In an interview with Reuters, Sheldon Adelson said Las Vegas Sands might launch operations in India, Thailand and Japan as soon as 2010. Given the ropey financial condition of his company, the fact that Marina Bay Sands will open at least two months behind schedule (Adelson is predicting March) and his Hong Kong IPO is a dud, the notion that LVS might start building casinos in three additional countries … well, you have to wonder what medications his wife has been prescribing.
Although he’s great at emitting vast amounts of hot air, former casino mogul Donald Trump is rarely able to back up his loud talk. Such is the case with Trump Entertainment Resorts. Poker player and banker Andrew Beal outplayed The Donald for the trio of Atlantic City casinos. Beal Bank and Beal Bank Nevada‘s offer to convert $486 million of debt into an equity stake proved a stronger hand of cards than Trump’s offer of a comparatively modest equity infusion. Congratulations, Mr. Beal — and good luck, given the very mixed bag of casinos you’re on the verge of inheriting.
Here today, Trop tomorrow. Rarely would one think that the presidency of the Tropicana Las Vegas was preferable to that of Planet Hollywood, but that’s proven the case for Thomas McCartney. With Harrah’s Entertainment extending its tentacles toward Planet Ho, McCartney is fleeing the embrace of Gary Loveman for that of Trop CEO Alex Yemenidjian. This is no small coup for Yemenidjian, who has made a number of headlines in very short time.
Another scummy deal involving a New England tribal casino and South African businessman Sol Kerzner has been uncovered and laid to rest. Kerzner and cohort Ken Wolman would have received something quite similar to the 5% rake of gross gambling revenues they currently enjoy at Mohegan Sun. Exit Kerzner, enter Genting Bhd. Of course, there’s still the not-inconsiderable matter of getting Massachusetts to approve casino gambling. And while Genting parent Kien Huat has a record of getting things done — running rings around Adelson in Singapore, for instance — its lucrative back-end deals at Foxwoods Resort Casino and Seneca Niagara Casino were the source of lingering resentment. So the Mashpee Wampanoag tribe may have gone from the frying pan to the fire.
All that money that’s coming in the front door of Greektown Casino, thanks to improved performance is going right out the back, in the form of much higher-than-average payments to law firms, consultants and restructuring companies. Las Vegas-based Fine Point Group is one of the beneficiaries, mainly because it gets a hefty cut of whatever revenues exceed projections. Those who stand to lose, of course, are the unsecured creditors. Nor are the outgoing owners, the Sault Ste. Marie Tribe of Chippewa any too thrilled about the big tab being run up. Fine Point recently suffered a setback of its own when its marketing wiz, Amanda Totaro, was compelled to withdraw her Michigan gaming license application. That’s bound to hurt Greektown down the road.
A hellish time for expansion. If any doubts remained that this is the worst time in living memory to be opening new casinos, just look to Pennsylvania. Already, casinos in the Pittsburgh area are cannibalizing one another. Despite the fact that Rivers Casino sits cheek-by-jowl with the Steel City’s two sports arenas and has been the subject of years of headlines, its marketing director straightfacedly laments, “I kind of feel like we’re Pittsburgh’s best kept secret.” (No, people just don’t seem terribly excited by your product, sir.) Meanwhile, thanks to high tax rates, state and local goverments are laughing all the way to the bank.
I haven’t been in the Trop since the new takeover, I will say the walk areas by Excal, where the prostitutes used to congregate in order to flee toward the Trop when MGM security came out on the walkway (when the Trop was really hitting bottom), seem to be clear of those ladies now, which might speak to a more responsible property. I’ll also say I think if they can even get a decent remodel and cleaning done on the property they’ve probably got a market waiting for them. A mid level property that offers solid value, is outside of the conglamorates, that is a larger property with good location could go a long way, especially if they figure out how not to squeeze their players at that level.
I’d compare it to what IP was doing when Ralph’s daughter took over and prior to Harrahs takeover, they put a remodel on the rooms, they redid the casino floor and brightened it up, and introduced the dealertainers. It went from being a dump, to a place that budget hungry tourists started congregating towards (albeit still a dump, just with personality). It will be interesting to see what happens. I think of PH and kind of smirk, during their renovations, they really focused on the gamblers and were sending out solid mid tier offers after the remodel everything dried up it seemed, they decided to go in a new direction. It’s tough to maintain the flavor of the month in Vegas though once the new car smell wears off.