Robbing Luxor to pay (for) CityCenter?

Posted on August 6, 2008 by David McKee

No sooner had MGM Mirage brass sprayed Wall Street’s fire during yesterday’s earnings call than comes a new scare: Glenn Hausmann of Hotel Interactive Inc. reported that “A variety of industry suppliers who wished to speak off the record have told Hotel Interactive that the company has been diverting cash from planned renovations at Excalibur and Luxor into the CityCenter project.”

A source at MGM responds that Hausmann’s got it half right, that spending reductions are taking place, but: “The changes in project spending are not as a result of diverting funds to CityCenter.” The source adds that Hausmann has subsequently spoken with MGM and stricken the paragraph in question, which had followed the quote by MGM CFO Dan D’Arrigo.

Luxor is a potentially problematic situation because it’s still in the middle of a big retheming (or, more accurately, a revision). The spending slowdown might explain why the switchover of the Titanic exhibit from the Tropicana is taking so long. And somebody should clue in the Trop that Bodies is over at Luxor now, regardless of what the Trop’s Web site says.

Posted in Columbia Sussex, MGM Mirage, The Strip | Comments Off on Robbing Luxor to pay (for) CityCenter?

Sands: More is sometimes less

Posted on August 6, 2008 by David McKee

One of the advantages of availing oneself of Las Vegas' public-transit system is that affords me plenty of time to read corporate filings. Such was the case this morning, when I spent some quality time belatedly curling up with Las Vegas Sands' 2Q08 report.

There's been some scattered evidence, here and there, that Palazzo and Venetian are leeching off one another instead of devouring others' market share. For instance, their combined operating income only slightly exceeded that of hard-hit Sands Macao during the first six months of 2008.

But LVS' decision to mulch together several categories of Palazzo/Venetian revenue clouds the picture of each megaresort's impact on the other. Instead of clear-cut comparisons between Venetian and Palazzo retail, entertainment and F&B revenues, LVS offers some cumed numbers for both properties, followed by two paragraphs of uninformative bombast.

The Venetian: older but (performing) better

The most interesting sentence in the entire filing was this disclosure: "The Venetian's occupancy of available guestrooms decreased to 90.6% [in 2Q08] … as we chose to spread a portion of The Venetian's booked business over the 7,100 total suite inventory of the combined Venetian and Palazzo complex." If that means what I think it means, LVS was shifting bookings to Palazzo to bulk up the latter's occupancy rate, which clocked in at 93%. (Venetian occupancy was 101% a year ago.) Although Venetian ADRs were just smidgen higher than Palazzo ones, the latter produced 2% more revenue per room. Overall, a 51.7% increase in rooms brought a 52.6% uptick in room revenues. So far, so good.

Despite a comparable number of table games (131 to 128), Venetian absolutely clobbered Palazzo there, generating 37% more win per table. At the slots, the older property came out 22% ahead, largely by dint of having 300 more machines at its disposal.

The opening of Venetian Macao appears to have really kneecapped Sands Macao. Hotel occupancy actually rose but ADRs plummeted 32%. Slot win per machine was up 16%, perhaps because 305 machines had been yanked from the floor, but slot business was still competitive with Venetian Macao. Table play was better (+14% per table) at Venetian Macao, though, even with a significantly higher number of gambling positions.

Lesson: Sometimes more is more. (Does this make Sands Macao the de facto 'slot joint'?)

In a month Four Season Macao opens, whereupon things should get very interesting. The mid-sized (by LVS standards) Marina Bay project in Singapore is pegged for a 4Q09 debut, but management's official statements are vague about the opening date for Sands Casino Resort Bethlehem. Going with LVS there was one of the relatively few decisions Pennsylvania's gaming commission got spectacularly right, selecting a developer who had the cattle to go with the hat.

Remember: A rival bidder was cheapskate Columbia Sussex, parent of insolvent Tropicana Entertainment, and heaven only knows what a mess the Bethelehem project would be if the Keystone State had gone that route. It might make the Don Barden trainwreck in Pittsburgh look like a mere fender-bender.

It's a metaphysical certainty that, regardless of when it opens, Sands Bethlehem will be the poshest of the Pennsylvania casinos, setting the standard for any that follow. It not only extends the LVS brand (however you define it) into new markets, the cash flow will provide a reassuring hedge against growing (over?)exposure in Macao.

Also, with debt creeping upward — but still well short of backbreaking Harrah's-like levels — and early retirement of same down 62% in the first half of '08 (and practically nonexistent in 2Q08) LVS could definitely use the extra money.

Curtains for downtown arena? Bits and pieces of the acreage accumulated for the REI Neon arena/condo/casino/anything-else-you-can-think-of project are being peddled off. I have to agree with the Sun's editors here and add that I've suspected for a while that REI Neon was but a stalking horse for opening up what used to be (part of) the Arts District to casinos.

Then again, anybody foolhardy enough to build a casino out on that fringe of downtown Vegas would be so isolated from both the Strip and the downtown gaming district that he'd be unlikely to scare up the needed critical mass of traffic. Besides, I don't know if you fellows behind that stalking horse have noticed, but the casino-centric business model has already been tried downtown and found wanting. The word "diversification" mean anything?

Posted in Columbia Sussex, Don Barden, Downtown, Harrah's, Macau, Pennsylvania, Sheldon Adelson, The Strip, Wall Street | Comments Off on Sands: More is sometimes less

Isle reduces risk in Florida

Posted on August 5, 2008 by David McKee

As we’re seeing, it’s not always a bad idea to scrap or delay an expansion. Such is the case with Isle of Capri‘s decision to allow the expiration of an agreement with Florida Gaming Corp. to turn Miami Jai-Alai into a slot parlor. Isle couldn’t even be bothered to announce the news. (Can’t imagine why.)

With the various Seminole casinos ramping up their offerings something fierce, Isle has its hands full defending market share at Pompano Park. The non-tribal Florida market just hasn’t been the bonanza anyone expected and Boyd Gaming‘s decision to hold off converting its own jai-alai fronton now appears prescient. Wall Street reacted favorably, with ISLE continuing to trend upward.

Perhaps we should have foreseen this. The Seminoles had a track record, a customer base, a brand name (Hard Rock) — and now they have table games. Newcomers to the market had a tough row to hoe before and now it looks darn near impossible, unless the Seminoles have to revert to Class II gaming (and that’s unlikely to happen anytime soon). Florida Gaming Corp., meanwhile, will try to find other takers for its faded fronton. Good luck with that.

Bury this in Boot Hill. It looks like yet another Kansas casino proposal may be about to bite the dust. Butler National Corp., a manufacturing concern that’s trying to take a flier into casino ownership (shades of Galaxy Entertainment, right to down to renting the Navegante Group braintrust) is pitching a low-budget, smallish (800 slot) casino. Trouble is, Butler’s a wee bit short on cash and needs an equity partner who will rescue the project but agree to take a back seat.

From Rick Alm‘s description, this is a Hail Mary play by a penny-stock company — a big red flag. However, the Boot Hill Casino that Butler is proposing for Dodge City sounds far more aesthetically appealing that the tacky-looking, theme-park-ish competing proposal. But the latter has the not-inconsiderable advantages of a larger upfront investment and previous in-house casino experience.

If would-be casino operators keep dropping out at the present rate of attrition, the lottery commission’s selection process will become downright Darwinian.

Posted in Boyd Gaming, Florida, Isle of Capri, Kansas, Tribal | Comments Off on Isle reduces risk in Florida

Case Bets: MGM Mirage, Ameristar, Penn National

Posted on August 5, 2008 by David McKee

It almost goes without saying right now that any earnings report is going to come in slightly below Wall Street’s consensus. That’s just the way the dice are bouncing these days. Such is the case with MGM Mirage, where Strip revenues are down 6% year/year, but JP Morgan finds some pleasant surprises in the Beau Rivage and MGM Grand Detroit numbers.

The Strip results also bear out what Majestic Research has been diligently reporting all along — a separation between MGM’s highest-tier properties, Bellagio and Mandalay Bay, which continue to ascend to the top (+14.4% at M’Bay) while the others lag, “especially the lower end.” MGM’s buyout of Mandalay Resort Group looked better on paper than the Harrah’s Entertainment/Caesars Entertainment one because MGM’s risk was spread between all price categories, including the bargain niche. Who could have foreseen this turn of events?

But there are glimmers of light at the end of the tunnel, particularly with regard to Continue reading →

Posted in Ameristar, Colorado, Detroit, Harrah's, Illinois, Indiana, MGM Mirage, Penn National, The Strip, Wall Street | Comments Off on Case Bets: MGM Mirage, Ameristar, Penn National

Ola, Amigo!

Posted on August 4, 2008 by David McKee

As of yesterday, I'm a newly minted Amigo card holder, having joined Station Casinos' spinoff players club for its Fiesta properties. (Chalk up a very modest victory for Fiesta's spirited marketing efforts.) Why Station, having put nearly a decade of effort into building up Boarding Pass, went and pulled it from the two Fiestas in favor of a new card without any brand equity … well, that's a puzzler.

Perhaps its a way of repositioning the Fiestas for sale, though this is a heckuva time to be peddling assets, even if Station has a trainload of debt to pay down. If that's the case (and I'm 101% speculating here), Station wouldn't be the only company in town to discover that it missed the boat when it came to offloading non-core assets.

Whatever the case, I now have $6.63 in "Samurai Master" winnings to show for my shiny new players card. Yup, "whale" is my middle name.

But what to make of Fiesta Henderson? An "Amigo" here and an El Pollo Loco there, and it's still about as Latin as Nelson Mandela in a  sombrero. In the older part of the casino floor the African decor ill-advisedly chosen by original owner Ameristar Casinos is still luxuriating about at every turn. It's not hard to see some of the reasons why, in its original incarnation as The Reserve, this was a rare Ameristar mega-goof, one which has apparently scared the company off the Vegas market to this day.

When it opened, in early 1998, The Reserve was operating in the shadow of Sunset Station (which was also bigger, more fashionable, and a lot closer to where the people were). Even by locals-casino standards of that time, The Reserve had a small casino floor, rendered dark and claustrophobic by the Trader Horn design scheme, with its big fake trees and heavy canopies. Station has considerably enlarged the place and substantially upped the number of amenities. The Station-built side is airier and more appealing, if visually nondescript.

If you look at it from Station's standpoint, with two flagship properties on the Boulder Strip, it made sense not to knock themselves out re-doing The Reserve. They were endeavoring the best of a bad situation: agreeing to take a dud casino off the hands of Craig H. Neilsen so that Station could make a quick getaway from Missouri, where Ameristar assumed control of Station's scandal-brushed riverboats. So what's now Fiesta Henderson arrived on Station's doorstep as sort of a red-headed stepchild and the trick was to make it thrive without eating into business at favored sons Sunset or Boulder Station.

As for the "Fiesta" brand, it was one that George Maloof had grown into marquee value up in North Las Vegas. Unfortunately, Station didn't seem to know what to do with it after buying Maloof out, so now "Fiesta" is just a means of designating casinos that don't rate the "Station" moniker but which are a healthy cut above a Wildfire or a Lake Mead Lounge, to say the least.

So I'm left figuring out where Fiesta Henderson fits into the grand scheme of things. If Arizona Charlie's Boulder has gotten too dingy for you, I can definitely see the appeal. But there's no question that nearby Sunset Station is the infinitely superior casino-hotel product, unless you crave a more a laid-back experience, away from the teenybopper crowd, in which case Fiesta Henderson might float your boat.

Kudos to Fiesta management, by the way, for recycling all the used paper from its bingo rooms. The question for other casinos in town is: Why aren't you doing the same?

Speaking of themed casinos, former bargain-casino mogul Gary Primm is back in the news these days, as though to remind us who we have to thank for New York-New York, home of — among other things — the Strip's most dysfunctional sports book. (You have to sit in the slot stools on the other side of the corridor to see the TV screens without requiring the services of a chiropractor.)

MGM Mirage is in the process of effecting an upgrade on the property, one of several they've had to perform in order to gradually de-Primm-ify it. NY-NY was far from the worst of the hyper-themed casinos (Excalibur, anyone?) but it wasn't until the tail end of the cycle, when Paris-Las Vegas was rolled out, that it seemed possible anyone (the late Arthur Goldberg, in this case) could go that route and wind up with something stylish.

Posted in Ameristar, Boulder Strip, George Maloof, Harrah's, MGM Mirage, Station Casinos, The Strip | Comments Off on Ola, Amigo!

Man Bites Dog Dept.

Posted on August 4, 2008 by David McKee

A Republican senator running for reelection on the strength of his good relationship with … Sen. Barack Obama?!? Between that and the strong possibility that Sen. John McCain could win the presidency and yet see the national GOP sustain tremendous losses, it’s the topsy-turviest election year I’ve ever seen.

Silliest Echelon Objection Yet. While Boyd Gaming‘s decision to mothball Echelon for a year has played to across-the-board raves in the financial community, not everyone agrees. A union exec pouts that the unfinished project will be an “eyesore” that will affront the delicate sensibilities of visitors. (Having 800 of his men suddenly idled surely plays more than a peripheral role in Mr. Ross’ sudden concern for aesthetics.) Heck, there are several eyesores along the Strip already — and they’re open for business.

Update: An analyst for BMO Capital Markets seconds the “eyesore” sentiment regarding Echelon, adding “embarrassment” for good measure. But his overall verdict can be summed up as, Better a loss of dignity now than a loss of money further down the road.

Posted in Boyd Gaming, Election, Politics, The Strip, Wall Street | Comments Off on Man Bites Dog Dept.

Boyd Has Brass Balls

Posted on August 1, 2008 by David McKee

Yesterday, I got a hint that Something Big was going to be announced in today’s Boyd Gaming earnings report. Little did I suspect it would be the completely unprecedented (in my recollection) step of halting a megaresort project in mid-stream and taking 9-12 months to see how the tourism and credit markets shake out. This was a gutsy call, one certain to provoke depression in the local media and perhaps panic investors.

To its great credit, Wall Street not only rolled with the news, it even heaved a collective sigh of relief, rewarding Boyd with a 20% stock price increase in a single day’s trading. Seems that analysts not only doubted Boyd’s ability to pull the project off but feared it would capsize the company, never mind adding to a coming capacity glut along Las Vegas Boulevard. (Perhaps those are the same analysts who want Boyd to sell the land — worth as much as $3 billion — and quit the Strip.)

If I had to guess — and I do, because Boyd is being a bit coy about the timeline of its decision — I’d hazard that it was General Growth Properties‘ 18-month postponement of the High Street mall component that forced the issue. The planned mall anchors the southeast corner of the project and its absence would leave a conspicuous gap, to put it mildly. Then subtract the Mondrian and Delano hotels on the property’s south side, and you’ve wiped the slate clean of most everything on the left side of the above rendering (borrowed from VegasTodayAndTomorrow.com).

Morgans Hotel Group has thrown in the towel on obtaining financing for its two-hotel commitment, making Morgans the skunk at the picnic. It played tattle-tale, rushing out the news of Echelon’s freeze 90 minutes prior to Boyd’s own announcement. The high-end hotelier even had the gumption to issue a press release implying that it was Boyd’s fault the pieces didn’t come together. Boyd came through with its equity, in the form of the land, but Morgans could never get its ducks in a row.

In a sense, the fate of the Mondrian/Delano component was sealed when playboy (ex-)CEO Ed Scheetz went haring off course and bought the Hard Rock Hotel & Casino, for reasons still unclear. (It goes with the rest of Morgans’ portfolio about as well as white shoes with a charcoal gray business suit.) Maybe Scheetz felt a need to outdo predecessor Ian Schrager.

Ed Scheetz, master of disaster

Extended to the limit by its Hard Rock purchase, not to mention a costly series of upgrades and expansions, Morgans seemed to lose sight of its preexisting commitment to Echelon. Instead of wrapping up financing for Mondrian and Delano while the markets were still flush, the company dithered around with trying to fix a property (the Hard Rock) that wasn’t broken and pursuing a Nevada gaming license.

Boyd has indicated that it’s in ongoing talks with Morgans, but that sounds like whistling past the graveyard. Morgans was the first of Boyd’s joint-venture partners to drop the ball, long before GGP did, and Boyd would be well shot of the hotelier that can’t make up its mind. Even now, after initially talking about jacking up ADRs and repositioning the Hard Rock for Morgans’ customer upscale base, it’s done a full 180 and is going into business with porn stars.

If you can filter out the anti-casino rhetoric, Hugh Jackson has an interesting take on What Went Wrong: “... over the years, as Boyd kept making noises about what it would ultimately do with the Stardust site, the company’s eyes just kept growing and growing, and the obsession to become one of the cool kids on the Strip became, well, palpable. It was almost as if Boyd somehow felt that its hitherto dependable revenue model …. was somehow inferior, or distasteful, and in any case not snazzy and glamorous …”

That analysis assumes that something like Stardust 2.0 would cut it on today’s Strip and I don’t for a minute think it would. Just remember what an anachronism the New Frontier became: a stinky dive that was like a B- or C-level locals joint that had been supersized and mistakenly plunked across from the stylish Desert Inn. I don’t know if Boyd bit off more than it could chew (at least in an inflationary market driven by myriad rival condo and hotel markets) but its JV partners sure did.

With Borgata and Water Club in Atlantic City, Boyd has proven twice over that it can execute a high-end property. And even if it were to throw in the towel on Echelon (possibly forever dooming the company to second-tier status in the eyes of the industry and media), this is the worst time to fling 65 acres or so of Strip land onto the market, especially with other properties — Riviera, Tropicana, San Remo/Hooters — going begging.

It took some cojones to make this move. But it was the right one and it’s good to see Wall Street lining up in support.

Posted in Boyd Gaming, Morgans Hotel Group, Riviera, The Strip, Wall Street | Comments Off on Boyd Has Brass Balls

Ameristar: What makes sense?

Posted on August 1, 2008 by David McKee

Perhaps this is what happens when you outsource your business coverage to India, but Reuters had a story yesterday positing MGM Mirage and Harrah's Entertainment as two of the likeliest buyers for Ameristar Casinos.

Uhhh, I hate to break this to Reuters, but MGM just came up $3 billion and change short on CityCenter and Harrah's is debt-strapped. So I'd say they've got their hands full. How either one would be able to swing an Ameristar acquisition is an open question. Harrah's also faces redundancy issues, as it already owns riverboats in three of Ameristar's key markets — Council Bluffs, Iowa, and St. Charles and Kansas City, Mo. Why MGM would feel a sudden hankering for Black Hawk, Colo., plus a brace of casinos in Jackpot, Nev., is even more of a poser.

Reuters' third suggestion, Boyd Gaming, seems a lot closer to the mark. With Echelon temporarily in the deep freeze and Boyd's Blue Chip riverboat leaking market share, a passel of regional casinos in markets where Boyd doesn't currently operate could provide welcome cash flow, shore up the company against its current non-presence on the Strip, and expand the web of properties from which Boyd could funnel players into its downtown Vegas cluster or (eventually) Echelon. Of course, Boyd may still be smarting from a failed Kansas City venture a decade ago, but Ameristar's assets are proven performers.

Besides, it's a company that could use some helmsmanship, having seemed to drift since the demise of CEO Craig H. Neilsen. Although paralyzed from the neck down and often bed-bound (which I've heard resulted in some very unconventional corporate meetings), Neilsen achieved more from the neck up than most able-bodied people do in their entire lifetimes. His successor, ex-Harrah's exec John Boushy, tried to sell the Ameristar people on a change of corporate culture but they didn't want to hear about it. So, given an evident leadership vacuum, a change of ownership makes sense.

Unless Penn National wants to take its $1 billion-plus in "mad money" and go after Ameristar, there aren't too other many potential acquirers abroad in the land. James Packer has already sworn off. Pinnacle Entertainment would rather build than buy. Tribal giant Mohegan Sun has been flexing its financial muscle of late and rates as a longshot candidate (but just came off a wretched second quarter). Beyond that … who knows?

Posted in Ameristar, Boyd Gaming, Downtown, Harrah's, James Packer, MGM Mirage, Mississippi, Missouri, Penn National, Pinnacle Entertainment, The Strip, Tribal, Wall Street | Comments Off on Ameristar: What makes sense?

America's biggest celebrity

Posted on July 31, 2008 by David McKee

Sen. John McCain‘s presidential campaign rolled out a unique tactic this week: complaining that McCain’s opponent is more popular and famous. I suppose you could call it “out of the box” thinking, though it seems a tad whiny to me.

(McCain’s ad about Hispanic-Americans shows a far nobler side and is notable for its sobriety and lack of flash. It also takes some cojones to run it, given the virulent anti-Latino sentiment that infects much of the GOP “base” (in multiple senses of the word), especially here in Nevada.

But the McCain people have it all wrong. America’s heftiest celebrity is 44-pound stray cat Princess Chunk, the heaviest domestic pussycat in the world. This exemplar of avoirdupois is already scheduled to appear on Good Morning America and Live with Regis and Kelly. Surely the Today show is chomping at the bit to get in on the action. News of the giant feline has made headlines at least as far as Australia — although I seriously doubt that an American cat-caregiver would say, “how do you lose a 20-kilo cat?” (Journalistic license, mayhap?)

Even Princess (né Captain) Chunk’s gender is a source of confusion, so we may to settle on plain old “Chunk.” Or “Powder,” its given name. And, in a “ripped from the headlines” touch worth of Law & Order, it turns out that Chunk/Powder is just the latest victim of the nationwide foreclosure crisis. Powder’s elderly owner found herself out on the street and turned the poor — if portly — kitty loose, which is why it was found lumbering about Voorhees, N.J., which sure is getting its 15 minutes of fame.

Anyway, it looks like the behemoth feline will soon find a new home — and if he/she/it doesn’t, maybe Mandalay Bay can give it a comfy domicile. Chunk/Powder might even outdraw that other big bruiser, the Komodo Dragon.

Posted in Animals, Current, Election, Pets, Politics, TV | Comments Off on America's biggest celebrity

Honey, I shrank Lake Las Vegas

Posted on July 30, 2008 by David McKee

Saying that a potentially ruptured pipe could drain Lake Las Vegas and turn it into one big-ass mud puddle in the desert conjures up quite an image. It’s also effective rhetoric if you’re trying to stampede the bankruptcy court into approving a $127 million loan, no questions asked (or at least answered). If asked to make a bet, I’d place my wager with the Nevada state engineer who puts the chances of a big sucking sound at Lake Las Vegas “way out there.” (The big sucking sound that is the resort community’s financial future is another matter entirely.)

And, if it does happen, the first thought that sprang to my mind was the same one that Steve Friess had, namely that the A-list likes of Celine Dion and Natalie Gulbis won’t be any too thrilled “to live around a big, smelly pit full of stuff that reckless boaters have been pitching overboard for years.” Heck, I tried wading out there recently and the lake water is pretty dodgy as it is.

Lake LV is starting to look like the second coming of The Resort at Summerlin, which some may remember as Swiss Casinos‘ vastly overbudgeted venture into the suburban Vegas market. (Its casino is now managed by the Cannery Resorts folks.) Problems like excessive cost and executive hubris aside, R@S failed in large part because it tried to create a market out of thin air: Palm Springs-style golf vacations which would involve coming to Vegas but staying well away from the Strip. As a business model, it didn’t live up the hype.

I’ve held off saying this for a long time, but Lake LV displays some of the same symptoms. It’s too close to the Strip to qualify as a getaway and yet far enough away to make it a real hassle if you want to stay out there and yet still experience Sin City at its finest. (The jury’s still out on whether similar factors will dampen Red Rock Resort‘s high-end aspirations, making it “just” an extremely swanky locals casino with fantastic meeting facilities.)

Not to put too fine a point on it: It’s a pain in the ass to get to Lake LV and some of that appears to be literally by design. Its landscaping and narrow, winding approach connote exclusivity, as does much else there (like the flighty retail offerings). You half-expect snipers hidden in the rocks to pick off vehicles deemed insufficiently chi-chi. So the local market is unlikely to embrace or even have much use for it. After all, you’d have to be a mighty hardcore player to drive all the way out to Casino MonteLago (above) when it entails bypassing numerous gambling options, including Fiesta Henderson, to get there.

Palms Springs is Palm Springs in large part because it is isolated. You couldn’t achieve something like that, say, just 17 miles outside of San Diego. Same with Lake LV, R@S, etc. Being simultaneously of and yet slightly away from Las Vegas isn’t working out so far. Lake LV wants to be a tourist magnet and a hideout for the super-rich, but having it both ways is proving a tightrope act without a net — or maybe just without a lake, if that pipe doesn’t hold.

Penitentiary Station. Did you know that inmates at the Nevada State Prison (the former site of the Warm Springs Hotel) used to be allowed to gamble? It’s true (see sidebar). Then some spoilsport went and outlawed it in 1967.

Now, it seems to me that with the state facing a revenue crunch and a governor who’d rather close prisons than raise taxes, that our lawmakers have been overlooking an opportunity: Bring back the craps games in the Big House! Heck, throw in some slots while you’re at it. Make the holds real tight, too, because it’s not like your customer base can take its business elsewhere.

Besides, it might shut up all those soreheads who write to the newspaper to complain that prisoners get paid to make license plates, etc., instead of being used as slave labor or as fodder for medical experiments. Convicts’ wages would just be going right back into the state treasury — after United Coin or whomever takes its cut, of course. Maybe it’d be the business opportunity that snaps slot-route operator Herbst Gaming out of its doldrums. Why, it’s a state/private sector win-win!

And I thought my cats were heavy. You could put my threesome on the scale together and they’d still be outweighed by 44-lb. Princess Chunk, found “waddling around” Voorhees, N.J., last weekend. Sounds like some feral cats — well, one anyway — have been eating even better than ones who have a predictable source of food and three squares a day.

Posted in Animals, Herbst Gaming, Lake Las Vegas, Pets, Station Casinos | Comments Off on Honey, I shrank Lake Las Vegas

We're no Pyongyang!

Posted on July 29, 2008 by David McKee

A story about an unsightly, unfinished ziggurat in Pyongyang, North Korea afforded an architecture critic an opportunity to throw a roundhouse right at Las Vegas. Lumping it together with Shanghai as the bad-architecture capital of the world, California Polytechnic State University (San Obispo) Architecture Dept. professor Bruno Gilberti couldn’t single out a single Vegas property for opprobrium, lumping the entire Strip together as something that “has no authentic sense of place and is thus more than a little soulless.”

Well, unlike Gilberti, I can nominate a single-worst building in Las Vegas and it’s … Continue reading →

Posted in Architecture, Columbia Sussex, Downtown, Harrah's, Michael Gaughan, Stanley Ho, The Strip | Comments Off on We're no Pyongyang!

Case Bets: Meow!; Dr. Death; Spineless Dems

Posted on July 29, 2008 by David McKee

Diss of the Day. “Having just raised the newsstand price for weekday and Saturday editions by 50 percent, the Las Vegas Review-Journal announced Monday it has eliminated sections of the paper as a cost-cutting measure.” — lead sentence of the Las Vegas Sun‘s coverage of cutbacks at its crosstown rival.

No tears for Desai. The doctor whose reckless methods put thousands of people — including our own beloved Jean Scott — at risk has suffered a stroke. I’m not going to be needing any crying towels and, judging from the all-schadenfreude “Comments” thread to that story, neither is anyone else in town. My favorite comment was also the shortest. It reads simply, “Karma.” (Although, “Lets [sic] hope that this is nothing trivial” is almost worthy of Oscar Wilde.) As ever, brevity is the essence of wit.

Harry Reid (D-Invertebrate). Sometimes — actually, very often these last seven years — it’s embarrassing to be a Democrat. Party “leadership,” as constituted by the likes of our own Sen. Harry Reid, desperately needs a spinal infusion. The ceaseless capitulations to a mostly reviled administration are difficult to stomach: Patriot Act, FISA telecom immunity, Iraq War funding and now this (I’d be less opposed if Big Oil was actually using all the leases it already has; this smells of corporate welfare to me).

The dead giveaway is buried at the end of the story, where a lobbyist displays unusual candor and says: “We never presented this as going to have an immediate impact on lowering the price of gasoline.” Ah, truth in Washington — now there’s a precious natural resource.

As usual, Hugh Jackson says it best, with accompanying Photoshop drollery. At least Hapless Harry can take solace in the news that the Justice Department says it has caught yet another GOP lawmaker with his hand in the cookie jar. I don’t agree with Rep. Dean Heller (R-Nev.) about much, but he’s right that there’s a culture of corruption that needs to be blown away by winds of change come November.

Occupancy rate or price point? Which is more important? Michael Gaughan has decided it’s the former, which is why he’s discounting room rates as deeply as 40% to amortize the extra cost of gas to get from SoCal to South Point. Liz Benston has more on it, plus a prognosis on the future of the cell phone ban in Nevada sports books. Forecast: still cloudy.

Posted in California, Current, Election, Environment, Politics, The Strip | Comments Off on Case Bets: Meow!; Dr. Death; Spineless Dems

Lamest casino promotion. Ever

Posted on July 29, 2008 by David McKee

Not long ago, I received an oversized postcard in the mail from Eastside Cannery Casino Hotel (or E-Can, in LVA parlance). They want me to go to www.cannerycasinos.com and sign up for a players’ card. And what do I get for adding my personal info to Cannery’s database? Just you wait!

Woo-hoo! I get to motor down to E-Can and pick up a free commemorative grand opening T-shirt! I could practically “Squee!” from the excitement. It’s almost as thrilling as meeting Amanda Tapping.

Well, no, actually it isn’t.

I mean, how many free-tchotchke promos are out there? And haven’t you lost count of Continue reading →

Posted in Boulder Strip, Boyd Gaming, International, Michael Gaughan | Comments Off on Lamest casino promotion. Ever

Donald Trump: ass; David Snow: hero

Posted on July 28, 2008 by David McKee

Don't you wish you lived in whatever parallel universe is inhabited by Donald J. Trump? If you did, you could claim that your 60%+ unoccupied Trump International — which just sacked 20% of its workforce — is an incredible success.

You'd also be able to maintain that the 73 employees you let go will be rehired when (if ever) sales on the last of your Las Vegas condo units closes. Nah, they're not out looking for new jobs or anything like that; they're just putting their lives on hold until the Trumpster calls to offer them their old job back. Wouldn't you? Besides, eating is so overrated.

In Trump Land, you're also able to grant access only to news organizations whose coverage you deem acceptable. And you spew profanities at reporters whose coverage was strictly factual. Nah, the only "bullshit" here is that being spewed by the real estate magnate Spy magazine habitually referred to as a "short-fingered vulgarian."

The incredible shrinking R-J. Details of the downsized Las Vegas Review-Journal are provided by Steve Friess. The paper will be making some of its content Web-only (instead of using the Web site a "backup" of the print version) and will reduce Corey Levitan's "Fear and Loafing" column to monthly status. So it's a big step forward, in some respects. Parent company Stephens Media still hasn't come to terms with the 20th century but it's nice to see it get dragged kicking and screaming into the 21st.

Boyd Gaming roasted. While largely focusing on the spinelessness of OSHA, a Los Angeles Times piece provides further details on a grisly 2007 accident at The Orleans that claimed two lives and disabled employee David Snow. It also adds a new wrinkle to the saga, in the form of a partial cover-up of a 2001 accident.

In closing, the article notes that both Snow and the late Travis Koehler were recently acknowledged by the Carnegie Hero Fund Commission. Their heroism is unquestionable — but it shouldn't have cost them their lives or health.

And since Echelon hasn't been dogged by the myriad safety issues that cloud MGM Mirage's CityCenter, we can hope that Boyd is running a tighter ship these days. Of the big gaming operators in Las Vegas, Boyd has been the most scandal-free … until this OSHA imbroglio. It's a truly unfortunate blot on one of the cleanest eschutcheons in the casino industry.

Posted in Boyd Gaming, Donald Trump, MGM Mirage, Regulation, The Strip | Comments Off on Donald Trump: ass; David Snow: hero

Quote of the Day

Posted on July 25, 2008 by David McKee

"There is better stuff than that." — Penn National Gaming CEO Peter Carlino, referring to the Las Vegas Tropicana, in a discussion of possible Las Vegas acquisition targets.

Posted in Columbia Sussex, Penn National, The Strip | Comments Off on Quote of the Day

A dirty rotten shame

Posted on July 24, 2008 by David McKee

According to local entertainment scribe Mike Weatherford, the new ownership at the Sahara is trying to re-up with promoter Larry Marshak‘s ersatz Platters/Coasters/Marvelettes act. Thanks to the byzantine histories of these groups and their ever-rotating membership, sufficient loopholes have existed for Marshak to peddle a variety of impostor bands hither and yon.

The groups whose identities Marshak counterfeits have the common root of being ones whose members were largely anonymous to the public and were comprised of African Americans and a time when the latter were second-class citizens, with little means of recourse. The impostor act at the Sahara perpetuates a shameful history of exploitation. Current casino owner Sam Nazarian has a chance to either break with this sharecropper business or become complicit in it. Deplorably, it looks like he’s opting for Door #2.

Chip off the old block. If you go to www.billyung.com, you’ll find the son of Columbia Sussex CEO William J. Yung III striking out on his own, starting with an Osage Beach, Missouri resort. My favorite page is this one. No, the apple doesn’t fall far from the tree, does it? Maybe the Web site designers were too busy puffing around Columbia Sussex HQ on the elder Yung’s miniature choo-choo train (see end of story).

Posted in Columbia Sussex, Sahara | Comments Off on A dirty rotten shame

Gold Coast buffet update, etc.

Posted on July 21, 2008 by David McKee

I just heard from Boyd Gaming and they say that the corned beef/chicken choice at the Gold Coast buffet's carving station was the luck of the draw and not indicative of a cutback. Roast beef, turkey and brisket are still in the rotation, I'm told — just not on the night we were there. It's not the greatest buffet in Vegas but it's skies above the comparably priced one at the Tropicana, where they actually had the gall to jack up the tab recently, even though the food choices are few and service borders on nonexistent.

Win-win situation? A spy in the ladies' room after a Saturday-night showing of the Mamma Mia! film says that the buzz was very positive, with several ladyfolk saying it made them want to see its Mandalay Bay incarnation* (or see it again). So the notion that the movie might actually put new legs under the stage version, instead of kneecapping it, maybe isn't such a pie-in-the-sky idea, after all.

For those of you who are interested in such things, the movie pulled in $27.6 million its opening weekend, putting it in line with The Devil Wears Prada's opening and $2.5 million-$4.5 million ahead of projected grosses.**

*–Warning!: The video clip also features the horrific noise that is Jerry Lewis.

**–Anyone care to theorize why IMAX showings of a little number called The Dark Knight ($158.3 million in three days) are selling out at Red Rock Resort but not at The Palms? Have customers been burnt once too often by Johnny Brenden's habit of charging $14 for IMAX prints that look like 90 miles of bad road but which his cinemas are evidently too damn chintzy to replace?

Columbia Sussex follies. Even though Tropicana Entertainment is going to be shooed out of the Horizon, in Lake Tahoe, in 2012, owner Columbia Sussex is parting with a few pennies to try and make the place viable in the meantime. Well, at least to the extent of rolling out an Elvis Presley Suite.

That, and there are myriad deferred-maintenance issues to be addressed now that ColSux/Trop has capitulated to landlord Park Cattle Co. This might include the plumbling that got blogger Chuck Monster drenched one memorable night when "a water pipe burst in the ceiling of the casino… raining buckets of water on slot plunkers in the middle of the casino floor and a torrential river of water out the side door of the casino."

Ah yes, the Bill Yung philosophy of "Excellence in Hospitality" in action.

Posted in Boyd Gaming, Columbia Sussex, Lake Tahoe, MGM Mirage, Movies | Comments Off on Gold Coast buffet update, etc.

Gold Coast buffet

Posted on July 18, 2008 by David McKee

Our ongoing buffet crawl took us to the Gold Coast last night. After applying a Pocketbook of Values coupon, it came out to $11.80 for two people, which definitely counts as a bargain play, provided you manage your expectations somewhat. For instance, anticipate fewer items per category … but also a few categories you might not expect, like “Mongolian.”

The food offerings aren’t identified, unless you count some places where things like Continue reading →

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Good riddance at Boyd

Posted on July 18, 2008 by David McKee

Former Nevada Athletic Commission chairman. Former Boyd Gaming director. Member of the 197-person "Midnight Jim" Gibbons transition team. Out-and-out disgrace. That'd be Luther Mack, who walked the plank at Boyd Gaming last week, not (as I speculated at the time) on account of company politics, but because his company, Mack Associates, was engaged in a criminal enterprise.

For a prominent Nevadan, Mack did an excellent job of keeping his legal troubles out of the newspapers — at least until The Associated Press broke the story, two days ago. Considering that Mack Associates actively connived at encouraging and facilitating the employment of illegal aliens, if somebody was going to have the book thrown at them, it hit the right target.

There really ought to special circle of jurisprudential Hell for companies that conspire to screw citizens of their own country out of jobs in favor of illegal immigrants. The latter are going to try and get those jobs — that's why they snuck in here, after all — but what sort of boneheaded businessman decides to engage in the facilitation and furtherance of the crime? And if the government is correct in its allegation that Mack Associates was providing its illegal burger-slingers with Social Security numbers that rightly belonged to other people, well, that'd be one of the scummiest sorts of fraud imaginable.

Mack wasn't indicted personally and he might try to push mid-level managers under the bus. Yet the fact that guilty pleas were entered by a vice president, director of operations and controller is hardly a vindication — unless Mack's preferred line of defense is that he was a clueless bozo who didn't know what was going on at the company that bore his name. In which case, one might ask why he felt competent to serve as an officer of Boyd Gaming.

Maybe Boyd was as blindsided by this as the rest of community. Considering that Mack's fast-food joints got busted by the feds last September, if Mack didn't clue Boyd in on his legal troubles sooner, he should have — as a matter of directorial responsibility if nothing else. In fact, he should have stepped down as soon as la Migra came knocking. And if Boyd didn't demand his resignation the moment Mack's problems became known to them, they should have.

It cannot be said too often that, given its past, the casino industry is like Caesar's wife and has to be above even the appearance of impropriety. There's a widespread perception (undoubtedly with at least some basis in fact) that illegal immigrants form a sizeable percentage of the Vegas casino labor pool. Under any circumstance — and especially that one — Mack is baggage that Boyd did well to throw overboard, and should have done at the first whiff of trouble.

Update: Given the opportunity to clarify the timeline on l'affaire Mack, Boyd Gaming balked at doing so and put the onus Mack himself to explain matters. The company was at pains to characterize the event as routine.

No free lunch — or coffee. A latté-sipping local publisher whines about the closure of 17 Starbucks outlets and how it will force him to drive a few blocks farther for some $5 espresso. Hey, them's free-market economics in action, baby.

(It looks like the Gulf Coast of Mississippi is a stronger bastion of Starbucks than is Las Vegas: 0 closings to our 17. Who knew?)

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The Ameristar war begins

Posted on July 17, 2008 by David McKee

Just a quick hit on my way out the door to spend an evening prepping for The Dark Knight by watching Batman Begins …

Ameristar's in play. No news flash there and, for the life of me, I can't figure out why the Motley Fool thinks MGM Mirage will be the ultimate acquirer. The company doesn't seem particularly interested in regional markets these days and has been pulling back from some of them — the same outstate-Nevada kinds in which Ameristar currently operates.

On the other hand, as the article points out Crown Ltd. has $5 billion burning a hole in its pocket after the Las Vegas Tower deal went limp. I don't know offhand what the seven-times-cash flow number for Ameristar is, but $5 billion should cover it with room to spare. The Fool lays out a compelling case for how Crown could use Ameristar's properties to funnel customers to Fontainebleau — much as Harrah's Entertainment did with The Rio, back in the Phil Satre era.

Then again, there's Penn National, which has about $500 million in mad money (after stock buybacks) right now, thanks to the breakup fee from its busted IPO. With another $775 million promised to Penn, it ought to be able to ante up the acquisition fee without breaking a sweat. Ameristar's Missouri properties have been money-spinners and, as the Fool points out, the acquisition of the Ameristar brand would enhance Penn's persistent second-tier image. A combined Penn-Ameristar would give Pinnacle Entertainment a run for its money in St. Louis, and could regain ground being lost to MGM and Harrah's in the greater Chicago market.

Whoever loses needn't feel too bad. The Atlantic City Tropicana is still out there and debtors will probably force a sale of the rag-tag remnants of Columbia Sussex's casino 'empire.' With its market cap languishing around $837 million, Boyd Gaming looks vulnerable and if you're in a thrift-store mood, Isle of Capri's fallen to near-micro-cap status, at $157 million. Then again, you have to figure out how to turn around 'Pile of Debris.' So maybe it's not such a bargain after all.

Posted in Ameristar, Boyd Gaming, Columbia Sussex, Harrah's, Illinois, Indiana, Isle of Capri, James Packer, MGM Mirage, Penn National, Pennsylvania, Pinnacle Entertainment, The Strip, Wall Street | Comments Off on The Ameristar war begins