“Someone needs to burn this place to the ground”

Posted on March 8, 2013 by David McKee

It seems potentially very funny … but isn’t Bradley Cooper getting rather dark and tragic for this sort of thing? He looks like a Quentin Tarantino protagonist who’s been parachuted into a Disney picture.

Posted in Marketing, Movies, The Strip | Comments Off on “Someone needs to burn this place to the ground”

North Strip: SLS yes, F-blew no, Riviera maybe

Posted on March 7, 2013 by David McKee

S&G contributor JeffInOKC returns from a too-long absence with some thoughts on one of our favorite topics, the North Strip …
It is common for us to hear the term “Too Big to Fail,” but I think the true story of Fountainebleau is “Too Big to Succeed.” The original plan for the property was doomed. But the boomtown mentality of the time placed scales on many people’s eyes and rendered them blind to the realities of the situation. A resort that size and scale will take at least five years to find its footing and get to where it was no longer losing money. That assumes the owners would have real operational experience at something near that scale and a very large customer base at any level, but especially at the high end. Steve Wynn with Kirk Kerkorian‘s bankroll would have had trouble making it work.
• In that regard, I see the Cosmopolitan as being very similar, with one major difference: Cosmo was NEVER intended to wind up as anything other than a part of CityCenter. I will go to my grave convinced that it was conceived with the intent of making it a part of CityCenter, that it can never make money as anything other than a part of CityCenter. I will be surprised if it will ever show a profit, even after any service on the cost of construction is removed. Cosmo’s explanation of it’s financial performance is “Just the right amount of wrong” and it will ultimately wind up being a part of CityCenter. As far as the current condition of the Fontainebleau physical plant goes, I have no fears about some kind of waterlogging or weather deterioration having made it unusable, or having any real effect for at least Continue reading →

Posted in Architecture, Boyd Gaming, CityCenter, Cosmopolitan, Current, Fontainebleau, Marketing, MGM Mirage, Riviera, Sahara, Sam Nazarian, Steve Wynn, The Strip, Tourism | 4 Comments

No surprise: MGM abandons Ho Tram Strip

Posted on March 7, 2013 by David McKee

As of June 3, MGM Resorts International‘s involvement in Vietnam‘s long-troubled Ho Tram Strip will be a closed chapter in the company’s history. This morning, Pinnacle Entertainment announced yet another delay — shocking! — in MGM Grand Ho Tram Beach, which Jim Murren‘s subsidiary, MGM Hospitality, was to manage. MGM, sensibly, never put real money into this Vietnamese chimera. Pinnacle, however, did and nearly $25 million of its $116 million investment is gone with the wind, undoubtedly to be followed by Continue reading →

Posted in Current, International, MGM Mirage, Pinnacle Entertainment, Wall Street | 1 Comment

Sahara Sam’s SLS surrealism

Posted on March 6, 2013 by David McKee

Kudos to Chuck Monster for finding this fanciful rendering of SLS Las Vegas, presumably designed to mislead would-be EB-5 Visa investors from China and points East. Shazam! The former Sahara has miraculously floated down the Strip and over to Koval Lane, where it will sit opposite bargain paradise Ellis Island Casino, a popular haunt for Las Vegas Advisor staffers and other bargain hounds. Wow! I’m amazed how $400 million raised mostly from obscure overseas sources (and subject to visa-approval contingencies) can rewrite the geography of Las Vegas at a snap. Even Steve Wynn never managed that trick! As for the rendering, it’s so daffy, it makes me wish it were true. (Does it rise to the level of a “material misrepresentation” to investors?) And when is “Sam the Sham” Nazarian going to file for that long-promised gaming license? Whaddya wanna bet somebody has to bail him out of this project?

Posted in International, Sahara, Sam Nazarian, Steve Wynn, The Strip | 2 Comments

Adelson: Yes, we did! Wait, no, we didn’t! Well, OK, sorta … but not really!

Posted on March 5, 2013 by David McKee

“On the U.S. side … we view the State of Nevada as having uninspiring oversight of activities occurring in Macau. For every gap of oversight that exists from the Nevada Gaming Control Board or Nevada Gaming Commission, the U.S. Federal Government may fill it … If the Nevada Gaming Control Board and Commission were to continue showing tame oversight of activities that occur in Macau, then those governmental entities risk losing their own legitimacy as the industry continues to globalize. The U.S. federal government will most certainly fill any illegitimacy of Nevada’s regulatory activities, just as it did in the 1970’s and early 1980’s when [it] was forced to purge organized crime out of Nevada when it became evident that the State of Nevada was having difficulty in doing so itself.” — Jonathan Galaviz, from a summarized version of a recent Galaviz & Co. research report.

When Mr. Galaviz published those words, last month, they may have seemed alarmist. After reading a news story like this, they sound chillingly prophetic. If the states can’t handle rogue elephants like Las Vegas Sands, are we going to have to whistle in the feds? In defense of Nevada regulators, a string of gubernatorial administrations — both Democratic and Republican — has starved the NGCB of funding, even as the casino industry ballooned to undreamt-of dimensions. Nevada regulators have to ride herd on a 21st century industry using a budget predicated on the pre-Steve Wynn era. Outsourcing the testing of games to private labs may free up some money for extra auditors and inspectors, but it’s only a step in the right direction.

Galaviz calls Nevada regulation “uninspiring,” “tame” and borderline illegitimate. For those of us who cover it regularly, “supine,” “toothless” and “willfully blind” would be closer to the truth. (Mr. Galaviz is being exquisitely diplomatic and admirably gentlemanly in his choice of words.) Silver State regulators don’t speak truth to power: They cower before it. There will be Winter Olympics in Hell before an operator of consequence loses his license, no matter how great the provocation.

In the case of Sands and its misadventures in China, the company’s March 1 10-K filing is a veritable all-you-can-eat buffet of Continue reading →

Posted in Atlantic City, Current, history, International, Internet gambling, Macau, Movies, Politics, Regulation, Sheldon Adelson, Stanley Ho, Steve Wynn, The Mob, Wall Street | 3 Comments

Ader vs. IGT: Hart wins, Adelson loses

Posted on March 5, 2013 by David McKee

This just in … the long-awaited showdown at the International Game Technology shareholder meeting has taken place and seven of the eight incumbents were re-elected, including two heavyweight allies of beleaguered CEO Patti Hart: former Harrah’s Entertainment CEO Phil Satre and former Nevada governor Bob Miller. Only director David Roberson got the boot, with Ader Investment Management President Daniel Silvers being elected in his place. Two other Jason Ader-backed candidates lost. Hart is safe to continue pursuing her innovative or erratic (depending on your perspective) strategies for growing IGT. Ader continues to hold a small position (3%) in IGT stock and now has a foothold in the boardroom, so he’s not done making mischief by any means. Neither is Sheldon Adelson, for whose derriere-garde efforts to thwart Internet gambling Ader has acted as a catspaw. In that respect, both men are on the losing side of the war. Adelson is accustomed to being on the wrong end of history by now but Ader still has a chance to salvage his reputation, as opposed to joining the Mossbacked Anachronism Brigade.

Posted in Current, IGT, Internet gambling, Sheldon Adelson, Technology, Wall Street | Comments Off on Ader vs. IGT: Hart wins, Adelson loses

Resorts World LV: Look familiar?

Posted on March 5, 2013 by David McKee

A reader in Arizona asks the question that was on my mind yesterday and probably yours, too: “Is it just me … or does this look like just a copper/gold-colored version of CityCenter?”
Agreed! (With a large helping of Mandalay Bay slopped around the front and sides. Look, if you want originality, you don’t phone up Paul Steelman.) Not only that, it vaguely resembles Jim Murren‘s original “bubble drawings” for CityCenter, with “Aria” now moved to the Strip and “Veer Towers” out back along Industrial Drive. The double-amputee on the south side represents Morgans Hotel Group‘s abortive, two-hotel participation in Echelon (a Mondrian and a Delano) and a sixth hotel tower (let’s call it “Mandarin Oriental”) stands where General Growth Properties‘ retail mall would have been. Continue reading →

Posted in Animals, Architecture, Boyd Gaming, Carl Icahn, CityCenter, Current, Entertainment, Fontainebleau, Genting, history, Macau, MGM Mirage, Morgans Hotel Group, Movies, Sheldon Adelson, The Strip | 3 Comments

Echelon no more: Boyd humiliated yet again; Caesars pulls another plug

Posted on March 4, 2013 by David McKee

If you’ll pardon my vulgarity, shit got real while I was tied up with other projects. Last week’s sale of excess baggage Dania Jai-Alai in Florida was just a tiny prelude to this morning’s blockbuster: Echelon is kaput. Instead, Boyd Gaming will liquidate it to Genting Berhad for $350 million. This closes the book on Boyd’s history as a Las Vegas Strip operator, brings a major new player to the Boulevard and raises hope for struggling north-Strip casinos, including Sam Nazarian‘s low-cost reinvention of the Sahara as SLS Las Vegas. It’s an S.O.S. for Boyd, which needs to pay down its Peninsula Gaming purchase.  The north half of the Echelon acreage, once occupied by the Stardust, was long since bought and paid for; the southern parcels were traded to then-Harrah’s Entertainment for the since-defunct Barbary Coast, at extravagant cost to Harrah’s. Near-term losers today were the new owners of the can’t-be-unloaded land where El-Ad Properties was going to build its Plaza metaresort and Carl Icahn, who’s still stuck with crumbling Fontainebleau. Mind you, before any victory laps are taken, note that Continue reading →

Posted in Architecture, Atlantic City, Boyd Gaming, Carl Icahn, CityCenter, Current, Downtown, Economy, Environment, Florida, Fontainebleau, Genting, Harrah's, history, International, Kansas, Mississippi, New York, Plaza, Politics, Racinos, Regulation, Sahara, Singapore, Station Casinos, The Strip, Wall Street | 7 Comments

Pinnacle expands, Boyd loses face

Posted on February 28, 2013 by David McKee

Jeez, I go on sabbatical to attend to other writing commitments and hella history breaks loose: Internet gambling is now the law of Nevada and New Jersey (so much for federal legalization being “just around the corner,” huh?), Caesars Entertainment floats a “controversial and complicated” IPO — well, nothing new there — and there’s a godawful, bloody massacre on the Las Vegas Strip. Or as civic boosters would call it, business as usual.

Pinnacle Entertainment, meanwhile, put another $20 million into the New Orleans market, breaking ground on a small (eight suites, 150 rooms) hotel to complement its Boomtown New Orleans riverboat. And why not? The Pelican State has been very, very good for Pinnacle, which has surpassed Caesars as Louisiana‘s dominant casino operator. The new hostelry won’t add a lot of jobs (50) over the long run, when it opens in April 2014. However, Pinnacle has poured so much money into the Lake Charles and Baton Rouge markets that Continue reading →

Posted in Boyd Gaming, Current, Florida, Harrah's, Internet gambling, Louisiana, Pinnacle Entertainment, Politics, The Strip | 4 Comments

Revel goes bust

Posted on February 19, 2013 by David McKee

In the most inevitable headline of 2013, Revel has — brace yourselves — filed for bankruptcy. It will become the latest in a long string of casinos that are owned and run by banks: Two-thirds of outstanding debt will be converted to equity in the property, although I doubt that two-thirds of Revel is worth a billion dollars anymore. The best news: “no layoffs are planned.” The most depressing news? “Existing management will remain in place.” That’s because Revel’s new owners are the same financiers who installed the hapless Kevin DeSanctis as chief restructuring officer, er, I mean as CEO. Throwing good money after bad, Revel lenders will fling another $45 million into this bottomless money pit. If Revel has to keep borrowing in order to pay the electric bill, there are some folks in the executive suite who damn well ought to be held accountable for this mess. Bringing in “hired gun” managerial talent would be preferable to keeping the architects of this calamity on the job.

The Associated Press‘ Wayne Parry diagnoses the cause of Revel’s near-death experience: Continue reading →

Posted in Atlantic City, Cosmopolitan, Current, Dining, Economy, Entertainment, Marketing, Revel, Wall Street | 6 Comments

Caudill: Binion’s open for business

Posted on February 19, 2013 by David McKee

Ixnay those Binion’s Gambling Hall-closure rumors. Owner Terry Caudill rang up Anthony Curtis to say that it’s (mostly) business as usual at the Downtown fixture. “Neither the casino nor the steakhouse is closing,” he told Curtis. “We have minor projects slated for the summer, but they’re all positive improvements and there will be no interruption in operations.” Mind you, between “the steakhouse [and] the casino,” you could run a Union Pacific freight train through the number of amenities that would potentially become “minor projects.” However, I’ve little doubt that these will indeed be “positive improvements,” although I’m still trying to find out exactly what form they will take.

The Tale of the Allergist’s Wife opened very successfully last weekend and continues for two weekends more (if Continue reading →

Posted in Current, Dining, Downtown, Entertainment, Terry Caudill | 2 Comments

Your move, Steve Wynn

Posted on February 18, 2013 by David McKee

Philadelphia casino-applicant frontrunner Bart Blatstein has a new sidekick. He’s ditched Hard Rock International in favor of … Isle of Capri Casinos. It’s a big win for Isle and a very embarrassing public setback for the Seminole Tribe, which Blatstein characterized as too slow-moving for his needs. The new alliance also has sentimental ties for Philadelphia native — and Isle CEO Virginia McDowell. (Hmmm … a Philly developer and casino manager working together? Should be music to city officials’ ears.) Isle can cover its $25 million bet if it sells Quad Cities laggard Rhythm City Casino, one of the lesser performers in the Isle fleet. If Blatstein’s bid is successful, Isle reaps newfound prestige. If not, it’s not out a red cent. The notion of Isle trumping Wynn Resorts may seem far-fetched but Blatstein is far more juiced into the City of Brotherly Love than is El Steve. (Other rival bidders, such as Penn National Gaming and Parx Casino, have already had a bite of the apple that is the Pennsylvania market — two bites, in Penn’s case — and may be dismissed accordingly.) Given recent oversaturation of the Philly-casino market, it surprising to see developers offering to put in $700 million or more. Then again, did you ever imagine Steve Wynn would be the underdog in this scenario?

Posted in Current, Iowa, Isle of Capri, Penn National, Pennsylvania, Steve Wynn, Tribal | 2 Comments

Case Bets: Binion’s redux; Dr. Doom; Everybody goes to Caesars

Posted on February 15, 2013 by David McKee

Today’s top story is the rumor, first aired on LasVegasAdvisor.com that Binion’s Gambling Hall & Hotel will close in July, lock, stock and million-dollar display. This dovetails with an earlier report that a detailed makeover is in the works. So Binion’s could follow the lead of the Plaza and go the short-term-closure route, rather than trying to overhaul on the fly. The last time owner Terry Caudill tried to redo Binion’s, cash flow petered out early in the process. One hopes that, this time, Terry has the money to see his plans through to fruition. Since rival owners like Tilman Fertitta and Derek Stevens have been upping the stakes for what’s considered an acceptable Downtown casino-hotel, Caudill can either follow suit or get left far behind. Either way, it means that Downtown is “happening” again, something for which Oscar Goodman long strove but which didn’t reach critical mass during his mayoral tenure.

I feel like Pollyanna when I read the prognostications of Ken Adams, who may be the foremost pessimist in casino industry. His grim forecast for 2013 is that “something has to give and some will have to go away if any are to is survive and make a profit … the numbers for January are painting an even darker picture.” Yes, voters and legislators continue to approve more casinos, and they’re not particularly concerned — especially in Illinois — whether adding a slot parlor here and a racino there sends Casino X over the brink in a highly taxed, limited-by-statute industry. Already, two months of slot-route revenues in Illinois have represented 5% and 7.5% of the state’s total gambling haul, while casino revenues continue to slip incrementally.

Adams somewhat exaggerates the threat: “casinos in all three states are reported serious revenue declines which have been attributed to Ohio casinos,” writes of Michigan, Indiana and Pennsylvania. Except for a battered Presque Isle racino in the Keystone State, I would be hard-pressed to name a casino whose revenue declines have been “serious,” unless a couple of percentage points is a matter of life or death. After all, as Adams himself says, Ohio’s much-anticipated casino rollout has been a disappointment, bordering on a flop (Horseshoe Cleveland excepted, right). And yes, Horseshoe Cincinnati could send Indiana’s Continue reading →

Posted in Architecture, Atlantic City, California, Dan Gilbert, Derek Stevens, Dining, Downtown, Economy, Harrah's, Illinois, Indiana, Internet gambling, Marketing, Massachusetts, Ohio, Oscar Goodman, Palms, Penn National, Pennsylvania, Problem gambling, Racinos, Slot routes, Taxes, Technology, Terry Caudill, The Strip, Tilman Fertitta, Tribal | 3 Comments

Crunch time

Posted on February 15, 2013 by David McKee

Photo by Susannah Smitherman

As though S&G correspondence hasn’t been spotty enough of late, thanks to “Maloof Flu,” a number of other external factors will be impinging on your weekly flow of ephemera and arcana. Deadlines for USA Today, Las Vegas CityLife, Casino Life and Desert Companion are bearing down upon me like the Four  Horsemen of the Apocalypse. Also, tonight Las Vegas Little Theatre opens its production of Charles Busch‘s The Tale of the Allergist’s Wife (above, with the spicy Continue reading →

Posted in Current, Entertainment | 1 Comment

Trump: And then there was one

Posted on February 14, 2013 by David McKee

What’s an Atlantic City casino worth? Not too bloody much, especially if the name of Donald Trump is emblazoned across the façade. Trump Entertainment Resorts has parted with unloved, unremunerative Trump Plaza and truly for a pittance — $20 million. This is the most rock-bottom resale price yet recorded for an Atlantic City gambling hall. That’s less than one-tenth of the hotel-casino’s construction cost … unadjusted for 28 years of inflation! The purchaser, Meruelo Group, is known to players in the Reno area, where it owns the Grand Sierra Resort. (Any thoughts, readers?) Meruelo paid $22K/key for the smallish hotel. It chose a good moment to swoop: The Plaza was coming off a catastrophic January, in which revenue fell 41%, to a truly pathetic $4.9 million. There was a time not so long ago that a $10 million monthly gross was a cause for shame along the Boardwalk.

By severing the Plaza from TER, Meruelo is rid of the poisonous Trump brand name. The Golden Nugget continues to flourish without it, having recorded Continue reading →

Posted in Atlantic City, Colony Capital, Current, Donald Trump, Economy, Entertainment, Reno, Revel, Tropicana Entertainment | 11 Comments

SLS/Sahara: Nazarian gets his green (cards); Caesars green-lit for Cincy

Posted on February 14, 2013 by David McKee

Just when Sam Nazarian‘s mooted reinvention of the defunct Sahara as SLS Las Vegas looked dead and gone, The Naz slipped in under the wire with all the offshore money he required and a bit more: Sahara Sam needs $115 million from overseas sources to hang onto $300 million that’s sitting in escrow. He told the Wall Street Journal he and his partners “believe they are close to coming up with $215 million.” That’s considerably more circumspect phraseology than was employed to the Las Vegas Review-Journal, where The Naz presented the financial situation as a done deal. Rather wishfully, Nazarian added, “We’re close to Downtown” and all its newfound hipness. Sorry, Sam, but you’re nowhere near the El Cortez, which helped kick-start the Fremont East action. “We also want to be a place for locals to visit,” added Nazarian, who needs every customer he can get.

Per the WSJ, Sahara Sam and partner Terry Fancher “insist the SLS Las Vegas will draw new visitors who are already fans of Mr. Nazarian’s night life and hotel empire in Continue reading →

Posted in Current, Dan Gilbert, Downtown, Economy, Harrah's, International, Maryland, Ohio, Racinos, Regulation, Sahara, The Strip, Tourism | Comments Off on SLS/Sahara: Nazarian gets his green (cards); Caesars green-lit for Cincy

An indispensable man; MGM’s two-front campaign

Posted on February 14, 2013 by David McKee

French statesman Georges Clemenceau once dryly remarked that the cemeteries are full of indispensable men. Clemenceau’s quip obtained fresh sting this week when the gaming world lost Dr. William Eadington. The industry scholar has been struggling with cancer for a year and a half, and succumbed at age 67. A reserved and unpretentious man, Bill was also a font of knowledge, infectiously enthusiastic about his chosen of field of study and always happy to share his highly informed perspective. A modest person, he could state strong opinions about the casino industry’s state of affairs (and its indiscretions) with a mildness that only redoubled their force. Bill was also well ahead of the curve in using the Internet as a preferred form of correspondence (I still have a dog-eared Rolodex card from the Nineties, listing his e-mail address), although us ink-stained wretches were freely encouraged to call him at home. The good doctor was, you see, an ahead-of-his-time practitioner of telecommuting, too. No aspect of the gaming sphere escaped his notice, although if he felt his knowledge of X or Y was a bit sketchy (and it rarely was), he’d be the first to say so.

Dr. Eadington leaves a great legacy, not only in the form of the University of Nevada-Reno‘s Institute for the Study of Gambling & Commercial Gaming, but in those of us who were enriched by his knowledge and willingness to share it. To say his death leaves a void would be a bit of an understatement. In recent years, we have lost UNLV economist Dr. Keith Schwer and reporter/commentator Jeff Simpson. Comparable figures have not arisen to take their place. Mortality has made many withdrawals from our bank of knowledge, but no deposits, leaving us much the poorer.

No Surprise Dept.: Taking his lead from other city fathers, Springfield Mayor Domenic J. Sarno has chosen to put the Penn National Gaming vs. MGM Resorts International choice of casino development in the hands of voters … provided that Continue reading →

Posted in Atlantic City, Boyd Gaming, Current, history, Internet gambling, Macau, Massachusetts, MGM Mirage, Pansy Ho, Penn National, Problem gambling, Regulation, Revel, Stanley Ho, Technology | Comments Off on An indispensable man; MGM’s two-front campaign

Palms 1, McKee 0

Posted on February 13, 2013 by David McKee

A one-night “staycation” the Palms was my undoing, as I contracted a severe cold and have been bedridden ever since. Coincidence? You make the call. Incidentally, at an event for local journos, I couldn’t help notice that many of the “media” were young ladies in short, thigh-gripping dresses, with small purses that dangled about their fannies. I don’t know if they were working girls but they were definitely “working it” and in a very high-visibility manner. Congratulations to Texas Pacific Group and Leonard Green & Partners: You’ve shown that your private equity firms can get down-and-dirty, Vegas-style just like an old-school operator would.

Posted in Palms, The Strip, Wall Street | 1 Comment

MGM back into Atlantic City?

Posted on February 8, 2013 by David McKee

MGM Resorts International has a 50% stake in Borgata that nobody wants … except MGM. In bolstering move that Atlantic City sorely needs, MGM may get to reclaim its half of the resort (with the support of partner Boyd Gaming), not to mention all the revenue that the State of New Jersey has been holding in trust, pending a sale, since it kicked MGM out three years ago. Garden State regulators had found that — surprise! — Stanley Ho was mobbed up and deemed that daughter Pansy Ho had acted as a conduit for some of Papa Ho’s money to flow into MGM Grand Paradise in Macao. Now, if Continue reading →

Posted in Atlantic City, Boyd Gaming, Current, Economy, Election, Horseracing, Internet gambling, Macau, Maryland, Massachusetts, MGM Mirage, Penn National, Regulation, Stanley Ho, The Mob | 1 Comment

December in Vegas: The house won; Sheldon of La Mancha

Posted on February 8, 2013 by David McKee

There are gambling markets … and then there’s Las Vegas. Players opened their wallets — oh, did they ever — and lost big. Casino winnings on the Las Vegas Strip were up 13.5% and Nevada casinos overall did 10% better than last year, for a statewide gross of $943 million. Downtown casino winnings shot up almost 20%. That’s right: 20%. Even Strip slot play was up 4%, thanks to a combination of slightly higher coin-in and incrementally tighter hold. But what mainly drove those balmy Strip numbers, of course, was baccarat, where $185 million was raked in. Whales and smaller aquatic fauna bet larger (up 23%) and lost bigger (ditto). Other table games saw 11.5% higher play and the house was lucky indeed, its winning rising nearly 18%. (According to J.P. Morgan, 18.5%.) Except for some outlying Clark County markets like Continue reading →

Posted in Boulder Strip, Boyd Gaming, Current, International, Lake Tahoe, Laughlin, Marketing, Mesquite, North Las Vegas, Reno, Sheldon Adelson, The Strip, Tourism, Wall Street | 2 Comments