The Drew is through; Stevens’ green shoots

Would somebody please implode Fontainebleau already? It’s an eyesore, a civic embarrassment and a product for which demand does not exist. We perhaps should be saying “The Drew” but—per Scott Roeben‘s all-but-infallible VitalVegas, The Drew is in default, meaning that it’s time for CEO Bobby Baldwin to update his resumé, presuming he wants people to know he was affiliated with this white elephant. Steven Witkoff (over)paid Carl Icahn for the incredible hulk (F-blue, not Baldwin) and his business plan always seemed to have more optimism than logic. Among Roeben’s revelations is that Witkoff’s capital—$490 million—was pathetically short of what he needed. The backers were “Mirae Asset Daewoo, NH Investment & Securities, Hana Financial Investment, Kangwon Land and a Hyundai Motor Group subsidiary.” (Witkoff also had some tobacco money in the project.) If Kangwon Land sounds familiar, it’s the only casino in South Korea that citizens are allowed to patronize.

The entire project would have cost three trillion won and it might as well have been three trillion dollars for all of Witkoff’s ability to raise the billions needed to complete The Drew. As for the Korean consortium, it over-exposed itself to the U.S. hotel market at the worst possible time. As a source said, “The hotels took a more direct hit from the pandemic due to their profit volatility, higher than that of office buildings.” Regarding Witkoff’s alleged “beehive of activity,” it mysteriously evaporated at least as soon as Coronavirus struck. The Drew was ticketed for late-2022 completion but we’ll take a page from Buzz Lightyear and describe its timeline as “To infinity—and beyond!”

* Derek Stevens carved time out from his busy green-shooting of the Las Vegas market to take Global Gaming Business into his confidence about some of his strategies. One of his business secrets was to keep casino hosts in touch with players weekly during the shutdown, reinforcing loyalty. “What I found were that a couple of thousand customers really wanted to come to Las Vegas again,” hence Stevens’ 2,00 comped, one-way tickets to Sin City. If he’d wanted, he probably could have booked 15,000 passengers, so intense was the demand. Southwest Airlines, Frontier and Sun Country were the carriers more receptive to the highly successful scheme. Stevens had been watching regional jurisdictions resume business robustly and thought, Why not Vegas?

Counter-intuitively, Stevens believes Las Vegas sports books will “surge” despite a dearth of major-league sports (with baseball bickering itself into oblivion). Yes, there will be some hockey, a bit of the NBA but “We really think the interest level is going to accelerate in the back half of the year.” Calling the casino shutdown the toughest period of his career, period, Stevens decided to go rogue and reopen his hotel rooms today, likening tomorrow to Repeal Day. “Everyone wants to be here when we open everything at midnight.” The mogul also promises to open Circa on schedule and to have health-screening procedures in place at his extant casinos that exceed what the Centers for Disease Control and Nevada regulators mandate.

And he remains bullish on Downtown, saying, “We love Fremont Street, we love sports, and we love meeting our customers and hanging out with them. It’s fun for us and our customers, which is something you can do when you are a smaller company.” With the exception of charging resort fees, Stevens seems to ‘get’ the Vegas experience better than nearly all his rivals. We could use a few more of him.

Jottings: According to VitalVegas, a company is creating socks that “smell like Las Vegas.” And what might that fragrance be? Cigar smoke? The nostril-choking perfume in Venelazzo elevator lobbies? Suggestions, anyone? … Phil Ruffin is suing his insurance company for denying a business-loss claim for Treasure Island‘s pandemic shutdown. Doesn’t that fall under “Acts of God”? … Horse racing will return June 6 to Hawthorne Race Course in Illinois, in a fan-less arrangement called “studio racing.” A variety of social-distancing measures (even for horses) enabled the re-start … World, meet Alexia, a wine-serving robot debuted in Pamplona. Five-foot-tall, roving Alexia enables the twin needs of alcohol service and social distancing. We foresee her soon at a casino near you. (It’s cheap to rent.)