Our ongoing buffet crawl took us to the Gold Coast last night. After applying a Pocketbook of Values coupon, it came out to $11.80 for two people, which definitely counts as a bargain play, provided you manage your expectations somewhat. For instance, anticipate fewer items per category … but also a few categories you might not expect, like “Mongolian.”
The food offerings aren’t identified, unless you count some places where things like
Just a quick hit on my way out the door to spend an evening prepping for The Dark Knight by watching Batman Begins …
Ameristar's in play. No news flash there and, for the life of me, I can't figure out why the Motley Fool thinks MGM Mirage will be the ultimate acquirer. The company doesn't seem particularly interested in regional markets these days and has been pulling back from some of them — the same outstate-Nevada kinds in which Ameristar currently operates.
On the other hand, as the article points out Crown Ltd. has $5 billion burning a hole in its pocket after the Las Vegas Tower deal went limp. I don't know offhand what the seven-times-cash flow number for Ameristar is, but $5 billion should cover it with room to spare. The Fool lays out a compelling case for how Crown could use Ameristar's properties to funnel customers to Fontainebleau — much as Harrah's Entertainment did with The Rio, back in the Phil Satre era.
Then again, there's Penn National, which has about $500 million in mad money (after stock buybacks) right now, thanks to the breakup fee from its busted IPO. With another $775 million promised to Penn, it ought to be able to ante up the acquisition fee without breaking a sweat. Ameristar's Missouri properties have been money-spinners and, as the Fool points out, the acquisition of the Ameristar brand would enhance Penn's persistent second-tier image. A combined Penn-Ameristar would give Pinnacle Entertainment a run for its money in St. Louis, and could regain ground being lost to MGM and Harrah's in the greater Chicago market.
Whoever loses needn't feel too bad. The Atlantic City Tropicana is still out there and debtors will probably force a sale of the rag-tag remnants of Columbia Sussex's casino 'empire.' With its market cap languishing around $837 million, Boyd Gaming looks vulnerable and if you're in a thrift-store mood, Isle of Capri's fallen to near-micro-cap status, at $157 million. Then again, you have to figure out how to turn around 'Pile of Debris.' So maybe it's not such a bargain after all.
I’m in the second day of stomach flu, so small portions are advisable …
A “juice job” that followed two fatalities at The Orleans has come under federal scrutiny. In an unrelated development, Boyd Gaming board member Luther Mack has stepped down. Boyd says his seat will remain unfilled. Maybe he was irked by a rule change that requires a two-thirds vote of Boyd shareholders to call a special meeting, up from the former requirement of 50%. Maybe not. But with Boyd stock in the toilet (and unfairly so, IMO) it’s a way to keep those unruly shareholders at bay.
El Cortez critiqued. $26 million of renovations were sufficient to lure City Life‘s Andrew Kiraly back to “the venerable El Cortez.” He notes a significant winnowing-out of the slot floor, along with signs of still-in-progress work elsewhere. “The new carpet is bright, firm and strangely edible-looking,” though, and “even the patrons seem to have a new spring in their skulk.”
Don’t be discouraged: Coming from the caustic Kiraly, this is an out-and-out rave.
If the Las Vegas Weekly‘s search engine weren’t such and out-and-out frack-up, I’d be only too happy to point you toward a dispassionate, well-substantiated takedown of the dubiousness of piggybacking a sports arena onto Bally’s Las Vegas. (One word: parking?) It’s by Damon Hodge and well-worth reading … if you can find it, that is. Hodge deserves better.
… because you could be Illinois, where June gambling revenues went into the toilet (-21%). Which isn’t to say that Indiana‘s numbers look good only by comparison. In fact, the Hoosier State may be benefiting from the Land of Lincoln’s misery. It’s sort of a “Yes, but …” situation.
Yes, Indiana would be a lot worse off (-12%) without two new racinos, Hoosier Park and Indiana Live. Their addition has kept gambling revenues virtually flat from June ’07. And that’s two flat months (as in variance of less than 1%) after eight months of declines. In terms of gross, Hoosier Park vaulted into the #5 spot, while Indiana Live checked in at #9.
Yes, northern Indiana initially looks like it got clobbered (-11.5%). But once you
… it's servicing its debt by issuing more debt. This isn't necessarily a bad thing, as it will save the company $100 million. "What is more curious, if not troubling, is the reference to retiring debt taking advantage of current market conditions," cautions analyst Barbara Cappaert (possibly a reference to the fact that Harrah's bonds are trading at an anemic 52 cents on the dollar).
Another satisfied customer: Add this Atlantic City regular's experience to growing volume of testimony that Harrah's Entertainment is turning into a big-ass Columbia Sussex …
Just a quick thought about Harrah's properties in Atlantic City. I visited there about once a month with my wife for a number of years. I play 25 dollar minimum blackjack and the horses. She likes the slots and always liked their bar-b-que restaurant in Bally's Wild West Casino.
However, everything changed a couple of years ago. It started in the buffet when I noticed that the omelette maker had disappeared. We then noticed that they had closed our favorite restaurant to make it a waiting area for the buffet. We had stopped going to the buffet when I asked for my steak medium rare. It was quite well done and they did give me another steak. Unfortuately for someone, they put my old steak back with the bite taken out on the fire.
We then started getting put in the Claridge for our free room. To put it mildly, it is about the level of a Rodeway Inn. I then found that we were getting about one third the comps that we used to get for my play. We also were being charged 2 dollars for a cup of ice (with a little bit of flat soda added) in the horse race room. The final straw was when they made most of the tables "hit on soft 17" for blackjack. We then started going to the Borgata instead and have not been back to any Harrah's property since that time.
Multiply us by hundreds, if not thousands of other customers who probably ran into the same problems over the past couple of years and you can see why they have trouble getting people inside to play their games. They can blame it on the no smoking laws, the economy, or the high price of gas, but the real reason is probably their penny pinching ways and their poor customer service.
I don't know what else to say but it seems that especially in the casino business, bigger isn't necessarily better. I have recently started getting better offers through the mail, but I won't set foot on any of their properties anymore.
While the Las Vegas Convention & Visitors Authority may blanch from peddling bargain-oriented messages, we don’t. While it wasn’t that long ago that some of us were mourning the apparent demise of on-Strip bargains — or redefining said bargains as $100/night — the downward economic spiral of the U.S. has dramatically reconfigured the equation. And a 39% drop in MGM Grand room prices or a 45% plunge at Green Valley Ranch definitely qualifies as “dramatic.”
Boulder Strip quality at Las Vegas Strip prices
On the lighter side, you’ve got wonder what they’re smoking at the Longhorn or Speedway that leads them to believe they can justify price points equivalent to Sunset Station, Excalibur or Harrah’s Las Vegas — and 2.5X those at Palace Station. Oh well, optimism is an admirable quality.
Speaking of bargains, Wall Street is punishing Las Vegas Sands for its room discounting, not to mention predictions of a delayed opening (as in months later than planned) for Four Seasons Cotai. At $43.09 and falling, LVS is definitely a “bargain play,” off $105.67/share from its 52-week high.
Gary Loveman must be working on his stand-up act. In today’s Wall Street Journal, he calls the present economic pickle “the toughest environment we’ve faced.” It might not be 
quite so difficult had Loveman not steered Harrah’s Entertainment (and its apparently sheep-like board) into a leveraged buyout, an act for which Loveman was handsomely compensated by new owners Apollo Management and Texas Pacific Group.
It gets better. Loveman tells the WSJ, apparently with a straight face, that Harrah’s is “profitable.” Somebody must have hid the most recent 10-Q from him. That little piece of paper shows a March 31, 2007 profit of $185.3 million swinging to a $187.8 million loss one year later.
And if you’re “boosting visits to its regional casinos by c
Harrah’s Entertainment continues to demolish the low-rise apartment dwellings it accumulated behind its Barbary Coast/Flamingo/Imperial Palace/Harrah’s Las Vegas cluster of properties. Also, a shiny new fleet of construction trailers now sits where Bourbon Street‘s hotel tower once did. Could we be seeing the first stirrings of “Epicentre”?
Regardless, apartment owner Oscar Nuñez, whose sad, little buildings are surrounded by more and more piles of rubble, looks the Big Loser of 2007. He squandered his opportunity to sell out to Gary Loveman when the market was at its height and Loveman was on a buying spree. Now he’s missed his moment and will probably either have to settle for a depressed price or watch Harrah’s build up all around him just out of spite.
Incidentally, we passed the now-infamous corner of Koval and Winnick the other night, on our way back from The Palazzo, and couldn’t help but think: If there’s anything left in the state budget other than a few pennies, nickels and some lint when Gov. Jim Gibbons finishes demolishing it, perhaps the Nevada Historial Society could erect an historical marker at the Koval/Winnick nexus, commemorating the sad story of Javon Walker — if he ever gets it straight, that is.
Direct Strip access is the holy grail of megaresort design — and those, like the Aladdin/Planet Ho, who ignore it do so at their own peril. Unfortunately, this means gnarly tangles of pedestrians, cars, buses … everything except rickshaws, when a crosswalk (er, “pedestrian realm”) must vie with the grand entrance of a Paris Las Vegas, say.
Kudos to Boyd Gaming, then, for circumventing this problem by planning a pedestrian tunnel “underneath the main project driveway” at Echelon, 151 feet long by 20 feet wide (the Strip is to the lower R-hand side of the rendering, above.) To provide some visual compensation, Boyd plans to line the tunnel with glass display cases (contents unspecified).
If there’s anything to regret, it’s the renaming of Stardust Road as “Echelon Resort Drive” (Boo!). The Stardust was a proud and important part of Boyd history and it would be touching if some vestige of it (however vestigial) lived on as part of Echelon. Instead, it looks like one more trace of our already ephemeral history will be effaced.
Those clever Germans, what new technical marvels will they, uh, conceive next? As long as my enjoyment of baseball games and Battlestar Galactica is to be disrupted by infestations of commercials featuring randy AARP members singing — sometimes literally — the praises of Viagra and Cialis, then the FDA had better get this spray-on prophylactic to market, stat. Just imagine the sales in Las Vegas (and Nye County) alone!
More is Less Dept.: Even if Mamma Mia! is coming to the big screen on July 18 — in cinematic treatment that makes the stage production look monastic — you’ll still get more music for your money at the live version, hanging tough at Mandalay Bay.
The Internet Movie Database and Wikipedia are — surprise, surprise — at odds as to which songs made the cut and which didn’t, while the movie’s official site is no help whatsovever. “Knowing Me, Knowing You” is definitely Out (and, from what I’ve been able to deduce, Pierce Brosnan‘s vocal limitations may have been a consideration — imagine Van Morrison covering ABBA). So are the Act II curtain-raiser, “Under Attack”, “One of Us” and the fatuous “Thank You for the Music” — which has supposedly been reinstated as end-credits music. And a 1981 song, “When All Is Said and Done” has somehow found its way into the show. WTF?
If Wikipedia is to be believed, the songs have also been re-sequenced, with “I Do, I Do … ” moved to the 3/4 mark. But if IMDB has its facts right, the encores of “Dancing Queen” and “Waterloo” are supplanted with other songs — which would be grounds for criminal prosecution, if not rioting in the streets.
However this shakes out, it appears highly unlikely that the movie is going to make the stage version in any way redundant. (Which is another way of saying MGM Mirage should let Mamma Mia! run at Mandalay Bay until its producers decide otherwise.)
And if all this makes your head spin, have a quiet lie-down and enjoy the sublime Meryl Streep letting ‘er rip in the title song and three others (with assists from Christine Baranski and Julie Walters), including a by turns rueful and torchy “The Winner Takes it All.” She should dust off the air piano and take this act on the road.
You know things are bad when McCarran International Airport offers space for three hotel-registration kiosks (ranging from 525 to 935 square feet, starting at $200/foot) and can’t find takers for all of them. Fifteen possible candidates were solicited and, when all was said and done, McCarran received two — count ’em, two — bids.
MGM Grand will get the mid-sized (764 sq. ft.) space, having bid on all three — albeit at the minimum. The Venetian Casino Resort was feeling more open-handed, offering to start at $400/square foot, but decided that the smallest of the three kiosk areas was sufficient to its purposes. Which means there’s almost 1,000 square feet of express check-in area at McCarran going begging. Belts must be getting pretty tight ’round here.
Encore is taking applications. I wonder what prospective dealers are going to hear about tipping policies in their job interviews (and how many of them will be unhappy campers from Caesars Palace and other Harrah’s Entertainment properties). Wynn Las Vegas dealers who are sticking it out through slow-moving negotiations would surrender a hard-won victory by applying at Encore?
And does Steve Wynn risk having unionization spread to his new casino if he raids his Wynn LV dealer pool for Encore? If he extends his tip-confiscation policy to Encore, what incentive would current Wynn dealers have to apply there, other than perhaps a bump in their base salary? Does it boil down to arguing that keeping most of your share of the tip pool at Encore is better that keeping all of what you’d make anywhere else? Since Wynn’s properties are still perceived as the top of the food chain (regardless of what Sheldon Adelson proclaims), that could still constitute a powerful argument.
Besides, you have to tip your cap to any company that makes the preservation of the King’s English part of its code of conduct: “Use complete sentences, avoiding slang and phrase fragments.” Because that’s like so totally … Whatever. Y’know?
Blame it on Kansas. Maybe it’s because their eyes are on landing a contract to build a megaresort in Kansas. Or maybe Pahrump just seems like small potatoes when you’re hanging out with Kurt Busch and Daniel Negreanu, but Golden Gaming has bailed on its purchase of Saddle West Hotel & Casino, dumping it back into the lap of Marnell Sher Gaming.
Roadhouse rides again. Another one of the ghost casinos of Sunset Road rose again as a slot house, if only for eight hours, to keep its gaming entitlement alive. Can the former Holy Cow Brew Pub & Casino be far behind?
Reuters reported this week that the debt carried by Harrah's Entertainment “may weaken from already distressed level as heavy capital spending and interest payments absorb cash flows at a time when the casino operator is also facing declining gambling revenues.” We've already seen one set of quarterly income wiped out — and then some — by costly interest payments and early retirement of debt.
One analyst decribes Harrah's leverage as “pushed … to the limit” with little prospect for improvement. Guess that puts paid to a Galaxy Entertainment acquisition. Not to mention that physical expansion is going to require even further indebtedness.
Meanwhile, Wall Street speculates that Harrah's may elect to retire some bonds not with cash payments … but with even more debt. The cost of insuring said debt is steep, reflective of the fact that “people are pricing in a lot of risk there,” according to analyst Christopher Snow of CreditSights. And while analysts like Snow wait to see which way the current downturn in gambling shakes out, they're also fretting over how new infusions of rooms into the Vegas market are going to eat into Harrah's pricing power.
Oh, and a slew of notes come due in 2010, when Snow predicts the company will hit “a pretty high wall of maturities starting in 2010 and going through to 2011 and afterward.”
Harrah's won't fail, predicts a third analyst, “but this is a tough one.” CEO Gary Loveman's multi-million-dollar early opt-out clause may be looking very attractive right now. The Harrah's car isn't going over the cliff by any means, but the upside of the Apollo Management/TPG Capital deal still appears chimerical.
The New York Yankees are hanging in there like the tough old birds they are. And if you can bear to watch Melky Cabrera's graceless outfield play (a far remove from the gliding elegance of Bernie Williams in years past), then you'll be looking forward to pulling up a table at either NYY Steak or a Hard Rock Restaurant in the House That Ruth Didn't Build, when it opens next year. This joint venture between the Pinstripes and Florida's Seminole Tribe is another tribute to the economic muscle that was nurtured by tribal gaming but is now being flexed in myriad other business arenas.
Still, while it's all well and good for the Seminoles to be tapping into the megamillions of the Bronx Bummers, I hope that — closer to home — they're showing some love to the Tampa Bay (Devil) Rays, 2008's Cinderella team. If no else is up for a Rays/Angels ALCS, you can at least count me in.
Snuggled inconspicuously in a recent El Cortez press release was the disclosure that the newly reconfigured ownership will include one Lonny Zarowitz. The aforesaid Zarowtiz figures briefly in John L. Smith's Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn.
Veteran investigative reporter Smith describes Zarowitz's father, Jerome, as a "mob frontman" who "retreated in style to Palm Springs" after cutting a March 23, 1973 deal with the Nevada Gaming Control Board "to approve his son Lonny as a percentage owner in the tiny Red Garter Casino." The younger Zarowitz had been previously turned down for a license to operate a slot route, Smith writes.
A former shift manager at the El Cortez, Zarowitz also held a tiny percentage of Gaughan's Exber Inc., and the two purportedly pursued an extremely contentious relationship in decades past, as detailed in a 1997 report by the New South Wales Casino Control Authority.
In 1992, it reads, Zarowitz accused Gaughan of past-posting in the El Cortez's race and sports book in 1986. However, since Zarowitz refused to provided the corroborating evidence he claimed to possess, the charges went nowhere.
Zarowitz was accused of sexual harassment by an El Cortez cocktail waitress in 1988 and was let go by the casino two years later, the document continues. He claimed the harassment complaint was a setup by Gaughan.
Reads the dossier: "Zarowitz made other allegations against Gaughan including that Gaughan was an FBI informant, that he had allegedly interfered with Zarowitz' mail and that Gaughan had conducted certain business transactions on less than an arms length basis …
"Zarowitz has also alleged that Gaughan has been able to influence the Nevada Gaming Regulators, the local Police and the US Postal Service not to conduct proper investigations into Zarowitz' allegations regarding the 1986 race and sports book issue."
New South Wales regulators ultimately deemed Zarowitz lacking in credibility and Gaughan suitable for licensure, "but that he should be the subject of continued scrutiny." So how is it that a character like Zarowitz is going to wind up with a piece of the El Cortez, should the Nevada Gaming Commission approve the sale? I can think of several states where he wouldn't have a prayer.
Gone and forgotten: In the course of reviewing the brief life and troubled times of the Bourbon Street hotel-casino, I discovered that if it was not the least-loved Strip (or just-off-Strip) casino, it wasn't for lack of trying. On a more personal note, I recall Bourbon Street for having the tightest slots I've ever played in Vegas. So no love lost there, either.
Following Bourbon Street's 2006 implosion, the southwest corner of the site became popular hangout for vagrants and winos, as attested by an impressive pile of empty liquor bottles that accumulated there. To be fair, this was apparently not that much of a change from when Bourbon Street was still open, to judge by eyewitness reports found at RateLasVegas.com.
One of the favorable customer reviews recounts finding a drunken woman passed out on the barroom floor. Others describe being panhandled in the restrooms. Comments also include: "It is not uncommon to catch someone shooting up in the bathroom," "Had to give $20 deposit for a hair dryer," "beds held up by phone books" while yet another offers this ringing endorsement: "I suppose it would beat staying in your car."
Stupid TV Anchor Tricks: Subbing on Fox 5's morning news program, co-anchor Heidi Hayes was in the course of reporting a buyout attempt of Cirque du Soleil by Dubai World. Not to be left out, self-involved co-anchor Jason Feinberg butted into Hayes' litany of Cirque Strip shows by noisily adding Le Reve to the list.
Now, anybody with half a brain knows that while Le Reve may play like a parody of Cirque at its most homoerotic, it is (or was) a solo venture by Franco Dragone — or as Steve Wynn infamously intoned, "A collection of imperfect dreams, created by Dragone." After three years and at least two makeovers, the non-Cirque-ness of Le Reve should be old and obvious news.
Send out the clowns: Incidentally, a trustworthy source recently viewed Le Reve 3.0 (you know, the version with ballroom dancing added) and says it's the best iteration so far. The clowns have reportedly been almost completely banished, which counts as progress any way you slice it.
That’s Bloomberg, bearing the dire news that casino junk-bond debt is “generating the worst return for investors as companies from … Harrah’s Entertainment Inc. to Herbst Gaming Inc. risk bankruptcy under the weight of their debt.” With a return of 10%, casino junk bonds “are the biggest losers this year.”
Who knew? “It was viewed very much as a safe haven,” says one portfolio manager, referring to an industry long perceived as recession-proof — a bubble that has burst this year. Aforesaid manager has seen his company take a bath on Donald Trump‘s casino debt, and is foreswearing taking on any Harrah’s or Station Casinos bonds, given the size of their respective debt loads.
Other clunkers are identified as Columbia Sussex (whose debtholders want CEO William J. Yung III‘s head on a platter), Greektown Casino (scrambling to keep its license) and Herbst Gaming, which has received a “going concern” notice from Deloitte & Touche, and whose debt is plunging in value.
In the cases of Harrah’s and Station, one of the rationales for privatization was that it would enable the companies to pursue new development at their own discretion, without having to answer to Wall Street. Instead, each is handcuffed. Given the evidence of market glut on Las Vegas’ locals scene, maybe it’s best for Station that there will be a four-year lull after Aliante Station opens. But it’s a shame that the company’s push into the Reno market — one that could use new product of Station-level quality — is now on indefinite hold.
$1 billion for the Trop? Although that nice, round number was floated by Larry Klatzkin recently, there’s no evidence (yet) that the New Jersey Casino Control Commission has cracked the “B” mark in its attempts to re-sell the once-lucrative resort. And while Tropicana Entertainment co-President Scott Butera may scapegoat Garden State regulators for not getting a higher price point for the Trop, one analysis places the blame for the mammoth hotel-casino’s reduced curb appeal on Columbia Sussex’s reign of error, which cratered revenues at the property. That erratic interregnum certainly infuriated a veteran regulator, who takes a few swings at ‘ColSux’ on his way out the door, saying “They flunked Casino Management 101, as far as I’m concerned.”
Third time’s the charm. Two general managers fled Casino Aztar during Columbia Sussex’s first year of ownership. Now a third has jumped ship … but merely to another ColSux operation. Considering that Mike Jones was back in Lake Tahoe by the time the news broke, and that he used to be Bill Yung’s GM of the MontBleu and Horizon casinos there, one’s best guess would have to be that he’s been putting in charge of turning those two around (especially the embattled Horizon), but I’ll let you know for certain as soon as I do.
No official announcement has yet been made. (But you can find the settlement of the Columbia Sussex/Park Cattle litigation, posted under a rather odd link.)
Steve Friess continues to poll his readers on the coolest names in Vegas. Interestingly, nobody has yet voted for Ka, the narrative-driven Cirque du Soleil show directed by Robert LePage that even Cirque-skeptics like myself can enjoy. But apparently there is no “Ka” in “cool.”
It reminds me of one of the most famous lines from Stargate SG-1 (in the episode, “The First Ones”), where we learn that the primitive race of Unas express their displeasure with vehement utterances of “Ka!”, prompting the ever-patient Dr. Daniel Jackson to reply, “Now don’t say ‘ka!’ until you’ve tried it.”
Much to the dismay of senior debtholders, perhaps, a Delaware bankruptcy judge OK'd $67 million in additional borrowing by Tropicana Entertainment, money the company says it needs for operational expenses. However, the court backhanded an even bigger loan offer from Canada's Onex Corp.
The latter was what you might call a "hostile" loan. So far only UNLV's David Schwartz has twigged to this story. Basically, Onex would try to roll a $100 million loan into an equity position, as the first step in a takeover attempt. It has even retained former MGM Mirage President Alex Yemenidjian to advise it on casino-sector acquisitions. Had Onex's ploy been successful, I wonder how Yemenidjian's former MGM colleagues would have felt about "Count Dracula" (the nickname he acquired when running the MGM film studio in Hollywood) setting up shop right across the street.
"If [the gambling sector] is overbuilt and in some difficulty right now it's a good time to look at it," Onex CEO Gerald Schwartz told the Toronto Globe and Mail. Onex used the hostile-lending ploy to take over Loews Cineplex Entertainment and he's already signaled that, should the ploy of lending to Columbia Sussex be rebuffed, he'd pursue low-hanging fruit on the Isle of Capri and Harrah's Entertainment vines. $100 million won't get him very far, but if he ups the ante then Isle needs someone to bail it out of its overseas over-extension and Harrah's could use a near-term cash infusion, too.
Unsecured Tropicana Entertainment creditors are opposing Columbia Sussex's effort to borrow $67 million in operating capital (which would push existing creditors even further toward the back of the queue). The Wilmington, Del., bankruptcy court has yet to rule.
Whoops. By filing Chapter 11, ColSux put its Casino Aztar riverboat — lock, stock and accounts receivable — under the purview of the bankruptcy court. Which means a delay of the $220 million sale to Reno-based Eldorado Resorts. Not only that, the court would have the discretion to tinker with the terms of that sale. (And check out the third comment below the story.)
Flashy new marketing be damned, the Los Angeles Times' Richard Abowitz checked into the Las Vegas Tropicana and discovered the same old malaise — maybe worse. Yes, the escalator to "Bodies" is still broken "and has even grown some advertising." (On CEO William J. Yung III's gravestone, it will read: "Maintenance? What's that?")
Worse yet, "it took an hour of waiting in line to check in" — on a Wednesday afternoon, due to a dearth of check-in staff. Abowitz's conclusion: "The bankrupt casino is sure letting customers feel the pinch of its reduced workforce." In all, Abowitz's outlook is as bleak, if not bleaker, than when he stayed at the Trop last December and found it to be "a warehouse with gambling." And I can attest personally to his contention that the air there is "literally and figuratively stale." Sort of like its management philosophy.
Now they tell us. When Toni Braxton was riding high at the Flamingo, and splashed across the western façade of the building in a va-va-va-voom "building wrap," I asked Harrah's Entertainment if customers were trying to get, say, a room nestled within Mega-Braxton's "cleavage." Came to the answer: Oh no, no; hasn't happened. Today, however, at the end of an announcement that Braxton's Flamingo gig is prematurely finis, we read: "In fact, the Flamingo was said to get frequent request [sic] for rooms with windows at strategically placed body parts of the singer."
If you think the Trop is bad, check out this customer review of Hooters Hotel & Casino. The descriptions of lackadaisical service and spare amenities are redolent of imminent closure, while the room decor could stand as the textbook definition of "fugly." But the kicker is the noisy, broken air conditioner. With video. Hilarious. Or tragic, depending on your perspective.
Liz Benston takes a look today at the newest message from the Las Vegas Convention & Visitors Authority and finds the LVCVA “thinks it’s bad form to make references to ‘affordable’ and ‘cheap.'” Oh yes, God forbid anybody should think there are deals to be found here (though there are) when they could spend that money closer to home, perhaps at one of the finer tribal casinos. Harrah’s Entertainment has a nice one in SoCal, I hear.
UNLV’s Prof. Jeff Voyles, says (in Benston’s paraphrase) that “it would be disingenuous for Las Vegas to market itself as a bargain because room rates will bounce back and the Strip will be punctuated by expensive, high-rise hotels bargain seekers can little afford.”
Yes, but that’s partly how we got into our present pickle: by creating both the perception and the reality that the Strip isn’t meant to be affordable anymore (which may account for the newfound market strength in Downtown, especially as Strip bargain plays bit the dust).
Also, I don’t mean to disrespect an academic — the parlor sport of choice among the low-forehead types at the Dogpatch Daily — but Voyles seems off base when he says, “We can’t change our market segment based on a dip in the economy.” Seems to me these are precisely the circumstances that would dictate a change in positioning. Principled talk of “sustaining the growth that we have” is fine (even though recent declines in gambling revenue and visitation make me want to ask, “What growth?”), but the bottom line — so to speak — involves putting fannies on slot stools and in poker chairs, to say nothing of hotel beds.
(MGM Mirage would seem to tacitly disagree with Voyles, seeing as it’s just created the position of “President of Marketing-Customer Development. It’ll be filled by Joe Brunini, whose brief will be to “identify emerging customer markets and create methods of attracting new audiences.” My congratulations to Mr. Brunini, who started in the business as a dealer in Atlantic City 28 years ago.)
In this respect the Bad Timing Award goes
Given the recent freeze-out on new casino operators in Macao, executives at Harrah’s Entertainment might as well be sporting T-shirts that read, “I spent $577.7 million in Macao and all I got was this lousy golf course.” And, in light of Harrah’s considerable debt load, CEO Gary Loveman will have the unenviable task of advising tight-fisted co-owners TPG and Apollo Management what to do next with their expensive piece of Chinese real estate.
They could gamble on hunkering down for a few years, taking a low near-term return while waiting for Macao supremo Edmund Ho’s successor to possibly liberalize the enclave’s gaming regime, admitting new corporate players. Or Loveman could try to peddle it around — probably at a loss, seeing as the land can’t be rezoned for gambling and he’s dealing from a position of weakness.
(A third option, whereby Harrah’s acts as a passive hotel operator as part of a joint venture in which Wynn Resorts or MGM Mirage owns the casino just seems too transparent and disingenuous to get past the current regime, IMO. It’d be obvious a subversion of the “three-plus-three” arrangement, turning it into 3 + 3.5.)
The fate of the golf course is a pressing question only because Harrah’s latest “Consolidated Summary of Operations” contains some scary-looking numbers. When 1Q08 is compared to 1Q07, interest expense has increased threefold (from $185.8 million to $557.6 million). Pile on $211.3 million in early retirement of debt – to reduce those interest payments – and an 11% decline in income from operations and it’s quite a jolt to the balance sheet. In the 1/28/08-3/31/08 period, combined income of $445.5 million was negated (and them some) by $679.2 million in interest expense and early debt retirement.
Then there’s the matter of the shuffling of properties between Harrah’s Entertainment and Harrah’s Operating Co. According to one analyst, it works like this …
Harrah’s Las Vegas, The Rio, the Flamingo, the A.C. Harrah’s and Showboat Atlantic City, Harrah’s Lake Tahoe, Harvey’s and Bill’s Lake Tahoe are going into the Entertainment portfolio, to be followed by Harrah’s Laughlin and Paris-Las Vegas. But then Bill’s, Harvey’s and Harrah’s Lake Tahoe, and Showboat are re-shuffled into the operating company.
(What? No mention of Bally’s Las Vegas? Hmmmmmmmm. Why does the word “implosion” keep bouncing through my brain?)
In an excellent analysis, Amy Calistri writes, “Reducing interest expense, through the reduction of debt, has to be at the heart of this accounting tangle.” In other words, Harrah’s is positioning itself for a big sell-off, fleeing the Tahoe market and reducing its high Atlantic City exposure, already worsened by good business at Harrah’s Chester. Trouble is, Calistri goes on, casino valuations aren’t what they used to be and potential buyers might still find credit scarce.
(The problem with operator consolidation is that it’s taken a lot of potential buyers off the table – no more Argosys out there — although Ameristar Casinos needs to rack up some debt to reduce its profile as a takeover candidate. Penn National is in a buying mood but, with its private-equity buyout threatening to unravel, it’s got hassles of its own.)
As for the cheese-paring moves that customers are reporting at Harrah’s Strip properties, Calistri warns that “cost cutting and efficiency will only help [Harrah’s] at the margins … Indeed, Harrah’s biggest hurdle toward profitability over the near term is likely to be undoing the debt associated with their acquisition.”
Which is why when analysts float the idea of Harrah’s buying Galaxy Entertainment as a quick means of entry into Macao, I’m tempted to employ one of my Mom’s favorite retorts: “Using what for money?” Galaxy has its problems (like basically learning the casino business on the job) but with no new gaming concessions on the Macanese horizon, its value just shot up considerably.
And then there’s the little detail of a $2.8 billion (with a ‘B’) tribal court judgment against Harrah’s that, if it continues to stand up (much data here), will lumber the company with even more debt and interest. The verdict isn’t really Harrah’s fault: The case dates back to when Arthur Goldberg was alive and running Park Place Entertainment, which became Caesars Entertainment, which was bought by Harrah’s Entertainment, which is contemplating changing its name to … Caesars Entertainment.
It’s a good thing Apollo and TPG hung onto Loveman, just in case their casino acumen is on par with Apollo’s retail acuity. Earlier this month, Apollo vassal Linens ‘n Things filed for bankruptcy in what Bloomberg called “the biggest leveraged buyout failure since credit-market disruptions began last summer,” and what one analyst characterized as “an utter and complete disaster.” The company will close 20% of its stores, leaving 2,500 people unemployed.
Apollo’s exposure is only (“only”) $260 million, meaning that others, primarily General Electric, are holding most of the bag on this debacle. And maybe the timing wasn’t so good for taking real estate franchisor Realogy Corp. private for $8.5 billion, either. (Bloomberg says $6.6 billion.)
And don’t forget about Harrah’s unraveling international strategy, which was ill-timed at best and possibly a total bust. But that’s a topic for another time …
"It's hard to pinpoint which one it is, but it's like the perfect storm — they all hit you at the same time." — Harrah's Entertainment Eastern Division President J. Carlos Tolosa.
Nothing against Mr. Tolosa but this is becoming the most overused phrase in business. Rub two or more vaguely coincidental economic factors together and, all of a sudden — it's "the perfect storm"! Eeek! Run for the cellar!
Seems we're hearing this wheeze a lot lately … to excuse the collapse of Columbia Sussex, for starters. In Tolosa's case, he's conflating Pennsylvania slot parlors, the recession and a largely ignored smoking ban. There won't be a true smoking ban until mid-October, the impact of the slot parlors should have been seen coming a long way off, and the recession … well, that sort of did take us by surprise. I'll give him that one.
But really, let's shelve "perfect storm" cliché until we have economic conditions that truly befit such cataclysmic terminology.
By the way … Harrah's recently reported diminished profitability in its Atlantic sector, citing the impact of Harrah's Chester: "The new casino and the partial opening of a new hotel tower at Harrah's in Atlantic City led to profit gains in the company's northeast region, though profit was lower than it might have been as revenue shifted from Atlantic City properties to Pennsylvania, where gaming is taxed at a higher rate, Harrah's Chief Executive Gary Loveman said Friday."
Ummmmm, you guys at Harrah's are supposed to be the math geniuses of the industry, right? The fellows who built an empire through number crunching par excellence? So didn't you run any, like, economic models on how going into eastern Pennsylvania might sap your Atlantic City market, where you're heavily exposed? Or that there were more cents to the dollar to be extracted from New Jersey, where the tax rate is but a modest fraction of Pennsylvania's? It just seems like you should have seen this Peter-robs-Paul scenario a good ways up the road, so to speak.
Hindsight being 20-20, Harrah's would surely have been better off putting all its marbles on Pittsburgh. Instead, it lurked behind a local stalking-horse group and put its primary effort into (literally) shoring up a racing oval in Chester.
Oh well, if Don Barden's finances continue to quiver like Jell-O, the Harrah's-Backed Group That Isn't Harrah's may get a do-over in Pittsburgh, where it looks more and more like the city fathers backed the wrong horse (and chose an awful site into the bargain).
OK, so it was a derelict that's been closed for 10 years and unlikely ever to reopen. But the Alystra is now officially "a total loss." Too bad. It was an attractive building that happened to sit in a sort of mini-Bermuda Triangle where no casino could flourish. It also was operated in a manner that brought it afoul of the Nevada Gaming Control Board. There were some flutters of interest 16 months ago, then silence. Since the Alystra had become a homeless hangout, it'll probably be no great mystery how it caught fire.
A bad month for Adelson. First, there was a shaky performance on the witness stand in the Richard Suen/Las Vegas Sands lawsuit. Then a first-quarter loss. Now he's been questioned in a bribery investigation of Israeli Prime Minister Ehud Olmert's government. Sheldon will probably have to do a little 'splainin' to the Control Board when he gets back from Jerusalem.
Luxor 2.0: A review of the ongoing makeover has been posted at VegasTripping.com. The verdict: "Pharoah's Tomb Meets Airport Bar." Hard to believe that Luxor is already 18 years old — unlike Excalibur, which only looks like it's been around for 30 years or so.
Nathan Burton at the Flamingo. I went. I saw. (And the stunt pictured here does not figure in the act, so caveat emptor.) The magic tricks were sloppily executed — you had to wonder what the coterie of rival magicians in attendance thought of them — and almost made one nostalgic for Hans Klok. For this Harrah's Entertainment ditched Society of Seven?
No warp speed here: A story that broke on the Web last week (and was picked up by LVA's "What's News" page six days ago) finally crept into the pages of the Dogpatch Daily. (UNLV's David Schwartz has a good critique of the situation, though.) The same writer who branded Strip casinos as "monuments to gullibility" now turns his scorn upon patrons of the Las Vegas Hilton's Star Trek attraction — while managing to meet the R-J's two-factual-mistakes-per-story quota and confusing "premiere" with "premier."
But he's not alone. A local publisher mistakes "ringer" for "wringer" in …
An utterly ridiculous column that suggested the Democratic presidential ticket be suggested by a coin-toss. Seriously. It's difficult to decide if this is a bigger insult to Las Vegas Sun readership or to the democratic process itself, this flippant (pun intended) notion of hinging the fate of our country — and perhaps, by extension, the world — on a game of chance. As one Sun reader notes, "I admire your ability to get paid for this."
Since one normally needs to pack a lunch and some No-Doz to finish a Brian Greenspun column (and I couldn't even get through this one w/o skimming), I'll boil down the "logic": "Hillary Clinton has worked harder than any person I know of to become America’s president [and] running for president, and the presidency itself, has to be the hardest job on the planet."
So? Meaning if Greenspun's next-door neighbor worked harder than Hillary Clinton to be on the donkey-party ticket, then he/she would deserve it even more? As Clint Eastwood's William Munny observes in Unforgiven, "Deserve's got nothin' to do with it."
Greenspun cites exit polls as holy writ, whereupon his moving finger moves on to write, "We all know that the polling this year has been wrong at best" (Who's this "we all"? I know no such thing. Do you?) "People, for good or bad reasons, don’t tell the truth to pollsters when it comes to race or gender." Well, if true, that puts paid to those exit polls in which Greenspun places so much stock.
After calling upon the respective campaigns not to "short-circuit the democratic process," out comes the loony coin-toss idea. Why? "We accept the coin toss in every other facet of our lives," quoth the suddenly Solomonic Greenspun. Oh, do we? Maybe that's how they make important decisions at Greenspun Media but I don't think, for instance, that the board of Harrah's Entertainment decided not to accept Penn National's buyout offer because the nickel came up "heads."
Hey, let's have representatives of the Kurds, Shiites and Sunnis over to the Bellagio poker room to decide the fate of Iraq in a game of Texas Hold 'Em, with Halliburton taking a "rake" of the pot. Works for me.
The clue to Greenspun's thoroughly trite and un-democratic "solution" can be found in a passing comment that enfranchisement "for far too long has been a burden to Americans rather than a blessing." I'll leave you to ponder the disturbing — and elitist — implications of that telltale remark.
Let's get one thing clear: Smoking is a noxious habit that's likely to kill you and certain to alienate other people, in my opinion. (I had two grandparents who smoked until the air turned blue, then smoked some more, which may explain my antipathy to the, uh, pastime.)
But … not smoking appears to be bad for the health of casinos, at least in Illinois. April's numbers are out and they're down over 19% — far more than can be plausibly blamed on the recession. For instance:
The biggest loser: It's Penn National's Alton Belle, off by 27%, with an $8 million gross. The rest of the results, as reported by Bear Stearns are as follows (with gross gaming $, when available) …
Harrah's Joliet: -18% ($26.4 million)
Grand Victoria [MGM Mirage]: -18%
Hollywood Casino [Penn National]: -20%
Empress Joliet [" "]: -26%
Casino Queen: -5.3%
Harrah's Metropolis: -25.5% ($9.8 million)
Pair-A-Dice [Boyd Gaming]: -16% ($9.7 million)
Illinois' smoking ban went into effect Jan.1 and things clearly haven't been the same since.
This Just In … Sheldon Adelson is stubborn. Who knew?
Nothing lasts. I’m finding that out the hard way as the acid in the paper labels in my CD collection eat through the discs, gradually rendering them unplayable and sending me into a race between preservation and catastrophe. (When last I checked, catastrophe was several furlongs ahead.)
Then again, when I revisit a casino and it seems different to me — and not in the sense that they’ve removed a favorite amenity or added a new one — I have to wonder if things merely seemed better or actually were better than they are now. For instance, three of us went to the Flamingo buffet Sunday night. I’d remembered it as being good value for the money (unless you count the plasticene-looking sugar-free dessert offerings).
However, with greater experience — and, sadly, sometimes a greater waistline — comes the realization that one can achieve far greater gustatory satisfaction at the premier locals’ casinos, such as Sunset Station and Green Valley Ranch. A recent LVA survey of Strip buffets didn’t even deign to sample the Flamingo’s, based on previous disappointments, so I’d say that it probably hasn’t gotten worse — most everyone else has raised the bar.
If you’re in the Huntington Press neck of the woods, the revamped seafood buffet at The Rio is definitely worth the wait (for a lengthier appraisal, see the current issue of LVA). The one at the Palms, however, I’d count as my biggest buffet disappointment so far. I would never expect such a humdrum offering from George Maloof, especially in a casino-resort that is comfortably above average is so many respects.
The Significant Other and I both got sick after trying South Point‘s buffet, so that one’s permanently off our list. (LVA readers give it very high marks, though — much better by far than the El Cortez‘s dire 2.5 rating.) However, the most abysmal buffet of a so-called “major” casino is surely the one at the Tropicana, a really sorry sampling. However … the big, logo-stamped paper napkins are quite sturdy and double exceptionally well as handkerchiefs. So go for the napkins, stay (if you dare) for the food.
Speaking of memories, some of the old Casino Executive crowd used to motor over to Arizona Charlie’s Boulder for lunch (again, for the buffet; Terrible‘s was closer but one experiment with it was enough for us). I hadn’t darkened the door of A.C.’s Boulder in quite a while, so we headed up there last night for some high-stakes bingo — do I know how to roll or what?
It was a profitable evening for my girlfriend’s adorable Mom, who came out $495 bucks ahead. However, either A.C.’s Boulder used to be seedier than I remembered or previous owner American Casino Entertainment Properties (read: Carl Icahn) has been letting it run downhill fast. To call the amenities “spartan” would be an insult to Spartans.
And a memo to management: Your HVAC system ain’t gettin’ the job done. Cigarette smoke is jammed up one’s nostrils the moment you step through the door and the sensation never abates. I felt like I’d smoked a whole pack all at once. If you miss Nevada Palace, you’ll feel right at home here. As CheapoVegas.com used to say of the inaptly named Palace, “Not only can I cut the smoke in this joint with a knife, I can butter it too.”
So if those Pocketbook of Values coupons for Arizona Charlie’s Boulder are burning a whole in your pocket, by all means, spend ’em while you got ’em. Just leave your lungs at home.
Speaking of the Flamingo, we got to try one of the revamped “Go” rooms. The beds are plenty comfy and the bathroom is spacious (and reverberant). We also had a birds-eye view of the Bellagio fountain show. On the minus side, the decor is what you’d find in an early-Seventies Playboy décor feature, if that’s your thing, and the selection of in-room TV channels might be described as “rudimentary.” Then again, these places don’t stay in business by having you lounge around in bed watching Sunday Night Baseball.
Gold Coast update. I just got off the phone with Boyd Gaming, which says that the shoeshine stand at the Gold Coast was underutilized, so they’re brainstorming new uses for that space. So I guess you’d better pack a shoeshine kit if you’re going to be staying in the Palms-Gold Coast-Rio corridor.