And I mean that with the greatest possible respect. I know people usually throw "fanboy" around as a pejorative, but to me the idea of someone who is so into whatever it is they're into--whether it's Star Trek, or cartoons, or craps--that they have a childlike enthusiasm about it is quite positive. After the jump, I talk a little about what Stevens' fanboy status means.
Courtesy of Detroit1051, that's what this 40-year resident thinks. Here's his description of a recent trip to the heart of Nevada's economic engine (after the jump):
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.
Attention to detail.
On paper, everyone agrees it's important. Like being "goal-oriented," it's one of those generic hallmarks of a good manager. In theory, it all makes sense: people should sweat the small stuff if they want the big stuff to turn out correctly. In practice, though, there are plenty of reasons why attention to detail is honored more in the breach than the observance: time (or lack thereof); conflicting priorities; lack of quality control; loss of ownership over a project.
After the jump, I'm going to talk about one small instance of a critical lack of attention to detail, and what it all might mean.
Although given only perfunctory mention in most of the Las Vegas media, the April numbers' release this morning was actually pretty significant. They seem to say that things are headed in the right direction again, but really looking at them raises more questions.
It feels like I've started my own cottage industry talking about SLS Las Vegas. It's a topic that people seem to be interested in and that they feel strongly about, and I feel I've got something to say because I talked to COO Rob Oseland last week. I shared my thoughts on last month's press release right here last month. After the jump, I'll talk about what I've written and share a little something new.
There's a bit of a mystery unfolding on the Strip thanks to Caesars Entertainment. Since the initial flurry that surrounded the initial announcement of Linq last August, we've heard precious little about the project, which will mostly be beneath, between and behind the Flamingo and Imperial Palace. After the jump, I take a look at what I consider the biggest unanswered question, and take a few guesses at possible answers.
We learned yesterday that all of the financing details for the soon-to-open SLS Las Vegas are in place. Well, actually, they aren't, and that's what makes this interesting.
Could the new Total Rewards signal more than an aesthetic shift for Caesars Entertainment? It's possible. Armed with a few images and my imagination, I'll take you on a little journey into the possible future...
and, though the article was never published, I sure would like that middle sentence back. See the guilty party after the jump.
Before the recent flurry of legal activity involving Kazuo Okada and Steve Wynn, the Japanese billionaire had a reputation as a bit of a mystery man. But back in 1988, he was at the forefront of Universal Company's U.S. ad blitz. After the jump, see an ad from the February 1988 issue of Casino Gaming magazine that puts Mr. Okada front and center.
Yesterday I wrote a few reports for the Center for Gaming Research summing up the financial performance of the "average" casino on the Strip, in Downtown Las Vegas, and in Reno. Because people here like talking about the Strip more than, say, Reno/Sparks, I'll break down the Strip results for you.
The Gaming Control Board released the November 2011 revenue results for Nevada casinos this morning. I've banged out two reports, and am now ready to pull everything together in a quick, easy-to-read narrative.
As I've said for months now--and proved, using geometric logic, quarterly reports, and benchmarks for the Strip--the Cosmopolitan has not done a great job of marketing their casino. Like the Paris balloon, it's an inside joke that's not even so inside anymore. With the appointment of Tom McCartney as property COO, some people (me included) have guessed that this would change. And, less than a week into his tenure, I've got some evidence that it is.
Yesterday was a momentous day in Las Vegas casino history. There was no closing of the doors (or taping-up of notes) or implosion, but one of the real stalwarts left the building. The Las Vegas Hilton is no more. Yes, the building is still there, along with the employees, and you can still book a room (for now, at least) and roll dice, but the name has been removed in place of the oh-so-exciting "LVH--The Las Vegas Hotel and Casino." After the jump, I'll recap the history of the property, hitting the high notes and a few low ones.
Hunter's already taken a look ahead at 2012. While I've still got a few hours left in the first day of the new year, I'd like to take a look back at 2011 and talk about six candidates for "Las Vegas Casino Story of the Year." These are the stories that I think most defined the year and, when historians look back at it, will be the ones that get the most attention.
Yesterday, the Nevada Gaming Commission adopted regulations that will pave the way for online poker play--for real money--in the state. After the jump, I'll break down exactly what the Commission passed and what it means for gambling, both in casinos and online, in the state of Nevada.
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.
Why do casinos have shops? After all, every dollar that's spent buying stuff is money that's not spent in the casino. Prompted by a recently-announced closure, I share a few thoughts about what casino shops should do for the rest of the operation...after the jump.
It's hard to say much more about Jeff Simpson. Richard Velotta at the Sun recapped his professional career. Hunter gave two personal tributes here, and no one could say what Chuck said in a more heart-felt way. Seeing Jeff's picture on the VT marquee makes me smile; seeing the sign dimmed reminds me that we're not going to be hearing him talk about casino parking garages--or the complex behind-the-scenes deals that make the business go--ever again.
A few weeks ago, I was lucky enough to do a long interview with Bill Eadington, one of my mentors in the gaming studies field and the one guy without whom there might not be a gaming studies field as we know it. We talked for quite a while about his career and some of the personalities he's known, and as he reminisced about working with scholars like Ed Thorp, Peter Collins, Peter Griffin, and David Spanier (to mention just a few), he had a smile on his face that said, "I'm lucky to have gotten to shared my best years with these guys."
I feel very lucky that someday I'll be able to say the same about Jeff and many others. As I said on our last show together, without Jeff, Chuck, Hunter, and all of you who read and contribute, what I do would be pretty bleak and thankless. Whenever Jeff complimented my work, it meant a lot to me, because I know that he's not the kind to mince words or impress easily.
Those of us that knew Jeff on a personal level have our many reasons for missing him. But even if you didn't know him, you're a little worse off without him around.
Before a lot of others, Jeff sensed that the news business was changing. He joined the Vegas Gang back in 2008, when he was still at the Sun, and after he left the Sun he transitioned to freelance work and writing for this blog. And here he blazed a trail for me. I'd been blogging about gaming stuff since 2001 on my own, but for a variety of reasons decided I wanted to join forces with something bigger. So I asked Hunter about coming about joining the team here. That Jeff had already shown this was a great forum for quality writing made it an easy decision to make. And for too short a time we made, I hope, a passable tag team of casino commentators, with his relentless ground-based attack a great foil for my sometimes more technical and occasionally whimsical approach.
But, as Chuck mentioned in his tribute, Jeff found a real niche on Twitter. Having him dissect the day's gaming news, pointing out credit for the hard questions that had been asked and laying blame where they hadn't, was a treat. It was like sitting at the editor's desk watching the paper being put together. There once was a time when none of us in the wider public would have benefited from insights like that.
I hope that Jeff's unofficial Vegas gaming/business news ombudsman presence forced gaming writers to take another look at their work before filing it--I know that I did, because I knew that if I tried to take the easy way out, I'd have to answer for it.
That's the part of Jeff's work that I think we'll all miss the most: that, like any good editor, he made those around him better. Professionally, I don't think there's anything better you can hope for.
The Las Vegas Hilton has a new name...and a not very creative one. I'm going to have some fun with this one. More after the jump.
I'm still thinking about the Cosmopolitan's decision to pull its free wifi, and I've come to believe that casinos should offer free wifi, at least on the casino floor and other public areas.
Keep reading after the jump, which shouldn't take too long to load, unless you're sitting at a slot machine and stuck with a 3G connection.
A little while ago, the Cosmopolitan eliminated its free wifi. After the jump, I talk about the broader significance of taking away what has already been given.
Come for the Neil Diamond reference, stay for the analysis of the gaming numbers! I've got plenty of the latter after the jump:
Last night, the American Gaming Association held its Hall of Fame induction ceremony. After the jump, I'll talk about each of the inductees--some more than others.
The Miami area has become, over the last few weeks, the most exciting potential casino development in the US. Massachusetts, it seems, has taken a backseat. Las Vegas Sands, Wynn Resorts, and Genting (who own Genting Highlands in Malaysia, Resorts World in Singapore, and are about to open at Aqueduct in New York) are seen as the frontrunners for gaming licenses, with MGM Resorts and Caesars Entertainment circling in the background.
As part of its pitch, Genting has said that it might build the world's biggest casino. But is that going to be the best fit for Miami? Or the best business model? After the jump, I'll compare casino square footage and break it down.
Along with well over a thousand other Las Vegans and Downtown visitors, I had a piece of cake today to celebrate the 91st birthday of local casino legend Jackie Gaughan. After the jump, I'll talk a little about the man and his considerable legacy.
If you weren't there this weekend, the Vegas Internet Mafia Family Picnic unleashed itself across Las Vegas. It was a good time had by all, to be sure. But I wanted to take a minute to share some thanks. There are plenty to go around. More after the jump.
Mulling the Las Vegas Mob Experience while writing yesterday's post on the Tropicana, a little incongruity that had been nagging at me for two weeks suddenly game into focus.
Hopefully that nags at you enough to keep you reading after the jump.
In the past few days, I've done a few media interviews, including one for KVVU Fox 5, on the Tropicana's current situation. I figured that I might as well write up my thoughts for the record.
I will do precisely that...after the jump.
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.
After a long day, I've finally finished crunching the August Nevada gaming numbers. If you want some historical perspective on this month, keep reading after the jump.
A little while ago, I had the pleasure of doing a few guest lectures at San Diego State University (Go Aztecs!). While I was down there, I took my family to Legoland and was amused to finally see the MiniVegas that's been built there.
You'll get my blocky explanation right after the jump.
A few days before the big reveal at G2E, I got an invite to swing by Bally Technologies' HQ across from the airport to get a sneak peek at what's going to be new for 2012. I jumped at the chance, and after the jump I'll share what I saw.
The July Nevada gaming numbers are out, and I've sliced, diced, and spliced them to exhaustion. After the jump, I'll share my thoughts on what's going on in Nevada casinos.
Not to be outdone by the serious investigative journalism going on over at VegasInc, I'm back with another in-the-trenches look at one of the lesser written-about sides of Las Vegas: its unique odors. In particular,, I focus on five (5!) smells you might encounter on the Las Vegas Strip.
More after the jump.
Most of us plebeians can only guess at the perks available to mega-high rollers at Las Vegas casinos. Twenty-four hour butler service? Dinners personally prepared by celebrity chefs? Carte blanche to do anything, say anything, be anything, as long as your credit holds up?
Take a glimpse behind the curtain and into a high roller suite after the jump.
I've already shared some of the details that were released at the press conference, but I'd like to talk more about some of the things the speakers said and share a few of my thoughts.
I'll linq you after the jump.
I went to the Linq press conference today. I'm going to write up some of my thoughts and answer a few questions, but first I wanted to share some of the press kit with everyone, since it will answer some questions.
All the fun after the jump....
The Cosmopolitan of Las Vegas has released its 2nd quarter results, giving us a glimpse into how the Strip's latest resort is faring. The answer? Not so poorly, though there's room for growth.
My focus here--and I'll be quick, I promise--is comparing the Cosmopolitan's revenue breakdown with the rest of the Strip. In some ways it isn't a true comparison, since I'm pulling the Strip average from the Average Big Las Vegas Strip Casino, 2010 report, which is a year behind the Cosmopolitan numbers. But I think that it still gives a good sense of what the average numbers are on the Strip.
More after the jump.
Earlier this morning, the Gaming Control Board released the June 2011 Gaming Revenue Report. That's like Christmas morning for gaming numbers geeks. After the jump, I'll share some of the highlights and my analysis.
"New media" is often rightly maligned for being unable to devote the resources to chasing important stories that traditional media can. It's easy for anyone to listen to a quarterly conference call and offer their opinion on what the suits are doing wrong (or right). But how many local bloggers have the time and patience to sit through humdrum municipal hearings? Or the expertise and contacts to do hard-hitting investigative journalism?
Well, this new media explorer (and, full disclosure, Nevada Press Association (2nd place) award winner)wants to try his hand at the kind of serious news piece that one of our local dailies has been treating its online readers to. Since we've already covered the most dangerous intersections, the best free attractions, and the five unique pools on the Strip, I want to share with you a news story that is truly relevant and not at all content-free link-baiting: the letters of Las Vegas.
What are they, and what order are they in? Keep reading after the jump to learn the hard truth. Hey, if you're reading this from the TWHT main page, you'll only have to click once, not 15 times, so give it a shot. And if you came straight to the post page, you're already here, so enjoy as I use a technique made famous by ransom notes to reveal, in their full glory, the letters without which Las Vegas would be something else entirely.
Late last week, the Cosmopolitan of Las Vegas unveiled its latest secret weapon--a purple truck. Since its existence was confirmed on Twitter, speculation about its true purpose has been running high. Would it dole out free indie rock and hipster glasses to the unwashed masses of Las Vegas? Would it spontaneously curate streetside happenings? Or would it actually do something useful, like provide free shuttle service? As usual with marketing promotions that want to go viral, it was shrouded in mystery.
Well, word has it they've been active this weekend, and I ran into the Cosmopolitan street team quite by accident this morning.
To learn what's going on with the purple truck, continue reading after the jump....
If you love those Las Vegas Sun slideshow-riffic stories (15 intersections of certain death! click now!), you might like this quick, numbered list of potential future events that will likely never come to pass but may give you a chuckle.
On the heels of this morning's delightfully-sequined astroturf "angry showgirl" march to protest resort fees, I started pondering what other marches protesting other indiginities or inconveniences of today's Vegas I'd like to see. My brain stopped working after five, so that's all you get. If you've got any ideas, feel free to add them in the comments.
I'll continue to delight you after the jump.
Or, Hamsterdam under the Mandarin Oriental
With the recent spasm of homicides on the Las Vegas Strip (3 in less than two weeks), public safety on the Boulevard has become a big issue. I wrote a little about it here last week, and several local news outlets have given the issue more scrutiny. Yesterday I did an interview with KLAS's I-Team for a week-long series on the subject that will air next week.
I'll continue after the jump:
Perception vs. reality.
In Las Vegas, the former is often more important than the latter.
Case in point: the vast majority of those who come to town to gamble don't leave winners. Most of them know it coming in; if it were any way else, how could casinos afford all of the fountain shows and ultra-luxe trimmings? They don't build them because people are carting money away, after all.
But most people have the perception--or at least the hope--that they'll get lucky, or at least have a swingin' time ending up broke. So, despite millions of visitors proving that regression to the mean is a money-making concept each year, people continue to gamble in Vegas--and buy lottery tickets, pick ponies, and visit casinos around the world.
When deciding what to do for fun, vacationers have no problem choosing perception over reality.
That's worked to Vegas' advantage, but what happens when perceptions shift from fun to fearful?
In less than two weeks, there have been two homicides on the Strip, each involving previously-unacquainted passers-by. Neither was a regrettable but could-have-happened-anywhere case of domestic violence spiraling out of control. Both happened when visitors to the Strip got into confrontations and decided that pulling a knife was the only solution.
These two fatal stabbings have been amply covered by the local dailies but haven't gone national...yet. But let's say the violence continues to escalate on the Strip, and fights, stabbings, and shootings become more common. It's only a matter of time before bystanders start getting caught in the crossfire.
Let's say one of them is an international visitor--say from Germany or Britain. The foreign press would have a field day with it, much like the murder of German tourists in Florida in the early 1990s or the recent slaying of two British tourists, also in Florida.
The LVCVA's bet big on international visitors. If safety becomes a concern, it's safe to say that they're not going to coming.
There are plenty of theories why crime rates rise and fall. Back in the 1990s, when crime rates in New York City were plummeting, many credited the broken windows theory for providing the key to turning around the city's out-of-control crime. In short, broken windows proponents believe that when small crimes--graffiti, fare beating--go unpunished, it creates an environment that breeds more serious crime by suggesting a breakdown in public order.
Could the Strip be due for some broken-windows style policing?
I don't know if there's a direct correlation between the free-for-all atmosphere on the Strip, with hustlers, buskers, and unlicensed vendors aggressively encroaching on pedestrians, and the recent uptick in violence on the Boulevard. But it seems a reasonable assumption to make. Now might be the time to redeploy Metro to crack down on the kinds of "quality of life" offenses that make the Strip seem like a lawless wasteland instead of a free-wheeling party zone.
I'm not an expert on policing or criminal justice, and I can't tell you definitively what the solution to the breakdown of order on the Strip. But when Metro Sergeant Tom Jenkins told me, point blank, the situation on the Strip is the worst he's seen in his 17 years on the beat, I became convinced that more people should listen to what he's saying.
We've got a career law enforcement officer telling us something needs to be done to clean up the Strip. Perusing the blogs and message boards on the subject, we've got plenty of visitors and potential visitors who are concerned for their safety on the Strip. And now, within less than two weeks, we've got two homicides on heavily-trafficked parts of the Boulevard.
What's it going to take before Clark County Commissioners and Metro leadership start taking this problem seriously?
Update: 24 hours, following another homicide, this one inside a Strip casino, Metro has announced it is shifting resources to beef up its presence on the Strip.
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.
Everyone wants to feel that they're a Vegas insider. It might be something as basic as knowing that the airport connector isn't the most direct route from McCarran to the MGM Grand, or it might be something as esoteric as being able to quote, from memory, the names of all of the bouncers at every Vegas nightclub.
Basically, it feels good to know that you're doing Vegas right. There are so many rookie mistakes to be made (and hey, even locals make them all the time) that it's great to know that you didn't waste your time or get ripped off.
After the jump, I'll share a few secrets that probably won't help you save money and might not even be that fun (hey, some of them might actually inconvenience you a little), but rest assured, they will make you feel like a real insider.
I just got this press release via email:
Palms Casino Resort has appointed Joseph A. Magliarditi as President.
In his role, Magliarditi will oversee all hotel and casino operations for the 1,300-room resort destination.
"We are thrilled to have Joe as part of our team," said Palms owner George Maloof. "We look forward to him being a part of the Palms' continued success."
Magliarditi brings more than 18 years of hotel and gaming experience to the Palms Casino Resort. An accomplished senior gaming executive, he most recently served as the President and Chief Executive Officer of the Hard Rock Hotel & Casino in Las Vegas. Before the Hard Rock, he held the position as Executive Vice President and Chief Operating Officer for the M Resort and Executive Vice President and Chief Operating Officer of Marnell Sher Gaming, where he operated the Edgewater and Colorado Belle in Laughlin. Previously, he served as Vice President of Operations of the Rio All-Suite Hotel & Casino and was also Executive Vice President, Chief Operating Officer of TRIRIGA INC., an enterprise software company.
Magliarditi was pretty new at the Hard Rock when the ownership change forced his departure. I interviewed him last year for a profile in Vegas Seven. After the jump, I'll share an excerpt.
Now that it's open to the public, I can't say this is a sneak peak, but I know there are a bunch of folks on here who haven't made it down to the big sell-off yet, so I figured I'd post some more pictures taken Thursday, a few hours after the doors opened.
The fun really gets going after the jump.
Here's the second half of my pictures from a liquidation.
Read after the jump for more photos from the Sahara's liquidation sale. Everything--and they mean everything--must go.
Yesterday I attended the media sneak peek of the upcoming Sahara liquidation sale. The fun starts for real Thursday, at 10 AM, when the general public will be admitted. For the first four days, you have to pay $10 to get in; after that, it's catch as catch can. Today (Tuesday), industry buyers have a chance to snap up the industrial-grade restaurant and hospitality equipment.
After the jump, I'll share a few pictures inside the incredibly tomb-like Sahara as it prepares for the sell-off.
Other people have already discussed the LA Times piece that featured "vintage Vegas" attractions, but I want to focus on a very narrow part of the set-up for the list of attractions, particularly this quote:
"It was better in the old days when the mob was still here," said Aiko Shono, a 35-year resident of Sin City. "Everyone had a job, everyone was friendly [and] people were not rude." (read full story here)
Coupled with longtime Golden Steer server Fernando Camacho's description of Anthony Spilotro holding court at his private booth ("Anybody who came through that door had to kneel and kiss his ring"), it creates quite a disconnect.
On one hand, it was an earthly paradise of full employment and universal civility. On the other, grown men had to literally kneel and grovel before a man whose only claim to power was his brutality. Demanding that kind of servility of his underlings shows a side of Spilotro that makes it difficult to consider his reign an enlightened one; after all, there was a reason General Zod (he of the cool accent and kneeling fetish) was the villain in Superman II.
Besides my knee-jerk revulsion towards the spectacle of retainers being forced to publicly abase themselves before self-appointed mob kingpins, I'm amazed that a journalist would take claims that "things were better when the mob ran the city" at face value. The woman who he quotes on the superiority of mob-era Vegas was about seven years old when Boyd Gaming took over the Stardust, the most convenient reckoning of the end of the mafia imperium in Vegas. What makes her an expert on when Las Vegas was better? She wasn't in the job market then, and when you're in first grade people are generally pretty polite to you whether they've made their bones or not.
I'm sure the small business owners who mafiosi like Spilotro preyed on have a much different view. Having your shop burglarized, being shaken down for protection money--these don't make the kind of warm-and-fuzzy memories that are the low-hanging fruit of "I remember when" Vegas stories.
When you look at the track record of Spilotro and his associates--murder, extortion, and grand theft for starters--you don't really see the work of nice guys intent on building a better city.
I'm not going to claim that I was keeping an eye on things in the Dunes soft count or sitting in the Sands steam room divvying up sphere of influence, but in my considered opinion--based on historical evidence including law enforcement files and interviews with many people who were active in the gaming industry when the mob was supposedly running everything--things might have been better for a few people--namely, those at the top--but weren't so good across the board.
For one, if you happened to be black you wouldn't even be allowed inside a Strip or Downtown casino until 1960, a point that's often lost in the nostalgic backwash. And if you weren't juiced in you could have a hard time getting ahead. There were just as many petty rivalries as there are today, just as many good people passed over for promotion and less-talented but better-connected schemers who got ahead.
It's also worth saying that most of us wouldn't have been on the inside, splitting up the skim and enjoying the run of the Strip--we'd have been the people organized crime was terrorizing to maintain its grip on power.
That's why it irks me when people just nod their heads and agree whenever they hear old-timers--or even newcomers--reminiscing about how much better things were when the mob ran Vegas. It's just a complete lack of critical thinking and basic logic--by definition, organized crime's power rests on the threat of brute force and is an affront to the idea of rule of law. Bobby Kennedy attacked it as an "enemy within" that rivaled the threat of communism, and it's unfortunate that, just like the very real presence of Soviet-funded organizations on American soil in the postwar period has been minimized by the US's ultimate triumph in the Cold War, the menace that organized crime posed to average Las Vegans has been airbrushed away and replaced by a cartoon history where the mob had no victims.
Unfortunately, there's the perception that laundered mob memories are profitable. Between the Mob Experience at the Tropicana, the forthcoming publicly-funded Mob Museum, or even the El Cortez using the likeness of Bugsy Siegel in its 70th anniversary promotions,championing a mobbed-up past is becoming common. Back in 1965, publicly embracing known organized crime figures would have cost you your gaming license (it cost Frank Sinatra his). Today, there's even a Godfather-themed slot machine in Las Vegas casinos. That movie (well, the sequel, but lets not split hairs) depicts the ongoing corruption of public officials by organized crime interests. You've got to wonder if people in the industry have a wicked sense of historical irony, or they're not really looking at the message they're sending out. It's OK to celebrate white collar criminals and embezzlers in the past? Even though you're paying tribute to notorious rule-breakers, we're still supposed to believe that your own business practices are above reproach?
Organized crime, which, contrary to the final scene of Casino, is still with us today, is no laughing matter, and celebrating its past excesses while turning a blind eye to its current ravages strikes me as the worst kind of myopia. It's one thing to remember and even laud the work of men and women who, though they worked in the old regime, weren't defined by violence the way out-and-out mafiosi like Spilotro were. It's another to surrender our history entirely to the carte blanche glorification of organized crime, particularly when there are plenty of people still around who can tell us just what was going on back then.
It's not that we should forget that episode in our history--it's that we're doing a disservice to those who lived through it by remembering it incorrectly.
With a renewed push for a casino smoking ban in Nevada, I go to thinking: which would happen first--no smoking in a casino, or a casino dress code? They are both changes that some people think would improve the casino experience, but would probably be fought tooth and nail by most operators. I just can't see them turning away a player because he's in a t-shirt instead of a sportcoat, or because he wants to smoke.
Still, I thought it would be interesting to consider which of these following scenarios might happen first.
1. A casino eliminates its nightclub/dayclub.
Super profitable, yes, but draws a crowd that doesn't necessarily gamble. Pumping music and lines snaking onto the casino floor might disrupt players. But with insane mark-ups on bottle service, this thing is a cash cow. As long as people are willing to spend their money on it, these will be here. With casinos trying to simultaneously appeal to as many segments of the demographic pie as they can (business travelers, gamblers, vacationers, nightclubbers, retirees, etc, etc), I don't see anyone who's gotten into this game getting out just yet. The Tropicana/Nikki Beach partnership is the experiment to watch. Amid all of the gushing I haven't really heard too much talk about how the last two Nikki Beach casino locations--Reno's Grand Sierra Resort and Atlantic City's Resorts--didn't work out. It's not out of the realm of possibility that, as gleaming white as it is, Nikki Beach just isn't compatible with casino resorts.
2. A casino goes entirely non-smoking.
We've seen it happen in other states, but so far Nevada casinos have steadfastly resisted any legislative attempt to make them go smoke-free. Back in 2006, voters approved a referendum that forced taverns with kitchens to go smoke-free or retrofit separate smoking and non-smoking areas. That went over so well that tavern owners are trying to get the legislature to overturn that referendum. But could a major Strip casino go smoke-free by its own choosing? There's talk that Revel in Atlantic City might go that route, and with non-smoking facilities becoming the norm across the country, it's probably only a matter of time before at least one Strip casinos gives it a shot. Unfortunately, the conventional wisdom says that serious gamblers smoke, and I don't see any casino executives risking their job to gamble otherwise.
3. A casino institutes--and enforces--a dress code after 6 PM.
This one came up in JohnH's VegasTripping post earlier this week. Almost everyone decries the sartorial deterioration of Strip casinos; jackets and evening gowns have been replaced by t-shirts and shorts. Partially, it's a bigger cultural change (Americans don't get dressed up as much to go out as they once did), but it's also a sign of how the Strip's cast its net progressively wider. Since the 1980s, families and low-rollers have been welcome at most casinos, and that means a more casual experience. As thing stands now, if you've got money to spend, casinos don't care how you're dressed.
4. Metal detectors and limited entry to casinos
After that "epidemic" of casino chip robberies, I wrote a column for the Las Vegas Business Press about why casino crime was something we'd just have to deal with. Basically, casinos are built around the principle of open access--there are as few barriers as possible between the people outside and the slot machines inside. That means multiple entrances with no natural choke points to restrict the pedestrian flow. Without costly renovations that would restrict accessibility, it would be impossible to force all casino-goers to submit to scans for weapons. Casinos as we know them in Las Vegas are, almost by definition, impossible to secure in that way. Even if they lost a million dollars a month to strong-arm robbers, it wouldn't make economic sense for them to make patrons pass through Checkpoint Charlie before playing.
5. Another casino closes on the Strip
This is a real possibility. We've already seen the Sahara close this year, and though the Riviera has new ownership its competitive position isn't exactly strong. Some of the near-Strip casinos, like Hooters, Westin Casaurina, and the Tuscany might also be in jeopardy. Throw the Hilton into the mix, and there's a possibility that another Strip-area casino might shut down. If the current status quo--visitation up but overall revenues still flat--continues for another 2-3 years, this could happen.
6. A new casino opens on the Strip
There are five North Strip would-be casinos that were, at one point or another, in the pipeline, and presumably it would be one of these. Ranked in order of completion, they are:
Fontainebleau: almost got done, but is currently being sold for parts by Carl Icahn. Unless something dramatic happens, it's never going to open, and presumably the existing structure would be completely dismantled before another casino could be built there.
Echelon: Started, then stopped. With Morgans out of the picture and the economic picture changing so completely, you'd have to think they'd go back to the drawing board on this one, or least open it in phases.
Plaza/El Ad Property/Former Frontier: They got the ground cleared, but nothing else. Again, the market has shifted so much since this was proposed we will likely never see the planned-for ultra-luxe Plaza Las Vegas. It'll be a case of El-Ad taking a loss on selling the land to someone else who would develop it. Until occupancy and room rates increase considerably, that's not going to happen.
CityCenter North: The almost-happened MGM/Kerzner joint venture north of Circus Circus would have seen Circus Circus Manor demolished and created another "master-planned urban environment" at the north end of the Strip. Since the first one turned out so well (though business at Aria has improved, the condos, which were a defining part of the project, have been a wash), this isn't very likely.
SLS Las Vegas: Promised for 2014, but with very little in the way of specifics, it's hard to believe that this is going to happen.
Until there's a broader economic turnaround that translates into higher gaming revenues and REVPAR on the Strip, no one is going to roll the dice on building another very expensive property that will just dilute the market.
7. An end to resort fees and other add-ons
Nobody likes them--outside of executives who trumpet how much they add to the bottom line. They're insidious, they make the customer feel like he's being nickel-and-dimed, and unfortunately they're not going away. With news that airlines made more than $21 billion on additional fees in 2010, executives at Strip casinos that have seen declining revenues for three years are probably trying to imagine more ways to extract a little more cash for a little less service from their customers. The only problem is that air travel's not quite as dependent on good vibes--and continued customer goodwill--as casino gaming. It's gotten to the point where travelers expect to be screwed over by their airline; while many come to Las Vegas hoping that'll happen to them here, few of them want it to be at check-in. Until there's significant resistance from customers, these fees aren't going anywhere, and will probably increase.
8. The end of 6:5 blackjack
The casino version of the resort fee, this kind of payout deflation makes serious gamblers livid and creates the impression that the casino is looking to put the screws to patrons playing games that already have negative expectations. And the next time the 6:5 tables aren't filled with $5 and $10 players happily trying to beat the dealer, casino managers will listen to you without breaking into laughter while you tell them that. It's debatable how much the games actually increase casino revenues anyway, since any player sitting at a 6:5 table isn't going to really be much of a skill player, and probably would lose just as much--and as quickly--with 3:2 blackjacks, though he might feel like less of a moron. But since it seems to be working--whatever it adds to the casino experience--it's also probably not going anywhere.
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.
Now that we have a date (10/22/11) for the first annual Vegas Internet Mafia Picnic, speculation is building about which hotel the VIMP braintrust will deign to grace its presence with. Naturally with an event of this significance, there's a considerable veil of secrecy around the high-powered negotiations that are taking place at this very moment.
Since I'm not directly involved in the complex back-and-forth that's currently on-going, I'm free to publicly speculate about where the VIMP will end up pitching its tent (yes, it's going to be that exciting of a weekend). Here are seven distinct possibilities:
Flamingo: Hosted the final (for now) Podcast-a-Palooza last year; we might get some overflow wedding guests, too.
Cosmopolitan: The newest with the mostest on the Strip, for the foreseeable future. Special bonus: the Cosmo will have the mother of all door prizes, a completely comped weekend (RFB) at one of its swanky clubside bungalows. The winner won't be picked randomly, as in the past. Instead s/he will be the one who guesses correctly the exact number of hours and minutes that Chuckmonster has to wait before his room is available.
Tropicana: Currently setting the Vegas eating press all abuzz with its spectacular opening party for Nikki Beach, this would be a great chance for the resort to show off its new look. Unfortunately, no one invited looks good in white.
Sahara: For a special one-night-only event, the fencing comes down and the VIM invades! Tragedy ensues, however, when Sam Nazarian, true to his word, secures a construction loan and chooses that weekend to implode the place to make way for the SLS Las Vegas, which opens on December 15, 2014.
Wynn Las Vegas: Yes, its social media star has been fading, but the resort offers the perfect venue: a repurposed Alex, which is just right to accommodate the raucous but eminently discerning Picnickers. It could happen.
Bellagio: The atmosphere is electric (and quite cramped) as the revelers push out the construction crews for an evening and take over the in-progress Hyde Lounge.
Vdara: Paul Carr guest stars as we take this weekend to highlight what is truly one of the Strip's under-appreciated gems.
Wherever this event lands, this much is clear: even five months out, excitement is building, and casino executives are working themselves into a frenzy out-bidding each other for the right to hold the gathering. Keep checking the official Vegas Internet Mafia Picnic website for updates.
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.
In today's flurry of email headlines (which continue whether I'm in the office or not) I read a blurb saying that Wynn Resorts "has become" a Chinese company. Certainly this is no surprise to Wynn. I remember him saying that as far back as 2005, though then it was more along the lines of, "One day Wynn Resorts will be a Chinese company.
Of course, this is getting press now since it's being coupled with his criticisms of the Obama administration, but looking at the numbers, it's clear that Wynn Resorts has been a predominantly Chinese company for quite some time. Here's a chart:
As you can see, there's nothing particularly momentous about the first quarter results when it comes to the revenue split: in fact, Macau's share is down slightly from calendar 2010. The bigger news, though, is that Wynn Cotai is about to start in earnest. He's not far enough along that a peek at the just-opened Galaxy hasn't sent him back to the drawing board for some elements of the Cotai project (and wouldn't you love to have been part of that conversation?), but he's clearly thinking build, rather than plan, for the near future. As soon as the government gives him its OK, he's going to start construction.
The potential for the future is what's changed his mindset. Let's fast forward to 2016, when Wynn Cotai has a few quarters under its belt. Wynn predicts that the Cotai project will double his Macau revenues. Using calendar 2010 for a baseline, and assuming that Las Vegas and Wynn/Encore Macau revenues remain stagnant (they won't, but lets assume they do for the purposes of this exercise), Cotai's doubling of Macau revenues does the following:
So, if all other things remain the same and Cotai performs as Wynn expects, by 2016 more less than one-fifth of total Wynn Resorts revenue will come from Las Vegas.
That being said, it makes a lot of sense to hold his annual meeting in Macau. It's where most of his revenue comes from, which means it's where his most important customers are. And it makes even more sense to speak of Wynn Resorts as a predominantly Chinese company, because that's where most of the action is.
When Harrah's got out of the Promus umbrella, it didn't consider moving its headquarters back to Reno, which was where the company was founded and, until the 1980s, where it was based. Instead, it moved to Las Vegas, which was clearly the center of the gaming world and a market that Harrah's wanted to get more involved in. (Today, as Caesars, it is nothing if not involved in Las Vegas). Wynn's increasing Sinoization is a sensible response to the direction that the business is headed.
Also, Wynn's a developer at heart. He's clearly relishing the challenges of building Cotai, and he's not done learning about the Macau market. Here's an extended quote:
"I believe the Cotai [project] is the best work we have done. It's a departure in many aspects. It has many new things and new approaches to the way the property is presented. I think the public is going to be very excited. It's very comfortable and user-friendly. Now that we have nine years of experience in Macau, as you saw with Encore we are learning how to really address the emotional and physical needs of our guests.
"That kind of insight comes with time and experience. Thankfully we have the experience."
It's easy to see how China's at the top of Wynn's mind these days. He's getting to build there, something he's not going to do in the United States for the foreseeable future. If I was Wynn, you couldn't get me to talk about anything but China these days.
Over the past few days, I've spoken to several journalists about last week's wave of indictments that targeted three major online poker sites. One question that I've been getting is, "Could this benefit brick and mortar casinos?"
My initial answer was no, it wouldn't in the long term. If you look at the numbers of tables and total win from 2002 to 2010, it's clear that, as online poker became more popular, poker in Nevada casinos boomed. That implies that a thriving online market actually helps Nevada casino poker, since more people are more familiar with the game.
Now, you can never prove that the boom in online poker caused the growth in Nevada poker; we all know that correlation doesn't necessarily mean causation. It could be that they both benefited from a bigger upswing in public interest in the game due to the rise of televised tournament poker around the same time. I'd argue that online and televised poker cross-pollinated each other, with a pretty big overlap in their audiences. But even though I can't definitively prove that online poker caused the 2003-06 Nevada boom, it seems the most likely explanation.
So what impact will closing three major websites have? Instead of logging on, will people flock to local cardrooms and casinos? It's definitely possible, particularly in the short term. But in the long term, denying Americans access to online poker will, ultimately, shrink the market for casino poker. With fewer places to learn with training wheels on, it's likely that there will be fewer new live poker players. It's one thing to get the feel of the game by playing for free, then playing for money online; it's another to make the jump from freeplay to a live table.
I was curious (there's a lot of that going around on this site, apparently) about what impact UIGEA's passage had on Nevada revenues, so I compiled a new report, looking at monthly statewide Nevada revenues from January 2004 to February 2011--that, I figured, would give me enough of a set of data to see how significantly UIGEA impacted Nevada gaming. Was there even a small influx of players to Nevada casinos after it passed?
The answer is no, there wasn't. The growth of Nevada casino poker really peaked in the summer of 2006; for the next year, it grew moderately each month. There wasn't any significant change in the rate of that growth in October 2006, when UIGEA was passed, or in the months following. In fact, after a big jump in June 2007 (because the WSOP was moved up by 3 weeks), Nevada poker started to decline pretty dramatically.
It might have been anticlimactic, but the official implementation of UIGEA in June 2010 didn't do anything to stop the decline in Nevada poker either.
To me these numbers suggest that, ultimately, the traditional casino and poker business won't really benefit from online poker prosecutions. I'd guess that either players will find other sites to play on or they'll cut back on their play. And, as I mentioned above, if online play noticeably drops, traditional poker rooms would lose a vast farm system.
So history seems to tell us that the prosecutions won't really be a game-changer for Nevada casinos. Their ultimate impact won't likely be a direct one; instead, it could be that the attention the indictments focus on online poker might spur cash-hungry state legislatures to seriously consider legalizing online poker. Should Congress be persuaded to slightly amend UIGEA to allow interstate play (it already allows intrastate play), we might see a new American online poker industry rise from the ashes of the Black Friday indictments.
But that's a story that hasn't been told yet.
UPDATE: I've expanded the CGR report to include data going back to January 2004. And it's now in landscape instead of portrait orientation.
Working on my lecture for tomorrow about Las Vegas gaming in the 1980s and 1990s, I wanted to go back to some of the original sources. So I've been browsing through the archives quite a bit.
I found a press release issued on November 14, 1989 titled "MIRAGE RESORT SETS NEW DIRECTION FOR LAS VEGAS." For those keeping score at home, that's 8 days before the Mirage's grand opening.
Here's a few excerpts:
Already, many are saying The Mirage will create a new standard for resort hotels that will redefine Las Vegas as the resort destination of the future.
"We said when we first announced the project that it would be a property which would help set a new direction for Las Vegas, one which would appeal to the entire family audience," said Stephen A. Wynn, chairman of Golden Nugget, Inc., developer of the plush, new resort.
"We've created an alternative to the traditional style of the Las Vegas casino-hotel," said Wynn. "Everyone will recognize The Mirage as a special place: a resort hotel which includes a casino, not a casino which includes a hotel."
The Mirage will attract on audience which has largely passed up Las Vegas as a choice for vacation travel. Younger, affluent families have, in recent years, sought out Mexico, Hawaii, and Caribbean destinations when choosing vacation spots. Now, with the Mirage, Wynn expects to bring some of these consumers and their families to Las Vegas instead.
So was Wynn right or wrong?
Clearly, The Mirage changed Strip casinos. So from that angle he definitely was right. The casinos built in the 1990s, to one extent or another, either tried to emulate or tried to differentiate themselves from The Mirage. It's definitely the most influential casino since Caesars Palace. I'd say that it's even more influential than Caesars, since the things built after Caesars (Kirk's International and MGM) didn't really incorporate its biggest breakthrough, the theming. The Mirage, on the other hand, immediately impacted casino design.
But Wynn wanted to more than change the way casinos looked--he wanted to change their audience. And I don't think he was successful at that. The Mirage didn't really redefine Las Vegas as a family-oriented destination. Sure, families come here, but they always did. And I'm not sure how many of them choose to come here instead of going to the Caribbean or Orlando.
So it's an interesting look into the past, particularly when you consider what Wynn's done since--after Treasure Island, he gave up the idea of appealing to families entirely. And there's that whole no-stroller policy at his casinos, which would definitely leave some families out.
When I finally get the chance to put a lot of my lectures and other writings into book form, I want to really explore this thread, since I don't think the Vegas of 2011 is at all what people anticipated in 1989, and the difference says a lot about what Vegas really is.
Kirk Kerkorian is stepping down from his position on the board of MGM Resorts International in June. It's a significant milestone for Las Vegas gaming, since he's one of the few remaining links with pre-corporate gaming.
Kerkorian owned a share of the Dunes in 1955, but really got involved with the industry in 1964, when he agreed to lease land he owned across from the Flamingo for the construction of Caesars Palace. For a while he was Caesars' landlord, and even had an office in Caesars after its 1966 opening, but he decided to sell the land to Caesars and focus on building his own casino hotel.
So in 1967 Kerkorian did two things: he hired architect Martin Stern, Jr. to begin building the International, whose tri-form hotel tower set the template for the next generation of Strip casinos, and he bought the Flamingo to train the staff who would run the International, which was slated to be the world's biggest hotel, and have the world's biggest casino floor.
It's worth noting that members of the group that Kerkorian bought from were later convicted of skimming money and hiding Meyer Lansky's stake in the property, so this represented a real changing of the guard. A few years ago I interviewed Alex Shoofey, who Kerkorian hired away from the Sahara to run the place, and he spoke about the challenges of making the transition from the old school to the new school--a process that would continue until the Boyd Group's purchase of the Stardust in 1985.
Kerkorian opened the International in 1969, and it was the first of the second generation casino resorts, which integrated every aspect of the resort into one large tower-and-podium structure. After selling it to Hilton in 1971/72, he built the first MGM Grand, which was at the time the world's largest hotel, selling it to Bally's in 1986. That same year he organized MGM Grand, Inc, and for the next few years owned a few casinos, including the Sands, Desert Inn, and Marina--the last of which was incorporated into the new MGM Grand that opened in 1993 as, again, the world's largest hotel.
From this point on, most people are familiar with the MGM Grand/MGM MIRAGE/MGM Resorts story, so I won't rehash it, but I thought it was important to point out Kerkorian's constant involvement with the industry since 1967. With him leaving it in June, Steve Wynn is the senior figure in the Strip game--he first got involved in 1967 at the Frontier, but really started making a mark on the business at the Golden Nugget in 1973.
Even though Kerkorian isn't the same public presence as Wynn, Adelson, or even Loveman, he's hardly an absentee owner, and his stepping down from an active role on the board of MGM Resorts really does signify the end of an era.
Every month, Revenue Day is always a bit of a mixed blessing for me. It means a lot of fairly frenetic number crunching (at least by the standards of academia), but also a chance to share my thoughts on what's happening in the gaming industry. I've been mulling over the numbers since about 6:45 this morning, and here's where I'm at right now.
First, if you want to see the numbers I'm referring to here, check out the official release and my February comparison (pdfs both). The February comparison looks at the results from 2004 to 2011, so it gives some much-needed historical perspective. Here, I'm going to focus on the Strip, because this isn't the blog for RateElko or RateBalanceOfClarkCounty.
Year to year, it looks pretty bad. Baccarat revenue was the big loser, declining more than 31%. There were some bright spots--mini-bacc revenues more than doubled, slot revenues actually increased, thanks to higher hold. The funny thing is that table handle increased--slightly--meaning that people gambled more at tables, while slot handle fell. But, because the casinos were less lucky at the tables this February, they had what appears to be an off month.
Zeroing in on baccarat, it's clear that this the Strip didn't do that badly. This is still the second-highest total baccarat win for the month since 2004, and the handle was just under the 2010 record. So people played nearly as much; they just won more in 2010 than 2011. It's important to mention that Feb. 2010 had an abnormally high hold percentage: 17.04% (not a record, but still far from the 12% or so average). Feb. 2011's hold, 11.71%, was really a return to normal.
If you take baccarat out of the equation, table game revenue actually increased from year to year, from $148.9 million (2010) to $153.0 million (2011). Basically, outside of the decline in baccarat, which was really a fall back to reality, the Strip didn't have an awful month--though it didn't have a great one, either.
Baccarat hold percentage is so crucially important to the overall gaming picture for the Strip and the state (55% of Nevada gaming revenues are generated on the Strip) because we're in a baccarat-based recovery, in which the game boosted revenue for much of 2010 while other games that draw more broadly from the spending public (which has less money to spend) stagnated. So, if a few high rollers get a few hot shoes, the entire state's revenue picture darkens.
Putting it in perspective: in February 2004, baccarat win accounted for 6.08% of total Nevada gaming revenue. In February 2011, it accounted for 15.98%. When the house gets lucky, that number is even higher; in February 2010, 21.77% of state gaming revenues came from a few baccarat tables on the Strip.
For those of you investors who are trying to gauge the performance of companies with heavy Strip exposure, there's an even higher reliance on baccarat: from 11.92% (2004) to 27.35% (2011), with the high point in 2010 (36.10%). Since the Strip totals also include resorts that don't have a lot of baccarat action, I'd guess that for WYNN, LVS, and MGM, that percentage is much higher.
It also appears that, in the big picture, the Cosmopolitan hasn't moved the needle much; with slot handle down, it doesn't look like there's a growing revival in broader gambling spending on the Strip.
And here's an interesting fact: for the first time since at least 2004, the number of baccarat tables on the Strip actually fell. This tells me that we shouldn't expect much more growth of this segment; if we're lucky, handle will remain about constant year-to-year, with revenue fluctuating along with the hold. It's not the worst possible scenario, but it's not a recipe for real growth, either.
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).
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.
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)
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...
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)
Dave's been blogging over at DieIsCast.com 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.