It was one of the stupefying follies of the Caesars Entertainment LBO that CEO Gary Loveman believed the company could take on $30 billion in debt and continue to expand. Even as he tries to reshuffle old assets into new IPOs, Loveman is finally coming around to what some of us knew years ago: The Roman empire is in ruins. At Southern Gaming Summit, he officially pronounced funeral rites for the erstwhile Margaritaville megaresort (not to be confused with the independent, low-budget Margaritaville that got built), whose podium will probably be broken up to form the basis of an artificial reef, nobody having wanted to buy that carcass. Casino Magic, vacant for nearly eight years, will probably not be reopened as a gambling venue either.
“Building more casinos in the near term strikes me as a very bad idea,” said the man whose company has just opened three in Ohio and is engaged in near-term casino development and/or lobbying in Toronto, Boston, Baltimore, Las Vegas and at Gulfstream Park, in Florida. The days of bigger and better casinos, Loveman said, “are over,” in what must have been the most depressing keynote address in Southern Gaming Summit history, wailing that “the only way the region can survive” is with more and pricier amenities. Never one to practice what he preaches, Loveman proposed a multi-pronged regime for Gulf Coast casinos that would include mandatory amounts of reinvestment and a freeze on new licenses (thereby artificially shielding Caesars from competition, heh heh). Were I another operator in that market I’d tell Loveman to mind his own damn business and put Caesars’ house in order first.
Loveman also couldn’t find any takers for the Kanesville Queen, now destined for the scrap yard and better known as Harrah’s Council Bluffs. The small and dysfunctional casino was historically one of Caesars’ worst performers, with revenue declines that lasted not for months but years. Now with a new, onshore casino, it gets a new chance to measure up against Ameristar II, which has been clobbering Harrah’s for time immemorial. The latter saves itself $2.4 million a year in riverboat maintenance and gains a more competitive foothold, so it will be interesting to see if this shakes the up the Council Bluffs market.
Our sincere condolences to former Revel marketing supremo Darlene Monzo, brought in to rescue a terribly positioned property. After six months on the job — hardly enough time to reinvent one of the industry’s most epic screwups ever — Monzo is out in favor of Fine Point Group. It’s only natural that CEO Jeffrey Hartmann would want his own people, not holdovers from the Kevin DeSanctis regime. And he chose well: Fine Point successfully repositioned Greektown Casino in Detroit, a seemingly hopeless case. In that instance, Fine Point’s reward was to be rudely ousted in favor of Warner Gaming, which then promptly fled for reasons that remain a mystery. Let’s hope Fine Point has equal or greater success at Revel, and receives appropriate gratitude this time.
The Caesars competitor in the Council Bluffs market is Horseshoe. The Harrah’s offering is really just there to hold the third license and keep out any competition that would arrive were they to give it up. And if a few customers happen to drop in, so be it.