A Tale of Two Resorts

As everyone knows, both Palms Casino Resort and M Resort recently changed hands, the former going to a pair of hedge funds and the latter to Penn National Gaming. Penn broke with industry tradition by keeping property CEO Anthony Marnell III and his management team at the helm. Although M’s financial performance has been disappointing, to say the least, Penn is a company with zero operational experience in Las Vegas, so keeping the same crew at the helm makes pretty obvious sense. The desert around Vegas is metaphorically littered with the bones of operators who tried to make a go of it here as novices, and I’m sure Penn is aware of it, too.

The M-to-Penn transition raises questions like, How will this affect prices and comp policies? Or maybe, How many customers is Penn expected to funnel into M? But you will seek answers in vain from the Las Vegas Sun‘s Erin Dostal, who conducts an amazingly vapid interview of Marnell (left) that provides no information of any value whatsoever.

At least George Maloof puts some unequivocal assertions on the table. While Caesars Entertainment was reported to be licking its chops over the Palms last year, Maloof assures readers that’s “never been true.”  He also states that, under his agreement with Texas Pacific Group and Leonard Green, he retains management of the property and chairmanship of the board.

But then … late today it was announced that much-bounced-around Joseph Magliarditi was the new president of the Palms, assuming one of Maloof’s old job titles, displacing Paul Pusateri, the first human sacrifice to the TPG/Green gods. Magliarditi didn’t last long at M or the Hard Rock Hotel & Casino, although he there sufficiently to implement a new, locals-intensive marketing strategy. Then he became of the casualties of the collapse of the Morgans Hotel Group regime. Although I sense the fine hand of TPG/Green behind this, at least they’ve chosen someone who’s experienced in the locals sector, the bedrock of the Palms’ business model.

Rick Velotta, R.I.P. One of the Valley’s best business journalists has, of late, devolved into a shill for Strip CEOs. This week he says that rival casinos (and the rest of us) should just suck it up with regard to a sweetheart tax increase being pushed by Caesars. Other Strip operators, mainly MGM Resorts International, understandably balk at a tax increase their patrons would pay so that Caesars — and Caesars alone — could get taxpayer subsidy for arena it can’t afford to build. (Geez, you think maybe that LBO was a bad idea?)

You know the drill: “the entire community would benefit” and all that jazz. Like it’s going to be affordable for the Average Joe, won’t create a monumental traffic problem and is premised on pie-in-the-sky suppositions involving major-league sports. But mostly the sticking point left unaddressed is: Why should taxes paid at Venelazzo make a detour into Gary Loveman‘s corporate cofffers?

This is almost as bad as a previous Velotta column, gratuitously defending Steve Wynn‘s tip-confiscation policy (but mostly fawning over Wynn). It’s such down-the-line Wynn Resorts propaganda you’d think Marilyn Winn Winn-Spiegel Spiegel drafted it for him. It rides roughshod over niceties such as what constitutes a “direct” or “indirect” benefit to ownership (the crux of the issue) and reiterates the fallacious logic of equating dealer pay — minimum wage plus tips — with salaried supervisors. The one is volatile, the other guaranteed and predictable.

Readers would have benefited from an analysis of the reasoning behind Labor Commissioner Michael Tanchek‘s controversial decision. (I could even lend him a copy.) For that matter, was it germane to allow testimony about an ancient policy at ancient Don Laughlin’s Riverside (above) that predates the law in question? Fughedaboudit. Velotta was too busy shaking his pom-poms.