Two Way Hard Three | Las Vegas Casino & Design Blog

I have always thought (and LV Sands always labeled it) the Sands Macao as a "temporary" casino, and was considered "non-essential" to the company even though it brought millions of dollars in revenue for the company. Venetian Macao is considered more of an importance to the company than Sands. So Adelson selling this casino is no surprise...given in this economic condition.

Because I am Las Vegas obsessed, this is the type of question that pops into my mind: Ownership not being a factor-what property would be the best choice to be renamed Desert Inn?

Steve Wynn didn't surprise me when he publicly said he'd be interested in Bellagio, but I didn't expect him to include Circus Circus in the same sentence. Is he looking years down the road to demolish and rebuild that North Strip acreage?
“I’d be interested, if at the right price, whether it’s Bellagio or Circus Circus,” Wynn said from the Milken Institute’s Global Conference in Beverly Hills, California. "
http://www.bloomberg.com/apps/news?pid=20601103&sid=af8DVhDl5o3E&refer=us

What's nearly as interesting is that Wynn is nixing the idea of buying raw land in favor of existing properties. That's got to be causing some long faces at El-Ad, Triple Five and maybe even MGM Mirage, which has all that raw acreage and no takers.

P.S.: Wynn may be twisting the knife in Kirk Kerkorian, for good measure. That's the interpretation of Steve Friess, who writes, "Wynn wouldn't take ownership Circus Circus if he could have it for free plus a lifetime buffet pass."

I think Wynn means he'd buy ANY casino at the right price. That doesn't mean he'd operate Circus Circus beyond the time he could figure out a better use for the property and finance it. Look at the DI acquisition. Or the Dunes.

Posted by Hunter

I agree with Jeff - I think he was just making it clear that if the circumstances were favorable, he'll look at any deal.

The funniest part about all of this is that the RJ put it up as 'breaking news'.

Also - 'Men Walk on Moon'. That is all.

Steve Wynn's 69 minute presentation to the Milken Institute conference this morning is on video. Steve is in his element, much better than he was on 60 Minutes a few weeks ago.
His prepared remarks are interesting, but the highlights begin with the Q&A starting about the 40 minute mark. Steve is particularly blunt in his discussion of CityCenter, which he calls a "radical idea" and a project which faces "daunting challenges".
When asked about the loss of convention business, he is equally tough on the Obama administration and politicians in general. The last question gave him the opportunity to again emphasize that Las Vegas would be much better off with more individual owners/entrepeneurs and with the break-up of companies like MGM.
Very, very interesting.
http://www.milkeninstitute.org/events/gcprogram.taf?function=detail&eventid=GC09&EvID=2001

Sweet, thanks. I was hoping his speech might be posted someplace, but I didn't even know where to start to look. Also, they just posted, they will be releasing earnings next Tue Morning. Wynn never releases before the market opens, is that good news? Or does he just want to get the bad news over, before the shareholder meeting, which starts later that same day?

Is it impossible to believe that Mr. Wynn would own and operate a mid market property? I can certainly see where he could be looking for a different challenge-for the past 20 years he has gone for high end market, new construction. How many times can he try to top himself, and find it fresh and exciting? I could easily see a new challenge being working with an existing property and making it something the middle and working class deserves. I think part of Wynn's charm has always been his ability to appear to be in touch with the financial situation of the working people in his company. Also, since the high end is saturated, and even Steve Wynn couldn't get the money for new construction, how else can his company grow?

Posted by Hunter

Yes, that's impossible for me to imagine at this point in his career. Of course he already did it in the past - Treasure Island. He doesn't seem to look favorably on that bit of his portfolio.

He's 67 years old. He's got nothing to prove. I don't think he wants one of his last projects to be new carpet at Circus Circus, even if Roger Thomas does spruce up the place with some kind of new clown-theme derived from inspiration in his childhood.

Wynn and Okada own a very large chunk of Wynn Resorts, thus hopefully somewhat less relentless pressure from shareholders to grow-grow-grow.

Ideally this financial crisis may re-calibrate the market's attitude to quarterlies anyway - an endless need to show top line growth at any expense is part of what encouraged a lot of companies to pile on debt at any cost.

Uh, I'm not talking about Circus-Circus. Excalibur is as low as even I can see Mr. Wynn going.

Posted by Hunter

Both of those properties are on the same quality 'rung': low.

Posted by mike_ch

If Steve Wynn would like to improve Las Vegas' casino business, I wish he would take the initiative to either flex some muscle onto the incestuous LVCVA/R&R juice machine, or begin his own independent marketing effort and circumvent them.

Las Vegas has a reputation of being a low business to pleasure ratio, and putting Sin City in the same breath as serious business (i.e. the LVCVA) is responsible for that. We couldn't have made it any more obvious unless we had an advertisement with an "exotic dancer" crawling on a mahogany desk while guys in suits look on with stunned faces. And we probably did.

Wasn't Wynn bragging in all these phone interviews while Encore was going up that "our hotel" was drawing all these unique conferences that would have never considered Vegas before? Things like the Mobil Awards and resort industrywide conventions? It wasn't the crass "sex sells" ads from the LVCVA that brought them there, it was his operation.

If Steve is really badly hurting (though one would think he'd be insulated more than the others if so many conventioneers consider his property to be classier and more credible than the others), he should just ignore the local government's efforts to draw conventions and get into business for himself.

If nothing else, it will draw Sheldy insane, between his dislike for the agency and his dislike for Wynn and his lack of finances preventing him from mounting a similar ad campaign.

VegasRex is reporting that the Walgreens at the Palazzo/St. Regis is finally open.

The timing of the posts makes it look like I made a disrespectful response to Hunter's post. PLEASE note that I was only adding to my earlier post (it was meant to look something like "even I don't think Circus Circus is possible"), and my hunt and peck style can take forever to type. I may have a different opinion, but, it is never meant disrespectfully.
Regarding the demands for WYNN growth, i think when the company went public, they accepted the demands for constant growth that go with it. I also think the design group, among others within the company, are at risk without sizeable acquisions. Regardless of market segment.

Posted by mike_ch

Yeah, I saw that on Saturday and was going to include that in the StripWalk that will be appearing soon. I saw the Serendipity thing at Caesars last time too but decided not to comment on it because it was at night, still not open, and I couldn't figure out what the heck it was (and by the time I got home from MGM I forgot it was there.)

Just for the record, whereas Rex does these things breaking news style because it's his own site/hobby, I have to space these things out because I can't update TwoWay from my smartphone like he does his site, and Hunter is nice enough to give me a little somethin-somethin for powerwalking the Strip and looking for closed things.

That's why I shamelessly hustle my Twitter account at the end of the past few columns: not because I want to have more followers than an ex (though that's nice), or because I want people to read my hockey opinions, but because when I'm on the Strip and see something noteworthy I'll step aside into a dark corner and punch out a message.

Posted by mike_ch

Jeff: WYNN is public, but the majority of stock is held by Wynn and Okada, the latter seemingly happy to just let the former run the show.

Wynn did not want to go public, at Mirage he felt bullied by shareholders looking out for themselves to go for short-term profits. With Wynn Resorts, there is Steve & Kazuo and then there is Everybody Else, and even if Everybody Else tried to rock the boat they wouldn't have much luck unless they can convince one of the Big Two to disagree with each other. As such, you don't really buy WYNN to influence the company, it's more like you buy it because you think Steve is going to make a profit and you want to get a piece of that.

Granted, there's other backdoors into a company as Icahn demonstrated a few weeks ago, but considering the don't have a bunch of debt they're pretty healthy it won't be a problem.

If Wynn wants to buy Circus Circus, chances are he is not going to keep it. He'd probably demolish it and build a super-cool fancy casino resort in the future when the economy recovers. If that's the case, why don't Wynn just buy an empty parcel of land without the hassel of imploding Circus? (*cough*cough*New Frontier/Plaza land!*cough*cough*cough*which is right across from Wynncore!*cough*cough*cough)
Unless of course, Wynn just want to temporary operate that property for a small cash flow for the time being until that property's time is up (e.g. Boardwalk during the Mirage days)

Great talk by Wynn. I disagree with his assessment that Las Vegas is going to recover in less than two years. Once the real truth of the crisis in the banking industry and the insolvency of our government becomes obvious, the economy will get much worse than it is now. However, even if there is some recovery in two years, the City Center project must be financially restructured(ie bankruptcy) because all of the assumptions in room rates, occupancy, and most devastatingly, condo pricing and sales, that made the building of City Center possible are now out the window. Even if it opens, it cannot survive because they will not be able to support the debt load from the cash flow. They must sell condo's at close to the price they expected to get. I just don't see that happening. The Fontaineblue is in the same boat. It may never get finished as the banks are cutting their losses now rather than later in bankruptcy. From their standpoint, it is cheaper to cut their losses now rather than throw another 800 million at a resort that will not be able to sell condo's to pay back that debt. There is a massive and painful restructuring needed in Las Vegas and I expect that it will be a very bad next few years for the investors. Of course that translates into great deals for the customers who will be able to afford to go there.

Mike's comment is excellent:
"As such, you don't really buy WYNN to influence the company, it's more like you buy it because you think Steve is going to make a profit and you want to get a piece of that."

However, I disagree that MIR shareholders were looking for short term profits. Steve really let expenses get out of hand at Mirage Resorts which cost him the confidence of key investors and Wall Street. This enabled Kerkorian to make an offer Steve couldn't refuse. In my opinion, it was a real wake up call and learning expereince for Steve and has made him a much better CEO at WYNN. He is the senior statesman of the gaming industry now. Interesting to compare MGM and Wynn in the current environment, nine years later.

Tom - I love your upbeat view, and how you're able to put a positive spin on things. :) I think the end of man kind as we know it, is near also. But Obama and Steve Wynn didn't get the memo.

Tom, couldnt agree with you more...

why the banks would pump another $800m into an already over budget Fontainebleau project which has no hope of ever paying back the interest on its cashflow, is beyond me.
The condo sales (none) on this project really have killed the deal, and cashflow that this project could generate.
The other item about FB, is that with no players club as such, and it being a new property, it will likely be busy for the first couple of months, then die a slow painful bankruptcy death, when the interest payments become due.

Posted by mike_ch

But even if these things go bankrupt because they didn't make the numbers that were expected when they broke ground four years ago for whatever reason (condos, tourism, whatever) it's not really the end of the building so much as it's the end of the owner.

If Fbleau doesn't make it, okay, that wipes out Glenn Schaeffer but it also leaves a shiny new casino there at a bargain price for somebody else to come along.

When shareholders (and analysts) are yelling, "Grow! Grow! Grow!", sometimes executives need to turn a deaf ear -- or do what Wynn occasionally does and give them a dose of tough love. Isle of Capri's revenues were shrinking on a casino-by-casino but it achieved the illusion of "growth" by opening new gambling halls. Of course, that eventually caught up with Isle and new management there is in serious retrenchment mode.

mike_ch,

I'm not so sure Steve Wynn is the ideal guy to reform the LVCVA's marketing approach. In just about every interview he gave before this year he bragged about how much dough his nightclubs raked in, but I don't recall him having much to say about the importance of the meeting business before the Wells Fargo fiasco.

And didn't he promise a 24 hour party at Encore when it opened? That doesn't seem like the ideal way to attract your more sober minded business/professional meetings. Especially when the virtual centerpiece of the resort is a huge nightclub called "XS" that spills out into the pool area to hold those 24 hour parties in.

While I don't think Wynn is seriously considering buying Circus Circus, let's not forget that he's a publicly owned company and while Mr. Okada and Mr. Wynn own the lion's share of stock, as a publicly owned company they have an obligation to shareholders to increase revenue and profit first and foremost.

Not to mention that based on Steve's public persona that he's crafted, he is regularly discussing how he likes to take care of his employees. In some cases I'd view it as business malpractice that in this market and having cash on hand that can produce additional revenue, he wouldn't consider offerings that are earning revenue that aren't a 'fit' for Wynn resort's image.

Lastly, one only has to look back at the GN to see that taking a property that doesn't fit the mold of luxury and see how it can be improved and resold or used to produce a revenue stream.

MGM Mirage trading was halted at 12:11 pm, pending a news announcement. Sale(s), anyone?

Posted by Hunter

Yeah, something's up clearly.

Interesting that the asking price is creeping a buck or so higher than the last trade - market seems to think it will be good news.

Twitter is going crazy but it's all questions and no answers so far.

Posted by Hunter

I can't see the experience at the Nugget having bearing on this situation - that was an entirely different set of circumstances - he was not established and building The Mirage in 1976 was not an option.

Right now, Wynn has TONS of options. He has undeveloped land, he has cash and he has three resorts, soon to be four, generating cash.

I think you're pretty much right, Mike. The questions I would have about these new properties such as Fountainbleau are if it has functionality issues that cripple it, such as the new Aladdin with its Las Vegas Blvd. entrance. Or, to the extreme, the Landmark, which I read never worked right. I may be crazy, but I wonder if these new monoliths could be too big to suceed at any price during this current economy. For instance if utilities, house keeping and fixed costs like taxes and insurance were $90 per day, and occupancy was 60%. So now the cost per rented room is about $125, but the market is way down, so the room rate is depressed, which leaves no room for debt service or maintenance. Is this the situation where it really is cheaper for the bank to close the property?

Posted by mike_ch

I think you've got it a bit mixed up, occupancy really doesn't reflect the cost per room. There are almost no ongoing costs for empty rooms. If the building is only 60% full then they shut down 40% of the floors and there's little need for housekeeping and the like. If it was like that for any long period of time, you'd probably do like Trump and lay off some staff.

Maybe I misread you but I can read your comment two ways and one of them suggests an empty room costs as much to keep up per day as an occupied one, which isn't so.

http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/04-29-2009/0005015946&EDATE=

CityCenter will be finished and open in December.

Posted by Mark D

Wynn can't buy Circus Circus because it is no longer for sale. It's part of the collateral for the new financing of CityCenter.

Mike, I think an empty room still has significant costs. My main point, however, is, for example, I build X rooms for Y per room, which I built based on $400 per night at 90% occupancy. Now the market is dead, and I can only get $150 per night and 60% occupancy. Is there a tipping point where that level of revenue is negative compared to simply shutting the property?

Jeff is right, if a room at Encore cost $1 million to build, the rooms cost for maids, utilities, etc, are minor, compared to what the room really cost to operate. Even if its sits there empty, you have to pay for the loan to build that room. But Alan Feldman, made some great points last week in a interview. Vegas is unlike most other resorts, because in Vegas, most of the revenue, and profits do not come from the room itself. When he was ask if MGM would consider closing down, floors, or wings, he basically said no. His point, was that the room rate is a small factor. Because the hotel makes its money, from shopping, eating, casino, and shows. If you close a wing at any of these places, you now have 1/3 less customers to spend money in casino, restaurants, and shows. So he said, while its not impossible, it would be very unlikely that MGM would close down anything, because the impact to the rest of the property would be far to severe.

Hunter, what is the fourth resort that Mr. Wynn soon will have generating cash?

Posted by Hunter

Encore at Wynn Macau opens in December.

Somewhat unrelated but interesting nevertheless, I heard Steve Wynn is bringing singer Beyonce to Encore to play 4 or 5 nights in a few months. I wonder what the logic in that is, do you associate Beyonce with the typical Encore customer? And by customer I mean gambler. I'm sure the shows will sell out instantly, but will Wynn get the pop in gambling after the show lets out or will the crowd just "hang out" and maybe buy a few drinks in the club and then go home afterwards. Beyonce will draw the young crowd, possibly teenagers with little expendable income, is that what Wynn wants at Encore?

Posted by Hunter

Actually, I think Beyonce perfectly straddles that hip divide - both younger people and older people dig her and those that don't know who she is and realize it's a hot ticket.

She's perfect for a short term engagement.

Some cache for Wynncore, people both old and young want to see her perform and they can give away tickets to a hot performer to high rollers.

You might be right, but if you ever been near the MGM Grand Garden exit after a "pop" act lets out, its not the typical Encore crowd. It will be interesting to see if it works out, because the bottom line is whether she increases gambling that night and not at the nickel machines but at the tables. If I had to guess, I'm sure Beyonce fan message boards full of kids plotting to get tickets at the Encore show. Not that adults don't like her too, but when I pass the high roller section at Wynn and Encore I don't associate that crowd as Beyonce fans. I just think Beyonce makes more sense at Palms, Hard Rock, Mandalay Events Center...those places that serve more the middle class guy (more slots, lower table limits). We will see if she brings money to the casino as thats the only reason for any big act is to draw gamblers. We both agree its a bold move by Wynn, its going to be a hit or a disaster in my view.

Posted by Hunter

Perhaps a show that a lot of high rollers want to bring their younger girlfriends to?

Posted by mike_ch

Brian: If they've said that (the casino subsidizes the rooms), then I'm glad, because Vegas got overpriced as soon as they stopped the "get 'em into the casino" mentality of subsidizing certain things and began requiring that each division (room, gaming, food, etc) create it's own profits.

Posted by mike_ch

What is the "typical Encore crowd"? Because I used to think that the typical Wynn crowd wasn't into nightclubs but before everything broke boy was I wrong!

Also, unless she's playing in XS or whatever, Encore really doesn't have any showrooms that Wynn didn't have at one point. But unless you're self parking at the WLV garage, getting from the showroom to anywhere not run by Wynn (i.e. Palazzo) is quite a long walk.

Posted by DavidF

Beyonce Concerts (7/30 thru 8/2) are now listed on the Encore website under Entertainment, no Big Surprise I remember Wynn Saying they could not keep the Avenue Q/Spamalot/Encore Theater running only having Danny Gans Play 4 times a week, the plan was to also bring in Short Concert Series from time to time.

I think the typical Encore/Wynn gambler is not the same person that goes to the clubs. Sure there is some crossover and exceptions, but my gut tells me the XS crowd along with few other highline clubs (Pure, The Bank, Tao) is mix of 3 types, the locals that tend to blow their check every weekend on the fast life a.k.a. guys looking for girls and vice/versa, then you have the out of towners (LA crowd) that drive up from LA for a good time on the weekends and lastly the special occasion parties like a wedding/bachelor party, but the well heeled Encore/Wynn guest, of which there are many, like the old money types have zero interest in the clubs. The new money types, the young entrepreneur, the young hedge fund guys, I'm sure do like the club scene. Again there are exceptions where the 50 year old and over crowd are going to these clubs, but there are only few Flavio Briatore types around.

In general, I think there are 2 different crowds that come to Wynn/Encore, those that have money (legitimately wealthy) and those that like to enjoy the lifestyle as if they had the money and splurge what they can or can't afford. Of course there are plenty that walk through Encore just to see it and walk out not spending a dime. The Vegas high roller places have always been like that. Everyday Wynn/Encore serves as "the" hotel for millionaires and billionaires from Russia, China or elsewhere, serious businessmen that you most likely don't know who they are, they're the Chinese factory owner benefiting from free trade, the orange grove owner from Brasil and yet two feet away from them is a visitor to Wynn/Encore who scrapes by at $18,000 a year taking all the experience in that is Encore/Wynn. Thats whats great about Vegas is, its open to all. Its not the highline restricted country club you aspire to get into one day, here they build them for all the public, rich or poor it don't matter.

This is for Brian who needs his Wynn fix daily.
Wynn does most everything first class. He wants to replace the concrete block walls on the Paradise Road side of the golf course with tall, decorative wrought iron fencing and more landscaping. The original concrete wall enclosed the old, upscale 1950's/1960's Desert Inn homes which were there before Wynn bought the property.
http://agenda.co.clark.nv.us/sirepub/cache/2/pdjoabrq1gxefta5e3sgmhut/13715704302009105104484.PDF

Regarding Desert Inn, Dave Schwartz wrote an interesting piece four years ago:
http://www.lvbusinesspress.com/articles/2005/05/09/news/news11.txt

Posted by mike_ch

Phil, something you forget is that millionaires and billionaires (and I suspect aside from Steve Wynn there's not a lot of billionaires hanging around Encore right now) can afford whatever entertainment they want. Bringing in the New York Metropolitan Opera or whatever it is you thing the upper crust likes is pointless, because these people can afford to jet off to NYC and see the opera.

I mean, if everything had to cater to the foreign gambler than they could load up the theatre with Cantopop stars, but you could probably make more money if you had them perform at a private party with just those high-end customers than in a showroom.

Wynn has never gotten too obscure or foreign with his entertainment. S&R were proven acts, Cirque isn't really French, and the Broadway stuff suffered probably because so many people had already seen the show.

I actually don't think the opera is a good idea nor what people want. Vegas has a philharmonic that plays UNLV and I'm sure the local upper crust support that. What I'm saying is Wynn is taking a gamble that Beyonce will draw the customers he wants. Just like his experiment of lessening room rates, he admits now that it brought a type customer to his hotel that weren't typical Encore customer, meaning they didn't spend the money he expected they just took advantage of the room rate. Beyonce is a risk because I know it will bring youth that don't have money and he won't get any pull from that at all. If he brought in Michael Buble, Connick Jr. or some other non-pop act that the middle, middle to upper class customer likes thats different. I'm very interested to see if we ever find out if it worked out for him in terms of drawing significantly more money than say a Danny Gans night. I think the customer that sees Danny Gans for the most part sticks around for a while and may play in the casino. Beyonce I think will draw a crowd that could spend money in XS aftewards on a few drinks, but whether that carries over to the tables thats what I want to know. As I said before, I've been at the exit of the MGM Grand Garden many times when a pop act leaves the arena and the crowd that sees those shows are not Encore customers. We shall see.

Posted by Hunter

Would you consider someone like Elaine Wynn to have a lot in common with 'Encore customers'? She expressed her appreciation for Beyonce several months ago.

None of the groups mentioned above: millionaires, billionaires, 'Encore customers', etc... are monolithic groups - they are of course filled with varied likes and interests. I know people that are very much good Wynncore customers that would love to go to this show.

Booking her is not a risk. She performed at the freaking Oscars for pete sakes. She's incredibly mainstream with fans in every social class I'm sure.

Contractors layoff workers at Fontainebleau
http://www.lvrj.com/news/breaking_news/44062552.html

Brian,

Sorry my viewpoint isn't upbeat enough for you. I am very pessimistic about the direction this country is going in financially. I think you are wrong, Steve got the memo, and in fact tells it like it is in his speech when he basically says the politicians in washington and elsewhere just are not smart enough to handle these challenges. Obama got the memo too, the day he took office. He's a politician though so he's not going to tell you about the memo. We have all seen what happens when the President makes flip comments about going to Las Vegas. Imagine if, in this current crisis, he started telling you that its going to cost 10-20 TRILLION more to solve the banking crisis and that there is over 100 TRILLION in unfunded liability in Medicare and Social Security. The Senate just passed the budget at 3.5 TRILLION, with a budget deficit of 1.8 TRILLION and a National debt just over 11 TRILLION. In fact, if our government were held to the same accounting rules that any business has to comply with, it is functionally bankrupt. The only thing that keeps us alive is that the government can print money. Eventually, these numbers will overwhelm the ability of our taxpayers to sustain this and the people loaning us this money (CHINA) will figure out that we won't be able to repay and will stop loaning us the money. Once that happens, we will be in serious trouble and there will be pain like we have never seen it. I hope that I am wrong but this is the type of situation that leads to wars. Do you think that China is going to sit by and let us default on all their money? So, yes I am pessimistic about the economy because the reality is much worse than what we are being told right now.

Binion's behind on rent
http://www.lasvegassun.com/news/2009/apr/30/landlord-rejects-binions-rent-request-sues-back-re/

A little off topic, but has anyone noticed that the Encore website is now accepting on line reservation for the 2-bedroom and 3-bedroom apartment? They also have a few pics... really cool.

Posted by Hunter

Yeah, for a few weeks now. Awesome.

Detroit - Thanks.

Tom - Yeah, I do get what you're saying. I have said for years, that the US Government is bankrupt, and the party will come crashing down at some point. Actually, go check out the documentary I.O.U.S.A. its a great movie, and every American should be required to watch it. So I do hear what you are saying, and while I do see a great depression coming, I don't think this is it. I don't even know that it will happen in the next 20 years, but I realize it will happen. Its a mathematical certainty. But over the next few years, I do think the economy turns around, and I do think Vegas turns around.

Tom,

Your numbers for the current budget, deficit, and national debt are reasonably accurate, but you need to explain your scary numbers re the banking crisis and unfunded medicare and social security liabilities. I think you are way off base--your numbers appear to be a total of the liability over the next 100 years or so.

I think China needs us to buy their exports just as badly as we need them to buy our bonds. If they stop buying, we stop buying, and both countries suffer.

Social security and medicare will simply go away--if you're under 50, forget them. The bank crisis is being solved slowly but surely--the big question is commercial real estate, and I think that problem will be a fraction of the residential one.

This IS under open-topic discussion, but let's try to keep it to Vegas, not to the broad economy drivel we can argue about elsewhere!

Posted by Hunter

Yeah - I love politics and could argue all day but I'd very much like to keep this as on topic re: Vegas as possible, though clearly the national economy does have an impact.

I trust you all not to drive this one off the road.

Ok Hunter, even though its open topic I get that you want to keep it on Vegas. I will just say that if you google some of the topics you will get the numbers from credible sources. Google is a great tool. And social security may go away, but the bill will not. The baby boom demographics and the fact that older people VOTE, will make this issue very tough to solve.

Posted by Hunter

I'll give you guys some latitude - I trust you - just try to keep it on topic.

Posted by Mark D

Rumor is that Fontainebleau construction will be shut down completely at noon tomorrow.

Posted by mike_ch

Just a suggestion (not a debate) for Tom M, since I don't have any other way to contact him: I want to recommend the Frontline episode, "Ten Trillion and Counting", part five of the online video shows you the graphs of the things you're talking about.

If you look at the graph about five minutes into part five, Social Security slowly rises a little bit for the next 20 years and then plateaus all the way to the end of the chart at 2050. What is unsustainable is health benefits.

That said, since you seem passionate about this topic the whole episode would be of interest to you (unless you've seen it already.)

Danny Gans died this morning, how sad
http://lasvegassun.com/news/2009/may/01/reports-las-vegas-headliner-danny-gans-dies/

A Breaking News story is floating around on Twitter about MGM Grand being robbed. Sounds like BS to me? No mention of it on LVSun or LVRJ. I suppose its possible it happened, and got lost today, due to the Gans news?

Metro needs help finding two suspects who robbed a casino cage at the MGM Grand. Police say an armed man robbed the cage around 4:30 a.m. Friday morning.

Police say after the robbery, the suspect ran out of the hotel and met up with another person who was riding a motorcycle.

Police say the robber was dressed in dark clothing and the identity of his accomplice is unknown.

Authorities are not saying how much money was taken. The robbery is under investigation.

found this on Las Vegas 8 news

Posted by mike_ch

Okay, I remember the Hilton Sports Book robbery, and anyone who has been there knows there's an exit outdoors right nearby, but the MGM cage?

That's across from La Femme, next to the Hollywood Theater, right in the heart of the casino. It's a long run to the taxis and an even crazier run to the exits next to Studio 54. Furthermore, the Security booth thing is right next to it.

How the heck did they pull that off?

Maybe they took the "secret" West Wing entrance/exit. You know, the one nobody supposedly knows about.

Mike_ch, one report said it was the High Limit Slot cage. When I was last there in 2006, it was more of a service counter than cage and had no decorative metal bars. At 4 AM, the place was probably close to empty, and it wouldn't take someone long to run out toward the hotel elevator lobby or maybe into Studio Walk. MGM's map shows the location:
http://www.mgmgrand.com/Data/media/MGM_Property_Map.pdf

Regarding Beyonce; In "The Wynn. Period." episode of The Strip podcast, around the 30 minute mark, Steve Wynn says that Tryst grossed $40 million in 2007, out of 9900 square feet. The (gross?) profit margin was 75%, and WYNN kept $21 million after paying Victor Drai $7 million for management. I think WYNN sees nightclubs as an important profit center, and the people I've seen there on a weekend night look like typical SoCal twentysomthings. They may have an acceptable amount of money to spend, but they aren't millionaires. I think Beyonce is very popular among that group, and a much larger demographic as well, while having a classy reputation. I see her fitting the younger end of the Wynn market perfectly, and nothing draws old(ish) rich guys like classy, young hotties.

Jeff in OKC hit the nail on the head. Exactly right.

Posted by mike_ch

Anybody who wants to win some old-school credibility know what was in the space of Tabu before it was there? I'd like to know. Thanks.

I recall a semi-separated area that was filled with branded slots. I wanna say Price is Right slots? Something like that...

It's been quite awhile now.

If you search Google for old maps, the space looks just like other casino space so I think my memory is right.

Mike - I think Hunter is right, but I don't spend enough time in MGM to know for sure. Somewhere I have original brochures for the property. I even have maps with the whole amusement park in tact.

Ok, and in keeping this game alive, in one Mirage Resort hotel, a restaurant was removed, and that space was converted to casino space. In which hotel did this happen, and what was it? :) You know, just for some old school credibility.

Jeff - Honestly, I never thought about that, and while you could be on to something, they did play at the same hotel, what I was talking about, all happened in the same theater. And I'd like to think I don't always make it about Wynn, I have many thoughts on MGM and LVS also that I share on this blog, but Wynn Resorts does happen to be my personal favorite, and obviously a favorite of many on this blog as well, as its the most talked about company, I would have to say.

Brian,

Pretty sure you mean the Black Spot Grille at TI, which is now slots.

Hunter

Brian-I knew I should have one of those :) thingies at the end of that post.

Family Feud in 2000. I was there shortly after they opened the room, and it was a flop. It was a Silicon Gaming product, and Andrew Pascal worked for Silicon.

What is this, nostalgia week?
I liked the original Treasure Island as Steve Wynn opened it, and liked most of the restaurants, especially Buccaneer Bay Club, Madame Chang's and Black Spot Grille.
I had never heard of Cirque du Soleil until I stayed at Treasure Island and saw Mystere. I didn't know what to expect before the show started when the guy came into the audience. Mystere always seemed the most serious of the Cirque shows, but it certainly didn't have the special effects of O or Ka.
Treasure Island's original pirate theme was spectacular, everything from the carpet to the "bone" chandeliers.
I liked the property better than The Mirage in some respects.
What MGM did to Treasure Island's pirate village and original pirate show was unforgiveable

Posted by Hunter

YES YES YES! It was Family Feud - I remember the giant Louie Anderson display.

LVS has info on the art that will be at CityCenter. I saw a pic of the canoes a while back, not sure if I'm feeling it.

http://lasvegassun.com/news/2009/may...s-crown-jewel/

http://www.lasvegassun.com/news/2009/may/03/citycenters-art-collection-was-never-doubt-even-wh/

Hunter - Ding, Ding, Ding, You WiN. You win absolutely nothing, but you win.

Detroit - Yes, I agree with you on TI. BBC was one of my single favorite places to eat in LV, even to this day. The private elevator, and all the tables with the windows overlooking the bay, it was SO cool, I loved to watch the battle from up there. I'll admit some changes have been for the better, mainly moving the check-in area, its just much more spacious now, but the pool sure did have to pay the price, as it lots lots of space, and a really super cool water slide.

OT: Fontainebleau Miami Beach
I was in Miami Beach on an early weekday afternoon and checked out the newly renovated and expanded Fontainebleau. I know it is totally different than the Vegas FB will be (if it opens), but I wanted to see what kind of energy it exuded. Its 1950's roots are clearly evident, but the property now has energy and positive vibes. It's unfortunate that it re-opened during the recession with South Florida tourism at the lowest levels on record.

Fontainebleau is clearly marketing to corporate customers and international visitors. I heard as much French and Spanish as I did English.

There are multiple small, open bars out by the pools and ocean as well as a circular lobby bar.

I don't see how FB would integrate a casino into the property if Florida ever approves full gaming. That area of Miami Beach is totally built up with the ocean on one side and water on the other. Parking is totally valet. FB would have to tear down adjacent buildings to have enough parking for a casino. Plus, there are only 1,500 rooms total in the multiple buildings.

The random photos I took don't convey the energy level because it was too early to have the place crowded with people. The beach is still as spectacular as when I was first there in the late 1950's.

http://travel.webshots.com/album/571784463hzngxm

Detroit-Regis Philbin did a History/Tour of the Fountainbleau yesterday on "Regis & Kelly". It was excellent. So good, in fact, I'm going to try and find it on that YouTube thing later today.

Regarding Binions:
Can anyone give a fuller explanation, than what I have seen lately, of the land ownership structure? I recall reading through the years that about 7 or 8 entities own various parcels of land under some part of BInion's/The Mint/the parking garage, As I read the stoies about the rent lawsuit, I'm guessing not all owners are united into the plaintiff listed, and it could be a difficult situation in good times. Heck, the dollar amounts being tossed around make it look like this'd be a cheaper place to put the new City Hall on.

Wildfires in Santa Barbara. Didn't this happen a few months ago? Anything near you, Hunter?

Posted by Hunter

Yes, we are having another large fire.

Personally, I'm fine but my Mom did have to evacuate and is now here with us. It's quite close to Downtown Santa Barbara.

Fontainebleau Flip Flop:
Will FB have two failed properties, one in Miami Beach and the other in Las Vegas? FB Miami Beach is not designed to be a family resort.
http://www.miamiherald.com/news/southflorida/story/1036040.html

Posted by mike_ch

Visitors in March were down 6%, casino revenues down 11.5%.

Seems like people are content to come to Vegas and enjoy it all without opening their wallet for anything when they get here.

I think these numbers go along with what Mike_ch said earlier this week regarding the positives is seeing the room rates go down closer to 2004 levels. It would seem that visitor spending is being slightly more guarded. I read the numbers to mean that the average visitor is spending about 10% less than 2008. This still leaves us in the 2006 range of spending, which was good by any sensible measure. Gary Loveman wasn't the only one spending like a drunken sailor by 2007-2008.

This is very picky, but it's obvious the person who wrote the press release on Whoopi Goldberg's show wasn't in my 9th grade English class:
"The Encore Theater has less than 1,500 plush seats..."
"Fewer" should be used with things that can be counted. "Less" should be used for things that can't be counted.
OK, I feel better now.
http://phx.corporate-ir.net/phoenix.zhtml?c=132059&p=irol-newsArticle&ID=1285982&highlight=

Fontainebleau vs. Deutsche Bank

http://www.lasvegassun.com/news/2009/may/12/fontainebleau-bank-wanted-minimize-cosmopolitan-co/

Well its not pretty, but MGM is well on its way to fixing their long term problems.

http://finance.yahoo.com/news/MGM-Mirage-looks-to-raise-25B-apf-15228402.html?sec=topStories&pos=7&asset=&ccode=

No surprises to me here, I fully expected them to dilute the shares, but issuing more, and they in fact are doing that. Kirk will still be the largest shareholder, but no longer the majority shareholder. Interestingly enough, he's buying more of the new offering, but not enough to make him keep full control. I've said all along, MGM would not file bankruptcy, they did have many options. As a holder of way more MGM stock, than I'd care to admit, this is still good news. So far, they haven't had to sell any of their cash registers, so to speak. Not to say, that they won't but once again, they have more options today, than they did yesterday. This will add $2.5 Billion to their balance sheet, which will more than cover things for the next few years, and give them time for the economy to come back, which it seems has already started. Rooms are full again, and room rates are starting to rise.

A little lowbrow for the crowd here apparently, but FWIW, Boyd posted results last week:

http://boydgaming.mediaroom.com/index.php?s=43&item=34

AtlanticCity:
Just got back from my first trip to AC (and the Philadelphia racinos) in 19 years.
I wouldn't return on my own for a pleasure trip. I kept comparing everything to Vegas which may or may not be fair. Everything seemed old and worn out to me, especially on the Boardwalk and the Boardwalk itself. One bright spot was that the typical casino customer I saw at the Boardwalk properties made me feel young.

Borgata was the only property which reminded me of Vegas, and if I were to return, the property at which I would want to stay. There was one red flag at Borgata with both of Luke Palladino's restaurants closed. Will they be replaced with generic, corporate restaurants?

Harrah's, in the Marina district, was a pleasant surprise since I was there in 1990. The domed pool, coffee shop and buffet were all first class. So was my room in the Bayview Tower. However, the casino didn't have a "flow" to it, because it just grew over the years.

Slots were old at Harrah's and all the other casinos we visited. I heard the replacement schedule has gone from 12 years on average to 30 years. I question the 30 year figure, but they were old. Harrah's Chester, outside Philadelphia, had more and better new games than any casino in AC, probably because it's only a couple years old. Since I haven't been to Vegas in almost three years, my reference point is the Seminole casinos in Florida. They have the best slot floors of any casinos I've seen. Of course, they put in all new machines when they went from Class II to Class III last year.

The Diamond Club at Harrah's AC is huge, a brilliant move by HET to keep customers loyal. The Diamond Club at Chester looked equally large, but I didn't check it out. What a great way to make customers feel "special".

Self-parking is dreary in AC, and the fees to park bugged me.

Trump Taj Mahal looked much better than it did when new. The casino was appealing in decor.

AC Hilton was like a time machine trip to Golden Nugget in Vegas. It looked like Steve Wynn still owned it, and it was clean and very well maintained. I would consider staying there if I wanted to be on the Boardwalk.

The Trop was depressing EXCEPT for The Quarter. They really did a great job with The Quarter.

Pier Shops at Caesars was also impressive. I hope they have enough business to keep all the retail in business.

Showboat and Resorts were unappealing.

If Revel is ever finished, it will be the most spectacular property in AC with 3,800 rooms, 150,000 sq ft casino and 500,000 sq ft of retail, entertainment, dining, etc. It would re-energize the Boardwalk. I was very impressed as we walked the length of it on the Boardwalk.

Final thought: Atlantic City appeals to drive-in customers, and business levels may suffer with more properties like Harrah's Chester, the new Philly Park to open this year and BethWorks which will open next week. It would be interesting to interview Beth customers and ask if they usually go to AC, and will they return to AC.
For someone like me, flying in, I would rather have a 90 minute longer flight and go to Vegas than fly to AC.

Twitter:
Hunter (and others who tweet), has Twitter had any impact on this blog? Has it reduced the number of entries and comments here? Are those who tweet part of a closed club who talk more with each other on Twitter than here on the blog?
I don't know why I awakened with these questions this morning, but I'd be interested in any thoughts.

Posted by Hunter

Well, I wouldn't say Twitter is a closed club. The site is (basically) totally open and you can view my tweets and many others w/o even signing up for Twitter. For the record, they are here:

http://www.twitter.com/hunter AND http://www.twitter.com/ratevegas

I use Twitter every day and really enjoy it. Has it reduced the entries here? I don't think so, no. There's certainly conversation there that covers some of the same stuff but as I said above, it's not a closed club. Anyone can join in.

Posted by mike_ch

Twitter is mostly not a closed club, though people can choose to have private profiles where they can pick and choose who read their writings.

Are you missing something? A little, but nothing too important. Maybe a bit of Brian Fey and I bickering over the future of MGM stock, and live updates of the stuff I posted here.

And since Hunter only wants StripWalks every so often (and I make them less often than that) on the odd day I'm out I'll spot something on the Strip and post it to Twitter. The day I went to see Star Trek I found Mandalay tram cars up on blocks outside Excalibur and a dude literally crawling on the side of Luxor as the next wrap went on.

MGM is desperately trying to resist lowering prices on CityCenter condos. They may have to cave on this when the first closings occur unless there is an unexpected improvement in real estate:
http://www.lasvegassun.com/news/2009/may/21/citycenter-unit-prices-not-bending-market/

We went to Planet Hollywood Monday night to see Peepshow, and thought it was outstanding, one of the best shows on the Strip.
However, when we went out on Las Vegas Blvd. and checked out CityCenter, I was stricken by how much the Harmon reminds me of the Riveria, with the curved front and silver/blue mirrored glass, along with the half height making it look like the casino sticking out in front of the hotel tower.

Detroit, I was wondering exactly the same thing(s). This is how I know I'm getting older -- can't keep up with this Web 2.x stuff anymore. (Or has some pundit declared Version 3.0 yet?)

Perhaps what you & I have perceived here is yet another indicator of the economy & its effect on interest in Vegas...?

(Should've clarified that I was referring to detroit's Twitter questions, as they were word for word the same as mine.... )