Oh, the humanity! How terrible is must be to serve on the Nevada Gaming Control Board, pull down a nice salary and be expected to do actual work. (This is not meant to the slight the many, lower-ranking NGCB employees who are both underpaid and overworked.) Yesterday, the “gold standard” of regulation held another of its dog and pony shows, this time to rubber-stamp the new gaming licenses of Virgin Las Vegas prexy Cliff Atkinson and CFO Chad Konrad. In doing so, it put untried JC Hospitality at the helm of a major Las Vegas gambling floor. JC replaces Mohegan Sun, which found the location and market to be rough sledding, and opted out. JC now rushes in where Mohegan feared to tread.
Atkinson was candid enough to admit one of the worst-kept secrets in Sin City: “Since reopening, the property has struggled.” Of course, that’s a self-serving admission, as it’s being used to justify the literally substandard wages and benefits Virgin is offering to its rank or file. (They opted to picket instead and Virgin is now being run as a scab resort.) He also tried to make it seem as though were his idea for Mohegan to depart, saying “The deal with Mohegan simply didn’t work.” NGCB Chairman Kirk Hendrick obligingly stuck his head in the sand. Rather than query the viability of Virgin, he “didn’t want to get into the finances of the former casino operator that made the decision to step out.” Why the fuck not? It’s clearly pertinent to Virgin’s current struggles and its sustainability as a going concern.
“I grew up here and just want to see that property succeed and flourish,” chirped Hendrick like the pom-pom-waving industry cheerleader that he is and not the regulator he’s supposed to be. (Of course, any lingering vestiges of serious regulation went out the door the moment Gov. Joe Lombardo came in—but that’s a topic for another day.) Atkinson’s gaming license appears to be merely cosmetic, as we are asked to believe that he will absent himself from casino-related decisions, leaving those to ‘tenant’ Konrad, while CEO Cliff acts as ‘landlord.’ Atkinson’s attorney straight-facedly cited the example of the scummy, defunct Gold Spike as an operating model. Perhaps as the former boss of Luxor, Atkinson ought to be applying his gaming expertise to the clearly troubled Virgin casino, but this is not to be the case.
One thing Hendrick got right was to stay on the sidelines of the Virgin/Culinary Union wrangle. NGCB assclown George Assad showed no such compunction, shamelessly carrying water for management. “This is about saving 1,710 jobs,” he shilled. “Despite what’s going on, that’s the bottom line. You are here putting yourselves out there, risking your own career, capital and reputation to save 1,710 jobs.” At least no one need worry about Assad risking his tattered reputation. He also had the temerity to lecture Atkinson and Konrad about their business model vis-a-vis whales. Fortunately, the two executives held their tongue, although their patience was apparently tested by Assad when the latter advised Virgin to get on its stick before Hard Rock Las Vegas opens in 2027. “We know there’s a ticking clock. Our former brand going down the street isn’t lost on us,” said Atkinson, with asperity that fairly leaps off the page.
Atkinson’s plan for reversing Virgin’s decline is to reposition the place “heavily around sports and entertainment and eat, drink, play, and have fun,” which sounds like more of a job for a true miracle worker like Derek Stevens. “There will be a renewed focus on local residents, promoting the loyalty program and free parking,” reports Buck Wargo. How Atkinson will get people to cross picket lines probably wasn’t discussed. And the casino floor can’t be doing as badly as advertised, if Atkinson is planning to use entertainment as a loss leader instead of a profit center, subsidized by gambling. The sports book remains in flux, with IGT (aka WTF?) tapped as interim operator, following the exit of ill-chosen Betfred. At least gambling, hotel operations, food and drink are gradually being centralized, if under the JC umbrella, although entertainment remains an outlier.
Falling on deaf ears was the Culinary’s demand that the NGCB perform something resembling due diligence and see who’s pulling Atkinson and Konrad’s strings. The board does not seem to have queried wherefrom C&C 4455 is conjuring up its operating capital. The union pointed accusatory fingers at a large Canadian pension fund, as well as Fengate Asset Management and Juniper Capital. “There are critical unanswered questions about the control and funding of Virgin Las Vegas,” groused the Culinary’s Ted Papageorge. Raising the specter of concealed foreign influence and even hidden ownership of Virgin LV, Papageorge darkly pointed to Canadian pension bosses Joseph S. Mancinelli and David D’Agostini, as well as to Fengate’s 63% overseas ownership. Juniper is apparently not above scrutiny itself, having been involved in a (again) Canadian land deal that ran afoul of regulators … then it turned out that Juniper was a stalking horse for a mystery Chinese investor who claimed to be the victim of a “misunderstanding.” Nope, nothing to see there.
The Culinary twisted the knife by pointing to past instances when the Control Board had been derelict in its statutory duties. It did nothing when Station Casinos got run out of Missouri. When Columbia Sussex got kicked out of Atlantic City, the NGCB was again silent, instead of revoking the Tropicana Las Vegas‘ license. It conveniently overlooked felonious conduct by a Deutsche Bank subsidiary which should have imperiled DB’s purchase of a controlling interest in Station. As the Culinary will happily point out, Nevada regulators were criminally late to the party in the Steve Wynn sex scandal. And—as the Culinary won’t tell you—Assad and Hendrick “exonerated” soon-to-be-convicted felon Scott Sibella mere weeks before the feds brought him down for a long string of criminal activities spanning multiple casinos.
One of the Sibella-led properties in question was Resorts World Las Vegas. An NGCB complaint against that casino is pending. Its imminent resolution will be the acid test of whether the Control Board is still a regulatory body or a group of sock puppets for Big Gaming’s bad actors.
Business as Usual Dept. Casinos in the great state of Maryland were, as usual, the first to report last month’s revenues. OK, it’s not so difficult when there are only six of you. Maryland Live continues to inch closer to MGM National Harbor. It rose 4% to $60 million, while the MGM behemoth (whose sheer preponderance cannot be understated) slipped 1.5% to $65.5 million. Distant, dismal third went to perennial underachiever Horseshoe Baltimore and its $14 million (-1.5%), which was actually better than what Deutsche Bank analyst Carlo Santarelli expected. Santarelli didn’t bother to mention Century Casinos‘ problem child, Rocky Gap Resort, which sank 9% to $4 million. (Century CEO Peter Hoetzinger addresses this issue frankly in a forthcoming interview.) Ocean Downs was down 7% to $6.5 million, leaving Hollywood Perryville and its $7 million, a 5.5% bounce.
Jottings: What used to be a Lord & Taylor store in Salem, New Hampshire will instead become the Granite State’s newest casino. The Cordish Gaming property (above) will be redeveloped at a cost of $160 million and will boast 900 slot machines alongside 40 table games … Hidebound Wyoming may, surprise of surprises, leap to the head of the queue for legalizing iGaming in the next Lege. It would be only the eighth state to do so … Casinos in Macao continue to turn it around. Gambling revenue leapt 15% last month. The $2.3 billion haul was still just 80% of pre-Covid amplitude, heights that Wall Street feels will never be scaled again … Despite fierce opposition from other tribes in Oregon, the Coquille Tribe is still advancing in its quest for an off-reservation casino. The tribe owns two acres in Medford—which haven’t yet been taken into trust, a major hurdle to clear. Competing tribes point to an unwritten one-tribe/one-casino rule in the state. Their biggest ally may be the incoming Donald Trump administration. The previous Trump regime nixed the Coquille’s application, only to have it revived under President Joe Biden.
This is bruising stuff. Once again it appears the gold standard of Nevada gaming regulation is more of a spray-on tan. Excellent column.
That location is real tough for Virgin Hotels so hopefully they can turn it around but it does not look promising. They do have some good restaurants in Virgin but Vegas Pauly C does videos there occasionally and the casino is pretty empty.