{"id":2473,"date":"2010-03-09T17:03:58","date_gmt":"2010-03-10T01:03:58","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=2473"},"modified":"2019-08-23T06:49:35","modified_gmt":"2019-08-23T14:49:35","slug":"pennsylvania-give-adelson-a-break-harrahs-latest-excuses","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/pennsylvania-give-adelson-a-break-harrahs-latest-excuses\/","title":{"rendered":"Pennsylvania: Give Adelson a break; Harrah’s latest excuses"},"content":{"rendered":"

\"SteveWhile principle dictates that Las Vegas Sands<\/strong> ought to be held to the terms of its agreement with the State of Pennsylvania<\/strong>, recent developments give one pause. Namely, why should Steve Wynn<\/strong> get favorable treatment enjoyed by no other casino developer in the Keystone State?<\/p>\n

It’s not a done deal … yet. Although Wynn can charm the birds out of the trees, his famous smile didn’t dazzle the Pennsylvania Gaming Control Board<\/strong>. Understandably skittish after a series of self-inflicted wounds, the PGCB told Wynn to come back when he has a concrete plan<\/a>. However, even in its present sketchy state, “Wynnwoods”<\/strong> would be a much smaller entity than the Foxwoods<\/strong>-led casino which was approved over two years ago. (If he makes good on his threat to give the place by the pretentious handle “SW<\/strong>,” I SWear I’m going to start referring to it as SW: Based on the casino “Penn’s Landing” by Foxwoods<\/em>.)<\/p>\n

The most obvious reduction is the budget, which would be downsized from $950 million (plus inflation, spread across three phases) to $600 million. As well as Pennsylvania’s casino are doing, there’s been no indication to date that the state can support costs on the order of a Las Vegas<\/strong> megaresort. Sheldon Adelson<\/strong>‘s $724 million Sands Bethlehem<\/strong> is eking out quite modest ROI and Neil Bluhm<\/strong>‘s $800 Rivers Casino<\/strong> in Pittsburgh<\/strong> looks like a serious candidate for bankruptcy. Economic pragmatism argues weightily in favor of a budgetary cutback.<\/p>\n

Even at $600 million<\/strong>, Wynn’s outline represents a comedown from Phase I of the Foxwoods plan. A nightclub is added, in lieu of the lounge, but both the planned showroom and retail offerings are out. The Phase III hotel is gone altogether, as Wynn plans to build a locals casino … not inapt for a neighborhood where his neighbors will include Walmart<\/strong> and Ikea<\/strong>. All in all, this downsized Wynnwoods makes more economic sense.<\/p>\n

(Pssst<\/em> … Wynn Resorts<\/strong>: Locals don’t refer to Sam’s Town<\/strong> as “ST” or Red Rock Resort<\/strong> as the “Triple-R,” ‘kay? Station Casinos<\/strong> had a hard enough time quashing the “Red Rock Station” misnomer. I’m just sayin’.)<\/p>\n

\"Sands<\/strong><\/p>\n

However …<\/strong> if that’s the case, why shouldn’t Adelson be able to renegotiate his own accord with the state? True, in time-honored Sands fashion, his project [above<\/em>] ran over budget and behind schedule. Construction on the promised hotel was embarrassingly suspended so that all the remaining labor and money could go into finishing the casino. A convention area and retail mall also continue to hang fire. In a further gaffe, Sands COO Michael Leven<\/strong>, the man charged with watching Adelson’s pennies and dimes, tried to wish the whole problem away — or at least well into 2011. When a sale rumor was born in Bethlehem<\/strong>, Adelson furiously backpedaled and promised work on the hotel would resume pronto.<\/p>\n

At this point, given Sands Bethelehem’s cash flow, its cost to date and the amount of spending still ahead, profitability seems out of the question. So, if Steve Wynn can dictate a diminution of Foxwoods’ Philadelphia project as the price of his coming to its rescue, why shouldn’t Adelson be allowed to negotiate a money- and face-saving compromise with the PGCB (like<\/em>: Finish the hotel and punt on everything else). Yes, the Bethlehem area will get screwed out of the amenities Sands promised — as will drive-in customers. Sands will also suffer, as it will not have the destination property it needs to grow business. But what’s sauce for Steve should be the same for Sheldon.<\/p>\n

“Gosh, who knew?”<\/strong> That’s the gist of Harrah’s Entertainment<\/strong>‘s explanation for getting knocked on its butt by an LBO\/recession double-whammy. The supposedly best-run company in gaming now says it was caught completely unprepared<\/a>. Those who are of the opinion that Harrah’s leadership is detached from on-the-ground conditions and customer-service issues will find their argument bolstered by this comment from CFO Jonathan Halkyard<\/strong>: “We said we were no longer going to tolerate differences in performance in very similar departments, regardless of market and customer base<\/em>.” [emphasis added]<\/p>\n

\"halkyard\"Halkyard might as well have declared, “We were no longer going to tolerate reality, by golly!” He also tells the Las Vegas Sun<\/em> that the company’s numerous beachheads are stabilizing, although Strip and regional revenue data argue otherwise (Strip ADRs continue to take a pounding, Louisiana<\/strong> is in freefall [ditto Lake Tahoe<\/strong>], Illinois<\/strong> refuses to bottom out and then there’s Atlantic City<\/strong> …). Besides, if these guys didn’t see the recession coming, why should we trust their prognostication skills this time around? At least Harrah’s profitable bottom line provides cause for confidence, even if management’s public pronouncements rarely do.<\/p>\n

Perhaps Halkyard meant to be hyperbolic<\/strong> about requiring maids to make beds in 28 seconds rather than 88; it certainly doesn’t make you want to stay in a Harrah’s hotel, does it? If he’s serious, then he’s guilty of the same assembly-line mentality for which his boss, Gary Loveman<\/strong>, criticized Columbia Sussex<\/strong> — a slam that looks mighty hypocritical in retrospect. After all, if you’re requiring your maids to make beds 3X as fast, then they can do 3X as many per shift and — presto!<\/em> — you can sack the other 2\/3 of your maid staff. It’s a page straight out of the William J. Yung III<\/strong> playbook.<\/p>\n

It’s like those 1.5-litter bottles and baby-sized soda cans you see at the grocery store now. The Halkyards of this world are trying to soften us up for an Era of Diminished Expectations, whether it’s paying the same price for less Coca-Cola<\/strong> or getting slower Total Rewards<\/strong> point accruals, fewer comps, dirtier rooms, less front-line service, cold chicken wings in the VIP lounge or tighter slots at the Palms<\/strong>, should Harrah’s capture it. Were it not bad enough that Harrah’s has a “K-Mart<\/strong> of casinos” rap, its leadership seems bent upon living down to the stereotype. Unless the point of the LBO was to have an excuse to decimate staffing, salaries, benefits, comps and point accruals, thereby buttressing profits, it’s difficult to see what purpose this exercise has served.<\/p>\n","protected":false},"excerpt":{"rendered":"

While principle dictates that Las Vegas Sands ought to be held to the terms of its agreement with the State of Pennsylvania, recent developments give one pause. Namely, why should Steve Wynn get favorable treatment enjoyed by no other casino … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[23,60,15,14,64,7,58,84,91,95,33,25,12,57,32,20,38],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/2473"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=2473"}],"version-history":[{"count":9,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/2473\/revisions"}],"predecessor-version":[{"id":24754,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/2473\/revisions\/24754"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=2473"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=2473"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=2473"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}