Earlier today, I penned a 1.5-page Question of the Day on the recent past and dubious future of the Las Vegas Hotel & Casino, which I habitually type as “Las Vegas Hilton.” Even if one confines the narrative to the last 15 months, or roughly the period after Hilton International informed Colony Capital that it would have to haul down its flag on Dec. 31, it’s still a calamitous microcosm of private equity’s swath of destruction through Big Gaming. Tom Barrack (above), the grinning boob atop Colony, managed to convert a $280 million asset purchase into a $252 million deed-in-lieu-of-foreclosure debacle, losing 90% of his investment in the process.
Well, not his investment … although I wonder if he shares this latest triumph with the poor schmucks he tries to lure into his crap-ridden funds. Now, the casino will devolve into the hands of two more PE firms — a Goldman Sachs subsidiary and Grammercy Capital, even as the LVH’s money troubles begin to yawn like a bottomless pit.
For all intents and purposes, Goldman has left the building, even as it plans to 
take title to it. Instead of folding it into its American Casino & Entertainment Properties portfolio, Goldman is trying to position the casino for a quick flip. Good luck with that. If you think times are lean now, just wait for the all-but-inevitable austerity regime that will follow once Navegante Group takes the keys, as manager. Where Navegante goes (Vegas Club, the Plaza, the Sahara, above), cutbacks — and worse — follow. Employees of the LVH have been issued WARN Act missives. Former Las Vegas Sands spokesman Kurt Ouchida, who should be embarrassed to be seen anywhere near the increasingly seedy LVH, tried to pass this off as a mere formality. I’m not buying it.
What’s coming? Probably one hella massive, 1,800-staffer layoff — although executives will undoubtedly retain their cushy sinecures — followed by the offer of 
possible rehiring, for drastically lower salaries and benefits. That’s unless you’re a table game dealer, in which case you’ve probably been supplanted by a robot already. (I’m sure receiver Ronald P. Johnson‘s $900K/year pay packet is safe.) The WARN Act is how Station Casinos ran the Culinary Union out of Santa Fe Station (above) and, given recent events at Resorts Atlantic City (another Colony casualty), the grinding sound you hear is the axe being sharpened, the better to amputate some payroll.
Given that Colony’s eradication of the Hilton relationship has pushed business right off the cliff, desperate measures are clearly in order. Projected losses have grown exponentially by the quarter and the hotel-casino is on pace to end the year $20 
million in the red. However, that makes fiscal castor oil no less unpleasant, and Grammercy and Goldman, if their credit bid prevails in bankruptcy court, will have the place free and clear. But any potential savings are being flung to the wind — or rather right into Navegante’s bank account. Between the cut of casino revenue the latter stands to take and the cost of hiring a redundant casino-management firm, the two Gs could easily make their financial position worse, if such a thing were possible. In any event, Navegante is clearly being brought in to do the dirty work. It’ll be the fall guy, shielding ACEP-run casinos from PR blowback.
Speaking of our friends at Station, who just love to read S&G, those wacky 
Fertitta Brothers threw a little soirée last Friday for private equity’s standard bearer, for want of a better term. Up front and center of course was wannabe puppetmaster Sheldon Adelson. Let’s leave aside the obvious question: Do we want Shel, Frank III (left) and Lorenzo wielding influence in Washington, D.C.? (A scary thought. Look at what they did to the Vegas economy in ’06-’09, then extrapolate it nationally. Yikes!)
More significantly, the casino industry has come a long, long way up in the world when it can schmooze with a presidential candidate, especially a nominally anti-gambling one, 
just as any other business can take for granted. Besides, being acutely uncomfortable with public speaking myself, I say there’s nothing that could make the ill-at-ease Mr. Romney look downright jiggy than putting him next to les freres Fertitta (one of whose major investments is shown at right), the two dullest individuals it has ever been my experience to encounter. I cut a 45-minute interview with them about Red Rock Resort short after 30 minutes for fear I would be bored clear to death up in Summerlin and nobody would come to claim my corpse.
Coco Austin. Sounds like a chain restaurant but it’s actually the name of Mrs. Ice-T and she has been officially named the successor to Holly Madison in Peepshow. Like I care.
