Polished Nugget, burnished Wynn

In what might be called The Era of Deferred Maintenance, Landry’s Restaurants CEO Tilman Fertitta still believes in spending money to make money. That’s why he poured $150 million into the former Trump Marina and, consequently, the Golden Nugget Atlantic City has been seeing a reversal of its once-flagging fortunes. (Touch wood.) When your Marina District neighbors are Borgata and Harrah’s Atlantic City, it behooves one to keep up with the Jonses … which, needless to say, Donald Trump didn’t. “The number-one comment we heard from customers was, ‘It looks like a hospital,'” said Nugget GM Tom Pohlman, in what ought to be Quote of the Year.

Unlike casino vulture Colony C(r)apital, Fertitta redid the place without encumbering it with a big-ass mortgage, a business practice that was the unmaking of Colony’s gaming ambitions. And, as is his custom, Fertitta owns all the on-property revenue streams. Nugget execs freely admit that much of the new gambling revenue was purchased with free play and other promos. Given what a Trump dump the Marina is said to have been, if comp-lured customers like its new, Tilman-ized look and much wider range of amenities, all those vouchers will have been a sound investment. Many upgrades similar to those just unveiled in Atlantic City will also be lavished on the Isle of Capri casino that will be converted to a Golden Nugget in Biloxi at a cost of $150 million. While Atlantic City remains at a tipping point, pending the full impact of Revel, Feritta is entering the Gulf Coast market at a propitious moment, with Mississippi seeing some of its best casino revenues in years. No disrespect to Steve Wynn but the Golden Nugget brand hasn’t had this much luster in decades.

Respecting Wynn. That’s what J.P. Morgan analyst Joseph Greff did earlier this week, at a time when Wall Street has been falling all over Las Vegas Sands, and not without reason. Crunching many a number, he argued that even without Wynn Macau and its long-promised Cotai Strip sibling, Wynn Resorts still holds “two of the better positioned assets” on the Las Vegas Strip. Greff also likes Wynn’s relative lack of debt and argues that the stock is undervalued in comparison to Sands, Melco Crown Entertainment and MGM Resorts International. Contending that expectations for Wynn’s Macao operations are too low, Greff forecasts that the Cotai development (if/when approved) will generate a 25% return on a $2.75 billion investment. You can’t redeem that large of a project cost anywhere near so fast in America. Heck, you can hardly even justify that big a budget stateside.