Looking back at 2008

I could do some official-sounding retrospective on the year in gaming, but that’s been done better elsewhere, by people with more time. Instead, I thought I’d take a moment to flip through my archives and pick out a few of my favorite posts from 2008.

January
Things you need to tell the GCB

Best name ever?

February
RJ says: Be more sadistic!

Could casinos become free? (this one is totally rendered moot by the plunging room rates on the Strip, but is still interesting, I think)

March
Too funny (Remember those halcyon days when our biggest problem was Columbia Sussex not cleaning their bathrooms enough?)

April
Parity Hedge System explained

It’s all in the name

May
Why is Vegas Vegas?

June
Aria alternatives

Inconspicuous luxury? (this gives you some insight into my take on Encore, which I think is a perfect example of this phenomenon)

July
Fake Vegas explored

August
Las Vegas song

September
Arrogance

Whining professor

Bombastic living

October
To boldly go where no analogy has gone before

A very quotable newsletter

Diff’rent strokes for casino folks (see me reference Hayek)

November
Gambling with word choice

Of rats and machine players

December
Funniest photo ever?

Guess the year

That last one says it all, I think.

Have a safe New Year’s Eve, and best wishes for a happy 2009.

Theater time in AC

With 2008 almost history, I’ve got a new Atlantic City history article in Casino Connection to tell you about:

Casino Connection Atlantic City | AC History | Curtain up.

It’s all about the proliferation and disappearance of theaters along the Boardwalk.

Taking a bow

My Las Vegas Business Press piece on Encore is up. It’s an expansion of my original post on this site. Here’s my grand conclusion:

Encore, in its essence, is hopeful. Even the name is a reminder that something came before, and something will come after. It’s both a great new resort and a call to remember that as long as it continues to change, Las Vegas will survive.

Wynn should take a bow for Encore and its essence of hope.

Insomuch as it’s possible to plumb a casino opening for a deeper read on the current American mindset, I’m giving it a shot. I’d really like to develop this into a 2000-word or so essay that pulls in the history of the Strip, speculation, consumerism, much more. Any editors out there want to pay for such a piece? Just checking.

Together, I think Wynn and Encore are the first Vegas resort that’s not looking backward: there’s no nostalgia for the past or for imagined versions of other, more notable, places. It looks like City Center and Fountainebleau will be in the same mold. Whether you love or hate the Wynn suite of properties, you’ve got to admit that stylistically they are a world away from, say, the Palazzo and Venetian, which are supposed to evoke the glories of a city whose heyday passed before Columbus sailed. They are original without making a fetish of their modernism.

If we don’t have the airline capacity to deliver people to town, though, does any of this make a difference in 2009? Later in the week I’ll be developing my year-in-review/looking ahead columns, and I think that will be the big question.

Not likely

This Christian Science Monitor editorial argues with some logic that gambling isn’t the best thing for the economy. But I think the last line is a bit utopian:

One bright spot in this deep recession is that gamblers might be saying "Enough" to the lure of easy money and calling it quits. States, too, should call it quits on lotteries and not peddle this vice.

Lottery’s lure lost | csmonitor.com.

I’d like to meet the state legislator who proposes eliminating the lottery and either cutting school budgets even further or raising taxes to offset the difference. It may very well be that, long term, funding would be better secured without a lottery, but I don’t think there’s a politician left who thinks past the next election.

See, for example: David Patterson’s formula for New York’s continued prosperity: more gambling in bars, restaurants, and racetracks!

Casino debt hall of fame

A recent case of kickbacks opens up an interesting public policy question that will probably not be answered. From the LV Sun:

A vice president of Fry’s Electronics who is accused of swindling the company out of more than $65 million has long been on the radar of Clark County prosecutors.

The Internal Revenue Service accuses Ausaf Umar Siddiqui, who has since been fired as Fry’s vice president of merchandising and operations, of helming a kickback scheme to help pay off his enormous debts amassed at Las Vegas casinos.

Since 2001, the bad check unit of the Clark County district attorney’s office has filed criminal complaints against Siddiqui in connection with at least $12.2 million in unpaid markers, according to the head of that unit, Bernard Zadrowski.

Siddiqui, Zadrowski said, is a whale — someone who bets in excess of $100,000 — and is among the top five debtors ever to pass through the bad check unit.

The Palo Alto, Calif., resident has repaid his $1.71 million debt to Binion’s and paid another $4.8 million to Caesars, but still owes Caesars Palace about $5.7 million, Zadrowski said. “Mr. Siddiqui has been paying back his restitution according to negotiations,” Zadrowski said.

It’s unclear whether these debts are related to Siddiqui’s alleged kickback scheme. Siddiqui repaid the Binion’s and Caesars markers documented by the bad check unit through cashier’s checks, said Zadrowski, who added he does not know the origin of those funds.

DA says Fry’s executive was major debtor in Las Vegas

Maybe as a supplement to the Gaming Hall of Fame exhibit over at gaming.unlv.edu we should put up a “Las Vegas Bad Marker Hall of Fame.” It would certainly add some spice to the site.

I like the part about how it’s “unclear whether these debts are related to Siddiqui’s alleged kickback scheme.” Ya think?

According to the SF Chronicle article about the same story, Siddiqui’s paid $120 million to Vegas casinos since 2005, even though his annual income is only $225,000.

Do casinos have the obligation to make sure all of their customers earned their money on the up-and-up? Right now, they don’t, and unless we want to subject high rollers to intrusive background investigations by privately-hired auditors and investigators, I don’t see it happening. The casinos already have their hands full keeping up with Title 31 filings, which they see as doing their part to prevent money laundering. They can say, with some justification, that no other business is asked to investigate its clientele to mitigate the possibility of previous malfeasance. If Nevada casinos were required to verify that all of their clients were completely law-abiding, many players would visit other jurisdictions rather than submit to lengthy investigations.

As a practical retort, though, critics can respond that most other businesses don’t take $120 million from customers over three years. And most lenders, before loaning out their money, ask for some kind of income verification.

From a law-enforcement perspective, it would probably be a better world if guys like Siddiqui could get caught before they had swindled others out of $65 million. Politically, though, neither the casinos nor the players, nor, I suspect, the states have any strong desire to rewrite the regulations to prevent someone from doing what he did. To the extent that anyone in Nevada actually talks about the issue, the need for revenue will likely trump criminal justice here.

There’s another question that I’ve always wanted to know the answer to, but don’t think there’s a practical way to find out: what percentage of money gambled in legal casinos is illegitimate–either embezzled or otherwise obtained unlawfully? That’s a subset of the bigger question of how much money circulating in the American economy is dirty. The answer can’t be zero, because we know that there is a great deal of crime that’s quite lucrative, and those criminals have to spend their money somewhere, unless they’re stashing it all in the Caymans. I guess if you totaled the entire amount of money that’s been discovered to have been embezzled, stolen, seized in drug raids, etc, you’d have an idea of what’s been detected, but how many criminals, particularly smaller ones, never get caught?

Merry Christmas, start gambling!

If you’re familiar with your gambling history (some of which you can find, in a single volume and at an outrageously affordable price, in Roll the Bones) you already know that, going back to the Romans, gambling was permitted, even encouraged, during the Saturnalia festival at the end of the year. Saturnalia evolved into Christmas, and the relaxation of gambling prohibitions during the Christmas season became enshrined in law several times over.

Now, of course, states let, and even encourage, people to gamble as much as they want, whenever they want. Apprentices never have to worry about their masters beating them for dicing, and no one goes to the stocks for playing too much whist. But if you want to really live history, go all out over the next few days (betting with your head and not over it, naturally), secure in the fact that if you were living eight hundred years ago, the king’s law would protect you from punishment for doubling down.

If they’re still doing the Sands casino in Bethlehem, maybe they should play up that angle. Or not.

Guess the year

Can you guess the year that an article appeared in Forbes magazine with these quotes?

– “Las Vegas is showing signs that it is becoming overbuilt.”

–”With traffic growing more slowly than capacity, older casinos have been hurting. Atlantic City casinos fared much worse last year.”

– “Steve Wynn put it this way: ‘The old formulas don’t work anymore. Customers won’t come just to see a Sinatra. You’ve got to give them an entire resort experience with spectacular scenery.”

–”Nevada Gaming Board [sic] data show that 42% of Las Vegas’s casinos were unprofitable last year. Casino bond issues totaling $612 million are in deafult with a number of others on shaky ground.”

Read after the break for the answer…. Continue Reading →

Encore echoes

There’s been quite the buzz for Encore over the Internet. This quote from Oskar Garcia’s AP piece explains, I think, why Wynn gets it more than anyone except Jack Binion and a few others:

Wynn expected thousands to jam the entrances to the casinos on Monday night, as some of his best customers ceremoniously pull the first slots and play the first hand at each machine and table with $2 million in house money.

If they win — at prices of $1,000 to $25,000 — they get to keep the winnings, but Wynn says he expects they’ll play some more no matter what happens.

“I’ve never met a gambler that would win a bet and retire from gambling,” he said.

Wynn’s Encore opens during tough times for Vegas

There’s something else about the place that I didn’t mention yesterday–like Wynn, it has a sense of humor about itself. Many of the other luxury joints take themselves way too seriously. I don’t get the feeling that Encore does. There’s a real sense of whimsy running throughout the place. I’m sure a guy that’s just blown $25,000 at mini bacc would beg to differ, but I can see it.

I’ve got an idea that I will hopefully get to develop more in an essay somewhere: Encore is a themed hotel, but it’s themed around ideas, not a time or place. It’s not homogeneous, but it all ties together because it comes back to the idea of change, metamorphosis, and reinvention…which is the essence of Las Vegas, after all.

And now for an Encore

After much anticipation, I got to see the inside of Encore. My expectations were high. As I said in the RJ, Steve Wynn’s been opening casinos for a while now, and he does it better than anyone in the business. I tried not to read the pre-opening press too closely because I’m in no hurry to see the future–I’d rather experience it as it happens.

I was enormously lucky this morning, since the group I was in (which included fellow Vegas Gang members Hunter, Chuck, and David) was conducted around the property by Roger Thomas, the hotel’s Executive Vice President of Design. He designed himself or had a hand in the realization of just about everything we saw, and had fascinating anecdotes about how he acquired many of the pieces on display throughout the property. It was a real treat.

I’m amazed at how well everything came together. When I ran past the place during the marathon (which was about 2 weeks ago but feels like 2 months), I thought that there was no way the hotel would be ready to open on the 22nd–and that was just the porte cochere. When I got there at quarter of 11 this morning, there was still work going on, but the place is absolutely ready. There’s something to be said for a hard opening: much more dramatic impact and excitement than doing it in dribs and drabs.

And that’s what it all comes down to: visual theater. It’s hard not to get jaded about casinos when you live in Las Vegas, and even tougher when you’ve worked in one. Encore really impressed me in a way that few hotels or casinos have. To explain the genius of the place, let me tell you about Mr. A and Mr. B. Mr. A has been coming to Las Vegas for thirty years and has gone from Caesars Palace to Mirage to Bellagio, with stays at Bally’s, MGM Grand, and Paris mixed in. He loves Vegas and everything about Vegas, especially the gambling. Mr. B came to Vegas once, in 1999, and hated everything about the city. He doesn’t gamble. I really think that both Mr. A and Mr. B would be equally wowed by Encore for completely different reasons.

Encore is the ultimate Vegas and the anti-Vegas, both at the same time. The colors are rich without being gaudy. The interiors deliver luxury without pretension. I didn’t get the feeling that it was trying to impress: instead, it felt like some folks with an unlimited bank account and excellent taste got together and decided to build. I can see how it’s the logical product of Wynn’s three decades plus in the casino business, but also a departure.

I won’t bore you with the petty details: the chambered casino, the unique finishes in each restaurant, and the square footage of the guest rooms. That’s been better told elsewhere. I’ll just relate some of my impressions of what I saw.

At first, I didn’t think that I was going to be very impressed with the restaurants. After all, they’re just places for people to eat, right? How creative can you get with that? Sinatra, for example: when I heard the idea of a Sinatra-themed Italian restaurant, I thought, ugh. I pictured Piero’s with Rat Pack photos and gold records on the walls. I couldn’t have been more wrong. The restaurant is actually a gem, a fantastically-designed space with brilliant details, and a few tasteful photos of Frank Sinatra that don’t look out of place at all. It’s really the opposite of everything I’d imagined it would be.

Switch, too, was a real shock. When I heard the concept of a restaurant whose walls changed, I cynically thought that they must not have much optimism for the menu if they have to use gimmicks like that. Seeing the concept in action, though, it all makes sense. Roger Thomas says that Steve Wynn’s idea was “dinner theater without the actors.” He absolutely achieved it: the switch effect is flawless, and the musical cues give it a true sense of drama. I can see now how it will complement, not distract from, your meal.

More cynicism exploded: you would think that opening a nightclub called “XS” in the midst of an economic slowdown is the height of hubris. Do we really need another gilded night spot? Walking through the space, I can say “yes.” It feels like a celebration of movement, of life, particularly the gold leaf body forms in the foyer, another detail that must be seen to be appreciated. It’s not hubris, it’s optimism, a bold statement that there still are moments in life worth celebrating.

Set against “the downturn,” the entire resort takes the shape of a manifesto, a declaration that there’s only one way ahead, and that’s to move forward. Granted, none of this was planned: Encore was conceived when it looked like smooth sailing ahead. Today, it has a relevance far beyond any other casino. It’s a profound cultural statement.

We’re not going to gamble or pamper our way out of our current societal predicament, but Encore is a bellwether nonetheless because it is forward-looking. There are elements from the past and from various parts of the world, but nothing sentimental or nostalgic. Sinatra, for example, looks like a room that the singer would be comfortable in, but like nothing that he would have seen during his life. It’s not about presenting Rat Pack nostalgia–it’s creating a space around the symbolic core of Sinatra’s music.

In short, next time you’re in Las Vegas, plan to spend some time in Encore. It will be something to remember.

I didn’t write this…not exactly

You might have noticed that I do a great deal of writing. Whether it’s the daily blogging, the articles for the Las Vegas Business Press, Casino Connection, and elsewhere, or the books, writing is something that is very important to me, both professionally and because I like to do it.

Since it means so much to me, I try to keep minimum standards in the quality of my prose. I’m not saying that everything I write is flawless, but it generally gets the job done and isn’t egregiously bad. You’ll notice typos in blog posts here, but that’s a failure in execution, not purpose. Generally, I strive to write well.

So imagine my surprise when this quote in the Jewish Times of Southern New Jersey, attributed to me, came into my mailbox:

Where would Atlantic City be if casino gambling wasn't authorized in 1976? Probably AC would be a ramshackle fishing village and a shallow summer retreat. Native David G. Schwartz, director of the Center for Gaming Research at the University of Nevada in Las Vegas, said in a recent column he wrote for the Casino Connection, "AC received a Second Chance with gaming, freeing the town from years of decline.The days before the rolling of the dice and the slot machine, were dark days but some residents didn't give up hope," wrote Schwartz, "since without gaming, they argued, the city could not reverse its decline. While casino revenues are down, gamblers are still coming here, in smaller numbers and some monies are coming in." It's still an uphill battle for the town but optimism has not been lost

Honorable ‘Menschen’ | www.jewishtimes-sj.com | Jewish Times of Southern New Jersey.

I honestly couldn’t believe what I read there. Did I really pen something that dreadful? With a sinking heart, I checked out the original Casino Connection article, Second Chances, which was about the 1976 gaming referendum:

The city had fallen far from its former standing as the “world’s playground.” Jobs had disappeared, infrastructure was decaying, and tourism had dwindled. In 1968, at a testimonial for 500 Club owner Paul “Skinny” D’Amato, city power brokers first discussed casino gambling as a cure for the city’s ills. Within six years, they managed to get a measure on the New Jersey ballot.

The 1974 referendum would have allowed casinos to open anywhere in the state after a local vote. But gambling opponents, including clergymen, advised their constituents to vote no, and the referendum failed.

These were dark days, but some didn’t give up hope. A small citizen contingent pressed for casinos. Without gambling, they argued, the city could not reverse its decline. Some considered them impractical dreamers, but they refused to take no for an answer.
Second Chances

I was profoundly relieved that I hadn’t actually written a sentence like, “The days before the rolling of the dice and the slot machine, were dark days but some residents didn’;t give up hope, since without gaming, they argued, the city could not reverse its decline.”

Why am I writing about this? It’s mostly defensive. I don’t want one of my students who I’ve upbraided for poor writing coming back at me with, “Yeah, but at least I didn’t write about ‘the rolling of the dice and the slot machine.’” It’s also professional pride. I happen to still know many people in South Jersey, and I’d hate for something like that to go out there uncorrected.

Usually, when I get mis-quoted, the journalist makes me sound better than I really do: they’ll clean up something like, “oh well you know the uh casino industry, many times in the past, like 1978-82 or 1991-1992, they’ve had hard times, you know” into: “The casino industry, Schwartz claims, ‘has been through hard times before, particularly in 1978-82 and 1991-92.’”

There’s another issue here: I never sounded an optimistic note about “some monies coming in.” I ended the piece on my usual optimistic, slightly ambiguous note, as I said that without gaming, “it’s a fair bet none of us would be where we are today.” That’s true, because I can say with absolute confidence that if Atlantic City didn’t get casinos, there is no way I’d have decided to study gambling.

I ordinarily wouldn’t belabor the point so much, but again, it’s all about professionalism. I partially earn a living through my writing, and I can’t have anything that absolutely sub-standard being ascribed to me without protest. While you’re going to find some clunkers in the thousands of pages worth of stuff I’ve written over the last ten years, you won’t (I hope) find anything that as stupidly awful as that quote up there. Going through the few sentences I really did write, I can name at least five revisions I’d make if I had another shot at it. But at least it’s not moronic.

Much ado about nothing, I’m sure, I’m going to use this in class for a while, so at the very least this post has some real pedagogical value.