David Mckee's Stiffs & Georges - Regulation

MGM: CityCenter worth $4.88 billion

Tue, 20 Oct 2009 15:37:00 -0700

MGM Mirage has announced that it's writing off approximately $1.3 billion (i.e., taking an "impairment charge") against CityCenter, with $348 million of that chalked up to falling real estate values. (Some $174 million of that will apparently be fobbed off on MGM's partners, bringing MGM's writeoff down to $1.1 billion.) The value of MGM's half-share of the project has been restated at $2.44 billion (a 31% decline). No word yet from Dubai World as to what it thinks its half of CityCenter is worth.

Kirk Kerkorian's Tracinda Corp. shook a rhetorical fist at Wall Street, stating in a press release that there is "substantial unrecognized value in MGM and CityCenter that is not reflected in the market value of MGM’s stock." It's nice to know that even mega-corporations can feel underappreciated.

Bottoming out? Air traffic into and out of Las Vegas was almost flat, year over year, -1.2% in September, helped by passenger-load increases -- and I don't mean those hefty people who take up two seats -- on nearly every domestic carrier not named US Airways (-26%). Considering that international traffic was -21%, this is augurs well for a return of domestic consumer confidence in Sin City. And, yes, flat is the new "up."

Pennsylvania: Rendell intervenes. Never accuse the Keystone State Lege of acting in haste. The table games bill is still mired in conference committe, prompting Gov. Ed Rendell (D) to wade into the fray. Rendell's magic number for the amount of revenue table games must yield in fees and taxes is $200 million. To get there, the guv believes the tax rate must be 16%. But he's closer to the GOP position, warning that the higher levies favored by Dems would "kill the golden goose" and deprive Little Johnny's school of needed funding. Meanwhile, Rivers Casino continues to disappoint, with the lowest revenue-per-slot in the state.

Finally, a taker! Out of left field, a contender has emerged for the orphaned casino license in Cherokee and Crawford counties in Kansas. You'll recall that it was awarded to Penn National Gaming, seemingly ages ago, but Penn -- spooked by nearby tribal competition -- all but spat on the license before leaving in a huff.

Enter Ozark Trail Gaming, a consortium of Kansas businessmen, offering to build a $225 million, 900-slot, 30-table casino. After some bad experiences with carpetbagger casino developers trying to dictate terms to the Sunflower State, you have to think the Kansas Lottery Board will look kindly upon this native-son effort.

ColSux loses again. A $41.5 million summary judgment has been slapped on Columbia Sussex for abrogating its purchase of the President riverboat in St. Louis (now the property of ColSux arch-foe Pinnacle Entertainment). Regulators for Missouri didn't like the looks of ColSux and its CEO, William J. Yung III (above). The latter pulled his license application and used that as an excuse to void the President purchase, but a federal district judge wasn't buying it.

The former President owners were also suing ColSux for jacking up parking rates for casino patrons by 560% (no, that is not a typo), a truly Yungian move. If poetic justice were served in this case, the court would award the ship to ColSux. Since the President's days on the water are numbered and Yung will licensed in Missouri only in his wildest dreams, trying to dispose of that near-worthless asset might be the aptest punishment of all.

Is outsmarting a slot machine not a crime?

Fri, 16 Oct 2009 17:08:00 -0700

... as even Pennsylvania racinos face hard times. It was inevitable that the American appetite for casinos would achieve a saturation point. We've not only reached it, the ongoing depression has pushed us well beyond the point of inelasticity.

Great O'Day in the morning

Fri, 16 Oct 2009 14:15:00 -0700

Peepshow star/trainwreck-in-progress Aubrey O'Day likes to speak her mind, for whatever it's worth. Evidently the recklessly candid utterances of Ms. O'Day were worth not one, not two but, yes, three dispatches by Richard Abowitz.

The fascination is understandable, given an interview subject who readily owns up to being unhappy and describes her demi-celebrity as "fame-ish-ness." O'Day's costar, Holly Madison may have been dubbed "Queen of Vegas" but when Las Vegas Weekly tried to wrest similar prose mileage out of her, the result was better than Sominex. Strangely, I find myself rooting for the id-on-the-loose that is O'Day to go the distance here in Vegas.

A Bronx Tale. Kudos to Sheldon Adelson for rolling the dice on Chazz Palminteri's virtuosic one-man show, whose run has been extended for another week. Yours truly finds it a rather warm-and-cuddly depiction of Mob life but both Mike Weatherford and Joe Brown express nearly unmitigated enthusiasm. Whichever way you slice it, it's still three thumbs up for Palminteri.

Wynn still happy. If the Chinese government's aim in applying further curbs to Macao is to "tamp ... down" the Cotai Strip™, where Sheldon Adelson™ aims to build "Asia's Las Vegas™" no wonder Steve Wynn is a happy camper. Anything that handcuffs main rivals Las Vegas Sands and Stanley Ho is good news at Wynn HQ, especially with Encore Macau coming on line soon. How boring life would become if Wynn and Adelson ever suspended their running verbal gunfight.

Night of the living dead

Thu, 15 Oct 2009 13:06:00 -0700

Will the last person leaving the Riviera please take down the Charo in Concert, Abra-ca-Sexy! and Tom Stevens posters? Everything about last night's visit to the casino suggested a business that's died but doesn't realize it. Not that it helps to be literally in the shadow of the rotting whale carcass that is Fontainebleau. Between it, Echelon and the apparently defunct Plaza project, that neighborhood is one giant buzz-kill.

Still, even on a Wednesday night one does not expect to see such a thinly populated casino floor. There were more players around the electronic table games than the real ones. In the parking-garage elevator, one of the braille "3" panels was missing from the keypad. Management's solution? Scrawl "3" in red ink where the braille pad should be. (ADA non-compliance much?) If the Riviera is blowing off its interest payments in order to use the money on operating costs, it's not going very far, from the looks of things.

The moribund feeling extended to the upstairs showroom, where Charo has given way to Andrew Dice Clay (or, as the Riv bills him, "Andrew DICE Clay"). Even with a 90-minute cocktail party as an inducement, Clay rolled snake eyes in terms of media turnout. It was a small crowd [sic] and even ~~some~~ many of the local bloggers blew it off, so scant was the event's cachet.

Maybe they were at the Tropicana, checking out Wayne Newton, whose new show ...

Features Rich Natole. This confirms well-sourced reports LVA had been receiving that the impressionist would land a new gig at the Trop and it was merely a question of when. Natole, who was subletting a time slot from Anthony Cools, got caught in the crossfire between Cools and Trop CEO Alex Yemenidjian. When Cools, Bobby Slayton and the Penny Lane show were sent packing, Natole found himself briefly at loose ends, too. The Natoles are nice people, so I'm glad this Vegas saga has a happy ending. On a sadder note ...

Lanni ailing. Former MGM Mirage CEO J. Terrence Lanni has an undisclosed form of cancer. The news comes almost a year to the month since he abruptly resigned from the gaming giant. At the time, Lanni denied that health problems were involved but he also said it had nothing to do with a resumé-inflation scandal that threatened to bring him under investigation in New Jersey, Illinois and Nevada. (Another possible motive for Lanni's abrupt departure: MGM stock had just sunk below $10/share.)

S&G sends wishes for a speedy and full recovery to Lanni, and to his family. I've lost a couple of friends to cancer, so I can imagine the ordeal the Lannis are experiencing. And, if it's not inappropriate, a tip of the Panama hat to low-budget broadsheet Gaming Today, which beat all major news outlets to this sad story.

Reality bites. At least if you're trying to maintain your price point at Aria. The megaresort has cut rates to $159 -- and thrown in a $75 amenity credit -- to entice two-night stays, through April 1. Wouldn't it be ironic if, instead of cannibalizing Bellagio, as feared, Aria wound up gravitating toward the mid-market crowd?

Please spare a thought for the Queen of Comps, the beloved Jean Scott, who's in her sixth week of convalescence from the flu. First, a hepatitis scare, now this. Let's hope LVA's most popular blogger catches a break -- and soon.

Macao giveth, Macao taketh away

Tue, 13 Oct 2009 17:41:00 -0700

Casino operators in Macao better make the most of the recent relaxation of visa quotas into the enclave. What the government gives with one hand, it partly reclaims with the other. Casino expansion remains out of the question and the minimum age for gambling would go up to 21, from 18, under a bill draft soon to be put forward. (Steve Wynn can afford to be sanguine, as it's far more likely to impact his mass-market-oriented competitors. Investors didn't share his enthusiasm.)

If Wynn -- who continues to toe the Peking party line -- comes out a winner, facing negligible "obstacables," Lawrence Ho is the presumptive loser. As best S&G can ascertain, the curtailment of gambling in residential areas is aimed at his Mocha slot routes, one of the younger Ho's bread-and-butter enterprises.

Another proposal awaiting action by the Macanese Lege would cap table-game inventory. Writes J.P. Morgan analyst Joseph Greff, "we believe the Macau government believes the timing is right to implement these initiatives given the completion of the commission cap rule and the resumption of growth in the industry ... if the number of tables will be limited to 1,000 per operator, [Las Vegas Sands] may need to modify its future expansion plans, as it is already over the limit, while SJM will need to close down some of the older tables operated by the third parties, as it too is already over the limit."

None of this appears to bode especially well for Sands' long-in-coming IPO, although it remains to be seen whether this is a bonafide legislative agenda or simply a warning to inhibit growth. The news, however, managed to cast a pall over Sheldon Adelson's planned resumption of his Cotai Strip™. Also, it's not as though the Macanese government and its casino-owning subjects don't have to worry about an upsurge in gambling back on the Mainland.

Detroit, briefly. The depression continues to eat into Detroit's casino revenues, -2% last month. Despite a -6.5% drop, MGM Grand Detroit remains the big cat, grossing $42 million. Second place is up for grabs, though, as MotorCity continues to fall back (-7%) toward upstart Greektown (+12%), which is closing the gap, grossing $28.5 million against $33.5 million for MotorCity.

Hope for Boardwalk?

Tue, 13 Oct 2009 16:08:00 -0700

As you know, S&G puts more stock in year/year comparisons than sequential ones, but the most recent set from Atlantic City affords a slender reed of hope. With the help of tighter slots, A.C. held its September decline to 6%, the lowest of 2009 and the smallest drop in over a year. Even perpetual dog Resorts International had a good month, up 4% y/y.

Both in dollar volume ($63 million) and growth (6%), the leader was -- no surprise -- Borgata. In fact, the Boyd Gaming property made more than the four lowest-grossing properties (Resorts, Atlantic City Hilton, Trump Plaza, Trump Marina) combined. The two lesser Trump properties slipped below the Colony Capital ones, so one doesn't know whether to feel good for Colony or sorry for Trump Entertainment Resorts. The handover of Resorts Int'l continues to proceed slowly, as regulators enter uncharted waters with understandable caution.

Percentage-wise, Showboat, the Hilton and the Plaza had the worst of it, while gainers included Harrah's Atlantic City (3%) and even the Tropicana (1%). But the bloom is off the Trump Taj Mahal rose; it fell back to the middle of the pack, grossing $36 million.

One unexpected factor in the city's bump was a late-September, gay-themed promotion at the four Harrah's Entertainment properties. For all the lip service paid, year after year, to diversifying Atlantic City's appeal, Don Marrandino and his Harrah's colleagues backed up the talk with meaningful action.

Dead casino walking: Trump Marina

Back at Trump, its CEO, Mark Juliano declares "The real question is how long until we get back to the results we saw in past years, which is the question everyone in every business has." No, the real question is: On what planet is Mr. Juliano living? And: Do they have oxygen up there?

The math is inexorable. Excluding three months of sub-2% growth, Atlantic City's revenues have going one way -- down -- for the last seven quarters, often by double-digit margins. Casinos in Pennsylvania continue to ramp up, Delaware is talking very seriously about casino expansion, slot parlors in Maryland are in train and then there's prospect of additional competition from the greater New York City area.

Instead of asking "Where are the snows of yesteryear," S&G modestly suggests the Boardwalk's casino braintrust ought to be thinking about how to move forward into a future of diminished (i.e., more realistic) expectations.

Up the road, now that the novelty factor has worn off of Sands Bethlehem (above), the $724 million casino remains mired in fifth place. The solution? More and bigger promotions, it would appear. Judging by the lukewarm response to Sands and to Rivers Casino, the Pennsylvania market isn't big enough to support casinos built with Vegas-sized budgets.

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.

Goodman: "We're in the toilet"; "Peepshow" redux

Fri, 02 Oct 2009 15:42:00 -0700

Mayor Oscar Goodman sounds increasingly motivated to run for governor next year. He's angry, which is good: Nevada needs someone who's nettled about our sorry -- pardon the pun -- state of affairs. (I tried umpteen times to embed the KRNV-TV video but had to admit defeat; sorry again!)

As to Goodman's fear that a governor couldn't make a difference, recent history is a poor guide. Both Gov. Jim Gibbons and predecessor Kenny Guinn developed reputations for doing as little as possible to move their legislative agendas through Carson City. The rap on both was that they'd issue their budget and then basically take the phone off the hook. One cannot imagine such passivity from Goodman.

On the issue of why we need an irate candidate, just replace "Somalia" with "Nevada" and this is where we're headed, fast:

We don't have cholera yet but we had a dandy hepatitis outbreak recently. And our assembly-line endoscopy centers will be happy to literally rip you a new one. (Remember, it was Goodman who took action during the hepatitis crisis, while Gibbons dithered. Even the Gibbons-adoring Las Vegas Review-Journal editorial page likened Midnight Jim's crisis response to a kitten trapped in a paper bag.)

Peepshow 3.0: The R-J's Mike Weatherford goes back for the band-less, Aubrey O'Day-augmented version and finds that this addition-by-subtraction thing is working pretty well. He also makes some trenchant points about the dainty approach that has ill-served the show from its inception.

The sins of the father

Fri, 02 Oct 2009 13:06:00 -0700

For all the brouhaha about Mike Ensign funneling 96 grand to his son's mistress and three of her four family members, the smoking gun (in the form of a canceled check) has not surfaced. Until now:

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Things are getting so bad for Ensign fils that even his confessor and gynecologist, Sen. Tom Coburn (R-OK) is pushing him under the bus. But, more importantly, if there's any doubt as to why states like Kansas should not be granting casino licenses to Mike Ensign, now one need only flourish a PDF of the 96-dime check he wrote to the senatorial concubine and her pimp daddy.

The good news is that Ensign Junior is merely a U.S. senator and not -- as he once was -- a middle-tier executive in a major casino firm (with an enabling Dad sitting atop the company). The Senate can withstand negative PR far better than the casino industry.

If Johnny Casino can ride out this latest scandal (and it doesn't seem likely), then the fun really begins. Odds are the Gov. Jim Gibbons would appoint himself to Ensign's seat rather than be ignominiously voted out of office next year. He could just think of it as a long, taxpayer-subsidized vacation.

Berman draws to empty hand

Thu, 24 Sep 2009 15:54:00 -0700

When Lyle Berman leapt into the reopened bidding for Kansas casino licenses, S&G expressed some skepticism. Why? Because Berman's Lakes Entertainment got into the bidding before it had any financing underway. Now Berman is basically saying, "Trust me," to Kansas regulators. Seems that he's been able to round up the moolah to build the casino but not the desired hotel. (Funny how the amentities always get pushed over the side when a would-be casino developer thinks he's got some rurals between a rock and hard place.)

Construction of the hotel is contingent upon Berman's finding of an as-yet-undiscovered joint-venture partner. He also holds out the hope that, maybe, banks will be a little more forthcoming with loans once the casino is open and generating cash flow. The Lottery Gaming Facility Review Board has stated that it's not going into Casino Bid 2.0 with a beggars-can't-be-choosers attitude. Let's see how they read Berman's bluff.

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.

Bad bulletins for Sands & Strickland

Tue, 22 Sep 2009 12:03:00 -0700

Last week, Audit Integrity identified the 20 companies most at risk of bankruptcy (minimum market capitalization: $1 billion) and the lone gambling operator on the list was Las Vegas Sands. On Friday, Business Insider piled on. Pruning Audit Integrity's list of any firms with market cap below $3 billion, that still left nine companies ... and Las Vegas Sands.

Quoth the Insider: "Conditions in Las Vegas are horrible, Asian expansion isn’t enough, and if this lasts too long then LVS will end up in bankruptcy court looking like it bit off more than it can chew."

Marina Bay Sands: a megaresort too far?

No shit. With an unfinished casino-hotel in Pennsylvania and the abortive St(ump) Regis condo on the Strip, Sheldon Adelson has too many fingers in too many pies. Plus, his $5 billion Singapore albatross will get beaten to the starting line by subsequent entrant Genting. And even with a sudden easing of access from mainland China to Macao, it's too soon to be going pedal to the metal on the remainder of the Cotai Strip™, as Adelson would clearly like to do.

(As though to twist the knife in the wound, retail developer Taubman Cos. made a point -- in the course of reiterating its interest in a rival project -- of saying it wasn't in the market for the two shopping malls Adelson is desperately trying to unload.)

Ohio's supreme court delivered a swift kick to the groin of Gov. Ted Strickland (D) -- and to the casino industry's hopes for imminent expansion into Ohio. By a 6-1 vote, the high court ruled that addition of seven racinos needs to go before a vote of the people, throwing as much as a 14-month hitch into the process.

If that weren't enough, Strickland has to cope with the continued meddling of Sen. George Voinovich (R-OH), who seems to believe he still occupies the governor's mansion, too. Governors hate it when the congressional delegation bigfoots them on intra-state affairs. Such a clash led to a permanent rift between fellow Republicans then-Gov. Kenny Guinn and then-Rep. Jim Gibbons.

Strickland, meanwhile, is poring over the court's ruling in search of loopholes that might allow Class II gaming to go on line in December. It's that or cut $852 million from the state budget. If he can insinuate VLTs into horse tracks by May, then voters have a few months to get habituated to them before the 2010 vote.

For Harrah's Entertainment, the good news is that the court's ruling temporarily shaves $47 million off the sale price of Thistledown Park (the full $89 million tab is contingent on racino conversion). For seller Magna Entertainment, the bad news is that the deal may fall through entirely if Harrah's doesn't want to gamble on the outcome of further legal challenges and the tender mercies of the electorate.

Gambling scandal ensares eight more

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

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

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

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

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

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

Can John Ensign disown his dad?

Wed, 16 Sep 2009 13:39:00 -0700

Sen. John Ensign (R-NV) finally has achieved distinction within the Senate -- albeit in a manner of which he's surely never dreamt. Citizens for Ethics & Responsibility in Government* has named Johnny Casino to its Most Corrupt Members of Congress list. It's an elite club in which he'll find six fellow Republicans and eight Democrats.

This calls for an awards-acceptance speech and, like so many before him, Sen. Ensign couldn't have done it without Dad. CREW's citation reprises the role played by recent Kansas casino aspirant Mike Ensign, who once upon a time ruled Mandalay Resort Group: "Sen. Ensign’s parents paid Ms. Hampton and her family $96,000 after they had learned of the affair. Mr. Coggins [the senator's attorney] insisted the payments were not made from campaign or official funds, nor were they related to any campaign or official duties. Rather, he explained, the April 2008 payments were 'gifts made out of concern for the well-being of long-time family friends during a difficult time.' Each of Sen. Ensign’s parents made out four checks in the amount of $12,000 to Cynthia Hampton, her husband and two of their children. [emphasis added] Sen. Ensign’s office claimed the alleged $25,000 severance payment was part of his parents’ $96,000 'gift.'"

So, in case your son doesn't show appropriate gratitude, let me say, thank you, thank you, thank you Mike Ensign for smearing feces all over the casino industry's image at the precise moment that new (and very conservative) jurisdictions are opening to it. And if you're MGM Mirage CEO Jim Murren, you might want to have your accountants vet the old Mandalay corporate books, just to be doubly sure there weren't any "patterns of generosity" back around 2002, when Sen. Ensign is widely believed to have had a prior affair. (The identity of his alleged mistress is no secret around Vegas, by the way.)

For all the senior Ensign's labors in the gaming industry, he's likelier to go into the history books as the bagman and enabler for his son's sexcapades.

Sen. John Ensign believes out-of-wedlock births should be "somewhat stigmatized." But out-of-wedlock sex? His position on that is more "nuanced," shall we say.

(* Yeah, yeah, I know: Ethics + responsibility + guvmint often seems oxymoronic, especially in Nevada, but we're working on it. And the senatorial Twitter feed actually springs from the satirically fecund mind of Andrew Kiraly.)

Speaking of Mike Ensign, what the heck was Kansas Lottery Executive Director Ed Van Petten doing playing the role of media-shy Ensign's personal spokesman? In a literally incredible statement, as paraphrased by The Associated Press, Van Petten said of Ensign and ex-Mandalay sidekick Peter Simon: "they didn't like the fact that the Lottery owns the new gambling under Kansas law — or the 27 percent share of revenues reserved for state and local governments."

Bullshit. Casino ownership by the Lottery has been part of the deal from Day One. As for the tax-rate malarkey, Mandalay Resort Group co-owned the Grand Victoria riverboat in Illinois, which -- in 2003 -- became eligible for a top-tier tax rate of 70%. In Detroit -- again on Ensign's watch -- MotorCity's tax rate went to 24%. In neither instance did Mandalay stalk out of town in a state of high dudgeon.

So the notion of Ensign Sr. falling into a gentlemanly swoon at the prospect of a 27% rate just doesn't wash. Either he and Simon knew this going in and are now prevaricating -- via messenger boy Van Petten -- or they're doofuses who failed to perform due diligence on the Kansas market. Which reputation would they prefer?

The truly inexcusable Van Petten further went on to apologize for his own state's oversight apparatus, saying, "Basically, [Simon and Ensign] just didn't like the regulatory makeup." Well too bad for them. It comes with the territory. What Van Petten should be saying is that if a couple of unemployed ex-Strip casino executives don't like the way Kansas does business, they never ought to have set their Gucci loafers in the Sunflower State to begin with. Or, in the immortal words of Law & Order's Jack McCoy:

"If you're gonna play stickball in Canarsie, learn Brooklyn rules."

Quote of the Day

Wed, 09 Sep 2009 15:26:00 -0700

"I can't personally say whether or not I believe there's any skimming going on, however, a large number of dealers suspect that it is." -- Wynn Las Vegas dealer Daniel Baldonado, to the Las Vegas Tribune, about closed-door reallocation of tokes. Lemme get this straight: Baldonado doesn't know whether he believes tip money is going missing but he does know that other dealers are of that opinion? Puh-leeze!

Of course, by locking the toke committee out of the counting process and only making it belatedly reviewable on videotape, Steve Wynn is leaving himself wide open to such quasi-accusations. The story itself is nothing new: I've been hearing it for years. But, were I a dealer at Wynn LV and my tips were being counted and divvied up by management, I might be suspicious, too.

Good luck for Illinois casinos

Thu, 27 Aug 2009 15:49:00 -0700

Turns out that it's not so easy to shower the Land of Lincoln with 45,000 video poker machines ... especially when no money has been allocated to regulate the process:

Pinnacle meets karma

Thu, 27 Aug 2009 13:30:00 -0700

Plans by Pinnacle Entertainment to move its President riverboat upriver just hit a big snag. Taking the view that the President's license is portable, Pinnacle hoped to use either the vessel itself or the license to jimmy open a new market niche along the Mississippi River.

Seems the Missouri Gaming Commission doesn't hold with Pinnacle's logic. Move the ship, they say, and it's open season on that 13th (and last) license in the Show-Me State. Right now, Pinnacle's keeping the President operational as a charity case -- thereby preserving the license -- but the Coast Guard is likely to shut her down in 10 months, so decrepit is the vessel.

Not that I wish ill for Pinnacle, one of the classier outfits in the industry, but this here is what's called "karma." Both Pinnacle and Ameristar Casinos pushed hard for legislation last year that uncapped the state's loss limits in return for capping the number of licensees. It was an anti-competitive move that was inveighed against in these pages.

Ameristar and Pinnacle tried to lock up what was an open territory. Now, with the President's license skittering about the field like a wet football, Pinnacle's going to find itself having to grapple with the very competitors it thought it had excluded from the game. Which is as it should be.

There can be only one. Two casino proposals from Cordish Gaming and Penn National have been forwarded to the Kansas Lottery Gaming Facility Review Board (Uff da!) for final arbitration, Remember that the last time we went through this, Penn got a whopping zero votes (probably due to a series of peevish public pronouncements), but then Cordish wanted to resubmit its project in smaller form.

This time around, Penn execs have been playing well with others, rather than trying to dictate the process. They're promising a three-phase, $564 million casino-resort (subject to certain economic conditions). Cordish is choosing to under-promise, committing only to a $390 million casino, at least until bluer skies return. Partnership with the Kansas Speedway still gives Cordish an edge (as does the Hard Rock brand) ... but the Kansas-casino process has been long, tortuous and filled with reversals of fortune. (Mike Ensign, anyone?)

Speaking of Kansas ... shoo-in Foxwoods has announced that it's restructuring its debt and enlisting outside assistance, yet another victim of ill-timed expansion. Small wonder Foxwoods and Lakes Entertainment decided to pool their pennies on Chisholm Creek Casino (above) rather than duke it out for the Wichita market.

Compromise is near. Down in Florida, that is. A formula too complicated to summarize here would bring the Seminole Tribe and the Sunshine State's Lege into agreement. (The Seminoles took one look at the compact fashioned by the Lege last spring and spat it out like bad food.) In return for accepting some restrictions on game offerings at some casinos, the Seminoles get a complete exemption from paying taxes to the state -- if private-sector gambling spreads beyond Broward and Miami-Dade counties. And if existing non-tribal casinos get, say, blackjack the Seminoles' obligation to the state is halved.

So tell me, why does Sheldon Adelson seriously think Florida is a potential growth market?

Meet the new Trop boss ...

Wed, 26 Aug 2009 16:29:00 -0700

... largely the same as the old boss. Tropicana Entertainment's diligent efforts to get back into the Tropicana Atlantic City have finally paid off. Thus (nearly) ends a prolonged interregnum during which no clearly superior alternativves emerged. Well ... there was an extended flirtation with Cordish Gaming but butterfingered trustee Justice Gary Stein fumbled that away.

Since Carl Icahn's stealthy buy-up of TropEnt stock extinguished Columbia Sussex CEO William J. Yung III's ownership rights, the era of Attila the Yung has finally ended. Also, getting Stein out and private ownership back in is a transition that can't happen soon enough.

On the downside, Trop property prexy Mark Giannantonio (a Yung appointee) remains at the helm. Also, TropEnt CEO Scott Butera and his lieutenants did an undistinguished job of running the Tropicana Las Vegas before selling it to Onex Corp. They still have a lot to prove in Atlantic City.

Mixed prospects for Foxwoods

Tue, 25 Aug 2009 14:20:00 -0700

First, the good news. Lyle Berman has folded his hand in Kansas. His Lakes Entertainment is scrapping its own casino bid and taking a partnership role in Foxwoods' Wichita-area bid. Apparently Lakes is no closer to finding financing than when it started ... but neither is Foxwoods. Both companies will be digging into their own pockets to pay for the $225 million casino.

With 1,300-1,500 slots and 30 tables, the Foxwoods/Lakes joint venture will be smaller than any of the previous casino proposals for the area. A J.P. Morgan report also implies that hotel facilities and other amenities will be sloughed off onto a third party to be named later. So Foxwoods emerges the de facto winner and Mike Ensign is left to wonder how different things might have been had hadn't bailed out his errant son ... and to come up with incredibly lame excuses for his withdrawal.

Remember Philadelphia? No, there is still no casino in the City of Brotherly Love, even as some outstate facilities are into their second iteration. Having failed to open -- or even build -- its casino within the time period alloted by statute, Foxwoods is going to petition the Pennsylvania Gaming Control Board for an extra two years.

It'd be a surprise if Foxwoods' request isn't granted. True, all Foxwoods has to show for itself is a much-criticized South Philadelphia site plan (which has been aptly likened to a big-box retail outlet) and a couple of possible fallback positions downtown. The way things look now, Foxwoods may be prodded back toward South Philly, though it's no likelier to find a friendly reception there than it's done anywhere else.

The alternative, however, looks far worse. Pennsylvania would have to restart the application process, select a winner and then pray it could open its slot house within the statutory 12 months. Which also means that Philadelphia has to go through site-review Hell all over again ... and casino opponents aren't going to be caught napping this time around. Could a new entrant accomplish more than Foxwoods by September 2011? It's highly improbable, given the rocky history of bringing casinos to Philly.

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.

Colony Capital comedy

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

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

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

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

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

11:59 p.m. for Midnight Jim

Fri, 21 Aug 2009 12:38:00 -0700

• Bad news for Gov. Jim Gibbons: Were he to run against former Attorney General Brian Sandoval (or rather, vice versa) undecideds would have to break 3-to-1 in Midnight Jim's favor for him to win the primary. Dr. Joe Heck and North Las Vegas Mayor Michael Montandon, thanks for playing; maybe you'd prefer to take on Sens. Harry Reid or John Ensign instead.

• Good news for Gibbons: The Mason-Dixon poll used a pitifully small sample (400 respondents), although the resultant margin of error -- 5% -- still doesn't afford Midnight Jim much hope. And even the anemically polling Rory Reid needs only 4% of undecideds to put him across the top vs. Gibbons, if the poll is to be trusted.

• Good news for Republicans: Sandoval would cruise to victory against any Democratic challenger. I've interviewed Sandoval in his gaming-regulator and AG days, and -- other than then-Sen. Richard Bryan -- he's probably the classiest public servant I've dealt with in Nevada (close third: then-Secretary of State Dean Heller). He's got my vote unless perhaps his opponent is ...

• Oscar Goodman. The World's Happiest Mayor will be made more joyful still to see himself trouncing both the spineless Barbara Buckley and the surprisingly unpopular Rory Reid. (The son does not also rise, it seems.) During Hizzoner's recent 70th birthday celebration, the Fremont Street Experience showed a montage of Goodman family photographs (births, weddings, bar mitzvahs, etc.). After the seedy sexual shenanigans of Messrs. Ensign and Gibbons, Oscar looks -- dare I say it? -- downright wholesome.

• Bad news for Goodman. Even he loses to Sandoval in the theoretical general election ... but the generous (6%) margin of error and large number of undecideds hold out a slim Reid, er, reed of hope.

I still say: Run Oscar, run! Goodman vs. Sandoval would be the best choice Nevadans have had in 12 years. Sandoval knows how the levers of power work in Carson City (unlike maladroit Midnight Jim), while a Gov. Goodman wouldn't be afraid to put some elbow grease and forceful rhetoric behind his budget proposals, unlike former Gov. Kenny Guinn. Nevada would be well-served by either of them.

Abraca - OMFG!

Fri, 21 Aug 2009 11:53:00 -0700

Scarlett, Princess of Magic has settled into her new revue, Scarlett and her Seductive Ladies of Magic, which finally gives me a reason to encourage people to visit the Riviera. The video below is taken from Scartlett's family-friendly V Theater show (long since closed) but many of the same tricks are reprised, on a bigger scale -- and with far less clothing. Her instance, the one-piece has devolved into a 'barely there' red bikini. Make sure your pacemaker is in working order.

There's some incredibly perfunctory toplessness from two assistants/dancers but it's Scarlett who brings the sexy -- and how! If this doesn't work out, she'd make a formidable contestant on Dancing with the Stars, too. I'm no great judge of magic but Scarlett is definitely the most hot-cha Strip headliner not named Marie Osmond. In a classy gesture, Scarlett's former presenter, David Saxe, was at the Riv last night amidst the well-wishers.

As for the Riv itself, corner-cutting is omnipresent, sometimes amusingly so. The post-Scarlett cocktail party featured but a lone plate of bruschetta and some cheese cubes. When they were (quickly) gone, they were gone. The Riv is just hanging on by its fingernails, even if it's not fallen off the cliff yet.

Amazed. It looks like an open-ended run is assured for this afternoon comedy show, highlighted by guitar-playing impressionist Mark Rayburn. (After you've seen him, you'll never take Gordie Brown seriously again.) Tickets are just a wee bit steep for a 2:30 p.m. show, but this is a winner, much better than certain comedy shows which I've seen and/or reviewed recently. I can't recommend it too highly. My more extended impressions of Amazed and Scartlett are due for publication in the near future.

Buffet bulletin. No word yet on whether MGM Grand, Luxor, Excalibur or Stratosphere are reining in their all-day buffet specials. Ben Bernanke's confidence notwithstanding, optimism in Vegas should be tempered with caution ... and price increases probably should not even be contemplated until those downward-trending visitation numbers start heading up for a change. One needn't be an economist to see that Nevada's recovery, when it happens, will be slow in coming.

The juice behind the juice. Could the speedy restoration of Privé's liquor license, following some cosmetic changes in management, have had another motive? Like maybe a precipitate dropoff in Planet Hollywood foot traffic? Xania Woodman reports, you decide.

Goliath gets a clean bill of health.

Goliath adopted? There's a glimmer of hope that little Goliath may soon find a new home. Why then am I so melancholy?

Can't imagine why

Thu, 20 Aug 2009 13:30:00 -0700

From the dispatch box of J.P. Morgan:

"Yesterday, the Wichita Eagle reported that South Central Gaming Partners (or Prairie Sky, which consists of former executives of Mandalay Resort Group [read: Mike Ensign, whose son's sex-payola scandal gives new meaning to the phrase "pay for play"]) would no longer partner with Chisholm Creek Casino Resorts (Foxwoods Development Company) for a casino in Sumner County (South Central Gaming Zone). The article noted that Foxwoods Development Company President Gary Armentrout indicated that he did not know why Prairie Sky withdrew and also stated that Foxwoods would go forward without Prairie Sky."

Two words, Gary: "background investigation."

Privé: behind the juice; Chucky vs. Jaws; Wynn pages Scalia

Wed, 19 Aug 2009 12:46:00 -0700

Had the Nevada Gaming Control Board not come down upon Planet Hollywood like a hod of bricks, it's entirely probable that Privé would still be up to its scofflaw antics. That's because Clark County has a long history of looking the other way or, at most, administering the occasional love-tap on the wrist. But when Gaming Control lays down a half-million-buck fine, it's kind of hard for Clark County Manager Virginia Valentine's crew to keep their heads in the sand, pretending to be invisible.

Hence the revocation of Privé's license, quickly restored once the Titanic deck chairs were rearranged and the vessel rechristened the Lusitania. I feel much better now, don't you? (It should be noted that there's a sizeable constituency in Las Vegas that thinks the county and NGCB should turn a blind eye and laissesz les bon temps roulez. Hey, why don't we bring back bribery, too? If those officials are going to be ignoring the laws they're charged with enforcing, shouldn't they be compensated for it?)

Kudos to the ever-clever management of Cannery Casino Resorts. They've struck a deal with ESPN to allow simulcast of Monday Night Football on Galaxy Theaters' giant DMAX screen at the original Cannery. The festivities begin on Sept. 14 with a Bills/Patriots and Chargers/Raiders doubleheader. (OK, the nightcap sounds like a real dog, but MNF doesn't get the pick of the litter since moving to cable.)

A 60-foot-tall Terrell Owens? Scary! More worrisome still: Will egomaniac Jon Gruden hog the mike this season, elbowing aside co-analyst Ron Jaworski? Nobody breaks down a play like "Jaws" but will "Chucky" let him get a word in edgewise?

Steve Wynn must be getting a little apprehensive about how Labor Commissioner Michael Tanchek's long-running hearings on tip confiscation will play out. Wynn's benched the able Gregory Kamer, as well as Wynn Resorts' in-house counsel, in favor of Beltway attorney Eugene Scalia. And, yes, his dad is that Scalia. (Does anybody else think the Bush administration passed over Scalia Sr. for Chief Justice in favor of John Roberts because he -- unlike Roberts -- was too contentious to forge majority rulings? Just me? OK.)

Wait Until Dark (@ CSN) obtains tepid praise from the R-J. I saw it last Friday. What's my verdict? Tune in tomorrow!

There's only one Native American currently serving on the federal bench. Might Nevada make it two? Vito de la Cruz, S&G hopes you receive due consideration.

Economic parable: Once upon a time there were two thrift stores in my neighborhood. One, run by Catholic Charities, sold good merchandise. The other, Goodwill, peddled garbage. Guess which one went out of business? It's like the nonprofit version of the Walmart saga.

Juice job at Privé

Tue, 18 Aug 2009 18:45:00 -0700

After three weeks of hand-wringing about the closure of Privé and What It All Means, it's back to business as usual in the Las Vegas nightclub scene. In a remarkably prescient analysis of the Privé scandal, reporter (and former nightclub insider) Xania Woodman laid out how it would go down -- as indeed it did.

Basically, it works out as follows: Designate a couple of fall guys, play musical chairs with the myriad ownership entities, hire a lawyer who's swimming in "juice," make a few concessions and -- voila! -- Opium Group, which bears ultimate responsibility for the scandal, is right back in the drivers' seat.

If there's a silver lining, it's that Planet Hollywood -- whose own request to take over Privé was backhanded by Clark County -- isn't left with a defaulted tenant and unpaid bills. That consolation doesn't come cheap. Planet Ho's already out 500 large for allowing Privé to run amuck and it'll have to pony up another 250 grand if it happens again. I've said it elsewhere and I'll say it here: Until somebody's license gets pulled permanently, few in town are likely to clean up their act.

Hey, Greenspun Media! Since when does the birthday party of one of your own reporters merit being pimped on the front page (down, down toward the bottom) of the Las Vegas Sun's Web site? Maybe the Pulitzer committee should rethink that lovely prize they recently bestowed upon you.

Mike Ensign's downfall

Tue, 18 Aug 2009 17:42:00 -0700

It's all over for Mike Ensign. The former COO of Circus Circus Enterprises has seen his Prairie Sky casino consortium drop-kicked from consideration for a Kansas casino. That's right; a Lakes Entertainment bid that is hedging its bets by vacillating between two sites and entered the running without having financing in hand is moving on to the semi-final round. (So is Foxwoods Development.) And Ensign? He gets a seat in the bleachers.

True, Kansas Lottery Executive Director Ed Van Petten said Ensign Sr.'s payment of 96 dimes' worth of hush money to his son's mistress "not an issue to us at all." He added, inaccurately, "There hasn't been any allegation of wrongdoing at all." So Van Petten either doesn't read the papers or ... say, did I ever tell you about this great bridge in Brooklyn I'm selling? No money down, adjustable-rate mortgage, the whole nine yards.

Even if Van Petten's on the level, the Kansas Racing & Gaming Commission had promised "a full background investigation" of the winner. (Translation: "We're going to be crawling up your sphincter.") So even if the Prairie Sky project had surmounted the next two hurdles, Mike Ensign would have eventually had to explain his generous subsidy of Sen. John Ensign's bedroom adventures.

It's going to be tough for Dad to spin this one. Either he lost out on merit to a comparative small-timer like Lyle Berman or his enabling of Johnny Casino's hide-the-salami antics got him kicked to the curb. Which is the less humiliating narrative?

When the chattering classes began predicting l'affaire Hampton would be the end of an Ensign's career, I'll wager they had a different Ensign in mind. Oh, and thanks for dragging the industry into the mud with you, sir. Let's hope there are no more $96,000 shoes still to fall.

Get 'em while they're young

Thu, 06 Aug 2009 15:04:00 -0700

One of the Atlantic City Hilton's most valued players was a 19-year-old from Brooklyn. This baby whale was sufficiently lucrative to the Colony C(r)apital property that he received a comped stay and qualified as a "rated player."

Better still, A.C. Hilton execs allowed him to keep playing even after they'd been tipped off to his juniority. Nice work! Step right up, Colony, and collect your reward -- a $115K fine from the New Jersey Casino Control Commission. Apparently the Hilton simply took the youngster's word that he was old enough to gamble before handing him the keys to kingdom.

Colony may be able to buy casinos but it sure as shooting can't run 'em. Frank Fertitta III may not have been the best monarch of Station Casinos but, compared to majority owners Colony, it's another case where the one-eyed man is king in the land of the blind.

One sings, the other doesn't (quite): Not only is Ali Spuck's new Liberace Museum show a real value proposition at $15/ticket but, hot damn, she's Spucktastic. As for Charo in Concert: A Musical Sensation, at the Riviera, it's something for everyone but not that much for anyone. Although Charo "goes to 11" on the Camp-o-Meter, gay audiences (and Baby Boomers, too) seem likelier to flock to Spuck.

Bleary blogger: My apologies for the disappointing blogorrhea of late. I've been immersed in a crash course on the crash-and-burn of Russia's casino industry (R.I.P.). Throw in some computer troubles and I'd conservatively estimate I'm three days behind the rest of the gaming world.

The sins of the son ...

Tue, 04 Aug 2009 15:54:00 -0700

... are visited upon the father, it would seem. The Sen. John Ensign sex-and-payola scandal becomes more incestuous and nepotistic by the day, and even the Las Vegas Review-Journal has slowly realized that this is not A Good Thing for the new-casino ambitions of former Mandalay Resort Group chair Mike Ensign.

By buying the silence of ... I mean, continuing a "pattern of generosity" to senatorial mistress Cynthia Hampton and her money-grubbing husband, Ensign Senior gambled with his reputation. It was a bad bet, a busted hand that's already making casino proponents uneasy and playing right into the hands of the anti-gambling crowd.

Quite simply, the State of Kansas has to decide whether it wants to entrust one of four casino licenses to a man who's been caught paying hush money. Is that indicative of how he'll do business as a casino owner? Ditto the convoluted structuring of the payola so that it would fly below IRS radar. Or do you cross your fingers and hope that, as boss of Prairie Sky, Mike Ensign doesn't sail too close to the wind?

As for Johnny Casino's political sidekick, Mike Slanker, he probably thought hitching a ride to Washington on holier-than-everyone Sen. Ensign's coattails would be a ticket to national prominence. He just never figured this is how he'd become famous:

What many thought/hoped would be a 48-hour story has become nearly a two-month extended engagement that shows no signs of ending soon. Neither is there any telling how much farther down Mike Ensign will be dragged by his son's skirt chasing but for the sake of his reputation and that of the casino industry, this would be a good moment for him to quietly re-retire from the fray.

Back here in Nevada, where the Ensigns are still awash in "juice," regulators could probably be persuaded to take a forgiving view. But Toto, we're not in Nevada anymore.

Douchebags on parade

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

With a crowd like this ...

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

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

Harrah's little oopsie

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

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

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

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

From the mind of Madison ...

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

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

'Show Me' no stinkin' IDs

Mon, 27 Jul 2009 18:46:00 -0700

"We don't want them in there," huffs Ameristar Casinos' Troy Stremming (left) with regard to pathological gamblers. Stremming's high dudgeon rings a mite hollow now that the Missouri ballot initiative he crafted and shepherded to victory last fall is providing a free pass for problem gamblers. Once boarding requirements were repealed, away went the mechanism for screening self-banned gamblers. Whoops.

It's not like they still can't be caught on-property, though. Woe betide the player who hits a sufficiently big jackpot for his slot machine to go into "IRS lockdown." His identity has to be verified -- which means he can kiss those winnings goodbye and prepare to be handcuffed. To quote Geena Davis in Thelma & Louise, "The law is some tricky shit."

But Missouri's got nothing on Illinois, where casino employees double as "bounty hunters." If you're a self-banned player who's shooting dice at Alton Belle or Casino Queen, there's literally a price on your head.

Packer steps in it again

Fri, 24 Jul 2009 12:02:00 -0700

After frequent demurrals, the Victoria government has 'fessed up that it was on the receiving end of ham-fisted lobbying by Crown Casino owner James Packer. A delicate quid pro quo (higher taxes in return for more table games) was being negotiated. But, not wanting to leave anything to chance, Packer personally besieged both Victoria's premier and treasurer in re Crown.

The state comes out of this looking worse than Packer, though, as witnessed by this weaselly attempt at damage control: "The Government is adamant that any expansion of Crown's gaming tables was under discussion for a long time and that poker was a less addictive form of gambling than poker machines." [Emphasis added] So I guess that makes it all copacetic, right?

Lawrence Ho & James Packer: less to smile about these days

Hammered in Macao. Packer's new City of Dreams is getting stomped by nearby Venetian Macao. VIP baccarat play for Melco Crown Entertainment properties was off 19% -- which is even worse than its sounds when you count on it for 60% of your total gambling revenues. Mass-market baccarat play was 12% up, so there's some consolidation. (Meanwhile, in some parallel universe, the Wall Street Journal is nattering on about a "brighter outlook" for Macao, even as revenue continues to decline and City of Dreams flops. Visitation was -16% in June and the Mainland China subset of that was -22%.)

A good thing for Sheldon Adelson that Venetian Macao's play is so strong. Bloomberg News reports that 85% of Las Vegas Sands' Macanese revenue is casino-derived ... which ought to raise serious questions about Adelson's hotel-, retail- and convention-premised Cotai Strip™ business model.

Double-whammy for Planet Ho

Thu, 23 Jul 2009 18:36:00 -0700

True, Planet Hollywood is feeling some pain in the wallet after the Nevada Gaming Commission approved a $500,000 fine. But it's Clark County Department of Business License which fired the shot across the bow that will really get the casino industry's attention. By scotching the liquor licenses of both Planet Ho's Privé and Living Room clubs, it signed their death warrant. That, more than anything, ought to get scofflaw club owners and laissez-faire casino owners to clean up their act.

It's hardly an excessive move when you consider that the bill of particulars against Planet Ho's clubs included "drug use, prostitution, underage drinking and assault." Besides, if you want those things, perhaps you should patronize one of Las Vegas' many "gentlemen's clubs." Nevada regulators' concern about on-Strip prostitution is laudable, if tardy. When it was rampant at the Tropicana, gaming's policemen snoozed at their posts, otherwise known as "monitoring the situation."

If the message still hasn't sunk in, the Nevada Gaming Control Board's Randall Sayre sent out an "invitation" for casino executives and middle management to discuss a wide range of potential concerns. Gov. Jim Gibbons appointed Sayre to the NGCB with a mandate to beef up its law-enforcement role and Sayre's made good on it. (Even Midnight Jim has his moments of perspicacity.) It's good to see the spirit of Bobby Siller living on in Carson City.

"Damn those customers!" What do you do when business takes a not-unpredictable nosedive during a recession? Blame the customers, of course. At least, if you're Golden Nugget owner Tilman Fertitta, that's what you do. When times were good, Fertitta was bullish on gaming (which was essentially propping up his Landry's Restaurants empire).

Oh, what transformation a few bad quarters brings! Moans the Texas tycoon, “I feel very good about restaurant hospitality, I do not feel very good about gaming.” Hmmm, maybe you should have pondered that change of heart when you were proceeding with a new $150 million hotel tower (opening ~~Aug. 1~~ Nov. 20) in the teeth of an economic tailspin?

As for the patrons, "discounted room rates appear to have attracted a clientele who are spending less on gaming and other amenities," harrumphs a company document. Yes, because in case you haven't noticed, we're on the verge of a depression. People have less money to spend. Period. Like many others like him, Fertitta needs to get hip to the fact that we're entering a period of diminished expectations. Shaking your fist at the rain isn't going to accomplish anything.

Other Fertitta scapegoats include MGM Mirage, for having the audacity to discount its rooms during the downturn. Sounding rather whiny, Fertitta utters, “You ought to go online and look at some of these rates and packages you can get. That is where we are just being murdered, trying to be competitive with the MGM and the Bellagio.”

Welcome to the NFL, man. And if you think -- with all due respect to the downtown Nugget -- that you're in the running against Bellagio or even the Green Monster, well, you're in a world of denial. I've not had time to read the last Landry's quarterly filing but, for once, it sounds like a real page-turner.

Station wins one, albeit on a technicality. All parties involved will be back for a grudge match in local court.

Facts are stubborn things

Mon, 20 Jul 2009 17:14:00 -0700

A big thumbs-up to a casino company in Central City, Colo., for making its case to players not with vague claims but quantifiable facts. Famous Bonanza & Easy Street Casinos shared with its patrons Colorado Division of Gaming Statistics data that showed its dollar- and penny-slot holds were 3% and 7.3%, respectively.

The averages for Black Hawk, Colo., casinos in those denoms are 5.27% and 9.8%. Famous Bonanza is comfortably below the Central City averages of 3.8% and 9.5%, too. Anybody in Vegas or Atlantic City want to try this marketing gambit? It sounds like a winner to us. (Thank you to Raving Consulting for spreading the news about this splendid idea.)

Without referencing it directly CityLife Editor Steve Sebelius makes it clear why Mike Ensign's $96,000 hush-money payment to Doug Hampton and his two-timing wife could write finis to any further aspirations the elder Ensign has in the casino industry. Just try explaining this mess to the Kansas Lottery's casino commission and making it sound like a mere bagatelle.

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

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

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

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

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

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

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

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

From distinction to disgrace

Fri, 17 Jul 2009 15:33:00 -0700

Even as CEO of Mandalay Resort Group (before it was subsumed into MGM Mirage), Mike Ensign kept well out of the limelight, content to let sublatern Glenn Schaeffer be the company's face. Now, as he contemplates a return to the casino business with a $235 million Kansas project, "Big Mike" Ensign may no longer have the prerogative of obscurity. In fact, his subsidizing of his stepson's tawdry sex-and-cronyism scandal could be the act for which the co-architect of Mandalay Resort Group is ultimately remembered.

The elder Ensign has always been there to support the man Jon Ralston has dubbed "Little Lord Fauntleroy," even installing him in key positions at then-Circus Circus properties like Nevada Landing. Industry crticic Sally Denton, writing in The Daily Beast, voices a hithero-unasked question about Sen. John Ensign's larger political aspirations.

Namely, "Johnny Casino" has made a career of shamelessly pandering to the religious right, which abhors gambling. Yet he (literally) made his fortune in the gaming industry. If push had come to shove and were the White House still in his sights, who would have gone under the bus? Casino baron Mike Ensign or his stepson's Goody Two-Shoes constituency?

S&G couldn't find a picture of Mike Ensign, so you'll have to make do with his "rigidly coiffed" stepson.

A Kansas casino license seemingly within his grasp, Ensign Sr. will now have to answer questions about the 96 dimes he lavished upon Ensign's mistress and her morally flexible husband. (Note to Papa Ensign's lawyer: If you have to assert that it's not "hush money," it's hush money.)

The cherry atop this sundae of seaminess is that the Ensigns structured the 96 grand payoff in multiple increments in order to circumvent having to pay taxes. Oh, and the acceptance of the Mike Ensign largesse by money-grubbing cuckold Doug Hampton went unreported and is currently unsubstantiated. So are we talking "on the up and up" or "under the table"?

When Mike Ensign has to make his case to Kansas officialdom as to why he ought to be entrusted with one of the Sunflower State's precious few casino licenses, he's gonna have some 'splainin' to do. The rest of us can thank our lucky stars that the former CEO was out of the industry at the time of this sordid imbroglio. Had corporate money found its way into the Hamptons' Love Nest Chest the collateral damage to the casino industry as a whole would be incalculable.

Guess we dodged a bullet there. But as for Mike Ensign, thanks for nothing, sir.

Case Bets: F'bleau, Adelson, Oscar

Fri, 17 Jul 2009 14:03:00 -0700

Whether it's the banks or the subcontractors, somebody's going to take a big screwing at Fontainebleau. That's the nub of a new lawsuit, whereby developer Jeffrey Soffer asserts that Turnberry West Construction (which he also owns) has superior repayment rights to those of the project's backers.

I believe this is called, "One hand washes the other." However, the legal issues involved make fascinating reading. Some new-to-Vegas casino developers have screwed the pooch and eventually come out smelling like roses (Sheldon Adelson, for one). I don't Soffer's going to make into that elite club. And you can forget about Big Bleau opening before July 1, 2010, at the very least.

Speaking of Sheldon ... results at his new Sands Bethlehem continue to disappoint. Adelson's tradition of half-assing his casino openings, dribbling the product onto the market, may finally be catching up with him. Marina Bay Sands should be the acid test of this managerial style. (Personally, I believe it's going to be Adelson's Waterloo, at least to the extent that the casino is expected to drive everything else.)

Sands Macao: Sheldon's best bet

Ironically, it was the comparatively "quick and dirty" Sands Macao, built for considerably less than any other Adelson casino, that has been his biggest hit. The cost-to-date of Sands Bethlehem, by the way, has been revised downward to $675 million (from $743 million), which ought to help the ROI numbers. However, early predictions that Sands Bethelehem was going to siphon business from the Philadelphia area were clearly unrealistic and should have been reported with greater skepticism.

Berzon: caped crusader

Truth, justice and the American way have one less champion in the Las Vegas area now that Pulitzer Prize-winning Alexandra Berzon has been hired by the Wall Street Journal. Good for Berzon, better still for the WSJ. But who will keep a gimlet eye on OSHA enforcement and the CityCenter clusterfuck now? (And she was moving into gaming coverage, too ... the prospect of a Berzon/Liz Benston/Rick Velotta trifecta would have dwarfed all other casino reportage in this burg.) With the loss of Berzon and editor Drex Heikes, the Las Vegas Sun is suddenly in a world of hurt.

Oscar gets whacked. Somebody's fantasy, anyway. (Were there any thumbless graffiti taggers in the house? Homeless advocates? Civil libertarians?) Hizzoner was the celeb-victim at the reopening of Marriage Can Be Murder in its new digs at Fitzgeralds. MCBM recently left the Four Queens and a good move it was, seeing as the 4Q is at risk of being evicted. Movie veteran Goodman (Casino) evidently forgot whatever he learned from The Master (aka Martin Scorcese) and didn't hit his "mark."

As for MCBM, a dinner-theatre show, I can't say it compared favorably with the ones we did at Grinnell Community Theater. I was the "juvenile lead" in several shows there and humbly submit that our gung-ho amateur troupe could have done better. Hey, we "killed" with Ten Nights in a Barroom. That thing could have run for six months, easily.

Case Bets: Midnight Jim, Sands, "Peepshow", Hard Rock, Reid

Thu, 16 Jul 2009 12:50:00 -0700

Chronic ineptitude by Nevada's governor is endless fodder for comedy (like entrusting your re-election campaign to the former marketing director of a ski resort and political novice.)

But it also has perilous consequences. For instance, his thoughtless decision to pack the Nevada Gaming Commission with lawyers now threatens to hamstring the board. Jane Ann Morrison details how new Commissioner Joe Brown had to abstain from 24% of last month's votes. Seems he had conflict-of-interest issues with a couple of miniscule slot houses called Station Casinos and Harrah's Entertainment. Whoops. Brown's is the most egregious problem but it's hardly the only one.

Most of Jim Gibbons' appointments to the NGC and the Nevada Gaming Control Board have been solid but this was a real boner and somebody up in Carson City should have seen it coming.

Midnight Jim discovers Facebook. He also learns the need to think before you "friend." He sure won't be getting Bill Raggio's vote next year.

Rescue may be at hand for the beautiful and historic Boulder Dam Hotel, thanks to a mysterious benefactor. As for recent arrival Shear Madness, not so much. I hear that the "interactive" show may not have been interactive enough to ride the Vegas wave of Marriage Can Be Murder and Tony 'n Tina's Wedding.

In case you missed it ... Apparently eager to stanch the flow of exiting executives, Las Vegas Sands has given Rob Golstein a promotion to senior VP. The new title comes with a $535,000 raise. For those of you keeping score at home, that's $2,758 for each of the 194 workers Sands just pink-slipped.

Bean out, O'Day in: The producers of Peepshow are, more than anything else, great at generating publicity. It's official that Shoshana Bean will be supplanted in late summer by Playboy cover girl Aubrey O'Day. It sounds as though Bean was plugged into the cast on very short notice (with seven days or fewer of rehearsal), lending credence to the reports that Mel B.'s disappearing act came as an unpleasant surprise to the erstwhile Scary Spice. At present, Bean is the best thing Peepshow has going. How unfortunate it was but a brief fling. Shoshana, we barely knew ya.

Rushing in where angels fear to tread, Morgans Hotel Group will open 490 more Hard Rock Hotel rooms on July 27, well ahead of schedule. The timing seems odd but Morgans and financier/hostage DLJ Merchant Partners have to make their rash of expansions at the HRH start turning a buck.

Reid safe at home. The window of opportunity for unseating Sen. Harry Reid (D-NV) is closing fast. Thanks to Reid's support of assault weapons, the National Rifle Association has got his back. Avowed challenged Sharron Angle is woefully short of cash, while GOP dream candidate Rep. Dean Heller has even less financial traction. If Reid's unpopularity with the home crowd makes him a low-hanging piñata, the GOP just keeps flailing at empty air.

It's lonely in the bunker; Luxor gets its groove on

Wed, 15 Jul 2009 17:35:00 -0700

Two resignations made the news today. First, the publicist for Criss F. Angel took a hike. Given the choice between the much-reviled Angel and unlikely rising star (and reportedly much, much nicer person) Holly Madison, Fantasy flack John Flynn left the sinking Angel ship.

With Guy Laliberté literally fleeing to outer space, defenders of Angel and his Believe debacle are growing fewer and fewer. (Hey, Cirque du Soleil, keep the title and redo the show as a Cher tribute. It can only be an improvement.)

"Would the last person to leave my office please turn out the lights?"

In an unrelated but symbolically parallel development, yet another high-ranking staffer has joined the exodus from the office of Gov. Jim Gibbons. Departing exec Mindy Elliott managed to drag Midnight Jim into yet another scandal when she persuaded the Gibber to exert influence on behalf of Boyd Gaming in a dispute with state OSHA. Unfortunately, the state's burgeoning jobless population will now have to deal with Elliott in her new role as head of the Dept. of Employment, Training & Rehabilitation. Is this a case of "failing upward"? "Sideways"?

Luxor? Sexy?!? It seems that the answer is, "Yes," judging by this creative marketing ploy: "Singles in Sin City." People come to Vegas to hook up, however briefly, so why not A) organize a promotion around it and B) class things up a bit? The four packages are, in ascending order of sexytime, "Get a Room," "Get Lucky," "PDA" and "The Player."

Well, it sure beats "First Base," "Second Base," etc., no? (If the funky vocal stylings of Robin Thicke don't make you want to get busy, nothing will.) And with the Strip currently floundering in disgrace -- and deservedly so -- Luxor's promotion is high heavens above, for instance, the cattle call that is Rehab at the Hard Rock Hotel. When they (foolishly, IMO) bought the place, Morgans Hotel Group claimed they were going to go upscale. Instead, by all accounts, they dove headfirst into the deep end of the cesspool.

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%).

Rough trade

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

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

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

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

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

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

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

It's Wynn + Laughlin

Wed, 08 Jul 2009 08:19:00 -0700

Despite rumors that it would be a no-show at Labor Commissioner Michael Tanchek's three-day hearing on Nevada's tip-pooling law, the company sent outside attorney Gregory Kamer for the first day of testimony. The Las Vegas Review-Journal reports that the witness list includes "Nevada Resort Association Chairman John Hinchliffe, and Steve Willett, assistant games manager at Don Laughlin's Riverside Resort in Laughlin," along with two other pro-Wynn witnesses.

So it's not to be eminence grise Don Laughlin himself but a relatively minor emissary. Due to Laughlin's late and shadowy emergence in thie hearing process, I didn't get a chance to find out why a tip-redistribution system that predates the 1971 law by five years has probative value. Meanwhile, an amicus curae brief written by the law's co-author (ex-state Sen. Donald Mello) has been deemed irrelevant by Tanchek. And, if Tanchek leans heavily on the Laughlin precedent rather than the law per se in his eventual ruling, does he reopen the door to litigation? In that case, the not-so-merry-go-round will just keep a-spinnin'.

Trop and tribulation

Wed, 08 Jul 2009 07:47:00 -0700

A pair of New Jersey lawmakers are hopping mad about the costly, dubiously competent Tropicana Atlantic City trusteeship of Justice Gary Stein. The solons are particularly het up over the way Stein was feathering his own nest.

"It is unacceptable, but not surprising, that this transaction would drag on for almost two years, yielding a cut-rate price for the sale and ballooning legal fees for the law firm of the state-appointed conservator," fumed Assemblyman Vince Polistina (R). He and colleague John Amodeo (R) will seek to impose new ethics rules and fee ceilings on future casino conservators. Good on them.

Divergent responses from within the New Jersey Casino Control Commission make interesting reading. The NJCCC's spokesman circles the wagons around Stein while Chairwoman Linda Kassekert -- clearly hip to which way the wind is blowing -- lines up with Amodeo and Polistina. She put Stein in the catbird seat but clearly has scant compunction about cutting him loose now that he's a millstone around her neck.

Laughlin to rescue Wynn?

Mon, 06 Jul 2009 17:02:00 -0700

I've just returned from the Grant Sawyer Building, one of many seats of guvmint in Nevada. (Judging from some the makeshift signage in the building, money is super-tight these days.) While I was down there, a couple of people told me the strangest thing.

Seems Wynn Resorts isn't going to send any representatives to a series of hearings convened this week by Labor Commissioner Michael Tanchek ... or so the story goes. Since the hearings are for the purpose of interpreting Nevada law on tip-pooling and distribution, you'd think Steve Wynn would have a vested interest. But supposedly he's sending Don Laughlin, owner of the Riverside Resort to speak on Wynn Resorts' behalf.

That'd be strange but not crazy. Laughlin's been doing the same thing as Wynn (cutting management in on tips) for decades. So even with the firepower at his disposal, Wynn Las Vegas President Andrew Pascal, General Counsel Kevin Tourek, etc., Wynn would be effectively ceding the letter-of-the-law argument. By using Laughlin as a stalking horse, his case would boil down to: "It's OK for us to control the tips because, look, here's Don Laughlin and he's been doing it for ages. Tell 'em, Don."

There's no hope of confirming this from the Wynn side of the fence. They all figuratively dove under the table when CityLife came calling last week. I'm waiting to hear from Laughlin himself, who can clarify this bizarre potential turn of events. If true, it'd be a sad day for the Most Powerful Man in Nevada when he has to have a rural casino owner do his heavy lifting for him.

House of wax

Fri, 03 Jul 2009 13:05:00 -0700

I call your bluff, comrade. As you may have heard, casinos in Russia can stay open by converting to poker rooms. A tip of the fedora goes to reader mike_ch for pointing out this story, which delineates some of the pros and cons. In Vegas, even the strongest poker rooms don't generate nearly the body count that table games and slots do. But Russian casinos are much smaller and at least a few might be able to hang on, depending on the size of the rake.

It's mighty big of the Kremlin, by the way, to concede that poker is a sport, not a game of chance. Now if only Uncle Sam would do the same ...

Rescue the Riv! Random observation from driving down Las Vegas Boulevard last night: The Riviera suddenly looks so much better and more classic when juxtaposed with the incredible bulk that is Fontainebleau. Land values have fallen, RIV stock is worthless and the property itself provides ready access to the Las Vegas Convention Center.

Time, methinks, for Penn National to get off its duff and make an offer ... unless Penn CEO Peter Carlino is waiting for the Riviera to go into bankruptcy, so he can pluck the carcass at auction. Then again, if Carlino really thinks that Planet Hollywood and some or all of Station Casinos are low-hanging fruit, who am I to second-guess him?

Who's the dummy? The purpose of our excursion was to attend an incredibly pointless media event at Madame Tussauds at The Venetian. If there was a point, it was so that the assembled media hordes would serve as extras for yet another episode of Kathy Griffin: My Life on the D List. A waxwork of Ms. Griffin was being unveiled and suffice it to say that Wax!Griffin looks far better than Real!Griffin. (I must be Officially Jaded, for I scarcely gave the comedienne a second glance.) The various and sundry female impersonators on hand -- led by Frank Marino -- had clearly taken greater care of their appearances than Griffin had of hers. There was, in fact, just about every stripe of LGBT humanity on hand last night, so it was almost more Rainbow Coalition than media event.

What excitement there was went on outside, where a smallish crowd surrounded the Michael Jackson statue. Tributes were in evidence but everything was tasteful and no hysteria was to be seen. As for Mme. Tussauds itself, I've been to the original one in London, and I recall its wax figures as being more believable and the setting itself as more atmospheric (especially the tableaux of infamous British homicides and regicides) ... but that was 35 years ago this month.

Give Vegas Tussauds props for having a Joan Rivers dummy who looks more animated than her real-life counterpart, as seen on the NBC sitcom Celebrity Apprentice. All that's missing is to give the waxwork Rivers a voice box that periodically squawks, "A pokuh playah! A pokuh playah!" Still, we easily spent more time checking out the doodads and gizmos in Brookstone than we did in the wax museum.

Big Brother 1, Casinos 0: Round 2

Thu, 02 Jul 2009 14:47:00 -0700

Journalists are working gambling metaphors overtime as they chronicle Vladimir Putin's casino crackdown. Although my previous CNN link dead-ended (pun unintended) are yet more Michael Jackson necroph ... er, coverage, that proved a blessing in disguise. The best and most comprehensive short-form report on the situation in Russia comes from ...

... Al-Jazeera, believe it or not. If you've got a half-hour to spare, Russia Today goes in-depth on the situation. (Ian Sutton has been aggregating links with remarkable thoroughness over GamingFloor.com, if you want even more coverage of Boss Putin's power play.)

For an insight into the paternalistic mentality that led to the Putin Putsch, you can't do better than this:

Not that Americans can afford the luxury of smugness. Consider this Philadelphia TV station's condescending report on Atlantic City, with its snide, disparaging, cliché-ridden attitude toward both gambling and the players themselves:

Stormy weather

Wed, 01 Jul 2009 12:40:00 -0700

It may be monsoon season in Las Vegas but there's a typhoon blowing through Macao's casino economy. A series of bulletins from J.P. Morgan outline a worrisome trajectory for China's gambling enclave.

City of Dreams: a flop

June 23: The South China Morning Post reports service cutbacks in Macanese air traffic during January-March. Low-cost carrier Air Asia held steady, but China Eastern Airline scrapped all flights, Xiamen Airline slashed service by 59%, followed by Malaysia Airlines (-38%). Single-digit declines were noted at Air Macau (-9%) and Viva Macau (-4%). Although recently de-licensed carrier East Star had been shedding flights (-40%), competitors did not appear to be moving to fill the void.

June 24: Macao's Special Administrative Region Statistics & Census Service reports a 20% visitation decline in May, to 1.6 million tourists. Of those, fewer than half were from the mainland (-27%) and 55% were day-trippers. Only 13% are coming from outside Hong Kong, Taiwan or the mainland.

July 1: News agency Lusa has preliminary revenue numbers for June (the first month for City of Dreams) and the comparisons, by Macao standards, are terrible: -17%, for $1.05 billion. So far, the casinos are tracking ahead of the government's revenue projections -- which were pretty dire ($892K/month) already.

There's a silver lining for Sheldon Adelson, whose Sands Macao and Venetian Macao rebounded, running Stanley Ho's myriad casinos a close second in market share, 26% to 30%. Wynn Macau fell toward the pack, which was as follows: Wynn 14% (a humiliating setback; it had been only three points behind Las Vegas Sands in May), Galaxy 12%, Melco Crown International down a point to 9%, and MGM Mirage bringing up the rear, as always, with 8%.

Sands Macao: Adelson's best-ever investment

Buoyed by Sands' Macao numbers, Morgan analysts are bullish on Adelson, mainly because of "reasonable near-term and achievable expectations for its LV Strip properties and our belief that its LV properties are outperforming its peers." Just when you think Sheldon's painted himself into a corner, he seems to find a means of escape ... which may be why some of us were less skeptical of the financial hurdles facing Sands Bethlehem and the Cotai Strip™ than we should have been.

There seems to be a school of belief that if one keeps saying that visa restrictions from mainland China to Macao are about to be relaxed, it will miraculously happen. Not if Peking muckety-mucks keep seeing headlines like this. More to the point, bailout money that was intended to induce Chinese banks into writing more loans, thereby stimulating production, is flowing to the casino tables instead. That's a scenario highly reminiscent of the circumstances that led Peking to crack down on Macanese traffic several times already.

Big Brother 1, Casinos 0

Tue, 30 Jun 2009 15:12:00 -0700

Gambling halls in Russia have fallen victim to Kremlin-led socio-economic engineering. Not only have 633 casinos in St. Petersburg and Moscow alone been forced to close, the cure may prove worse than the alleged disease.

Case Bets: A.C. Trop, 21, Ensign, Boulder City, Jacko, etc.

Mon, 29 Jun 2009 12:45:00 -0700

After conservator Justice Gary Stein turned his trusteeship of the Tropicana Atlantic City into a $7.4 million gravy train, the New Jersey Casino Control Commission is belatedly bolting the barn door. It's going to petition the Lege to limit the ambit of future trustees, none of which would be necessary had the NJCCC not let Stein run amok in the first place.

The failings of his butterfingered stewardship have been rehearsed enough in this space. However, the Press of Atlantic City's story adds yet another incredulity-making touch. Stein, a former member of the New Jersey Supreme Court and with an entire law firm at his command, still had to rely upon legal opinions from the NJCCC's general counsel.

Lower bet limits are no bargain, the Las Vegas Sun finds. The Strip casino that has the stones to go back to 3:2 blackjack will become the hottest spot in town.

Who knew? Seems that Sen. John Ensign's curriculum vitae included a stint at the helm of the Gold Spike, one of downtown Vegas' seamiest casinos. Given the comparable seaminess of Ensign's ongoing scandal, perhaps it was a case of water seeking its own level. Las Vegas Gleaner reader "Goldy" puts the sordid mess in perspective: "... he didn't reveal the affair until the demands from the Hampton's [sic] (including Doug) became 'outragous.' [sic] That implies that prior demands were 'reasonable' and Doug was making them. ... he essentially was selling his willing wife, and Ensign was buying, until the number got too high. So, like most things, this entire deal was really just about the number." [emphasis added]

You can take Ensign out of the casino but you just can't take the casino out of Ensign.

A potential tragedy. Several weeks back, the Better Half and I spent a beautiful Sunday in Boulder City. The highlight of our visit was the Boulder Dam Hotel, where we enjoyed a splendid lunch and an eye-opening tour of a museum devoted to the history of Hoover Dam. (Suffice it to say that the people who built it endured privation that 21st century Americans would find unimaginable.) Sadly, we do not have the $60,000 that it's going to take to keep the Boulder Dam Hotel open. Please, philanthropic Nevadans, do not let this treasure go dark like ...

Nevada itself. Visitors to Gibbons-era Nevada are likely to find it closed. History? Books? Parks? Them's pansy egghead stuff fer Commie states like Kalifornia, doncha know? Gawta get me some more guns afore Harry Reid repeals the Decoration of Independence or whatever.

Speaking of museums ... could the untimely demise of Michael Jackson spell opportunity for mistake-prone Colony Capital? The casino owner has the opportunity to monetize its acquisition of Neverland Ranch as never before. Converting it to a tourist attraction rather than a (misguided?) real estate play seems a no-brainer.

Don't do it, Alex!

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

Noooooooo!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A-Yem to the rescue

Fri, 19 Jun 2009 15:14:00 -0700

"No corporate liposuction." With those words, new Tropicana Las Vegas CEO Alex Yemenidjian not only coined the catchphrase of the year, he implicitly repudiated the policies of forerunner William J. Yung III, whose Columbia Sussex modus operandi was to solve all problems by sacking large numbers of employees, stripping out amenities, raising prices, slashing marketing and decimating advertising budgets. (A super-stupid policy, it turns out, as revenues and cash flow at at least three of four former Aztar Corp. casinos plummeted under Yung's reign of error.)

A-Yem's approval hearing with the Nevada Gaming Commisson was marred only by a senior moment from Commissioner John Moran Jr. According to the Las Vegas Sun, Moran "applauded Yemenidjian’s efforts and recalled playing golf at a course near the Tropicana, adding that he hopes new management will be able to return the property to its glory days."

WTF? Is Moran flashing back to the Tropicana golf course that used to be in back of the old Marina Hotel and was cannibalized by MGM Grand? Or maybe the Dunes Golf Course across the street? That was more than 10 years ago, dude, and what's it got to do with the price of tea in the Trop? Is he suggesting A-Yem put in some links? The only ones you could fit into the current Trop site are the putt-putt kind -- not that there's anything wrong with that.

Yemenidjian's $440 million debt-for-equity swap effectively reprices the Trop at $12.9 million/acre ... possibly even less depending on how great of a discount Onex Corp. obtained on that debt.

Kudos to NGC Chairman Peter Bernhard (pictured) for crafting a sensible solution to the problem of licensing Las Vegas Gaming CEO Jon Berkley. Both the new CEO and his company have been stumble-prone, so Bernhard's provisional one-year license is a prudent compromise, giving Berkley just enough rope to either hang himself or prove that he's the Mr. Fixit his lawyer says he is. As for Las Vegas Gaming, it's where your phone call rolls over when you dial up ...

... the Ensign scandal's casino connection. Over at the Las Vegas Gleaner, Hugh Jackson has unearthed "the forgotten Ensign," brother Bill, onetime COO of Nugget Gaming, a company with a remarkable development slate. When S&G rang up Nugget's executive offices on Ali Baba Lane, we got Las Vegas Gaming instead. Neither Bill Ensign nor Nugget CEO Stephen Crystal were to be found on the voice-mail directory either.

Crystal was the chief huckster for Barrick Gaming, an underfunded company that fronted Lichtenstein-based Tamares Group's stealthy acquisition of six downtown Las Vegas casinos, before vanishing in a cloud of insolvency. During my early months at the Las Vegas Business Press, I quickly learnt to take Crystal's public pronouncements cum grano salis. (Well, he was an ex-politician, after all.)

Helpfully, the Nugget Gaming site actually provides old news clippings that show just how hilariously full of it Crystal and front man D.W. Barrick were. A former colleague who had a ringside seat for Barrick Gaming's licensing told me that Nevada regulators were desperate and convinced themselves the (wholly unrelated) Barrick Gold Corp. fortune stood at Mr. Barrick's back. As the Barrick/Crystal house of cards was collapsing, I called Toronto-based Barrick Gold spokesman Vince Borg for comment. He'd never heard of Barrick Gaming. So much for that.

DINO? Not as in "Martin," sadly. Reporter Dennis Myers breaks down why casino executives and other bidness bigwigs are lining up behind Sen. Harry Reid (D-NV). Yes, this is the same Reid the Las Vegas Review-Journal routinely and hysterically calls "socialist." Then again, the R-J thinks anybody to the left of Grover Norquist is a pinko.

Harrah's Azov?

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

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

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

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

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

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

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

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

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

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

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

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?

Trump: The Coup

Mon, 08 Jun 2009 14:35:00 -0700

Despite having publicly washed his hands of Trump Entertainment Resorts, timeshare pitchman Donald Trump has been quietly plotting an external takeover. But Trump's former company has no intention of quietly yielding to his embrace.

But they really mean it this time. Despite being not up to regulatory snuff "in every category," Las Vegas Gaming is receiving exceptional indulgence from the Nevada Gaming Control Board. Although, through his attorney, new CEO Jon Berkley basically admits to being overwhelmed and out of his element, he received the NGCB's blessing. True, Chairman Dennis Neilander promised "zero future tolerance. I’m at the end of my rope." But Las Vegas Gaming has been able to get pretty far out of compliance without any evident consequence. Neilander needs to show that his threat is not any empty one.

Satisfy them. A consortium of German lenders find themselves badly upside down on that never-very-likely Elvis-themed high-end resort. If you accept soon-to-be-ex-owner FX Real Estate & Entertainment's revised valuation of the property, center-Strip land has has fallen to $12.4 million/acre. Think what that acreage might have fetched when we were at the height of the Strip bubble.

Schreckliche idée, revisited. Prominent gaming attorney Frank Schreck continues to lug water for one of the less-potable ideas of recent years: Allow institutional investors to own as much as 25% of casino companies without deigning to subject themselves to Nevada scrutiny. In the course of shopping this around, Schreck has either revised his proposal or his sales pitch. He's now emphasizing that these companies would be passive investors.

That may be more palatable to both regulators and the public at large, but I'm not sure it will be much of an incentive to mutual funds, etc. Judging by the tugs of war we're seeing at Fontainebleau, CityCenter and Station Casinos, Wall Street isn't in the mood to fork over even more money to casino developers in return for being at management's mercy.

As for F'bleau, its owners have pressing problems to worry about on the home (i.e., Miami Beach) front.

Our Man Flint

Wed, 03 Jun 2009 16:31:00 -0700

"All of the Nevada Administrative Code is built on the female anatomy." -- Nevada Brothel Association spokesman George Flint, bemoaning the difficulties of licensing male prostitutes.

Reid rewarded, Trop rescued

Wed, 03 Jun 2009 15:47:00 -0700

... Sen. Harry Reid's (D-NV) efforts on behalf of the casino industry have not gone unrewarded. If you can follow this formatting garble, you'll see that his donors include not only Tim & Tom, late of the Golden Nugget, but also several reliably Republican casino CEOs.

Even the Fertitta Brothers have chipped in, which is the least they could do after the Senate Majority Leader shepherded a provision that incentivizes companies to buy back distressed debt ... which Station Casinos has in abundance. All of which means that Sharron Angle and any other GOP challenger will have to build up a war chest from other industries. The coffers of Big Gaming -- with possible exception of Sheldon Adelson's kitty -- are slamming shut. The industry has taken sides and put its money on Reid.

Yemenidjian is in the house. Pending the stamp of approval for the Nevada Gaming Commission, all systems are "go" for Alex Yemenidjian to take the reins of the Tropicana Las Vegas. The feeling at the Trop must be akin to that of a besieged garrison finally seeing a relief column marching its way.

The former MGM Grand boss is saying all the right things. His backer, Onex Corp., will invest $100 million (or more) in the property, which has suffered manifest neglect. Current operator Tropicana Entertainment's capex budget was fairly puny, symbolic of CEO Scott Butera's halfhearted commitment to the LV Trop.

Under Yemenidjian, the casino will be extended to encompass the ends of the two pedestrian bridges. Two new eateries and a nightclub are planned. No word yet about a new evening show (or about chasing the prostitutes, pimps and -- worst of all -- timeshare peddlers from the premises). But Yemenidjian has too much reputation at stake to simply continue the stagnation that has been the Trop's status quo for more years than I care to remember.

(Correction: Yemenidjian plans to lower the bridge, not raise the river. Which is to say that the pedestrian bridges will be extended to reach the casino, not the other way around.)

When Yemenidjian was (unsuccessfully) pitching an Illinois casino -- also backed by Onex -- his prospective management team included two Gulf Coast veterans: Joe Billhimer and Karen Sock, late of Hard Rock Biloxi and Harrah's Grand Biloxi, respectively. Both are heavy hitters and Sock, in particular, is overdue for a Vegas posting. Here's hoping Yemenidjian brings them here. Better late than never ... and the Trop needs some serious brainpower.

"We really mean it this time." Another day, another "Las Vegas Sands has the capital to restart the Cotai Strip™" story. Turns out it's the same old same-old. The prospect of asset sales, if not dead, isn't looking terribly hale. After all, who wants to buy a hotel in Macao if you must forefeit the casino action? Where's the fun in that (to say nothing of the money)?

Case Bets: Packer & Ho, Sands Bethlehem, MGM Mirage, Ameristar, Penn, Harrah's, etc.

Wed, 03 Jun 2009 14:40:00 -0700

• Smashing guitars -- but not over each other's noggins -- James Packer and Lawrence Ho christened City of Dreams. The younger Ho downplayed expectations of foot traffic, saying his $2.4 billion megaresort could get by on far fewer visitors than the nearby (and comparably expensive) Venetian Macao, which draws 70K visitors daily.

• After a record-setting opening, Sands Bethlehem fell into fourth place during last week's casino action in Pennsylvania. Not surprisingly, Philadelphia Park and Harrah's Chester led the state.

• Beau Rivage is safe. Although MGM Mirage was peddling several of its regional casinos, J.P. Morgan reports that "we have heard from some bidders that this process is close to dead, so we don’t expect to hear asset sales chatter in the near to medium term."

• While yours truly was critical of staffing cuts at Ameristar Casinos, they appear to be paying off. The company projects flat revenue comparisons in 2009 but better cash-flow margins, pegging the savings as $40 million-$48 million, annualized.

• When in doubt, Penn National Gaming falls back on what it knows: racinos. It's angling for the Laurel Park concession left on the table when Magna Entertainment collapsed. Both Penn and rival David Cordish appear to be trying to chisel a loophole into Maryland's slot-parlor law, which limits companies to one slot house apiece. Penn is already committed to Cecil County but wants Laurel Park ... as does Cordish, who has a pre-standing commitment to the Arundel Mills area. The latter project has run into serious opposition. Expect a nip-and-tuck fight for Laurel Park.

• Penn is evidently getting cold feet in Ohio, however.

• Casino expansion in Iowa will have to wait until 2010, at the earliest. This delay is a disguised blessing. The Hawkeye State market has been holding its own during the recession but the timing for diluting the market with four new casinos could scarcely be worse.

• If wishes were horses, Harrah's Entertainment would be galloping along the shores of the Yangtze River this very minute. Seriously, would you lend Harrah's more money? Would you give an alcoholic the keys to your wine cellar? Well, you might get the empties back so you could redeem the deposit on the bottle.

Pansy passes the buck

Wed, 03 Jun 2009 12:52:00 -0700

An understandably sheepish-looking J. Terrence Lanni toasts the opening of MGM Grand Macau alongside business partner Pansy Ho and, front and center, project co-financier Stanley Ho.

MGM Grand Macau co-owner Pansy Ho says it's entirely up to MGM Mirage to defend her honor before the New Jersey Casino Control Commission. The gaming company says it isn't going to take the "unsuitable" finding of the Division of Gaming Enforcement lying down, setting the stage for the most riveting regulatory confrontation since the NJCCC decked Columbia Sussex.

Meanwhile back in Macao, papa Stanley Ho says that because his company is publicly traded that means everything is ipso facto on the up-and-up. Gosh, what a relief. How could we have ever doubted the man?

Pansy Ho: time for Plan C

Fri, 22 May 2009 18:12:00 -0700

In my usual cart-first, horse-later fashion, I elicited a legal opinion regarding the scenario I postulated the other night: MGM Mirage spinning off either its Atlantic City holdings or MGM Grand Macau into a quasi-autonomous entity, much as Sheldon Adelson proposes to do with his Macao properties.

Well, unless Pansy Ho can sit down with the New Jersey Casino Control Commission and charm them into turning a blind eye to the penumbra of unsavoriness that surrounds her father, Stanley Ho, MGM is up against a wall. It could put MGM Grand Macau into a limited partnership in which it would have equity but no power.

Did MGM spend so much time and money getting into Macao just so it could be a passive investor? Probably not. So either MGM has to scrape together the cash to buy out the Ho family or Pansy and her sister can exercise their right of first refusal on the property.

Likewise, Boyd Gaming holds the prerogative of acquiring MGM's Borgata share, but of all the possible scenarios on deck, that appears the most unlikely. Here's why:

Borgata represents no ongoing cost to MGM. It can sit back and collect 50% of the profits in perpetuity, while Boyd does the heavy lifting. In Macao, not only does MGM have to run the place, it's in a market with narrower profit margins, thanks to a confiscatory tax rate and the commissions charged by junket operators -- to say nothing of the draconian meddling of the Chinese government. And if it's relying solely on mass-market play, it's not enough to get MGM out of single-digit market share.

MGM took too long and spent too much getting into Macao to be happy with being stuck in sixth place among operators. If it's going to have to amputate a limb, losing Macao may be the less painful cut.

It could also be the more lucrative one because, even in a down market, Macao has two very price-boosting qualities: a finite number of casino concessions and a comparable limitation on casino-zoned land. Neither freeze is likely to thaw anytime soon.

Macao is still a seller's market. But if Boyd were to decline its option on MGM's half of Borgata, other suitors are going to be very hard to find. Nobody wants in on Revel or Bader Field and the Tropicana is essentially being given away. The accomplished Ms. Ho could still pull MGM's chestnuts out of the fire but if she can't, her family could wind up with 2.5 of the six casino concessions in Macao.*

* -- slightly more, actually, as James Packer's stake in Melco Crown Entertainment is exceeded by that of Lawrence Ho.

Brooks: Steve Wynn sucks

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

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

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

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

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

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

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

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

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

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

Surrender in Atlantic City?

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

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

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

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

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

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

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

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

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

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

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

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

Solving the Pansy Problem

Wed, 20 May 2009 01:34:00 -0700

Amidst today's crush of news, I forgot at least one other potential solution to l'affaire Pansy. Perhaps MGM Mirage can have its cake and eat it as well, by taking a page from Sheldon Adelson's playbook. It'd be a transparent move, a change more cosmetic than substantive. But it also might be procedurally deft enough to sidestep a potential head-on collision with the New Jersey Casino Control Commission.

Were either the company's Macao or Atlantic City assets walled off from everything else stamped "MGM Mirage," it just might do the trick. It's at least worth trying and I'll bet the MGM legal team is burning the midnight oil right this very minute, working on some smooth move of that ilk.

Incidentally, former Atlantic City mayor -- and current state senator -- James Whelan has proposed removing one step from the Garden State regulatory process. Deeming the Division of Gaming Enforcement and the NJCCC to be redundant, he proposes eliminating the latter. Imagine the alternate reality in which Whelan's proposal had already become policy: Columbia Sussex would still be ensconced at the Tropicana Atlantic City but MGM would be metaphorically packing its bags. That just doesn't sound right.

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.

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

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

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

The grinning ghost of MGM Grand Macau

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

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

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

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

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

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

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

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

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

"Another one bites the dust"

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

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

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

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

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

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

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

Just a thought.

Quote of the Day

Thu, 14 May 2009 17:39:00 -0700

"[Nevada Policy Research Institute fiscal analyst Geoffrey] Lawrence said the preponderance of mortgage fraud and foreclosures only indicates the failure of the regulatory state. Given that failure, Lawrence asked: 'What’s the point of having it?'” -- from an analysis of a proposed "freedom budget" that would meet Nevada's budget deficit by, among other things, eliminating insurance examiners as well as the entire Department of Business & Industry.

Perp Show

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

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

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

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

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

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

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

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?

Bleak Horizon

Tue, 05 May 2009 16:48:00 -0700

Anybody who thought Columbia Sussex CEO William J. Yung III was exiting the casino industry, let alone going quietly, got a bracing dose of reality today. The older of Tropicana Entertainment's two leases in Lake Tahoe, the Horizon, is in wind-down mode. It has two years to go on its lease (although it could theoretically operate into 2014) but TropEnt CEO Scott Butera is wasting no time rolling up the sidewalks.

Rather than be bothered with the continued management of the Horizon, Butera is fobbing it off on Lake Tahoe Realty I, a creature of Columbia Sussex. The transfer kicks off in true Yungian fashion with the elimination of 75 jobs. As bad or worse from the customer's standpoint, the table games operation at the Horizon is being axed altogether and the 719-slot inventory will be decimated by two-thirds or more. While all of this is straight from the Bill Yung playbook, there's no indication so far that it's anyone's fault but that of Butera. As he prepares to consolidate Tahoe operations around MontBleu (the former Caesars Tahoe), he'd clearly like to see as little as competition from the Horizon as possible. Hence its demotion to grind-joint status.

How this ledger-demain plays with landlord Park Cattle (aka Edgewood Cos.) will be interesting to see. Yung's stewardship of the Horizon (which, according to recent litigation, could be characterized as malign neglect) was a source of great vexation to Park Cattle. One can only wonder how Edgewood execs feel about being back in business with Bill Yung. If the Horizon's recent history -- not to mention its savage downsizing to 200 gaming positions -- is any guide, Park Cattle's stated goal of converting it into a non-casino hotel is going to happen sooner rather than later, options notwithstanding.

Harrah's takes out the garbage; Yemenidjian's return

Tue, 05 May 2009 14:53:00 -0700

Congratulations -- I think -- to new Harrah's Entertainment General Counsel Timothy R. Donovan. A graduate of The Ohio State University, Mr. Donovan comes to Harrah's by way of the garbage industry. Considering that picking up the trash around Harrah's properties has sunk to a very low order of priority, maybe he can put CEO Gary Loveman in touch with an affordable waste-disposal provider. In any event, bringing a veteran of the garbage-removal business into a trashed company is priceless in its symbolism.

The man who wouldn't leave. In case you hadn't heard, not only is the bankruptcy auction for the long-suffering Tropicana Atlantic City expected to drag into the summer, that won't be the end of Gary Stein's dilly-dallying trusteeship. No, not by a long chalk! After all, the new buyer will have to be vetted by the New Jersey Casino Control Commission, which means that Stein's sinecure will become a two-year gig, extending into December ... at least.

In the meantime, the splitting of Tropicana Entertainment into components that can be termed "Las Vegas" and "Everything Else" continues apace. It's being underwritten by $150 million from Carl Icahn. But there are limits to Icahn's generosity, as his loan comes attached with a 15% interest rate.

Remember how S&G predicted that transfer of management of the Tropicana Las Vegas to former MGM Grand boss Alex Yemenidjian looked like the start of a sale. Sho' nuff! Yemenidjian's backers, Canadian Onex Corp. will control the majority of the board. The LV Trop has been a manifestly low priority for TropEnt CEO Scott Butera, who been's primarily fixated on Atlantic City (and secondarily on Indiana). A shift of directorship to a company whose first and only priority will be Las Vegas is to be welcomed.

Chump change for Trop

Wed, 29 Apr 2009 17:00:00 -0700

While there has been no shortage of bad decisions in the casino industry of late, the Dunce of the Year winner for 2008 and presumptive favorite for 2009 has got to be Tropicana Atlantic City conservator Gary Stein. This former member of the bench managed to turn what was intended to be a brief transitional process into a munificent 16-month sinecure ... which could stretch to 18 months or longer, depending on how soon the bankruptcy court acts. Not only was Stein's interminable tenure an unconscionable waste of money, if he made one good decision during that time, S&G must have nodded off for five seconds and missed it.

You will recall that, last spring, Stein scoffed that an $850 million bid by Colony Capital and an undisclosed one from Cordish Co. were "unreasonably low." What's more, he said the market for a distressed, mismanaged Atlantic City casino could only get better. (One of Stein's several miscalculations was to use the still-in-abeyance Trump Marina sale as an economic barometer.)

Reality was close behind with a swift kick in the ass, as the best Stein could manage was $545 million in cash (plus another $150 million or so in securities) from Cordish. And, as Stein's tortoise-powered negotiations crept onward, Cordish wanted to haggle the price down even further and eventually there was no deal to be had.

Which means that a casino that might have fetched over $800 million 11 months ago will now go on auction for a quarter of that amount, after a process that the Press of Atlantic City eventually characterized as "exceedingly slow." Worse still, since Icahn would gain the Trop via a credit bid, New Jersey won't have any sale proceeds to show for its year and a half of trouble. Since a parallel bankruptcy proceeding hasn't yet expunged Tropicana Entertainment owner William J. Yung III's equity stake, there's no way in hell the NJCCC would hand the Trop's keys to TropEnt CEO Scott Butera, no matter how pure his intentions.

Stein put the best spin he could on this fiasco, stating that "although like the entire industry our revenue and profits have been effected [sic] by the difficult economy, our financial position is solid and the only reason we are filing petition today is to be able to sell the casino assets free and clear of all liens." Somehow NBC40 was able to keep a straight face while reporting that the NJCCC believes "this 'stalking horse bid', will help them achieve the highest price possible in light of the current economic conditions facing the gaming industry."

True, starting the bidding at a rock-bottom $200 million might entice Cordish or someone else to pony up real money. But whatever the Trop eventually fetches is all but certain to be a shadow of what it could once have brought, had Stein performed his duty with alacrity. (And no potential bidder's position is nearly so advantageous as Icahn's.) It took an April 15 public yanking of Stein's leash by his NJCCC overseers just to get this much accomplished, threatening to send the Trop to bankruptcy court with no stalking horse bid.

While Stein strove for a victorious posture, The Associated Press cut through the crap. Its headline? "NJ OKs cut-price auction for Atlantic City casino." Reporter Wayne Parry even got Stein to concede there was no guarantee that $200 million wouldn't be the final price. If that's the ignominous conclusion to this saga, it may someday be known in the industry as "Bill Yung's Revenge."

What a screw-up.

Case Bets: Isle exits U.K.; no room at the Trop; Carlino channels Astaire, etc.

Fri, 24 Apr 2009 17:22:00 -0700

Isle of Capri Casinos is coming up for air, literally extricating itself from underneath Ricoh Stadium in Coventry, U.K. As part of CEO James Perry's attempt to refocus a company that spread itself too thin under his predecessor, he's walking away from an ill-starred British venture. Rank Group not only assumes Isle's lease, it gets the casino itself for pocket change, by industry standards: $940,000.

Perry may also be preparing to unload Isle's Pompano Park racino in the disappointing Florida market. At least one analyst is now picking Isle, so recently stuck in the mud, as one of the better bets to emerge intact from the gaming group's crisis.

A house divided cannot flush. Staggering from miscalculation to mishap, the Tropicana Las Vegas has sustained another self-inflicted wound. But don't blame current steward Tropicana Entertainment, predecessor Columbia Sussex or even Aztar Corp. The non-kosher plumbing that got the Paradise Tower shut down dates back to the 1990s, when the Trop was under divided ownership (one of the many obstacles to its redevelopment). The scary part is that it took at least 10 years for the code violations to be discovered.

The real victims, of course, are the hotel guests who are getting bumped from their Paradise Tower rooms. Since it's far and away the nicest part of the Trop, by definition they'll be moving to less-desirable rooms, some of them in truly decrepit parts of the hotel. Given the condition of the Trop's physical plant when I made a "secret shopper" visit, today's news comes as less than a surprise. The resort's advancing years were bound to catch it out sooner rather than later.

Penn's fancy footwork. While not out-and-out denying an attention-getting New York Post story about a possible 'credit bid' play for The Mirage, executives of Penn National Gaming were at some considerable pains to imply that it was all smoke, no fire. CFO William Clifford put it thusly: "... there were quotes and things said that have been pulled all the back to the last year’s Gaming Conference ... I’m not quite sure that the Post article is a very good reflection of anything we’ve ever said at any point in time."

CEO Peter Carlino followed with, "Some of the most interesting quotes were made at a time when none of the stuff that you are all currently thinking about was out there so it’s unfortunate. It’s just a hodgepodge of things pulled together to make a story. We would have preferred not to have seen it that way. Look, common sense says if there’s an opportunity we’re going to follow it but it’s no more exciting than that; enough said." [Emphasis added]

A Bloomberg News report that Penn was pursuing Greektown Casino went unaddressed in yesterday's earnings call. To the extent that Carlino was willing to commit himself on Las Vegas, he said Penn wanted no more than a single property "if we can find one." The consensus of Penn execs was that Vegas would be a "viable" market for the company ... in five years. (The company's strategy is partially predicated on an exodus of Californians relocating to Vegas and jump-starting the local economy.)

Sadly, Atlantic City seems to have slipped off Penn's radar screen altogether. On a happier note, the company promises a new and "exciting" replacement for the Empress Joliet pavilion that was destroyed by fire -- which makes it sound like the previous Ye Olde Egypt theme is now history, so to speak.

Schreckliche Idee! At a time when institutions like Goldman Sachs and Deutsche Bank control ever-larger chunks of the Strip, the Nevada Gaming Commission is seriously considering lowering the threshold of scrutiny even further. (Because if there are any two words that instill confidence nowadays, those words are "Wall Street.")

The man fronting this idea, veteran gaming attorney Frank Schreck, argues that his proposed rule change wouldn't result in casinos ceding managerial or operational control. However, that's already happened at the Las Vegas Hilton, where a Goldman-owned stalking horse holds a sizeable minority interest. What he's proposing would take a bad precedent and codify it.

By linguistic coincidence, schreck is the German word for "fright" and the root of schrecklich or "horrible." Which is what this idea is. But Nevada regulators are already overburdened and about to become more so, once the next budget is enacted. Given that grim future, Schreck's proposed lightening of their workload will be probably be embraced.

Oops, they did it again

Thu, 23 Apr 2009 14:27:00 -0700

Back when Art Marshall was still on the Nevada Gaming Commission, he warned against the dark prospect of "corporate arrogance." Unfortunately, when MGM Mirage proposed to devour Mandalay Resort Group and Harrah's Entertainment followed with a "me too" takeover of Caesars Entertainment, Marshall opposed neither. He was far from alone in assenting to this anti-competitive duopoly on the Strip but he and others might do well to observe how the chickens have come home to roost.

For instance, according to a report in this morning's Las Vegas Review-Journal, if you're Harrah's Las Vegas and you've applied for a permit to overhaul the second floor, you don't actually have to wait for approval. You just go ahead and do it.

Never mind that Harrah's was caught red-handed by the R-J engaging in this sort of mischief over and over, something county authorities were either too lazy or disinterested to notice. (To its eternal credit, the R-J did ... and paid a terrible price.) There's still an outside chance that Harrah's will get a few light wrist slaps for its previous corner-cutting -- but that's obviously not been any great deterrent. Heck, even after Harrah's had been nabbed the first time, gaming regulators said everything was A-OK. Move along, folks. Nothing to see here.

The jury's still out on whether Harrah's is too big to fail, although MGM Mirage clearly is -- if recent intercessions by Sens. Harry Reid and John Ensign hold any significance. However, Harrah's has clearly gotten too big for its britches, as its cavalier attitude towards following the building code indicates. Congratulations to Leon Black and CEO Gary Loveman for having brought a once-admired company to its present state.

(Say, Gary, whatever happened to that remodeling/retheming of Bally's Las Vegas you promised the world 46 months ago? Just wondering.)

In one particularly tart mini-essay, Steve Friess identified the two mega-takeovers as the point where Las Vegas began to go off the rails. Except for interested bystander Steve Wynn, there are still too few people willing to say it was a mistake -- and fewer still back then. Between the anti-regulatory fervor of the Bush II administration and a Vegas ethos that what's good for Kirk Kerkorian is good for everybody, a once-competitive Strip got steamrolled into an oligopoly.

And the market did sustain it ... for a time.

Kansas reduced to begging

Wed, 22 Apr 2009 15:32:00 -0700

So nobody wants a casino in either Cherokee County or Crawford County, Kan.? Let it not be said that Sunflower State officials were too proud to beg. Heck no, they're down on their knees groveling and pleading for somebody, anybody to bid on that woebegone fourth license. Oh sure, it's the third deadline they've proclaimed but we bet they really, really mean it this time ... just as they will the next time ... and the next.

Time was when casino companies went to desperate, sometimes foolish lengths to get any old development agreement anywhere. But with two decades of geographical expansion under its belt -- and a cinching of that belt thanks to the rise of tribal casinos and the fall of the global economy -- the industry has found the strength to just say "no" every so often.

Quote of the Day

Wed, 22 Apr 2009 12:44:00 -0700

"The entire economy here depends on the gaming industry. People who I would have expected to get to the bottom of things didn't want to." -- reporter Alexandra Berzon, on the obfuscation and conspiracy of silence that complicated the Las Vegas Sun's efforts to plumb the causes of a rash of construction-related fatalities at CityCenter. The Sun's dogged initiative won it a Pulitzer Prize.

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.

James Dobson admits he's a loser

Wed, 15 Apr 2009 14:51:00 -0700

Whiny anti-gambling obssessive (and sometime pediatrician) Dr. James Dobson exited his Focus on the Family with an admission that he's on the losing side of the culture war. He blames it on the Nineties, Bill Clinton and that damned Internet. (A bit behind the times, isn't he?) At least Dobson needn't worry about "made fools for Christ." He's been doing a splendid job of making a fool of himself without any assistance whatsoever -- and shows every indication of continuing to do so.

Don't let the doorknob hit you on the way out, Jimbo.

Ader returns. Once the most-read (and arguably the most-feared) gaming analyst on Wall Street, Jason Ader is back in the picture as the newest board member of Las Vegas Sands. Here's hoping he'll have better luck than his predecessor at exercising a modicum of restraint upon CEO Sheldon Adelson, who's been in a pedal-to-the-metal frame of mind lately. Unlike the appointment of Michael Leven as Sands' new prez, this is one Adelson hire whose resumé won't be open to second-guessing.

Fun with numbers. Nevadans, apparently angry about having the day off or maybe irked from shouldering the second-lowest tax burden in the nation (Wyoming is #50) rallied in Carson City today. A Southern Nevada anti-tax newsletter estimates the crowd at 2,000. Local constabulary spotted only half as many, tops. (Subseqently revised to "more than 1,000.") I hope Stephens Media is better at bean-counting than head-counting.

Gibbons Follies. Having lain low for a few days, Gov. Jim Gibbons is back in the news with a vengeance. After saying he simply wouldn't sign a domestic-benefits law making its way through the Nevada Lege (about the only solid accomplishment emerging from that frivolous convocation), all it took was a quick chat with untiring homophobe Richard Ziser to make Midnight Jim wimp out completely. Now he says he'll veto the bill, thereby continuing to consign many Nevadans to second-class citizenship. (Supporters of the bill are trying to get Gibbons' ear but are more likely to receive the back of his hand.)

This is just plain wrong and a slap to a lot of hard-working, taxpaying citizens whose committed relationships might as well not exist, as far as the current law is concerned. "I just don't believe in it," sayeth Midnight Jim in re domestic-partner benefits for gay and lesbian citizens. Judging by his two divorces, Gibbons doesn't put great store in conventional marriage, either.

Jim Gibbons finds something he can believe in.

But alas, his latest strategem for meeting chicks laid an egg. Or did it? You be the judge. More seriously, Nevada can't afford to fill open Nevada Gaming Control Board positions but it can afford 5,000 gubernatorial eggs? Something's cracked here and it's not an eggshell.

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.

Regulators brace for crash

Wed, 08 Apr 2009 18:02:00 -0700

Wow.

I'll say it again.

Wow. It wasn't that long ago that the prospect of multiple major casino bankruptcies was unthinkable to a degree that words cannot convey. Even now, after weeks of bad news followed by worse news, the enormity of the present collapse didn't really sink in until the Reno Gazette-Journal reported that the Nevada Gaming Control Board has formed a special crisis unit to handle an anticipated series of bankruptcies. I daresay the NGCB probably never thought it would have to clear the decks for multiple crash landings like these.

Big deal? The Sun Herald of Biloxi is practically squeeing over the arrival of some A.C. Coin & Slot products that offer communal bonus rounds. (The story reads more like advertorial copy than serious journalism.) What I find interesting here is that the shared bonus round is something I've heard used as a selling point for server-based gaming. So, if it can be accomplished with conventional slot technology, why retrofit your floor for SBG? The casino crash isn't going to smother SBG in the cradle but it's definitely going to subject it to a very prolonged infancy.

A.C. Coin, meanwhile, is making inroads with these slot banks. In the Vegas area, "Super Bankroll Bonus" is in 14 casinos and not a grind joint in the bunch. "Slingo Bonus Deluxe" is on 11 Vegas gaming floors with Bellagio and Mandalay Bay soon to join them.

Meet the New Vegas, same as the old Vegas. Or so one entertainment scribe contends.

Adelson in the details

Fri, 03 Apr 2009 12:39:00 -0700

Nearly lost amidst a flurry of news stories about Las Vegas Sands hoping to jump-start construction on its stalled Cotai Strip™ (with the help of new equity partners) was this snippet from Sands' president of Asian affairs, Stephen Weaver. Rents at the Marina Bay Sands shopping mall, still under construction in Singapore, are being “pulled down to adjust to the market.”

Lower projected rents? Just one more reason to curb the irrational exuberance with which some Wall Street analysts view this $5.4 billion project.

Under the radar: Remember how Columbia Sussex told the New Jersey Casino Control Commission, in effect, "put it on our tab," when hit with a $750,000 fine? ColSux's original plan was to just have the NJCCC skim the 750 large off the top of whatever it got from selling the Tropicana Atlantic City.

However, the NJCCC informs me that ColSux affiliate Adamar settled up with the state a ways back. Bravo to them. Besides, if Carl Icahn wins the Trop with a credit bid, the casino will change hands but no money will. So much for the windfall everyone was anticipating a year ago.

Kansas heats up again

Thu, 02 Apr 2009 13:57:00 -0700

It's always either feast or famine for the casino industry's prospects in the Sunflower State. A week ago, there was one in-progress project, Butler National's low-cost Dodge City casino and almost nothing else. Now, with the window of opportunity slamming shut (again) for Wyandotte County, a slew of applicants has skittered over the sill.

First in was Cordish Co., making good on its promise to be back with a downsized proposal for the Kansas Speedway. A $390 million Hard Rock-branded casino will be the entirety of Phase One, with the hotel and all other amenities to emerge at an unspecified future point. Yesterday, Penn National Gaming got back into the act, pitching a $500 million iteration of its Hollywood Casino brand. It'd be a full-service product (hence the higher price tag) but Penn's noblesse oblige attitude and its abrogation of a casino development it had been awarded in Cherokee County may still rankle the Kansas Lottery Commission. It blanked Penn in the previous round of bidding.

Hard on Penn's heels comes Las Vegas-based Golden Gaming, which lost to Cordish by one vote last time around. Its proposal is Cordish-like in terms of proposing a $360 million casino (with restaurants and entertainment venues) to be eventually followed by another $300 million in augmentations. These would include an expansion of the casino from 2,000 slots to 2,500 and from 65 table games to 98. Also promised are "a 300-room hotel, spa, restaurants, retail shops, convention and meeting space, an 18-hole championship Tom Watson golf course, 60-lane bowling alley, entertainment venues and more."

(Boy, $660 million sure goes a lot farther in Kansas than it does in Vegas. Here, all it gets you is Aliante Station.)

Golden's would-be project, to be sited along I-70 near Edwardsville, is Cordish-like but arguably Cordish Lite, too. Allying itself with the speedway and sublicensing the Hard Rock brand gives Cordish two sharp arrows in its quiver. It'll take some pretty strong argumentation by Golden to persuade Lottery commissioners to reverse their earlier preference for the Baltimore-based developer, which can now also point to the early success of its Indiana Live! racino as further evidence of its suitability. In Round One, last year, the vote between Cordish, Golden and Penn went 4-3-0 in Cordish's favor. It's the latter's game to lose.

Over in Sumner County, previous applicant Equity Ventures has been pawing the ground for a while now. It's hedging its bet by optioning two sites but one of them is entangled in litigation due to the City of Mulvane's attempt to grab, er, annex it. (Way to improve that tax base, guys!) Jilted partner of Harrah's Entertainment, which retreated from Kansas last year, Equity's profile got higher this week when former Mandalay Resort Group CEO Mike Ensign turned up at the helm.

After a bit of hemming and hawing, Foxwoods Development is returning to the fray, too. It's making the argument that it can get a casino on line quickly and inexpensively, probably in the $225 million neighborhood. Squeaking in just under the wire is Lakes Entertainment, coming off a rebuff by Ohio voters last November. Like the Ensign group, Lakes is opting for a parlay of sites, one of them in Wellington.

The state ought to have fun sorting out what are, in effect, five proposals. Equity has the theoretical advantage of representing the core of the joint venture that won the bidding last year (presuming that Harrah's defection hasn't left a sour aftertaste). Foxwoods, despite recent economic misfortunes in Connecticut, still owns the longest and strongest track record. Promising an operational casino lickety-split is music to tax-starved bureaucrats' ears, too. Lakes has the site (Wellington) that's been bruited as the ~~Lottery's~~ Sumner County Commission's location of preference. This one's impossible to call.

That leaves orphaned Cherokee County, where bidding remains open for another three weeks. Anybody ... anybody at all? Don't everyone jump up at once, now ...

Adelson says "Sell!"

Fri, 27 Mar 2009 17:54:00 -0700

... casinos, that is. In a once-unimaginable turn of events, Sheldon Adelson is openly discussing selling off chunks of his Macao triple crown: Venetian Macao, Sands Macao and the Four Seasons. For all of Adelson's brave talk about sunny skies ahead, the fact that he'd float such a scenario speaks to how Las Vegas Sands has fallen and can't get up unassisted.

Sheldon Adelson, meet your new business partner.

His improbable rescuer is ... Melco International, which raises the deliciously ironic prospect of Adelson going into business with the son of archenemy Stanley Ho. You can't script this stuff! The Lawrence Ho solution sidesteps the pesky question of how to bring in a third party, effectively creating a sub-sub concession. (Do you cut them out of the gambling revenue? Would Chinese authorities stay on the sidelines?)

However, it raises another conundrum: How is the Macanese government going to react to one subconcessionaire owning part of another concession? It should be fascinating to watch this unfold.

The Unlucky Club & other Case Bets

Thu, 26 Mar 2009 14:40:00 -0700

Did somebody build the inaptly named Lucky Club (above) over an Indian burial ground? A deprivation of access is but the latest indignity suffered by this North Las Vegas grind joint. While it was still the Speedway Casino, it was ravaged by fire. Years earlier, it was the Cheyenne, most famous for having its bookeeping described as "smoke and mirrors" by then-Nevada Gaming Control Board Chairman Bill Bible. That rumpus -- and a few others like it -- would dog casino speculator Shawn Scott for the rest of his spotty career. Last we heard, Scott had hunkered down in the Virgin Islands.

Better fortune was in store for the long-on-the-market Ritz-Carlton Lake Las Vegas, which couldn't find any takers not so long ago. I'm guessing "undisclosed price" is code for "fire sale."

(Update: It sold for $98 million.)

At least I'm not alone in thinking that Las Vegas Sands is headed over the brink. So does John L. Smith who has more bad news for Sheldon Adelson.

Need to raise awareness of your bookmaking service? Hire a gambling addict as your pitchman! The surprise isn't that this, er, novel marketing initiative was ashcanned but that it got as far as it did. Earth to Better Bet, Earth to Better Bet ...

Earth to Wynn ... Weather forecasters have been predicting high Thursday gusts of wind all week long. But Wynn Resorts must not have paid its cable TV bill because it sent window-washers up Encore anyway. Not surprisingly, something went wrong and they had to be rescued. Now that everybody in Vegas is on a curtain-wall craze, expect crises like these to multiply exponentially.

Going out on a limb, the Las Vegas Sun says that Sens. John Ensign and Harry Reid were doing the right thing ... now that a consensus has formed and the story has faded, making it safe to take a stand.

Wendover: Casinos, yes; mental health care ... not so much.

If you're going to lose your marbles in Nevada (some would say I already have), don't do it in Wendover. It's still OK to lose money there, though. Wendover Will approved this message.

On second thought, you might not want to bring your money here, either. At least not if you use debit cards. Where do I sign the petition to abolish the Nevada Legislature? They don't need any stinking due process, do they?

Case Bets: Florida standoff; No Goa; "Good news"?

Wed, 25 Mar 2009 16:39:00 -0700

Legislators in Florida are occupying different sides of the planet when it comes to crafting a new casino compact with the Seminole Tribe. At the risk of being accused of giving the store away, the state Senate favors granting full Class III gambling to the Seminoles, in return for $400 million a year. The lower house, meanwhile, would roll the tribe back to slots-only parity with southern Florida parimutuels and charge tribes $100 million ... for games they're to which already entitled under federal law. In the unlikely event the Seminoles assent to Plan B, it will probably get a constitutional body-slam in court.

The upper house's proposal is also more "george" for private-sector casinos, as the Miami-Dade and Broward county parimutuels would get limited table games and all parimutuels statewide would be allowed Class II gambling. The stingier House bill is the Line of Death for anti-gambling forces, who'd prefer to cut off a $100 million-plus nose to spite their collective face. Even if it prevails, it's too late to do more than protract the agony of existing non-tribal casinos in Florida. This war is over and the Seminoles have won.

Oh, and revocation of the existing compact would deprive the state not just of money of hard-to-get (if limited) judicial purview over disputes that occur on tribal land. These sorts of exemptions to tribal sovereignty are rare as hen's teeth, so solons might want to ponder whether it's something they're willing to forfeit for the sake of striking a pious stance.

Slumdog customer relations: What do you do when one of your players wins big at the tables? Beat the living crap out of him, of course. Let's see if this innovative form of customer-relationship marketing catches on ... not!

Unclear on the concept: "Good news No. 3: As of January 2009, Las Vegas’ hotel room inventory was 140,729, and this number is expected to increase by 9.9% to 155,562 by the end of 2009. In comparison, Orlando, Florida has 111,700 hotel rooms and San Francisco a little over 33,300."

Uh, this guy obviously wasn't CC'd on the memo that an onrush of new hotel rooms at a time when visitation is in decline is not "good news."

(Quoth Andrew Zarnett of Deutsche Bank, "We view a CityCenter postponement as a net positive for the overall Strip demand and supply dynamics, which is currently lopsided towards oversupply.")

Taking a page from Red China, lawmakers in New Jersey propose "stopping payments to state prisoners who make license plates and do other work." I hold no brief for convicted felons but, the last time I checked, slave labor was illegal in this great land of ours.

Nevada: Building a bridge to the 19th century

Fri, 20 Mar 2009 13:50:00 -0700

Our antiquated regulatory infrastructure is making headlines again. You'd think fiscal watchdogs would raise a hue and cry about casino regulators having to fly up and down the state every time there's a meeting. Why all the travel? Because previous and current administrations are too damn cheap to invest in more and better teleconferencing equipment. It's a classic example of spending a dollar in order to save a penny.

Nevada is hemmorhaging casino and resort revenue to competing states, so what does Gov. Jim Gibbons propose to do but disembowel the Commission on Tourism. 'Cause if there's one thing Nevada doesn't need it's more of those pesky tourists, right? Good riddance to the varmints!

This shortsighted thriftiness is playing to predictably bad reviews in the Legislature. Even Midnight Jim's own lieutenant governor disses the notion, but the best sound bite comes from Assemblyman Marcus Conklin (D-Las Vegas). He took the commission's fill-in director to task, saying, "Your budget -- and I realize it's not your fault -- lacks vision and general business understanding. Those customers that would traditionally come to Vegas are going to be marketed to aggressively by everyone else, while we're sitting here playing tiddlywinks because we don't understand what's going on in the market."

Call that a proxy smackdown. "Lacks vision and general business understanding ... playing tiddlywinks" -- he's talking about you, Jim.

In defense of Gibbons on another matter, his accidental (?) defunding of the Nevada Film Office doesn't seem like such a big deal. State government isn't -- and hasn't -- done squat to incentivize film production here, content to see it snapped up by neighboring states (and Canada). Until the Silver State is going to do more than pay lip service to the silver screen, why bother pretending otherwise?

Inside the Harrah's filing:

Fri, 20 Mar 2009 12:28:00 -0700

Hare 1, Tortoise 0: After reading through the March 13 Harrah's Entertainment 4Q08 filing this earlier this week (one of the benefits of using mass transit), I set it aside for a few days, enabling the Las Vegas Review Journal's Arnold Knightly to beat me to the punch. What caught both his eyes (presumably) and mine (definitely) was a line of copy in which Harrah's acknowledged that its poor Las Vegas Strip performance was partly driven by "fewer hotel rooms availabe due to room remodeling and remediation projects at three Harrah's properties [including The Rio]."

You will recall that, whether to save time or money (or both), Harrah's made an end run around the Clark County permitting process when it wanted to make changes to several of its hotels. In some instances, these alterations not only didn't match the blueprints submitted to the county, they also compromised fire safety. (Lax inspection on the county's part allowed the problem to mushroom.)

Harrah's is presently under indictment for these cheeseparing measures, which were uncovered by dint of a forceful R-J investigation. It was a rare instance of the R-J speaking truth to power and the paper has suffered mightily for it, as Harrah's has retaliated in measures both great (an advertising boycott) and petty, like banning the R-J from Harrah's Las Vegas properties.

Whatever punishment the judicial system may or may not levy upon Harrah's will be nothing compared to the dent this misadventure put in Harrah's balance sheet. (By the way, I should acknowledge that Knightly read the Tolstoyian 160-page version of the quarterly report, while I settled for the 34-page "Cliff's Notes" version.) Harrah's may have thought it was saving money by going rogue but that false economy has now come back to bite it in the ass, to the tune of $60.5 million.

Gargantuan writedowns swung income from positive to negative in almost every jurisdiction. The international sector has bled red ink for two years, as London Clubs has proven to be a money-loser. The venture, like the company's hapless flip-flopping in Kansas, is typical of the spasmodic decisionmaking that has characterized CEO Gary Loveman's stewardship. Seemingly random projects (Slovenia, Singapore, the U.K.) were lunged at and toyed with briefly, then ditched. Having settled for one of the smaller fry of the British casino industry -- London Clubs -- and then unable to swap it for a piece of the big boy, Rank PLC, Harrah's must settle for selling off a little bit of LCI here or there.

Harrah's Atlantic City numbers would look much worse if the company didn't cleverly roll its Pennsylvania competitor, Harrah's Chester, into the A.C. portfolio for reporting purposes. If you had to assign Harrah's Chester to a region (as opposed to "Other"), the only one that fits is "Atlantic City Region," though that's a bit like rolling Laughlin numbers into "Las Vegas Region."

Debt service is murder, up 2.7X from 2007. 'Nuff said.

If asset sales are necessary, a non-Total Rewards property like Bill's Lake Tahoe would be already positioned for spinning off. However, Harrah's would have difficulty justifying more than a $160 million average sale price for any of its outlying Nevada properties, where cash flow is comparatively small. If significant relief is to be achieved from unloading casinos, some trophy properties will have to be sacrificed. After all, why should the bondholders be the only ones taking a bath?

Case Bets: Macao, Icahn, Atlantic City, MGM Mirage, Sin City Kitties

Tue, 17 Mar 2009 17:17:00 -0700

According to Telegraph correspondent Ben Bland, Macao finds itself in a bind. Peking's efforts to prevent money from being siphoned out of the country have crimped high-roller play, forcing a greater reliance upon mass-market customers. But the recession is cutting into their gambling budgets, too. Who's having the last laugh in all of this? Who else but Stanley Ho? As we're learning, never underestimate old Stan's ability to survive. He's probably found a loophole out of death, too. (But somebody needs to clue Bland in that Celine Dion doesn't play Vegas these days.)

Icahn's in: Well, sorta. Although the former Stratosphere owner is officially making a play for the Tropicana Atlantic City, he wants -- get this -- another six months to close the deal. Since the sale of the Trop was supposed to have been wrapped up 11 months ago, regulatory patience is finally running thin. Keeping the Trop in a 21-month limbo is grossly unfair to its long-suffering employees, too.

Icahn's equivocations could send the Trop caroming straight into the arms of Cordish Co., although it's unclear whether Cordish is still interested. Had chowderheaded, state-appointed trustee Gary Stein -- who was characteristically out of the loop on the Icahn bid -- closed the deal when deals were still to be had, all of this would be ancient history. New Jersey Casino Control Commmission members should be marched off to the woodshed for appointing Stein and then tolerating his interminable (and very expensive) bungling.

Elsewhere in New Jersey, solons have relieved Atlantic City's denizens of their second-class citizen status, albeit with many clauses and exceptions. This was accompanied by the usual howls about casinos wielding untoward influence (they can't even make political donations, which seems blatantly unconstitutional), although "juice" from other industries -- like the sacrosanct horse-racing business -- is implied to be hunky-dory. The horsey set's constant pining for slot machines gets a cold shoulder from the voting public, however.

Remember how I forecast that MGM Mirage's $1.2 billion writeoff of much of the value associated with former Mandalay Resort Group properties was going to kill 4Q08 earnings? Well, it did. However, the company supposedly still doesn't want to take on equity partners in anchor-around-the-neck CityCenter. "I'd be surprised if they dilute the joint venture [with Dubai World]," says a Reuters source. Geez, seems like if they'd "diluted" it with additional partners earlier on, they might not be hawking the family silver to raise completion money. Pride goeth before a ... well, you know.

Literacy-challenged Kitties: There's no better topless show on or off the Strip than the Sin City Kitties, who perform all the way out at Whiskey Pete's (which boasts a surprisingly spacious showroom). OK, I haven't seen Fantasy, probably because Luxor insists on advertising it as "Carrot Top Fantasy." As one wag observed, those are three words that should never inhabit the same sentence.

Anyway, Sin City Kitties is the only topless show I've seen that's predominantly erotic, as opposed to having a good number or three. And none of the girls betrayed signs of "enhancement" on the night we saw it, when it played to an appreciative audience of leathernecks and other servicemen.

However ... somebody needs to inform these pussycats that what they perform is not a "topless review [sic]" -- unless they plan to critique other topless shows from their stage in Primm.

"The Harry Reid Train": The asshat who made this fumbling attempt at an "ambush interview" might want to learn what the "Harry Reid Train" is (or more accurately, isn't) before attempting to smart-mouth Rep. Dina Titus (D-NV). Titus brushes off the uninformed oaf with the contempt he deserves. And hey, that's the "Sin City Express," bucko. Don't go messing up our catchy new brand name.

The mystery of James Packer

Fri, 13 Mar 2009 11:26:00 -0700

Lawrence Ho and James Packer bet the farm on City of Dreams.

If you can endure the small print, The Australian Business takes an in-depth look at the simultaneously waxing and waning fortunes of James Packer. Compared to what's portrayed as savvy handling of his media and livestock portfolios (he's selling the latter for 17X [!] EBITDA), it's a through-the-looking-glass story with regard to Packer's casino investments. There, his business acumen appears to have deserted him altogether.

A Packer associate's statement, "He's a tremendously disciplined person ... I think he's a bit of a deal perfectionist," doesn't square with the series of dead-end casino investments Packer's made in the North America, coupled with his impulse to buy in at the top of the bubble.

There may be a couple of drafts of wind beneath the wings of Crown Ltd. A slowdown in Macao means that Melco Crown Entertainment's City of Dreams will be 2009's sole megaresort opening in that market. Australian punters, meanwhile, can look forward to $590 stimulus checks from their guvmint, much of which is expected to flow into Crown's casinos -- and coffers. But across the Pacific, Packer's Canadian casinos are ailing and ...

Stop the presses! Packer is slamming the brakes on the Cannery Casino Resorts deal, paying $370 million for the privilege of punting the acquisition two years down the road and maybe clear out to sea. If it's the latter, he could wind up paying $660 million with only a 4% stake to show for it, once breakup fees are factored into the equation.

In the near term, there are several upsides. Cannery bosses William Paulos and William Wortman get to hang onto Pennsylvania's #1 revenue-per-slot racino, which is on the brink of expansion. Indeed, they could but scarce contain their glee. Crown shares leapt upward and Packer now has the option of rolling his downpayment into a minority (25%) share of Cannery.

Paulos and Wortman don't have to sue Crown and stick in the mud Gretel Packer for scuppering the deal -- and the unnamed trustees who constituted three big spanners in the works turn out to be Ms. Packer's three little kids. This revelation should go a long way toward satisfying Pennsylvania regulatory concerns. On that front, the clock continues to run, as the new Packer/Paulos-Wortman accord gives Crown 90 days to complete the regulatory-approval process.

The funniest line in the news coverage has to be "a complete collapse of the deal would have tarnished [Crown's] reputation in the tight knit US casino industry." Because it's not like Crown's escutcheon is all shiny-like, what with $455 million worth of anvils tied around its neck in the form of written-off grubstakes in Harrah's Entertainment, Station Casinos, Crown Las Vegas, not to mention an ongoing commitment to mastodonic Fontainebleau.

No what to with all that money from Packer's Down Under real estate play? It's said young Packer "didn’t have to sell, but he could see better places for his interest, to put his money." There sure are ... like Trump Entertainment Resorts or the Cosmopolitan and maybe the former Herbst Gaming empire, or perhaps bits and pieces of that disintegrating edifice known as Las Vegas Sands.

Meanwhile it's a happy day indeed at Cannery HQ, what with $50 million of Crown's money in the kitty, free and clear, plus hundreds of millions more sitting in escrow, plus a blue-sky future in Pennsylvania. Break out the bubbly, Bill and Bill!

Another downbeat quarter for struggling Shuffle Master. Considering the uninspiring succession plan for the post-Yoseloff era, is it too soon to say "takeover target"?

What's the future of Las Vegas Sands now that CEO Sheldon Adelson has dissident executives on the run and is exuding optimism that even Dr. Pangloss might deem over the top? (To say nothing of the revelation that many key shots are being called by Mrs. Adelson.) I consulted the utterances of the prophet Stewie Griffin, as found in Family Guy I:2, and beheld these words: " ... partly cloudy with a chance of doom!"

Case Bets: Fasolt, etc.

Thu, 12 Mar 2009 15:17:00 -0700

A reader has asked how Fasolt got his name. I'm to blame for that, because he was called "Marble" when I met him. He was living in a foster home in Minneapolis, after a woman had thrown out her boyfriend and his cat, but not before her bratty kids has smeared bubble gum in his (the cat's, that is) fur. "Marble" was a logical reference to his coloration but it's also cold, smooth and impersonal ... in short, nothing like the friendly and gently inquisitive -- albeit huge -- cat to whom I was introduced.

Fifty bucks later (the best $50 I ever spent), the mega-kitty was mine but the name had to go. Casting about for inspiration, my mind fell upon Fasolt, the soft-hearted giant from Richard Wagner's opera Das Rheingold. In it, Fasolt has a surly brother, Fafner, who clubs him to death in an argument over some gold. Fasolt, to his credit, only had eyes for the goddess of spring, Freia, but once the brothers are persuaded to take mere money instead, they're at each other's throats in nothing flat. (Allegory much?)

Fasolt, the giant, as portrayed in the Bayreuth Festival's 1980 revival of Das Rheingold.

Since Fasolt is the only character in the Ring of the Nibelung whose morality doesn't come into question at some point, he made a perfect namesake for my new feline friend. It's been the despair of veterinarians, who always misprononounce his name "fasOLT," but they've come to love him so much, I no longer mind. He lives with two Norwegian Forest Cats, Shadow and Mr. Bit, so that's a lot of plus-sized felines lumbering around my little pied-a-terre.

Magic's a Drag: I was persuaded to see it last night and, yes, it is indeed a drag. How anyone can justify $50 a ticket for such a cheaptastic show is beyond me -- especially when you can now get into Cirque du Soleil's Love for as little as $60.

Dix Nix Snix: Some gay-bar hanky-panky (third item) will cost Snick's $50K and a sex-, er, six-month loss of its slot route, unless the Nevada Gaming Commission overrules an already lenient settlement. Moral: Sex and slots don't mix.

Actually ... I can think of some off-color variants of that lesson, but I'll spare you.

Case Bets: Berkley's blast, Nevadapedia, slot fleece

Fri, 06 Mar 2009 11:39:00 -0700

Our senior U.S. Representative had some fightin' words for Las Vegas' political detractors. Unfortunately, she pulled what could have been her knockout punch. She kinda, sorta -- but ultimately doesn't -- say what needs saying, which is that "Las Vegas" is code language to stir up the churchy set, the "values voters" (regardless of party affiliation). It's like Dr. Pavlov's bell to that crowd. Rep. Berkley feints at this but doesn't follow through.

McCain drain: I'll leave aside the august senator's quips about "sustainable Las Vegas." (Two words, senator: Lake Mead.) But I do take issue with his jab at Nevada Humanities for creating an online encyclopedia of the Silver State. I mean, there's Wikipedia, right? (Which is famous for its reliability ... not.)

One of the central features of LVA is our online "Question of the Day," which would benefit greatly from resources like Nevada Humanities's 'Nevadapedia,' as it were. We're reliant upon the generosity of a network of amateur historians, with ever-helpful pros like Michael Green and Dennis McBride adding to the mix. So, hell yeah, this is an earmark I'm proud to have my tax dollars support.

Another Black Book inductee. Tampering with a Rite Aid slot machine will probably be enough to land this guy in Nevada's unofficial Hall of Infamy. There's a casino CEO out there whose company was found to have cheated its patrons -- and he still has his license. The smaller the miscreant, the more severe is the frontier justice that the Nevada Gaming Control Board metes out.

Case Bets: Taxes, Stratosphere, Riviera, Treasure Island

Wed, 04 Mar 2009 13:43:00 -0700

If you, like me, had hoped for a breather from bad news today, you hoped in vain. In no particular order ...

Faced with a collapsing state budget and a scorched-earth set of spending cuts proposed by Gov. Jim Gibbons, do state Democrats take an Obama-like, "Hard choices are upon us" stance? You're kidding me, right? No, they're seeking refuge in weaselly evasions that they can't make specific proposals because they don't know the exact number that they have to hit.

Will they take on the mining industry or propose the gross-receipts tax on non-casino businesses for which J. Terrence Lanni used to stump? Nope. Even though sales taxes are by nature regressive and both they and gaming revenue are spiraling downward, 60% of the state's eggs will continue to be put into that fraying basket. (The best analogy for this budgetary formula is that of CityLife's Steve Sebelius, who likens it to building a house on the slope of an active volcano.)

The rest of the non-solution, as propounded by Ways & Means chair Morse "Moose" Arberry (D) consists of More Of The Same: Just jack up each existing tax a teensy bit and maybe nobody will notice -- or at least squawk too loudly. The rationale, as explained by one budgetary sage, is that everybody takes it in the shorts (basically), sparing legislators from having to confront one or two particular interest groups. It also means that the increased -- they hope -- revenue starts rolling in on Jan. 1, 2010 ... whereupon the larger issue of Nevada's revenue structure can be safely palmed off on the 2011 Lege, absolving the current bunch of responsibility. Yup, sounds like a real winner.

So Nevadans and tourists alike can brace themselves for higher taxes on: alcohol, tobacco, live entertainment, insurance premiums, property transfers -- and casino revenues. Not to mention the hotel-room tax that's already sailing through. Heck, it seems the gambling industry dodged a credit-chilling acceleration of the tax on markers largely because Midnight Jim went off half-cocked. Gibbons' characteristic ineptitude is rarely a cause for relief but here's an exception to the rule.

As for the Buckley/Arberry proposition that the people who are already paying (you, me, the guy behind the tree) should pay more while the ones who aren't will continue to skate ... to say that it's disgraceful, inequitable and it stinks would be a gross understatement. It's a sad day when Jim Gibbons is your local Profile in Courage but there you have it.

J. Terrence Who? The unfortunate Mr. Lanni was a no-show at his Nevada Business Hall of Fame induction. Maybe, just maybe he's keeping a low profile because MGM Mirage is cracking under the strain of debt that was run up on his watch. Then again, this is a town that has no compunction about giving sentimental awards to mobbed-up old casino execs. But fudge one resumé and you're a non-person, buddy.

More 401-ks stopped. This time it's the Goldman Sachs-owned Stratosphere and both Arizona Charlie's, etc. Gosh sakes, yes, let's raise gaming taxes right this minute.

If a Strip casino were to close, the odds-on favorite would be the Riviera. It has shuttered all but one of its restaurants and has got to be worrying that a rumored six-month postponement of Fontainebleau could be the kiss of death. If that weren't enough, Wachovia Bank has decided to give the Riv a shove under the bus by insisting that -- according to Riviera Holdings President William Westerman (via PR Newswire) -- "Wachovia could gain access to all cash held in Riviera's bank accounts by merely advising the banks of a notice of default without first allowing us the opportunity to cure the default, no matter how trivial."

He adds that Wachovia's alleged brinksmanship has been going on since last Oct. 14. What luck: Of all the banks willing to help prop up the casino industry, Westerman has to deal with the one that decides to play hardball instead. When you consider that people were writing Westerman off 10 years ago, he's no stranger to facing long odds.

Ready for some good news? Cash-parched MGM Mirage is close to gaining some desperately needed liquidity now that the Nevada Gaming Control Board has OK'd Phil Ruffin's purchase of Treasure Island. Ruffin has enjoyed excellent luck with Nevada regulators. Like his New Frontier acquisition, this one went through like greased lightning. An exhaustive LVA profile of Ruffin found him always to be on the up and up. And unlike James Packer, he doesn't plan to fix what isn't broken.

Strike at the Trop

Mon, 02 Mar 2009 14:50:00 -0700

No date certain has been set for Tropicana Atlantic City dealers to hit the bricks but their patience has run out. This sorry state of affairs has been brought to pass by New Jersey Casino Control Commission-appointed trustee Gary Stein. Under the once-admirable principle of not wanting to lock new ownership into a union contract negotiated by receivers, Stein has justified punting this football further and further down the field.

Stein's position has been rendered untenable by his own feckless tenure, as he frittered away several pricey bids for the Trop last spring and now looks like he's let a downsized Cordish Co. offer slip through his butterfingers, too. This guy couldn't sell lemonade in Death Valley on the hottest day in August ... and to think that, if he got his way, the 15-month sale process would be further extended into May!

Blame also accrues to ~~Stein's handpicked interim~~ Trop administration, ~~headed by Pam Popielarski,~~ which has decided to charge dealers more money for fewer benefits. Belt-tightening may be the order of the day on the Boardwalk but to do this in the teeth of a contract negotiation is tantamount to an outright provocation.

This latest incident removes any doubt that the NJCCC should either put Tropicana Entertainment CEO Scott Butera behind the wheel (with the NJCCC acting as faculty monitor, if need be) or broker a deal with lead creditor Carl Icahn to appoint TropEnt as casino manager if Icahn prevails at the bankruptcy auction. When a strike looked inevitable at the Tropicana Las Vegas, Butera was quick to make peace. Let's hope he can do the same in Atlantic City.

Lobster heist. Down the street at Bally's Atlantic City, security nabbed a crustaceon thief, in an incident straight out of Paul Blart, Mall Cop.

Cannery sale on ice?

Wed, 25 Feb 2009 15:41:00 -0700

Nevada Gaming Control Board Chairman Dennis Neilander was kind enough to ring up pesky old NGCB detractor S&G today and provide some clarification on why Crown Ltd. and its supremo, James Packer, passed muster in the Silver State but have run into heavy weather in Pennsylvania.

"When we first started ... the Packer shares are held in a variety of trusts," controlled by Packer himself, Neilander explained. NGCB representatives met with trust counsel and "pored through all of the trusts," concluding that Packer was the controlling shareholder. "We have no concerns about it here. It was all disclosed to us."

(A government source adds that trustees fear Keystone State confidentiality provisions are less airtight than Nevada ones and information provided to regulators would become public. Which is why three Crown Ltd. participants are suing -- under aliases -- for declaratory relief, in a Delaware court.)

As for a spate of recent developments, Neilander said that Gretel Packer (above) -- who's suddenly gotten cold feet about Pennsylvania licensure -- didn't reach the 10% ownership threshhold necessary to mandate Nevada scrutiny. "We did" have contact with gambler Harry ~~Kanavos~~ Kakavas, Neilander added, saying that at the time there was no indication that Kanavos had tapes of Crown executives allegedly making illegal overtures to him. (Pennsylvania has sent an investigator Down Under to hear the recording.) And with regard to bribery allegations connected to Melco Crown Entertainment's City of Dreams project, those arose late in the proceedings, the chairman said, and there was not enough evidence from which to reach a conclusion as to their validity.

Neilander added that the NGCB is monitoring both the Kanavos and Macanese situations for potential post-licensure action. But with Cannery Casino Resorts bosses William Paulos and William Wortman accusing the Packers of colluding to scuttle the sale, these questions may soon be extremely moot.

Quote of the Day

Tue, 24 Feb 2009 11:36:00 -0700

"[Columbia Sussex CEO William J.] Yung showed a callous disregard both for New Jersey casino auditing regulations and for the requirement that any Atlantic City casino be a 'first-class facility of exceptional quality.'

"But if the restructured Tropicana Entertainment can prove it is indeed a new company that meets the state's licensing requirements, that would be the quickest way to get the Trop out of limbo and into the hands of new owners." -- from an editorial in The Press of Atlantic City, endorsing TropEnt CEO Scott Butera's push to have the Atlantic City Trop restored to the fold.