Cosmo rides the wave; Old Sixty Votes rides again

It may be $1.9 billion over budget and 2.5 years behind schedule but The Cosmopolitan appears to be hitting the market with perfect timing. That’s good news for the 5,000 employees who are furiously getting acclimated with the new megaresort. In its weekly survey of Las Vegas Strip hotel rates, J.P. Morgan observes that ADRs are 64% up for the New Year’s Eve weekend — boosted in part by those $5,600 standard rooms at Cosmo, no doubt. The year is closing out steadily, with weekend rates up ever so slightly and weekday ones rising 7% in the fourth quarter.

Looking ahead to 1Q11, Morgan’s models show improved rates for weekdays (13%) and weekends (9%) alike, with all major operators up by double-digits … except Caesars Entertainment (+14% midweek, +3%+ weekend and where raiding the maintenance budget has taken its toll), confirming reports that the lower end of the room spectrum is proving slow to budge. However MGM Resorts International (+13% weekend/+11% midweek) will have few complaints. Ditto Venelazzo (+17%/+11%) and Wynncore (+16%/+11%), who don’t have to cope with the drag anchor that is MGM’s budget-tier cluster of casinos, the company’s most sluggish performers.

However, at the high end MGM isn’t feeling any dilutive effects from Cosmo itself. Aria‘s room rates ($194/$284) are running ahead of Cosmo’s ($196/$269) and Bellagio is doing even better still. Those Cosmo ADRs — without adjusting for inflation — were what Venetian and the Aladdin were commanding a decade ago, when both were brand new. Take inflation into account and the luxury tier of the Strip is arguably more affordable than 10 years ago, thanks to the lemming-like  urge gaming companies felt to all flood the high end simultaneously with massive infusions of new rooms.

“It’s a sin!” When the uptight likes of Rep. Spencer Bachus (R-AL) send that low-pitched dog whistle to the Religious Right, you can be sure the debate about that “gravest sin” — Internet poker — isn’t really about money. Mercy me, Sen. Harry Reid (D-NV) might create “a federal right to gamble,” the sort of notion that’s sure to get the bloomers of the “family values” crowd all in a bunch. (Opponents, however, may be a couple of decades behind the curve about the incendiary value of gambling as a wedge issue. Been there, done that. America’s moved on.) Given the ability of Sixty Votes Reid to screw up any piece of legislation, don’t discount the potential for a relatively small group of senators and congressmen to corner Reid’s bill, like a cat cowering before a mouse.

Uncle Sam would take a 20% cut of any tax revenue generated by online poker but the burden of regulation would fall to the states themselves. One presumes that the latter would be enforcing a federally codified set of rules, as the alternative would be a crazy quilt of state-by-state and tribe-by-tribe rules — a rickety regulatory jalopy that even Jed Clampett would disdain and whose cost of compliance would drive the likes of Caesars Entertainment and MGM Resorts International bananas. The National Indian Gaming Association isn’t on board with Reid’s bill, period.

Existing ‘Net-bet operations could get into the action through marriages of convenience with U.S. casino companies and parimutuels during the initial, two-year window (something at which Steve Wynn and Sheldon Adelson balk — not that Reid’s going to lose any sleep over arch-conservative Adelson’s displeasure). The “buy American” provision is clearly more of a sop to Reid backers in the casino industry than a patriotic gesture. However, as the Las Vegas Sun‘s reporters point out, both American and offshore gambling operators have something the other one wants. Overseas, they’ve got the online infrastructure and the player databases. Onshore, we’ve got player lists of our own plus consumer-trusted brand names. There could be worse things than hitching your cyber-wagon to Gary Loveman‘s star.

If old Sixty Votes is willing to drop the hammer, we could all be playing online poker this time next year. However, audacity is not Reid’s strong suit (or even in his deck of cards, some would argue). His stratagems tend to be of a more cunning variety: What he may do is tie online-poker legalization to extension of the Bush tax cuts, putting Senate opponents in a truly fiendish bind. Until or unless Reid folds his hand, the process is enjoyable if only to hear the holier-than-thou crowd yowling with spinsterish alarm.

(Thanks to reader Greg Askins for the NRO links.)