Now *this* is a scandal

During the early years of tribal gaming expansion, Native Americans had to go to Malaysia and South Africa for their startup capital — and it came at a hefty cost. Now Mohegan Sun is reeling from the delayed effects of its alliance with Sol Kerzner. As the Mohegans’ share of casino revenues goes down and down, Kerzner’s keeps going up. While this may be some form of karmic payback, it’s not very amusing to see money spent on tribal lands filling the pockets of Kerzner, developer of that crown jewel of apartheid, Sun City.

Kerzner & Co. have made $67 million more than the Mohegans over the last nine years, partly by dint of some legal parlance that allows them to reclassify a management contract as a “consulting” one … whereupon Kerzner is reimbursed on the basis of gross earnings, not net ones. Not even the efforts of Sen. John McCain (R-AZ) could thwart this highway robbery. As for the Mohegans, the day has already come for them to rue Kerzner’s sweet deal. He’s now pondering moving into tribal gambling in Massachusetts. Gov. Deval Patrick should have a good, hard look taken at how that’d be financed. (Somehow the Mohegans found the wherewithal to slap their name on a sports arena, though.)

Still in ostrich mode, bankruptcy plagued Station Casinos continues to insist that it wasn’t excessively optimistic cash-flow projections, a $5.7 billion LBO (which itself was predicated on a cash-flow multiple that only a first-rate Strip operator could justify), nor even nearly a half-billion in Fertitta family largesse was to blame for the company’s collapse. Nope, it was all that big, bad recession’s fault. Nothing else.

OK, whatever. Anybody expecting a mea culpa from Station HQ had better pack some snacks and a sleeping bag. It’s gonna be a long vigil.

Meanwhile, Station creditors continue to insist that the company is siphoning money away from them via an arrangement whereby it leases four casinos back to itself. Assuming for purposes of argument that this is all standard business practice, Station still appears to be playing Russian roulette with its debtors, the bullet in the chamber being the potential seizure of Red Rock Resort, Boulder Station, Palace Station and Sunset Station. (With possible substitute operators Boyd Gaming and Isle of Capri Casinos waiting breathlessly in the wings.)

The CityCenter Effect. While MGM Mirage CEO Jim Murren predicts it will grow Vegas visitation without cutting into business in other MGM properties, American Gaming Association President Frank J. Fahrenkopf doesn’t sound fully convinced. While I’m certain that Murren’s peeps have done as much number-crunching as he says, it’s hard for this layman to conceive how MGM will pick up so much CityCenter business without cannibalization … unless it just discounts the bejeesus out of its non-CityCenter resorts, in an effort to steal customers from Harrah’s Entertainment, Las Vegas Sands and Wynn Resorts. (Although if you can afford to stay at a Wynn property, where’s the incentive to luxuriate someplace else, even for less?)

Admirable as CityCenter is, from what I’ve seen of it (aside from the Aria casino floor … a fiasco) was it necessary for the Nevada Gaming Commission to fawn all over MGM Mirage? Honest to God, we have the most sycophantic regulators in the U.S. The revelation that server-based gaming has been quietly in progress at Monte Carlo was interesting — as was the tactful omission of the fact that Crystals is less than 50% leased and won’t even be at 100% by mid-2010.

The Aqueduct mess. It’s hopeless. Steve Wynn‘s decision to get out looks wiser by the day.