Nevada Lege sticks it to you

Posted on March 10, 2009 by David McKee

Although a few Democrats in the state Senate toyed with the idea of growing a spine and opposing raising the hotel-room tax, all of them — plus several Republicans — did the easy thing and opted for Plan A: Soak the tourists. Again. So the new top rate in Las Vegas will be 13%. Pardon us while we put this cigar butt out in your face, too.

All the rationale you need can be found in the final line of Ed Vogel‘s story, where he’s told this “may be more palatable than other tax increases because the tax would be paid by tourists.” The disdainful tone expressed toward tourists by KVVU-TV talking heads on this morning’s 7 a.m. newscast simply drove the point home: Tax that schmuck behind the tree.

Of course, the tax increase was popular with two-thirds of Clark County voters. Wouldn’t you love any tax that somebody else has to pay? Despite having booked the revenue already, Gov. Jim Gibbons will take the coward’s way out and let the new impost become law sans signature. That hardly befits a decorated military veteran. (Proving yet again that irony is dead, Gibbons reiterated his now-is-not-the-time-to-raise-taxes mantra the very same day.)

The solons’ fecklessness is pithily summarized by an understandably exasperated Jon Ralston:

The session is nearly a third over and a pervasive sense of deja vu is settling in. Governor presents controversial idea(s). Legislature declares them DOA. Partisan sniping ensues between lawmakers and governor and among legislators. Final budget/revenue plans are an abomination, some kind of Frankensteinian creation that has no policy underpinnings but fills a budget hole with cobbled together revenue Band-Aids.

While Gibbons’ budgetary ‘solution’ might be dubbed the Nevada Chainsaw Massacre, the Dems’ non-response is equally deplorable, consisting as it does of socking it (among others) to the casino industry even more than ever. This approach would simply amplify existing inequities in Nevada’s structure, as Hugh Jackson tried to explain to the Lege, throwing in some charts that even a legislator could understand. They neatly highlight the disparity between the enormous revenue contribution made by casinos — hundreds of millions of bucks — and the measly input from the mining industry.

Silver Lining Dept.: Amid all those beyond-horrid numbers from the Nevada Gaming Control Board, note that slot hold is down almost a full percentage point. Hopefully the example of M Resort, trading off loose slots for longer play (the old Cactus Jack’s philosophy) will find more adherents. Oh, and Washoe County was up. We’ll take any good news we can get and this was pretty unexpected.

A reader enlightens me. Among the possible reasons for the increased smoke infestation at formerly respectable joints like Sunset Station (and Eastside Cannery), a California visitor suggests another: The ban on smoking in Nevada restaurants has driven the cigarette-and-cigar crowd to the casinos more than ever, since the latter represent one of the few safe havens remaining. He’s noticed a gradual increase in the smokiness of Red Rock Resort and comparable places that provide a one-stop-shop for dinner, video poker and a smokin’ them while you’ve got ’em.

Can’t argue with that … although the rapid declivity of both Sunset and E-Can into mega-ashtrays suggests to me a confluence of factors, all of them untoward.

Posted in Cannery Casino Resorts, Economy, M Resort, Politics, Station Casinos, Taxes | Comments Off on Nevada Lege sticks it to you

Boyd cuts through the crap

Posted on March 10, 2009 by David McKee

There’s no longer any pretense whatsoever that Boyd Gaming‘s takeover offer for Station Casinos is being pitched to Station management. In its reply to Station CEO Frank Fertitta III‘s trash-talking refusal of Boyd’s offer, the latter posits that “the proposal outlined in its February 23, 2009 letter offers a superior recovery to creditors when compared to the current restructuring offer Station has proposed.”

Boyd’s target audience, the Station bondholders, find themselves in the catbird seat. Even if they don’t like the color of Boyd’s money, the onus is on gambling’s best-paid CEO to come up with something better. Responding to Fertitta’s jab at Boyd’s financial status, the company “reiterates that it has sufficient liquidity under its credit facility to finance a cash transaction, and contemplates that no amendment to its credit facility would be required under the proposed transaction structure.”

Translation: There’s as much as $2 billion on the table for you … but not a penny more. Whether or not it’s prudent for Boyd to be pushing all its chips into a Station bid (as opposed to finishing Echelon), putting a hard cap on the deal is a wise move, signaling that the company won’t be drawn into more than a finite bidding war.

Frank Fertitta III: superfluous?

In Boyd’s defense, while Station’s cash flow hasn’t been what management cracked it up to be, it would still provide Boyd with a means of paying down the acquisition from Day One. In addition to reducing the potential leverage ratio, Boyd would get an immediate return on its $2 billion — something that can’t be said for the project that has been dubbed “Inch-along.” Boyd can also make the argument that those returns will look even better once it starts making economies of scale and eliminating redundancies … starting with the Fertitta brothers and working downward.

Oh … and if you’re wondering who’d get the “Station” name (and the brand equity attendant thereupon), I’m told the answer is: Nobody knows. At least not yet.

Posted in Boyd Gaming, Station Casinos | Comments Off on Boyd cuts through the crap

Big bounce in Pennsylvania

Posted on March 5, 2009 by David McKee

Casino revenues in the Keystone State leapt 14% from February of Leap Year to this year, at least at six of the state's seven casinos. (Hollywood Casino at Penn National Race Course is excluded; it wasn't open a year ago.) That's $126 million against $110 million, even with one less day in the month, which is divided 55/45 between the state and operators. A 1,578-machine increase in slots, mostly at Mohegan Sun at Pocono Downs really helped, too, as you'll see.

The comparisons of gross-revenue (not to be confused with cash flow, which can be considerably less) are as follows …

Mohegan Sun @ Pocono Downs: $12.4 million/$17.8 million (44%)

Philadelphia Park: $28.5 million/$30.3 million (6%)

Harrah's Chester: $28.5 million/$27.9 million (-2%)

Presque Isle Downs: $12.1 million/$13.9 million (15%)

The Meadows [Cannery Casino Resorts]: $17 million/$20.6 million (20%)

Mount Airy Resort: $11.6 million/$15.3 million (32%)

Plus another $19.7 million realized at Penn National. Once expansions are completed at The Meadows and Philadelphia Park (more bad news for Harrah's Chester), and Sands Bethlehem and Rivers Casino in Pittsburgh open, the state expects the annual take to swell to $2.25 billion, with industry employment growing to 8,500 souls.

Three-fourths of the value of the troubled, $1.7 billion Cannery/Crown Ltd. deal now rests on The Meadows. Crown says it expects an annual cash flow contribution to be $115 million versus only $35 million from the two Canneries in Las Vegas. If New Yorkers really are willing to drive an hour and 50 minutes to pull the slot handles in Bethlehem, then Sheldon Adelson's 17% projected ROI won't be as zany as it appeared at first blush.

Posted in Cannery Casino Resorts, Harrah's, James Packer, Neil Bluhm, Penn National, Pennsylvania, Sheldon Adelson, Taxes, Tribal | Comments Off on Big bounce in Pennsylvania

Scant love for Boyd, big love for M

Posted on March 5, 2009 by David McKee

I guess Fitch Ratings doesn’t have the stomach for Boyd Gaming‘s attempt to take over Station Casinos either. It’s downgraded Boyd, whose bonds sank “further into junk status.”

Locals love M Resort, it would appear. The Anthony Marnell III property has been open less than a week and is already hiring an additional 250 staffers — after being swamped by early busness. Instead of the projected 5,000 covers per day, M’s restaurants have been doing closer to 10,000. Also, the number of sign-up stations for the players club will be increased to 20, the casino having realized 80% of its goal of having 25,000 enrollments in March. (This may explain why furniture was being removed from parts of the main floor.)

Another 100 slots will be added and there will be more sightings of the gambler’s best friend: the ATM machine. Obviously, some of the “honeymoon” hubbub will wear off once the curiosity factor has subsided (which is what happened to Red Rock Resort). But good news is at a premium these days, so we shan’t look this gift horse too closely in the mouth. That surely goes double over at MGM Mirage, whose minority stake in M looks more and more like one of that company’s savviest investments — not to mention likely to yield the most bang for the buck.

Posted in Boyd Gaming, M Resort, MGM Mirage, Station Casinos | Comments Off on Scant love for Boyd, big love for M

Wall Street swoons for Sands

Posted on March 4, 2009 by David McKee

That must have been some mighty tasty Kool-Aid that Las Vegas Sands CEO Sheldon Adelson was ladling out at the Reuters Travel & Leisure Summit yesterday. Had we not been hearing it from other news sources, one wouldn't put much credence in Adelson's prediction of wider access to Macao from mainland China, mainly because his recent forecasts of what Peking would and wouldn't do have tended to be dead wrong.

Marina Bay Sands: A 28% return on investment? Sheldon says that's a lowball figure.

But what really staggered the imagination were the ROI projections Wall Street's making for Marina Bay Sands, in Singapore. Putting cash flow anywhere between a half-billion and $900 million is a scattershot figure, to say the least. But even those seemingly giddy estimates are "somewhat low," according to Sands' grand vizier. Depending on which of three reported Marina Bay budgets is the correct one, here's how the ROI range would shake out …

$3.2 billion (original): 16%-28%

$4.5 billion (interim): 11%-20%

$5.4 budget (alleged final budget): 9%-17%

Those are some extraordinarily optimistic projections for the most expensive casino megaresort in history (unless you count CityCenter as one property). But it gets better. The $743 million Sands Bethlehem project, in Pennsylvania, is going to do a 17% return on investment, according to Adelson.

Let's hope he's right, because that'll mean we're busting out of this recession something fierce. Of course, Sands saved itself a pile of money in Pennsylvania by simply deferring its contracted retail mall and hotel until an unspecified future date. But if $743 million represents not the total cost of the project but what Sands has spent on the casino alone, that $800 million Don Barden/Neil Bluhm behemoth in Pittsburgh may start to look like a paragon of frugality.

Posted in Don Barden, Macau, Neil Bluhm, Pennsylvania, Sheldon Adelson, Singapore, Wall Street | Comments Off on Wall Street swoons for Sands

Casino commercial of the year

Posted on March 4, 2009 by David McKee

Although Sheldon Adelson‘s taunting of the president may have seemed very clever at the time, the joke might be on the mogul. Check out this inspired TV spot, dreamt up for the grand opening of the permanent racino at Indiana Downs:

A tip of the sombrero to the reader who clued me into this brilliant ad, which has supposedly stirred a ruckus in the Hoosier State. It’s the brainchild of Cordish Gaming CEO Dennis Gomes (the once and would-be future boss of the Tropicana Atlantic City), who is also credited with instituting the greatest casino promotion of all time, the Trop’s tic tac toe-playing chicken.

I hear the chicken had been given its walking papers long before Columbia Sussex got ahold of the Trop. A good thing, too. Knowing ColSux, CEO William J. Yung III probably would have had the chicken killed, fried and served for lunch.

Posted in Atlantic City, Columbia Sussex, Economy, Indiana, Marketing, Sheldon Adelson | Comments Off on Casino commercial of the year

Case Bets: Bank shot, Sin City Express

Posted on March 4, 2009 by David McKee

In today's Movable Buffet, Richard Abowitz speculates on the possible evolution (devolution?) of Las Vegas from a boomtown built on junk bonds to critical-care patient who's a ward of the banks. To Abowitz's mention of the bank-owned Cosmopolitan, I would add the Hard Rock Hotel, Stratosphere, two Arizona Charlie's and the Las Vegas Hilton. The first is owned by DLJ Merchant Partners, most of the others by Goldman Sachs.

Goldman has but a minority stake in Colony Capital's LVH. However, it enjoys veto power over any capital expenditures. Which is as good an excuse as any (or none) to mention that on my last visit to the Hilton the volume on the slot machines had "gone to 11." If it was a clever ploy to create the subliminal impression that the casino was busier than it actually was, it worked.

"Sin City Express": That mag-lev train that's causing Gov. Bobby Jindal (R-LA) and others of his ilk to lose sleep is a real juggernaut, consisting of one unpaid retiree living on the west side of Vegas. (For the record, LV lifeline I-15 has undergone regular midweek closings this winter, to facilitate blasting, as well as one snow-induced shutdown.) At least Jindal's a smart guy just pretending to be dumb, not an out-and-moron like Rep. Trent Franks (R-AZ), who fantasizes high-speed rail from Disneyland to a Carson City brothel. Whatever turns you on, Congressman.

Posted in Colony Capital, Goldman Sachs, Morgans Hotel Group, Politics, Technology, Wall Street | Comments Off on Case Bets: Bank shot, Sin City Express

Harrah's new Atlantic City pitch

Posted on March 4, 2009 by David McKee

Two minutes of Asian American-oriented marketing messages, all of which boil down to, “Atlantic City: It’s not just for gambling anymore.” Lots of Total Rewards pluggery, as you’d expect, but oddly no mention of the new ACES train, of which Harrah’s Entertainment is a co-sponsor (with Borgata).

Posted in Atlantic City, Boyd Gaming, Harrah's, Marketing | Comments Off on Harrah's new Atlantic City pitch

Station vs. Boyd III: This time it's personal

Posted on March 4, 2009 by David McKee

You really have to hand it to Station Casinos CEO Frank Fertitta III. This dude has more lives than a cat. Every time you think his luck has run out, he slips the noose yet again.

So it was Tuesday. FF3 proved that his time at the gym hasn’t been wasted, as he applied a one-two punch to Boyd Gaming. While studiously ignoring Boyd’s $950 million offer for most of Station, FF3 was persuading his creditors to give him a forbearance that will extend until Tax Day. When it comes to sweet-talking bondholders, this guy is sheer Sheherazade … especially when you consider that Boyd’s offer made the Fertitta family’s proposed $244 million cash infusion look like chump change.

Forbearance in hand, FF3 then unveiled a Continue reading →

Posted in Boulder Strip, Boyd Gaming, Colony Capital, Current, Economy, Station Casinos, The Strip, Wall Street | Comments Off on Station vs. Boyd III: This time it's personal

This is your industry on crack

Posted on March 3, 2009 by David McKee

Finally, someone (in this case, Liz Benston) has written the definitive user-friendly analysis of how the casino industry crashed and burned. To try and quote the salient points would require little short of reprinting the entire article (to say nothing of its copious charts).

In essence — as run through the S&G juicer — we're dealing with an industry that could be said to have lost its marbles four to five years ago. As I've contended on the Vegas Gang podcasts, captains of the casino industry, borne aloft on a bubble of illusory "wealth," mistook a bubble for a baseline. Instead of paying down debt on acquisitions, they doubled down on extra-super-megaresorts and wholly unncessary LBOs.

And now that the party's ended, the resultant hangover is shaking out the business like a case of the DTs. The irony is that Strip revenues have reverted to 2005 levels … back when business was pretty darn 'phat,' and MGM Mirage and Harrah's Entertainment were so flush they were able to devour Mandalay Resort Group and Park Place Entertainment, respectively, with scarcely a burp.

One of the few things now standing between insolvent casino companies — a group that may soon include both Harrah's and MGM — and outright disaster is that gaming has become "too big to fail." In an otherwise normal economy, collapsing companies like Herbst Gaming, Black Gaming, Colony Capital and even big shots like Station Casinos would probably be staring receivership in the face. But extraordinary forbearance — in more than one sense of the term — by lenders is keeping the lights on and the doors open. The bankers and bond markets have obviously decided it's better to keep their wobbly dance partners upright than let gravity take its course. Lord knows, the seismic impact of a cascading series of casino bankruptcies beggars the imagination and not in a good way.

Into this maelstrom, is flung the news that two companies are going to miss their scheduled 10-K filings. In the case of Pinnacle Entertainment, they need some extra time to perform mark-to-market ledger-demain, writing down $275 million-$330 million. J.P. Morgan analysts are sanguine, though, partly because of an 18% increase in fourth-quarter revenue. Also, although Pinnacle's net loss may be as high as $308 million, other results "should be above expectations, reflective of PNK’s strong Louisiana performance at Lake Charles, stable New Orleans trends, and a ramp at Lumiere [Place] in St. Louis. Trends that, generally, should continue."

Also playing for time is MGM Mirage. According to the Sun, last week's draw-down of credit has tapped out the company's liquidity, a statement confirmed in a J.P. Morgan note. Contrarily, the Review-Journal implies there's plenty left.

(Update: MGM tells me, no, there isn't and I was wrong to have concluded otherwise last week. Error duly noted. Self-flagellation in progress.)

Whatever the case, Wall Street is sounding like it's accepted that Chapter 11 is all but inevitable. Slightly less apocalyptic scenarios still include potential defaults, debt-for-equity swaps that would surely cost Kirk Kerkorian his majority ownership, asset sales, a restructured balance sheet and a $7 billion note that's less of a balloon payment than an incoming Hindenberg.

Or, as Morgan analysts write, per their wait-and-see strategy: "We expect to hear from MGM over the next few weeks, and suspect it is or shortly will be working with its banks on amending its bank covenants (leverage covenants now likely tripped after drawing down debt last week and hoarding cash) and looking to restructure its bank debt, among the other options MGM is considering (asset sales, amending CityCenter, etc.)."

Emendations to CityCenter? That would be an extremely bitter pill for MGM to swallow. First the Harmon truncation, now this prospect. In a totally unscientific measurement, page views of our online image gallery of Aria and Vdara were barely a ripple compared to the levels of interest manifested in Encore, M Resort and, good golly, even the Cabana Suites at the El Cortez — all of which have vastly outpaced Aria/Vdara in viewership. Like I said, unscientific but who'da thunk we'd see an El Cortez ≥ CityCenter equation?

And we still haven't touched upon today's earnings report from Isle of Capri (half good, half bad) or the latest round in the Station-vs.-Boyd catfight, chock full of hissing and spitting. We live in interesting times, to be sure, regardless of whether that's a blessing or a curse.

Posted in Boyd Gaming, Colony Capital, Downtown, Economy, Harrah's, Herbst Gaming, Isle of Capri, Louisiana, MGM Mirage, Missouri, Station Casinos, The Strip, Wall Street | Comments Off on This is your industry on crack

Harrah's enjoys bailout

Posted on March 3, 2009 by David McKee

“Critics argue that the tax-law change rewards companies that took on too much leverage during the credit bubble, such as those that were bought by private-equity firms.”

Sound like anybody we know? How about Harrah’s Entertainment, which played Russian roulette with the bond market and got its brains spattered all over the wall. Lucky for them, Senate Majority Leader Harry Reid (D-NV) was there with a “Get Out of Jail Free” card — or at least a tax break that, in effect, rewards morally hazardous borrowing. Thanks to Harry’s largesse, it’ll be a full decade before Harrah’s pays off the gains it’s about to realize from buying back part of its $23 billion (!) debt at a discount.

That is, assuming that the crafty Reid hasn’t Continue reading →

Posted in Colony Capital, Economy, Harrah's, James Packer, Macau, Melco Crown Entertainment, MGM Mirage, Politics, Sheldon Adelson, Station Casinos, Taxes, Wall Street | Comments Off on Harrah's enjoys bailout

Comp cutbacks in Atlantic City

Posted on March 3, 2009 by David McKee

Last week, the Press of Atlantic City reported a 5% drop in comping along the Boardwalk and Marina District. However, the story played it as merely a reflection of decreased business in Atlantic City. Yesterday, however, The Associated Press weighed in with a completely different take.

According to Spectrum Gaming Group's senior veep, Joe Weinert, the fanny-packers are getting left out of the comp action. "It's a conscious decision to cut back. They have to target their cash very carefully and cut out the low-end customers. They're being very careful about how they're throwing those free dollars around," he told reporter Wayne Parry.

Displaying the can't-do spirit that has made Colony Capital the scorn of the Boardwalk, Resorts Atlantic City CEO Nicholas Ribis told regulators the casino had given away "too much food, too much drink, too much everything." (Maybe if Colony would stop borrowing money it can't repay it wouldn't have to sweat the comps so much.)

Selected reductions in comping, as reported by the AP, are as follows (Jan. '08 vs. Jan. '09), rounded to the nearest full point:

Resorts: $7.8 million/$6.3 million (-19%)

Bally's: $15 million/$11.3 million (-25%)

Caesars: $12.4 million/$11.1 million (-10%)

Showboat: $9 million/$8 million (-11%)

Trump Marina: $6.5 million/$5.6 million (-14%)

Trump Plaza: $7 million/$6.1 million (-13%)

Most of those cuts roughly parallel the overall decline in the market. As for the "outlier," Bally's, a whopping comp cutback is certainly in keeping with the general decimation of that sprawling complex. I guess we know now which of its four Atlantic City casinos Harrah's Entertainment would put "in the sell block," if push came to shove.

"Off the box" redux: Since Donald Trump wants his name taken off bankrupt (again) Trump Entertainment Resorts, one reader has submitted a possible replacement moniker — "Blowhard Entertainment Resorts."

Posted in Atlantic City, Colony Capital, Donald Trump, Economy, Harrah's | Comments Off on Comp cutbacks in Atlantic City

M-enations

Posted on March 2, 2009 by David McKee

Last night’s grand opening of M Resort wasn’t quite your usual Vegas casino debut. The 4,000-7,000 (sources vary) who turned out for the VIP preview were an older, more outwardly affluent and buttoned-down crowd than one expects. Nor is the presence of Sen. John Ensign, Rep. Dina Titus and former Sen. Richard Bryan an everyday occurence at one of these hootenannies.

Also in attendance, though we missed them in the crowd and the resort’s disorienting layout, were bloggers extraordinaire Hunter Hillegas, Steve Friess and the Queen of Comps herself, Jean Scott. LVA‘s David Matthews also turned out, but the Significant Other and I had taken a powder — missing the Son of Cirque umbrella show — before he arrived.

Verdicts on M are, suffice it to say, all over the place. Big LVA kahuna Anthony Curtis was remarkably impressed and Jean was arguably even more so. Our resident poker pro was nearly as upbeat but had a few minor qualms. Both Messrs. Hillegas and Friess were pretty ‘meh,’ although Friess was the less guarded of the two in his summation. As the latter is quick to concede, his photos don’t do M justice, whereas Hunter’s gallery gives a very accurate impression of the resort. (And, yes, that is a jolly-looking Friess in the third photo.)

I do have to agree with Hunter that the casino floor is more than a bit — how shall I say? — generique. Those who worry that server-based gaming (or server-readiness in M’s case) will erase much of the idiosyncrasy from the slot floor will have their fears confirmed at M.

The Las Vegas Sun has been all over the M opening like a tight-fitting suit, complete with photo gallery and video. Coverage by the Las Vegas Review-Journal has been somewhat more restrained. The R-J does have an attractive slideshow. Over at the “multimedia” department (where we hear they’re still struggling with a newfangled concept the kids are calling “fire”), they couldn’t manage any video footage — just the breathless declaration by Nathan Tannenbaum, “How ’bout the Sunday night fireworks way on the south end of the valley … ?” over a lame graphic. (“How about it?” I wouldn’t know — because you don’t have any f***ing footage.) There is some pre-opening video video, if that’s any consolation, though it leaves an unfairly “blah” impression.

With Matthews and Scott “pro,” and Hillegas and Friess “con” on M Resort, I was hoping Richard Abowitz or David G. Schwartz would weigh in with tiebreakers … but nothing yet. And why all the fascination with the last wheeze of Siegfried & Roy? The charity bash they headlined looks like it cost more than it could have garnered.

Or maybe I’m just grumpy because nobody succeeded in taking any snaps of Kristin Davis. Oh well …

Posted in Architecture, Charity, Entertainment, M Resort | Comments Off on M-enations

M in pictures

Posted on March 2, 2009 by David McKee

Well … sorta. You'd think a billion dollars might buy a decent press kit but M Resort's didn't arrive at LVA HQ until the day after the opening. To add to the farce, most of the pictures aren't bonafide photos but extremely obvious computer-generated renderings. As a PR effort goes, this was a real face-plant. You know what they say about first impressions and second chances.

Anyway …

M's overall vibe is one I'd describe as "understated elegance." If the message of Encore is that nothing succeeds like ripe excess, M aims for a decidedly un-Vegas image — Southwestern simplicity and a moderately upscale position, and oh yes, we do have gambling here.

The foyer of the spa, which wasn't quite finished on opening night. There are, among many other amenities, two heated pools. One is 101 degrees, the other 104 Fahrenheit. I neglected to ask why the three-degree discrepancy was so important.

You wouldn't guess it from this rendering but the Ravello lounge has excellent sightlines and is an intimate — but not claustrophobic — venue for live music.

M Resort's eponymous bar. We skipped this one, I think.

Rooftop restaurant Veloce Cibo was closed for a Marnell family event (it's a big family, I hear). The only way you could get that view out the window — practically atop Wynn Las Vegas — would be if Veloce Cibo was in the belly of the M Resort blimp.

The foyer of Marinelli's. In terms of decor, this is the fanciest of the M restaurants. Gastronomically, we were too maxed-out to sample the fare.

The Studio B kitchen, just off the buffet. Try as I might, all I could think of was the council chamber in Babylon 5 ("Delicacies by Delenn"? "Noshing with the Narn"? "Lunch at Londo Mollari's"?) We overdid it at the buffet proper but the cooking staff really put its best foot forward for the opening-night crowd.

A standard room. You can't really see it at this size, but the "view" out the window makes the Strip look several miles closer than it actually is.

A flat suite, with another incredible (as in "not to be believed") view.

Partial view of a "Classic" one-bedroom suite.

The lobby of the conference area. Overall, it's almost as swanky as Encore, if not as breathtaking as Red Rock Resort.

Does the billion bucks show up in the final product? Yes. Is it worth the (not inconsiderable) drive? Yes. Hopefully it will stand up to wear, tear and cigarette smoke, as M made a powerful first impression of "affordable luxury," offering a higher-than-average number of amenities in a soothing atmosphere. We'll see how that imprint is sustained once the slot machines start chiming en masse and the players light up in similar numbers … and let's not kid ourselves: In this economy, large numbers of anything (except foreclosures) tend to be welcome.

Posted in Architecture, Encore, M Resort, Station Casinos | Comments Off on M in pictures

Strike at the Trop

Posted on March 2, 2009 by David McKee
Posted in Atlantic City, Columbia Sussex, Harrah's, Regulation, Tropicana Entertainment | Comments Off on Strike at the Trop

MGM Mirage: Uh-oh; "Off the box"

Posted on February 27, 2009 by David McKee

Following in the footsteps of Station Casinos and Harrah's Entertainment, now MGM Mirage is drawing its revolver, so to speak, to fund operating expenses. This is never a good sign. Earlier this week we learnt that all of Kirk Kerkorian's Tracinda Corp. stock (53% of MGM shares) has been pledged against CityCenter. I was guardedly optimistic about MGM's future, but now … ?

At least if what LVA is hearing about Fontainebleau is true, MGM won't have to worry about competition from F'bleau for as much as 10 weeks after Aria opens.

"Off the box": That's the new coinage for describing public figures who go from being seen as assets to liabilities. It was inspired by Kellogg's dumping of Michael Phelps after those bong photos surfaced.

In the gaming sector, the obvious "off the box" candidate is Donald Trump — so obvious, in fact, that Trump is trying to get himself off the box, demanding that Trump Entertainment Resorts become Something Else Resorts. Another OTB candidate might be former Cirque du Soleil wunderkind Criss F. Angel.

Anybody else?

Posted in Cirque du Soleil, Donald Trump, Economy, Fontainebleau, Harrah's, MGM Mirage, Station Casinos, Wall Street | Comments Off on MGM Mirage: Uh-oh; "Off the box"

"Sin City Express"

Posted on February 27, 2009 by David McKee

Expect to be hearing that catchy new canard a lot, not to mention the “Las Vegas to Disneyland” little white lie that Gov. Opie Jindal (R-LA) trotted out in his Tuesday-night audition for the 2012 presidential nomination. “Vegas to Disneyland” is, of course, a linguistic formation sure to stoke the ire of the “family values” crowd far more than the fiscal-restraint one. A jab that might possess some heft were it coming from Vegas-friendly Sen. John McCain (R-AZ) rings hollow when spouted by politicians who are anti-gambling cranks opportunistically masquerading as fiscal conservatives.

Then there was the Tennessee congresswoman whose official Web site informed constituents that the train would run from “Los [sic] Vegas to Las [sic] Angeles.” Your tax dollers [sic] at work, folks. Perhaps federally funded literacy programs should start with remedial classes at the Capitol.

As for “Sin City Express,” if the feasibility study goes well and if the Anaheim-to-LV route is approved and if it can be financed (a whole lotta “ifs”), we ought to call the mag-lev train precisely that, just to make its detractors suck on it. For that matter, why is the need for high-speed rail of any sort open to debate? Do we pride ourselves on taking a back seat to other industrialized nations?

In the meantime, deficit hawks and pietists bicker amongst themselves. And Howard Stutz makes a trenchant observation: The fortunes of Lousiana — where Harrah’s Entertainment and Boyd Gaming are major employers — are tied to those of Las Vegas. Maybe Jindal would like to take a long, slow ride on Amtrak and think it over.

“Singapore City Express”: No cost overruns at Sands Marina Bay, quoth Sheldon Adelson. Unfortunately, his “no significant changes” comment begs the question of whether the $5.4 billion figure represents the actual budget or whether the tab is still in the neighborhood of $3.2 billion. If it’s the latter, perhaps Sands still can make this mega-gambit pencil out.

No harm, no foul: At first blush, Harrah’s Entertainment has lined up strong arguments for dismissal of a bondholder lawsuit. The only non-starter would be appear to be Argument #1 — the assertion that bondholders have suffered no harm — which, at minimum, “assumes facts not in evidence,” as the saying goes. When debt is being swapped out at a 40% writeoff, somebody’s taking an uncomfortably close shave, to say the least.

Posted in Boyd Gaming, Harrah's, Louisiana, Politics, Sheldon Adelson, Singapore, Technology, The Strip | Comments Off on "Sin City Express"

Boyd vs. Station II

Posted on February 26, 2009 by David McKee

Well, that was a waste of a good hour. Boyd Gaming teased its Thursday morning conference call with intimations that All (or at least Some) Would Be Revealed about its surprise bid for most of the assets of Station Casinos. Boyd execs made a few pro forma comments about the offer at the top of the show, for want of a better term. They then announced that they would be taking no questions about the Station bid, so don't you be asking any, sonny.

Later, they did relax to the extent of allowing that they assume that Station's management contract with the Thunder Valley tribal casino near Sacramento would be included (but implied that Station's management pact with a Michigan tribe would not). The reason that the general public is in some confusion about what Boyd would be paying $950 million for is: Boyd itself is uncertain. Company officials implied they weren't getting any cooperation from Station — or to the mythical entity that Boyd's president consistently refers to as "Stations [sic] Casinos." (You know … the archivals of Boyds Gamings and builders of Red's Rocks Resorts.) After he buys it, of course, he can call it whatever he wants.

One of the many questions begged by Boyd's non-presentation was what's going to happen to Echelon, now that the company proposes to cannibalize its remaining $2 billion in borrowing capacity (against $2.6 billion in debt) to finance the Station deal. That money had been earmarked for finishing Echelon. Seemingly intent on having his cake and eating it too, Boyd prexy Keith Smith said, "We have nothing to report on [Echelon]" but added that having a Strip presence remained a long-term goal. Translation: Don't hold your breath.

Smith also ducked some pointed Larry Klatzkin queries regarding performance expectations at Blue Chip, in Indiana. (He evaded a question about ADRs, too.) CFO COO Paul Chakmak, referring to the expanded riverboat complex as "the new Blue" (do I sense a marketing slogan there?), said that early results are promising if not definitive. He noted that a record 2008 and January '09 performance at Delta Downs in Louisiana "shows the value of our geographic diversity" and noted that Borgata was the only Atlantic City casino to post growing slot win in 2008. Boyd will be taking a variety of one-time charges, including on some of its North Las Vegas real estate, and will be drawing out the payment schedule on Dania Jai-alai, a would-be Florida casino venture that has gone into the freezer, due to a disappointing Sunshine State market.

"Our goal is not just to get by," Chakmak said, while allowing that the Las Vegas locals market "remains challenging." Downtown, he added, was a better scene, given that increased charter flights were offsetting any effect that might be felt from reduced commercial airline service to Hawaii. Why one would want to exponentially expand into a "challenging" Vegas market right now was yet another of those questions that didn't get to be asked.

Good news for bargain hunters in Atlantic City; Smith expects promotional allowances to "stay elevated" in 2009. He also said that, with only two weeks of service so far, it's much too early to prognosticate about the performance of the ACES train (a joint venture with Harrah's Entertainment). Boyd execs did talk up the savings achieved by infusing T.G.I. Fridays, Fuddruckers, Sbarro, etc. into their locals properties. If you were a Boyd restaurant employee whose eatery was displaced to make room for a fast-food franchise, you might not share that enthusiasm.

Posted in Atlantic City, Boulder Strip, Boyd Gaming, Downtown, Economy, Florida, Harrah's, Indiana, Louisiana, Station Casinos, The Strip, Tribal, Wall Street | Comments Off on Boyd vs. Station II

Cannery sale on ice?

Posted on February 25, 2009 by David McKee

Nevada Gaming Control Board Chairman Dennis Neilander was kind enough to ring up pesky old NGCB detractor S&G today and provide some clarification on why Crown Ltd. and its supremo, James Packer, passed muster in the Silver State but have run into heavy weather in Pennsylvania.

“When we first started … the Packer shares are held in a variety of trusts,” controlled by Packer himself, Neilander explained. NGCB representatives met with trust counsel and “pored through all of the trusts,” concluding that Packer was the controlling shareholder. “We have no concerns about it here. It was all disclosed to us.”

(A government source adds that trustees fear Keystone State confidentiality provisions are less airtight than Nevada ones and information provided to regulators would become public. Which is why three Crown Ltd. participants are suing — under aliases — for declaratory relief, in a Delaware court.)

As for a spate of recent developments, Neilander said that Gretel Packer (above) — who’s suddenly gotten cold feet about Pennsylvania licensure — didn’t reach the 10% ownership threshhold necessary to mandate Nevada scrutiny. “We did” have contact with gambler Harry Kanavos Kakavas, Neilander added, saying that at the time there was no indication that Kanavos had tapes of Crown executives allegedly making illegal overtures to him. (Pennsylvania has sent an investigator Down Under to hear the recording.) And with regard to bribery allegations connected to Melco Crown Entertainment‘s City of Dreams project, those arose late in the proceedings, the chairman said, and there was not enough evidence from which to reach a conclusion as to their validity.

Neilander added that the NGCB is monitoring both the Kanavos and Macanese situations for potential post-licensure action. But with Cannery Casino Resorts bosses William Paulos and William Wortman accusing the Packers of colluding to scuttle the sale, these questions may soon be extremely moot.

Posted in Australia, Boulder Strip, Cannery Casino Resorts, James Packer, Macau, Melco Crown Entertainment, Pennsylvania, Regulation | Comments Off on Cannery sale on ice?

Station vs. Boyd

Posted on February 24, 2009 by David McKee

Seeing as I'm still trying to make sense of Boyd Gaming's offer to buy much (but not all) of Station Casinos — and some Station assets may not be worth obtaining — I'll just pass along Station's response to the Boyd offer:

"We received an unsolicited, non-binding, preliminary indication of interest from Boyd Gaming Corporation to buy some of our company's assets. We intend to continue to work with our lenders and bondholders to pursue our previously proposed plan of reorganization, but we will evaluate the terms of Boyd Gaming's proposal."

In other words, Station is blowing off Boyd … but Boyd is already talking over Station's head. Its true audience is Station's debtors. And with Boyd putting $950 million on the table (and drawing attention to its $2 billion line of credit), the prospects of bondholders falling meekly in line for that March 2 debt swap suddenly got a whole lot worse. Thursday's Boyd conference call is going to be must-hear podcasting.

Posted in Boulder Strip, Station Casinos | Comments Off on Station vs. Boyd