Dubai World/CityCenter, explained

Posted on December 1, 2009 by David McKee

City Center

Given the tremors that are coursing through the financial cosmos, due to the Dubai World restructuring, here are a few relevant paragraphs from J.P. Morgan’s recent rundown of the situation:

  • * We think the direct implications of DW’s actions last week on CityCenter and MGM [Mirage] are de minimis. Dubai World has already fully funded its entire capital commitment in CityCenter, so there is no risk there. There are no cross default provisions that would trigger a default at the CityCenter property level (recall CC has a $1.8b credit facility there), so we don’t see any risk or issues involving CC’s debt facility. Should DW look to sell its stake in CC, MGM would have the right of first refusal (and as we understand it, the last) to buy out DW’s stake (especially if it were to be sold at what MGM would deem to be a fire sale price).

  • * We think a more realistic issue for DW (but one we would ascribe a very low probability to) is DW’s selling its stake in MGM in the open market to raise liquidity. However, this is a relatively small amount in relation to what we understand to Dubai World’s global debt payments to be. In any event, we think a fire sale of DW’s interest in MGM shares (given the average daily volume, this could be done quite easily, in any event) and/or CC to be remote risks here.

  • * Net-net, we think this a more of a headline issue for CityCenter and MGM and see the impact as more indirect in terms of macro drivers that will push around equity valuations, including MGM.

Posted in Uncategorized | Comments Off on Dubai World/CityCenter, explained

Quote of the Day

Posted on December 1, 2009 by David McKee

Trump“Donald Trump is on CNBC bashing City Center, and saying how horrible it is. Like his track record, especially with casino’s [sic] is worth a shit.” — Brian Fey, on Twitter.

Posted in CityCenter, Current, Donald Trump, MGM Mirage, TV | 1 Comment

Quote of the Day

Posted on November 30, 2009 by David McKee

“Some of the worst things that happen in life are some of the things that turn out in a very positive way.” — Sen. John Ensign (R-NV), explaining why his extramarital shenanigans are, in fact, a Valuable Teaching Moment.

Posted in Uncategorized | 1 Comment

Back in Vegas

Posted on November 30, 2009 by David McKee

Just returned from Chicago last night and so far I’m showing few ill-effects [knock wood] from the swine flu vaccine that was administered to me at O’Hare International Airport. (Can’t get one at my doctor’s office, can get one at the airport. Go figure.)

Fasolt is back in the hospital and the prognosis is grim. Now to a few bits of housekeeping …

viva-elvisNo, Cirque du Soleil is not planning a Sinatra show and I apologize if I gave that frightening impression. I was merely remarking upon the tactless verbiage of Cirque’s announcement of ticket sales for Viva Elvis. No disrespect to Elvis Aaron Presley but the musical performer people most associate with Las Vegas is one Francis Albert Sinatra. Heck, even Liberace might edge Elvis for the #2 spot in many peoples’ consciousness, depending on age.

My apologies to the dud link to coverage of the Aqueduct mess. I will attempt to remedy that shortly.

jaywhite-picAlso, word through the grapevine is that the Neil Diamond tribute show at the Riviera will close up shop shortly. Being a closet Neil Diamond fan, I’m not happy to see it go but it but shows how far the concept of “lounge” has sunk that the Riv curtained off a formerly open area and turned a lounge act into a for-pay show. It’s a mid-level example of how the squeeze-every-nickel-from-the-consumer mentality continues to bite Vegas in the butt.

Posted in Animals, CityCenter, Current, Entertainment, Illinois, Pets, Riviera, The Strip, Tourism | 2 Comments

Quote of the Day

Posted on November 27, 2009 by David McKee

“Cleveland, Toledo, and Cincinnati should not be in a position to make development decisions for Columbus any more than Columbus residents should be weighing in on Cleveland projects.” — Ohio state Sen. David Goodman, on a proposal that would allow the Columbus area to opt out of a Penn National Gaming casino project that was approved in a recent statewide vote. Aside from the political inadvisability of imposing a casino on a county that voted 58% against it, the economic viability of a project with so little local support has to be questioned.

Posted in Election, Ohio, Penn National, Politics | Comments Off on Quote of the Day

CityCenter dodges bullet

Posted on November 27, 2009 by David McKee

Morton Grove, IL. Lying low while Black Friday sweeps Chicagoland …

You will remember that, when CityCenter teetered upon the brink of bankruptcy earlier this year, it was saved by a compromise that put the onus on MGM Mirage for any cost overruns. At the time, it looked like MGM came out the loser in its showdown with partner Dubai World. Well, maybe not. If CityCenter’s price tag increases, you wouldn’t want to have to wait around for Dubai World to pick up even half the tab.

Sobering thought: Not only is Las Vegas adding as many hotel rooms in the 2009-2011 period as it did from 2001-2008 (eight years of growth packed into three), it will need to generate 3.2 million visitors to fill them. Barring an economic miracle, that seems a pretty tall order — especially amidst the Great Recession. If ever the phrase “irrational exuberance” applied, it would be to the casino industry’s expansion-and-LBO mania that produced this incredibly un-propitious confluence of new product, big debt and a bad economy. The men who run these companies aren’t idiots who couldn’t read the warning signs. Judging from their own after-the-fact rationalizations, they simply chose to ignore them, borne on a wave of optimism that proved reckless … or worse, judging by the economic havoc that can be found just a block or two beyond the Las Vegas Strip.

Cirque du So Late: Is there trouble under the big top? A media preview for Viva Elvis was quietly scrubbed and ticket sales for preview performances only went on sale in the last 48 hours. Which means that a show whose debut was supposed to crown the rollout of Aria will only be in previews as of Dec. 16. Given how incredibly underwhelming Continue reading →

Posted in Ameristar, Atlantic City, Cirque du Soleil, CityCenter, Current, Don Barden, Economy, Entertainment, Harrah's, IGT, Illinois, Indiana, International, Kansas, MGM Mirage, Ohio, Penn National, Regulation, WMS Industries | 4 Comments

Quote of the Day

Posted on November 26, 2009 by David McKee

“… a harmonious fusion of dance, acrobatics and live music will focus on the essential humanity of the one superstar whose name will forever be linked with the history of Las Vegas.” — Frank Sinatra, right? No, Elvis Presley, according to Cirque du Soleil‘s announcement of ticket sales for Viva Elvis. Sorry, Ol’ Blue Eyes. You deserved better.

Posted in Cirque du Soleil, CityCenter, Current, Entertainment, MGM Mirage, The Strip | 2 Comments

Now *this* is a scandal

Posted on November 24, 2009 by David McKee

During the early years of tribal gaming expansion, Native Americans had to go to Malaysia and South Africa for their startup capital — and it came at a hefty cost. Now Mohegan Sun is reeling from the delayed effects of its alliance with Sol Kerzner. As the Mohegans’ share of casino revenues goes down and down, Kerzner’s keeps going up. While this may be some form of karmic payback, it’s not very amusing to see money spent on tribal lands filling the pockets of Kerzner, developer of that crown jewel of apartheid, Sun City.

Kerzner & Co. have made $67 million more than the Mohegans over the last nine years, partly by dint of some legal parlance that allows them to reclassify a management contract as a “consulting” one … whereupon Kerzner is reimbursed on the basis of gross earnings, not net ones. Not even the efforts of Sen. John McCain (R-AZ) could thwart this highway robbery. As for the Mohegans, the day has already come for them to rue Kerzner’s sweet deal. He’s now pondering moving into tribal gambling in Massachusetts. Gov. Deval Patrick should have a good, hard look taken at how that’d be financed. (Somehow the Mohegans found the wherewithal to slap their name on a sports arena, though.)

Still in ostrich mode, bankruptcy plagued Station Casinos continues to insist that it wasn’t excessively optimistic cash-flow projections, a $5.7 billion LBO (which itself was predicated on a cash-flow multiple that only a first-rate Strip operator could justify), nor even nearly a half-billion in Fertitta family largesse was to blame for the company’s collapse. Nope, it was all that big, bad recession’s fault. Nothing else.

OK, whatever. Anybody expecting a mea culpa from Station HQ had better pack some snacks and a sleeping bag. It’s gonna be a long vigil.

Meanwhile, Station creditors continue to insist that the company is siphoning money away from them via an arrangement whereby it leases four casinos back to itself. Assuming for purposes of argument that this is all standard business practice, Station still appears to be playing Russian roulette with its debtors, the bullet in the chamber being the potential seizure of Red Rock Resort, Boulder Station, Palace Station and Sunset Station. (With possible substitute operators Boyd Gaming and Isle of Capri Casinos waiting breathlessly in the wings.)

The CityCenter Effect. While MGM Mirage CEO Jim Murren predicts it will grow Vegas visitation without cutting into business in other MGM properties, American Gaming Association President Frank J. Fahrenkopf doesn’t sound fully convinced. While I’m certain that Murren’s peeps have done as much number-crunching as he says, it’s hard for this layman to conceive how MGM will pick up so much CityCenter business without cannibalization … unless it just discounts the bejeesus out of its non-CityCenter resorts, in an effort to steal customers from Harrah’s Entertainment, Las Vegas Sands and Wynn Resorts. (Although if you can afford to stay at a Wynn property, where’s the incentive to luxuriate someplace else, even for less?)

Admirable as CityCenter is, from what I’ve seen of it (aside from the Aria casino floor … a fiasco) was it necessary for the Nevada Gaming Commission to fawn all over MGM Mirage? Honest to God, we have the most sycophantic regulators in the U.S. The revelation that server-based gaming has been quietly in progress at Monte Carlo was interesting — as was the tactful omission of the fact that Crystals is less than 50% leased and won’t even be at 100% by mid-2010.

The Aqueduct mess. It’s hopeless. Steve Wynn‘s decision to get out looks wiser by the day.

Posted in Boulder Strip, Boyd Gaming, CityCenter, Economy, Harrah's, International, Isle of Capri, MGM Mirage, New York, Racinos, Regulation, Sheldon Adelson, Station Casinos, Steve Wynn, Technology, The Strip, Tourism, Tribal | 3 Comments

Sands IPO: bad timing?

Posted on November 24, 2009 by David McKee

If Steve Wynn‘s stock float for his Macao properties hit the Hong Kong bourse at the optimal moment, the tortoise-like progress of Las Vegas Sands‘ offering comes at a price. Specifically, its $1.34 opening price is at the absolute bottom end of Sands’ projected range. J.P. Morgan analysts critiqued the IPO launch thusly: “We think the lower end of the range is more a function of timing than anything else as we believe institutional investors were smaller in size than normal given the quickly approaching year end (recall the stock doesn’t begin trading until 11/30/09). That being said, we believe some upside was left on the table.” (In an earlier report, they sounded skeptical of Sands’ ability to open Marina Bay Sands before April 2010. That project just falls farther and farther behind schedule. Cash flow projections suggest a 5.5% ROI in 2010 and 13% in 2011.)

Even at a somewhat debased price, Sheldon Adelson‘s Hong Kong stock offering should raise $2.64 billion. The two unfinished Cotai Strip™ sites are expected to consume $1.84 billion of that. Back home, Adelson only has $16 million in his restricted cash balance that isn’t already pledged against Macao and Singapore. So it looks like completion of Sands Bethlehem isn’t going to happen anytime soon. Sorry, Pennsylvania.

Posted in Current, Economy, International, Macau, Pennsylvania, Sheldon Adelson, Singapore, Steve Wynn | Comments Off on Sands IPO: bad timing?

F-bleau: It’s Icahn’s … or is it?

Posted on November 24, 2009 by David McKee

True to form, Carl Icahn sprang when you least expected him to, sneaking up on Penn National Gaming in bankruptcy court to outbid it for the bankrupt Fontainebleau in the first round of bartering (a process that will drag into January). Question is: Does this make Icahn like the dog who caught the car? And: Would it be cheaper to implode F-bleau than finish it?

I’m not the only one thinking the real winner is Penn. This morning’s bulletin from J.P. Morgan tacitly urged Penn to stop its F-bleau madness, noting that it “would be a positive for the stock.” It also tactfully remarked that Penn had a plateful of other projects (“WV table games, PA table games, Ohio Issue 3, New York Aqueduct, Maryland and Kansas new builds“).

Just speaking for myself, Penn committed a tactical blunder in saying, after declaring its interest in F’bleau, that of course it would only take the project on in tandem with a major hotelier. That’s the same sort of blunder Morgans Hotel Group made when it overpaid ($770 million) for the Hard Rock Hotel and then started casting around for joint-venture partners to take two-thirds of the cost onboard. Lotsa luck. Face was saved by selling the HRH back to the bank via a holding company that functions as an ill-concealing fig leaf. Penn, were it to obtain F-bleau, would find itself negotiating from the same position of weakness in which Morgans placed itself.

As for this, I’m totally gobsmacked: “Fontainebleau’s representatives have had meetings with more than 40 other interested parties.” Forty potential suitors for F-bleau? Holy crap.

Pinnacle moving ahead. Instead of freezing action (again) on its two new Louisiana riverboats, Pinnacle Entertainment will be going forward more or less as planned. Morgan stock analysts don’t like this but it can only be a positive for the Lake Charles and Baton Rouge economies, which have seen these two casinos go to and from the back burner. The Baton Rouge project remains as planned but the budget for Sugarcane Bay has been slashed by $102 million and the casino-hotel will be made symbiotic with L’Auberge du Lac. The ostensibly interim Pinnacle administration sure is acting like it plans to stick around awhile.

On the road: This edition of S&G comes to you from the 28th floor of the San Francisco Hilton, scene of a massive and rowdy convention of narcotics-unit cops. It’s like being right back in Vegas: a lobbyful of beefy conventioneers with tragic facial hair and Ed Hardy t-shirts. Though if I were a narc, I’m not sure I’d walk around wearing a nametag stating my profession.

We’re in The City (as local parlance has it) for my sister’s birthday, to be followed by a jaunt to Chicago for Thanksgiving with my Dad. Sadly, the morning was marred by a bit of a set-to with some family members when they tried to shanghai me into some involuntary sightseeing after I’d made it clear I needed some quality time with my S&G readers. Then I got “longhauled” by a taxi driver. In his case, I’d say a 75-cent tip is hardly “stiffing,” although your mileage may vary, so to speak.

Posted in California, Carl Icahn, Current, Economy, Fontainebleau, IGT, Louisiana, Morgans Hotel Group, Penn National, Pinnacle Entertainment, The Strip, Wall Street | 6 Comments

Quote of the Day

Posted on November 24, 2009 by David McKee

“Pattern of generosity? ‘Oh, hey, listen, we realize our son is having an affair with your wife, maybe some money will help?’ It’s ridiculous,” — cuckolded senatorial staffer Doug Hampton, on the $96,000 in hush money he received from former Mandalay Resort Group boss Mike Ensign.

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No Sh!t, Sherlock Dept.

Posted on November 21, 2009 by David McKee

“Motorists are advised to expect delays or find an alternate route.” — Clark County‘s considered opinion of the proper response to a drastic narrowing of the Strip, ending (we hope) Nov. 27. Is this advice likely to be heeded? Not very. Are we in for the greatest clusterfuck known to mankind? Let’s just say Strip motorists and commuters had best steep thine souls in infinite amounts of patience. They’ll need it.

From  the ColSux file: You know McDonald’s is scraping the bottom of the legal barrel when it cites the human resources policies of Columbia Sussex to excuse strip-searching and sexually assaulting an employee (or at least justify the corporate negligence that made the incident possible). ColSux’s great moment in due process was as follows:

“In Columbia Sussex, a hotel was robbed and circumstances led management to believe the robber was aided by an employee. A number of employees, including Hay, were asked to take a lie detector test.

“Hay inquired of [the hotel’s president] what would happen if they did not take the test. His answer was that they could leave, indicating that their jobs would be lost. Ultimately, each employee who was called took the polygraph examination. At the time that the tests were administered, each, including Mrs. Hay, signed a paper which acknowledged that the subject was taking the test under neither coercion nor duress. Mrs. Hay’s testimony is that she did indeed submit under duress inasmuch as her job rested on such and that she informed the polygraph operator that her only lie was that she was taking it without coercion. The operator was not called.

“Columbia Sussex at 273. Quoting William L. Prosser, Handbook on the Law on Torts, § 11, pp. 44-45 (4th ed. 1971), we said, “Moral pressure, as where the plaintiff remains with the defendant to clear himself of suspicion of theft . . . is not enough.” Columbia Sussex at 277-78. We applied that concept to Mrs. Hay.”

In other words, consent was all that mattered, regardless of the implicit punishment with which it was extracted. Stay classy, ColSux. A lonely nation turns its eyes to you.

Posted in Columbia Sussex, Current, The Strip, Transportation | 1 Comment

Case Bets: Aria, IGT, Maryland & Detroit

Posted on November 20, 2009 by David McKee

There was a small setback for Bally Technologies when it had to pull its iView DM systems software out of Aria. Seems MGM Mirage gave Bally a scant five days to get iView DM up, running and certified. Expect to see it deployed there in mid-March or April.

IGT’s priorities for next year, as enumerated by J.P. Morgan analysts, are “1) managing cash flow, 2) managing expenses, 3) managing its installed base, 4) growing revenues, 5) improving margins, and 6) converting R&D to revenue.” Hmmmm. Except for #6, there’s not a lot there that portends interesting new product for consumers. The company is clearly still in righting-the-ship mode, targeting its budget for a further $65 million in cuts and promising debt reduction, too. Morgan’s reps thought IGT’s new products were “considerably improved” from what we’ve seen in recent G2Es. Unfortunately, I do not share their enthusiasm in that regard.

Slots ahead. G2E left with two salient impressions regarding the near future slot machines. One, if your machine isn’t configured to be compatible with a server-based slot floor, you’re nowhere. Two, spinning reels are making a comeback, in large part because of technological advances that enable virtual imagery to be superimposed on an otherwise mechanical reel. If you don’t have to physically change the reels to change the game, why not?

Table games will be getting into Maryland via the back door. Seems those robotic blackjack games come in awfully handy when your state doesn’t permit banked games but a cyber-version creates a loophole just wide enough for hundreds of machines to slip through. As one solon puts it, “As far as I can tell, these machines are perfectly legal. It’s getting close to the line for sure, but it’s on this side of the line.” Which means that Maryland punters will soon be pitting their mad ’21’ skillz against some virtual vixen ‘dealer.’ And if you think that’ll pull in the younger players, you’d be right.

Greektown

In keeping with flat being the new “up,” another month of -1% revenue decline in Detroit is cause for celebration. Greektown Casino (+18%) continues to eat into the competition, with MGM Grand Detroit feeling the bite more (-7%) than MotorCity (-5%). Then again, MGM always had more business to lose and Greektown (left) still only represents 26% of the total market. While Detroit hasn’t had a revenue-positive month since February, October’s was the third-smallest decline of the year to date.

Funny you should ask about what constitutes Class II gambling because even the National Indian Gaming Commission‘s definition is in flux and will be for some time. Thankfully, a change of administrations in Washington, D.C., has helped sweep out former NIGC chair Phil Hogen and his plan to reclassify gambling machines in such as way as to basically exterminate the Class II market. That would have meant a world of hurt for tribes and manufacturers alike — a severe economic blow even in the best of times, which these assuredly are not.

Posted in Bally Technologies, CityCenter, Current, Detroit, Economy, IGT, Maryland, MGM Mirage, Regulation, Technology, Tribal | 2 Comments

Commercial of the Month

Posted on November 20, 2009 by David McKee


Although Gr88.com has endured some S&G razzing of late, this gloss on 300 gave me a chuckle. Its only arguable drawback is that its “Leonidas” is no Gerard Butler, as I’m sure the ladies in our readership will concur.

Posted in International, Internet gambling, Marketing, Movies | Comments Off on Commercial of the Month

Case Bets: Ensign, Angelica Bridges & the smell of Vegas

Posted on November 20, 2009 by David McKee

Look for ex-Mandalay Resort Group boss Mike Ensign to play a supporting role in Nightline‘s Nov. 23 exposé of, among other things, the 96 dimes in hush money he channeled to the cuckolded husband of his son’s mistress.

You’ve got to wonder how many orders for new Class II and Class III games manufacturers picked up at G2E when California tribes are refraining from new expansion opportunities. Much like Vegas locals players, Californians are dropping less coin at the casinos and gravitating toward lower-denom games (not entirely a bad thing for the house if you consider the higher hold percentage that penny games enjoy). As a result, revenues are falling back toward pre-bubble (i.e., 2004) levels.

The money quote, literally, is from a player who glumly discloses, “I just came here for the free food.”

What’s that smell? Did you know that Las Vegas has an official smell — or will, as of SCENTWorld 2009‘s dinner gala? According to our LVA news bureau: Top executives from the Las Vegas business community, the City of Las Vegas, and the Vegas Airport Authority were asked to assist in “capturing everything the city stands for,” while the actual creative task was performed by Christophe Laudamiel, the “enfant terrible of contemporary perfumery” whose produced fragrances for Estée Lauder, Ralph Lauren, and Abercrombie & Fitch.

If they have a sense of humor, these people will make our Official Odor that of stale cigarettes … or maybe whatever that chokingly sweet stench is that’s pumped into the air system at Palazzo.

What fragrance would you nominate as The Smell of Vegas?

Switchover at Isle: After three years as general manager/veep of Isle of Capri Black Hawk, in Colorado, it appears that John Bohannon is out and Brian Watts is in, newly arrived from Kansas City. Whence goeth Bohannon? That remains unclear.

angelica_bridges_t270Un-burned Bridges. Former Playboy cover girl Angelica Bridges has returned to Fantasy at Luxor, which is being treated like major news around here. (Besides, it’s good to see Richard Abowitz‘s byline online again.) Personally, I thought Bridges’ vocalism so meager in quantity — and little better in quality — that her sudden departure hardly felt like a loss. If you’re going to a topless show for the vocal talent, Lorena Peril of Sin City Bad Girls has it all over anybody else in town. I suppose “rock ‘n roll lounge act” is a contradiction in terms but if it’s not, Peril ought to be headlining one. That dame’s got some serious pipes.

A touch of class. Tall drink of water Allison Janney passed through town lately. She’s got a bit of free time on her hands, following the untimely demise of the 9 to 5 musical on Broadway. So C.J. from The West Wing sings too? Some people have all the luck (read: talent).

Signs of the Times: I awoke to the news that the drugs which killed Michael Jackson were bought from some dump of a Vegas pharmacy. I mean, I’d trust a drug store whose signage is handwritten, wouldn’t you?

Posted in California, Colony Capital, Colorado, Current, Economy, Entertainment, Isle of Capri, Marketing, MGM Mirage, Sheldon Adelson, The Strip | 4 Comments

G2E, tweeted; Flop @ the Trop

Posted on November 20, 2009 by David McKee

Here’s a quickie précis of Global Gaming Expo 2009, as culled from the S&G Twitter feed:

“G2E ’09 is G2E Lite. Upside: less walking, less crowding, less backache. Downside: less food. Also, seminar tracks more like Sominex … Slot floor @ G2E features a lot of real beasts, towering devices. Nothing like the endless rows & rows of small, low dumb terminals @ Aria … Slot-loving friend calls $IGT‘s Sex & the City slot a yawn, likes its Bombs Away, though. My 2¢: bonus rounds need work, not exciting … Did Robin Leach‘s mother never tell him not to talk w. his mouth full? Also, texting @ the dinner table is rude. No dessert for you!”

(Actually, that last bit is from an unrelated event that occurred during G2E week. No Leach sightings at G2E, although both Lily Tomlin and Navegante Group CEO Larry Woolf were among the notables spotted on the show floor.)

Here’s a tax we know Steve Wynn will despise and abhor. At the very least, it may give him cause to re-think his endorsement of Sen. Harry Reid (D-NV).

“An acid tongued little man”: Someone is not amused by my review of Wayne Newton‘s flop at the Trop.

Posted in Alex Yemenidjian, CityCenter, Entertainment, G2E, Harry Reid, IGT, Steve Wynn, Taxes, The Strip | 5 Comments

Quote of the Day

Posted on November 20, 2009 by David McKee

paris-las-vegas

“I’m in Paris.” — woman on cellphone, talking to a friend (presumably) while walking through Paris-Las Vegas. No, ma’am, you’re at Paris, not in it … unless your sense of geography is fantastically poor.

Posted in Harrah's, The Strip | Comments Off on Quote of the Day

From the mailbag #12

Posted on November 20, 2009 by David McKee

A former colleague, a person of upbeat disposition and someone who, along with his wife, achieved the American Dream here, recently sent ’round the following dispatch. Were it coming from somebody who was a congenital naysayer, that’d be one thing. Flowing from the keyboard of a person who’s been around the bidness block a long time and was a believer in Las Vegas‘ growth … well, that’s quite different. Read on.

“I think the town is dying and smart people need to get ahead of that. CityCenter has been jinxed and those hoping it will be some kind of savior are going to be disappointed. I’ve been reading coverage of the Global Gaming Expo and the experts seem to think that there is some God-given level of demand to visit Las Vegas, and as soon as people feel more secure in their jobs they will come flocking back. Ha.

“Well, jobs aren’t coming back. Not here. Not anywhere. There is so much excess to work out (residential, commercial, retail, people) that it will take years before people regain their confidence. And when the town was filled with folks seeing how much they could spend in three days, didn’t you used to wonder,’Don’t they know any better?’ Well, now they do.

City Center_1

“When your neighbor is in foreclosure and your brother is out of work, it’s hard to get excited about coming to Las Vegas and wiping your ass with $100 bills. So as the town reaches for the lowest common denominator to prevent the properties from looking like ghost towns, it’s driving away the high-end corporate business and expense-account-funded debauchery that the new Las Vegas was built around. You can only put so much regular gas into an engine built to run on premium before it sputters and dies.

“I don’t know if President Obama saw the stories about the stripper-mobile, but if he did he could be forgiven for feeling some smug satisfaction. The dude was right that companies on the dole should not come to Las Vegas. There are a lot of good people in this country who don’t buy what we sell and should not be forced to subsidize it.

“I hate being proved right on this, but do you remember Jeremy Aguero‘s Little-Mary-Sunshine speech to the PRSA? I told the dude then we were f’d, but he had the data on his side and when he showed people all the construction cranes they knew Las Vegas was going continue on its unabated trajectory toward heaven on Earth. I guess that wisdom got him booked for the 2010 Preview Las Vegas, put on by our Chamber of Commerce, which I believe is headquartered in a failing retail and entertainment complex.”

Which reminds me that even when the new affordability of Las Vegas brings people to Strip resorts, the result is starchy huffing they’re not the right sort of people. I mean, bringing a pizza to your hotel room? How déclassé!
Don’t those people know they’re supposed to be getting wasted at Rehab, performing public sex acts at Privé or engaging in traditionally comme il faut Vegas conduct? And if Michael G … er, Casino Executive X would prefer those pizza boxes and coolers went somewhere else, there are plenty of empty hotel rooms here that would be glad to have them.
Posted in CityCenter, Current, Economy, Michael Gaughan, Morgans Hotel Group, Planet Hollywood, The Strip, Tourism | 2 Comments

Case Bets: Cullotta’s moll, squeeze on Sands, gay old UFC

Posted on November 17, 2009 by David McKee

Local radio chatterbox Heidi Harris recently set her pants on fire attempting to rewrite history about a Mob terror campaign against then-Nevada Gaming Commissioners (one of whom went on to become Sen. Harry Reid [D-NV]). The evidence seems pretty unambiguous but Harris — not one to stop digging once she finds herself in a hole — snuggled up to an old mafioso in hopes of receiving validation. Never mind that Frank Cullotta might have his own motives for pooh-poohing the historical record.

Gov. Jim Gibbons flat-out lied about what happened to the families of Reid and George Swarts. But one expects that of the incorrigibly mendacious Midnight Jim. What Harris is doing is a subtler calumny because Cullotta’s testimony — by logical extension — paints the attempt on Swarts’ life as a fabrication, too. Harris is no Cullotta, however: She’s merely a character assassin.

Caveat emptor. That’s stock gadfly Eric Jackson‘s advice to would-be buyers of Las Vegas Sands stock. He lays out a multi-point case why LVS shareholders should be worried, very worried. Among the factors explaining CEO Sheldon Adelson‘s sudden sense of urgency to finish up his uncompleted Cotai Strip™ (below) hotels is that if they’re not done by the summer of 2011, Peking will nationalize all of Sands’ Macanese properties. Besides, “Sheldon Adelson is known for slipping delivery deadlines.” (Tell us about it!)

CotaiStripMacau

Another motivation for getting a move on in Macao (and Singapore) is that Sands is bumping up against the ceiling of its debt-to-cash flow ratios — ceilings which will get lower during the next 13 months. Other causes for concern are that one default by Adelson trips a series of additional ones … and that “roughly 10% of their recent $500 million in total cost savings Sands management boasted about” went straight into the pocket of Dr. Miriam Adelson, thanks to a preferred-stock dividend.

Well, maybe this. In another boneheaded move, I completely spaced out last night and forgot to cast my 20 online Dancing with the Stars votes. If Kelly Osbourne is eliminated, you can pin the blame on me if you like.

Posted in Harry Reid, International, Macau, Politics, Regulation, Sheldon Adelson, Singapore, Sports, Station Casinos, The Mob, TV, Wall Street | 6 Comments

Quote of the Day

Posted on November 16, 2009 by David McKee

HRZ-tahoe

“We’re trying to let the community know that we are here and we are here to stay for a while.” — ominous words from Glenn Koehler, Columbia Sussex‘s director of the Horizon casino-hotel in Lake Tahoe. Landlord Park Cattle Co. thought it was rid of longtime nemesis ColSux when it settled a lawsuit in return for a huge cash payment and an expedited termination of the Horizon’s lease, then held by Tropicana Entertainment. The latter then turned around and — surprise! — sold the Horizon lease to ColSux, putting it back in bed with Park Cattle. Oh, and after the parent company got run out of New Jersey and Indiana by casino regulators, how did ColSux subsidiary LV Casino get a Nevada gaming license?

Posted in Columbia Sussex, Current, Economy, Lake Las Vegas, Regulation, Tropicana Entertainment | Comments Off on Quote of the Day