Earth to NYT, Earth to NYT …

They don't call the New York Times "the gray lady" for nothing. Today, she seems a little more hard of hearing and out of touch than usual. Four of the six "New Titans" pictured in this story haven't been in the casino industry for more than three years.

Mind you, there could be worse things than if Messrs. Breitling, Agassi & Rogers pooled their pennies and bought the San Remo/Hooters out of its interminable "for sale" limbo. Or maybe they could scare up the $1 billion necessary to persuade Columbia Sussex to part with the Las Vegas Tropicana. They seem like just the fellows to bring class back to that much-abused dowager.

Tim Poster, though, they should probably leave at home. As depicted in Breitling's Double or Nothing, Poster comes off as temperamentally ill-suited to running a casino. After all, if you raise the limits on high-end play, you've got to lie in the bed you've made, not have a meltdown and get resentful toward the player(s) who took you to the cleaners.

Posted in Columbia Sussex, The Strip | Comments Off on Earth to NYT, Earth to NYT …

From A(BBA) to Z

Too much blogohrrea and too little hydration have left me spent, drained, kaput-ski. (Mind you, some would say I’ve been running on empty for a long time.) And when our cranky blogging software devoured another hour’s worth of work — this one about Las Vegas Sands‘ emergency “stop-loss” mission to Macao, it was time to stick a fork in me.

So I may take it easy for a couple of days — relatively speaking. (Which is okay, because Ian Sutton has all the news that’s fit to link over at GamingFloor.com.) ‘Cause when I’m not blogging or writing squibs for “What’s News,” I’m whaling away on our big “Question of the Day” archive, categorizing and cross-categorizing. And out of all that mulching, we intend to produce a super-FAQ, a gambling/Vegas lexicon and guide that will hopefully merge some of the best features of QoD and Wikipedia.

In the meantime, let’s end with even more good news: Mamma Mia! just marked its 2,000th Las Vegas performance last Sunday night. I’ve had the great good fortune to see it three times in three years, belatedly getting in touch with my inner ABBA fan.

That’s meant seeing three Sophies, nine prospective fathers, two or three Skys (Skies?), but always the indomitable Carole Linnea Johnson and her two kick-ass sidekicks, Vicki Van Tassel and Robin Baxter. I have no idea what impact the forthcoming movie version, starring Meryl Streep, will have on the Las Vegas box office or whether MGM Mirage will give Mamma Mia! another reprieve. (It’s already had one stay of execution.) But long may these Dancing Queens reign.

Posted in ABBA, MGM Mirage, Movies, Sheldon Adelson, The Strip | Comments Off on From A(BBA) to Z

Animal Cruelty

1) Following Saturday's tragedy at the Kentucky Derby, maybe it's time to put "the sport of kings" out to pasture. After all, market forces have already appeared to have "selected out" horse racing for extinction. Just think of all the states where horse racing is subsidized by slot machines and VLTs (and contemplate the irony of the snobbiest of sports being underwritten by the most snob-averse form of commercial gambling). And if some states (think Maryland, Kentucky) don't have slots propping up the horsey set, it's not for lack of trying.

At the very least, horse breeders, trainers, tracks and racing associations should adopt en bloc the recommendations of ESPN horse racing analyst Randy Moss (no, not that Randy Moss). They include: A) ban the whip; B) change the track surfaces, as has been done overseas; and C) stop medicating horses on race day to enable them to run. The last is just plain common sense, but it seems it takes the sad fate of a Barbaro or an Eight Belles to get it through our communal noggin.

2) If pictures like these make you sick …

… then this blog has, at long last, done some good. These poor, tortured animals are part of some sick, twisted person's "art installation." It's really interactive "snuff" porn. If you want to put a stop to this, sign here.

Now if only we could wrap our minds around the unimaginable enormity of 22,000 lives (at minimum) lost in the Burmese catastrophe

(I see that Laura Bush is getting a raw deal for making a few common sense remarks about the crisis. The moral? Whatever you do in politics, for Pete's sake, never speak your mind.)

Posted in Animals, Politics | Comments Off on Animal Cruelty

Tahoe: Scratch one casino

Part of the ongoing fallout from the Tropicana Entertainment bankruptcy is an even more dire forecast for the Lake Tahoe market. How bad is it? Well, even though Columbia Sussex has an option to renew its lease on the Horizon, the property’s owner, Park Cattle Co., says it intends to take possession of the property when the lease is up (in three years) and “expects to convert the Horizon into something other than a casino when the property changes hands.”

I guess you know things are bad when casino gambling ceases to be the highest and best use of a Nevada resort hotel. And you have to love the quote from the hospitality consultant who says Tropicana’s Chapter 11 filing won’t hurt the Horizon and sister property MontBleu so long as they don’t “have to start cutting corners.”

Man, you’re talking about Columbia Sussex! It’s what they do! (Bill Yung used to brag about it.)

Rounding up the rest of the Columbia Sussex reportage for the day, the admirably optimistic Scott Butera says his company is entering bankruptcy Continue reading

Posted in Atlantic City, Columbia Sussex, Indiana, Lake Tahoe, The Strip | Comments Off on Tahoe: Scratch one casino

Quote of the Day; More MGM and Trop news

Cher: “[a] well-preserved diva-saur.” — The New York Post

(Props to Jessica Roe for spotting this gem.)

MGM Mirage 2.0? Two separate companies, one in hotels and one in gaming? Makes sense, especially with so much non-casino expansion into Dubai and China. Besides, it might afford a graceful way around the potentially awkward problem of obtaining gaming licenses for Dubai World. After all, that Pansy Ho probe was still dragging along in New Jersey, last I heard. Had MGM Mirage been bifurcated earlier, perhaps Pansy could have been nominally responsible for the Macao hotel operations while MGM Mirage was titular owner of the casino.

It’s an idea that merits further discussion. (Steve Friess got there first and has a just slightly different take.)

Keeping up with Friess. He’s been way ahead of me on the unfolding Tropicana collapse. Interesting how the Columbia Sussex company line to Friess was “pure speculation” (i.e., a non-denial denial), even though Tropicana Entertainment had already confirmed it to The Associated Press. Sounds like another case of the ColSux left hand not knowing what the right hand is doing.

Friess has the official filing, too, and he’s less than impressed with the new management team, seeing as their last gig was The Cosmopolitan, not a project renowned for its robust financial health.

Note that MGM Mirage’s Alan Feldman tells Friess that acquiring The Trop is something “we have not considered,” as though to say it’s beneath MGM’s notice. To say it’s unlikely is one thing; to it’s not even been thought about, quite another. (It would give MGM complete control of the “new” Four Corners at Tropicana Avenue and The Strip, though.)

Back during the Aztar bidding war, Feldman had been openly disappointed that Dan Lee and Pinnacle Entertainment didn’t emerge victorious (see penultimate paragraph). Perhaps MGM would like to see a classy property on that corner — just so long as somebody else goes to the trouble of buying and building it. After all, it’s not like they don’t have an iron or two in the fire already.

Posted in Columbia Sussex, Current, MGM Mirage, The Strip | Comments Off on Quote of the Day; More MGM and Trop news

Still more updates!

Another day, another default. Tucked snugly at the bottom of Tropicana Entertainment‘s notice of default is another news nugget. Seems that the City of Evansville has informed the Columbia Sussex subsidiary that it’s defaulted on certain terms of its lease with Evansville (including minority-hiring obligations). That sale of Casino Aztar to the Caranos undoubtedly can’t close fast enough, bringing an end to 16 months (and counting) of recriminations along the Ohio River.

Spoke too soon? Did I say that the year-old Tropicana Casinos & Resort (TCR) Web site was finally finished? Wrong again. At least it’s easier on the eyes than the brutal-looking Columbia Sussex Web site, a relic of the Pleistocene Era of Web design.

About that Chapter 11 filing. During yesterday’s taping of the next “Vegas Gang” podcast, we were under the impression that the Tropicana default took the company by surprise. But lookee here. Could ColSux have been planning this move long in advance? Naaaaaaaaaaaaaaah!

If you’re a vendor and made delivery before Cinco de Mayo, take a number and go to the back of the line. (See FAQs #1 & 2; most of the others are just boilerplate happy talk.)

The Trop Has Two Daddies. If a company has two presidents, which one is really calling the shots? Just wondering.

“Why,” you might ask, “are certain casinos excluded from the Chapter 11 filing?” Good question. The Atlantic City Tropicana is under trusteeship of the State of New Jersey (and I’ll bet the New Jersey Casino Control Commission is real happy it didn’t return the property to Columbia Sussex, as requested by CEO William J. Yung III and trustee Gary Stein a few weeks ago).

The Westin Casuarina in Las Vegas and the Amelia Belle riverboat (above) are owned by Tropicana Entertainment CEO Yung’s TCR. Tropicana Entertainment is a discrete subsidiary of TCR, separated by a pair of holding companies. (And, just to make matters even more opaque, the Amelia Belle is scheduled to be swapped out with the Belle of Baton Rouge, which is part of the Chapter 11 proceeding; I wonder how their respective parishes will sort that one out?)

As for Greenville, Miss.’s Lighthouse Point Casino, it’s severally owned. One percent is held by Yung personally, 79% by Tropicana Entertainment and one of its subsidiaries, and 20% by unrelated third party Rainbow Entertainment.

I apologize for not being able to share the Columbia Sussex corporate chart with you. Our PDF-making capacity is offline for the day, but I hope to have it for you soon.

Posted in Atlantic City, Columbia Sussex, Indiana, Louisiana, The Strip | Comments Off on Still more updates!

More updates (or, Trouble with Trolls)

First, a correction: The Tropicana Casinos & Resorts Web site is here, finally up and running after languishing in a half-finished state for an entire year. I don’t know why Columbia Sussex has left the Tropicana Entertainment domain name sitting out there vacant (probably something to do with saving money) but that’s why you (or rather, I) shouldn’t Google “Tropicana Entertainment.”

The troll who says that the “Casinos” link “has been off the Columbia Sussex Web site for months,” however, is sadly misinformed. (I know, because I accessed it at least as recently as April 11.) Unless 24 days constitutes “months.” I was never good at New Math.

Then some good news: Tropicana Entertainment management is promising no (additional) layoffs at the Vegas property, in the wake of the bankruptcy filing, according to a KVBC-TV report this morning. That’s another pleasant change from what we’ve gotten used to since the property changed hands.

On the other hand, staffing has been cut so deeply in certain areas that it’s difficult to imagine where they could find room for further reductions. One maid to every hotel floor, maybe?

Aforesaid troll wrote in today mostly to spew ad hominen insults, and ethical and personal slurs, but also to float a few contentions, vis-a-vis the Tropicana bankruptcy. He’s thoroughly unpleasant but may have something of value to contribute to the discussion, especially as he seems to be privy to information that hasn’t appeared in news coverage of Tropicana. To wit …

A) “Any conversation with analysts would tell you that [Tropicana Entertainment President Scott] Butera was brought in for this very reason [bankruptcy]. His hiring was, it is widely believed, forced upon [Columbia Sussex CEO William] Yung by the debtors. This is what he does. He is in it for the long haul, as he was with Trump on his financial problems.”

(In support of this argument, one could cite the displacement of Yung sidekick Theodore Mitchel with Robert Kocienski, Tropicana Entertainment’s new CFO. Whatever the reason, the shift brings a long-overdue infusion of demonstrable casino expertise to Trop HQ.)

B) “Tropicana Entertainment intentionally missed the [Credit Suisse] payment which defaulted the Tropicana here because preparation for the bankruptcy filing was being prepared. CS, as well as all the creditors, have been in continuous contact with Butera.”

(I can’t wait to find out how Wilmington Trust Corp. feels about that, having been persuaded to give Butera the proverbial ‘just a little more time’ to work things out. Forbearance ends May 15; Chapter 11 filed May 5. Score: Butera – 1, Wilmington Trust – 0.)

(UPDATE: The forebearance agreement was amended late last week.)

C) “The true value in the Aztar [Corp.] deal was, and still is, the 34 acres on the Strip.”

A matter of opinion, Mr. Troll (who labels any view to the contrary as “idiotic”). Analyst estimates placed as much as $985 million to $1 billion-plus worth of the Aztar deal on the Las Vegas Tropicana.

However, as anybody who’d ever read any Aztar financials would know, the Atlantic City Tropicana was basically carrying Aztar, bringing in over half the company’s cash flow and revenue (see p. 22): 64% and 58%, respectively, in 3Q06. The LV Trop accounted for 13.5% of EBIDTA and 17% of revenue in that same time frame.

D) “The same would have happened if they lost control of Vegas … “

Flat wrong. The financial damage caused by subtracting the LV Trop’s cash flow wouldn’t be chicken feed, but it wouldn’t have been the dagger blow to the heart that was the loss of the A.C. Trop (see above). The Vegas site might have a lot of potential value that hasn’t been unlocked — or is being underutilized — but the Atlantic City property was putting by far the most cash on the table … a not inconsiderable value when there are interest payments to be met.

Then again, Columbia Sussex might unlock a treasure chest of wealth when Tropicana Entertainment crawls out from beneath the rubble and erects a vast pleasure palace on the Strip. And the cow might jump over the moon, too. But I’m not staying up nights.

Still, perhaps Mr. Troll has a point or two, if his social skills are somewhat lacking. You be the judge.

Posted in Atlantic City, Columbia Sussex, The Strip, Wall Street | Comments Off on More updates (or, Trouble with Trolls)

Update!

The previous blog entry has been updated to reflect new disclosures regarding the Tropicana Entertainment bankruptcy. (Yes, it's official.) Also, the "Casinos" link has been removed from the Columbia Sussex Web site. The disowning begins …

(And is Tropicana Entertainment so hard up for cash it's selling its domain name?)

Posted in Columbia Sussex | Comments Off on Update!

Coming soon: Venetian Baghdad?

It’s not quite so crazy at it sounds. Well, OK, it does sound off-your-rocker crazy, at least while mortar shells continue to drop on the Green Zone: A $5 billion commercial development in the heart of the world’s most, um, volatile tourist destination. Marriott International is already in and a cool billion of Saudi capital has been pledged. According to the Pentagon, the plan has stoked the interest of “some deep pockets in the world of international hotels and development.”

Hmmmm … deep pockets … international development. Sounds like a job for — Sheldon Adelson! He’s certainly ploughed a lot of dough (mostly via Freedom’s Watch) in keeping us militarily invested there. He’s also been trying to cry “Havoc!” and let slip the dogs of war against Iran — which gives him something in common with Sen. Hillary “Total Annihilation” Clinton. (And to think that such mushroom-cloud rhetoric undid the presidential candidacy of the late Sen. Barry Goldwater [R-Ariz.], 42 years ago. Times sure have changed.)

Of course, there’s a little problem with the Iraqi government, which isn’t entirely down with this scheme, especially because it brings back memories of Hussein-era cronyism. The fact that ultimate veto power over who can and can’t buy in resides with the U.S. military isn’t likely to play well, either. (Our government tends to take a selective attitude toward Iraqi sovereignty, even after five years.)

Maybe Las Vegas Sands could bid on one of pathetic old Saddam Hussein‘s palaces and call it … Palazzo. And after that, maybe Venetian Tehran?

Hey, if forced to choose between a weekend in Tijuana and one in Baghdad, I’ll take Baghdad anytime.

Tropped up. The Wall Street Journal is reporting that Columbia Sussex missed a Credit Suisse interest payment last Friday, which could push Tropicana Entertainment into Chapter 11. According to the WSJ, if true, this “would be the largest corporate filing of the year, a startling reversal of fortune for the new owner of one of the most historic casinos in Las Vegas.”

According to the Las Vegas Sun‘s Jeff Simpson, who is feeling understandably vindicated, a bankruptcy filing for Tropicana Entertainment would shield Columbia Sussex’s hotel properties (and three of its casinos) from creditors. It could also mean the imposition of onerous employment contracts upon the Las Vegas Trop’s workforce.

Bad career move. Was this what Scott Butera and Robert Kocienski had in mind when they signed on with Tropicana Entertainment? Or should they have taken the presence of a Titanic exhibit at the LV Trop as an omen? Their jobs now will definitely consist of rearranging the deck chairs on the You Know What.

Update: It’s confirmed. Butera obliquely affirms what many believe: That Columbia Sussex CEO William J. Yung III overpaid for Aztar Corp., just before the bottom fell out of the market.

Wall Street analysts put too much stock (pardon the pun) in the value of the LV Trop’s Strip acreage, ignoring the fact that it was the Atlantic City Trop whose cash flow kept the lights on. I thought so at the time of the sale and ensuing events have borne that out.

With so many eggs in its Atlantic City basket, Yung could ill afford to screw up there, which he did on a colossal scale. Judging from some of the circle-the-wagons verbiage in the wire story, Butera’s high profile — and the structuring of the Chapter 11 filing — look partly like a diversionary tactic to shield Yung from blame, even though he is the sole director, president, CEO, secretary, treasurer and lone shareholder of Tropicana Casino Resorts when it hit the fan and only recently ceded the presidency of Tropicana Entertainment to Butera.

Depending on how things play out, Butera is perfectly positioned to be either the savior or the fall guy.

Best line: Butera says, “We will continue to offer our visitors and players a full range of lodging, entertainment and gaming services.” Well, that’d be a pleasant break with tradition.

Posted in Atlantic City, Columbia Sussex, International, Politics, Sheldon Adelson | Comments Off on Coming soon: Venetian Baghdad?

Wynn tells Wall Street where to go

Not so long ago, Steve Wynn stated an obvious truth: The our deepening recession would impact Las Vegas sooner or later. Wall Street promptly punished him by selling down Wynn Resorts stock.

Fast-forward a few months and now it’s the conventional wisdom of the moment that “Las Vegas is not recession-proof.” Turn the crank on any stock analyst and that newly minted cliché will come tumbling out. We’re not privy to the considerations that recently led MGM Mirage and Station Casinos to pink-slip a collective 500-plus employees last month. However, in the case of MGM, even a company that turned a $1.7 billion profit last year has to placate the whims of Wall Street, which lives from quarter to quarter, long-term considerations be damned.

Hence the gargantuan post-9/11 layoff that earned J. Terrence Lanni the nickname “Osama bin Lanni” from his then-employees. MGM Mirage ended up having a profitable 2001 fourth quarter and year (and some of its executives were rewarded with six-figure bonuses, too). It was a panic-driven overreaction and highlighted how the mantra of “maximizing shareholder value” had turned into a millstone around some companies’ necks.

Had MGM turned but one penny per share of profit (far less than it actually did) in 4Q01, would it have been the end of the world? If you’re a stock analyst, yes. They’ve no stomach for short-term adversity or austerity. It’s gotta be blue skies and sunshine eight days a week, 25 hours a day.

That’s why it was satisfying to “open” today’s paper and read Steve Wynn‘s thoughts on the subject. A $0.41/share profit is hardly the kind of scenario in which Wynn should be feeling pressured to lay people off. Yeah, it was 15 cents higher a year ago. And fuel was a lot cheaper then. As was food. And there weren’t Spamalot costs to write off. And the Bush economy wasn’t in the crapper. And so on.

(Though, as Wynn told the Milken Institute Global Conference, our dollar seems like a peso to Europeans, so Vegas is a becoming an even bigger draw for them.)

A big part of what makes Steve Wynn who he is, as an evolutionary force in the casino-resort industry, is that he usually builds and plans for the long-haul, for better or (if you work on Wall Street) worse. The value of having fine art on property or building a conservatory, etc., doesn’t translate directly to the bottom line, but it’s what made the Wynn brand so highly respected and fungible. You won’t see a Palazzo-style slap-happy opening from Wynn because of the value he places on his reputation.

He’s also been around long enough to have experienced a few adverse swings in business. By contrast, Wall Street’s relationship with gaming is manic-depressive. Excessive euphoria alternates with premonitions of imminent doom. It doesn’t really care if you beat up on the product so long as those ‘eps’ numbers keep going up and up.

Take this to an extreme and you get the Columbia Sussex chop-shop mentality, which juices near-term profits but results in properties whose long-term performance brings up the rear in their respective markets. And for the consumer it means being offered places like the Las Vegas Tropicana, where the prices are higher, the promotions are fewer and the product is filthy.

Margin-obsessed William J. Yung III would never be caught dead saying, “We consider the morale and feeling of security our employees have is the most important asset the company owns.” That’s why he’s an industry laughingstock and Wynn is an industry leader. (Mind you, Wynn’s tip-confiscation regime hasn’t done anything for “the morale and feeling of security” among his dealers and he seems wrongheadedly determined to make that his “line in the sand” issue.)

Sure enough, Wynn’s much-needed pushback to Wall Street produced some downward drift in Wynn Resorts stock. But we could use a few more CEOs who say things like, “My colleagues and I are paid to run hotels in good times and fair times … This is not a company that gives a damn about short-term markets.”

Good on him.

Posted in Columbia Sussex, MGM Mirage, Sheldon Adelson, Station Casinos, Steve Wynn, The Strip, Wall Street | Comments Off on Wynn tells Wall Street where to go

Same as it ever was?

Nothing lasts. I’m finding that out the hard way as the acid in the paper labels in my CD collection eat through the discs, gradually rendering them unplayable and sending me into a race between preservation and catastrophe. (When last I checked, catastrophe was several furlongs ahead.)

Then again, when I revisit a casino and it seems different to me — and not in the sense that they’ve removed a favorite amenity or added a new one — I have to wonder if things merely seemed better or actually were better than they are now. For instance, three of us went to the Flamingo buffet Sunday night. I’d remembered it as being good value for the money (unless you count the plasticene-looking sugar-free dessert offerings).

However, with greater experience — and, sadly, sometimes a greater waistline — comes the realization that one can achieve far greater gustatory satisfaction at the premier locals’ casinos, such as Sunset Station and Green Valley Ranch. A recent LVA survey of Strip buffets didn’t even deign to sample the Flamingo’s, based on previous disappointments, so I’d say that it probably hasn’t gotten worse — most everyone else has raised the bar.

If you’re in the Huntington Press neck of the woods, the revamped seafood buffet at The Rio is definitely worth the wait (for a lengthier appraisal, see the current issue of LVA). The one at the Palms, however, I’d count as my biggest buffet disappointment so far. I would never expect such a humdrum offering from George Maloof, especially in a casino-resort that is comfortably above average is so many respects.

The Significant Other and I both got sick after trying South Point‘s buffet, so that one’s permanently off our list. (LVA readers give it very high marks, though — much better by far than the El Cortez‘s dire 2.5 rating.) However, the most abysmal buffet of a so-called “major” casino is surely the one at the Tropicana, a really sorry sampling. However … the big, logo-stamped paper napkins are quite sturdy and double exceptionally well as handkerchiefs. So go for the napkins, stay (if you dare) for the food.

Speaking of memories, some of the old Casino Executive crowd used to motor over to Arizona Charlie’s Boulder for lunch (again, for the buffet; Terrible‘s was closer but one experiment with it was enough for us). I hadn’t darkened the door of A.C.’s Boulder in quite a while, so we headed up there last night for some high-stakes bingo — do I know how to roll or what?

It was a profitable evening for my girlfriend’s adorable Mom, who came out $495 bucks ahead. However, either A.C.’s Boulder used to be seedier than I remembered or previous owner American Casino Entertainment Properties (read: Carl Icahn) has been letting it run downhill fast. To call the amenities “spartan” would be an insult to Spartans.

And a memo to management: Your HVAC system ain’t gettin’ the job done. Cigarette smoke is jammed up one’s nostrils the moment you step through the door and the sensation never abates. I felt like I’d smoked a whole pack all at once. If you miss Nevada Palace, you’ll feel right at home here. As CheapoVegas.com used to say of the inaptly named Palace, “Not only can I cut the smoke in this joint with a knife, I can butter it too.”

So if those Pocketbook of Values coupons for Arizona Charlie’s Boulder are burning a whole in your pocket, by all means, spend ’em while you got ’em. Just leave your lungs at home.

Speaking of the Flamingo, we got to try one of the revamped “Go” rooms. The beds are plenty comfy and the bathroom is spacious (and reverberant). We also had a birds-eye view of the Bellagio fountain show. On the minus side, the decor is what you’d find in an early-Seventies Playboy décor feature, if that’s your thing, and the selection of in-room TV channels might be described as “rudimentary.” Then again, these places don’t stay in business by having you lounge around in bed watching Sunday Night Baseball.

Gold Coast update. I just got off the phone with Boyd Gaming, which says that the shoeshine stand at the Gold Coast was underutilized, so they’re brainstorming new uses for that space. So I guess you’d better pack a shoeshine kit if you’re going to be staying in the Palms-Gold Coast-Rio corridor.

Posted in Boyd Gaming, Columbia Sussex, Harrah's, Herbst Gaming, Station Casinos, The Strip | Comments Off on Same as it ever was?

A call to action

Remember that editorial about construction safety (or the obvious lack thereof) that I said the Las Vegas Sun ought to be writing — as opposed to printing a jeremiad about the Miley Cyrus photo flap? Well, it’s been written … but not in or by the Sun, but rather by a man who knows the commercial building inside out, Tony Illia. He says what needs to be said. As he puts it, “the price of life is being determined daily on Las Vegas Strip.”

Remember when the State Dept. was looking askance at Macao for acting as a laundromat for dirty money, particularly from crazy Kim Jong-Il? Now it’s the turn of the Philippines, whose 15 government-owned casinos have been designated a money-launderer’s paradise. Pagcor has never had a sparkling reputation and the vast Philippine archipelago is rife with terrorists, rebels and kidnappers. So this unholy nexus of government, suspect cash and myriad evildoers does much to explain why U.S. casino operators give the Philippines a wide berth as they attempt to penetrate virtually every other major market in the Pacific Rim.

The wait is over. In the unlikely event you were anticipating my appraisal of Tom Breitling‘s Double or Nothing, it’s to be found in the new issue of City Life. Let’s put it this way: Jack Sheehan was Breitling’s initial co-author but Cal Fussman finished the job and gets the credit. Sheehan was the luckier of the two.

 

Posted in Downtown, International, The Strip | Comments Off on A call to action

Stumped by a reader

For those of you who don't click on the "Comments" link, my last update on the casino freeze in Macao prompted a response that left me, momentarily, at a loss for an answer (other than "I'd hate to pass up an opportunity to make fun of Stanley Ho, that's why.")

The question was: Why should we care about the international misadventures of companies who flee American affordability while chasing the Chinese dollar?

Somebody else want to take a crack at that? Anyone?

In bobblehead veritas. In case 15 seasons (and counting) of sub-.500 baseball haven't gotten the message across, Pittsburgh Pirates ownership makes sure Pirates fans get the message. Mutual, I'm sure.

Posted in Baseball, Macau | Comments Off on Stumped by a reader

Safety scandals still fester

No harm, no foul. That's more or less the company line coming out of One Harrah's Court, after Clark County reluctantly released a document detailing 34 fly-by-night remodeling jobs during the 2000-07 period. But following procedures codified in law apparently doesn't matter when the jobs are "minor in nature" (per Harrah's official excuse). Besides, doing this work on the sly saved Harrah's 34 permit fees. Thrift, Horatio!

Whether we're talking about MGM Mirage corner-cutting on security at Luxor or Harrah's Entertainment not pulling permits and shutting down its Seven Stars Lounge, one does well to remember that these are still comfortably profitable companies ($1.7 billion last year, in MGM's case). So it's not a question of keeping the wolf from the door.

"Juice" in action. Meanwhile, Boyd Gaming is in the hot seat concerning an incident at The Orleans that resulted in two grisly deaths. (The company says it doesn't want to "relive the tragedy"; neither do the victims' families, I'm sure, but they have to do so on a daily basis.)

While the issue was initially OSHA's $185,000 fine for safety violations, it soon transpired that three members of Gov. Jim Gibbons' administration, including one of his chief advisers, had "big-footed" the matter. Their unprecedented intercession on behalf of Boyd was considered so egregious that Boyd's own safety manager quit in outrage, as did an OSHA investigator. (Gibbons is a longtime beneficiary of Boyd's largesse.) It also resulted in a watered-down settlement. Boyd says top state officials got into the act because "They wanted to address their relationship with the casino industry." Huh?

It's a complicated story, involving evidence of unresponsiveness to safety issues by Boyd and a drawn-out, fits-and-starts investigation by OSHA. The latter acceded to a settlement which ties its hands, forbidding it from conducting regular inspections of Boyd properties for two years. Also, OSHA will provide Boyd employees with safety training — on the taxpayers' dime.

Now the Nevada Attorney General's office is looking into whether Business & Industry Dept. boss Mendy Elliott — or other state officials — had a thumb on the scales of justice. The attorney for the Industrial Relations Division says Elliott and another high-ranking state official were involved at Boyds' request; Boyd hotly denies the allegation. It also disputes that $45,000 donated to Gibbons' gubernatorial campaign (plus $40,000 across his five congressional races) constitutes a "major" contribution. In today's politics, maybe not, but it's scarcely chump change.

Perhaps Boyd also has a reasonable explanation for why it didn't assuage the concerns of its safety manager, especially after receiving comparable OSHA citations at two other casinos. As for OSHA, it finds itself in a bind whereby it its initial fine is more like an opening bid. If the company accepts it, all well and good. If not, OSHA is faced with a protracted appeal process in which its citation may be reversed — and during which the cited problem goes unremediated. So it often bargains for a reduced fine and immediate action. In the case of the Orleans incident, though, it looks like OSHA had some non-kosher "encouragement" to play Let's Make a Deal.

Posted in Boyd Gaming, Harrah's, MGM Mirage, Politics, The Strip | Comments Off on Safety scandals still fester

Did he or didn't he?

While I'm somewhat skeptical of the claims of Richard Suen, vis-a-vis his relationship with Las Vegas Sands, if he wins his lawsuit in Clark County District Court, he'll probably have Sands executives to thank for it. They've been tripping over their shoelaces in court testimony. William Weidner's latest gambit has been to say that Suen didn't earn his dough. Which would seem to implicitly concede that he had a valid agreement with Sands.

Suen's case probably isn't being helped by an attorney who confuses cash flow with profit. And Weidner outfoxes him on whether Sands is making a profit in Macao. Sands' performance on the stand has been maladroit and this case still looks like it could go either way, thanks mainly to a few own-goals scored by the home team.

More readers' gripes: A Californian follows up on another reader's suggestion for an inventory of gripes about niggling casino thrift moves, inspired by Harrah's Entertainment's suspension of Las Vegas Review-Journal sales. The newly submitted grievances are …

"1. the Hard Rock stopped serving Guinness at the tables. 

 
2. when Barbary Coast changed over to [Bill's Gamblin' Hall & Saloon], they took out their double-deck blackjack tables and replaced them with 6:5 single deck. therefore, I no longer play there, and I play at limits that they would actually care about.
 
3. Venetian moving their valet stand into the garage. and it's always full now. less likely to go there. good thing they have Palazzo now for easier (emptier) parking.
 
4. I'm comped at Red Rock Resort] so it doesn't really matter to me, but if I had to pay their nightly $20 "resort fee" I'd stay somewhere else just on principle.
 
5. Red Rock won't comp decent scotch at the tables.  Talking about anything better than a $30 bottle. You'd have to do a hard comp which is silly.
 
6. Red Rock's gift shop closes. it can't cost that much to staff the place overnight, and that's a convenience that any hotel should have.  Need some advil or antacid or something at 2 AM? too bad.
 
7.  Monte Carlo's brewpub stopped being a 'brew' pub. Was nice having something different back there, I used to go there all the time.
 
8.  Harrahs rerouting everything so you have to walk through that stupid fake-Mardi Gras thing just to walk down the street. I can't stand it there, and make it a point to cross the street rather than walk through White Trash Land. Friends feel the same way.
 
9. everything that Binions has done since they stopped being the Horseshoe."
 
On that last point, Terry Caudill promises that help is on the way. As for refusing to serve Guinness to table game players? That's just … perverse.

Posted in Downtown, Harrah's, MGM Mirage, Sheldon Adelson, Station Casinos, The Strip | Comments Off on Did he or didn't he?

‘Luxoricana’?; When unions attack (each other)

Labor unions aren’t very popular these days but sometimes even the mere threat of one is enough to effect improvements. Such seems to be the case at Luxor, where the International Union of Security, Police & Fire Professionals of America (uff da!) seeks to expand its MGM Mirage presence beyond MGM Grand Detroit. After Luxor comes Mandalay Bay.

Prior to the union showing up at the pyramid, “officers say, hiring and overtime freezes left properties understaffed and on-duty guards vulnerable,” reports the Las Vegas Sun. “Cuts were so deep, they say, that a lone guard was sometimes posted on the Luxor casino floor.” What is this, the Tropicana?!?

If true, that’s the kind of false economy we expect from bottom-feeders like Columbia Sussex, not top-echelon operators like MGM Mirage. For the love of all that’s holy, next to fire safety, the last area where one should scrimp is security. I mean, that’s not Monopoly money out there on the casino floor.

“MGM Mirage has reinstated overtime and boosted staffing levels, and is now offering officer-training classes,” according to a union rep, as well as replacing “battered patrol vehicles.” It shouldn’t have to take a union-organizing drive to effect that kind of positive change, but in this case it’s good it did. I sincerely hope this is the last we’ll hear about security getting short-sheeted on the Strip.

When unions attack (each other). Well, I never thought I’d live to see the day when one union pickets another. But that’s what’s happening in the ongoing scrumdown between the Culinary Union and a Vegas newbie, the Transport Workers Union. The latter is representing casino dealers at Wynn Las Vegas and Caesars Palace.

At issue is an initiative petition through which the TWU seeks to outlaw the sort of tip-confiscation practices currently in place at Wynn (and creeping into other businesses in the Vegas and Laughlin markets, I’m told). But, responds the Culinary, the initiative is “half-baked,” simplistic and would void existing contracts.

The Culinary’s opening salvo in this escalating war practically oozes faux solicitude for casino dealers. But if getting what’s fair for dealers were a Culinary concern, it wouldn’t have been MIA during the Wynn dustup or the uprising at Caesars. It’s the biggest open secret in Las Vegas that detente between the casino giants and the Culinary is maintained largely by dint of the Culinary taking a hands-off attitude toward dealers.

Still bloodied from its botched endorsement of Sen. Barack Obama, the Culinary is also having to tiptoe carefully in sending the message out that money from Sheldon Adelson is bad, bad, baaaaaaaaaaaaaaaad!

Drawing to a weak hand? Elections won by dealers’ unions in Atlantic City and Las Vegas: Six. Contracts negotiated: Zero to date. Even if we subtract Caesars Palace, given the recency of the vote there, and the Atlantic City Tropicana, which is in trusteeship and in no position to negotiate with anybody, that still leaves an 0-4 record. Besides, with both markets experiencing revenue declines — and the potential for job cuts — casino management can probably afford to run out the clock.

This week in Columbia Sussex. The pep-talk tour by Tropicana Entertainment President Scott Butera played Cincinnati this week. “Clearly, the company is undergoing a full recapitalization,” he understated. The story’s reference to the LV Trop as the company’s “crown jewel” will draw an ironic laugh from anyone who has witnessed the place’s wilted condition of late.

Meanwhile, the company hasn’t backed off its plan to erect a ginormous eyesore in place of the existing Trop: “a gambling facility twice the size of the Pentagon.” Columbia Sussex CEO William J. Yung III “acknowledged the project may cost more than $1 billion.” (More than a billion? Really? Ya think? A shrew customer, this Yung.) But, having arguably overpaid for Aztar Corp. (now reduced to one casino each in Las Vegas and Laughlin), the Wal-Mart approach seems inevitable. “It has to be done to maximize the value” of the site, according to Butera. Sadly, he’s probably right.

Nor is it surprising that Yung is being blamed/scapegoated for the collapse of Gov. Steve Beshear‘s pro-casino push in the Kentucky Legislature. Yung’s galumphing attempts to cash in on Beshear’s candidacy were certain to raise a ruckus — and, boy, did they ever.

Also, buying a would-be casino facility in Covington, before any enabling legislation had been passed, any popular vote had been taken, any applications made, any jurisdictions established or any licenses awarded is the sort of thing that looks at best presumptuous and, at worst, like the fix is in. And, following the catastrophic tenure of Beshear’s predecessor, Kentuckians seem doubly shy of anything that smacks — however remotely — of cronyism.

Whitewash? There’s a difference between not speaking ill of the dead and telling a very incomplete version of the truth. Such is the case with the sentimental obituary of a casino executive whose conduct at the helm of the Las Vegas Hilton was considered sufficiently deplorable that the Nevada Gaming Control Board voted unanimously to deny him a gaming license at the old Sands, in 1989. Sheldon Adelson was able to have that recommendation overturned by the Gaming Commission — an instance of “juice” (as demonstrated here) so significant that it gets an entire chapter in the history of Nevada casino regulation (pp. 128-55).

(An interesting saga involving Max Schmelling also didn’t make it into the obit even though it’s a now-famous incident.)

Full disclosure: I was delegated to edit Henri Lewin‘s copy during the period he had his Casino Journal column. To put it kindly, it was an experience that was indescribably unique and unforgettable.

Posted in Atlantic City, Columbia Sussex, Kentucky, MGM Mirage, Regulation, Sheldon Adelson, The Strip | Comments Off on ‘Luxoricana’?; When unions attack (each other)

A reader's suggestion

… and, no, it isn’t that I perform anatomical impossibilities on myself.

Rather, one of LVA‘s faithful “Question of the Day” readers suggests we run a poll or forum topic (or maybe both) on niggling little subtractions from Vegas casino floors which might save a few bucks on the bottom line but which detract from the guest-service experience — traditionally one of the casino industry’s strongest links.

Such false economies could include the closing of the Las Vegas Club‘s sports book, the reported removal of the shoeshine stand from the Gold Coast, Harrah’s Entertainment‘s cessation of single-copy sales of the Las Vegas Review-Journal (Steve Friess reports that Harrah’s may done a lot more than that) or the Tropicana‘s … well, you could fill a whole column with what the Tropicana has discontinued (seven things occur to me off the top of my head).

Any other suggestions? My personal peeve is the closing of the IMAX theater at Luxor, a place where I dropped a fair amount of $$. Given the number of movies in rotation at any point, repeat visits were an absolute must. Now it will give way to two funerary exhibits (Titanic and Bodies) for which one visit apiece is probably sufficient.* It may be the more remunerative course for Luxor to take, but it blows all the same.

* — One visit to Bodies would actually be one too many for me, but others find it less ghoulish and more fascinating.

Komodo Dragons at Mandalay Bay! Well, one Komodo Dragon. But one is a 100% improvement on none. Besides, if you dropped off your tax forms at M’Bay on April 15, you got free Shark Reef tix, which are good through June 30 … meaning that you’ve got 11 days to see Mr. Dragon gratis, from his June 20 debut onwards.

That’s all for today. Not that there isn’t a ton of news worth reporting (the Adelson vs. Richard Suen throwdown, the ongoing OSHA controversy, more Columbia Sussex craziness, just for starters) but other responsibilities at LVA take priority at the moment. But that means expanded LasVegasAdvisor.com content will be yours sooner rather than later.

Posted in Downtown, Harrah's, MGM Mirage, The Strip | Comments Off on A reader's suggestion

A good question

Math was always my worst subject, so it’s a good thing I’ve got sharp-eyed readers who keep me honest. One of them asks how MGM Mirage is going to save $75 million (later restated by the company as $200 million) by showing 400-plus managerial employees the heave-ho. “What,” the reader asks, “is the annual salary of the 400 managers? [$]75,000,000/40 = $187,500 […] pretty good gig for middle management!” (Can’t argue with that last point, for sure.)

To be fair, let’s re-divide by 440 (the precise number of mid-level people MGM has said it let go), which gives us $170,454.54. But I’m still foxed for an answer — unless the value of employee benefits, like health insurance (possibly including dependents) is being factored into MGM’s equation. Asks the reader, “is somebody fudging some numbers?”

Well, considering that those numbers increased by $125 million in the space of a day, I’d conjecture that despite “months of research” MGM is itself unsure as to what they are. Maybe it just threw a ballpark figure out there and then, when Wall Street reacted with a sell-off, tossed out a bigger one. But that’s 101% speculation.

Speaking of MGM Mirage, it must be feeling pretty confident that server-based gambling in Nevada is a “go” because it’s inked a memo of understanding with IGT for the latter to set up a all-server-based casino at CityCenter. (Yes, even table games)

Although, as the Las Vegas Review-Journal’s Howard Stutz once observed, server-based gaming is forever ‘a year away,’ it makes more sense to put the infrastructure in beforehand than to retrofit. Plus, with CityCenter’s opening night a year and two-thirds away, Nevada has plenty of time to sign off on the technology. It also provides a distinctive selling point for a casino that’s been overshadowed by all other aspects of CityCenter so far.

Unfortunately for IGT, the good news was upstaged by 2Q08 results that came in 35% lower than expected. The recession also cast a pall over the outlook for the rest of the year. Here’s the full report.

There’s got to be some good news, right? Indeed. Tourists visiting Macao are spending 15% more than last year. I wish they were spending it in the good old U.S. of A. But at least they’re still spending.

Oh, and CotaiNews.com has launched an offshoot, devoted to worldwide casino developments. The lead story? Myriad Botanical Resort (above) — what else? According to the blog, Myriad’s snow park is still part of the plan. Wacky! Like I said, it’s the Dixie Dubai.

Is Eisenhower still president? That’s how I felt last night after a BoSox/Yankees game that ran a mind-numbing 4.25 hours and ended with a football score (9-15) … which didn’t preclude Joe Girardi from having Mariano Rivera warm up to protect a six-run lead (had it been a mere five runs, I’m sure panic would have run rampant). The Yankees are aging better than the BoSox, who look ancient and cement-footed, but it took them a week to steal their first base, so don’t expect much excitement out of either team. Just mediocre pitching vs. worse pitching, while they take turns clubbing each other into submission.

Posted in Baseball, International, Macau, MGM Mirage, Mississippi, Taxes, Wall Street | Comments Off on A good question

MGM Mirage: What's it all about?

By now it’s old news that MGM Mirage took a paring knife to its personnel roster and gave 440 staffers the sack on Monday. Admittedly, saving $75 million seems like trimming a fingernail off a company whose 2007 profit was $1.58 billion (nor has the company acted as though in peril of dire penury).

Then again, MGM Mirage didn’t do a Columbia Sussex and take it out on service-level employees, choosing instead to thin the ranks of middle management. And, truth be told, I’ve run across some bureaucracy there that might be fairly described as “bloated.”

But MGM Mirage must have decided that Version 1.0 of its downsizing didn’t play so well, especially with its target audience, Wall Street. A downward skid in MGM stock accelerated before stabilizing today.

Hence, President Jim Murren rolled out Version 2.0: No, it wasn’t a reaction to the darkening economy (which at least Sen. John McCain is willing to call a recession, even if the occupant of the White House is boating on DeNile), contrary to what Alan Feldman had said previously. And the projected savings had risen overnight to $200 million.

OK, Murren’s the numbers guy, so let’s go with the larger figure. But what about this spin that the sudden exodus (abruptly announced to the affected employees mid-Monday) was the elimination of “redundancies” from MGM’s takeover of Mandalay Resort Group?

Does it really take three years and “months of analysis” (at God only knows what cost) to identify a few hundred redundant employees (a seemingly disproportionate number of whom are in the Mississippi market)? Then again, if you’re trying to make the case to your shareholders that you’re running an less-than-optimally-efficient company, “streamlining” that moves with the speed of a Galapagos tortoise constitutes mighty convincing evidence, IMO.

(Steve Wynn is right on the money, I think, both in terms of the deleterious psychological effect and the failure to use subtler methods, like attrition.)

MGM is far from alone in this situation (even if its newly restated motives may be disingenuous) and — given the alarming erosion of gaming stocks in the last six months — perhaps we should heave a sigh of relief that the cuts haven’t come sooner and in larger chunks. That’s not much comfort if you’re among the newly unemployed or contemplating the ripple effect on the local economy, but the industry is reacting with much greater circumspection than it showed in its panicky overreaction to the 9/11 crisis.

MGM Mirage will probably continue to be about as profitable as it is now. And if there’s any villain in this scenario, it’s those shareholders who whinge if their EPS is off by so much as a fraction of a penny (it does look as though MGM is going to miss its quarterly target) and devil take product quality. Fortunately, MGM is run by people for whom quality matters.

Speaking of Columbia Sussex, new Tropicana Entertainment President Scott Butera (no stranger to financially troubled companies, having served at Trump Entertainment Resorts and the Cosmopolitan), has been making the rounds and putting a friendlier face on his company’s oft-truculent public posture. He places the best spin possible on the collapse of his company’s Lake Tahoe lawsuit (in which Columbia Sussex at least eked out a three-year stay of execution, with hope of an eventual pardon).

He’s also managed to gain a 25-day reprieve from Wilmington Trust Co., contingent upon various conditions which include essentially pledging the Las Vegas Tropicana as collateral. I’m not sure that 25 days counts as “significant” given the number of things which would have to happen in order for Wilmington Trust to be assured that its $960 million was safe.

The proceeds from the sales of the Horizon Vicksburg (above, $35 million), Casino Aztar ($220 million) and Atlantic City Tropicana (unknown) have already been pledged to other debtors, and the pace at which the latter two sales close is now up to regulators in Indiana and New Jersey. Columbia Sussex’s cut of the A.C. Trop sale will have to come to $747 million to reach even the bottom of analyst Barbara Cappaert‘s $982 million-$1.34 billion aggregate price. It’d be a heck of a time for Butera to have to hang the “For Sale” sign on the LV Trop, but with Wilmington Trust breathing down his neck, he may have little choice.

Posted in Atlantic City, Columbia Sussex, Indiana, MGM Mirage, Mississippi, Steve Wynn, The Strip | Comments Off on MGM Mirage: What's it all about?

Nine down, 153 to go

Our blogging software just ate a lengthy post on the smoking controversy in Atlantic City. And a follow-up effort. Which is technology's way of saying, "Fuck it; it's Friday and I'm outta here!"

In other news, Bill Clinton still can't find the truth with both hands and a flash light. (The accompanying "I almost caught one THIS big" photo is particularly apt.)

But, to end the week on a positive note, I see that the snakebitten Detroit Tigers have finally taken a game, bringing their winning percentage to a robust .111. On the other hand, the St. Louis Cardinals offloaded most of their power hitters — not to mention the sublime David Eckstein — in the offseason but are 7-3. Go figure.

And the Los Angeles Angels of Anaheim have a half-share of the lead in the AL West. So life is good.

Posted in Atlantic City, Baseball | Comments Off on Nine down, 153 to go