SkyFail

Posted on January 17, 2013 by David McKee

It’s time we reluctantly stuck a fork in Howard Bulloch‘s South Strip Ferris wheel, Skyvue. It’s besieged by liens and unpaid bills, which Bulloch is going to cover by — wait for it — borrowing still more money. The developer is all happy-days-are-here-again about Skyvue but when the construction crane has been dismantled and the main bearing sent to Germany, it’s never cause for optimism. If regarded as abstract art, Continue reading →

Posted in Current, Economy, Entertainment, Harrah's, The Strip, Tourism | 2 Comments

Quote of the Day

Posted on January 16, 2013 by David McKee

“This issue doesn’t affect us because really we don’t know anything about these investigations.” — Madrid Mayor Aña Botella, winning the Ostrich Award last summer by sticking her head in the, uh, sand with regard to scandal-plagued Las Vegas Sands and its Iberian mega-ultra-über-meta-casino resort proposal.

Posted in International, Regulation, Sheldon Adelson | Comments Off on Quote of the Day

Palms: “It’s going down”

Posted on January 16, 2013 by David McKee

That’s what Lt. Castillo (the one, the only, the awesomeness that is Edward James Olmos) would say of the situation at Palms Casino Resort, which has spent the Joseph Magliarditi administration spiraling into disrepute. (Trouble at a Magliarditi-run casino? Shocking!) According to the Las Vegas Review-Journal‘s lightning-fast Chris Sieroty, multiple arrests are “imminent” in a prostitution-and-drugs case that will cost the Palms over $1 million in fines. Had TPG Capital and Leonard Green not purchased N9ne Group and rolled it into FP Holdings, N9ne would be getting escorted Continue reading →

Posted in Current, Environment, Palms, Regulation, The Strip, TV, Wall Street | 1 Comment

Massachusetts … and then there were 11; End of the Colony Capital era?

Posted on January 16, 2013 by David McKee

“[W]ell-connected developer” — but so not well financed — David Nunes (below) just got his casino-application fee across the transom, meaning that there are 11 contestants vying for two casino licenses and a slot parlor in Massachusetts. A couple of casino aspirants who couldn’t get their act together in time are pleading for extensions That number could rise still further once the Massachusetts Gaming Commission has decided it’s waited long enough for the Mashpee Wampanoags to prove that they are eligible under the Carcieri v. Salazar ruling, which foreshortens the number of federally recognized tribes that are qualified to offer gambling. If the Interior Department, soon to be minus one Ken Salazar, rules adversely, it’s a free-for-all in southeastern Mass. If the State of Massachusetts opens the region to private-sector casino developers and the Mashpee Wamps then achieve recognition, Gov. Deval Patrick finds himself with four casinos on his hands, not the three upon which he insisted.

Nunes, whose above-pictured Milford project has looked like smoke and mirrors so far (and is fugly beyond description) is at best a distant third-place contender for the Boston-area license. Steve Wynn has to be regarded as the prohibitive frontrunner because … well, because Continue reading →

Posted in Architecture, Atlantic City, Cordish Co., Harrah's, Internet gambling, Maryland, Massachusetts, Neil Bluhm, Pokergeddon, Racinos, Regulation, Steve Wynn, Taxes, Tribal | 1 Comment

Margaret Elardi … still here; One bullet dodged, another incoming

Posted on January 15, 2013 by David McKee

To hear the Los Angeles Times tell it, Margaret Elardi — crusty, superannuated, former owner of the Frontier — has called it a day over at Casino Royale. Now redubbed “Best Western Plus Casino Royale,” the small-but-splashy casino has a new brand affiliation for certain — whereby a room for tomorrow night would set you back $199. However, a search of Clark County property records shows no transfer of title since 1993. Pending a call to the Nevada Gaming Control Board, it would appear that the Elardi family has farmed out management of the Casino Royale to Best Western but hung onto the land and casino license. There’s certainly been nothing in the newspapers or on the wires to indicate otherwise. According to the Las Vegas Review-Journal, Elardi — who vowed to die with her boots on — is still alive, so I won’t believe the Elardis have cashed out of the Royale until their cantankerous matriarch is carried out, feet first.

Okay, so we made it past that “fiscal cliff” scare — by dint of the usual half-measures, of course. But now there’s a high-stakes game of chicken in Washington, D.C., over the raising of the debt ceiling. (For a town that frowns upon legalized, regulated gambling, Continue reading →

Posted in Dan Gilbert, Economy, Massachusetts, Regulation, The Strip | 6 Comments

What manner of idiot …

Posted on January 15, 2013 by David McKee

… keeps fountains running during a hard freeze? A Caesars Entertainment executive, who else? Never mind that pipes have been bursting all over the valley (including one at LVA HQ) and that Lake Tahoe casinos have experienced “severe water and flood damage to the hotel and gambling areas” from ruptures, wreaking havoc upon two Caesars-owned casinos, one Tropicana Entertainment joint and a Columbia Sussex slot house. No, some doofus at Caesars Palace just had to keep the fountains going, even when they froze two days in a row. It kills Gary Loveman to do anything remotely resembling maintenance but Caesars sure chose to live dangerously with this fountain caper. Wouldn’t you love to be a fly on the wall when the repair bill lands on his desk?

Posted in Columbia Sussex, Cretins, Current, Environment, Harrah's, Lake Tahoe, The Strip, Tropicana Entertainment | 2 Comments

Trouble for riverboat gambling?

Posted on January 15, 2013 by David McKee

Sorry to sound apocalyptic, especially since we just dodged that Mayan Calendar bullet. However, a brand-new Supreme Court ruling is sure to get the attention of every company that owns a riverboat casino. By a 7-2 margin, the high court ruled that “anything that floats” does not constitute a vessel. In an opinion penned by Justice Stephen Breyer, houseboats have been deemed the province of housing authorities, not maritime ones. We’ve long had the farce of “boats in moats,” platforms surrounded by water, theoretically inoculating states like Mississippi and Missouri from that icky-poo gambling stuff. However, what would this latest ruling by the Supremes portend for floating — but permanently docked — riverboat casinos. Since they don’t meet the “used for transportation” standard set by Breyer and his colleagues, they suddenly find themselves reclassified as buildings. Will they have to resume nominal cruising? Perhaps Continue reading →

Posted in Current, Florida, Mississippi, Missouri, Pinnacle Entertainment, Regulation, Taxes | 2 Comments

Palms cops a plea

Posted on January 11, 2013 by David McKee

It’ll cost the Palms a cool $1 million and change to make problems with the Nevada Gaming Control Board go away quietly … unless the Nevada Gaming Commission decides a still-higher penalty should be exacted. (Unlikely, but possible.) According to the NGCB, in spring of last year, “security guards, bottle runners and women provided drugs and offered sexual favors to officers at Moon, Rain and Ghostbar, as well as at Ditch Fridays pool parties.” The misbehavior is laid at the feet of N9ne Group, whose ownership entity, NM Ventures, was rolled into a bundle last fall with the rest of the Palms by the latter’s private-equity owners, who include Caesars Entertainment co-owner TPG Capital and Leonard Green & Partners. Since the alleged Continue reading →

Posted in Current, Entertainment, George Maloof, Regulation, Wall Street | 2 Comments

Hollywood, we have a problem; The Marrandino mystery

Posted on January 11, 2013 by David McKee

Ohio casinos had a below-average December, although the blow was softened by table hold of — YEOW! — 23%. That’s borderline-astronomical compared to Las Vegas averages for 2004-2011 period. It’ll help make up for slot revenues that suggest, with six racinos and one full-service casino still to come, the Buckeye State market isn’t what it was cracked up to be. If, per Dr. David G. Schwartz, $200 per day is the average win you’d like to see from your slot machines, the two Penn National Gaming casinos (even in a limited marketplace) are looking a tad pale. Last month, Hollywood Columbus — which competes with nearby Scioto Downs — won a sickly $115/day, down from a not-exactly-impressive $140/day monthly average. Hollywood Toledo has been hovering above the Mendoza Line, at $217/day, but dipped to $175/day in December.

Conversely, Scioto Downs — where the VLT hold is incrementally tighter than Hollywood’s — was steady. “We’re happy with our numbers,” said General Manager Troy Buswell — and with good reason. VLTs have also been, very surprisingly, a boon to harness-race wagering at the racino. Kudos to MTR Gaming for a hand exceptionally well played. Holiday season or no, Horseshoe Cleveland actually improved its monthly slot-win numbers, producing an above-average $265 per slot (up from $254). This led to some irrational exuberance on the part of local TV station WEWS, which erroneously crowed that the Caesars Entertainment property had — at $24.5 million — outgrossed all Atlantic City casinos except Borgata. Not so, my good friends. There’s a little hole in the wall called Continue reading →

Posted in Atlantic City, Boyd Gaming, Cordish Co., Current, Dan Gilbert, Economy, Harrah's, Horseracing, Maryland, MTR Gaming, Ohio, Penn National, Racinos, Regulation, Wall Street | 3 Comments

November in Vegas: The house lost; Players jilt Caesars in A.C.

Posted on January 10, 2013 by David McKee

There’s no other way of saying it (although many are trying). Strip casinos got their clocks cleaned in November as Lady Luck favored the punters, not the house. A 13% dropoff on the Strip was driven by a perfect storm of factors. Sports books relearned the old lesson that it’s not whether you won or lost; it’s whether you covered the spread. Coin-in at the slots was up 4% but holds were looser and casinos took in 10% less than 2011. Same at the tables: Players put 5% more on the felt and casinos lost 10% more than in the year previous. Baccarat dealt the cruelest blow. Wagers were down 16% and fortune smiled on the players, as the casinos raked in 25% less, year over year.

Off-Strip, Boyd Gaming (-14%) actually fared much Continue reading →

Posted in Atlantic City, Bally Technologies, Boulder Strip, Boyd Gaming, Colony Capital, Current, Donald Trump, Downtown, Economy, Harrah's, Lake Tahoe, Laughlin, North Las Vegas, Revel, Station Casinos, The Strip, Tourism, Tribal, Tropicana Entertainment, Wall Street | 5 Comments

Pinnacle makes pricey Atlantic City exit; Fertitta’s Downtown mess

Posted on January 9, 2013 by David McKee

A Wall Street Journal story from yesterday evening reports that Pinnacle Entertainment has found a buyer for its 19 acres of Boardwalk land. These were cobbled together at huge cost — $270 million or $14 million an acre — by former CEO Dan Lee (left). His successor, Anthony Sanfilippo, is reportedly flipping them for approximately $35 million. That’s $1.8 million/acre and a $235 million writeoff by Pinnacle, just as it’s sprucing up its balance sheet in order to acquire Ameristar Casinos. One realtor told the WSJ, “if the market turns, somebody can come in and build a casino lickety-split.” In your dreams, bub. Hard Rock International has a site but reportedly can’t raise money amid post-Revel malaise. Anybody “can come in” and peel off an asset like Trump Plaza for relative peanuts. And nobody ever “[built] a casino lickety-split” that was worth a damn. Of course, if Lee had not precipitously demolished Carl Icahn‘s former Sands Hotel & Casino, this might be a more upbeat story — and Pinnacle would be amortizing its investment, at least to some small degree. Better luck with this Ameristar thing, guys … and I mean that sincerely.

8 News NOW

Roach hotel. In researching a “Question of the Day,” I discovered that the Golden Nugget‘s downtown Las Vegas roach problem was a “multi-generational” Continue reading →

Posted in Atlantic City, Carl Icahn, Current, Dan Lee, Donald Trump, Downtown, Economy, Environment, Pinnacle Entertainment, Regulation, Tilman Fertitta | 3 Comments

MGM Cotai clears final barrier; devil in the Maryland details

Posted on January 9, 2013 by David McKee

Although the government of Macao enjoys nothing better than to make casino owners wait and fidget for their land leases to be “gazetted,” today is MGM Resorts International‘s lucky day. MGM China received final approval for its Cotai Strip megaresort. Deutsche Bank analyst Carlo Santarelli calls the timing “ahead of expectations,” which suggests that Macanese bureaucrats were in a generous mood this week.  J.P. Morgan analyst Joseph Greff estimates this will add almost $2/share to MGM’s value. Santarelli projects an ROI of 16% from the casino-to-be. Macao is being a “george” landlord, charging only $270,000/year during construction and $700K/year afterward. (For perspective, if MGM sold it to Penn National Gaming‘s overhyped REIT — an absurd hypothetical but bear with me — Jim Murren would be forking over $200 million a year in EBITDA, plus fees, just for starters.) But don’t pop the champagne corks just yet: The $2.5 billion development isn’t expected to be completed until 2016 and reach full potential the year following. When finished, MGM Cotai will incorporate 2,500 slots, 500 tables and 1,600 hotel rooms, spread over 18 acres of — let’s face it — landfill. For a company that was last into the Macanese market and had only property (above), and in a disadvantageous location at that, MGM has hung in there pretty admirably, at least where market share is concerned.

In the near term, multi-property operators Las Vegas Sands, Melco Crown Entertainment and Wynn Resorts are favored Continue reading →

Posted in Boyd Gaming, California, Current, Macau, Marketing, Maryland, Melco Crown Entertainment, MGM Mirage, Penn National, Politics, Regulation, Sheldon Adelson, Stanley Ho, Station Casinos, Steve Wynn, Tourism, Transportation, Tribal, TV, Wall Street | Comments Off on MGM Cotai clears final barrier; devil in the Maryland details

New blog in town

Posted on January 8, 2013 by David McKee

It looks like S&G will have some competition in the leave-no-word-unminced department: Former Las Vegas Review-Journal Business Editor Doug Puppel has created Vegas WTF (test version). If you want to read about jailed high rollers and violence on the Strip, this will be your go-to source. He’s looking for sports book insights — like how is the long NHL layoff going to affect betting lines — and skeptical coverage of the nightclub scene. If you’ve got anything to offer on those fronts, let him know.

Posted in Current, Entertainment, Sports, The Strip | 1 Comment

Revel: Slow learning curve ahead; Sheldon spanked in Singapore

Posted on January 8, 2013 by David McKee

By the time Revel CEO Kevin DeSanctis realizes he’s made a mistake, he’s almost always past the point of no return. Although it is my deeply rooted opinion that smoking is a noxious, disgusting habit that invades other people’s space, banning it has been demonstrated to cause a 15% or greater decrease in the revenues of those casinos that did so. Yet, while Revel is stuck toward the bottom of the Atlantic City market, DeSanctis continues to insist that “too early” to know if his no-smoking policy has hurt Revel revenues. Wake up and smell the nicotine, Kevin. Delaware’s racinos don’t permit smoking and they’re paying quite a price … Actually, there are hints that Revel may be having second thoughts about this whole smoke-free thing, which makes it unique (read: uniquely disadvantaged) among Atlantic City casinos. A mysterious new slot lounge may be intended as a smokers’ haven. Why else would you need a discrete slot lounge, other than for high-end play? Right now, Revel needs plain old play, never mind from which end it comes. So, as the Jersey shore claws its way back from Hurricane Sandy and while the Boardwalk recalibrates toward business and hiring plans that go from year to year, not season to season, problems of such a nature are a luxury at Kevin’s Krib.

Keeping in mind the agenda of Unite-Here, it’s done some number-crunching on Revel and predicts it will celebrate its first anniversary with $1.6 billion in debt, which would require Continue reading →

Posted in Atlantic City, Cordish Co., Current, Economy, Environment, Genting, International, Maine, Marketing, Maryland, Penn National, Problem gambling, Racinos, Regulation, Revel, Sheldon Adelson, Singapore, Wall Street | Comments Off on Revel: Slow learning curve ahead; Sheldon spanked in Singapore

Exit Fahrenkopf, enter … ?

Posted on January 7, 2013 by David McKee

After a long (17 years) and eventful tenure at the top of the American Gaming Association, President Frank J. Fahrenkopf is calling it a day. On June 30, he hands over the reins to a successor as yet to be named. Although this decision was taken over a year ago, the AGA is only now commencing the search for a replacement. The smooth-talking and seemingly ageless Fahrenkopf gave Big Gaming a media-savvy voice and a politically connected presence on Capitol Hill. Mind you, those who crossed him did so at their peril: Just ask Ian L.M. Thomas, the chowderhead who singlehandedly scuttled the World Gaming Congress by refusing to give the AGA the equity participation it requested. (I know: I was aboard the sinking ship.) Fahrenkopf promptly formed the rival Global Gaming Expo and Continue reading →

Posted in Atlantic City, Australia, Boyd Gaming, Current, Florida, G2E, Internet gambling, Mississippi, Pennsylvania, Politics, Sheldon Adelson, Tribal | 2 Comments

Blood on the Boardwalk: Marrandino out

Posted on January 6, 2013 by David McKee

You can practically hear the wind whistling through the corridors of power as top execs continue to jump — or are flung — from the sinking Caesars Entertainment ship. First, CFO Jonathan Halkyard up and quits, in favor of the lower-stress environment of Nevada Energy. Now a major power vacuum is created by the ouster of Don Marrandino, viceroy of Caesars’ growing East Coast portfolio.

Sure, Marrandino might have quit. Maybe. But the news went out late Friday night, accompanied by the phrase “move on to pursue other interests” … a favored corporate euphemism for ‘canned.’ The task of delivering Marrandino’s eulogy was delegated to operational chief Tom Jenkin.  (At least Marrandino got a nicer send0ff than Halkyard did.) And so Caesars loses one of the few top-tier execs to display the “vision thing,” a quality sorely lacking in CEO Gary Loveman, a bean counter and hopelessly inept strategist. In deference to its best-performing Atlantic City property, Caesars gave autonomy to Harrah’s Marina General Manager John Smith, while regrouping its other three Boardwalk properties under Kevin Ortzman‘s stewardship.

One news account strongly implies that the Don’s downfall was caused by a Marrandino indiscretion — and regulatory violation — Continue reading →

Posted in Atlantic City, CityCenter, Current, Florida, Harrah's, Maryland, Massachusetts, MGM Mirage, Regulation, Revel, The Strip | 7 Comments

Quote of the Day

Posted on January 2, 2013 by David McKee

“The White House sent [Sen. Harry] Reid a list of suggested concessions … Reid looked over the concessions the administration wanted to offer, crumpled up the paper and tossed it into his fireplace … Reid frequently keeps his fire going and is fond of feeding a variety of proposals to it.” — Nevada‘s senior senator and his idiosyncratic manner make news again.

Posted in Current, Harry Reid | 11 Comments

CityCenter’s clearance sale; Ameristar’s secret admirer

Posted on December 27, 2012 by David McKee

After a long, abyssal plunge, Las Vegas‘ real estate market has bottomed out — or so knowledgeable people tell me. Seems that the banks ’round here ignored Mitt Romney‘s (bad) advice to dump the “shadow inventory” en masse into the marketplace, which would have sent housing prices into an incredible downward spiral. No, they’re keeping those homes buttoned up as the market tightens (I’m hearing of nine- to 12-month waiting periods for a short sale), as well as laying off bundles of houses to investment firms which will rent them or hang onto them until the laws of supply and demand turn in their favor … Which is exactly what MGM Resorts International did with a sizeable tranche of CityCenter condos, ditching 429 Veer Towers units for $119 million (or $278,688.52 apiece). No doubt eager to palliate a major advertiser, the Las Vegas Review-Journal duly packaged the story as a triumph for MGM and a harbinger of economic turnaround on the Strip. It even dredged up Eric Trump to proclaim, “We’re moving at a faster pace than anybody and at higher sales prices.” Mind you he said that after Trump International sold 300 of its units to Hilton Grand Vacations at $333K apiece. (For once, Trump made the better deal.) Analysts like Union Gaming‘s Bill Lerner speedily forgot what a boondoggle Strip-side condos have been and warbled, “it clearly signals a rebound in the Las Vegas condo market.” Yes, if a dead-cat bounce counts as a rebound.

The Motley Fool was not amused. “MGM has fire sale at CityCenter” was its headline, saying the metaresort “has become a symbol of Continue reading →

Posted in Ameristar, CityCenter, Current, Donald Trump, Economy, Election, Harrah's, Illinois, Louisiana, Massachusetts, MGM Mirage, Missouri, Penn National, Pinnacle Entertainment, Sheldon Adelson, The Strip, Wall Street | Comments Off on CityCenter’s clearance sale; Ameristar’s secret admirer

PNK piquing little interest; B.S. walks

Posted on December 26, 2012 by David McKee

‘Twas the day after Christmas and all through the house, shareholders were beginning to cool on the value of Ameristar Casinos stock. It closed ever so slightly down from Pinnacle Entertainment‘s $26.50/share offer price. Perhaps I was wrong and $869 million is enough to get this deal done, after all, though I still expect rumbles of discontent from stockholders as approval of the sale draws near. At least one Wall Street analyst, however, looks at the sale price and gets vertigo. And no wonder: Further crunching of the numbers shows the cash-flow multiple deal to be 8.3X, not the previously advertised 7.4X, meaning it’s above market average. Only Isle of Capri Casinos currently has a better debt-to-cash flow ratio than Pinnacle (Las Vegas Sands has the worst, at 13.4X), but while only Penn National Gaming surpasses Ameristar in profit margins, that latter is looking at no foreseeable revenue growth … well, so small it’s not worth mentioning.

Even if Penn wanted to get into the hunt for Ameristar, the question is not only academic because of Penn’s current REIT machinations (among other reasons) but also due to the obvious lack of interest by Continue reading →

Posted in Ameristar, Boyd Gaming, California, Current, Goldman Sachs, Hard Rock Hotel, Harrah's, Illinois, Isle of Capri, Louisiana, Missouri, Penn National, Pinnacle Entertainment, Plaza, Regulation, Sahara, Sheldon Adelson, Sports, The Strip, Wall Street, Warner Gaming | 1 Comment

A Christmas wish list …

Posted on December 24, 2012 by David McKee


For those of us who missed it this year, the best Christmas tradition of which I know.

First and most importantly …

To you, the reader, who makes this possible, a year of happiness, health and wealth, whether material, intellectual or spiritual.

Atlantic City: Good luck in a year that will end with ’13.’

Boyd Gaming: New TV commercials.

Caesars Entertainment: A new Continue reading →

Posted in Architecture, Atlantic City, Boyd Gaming, Carl Icahn, Cirque du Soleil, CityCenter, Cosmopolitan, Current, Dan Gilbert, Don Barden, Donald Trump, Entertainment, Fontainebleau, Harrah's, IGT, Illinois, Kansas, Massachusetts, MGM Mirage, Neil Bluhm, Penn National, Pennsylvania, Pinnacle Entertainment, Regulation, Revel, Sahara, Sheldon Adelson, Sports, Station Casinos, Steve Wynn, Tamares Group, Tilman Fertitta, Tropicana Entertainment, TV, Wayne F. Newton | 5 Comments