Caught between a skank and a Hard Rock; Kasich vs. casinos

Morgans Hotel Group may have skedaddled out of Las Vegas, tail firmly between legs, but it’s not free of trouble linked to its calamitous Sin City sojourn. During Morgans stewardship of the Hard Rock Hotel & Casino, it offered $300,000 a year (plus pricey perks) to Paris F. Hilton, for the sake of promoting the property. (Any casino associating itself with Holly Madison automatically looks better by contrast.) Long story short, the celeb-skank says the Hard Rock shorted her by 200 grand. That may be chump change, in view of her lifestyle, but she’s taking the Hard Rock to court anyway. It must be a matter of principle.

Fungible ethics. Personal-appearance fees aren’t quite the style of Assm. William Horne (D, pictured) … yet. Fast becoming known as Carson City‘s most ideologically pliant solon, Horne made the proverbial “fact-finding trip” to Great Britain, prior to introducing a bill that would make Nevada the newest seat of Internet gambling — done at the behest of lobbyist Richard Perkins. Horne did so as a guest of PokerStars, which — along with Wynn Resorts — stands to benefit from the passage of Perkins’ bill.

Who knew that becoming an authority on Internet casinos required arduous travel to hellholes like the Bahamas … as endured by state Senate Majority Leader Steven Horsford (D)? At least Assembly Speaker John Oceguera (R) had the probity to decline a chance to ride shotgun with the globe-trotting Horne. As noted by Gov. Brian Sandoval (R), the Perkins-penned bill would put Nevada on a collision course with the federal Wire Act and long-standing Justice Department policy. A veto now will save the state untold thousands of dollars in court costs down the road. Left begging by Horne and Horsford is the question that Jon Ralston phrases thusly: “Couldn’t these lawmakers have learned all they needed to know by, say, going on the Internet?”

Recession? What recession? Visitors to Las Vegas may be more selective in their spending nowadays but that hasn’t prevented Strip and Downtown shows from racheting their ticket prices to record heights. As crunched by our own Las Vegas Advisor research staff, not only is the average tab $76.46 but there were five more shows with a $100+ top tier than a year earlier. The near-death experience of Viva Elvis last summer (when MGM Resorts International seriously pondered shutting it down) just might have something to do with its being easily the highest-priced Cirque du Soleil show on the Strip. Comparatively venerable O costs you $21 less — and routinely clocks in as one of the very best-selling productions in town.

While the Cuyahoga burns … OK, even if Ohio casino developers such as Dan Gilbert‘s Rock Ventures and Penn National Gaming highballed their revenue projections (by 40%) to win votes, achieving those numbers won’t be made any easier by gubernatorial fiddling with tax rates. Gilbert, for instance, might have to put a hold on his Cincinnati project shortly (a joint venture with Caesars Entertainment). Yes, Caesars has a weak trigger finger but it can’t be blamed for hesitating when the break-even point is a moving target. Ohio may now be proclaiming itself a pro-business state … but only if you’re in the right sort of business.

The villain of this economic melodrama is Gov. John Kasich (R, left), who’s dragging as many feet as possible, including airing a demand for a retroactive, 1oo% increase in casino licensing fees. Having inherited casinos from the Buckeye State’s electorate, Kasich looks as though he’s doing everything possible to cause them either to fail financially or become prohibitively expensive to develop. (Shades of the faltering early years of Florida racinos under the Jeb Bush administration.) It could take as much as a year for a yet-to-be-hired tax consultant to advise the governor, although Kasich’s office promises swift action. S&G‘s take-it-to-the-bank prediction: Kasich’s consultant will call for — surprise! — higher levies than the 33% currently in force. True, as of 2008, Illinois and Indiana had comparable rates and many more than four casinos … but other states with a statutorily restricted number of casinos (such as Louisiana and Iowa) had notably lower imposts.

Throw in some genuine ambiguity about how the state’s fractional Commercial Activities Tax would be implemented — causing an exponential increase in casinos’ tax bill — and there could be severe brake-slamming in what had appeared to be a fairly smooth ride to commercial gaming. However, Gilbert and Caesars were still feeling sufficiently bullish to take out an option last week on a boutique hotel for high rollers. You’d think, with investment like that, Kasich would welcome the new players in town but damned if he isn’t trying to discourage them as best he can. To get the changes he wants would require re-amending the constitution, putting Ohio casino gambling on ice until 2013. Nice going, guv!