Vegas Right Now = Bargain Country

Posted on July 2, 2008 by David McKee

While the Las Vegas Convention & Visitors Authority may blanch from peddling bargain-oriented messages, we don’t. While it wasn’t that long ago that some of us were mourning the apparent demise of on-Strip bargains — or redefining said bargains as $100/night — the downward economic spiral of the U.S. has dramatically reconfigured the equation. And a 39% drop in MGM Grand room prices or a 45% plunge at Green Valley Ranch definitely qualifies as “dramatic.”

Boulder Strip quality at Las Vegas Strip prices

On the lighter side, you’ve got wonder what they’re smoking at the Longhorn or Speedway that leads them to believe they can justify price points equivalent to Sunset Station, Excalibur or Harrah’s Las Vegas — and 2.5X those at Palace Station. Oh well, optimism is an admirable quality.

Speaking of bargains, Wall Street is punishing Las Vegas Sands for its room discounting, not to mention predictions of a delayed opening (as in months later than planned) for Four Seasons Cotai. At $43.09 and falling, LVS is definitely a “bargain play,” off $105.67/share from its 52-week high.

Posted in Boulder Strip, Harrah's, LVCVA, Macau, MGM Mirage, Riviera, Sheldon Adelson, Station Casinos, The Strip, Wall Street | Comments Off on Vegas Right Now = Bargain Country

Denial in the suites

Posted on July 1, 2008 by David McKee

Gary Loveman must be working on his stand-up act. In today’s Wall Street Journal, he calls the present economic pickle “the toughest environment we’ve faced.” It might not be quite so difficult had Loveman not steered Harrah’s Entertainment (and its apparently sheep-like board) into a leveraged buyout, an act for which Loveman was handsomely compensated by new owners Apollo Management and Texas Pacific Group.

It gets better. Loveman tells the WSJ, apparently with a straight face, that Harrah’s is “profitable.” Somebody must have hid the most recent 10-Q from him. That little piece of paper shows a March 31, 2007 profit of $185.3 million swinging to a $187.8 million loss one year later.

And if you’re “boosting visits to its regional casinos by c Continue reading →

Posted in Columbia Sussex, Harrah's, Isle of Capri, Penn National, Station Casinos, Wall Street | Comments Off on Denial in the suites

Court smacks down ColSux; Pinball and Dragons

Posted on July 1, 2008 by David McKee

This just in: The legal appeal by Columbia Sussex of its New Jersey license denial has been ashcanned by an appellate court. In a 44-page ruling, the court sided with the New Jersey Casino Control Commission, writing — in part — that “The findings made by the commission that Tropicana lacked the financial integrity and responsibility, as well as business ability, are amply supported by the record.”

We may not have heard the last from the famously “contumacious” William J. Yung III, but it appears that all systems are go for a sale of the Trop … if only the NJCCC and its bungling conservator, Justice Gary Stein, could ever get their act together.

Las Vegas’ Pinball Hall of Fame gets some well-deserved love from the Los Angeles Times. As luck would have it, the Significant Other and I blew a roll of quarters (and then some) at the Pinball HoF last Sunday and — when it comes to value for your dollar — this is probably the best deal in Vegas. Not to mention that it’s about as much sheer fun as you can find anywhere in town. Even though my hand-eye coordination is too f-ed up to make me a viable pinball player, there’s no denying the endorphin rush. (The only game I performed well on was — wouldn’t you know it? — Stargate.)

One bad boy. That’d be the new star of Mandalay Bay‘s Shark Reef, its seven-foot-long Komodo Dragon. This massive predator is such a badass that he’ll bite you, then stalk you for as much as a week, waiting for his deadly saliva to do its work. Mandalay Bay’s resident dragon looks like a cool customer and he fixed me with a hypnotic stare that was uncomfortably reminiscent of James Earl Jones as the shape-shifting Thulsa Doom in Conan the Barbarian.

As much as we admired the great predators (especially the water monitor and the crocodile) our greatest awe was reserved for the gentle majesty of the sea turtles, mystic creatures of great serenity. Amidst all its “wow” factor, Shark Reef does a terrific job of inculcating visitors with eco-friendliness and warnings as to the dangers of overexploiting the oceans. (Although there’s an irony in the exhibit that decries the harvesting of sharks for the fins, even as some high roller is probably sitting down to a bowl of shark’s fin soup somewhere else in the casino.)

Hats off to the former Mandalay Resort Group for making a home for this noble endeavor, and to MGM Mirage for keeping it going. There aren’t many things in Las Vegas that ennoble the spirit but Shark Reef is one of them.

Posted in Animals, Atlantic City, Columbia Sussex, MGM Mirage, Regulation, The Strip | Comments Off on Court smacks down ColSux; Pinball and Dragons

Tripped up by Trop

Posted on July 1, 2008 by David McKee

State-appointed conservator Justice Gary Stein continues to trip over his shoelaces in his efforts to sell the Atlantic City Tropicana. Amazingly, the New Jersey Casino Control Commission still backs him, even though Stein has given commission members precious little reason to maintain confidence in his stewardship. It's almost — almost — enough to make you nostalgic for Columbia Sussex. Well, OK, not quiiiiiiiiite that bad.

Still, as a colleague of mine who knows Atlantic City like the back of his hand said recently, it would have been a pleasant surprise had the Trop fetched bids north of $650 million. Instead, at least two of the offers have been in the $850 million-$950 million range. But Stein has the effrontery to deem them "unreasonably low." That's a decision for the collective wisdom that is the free market, not for a middleman. Stein needs to strike the best deal he can (preferably with Cordish Cos. or Planet Hollywood, which has taken the former Aladdin from 18th to 8th in Strip gambler volume in the past year) and get the hell out. He's wasted enough taxpayer money already.

Posted in Atlantic City, Columbia Sussex, Regulation | Comments Off on Tripped up by Trop

Lady Luck deal in offing

Posted on June 30, 2008 by David McKee

On Wednesday, the Las Vegas City Council is scheduled to vote on an agreement that may finally re-start development of the long-defunct Lady Luck Hotel & Casino. As you may recall, the Henry Brent Co. planned to convert half the property into condos and keep the other half a hotel.

Foolishly, Brent closed down the whole kit 'n kaboodle, rather than renovating in stages. So long, cash flow. Not surprisingly, the project eventually ground to an agonizing halt, leaving downtown Las Vegas with one more eyesore, of which there was already no surfet.

Current owner CIM/LL Las Vegas has been presented with a laundry list of demands from the city, including at least $100 million in upgrades to the Lady Luck, ones which will make it theoretically commensurate with a three-star hotel. In return, the city will make various concessions, including bending the rules regarding "the placement of supergraphic and tall-wall signs." Three million dollars derived from said signage (over a 10-year period) will go to the so-called "Mob Museum" — its full and fancy name is The Las Vegas Museum of Organized Crime and Law Enforcement.

In return for getting the Ogden Garage from the city at a discounted rate (anywhere from 40% to 61% off its appraised value), CIM has to spend a half-million on upgrades. It also gets a big chunk of city land (again, at a discount), contingent on building a low-rise mix of retail, restaurants and nightclubs — and, yes, maybe condos.

If CIM can't get started by New Year's Eve next or isn't "substantially" done two years later, all bets are off … although I doubt the City of Las Vegas is going to want to revert to having yet another dark, half-finished Lady Luck looming in its midst. CIM may not be holding all the cards, but the city seems to be trying to make the best of a weak hand.

Posted in Downtown | Comments Off on Lady Luck deal in offing

"Raking" it in at Trump

Posted on June 27, 2008 by David McKee

Once I'd read that Trump Plaza had gone to automated no-dealer poker, my first thought was, "What becomes of the 'rake'?" Not to worry: The machines have taken care of it. Or, as Casino Manager Anthony Spagno was kind enough to explain, "As the case with a dealer, the rake is deducted from the pot at certain intervals during each hand with a maximum of $3.00. Time raked games are deducted from the players table stakes according to the rake schedule."

Automated poker is catching on at Trump Plaza in part, I suspect, because there was no poker there previously and because, according to the article, it provides a user-friendly 'bunny slope' upon which to get acclimated to the game.

These Poker Tek tables have yet to be approved in Nevada, where I'm sure they'll produce an interesting schism. Obviously, no self-respecting poker room on the Strip would install them, but they'd probably do well out on the floor amongst the casual players, even more so than Rapid Roulette, for instance.

And I can definitely see PokerPro muscling into the low-budget Vegas casinos and maybe even some mid-market ones. For instance, you could plunk them down in the poker "room" at Suncoast (really just a random corner of the casino floor) and I doubt anyone would notice the difference.

June's Bad Service Award goes to the bartender at the Sahara's NASCAR Cafe. I killed time there with a soda while some friends and family went roller-coaster-riding. The bartender was surly, took forever (on a very slow Saturday night) and my $2.95 Coke came in a thimble. No tip for that schmuck.

Why is it that casinos are usually willing to pay higher taxes when virtually every other business is only too eager to shirk its civic responsibility? The latest group of gambling halls to pony up are the East Baton Rouge riverboats. Most generous, at least in theory (because it haven't built its riverboat yet) is Pinnacle Entertainment, offering 4.5% of revenues outright, according to JP Morgan.

More complicated formulas apply to the two extant vessels. Columbia Sussex's Belle of Baton Rouge will pay 2% if revenues are less than $73.6 million, but — if that benchmark is achieved — it pays a split rate of 3.5% on the first $73.6 million and an extra percent on anything more. Penn National's Hollywood Casino Baton Rouge subscribes to an identical formula, save that the magic number for Penn is $100 million, not $73.6 million (which seems to be a nice way of saying that Penn is trouncing Columbia Sussex. What a surprise.)

The new tax rates supplant $2.50/head boarding fees formerly in place in East Baton Rouge Parish.

Posted in Atlantic City, Columbia Sussex, Donald Trump, Louisiana, Penn National, Pinnacle Entertainment, Sahara, The Strip | Comments Off on "Raking" it in at Trump

Something's brewing on Koval; Echelon goes underground

Posted on June 26, 2008 by David McKee

Harrah’s Entertainment continues to demolish the low-rise apartment dwellings it accumulated behind its Barbary Coast/Flamingo/Imperial Palace/Harrah’s Las Vegas cluster of properties. Also, a shiny new fleet of construction trailers now sits where Bourbon Street‘s hotel tower once did. Could we be seeing the first stirrings of “Epicentre”?

Regardless, apartment owner Oscar Nuñez, whose sad, little buildings are surrounded by more and more piles of rubble, looks the Big Loser of 2007. He squandered his opportunity to sell out to Gary Loveman when the market was at its height and Loveman was on a buying spree. Now he’s missed his moment and will probably either have to settle for a depressed price or watch Harrah’s build up all around him just out of spite.

Incidentally, we passed the now-infamous corner of Koval and Winnick the other night, on our way back from The Palazzo, and couldn’t help but think: If there’s anything left in the state budget other than a few pennies, nickels and some lint when Gov. Jim Gibbons finishes demolishing it, perhaps the Nevada Historial Society could erect an historical marker at the Koval/Winnick nexus, commemorating the sad story of Javon Walker — if he ever gets it straight, that is.

Direct Strip access is the holy grail of megaresort design — and those, like the Aladdin/Planet Ho, who ignore it do so at their own peril. Unfortunately, this means gnarly tangles of pedestrians, cars, buses … everything except rickshaws, when a crosswalk (er, “pedestrian realm”) must vie with the grand entrance of a Paris Las Vegas, say.

Kudos to Boyd Gaming, then, for circumventing this problem by planning a pedestrian tunnel “underneath the main project driveway” at Echelon, 151 feet long by 20 feet wide (the Strip is to the lower R-hand side of the rendering, above.) To provide some visual compensation, Boyd plans to line the tunnel with glass display cases (contents unspecified).

If there’s anything to regret, it’s the renaming of Stardust Road as “Echelon Resort Drive” (Boo!). The Stardust was a proud and important part of Boyd history and it would be touching if some vestige of it (however vestigial) lived on as part of Echelon. Instead, it looks like one more trace of our already ephemeral history will be effaced.

Those clever Germans, what new technical marvels will they, uh, conceive next? As long as my enjoyment of baseball games and Battlestar Galactica is to be disrupted by infestations of commercials featuring randy AARP members singing — sometimes literally — the praises of Viagra and Cialis, then the FDA had better get this spray-on prophylactic to market, stat. Just imagine the sales in Las Vegas (and Nye County) alone!

More is Less Dept.: Even if Mamma Mia! is coming to the big screen on July 18 — in cinematic treatment that makes the stage production look monastic — you’ll still get more music for your money at the live version, hanging tough at Mandalay Bay.

The Internet Movie Database and Wikipedia are — surprise, surprise — at odds as to which songs made the cut and which didn’t, while the movie’s official site is no help whatsovever. “Knowing Me, Knowing You” is definitely Out (and, from what I’ve been able to deduce, Pierce Brosnan‘s vocal limitations may have been a consideration — imagine Van Morrison covering ABBA). So are the Act II curtain-raiser, “Under Attack”, “One of Us” and the fatuous “Thank You for the Music” — which has supposedly been reinstated as end-credits music. And a 1981 song, “When All Is Said and Done” has somehow found its way into the show. WTF?

If Wikipedia is to be believed, the songs have also been re-sequenced, with “I Do, I Do … ” moved to the 3/4 mark. But if IMDB has its facts right, the encores of “Dancing Queen” and “Waterloo” are supplanted with other songs — which would be grounds for criminal prosecution, if not rioting in the streets.

However this shakes out, it appears highly unlikely that the movie is going to make the stage version in any way redundant. (Which is another way of saying MGM Mirage should let Mamma Mia! run at Mandalay Bay until its producers decide otherwise.)

And if all this makes your head spin, have a quiet lie-down and enjoy the sublime Meryl Streep letting ‘er rip in the title song and three others (with assists from Christine Baranski and Julie Walters), including a by turns rueful and torchy “The Winner Takes it All.” She should dust off the air piano and take this act on the road.

Posted in Boyd Gaming, Harrah's, MGM Mirage, Movies, The Strip | Comments Off on Something's brewing on Koval; Echelon goes underground

Case Bets: Airport, Encore, Pahrump, Roadhouse

Posted on June 25, 2008 by David McKee

You know things are bad when McCarran International Airport offers space for three hotel-registration kiosks (ranging from 525 to 935 square feet, starting at $200/foot) and can’t find takers for all of them. Fifteen possible candidates were solicited and, when all was said and done, McCarran received two — count ’em, two — bids.

MGM Grand will get the mid-sized (764 sq. ft.) space, having bid on all three — albeit at the minimum. The Venetian Casino Resort was feeling more open-handed, offering to start at $400/square foot, but decided that the smallest of the three kiosk areas was sufficient to its purposes. Which means there’s almost 1,000 square feet of express check-in area at McCarran going begging. Belts must be getting pretty tight ’round here.

Encore is taking applications. I wonder what prospective dealers are going to hear about tipping policies in their job interviews (and how many of them will be unhappy campers from Caesars Palace and other Harrah’s Entertainment properties). Wynn Las Vegas dealers who are sticking it out through slow-moving negotiations would surrender a hard-won victory by applying at Encore?

And does Steve Wynn risk having unionization spread to his new casino if he raids his Wynn LV dealer pool for Encore? If he extends his tip-confiscation policy to Encore, what incentive would current Wynn dealers have to apply there, other than perhaps a bump in their base salary? Does it boil down to arguing that keeping most of your share of the tip pool at Encore is better that keeping all of what you’d make anywhere else? Since Wynn’s properties are still perceived as the top of the food chain (regardless of what Sheldon Adelson proclaims), that could still constitute a powerful argument.

Besides, you have to tip your cap to any company that makes the preservation of the King’s English part of its code of conduct: “Use complete sentences, avoiding slang and phrase fragments.” Because that’s like so totally … Whatever. Y’know?

Blame it on Kansas. Maybe it’s because their eyes are on landing a contract to build a megaresort in Kansas. Or maybe Pahrump just seems like small potatoes when you’re hanging out with Kurt Busch and Daniel Negreanu, but Golden Gaming has bailed on its purchase of Saddle West Hotel & Casino, dumping it back into the lap of Marnell Sher Gaming.

Roadhouse rides again. Another one of the ghost casinos of Sunset Road rose again as a slot house, if only for eight hours, to keep its gaming entitlement alive. Can the former Holy Cow Brew Pub & Casino be far behind?

Posted in Boulder Strip, Current, Harrah's, MGM Mirage, Sheldon Adelson, Steve Wynn, The Strip | Comments Off on Case Bets: Airport, Encore, Pahrump, Roadhouse

Quagmire at the Trop

Posted on June 23, 2008 by David McKee

So the feckless — and costly — Tropicana conservatorship of Justice Gary Stein is to drag on still further. Let’s see: Bids that were supposedly “unreasonably lower” but which Stein refuses to share with the public. A wholesale chucking-out of a bidding process which has dragged on for over half a year. A revelation that Stein has been playing footsie with other potential buyers, even after the process was closed. Bland reassurances that everything will go much faster this time around. (Remember, Stein was initially supposed to have this whole thing wrapped up last April).

As one exasperated newspaper reader puts it, “Fair market value is what the property is worth adn [sic] what people are willng to pay for it, not what you want the property to be worth!” Oh, and Stein wants to retain a second set of financial advisers. At the rate Stein is pissing money away, it’s a miracle the Trop can meet its payroll.

When the Last Trump (pun intended) sounds for Continue reading →

Posted in Atlantic City, Columbia Sussex, Donald Trump, Regulation, The Strip | Comments Off on Quagmire at the Trop

"Risky" Harrah's; Yanks Heart Seminoles

Posted on June 20, 2008 by David McKee

Reuters reported this week that the debt carried by Harrah's Entertainment “may weaken from already distressed level as heavy capital spending and interest payments absorb cash flows at a time when the casino operator is also facing declining gambling revenues.” We've already seen one set of quarterly income wiped out — and then some — by costly interest payments and early retirement of debt.
One analyst decribes Harrah's leverage as “pushed … to the limit” with little prospect for improvement. Guess that puts paid to a Galaxy Entertainment acquisition. Not to mention that physical expansion is going to require even further indebtedness.

Meanwhile, Wall Street speculates that Harrah's may elect to retire some bonds not with cash payments … but with even more debt. The cost of insuring said debt is steep, reflective of the fact that “people are pricing in a lot of risk there,” according to analyst Christopher Snow of CreditSights. And while analysts like Snow wait to see which way the current downturn in gambling shakes out, they're also fretting over how new infusions of rooms into the Vegas market are going to eat into Harrah's pricing power.

Oh, and a slew of notes come due in 2010, when Snow predicts the company will hit “a pretty high wall of maturities starting in 2010 and going through to 2011 and afterward.”

Harrah's won't fail, predicts a third analyst, “but this is a tough one.” CEO Gary Loveman's multi-million-dollar early opt-out clause may be looking very attractive right now. The Harrah's car isn't going over the cliff by any means, but the upside of the Apollo Management/TPG Capital deal still appears chimerical.

The New York Yankees are hanging in there like the tough old birds they are. And if you can bear to watch Melky Cabrera's graceless outfield play (a far remove from the gliding elegance of Bernie Williams in years past), then you'll be looking forward to pulling up a table at either NYY Steak or a Hard Rock Restaurant in the House That Ruth Didn't Build, when it opens next year. This joint venture between the Pinstripes and Florida's Seminole Tribe is another tribute to the economic muscle that was nurtured by tribal gaming but is now being flexed in myriad other business arenas.

Still, while it's all well and good for the Seminoles to be tapping into the megamillions of the Bronx Bummers, I hope that — closer to home — they're showing some love to the Tampa Bay (Devil) Rays, 2008's Cinderella team. If no else is up for a Rays/Angels ALCS, you can at least count me in.

Posted in Baseball, Harrah's, Tribal, Wall Street | Comments Off on "Risky" Harrah's; Yanks Heart Seminoles

Turnaround for Lady Luck?

Posted on June 20, 2008 by David McKee

A reliable source sees some light at the end of the Lady Luck tunnel: “CIM took ownership of the timeshare property last Oct. as LL Timeshare. Just this month they’re doing the individual deed assignments.”

Don’t get your hopes up for a big makeover of the Gold Spike, downtown’s skankiest casino. However, some modest improvements are being requested, including improved fire sprinklers and “upgrading the restaurant,” which would barely qualify as a lunch counter.

Gloom over Macao: Coverage of the Macao market has been initiated by Majestic Research and it’s less than thrilled with what it found, including a April-May flattening of the mass-market sector. Also, the physical amount of play at Venetian Macao “is still below its share during its first few months of operation last year.” (Guess the novelty factor has worn off.)

Game occupancy — the number of positions in play — is described as well below average … 25% below average. Again, this may reflect the plopping of a casino behemoth onto the market, as opposed to rolling out its gargantuan new amounts of casino capacity in stages (and by that I don’t mean a “soft opening”; Las Vegas Sands has had enough of those). “There continues to be very little play at The Venetian’s high end mass market tables,” the report concludes.

PBL Melco‘s Crown has “ramped significantly” in its mass market play, although it’s now sacrificing some of that for VIP play “much of which occurs behind ‘closed dooors,'” and therefore beyond Majestic’s ability to measure.

Business at Wynn Macau, meanwhile, was observed to have “increased sharply” following the opening of nearby MGM Grand Macau. However, this doesn’t cut both ways: “MGM’s share of game usage has not ramped up since it opened. In fact, its share … declined slightly each of the past few months.”

Is Pansy Ho the instrument of Stanley Ho’s revenge? Majestic reports that MGM made a brief dent in SJM‘s amount of play, but that Stanley Ho’s fleet of decrepit casinos “rebounded sharply later in January and further increased following the opening of Ponte 16 in early February.” Majestic does note some possible SJM market-share erosion in April and May, though.

Note: A contrasting, and sometimes complementary, first-hand report on Macao can be found at RateVegas.com. It’s must-reading.

Posted in Downtown, International, James Packer, Macau, MGM Mirage, Sheldon Adelson, Stanley Ho, Steve Wynn, Wall Street | Comments Off on Turnaround for Lady Luck?

Blasts from the past

Posted on June 18, 2008 by David McKee

Snuggled inconspicuously in a recent El Cortez press release was the disclosure that the newly reconfigured ownership will include one Lonny Zarowitz. The aforesaid Zarowtiz figures briefly in John L. Smith's Running Scared: The Life and Treacherous Times of Las Vegas Casino King Steve Wynn.

Veteran investigative reporter Smith describes Zarowitz's father, Jerome, as a "mob frontman" who "retreated in style to Palm Springs" after cutting a March 23, 1973 deal with the Nevada Gaming Control Board "to approve his son Lonny as a percentage owner in the tiny Red Garter Casino." The younger Zarowitz had been previously turned down for a license to operate a slot route, Smith writes.

A former shift manager at the El Cortez, Zarowitz also held a tiny percentage of Gaughan's Exber Inc., and the two purportedly pursued an extremely contentious relationship in decades past, as detailed in a 1997 report by the New South Wales Casino Control Authority.

In 1992, it reads, Zarowitz accused Gaughan of past-posting in the El Cortez's race and sports book in 1986. However, since Zarowitz refused to provided the corroborating evidence he claimed to possess, the charges went nowhere.

Zarowitz was accused of sexual harassment by an El Cortez cocktail waitress in 1988 and was let go by the casino two years later, the document continues. He claimed the harassment complaint was a setup by Gaughan.

Reads the dossier: "Zarowitz made other allegations against Gaughan including that Gaughan was an FBI informant, that he had allegedly interfered with Zarowitz' mail and that Gaughan had conducted certain business transactions on less than an arms length basis …
 
"Zarowitz has also alleged that Gaughan has been able to influence the Nevada Gaming Regulators, the local Police and the US Postal Service not to conduct proper investigations into Zarowitz' allegations regarding the 1986 race and sports book issue."

New South Wales regulators ultimately deemed Zarowitz lacking in credibility and Gaughan suitable for licensure, "but that he should be the subject of continued scrutiny." 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? I can think of several states where he wouldn't have a prayer.

Gone and forgotten: In the course of reviewing the brief life and troubled times of the Bourbon Street hotel-casino, I discovered that if it was not the least-loved Strip (or just-off-Strip) casino, it wasn't for lack of trying. On a more personal note, I recall Bourbon Street for having the tightest slots I've ever played in Vegas. So no love lost there, either.

Following Bourbon Street's 2006 implosion, the southwest corner of the site became popular hangout for vagrants and winos, as attested by an impressive pile of empty liquor bottles that accumulated there. To be fair, this was apparently not that much of a change from when Bourbon Street was still open, to judge by eyewitness reports found at RateLasVegas.com.

One of the favorable customer reviews recounts finding a drunken woman passed out on the barroom floor. Others describe being panhandled in the restrooms. Comments also include: "It is not uncommon to catch someone shooting up in the bathroom," "Had to give $20 deposit for a hair dryer," "beds held up by phone books" while yet another offers this ringing endorsement: "I suppose it would beat staying in your car."

Stupid TV Anchor Tricks: Subbing on Fox 5's morning news program, co-anchor Heidi Hayes was in the course of reporting a buyout attempt of Cirque du Soleil by Dubai World. Not to be left out, self-involved co-anchor Jason Feinberg butted into Hayes' litany of Cirque Strip shows by noisily adding Le Reve to the list.

Now, anybody with half a brain knows that while Le Reve may play like a parody of Cirque at its most homoerotic, it is (or was) a solo venture by Franco Dragone — or as Steve Wynn infamously intoned, "A collection of imperfect dreams, created by Dragone." After three years and at least two makeovers, the non-Cirque-ness of Le Reve should be old and obvious news.

Send out the clowns: Incidentally, a trustworthy source recently viewed Le Reve 3.0 (you know, the version with ballroom dancing added) and says it's the best iteration so far. The clowns have reportedly been almost completely banished, which counts as progress any way you slice it.

Posted in Downtown, Harrah's, International, Regulation, Steve Wynn, The Strip, TV | Comments Off on Blasts from the past

Terrible news for Vegas

Posted on June 11, 2008 by David McKee

Comment is superfluous: This headline says it all. At least I won't have to explain anymore why I don't own a car.

Posted in Downtown, The Strip | Comments Off on Terrible news for Vegas

Good news for the Boardwalk

Posted on June 11, 2008 by David McKee

May 2008 was only the fourth-best May in Atlantic City’s 30-year history of casino gambling, but it was good enough to qualify as cause for celebration. The New Jersey Casino Control Commission has the full breakout, from which a few highlights may be extrapolated.

Table games were once again the Boardwalk’s savior, propelling a 1.6% year/year revenue increase. Let’s hope Pennsylvania solons don’t get it into their heads to add craps, 21 and baccarat to their ‘slot parlors.’

Slot winnings were a mixed bag, with the notable exception of Caesars Atlantic City, which either got its clock cleaned or has driven slot players away, down -10.4%. Still, even with slot win down -1.5% overall, more casinos were in the “plus” column than the “minus” one, 6-5.

Positive slot results at Tropicana and, particularly, Resorts Atlantic City was negated by unlucky table play, down -8% and 16%, respectively. While Trump Marina remains the market laggard, it had a bonny May at the tables, +22.7%, overshadowed only by Trump Taj Mahal (+31%) and Harrah’s Marina (+37.5%). Both the Atlantic City Hilton and Borgata posted double-digit gains, too.

Although six casinos posted decreased wins, exceptional months at the Taj (+11.4%) and Harrah’s (+9.8%), plus a good month at Borgata (+4.9%) were enough to drag the Boardwalk into the “plus” column overall. As far as sheer volume of win was concerned, tops was Borgata (who else?), at $64 million, trailed by Bally’s Atlantic City ($53 million). Harrah’s, Caesars and the Taj were bunched together to form a kind of “second tier.” At $35 million and $33.7 million, respectively, the Showboat and Tropicana formed the third echelon. Bringing up the rear were the Hilton, Trump Plaza, Resorts and the Margaritaville-to-be, Trump Marina.

The Press of Atlantic City has the "why" of the good numbers. It's amazing what a little sunny weather will accomplish.

Colony Capital, Resorts’ owner has finally confirmed that it did put in a formal bid for the Tropicana. That’s a relief, as a rerun of Colony’s ‘phantom’ bid for Aztar Corp. (announced, never submitted), would have given Colony a reputation for a weak trigger finger.

But if Trop trustee Justice Gary Stein wants to draw the sale process out any further, he’d better be darn sure he’s going to get bids comfortably above the $850 million-$950 million range currently on the table. Colony, Cordish Cos. and those publicity-averse New York bidders – all of whom appear to have bargained in good faith – have reason to feel skeeved at the moment.

Posted in Atlantic City, Boyd Gaming, Pennsylvania, Regulation | Comments Off on Good news for the Boardwalk

"Casino Bonds Crush Harrah's"

Posted on June 3, 2008 by David McKee

That’s Bloomberg, bearing the dire news that casino junk-bond debt is “generating the worst return for investors as companies from … Harrah’s Entertainment Inc. to Herbst Gaming Inc. risk bankruptcy under the weight of their debt.” With a return of 10%, casino junk bonds “are the biggest losers this year.”

Who knew? “It was viewed very much as a safe haven,” says one portfolio manager, referring to an industry long perceived as recession-proof — a bubble that has burst this year. Aforesaid manager has seen his company take a bath on Donald Trump‘s casino debt, and is foreswearing taking on any Harrah’s or Station Casinos bonds, given the size of their respective debt loads.

Other clunkers are identified as Columbia Sussex (whose debtholders want CEO William J. Yung III‘s head on a platter), Greektown Casino (scrambling to keep its license) and Herbst Gaming, which has received a “going concern” notice from Deloitte & Touche, and whose debt is plunging in value.

In the cases of Harrah’s and Station, one of the rationales for privatization was that it would enable the companies to pursue new development at their own discretion, without having to answer to Wall Street. Instead, each is handcuffed. Given the evidence of market glut on Las Vegas’ locals scene, maybe it’s best for Station that there will be a four-year lull after Aliante Station opens. But it’s a shame that the company’s push into the Reno market — one that could use new product of Station-level quality — is now on indefinite hold.

$1 billion for the Trop? Although that nice, round number was floated by Larry Klatzkin recently, there’s no evidence (yet) that the New Jersey Casino Control Commission has cracked the “B” mark in its attempts to re-sell the once-lucrative resort. And while Tropicana Entertainment co-President Scott Butera may scapegoat Garden State regulators for not getting a higher price point for the Trop, one analysis places the blame for the mammoth hotel-casino’s reduced curb appeal on Columbia Sussex’s reign of error, which cratered revenues at the property. That erratic interregnum certainly infuriated a veteran regulator, who takes a few swings at ‘ColSux’ on his way out the door, saying “They flunked Casino Management 101, as far as I’m concerned.”

Third time’s the charm. Two general managers fled Casino Aztar during Columbia Sussex’s first year of ownership. Now a third has jumped ship … but merely to another ColSux operation. Considering that Mike Jones was back in Lake Tahoe by the time the news broke, and that he used to be Bill Yung’s GM of the MontBleu and Horizon casinos there, one’s best guess would have to be that he’s been putting in charge of turning those two around (especially the embattled Horizon), but I’ll let you know for certain as soon as I do.

No official announcement has yet been made. (But you can find the settlement of the Columbia Sussex/Park Cattle litigation, posted under a rather odd link.)

Steve Friess continues to poll his readers on the coolest names in Vegas. Interestingly, nobody has yet voted for Ka, the narrative-driven Cirque du Soleil show directed by Robert LePage that even Cirque-skeptics like myself can enjoy. But apparently there is no “Ka” in “cool.”

It reminds me of one of the most famous lines from Stargate SG-1 (in the episode, “The First Ones”), where we learn that the primitive race of Unas express their displeasure with vehement utterances of “Ka!”, prompting the ever-patient Dr. Daniel Jackson to reply, “Now don’t say ‘ka!’ until you’ve tried it.”

Posted in Atlantic City, Columbia Sussex, Detroit, Donald Trump, Harrah's, Herbst Gaming, Indiana, Station Casinos, TV, Wall Street | Comments Off on "Casino Bonds Crush Harrah's"

Laughing my … off

Posted on June 3, 2008 by David McKee

What’s the best Vegas-related Web site? Too many too choose from, I say. But I’m definitively certain I’ve found the funniest. If you’re a  fan of CheapoVegas.com, you’ll absolutely love its Casino Boy Graveyard. Yes, it’s a stroll down memory lane past the tombstones of some of Vegas’ best — and worst — casinos, which now only exist in our collective memory.

Pride of place is given to the Desert Inn, “the classiest place [Vegas] may ever see.” But if you want laughs, nothing beats Casino Boy’s incomparably pithy eulogies for those casinos whose demise is mourned only because we won’t have them to kick around anymore. The Boardwalk, Key Largo and Westward Ho … they’re all here. (Boardwalk, with its demonic, leering Pennywise marquee, deserves a special circle in Casino Hell.)

Maybe the prize reminiscence of the bunch is Casino Boy’s valediction for “the waiting room of the damned,” Nevada Palace: “There are other smoky dumps in town, but this place out on Boulder Highway was like a magnet for locals who loved to stuff their mouths with four, five, six cigarettes at a time and have their oxygen tanks wired directly into their tracheotomy holes.”

Just be sure not to visit this page while eating or drinking, lest you have a bad moment all over your keyboard.

Posted in Downtown, The Strip | Comments Off on Laughing my … off

Trop Trojan Horse barred from gates

Posted on June 2, 2008 by David McKee

Much to the dismay of senior debtholders, perhaps, a Delaware bankruptcy judge OK'd $67 million in additional borrowing by Tropicana Entertainment, money the company says it needs for operational expenses. However, the court backhanded an even bigger loan offer from Canada's Onex Corp.

The latter was what you might call a "hostile" loan. So far only UNLV's David Schwartz has twigged to this story. Basically, Onex would try to roll a $100 million loan into an equity position, as the first step in a takeover attempt. It has even retained former MGM Mirage President Alex Yemenidjian to advise it on casino-sector acquisitions. Had Onex's ploy been successful, I wonder how Yemenidjian's former MGM colleagues would have felt about "Count Dracula" (the nickname he acquired when running the MGM film studio in Hollywood) setting up shop right across the street.

"If [the gambling sector] is overbuilt and in some difficulty right now it's a good time to look at it," Onex CEO Gerald Schwartz told the Toronto Globe and Mail. Onex used the hostile-lending ploy to take over Loews Cineplex Entertainment and he's already signaled that, should the ploy of lending to Columbia Sussex be rebuffed, he'd pursue low-hanging fruit on the Isle of Capri and Harrah's Entertainment vines. $100 million won't get him very far, but if he ups the ante then Isle needs someone to bail it out of its overseas over-extension and Harrah's could use a near-term cash infusion, too.

Posted in Columbia Sussex, Harrah's, Isle of Capri | Comments Off on Trop Trojan Horse barred from gates

This just in …

Posted on May 30, 2008 by David McKee

So Tropicana Atlantic City trustee Justice Gary Stein wants to toss the existing bids for the property … possibly because better ones are being dangled before him. As a consequence, he wants to restart the clock, which would push the deadline for a Trop sale into October. With Columbia Sussex‘s appeal of its New Jersey license denial still hanging fire, a longer timeline for the sale is a fait accompli anyway.

While a New York investment group ($950 million), Colony Capital ($850 million) and Cordish Cos. ($???) are believed to have bid on the Trop, it remains unknown whether there are more — or fewer — bids on the table. After all, Colony’s 2006 bid for Aztar Corp. turned out to be just hot air, so there’s no assurance its trigger finger has proven stronger this time ’round.

If Stein is hearing offers in the neighborhood of $1 billion or more, that’d run a cart and horses through Tropicana Entertainment co-President Scott Butera‘s contention that, by selling the Trop in the present economy and in within a set timeframe, the New Jersey Casino Control Commission is driving down the price of the asset. Actually, yesterday’s sale of Trump Marina put paid to that argument, as the highest known bid for the Trop ($950 million) is more than three times the amount being paid for the Marina.

Turning to Trump Marina, while it’s hard to think its fortunes could get much lower, it’s worth noting that Trump Entertainment Resorts was reduced to selling it to a company (Coastal Development) whose main claim to casino cred is that it’s the plurality shareholder in the Suffolk Downs racetrack.

These aren’t the days to be learning on the job in Atlantic City. Even Columbia Sussex had a modicum of casino experience and look how badly it screwed the pooch. (Coastal’s “Margaritaville” deal is a first step in the right direction, though.)

As for Coastal buying the Marina at an 11X EBIDTA multiple, instead of the standard 7X ($200 million), at least analyst Justin Sebastiano says what I only dared think: The high multiple is a way of ‘stashing’ a litigation settlement within the sale price. Ironic that Trump and Coastal fell out over a Hard Rock franchising deal. Many years back, Donald Trump had a deal in place with the Rank Organisation to re-brand the then-Trump Castle as a Hard Rock hotel — an accord that fell apart the night before it was to be formally announced.

Greektown joins Columbia Sussex … in Chapter 11, that is. Seems the tribally owned Detroit casino has gotten quite a bit overextended in its borrowing. The giant sucking sound that is MGM Grand Detroit vacuuming up customers can’t be helping, either. Greektown is profitable but just barely.

On a more practical level, Greektown’s current facility is cut-rate, and overcrowded with tables and slots. Despite a few gestures at Gilded Age plush and the convenience of being right on the People Mover, Greektown exudes “second tier” and is in danger of being selected out by escalating competition — making it all the more imperative that the half-billion-dollar permanent casino-hotel get finished. If Stanley Ho built a U.S. casino, it would be Greektown.

Overseas, University of Macao economics professor Fong Ka Chio predicts that Guangdong Province‘s cutback on visa applications to Macao may boomerang. The Chinese government has made no secret of its desire to have a Macanese economy that’s less casino-centric (60% of GDP). However, Fong says this latest market intervention may be counterproductive, resulting in a 7.5% casino-revenue drop that could drive casino operators to scrap future projects.

Posted in Atlantic City, Columbia Sussex, Detroit, Donald Trump, Macau, MGM Mirage, Regulation | Comments Off on This just in …

The curse of Columbia Sussex

Posted on May 30, 2008 by David McKee

Unsecured Tropicana Entertainment creditors are opposing Columbia Sussex's effort to borrow $67 million in operating capital (which would push existing creditors even further toward the back of the queue). The Wilmington, Del., bankruptcy court has yet to rule.

Whoops. By filing Chapter 11, ColSux put its Casino Aztar riverboat — lock, stock and accounts receivable — under the purview of the bankruptcy court. Which means a delay of the $220 million sale to Reno-based Eldorado Resorts. Not only that, the court would have the discretion to tinker with the terms of that sale. (And check out the third comment below the story.)

Flashy new marketing be damned, the Los Angeles Times' Richard Abowitz checked into the Las Vegas Tropicana and discovered the same old malaise — maybe worse. Yes, the escalator to "Bodies" is still broken "and has even grown some advertising." (On CEO William J. Yung III's gravestone, it will read: "Maintenance? What's that?")

Worse yet, "it took an hour of waiting in line to check in" — on a Wednesday afternoon, due to a dearth of check-in staff. Abowitz's conclusion: "The bankrupt casino is sure letting customers feel the pinch of its reduced workforce." In all, Abowitz's outlook is as bleak, if not bleaker, than when he stayed at the Trop last December and found it to be "a warehouse with gambling." And I can attest personally to his contention that the air there is "literally and figuratively stale." Sort of like its management philosophy.

Now they tell us. When Toni Braxton was riding high at the Flamingo, and splashed across the western façade of the building in a va-va-va-voom "building wrap," I asked Harrah's Entertainment if customers were trying to get, say, a room nestled within Mega-Braxton's "cleavage." Came to the answer: Oh no, no; hasn't happened. Today, however, at the end of an announcement that Braxton's Flamingo gig is prematurely finis, we read: "In fact, the Flamingo was said to get frequent request [sic] for rooms with windows at strategically placed body parts of the singer."

If you think the Trop is bad, check out this customer review of Hooters Hotel & Casino. The descriptions of lackadaisical service and spare amenities are redolent of imminent closure, while the room decor could stand as the textbook definition of "fugly." But the kicker is the noisy, broken air conditioner. With video. Hilarious. Or tragic, depending on your perspective.

Posted in Columbia Sussex, Harrah's, The Strip | Comments Off on The curse of Columbia Sussex

Bargains? Shhhhhhhhhhhh!

Posted on May 28, 2008 by David McKee

Liz Benston takes a look today at the newest message from the Las Vegas Convention & Visitors Authority and finds the LVCVA “thinks it’s bad form to make references to ‘affordable’ and ‘cheap.'” Oh yes, God forbid anybody should think there are deals to be found here (though there are) when they could spend that money closer to home, perhaps at one of the finer tribal casinos. Harrah’s Entertainment has a nice one in SoCal, I hear.

UNLV’s Prof. Jeff Voyles, says (in Benston’s paraphrase) that “it would be disingenuous for Las Vegas to market itself as a bargain because room rates will bounce back and the Strip will be punctuated by expensive, high-rise hotels bargain seekers can little afford.”

Yes, but that’s partly how we got into our present pickle: by creating both the perception and the reality that the Strip isn’t meant to be affordable anymore (which may account for the newfound market strength in Downtown, especially as Strip bargain plays bit the dust).

Also, I don’t mean to disrespect an academic — the parlor sport of choice among the low-forehead types at the Dogpatch Daily — but Voyles seems off base when he says, “We can’t change our market segment based on a dip in the economy.” Seems to me these are precisely the circumstances that would dictate a change in positioning. Principled talk of “sustaining the growth that we have” is fine (even though recent declines in gambling revenue and visitation make me want to ask, “What growth?”), but the bottom line — so to speak — involves putting fannies on slot stools and in poker chairs, to say nothing of hotel beds.

(MGM Mirage would seem to tacitly disagree with Voyles, seeing as it’s just created the position of “President of Marketing-Customer Development. It’ll be filled by Joe Brunini, whose brief will be to “identify emerging customer markets and create methods of attracting new audiences.” My congratulations to Mr. Brunini, who started in the business as a dealer in Atlantic City 28 years ago.)

In this respect the Bad Timing Award goes Continue reading →

Posted in Atlantic City, California, Downtown, Harrah's, LVCVA, Marketing, MGM Mirage, Sheldon Adelson, Station Casinos, The Strip | Comments Off on Bargains? Shhhhhhhhhhhh!