Upside down at Cosmo; Casino beggars; Tribal casinos set new record

Posted on March 26, 2014 by David McKee

450px-Cosmopolitan_from_Las_Vegas_BlvdIf a 3% ROI is your idea of a good return on a casino, have we got the place for you: The Cosmopolitan of Las Vegas. It continues to narrow losses and improved gambling revenues 25%. Last year, the Cosmo’s casino made $155.5 million. But … hotel rooms generated $277 million and F&B brought in $314 million. When gaming is the “loss leader” at your $3.9 billion casino, you’ve got a problem. No wonder Deutsche Bank has been trying to hide these numbers from public scrutiny. They’re an embarrassment. Rather feebly, the Cosmo said it was looking to its Rose. Rabbit. Lie show/nightclub and its Chelsea concert hall to drive revenues. I’ve been the former and everyone should see it once, but it’s not going to get the Cosmo out of its doldrums. (Can Caesars Entertainment really be trying to acquire this turkey? Somebody must have offered them a helluva bargain.)

Delaware taxpayers will be out $20 million if a casino-bailout plan passes the Legislature. One of the unspoken attractions of casino gambling for states is that it’s industry that pays its own. When it’s got its hand out for a taxpayer subsidy, it’s time to reexamine Continue reading →

Posted in Alabama, California, Colorado, Cosmopolitan, Delaware, Dining, Entertainment, Harrah's, Kansas, Macau, New York, Oklahoma, Racinos, Singapore, Taxes, Texas, The Strip, Tourism, Tribal | 1 Comment

No cause for jubilation; Cool spring at IGT

Posted on March 26, 2014 by David McKee

ballys-jubileeAudience feedback on the revamped, urbanized Jubilee! is starting to pour in … and it’s devastating. How bad can it be, I hear you say? Try this: “Like trying to save the Hindenburg with a bicycle pump … hands-down the worst show I’ve ever seen … The Titanic sinks and turns into the Statue of Liberty for some reason … I think I booed twice … The mic was not functioning for many songs, the curtains would not go up and down as needed … What has been the classiest showgirl revue in the history of Las Vegas has been ‘reinvented’ to nothing more than a trashy, discombobulated, nonsensical amalgam of disconnected dance numbers performed by a talented ensemble which seems to be lacking leadership and direction.”

Get the picture? Maybe Caesars Entertainment CEO Gary Loveman isn’t personally to blame for this mess but he’ll do in a pinch, having green-lit the redo. I had a soft spot for the old Jubilee!, even if it was High Camp in many places. I dread having to go back to see its successor.

International Game Technology‘s citation of “tough industry conditions and a challenging operating environment” prompted Continue reading →

Posted in Don Barden, Economy, Entertainment, Harrah's, IGT, Missouri, The Strip, Wall Street | 2 Comments

Casino proposed for Albany; The smell of gambling

Posted on March 24, 2014 by David McKee

E23. That’s the provisional name for a casino complex that developer David Flaum has proposed for the Albany area, right on the New York State Thruway. The budget ($300 Flaummillion-$400 million) is modest. Flaum is not. “This thing, frankly, is going to make a lot of money,” he told the Albany Common Council. He was addressing the council because he wants its official blessing before he applies for one of the four casino licenses that will soon be up for grabs. “Please think of this as more of an entertainment complex. It’s not about taking the last dollar out of someone’s pocket,” he added. Revenue would be distributed across 19 counties, thanks to Flaum’s partnership with Capital District Off-Track Betting.

Flaum has another casino iron in the fire, having contracted with the Seneca Indian Nation to build the latter’s controversial Monroe County casino (the one the town of Henrietta is fighting). He doesn’t have Continue reading →

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Quote of the Day

Posted on March 24, 2014 by David McKee

“Rights matter because you never know when you’re going to need them.” — National Security Agency leaker Edward Snowden, in a surprise address to the 2014 TED conference.

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Strange Bedfellows Dept.

Posted on March 24, 2014 by David McKee

Sheldon pashaIt’s hard to know what to make of this. The Republican Jewish Coalition is coming to Las Vegas and its headliner is Jeb Bush. Now, if there is anyone more anti-gambling in the GOP than Jeb, you’d be hard-pressed to find them. Ask the Seminole Tribe, which got flat-out stonewalled by Bush when it sought a casino compact. Stranger still, J.B.’s host is none other than Sheldon Adelson, the richest man in the casino biz. The dinner will be held — where else? — in Adelson’s private airplane hangar at McCarran International Airport, adding a touch of surrealism to the whole affair. (All that Sands Expo showcase space and this was the best Sheldon could do?)

After the Friday-night revelry, if the visiting GOPers can crack an eyelid, they can see pro-casino Gov. Chris Christie (R-NJ), who’s got the early slot, along with somewhat pro-gaming Continue reading →

Posted in Atlantic City, Economy, Election, Florida, Internet gambling, Ohio, Politics, Regulation, Sheldon Adelson, Tourism, Wisconsin | Comments Off on Strange Bedfellows Dept.

Jim Murren’s white flag; More slots in New England

Posted on March 21, 2014 by David McKee

Murren unhappyIn a moment of weakness upon which Sheldon Adelson is certain to pounce, MGM Resorts International CEO Jim Murren called for a cease-fire in the intra-industry war over Internet gambling. In addition to his day job, Murren is chairman of the American Gaming Association and his remarks were a sharp yank on the reins of AGA President Geoff Freeman, who has been vocal on the issue, aggressively pushing back against Adelson and sometime ally Steve Wynn. Although Adelson is relatively isolated in his efforts, Murren waved the white flag: “I feel like the Internet has become too divisive a topic when there are so many other topics we want to put forward where we can all agree.”

That’s a sign of weakness, once which fails to acknowledge that Adelson is in this to win it and isn’t about to call off his dogs, who include former New York State Gov. George Pataki. “We have no interest at MGM in pursing an Internet gaming strategy that goes after men and women in small towns in America,” said Murren, leaving one to wonder if big cities are fair game. Just because MGM lacks a viable Continue reading →

Posted in Geoff Freeman, Internet gambling, Macau, MGM Mirage, New York, Pennsylvania, Politics, Sheldon Adelson, Steve Wynn, Taxes | 1 Comment

More hitches in Massachusetts

Posted on March 21, 2014 by David McKee

martinjwalsh-headshotEfforts by Wynn Resorts and Mohegan Sun to bring casinos to eastern Massachusetts could be in trouble. In another hitch to its elongated selection process, the Massachusetts Gaming Commission has agreed to consider whether to consider Boston a host community. It was evidently moved by a personal appearance from Beantown Mayor Martin J. Walsh. If the MGC assents to Walsh’s plea, voters get to decide the fate of the two casino proposals  — and it’s anybody’s ballgame at that point.

Walsh has moved off the old Thomas Menino talking point that the casinos would be in Boston. Rather, he argues, “Boston is the crucial component, the key selling point of the proposed gaming establishments.” (He’s obviously angling for a pound of flesh.) It’s hard to argue with him on that one. He’s playing Russian roulette, though, by wanting to hold referendums in East Boston — which already rejected one casino – and affluent Charlestown, whose burghers are Continue reading →

Posted in Atlantic City, Foxwoods, Marketing, Massachusetts, MGM Mirage, Mohegan Sun, Problem gambling, Regulation, Sam Nazarian, Steve Wynn | 1 Comment

Adelson needs elbow room; Critical mass in Florida

Posted on March 21, 2014 by David McKee

AdelsonSixty percent more hotel rooms. That’s what Sheldon Adelson says he needs at Marina Bay Sands and he hopes the government of Singapore will humor him and release the needed land. It’s greatly outperforming other hotels in the market. Last year it averaged 99% occupancy with ADRs of $396. The citywide average was 86% occupancy. So friend Adelson isn’t exaggerating when he says, “We are running at a 100 percent occupancy; on a bad day it’s 98 percent, no other hotel in the world runs like this except some in Vegas.” Same too when he calls Marina Bay Sands “a catalyst for enormous tourism growth.” (Genting Group‘s Resorts World Sentosa deserves some of that credit, too, but Adelson’s point is well taken.)

In the meantime, he has to dance attendance upon the Singaporean government and hope that is smiles upon his request for enough land to build 1,500 rooms. At least he’s stopped Continue reading →

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Quote of the Day

Posted on March 20, 2014 by David McKee

madmen1“I am always writing about the period we’re in, and sometimes I’m telling people things they don’t want to hear. … The economy, the Internet—all these things are isolating us and making us feel defeated. Our national culture feels defeated, our exceptionalism.” — Mad Men creator Matthew Weiner.

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Massacre in Maine; South Korea, land of opportunity?

Posted on March 20, 2014 by David McKee

Maine State FlagSix gambling-expansion bills were mowed down in Maine‘s state Senate last night. Three of the quashed proposals would have provided some form of Native American gambling.  (A fourth would have allowed racinos to go from 3,000 slots to 4,500.) Pleasant Point Passamaquoddy Tribe Chief R. Clayton Cleaves lashed out at the state for having a lottery but barring tribes from so much as wagering on beano. “This is not about fairness. It’s about race, color and creed. … We’re just trying to get jobs on our reservations, just like everyone else in this state.”

Casino opponents, however, were motivated in part by Maine’s lack of a cohesive structure for gambling expansion. The latter has been achieved willy-nilly, via a series of referendums. “Before we move forward we should do so cautiously and judiciously. We want to establish the proper policy,” said state Sen. Andre Cushing (R), although some gaming supporters were having none of it. “They’ve had more than enough time to come up with a strategy or policy to address that,” rejoined Indian Point Passamaquoddy Tribe Chief Joseph Socobasin. His sympathizers in the senate lamented that the tribes had to go through the Lege in order to achieve this sort of economic development. Even Gov. Paul LePage‘s support for the Passamaquoddy (and favorable votes in the House) weren’t enough to turn the tide.

Despite the excitement of Continue reading →

Posted in Dining, Harrah's, International, Maine, Mississippi, New York, Politics, Racinos, Regulation, Tribal | Comments Off on Massacre in Maine; South Korea, land of opportunity?

Twin setbacks in Massachusetts

Posted on March 20, 2014 by David McKee

CoakleyAfter all the tsuris that’s gone into bringing casinos to Massachusetts, it may be for naught. In two months, public support has gone from 53% to 46% (against 43% opposed), according to MassINC Polling Group. That means that, if casino opponents can get their repeal measure onto the November ballot, the industry is in serious trouble. Companies like Penn National Gaming, which is already building, had better hope that state Attorney General Martha Coakley prevails at the state Supreme Court with her argument that a repeal (which would be tantamount to an asset forfeiture) would be an unlawful taking of the money and other assets the industry has poured into the Bay State.

Opposition is strongest among women and (especially) people with advanced degrees. Towns and cities hit by the double whammy of low wages and high unemployment are the most supportive. (Foxborough was resistant to Steve Wynn‘s courtship because there was no great economic need there, among other reasons.)

Further complicating matters, Boston Mayor Martin J. Walsh continues to try and bring home some bacon for his constituents, demanding Continue reading →

Posted in Atlantic City, Culinary Union, Goldman Sachs, Macau, Massachusetts, Mohegan Sun, Penn National, Revel, Steve Wynn, The Strip | Comments Off on Twin setbacks in Massachusetts

Sheldon’s boys

Posted on March 20, 2014 by David McKee

ChaffetzAt least one Congressman has rallied to Sheldon Adelson‘s banner, in the form of boyish Rep. Jason Chaffetz (R-UT). He’s introducing a bill to reimpose the pre-2011 interpretation of the Wire Act, banning all forms of online gambling. Chaffetz’s spokeswoman was somewhat disingenuous: “The issue of Internet gambling, both sides have strong arguments, so if we’re going to allow Internet gambling in this country, it needs to go through Congress.” Of course, once Congress has outlawed it, what are the chances it’s going to do a 180, even for Internet poker?

It’s thought that the interstate compact between Nevada and Delaware spurred Chaffetz to act. His bill joins a similar one in the Senate. The X factor is how much lobbying (and money) Sheldon Adelson pours into the effort. “All bets are off. It’s not like the guy has never shot for the sun, moon and stars,” one lobbyist told Continue reading →

Posted in Harrah's, Internet gambling, Planet Hollywood, Politics, Sheldon Adelson | Comments Off on Sheldon’s boys

Quote of the Day

Posted on March 19, 2014 by David McKee

Delaware_State_Capitol“It’s not good public policy in the first place to be bailing out failing businesses. We’re not seeing any detail to show that this money is actually going to save jobs or create jobs. Is this just going to go to dividends? Is this just going to go to executive compensation and bonuses for the managers?” — state Rep. Dennis Williams (D), voicing opposition to a $30 million, two-year subsidy for Delaware racinos.

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Dramatic turnarounds in Massachusetts; Tribe-on-tribe conflict in California

Posted on March 19, 2014 by David McKee

Mashpee 4Hopes that the Mashpee Wampanoags have for a casino got a big lift on March 12. That’s when Interior Department Solicitor Hilary Tompkins ruled that tribes not recognized before 1934 weren’t excluded from casino eligibility. In her interpretation of the Supreme Court‘s Carcieri v. Salazar case, Tompkins seized upon the phrase “under federal jurisdiction.” Jurisdiction and recognition, she argues, are two very different things. If Tompkins’ ruling stands, the Mashpee Wamps can get on with the business of having land taken into trust — the biggest obstacle to their hopes of getting a Massachusetts casino. It still has to prove ancestral ties to the Taunton area but it has a compact with Gov. Deval Patrick, so this news comes as a big game-changer, removing the need for a “Carcieri fix” in Congress, something that has never come to a boil.

Closer to Boston and as S&G predicted, Suffolk Downs plans to pull down “decrepit, manure-strewn racehorse barns” to make room for a Mohegan Sun casino. That may not play well with historic preservationists. The clubhouse, racing oval and grandstand date back to Continue reading →

Posted in Boyd Gaming, California, Culinary Union, Derek Stevens, Downtown, Goldman Sachs, Harrah's, Horseracing, Massachusetts, Mohegan Sun, Regulation, Station Casinos, Steve Wynn, Tamares Group, Terry Caudill, The Strip, Tilman Fertitta, Tribal | Comments Off on Dramatic turnarounds in Massachusetts; Tribe-on-tribe conflict in California

Rebottling a genie

Posted on March 19, 2014 by David McKee

One would hate to think how many businesses in Clark County get by on the revenue from slot routes, rather than from their primary purpose. But county commissioners didn’t think to define “incidental” — an understandable oversight — when making regulations in 2011 that were intended to curb the growth of slot routes. So your “tavern” might be deriving 90% of its income from your 15 slots and there’s nothing the county can do about it. The legal definition of these establishments as “restricted” gaming operators takes on an ironic twist. Ergo, the commission has imposed a 90-day moratorium on new business licenses for restricted locations, to sort out what’s incidental revenue and what’s primary.

“We don’t have a problem if you have 15 (slot) machines because the bar is doing an enormous amount of business. It’s like a pool table. It’s an amenity. If it’s your main business, that’s where the problem comes up,” said Commissioner Steve Sisolak, the most Continue reading →

Posted in Atlantic City, California, Carl Icahn, Horseracing, Indiana, Internet gambling, Slot routes, Tropicana Entertainment | 1 Comment

Louisiana and other Case Bets

Posted on March 19, 2014 by David McKee

Louisiana_FlagMargaritaville ($10 million) was the difference between a positive (1.5%) and negative month in Louisiana, which was down 3% on a same-store basis. Isle of Capri Casinos had an exceptionally good month (+12%) but Pinnacle Entertainment (-3.5%), Boyd Gaming (-5%). Gaming & Leisure Properties (aka Penn National Gaming, -12%) and Caesars Entertainment (-1%) saw varying degrees of adversity. The month of February also saw a bit of whimsy, as market analyst Carlo Santarelli dubbed a pair of Pinnacle riverboats “The Boomtown Brothers.”

It was a rough month for the Shreveport/Bossier City market, where declines were in the double digits: Boomtown Bossier -26%; Sam’s Town -16%; El Dorado -13%; Horseshoe Bossier City -6.5%; Diamond Jacks -16%; Louisiana Downs (Caesars) -10%. Continue reading →

Posted in Boyd Gaming, Churchill Downs, Harrah's, Isle of Capri, Louisiana, New York, Penn National, Pinnacle Entertainment, Slot routes, Tribal, Wisconsin | Comments Off on Louisiana and other Case Bets

Meet Derek Stevens

Posted on March 18, 2014 by David McKee

Posted in Architecture, Derek Stevens, Downtown, Economy, Marketing | Comments Off on Meet Derek Stevens

Jackie Gaughan remembered; New York’s bullish expansion

Posted on March 18, 2014 by David McKee


Verbal tributes to the late Jackie Gaughan continue to roll in and may not end with yesterday’s funeral. He was remembered as a man who said “Honesty, character and morals are 75 percent of the job. I can teach you everything else,” and who was out at dawn every day, checking out the slot machines at his properties and his competitors on Fremont Street. If there was ever such a thing as the complete casino executive, Jackie Gaughan was it.

Conversion into slot parlors provides hope for bankrupt Suffolk Off-Track Betting Corp. It will get 1,000 slots and turn over management to Delaware North Companies Gaming & Entertainment Inc. (pending bankruptcy court approval), concessionaire at MetLife Stadium. The latter has guaranteed Suffolk OTB Continue reading →

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Caesars’ big coup; Foxwoods site revealed

Posted on March 18, 2014 by David McKee

South Korea hasn’t opened its casino business to Western firms … until now. Caesars IMG-20130507-00006Entertainment, in partnernship with Hong Kong‘s Lippo Ltd. and OUE Ltd. from Singapore has won preliminary approval for a concession. The project is expected to cost $2.2 billion and be open by 2018. It is, Reuters observes, “a promising market by virtue of its proximity to China and the country’s wealthy punters.” Barring a change in South Korean law, the megaresort will have to make its nut entirely on tourist traffic, as only one casino in the country is open to citizens. The move is part of a governmental effort to reduce dependence on exports to prop up the South Korean economy. The goal is to draw 10 million Chinese tourists by 2020.

Luckily for Caesars, its site — Yeongjong Island — is near Inchon International Airport. Governmental approval of the project is subject to Continue reading →

Posted in Foxwoods, Genting, Hard Rock Hotel, Harrah's, International, Kentucky, Macau, Massachusetts, Mississippi, Politics, Warner Gaming | Comments Off on Caesars’ big coup; Foxwoods site revealed

Incest in Philadelphia and New Jersey

Posted on March 17, 2014 by David McKee

Pennsylvania‘s one-and-one-third rule for casino ownership is playing hob with applications for the state’s final casino license, in Philadelphia. For instance, frontrunner Market 8 would be one-quarter owned by the ubiquitous Ira Lubert, who already owns half of Valley Forge Casino Resort and 3% of Rivers Casino. (Mohegan Sun owns 16%.) There’s an obvious conflict presented by the proximity of Parx Casino, put thusly but the attorney for Joseph “Tomato King” Procacci, “To give Parx a casino license in South Philadelphia while they have one sitting right on top of the northern tip of Philadelphia would be essentially granting them a monopoly over Philadelphia gambling.”

Pennsylvania 064Agreed. Also, the Parx ownership structure has trouble passing the smell test. Yes, Cordish Gaming has a 50% stake but Greenwood Racing principal Watche “Bob” Manoukian divvied his half of the project between Parx and a trust for his sons … controlled by Manoukian. But the arrangement that most noxiously fails the smell test is Penn National Gaming‘s decorative nonprofit partner. According to the Philadelphia Inquirer, the tax-exempt stalking horse, er, partner would get two-thirds of net cash flow. “That’s the amount left after Continue reading →

Posted in Atlantic City, Cordish Co., Don Barden, Greenwood Racing, Iowa, Macau, Mohegan Sun, Neil Bluhm, Penn National, Pennsylvania, Regulation, Revel, Sheldon Adelson, Tomato King Procacci, Tribal, Warner Gaming | Comments Off on Incest in Philadelphia and New Jersey