Would somebody please sack the so-called casino management and marketing staff at The Cosmopolitan of Las Vegas. Everything at the Cosmo is improving except the gambling floor, which took a 20% nosedive in 2Q13, to $31 million. Losses were 25% worse than last year, despite a $5.5 million growth in net revenues. As though to confirm that the Cosmo doesn’t have its eye on the (roulette) ball, it released the following, mind-boggling blather: ““We are encouraged by the increases we continue to experience in key areas of our business and pleased that the brand continues to resonate with Las Vegas visitors and locals …” (emphasis added). Both room revenues (up 12%) and F&B continue to outgross gaming. It missed its projected hold on table games by a country mile. By contrast, high occupancy (94%) translated into high ADRs. Still, the Cosmo really should look into bringing someone like Randall Fine or Aaron Gomes into the fold to try and help them learn this casino thing, which evidently continues to stump them.
U.S. casino corporations doing business in China now have a license to run amuck. Why? Because in testimony before the U.S. China Economic & Security Review Commission, our own Nevada Gaming Control Board Chairman A.G. Burnett waved this white flag: “We regulate gaming within our borders, but have neither the authority nor the desire to regulate gaming in another jurisdiction.” It’s not entirely the Control Board’s fault. It’s still budgeted as though the year were 1990, prior to the explosion of growth in Vegas. Or, as the Las Vegas Review-Journal‘s John L. Smith puts it, “Nevada regulators are way out of their depth in Macau. That should seem self-evident …” Of the all-important junketeers who extend credit to VIP players, all but seven are mobbed up.
This prompts Smith to ask, “If it’s acceptable for Nevada licensees to do 
business — even at arm’s length — with triad associates in Macau, will it one day be acceptable for triad-influenced companies to do business on the Strip?” In our desperation for new capital, we appear to be heading that way. And don’t forget that Genting Group tried to bring Stanley Ho into its Singapore operations through a back-door arrangement. The Singaporean government came down on that like a ton of bricks but Nevada regulators are more inclined to be complacent. So Sheldon Adelson, Steve Wynn and Jim Murren, the message is this: See how much you can get away with in Macao … ’cause nobody in Nevada is going to slap you down. I’ve long said that Silver State regulation is a toothless tiger and Burnett has just proven it.
If a gal didn’t want me, I’d stop chasing her. That’s why it’s been odd watching Rational Group trying to use the New Jersey court system to forcibly copulate it with Colony Capital, owner of the disputed Atlantic Club. Well, Rational finally got some rationality over the weekend. The parent of PokerStars has called off the unrequited romance (which had distinctly sadomasochistic overtones). Good call, gentlemen.
Dave, I get your point on Nevada regulators looking the other way on Macau; however, when NJ brings down the hammer (MGM), it seems that journalists mock their own standards about being anti-business “Its MGM!” kind of stuff.
What say you?
I’d say MGM dug its own grave in New Jersey and that other states should not have been so complacent about the whole affair, especially in light of the Division of Gaming Enforcement’s findings in the matter. Now, since all the bad actors (including Lanni, I regret to say) are gone and Pansy Ho has been demoted to a minority shareholder, the case can be made for re-instituting MGM’s license. Its sins were minor compared to those of PokerStars and very few seem to find the latter’s move on Atlantic City objectionable.
Anyway, it’s ludicrous to try and ride herd on Macao with a mid-20th century regulatory setup, as we have in Nevada.
The problem for the Cosmo is that gamblers won’t gamble at a one-property joint knowing it’s harder to get room comps there than with the bigger boys like MGM and Caesars with tens of thousands of rooms to give away. I know that’s been my reason for not gambling there over the years, but like everybody else I do enjoy the Cosmo’s great bars and restaurants. The sensible solution would be for MGM to buy the Cosmo since everyone thinks its part of City Center anyway.
Dave:
We just got back from Vegas and spent the better part of a day in the Cosmo.
I am not sure if the results are a result of the type of play we experienced but we had an interesting visit.
Firstly my wife hit a $1,050 jackpot on a slot machine along with a $300 play on the same machine two minutes earlier.
Secondly, I walked across the road to the Planet Ho to play some table games and played on a $5 Flushes game which is unique to the Strip. I also could have played $5 five-card with a six-card bonus of $5 Texas Hold’em.
Neither of these games are offered at the Cosmo. All of the Cosmo tables are at least $10 and no game is unique. The tables are generally empty.
I personally do not like the table setup and the mix of the slots with the tables. In addition I believe that have too many of them. And even the Encore has a $5 three-card poker table during the day.
From what I could see, no one is playing the higher-return table games and if the only successful ones are Blackjack and other player-friendly games them their table hold will be poor.
Bite the bullet an lower your daytime limits to $5. I play almost exclusively the $5 tables up and down the Strip and almost always lose. But the games are fun. The tables are fun because of the interaction between the players, which doesn’t happen in Blackjack.
BTW it’s not the first slot jackpot my wife has won. And we do not go into the bars. Call us weird but we go to Vegas to play the slots, which are quite good in the Cosmo.
Dan
Cosmo set out to be the top young, hip destination in Las Vegas.
For the most part, it achieved that.
Walk through any weekend and it is packed with twenty somethings who are there to party.
The problem for the Cosmo is they are not there for the gaming.
I’ve walked through during the week when nearby casinos are busy and the casino at Cosmo is almost empty.
They are making money on the hotel, food and beverage side as the place does have some nice restaurants and the rooms with the best view in town.
I stayed there in March for 4 nights and had a fairly positive experience despite some hiccups on the hotel side primarily with housekeeping which was poor.
It seems that they are making an effort to attract more players as the offers I started receiving are very attractive including tournaments, free play, F+B credit and most recently a free cruise.