Monthly Archives: June 2007

Second Life on Paradise

June 29, 2007 4:25 pm

This is kind of strange–Starwood, who just flushed their plans for a W on Harmon down the toilet, will be opening an “aloft,” which is apparently a hotel that’s being debuted on Second Life, an online world. From the LV Sun:

Aloft, the latest “lifestyle” hotel brand from Starwood Hotels and Resorts Worldwide Inc., is reaching further afield than any of its competitors in the hotel or casino industries to cultivate in-demand Generation X and Y customers.

In fact, Starwood is drawing from a different universe – the digital world known as Second Life – to generate buzz for aloft, a midpriced hotel chain that will launch next year. The hotel company is one of several businesses opening in Second Life, a brightly colored, opportunistic world where people use digital avatars to get jobs, meet people, buy and sell goods (converting real money to virtual and back again) and engage in recreational activities.

The first hotel company to take this digital plunge, Starwood hired digital experts to create detailed 3-D renderings and monitor the action as digital customers hung out in the digital lobby, bought digital drinks and even chatted up digital women (or men). Input from Second Life customers on color palette, furniture and other details has been incorporated into the latest plans for a chain of hotels it plans to build across the country.

Las Vegas SUN: LOOKING IN ON: BUSINESS

Yesterday at the Casino Real Estate conference I said that the future would bring a further convergence of the online and terrestrial worlds in commerce, casinos, and all things Vegas. I don’t feel so dumb saying that now.

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Smoking, binge drinking, and drugging

June 28, 2007 1:22 pm

Clark County’s latest health report is out, and it could be worse. From the LVRJ:

More people smoke, binge drink and use hard drugs in Southern Nevada than elsewhere in America.

But we’re not as fat.

The first report on the overall health of Clark County residents by the Southern Nevada Health District was far from a clean bill of health. Southern Nevadans don’t live as long as the average American, and they’re more likely to suffer from chronic diseases such as diabetes.

But the health district’s chief health officer, Dr. Lawrence Sands, said that despite the variations from national norms, people in Clark County are largely representative of Americans overall.

One bright spot: The obesity rate, at 21.4 percent in 2005, remains lower than the national average, which was 24.4 percent that year, according to the Centers for Disease Control and Prevention.

But the local rate is up more than 3 percentage points since 2000 and continues to rise.

“If we keep going as we are, we’ll probably come up to that (national) rate or pass it,” Sands said.

The rise in obesity led to increases in other categories, he said.

The share of county residents with diabetes and high cholesterol are both above the national average, though the rate of diabetes is down since 2000. And among people 65 and older, hypertension was higher than the national average.

ReviewJournal.com – News – BAD HABITS: Unhealthy ways: Locals indulge

Funny comment on the RJ page: “We’re not as fat because of all the drugs.” Good point. But, as the report says, Las Vegas is basically like the rest of America–only, in some cases, less so.

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Get paid to do research in Las Vegas

June 27, 2007 12:47 pm

This is a big day for me–I get to announce a program that I’ve been looking forward to for a long time: at last, the Center for Gaming Research can offer research fellowships. That means that, if you are a qualified graduate student or professor, you can get $4,000 to spend a month studying in Las Vegas. As I posted it on gaming.unlv.edu:

Fellows will spend one month doing research at UNLV Special Collections, which includes an unrivalled collection that spans the 17th to 21st centuries. Although primarily in English, the holdings include many texts in French, German, and Italian.

This, the largest gambling library in the world, includes manuscript collections, casino corporate archives, promotional and publicity files, and government publications. For more information on the collections see http://library.nevada.edu/speccol/gaming/index.html.

What you get

* A $4,000 stipend to cover housing and expenses
* Desk space in the UNLV Special Collections Reading Room
* Use of a laptop computer

What you give

* One month’s residency in Las Vegas
* A public lecture relating to your research near the end of your residency
* Ultimately, a publication (article, chapter, or book) that showcases your research

Who’s eligible
Both faculty and graduate students are encouraged to apply. Applicants are expected to primarily represent the fields of history, English, sociology, criminal justice, and anthropology, though those from all disciplines with relevant research interests are encouraged to apply. Suggested fields of research include Las Vegas history, the history of gambling, and comparative studies of gambling in literature, history, and society.
Center for Gaming Research: Fellowships

To see the application details, click through to the announcement.

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Dragin event written up

June 26, 2007 3:07 pm

You might remember that a while ago I recommended Burt Dragin’s reading/signing event that we hosted at UNLV. The LVRJ attended, and gave it a great write-up:

Burt Dragin spent considerable time in Las Vegas during the 1950s but never lived in the gambling resort town.

An 8-year-old Dragin started taking frequent “family vacations” from California so his father could indulge in legally what he was having little trouble engaging in illegally around Beverly Hills — gambling.

“My father … always gambled beyond his means,” Dragin said. “Las Vegas was built, initially, on people like my father.”

A journalism professor at Laney College in Oakland, Calif., Dragin discussed his family and the problem of compulsive gambling Friday at the University of Nevada, Las Vegas.

“There is no mystery about those who, like Steve Wynn, are inclined toward owning the house,” Dragin read from his autobiography, “Six to Five Against: A Gambler’s Odyssey.”

“It’s guaranteed gravy. You walk around with a frozen smile and watch the suckers crushed by the immutable odds.”

How widespread compulsive gambling is in the country depends on who you ask, according to Dragin.

He said that most neutral studies say approximately 5 percent of the population, or 11 million, suffer from compulsive gambling. However, Dragin added that the American Gaming Association puts the number at less than 1 percent.

Emphasizing that he is not a moralist, he said the gaming industry is not contributing enough money toward research and treatment programs to address issues that helped build lavish Strip resorts.

ReviewJournal.com – Business – Author says he escaped family demon: gambling

The event was a great success. I want to run another one in October. If you know of an author on a book relating to gambling–be it an academic monograph or a novel–get in touch with me. That being said, if it’s a systems book I probably won’t be able to get the administration behind it: they’re all for fostering discussion about gambling, but I think they draw the line at flat-out teaching people how to play blackjack. Of course, that won’t stop me from teaching my students how to count cards when I teach Econ 404 next semester up in Reno.

If you attended, thank you for coming, and if you’ve got any suggestions for future authors to feature, please let me know.

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On the radio in Manchester

June 22, 2007 10:23 am

I woke up at quarter of four this morning to get down to Caesars Palace to do a radio interview that aired live in Manchester. It was for the lunchtime (12-2) show, with host Allan Beswick, and was a lot of fun. As you might have heard, Manchester is slated to get the UK’s “supercasino,” and I was part of a lively discussion about the gambling hall’s prospects. You can listen to the show here: BBC – Manchester by clicking on the “Listen Again” tab and then selecting “Allan Beswick.”

If you’re in Las Vegas today, at 4 this afternoon we are hosting a reading/signing event featuring author Burt Dragin at UNLV. Come down to Lied Library’s Extended Study Lounge at 4 p.m. to hear a very good writer read from his work and talk about his gambling and his writing.

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Inside slot machines

June 21, 2007 11:42 am

Channel 8 KLAS-TV has an exclusive look inside slot machines:

Las Vegas has more than 207,500 slot machines. Anyone living here or visiting has seen the outside of them, but few people actually see the inside… until now. Reporter Edward Lawrence gives us an exclusive inside look at how slot machines are built and what they look like inside.
LasVegasNOW.com | News for Las Vegas, Nevada – Video Clips

You need to scroll down and select the story, which should open up in your video player–there is no permalink up for it. Still, it’s good viewing. Great camera work, particularly.

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Casinos liable for criminal customers?

June 20, 2007 12:56 pm

According to an Australian judge, casinos should be sure where the customers’ money comes from. From NineMSN:

Crown Casino should either ensure money from big spenders is legitimate or be forced to compensate victims of crime for ill-gotten gains gambled by criminals, a Victorian judge says.

County Court Judge Frank Dyett made the remarks as he sentenced Heather MacNeil-Brown, 63, to six years’ jail – with a minimum non-parole period of four years – for embezzling almost $1 million from the Australian branch of global consulting and accountancy firm, PricewaterhouseCoopers (PwC).
…

Judge Dyett said MacNeil-Brown initially spent the proceeds of crime at small pokies venues in Melbourne but from 2002, most of the money was lost at Crown Casino.

He said MacNeil-Brown was a frequent guest at the casino’s Mahogany Room for high rollers.

“Cases of this sort, which are increasing in number, call for consideration of legislation which would put the onus on Crown Casino and other gaming venues to make reasonable inquiries to ensure that large sums of money continually being lost by regular customers, as in this instance, are emanating from legitimate sources,” Judge Dyett said.

“In default of such inquiries, a civil liability should be imposed by legislation upon these venues to reimburse the victims of crimes of this nature.”

Casino must monitor big spenders: judge

How do you do that? Make gamblers provide W4s? Or just flat out ask them if they’ve stolen the money? I’m guessing this won’t get very far.

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Echelon groundbreaking

June 19, 2007 3:45 pm

Boyd Gaming broke ground on Echelon Place today. Here’s the AP story, but I’ll cut and paste some stuff from two press releases I go this morning. First up: the Delano and Mondrian:

Morgans Hotel Group Co. and Boyd Gaming Corporation today announced their development and design plans for the new Mondrian and Delano hotels at Echelon in Las Vegas. A world-class team of designers and architects has been appointed to lead the project.

MHG and Boyd have named Chad Oppenheim as design architect, Klai Juba as executive architect, Marcel Wanders as interior designer for Mondrian, Piet Boon as interior designer for Delano and Cagley and Tanner as executive interior designer. Together, this celebrated team of designers and architects will design and develop the hotels to bring a new level of style and sophistication to Las Vegas.

“We are incredibly excited about this project and the talented design team we’ve assembled,” said Ed Scheetz, President and Chief Executive Officer of MHG. “The level of creativity and experience each brings to this project is perfectly matched with MHG’s goal to set a new standard for groundbreaking hotels.”

“The Delano and Mondrian are iconic hotel brands and will help define Echelon,” said Bob Boughner, President and Chief Executive Officer of Boyd Gaming’s Echelon Resorts. “Their presence will add a fresh sensibility to the Las Vegas hotel experience.”

As announced in January 2006, MHG and Boyd will develop a Delano and Mondrian at Echelon through a 50/50 joint venture. The new Mondrian and Delano will feature approximately 860 and 550 rooms respectively, with a diverse collection of rooms, suites, lofts and bungalows. Each hotel will feature its own porte-cochere, lobby, destination restaurants, nightlife venues, pools and gardens and will have direct access to the gaming, retail, dining and entertainment offerings of Echelon. Delano will boast a lobby bar and one of Morgans Hotel Group’s historically successful restaurants, and amenities including a spa and fitness center, private pool and recreation area. Mondrian will include an innovative nightlife venue, private pool and meeting and conference space to appeal to both business and leisure guests. The expected development cost for the project is approximately $950 million.

And here’s the general project rundown:

Hotel Echelon

Hotel Echelon, with 2,500 guest rooms and suites, will embody elegance, comfort and convenience with clean, contemporary design. The guest rooms and suites, designed by Lawrence Lee Associates, will be thoughtfully appointed to host, with equal attention, guests visiting for business or staying for pleasure. The hotel will feature a grand arrival experience and a dramatic entry lobby designed by Gabellini Sheppard Associates. A separate dedicated group arrival area will ensure smooth check-in and access to the hotel. The hotel will also feature a two-story luxury spa, salon, barbershop, a comprehensive fitness center and lushly landscaped pools and gardens.

Suites at Echelon

The Suites at Echelon is a 650 all-suite hotel catering to the discerning business traveler and indulgent vacationer alike. With a separate entrance and porte cochere, the Suites at Echelon will offer an elevated level of style, service and amenities. With interiors designed by Jeffery Beers International, the hotel will feature suites ranging in size from 800 square feet to over 7,000 square feet, a hotel lobby with guest reception and concierge, an intimate bar and lounge and a feature restaurant. The Suites at Echelon will showcase dedicated conference space, a luxurious spa, salon and full-service fitness center. The all-suite hotel will be steps away from high-limit casino action.

Shangri-La Hotel, Las Vegas

Shangri-La Las Vegas will be operated by Shangri-La Hotels and Resorts, Asia’s premier five-star luxury hotel company. The intimate, modern luxury setting will include 282 guest rooms and 71 premium suites with a distinctive porte cochere and hotel lobby. Shangri-La will feature 14 guest rooms per floor, providing quick and easy access from elevators, and will offer a superior in-room hospitality experience. With interiors designed by Hersh Bedner Associates, the hotel will feature a 20,000 square foot CHI spa, well-appointed premium meeting space and two feature restaurants.

Delano and Mondrian Las Vegas

The new Mondrian and Delano will feature approximately 860 and 550 rooms respectively, with a diverse collection of rooms, suites, lofts and bungalows. Morgans Hotel Group has named Chad Oppenheim as design architect for both hotels, Marcel Wanders as interior designer for Mondrian and Piet Boon as interior designer for Delano. Together, this celebrated team of designers and architects will design and develop the hotels to bring a new level of style and sophistication to Las Vegas.

Each hotel will feature its own porte cochere, lobby, destination restaurants, nightlife venues, pools and gardens and will have direct access to the gaming, retail, dining and entertainment offerings of Echelon. Delano will boast a lobby bar, one of Morgans Hotel Group’s historically successful restaurants, and amenities including a spa and fitness center, private pool and recreation area. Mondrian will include an innovative nightlife venue, private pool and meeting and conference space to appeal to both business and leisure guests. Construction on the Delano and Mondrian is expected to begin in the first quarter of 2008.

Echelon Retail Promenade

Echelon’s Retail Promenade will complement the style and sophistication of the five distinctive hotels of Echelon. With interiors designed by Gabellini Sheppard Associates, the contemporary promenade will feature a mix of luxury boutiques, international brands, distinctive cafes and signature restaurants. The Retail Promenade is co-owned by Boyd Gaming and General Growth Properties, one of the retail industry’s most diversified and well-resourced operators.

Entertainment Venues

AEG, one of the world’s leading producers of entertainment and sporting events, whose venues include The O2 in London and O2 World in Berlin, the Staples Center in Los Angeles and the Nokia Theater in New York City, will operate the 4,000-seat production theater that has been designed to accommodate both concerts and production shows. In addition, a more intimate 1,500-seat theater will house touring acts and performances.

The Meeting Center

The Meeting Center at Echelon has been designed to meet Las Vegas’ strong and growing demand for meetings and convention space integrated into a resort environment. The Meeting Center will feature 650,000 square feet of meeting and convention space, bringing the total meeting and convention space at Echelon to approximately 750,000 square feet, including over 200 meeting rooms. The Meeting Center’s proximity to the 5,000 rooms at Echelon will offer guests unparalleled convenience and access.

Echelon Resort Las Vegas

This is going to be way more than Borgata West, and will do a lot for the north end of the Strip. I wonder how much new convention space the Strip can absorb–Fontainebleau will also be heavy on meeting space. I’m interested in seeing how this one develops.

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Own an (expensive) piece of Vegas

June 18, 2007 3:21 pm

Interesting piece in the LV Sun about casinos for sale:

You might not think there are any casinos for sale in town, but for the right price – think Bellagio – just about any joint might be in play, especially downtown.

But watch out. Like with buying a house, you need to do your homework and read the disclosure statements before signing those escrow papers. Not every casino is growing a money tree out back.

“You’ve got to have a facility that makes sense because it’s got a good location and good parking,” says Michael Gaughan, owner of the South Point and a second-generation casino operator. “You’ve got to have good management. And you’ve got to have people. These places (that struggle) are missing one of the three.”

So, having been forewarned, ask your broker to show you these places if you want to keep up with the Kerkorians.

Las Vegas SUN: Own your own casino

You can click through to see the actual list, with suggested retail prices.

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Penn to go private

June 15, 2007 2:13 pm

Because I like the finance side so much, here’s a pretty bit story about a major gaming operator going private, from Bloomberg:

Penn National Gaming Inc., the owner of 18 casinos and horse-racing tracks, agreed to be taken private by buyout firms Fortress Investment Group LLC and Centerbridge Partners LP for $6.1 billion.

Penn National’s revenue quadrupled in the past five years as more U.S. states legalized gambling, adding slot machines and table games to boost their tax base. The company in April acquired the Zia Park Racetrack and Black Gold Casino in New Mexico and will open new facilities in Pennsylvania and Maine by 2008.

Investors will get $67 a share in cash, Penn National said today in a statement. That’s 31 percent higher than yesterday’s closing share price. The firms plan to repay $2.8 billion of the company’s debt.

“They have a very stable management, and it’s a very well run company,” said Dan Ahrens, a Dallas-based portfolio manager for the Ladenburg Thalmann Gaming and Casino Fund, which owns Penn National shares. “There certainly could be higher offers. I see very, very little downside risk.”

Penn National, based in Wyomissing, Pennsylvania, is the latest casino company to be taken private by investment firms attracted to their real estate and ability to generate cash. Since the beginning of 2006, companies including Kerzner International Ltd., Aztar Corp., Station Casinos Inc. and Harrah’s Entertainment Inc. have all agreed to takeovers.

…

The agreement allows the company to seek higher bids for the next 45 days. Chief Executive Officer Peter Carlino and other members of the management team will remain with the company, Penn National said.

“Due to the scarcity of quality regional assets, we can’t rule out competing bids at this point,” Joseph Greff, an analyst at Bear Stearns Cos. in New York, said today in a research note.

The price of $67 a share values Penn at about 10.3 times 2008 estimated earnings before interest, taxes, depreciation and amortization before taking into account construction in progress, Harry Curtis, an analyst at J.P. Morgan Securities Inc., wrote in another note.

That’s less than Harrah’s and Aztar deals, which he valued at between 11 times and 12 times 2008 Ebitda. Using that valuation, Curtis estimated Penn could go for between $73 and $80 a share. Curtis, based in New York, rates shares “overweight.”

Penn National operates slot machines and table games in 13 states and Canada including New Jersey, Colorado and Illinois.

Penn said the transaction is expected to be completed within the next 12 months to 16 months, pending approval from state and federal regulators. The firms will pay an additional 1.49 cents a day a share for each day beyond June 15, 2008, the deal isn’t finished.

With so many states needed to approve the acquisition, investors are taking a possible delay into account, said the Gaming Fund’s Ahrens. The difference between the share price and the offer “is only the time value of money,” he said.

The Carlino family, including Peter Carlino, is Penn’s largest shareholder, owning an 11 percent stake through a trust At $67 a share, they will receive about $639 million. Individual family members have additional holdings.

Other regional casino companies climbed as well as investors speculated they may be takeover targets. Boyd Gaming Corp. rose $1.55, or 3.1 percent, to $51.35, Pinnacle Entertainment Inc. gained $2.31, or 8.1 percent, to $30.79, and Ameristar Casinos Inc. increased $2.60, or 8 percent, to $35.

Last year, Apollo Management LP and TPG Inc. agreed to buy Harrah’s for $17.1 billion, or $90 a share, in what would be the largest casino acquisition. That deal is still awaiting regulatory approval. Penn had made a bid for Harrah’s worth about $87 a share, the Wall Street Journal reported at the time.

Penn National started as a single horse-racing track in Grantville, Pennsylvania, in 1972 and has expanded to 18 casinos and horse-racing facilities under CEO Carlino, 60. The company went public in 1994.

Penn’s revenue last year climbed 59 percent to $2.24 billion compared with a year earlier. Profit almost tripled to $327.1 million.

Bloomberg.com: Worldwide

At this rate, I wouldn’t be surprised if most casino companies go private in the next 2-3 years. If Trump Resorts gets bought by a private company, for example, the Borgata will be the only casino owned by a publicly-traded company in Atlantic City. That’s quite a change.

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