Atlantic City's latest casino opened in April; I got to see it last week. Mr. Monster wrote a great review of Revel on Atlantic City Tripping and I'll try to avoid covering the same ground. Shouldn't be too difficult, since I didn't see inside the guestrooms, but there's always the danger of going "He's So Fine"/"My Sweet Lord" with the common areas.
So, after the jump, here it is: Dr. Dave's look at Revel.
The Casino Formerly Known as the Atlantic City Hilton (and currently known as the ACH) has just announced its new name: the Atlantic Club. It's also got a new game: the locals and low-rollers market. I'm really undecided about this one, but I thought I'd share some of my thoughts.
Yesterday I did the second in a two-part series of interviews with Sarno Award-winning casino architect Paul Steelman. After the jump, I'll talk about what I found most enlightening in the conversation.
A story recently appeared in the Atlantic City Press talking about the apparent rise in comping at Atlantic City casinos. I wanted to compare the AC casino comping (big) picture with the Vegas one, and will do so just after the jump.
You might have read that the Las Vegas Hilton's days as a Hilton are numbered (if my calculations are correct, there are exactly 183 of them left).
Today we learned that the the Atlantic City Hilton has already lost its licensing agreement with Hilton Hotels and Resorts and must change its name, ASAP. It's not clear exactly when the agreement lapsed, but the property has begun rebranding itself as... the ACH.
Check out the website if you don't believe me.
The ACH name is obviously a placeholder. The property is currently for sale and there's absolutely no excuse to go through the effort and expense of a bona fide rebranding. At this stage, it adds nothing to the purchase price, so why bother?
Hopefully someone buys the property, invests some dollars, and gives it a thorough makeover and a new identity. For some reason the name "Seaside" is jumping out at me as a good one. It's rooted in one of the things the place has going for, its location. But they'll probably plug it into the Vdara hotel name generator and get a random string of consonants and vowels that has no tie to history, geography, or aesthetics.
The Las Vegas Hilton isn't changing signs yet, but it's going to have to do the same thing by the end of the year. Here things are a little different. The property isn't, to my knowledge, for sale. Right now it doesn't have a lot going right, but you can't find a better location for business travelers: adjacent to the Las Vegas Convention Center with a monorail that can take you to the Strip if you don't want to wait for a taxi. So I don't think it'll close--there has to be someone who sees the upside in the place, even if Colony hasn't had the best of luck with it.
So assuming that the Las Vegas Hilton isn't closing, what is it going to be called on January 1, 2012? Here are a few possibilities:
1. It affiliates with another national hotel brand. Hyatt? Wyndham? La Quinta? In any event, it wouldn't exactly bring pizazz to the property, and frankly it would be boring.
2. They go back to the future and rename themselves the International and go for a funky midcentury modern retheming. I'm seeing a Mad Men meets tiki bar vibe. Which might not make sense, but it does to me.
3. Return, hat in hand, to Cedar Fair and get a new Star Trek: The Experience open. This time, retheme the entire property to match: you could call it:
A) Star Trek: The Hotel Casino
B) Quark's Gambling Hall, Inn, and Resort
C) The Risa Suites (free horga'hn with checkin!)
D) The Final Frontier Casino Resort
4. Paradise Casino Resort: that's the street it's on, at least.
That's all I can think of...they've definitely got their work cut out for them. I'll stick with the International as the favorite, unless they just license another brand name.
In the LVRJ article, I talked about what Hilton Hotels might do next. Yes, they've got several properties around town, but they're not exactly convenient on the Strip or the kinds of destinations that would incent your loyalty program members. So it seems like they will be affiliating themselves with another casino.
Assuming that the MGM and Caesars properties are off the table, what does that leave them?
Wynn is already working with Pinnacle, though I don't know whether that would rule out an alliance with a purely hotel brand. LVS has Intercontinental. Cosmopolitan has Marriott.
That leaves the Tropicana, Treasure Island, Riviera, and Stratosphere.
My money would be on the first two--they'd both benefit from the added database. The Riviera, with new owners, is in flux right now. The Stratosphere is also a possibility, though I'd say it's way behind Tropicana and Treasure Island.
Let the speculation begin.
The Wall Street Journal is reporting to day that Trump is looking to sell the storied Steel Pier, which currently houses an amusement park.
The current incarnation of Steel Pier dates to the early 1990s. As it is right now, Trump leases the pier to a third party who operates the rides and games. When the Taj first opened, Trump used the pier as a heliport; he'd shuttle back and forth from NYC in a helicopter. I remember reading the SOPs for helicopter landings in an old security manual when I started at the Taj back in 1994.
Jen A. Miller has pointed out that this isn't the first time changes have been proposed for the site, and a little bit of googling reminds me that I let loose with a "log flume" blast when asked about a possible redevelopment 5 years ago.
Back in 2004 I wrote an AC History column for Casino Connection about the history of Steel Pier. I've reproduced it on my own site, right here, if you want to read some of the pier's fascinating history. My final AC History column was about Tony Grant, whose career was deeply intertwined with the pier.
Turning from history to current events, I want to focus on the justification for selling Steel Pier:
"We believe selling the Pier through auction is the best course of action for the company to increase the equity value for our shareholders," said Brian Cahill, a spokesman for Trump Entertainment. "We are a gaming company, and Steel Pier is not part of the casino." (bolding is mine)
Nothing could be further from the truth. The company's name is Trump Entertainment Resorts, not Trump Gaming. Though I'll point out here that, as of today, the company is still listing a casino that no longer exists as one of its fine resorts (the link gets redirected to the Golden Nugget site).
Still, the idea is that the company is supposed to be offering more than just slots, particularly at its flagship resort. People have been beating the drum for diversification of the travel offerings in Atlantic City for thirty years now. If an oceanside amusement park isn't exactly the kind of family destination that needs to be tweaked and improved to draw a bigger clientele and to take advantage of an asset that Pennsylvania (and Vegas, for that matter) can't beat, I don't know what is.
To me, Steel Pier is symbolic of the failures of the casino industry in Atlantic City. When it was being built, a bridge over the Boardwalk to Steel Pier was considered one of the marquee attractions of the Taj. This would have hosted a restaurant or nightclub offering tremendous views of the Boardwalk. I can only imagine how great it would have been to sit down for a meal or go out for a night of dancing with the lights of the Boardwalk and the ocean waves surrounding you.
Because of money problems, the "Bridge Restaurant" was never finished. Back when I was working security at the Taj in the mid-1990s, there was a little sign pointing people towards the BRIDGE RESTAURANT in the back of the house. Some wag scrawled "to nowhere" after "BRIDGE," and if it's still there I'd love for someone to snap a photo and share it with me; that little piece of graffiti sums up just went wrong in Atlantic City. Operators spent money, but didn't follow through, and as a result didn't use some of their best assets.
If there's one thing a company with the name "Trump" on it should be good at, it's real estate development and getting deals done. I'm dumbfounded that, in the past 21 years, no one was able to swing a deal that would get the bridge restaurant finished or find a better use for Steel Pier that would incorporate amusements but add a unique twist.
Add to this that the casino's already taken on the sunk costs of constructing a bridge to the pier, and you've got to ask: why aren't you making better use of the pier? It's like Harrah's not using its marina; I just don't get it.
If I was calling the shots at the Taj, I'd work on finishing the bridge restaurant and start looking for a new operator for the pier. You've got five years before the lease with the existing operator is up, so there's plenty of time. I'd look for someone who would invest some money to create an attraction that would really draw people--maybe some kind of diving bell off the pier--and would complement amusements and whatever else you want to have. That was you give people a reason to drive all the way to Atlantic City, but also have some lighter fare for whose who have already seen it.
As a gaming destination, Atlantic City has a pretty bleak future. As a resort/leisure/entertainment destination? There, at least, it has a fighting chance.
The AP's Wayne Parry wrote an excellent article about Atlantic City's rise and fall. He reached out to me for my thoughts, and I answered several of his questions. Obviously, with space constraints being what they are I figured most of what I said wouldn't make it into the story, so I planned to post it here so I could share my thoughts with a broader audience. You can see many of the numbers I reference in my Atlantic City Gaming Revenue (pdf) report.
Here are his questions and my responses:
What were the crucial points on the way up--and the way down--for Atlantic City, and why?
The first seven years (1978-85) saw phenomenal growth. In 1982, Atlantic City casinos surpassed Las Vegas Strip casinos in total revenues. In the mid-1980s, though, things started to change. AC's table revenues began to stagnate; today, they are about where they were in 1985; adjusting for inflation, that mean's they've shrunk in real dollar terms. At the same time, the Las Vegas Strip really boomed. So by 1990, even though Atlantic City revenues were still growing, they were now increasing at about half the rate of the Strip's. Since 2007 (the decline predates the recession) revenues have declined by 9% per year, on average. That's worse than Las Vegas, and, unlike in Vegas, the bottom still hasn't been hit.
What could have been done differently, and at what point?
For a while in the mid-1980s, it looked like AC was going to become the world's gambling capital. That didn't happen because of industry and regulatory inertia. Everyone was happy to coast along since the money was coming in. The responses to Foxwoods and increased competition in the early 1990s (24-hour gaming, poker, keno, simulcasting) should have been the start, not the end. The failure to legalize sports betting was a historic mistake, and it's symptomatic of what ails the AC industry: a lack of strategic planning. By the mid-1990s, it should have been clear to everyone that there was going to be substantially more regional competition, and that AC needed something that no one else had. But for many reasons (political, cultural), the industry couldn't lobby successfully for sports betting, which would have been a game-changer.
In general a less parochial perspective on behalf of legislators, regulators, and the industry would have benefited everyone. Casinos were worried about their "competition" at the other end of the Boardwalk, not Foxwoods, Las Vegas, or Delaware. While AC's market share was getting chipped away in the 1990s and 2000s, Las Vegas was successfully building up its own in the face of dramatically more competition, particularly in California, its primary feeder market. AC execs should have seen what was working in LV, and the regulators should have empowered them to make the necessary changes.
What do you think is the worst-case scenario for Atlantic City's future, as well as the best-case scenario?
Worst-case scenario is that the ROI is no longer there, and future investment dries up. The city saw this happen from the 1940s to the 1970s, and it isn't pretty. It's happening right now in Northern Nevada. Casinos close, and the existing operators run what's already there, but don't do much to attract new interest. There will still be revenues, but you won't have as many jobs or any real prospect for growth.
Best-case scenario is that the regulators get out of the way and the state creates an environment that attracts new capital. New people with new ideas come into the market (seeing a bit of this with Revel and Golden Nugget) and are able to create distinct destinations that continue to draw visitors--and their money.
What do you think of what is going on now with the tourism district, regulatory reform and the greater overall state attention to AC?
It's a good idea, but it has to be done right. I'd suggest looking at what worked and what didn't in Las Vegas. In addition to building attractions, the entire region needs a marketing push.
What role did municipal government have in the industry's decline, and how might it help bring it back?
As with the regulators, it's mostly a failure to imagine something besides the status quo. I don't see much leadership coming from the municipal level: mostly the city needs to provide services to its residents and businesses and, as much as possible, stay out of the way.
Can things ever get back to where they were just four years ago, or are we in for a "new normal" of reduced revenues and third-class status, behind NV and PA?
Things will never go back to where they were: conditions have just changed too much. If things remain as they are, the city's casinos will slowly lose market share to PA, NY, DE, MD, and whoever else gets into the game. If there's substantial new development and a coordinated effort to brand and market the city in a different way, Atlantic City can be successful again, but it's going to require a reinvention, not a return to the past.
Basically the city needs to stop looking backwards and start looking ahead.
Landry's Inc. a Houston-based company that owns a full spread of restaurant chains and Downtown Las Vegas and Laughlin's Golden Nuggets, has officially taken ownership of the now-former Trump Marina and will be putting about $100 million into renovating it. Meanwhile, a vaunted plan to allow "mini-casinos" has resulted in exactly zero construction to date. That's exactly what anyone would have predicted when the mini-casino concept was first mooted, and it's a good sign that some operators, at least, see some upside in the market.
First, some history. Steve Wynn's AC Golden Nugget opened in 1980--it was the first Atlantic City casino to be built new from the ground up, not a patch-and-paint job of an existing hotel. Wynn was young, charismatic, and with the help of Frank Sinatra and many others, made the Nugget the Atlantic City casino for high rollers. Wynn was a hero in Atlantic City: one year, he gave all of his managers new cars as bonuses, which made him an absolute legend. But in 1987, frustrated with the regulatory regime, he sold the Golden Nugget to Bally's. If you want to hear a good first-hand account of the change-over, listen to my podcast interview with Roger Gros, who describes the tears shed when Steve left town. The Golden Nugget become Bally's Grand, then The Grand: A Bally's Casino Resort, then the Atlantic City Hilton. [Personal history: My first job inside a casino was working in the Bally's Grand ice cream parlor back in 1989. And I left a ton of quarters in the old Golden Nugget arcade before that. So you could say this was the first casino I spent a substantial amount of time in.]
Across town, Hilton Hotels started building a hotel-casino on the marina in the early 1980s. By 1985, they had it ready to open, with signs installed and matchbooks printed with the Hilton name, when the Casino Control Commission denied the company a license for doing business with Sidney Korshak, a Chicago attorney with reputed mob ties. Donald Trump, who was in the midst of a struggle for control over what became Trump Plaza with Holiday Inn/Harrah's, bought the nearly-finished Hilton and renamed it Trump's Castle. This was both a way for him to expand his casino holdings and for him to strike against Harrah's, whose Harrah's Marina was across the street.
Trump's Castle lasted until 1997, when, after a plan to rebrand it as a Hard Rock casino fell through, it became Trump Marina. For years it was the runt of the Trump Entertainment Resorts litter. Back in 2008 Trump almost sold it for $318 million--it would have become a Margaritaville casino. Landry's paid a cool $38 million and is planning to put $100 million--not the $150 million that was thrown around before the sale became final--into a complete renovation.
So it turns out that, for $138 million, Landry's gets a spiffy "new" casino hotel with about 1,000 rooms, 70 table games, and 2,000 slots (give or take). Considering Encore Beach Club alone cost about $70 million, that seems like a pretty good deal.
And let's compare it to the "mini-casinos" that were supposed to be Atlantic City's savior. I spent a lot of time trying to debunk the idea that the proposed mini-casinos are feasible, let alone will bring the salvation of Atlantic City.
These mini-casinos are limited to 20,000 square feet and can be built with only 200 hotel rooms instead of the previously-required 500. Back in March 2010, when the idea was first floated, I did ran a few cursory numbers and determined that, with casinos that size, the projects would be difficult to keep open if someone waved a magic wand and created them; there was no way that they'd ever be able to pay for their construction. The money just wouldn't be there.
Meanwhile, rumors were flying that certain operators were going to come to town and spend $300 million--no, make that $450 million--on building a mini-casino. In a blog post that would surely make me a modern Nostradamus if I wasn't saying anything that wasn't completely obvious to anyone with a rudimentary knowledge of business and no vested interest in the outcome, I posited a hypothetical scenario: why build a $300 million mini-casino when Trump Marina could be had for $75 million?
This is what I wrote back in 2010:
So instead of starting from scratch and investing $300 million in a new facility with one-quarter of the revenue potential, why not just buy Trump Marina and renovate it-really renovate, almost beyond recognition? Even if you put $100 million into it, you're still saving money, and you've got a much bigger, better-situated...casino with way more potential upside.
As it turns out, that's exactly what Landry's is doing. And we've yet to see ground break on one of the two now-permitted mini-casinos. And, as I said earlier this year when mini-casinos were approved, "Paying fourteen times the price for less than one-quarter of the footprint is beyond delusional."
Looking around the market, there are still opportunities. Caesars Entertainment has four properties in Atlantic City--about 40% of the market. I'm sure they'd be willing to spin off the Showboat if they could find a willing buyer. In 2011, it doesn't really add anything to the company except more rooms and slots. Bally's/Wild Wild West/Claridge has a huge footprint and lots of potential should the market turn around, Caesars is the prestige brand (and now corporate namesake), and Harrah's is the second-best performer property in town, behind Borgata. So Showboat would probably be available if the money was there, and if it's not already encumbered by a debt agreement.
The Atlantic City Hilton's woes have been well-documented, and with the Tropicana under Icahn's control, that's easily the most vulnerable, and the only one that's officially on the market. Anyone got $30 million burning a hole in their pocket? If you had the money to invest in improvements and marketing, it could be a solid buy.
Basically, what happened to Trump Marina is proof that, if the economics are right, there are still operators willing to invest in Atlantic City--and you don't need mini-casinos to persuade them to dip their toe in the water.
The Fontainebleau is about to open.
A re-invigorated Plaza project has broken ground and Boyd is halfway through putting up a gorgeous red-gold glass curtain wall on Echelon Place. Jim Murren is a semi-successful investment banker in Connecticut, the Marnell's own the recently joined Rio/Palms complex and Nevada's recently elected junior senator is attending the groundbreaking of a monorail extension that will bridge McCarran Airport, The Strip and Fremont Street.
Can we fast forward to 2017? I'm sure that's what some Las Vegas casino operators would wish for. It's hard to blame them.
Things look a bit sour for Las Vegas - August numbers notwithstanding, let's be honest - some of the city's best boom-time customers don't have any more money to spend on bottle service and $500 dinners at SW. Sure, the biggest players haven't lost enough to kill their gambling habit but that mid-tier backbone - successful young people, boomers and a smaller segment of folks truly blowing the rent on a weekend in Vegas - they're still pretty fucked up from this recession.
Well, at least it's not as bad as it is in Atlantic City where the top operator doesn't even want to own the other half of their property. In my mind, AC is toast.
As someone that has spent the last ten years as mostly excited about Las Vegas and now sells a product that is inexorably linked to the city, I have to say that things look very tough for the next few years.
A CB Richard Ellis study publicized today really laid out the bad news. The market won't be able to handle the massive increase in supply for some time. Thanks a lot CityCenter. At least we don't have any more rooms coming online anytime soon... Oh, crap... Thanks a lot Cosmo.
The Cosmopolitan will be the last property for awhile, and that's almost certainly a good thing. In a way, they may end up with an advantage - they can be the 'newest property on The Strip' for five years or more. That title worked great for The Aladdin. Oh well, whatever, nevermind.
Some of the issues mentioned in the report are structural - air traffic is more difficult than ever in the era of shoe-bombers and naked body scanners. Asian baccarat is slated to increase but that alone is not a market savior. The formerly solid underbelly of Las Vegas tourism - that combination of California drive-ins along with southern and midwestern vacationers... well, they're hurting... and that's not going to change anytime soon (damn that Obama-Reid-Pelosi-Boehner-Palin-McCain cabal!)
It's easy for Wynn to charge $200+/night for a weekend night when the town is half full but when Luxor, Excalibur, Monte Carlo and Treasure Island are all offering rooms in the sub-$50 range (sans the ridiculous resort fees), those rates are harder to justify... and how anyone could feel good about a $150/night room at Aria or Vdara mystifies me. Just say no.
But it's not the Wynns of the world I'm worried about. Aside from maybe Las Vegas Sands, they're probably best positioned to ride this turbulence out. As a lover of the history of Las Vegas, it makes me a little sad to see how little of their revenue now comes from the 'Gambling Capital of the World'. In quarterly earnings today, LVS reported that barely 15% of their revenue comes from their two Strip casinos. With Singapore on the rise, LVS is again a gaming company to watch, even if their numbers don't yet match Chairman Adelson's bluster.
Why am I writing this? I dunno. For whatever reason, a few stories today sucked me in and I felt compelled.
News this morning that Boyd Gaming will decline their opportunity to purchase the other half of Borgata, currently owned by MGM Resorts Intl. and held in trust. Boyd is the managing partner of Borgata.
Frankly I'm a little surprised - they only had to cough up $250MM and it's not even worth that to them? Clearly the macro trend of the city weights heavily on this decision.
This moves the process along a bit for MGM for whom the asset is tied up in a trust following action by the New Jersey Casino Control Commission.
This time on the show:
Podcast-a-palooza - Oct. 30th, 2010. Our guest will be Tropicana Las Vegas President Tom McCartney - all the details are available on the Web site.
* PENN Swallows M
* August Gaming Figures
* MGM May Sell Borgata ; Not Making Much Money
* Room Rate Survey Data
* Vegas Gang 'Sure Bets'
Check out the show: http://www.vegasgangpodcast.com
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 email@example.com.
First off, a note - very excited to announce that Jeff Simpson will be writing a bi-weekly column for Two Way Hard Three. I'm very excited to have him on board!
* Encore Beach Club Opens
* MGM Mirage vs. Perini
* Atlantic City Numbers Down
* Tropicana Reborn?
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 firstname.lastname@example.org.
Vegas Gang is back!
Win an iPad! Details here: http://www.ratevegas.com/blog/2010/03/submit_your_veg.html
* Station Casinos Re-Org
* CityCenter's First Hundred Days
* CityCenter vs. Perini
* Atlantic City Mini-Casinos
* Closure of CalNeva
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 email@example.com.
The process for MGM Mirage to divest itself of its 50% share in Atlantic City's Borgata is starting to become clear:
Boyd is the obvious buyer as they own the other half. Who else though? Have recent developments scared off Atlantic City investment? It will be an interesting barometer.
This time on the show:
* MGM's Aria - 2 Months In
* MGM Mirage Exits Atlantic City / Wynn Enters Philadelphia Market
* Greenspun / Station Casinos Relationship Disintegrates
* Lake Las Vegas Shuts Down
* President Obama's Remarks and Visit
* Harrah's Interested in The Palms?
Check out the show: http://www.vegasgangpodcast.com/2010/02/vegas-gang-44-february-25th-2010/
Feel free to leave comments below. Trivia questions can be sent to firstname.lastname@example.org - we might use yours on the show.
In a much rumored development, Wynn Resorts has announced that they are slated to become the managing partner for the casino project slated for the Philadelphia waterfront.
This is a slap for New Jersey and is potentially another significant nail in Atlantic City's coffin.
Here's a little more from the local media:
What's not clear is how much, if any, design influence Wynn Design and Development would have over the project. It's hard to imagine Wynn putting their name on something they didn't design or at least make-over. Time will tell.
UPDATE: Here's the Web site for the project as originally envisioned, including some renderings: http://www.foxwoodspa.com/overview/
Well, this seemed inevitable. MGM Mirage announced they are planning to divest themselves of the 50% stake they own in Atlantic City's Borgata.
The asset will remain in trust as they arrange a sale.
This time on the show:
* CityCenter Opens
* 2009 Recap/2010 Look Forward
* Gary Jacobs and MGM Mirage
Have a Happy New Year. We love you.
This morning, Nevada based MGM Mirage released their second quarter results:
A loss of $212 million for the quarter, along with lower revenues as well. Despite taking a big hit this quarter, some analysts believe MGM Mirage has turned their balance sheet around and should start to see some upside in the coming quarters. They miraculously were able to navigate a very difficult set of conditions this Spring without resorting to an asset fire sale.
Their massive City Center project opens in phases starting in October.
An investment group lead by Carl Ichan has finalized a purchase of the Tropicana in Atlantic City. Ichan has gaming experience having previously owned interests in Arizona Charlie's and The Stratosphere in Las Vegas.
The AC Trop was forced into sale when the NJCC opted not to renew the license of previous owner, Columbia Sussex.
The price for Ichan? $200 million - that's 80% less than the $1B the property was expected to fetch. Amazing.
Happy to be back after a little bit of a break. Lots to talk about, as always.
* MGM Mirage Pulls a Rabbit Out of its Hat
* Fontainebleau May Not Be Totally Screwed (we'll see)
* UNLV Center for Gaming Research Trends
* MGM Mirage Selling Properties
The results of the long-running New Jersey investigation into the suitability of Pansy Ho as a business partner for MGM Mirage has resulted in the department of enforcement recommending against.
MGM Mirage partnered with Ho on MGM Grand Macau and owns a 50% interest of one New Jersey property, the Borgata.
What happens next is unclear - maybe nothing. The Sun has more:
A very tough quarter for the Las Vegas based operator - 20% reduction in net revenue. To their credit, they don't sugar coat it - things are tough in gaming and these results reflect that.
If they hadn't had some of the TI sale figures in this quarter, things would have looked even worse.
REVPAR took a big hit - looks like they had to significantly drop rates to stabilize occupancy.
Looks like The Donald has resigned from the board of the casino company that bears his name, ahead of a potential involuntary bankruptcy:
[Insert Apprentice Joke Here]
Trump Ent market cap is in the $7.8 million range (!).
A bit more on the excellent Gaming Atlantic blog.
We're back with another episode! It can be downloaded here.
This time around we discuss:
* Atlantic City
* Las Vegas Economic Woes
* Tropicana Re-Brands as Value Property (!)
* City Center's Harmon is Stunted
Also, be sure to check out the new podcast from the UNLV Center for Gaming Research. You can subscribe to that here: http://gaming.unlv.edu/podcast.html
My friend and fellow Vegas Gang member David McKee put up an interesting post yesterday with a few updates on the status of the forced sale of the Tropicana property in Atlantic City.
We've talked about Tropicana Resorts several times on the Vegas Gang Podcast but it seems the news never stops... and for those not reading McKee on a regular basis, you're missing out.
Over at CityBoom, Chuck has a story about the possibility of the Planet Hollywood folks bidding on the Tropicana AC and possibly opening a branch on the Jersey Shore.
I'm waiting for my invite to the opening party.
It looks like the 'chickens are coming home to roost' for Tropicana Entertainment - in our pre-call bater for Vegas Gang, Jeff Simpson tipped us off to this story.
Thanks to Chuck for the link.
The first episode of what could become a new, semi-regular podcast has been posted.
It doesn't yet have a name but the working title is 'Vegas Roundtable'. It's a gaming industry related podcast in a discussion format. Today's participants include:
David McKee - http://www.lasvegasadvisor.com/blogs/dmckee/
Dave Schwartz - http://www.dieiscast.com
Chuck Monster - http://www.vegastripping.com
Thanks to all participants. The podcast is in my normal feed for 'The Worst Las Vegas Podcast' but it will probably move to a dedicated feed. Also, if anyone can think of a good name, drop them in the comments.
If you don't subscribe to the feed and want the direct URL, here it is:
Wow. In a pretty amazing turn of events, the New Jersey Casino Control Commission has denied a license extension to the Tropicana Atlantic City.
The RJ has details on the departure of Tropicana's CFO:
The embattled parent company of the Tropicana on the Strip took another blow with the resignation of the company's chief financial officer after only 120 days in the position. [From ReviewJournal.com - Business - Tropicana CFO quits, takes new job]
MGM Mirage posted their 2007 Q3 results - the company's net revenues are up 6% to $1.9 billion.
Some discussion on the call surrounded City Center and Dubai, Bellagio's baccarat room being closed, and the ongoing construction at former Mandalay properties.
Occupancy was up 1% to 97% and ADR hit $147, up from $140. REVPAR hit $143 from $135 a year ago.
An interesting item - gambling revenues, excluding Beau Rivage, are actually down 3% from a year ago.
An interesting wire story about Harrah's dispute with a Native American tribe and a possible $2.8B judgement against the casino company. Analysts pose the possibility that it could even derail the privatization of the company, if the judgement is upheld.
In Business Las Vegas did a fascinating interview with MGM Mirage President and COO Jim Murren last week. It is a highly recommended read that gives great perspective into the thinking that has driven recent deals with Kerzner, Dubai World and others.
It's clear that Terry Lanni and Jim Murren 'get it' when it comes to the biz side of the gaming industry - they are re-defining the standard practices that have been common knowledge in the industry. Business as usual? Not anymore.
From partnering with interesting companies to big ambitious projects like City Center in Las Vegas, they are bringing techniques that have worked well in the general hospitality industry to gaming and it seems to be paying off in spades.
Personally, I'd love to do an interview with Murren but MGM MIRAGE sometimes looks down on Internet media, even those of us with larger numbers than some print publications. I'm hoping one of these days these companies will wake up to that. They're not as bad as some companies but they could do better in this department.
MGM Mirage made a few changes in the executive suite which they announced today.
First off, the extremely capable Jim Murren has been promoted to President and COO of the company (from President, CFO, and Treasurer). Murren came from Wall Street and is probably the most responsible for MGM Mirage being a model for other gaming companies to follow, especially when talking about reporting. Murren will also oversee all properties except for those that are part of the 'City Center Campus'.
Bobby Baldwin has been moved into a new position - Chief Design and Construction Officer. He'll oversee all new construction and capital improvements in the US. He also will oversee the 'City Center Campus', which includes City Center, Monte Carlo and Bellagio.
Lastly, Dan D'Arrigo has been promoted to EVP and CFO.
All of these positions report to Terri Lanni, the company's Chairman and CEO. Additionally, John Redmond, who had been running the properties formerly in the MGM family, including MGM Grand and NYNY has resigned as planned.
Unrelated, Harrah's has scheduled an announcement for tomorrow regarding entertainment changes at their resorts in Las Vegas.
This interesting story in the RJ caught my eye - a well known casino security expert that has trained many in the industry has been accused of colluding to fix high stakes poker games in Atlantic City.
While an integral part of internal controls and even public safety, we don't hear about much of this stuff and that's why I thought it was worth sharing and discussing.
A fresh new discussion zone for y'all.
MGM Mirage had a big quarter but a large portion of the ground they gained were from one time events - property sales in Primm and elsewhere.
Still, income from continuing operations was also up - the company is healthy and I still consider it to be one of the best run in gaming - a model for the industry in that regard.
Revenues hit $2.11 billion and earnings were at $360 million with those property sales factored in. Incoming from continuing operations was $182 million, up from about $140 million in the year ago quarter.
REVPar on the Strip jumped 7%. I hope to have property specific info soon.
Technorati Tags: atlantic city, bellagio, borgata, cirque du soleil, cirquedusoleil, condos, gaming industry, las vegas, lasvegas, luxor, macau, mandalay bay, mgm grand, mgm mirage, mirage, project citycenter, treasure island, vegas
Thanks to Dave Schwartz for allowing us to publish his recent Atlantic City trip report.
The report is after the jump and the photos that go with it are here:
We really don't do a lot of Atlantic City coverage - I've only been there one time myself... Not a place that I would want to visit on a regular basis but I had an interesting day there and a great meal at one of Borgata's gourmet rooms.
Borgata itself was impressive - standing in their casino you would be hard pressed to forget you were on the Jersey shore. It feels like a Mandalay Bay-ish type of place.
Anyway, thanks to reader Tom M., for a slew of photo updates:
Some interesting new projects like an expansion at Borgata, plus of course MGM Mirage's possible entry into the market - AC is hopping!
It's funny, Harrah's is the largest gaming company in the world and I'm just totally not interested in their quarterlies. Maybe it's because they are so spread out and derive revenue from so many locales - I'm not sure.
Anyway, here's an RJ report on Harrah's luck for Q1, which it seems wasn't so awesome due to Atlantic City.
Harrah's is in the process of going private so pretty soon I won't have to write these stories any more.
Boyd Gaming posted some nice results yesterday:
Boyd is building Echelon Place in Las Vegas on the site of the Stardust, which is set to come down in mid-March. Their joint venture in Atlantic City with MGM MIRAGE, Borgata, has many folks believing that Echelon is a project to watch and their Las Vegas opening will be a bigger splash than some have predicted.
Roll The Bones is a new book by Dr. David Schwartz, the director of the Center for Gambling Studies at UNLV. His blog, DieIsCast.com is a great source for gambling information and news along with the ever-popular casino carpet gallery.
Dave has written several gambling related books in the past, including Suburban Xanadu, a study of the casino resort's evolution (this book features an in-depth look at Martin Stern, Jr., who's work we have mentioned several times in the past here on this site) and Cutting The Wire, a look at the Wire Act and Internet gambling.
You can buy this book here (and it supports this site in a small way): Roll the Bones: The History of Gambling
Keep reading after the jump...
Some of you may know Dave Schwartz over at UNLV and also know that his latest book, 'Roll The Bones', a fascinating history of gambling, was recently released.
I've been plowing through it and plan a review soon. In the meantime, he's running a contest for readers to win a copy of his last book, 'Cutting The Wire'. The rules and regs are located here:
The basic idea is that you read his latest and write an Amazon or Barnes and Noble review and then you've got a good chance of getting a signed copy of the last book, 'Cutting The Wire'.
Also, if you mention that we sent you, this Web site could get a special write up from Dave, which would be neat but honestly, you should read 'Roll The Bones' anyway - so far it's a great read and very easy to digest.
Technorati Tags: atlantic city
Is Steve Wynn coming back to Atlantic City and is he working with former arch-rival Donald Trump to make it happen?
This has been reported a few places today (including via our listener line - thanks Brian)!
The rumor is that Steve Wynn and Donald Trump are considering some kind of deal to bring Wynn back to AC on the site of Trump Plaza. That could mean a joint venture, Wynn Resorts purchasing the land outright, or nothing at all.
Nothing concrete on this topic but let's open it up for discussion. Thoughts?
Updated: This is gaining more ground: http://pressofatlanticcity.com/news/story/6878196p-6743121c.html
I got my review copy of Dave Schwartz's new book, "Roll The Bones" today and I've started to read it. Dave is a friend of mine and I feel lucky to call him that. He's the number one gambling historian and author of several books. He works at UNLV as the Director of the Center for Gaming Research. His Web site is located here, which we are now proudly hosting for him: http://www.dieiscast.com
A full review will follow when I'm done but so far, it's great. Anyone that's seriously interested in gambling should buy this book right now.
The link below is from Amazon.com and not only do you get the book for a great price, but we get a small cut of the proceeds, so you are supporting the site and getting what so far seems like a great book.
Ok, here goes: Roll the Bones: The History of Gambling
Technorati Tags: atlantic city, aztar, bellagio, borgata, boyd, broadway, caesars, casino design, cirque du soleil, fremont, gaming industry, golden nugget, hard rock, harrahs, hilton, hooters, las vegas, luxor, macau, mandalay bay, mgm grand, mgm mirage, mirage, monorail, palazzo, palms, planet hollywood, playboy, project citycenter, red rock, riviera, sahara, southcoast, stardust, station, table games, treasure island, tropicana, vegas, venetian, wynn, wynn macau, wynnlasvegas
This was on VT yesterday and I should have posted it then but hey, I was busy.
Anyway, this story out of New Jersey indicates that Wynn Resorts might make a play to build a hotel there. I see this as very possible - along with Mississippi and Nevada, New Jersey is the only gaming jurisdiction in America with any sensible tax and regulatory setup.
A few quick items:
Harrah's is set to remodel the rooms at the Flamingo, casting any demolition rumors into severe question:
After losing the Tropicana assets, Pinnacle will buy the Sands in Atlantic City:
Boyd has announced the Stardust will close November 1st: