Case Bets: Midnight Jim, Sands, "Peepshow", Hard Rock, Reid

Posted on July 16, 2009 by David McKee

Chronic ineptitude by Nevada's governor is endless fodder for comedy (like entrusting your re-election campaign to the former marketing director of a ski resort and political novice.)

But it also has perilous consequences. For instance, his thoughtless decision to pack the Nevada Gaming Commission with lawyers now threatens to hamstring the board. Jane Ann Morrison details how new Commissioner Joe Brown had to abstain from 24% of last month's votes. Seems he had conflict-of-interest issues with a couple of miniscule slot houses called Station Casinos and Harrah's Entertainment. Whoops. Brown's is the most egregious problem but it's hardly the only one.

Most of Jim Gibbons' appointments to the NGC and the Nevada Gaming Control Board have been solid but this was a real boner and somebody up in Carson City should have seen it coming.

Midnight Jim discovers Facebook. He also learns the need to think before you "friend." He sure won't be getting Bill Raggio's vote next year.

Rescue may be at hand for the beautiful and historic Boulder Dam Hotel, thanks to a mysterious benefactor. As for recent arrival Shear Madness, not so much. I hear that the "interactive" show may not have been interactive enough to ride the Vegas wave of Marriage Can Be Murder and Tony 'n Tina's Wedding.

In case you missed it … Apparently eager to stanch the flow of exiting executives, Las Vegas Sands has given Rob Golstein a promotion to senior VP. The new title comes with a $535,000 raise. For those of you keeping score at home, that's $2,758 for each of the 194 workers Sands just pink-slipped.

Bean out, O'Day in: The producers of Peepshow are, more than anything else, great at generating publicity. It's official that Shoshana Bean will be supplanted in late summer by Playboy cover girl Aubrey O'Day. It sounds as though Bean was plugged into the cast on very short notice (with seven days or fewer of rehearsal), lending credence to the reports that Mel B.'s disappearing act came as an unpleasant surprise to the erstwhile Scary Spice. At present, Bean is the best thing Peepshow has going. How unfortunate it was but a brief fling. Shoshana, we barely knew ya.

Rushing in where angels fear to tread, Morgans Hotel Group will open 490 more Hard Rock Hotel rooms on July 27, well ahead of schedule. The timing seems odd but Morgans and financier/hostage DLJ Merchant Partners have to make their rash of expansions at the HRH start turning a buck.

Reid safe at home. The window of opportunity for unseating Sen. Harry Reid (D-NV) is closing fast. Thanks to Reid's support of assault weapons, the National Rifle Association has got his back. Avowed challenged Sharron Angle is woefully short of cash, while GOP dream candidate Rep. Dean Heller has even less financial traction. If Reid's unpopularity with the home crowd makes him a low-hanging piñata, the GOP just keeps flailing at empty air.

Posted in Downtown, Entertainment, Morgans Hotel Group, Oscar Goodman, Planet Hollywood, Politics, Regulation, Sheldon Adelson, Technology | Comments Off on Case Bets: Midnight Jim, Sands, "Peepshow", Hard Rock, Reid

It's Gaughan

Posted on July 16, 2009 by David McKee

Congratulations to South Point owner Michael Gaughan, the 2009 inductee to the American Gaming Association Hall of Fame. An industry "lifer" who worked his way up from the Royal Inn to the CEO's chair at Coast Casinos, Gaughan has been one of the most consistently successful operators in the business. After 9/11, when other operators were slashing jobs, Gaughan actually added employees. That practically qualified him for on-the-spot sainthood.

He briefly succumbed to the siren song of consolidation and merged Coast with Boyd Gaming. It was a rocky marriage and Gaughan soon decided that the world of publicly traded casino corporations was not his bag. But the "divorce settlement" gave him South Point free and clear, and he maintains a lucrative ancillary revenue stream through 1,308 slots (give or take) at McCarran International Airport.

Gaughan is a man of few words — but many deeds — so we hope he's not forced to make a speech. But S&G applauds the AGA's excellent selection of its '09 inductee.

(And there we thought they were going to give it to James Packer.)

Posted in Boyd Gaming, G2E, James Packer, Michael Gaughan, Tourism | Comments Off on It's Gaughan

To blog or not to blog?

Posted on July 15, 2009 by David McKee

That is the question for today. It's not the larger, existential question of whether the opinions of one curmudgeonly blogger amount to a hill of beans in this world, especially when even the village idiot has a cyber-soapbox.

No, it's a more practical quandary. My cup runneth over with prospective topics — and with pending deadlines. To wit, a theatre review and a news story for the July 23 CityLife, reviews to stockpile for Mike Shackleford's forthcoming WizardOfVegas.com Web site, three Question of the Day topics, and a revision of an old article I wrote for Washington National Opera in the wayback.

Say … one of the QoDs upon which I'm working asks for instances of complaints about Harrah's Entertainment. Care to chip in? You'll be duly credited (or not, if you prefer). Actually, the back pages of S&G have been a marvelous source of information on this topic, due in no small part to your contributions. Actor Ben Browder (Stargate SG-1) says that the most important element of any story is the audience. That goes double for S&G.

Also, in the (I hope) very near future, there will be some original S&G reportage on labor negotiations at Caesars Palace, among other topics. In the meantime, I have a week of GamingFloor.com to catch up with, plus wrapping my brain around LinkedIn and Facebook, when there's a moment to spare. Given the exponentially faster advance of technology (compared to say, 1965), I can but conclude that it's a Star Trek world and we're just living in it … long and prosperously, one hopes.

In the meantime, if the blogorrhea is less generous than average, I beg your indulgence.

All-Star Game: Not much to say about it, other than its relative brevity was merciful. (Never saw so much first-pitch swinging in my life.) Contrary to expectation, the most interesting aspect was the usually tiresome pre-game extravaganza. Sheryl Crow gave a master class in how the National Anthem should be sung and President Obama threw a rainbow curve the likes of which I haven't seen since the heyday of Sid Fernandez.

And it did bring a lump to my throat to see our nation's first black president shaking hands with Bob Gibson and Lou Brock, venerated figures in the Cardinal-worshiping McKee family and two players whose prime coincided with the apex of the Civil Rights movement in the U.S. I'd love to know how much Brock and Gibson think our country has advanced since then. Oh, and Tim McCarver was actually bearable. Wonders never cease.

Posted in Baseball, Entertainment, Harrah's, International, Technology, TV | Comments Off on To blog or not to blog?

It’s lonely in the bunker; Luxor gets its groove on

Posted on July 15, 2009 by David McKee

Two resignations made the news today. First, the publicist for Criss F. Angel took a hike. Given the choice between the much-reviled Angel and unlikely rising star (and reportedly much, much nicer person) Holly Madison, Fantasy flack John Flynn left the sinking Angel ship.

With Guy Laliberté literally fleeing to outer space, defenders of Angel and his Believe debacle are growing fewer and fewer. (Hey, Cirque du Soleil, keep the title and redo the show as a Cher tribute. It can only be an improvement.)

“Would the last person to leave my office please turn out the lights?”

In an unrelated but symbolically parallel development, yet another high-ranking staffer has joined the exodus from the office of Gov. Jim Gibbons. Departing exec Mindy Elliott managed to drag Midnight Jim into yet another scandal when she persuaded the Gibber to exert influence on behalf of Boyd Gaming in a dispute with state OSHA. Unfortunately, the state’s burgeoning jobless population will now have to deal with Elliott in her new role as head of the Dept. of Employment, Training & Rehabilitation. Is this a case of “failing upward”? “Sideways”?

Luxor? Sexy?!? It seems that the answer is, “Yes,” judging by this creative marketing ploy: Continue reading →

Posted in Boyd Gaming, Cirque du Soleil, Entertainment, Marketing, MGM Mirage, Morgans Hotel Group, Regulation, The Strip | Comments Off on It’s lonely in the bunker; Luxor gets its groove on

Quote of the Day

Posted on July 14, 2009 by David McKee

“Did these companies come in and make Harrah’s and Station better companies? Not really. In the case of Harrah’s, they have made things worse.” — T. Rowe Price portfolio manager Joe Fath on the effects of private equity buyouts on the casino industry.

Posted in Colony Capital, Harrah's, Station Casinos, Wall Street | Comments Off on Quote of the Day

Penn finally makes a move

Posted on July 14, 2009 by David McKee

Well, let's not get all excited yet. Penn National has bought a puny stake in Morris Goldstein & Assoc., a slot distributor. It's a bit of kabuki theatre whereby Penn and executives CEO Peter Carlino, President Tim Wilmott, CFO Bill Clifford and veep Robert Ippolito can go through the licensing process now, just in case they feel like acquiring something significant down the road.

Mind you, Donald Trump did the same thing several years ago, by dint of a buying a stake in Rivieria Holdings. Nothing ever came of it.

Clouds over Macao. Hey, dictatorial Chinese Communist overlords in Peking, feel free to loosen up those visa restrictions to Macao anytime now. Visitation was down 42.5% in May. Hotel occupancy was also off 18%. One small bright spot was that Taiwanese visitation continues to ramp up, however modestly (i.e., 3%).

Posted in Donald Trump, Internet gambling, Macau, Penn National, Regulation, Riviera, Tourism | Comments Off on Penn finally makes a move

More Midwest notes

Posted on July 14, 2009 by David McKee

Continuing a trend of lower-than-projected returns across the Midwest, Iowa's riverboats were flat last month and racinos saw a 5% decline. All major operators lost ground but something is very wrong at Ameristar Casinos, whose Council Bluffs boat was way outside the margin, reporting a 15% decline from last year.

Over in Detroit, in the hardest-hit state in America, general economic collapse is finally eating into the casino bidness. With MGM Grand Detroit off 10% and Motor City down 3%, it took a 24% upward leap in revenues at recently expanded Greektown Casino (above) to keep the market on an even keel. With an 0.4% overall decline in dollars won, Detroit stays within the "flat" classification.

Good time to own IGT. Sitting upon Illinois Gov. Pat Quinn's desk is a bill that could swamp the state with as many as 77,000 video slot machines. As J.P. Morgan breaks down the particulars: "video gaming terminals may be placed in 1) licensed establishments (“any licensed retail establishment where alcoholic liquor is drawn, poured, mixed, or otherwise served for consumption on the premises”), 2) licensed truck stop establishments (“facility that is at least a 3-acre facility with a convenience store and with separate diesel islands and parking spaces for commercial motor vehicles”), 3) licensed fraternal establishments (“location where a qualified fraternal organization regularly meets”), and 4) licensed veterans establishments (“location where a qualified veterans organization regularly meets”)."

Morgan analysts take a less-alarmist position on this change, projecting that no more than 40,000 devices will be installed, over a two-year period starting next year. Still, they like the prospects of International Game Technology, which is predicted to snare 60% of the market, with another 30% equally divided between WMS Industries and Bally Technologies — a bit of a snub to favorite son WMS, no?

Posted in Ameristar, Bally Technologies, Detroit, Economy, IGT, Illinois, Iowa, MGM Mirage, WMS Industries | Comments Off on More Midwest notes

Competition forces sanity

Posted on July 13, 2009 by David McKee

While the Bible Belt may hold out until the bitter end, we may finally be seeing the demise of the "boats in moats" arrangement, a fig leaf that enabled Midwestern states to blushingly accept casino money. Illinois has started phasing it out. Ohio Gov. Ted Strickland's decree today that seven Buckeye State racetracks can go to racino status may be a real game-changer for neighboring Indiana.

First, a word on the Strickland move. It anticipates legislative passage of a package deal that would require tracks to pay $65 million upfront and the usual usurious tax rate (48-50%). However … slot machines would be purchased by the state (and run under the auspices of the Ohio Lottery), which softens some of the pain. Racino facilities would have to be periodically upgraded, too, at an average of $16 million/year.

All this has spurred (well, slowly prodded) Indiana's Lege to take a second look at the Hoosier State's riverboat regime. This could mean everything from on-land casinos to free drinks for players. There's also talk of "simplying" taxes and admission fees. How about simply eliminating the latter? It's a paternalistic anachronism that needs to go away.

Don Barden's two Majestic Star boats will likely prove an impediment. Some solons want any arrangement to include moving one of them out of Gary, Ind., to better the chances of both. Whatever the case, don't expect any action until next year.

The recession is catching up with regional casino markets. Even the loosening of operating rules in Missouri wasn't enough to stave off a slippage in revenues. Chrysler and Hummer plant shutdowns might explain a -1% shift in St. Louis, but what about a -2.5% June in Kansas City? A 2% drop in statewide slot win was almost countered by an 8% jump at the tables, where higher betting limits are now in force.

Ameristar Casinos took the hit in K.C., down 12%. All other three major boats posted growth, led by Isle of Capri, up 5%. With a $19 million June, the Ameristar boat still led the market in dollar volume but both Harrah's Entertainment and Penn National are closing the gap.

In the greater St. Louis area, both Harrah's and Ameristar fell by an average of 5%, while Pinnacle Entertainment's Lumiere Place gained almost 6%, really starting to give the two older casinos a battle. Even the snake-bitten President had a good month, chipping in nearly $2 million to Pinnacle's kitty.

Further good news came in the form of the bulletin that Isle of Capri had eked out a month in the "plus" column. So even an outwardly disappointing June in the Show-Me State cosseted some significant tidings of comfort and show.

Posted in Ameristar, Don Barden, Economy, Harrah's, Horseracing, Indiana, Isle of Capri, Missouri, Ohio, Penn National, Pinnacle Entertainment, Taxes | Comments Off on Competition forces sanity

Rough trade

Posted on July 13, 2009 by David McKee

May wasn't great for Las Vegas, to say the least, with hotel occupancy -6%, a figure somewhat amplified by the presence of 3% more hotel rooms. The local ADR of $96.96 would have been regarded as real money back in the day. Hoteliers now are more likely to look at it in the context of the -28% shift from last year's rates. More worrisome is that convention attendance (-33%) outslid the number of conventions held (-26%), whereas it used to be the reverse.

Indiana has absorbed the effect of its two new racinos. Casino revenues were flat in June, a decline at most boats offset by the extra dollars generated at Harrah's Entertainment's Horseshoe Hammond (+13.5%) and Boyd Gaming's Blue Chip (+4%), both of which recently expanded. Penn National was hurt by the switchover to Hollywood Casino Lawrenceberg, its new vessel, and Ameristar East Chicago (-15%) withered under the glare of Horseshoe Hammond.

Illinois is scraping along, having evidently struck bottom … for now. Once the impact of a fire-closed Empress Joliet was backed out, Illinois was down a mere 3%. That's practically a moral victory. Of course, with the institution of slot routes en route and the Lege contemplating a huge casino expansion in the state, any celebration will be short-lived. Harrah's Joliet was the logical beneficiary of the Empress Joliet shutdown (+5%), while MGM Mirage's Grand Victoria spiraled -17%.

There were a few gainers, ranging from miniscule (Boyd's Par-A-Dice) to massive (+109% at independent Casino Rock Island). East St. Louis-based Casino Queen finally lost a significant chunk of business (-11.5%) to its augmented Missouri rivals, while Penn's Alton Belle kept its leakage to -3%.

It's not a free market. Lawmakers in the Land of Lincoln have not only introduced slot routes, they may add four more casino licenses to the state. Factor in Neil Bluhm's casino project in Des Plaines (license #10), and the gambling market in Illinois becomes seriously diluted. However, no compensatory tax reduction is on the table.

When it comes to casinos and taxes, solons think simply that more = more. However, in a state where competition is limited by statute, not only does guvmint control the levers of the market place it has an obligation to take the economic consequences of its actions into account. This is not being done and the repercussions are likely to be severe.

Posted in Ameristar, Boulder Strip, Boyd Gaming, Downtown, Economy, Harrah's, Illinois, Indiana, MGM Mirage, Missouri, Neil Bluhm, Penn National, Regulation, Slot routes, The Strip | Comments Off on Rough trade

"The mean reds"

Posted on July 13, 2009 by David McKee

Back at the home office, things still aren't up to speed. I'm caught between a cold and a stomach bug, so I feel pretty thoroughly depleted. On top of that, I'm trying to grappled with a sudden plunge into depression. It's one of the lingering aftereffects of having fallen victim to clergy-parishioner sexual abuse when I was younger. I didn't address it in therapy when I had the chance and I'm paying the price now.

Despite the risk of giving too much information, I feel it's important to acknowledge the past in the hope that it might encourage other people that they're not alone and it's never too late to get help. Considering that this kind of trauma can wreak havoc in all spheres of one's life, the dangers of suppressing it are great indeed.

Oh, and my refrigerator is broken …

… other than that, it's as wonderful as Mondays are famous for being. At least there's the Home Run Derby tonight.

Seen last night flying into Las Vegas from Dallas, former MLB manager and current Fox Sports personality Kevin Kennedy (or, as a friend refers to him, "the man with the square head").

Posted in Baseball, Current, Tourism | Comments Off on "The mean reds"

Trop and tribulation

Posted on July 8, 2009 by David McKee

A pair of New Jersey lawmakers are hopping mad about the costly, dubiously competent Tropicana Atlantic City trusteeship of Justice Gary Stein. The solons are particularly het up over the way Stein was feathering his own nest.

"It is unacceptable, but not surprising, that this transaction would drag on for almost two years, yielding a cut-rate price for the sale and ballooning legal fees for the law firm of the state-appointed conservator," fumed Assemblyman Vince Polistina (R). He and colleague John Amodeo (R) will seek to impose new ethics rules and fee ceilings on future casino conservators. Good on them.

Divergent responses from within the New Jersey Casino Control Commission make interesting reading. The NJCCC's spokesman circles the wagons around Stein while Chairwoman Linda Kassekert — clearly hip to which way the wind is blowing — lines up with Amodeo and Polistina. She put Stein in the catbird seat but clearly has scant compunction about cutting him loose now that he's a millstone around her neck.

Posted in Atlantic City, Carl Icahn, Columbia Sussex, Politics, Regulation, Tropicana Entertainment | Comments Off on Trop and tribulation

Quote of the Day

Posted on July 8, 2009 by David McKee

"Forget the Cirque du Soleil show Zaia, which was quite good but played in a theater that was approximately 30 percent full on a Thursday night. And forget those poor saps trying to sell one high-end watch per day. As long as those tables remain full, which they generally are in the world's largest casino, it would be inaccurate to describe business in Macau as truly slow." — AGEM Executive Director Marcus Prater, in the new issue of Casino Executive Management.

Posted in Cirque du Soleil, Economy, Macau, Sheldon Adelson | Comments Off on Quote of the Day

Off to Michigan

Posted on July 8, 2009 by David McKee

If you notice an attenuation in the S&G blogorrhea, it's because I'm taking a view days to visit terra incognita: the Upper Peninsula of Michigan. I'll be spending an extended weekend in the bucolic environs of the greater Marquette area. And, if I start to climb the walls, I might even poke my snout into the nearest tribal casino.

I'll be in a neck of the woods that doesn't have cable TV, which will provide needed respite from the two most tiresome "news" obsessions of the moment: anything and everything related to Michael Jackson, and the hidden meaning in the convoluted locutions of Sarah Palin. Whatever her virtues, the Great Communicator she ain't. (For unimprovable concision, my favorite American president is Calvin Coolidge, he who said, "The business of America is business." A political philosophy in six words. Hard to beat.)

City slicker that I am, I'm sure I'll stick out like a sore thumb in towns like Ishpeming. Sort of like a dog nursing a cocktail …

So whose leg do I have to hump to get a dry martini up there?

Posted in Alaska, Entertainment, Tourism, Tribal, TV | Comments Off on Off to Michigan

Fertittas reinvest …

Posted on July 7, 2009 by David McKee

… not in Station Casinos but in Orange County real estate, it would seem. The neighborhood is popular with casino moguls who have run their companies into the ground: A nearby, $35 million crib is a domain whose master is Jerry Herbst, late of Herbst Gaming, recently surrendered to its creditors.

At least Frank J. Fertitta III can argue that he was bargain-shopping, as his Emerald Beach pied-a-terre was purchased for 24% off list price. Station employees, however, aren’t likely to be house-hunting anytime soom.

I’m reminded of something Transport Workers Union representative Joe Carbon said last week: “That’s what it’s about … the CEOs making their $25 million and the workers having their health plan cut.” He wasn’t speaking of Station or Herbst specifically but the consequences of poor leadership at both redound primarily to the workforce — and the creditors.

Posted in California, Current, Herbst Gaming, Station Casinos | 1 Comment

Moulin Rouge: Whoops!

Posted on July 7, 2009 by David McKee

The Moulin Rouge development that will never be.

Oh dear, oh dear. Seems like the City of Las Vegas unwittingly obstructed its own arson probe into the demise of the Moulin Rouge when it allowed the property to be immediately demolished. Sloppily, the actual tearing-down was farmed out to the property’s former owners, who happened to have a demolition contractor on site during the blaze.

The fire’s cause remains speculative and no finding of arson has been made — and now perhaps never will. But the city’s decision not only looks overhasty, it was (at the very least) cavalier to entrust it to dispossessed Moulin Rouge Development Corp. and not new owner Olympic Coast Development. The latter’s prexy, John Hoss, told the Las Vegas Sun he found the chain of events “a little odd” and “a weird coincidence.” Since Hoss is only trying to corral a $100,000 insurance claim, the city could get stuck with an asbestos-removal tab as high as $1.1 million.

Can they screw this up any further? Is the Pope Catholic?

F’bleau-minus. The bankrupt resort’s developer, Jeffrey Soffer, proposes some unspecified corner-cutting to get the project back on budget. (“On budget” being a very relative term where Fontainebleau is concerned.) Combine this with the allegedly secret “Enhanced” costs for F’bleau’s highly touted amenities and the moral of the story is that what you see on the Web site or in the design renderings has a tenuous relationship to what you’ll actually get.

At least Soffer is offering to chip in some equity, unlike former investor James Packer, who scuttled away from F’bleau the moment the chips were down.

Gator on the loose. One of Las Vegas’ larger parks got a lot more interesting yesterday when a 42-inch-long alligator turned up. Instead of entrusting the spunky fellow to a local zoo or perhaps one of our local casino-based wildlife habitats, the Wildlife Dept. killed him. Bastards. I hope they never get their mitts on our beloved Mojo …

Mojo, the monarch of Huntington Press.

Speaking of James Packer … griefs are arriving in battalions (thanks, Mr. Shakespeare) for City of Dreams. In terms of mass-market business, Venetian Macao is eating City of Dreams’ lunch. “Despite 41,000 people walking through City of Dreams every day since it opened in the first week of June, most of the visitors were just admiring the decor instead of sitting down at its tables for a game of baccarat,” reports The Age.

Not only is one analyst projecting a 15% earnings shortfall for Melco Crown Entertainment, another has tripled his loss-per-share projection. J.P. Morgan is also revising its 2010 cash-flow projections on the $2.1 billion megaresort to 13% ROI, down from 17%. (That’s still a better return on investment than you can get on the Las Vegas Strip.)

Did Steve Wynn take Packer to the cleaners when sold him 37% of a casino concession for $1 billion? Wynn had a chance to size up Packer and deemed him not yet ready for the big leagues. Score another one for El Steve.

Posted in Animals, Architecture, Australia, Current, Downtown, Fontainebleau, International, James Packer, Lawrence Ho, Macau, Melco Crown Entertainment, Pets, Sheldon Adelson, Steve Wynn, The Strip, Wall Street | Comments Off on Moulin Rouge: Whoops!

Case Bets: CityCenter, W, Bernie Goldstein, Roger Thomas

Posted on July 7, 2009 by David McKee

Some rueful condo buyers are probably calling MGM Mirage‘s ultra-mega-super-duper resort “ShittyCenter,” judging by their ire. It’s difficult to know with whom to sympathize in this ongoing dispute. Condo depositors want to renegotiate prices (which range all the way up to $9.4 million/unit) while MGM — though not unsympathetic — maintains buyers got a special deal going in and therefore have relatively little cause for complaint.

Good luck trying to renegotiate the price of that Saturn on which you just made a downpayment. MGM needs those condo purchases if CityCenter is to remain in balance (look what happened to Fontainebleau, which has sold nary a timeshare). And it really can’t afford to start refunding some of that $313 million that depositors have already placed in the kitty.

However … there might be a pragmatic argument to be made for Continue reading →

Posted in Architecture, California, Current, Economy, Encore, Fontainebleau, G2E, Harrah's, Isle of Capri, MGM Mirage, Steve Wynn, The Strip | Comments Off on Case Bets: CityCenter, W, Bernie Goldstein, Roger Thomas

House of wax

Posted on July 3, 2009 by David McKee

I call your bluff, comrade. As you may have heard, casinos in Russia can stay open by converting to poker rooms. A tip of the fedora goes to reader mike_ch for pointing out this story, which delineates some of the pros and cons. In Vegas, even the strongest poker rooms don’t generate nearly the body count that table games and slots do. But Russian casinos are much smaller and at least a few might be able to hang on, depending on the size of the rake.

It’s mighty big of the Kremlin, by the way, to concede that poker is a sport, not a game of chance. Now if only Uncle Sam would do the same …

Rescue the Riv! Random observation from driving down Las Vegas Boulevard last night: The Riviera suddenly looks so much better and more classic when juxtaposed with the incredible bulk that is Fontainebleau. Land values have fallen, RIV stock is worthless and the property itself provides ready access to the Las Vegas Convention Center.

Time, methinks, for Penn National to get off its duff and make an offer … unless Penn CEO Peter Carlino is waiting for the Riviera to go into bankruptcy, so he can pluck the carcass at auction. Then again, if Carlino really thinks that Planet Hollywood and some or all of Station Casinos are low-hanging fruit, who am I to second-guess him?

Who’s the dummy? The purpose of our excursion was to attend an incredibly pointless media event at Madame Tussauds at The Venetian. If there was a point, it was so that the assembled media hordes would serve as extras for yet another episode of Kathy Griffin: My Life on the D List. A waxwork of Ms. Griffin was being unveiled and suffice it to say that Wax!Griffin looks far better than Real!Griffin. (I must be Officially Jaded, for I scarcely gave the comedienne a second glance.) The various and sundry female impersonators on hand — led by Frank Marino — had clearly taken greater care of their appearances than Griffin had of hers. There was, in fact, just about every stripe of LGBT humanity on hand last night, so it was almost more Rainbow Coalition than media event.

What excitement there was went on outside, where a smallish crowd surrounded the Michael Jackson statue. Tributes were in evidence but everything was tasteful and no hysteria was to be seen. As for Mme. Tussauds itself, I’ve been to the original one in London, and I recall its wax figures as being more believable and the setting itself as more atmospheric (especially the tableaux of infamous British homicides and regicides) … but that was 35 years ago this month.

Give Vegas Tussauds props for having a Joan Rivers dummy who looks more animated than her real-life counterpart, as seen on the NBC sitcom Celebrity Apprentice. All that’s missing is to give the waxwork Rivers a voice box that periodically squawks, “A pokuh playah! A pokuh playah!” Still, we easily spent more time checking out the doodads and gizmos in Brookstone than we did in the wax museum.

Posted in Architecture, Donald Trump, Entertainment, Fontainebleau, International, Penn National, Planet Hollywood, Regulation, Riviera, Sheldon Adelson, Sports, Station Casinos, The Strip, Tourism, TV | Comments Off on House of wax

Tropic(ana) of Confusion

Posted on July 2, 2009 by David McKee

News reports are at sixes and sevens of just how much of the Tropicana Las Vegas is now owned by Onex Corp. For instance, Bloomberg states that Onex's stake represents 60% of the $440 million owed on the property (or would that be 60% of a theoretical $733 million/$21.5 million per acre?), while the Calgary Herald confusingly spreads Onex's $440 million — or would that be $264 million? — commitment between the Vegas and non-Vegas holdings of Tropicana Entertainment.

The Herald, in an obvious boo-boo, mis-reports that TropEnt was split into Atlantic City and non-A.C. halves. Seriously, once the new LV Trop administration starts taking reporters' calls, could somebody straighten out if Onex's commitment is $440 million, six-tenths of that or some more-confusing permutation altogether? The dueling numbers are starting to make my head spin.

The Calgary paper, though, discover the interesting wrinkle that TropEnt CEO Scott Butera is trying to make off with the Vegas Trop name and lease it back to Onex at $10 million a year. Clever, yes. And, if the courts allow it, Butera's got Onex over a barrel because relaunching old properties with new names has been a losing proposition in Las Vegas. Bereft of its name, the Trop could easily become a big-ass Hooters Hotel.

Amidst this turmoil, Alex Yemenidjian has taken the reins at the Trop with an emphasis on customer service. (Interestingly, if you read the non-R-J coverage, Onex has partly reneged on its capex commitments, rolling back a $100 million reinvestment to $75 million.) The proposed South Beach retheming will have to be done in stages but, hey, that's the way they used to do it.

One need only look at the corpse of the Lady Luck or the gravesite of the Stardust to see the perils of a do-it-all-at-once makeover. And it beats the heck out of Butera's 2014-2016 timeline for even beginning work. While Butera may have been an improvement on Columbia Sussex CEO William J. Yung III, his diffident attitude toward the LV Trop will probably leave few regretting his departure.

Posted in Alex Yemenidjian, Atlantic City, Columbia Sussex, Marketing, The Strip, Tropicana Entertainment | Comments Off on Tropic(ana) of Confusion

Stormy weather

Posted on July 1, 2009 by David McKee

It may be monsoon season in Las Vegas but there’s a typhoon blowing through Macao‘s casino economy. A series of bulletins from J.P. Morgan outline a worrisome trajectory for China‘s gambling enclave.

City of Dreams: a flop

June 23: The South China Morning Post reports service cutbacks in Macanese air traffic during January-March. Low-cost carrier Air Asia held steady, but China Eastern Airline scrapped all flights, Xiamen Airline slashed service by 59%, followed by Malaysia Airlines (-38%). Single-digit declines were noted at Air Macau (-9%) and Viva Macau (-4%). Although recently de-licensed carrier East Star had been shedding flights (-40%), competitors did not appear to be moving to fill the void.

June 24: Macao’s Special Administrative Region Statistics & Census Service reports a 20% visitation decline in May, to 1.6 million tourists. Of those, fewer than half were from the mainland (-27%) and 55% were day-trippers. Only 13% are coming from outside Hong Kong, Taiwan or the mainland.

July 1: News agency Lusa has preliminary revenue numbers for June (the first month for City of Dreams) and the comparisons, by Macao standards, are terrible: -17%, for $1.05 billion. So far, the casinos are tracking ahead of the government’s revenue projections — which were pretty dire ($892K/month) already.

There’s a silver lining for Sheldon Adelson, whose Sands Macao and Venetian Macao rebounded, running Stanley Ho‘s myriad casinos a close second in market share, 26% to 30%. Wynn Macau fell toward the pack, which was as follows: Wynn 14% (a humiliating setback; it had been only three points behind Las Vegas Sands in May), Galaxy 12%, Melco Crown International down a point to 9%, and MGM Mirage bringing up the rear, as always, with 8%.

Sands Macao: Adelson’s best-ever investment

Buoyed by Sands’ Macao numbers, Morgan analysts are bullish on Adelson, mainly because of “reasonable near-term and achievable expectations for its LV Strip properties and our belief that its LV properties are outperforming its peers.” Just when you think Sheldon’s painted himself into a corner, he seems to find a means of escape … which may be why some of us were less skeptical of the financial hurdles facing Sands Bethlehem and the Cotai Strip™ than we should have been.

There seems to be a school of belief that if one keeps saying that visa restrictions from mainland China to Macao are about to be relaxed, it will miraculously happen. Not if Peking muckety-mucks keep seeing headlines. More to the point, bailout money that was intended to induce Chinese banks into writing more loans, thereby stimulating production, is flowing to the casino tables instead. That’s a scenario highly reminiscent of the circumstances that led Peking to crack down on Macanese traffic several times already.

Posted in Australia, Economy, James Packer, Lawrence Ho, Macau, Melco Crown Entertainment, Regulation, Sheldon Adelson, Stanley Ho, Steve Wynn, The Strip, Tourism, Transportation | Comments Off on Stormy weather

Harrah's goes to the dogs

Posted on June 30, 2009 by David McKee

Harrah’s Entertainment is poking its snout into the prospect of obtaining a management contract at bankrupt Twin River Casino, a dog track with VLTs in Rhode Island. The paraphrase of the explanation given by Harrah’s senior veep Jan Jones seems fairly counterintuitive: “the state might be motivated now to give the company a shot because Massachusetts was on the brink of legalizing casinos.”

OK, so Massachusetts is likely to legalize casinos, which makes this the perfect time to expand into … Rhode Island? With its 60% tax rate? The part of Jones’ explanation that makes more sense is that Harrah’s would be able to tap into its New England base of Total Rewards players much closer to home (the nearest Harrah’s outposts being Chester, Pa., and Atlantic City).

This could all be moot if the R.I. Lege scuppers a gubernatorial compromise that would can the dog racing and keep the casino open ’round the clock. Greyhound racing is a sport that really needs to be put out to pasture. Besides, it’s only in place at Twin River because of a Byzantine legislative arrangement that Steve Friess rightly calls “a very weird deal,” much of which involves propping up the dog-race union. (I never knew there was such a thing, but there is.)

So it’s a win-win, right? A corporate savior for Twin Rivers and no more suffering doggies, yes? Well … no, not if you’re a nearby homeowner like Hal Perry, whose semi-rural lifestyle has been impinged upon by creeping incrementalism at Twin Rivers. Rather than lower the usurious tax rate, the state (which is seriously hooked on VLT revenue) simply keeps moving the goal posts — longer hours, more machines.

Here comes Harrah’s and, if you’re a Twin Rivers neighbor worried about your property value, the noises are ominous indeed. As Jones tells Friess, “you couldn’t build a hotel right now … So all of this is a process. But it’s the beginning of the process and the point is that it’s an excellent opportunity.”

“Right now … process … beginning.” In other words, Mr. Perry: Sell! Sell now! Get out before Harrah’s drives you out.

Harrah’s wins one. Sort of by default, but a win is a win. Dissident bondholders S. Blake Murchison and Willis Shaw had a shyster for an attorney. Case dismissed. Clearly, their due diligence with regard to lawyers was even worse than that they displayed as investors.

Gunshot? What gunshot? Although the Las Vegas Hilton was able to keep an on-property suicide out of the local papers, the news eventually surfaced via the Louisville Courier-Journal.

Posted in Animals, Colony Capital, Harrah's, Massachusetts, Politics, Problem gambling, Taxes | Comments Off on Harrah's goes to the dogs