Bad timing

Posted on November 21, 2012 by David McKee

Is it any wonder that Trump International and other Donald Trump-branded hotels are struggling when they wait until the day before Thanksgiving to blast this offer to their customer base? Wouldn’t you think people had made their Black Friday and other holiday plans by this point? I’m looking forward to Trump rolling out a special Christmas discount on Dec. 24.

Posted in Current, Donald Trump, Marketing, The Strip, Tourism | 4 Comments

Lou Lang up to old tricks; Dog-and-pony show at Sahara

Posted on November 20, 2012 by David McKee

For months, state Rep. Lou Lang (D-Skokie), has been threatening to push an enormous gambling expansion through the Illinois Legislature during its lame-duck session. He says he’s “getting very close” but we’ve heard that kind of braying from Lang previously. A sock puppet of Illinois‘ horsey set, Lang won’t be satisfied with any bill that doesn’t dump as many racinos as possible on the greater Chicago area. That may not sit well with Gov. Pat Quinn (D), but did anyone doubt that Lang would press the issue until the last dog is hung? Never mind that we’re still months from seeing the effect that Illinois slot routes will have on casino gambling (and it could be immense): Quinn’s concerns are of a more here-and-now sort, such as the lower level of regulatory scrutiny to which a Chicago casino would be subject. (Chicanery in the Windy City? Perish the thought!) Less admirably, Quinn would reduce casino managers and other licensees to second-class citizenry by barring them from making campaign contributions. Existing casinos are going to take it in the shorts sometime in the next Lege, that’s inevitable, but Rule-or-Ruin Lou wants to inflict maximal damage and as soon as possible.

How symbolic it is that the offices of SLS Vegas, the planned reinvention of the Sahara, formerly housed Fontainebleau personnel? Sam Nazarian‘s cart-without-horse hotel project may be months behind schedule in terms of physical work, but it Continue reading →

Posted in Architecture, Carl Icahn, Cosmopolitan, Current, Entertainment, Fontainebleau, George Maloof, Harrah's, Illinois, MGM Mirage, Politics, Racinos, Regulation, Sahara, Sheldon Adelson, Slot routes, Steve Wynn, The Strip, Tourism, Transportation | 4 Comments

More Tales of Trump; Tribes vs. Tribes

Posted on November 20, 2012 by David McKee

Penn Jillette, never known for circumspection, has a field day with Donald Trump in his latest tome, Every Day is an Atheist Holiday. Like any patriotic American, he can’t resist a pot-shot at Trump’s combover, which is described as resembling “cotton candy made from piss” (although I think the latter might actually look better). You might yourself wishing you could see the outtakes from sitcom Celebrity Apprentice, as they’re better than anything that made air: Contestants were subject to Hilter’s bunker-style tantrums during which The Donald went “into his free-form rants in front of a captive audience, he would talk about articles written about him and defend himself against charges made, as far as I could tell, by random bloggers with a few hundred hits. Attacks that could have no impact on his life at all. It sounded like this cat was Googling himself, being bugged by what was written, and then defending himself to people who were trying to improve their careers by playing a TV game with him.”

As though dealing with Das Trump weren’t bad enough, Jillette had to spend quality time bonding with Continue reading →

Posted in California, Charity, Donald Trump, Regulation, Tribal, TV | 1 Comment

Wynn cashes out; X Train back on track; Newport Grand out of luck

Posted on November 19, 2012 by David McKee

Caught between the twin hazards of prospective higher taxes on investment income and the looming fiscal cliff, Steve Wynn made headlines today with his $750 million Thanksgiving special dividend, which ought to help pay for all those Black Friday purchases on Wynn Resorts‘ investors to-do list. The New York Times also speculated that there might be a gallop to sell off small businesses by the end of the year. While this might cause a boomlet of further consolidation in gaming, the time frame of such sales and the number of regulatory approvals that would be required make me doubt things will go that far … although we could see some very creative transactions, judging by Penn National Gaming‘s cloning of itself into a REIT.

In the meantime, Steve, you’ve got a fashion emergency looming and it’s not pretty. Did somebody dare him to wear that sweater? Wynn’s attire has taken a turn for Continue reading →

Posted in California, Downtown, Election, Penn National, Racinos, Steve Wynn, Tamares Group, Taxes, Transportation, Wall Street | 1 Comment

Right idea, wrong place?

Posted on November 19, 2012 by David McKee

Las Vegas is a city whose attractions feature the eat-at-your-own-risk Heart Attack Grill. It’s also got no shortage of vast, empty spaces waiting to be filled. So it would have seemed inevitable had Guy Fieri chosen to open a three-story, 500-seat (!) temple to junk food in Sin City rather than Times Square. Local food critics are so starstruck they’d undoubtedly have waxed rhapsodic over Fieri’s “Donkey Sauce” and “Malibu Oysters.” However, it was Fieri’s misfortune to erect Guy’s American Kitchen & Bar in New York City, not on the Las Vegas Strip. This earned him a royal roasting from New York Times food critic Pete Wells: “How did Louisiana’s blackened, Cajun-spiced treatment turn into the ghostly nubs of unblackened, unspiced white meat in your Cajun Chicken Alfredo?” Wells expounded the thinking behind his review even further to Poynter.

However, such is the power (read: money) commanded by Fieri that the Times‘ public editor called Wells on the carpet to explain himself. What’s more, Fieri hopped a readeye from The Coast and apparently demanded Continue reading →

Posted in CityCenter, Current, Dining, New York, The Strip, TV | 3 Comments

A tale of two Penns

Posted on November 16, 2012 by David McKee

Update: Seeking Alpha’s Brad Thomas has run the numbers on the Penn split and doesn’t like the risk/reward scenario.

Fifteen years and many consolidations ago, the casino industry was seized by a brain fever. It was set off by the bidding war between Hilton International (led by Steve Bollenbach) and Starwood Resorts (then run by current Riviera owner Barry Sternlicht) for the ITT/Sheraton portfolio, which included Caesars Palace and the Desert Inn. Starwood’s winning pitch was that it was going to roll ITT/Sheraton into a real estate investment trust (or REIT). This sparked a furor among gaming executives, who collectively began to gobble like so many turkeys, “REIT! REIT! REIT-REIT-REIT! We’re gonna become a REIT. Everybody’s gonna turn into a REIT!”

In the end, nobody did. The phenomena, which I dubbed “REITmania” in the pages of Casino Executive magazine almost led to a takeover of Station Casinos, but that ended acrimoniously. By 2000, Starwood had shucked its casino assets and the acronym “REIT” was largely forgotten … until late, late yesterday, when over the wires went what Deutsche Bank analyst Carlo Santarelli rightly called “a shocking and somewhat confusing release.”

Penn National Gaming has announced that it will split itself into an operating company and a REIT. The casino properties will be cleft between the two entities, with Penn National leasing most of them from the REIT. OK, let’s get right to the bottom line: This is a big-ass tax dodge. REITs are exempt from federal taxes. Ergo, Penn rents property to itself and then is “required by law to distribute at least 90 percent of [its] taxable earnings to shareholders as dividends.” That only leaves 10% of taxable earnings for reinvestment, so make of that what you will. The devil is in one, unspecified detail: How are the gross gaming revenues divided? If the operating entity keeps all the lolly from the slots and tables, where does the property company get the cash flow to both keep expanding and pay down debt?

The split also enables Penn to make an end-run around anti-trust laws limiting concentration of ownership (think Indiana, Maryland, Pennsylvania, Colorado, Maine) and dabble in overseas casino ventures: “No, it’s not this Penn National that’s bidding on the license, it’s my identical twin cousin.” Continue reading →

Posted in Ameristar, Colorado, Cordish Co., Harrah's, history, Indiana, International, Kansas, Louisiana, Maine, Maryland, MGM Mirage, Ohio, Pennsylvania, Racinos, Regulation, Riviera, Sheldon Adelson, Station Casinos, Steve Wynn, Taxes, Texas, The Strip, Tribal, Wall Street | 2 Comments

Quote of the Day

Posted on November 16, 2012 by David McKee

“I just don’t get it: How can Hostess go out of business in the land of the fattest asses on the planet? That’s like the French quitting wine and cheese making, or Hawaiians giving up on surfboards. It’s a world gone mad.” — Las Vegas Review-Journal columnist Steve Sebelius.

Posted in Current | 1 Comment

Louisiana be crazy; Maryland: If you can’t beat ’em …; Revel on the ropes

Posted on November 15, 2012 by David McKee

Casino revenues in the Pelican State were up 2% last month, entirely upon the strength of Pinnacle Entertainment‘s L’Auberge Baton Rouge (above). It propelled the Baton Rouge market 58% upward, grossing $11 million at the expense of Argosy Baton Rouge (-10%) and especially Penn National Gaming‘s Hollywood Baton Rouge (-25%). Still, Pinnacle is growing the “Red Stick” market, not just cannibalizing it. The bright spot in Shreveport (-5% overall) was Horseshoe Bossier City, up 9%. Caesars Entertainment also had a strong month at Harrah’s New Orleans (+5.5%), whereas the rest of the Big Easy market — with the exception of the Fair Grounds racino (+7%) — was in the doldrums. Even Lake Charles had an atypically “off” month, down 5%. Bottom line: It was an encouraging October for Pinnacle (+20%) and Caesars (+5%); for Boyd Gaming (-6%) and Penn National, not so much.

Cordish makes love, not war. Despite being nominally opposed to Question 7, the leading casino operator in Maryland has decided it would rather switch than fight. Cordish Gaming‘s enormous Maryland Live slot parlor has already held a big media hoedown to promote its new table-game offerings. The slot floor will be thinned out in order to add 150 tables and a poker room, and hours of operation will soon be ’round the clock. A hotel is tentatively planned but David Cordish must be smoking something powerful when he says the result will be “a world-class, full-destination casino that will equal and exceed anything in Las Vegas or Atlantic City.” I have a one-word response to that: Continue reading →

Posted in Atlantic City, Boyd Gaming, CityCenter, Cordish Co., Current, Economy, Election, Harrah's, Iowa, Louisiana, Maryland, Penn National, Pinnacle Entertainment, Racinos, Revel, Taxes, Wall Street | 4 Comments

Quote of the Day

Posted on November 15, 2012 by David McKee

“Players are no longer loyal, they simply go where they get the best price. They are shoppers who flit from one store to another, looking for bargains, giveaways, closeouts, going-out-of-business sales. And guess who taught them to do it? That’s right. We did.” — letter from a casino host, lamenting the new casino economy, in which customers “sell their play” to the highest bidder.

Posted in Economy, Marketing | 1 Comment

New cowgirl in town; “Zarkana” opens quietly

Posted on November 15, 2012 by David McKee

There may be a new Cirque du Soleil production show at Aria but it’s been drowned out in the thundering hooves and comparable hype that marked Shania Twain‘s arrival at Caesars Palace. It was quite a sight: 20 horses and Twain herself, “in a floor-length leather coat and black leather trousers, her curly hair wild in the wind,” rhapsodized England‘s Daily Mirror.

Meanwhile, you could be forgiven for thinking you’d missed the Zarkana premiere. Lead-up promotion and coverage were distinctly muted, probably in attempt to avoid the high-expectation/low-response double whammy of Continue reading →

Posted in Cirque du Soleil, CityCenter, Current, Entertainment, Harrah's, MGM Mirage, The Strip, Tourism | 1 Comment

Smooth transition at Bally; Trumpalypse in Toronto

Posted on November 14, 2012 by David McKee

Late-breaking stories usually bode ill but it’s nothing of the sort at Bally Technologies, where a transfer of power was announced during the waning hours of the day. CEO Richard Haddrill (left) steps aside and up, moving to chairmanship of the board at year’s end. President/COO Ramesh Srinivasan will become the new CEO. The latter is a seven-year Bally veteran, having previously overseen its systems division. Pre-Bally, he worked with Haddrill at software firm Manhattan Associates, so it’s fair to say he’s been groomed for the top spot at BYI. J.P. Morgan analyst Joseph Greff sees nothing at all untoward in this bit of musical chairs, due to “recent momentum across [Bally’s] three operating segments,” adding that the company is “going smoothly.” Nor will Haddrill be a back-seat chairman: Greff reports his brief will encompass “long-term strategic initiatives, international expansion and i-gaming.” By contrast, Deutsche Bank analyst Carlo Santarelli found Continue reading →

Posted in Bally Technologies, Current, Donald Trump, International, Wall Street | Comments Off on Smooth transition at Bally; Trumpalypse in Toronto

Strange but sad and true

Posted on November 14, 2012 by David McKee


At first, I thought this news item and the accompanying video report were pure fantasy. Alas, truth proves stranger than fiction once again and we could be looking at the audio equivalent of the dreaded Christmas fruitcake.

In previews since Sept. 20, Sirc Michaels‘ Eighties-themed musical, Legwarmers will finally be unveiled to the media on Nov. 28. Considering that the decade of Ronald Reagan, Rick Astley and Duran Duran is a demographic ‘sweet spot’ for Vegas tourists, you’d think this was a can’t miss proposition. But the promotional video fairly screams, “Sucktasm!”, despite the presence of one or two top-flight singers like John Tomasello, who brings intermittent relief to the ordeal that is Evil Dead! The Musical, another V Theater staple.

Posted in Current, Entertainment, Planet Hollywood, The Strip | Comments Off on Strange but sad and true

Missouri: Penn vs. Penn; Pinnacle debacle deepens

Posted on November 13, 2012 by David McKee

This just in: It’s another winning strategy from those gaming-industry masterminds at Colony Capital. God forbid you’re playing at the Atlantic Club and work up an appetite. Or did Tom Barrack hear about “Stiff of the Year” and wants to get in the race?

There’s no point in revisiting Midwestern casino misery month in, month out. Although Illinois looks to have maybe, finally struck bottom, it’s pretty much the same story everywhere: Consumers are keeping their billfolds shut and “growth” is a mirage. It just means another casino has opened. But there’s a phenomenon in Missouri that’s worthy of remark …

In the Kansas City market, Penn National Gaming has essentially sabotaged one of its existing properties in order to get the coveted Kansas Speedway concession. Argosy Riverside has been screeching downward by high double-digit amounts for eight consecutive months. It fell 23% last month, as a casino that grossed $16 million in the first month of the year just posted $12 million in gaming revenues, skidding past Harrah’s North Kansas City ($15 million, -6%) on its way to third place. Penn is no stranger to scorched-earth tactics: It was prepared to walk away from a fully completed casino in Maryland before it even opened, so don’t tell me CEO Peter Carlino wasn’t willing to sacrifice a big chunk of Argosy business in order to have some Kansas action, too. Although both Isle of Capri Kansas City (-7.5%) and Ameristar Kansas City (-12%, left) having been taking hits, nobody’s reveneus been bled the way Penn has exsanguinated Argosy. (All but Ameristar are hemorrhaging customers, however.)  I guess you’d call it “vampire capitalism.”

Trick or treat. Halloween was all treat for Isle of Capri Cape Girardeau, which grossed $600,000 in the last two days of October. Even if it falls off that torrid pace, it’s still certain to Continue reading →

Posted in Ameristar, Atlantic City, Colony Capital, Colorado, Dining, Economy, Election, Genting, Harrah's, Illinois, International, Isle of Capri, Kansas, Marketing, Maryland, Missouri, Movies, Penn National, Pinnacle Entertainment, Regulation, Sheldon Adelson, Singapore, The Strip, Tourism, Wall Street | 2 Comments

Un-Lucky by any name; Shame on Trump Entertainment

Posted on November 13, 2012 by David McKee

Since there is no problem in today’s America too trivial to be resolved with gunplay, let the record show that 31-year-old Kevin Jones Jr. was mortally wounded at the Lucky Club Casino early this morning. Jones was pronounced dead at a local hospital. How his alleged assailant, convicted felon Shonta Holland, came to be in possession of a firearm is a question for the people who run background checks on would-be gun owners. There’s no question, however, that this is another blotch on the Lucky Club’s stained blotter. In the 1990s, back when it was the Cheyenne Hotel, its owners were chased out by Nevada regulators, who found too much jiggery-pokery on the balance sheets.

In 1998, MTR Gaming purchased the Cheyenne — soon to become the Speedway Casino — an electrical fire shut the place down for a fortnight. During the 2007 gaming bubble, MTR sold the Speedway at a 330% markup. New owner Seth Schorr — son Wynn Resorts COO Marc Schorr — had scarcely taken the keys to the property in June 2008 when Continue reading →

Posted in Atlantic City, Current, Donald Trump, Economy, Environment, MTR Gaming, North Las Vegas, Regulation, Steve Wynn | Comments Off on Un-Lucky by any name; Shame on Trump Entertainment

Wynn comes to Philadelphia … again; Atlantic City: About as expected

Posted on November 12, 2012 by David McKee

Now we know why Steve Wynn was careful to mend fences with Philadelphia Mayor Michael Nutter (below) in 2010 when negotiations to take over the doomed Foxwoods Casino Philadelphia project abruptly feel apart and Wynn skipped town. He’s back with “Wynn Philadelphia,” a 300-room, 100-table, 2,500-slot knockoff of Encore Macau, to be built in stages and sited in the Fishtown neighborhood. As Wynn obliquely admits to the Philadelphia Inquirer — and was patently clear at the time — Wynn Resorts didn’t perform its due diligence on the Foxwoods project. But instead of simply licking his wounds, Wynn has used the subsequent two years to Continue reading →

Posted in Atlantic City, Baseball, Colony Capital, Cordish Co., Current, Donald Trump, Economy, Harrah's, Maryland, Neil Bluhm, Penn National, Pennsylvania, Politics, Regulation, Revel, Steve Wynn, Tilman Fertitta, Tribal, Tropicana Entertainment, Wall Street | Comments Off on Wynn comes to Philadelphia … again; Atlantic City: About as expected

D, Trop try something different; Cannibalization comes to Ohio

Posted on November 12, 2012 by David McKee

Nothing says ‘November in Las Vegas‘ quite like a beach club. Yes, after unending delays, Nov. 16 is the date certain for the opening of Bagatelle Beach & Supper Club. If Bagatelle does, as promised, deliver “afternoons that transport guests to the South of France” it will decidedly be the Cote d’Azur of the off-season. Weather here of late has been chilly and windy, which may put something of a damper on the Las Vegas Tropicana‘s latest attempt to cash in, belatedly, on the “daylife” scene.

The weeks leading up to Christmas are traditionally some of the bleakest for business in Vegas. D owner Derek Stevens is pushing back — and trying to reintroduce youthful crowds to Downtown — with a bargain play that many will find hard to resist. College students can book room nights at The D for $39/evening and will receive a $39 booze credit in return. Given the collegiate crowd’s ability to consume mass quantities of alcohol, I’m sure they’ll spend well past their $39 credit and Stevens will recoup the price of those comped rooms. There’s just one catch …

The legal drinking age in Nevada is 21. Ditto Continue reading →

Posted in Alex Yemenidjian, Current, Dan Gilbert, Derek Stevens, Downtown, Economy, Entertainment, Harrah's, Marketing, MTR Gaming, Ohio, Penn National, Racinos, The Strip | Comments Off on D, Trop try something different; Cannibalization comes to Ohio

Pinnacle’s Vietnamese quagmire; Caesars’ South American pullback

Posted on November 12, 2012 by David McKee

Last Friday, Pinnacle Entertainment tiptoed out with a little bombshell that may have detonated into your e-mail or stock portfolio. In brief: Vietnam‘s planned Ho Tram Strip casino resort is in deep shit. As a 26% owner of the project, Pinnacle is at least knee-high in the manure, too. Pinnacle stock fell 82 cents a share after the news broke.

“Broke” would also describe lead investor Asia Coast Development Ltd. Not only can’t ACDL make the deadline for completing $175 million Phase I, project manager MGM Resorts International has advised ACDL that, even were Phase I to be finished, there’s no working capital left Continue reading →

Posted in Architecture, Current, Dan Gilbert, Harrah's, International, Marketing, Maryland, MGM Mirage, Ohio, Pinnacle Entertainment, Wall Street | 1 Comment

Wake up with Loveman; More election aftermath

Posted on November 8, 2012 by David McKee

No sooner were Wall Street analysts uttering serious concerns about a slow post-Sandy recovery for Atlantic City than who should pop up on CBS This Morning but Caesars Entertainment CEO Gary Loveman, doing damage control …

It’s hard to decide which is funnier: doddering Charlie Rose unwittingly picking at a Loveman sore spot by mentioning Macao, where the professor misjudged the political process so badly, or Loveman denying that there’s been a decline in Atlantic City, at about 5:15. The Caesars CEO is actually in peak form here, nimbly Continue reading →

Posted in Atlantic City, Boyd Gaming, Current, Dan Gilbert, Donald Trump, Economy, Environment, Harrah's, Internet gambling, Kentucky, Massachusetts, Pennsylvania, Politics, Regulation, Sheldon Adelson, Steve Wynn, The Strip, Tilman Fertitta, Tourism, Transportation, TV, Wall Street | Comments Off on Wake up with Loveman; More election aftermath

Election wrap-up: Winners & losers

Posted on November 7, 2012 by David McKee

But first, because it will never, ever get old …

Also this, from @daveweigel: “[Florida] exit poll: Obama winning Jewish vote by 40 points. 40 points. Nice work, Sheldon Adelson.” We’ll tap dance on Sheldon’s head some more further down, but let’s roll out the barrel for gaming’s winners last night. There were five ballot questions, from coast to coast, and here’s the quick rundown.

Maryland: Voters approved Question 7, which lowers casino taxes to an average of 61% — lower still if they buy their own slots and meet certain levels of reinvestment — adds table games (taxed at 20%), allows 24-hour gambling and adds a Prince George’s County casino license. The vote was close but, with 52% support, Question 7 carried the day. SHFL Entertainment, known to you and me as Shufflemaster, is pegged by Wall Street as the most immediate beneficiary.

Florida: The citizens of Palm Beach County approved slots for Palm Beach Kennel Club. Now the Lege has to find a way to rationalize why Palm Beach can’t have what Broward and Miami-Dade counties already do. The Seminole Tribe, Florida‘s biggest tax contributor in the gaming biz, however, is in position to play spoiler in the upcoming session.

Rhode Island: Bittersweet victory for gaming interests — they carried three of four plebiscites but only gained one casino expansion rather than the desired two. Table games had been proposed for both Twin Rivers racino and the Newport Grand slot parlor. However, these had to be voted in at the state and local level alike. Twin River won by enormous margins (71% in favor) and 67% of voters statewide gave Newport Grand a thumbs-up but 53% of Newport voters said “nay.” (Misinterpreting data, Deutsche Bank erroneously reported victory.) Twin Rivers could have its tables in play by next summer. And, in two years, when Massachusetts casinos are close to fruition, Newport will finally wake up and smell the coffee.

Oregon: A non-event, private equity firm Clairvest having taken its ball and gone home weeks before the election, when it realized that a Portland-area casino, The Grange — known to its detractors as “The Grunge” — didn’t have a snowball’s chance in Hell. (It lost, 72% to 28%; a Wood Village-only ballot question suffered a narrower defeat, with 53% voting against.) Oregonians are happy with their tribal-only casino industry and likely to remain so for quite some time.

Back to Maryland. Gov. Martin O’Malley (D) gets a boost, having cobbled Question 7 together and pushed it over the electoral transom in but a few months. All existing casinos won, to some extent, thanks to Continue reading →

Posted in Atlantic City, Colony Capital, Colorado, Cordish Co., Cretins, Current, Donald Trump, Economy, Election, Florida, Goldman Sachs, Harrah's, International, Internet gambling, Maine, Marketing, Maryland, Massachusetts, Minnesota, Pennsylvania, Politics, Racinos, Sheldon Adelson, Shuffle Master, Steve Wynn, Tribal, TV, Wall Street, West Virginia | 4 Comments

L-O-S-E-R

Posted on November 7, 2012 by David McKee

Sorry, Sheldon Adelson, but American democracy is not for sale to the highest bidder. Now go back to doing what you do best: opening overseas casino markets … far overseas, preferably.

Posted in Current, Election, Sheldon Adelson | 2 Comments