Cosmo: The right amount of money; MGM learns Arabic

A camel is a horse designed by a committee, the saying goes, and The Cosmopolitan of Las Vegas resembles nothing so much as a camel — and Deutsche Bank executives are accused of dabbling in its design. If Bloomberg News‘ sources are correct, Deutsche Bank has tired of The Cosmo and is taking its dromedary to the bazaar. The bank would endure a severe haircut on the resale, marking The Cosmo down to $2 billion or maybe even $1.5 billion. That will only begin to cover a $3.5 billion loan that Deutsche Bank made to its own, Cosmo-owning subsidiary, Nevada Property 1. (The structure of deals within the casino industry sometimes veers into surrealism.)

But who will buy, especially as the Cosmo continues to bleed red ink? MGM Resorts International has often been mooted as a potential acquirer, especially as Bellagio and CityCenter wrap around the building. But it has a lot on its plate already, as you’ll see below. Las Vegas Sands (a long-shot proposition) can’t even commit to a timeline for finishing its abortive St. Regis Tower. As for Steve Wynn, he’s publicly dissed The Cosmo’s design. Any buyer is going to have to face the fact that The Cosmo’s casino is being underwritten by F&B revenues, nightclubs and room rates.

That still leaves Caesars Entertainment, which has an appetite for things it doesn’t need. I wouldn’t put it past Gary Loveman to be bidding on this turkey (especially with Caesars taking out new debt). Penn National Gaming covets a Strip property and  has made no secret of it. Pinnacle Entertainment is in a good position to lever up and buy it The Cosmo. Beyond that … who knows? Deutsche Bank is said to have held talks with four suitors, which is a surprising level of interest for such a challenged property.

Speaking of MGM, it is continuing its reinvention of itself as a non-gaming brand. Having scored a smash hit with its category-killing Hakkasan night club, MGM is joining forces with its parent in MGM Hakkasan Hospitality, which aims to build hotels in “key international gateway cities and resort destinations worldwide,” under four brands: Bellagio, Skylofts, MGM Grand and Hakkasan. (Hmmm, no Aria brand. Interesting.) Unspecified, in-progress developments will be rolled under the MGM/Hakkasan umbrella, extending MGM’s presence into the Persian Gulf region, among other things.

Back in 1999, when Swiss Casinos opened the then-Resort at Summerlin, it spent an exponentially larger amount on the property than was the norm for an off-Strip casinos. As for how other locals casinos did things, they didn’t want to hear about it. Their real competition was The Strip. Yeah, right. Many failures and missteps later, The Resort at Summerlin was reincarnated as Rampart Casino. And its newest amenity is a bingo room, slated to open on Saturday. Yes, a bingo room. If you listen closely, you can hear Swiss Casinos executives rolling over in their metaphorical graves.