New blogs on the block

A couple of new bloggers just rode into town, meaning I’m going to have raise my game a bit. Actually, they’ve been in town for quite a long time and know where many of the bodies are buried, but are relatively new to the blogosphere. One is Jeff Burbank, whose contrarian Las Vegas Downtown News doesn’t pull any punches. (Though I wish he’d turn his sights on those do-nothings at Tamares Group.) Burbank is also noteworthy as the author of License to Steal, the standard reference work on gambling regulation in Nevada. I always keep a copy within reach.

Over at the R-J corral, Howard Stutz is doing an online version of Inside Gaming. He’s only been at it for a few days and, for the moment, it’s a sort of parking lot for items that don’t quite merit a full news story but are too worthwhile to be tossed aside. Besides, it’s not like the guy isn’t criminally overworked already. His R-J masters expect multiple bylines per day (and sometimes multiple updates of the same story, too), plus his Sunday column plus contributions to the Las Vegas Business Press. So I wouldn’t blame him if he looks on this “opportunity” more as an additional burden.

Dig these dancing queens while yet you may.

As we’re now one month and counting from the closing night of Mamma Mia! at Mandalay Bay, let’s pause for a bit of good news. Not only has the celluloid version become Britain’s highest-grossing film of all time (unadjusted for inflation), but first-day sales of the DVD outshot previous record-holder Titanic by 34%. It’ll be a shame to lose the best show on the Strip but The Lion King isn’t exactly chopped liver and — best of all — it’s not giving ground to another Cirque du Soleil show. If Cirque ever gets its Silly Putty-covered mitts on ABBA, I’m going to enter a Trappist monastery.

Posted in Current, Downtown, MGM Mirage, Movies, The Strip | Comments Off on New blogs on the block

Quote of the Day

"The massive staff layoffs, the turnover in senior management accompanied by their replacement with personnel with less extensive casino management experience, the cleanliness crisis experienced in the late winter-spring 2007, the regulatory violations directly related to inadequate staffing, and the failure to recognize the immediate need for a conforming independent audit committee, and the intransigence in adopting a conforming committee, all attest to the ultimate conclusion that the Tropicana AC license should not have been renewed," — written opinion of the New Jersey Supreme Court, applying a rhetorical boot to the posterior of Columbia Sussex.

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

Palace more ‘impotent’ than ever

More nails are being pounded into the coffin of the Imperial Palace. The official word is that eateries The Ming and Cockeyed Clam are closed for good. As for the others, operating hours are being truncated “periodically. Nothing is written in stone.” Not even the future of “Impotent Palace,” it seems.

G2E attendees taking the monorail north to the Las Vegas Convention Center were treated to the daily spectacle of Harrah’s Entertainment demolishing the last of the apartment buildings that sat on the acreage it’s accumlated between Audrie and Koval lanes. Now it’s nothing but magnificent desolation, save for some fugly, Continue reading

Posted in Columbia Sussex, Harrah's, Tropicana Entertainment | Comments Off on Palace more ‘impotent’ than ever

Sally Rand has left the building

That corpse you may have stumbled across while strolling the riverbanks of Pittsburgh is Pennsylvania’s ‘one and one-third‘ rule. It was a legislative fig leaf whose ostensible purpose was to prevent the prime casino/racino opportunities in the state from being gobbled up by a couple of operators. It’s what helped doom Harrah’s Entertainment‘s bid for a Pittsburgh casino, as few seemed willing to believe Harrah’s was merely the minority investor/advisor it said it was. (Since Harrah’s was already the owner of a racino in Chester, Pa., that scotched its chances for more than a 33% share of anything else.)

So Pittsburghers got Don Barden instead. Didn’t work out too well. (Then again, who could have predicted Harrah’s would be in the parlous financial health from which it currently suffers?)

Anyway, earlier this month, Pennsylvania’s Gaming Control Board bowed to the inevitable and transferred the Pittsburgh license to developer Neil Bluhm, owner of the as-yet-unbuilt SugarHouse Casino in Philadelphia. Which means that the Pittsburgh project will actually get done now. But …

Although Bluhm technically holds only a small stake in the soon-to-be Rivers Casino, the license is in his name. And a Bluhm-controlled entity, Walton Street Capital, is one of the major stakeholders. And the CEO of the project is Greg Carlin, who also just so happens to be CEO of SugarHouse. (Lest it be unclear, in my opinon — not that it matters — Bluhm has an admirable track record as a developer and is the sort of corporate citizen the casino industry needs.)

So let’s call out the 1.33 rule for the fiction it has become. If the PGCB isn’t going to enforce it in other than the most cosmetic fashion, the Pennsylvania Lege should repeal it. This fan dance isn’t fooling anyone.

Speaking of Neil Bluhm, he and Greg Carlin have turned up in Illinois, where they’re amongst the bidders for the state’s 10th and final casino license. The deleterious financial effects of the Illinois smoking ban and the state’s staggering tax rates on casinos have scared off all but a trio of no-name outfits: Bluhm’s Midwest Gaming & Entertainment, Waukegan Gaming and Trilliant Gaming, steered by the Flying Dutchman of the casino industry, Alex Yemenidjian.

The former MGM Mirage and film-studio exec tried to jimmy his way back into Vegas this year, asking a federal bankruptcy court to force Tropicana Entertainment to accept a loan from a Canadian firm with which Yemenidjian had become affiliated. Bluhm, whose base of operations is Chicago, might have a “home field advantage,” but he’s crying foul over Yemenidjian’s opening gambit. The erstwhile casino executive is plunking down a whopping $435 million to, in effect, buy that 10th license. Crass? Yes. Persuasive? Undoubtedly.

Bluhm, by contrast, is offering only $100 million upfront, followed by a series of conditional $10/year payments. Waukegan Gaming effectively splits the difference, bidding $225 million for the license. If Yemenidjian is going to throw $435 million at the license alone, that raises the question of whether he’s robbing Peter to pay Paul: i.e., Will commensurate capital be available to build the casino? (Magic 8 Ball says, “In this economy?!?“)

Help the Neon Museum. All it takes is two clicks of your mouse. Just go to Hampton Inns‘ Nevada Landmarks page and click on the “Vote for this Landmark” link for the Neon Museum (or the Nevada Northern Railway Museum or Carson City’s Children’s Museum of Northern Nevada, if you’re so inclined). The winner of the plebiscite will receive a donation from Hampton Inns at year’s end. Thank you, Hampton. You’re a class act.

Posted in Don Barden, Downtown, Harrah's, Illinois, Pennsylvania, Regulation, Tropicana Entertainment | Comments Off on Sally Rand has left the building

Packer's reverse Midas Touch

Remember what I wrote yesterday about James Packer being bad luck for everything with which he gets involved? Now Station Casinos is the latest victim of his reverse Midas Touch (and he owns a portion of Harrah's Entertainment, too). Maybe we should be hoping his purchase of Cannery Casino Resorts doesn't go through, because Dame Fortune is not smiling upon the heir to Packer billions these days.

Posted in Cannery Casino Resorts, Harrah's, James Packer, Station Casinos | Comments Off on Packer's reverse Midas Touch

Case Bets: Hooters; Defection at Borgata; Yung vs. Butera

"All of the economists who gave us information predict 2007 is going to be a year where the economy slows throughout the country and Nevada. Then we will see a pickup in 2008-09." — Deborah Pierce, CFO, Hooters Hotel, Las Vegas, November 2006

With prognositication like that, no wonder Hooters has consistently fallen short of expectations.

Mullin mulls Oz offer. Shortly after he had to pink-slip several hundred employees, Borgata COO Larry Mullin relieved himself of duty. He's not falling on his sword but moving to greener pastures instead, becoming CEO of the casino division of Australian gambling firm Tabcorp. Which means he'll have four casinos to operate, not just one. Boyd Gaming's Bob Boughner, left twiddling his thumbs after Echelon's plug was temporarily pulled, will fill in at Borgata. Congratulations to Mr. Mullin on his new opportunity.

Leap of faith. Sure enough, it looks like any hopes Tropicana Entertainment CEO Scott Butera had of getting back into the good graces of the New Jersey Casino Control Commission took a massive hit below the waterline. They were torpedoed when Columbia Sussex CEO William J. Yung III unexpectedly paid a visit.

Why U-Boat Yung surfaced at the New Jersey Supreme Court hearing and where the heck Butera was is a good question — as is how Butera managed to get blindsided by this PR disaster. Does Yung still fancy himself the string-puller at TropEnt? Was he trying to stick it to Butera somehow? Or was this merely another example of Yung's professed — and sometimes demonstrable — cluelessness about virtually everything on Planet Earth, up to and including documents he signs.

In any event, the sole shareholder of the company Butera ostensibly controls just trampled him like a rogue elephant. The odd Yung-Butera dynamic suggests conjoined twins who aren't on speaking terms but can't be surgically separated either.

If the NJCCC can somehow ignore the Yungian elephant in the middle of the room, there's a good argument to be made for letting Team Butera have a crack at the Atlantic City Tropicana … especially after a state-appointed trustee left hundreds of millions on the table in a bungled sale of the property. But that's a mighty big "if" and the NJCCC probably hasn't the faith sufficient to make that leap.

Posted in Atlantic City, Boyd Gaming, Columbia Sussex, Economy, International, Regulation, Tropicana Entertainment | Comments Off on Case Bets: Hooters; Defection at Borgata; Yung vs. Butera

G2E scuttlebutt

Could Herbst Gaming President Ferenc Szony be headed to the Cosmopolitan? That was one of the rumors bruited about at G2E last week. It would make sense. Szony, one of S&G's favorite gaming executives, is no stranger to operating in difficult markets. Right now he's got the unenviable task of pulling the Herbst Gaming jalopy out of the deep ditch into which the Herbst brothers piled it.

Also, the Cosmo still has no gambling expertise on board, a glaring omission for a casino-based property that's already got more than a couple of strikes against it. In Reno, Szony's had to keep the Sands Regent afloat in an out-of-the-corridor location and a declining market … and by all accounts, he's succeeded. He's got the right stuff, casino-wise, and should have been running a Strip property years ago. If the Szony-to-Cosmo rumor isn't true, it should be.

 

Fontaine-blown? While over at the Convention Center, I heard a dire forecast regarding the future of Fontainebleau Las Vegas. Namely, its splendid isolation, surrounded by various 'failsinos' like Crown Las Vegas and Echelon, may result in very attenuated business. One greatly hopes otherwise, but don't discount the James Packer Factor: The Aussie heir has displayed a reverse Midas Touch of late and he's a key Fontainebleau investor.

Not a Harrah's property.

The 11% Solution. More grim news from G2E — Harrah's Entertainment is contemplating cutting its maintenance budget by as much as 89%. Considering the disgustingly filthy condition of the Harrah's Las Vegas parking garage last Thursday night, I believe it. That place looked like it hadn't been swept up in weeks, if not months (though the casino itself was quite spic-n-span). The hobo encampment near LVA HQ is quite tidy and well-policed by comparison.

So Frank P. in Negaunee, if you're reading this … beware!

Posted in Cosmopolitan, G2E, Harrah's, Herbst Gaming, James Packer, Reno | Comments Off on G2E scuttlebutt

Vegas electoral oddity

Today's Las Vegas Sun has a precinct-by-precinct breakdown of how President-elect Barack Obama won the Las Vegas metro area. In colorful map form, it shows Obama winning Downtown (handily) and most of the Strip … save for MGM Mirage's string of properties from New York-New York northward through Bellagio. (Yes, you can tell your friends a Republican won "New York" this year.) I'm happy to report that my neighborhood went pretty gosh-darn "blue," while unassailable fortresses of support for Sen. John McCain included CityCenter, The Cosmopolitan and Monte Carlo, along with Summerlin, Boulder City, Southern Highlands and that hotbed of populism, Lake Las Vegas.

Posted in Downtown, Election, Lake Las Vegas, MGM Mirage, The Strip | Comments Off on Vegas electoral oddity

Quote of the Day

“If they don't [know how], it strikes me that they lack sufficient business judgment to be in the industry in the first place.” — New Jersey Supreme Court Justice Roberto Rivera-Soto on Columbia Sussex's inability to form an independent audit committee — or to grasp the importance of doing so — at the Tropicana Casino & Resort in Atlantic City.

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

Atlantic City Death Watch II; Banquo's Ghost

Wow, I never thought we’d have our second installment so hard upon the first. But no sooner had S&G ticketed Resorts Atlantic City for a visit to Intensive Care comes word that it’s going to miss a $10 million loan for which the casino-hotel itself is collateral. Could we actually see a casino shutdown before year’s end?

Don’t ask Colony Capital spokesman [sic] Owen Blicksilver, possessor of the World’s Cushiest Job. Contacted by a reporter, Blicksilver did what he always does: “declined comment.” Colony could conserve some much-needed capital if it’d replace Blicksilver with a tape loop that just utters, “No comment … No comment … No comment” anytime the phone rings.

The long-suffering Tropicana has had to make layoffs, its first of the year. And while its license denial was being litigated before the New Jersey Supreme Court, who should turn up like Banquo’s Ghost (and every bit as welcome, I suspect) but Columbia Sussex CEO William J. Yung III. Irrevocable proxy or no, Yung still hovers far too close to Tropicana Entertainment for comfort. And TropEnt’s recent spate of public statements have not come from CEO Scott Butera but from a PR agency on Yung’s payroll. So much for the ‘new, independent’ TropEnt.

Butera’s big goof. Meanwhile, the long-postponed Casino Aztar sale has definitively gone down the toilet. Butera had a deal in place but elected to renege, on the assumption he could get a better offer elsewhere. He received, in fact, zero offers. While he vacillated, credit markets went south and Eldorado Resorts‘ purchase loan rocketed from an 8% interest rate to a 19% one. Ouch!

So it’s entirely possible that, even though it just received its Indiana gaming license, Eldorado would have found Casino Aztar too rich for its blood and bailed anyway. But had Butera and TropEnt’s creditors stayed on the sidelines instead of booting the ball around, Eldorado would have had to face the state’s wrath alone. Now it looks very much like TropEnt’s grass-is-greener mentality helped scotch the deal, meaning Butera can queue up for a share of the blame, too. Evansville, Ind.’s mayor, Jonathan Weinzapfel didn’t miss the opportunity to remind people that the casino has been doing better since TropEnt management was evicted last spring.

Our long Vegas nightmare is (temporarily) over. Tonight marks the last performance at The Mirage given by Danny F. Gans, whose giant, grinning visage (and even larger pair of biceps) dominates the Strip. Gans will return, sometime in the new year, in what used to be the Spamalot/Avenue Q theater at Wynn Las Vegas/Encore.

We hope he’s able to use the slacktime to get some much-needed rest and recuperation from his grueling four-show-a-week regimen, which would have been the death of many a lesser performer. But not the redoubtable Gans. Nothing short of a five-day work week can stop him. Maybe he can even employ his sabbatical to conjure up impersonations of celebrities who postdate George Burns and H. Ross Perot.

Posted in Atlantic City, Colony Capital, Columbia Sussex, MGM Mirage, Regulation, Steve Wynn, The Strip, Tropicana Entertainment | Comments Off on Atlantic City Death Watch II; Banquo's Ghost

Atlantic City Death Watch

New Jersey's Casino Control Commission has come out with a grim set of numbers regarding gross operating profitability in Atlantic City's casinos during 3Q08. And, as bad as these numbers sound, once the cost of operation is subtracted, a $121 million collective net profit in 3Q07 dissolves into a an aggregate loss of $78.5 million (a -$199 million swing, year/year).

If, to borrow a phrase from Chuck Monster, "flat" is the new "up," there's one clear winner in this bunch, a clutch of casinos that are doing about as well as could be hoped, a few that are cause for concern, and two that need to be rushed to Intensive Care. Without further ado …

1. Harrah's Resort Atlantic City: -2% ($52M profit)

2. Trump Taj Mahal Casino Resort: -13.6% ($35M)

3. Trump Plaza Hotel Casino: -15% ($17M)

4. Borgata Hotel Casino & Spa: -17% ($61M)

5. Bally's Atlantic City: -19% ($43.5M)

6. Caesars Atlantic City: -22% ($49M)

7. Showboat Hotel Casino: -35% ($24M)

8. Tropicana Casino & Resort: -43% ($22M)

9. Trump Marina Hotel Casino: -36% ($7.6M)

10. Resorts Atlantic City: -62% ($3M)

11. Atlantic City Hilton Casino Resort: -73% ($3M)

The argument could be made that Trump Plaza and the Taj were low on the food chain already and had less room to fall. But that could also be said of Trump Marina and Colony Capital's two bottom-tier properties, not to mention the ailing Trop. The fact that Trump is maintaining its margins relatively well (except at the discarded Marina) also supports CEO Mark Juliano's contention that he's operating as thriftily as possible already.

With Station Casinos losing money, Colony can't look elsewhere in its casino portfolio for cash with which to prop up the Hilton and Resorts. Will they still be around when Revel opens? For the sake of their employees, I hope so. But it's not looking good.

Posted in Atlantic City, Boyd Gaming, Colony Capital, Donald Trump, Economy, Harrah's, Station Casinos, Tropicana Entertainment | Comments Off on Atlantic City Death Watch

Where do we go from here?

Let's say, for purposes of argument, that the casino industry has supped full on meta-megaresort development and needs several years to digest the feast. What then?

The answer, to judge by yesterday's G2E panel of design, construction and development experts, is not to stand still. Rather it's to find the near future within the past.

"We have existing facilities that are allowed to get tired," said architect Joel Bergman. Anybody who visited Luxor at the time MGM Mirage took it over from Mandalay Resort Group knows exactly what kind of dilapidation he's talking about. Prudent operators, Bergman argues, will realize that have to have competitive, well-maintained facilities.

Perini Building's Dick Rizzo went one step farther, positing it as an absolute necessity: "You can't let them get tired or they'll lose business." With operators like Harrah's Entertainment and MGM Mirage cutting back maintenance, this thesis is about to be tested.

Besides, tribal casinos are running up Vegas' back, we were told. Bergman says they're not only becoming more resort-like but, "Vegas has, by participating in these, created its own competition." Since they cater to discrete, relatively isolated markets, Rizzo added, their only competition is the patron's amount of discretionary income.

He also had a CityCenter story. Namely, that even while the foundations were being poured, it was still but a nebulous concept and the decision as to what to build was still in flux. Its hotel, retail and convention components have doubled from the original conception, Rizzo disclosed.

That shift of focus is in line with Rizzo and Bergman's concept of the future. The former describes the current crop of casino designs as "all entertainment-driven" because that's the new profit generator. Atlantic City and Las Vegas, Bergman noted, are "going to have to expand what we do well," by dint of expanding retail and convention offerings.

He sees an early 2010 comeback for the casino industry. But Rizzo warned that things will get worse before they get better: "The best we have now is a bear market really and the bottom is yet to come."

Posted in Architecture, Atlantic City, Economy, G2E, Harrah's, MGM Mirage, Wall Street | Comments Off on Where do we go from here?

Case Bets: Ho Tram, Shuffle(d) Master, Ameristar

Tout le monde may be at G2E (albeit 10% less le monde than last year, I’m told) but the big news is happening elsewhere.

MGM Mirage has emerged as the “angel” for the Ho Tram Strip in Vietnam. It’s a sweet deal for MGM, as Mike Aymong‘s Asian Coastal Development Ltd. ponies up the $4.2 billion construction cost, while MGM lends its brand name and operational expertise (in return for a fee) to an 1,100-room hotel but is spared any exposure. ACDL will also receive the benefit of MGM’s marketing abilities. An empty stretch of Vietnamese beachfront suddenly looks a great deal more like a viable resort project.

Per Joel Bergman’s remarks, given on Monday, about MGM putting property on the block, Marketwatch confirms it. MGM President Jim Murren says “non-core assets” are for sale, including undeveloped land on the Strip. So maybe City Center II, including “Atlantis Vegas” isn’t happening after all.

Shuffle Master gets shuffled. The deck of executive cards at Shuffle Master just got run through the shoe. Senior VP Brooke Dunn is being placed on leave, at least for now. The SEC is recommending civil litigation against him pursuant to alleged insider trading. Dunn’s accused of tipping an unidentified third party to Shuffle Master inside dope.

Splitting kings. The chairman and CEO roles at Shuffle Master are being cleaved apart, with board member (and former Greenspun Corp. exec) Phil Peckman assuming the chairman’s gavel. Outgoing CEO Mark Yoseloff stays in that role, as the company’s search for a replacement continues … and continues. Presumably to further ensure stability, three veteran Shuffle Master execs — Perry Lopez, General Counsel Jerry Smith, and Roger Snow — have all been named executive veeps.

Ameristar Casinos continues to run up the white flag, laying off over 5% of its Missouri workforce. This is ironic, considering that Ameristar was the author and prime backer of the constitutional amendment that will remove the state’s “loss limit” — a change that will redound to Ameristar’s financial benefit. Although the amendment’s passage is expected to widen the gap between the “haves” (Ameristar, Pinnacle Entertainment, Harrah’s Entertainment) and the “have-nots” (Isle of Capri and several independent operators), Ameristar is acting like it came out on the losing side.

Posted in Ameristar, Current, Economy, Harrah's, International, Isle of Capri, MGM Mirage, Missouri, Pinnacle Entertainment, Shuffle Master | Comments Off on Case Bets: Ho Tram, Shuffle(d) Master, Ameristar

Butera up to old tricks; Dog days for Ruffin; Fowl play

Grasping at straws in his attempt to wrest control of the Tropicana Casino & Resort back from the New Jersey Casino Control Commission, the CEO of Tropicana Entertainment, Scott Butera, has seized upon a letter from state Sen. Richard Codey. In his Nov. 14, 2007 missive, Codey requests that Unite-Here Local 54 be allowed to intervene in NJCCC hearings against TropEnt owner Columbia Sussex (which, back home, was the beneficiary of some rare — but no doubt welcome — good news).

Codey’s letter, Butera’s lawyers contend, smacks of “political interference” and tipped the scales of justice against ColSux.

But Local 54 was only allowed to make a statement toward the proceedings’ end, not be an Continue reading

Posted in Atlantic City, Columbia Sussex, G2E, Harrah's, Kansas, Marketing, Mississippi, Regulation, Tropicana Entertainment | Comments Off on Butera up to old tricks; Dog days for Ruffin; Fowl play

Fire sale at Harrah's, MGM?

That was one of the bombshells dropped this morning at Global Gaming Expo. According to a member of a "state of the industry" panel of G2E's Casino Design track, Harrah's Entertainment has several unprofitable properties that were for sale. "Now I believe any of [Harrah's casinos] are on the block," he said, adding that similar things could be said of MGM Mirage.

Architect Joel Bergman revealed that he'd laid off 29% of his staff last week: "Work has simply dried up." Perini Building's Dick Rizzo added that Kerzner International is still "bullish" on City Center II, at the north end of the Strip and its centerpiece will be an exact reproduction of the company's Atlantis Dubai resort (plus casino, presumably).

Dubai and Abu Dhabi were identified by Rizzo as two of the main growth pipelines that continue to flow. So does the California tribal-casino market, along emergent casino markets in New York State and Pennsylvania. He's also working with the Seminole Tribe in Florida, where two Hard Rock-branded casinos will double in size, starting next spring.?

As for job cutbacks in the tribal market, Rizzo doesn't think those are economy-driven but "an excuse to get leaner." He defended MGM Foxwoods as a victim of poor timing, saying it can't be judged on current performance. He pointed out that the soft debut of MGM Foxwoods prompted the mothballing of a similar expansion at nearby Mohegan Sun.

Rizzo shrugged off the implications of server-based gambling: "The public sees the casino the same way." And while he saw no prospect of non-gaming Strip resorts, off-Strip ones are conceivable. Given the current condo glut, Trump International and others are looking to convert those properties to pure hotel plays, at least until the market takes a more propitious turn.

Recently, MGM Mirage spokesman Alan Feldman took up President Jim Murren's contention that we may not see new construction on the Strip for a decade (does that make it a "meme"?). Panelist John Restrepo interprets that as a way of saying, "We don't know" where the world is going and "a bit of an overstatement," reflecting what Donald Rumsfeld infamously called "known unknowns."

Per S&G prediction, we're seeing a market correction in the prices paid for land on the Strip. Restrepo says the value per acre has readjusted -25% to -30% and even more so elsewhere in Las Vegas, including the corridor south of Mandalay Bay. Still, lenders are now requiring as much as 50% equity before they'll commit to a project, Restrepo notes

Restrepo also doubts the viability of the "If we build it they will come" paradigm that has so long served Las Vegas. Besides, it still remains to be seen whether Joe the Player is tapped out … and Restrepo hears that a wave of car repossessions is imminent.

That being said, his company is performing feasibility studies for new projects, even if those developments are going to have be put on ice until a few years hence.

Posted in Architecture, California, Donald Trump, Economy, G2E, Harrah's, International, MGM Mirage, The Strip, Tribal | Comments Off on Fire sale at Harrah's, MGM?

Quote of the Day

"I was ahead of the curve." — Columbia Sussex CEO William J. Yung, taking credit for being the first casino owner in Atlantic City to engage in massive layoffs and service reductions.

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

Aristocrat @ G2E

Aristocrat Technologies previews its new slot products. Try not to get carried away by President Nick Khin‘s enthusiasm.

Posted in Aristocrat | Comments Off on Aristocrat @ G2E

Indiana: It's all relative

Sifting through my massive pile of unwritten Questions of the Day and unstudied analyst reports, we come to Indiana's October revenues. Ultimately, whether any particular metric is good or bad depends on context and perspective.

To start with the big number, revenue was up 14% from October '07. But that turned into a 1% decline once new racinos Hoosier Park and Indiana Park were sifted out, and goes even lower if you minimize the numbers from the recently augmented Horseshoe Hammond. So, whatever "bounce" Indiana is getting from the smoking ban in Illinois, it's being diluted by gambling expansion within the Hoosier State. So it's good for tax coffers, not so good for individual operators.

Harrah's killed with Horseshoe Hammond, which is more like an aircraft carrier with slots than a casino. But it proved a potent "one-ship task force" (a sometimes sacrcastic nickname given the U.S.S. Boise after it claimed to have sunk six Japanese ships at the Battle of Cape Esperance), more than making up for declines at Horseshoe Southern Indiana. Hammond revenues went up 52% and Harrah's overall take rose 20%.

Despite the panicky attitudes manifested of late at Ameristar Casinos, its East Chicago property was off but 3.5%, despite the Horseshoe Hammond factor, which ate far worse into Don Barden's Gary, Ind., flotilla.

What to make of Blue Chip? To see the glass as half-full, the double-digit revenue declines that began in August '07 are slowly starting to narrow. Business has been off as much as $10 million year/year, and October's 18% decline comes atop a 22% declivity the year before. But it looks like Blue Chip is going to bottom out at 60%-65% of its former market share. And it was Indiana's seventh-winningest casino in October, keeping Boyd Gaming out of the bottom tier.

Down south, only Casino Aztar showed revenue growth (5%), which continues to validate current management's aggressive mindset — but business still hasn't returned to pre-Columbia Sussex levels. As for French Lick, so long hyped as a casino destination, so greatly anticipated, it has proven Indiana's most disappointing market. It's the least-lucrative in the state and continues to give indications of having peaked.

Slots are tight at Belterra. How else to explain a 10% win increase on -14% handle? The last time somebody managed a feat like that He fed a large crowd with but a few loaves and fishes.

Posted in Ameristar, Boyd Gaming, Columbia Sussex, Don Barden, Economy, Harrah's, Illinois, Indiana, Pinnacle Entertainment | Comments Off on Indiana: It's all relative

Shut up yourself

New York-New York‘s obnoxious new ad campaign, “comes right out of an honest voice,” says ad exec David Angelo. “Stop your whining and have a great time.”

It’s “an honest voice,” all right: That of Phil Gramm, who famously called us a “nation of whiners,” victims of a “mental recession.” And that message resonated so very effectively, didn’t it?

I’m guessing Angelo and MGM Mirage decided the slogan “Give us your money, chump” was excessively subtle.

A third-quarter loss is hardly good news, unless you’re Sheldon Adelson and your company’s red ink actually narrowed from 3Q07. Too bad about St. Reggie’s, though.

Then there’s Ameristar, which increased revenues by $56 million, turned a profit — and yet all it can talk about is cutting jobs and sweating comps even more than it already has. Ameristar’s embrace of “death spiral marketing” is further evidence — if any were needed — that this company is adrift, lacking any forward-looking strategy.

Posted in Ameristar, Marketing, MGM Mirage, Sheldon Adelson | Comments Off on Shut up yourself

Gaming bosses step up

While some casino companies we won’t name (coughBoyd Gamingcough) are responding this week to the bad economy with downsizing their workforce, others are setting a nobler example.

Executives at both Isle of Capri Casinos and Trump Entertainment Resorts are literally taking it in the wallet, sharing the pain that is customarily meted out to line employees. Trump spreads the sting of a 5% salary decrease across 21 executive positions. But even that noble gesture pales next to what happened at Isle. CEO James Perry, COO Virginia McDowell, Chairman Bernard Goldstein and Vice Chairman Robert Goldstein imposed a 25% — 25%!!! — pay cut on themselves, retroactive to Nov. 1. (You see why these are some of the most admired executives in the casino biz.)

Both companies are in serious turnaround mode and leadership is really putting its money where its mouth is with these sweeping moves, which should be a tonic for corporate morale. Isle will also be a little heavier in the wallet now that Executive Vice President Allan B. Solomon has stepped down and no replacement has been named. Solomon was part of the old Goldstein crew that led Isle to prominence but arguably stuck around too long while other companies caught up with and passed them.

Recently, MGM Mirage made a big show of forgoing end-of-year bonuses but, as you read here, that was a sham. Show me some Vegas bigwigs who did what the Isle and Trump brass did and then we’ll talk. So might ex-Borgata dealer Stanley Silow, who took issue with management’s resort to the meat-cleaver approach: “They’re kind of cold about it. I know business has declined and all that, but they didn’t even attempt to reduce hours. They just cut.”

The morale-boosting gesture at Trump couldn’t come at a timelier juncture. Third-quarter numbers were horrible, representing 74% of the $188 million TER has lost this year, including a $46 million markdown on the sale price of Trump Marina and a further $62 million, Marina-related writedown. The company says it hasn’t laid off any employees this year (though some attrition appears to be taking place), which bolsters CEO Mark Juliano‘s contention that staff can’t be reduced any further without shuttering big chunks of the operation. If there’s a silver lining, it’s that most of the lumps taken were in the nature of one-time charges and most of whatever bruising is likely to be done to TER this year has been done.

A guy who ‘gets it.’ Few TV reporters display any degree of expertise when covering the casino industry. A sterling exception is KVBC-TV‘s Steve Crupi, as this report on the potential collapse of Las Vegas Sands demonstrates. Very thorough. Crupi really knows his shit — though I don’t think he’ll put that quote on his resumé.

Posted in Atlantic City, Boyd Gaming, Isle of Capri, MGM Mirage, Sheldon Adelson, TV | Comments Off on Gaming bosses step up