Wasted … and the 77% solution

Not even the cachet of Carey Hart and occasional appearances by Pink were enough to keep Wasted Space going. The Hard Rock Hotel is calling it quits on the club, bumping it in favor of a race and sports book. Not coincidentally, the HRH had just inked a pact with Cantor Gaming to bring the latter’s mobile-gambling application to the Hard Rock for sports-wagering purposes. Even less coincidentally, CEO Joseph Magliarditi came to the Hard Rock from M Resort, which was Cantor’s second client in Las Vegas (the first being Las Vegas Sands). Incidentally, the Palms was tinkering with a rival application made by a small company but it never seems to have gotten off the ground.

Although handheld gambling has been a dud, when it comes to supplanting slot and table-game play, it’s been a home run with sports bettors. I’m sure Morgans Hotel Group and its co-owners will also be able to “own” more of the sports book revenue, even after Cantor takes it cut, than they were hosting Wasted Space. Combine this with a rumor that the Hard Rock’s poker room is downsizing and we could be looking at a fundamental restructuring of the Hard Rock’s business model. Given the property’s struggles in the post-Peter Morton era, it’s an idea that’s past due.

And I’m Santa Claus. What a bunch of cutups they are at Harrah’s Entertainment. We’re asked to believe that a $52 million writeoff of real estate underlying the abortive Foxwoods Philadelphia project is simply an “accounting determination” that reduces the value of the land to $15 million (a 77% depreciation). Since the sine qua non of any Harrah’s involvement with the revival of Foxwoods Philly was a land-for-equity swap and a “term sheet” for a new development deal is overdue, it’s difficult to believe Harrah’s protestations that nothing is in the works … unless CEO Gary Loveman thinks the whole Ed Snider-led deal is FUBAR, and is getting ready to try and unload the land at — pardon the pun — dirt-cheap prices.

Don’t tell Sharron Angle but not only has CityCenter failed to move the needle on Las Vegas visitation even remotely close to MGM Resorts International CEO Jim Murren‘s downsized prediction of 7%, it may be blunting a modest recovery rather than leading it. It’s a bit of a stretch to blame the troubles of the Riviera (which has been on the ropes for years) and the Tropicana (victimized by revolving-door management) directly on CityCenter. These Darwinian evolutions of the Vegas Strip were virtually inevitable but CityCenter appears to be accelerating the natural-selection process.

However, every resort opening bumps Casino X one step lower on the food chain. Yesterday’s category killer is tomorrow’s bargain play. That’s how it goes on the Strip. Bellagio continues to be the exception that proves the rule. Steve Wynn oversaw a design that makes the hotel a natural focal point for the Strip and the property wears its years lightly. By contrast, CityCenter’s design not only seems to turn its back on the Strip but is best appreciated from I-15 … as though the target customer were impulse gamblers rolling up the interstate from California.

The Sun‘s Liz Benston calls the scrum of contradictory economic indicators an “out-of-whack scenario [that] is a result of an overheated economy cut short — a process that happened too fast for spendthrift, overleveraged Las Vegas resort giants to react quickly enough to changing market conditions.” Those who believe federal stimulus has consisted of half-measures too small to jump-start the economy, the sputtering visit-slightly-more/spend-somewhat-less dynamic playing out on the Strip may constitute evidence for the prosecution.

Any good that Uncle Sam might have done in Nevada has been greatly diluted by Gov. Jim Gibbons‘ tardiness to deploy some federal monies and complete failure to tap others. And when it comes to tax cuts, I’m not hearing any proposals to lighten the load upon bread-and-butter players — the Harrah’s demographic, let’s say — just on high rollers, who are still here, still spending and don’t seem to need further incentivization. Besides, can anything on the scale of the Las Vegas Strip be sustained solely on high-end play? Judging by recent numbers, the answer appears to be “no” (worst-case) or, taking the optimistic view, “just barely.”