Quote of the Day

Posted on February 9, 2011 by David McKee

“If Gov. Brian Sandoval could take the state’s checkbook to a Money Tree store, maybe he could borrow the $1 billion that would at least get Nevada back to the budget amount approved by the 2009 Legislature. The Money Tree in Carson City charges $16.50 per $100 borrowed, so Nevada would have to eventually have to pay fees of $165 million. But the economy will have come back by the time the loan is due, right?” — Las Vegas CityLife political columnist Steve Sebelius, waggishly suggesting possible fixes for the Silver State’s yawning revenue chasm.

Posted in Current, Economy, Politics | Comments Off on Quote of the Day

NorthStar’s Hard Rock bluff wins

Posted on February 7, 2011 by David McKee

While Yr. Humble Blogger is laid up with a fractured ankle, the Hard Rock Hotel & Casino caught a lucky break for once. Announcements of foreclosure auctions are sometimes brinkmanship, an attempt to get a recalcitrant borrower to the bargaining table. So it was last year with the Union Plaza downtown and so it was again with the wrangle between NorthStar Realty Finance Corp. and Morgans Hotel Group. The former’s auction of the Hard Rock was scrubbed a couple of hours ago, which means that Morgans HRH co-owner DLJ Merchant Partners made some form of concession. The lender’s main beef was that it wasn’t close enough to the front of the repayment queue if the Hard Rock went bust. There’s not much Morgans/DLJ can do about that. Although no details are available yet, I’m guessing the phrase “higher interest rate” is going to be somewhere in the mix.

Posted in Current, Morgans Hotel Group, The Strip | 3 Comments

A new “eye in the sky”?

Posted on February 4, 2011 by David McKee

Editor’s note: While I’m occupied on other fronts, guest blogger Alan Saway of software firm Quova takes up the slack, examining some of the infrastructural problems associated with Internet casinos.

The Internet Gambling Enforcement Act (UIGEA) of 2006 prohibited online gambling in the U.S. by restricting the use of payment systems (e.g., banks, payment processors, credit card companies) for Americans who gamble over the Internet.  The Act was conceived as a measure to prevent activities such as money laundering and bank fraud within the gaming sector as well as a means to prevent underage and compulsive gambling through unregulated access to Internet gambling sites.

However, from the outset, many – including members of Congress – viewed this legislation as  inappropriate interference with individuals’ personal freedom to spend their money as they see fit. In response, Rep. Barney Frank (D-Mass., left), then-Chairman of the House Financial Services Committee, introduced the Internet Gambling Regulation, Consumer Protection & Enforcement Act of 2009.

This Act would have established a federal regulatory and enforcement framework under which Internet gambling operators could obtain licenses authorizing them to accept bets and wagers from individuals in the U.S.  Conditions of the license would require operators to maintain effective protections against underage and compulsive gambling, money laundering and fraud, and enforce prohibitions or restrictions on types of gambling prohibited by states and Indian tribes.

A companion bill, the Internet Gambling Regulation & Tax Enforcement Act, introduced in the House by Rep. Jim McDermott (D-Wash., above), was designed to capture revenue from proposed legal online gaming activity for federal, state and tribal governments and increase protection against tax cheating. Which is a reminder that …

New online gaming operators will need to know who their customers are and where Continue reading →

Posted in California, International, Internet gambling, Maryland, Massachusetts, MGM Mirage, Ohio, Politics, Regulation, Taxes, Technology, Tribal | 3 Comments

Programming note

Posted on February 4, 2011 by David McKee

You’ve probably noticed an attenuated output from Yr. Humble Blogger. A backlog of commissions, including LVA mini-bios of Jay Sarno (left) and former Desert Inn exec Milton Jaffe, has put me well and truly behind the 8-ball, and may continue to do so. Heck, I’ve not even had time to bone up on Sheldon Adelson‘s stunning discontinuation of comps at Venelazzo. Short-sighted greed or sagacious business practice? You decide.

Posted in Current, history, Sheldon Adelson, The Mob, The Strip | 1 Comment

Hard Rock: Oh no!; Bellago bandit busted

Posted on February 3, 2011 by David McKee

Is there anybody who could probably run the Hard Rock Hotel & Casino worse than hapless Morgans Hotel Group? We may soon find out as Navegante Group has been announced as operator-to-be by NorthStar Realty Finance Corp. The latter, as you know, is trying to foreclose on the property, for fear that senior lenders would get paid but NorthStar will be shafted for its $96 million. The Las Vegas Sun reports that the Hard Rock is on a collision course with a Feb. 9 deadline for making good on $1.25 billion in debt, with no rescue plan announced — although a frantic sell-off of MHGC assets would suggest that the company is earnestly trying to avoid default. No wonder it can’t find a CEO. Who wants to accept captaincy of the Titanic?

Now, if NorthStar had nominated Fine Point Group (which temporarily improved Greektown Casino‘s performance while the property was in Chapter 11) or perhaps Golden Gaming, which briefly operated the HRH while Morgans was getting its gaming license, it’d be a happy day. Navegante, however, has come a long way down from the days when it was helping Galaxy Entertainment get its footing in Macao. Since then, Navegante has signed on with bottom-feeders like Tamares Group and Sam Nazarian. Just trot on over to the Sahara if you want to see what a post-Navegante casino looks like. Now that the Riviera has new ownership, a capital infusion and a much improved debt structure, it’s the Sahara that has the aura of imminent mortality.

Who was that masked man anyway? According to Las Vegas Metro, it’s Anthony Carleo who stuck up Suncoast and — more notoriously — Bellagio recently. After a helmet-wearing bandit robbed Steve Wynn‘s old place, casino pundits warned that those chips would be damned difficult to fence. Evidently the robber (and his accomplices, if any) didn’t listen because Carleo got busted trying to peddle casino chips to undercover Metro officers, according to KTNV-TV. The accused stickup man has “juice” of his own, Continue reading →

Posted in Current, Detroit, Entertainment, Herbst Gaming, history, Macau, MGM Mirage, Morgans Hotel Group, Regulation, Riviera, Sahara, Stanley Ho, Steve Wynn, Tamares Group, The Strip, Wall Street | 6 Comments

Hard Rock in foreclosure

Posted on February 1, 2011 by David McKee

Update: Taken by surprise, the Hard Rock’s owners swung into action with a countersuit.

If you’re in New York City next Monday and have a little “mad money” in your pocket, like a hundred grand or so, you have the exciting opportunity to become a junior secured creditor in the Hard Rock Hotel & Casino, aka “Project Paradise.” Lender NRFC HRH Holdings has retained Las Vegas-based Global Gaming & Hospitality to hold a foreclosure auction of a pair of Morgans Hotel Group subsidiaries along with other HRH collateral (including “gaming assets and intellectual property”) that is securing a mezzanine loan that’s junior to a pair of other loans — part of $1.36 billion that Morgans has borrowed against the property over the last several years.

This comes on the heels of reports that Morgans, coming off a $37 million loss in 3Q10 and tottering under $801 million in debt, is peddling a pair of NYC hotels to ease its burden. Ominously, one of its major investors wants “to discuss a wide range of strategic alternatives” for the company, which bit off way more than it could chew when it purchased the HRH LV for $760 million, leaving ex-owner Peter Morton laughing all the way to the bank. Inflation of the property into a jumbled, Strip-sized megaresort has further weighed on the bottom lines of Morgans and its financier/majority HRH owner DLJ Merchant Partners. Lenders could also void Morgans management contract, unless the Vegas market rebounds and rescues the HRH from taking a ride on the Foreclosure Express.

Morgans recently surrendered the deed to a hotel project in Continue reading →

Posted in Boyd Gaming, Current, Genting, Harrah's, International, MGM Mirage, Morgans Hotel Group, Pansy Ho, Regulation, The Strip, Tribal, TV, Wall Street | 9 Comments

The sky is falling!

Posted on February 1, 2011 by David McKee

Or so you’d think, to hear the reaction to the news that Florida is contemplating bringing a micromanaged form of casino gambling to its fair shores. S&G readers are well rehearsed in the flaws of the bill being contemplated in Tallahassee (although it’s an improvement on an earlier proposal that would have made the entire Sunshine State a Las Vegas Sands fiefdom). However, the Tampa Tribune manages to fire off an entire bandoleer of anti-casino clichés without once hitting the target. Come to think of it, if the solution to problem gambling is to get rid of casinos, parimutuels and lotteries, then the cure for alcoholism would be …

Panic isn’t exclusive to Tampa. Back home, the Las Vegas Weekly‘s Rick Lax took a little too much Ex-Lax, to judge by his incontinent reaction to the Florida bill. The end is nigh! Las Vegas is doomed!

We’ve heard it all before. Besides, if Nevada had ever legalized casinos in the manner Floridians are considering, the Strip would just be a wide spot in the road to California. Imagine if, when Billy Wilkerson (left) began building the Flamingo, the nearest a competitor could be was Beatty, Nev.? The Silver State’s signature industry would never have gotten off the ground.

A more legitimate cause for concern is that, after much skittishness, Hawaii‘s Continue reading →

Posted in Boyd Gaming, Current, Economy, Entertainment, Florida, Harrah's, Hawaii, history, Ohio, Sheldon Adelson, The Strip | 1 Comment

The Four Families of Stanley Ho

Posted on January 31, 2011 by David McKee

It’s Monday, which means that Stanley Ho either is or isn’t suing the wife and children who tried to wrest control of his financial empire last week. (Or he’s still telling each side what it wants to hear.) The tug of war has put the enfeebled casino magnate back in the hospital, while an unidentified third party tries to broker an arrangement in which each of Ho’s four families gets an equal stake. In a scene reminiscent of a Communist “show trial,” a bib-wearing Ho gave a videotaped recantation of last week’s recantation/reconciliation with third wife/concubine Ina Chan and the children of second wife/mistress Lucina Laam. Confused yet?

The emergence of MGM Grand Paradise Managing Director Pansy Ho as the face of the controversy isn’t going to do her American business partner any favors, as it’s tried to downplay her ties with Dear Old Dad in the past. Yet, she’s front and center in the power grab, throwing unwanted light on a potentially collusive arrangement whereby MGM’s leading lady and Melco Crown International‘s CEO, Lawrence Ho, could hold nearly 20% of Ho’s Sociedade de Turismo e Diversoes de Macau (parent of Sociedade de Jogos de Macau) between them. Other casino operators in Macao have to be watching that with some trepidation. The controversy also serves as an advance warning of the economic realignment that could follow as a series of power-hoarding Chinese oligarchs enter their dotage, with consequences as yet unforeseen. One hint: The SJM controversy has cost the casino firm $1 billion in diminished market capitalization.

Posted in Current, International, Lawrence Ho, Macau, Melco Crown Entertainment, MGM Mirage, Pansy Ho, Stanley Ho | 1 Comment

R.I.P., John Barry

Posted on January 31, 2011 by David McKee


Composer of far too many good soundtracks and title tunes to name (Goldfinger ought to suffice), John Barry‘s music defined the sound of the Sixties, in a large extent — and nobody wrote for Shirley Bassey‘s thermonuclear vocal cords so effectively. His passing leaves a considerable legacy, one which ABC News didn’t need to erroneously inflate this morning by crediting him with the James Bond theme, immortal handiwork of the otherwise forgotten Monty Norman. Back in college, Continue reading →

Posted in Current, Movies | Comments Off on R.I.P., John Barry

Burnt out at Marina Bay Sands; Winners in Atlantic City

Posted on January 28, 2011 by David McKee

Another day, another Las Vegas Sands executive falls by the wayside. In the case of Marina Bay Sands, it sounds like CEO Thomas Arasi has been burned out in what must have been a pretty intense 18 months at the helm of the $5.6 billion megaresort, which struggled with schedule and budgetary issues. In a memo to colleagues, he wrote, “I have decided to pause, take a breather and spend more time with my daughter and other family.”

Arasi’s clearly not being given the sack, as his resignation doesn’t take effect until Tuesday and even then he’ll be hanging around for until Feb. 18, ensuring an orderly transition. J.P. Morgan analyst Joseph Greff was sanguine, saying that this was not one of those executive departures that betokened turmoil within Sands. (Others suggest Sheldon Adelson may have pushed Arasi out.) He also predicted that the company’s Asian viceroy, Rob Goldstein, would be shopping around for a marquee-name executive to replace Arasi, one more conversant with the casino side of the business.

Although Marina Bay Sands came roaring out of the gate, at least as far as its casino was concerned, there were early and well-publicized troubles Continue reading →

Posted in Atlantic City, Boyd Gaming, Colony Capital, Cordish Co., Current, Dennis Gomes, Donald Trump, Economy, Harrah's, IGT, International, Macau, Marketing, Maryland, Penn National, Politics, Racinos, Sheldon Adelson, Singapore, Tilman Fertitta, Tourism, Wall Street, WMS Industries | 3 Comments

Quote of the Day

Posted on January 28, 2011 by David McKee

“Go see Carrot Top. He’s channeling the ghost of Rip Taylor — and Rip Taylor’s still alive.” — Bobby Slayton, kicking off his return to Hooters Casino Hotel. He characterized the shroud-covered stage as “like one of those bad Abbot & Costello movies where they go to a haunted house.“

Posted in Entertainment, The Strip | Comments Off on Quote of the Day

Fun with geography, Adelson-style

Posted on January 27, 2011 by David McKee

Thanks to a tip from reader detroit1051, S&G customers can avail themselves of this handy online tool. With it, you can pretend to be Sheldon Adelson, scissoring the State of Florida into 75-mile zones of exclusivity (because, being a super-patriot and frequent payer of lip service to free-market capitalism, the last thing Sheldon wants is competition). I played a bit with Radius Around Point and, if Adelson gets his wish, you could theoretically fit three casinos into the Sunshine State — Adelson and his supporters want four, maybe five — if you sited them in Miami, Jacksonville and the greater Tampa/St. Petersburg area. The lucrative Naples market would fall right between the Miami and Tampa/St. Pete circles, so its gamblers would be a fiercely contested prize.

If the state were prepared to foist a casino upon the super-conservative Panhandle region, you could Continue reading →

Posted in Current, Economy, Florida, Politics, Sheldon Adelson | 1 Comment

The decline and fall of Stanley Ho

Posted on January 27, 2011 by David McKee

As predictable as the sunrise, today’s headlines brought yet another reversal in the Stanley Ho vs. His Wives & Kids saga, “an ugly and Byzantine family squabble” that is also driving down the value of Sociedade de Jogos de Macau stock. Further complicating matters, the shareholder list of parent company Sociedade de Turismo e Diversoes de Macau conveniently went missing some time back.

(For those of you keeping score at home, Agence France Presse provides a helpful cheat sheet as to which of the squabbling children were sired off which of Dr. Ho’s four wives. I mean, when you have 17 offspring it must be Continue reading →

Posted in Current, International, Lawrence Ho, Macau, Melco Crown Entertainment, MGM Mirage, Stanley Ho | 2 Comments

Quote of the Day

Posted on January 27, 2011 by David McKee

“Needless to say, gambling can indeed be a safe activity, gambling is common, and state-regulated casinos are not inappropriate locations for gambling.” — federal Judge Renée Marie Bumb, rejecting the claim of disbarred New Jersey attorney and compulsive gambler Arelia Margarita Taveras (left) that gambling is “abnormally dangerous.” Taveras was suing a plethora of Atlantic City casinos, their employees and their owners on a dozen counts, including racketeering and Bank Secrecy Act violations. She lost.

Posted in Atlantic City, Current, Problem gambling, Regulation | Comments Off on Quote of the Day

This just in …

Posted on January 26, 2011 by David McKee

An Illinois court of appeals has struck down a pair of Public Acts pertaining to the state’s gambling industry. One nullifies a deal that would have farmed out the state lottery to Scientific Games (luckily, SGMS stock withstood the bad news). The other ixnays a statewide expansion of video poker, a pet project of Gov. Pat Quinn (D, above) but one that went over like a lead balloon at the local level.

Wells Fargo analyst Carlo Santarelli says that International Game Technology will feel the “most punitive” effect of this ruling — which could yet be overturned by a higher court. Of course, if you own a casino in Illinois it was a very good day indeed, one in which the judicial branch deflected a dagger thrust from the legislature, which seems hellbent on killing the Land of Lincoln’s gaming business through mindless overexpansion.

Salty assessment. Looks like Standard & Poor’s wasn’t the only S&P to voice a negative rating on CityCenter this week. Pedestrians continue to vote with their feet as well, as the plebiscite isn’t going well for the $8.5 billion metaresort. How much more tinkering around the edges has to take place before MGM Resorts International concedes that it went all in on a fundamentally flawed design concept?

Notice how CityCenter boss Bobby Baldwin continues to pin the resort’s fortunes on Continue reading →

Posted in Architecture, CityCenter, Current, IGT, Illinois, MGM Mirage, New York, Regulation, Wall Street | 5 Comments

Stanley Ho abdicates

Posted on January 26, 2011 by David McKee

So this is how Stanley Ho‘s world ends: Not with a bang but with the ancient casino vizier giving a televised address in which he laboriously delivered lines from a cue card and ceded control of his Sociedade de Turismo e Diversoes de Macau to third wife Ina Chan. From Mrs. Chan also came the news that Ho had sacked lawyer Gordon Oldham. “Did so,” she proclaimed. “Did not” (or words to that effect), replied Oldham. For good measure, he derided Chan as Ho’s “third mistress.”

The sad-sounding spectacle raises questions of Ho’s mental competence. He was ferried to the Chan residence, whereupon he read from idiot boards, with daughter Florinda Ho sticking a microphone under his face. Ho seems for all the world like a puppet — or a volleyball — fought over by competing branches of his thicket-like family tree. Had he known it would come to this, perhaps Dr. Ho would have had a vasectomy, lo, those many years ago.

(Reporters are routinely mystified as to whether Stanley Ho’s four marriages are Continue reading →

Posted in Charity, Current, G2E, history, International, James Packer, Lawrence Ho, Macau, Melco Crown Entertainment, MGM Mirage, Pansy Ho, Regulation, Sheldon Adelson, Stanley Ho, Steve Wynn | 1 Comment

The race for Florida is on

Posted on January 26, 2011 by David McKee

Emissaries from Las Vegas Sands and Wynn Resorts were in Tallahassee to woo Florida legislators yesterday. Also present was Boyd Gaming, which owns property in the Sunshine State and understandably doesn’t want to see solons crafting a sweetheart deal for either Steve Wynn or Sheldon Adelson. The latter’s ambassador, Vice President of Government Relations & Community Development Andy Abboud (below), projected a Continue reading →

Posted in Boyd Gaming, Florida, Genting, Macau, Politics, Regulation, Sheldon Adelson, Singapore, Steve Wynn, Taxes, Tribal | 3 Comments

Another one bites the dust

Posted on January 25, 2011 by David McKee

Whoever gets the three resort casinos that Gov. Deval Patrick (D) wants to bring to Massachusetts, it probably won’t be Fall River and it certainly won’t be the Mashpee Wampanoags. The city has pulled a controversial land deal with the tribe off the table. The project was contingent upon, among other things, Congress “fixing” the Carcieri v. Salazar ruling, so this was always one of the longer shots for a Bay State casino, although one expects the tribe to shop it elsewhere around the commonwealth.

Start making sense. There are few states whose attitude toward gambling is as mixed-up as South Carolina‘s. You can buy lottery tickets in the Palmetto State but Continue reading →

Posted in Charity, CityCenter, Cosmopolitan, Current, Economy, Harrah's, International, Louisiana, Massachusetts, Pinnacle Entertainment, Politics, Regulation, South Carolina, The Strip, Tribal | 3 Comments

The gospel according to Sheldon

Posted on January 25, 2011 by David McKee

“People like to blame somebody,” he says. Exhibit A: Sheldon Adelson, whose operative motto is clearly, “When in doubt, find a scapegoat.” If you’re looking for accountability, the executives offices of Las Vegas Sands are the wrong place in which to seek it. Unlike papal infallibility, the Adelsonian version is unconditional. But I doubt the CEO is much bothered by the mathematics employed by ABC News, which confuses cash flow with profit. As with analyst meetings Sands held during Global Gaming Expo, there seems to be a gentleman’s agreement not to discuss the white elephant that is Sands Bethlehem, a project that — at its present snail-like pace — is unlikely to see completion in Adelson’s lifetime.

Posted in Macau, Pennsylvania, Sheldon Adelson, Singapore, The Strip, TV | 1 Comment

Dude, who stole my casinos?

Posted on January 25, 2011 by David McKee

Update: In yet another reversal, Stanley Ho says he has sacked his attorney and that the brouhaha over his stock is all a big misunderstanding. Stay tuned for further developments in what’s already a rapidly morphing narrative.

Yesterday, aging (and ailing) casino oligarch Stanley Ho (middle) made news via an announcement that he’d supposedly relinquished all but 100 of his shares in Sociedade de Turismoe Diversoes de Macau, parent company of Sociedade de Jogos de Macau. The holdings were said to be divided between two other affiliates, one controlled by his third wife (i.e., not Angela Leong, his heir presumptive), the second run by five of his 17 children, the issue of Wife #2 — including  MGM Resorts International partner Daisy Ho (right) and Melco Crown Entertainment principal owner Lawrence Ho. (That’d be a sheepish-looking J. Terrence Lanni, erstwhile CEO of MGM, on the left.) If this is a power grab by the two siblings, it could put them in control of over 50% of the Macanese casino market share, creating an interesting regulatory situation for the administration of Fernando Chui, who seems to be trying to level the playing field recently.

Today, Ho’s attorney fired back, saying the Macanese gambling potentate had been robbed blind. If Dr. Ho had wished to create an orderly succession, dissipating his SJM shares in the fashion initially reported would run a cart and horses through that plan. Leong’s 8% ownership of SJM is now quite overshadowed by the shares controlled by Chan Un-chan and the children of Lucina Laam King-ying. It’s all very dynastic.

If MGM entertained the thought that a Stanley Ho divestiture reopened the door into Atlantic City, this new controversy could slam it shut again. The old man has pegged Pansy as Continue reading →

Posted in Cosmopolitan, Current, Harrah's, International, Lawrence Ho, Macau, Melco Crown Entertainment, MGM Mirage, Pansy Ho, Problem gambling, Regulation, Stanley Ho, The Strip, Wall Street | 1 Comment