Even outgoing Pennsylvania Gov. Ed Rendell (D) has thrown in the towel on a second Philadelphia casino. Now that he no longer has to gratify “george” campaign donors, Rendell says it may be time to look elsewhere in the state. Although he’s wrong that there hasn’t been any intra-state cannibalization (last month’s revenue numbers showed otherwise), Rendell does well to note that the impact of a mini-casino in Valley Forge has yet to factored into the equation. Casino aspirant William R. Miller IV dissents, saying that his group’s data shows that if you just add table games — Shazam! — Philadelphia can support another full-scale casino. However, Miller is not exactly a disinterested party and one would hardly expect his research to reach any different conclusion. Besides, a set of projections weighs fairly little against actual dollar figures — and they show a Keystone State market that, if it’s to grow, will have to be served somewhere than in the City of Brotherly Love.
Considering the track record of the sometime casino operator known as Donald Trump, his thumbs-up for Trump Entertainment Resorts‘ newest CEO is a dubious accolade. Remember that Trump quickly parted company with James Perry, who went on to take the helm at Isle of Capri Casinos, one of last year’s few turnaround stories. It’s not that Robert Griffin isn’t necessarily the man for the job but that The Donald wouldn’t know a good casino executive if he tripped over one. (His attempt to bludgeon his way into Philadelphia has been quashed yet again.) Luckily, Griffin wasn’t his choice to make, since the latest Trump Entertainment bankruptcy left its namesake little more than a noisy figurehead. What’s more to the point is whether former Isle exec Griffin, who left Atlantic City in 1996, when it was still on the rise, will be able to cope with the struggling Boardwalk of 14 years later. He has to play one of the weakest hands in gaming: Trump Marina (above) can’t find any takers even at $75 million, while Trump Plaza‘s laggardly performance makes an unattractive candidate for a joint venture. (Having been involved with Isle’s disastrous Coventry casino and its bizarre run at the Singapore market, Griffin is no stranger to quixotic business strategies.) Last year, the Marina finished 11th out the city’s 11 casinos, despite eking out modest revenue growth in the last quarter, while the Plaza was good for no better than a distant eighth place.
Griffin has sentimental ties to both casinos, so maybe he can rediscover what once made them good investments. These days, they’re invariably in the bottom four of Atlantic City casinos. Concentrating capital improvements in the company’s one strong asset, Trump Taj Mahal, is the most pragmatic course imaginable. Some of the other notions being floated sound like wishful thinking. Buying “distressed” casinos on the cheap is an excellent plan on paper — but then you consider Trump Entertainment’s balance sheet and wonder who’d lend TER the requisite capital, especially with those money-losing albatrosses, the Marina and Plaza, still hanging about its neck.
Heir apparent? Evidently punting on the question of a new CEO for Sands China, parent company Las Vegas Sands has named Venelazzo prexy Rob Goldstein “president of global gaming operations.” While Sheldon Adelson has shows no loss of appetite for his role as one of the industry’s top movers and shakers, the advanced ages of both Adelson and COO Michael Leven — plus recent turnover at the company’s highest levels — creates legitimate concern about the line of succession. Giving Goldstein a transoceanic portfolio reinforces the impression that he’s the logical successor to the man Jon Ralston dubbed “Gondolier Numero Uno.”
Speaking of successors, ailing casino vizier Stanley Ho has turned the reins of Sociedade de Jogos de Macau over to wife Angela Leong, cementing the perception that she will be the next occupant of the SJM throne. That still leaves plenty for Stanley’s 17 kids.
Elsewhere in Macao, MGM Resorts International CEO Jim Murren is still waiting for approval of the Cotai Strip™ land claim his company and partner Pansy Ho made in 2007. Perhaps that’s why Murren’s making noises about building MGM’s next casino on the crowded, historical Macao Peninsula or somewhere in the protectorate other than the glorified landfill that is “Asia’s Las Vegas”™.
Wherever MGM tries to go, it will still have to contend with Fernando Chui‘s administration — but the prospect of MGM shopping for casino land elsewhere in the city just might be a sufficiently convincing bluff to jolt the glacial land-approval process into something resembling expeditiousness. And, as Singapore’s economic growth continues to zoom past Macao’s, Chinese policymakers who envy it might do well to consider that Singapore (home to $5.76 billion Marina Bay Sands) had economic diversity and a global tourism allure before it went into the casino business, while Macao arguably put the cart before the horse in pursuing the same goal.
I was skeptical about Mr. Griffin taking over Trump, but after speaking to a trusted former CEO in the industry, I hear that he is a very capable executive and very good operator. You are absolutely correct, he has been dealt a weak hand (very ugly actually)! But I wish him the best of luck. Both Trump Marina and Plaza have unbelievable locational attributes. It is too bad that Donald squandered them. Hopefully Mr Griffin can play a better game of Monopoly than Donald did!