Two Way Hard Three | Las Vegas Casino & Design Blog

All Articles Published: March 2011

Cosmo has filed it's first 10-K for the year 2010. This comprises a year of opening expense but only 17 days of operations.

More analysis to come (I'm hoping Dave and/or Jeff will share their takes and I may have more to say too) but a few interesting figures:

We incurred a net loss for the year ended December 31, 2010 of $139.5 million


The Company's gaming revenues were $4.3 million for the 17 days of operations during the 2010 fiscal year. Non-gaming gross revenues over the same period were $14.0m. The Company's gross room revenues were approximately $4.2 million. Average daily rate ("ADR") and occupancy for that period were $319 and 97.8%, respectively, generating revenues per available room ("REVPAR") of $312. Other non-gaming revenues included gross food and beverage revenues of approximately $9.3 million and convention and retail revenues, including the spa and salon, of approximately $0.5 million.
Revenues for the 17 days of operations in 2010 include retail value of accommodations, food and beverage, and other services furnished to our guests without charge. These amounts totaled $7.6 million and, in accordance with industry practice, have been deducted from revenues as promotional allowances.

Perhaps some of this stuff will show up on EBay?

We recorded an expense of $10.1 million in 2010 primarily relating to certain construction in progress ("CIP") related assets that we deemed had no future value to the Company. These abandoned assets consisted primarily of fixtures and furnishings, including assets which were in various stages of completion at our suppliers, as well as cancellation fees charged by some suppliers against deposits held by them. These assets were identified following the finalization of certain interior designs in the period leading up to the opening of the Property on December 15, 2010.

A big chunk of 2010's expenses were advertising related:

Total advertising costs were $44.3 million, $0.1 million and $0, respectively, for the years ended December 31, 2010 and 2009 and the period from July 30, 2008 (inception) to December 31, 2008.

Looks like John's taking home $800k per year:

The annual base salaries for Mr. Unwin and Mr. Burge have been set at $800,000 and $400,000, respectively.

That makes him a bit of a bargain, especially compared to his neighbor, Jimbo Murren, whose salary, not including stock or bonus, was $2.0 million in 2009.

If the hotel is sold, they want Unwin to stay...

Each of Mr. Unwin and Mr. Burge is entitled to earn a retention bonus based on continued employment through the date on which a sale of The Cosmopolitan is consummated. If, during the term of their respective employment agreements, The Cosmopolitan is sold to an unrelated third party and their employment has not terminated as of the completion of such sale, Mr. Unwin and Mr. Burge shall be paid a retention bonus of $4,500,000 and $1,000,000, respectively, within 60 days following the completion of the sale.

... and if it's shutdown, he still cashes in:

Similarly, if at any time during the term of their respective employment agreements, each of Mr. Unwin and Mr. Burge's employment is terminated due to a shutdown of The Cosmopolitan, they shall be paid 100% of their respective retention bonus.

As for the data itself, 17 days isn't much to work with... But, given the past few years of property openings, we do have some other resorts we can compare against.

According to the Las Vegas Sun, Aria generated operating income of $7m during it's first 15 days of operation. Aria is a much larger hotel than Cosmo though neither were able to ramp up all their rooms out of the gate. As Aria headed into the first quarter of 2010, it famously had occupancy of only 63%.

Wynn Resorts reports WLV and Encore together so we don't have specific figures for the latter, which opened in late 2008.

UPDATE: Dr. Dave here. Here are some of my thoughts.

It's notoriously difficult to evaluate opening numbers like these; there's never enough information to make a good comparison. What's a "good" gaming revenue number for a casino that's opening without a legacy player database? What kind of F&B numbers should the place be pulling in? There aren't any real benchmarks, which is kind of scary when you think about it. People invest billions in building these things and don't have any way to define what makes them a success. Or at least no definition that they'll share with the public.

In the absence of those kinds of apples to apples comparisons, I figured the best thing to do would be to take the daily average in each of the categories that Cosmopolitan reported and compare it to something I have: the daily average revenues for big ($72 mil plus in annual gaming revenue) Strip casinos for fiscal 2010. If you want to see that report, it's over here (pdf).

Here's what I found--all numbers are in thousands of dollars.

As you can see, the Cosmopolitan's got a lot of heavy lifting to do. In gaming, it woefully underperformed, lagging the Strip average by a whopping 55%. I'm not totally sure whether the casino took that million dollar hit from baccarat cheaters in December or January, so that might be skewing the results.

In rooms, it's also underperforming, but that's not surprising since it didn't have all of its rooms online.

The big surprise is food and beverage; here, the Cosmopolitan significantly outperformed the Strip average, by 172%. Of course, you might have casinos like Circus Circus and Riviera in the group, so it's hard to compare these numbers with, say, Aria, Bellagio, or Wynncore. But with this limited data, it looks like the "new to market food and beverage concepts" (I've got that burned into my brain now) are a success.

"Other" revenue is mostly retail and entertainment, and since the Cosmopolitan's big theater isn't yet open, and it doesn't have a staple show that will consistently bring in big bucks, this isn't a surprise.

So all in all, it's hard to say exactly what's going on, but judging from what we see here, in December the Cosmopolitan struggled with its casino, about par with its rooms, doing great with f&b, and straggling along with everything else.

March 28, 2011

Riviera financials show North Strip's plight

Posted by daveschwartz

Riviera Holdings Corp, the company that owns the bankrupt Riviera casino hotel on the Las Vegas Strip, recently released its annual report. The company had a rough year, and a look at the financial reports from the last few years sheds some light on why the casino's in such trouble, and why the Sahara is closing.

(more after the jump)

March 27, 2011

Vegas Mate Stats - March 2011

Posted by Hunter

I'm back with another peek at the stats collected by Vegas Mate, my iOS app for all things Vegas. Traffic in the app is up again this month, which is always nice.

Over the past thirty days, Vegas Mate usage has broken down as follows - most viewed hotels:

1. Aria (5.73% - Last Month: #1)
2. Bellagio (5.45% - Last Month: #3)
3. Caesars Palace (4.39% - Last Month: #4)
4. Cosmopolitan (4.31% - Last Month: #2)
5. MGM Grand (4.04% - Last Month: #6)
6. The Venetian (3.59% - Last Month: #5)
7. The Mirage (3.22% - Last Month: #9)
8. Wynn Las Vegas (3.09% - Last Month: #7)
9. Planet Hollywood (2.90% - Last Month: #8)
10. Mandalay Bay (2.72% - Last Month: #10)

A few interesting points:

* Cosmo fell from #2 to #4.
* Aria remains in the top spot.
* The Mirage zoomed up two spots.

Compared to last month, the top 10 represented a smaller share of the overall pie, indicating less concentration amongst the top properties.

The least popular? Fiesta Henderson. The least popular on The Strip was the Four Seasons.

In restaurants, the Buffet at Bellagio was again the most popular, followed by the Wynn Buffet, Aria's buffet and then Craftsteak. The top ten restaurants are four buffets, two cafes and four fine dining places.

The most popular shows? Peepshow followed by O, Garth Brooks and Jabbawockeez.

March 24, 2011

MGM Who?

Posted by Hunter

It's obvious that Steve sees WYNN as the spiritual successor to Mirage Resorts, not MGM Resorts International:

As a company that has safely conducted gaming in the US for more than 40 years, we believe that the same can be done for poker on the internet

From the Wynn Resorts press release today about their alliance with

Wynn Resorts was founded in 2002 (though some of it's subsidiaries existed as far back as 2000).

March 23, 2011

AB 258: Legal Online Poker in Nevada

Posted by daveschwartz

A bill currently on the floor of the Nevada legislature's getting a lot of attention. AB 258 would legalize online poker in the state of Nevada and, with the consent of partner states, outside it as well.I thought I'd look at the text of the bill and share my thoughts.

More after the jump...

March 21, 2011

SIMPSON ON VEGAS #017: What's On

Posted by Hunter

Here we are with a new SoV, and this time it's all about Strip entertainment.

Jeff's full text is after the jump and in case you missed Dr. Dave's debut column yesterday, you can read it here.

Keep reading after the jump.

March 19, 2011

Dr. Dave: Thoughts on Bacc & Pennies

Posted by daveschwartz

Last week, one of the local dailies ran a story reporting on the latest trend: baccarat and penny slots are big revenue producers for casinos, particularly on the Las Vegas Strip.

Great story, but it's about 6 months out of date--at least where baccarat's concerned. And, as a look at the numbers will show, the ascendancy of the penny slot is hardly news. There's a real story in here, but it's not the one you read in the paper--and it's not necessarily a good one for Nevada gaming.

(More after the jump)

March 19, 2011

Vegas Gang #59 - March 17th, 2011

Posted by Hunter

This time on the show:

* Sahara Closing
* Marilyn Winn Spiegel
* LVS Lawsuit
* Nobu Coming to Caesars Palace

Referenced on the show:
- Dr. Dave's interview with Winn Spiegel:
- comment thread on the topic:

** Sure Bets **

* Rooftop Parking @ Wynn Las Vegas
* Roll The Bones
* Bukowski's 'Women'
* Ellison's 'Invisible Man'
* GarageBand for iPad

Check out the show:

Feel free to leave your comments below.

If it's a question that you want asked on the show, please make that clear in your post. You can also send those to

I'm excited to announce that Dr. Dave Schwartz, head honcho over at UNLV's Center for Gaming Research (and of course, fellow Vegas Gangster), will be joining Two Way Hard Three as a contributor.

Dave's been blogging over at for years and going forward, you'll see a lot of that content published here instead. Also, some features like the casino carpet gallery will be transferred over as well (I look forward to fielding confused reader's demands for carpet).

This is so great. Dave is one of the smartest people I know and I'm honored that he'd consider contributing to this community.

One of the greatest things about series like Jeff's SIMPSON ON VEGAS are the incredible comments and discussion generated by y'all. I'm sure the same will be true for Dr. Dave's stuff.

Expect to see the first of his musings soon.

Welcome Dave!

March 11, 2011

VegasTripping Pegs Sahara Closing Before MSM

Posted by Hunter

My friends at nailed a big story and this time they got it before it was reported in either of the big Vegas newspapers.

Nice work Chuck.

Oh, and by the way, The Sahara is closing May 16th.

Las Vegas Sun


March 7, 2011

Caesars Announces Delicious New Seafood Tower

Posted by Hunter


This morning, Caesars Entertainment, Inc., in their infinite wisdom, announced a partnership with the folks at Nobu... Yes, that Nobu - the ones that have a restaurant at the Hard Rock, founded by admittedly legendary chef Nobu Matsuhisa.

The Centurion Tower will be re-done and re-branded as the Nobu Hotel. A lounge and of course a restaurant will also be added. The transition will take a year and the hotel will have it's own check-in area.

While 180 rooms and separate check-in may sound like Tower Suites or Skylofts, don't get your hopes up. The Centurion Tower was built in 1970 - most of the rooms are far smaller than what you'd find at Wynncore, Aria or Cosmopolitan. David Rockwell is doing the interiors so I guess we know what the room's desk chair will look like.

More in the Sun and RJ:

March 4, 2011

SIMPSON ON VEGAS #016: Giant Wheels of Fun

Posted by Hunter

You've always wanted a ferris wheel in Vegas, right? Well, Jeff's gonna be sitting right next to you on that first go-round. How about a stadium? He's got that covered too.

He's back with SIMPSON ON VEGAS #16. Enjoy.

March 1, 2011

Federales Investigate Las Vegas Sands

Posted by Hunter

Ok, so it's the US, not Mexico... I just really wanted to say 'Federales'. Anyway, here's the deal...

It seems the US Securities and Exchange Commission (SEC) and the US Department of Justice (DoJ) have decided to investigate Las Vegas Sands under the provisions of the Foreign Corrupt Practices Act. This investigation came to light in Sands 10-K, filed today.

It seems that allegations by Steve Jacobs, a former exec at Sands China Limited (LVS subsidiary) triggered this investigation. He alleges all sorts of shady and underhanded dealings, some supposedly instigated by the head Rascal operator himself, Mr. Sheldon G. Adelson.

No way to know if any of Jacob's allegations are true - he clearly has an axe to grind with the brain-trust at the MEGACENTER™. Still, would it surprise anyone to find out if this really was how business was conducted over there? Secret investigations of your enemies? Bribes? Kinda exactly how I imagine things might work when billions are on the line and your regulator is a semi-corrupt authoritarian state. But hey, what do I know...

Can't wait to see what happens... My bet is probably nothing. The SEC doesn't really have a great track record when it comes to busting real financial criminals.