Send in the Clowns

Grease paint and putty noses were on full display yesterday at the Nevada Gaming Commission‘s charade of pretending to discipline Resorts World Las Vegas for consorting with criminals and laundering their money. In reality, the purpose of the hearing was to sweep the whole inconvenient mess under the nearest rug. The NGC rubber-stamped a paltry, $10.5 million fine, one which veteran casino executive and regulator Richard Schuetz termed not even a wrist slap.

In the past we’ve been hard on Australia‘s gaming regulators. But when faced with an out-of-control company in Star Entertainment, they appointed a special master to run it, suspended three casino licenses and are preparing to levy as much as $95 million in fines. That’s over $31 million per casino. Resorts World got off easy.

NGC members clearly had no stomach for their duty. “I never wanna do this again,” whined Commissioner Brian Krolicki. He rationalized the puny punishment by saying, “I don’t think it’s for us to tweak.” Ah, but it IS, Brian. After all, you and your colleagues just rejected the Nevada Gaming Control Board‘s plea agreement with Nicole Bowyer, saying a five-year ban was excessively lenient. You could have done the same thing with the Resorts World fine. But no, you clearly wanted to hustle this into the closet, lest it spoil your weekend. But no, the worst Resorts World will suffer (per Commissioner George Markantonis) is tarnished brand equity. Even the Malaysians think Resorts World beat the rap.

Doubling down on his ass-clownery, Krolicki claimed the fine constituted “a clarion call … we really mean it.” Which totally explains why Wynn Resorts and Steve Wynn were fined a combined $30 million for sexual predation but Resorts World broke the law and got off with one-third the damage. Any further violations, Krolicki emptily cautioned, would bring “severe ramifications.” Boy, Genting Berhad must be really scared now. Massa Brian gwine get serious someday maybe.

In case the NGC had any ideas about getting serious with discipline, Resorts World CEO Alex Dixon (below) fired a shot across its bow Wednesday by throwing 50 employees overboard, ostensibly to show what dire financial shape the place is in. Maybe Dixon has found waste and redundancy at Resorts World and is trimming the ship (and payroll). But he sure seems to have put a scare into regulators, ever-fearful of putting a casino out of business.

The commissioners even groveled before the assembled, new-look Resorts World executive team. Krolicki gushed that they had—get this—”extensive Wikipedia pages.” (Note to self: Create Wikipedia page.) Now we’ve never had an unkind word for new board member A.G. Burnett, relatively few for Chairman Jim Murren and almost none for board member Brian Sandoval. But they’re not the ones who need to be hearing the message. The Control Board and Commission had to apply a kick to the posterior strong enough to register all the way to Malaysia. They signally failed to do so.

Why does Genting need a bruise on the keester? Because it had to brazenness to deny having done anything wrong, despite having been caught red-handed. Genting “believed it was operating within industry standards and norms.” That’s both breathtakingly arrogant and incredibly insulting to the United States casino industry, which deserves an apology. A culture of corruption might be hunky-dory in the Pacific Rim, but we take a dim view of money-laundering here. Genting deserves an education on “industry standards and norms,” starting with denial of its application for a Class III casino concession in New York City, one it desperately covets.

Brace for impact. We got a preview yesterday of February’s gambling-revenue numbers for Las Vegas … and it ain’t pretty. Bottom line, tourism from Mexico and Canada has cratered. When you consider that those two nations represent 71% of all international travel to Sin City, this is serious. Especially since tourism from other countries still hasn’t recovered from Covid-19 and that alleged VIP magnet Formula One has failed to move the needle. Aeromexico traffic is down 16% year over year and 63% since January(!). Air Canada is off 5% and Flair a staggering 55%. Between the double whammy of tariffs and hostile rhetoric emanating from the White House, Canadians and Mexicans have every reason to feel unwelcome here and one can’t blame them one bit for staying away … and spending their money elsewhere, more to the point. (Drive-in traffic from our neighbors falls preponderantly upon tribal casinos, who aren’t likely to be amused by this newest turn of events.)

Don’t look for U.S. customers to pick up the slack. Even before the current administration took office and ran amuck, the best-case scenario for Big Gaming in 2025 was that it would be flat with 2024. That’s starting to look awfully optimistic. For instance, despite the energetic spin-doctoring of the Las Vegas Convention & Visitors Authority, its most recent tourism survey found a 10% drop in frequency of visitation. Also, Generation Z (7% of all visitors) isn’t showing up in the droves that the industry needs. Fewer visited Downtown than last year and, wherever they stayed, they were greeted with all-time-high room rates ($179/night). Roughly 20% fewer went to shows and, when they ate, they had to pay more than ever before.

While we hesitate to draw a clear, bright line from the price-gouging to the dimmed visitation, the evidence is there. It’s possible Las Vegas will re-recalibrate itself as a budget-friendly destination. It is also possible that pigs will fly. But we’re not putting money on it. In the meantime, Big Gaming is whistling past the recession and predicting that this month will be oh, so much better. After February, how much worse can it get? Not much, we hope.