Comp cutbacks in Atlantic City

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

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

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 in Atlantic City, Columbia Sussex, Harrah's, Regulation, Tropicana Entertainment | Comments Off on Strike at the Trop

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

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"

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

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?

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

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

Quote of the Day

"[Columbia Sussex CEO William J.] Yung showed a callous disregard both for New Jersey casino auditing regulations and for the requirement that any Atlantic City casino be a 'first-class facility of exceptional quality.'

"But if the restructured Tropicana Entertainment can prove it is indeed a new company that meets the state's licensing requirements, that would be the quickest way to get the Trop out of limbo and into the hands of new owners." — from an editorial in The Press of Atlantic City, endorsing TropEnt CEO Scott Butera's push to have the Atlantic City Trop restored to the fold.

Posted in Atlantic City, Columbia Sussex, Regulation, Tropicana Entertainment | Comments Off on Quote of the Day

Another setback for Packer

Several potential owners of Cannery Casino Resorts want to withdraw from the process rather than disclose their identities to Pennsylvania regulators. In addition, Gretel Packer, sister to Crown Ltd. CEO James Packer, has asked to pull back her license application.

This development inspires no end of questions. If Pennsylvania holds its ground and the Crown affiliates who are insisting upon secrecy pull out, does the whole Cannery deal begin to unravel? (Crown says no.) Was a similar identity waiver granted in Nevada? If so, why? Who are these mystery investors and why is their anonymity so important?

Considering that a gaming license is a privileged and highly prized asset (to say nothing of a potentially lucrative one), there's no conceivable justification for the citizens of Pennsylvania to be kept in the dark about who's behind the Crown Ltd. bid. If the Pennsylvania Gaming Control Board accedes to Crown, its already shaky credibility will be shot.

 

Posted in Cannery Casino Resorts, Horseracing, James Packer, Pennsylvania, Regulation | Comments Off on Another setback for Packer

Earth to Colony Capital

"If I had a crystal ball two years ago, I would never have taken on that debt. Never, ever. But looking back, we saw growth. That's why we put up that beautiful new tower, with a plan to do extensive renovations [on the older hotel tower] next door. We're not able to do that now."Resorts Atlantic City CEO Nicholas Ribis

Growth? Two years ago? Would somebody please buy Nick Ribis that crystal ball? By early '07, casinos in Pennsylvania were a done deal. How could anyone have foreseen growth for Atlantic City in that scenario?

Just asking …

Posted in Atlantic City, Colony Capital, Economy, Pennsylvania | Comments Off on Earth to Colony Capital

Gibbons retreats, sorta

Gov. Jim Gibbons has scuttled away from one of his several proposals to jack up taxes on the only segment of Nevada that's carrying its own weight — the casino bidness. He's retreating from a demand that casinos pay taxes on uncollected markers (which, in turn, would be certain to cause a tightening of casino credit). Midnight Jim continues, though, to support raising hotel-room taxes in Clark and Washoe counties, and taxing comped meals. The casino industry's love affair with Gibbons — which helped get him into office — has so far proven a one-way romance.

Worries about Boyd. Here's why I resist the occasional invitation to give stock picks: No sooner have I sung the praises of Boyd Gaming's sound fundamentals, its diversified casino portfolio and its (Echelon excepted) aversion to risk, comes news that analysts have the heebie-jeebies in re Boyd. A slow-ramp-up at Water Club in Atlantic City and weakness in the Las Vegas locals market are the primary worries.

Advertising during the Oscars: Casinos that ran ads during last night's interminable Academy Awards snoozer included M Resort (twice), Encore, the CasaBlanca in Mesquite and Green Valley Ranch, which has suddenly discovered a great lurve for the local clientele. The latter is quite a turnaround for a property that used to tout its high-end cachet. Oh, and Mickey Rourke got totally, utterly and criminally screwed. Which ruined the evening right then and there.

Atlantic City Death Watch, cont. After taking a long gander at the market, Macquarie Securities analyst Joel Simkins had this to say: “In our view, there is a distinct possibility that one to three casinos could be permanently closed in the next few years, particularly when many older locations are barely breaking even and, we believe, cannot be rehabbed to be economically viable.” [emphasis added]

Anybody care to speculate which casinos Simkins has on the "do not resuscitate" list? Resorts Atlantic City is a no-brainer for the "one." As for the "to three," we could toss in the Atlantic City Hilton and Trump Marina, where the news comes in two flavors — Bad and Worse.

The Tropicana might also be on the bubble, partly because it's not performing up to its preponderant size and also on account of interim management's inability to restore the business that was lost during the Columbia Sussex reign of error. A veteran Trump-watcher has another suggestion, writing that"his decision to abandon and bad-mouth the company suggests that this may not be the routine Chapter 11 bankruptcy from which the company eventually emerges. Indeed, I wouldn't be surprised if this is the last gasp for Trump's three Atlantic City casinos."

Posted in Atlantic City, Boulder Strip, Boyd Gaming, Colony Capital, Columbia Sussex, Donald Trump, Downtown, Economy, M Resort, Marketing, Mesquite, Movies, Politics, Station Casinos, Taxes, TV, Wall Street | Comments Off on Gibbons retreats, sorta

Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

Phil Hevener, the guy who was onto the Imperial Palace sale before anyone else, says Penn National pitched offers for not only The Mirage but also Caesars Palaceat insultingly low EBITDA multiples (see bottom of story). The Strip has seen much better days but it’s not a flea market.

Et tu, F’bleau? It hasn’t even opened and already Fontainebleau‘s viability as a going concern is in doubt. Those thousand condos represent a giant millstone around the resort’s neck; the relationship between Vegas casino operators and the condo business has been akin to that between lemmings and the sea. Already, it’s looking like a rerun of the Harrah’s/Station scenario: Partial recovery for senior debtors and a dime on the dollar for junior ones.

See no evil, speak no evil. A robbery was committed at a casino “in the 4000 block of West Flamingo Road,” an address that just so happens to exactly coincide with the Gold Coast. (The Palms is in the 4300 block.) This is at least the third time that I can recall offhand in which the location of a casino robbery was obfuscated by local law enforcement — nor the first time that Las Vegas Metro has placed a higher priority on protecting casinos’ images than on solving crimes. It might be easier to find witnesses if you told the public where the crime took place, no?

I got a horse right here, his name is not Paul Revere and if you backed this horse you had quite a lot to fear. A quarter-century ago, literal also-ran Fine Cotton wound up at the center of a bizarre racing-fraud scandal involving a — get this — impostor horse. Could Dick Francis have dreamt up a better yarn than this?

Station to the rescue. With Thunder Valley execs given the chop and new managment parachuting in from Station Casinos, work has resumed at the Sacramento-area casino-resort — after some downsizing of the original expansion plans. Kudos, Station.

Posted in Australia, Boyd Gaming, Fontainebleau, Harrah's, Horseracing, MGM Mirage, Penn National, The Strip, Tribal | Comments Off on Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

Trump: The end

So Trump Entertainment Resorts has such little worth that it’s facing delisting, having become quite literally a penny stock. In a move described as “petulant,” not only is Donald Trump taking his ball and going home, he wants the name of the company changed.

He claims he could have done better, had he simply been allowed to exercise his incomparable casino mojo … but this emperor’s been naked for the better part of a decade. As for the “wasteful spending” he decries, one can only guess he’s referring to the capital improvements at Trump Taj Mahal (the sort of thing Trump himself could rarely be bothered with) which have goosed business there substantially.

The already discounted sale of Trump Marina to Richard Fields (who hasn’t lined up the dough and recently liquidated his Manhattan pied-a-terre) looks shakier than ever — and it was not a deal that inspired confidence to begin with. Trump’s tantrum could easily kill it outright. Fields’ company is hemming and hawing ominously. And if that sale doesn’t come through, one analyst predicts a “death spiral” for TER.

View the video at CNN.com

Bloviation alert: Trump disses own casinos, says they’re not worth beans.

Meanwhile, the Trumpster is engaging in a little revisionist history, complaining that the company hasn’t diversified outside Atlantic City. Oh, its various incarnations have tried. A Trump-branded riverboat in Gary, Ind. (now Don Barden‘s Majestic Star II) enjoyed an early vogue, then went into steep decline. A Trump tribal-casino-management arrangement in California was short-lived. An effort to get in on the Philadelphia market went nowhere, except to court. As always with Trump, when in doubt … sue!

Contrary to Trump’s ever-bombastic contentions, things are not coming up roses for him elsewhere, either. (On a personal note, I balked at purchasing an otherwise appealing necktie at Filene’s Basement because it bore the Trump moniker on the reverse. Would you call that “negative brand equity”?)

About the only good thing that’s come out of Trump’s insufferable TV series, The Apprentice, is that the mainstream media finally began paying attention to the thing of smoke and mirrors that was Trump’s casino kingdom.

Posted in Atlantic City, Don Barden, Donald Trump, Economy, Pennsylvania, Tribal, TV, Wall Street | Comments Off on Trump: The end

Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

Phil Hevener, the guy who was onto the Imperial Palace sale before anyone else, says Penn National pitched offers for not only The Mirage but also Caesars Palace … at insultingly low EBITDA multiples. The Strip has seen much better days but it’s not a flea market.

Et tu, F’bleau? It hasn’t even opened and already Fontainebleau‘s viability as a going concern is in doubt. Those thousand condos represent a giant millstone around the resort’s neck; the relationship between Vegas casino operators and the condo business has been akin to that between lemmings and the sea. Already, it’s looking like a rerun of the Harrah’s/Station scenario: Partial recovery for senior debtors and a dime on the dollar for junior ones.

See no evil, speak no evil. A robbery was committed at a casino “in the 4000 block of West Flamingo Road,” an address that just so happens to exactly coincide with the Gold Coast. (The Palms is in the 4300 block.) This is at least the third time that I can recall offhand in which the location of a casino robbery was obfuscated by local law enforcement — nor the first time that Las Vegas Metro has placed a higher priority on protecting casinos’ images than on solving crimes. It might be easier to find witnesses if you told the public where the crime took place, no?

I got a horse right here, his name is not Paul Revere and if you backed this horse you had quite a lot to fear. A quarter-century ago, literal also-ran Fine Cotton wound up at the center of a bizarre racing-fraud scandal involving a — get this — impostor horse. Could Dick Francis have dreamt up a better yarn than this?

Station to the rescue. With Thunder Valley execs given the chop and new managment parachuting in from Station Casinos, work has resumed at the Sacramento-area casino-resort — after some downsizing of the original expansion plans. Kudos, Station.

Posted in Australia, Boyd Gaming, Fontainebleau, Harrah's, Horseracing, MGM Mirage, Penn National, The Strip, Tribal | Comments Off on Case Bets: Penn in Vegas, Fontainebleau, Fine Cotton R.I.P.

In defense of Reid's largesse; Cosmo craziness

My take on Sen. Harry Reid (D-NV) and his "casino bailout," as one reader has described it, drew the following response from MGM Mirage spokesman Alan Feldman, which is reprinted below with his kind permission. I note only that my objection has to do with the principle of the Reid-sponsored deferral — which I called "skanky" — and not whatever dollar savings are realized thereby.

By the way, saw your well-written piece slamming Harry Reid for his support of the tax deferral portion of the Stimulus bill. I must respectfully disagree with the opinion you presented. This is a tax deferral, not a give-away. And it is only possible if we purchase our debt at reduced prices because of the collapse in the markets. Besides, the fact is that the amount of these tax deferrals is relatively small taken in context. By way of example, we are in the midst of a $9 billion investment in CityCenter and the entire benefit of the deferred taxes … is only several million dollars.  We will use this cash flow benefit this year to further invest in the project and, once open, pay the deferred taxes from the cash flow the project generates.

In any event, we will pay several tens of millions in Federal taxes this year, far more than the amount this benefit defers.

There may well have been some things to complain about in the Stimulus bill.  I simply don’t think this was one of them.

P.S.: In case anybody didn't see it, there's a crazy-sounding item that made Debtwire this week, saying that Deutsche Bank was poised to hand the Cosmopolitan over to MGM Mirage, along with a loan of $1.2 billion to finish CityCenter. There seems to be general agreement that this is about as far-fetched a scenario as they get, but I also hear that something like it is the only way Deutsche Bank is going to be shot of that white elephant. If the bank were to, in essence, pay someone to take the $2.8 billion Cosmo off its hands, it would be an act of desperation the scale of which we've never seen.

Posted in Cosmopolitan, Economy, MGM Mirage, Politics | Comments Off on In defense of Reid's largesse; Cosmo craziness

Joint 2.0

Yesterday, a large gaggle of local media traipsed through the Hard Rock Hotel & Casino's in-progress new version of The Joint (or Joint 2.0, if you will). Those on hand included Mike Weatherford and Jason Bracelin from the Las Vegas Review-Journal, City Life's Mike Prevatt and Dave Surratt, as well as a gushy, gung-ho reporter from KLAS-TV, among many others (but not "the Hindenburg," thankfully).

As is the case with many a hard-hat tour it bordered on pointlessness, in that you're looking at an empty concrete shell much of the time. Only the stage (40 feet deep, with a 69-foot proscenium) actually resembled what it will eventually become. The stage's dimensions, we were informed, match those of the Aladdin Theater for the Performing Arts … site of ABBA's only Las Vegas appearance, by the way.

Why these preview tours aren't given when the facility is in some semblance of finality is one of the enduring mysteries of Las Vegas. Hence, computer-generated renderings will have to provide an idea of the finished product, which ought to look very much like this:

All those seats can be stored beneath the stage on a series of beds that roll out at the touch of a button, yielding this look:

As you'll see, the sound-and-lighting booth has been moved to smack-dab in the middle of the main floor. Not only will the stage be flanked by giant video screens, a third, even larger one (18' X 24') will hang at the rear of the set. Other technical specs include:

A 96-channel mixing board • 12 subwoofers, distributed in clusters of three apiece • 23 "delay" loudspeakers (presumably to simulate the resonance that is being soaked by the acoustical-absorption material that will cover many of the surfaces) • 38 small-ish flat-screen TVs • four video projectors • 28 moveable lights • a live-blogging station for media coverage • WiFi access throughout.

As big as it looks, the furthest seat is 155 feet from the stage and I can report that the sightlines are excellent (something that could not always be said of Ye Olde Joint, with its flat main floor). If your taste runs to blood sports, Joint 2.0 can be rejiggered to host wrestling, boxing and mixed martial arts, like so:

HRH exec Paul Davis said the goal of the new facility was to cosset "arena-sized productions in a small-capacity [4,000-seat] venue." Why upsize the old Joint? The market has changed, particularly in terms of the size of the shows — and the guarantees demanded by the artists themselves. ("We're doing our best to keep ticket prices in check," Davis promises.)

Aforesaid artists shan't have to mingle with regular people, as they can go straight from a loading dock that accommodates three buses or trucks to a four-dressing-room backstage area, augmented with a luxurious green room. The latter is connected via a spiral staircase to Wasted Space, if the artist feels like a late-night jam session.

Keeping with the current Vegas spirit of pointedly sequestering the haves from the have-nots, the second floor of Joint 2.0 is all-VIP. The side balconies will be outfitted with highboy tables (it's standing-room only one floor up) and the middle of the tier is given over to seven luxury suites, approximately 430 square feet apiece. Some can be made even larger still, thanks to retractable walls. There is seating for 12 or …

… an ottoman-laden lounging area, if you can't be bothered with watching the concert. Back on the main floor …

… the foyer and back-bar area are spacious indeed. The style of the railings (not shown) is carried over from the previous Joint. The walls are done in the style of a guitar fretboard, one which we were assured is musicologically correct.

The HRH was able to obtain Paul McCartney as its first superstar act because — as Davis put it — "He wanted a down-and-dirty, old-fashioned rock 'n roll show," where he could see "the fans right down in his grille" The fact that the Joint's opening coincides with McCartner's Coachella gig didn't hurt either. General Manager Yale Rowe said "all the stars aligned" to land McCartney in the HRH's lap. "We were quite conscious of having multiple styles [of music]. We wanted to have a mega-concert that was going to open The Joint."

Open the doors and see all the computer-generated people!

Back when Ed Scheetz was still calling the shots at HRH minority owner Morgans Hotel Group, he identified Priority One as raising ADRs at the property. Rowe says that goal met with "great success" initially, when the Vegas market was at its zenith. "The consumer is almost dictating what the price points are going to be [now]," he added, noting that the Hard Rock's room rates aren't as resilient as those for most Morgans properties, though not as depressed as those of Vegas in general.

The Joint represents $60 million of a $750 million expansion, stacked atop the $770 million Morgans (or rather, its bank) paid to acquire the HRH. Much of that money is also going toward 60K square feet of convention and meeting space. Hence the 860 additional hotel rooms, in two towers, that are coming on line in August and December, respectively.

Another reason for the more-than-doubling of the property's room capacity is that, according to Rowe, the HRH has been doing spectacularly well with high-end play, save one respect: "We haven't had the room space that satisfies their discerning requests." And anyone who's followed the "Omar" Siddiqui* scandal knows just how unpleasant a dissatisfied high roller can be — sort of like unfed infants, only more hysteria-prone.

(* — Turns out Siddiqui's luck wasn't entirely bad. It seems he cleaned the clocks of Tim Poster and Tom Breitling back when they owned the Golden Nugget.)

HRH officialdom keeps voicing the refrain that their project has been "fully financed" since Homer was a pup. In light of this, a question was irresistible: Why didn't Morgans finance its pre-existing commitment to Echelon instead of channeling all that dough into the Hard Rock? How did the latter jump to the head of the financing queue? (It was Morgans' terminal fecklessness that helped send Echelon into cold storage, though that may yet prove a blessing in disguise.) Morgans says they'll get back to me on that but I'm not holding my breath.

While gambling still represents but a third of the HRH's cash flow, Rowe adds that he "always gave Hard Rock the credit for debunking the theory that all the revenue had to come through the casino." He also praises Peter Morton's regime for proving that the pool could be a major source of lucre. As for the current decline, he says it's consistent across all departments of the property. Allowing that it's "tough not to clamor up and play defense all the time," Rowe says, "We still succeed in getting volumes of people" into the place … although the casino floor was utterly dead on Thursday. It can't help that construction has rendered the HRH damn near inaccessible.

The only bad news regarding The Joint is that, from the outside, it looks like somebody has flung a big-ass, off-white warehouse on the Paradise Road side of the HRH. Between that and a new parking garage and hotel tower on Harmon Avenue, Morton's original boutique hotel is almost completely masked from the street. A couple of Hard Rock neon icons on the exterior of Joint 2.0 will provide scant relief from what can only be described as a ghastly design miscalculation.

At least this will remove any ambiguity from giving directions to the HRH in the future: "It's the huge, fugly jumble of stuff down there; you can't miss it."

Posted in Architecture, Boyd Gaming, Current, Economy, Entertainment, Morgans Hotel Group, Technology | Comments Off on Joint 2.0

Packer steps in it again

Now aren’t you glad that the Nevada Gaming Control Board and Gaming Commission were so quick to give James Packer the green light to own Cannery Casino Resorts? Not only is he facing an unfolding scandal in Australia, two casinos he co-owns in Macao have been tied into a high-profile bribery case. Whoops.

When asked for comment, Packer’s Crown Ltd. passed the buck ($1AU) to Melco Crown Entertainment, in effect dumping the matter in the lap of Packer partner Lawrence Ho. Considering that Packer/Ho’s City of Dreams was built on land earmarked for an institution of higher learning — without even waiting for formal rezoning approval — this could stir serious backlash in Macao. Foreign-born casino owners are the villain of choice this season, perceived to have their thumbs on the scales of justice.

Who knows? Maybe the younger Ho or one of his associates did grease somebody’s palm. However, the casino career of the Packer scion continues to be a catalogue of missteps and misfortunes. Vegas will make short work of him … if he’s still allowed to set up shop here.

Posted in Australia, Cannery Casino Resorts, Macau, Melco Crown Entertainment, Regulation | Comments Off on Packer steps in it again

How desperate is Scott Butera?

Perhaps sensing that the Tropicana Atlantic City is slipping irretrievably from his grasp, Tropicana Entertainment CEO Scott Butera has taken his case to the media — seeking an audience with the editorial board of The Press of Atlantic City, no less. Butera has a persuasive manner, as you'll hear in the attached audio excerpts. Repositioning the Trop as a smoke-free property seems a bit out there but it has the virtue of novelty, so let's give it the benefit of the doubt. (There is a serious disconnect, though, between what Butera thinks the Trop to be worth and what the market is telling him.)

Butera's real sales job is going to be with the hard-to-convince New Jersey Casino Control Commission, of course … a task not made any easier when TropEnt sole shareholder William J. Yung III popped up at a New Jersey Supreme Court hearing on the Trop's fate, about as welcome a sight as Banquo's Ghost. Short of drawing and quartering Yung in front of the assembled NJCCC, I'm not sure what Butera can do that will guarantee him a fair hearing.

He might have one ace left to play by throwing his support to Carl Icahn's mooted stalking-horse bid. Even if Icahn doesn't really want the Trop, the mere possibility that he could throw all or most of $1.4 billion in secured debt onto the table should force rival bidder Cordish Co. to either pony up some real money (instead of incessantly haggling) or drop out. Of course, Butera needs Icahn more than Icahn needs him; the old corporate raider could always rustle up Richard Brown and the rest of the old ACEP band and run the Trop himself.

Still no word on whether Colony Capital will be run out of Resorts Atlantic City or not. The NJCCC is playing this close to the vest. From a logical standpoint, Colony's argument that Column Financial can't be allowed to take over because the latter doesn't have a gaming license (and never mind that Colony is three months in arrears on its mortgage) is silly. It's like saying your banker can't repossess your car because he doesn't have a driver's license.

However, the law is something else again and Colony appears to be on firm ground there unless Column can make the case for a state-run trusteeship. Not that such an arrangement worked out entirely well in the case of the Trop.

Posted in Atlantic City, Carl Icahn, Colony Capital, Marketing, Regulation, Tropicana Entertainment | Comments Off on How desperate is Scott Butera?