Kansas, Round 2: It's Cordish!

Posted on September 19, 2008 by David McKee

OK, I was wrong. Incredibly wrong. As you’ll hear on the next Vegas Gang podcast, I stuck by my prediction that Kansas‘ largest casino contract, the one for the greater Kansas City area, would go to Mohegan Sun. Why? Biggest budget, most amenities, a track record of large-scale casino development. At least I covered my butt by saying that Cordish Cos.‘ piggybacking of their proposed casino onto the Kansas Speedway gave them “dark horse” status. Also, franchising the casino under the Hard Rock brand was not to be gainsaid.

A racino of a different stripe

So when the winner was announced today, Cordish was it. While Mohegan Sun was willing to put a bigger investment ($740 million vs. Cordish’s $680 million) on the table, Cordish’s synergy with the Speedway appears to have done the trick. They’ll whip up a temporary casino (2K slots, 75 tables) sometime next year, to get the cash flowing while the full-scale project rolls toward a 2011 debut.

Here’s the real shocker: Mohegan Sun got zero votes, primarily because state consultants projected its revenues as the lowest of the three proposals remaining on the table. (Pinnacle Entertainment and Las Vegas Sands has already withdrawn from the fray. With a major project underway outside St. Louis, plus others in holding patterns in Atlantic City and Baton Rouge, Pinnacle’s chances seemed remote. It’s difficult to imagine Kansas being willing to take a place at the back of that queue.)

Which means that three of the seven votes went to — surprise! — Golden Gaming, a company whose chances I will freely admit to having severely undersold. It says a lot for CEO Blake Sartini‘s reputation and for Golden’s presentation that it came within an ace of winning, despite having a relatively modest track record — at least nothing remotely approaching the $662 million casino it proposed to build. With Penn National having sulked its way clear out of Cherokee County and the Kansas lottery board starting to display skepticism toward the Ford County bidders, Golden has at least one, maybe two more opportunities it could pursue in the Sunflower State.

Ten months ago, at the time its casino empire was starting to collapse, Columbia Sussex announced that it had sold the Horizon Vicksburg to casino investor Nevada Gold for $35 million. Seems now that it’s yet another William J. Yung III transaction that’s (pardon the pun) gone south, following the cancellation of the sale of Casino Aztar to Eldorado Resorts.

Juding from the language that ColSux successor Tropicana Entertainment “have been in discussions regarding a possible alternative transaction” without avail, it appears as though new CEO Scott Butera wants to hang onto the riverboat property (whose on-shore facilities are leased, not owned, by the way — a common ColSux practice). “(N)o alternatives exist that are suitable to both parties” sounds like a nice way of saying that if any other TropEnt properties were worth having, then they weren’t on the table. Then again, given Nevada Gold’s current financial situation, it might have been the one getting cold feet, but the formal language doesn’t encourage that interpretation.

Either way, Butera’s been making some expansionist noises of late and pining for the return of the Atlantic City Tropicana. While Butera has operational experience in that market, from his days at Trump Entertainment Resorts, it’s exceedingly difficult to imagine New Jersey regulators letting TropEnt back onto the property so long as Yung has one thin dime of equity in the company.

Posted in Atlantic City, Columbia Sussex, Current, Golden Gaming, Kansas, Mississippi, Penn National, Pinnacle Entertainment, Sheldon Adelson, Tribal, Tropicana Entertainment | Comments Off on Kansas, Round 2: It's Cordish!

A "character" responds

Posted on September 17, 2008 by David McKee

You may recall that, some time back, in an item entitled "Blasts from the Past," I discussed an anomaly in the transfer of the El Cortez from Jackie Gaughan to an ownership group that included various longtime associates — and Lonny Zarowitz. The latter is a former Gaughan employee and subsequent adversary. He accused the elder Gaughan of certain illegalities, accusations that were taken seriously as far away as New South Wales.

However, despite having tried periodically to throw a spanner into the Gaughan works, Zarowitz remains firmly ensconced within El Cortez ownership and is part of the group currently running it (and whom, presumably, we have to thank for the recent closure of the Chinese Kitchen Buffet). My musings shook loose a response from the real Lonny Zarowitz, who graciously gave permission to reprint some of his correspondence here.

Sept. 4, 2008

Dear Mr. Mckee,

I am writing in response, or more accurately to add my two cents to your blog dated June 18th concerning my situation with Jackie Gaughan, the El Cortez, & Nevada gaming authorities, among others. I have one minor criticism, namely, that you didn't make the effort to get BOTH sides of the story before forming and voicing your opinion. But given the unlikely nature of my version, and the concerted efforts to discredit me, this isn't too hard to understand.

Yet, even without the benefit of a full perspective, you managed to get nearly to the crux of the matter with your rhetorical question; "So how is it that a character like Zarowitz is going to wind up with a piece of the El Cortez, should the Nevada Gaming Commission approve the sale?" If, with a more balanced view, you had included the qualifying phrase "unless Zarowitz's allegations are true", you would have turned the key on the whole matter (let's shorten the phrase to 'UZAT' because I'll be using it again).                                                               

The whole dispute breaks down very simply. I accuse Gaughan of a series of criminal acts, and various government agencies (including the Gaming Control Board) of helping him cover it up and continue his illegal activities a la Whitey Bulger. They all deny it, and one side is LYING! Pure & simple. No misunderstandings or shades of grey. But who? Certainly the GCB would know if the allegations against THEM are true or not. So, what do they say? Well, their words say I'M the liar, but, as you point out, their actions tell a completely different story! For the better part of 5 years I did everything I could to rub their noses in my allegations. In my own concerted effort to bring warranted disrepute on the state's gaming industry and its regulators, I even passed out accusatory fliers at GCB meetings, offering to share my evidence with unsuccessful applicants, and did so with gaming opponents nationwide, all the while, daring the board to discipline me.

They never did. Why? 'UZAT'.  When this recent transaction came before them, their mandate required them to determine my suitability. Did they take the opportunity to call me to task for my behavior? NO!! Why? 'UZAT'. With a multi-million dollar windfall in the balance, they never even had me fill out a form, or provide any information, financial or otherwise. Not one question! About ANYTHING!! I didn't even have to attend the hearing! Why 'UZAT'. If my allegations were false, my behavior would be reprehensible and as the ''victims' of my slanders the GCB would have had the motivation as well as the obligation to act to make me put up or PAY UP!  But they didn't. Why? 'UZAT'. Sherlock Holmes would call it the curious actions of the dog in the night … after night … after night. As I said, clearly they know the truth, and just as clearly, they don't want anyone else to. Why? 'UZAT'

I hope you will continue to pursue this now that you realize the significance of your own questions, and trust those instincts. Finally as for your referring to me as "a character like Zarowitz" you are absolutely right on that score. The fact is, I had to choose between being one, and having none.

Thank you,
Lonny Zarowitz

Sept. 14, 2008

Dear Mr. Mckee,

Thank you for acknowledging my response. I was confident you would find my points 'interesting', as would your readers. For that reason, and in the interest of fairness, I would greatly appreciate it if you would post it for them as well. Surely, my version of events, if true, makes for a far more compelling, and important story that should have piqued your journalistic curiosity. I would also love to hear your specific opinions on the points I've made (posted or otherwise).

As for a buyout, the offer I received from Gaughan amounted to 30 cents on the dollar.(*) Incidentally, this offer came at a key point in the set up. To accept that, or any subsequent incarnation, would have been tantamount to, and easily construed as, an admission of guilt. That will never happen! The Epstein group has also demonstrated a high-handed, bad faith attitude, made possible by the same continued undue influence with GCB that first made YOUR antennae twitch, giving me no alternative but to resurrect "The Character".

Thanks, Lonny Zarowitz

* — I had asked Mr. Zarowitz: "Given the, um, adversarial relationship between Jackie Gaughan and yourself, how is it that he (or his successors) never bought you out?"

Copies of Zarowitz's two e-mails have been shared with Mark Clayton of the GCB (as well as with the El Cortez's PR firm) and I will inform you of any official response.

Posted in Downtown, Regulation | Comments Off on A "character" responds

Letter from Colorado

Posted on September 17, 2008 by David McKee

Every so often, it's my pleasure to turn over this space to readers who offer informed takes on the issues or insight into subjects with which we (I, certainly) might be unfamiliar. Today's letter comes from a Colorado player who disputes conventional wisdom about what ails the state's casinos …

"I live in Colorado and have heard a lot of talk about why the casinos in Black Hawk and Central City (the ones I am most familiar with) are having so much trouble. Many people have suggested that the smoking regulations are to blame. However, I have another take on the problem — transportation!

"For years, there were companies which would take me to the casinos on a bus. At one time, there were at least two (and sometimes three, depending on where I wanted to be dropped off when I got up to the mountains) places within a few miles of my house to catch a bus at a reasonable price with a rebate from the casino. The buses were usually quite full because casino employees also took them rather than drive and find parking. My mother and I would go at least once a week and when there were promotions, even more often. Some people went every day.

"My mother passed away and I got a new job which left me with less free time so I hadn't gone up for a couple of years. Recently, I tried to find where I could catch a bus for a day of R & R but I had an incredibly difficult time of it! First, all the links for transportation on casino/gaming/Colorado sites were incredibly outdated or non-operational. One listed a bus picking up at a shopping center that I know for a fact is now a giant hole in the ground, awaiting re-construction.

"There didn't seem to be anything on my side of town (I live in an eastern suburb). I can still take the bus but I have to drive across town, halfway to Black Hawk to catch it, which is what I wanted to avoid. One of the pick-up points is a K-Mart shopping center in a less-than-savory part of town, with no kind of security for cars left there.

"What I am wondering is if all the people who used to take the same buses that I did are making the effort to drive either to the existing stops or on up the mountain? I don't think so. I think they are just not going and, therefore, the casino towns are not thriving.

"I know this isn't a particularly important issue in the grand scheme of things, but it illustrates that there are a lot of factors involved in successful casino management and profitability, including getting your customers from their homes to your place of business.

"Thanks for letting me get this off my chest!"

Posted in Colorado | Comments Off on Letter from Colorado

More Trop tomfoolery

Posted on September 16, 2008 by David McKee

Justice Gary Stein's trusteeship of the Atlantic City Tropicana continues its slide toward disaster. The UAW has filed a charge with the National Labor Relations Board, accusing Stein of a lack of good-faith bargaining. Stein has said in the past that he's reluctant to bind a new buyer to the terms of a contract negotiated by a third party.

That was a viable argument back when it looked as though Stein could get the Trop sold by Spring or early Summer. Then he sniffily deemed the offers on the table not good enough (talk about failing to bargain in good faith!) and reset the whole process to "zero."

Given Stein's miserable, foot-dragging performance, it could be months more before long-suffering Trop employees have a new owner, in which case it's unconscionable to continue to allow this situation to fester. Heck, considering the speed with which Scott Butera was able to bring peace to the Las Vegas Tropicana, maybe letting him have the A.C. Trop back wouldn't be such a bad idea, after all. (Not that it's going to happen as long as sole shareholder William J. Yung III has so much as one thin dime of equity in Tropicana Entertainment.)

While restored Trop President Pam Popielarski has shored up the A.C. Trop's financial performance, some of the UAW's charges, if true, suggest she's working off the Columbia Sussex playbook: "denial of Family and Medical Leave Act benefits for dealers, changes to the casino floor, and unilaterally changing the attendance point system and start times for workers."

President Closed … Again. For the third time this year, Pinnacle Entertainment's President riverboat has pulled up its gangway on account of flooding. Which means that the President will have lost at least 47 business days (and counting), depleting what is already a pretty attenuated revenue base. Given the President's fairly negligible contribution to the St. Louis casino market, perhaps Pinnacle should mothball the old gal. Having grown up near St. Louis, I can well remember the President in her glory days, resplendent upon the St. Louis riverfront. It's sad to see her come down in the world like this.

Note: In honor of Scott Butera's fresh start at the LV Trop and his efforts to put the 'ColSux' era behind him, I've started a new "Tropicana Entertainment" category, as a gesture of faith.

Posted in Atlantic City, Columbia Sussex, Labor, Missouri, Pinnacle Entertainment, Tropicana Entertainment | Comments Off on More Trop tomfoolery

Penn impresses analysts

Posted on September 12, 2008 by David McKee

Penn National threw open its doors to Wall Street and JP Morgan, for one, came away impressed by what it heard. Basically, management is charting a fiscally conservative course, even though it could eventually reap $1.2 billion from its busted LBO. For instance, whereas Penn was formerly willing to plunk down $800 million for Bader Field in Atlantic City, now it’s halved its valuation of the site.

Now Penn has turned its focus to some abandoned land west of the city (which would give it a “choke point” for traffic headed into A.C.) and Morgan seems to agree. It advises against buying an existing casino (read: Tropicana). It also found Penn bosses unconcerned with the narrow prospects for casino approval in Maryland and Ohio, writing: “our sense is that management would be content to see both [initiatives] fail.” (If that were the case, it would be five rebuffs of casino legalization in one year; is the U.S. industry at or near a saturation point?)

Largely, this stems from concern about how both markets would sap traffic to Penn’s flagship property in Charles Town, W.V. The proposed 67% (!) tax rate in Maryland is no small disincentive, either, although Penn has covered its butt — should the pro-casino measure be passed — by obtaining a site east of Baltimore. It’s also moving to protect its Charles Town business by pushing for table games, something else that requires voter approval.

Looking down the road, Penn’s capital projects appear to proceeding on or under budget, its debt is projected to decline by 44% over the next two years, while its cash flow increases 16%. And while Penn says it “can’t get the returns or free cash flow” that would justify building in Las Vegas, it continues to contemplate scarfing up other companies’ downgraded debt. Morgan thins Penn will either pursue a pure Vegas play or “another regional operator with LV exposure.”

I’m thinking “Boyd” but remember that Penn has made one run at Harrah’s Entertainment already and might well turn the latter’s debt-strapped situation to its advantage. In any event, Morgan reports, Penn will bide its time, “as it feels asset values may get cheaper, and will take its time to evaluate opportunities given other casino operators’ leverage. Just visualize a buzzard sitting on a tree branch in the desert, waiting for some poor, dehydrated soul to collapse.

By the way, Penn is proud owner of Bullwhackers Casino, a property whose name suggests nothing so much as the performance of unnatural acts upon livestock. But, if you want to know whatever became of Erin Moran, it’s the place to go.

Posted in Atlantic City, Boyd Gaming, Colorado, Election, Harrah's, Penn National, Taxes, Wall Street | Comments Off on Penn impresses analysts

Headless owner in topless bar

Posted on September 8, 2008 by David McKee

“It is amazing how people get religion once they want a gaming license,” said then-Nevada Gaming Control Board member Brian Harris, back in December ’98, in one of the all-time-great casino-related quotes. Harris’ statement came in connection with the license-application withdrawal of the Sunrise Suite Hotel. If you’ve never heard of it, that’s because — sans casino — it quickly went bankrupt, was stealthily snapped up by Carl Icahn and became Arizona Charlie’s Boulder.

Harris’ remark is pertinent once more the wake of last week’s Control Board hearing. There, the CEO of a downtown topless bar professed to have been shocked — shocked! — to learn that drugs and prostitution were being peddled in his fine establishment. His attorney added that the club has received a clean bill of health … from its own investigative service.

Regulators weren’t having any of it. Nor does it say much for the charms of the Girls of Glitter Gulch that it needs slot machines to keep patrons interested. Or is that simply another manifestation of our ADD-riddled, multi-tasking society?

Another regressive tax. Since neither you nor I can afford to hire lobbyists, we’re the ones who get jammed up whenever guvmint needs to find a few extra coins ‘neath the sofa cushions. The latest indignity is an Internet sales tax, long bruited and finally gaining traction, I regret to say. All those eBay vendors are just going to love all the additional paperwork that they’ll have to fill out if this turkey flies through Congress.

The presidential contenders are (mostly) ‘Net friendly on this one. Sen. Barack Obama‘s position is “No” … but with some ominous qualifiers. Sen. John McCain‘s flat “No” is to be preferred.

On our last “Vegas Gang” episode, we discussed whether it’s true that the only color which matters in a Las Vegas casino. I was of the “No” persuasion. Further ammo comes by way of Norm!, who reports on alleged discrimination against Poetry, a club catering primarily to a black clientele.

If true, this stuff would come right out of Las Vegas’ “Mississippi of the West” era — and be another reminder of how illusory progress can be. A friend of a friend, a successful African American musician, said that a good day for him was one that went by without his being on the receiving end of a racial slur.

I don’t complain too much about my lot in life since hearing that.

Posted in Downtown, Election, Regulation, The Strip | Comments Off on Headless owner in topless bar

Telemundo rescues Neonopolis

Posted on September 8, 2008 by David McKee

OK, so they’re now calling it “Fremont Square,” but it’s still like a fugly fortress-like concrete cube that was somebody’s perverse notion of a shopping center. However, the local Telemundo affiliate wants to move its broadcast and studio operations into Neonopolis (yes, they still call it that, too). This is probably the best news the place has had since it opened.

Wet Ultra Club also wants to move in, predicting it “will be the premiere [sic] club destination on Fremont Street.” True, the competition’s not very stiff, except for Gold Diggers at the Golden Nugget. Shame on the Nugget, by the way, for practically burying Gold Diggers on its Web site, relegating it to three lines of copy halfway down the “Bars” page (which, if you engage your psychic powers, you’ll reach by way of “Dining.” Huh?)

Stump the blogger: Here’s part of a reader e-mail, reprinted with permission, that left me absolutely bereft of an answer. Ergo, I’m throwing it open to the wisdom of the readership, in hopes that someone can address this poser:

I used to live in a small town on the cusp of the San Francisco area, and change-taking newspaper stands commonly sold the local paper, and some even sold the San Francisco Chronicle as well. Big collections of newspaper machines outside grocery stores would sell those two, the Oakland Tribune, the Wall Street Journal, the New York Times … and so on.

When we first moved to Vegas, I immediately noticed the lack of paper stands all over the place … they’re practically unheard of here. I quickly found out if I went to Burger King or something and wanted to read the paper at lunch, to go to the nearest gas station or drug store and buy one in there. Even then it’s almost impossible to get anything other than the R-J … and if you wanted a Times from either coast you’d practically have to go to a hotel.

What’s the deal here? It seems like if you want a girl in tight clothing within an hour it’s as easy as walking to the sidewalk, but if you want a newspaper you have to practically go to Borders … Is there something about this town … that simply doesn’t like to read?

Of course, if you’re staying at a Harrah’s Entertainment property, you can’t get the R-J either. Or has that fatwa been quietly revoked?

Posted in Downtown, Harrah's | Comments Off on Telemundo rescues Neonopolis

Mont-blew it; more E-Can; Trump struggling

Posted on September 5, 2008 by David McKee

"Montbleu screwed our pooch." That's the conclusion of Chuck Monster, who chronicles a bait-and-switch at the former Caesars Tahoe. It's now part of the prospering casino fleet that is Columbia Sussex and its "pet friendly" package turned out to be more like "pet indifferent." After withholding it for a full year, in hopes of a partial refund that materialized, Chuck has finally released a Montbleu-by-blow account.

New casino overseer Scott Butera may be promising a new, improved Tropicana Entertainment but, from what Chuck says, it's still ColSux as usual for the time being. At least the incident gave him excuse to post numerous photos of Montbleu being inspected by a totally adorable pug named Maxine, who is certain to steal your heart.

E-Can makes the rounds. The reviews of Eastside Cannery keep rolling in. There's a Compton/Dancer critique of its gambling value (good). Steve Friess went a while back and was mildly amused/bemused. For his part, Chuck Monster deconstructs its decor. Our new issue of Las Vegas Advisor contains a lengthy appraisal by Anthony Curtis.

Trumped. Perhaps the single most interesting fact in Chuck's review is buried way down at the end and it's this: On an upcoming weekend, when E-Can is commanding $129/night ($1 less than Circus Circus), rooms at Trump International are going for $163/night — $38/night less than Excalibur. Yes, Excalibur! (And $346/night less than Wynn Las Vegas.) Can you say "bomb"? I thought you could.

Posted in Animals, Boulder Strip, Cannery Casino Resorts, Columbia Sussex, Donald Trump, Lake Tahoe, Pets, The Strip | Comments Off on Mont-blew it; more E-Can; Trump struggling

Alaska nixes gambling; Politics here, Harrah's there

Posted on September 2, 2008 by David McKee

With Alaska and its governor all over the news of late, I got to wondering what had become of that ballot initiative, backed by bar owners, to expand gambling in Alaska.

As it happens, the initiative was voted down, the most lopsided defeat for the casino industry in a year of setbacks, following legislative rebuffs in Kentucky and Massachusetts. It did, however, prevent discomfiture for one opponent — Gov. Sarah Palin, who would have been required to appoint the members of the proposed Alaska Gaming Commission, had it been voted in.

If you’re scoring at home, that’s: Palin 1, Slot makers 0.

Politics Makes Strange Bedfellows Dept. Although the largesse of MGM Mirage tends to flow towards the GOP, one of its prime beneficiaries this year is Rep. Carolyn Cheeks Kilpatrick (D-MI). Meanwhile, the war chest of unopposed Rep. John Conyers (D-MI) has been swelled by donations from Phil Ivey and Doyle Brunson.

Conyers is seen as a critical ally in the move to overturn the UIGEA, that midnight raspberry blown to online poker players by then-Senate Majority Leader Bill Frist (R-TN) and Rep. Jim Leach (R-IA). Frist retired soon afterwards and voters — probably including some pissed-off poker players — sent Leach packing.

Swift Harrah’s verdict? We may not have to wait long for a ruling on Harrah’s Entertainment‘s legitimacy to build and run a casino in Kansas. There’s the little matter of a disputed non-compete clause with the Prairie Band of Potawatomi Indians, who formerly made use of Harrah’s managerial experience before the latter severed ties. However it comes out, a speedy resolution is to be hoped for. It’s going to take the Sumner County casino two years to get up and running anyway, even without being ensnared in litigation.

Posted in Alaska, Detroit, Election, Internet gambling, Kansas, Politics, Tribal | Comments Off on Alaska nixes gambling; Politics here, Harrah's there

Case Bets: South Point, Gustav, Monte Carlo, Gold Spike, Excalibur, etc.

Posted on September 2, 2008 by David McKee

Why does a holiday weekend suck? Because it means that instead of having to dig through three days' worth of the Las Vegas Review-Journal on Monday (a depressing task under the best of circumstances), a Tuesday start means at least four days of windfall from what Hugh Jackson calls "the dead tree of record" through which one must cut brush. Solution? Chop it up into Insta-Blog fodder! Like …

Horse dies at South Point, in front of 500 undoubtedly traumatized spectators. Leaving aside the equine tragedy, if South Point can only rustle up 500 attendees for a Friday-night event, its equestrian center may be even more of a gold-plated albatross than was originally thought.

Gulf Coast casinos ordered to close. Good grief, has common sense taken a leave of absence down there? Why was Mississippi required to force the issue?

Monte Carlo not up to code, says Clark County. Whereupon neither the county nor MGM Mirage takes responsibility for remediating the situation, each putting the onus on the other.

Wall Street comes around. The Street has a manic-depressive attitude toward gaming stocks and is coming out of its latest episode of depression. Even so, some of these stocks look ridiculously undervalued, especially Las Vegas Sands, which The Street used to think was worth three times as much.

Speaking of Sands, there's confidence and then there's foolhardiness. Then again, given the company's genius at protracting litigation to superhuman lengths, its sanguine attitude may be born of experience.

Somnolent editors awake from nap, find that Nevada's economic model isn't working, call for more of the same, go back to sleep. (BTW, here's one of those "Nevada Democrats" the editorial reflexively derides.)

First Nevada Palace fell and now the Gold Spike is half-renovated. We're going to have to come up with a new shorthand for "bottom-of-the-barrel casino" now that we won't have the Spike to kick around anymore. Stephen Siegel has done more with the place than his predecessors, absentee owners Tamares Group, accomplished in three years (unless you count the offerings they took out, like table games).

Still, Siegel's being a wee bit charitable when he says "most people underestimate the Gold Spike." Stephen, it is impossible to underestimate the Spike, the only Nevada casino for which I would have used "vile" as a description, back in its Tamares days.

Comment threads in newspapers can be a very mixed blessing, but much of the back-and-forth that follows this story about electronic poker at Excalibur is well worth reading, as it provides a great deal of hard information and a player's-eye perspective on the experiment.

Posted in Animals, Current, Downtown, MGM Mirage, Michael Gaughan, Mississippi, Monte Carlo fire, Sheldon Adelson, Tamares Group, Taxes, The Strip, Wall Street | Comments Off on Case Bets: South Point, Gustav, Monte Carlo, Gold Spike, Excalibur, etc.

E-Can debuts

Posted on August 29, 2008 by David McKee

We got out of the way of the front doors of Eastside Cannery last night just in the nick of time. For all the apprehension about opening new casinos in the current economy (especially when locals' gambling budgets have taken a big hit), patrons were out in force for the opening, literally charging the casino floor when the doors swung wide. Whether by car or by foot, it was impressive turnout — not the mob scene that greeted The Palms in 2001 — but quite a heartening sight nonetheless.

E-Can is yet another nail in the coffin of the old "entrapment" theory of casino design. The entryways are airy and easily visible throughout the casino floor. Aisles are wide and, even with 2,100-plus slots, one gets that sense that Cannery Casino Resorts could have jammed in quite a few more but elected not to. Good on them.

Ceilings aren't so low as to be oppressive, but not so high as to engender the "slot barn" feeling of Palazzo or South Point. The various eateries are distributed in a "restaurant row" along the east wall. The sports book is very open and spacious, and wouldn't look out of place at a Strip casino — and is far superior to some Strip books I could name, but won't.

We gorged a little too much early in our go-around, so we didn't do justice to each restaurant's offerings. (Though, for the record, oysters on the half shell and covered with chives and melted cheese tastes a helluva lot better than it probably reads. Kudos on the sausage-stuffed mushrooms, too.) If what was on display — and in our stomachs — last night was a representative sample of the everyday fare, my biggest concern will be whether such a high standard can be maintained over the long haul.

If you grew up in the Sixties, as I did, the prevalent color and décor schemes will have a comforting familiarity. The overall aesthetic could be called 'Light Industrial,' and I don't mean that in a cute or pejorative way. Exposed pipework appears to be part of the statement, although I'm not so sure about the lack of drop ceiling. I couldn't tell whether the acoustical tiling has simply been omitted or is going to be installed later.

There's not a lot of fine detailing; strong colors, acute angles and long, undulating curves all typify a casino where the design elements are writ large. Sometimes form takes precedence over functionality: Stools in the sports book and one of the restaurants may be pleasing to the eye but they're distinctly unforgiving to the ass. On the other hand, the keno lounge is as classy and comfortable as any I've seen in Vegas.

Given the unbelievable thrift with which "the dollar Bills," Messrs. Paulos and Wortman* pulled E-Can off, one does feel the compulsion to scan the place for obvious economies, trying to figure out how they did it. The exterior is pretty Spartan; big, sharp and sweeping lines (and a wraparound neon display after dark) endeavor to divert one's attention from an otherwise utilitarian look.

Inside, certain of the wall coverings and materials screamed "Cheap!", especially around the proscenium in Marilyn's, the live-entertainment lounge. Some upfront savings will probably mean frequent-replacement costs on the back end. Then again, I heard similar criticisms of The Palms when it opened (and George Maloof arguably overcrowded his slot floor in the early going — a mistake not repeated here), but keeping construction costs low was one of the cornerstones of that place's success.

Paulos and Wortman's heir, James Packer, will be in profit on E-Can a lot more quickly than will any recent or forthcoming Station casino, given the latter company's current tendency to spend lavishly and then scrimp down the road. Assuming that maintenance is proactive and frequent, I don't see any downside for E-Can.

Despite my longstanding fondness for Sam's Town, the pioneering Boyd Gaming property will seem that much more like a crowded and badly laid-out warren of gambling rooms — definitely Old School, if that's what you dig. Given the two casinos' proximity, I can see Sam's Town evolving into a "dormitory" where people stay or park their RVs, take advantage of the movie theaters, etc., but do their playing at E-Can. Plus, the cheerful, retro Cannery "brand" has struck quite a chord with Las Vegans. Aggressive counter-marketing will have to be the order of the day.

* — "The dollar Bills" was Hollywood's nickname for producer William Pine and his business partner, William Thomas, so named for their budget-conscious tendencies. It seems affectionately apt for the Paulos/Wortman duo, who balance fiscal conservatism with quality.

Posted in Boulder Strip, Boyd Gaming, Cannery Casino Resorts, George Maloof, James Packer, Station Casinos | Comments Off on E-Can debuts

Eastside Cannery update

Posted on August 28, 2008 by David McKee

Yesterday, I asked how William Paulos and William Wortman were able to bring in Eastside Cannery (which opens tonight) for 250 million clams — $425 million less than Station Casinos is splurging on Aliante Station. In today’s Sun, Liz Benston explains how. The two Bills have a history of turning sow’s ears into silk purses and, should the buyout of Cannery Casino Resorts by James Packer go through, they’ll only stay on long enough to get their Pennsylvania racino open.

Hopefully — hopefully — Packer will retain enough of the Paulos/Wortman-assembled executive team to get things humming along in their wonted fashion, and will refrain from meddling. Casino operators, especially ones from overseas, who are novices in the Vegas market tend to have a very rough go of it here.

Harrah’s makes the news and not in good way. On the other hand, who knew that the erstwhile Barbary Coast was where the hip-hop crowd likes to roll, especially after a run-in with the law? Of course, the “Suge” Knight incident is big news for us at LVA, seeing as it went down an Olympic shot put-throw’s distance from our Procyon Ave. corporate headquarters. And now Gary Loveman can brag on how “gangsta” his properties have become.

Posted in Boulder Strip, Cannery Casino Resorts, Current, Harrah's, Station Casinos | Comments Off on Eastside Cannery update

Durango Station, slightly downsized

Posted on August 27, 2008 by David McKee

Station Casinos has filed its latest set of plans for Durango Station and it looks like they’ve pulled back a bit, although you can judge for yourself. Hotel inventory has been reduced from 1,040 rooms, then 1,000, to 726; the smaller of the two towers has been scaled back an additional 10 feet in height.

Bingo players will be displeased, as a bingo room has been scrapped; ditto a bowling alley. Two fewer reasons to go there, IMO.

Rather than wait, though, Station will go ahead straightaway with the second of two parking garages. Even with 4,048 covered spaces, Station is also budgeting for over 2,100 surface-parking spaces, causing Clark County planners some minor qualms over the oceans of asphalt surrounding Durango Station and the pedestrian hazard they could represent.

Joe Hasson, Aliante Station GM

Carol Thompson, Aliante’s assistant GM

On the executive front, Station has selected the general manager and assistant GM for Aliante Station. They are, respectively, Joe Hasson and Carol Thompson. The former boss of Harrah’s New Orleans, Hasson — who Casino Executive Magazine once described as “whippet-thin” (and who, if memory serves, is a marathon runner), comes to Aliante from a lengthy tenure at Green Valley Ranch. If he looks familiar, it’s because he was a regular on the Discovery Channel’s American Casino, filmed at GVR. Thompson, who is active in local philanthropy, honed her managerial school at some of Station’s “farm team” properties, such as Barley’s.

The only question remaining is this: If Aliante Station cost $675 million, why was Cannery Casino Resorts able to build Eastside Cannery for $425 million less? Yes, Aliante has a concert hall and a 16-screen cineplex. But ECan has 105 more hotel rooms, more meeting space and an equal number of restaurants. (It also boasts a spa and a bingo room, items not listed among Aliante’s amenities.)

ECan also makes a bolder, striking architectural statement, the jagged parapet of its hotel tower serrating the sky. Aliante’s outward style might be described as Office Park Chic.

Station just doesn’t seem to be getting nearly as much bang for its buck. How come?

Posted in Boulder Strip, Cannery Casino Resorts, Station Casinos | 1 Comment

Quote of the Day

Posted on August 27, 2008 by David McKee

“The real story here is the workers, who put up with the worst working conditions, having the fortitude and tenacity to say we’re not going to be run out of here by someone who has come in from Kentucky to destroy our standard of living,” — Culinary Union Secretary D. Taylor, on Tropicana workers’ long-in-the-making victory over Columbia Sussex CEO William J. Yung III. New Trop management capitulated to the Culinary’s demands last week.

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

Just as I suspected …

Posted on August 27, 2008 by David McKee

… and tried to imply the other day, we have two conflicting agendas in the ixnayed Casino Aztar sale. One is that of the creditors, who think the boat can fetch a higher price than the $220 million for which Columbia Sussex CEO William J. Yung III had to settle. (You will recall that prospective buyers were distinctly thin on the ground at the time.)

They're walking a tightrope, as they don't want to alienate putative buyer Eldorado Resorts and, should Eldorado walk (having already been told its money's not good enough) they don't want to be stampeded into a fire sale before Sept. 28. That's when disposition of the vessel passes into the hands of the State of Indiana.

The other endgame, as I tried to hint earlier, is that of Tropicana Entertainment CEO Scott Butera. He, creditors fear, may be trying to hang onto Casino Aztar by putting it back on the market and then saying — as was already bruited in the Wall Street Journal — that no offer is good enough, so TropEnt is keeping it. Which means creditors, instead of getting hundreds of millions of dollars now, would be asked to settle for a dribble of cash over the long haul. Butera seems able to charm the birds off the trees, but that might be a tough sell, even for him.

(The Evansville Courier Press story comes with a helpful timeline. Note the succession of three general managers in 14 months — a period in which Casino Aztar's revenues sank lower and lower and lower, only beginning to rise again in May.)

Then again, the would-be casino titan whose company managed to lose $1 billion-plus in a year still has his fans. Raves Courier Press reader lmajors_koch, "[Bill] Yung is the smartest man alive!!!! He's going to end up keeping Casino Aztar before this is all over with. You guys just watch."

Yeah, we will.

Posted in Columbia Sussex, Indiana | Comments Off on Just as I suspected …

On the other hand …

Posted on August 25, 2008 by David McKee

… if Illinois casinos are sucking wind (which they are), why hasn't this redounded more to the benefit of neighboring states? For instance, it looks like Indiana had a good July, but once you back out two new racinos, a 2% gain turns into an -11% retreat from last year's numbers.

And the northern Indiana boats ought to be doing better, even if Horseshoe Hammond's revenues (-18%) were depressed by a temporary closure and Boyd Gaming's beleagured Blue Chip (-40%) is a drag anchor on the regional average. Still, a -15.5% year/year comparison — even with those two factors taken into consideration — doesn't suggest floods of nicotene-deprived gamblers storming the gangways.

Only Majestic Star, of all unlikely vessels, had a revenue-positive July. Year to date, Ameristar Casinos is doing the best of any single company, which makes its recent decision to run up the white flag and sack 244 employees, fretful over a newly expanded Horseshoe Hammond, look doubly defeatist. Current Ameristar management just doesn't look like they're in it for the long haul (read "not cut out for it" or "lack the stomach for it").

A change of brand, to Horseshoe, isn't doing the trick — yet — for Harrah's Entertainment's Glory of Rome. The glamorously named Horseshoe Southern Indiana (formerly Caesars Indiana) is the only casino in the Hoosier State's southern reaches to post negative revenue comparisons for every month of 2008. The others either swing like weathervanes or, in the case of Casino Aztar, improved dramatically with a change in management.

If French Lick isn't licked, it appears to have crested. The turnaround at Casino Aztar (currently under state trusteeship) blunted its revenue growth, as did the debut of the Indiana Live and Hoosier Park racinos. Until the economy improves, it looks like it's maxed-out at $8.5 million-$9 million per month.

Missouri is another puzzle, down 3% once the effects of Pinnacle Entertainment's nascent Lumiere Place are subtracted. The St. Louis market, closest to Illinois, was -8%, while Kansas City — the market with the least to gain from Illinois' troubles — was up 2%. Go figure.

All companies except Harrah's had a revenue-positive July, even Isle of Capri Casinos. Harrah's lost market share in St. Louis and Kansas City, and Ameristar gained in both markets. (See previous comments about unwarrantedly panicky Ameristar execs.)

And see them again once we note that Ameristar had the best July of any publicly traded company in Iowa, +3%. (Harrah's and Penn were flat, Isle down almost 6%.) Ameristar had the third-highest performing casino in the market, trailing Harrah's Horseshoe-branded racino and the Prairie Meadows track. A good month at the tracks offset a flat one on the riverboat, making Iowa revenue-positive for the month.

This was the first full month of year-over-year comparisons for Isle's newest casino, in Waterloo, which was down over 13%. Wow. The bloom went off that rose fast. The previous Isle regime's business model of growing revenues by opening more and more casinos is well and truly out of gas.

Isle's Bettendorf casino, however, was the only one of the company's quartet of Hawkeye State riverboats to increase revenue in July.  Could it be … the Illinois smoking ban coming into play? I'm going to opt for Occam's Razor and say,  "Yes."

Posted in Ameristar, Boyd Gaming, Columbia Sussex, Don Barden, Harrah's, Horseracing, Illinois, Indiana, Isle of Capri, Missouri, Penn National, Pinnacle Entertainment | Comments Off on On the other hand …

Trop to Eldorado: "Never mind"

Posted on August 25, 2008 by David McKee

In the strongest sign to date that company owner William J. Yung III has been banished to the doghouse, Tropicana Entertainment formally reneged on its sale of Casino Aztar to Reno-based Eldorado Resorts. The latter could walk away with as much as $7.1 million for its troubles, but appears determined to enforce the sale. Tropicana, meanwhile, already has its bankers out beating the bushes for prospective buyers.

“We are committed to obtaining maximum value for our assets and doing what is right for all of our constituents,” declared Trop CEO Scott Butera, sounding for all the world like Continue reading →

Posted in Columbia Sussex, Harrah's, Indiana, Kansas, Regulation | Comments Off on Trop to Eldorado: "Never mind"

Kansas, Round 1: It's Harrah's, Penn

Posted on August 22, 2008 by David McKee

Score one victory each for Harrah’s Entertainment and Penn National Gaming in the first round of casino concessions awarded in Kansas today (with Round 2 to follow in a month). But there’s really only one winner …

…. and it’s Harrah’s, which got the Sumner County contract and, with it, the Wichita market. Penn National must settle for the concession prize of Cherokee County.

Big deal. Penn had no competitors for that market and — keeping that in mind — two of the seven state arbiters voted against Penn. Perhaps that’s because Penn had previously sulked that it might pull out of Cherokee County if it didn’t get the Sumner concession as well. Announcing that it was going to scale back its Cherokee County investment and dribble it onto the market in piecemeal fashion (fearful of a nearby tribal casino) probably didn’t endear Penn to the Lottery Gaming Facility Review Board, either.

Even today, Penn’s spokesman was still threatening that the company might not go through with the casino Kansas just handed it. That’s unbecoming conduct from one of the few cash-rich casino companies at the moment.

Small wonder Penn’s Sumner proposal garnered only one vote of support. Which isn’t to imply Harrah’s gets the Wichita market out of spite or default. (There was, after all, a third contender.) Board members were impressed by the proposed amenities in Harrah’s $535 million-560 million proposal and by the site’s proximity to Wichita.

Probably the most attractive criterion was that the state’s first-year revenue projections for Harrah’s, while lower than the company’s own, were the highest for any of the three proposals — 48% more than those for Penn and 44% higher than for Marvel Gaming.

Marvel, which has local ties, particularly to the Binion family, says it’s keeping its powder dry. No wonder: If Penn decides to take its ball and go home, Marvel (which got two votes to Harrah’s four) appears to have made a good enough impression on the review board that it could make a strong run at Cherokee County, if the opportunity arose — and the cost of entry would be a great deal lower there.

View the complete set of proposals here.

Recommendation for the weekend: The new suspense drama from Claude Lelouch, Roman de Gare.

Karaoke fans, rejoice! As reported here, earlier (and now official), a singalong version of Mamma Mia! opens on Aug. 29. Presumably smarting from hearing Dark Knight this and Dark Knight that, Universal Studios‘ press release gets in some passive-aggressive jabs on behalf of its $330 million-grossing musical, noting “is now the highest grossing film of 2008 in the U.K., Austria, Greece, Hungary, Norway and Sweden.” And, just to get one more dig in: “The film still has more than 35 territories in which to open.” Meow!!!

False alarm: If you got an e-mail alert about a Philadelphia-related S&G posting, but couldn’t find it, it’s temporarily on hold, pending some new wrinkles in the story. Then there are latest Illinois/Iowa/Missouri/Indiana revenue comparisons and … and … and …

Posted in Ameristar, Harrah's, Kansas, Movies, Penn National | Comments Off on Kansas, Round 1: It's Harrah's, Penn

Quote of the Day

Posted on August 21, 2008 by David McKee

"You can't save your way to success." — Tropicana Entertainment CEO Scott Butera, commenting on the new collective-bargaining agreement at the  Las Vegas Tropicana. Funny, but that's almost a word-for-word reprise of Dennis Gomes' analysis of parent company Columbia Sussex's downfall in Atlantic City ("you can't save your way to prosperity [in the casino industry].")

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

Stupid Ameristar tricks

Posted on August 20, 2008 by David McKee

So your lucrative, big-ass casino company is costing headaches — and money — for a Chicago tax preparer because of a single-digit difference between your toll-free number and his. Which means he has to waste time fielding calls from thick-fingered (and, in some cases, thick-headed) patrons.

So, if it’s true that Mr. Refund “sometimes pretended to be an Ameristar employee, answering the phone as ‘Mr. Ameristar,’ pretending to take hotel reservations, asking customers for personal information and credit card numbers or telling callers that Ameristar hotels had burned down,” one can’t entirely blame him. (I’ve had the same phone number for over nine years and still get wrong-number calls, over and over.)

Anyway, what does Ameristar Casinos do but sue the poor S.O.B. to wrest his 1-866 number away from him? Ridiculous! Besides, had Ameristar accepted the solution that Mr. Refund says he offered the company, it would have cost Ameristar far less than the contentious route it’s taken.

This is easily Ameristar’s dumbest move since it opened the short-lived Reserve (now Fiesta Henderson) 10 years ago.

Posted in Ameristar | Comments Off on Stupid Ameristar tricks