic and violent halt when were accosted near The Venetian by several self-identified Nevada white supremacists, one shirtless, another in a wife-beater and nearly all of them spoiling for a fight.

Cooler heads prevailed, but not before each of us was called "a nigger" and advised to "go back to fucking France." In other words, it was little different than the average "Comments" thread following a Review-Journal story.

Although I'm hoping to get left on the cutting-room floor, the worst-case scenario is that if I'm not, it'll only be seen on French TV and then not until after the November election. Better still, I'll probably be overdubbed in French, which will lend some much-needed sangfroid to my babblings.

Whatever happens, it was a valuable learning experience, as the saying goes (and after seeing the video feed of the Podcast-a-Palooza,* I knew I could use the education). That includes developing a little extra respect for those ubiquitous TV pundits. It may look like falling off a log, but it sure as heck isn't. Except for the falling sensation, of course.

* -- and, no, I am not going to link to the online video feed. My appetite for public self-mortification has its limits.

Shame on you, MGM Mirage!

Mon, 11 Aug 2008 12:28:00 -0700

There's been a steady stream of anecdotal evidence (like this) of a cheeseparing mentality afoot at MGM Mirage, one that may have been afoot far longer than anyone suspected. A thoroughly clogged air-conditioning filter here, exposed construction foam there, faded carpeting and cracked tiles at Bellagio and a discontinued people mover at The Mirage ... it all begins to add up, and to chip away at a company's image. Even if shiny new CityCenter hasn't actually sucked money away from other properties' budgets, it's starting to look like MGM execs are so mesmerized with their new thing of beauty that they're blind to an accretion of inadequacies (sometimes literally) beneath their feet.

This, however, cannot be chalked up to mere oversight. No, replacing Excalibur's poker dealers with PokerPro tables is out-and-out chintziness. True, Playboy once described Excalibur as "tacky even by Vegas standards" (and that was almost 10 years ago!) but it and its customers deserve better than this. Besides, as David Matthews reports, if it flies at Excalibur, MGM Mirage will inflict this on its other properties, creeping up the food chain toward Bellagio.

The company saves 12 salaries, players keep a few bucks that would otherwise go toward tips, and the "casino" experience gets one big step closer to online gambling. I think the key phrase in David's story is when he says the company believes "each table will generate a greater amount of rake per hour." Chalk up another victory for the time-and-motion experts.

Small wonder that the casino industry shows little interest (let alone urgency) about repealing or otherwise circumventing "Slick Billy" Frist's parting legacy, the Unlawful Internet Gaming Enforecement Act, that shameful sop to the Religious Right. If it's legally perilous to play poker online and the games aren't always on the square, then why not just offer an Internet-poker simulacrum at the casino instead?

Maybe so. But if this pinchpenny trend spreads, it'll give players one less reason to draw to their inside straights here and to do it closer to home instead. Since M Resort is planning to have freestanding, help-yourself beverage stations, it looks like cocktail servers are next on the Endangered Employee List. I'm sure we'll get to the all-robotic casino floor eventually, but I hope I'm somewhere else when that happens.