Donald McRae. The Last Trials of Clarence Darrow. New York: William Morrow, 2009. 422 pages.

Clarence Darrow was one of the most polarizing figures of the early 20th century. He was at the forefront of several of the era’s most widely publicized trials, including the McNamara brothers’ 1912 trial for allegedly bombing the LA Times building, the 1924 defense of notorious Chicago thrill killers Leopold and Loeb, Tennessee’s famous 1925 “Scopes Monkey Trial,” and the 1925-6 Detroit trials of Ossian Sweet and others, black men accused of killing a white man in defense of Sweet’s home.

In this book, McRae looks at the last three of those trials, with a new spin: he brings in Mary Field Parton, Darrow’s lover. Parton and Darrow had an affair from 1908-1912 and rekindled it, though Parton was happily married.

McRae portrays Darrow as an eloquent, complicated warrior for justice, and makes good use of existing accounts of his career and personality. We see a man devastated by his 1912 trials for alleged jury-tampering begin to rebuild his reputation with the Leopold and Loeb case. The two men had already confessed to murdering a 14-year-old boy as an experiment, and their conviction and execution was widely considered a done deal. Yet Darrow, through ingenious legal footwork and emotive argumentation, was able to spare them the electric chair.

Here lies one of the unspoken contrasts of the book. Darrow is constantly lauded by his admiring contemporaries and the author as a brilliantly logical lawyer. Yet most of his triumphs came as a result of his openly emotional rhetoric and oratory. Several times in the book, Darrow ends an hours-long summation in wiping away tears, along with members of the jury and even the judge. It’s just one of the complexities of Darrow that is hinted at here.

It’s an unvarnished, though largely uncritical portrait, of one of the major legal and political figures of the period, and a introduction into that time.

Following up on yesterday’s post about Nevada regulation, here’s a story that demonstrates the need for strict internal controls in Florida, from the Miami New Times:

For some employees, Gulfstream Park was a hell of a place to work, full of cocaine and free gambling. When the scheme was finally discovered in 2007, hundreds of thousands of dollars had been stolen from the casino and taxpayers, and now the “family-friendly” racetrack is left with a potential public relations nightmare.

A state investigation is just about finished, and it paints an ugly portrait of Gulfstream. According to investigators, the parks employees and their friend, a cocaine-slinging ex-con once convicted of murder, ripped off nearly $289,324 in slot winnings. The Florida Department of Law Enforcement determined the Hallandale Beach casino now owes $144,662 in taxes on that ill-begotten money.

The ring of employees, which included highly placed supervisors, clearly acted in rogue fashion. The investigation also revealed that Gulfstreams sloppy management might have allowed the crime to occur. One example: Auditing of the casinos computer system was turned off, presumably by ring members, and nobody noticed.

Gulfstream executives were shielded from investigators by the parks politically connected attorney, Marc Dunbar, and the casino was slow in producing crucial documents.

via Miami News – Cocaine and Free Gambling at Gulfstream Park – page 1.

It’s a pretty sordid tale, but it shows just what can happen without proper oversight.

There’s a great article by Liz Benston in the LV Sun today about the investigation that ultimately deprived a nightclub of its license:

Managing a Las Vegas nightclub requires the deft and daring skill of operating a party environment that almost crosses the line into illegal activity. Anything less would be considered too tame to generate a buzz.

Planet Hollywood knew its tenant, the Prive nightclub, was crossing the line but didn’t stop it, and gaming regulators pounced.

Last week Planet Hollywood agreed to pay a $500,000 fine to the Gaming Control Board after acknowledging it knew of illegal and illicit activities occurring at the club, which operates on the mezzanine level above the casino. On Thursday the county denied the club a permanent liquor license, forcing its closure at midnight Tuesday, when its temporary liquor license expired. The club opened less than two years ago.

As a result of the unprecedented enforcement action against Planet Hollywood for allowing a nightclub to run wild, contracts between hotels and their nightclubs are now being rewritten to give the hotels greater authority to lay down the law with nightclub managers.

via Is the party over for Prive? – Las Vegas Sun.

If you haven’t already, I encourage you to click over and read the whole thing.

The goings-on at Prive bring up a deeper issue that I alluded to in a story about Randall Sayre’s 7/21 Industry Letter (pdf). Here’s most of the letter:

Recently there has been a great deal of attention focused on nightclub operations affiliated with Nevada licensees. Clearly, this is an important issue which, if
left unattended, can lead to serious regulatory ramifications. In addition to nightclub operations, there are a number of other areas where
regulatory concerns have surfaced. Either through lack of knowledge or apathy, licensees are creating regulatory challenges in areas requiring corrective action. Following are just a few examples of these areas of interest:
• The conduct of promotions;
• Approval and conduct of tournaments and charitable events;
• Race and Sports Book Operations;
• Intellectual property theft; and
• Questionable or misleading advertising
The vast majority of this State’s licensees attempt to “get it right” and any indiscretions are typically addressed in a non-disciplinary fashion with the cooperation
of the licensee. The Board recognizes these are hard economic times and licensees are facing increased competitive pressures. This does not mean, however, the Board
can allow a reduction in the regulatory standards governing licensees’ operations. In order to reduce disciplinary actions and foster open communication between
the Board and gaming licensees, the Board is proposing informal seminars covering our collective areas of concern. These seminars would allow the Board to identify some
common pitfalls frequently seen and provide an opportunity for the industry to voice their challenges and concerns. The process will also provide any needed clarification of
governing statutes and regulations.
This would be an operator’s workshop, not a formal seminar on law. The appropriate audience would be mid-level supervisors and program managers. It would
be property individuals that are responsible for following and enforcing policy and legal/regulatory requirements.

I hope that Sayre is successful in getting the casinos to send their managers to these workshops. This is the kind of program that they should be thankful for. Here’s why:
Imagine a homeowner throwing a party. During the course of the night, things get a little loud. The police are called. Should they break down the doors and immediately rest everyone for disturbing the peace, or knock on the door, ask to homeowner to keep it down, and see what happens?

The first option preserves public order and minimizes the burden on law enforcement–imagine if they had to arrest, transport and book everyone in the house, instead of policing the rest of their jurisdiction. Of course, if things get loud again and noise complaints continue, they would have to take “corrective action,” but usually, a little reminder of neighborly courtesy is enough.

This is essentially Sayre’s approach. Some parts of the regulations casinos operate under–the Minimum Internal Control Standards–are completely unambiguous. You’re either in compliance with them, or not. Others are more nebulous. Take, for example, NRS 463.0129, the backbone of gaming regulation in Nevada:

NRS 463.0129 Public policy of state concerning gaming; license or approval revocable privilege.

1. The Legislature hereby finds, and declares to be the public policy of this state, that:

(a) The gaming industry is vitally important to the economy of the State and the general welfare of the inhabitants.

(b) The continued growth and success of gaming is dependent upon public confidence and trust that licensed gaming and the manufacture, sale and distribution of gaming devices and associated equipment are conducted honestly and competitively, that establishments which hold restricted and nonrestricted licenses where gaming is conducted and where gambling devices are operated do not unduly impact the quality of life enjoyed by residents of the surrounding neighborhoods, that the rights of the creditors of licensees are protected and that gaming is free from criminal and corruptive elements.

(c) Public confidence and trust can only be maintained by strict regulation of all persons, locations, practices, associations and activities related to the operation of licensed gaming establishments, the manufacture, sale or distribution of gaming devices and associated equipment and the operation of inter-casino linked systems.

(d) All establishments where gaming is conducted and where gaming devices are operated, and manufacturers, sellers and distributors of certain gaming devices and equipment, and operators of inter-casino linked systems must therefore be licensed, controlled and assisted to protect the public health, safety, morals, good order and general welfare of the inhabitants of the State, to foster the stability and success of gaming and to preserve the competitive economy and policies of free competition of the State of Nevada.

(e) To ensure that gaming is conducted honestly, competitively and free of criminal and corruptive elements, all gaming establishments in this state must remain open to the general public and the access of the general public to gaming activities must not be restricted in any manner except as provided by the Legislature.

The key here is the requirement that licensees “protect the public health, safety, morals, good order and general welfare of the inhabitants of the State, to foster the stability and success of gaming and to preserve the competitive economy and policies of free competition of the State of Nevada.” Technically, a casino could have its license revoked for a kitchen worker forgetting to wash his hands after using the bathroom–that is, after all, endangering the public health. Should that happen? No, because no one would be willing to build a multi-billion casino if their license rested on such a slender thread.

I’m aware that there is some disconnect–some might call it hypocrisy or at least confusion–in the idea of casinos as watchdogs of “morals” when the bulk of promotion for Las Vegas in the past few years has been geared towards proving that the city is a place without morality. But it’s clear that, in the minds of the industry and its regulators at least, that there is immorality and then there is immorality. Gambling more than you should is OK; cheating on your spouse with a consenting adult is OK; engaging in public sex or, if you a prostitute, soliciting clients in casinos is not. I’m not saying that drawing the line between these things is logical, or even rational; I’m just saying that it’s there, and everyone in the industry knows it.

A lot of things that Sayre makes reference to blur that line between permissible and impremissible immorality. The letter is the Control Board’s offer to work with the industry to clarify exactly where the line is, to explain what will put licensees in clear violation of NRS 463.0129. With this letter, the GCB is saying that, regardless of what’s been going on until now, here’s how things are going to run from now on. They’re doing this without staging intrusive raids or indiscriminately levying fines for things in this gray area.

If the operators don’t take the Board up on its offer, they will be out of excuses if they are tabbed for “corrective action.” They have an out–”I didn’t know that was a violation”–and if they don’t take it, they’ll only have themselves to blame.

Interesting editorial piece about the hypocrisy of the major US sports leagues when it comes to gambling from the KC Star:

Late last week, the four major professional sports leagues NBA, MLB, NFL and the NHL, along with the NCAA, filed a complaint against the state of Delaware in federal court in Wilmington, seeking to stop the state from offering single-game betting on pro and college games.

The leagues and the NCAA assert that the state's recently-announced decision to offer single-game betting as part of the 2009 Delaware Sports Lottery violates federal law.

To the rest of the world, Delaware is known as one of the 13 original states to participate in the American Revolution and the first to ratify the Constitution of the United States. To those of us who live within driving distance, it's the home of tax-free shopping.

In corporate America, despite its diminutive size, the state is a true heavyweight, loved for its friendly laws designed to lure big business. In fact, if you look closely you will often see the term “A Delaware Corporation” next to the names of many large companies. Over 50 percent of US publicly traded corporations, and 60 percent of the Fortune 500 companies, are incorporated in Delaware.

To be blunt, most major corporations love Delaware and its tax policy, save for David Stern's monopoly and his compatriots, who have always remained more than hypocritical on the betting issue.

The daily point spreads you see in your local newspaper are an obvious deference to games of chance, but the NBA and its cohorts have always had plausible deniability in that aspect since the spreads are compiled by various Las Vegas casinos and sportsbooks, not the leagues themselves.

Of course, daily press releases announcing injuries are clearly designed to even the playing field for the gamblers who fuel the popularity of all the various sports.

via Gambling is NBA’s latest hypocrisy – Kansas City Star.

This is a point that I’ve made before. If the leagues really wanted to slow down action on their games, they could do a few easy things, like discontinuing pre-game injury reports or even denying press credentials to media outlets that publish point spreads.

It’s also strange that many casinos are high-profile advertisers in stadiums and arenas in the US and Canada, but the leagues that play in those arenas insist that legal sports betting in those casinos would ruin the integrity of the sport. The numerous point-shaving scandals of the past sixty years have all been connected to illegal gambling; many of them happened before Las Vegas had a sizable sports betting industry.

Professional and amateur leagues in other countries seem to be doing a better job of dealing with sports betting.

Here’s something to remind us that an oceanfront view can be great, but an oceanfront smell isn’t always the best. From the AC Press:

Local beach patrols reported spotting mussels along area beaches Sunday, but so far there have been no problems.

Atlantic City Beach Patrol Chief Rod Aluise said there were some mussels on the beach by Albany Avenue near Ventnor, though it was not a big problem.

The problem in the city, Brigantine and other beachfront communities Saturday was clam worms, also known as jelly worms or bugs.

Aluise said the clam worms are harmless, but swimmers and beachgoers are bothered by them because of the “icky factor.”

The clam worm problem only happened Saturday.

Margate Beach Patrol Lt. Joe Cincotta said a lot of mussels, about a foot deep, washed up by Washington Avenue, and to a smaller extent on Monroe and Quincy avenues.

“It's pretty heavy, the heaviest we've seen in a few years,” said Cincotta, adding that it smells, but there have been no complaints.

Ventnor Beach Patrol Lt. William Ferry said the mussels were around New Haven Avenue, and they haven't gotten any complaints about the smell. Ferry said they got clam worms on Saturday, too.

via Mussels invade area beaches – pressofAtlanticCity.com : Breaking News.

I figured this article would be a fun break from the usual doom and gloom around here because it’s got such a small-town charm.

Plus I used to work on the beach in Ventnor, so a few years ago I would have been one of the guys cleaning up those mussels at Newport Ave (you’ve got to click through and see the photo).

Here’s more evidence that Las Vegas never was recession-proof. This is taken from Parry Thomas’ biography, Quiet Kingmaker. As the most important banker to the gaming industry from 1955 to the 1980s, he knows what he’s talking about:

In my first twelve years here in Nevada [1955-1967] we went through at least three depressions locally in Las Vegas. Things got really tough and it was very hard to keep some of these places going…there were only two hotels on the Strip by the mid-1960s that didn’t have to go through some financial restructuring, and those were the Desert Inn and the Sands.
from Jack Sheehan, Quiet Kingmaker, page 161

The idea that Las Vegas is recession-proof is a myth that people started selling in the mid-1970s, just as corporate investment was starting. While the rest of the US was in bad shape, gaming revenues kept on rising. So everyone figured, “Wow, casinos are recession-proof!” It sounds really good when you’re making a pitch to investors, I guess, so it keeps cropping up, even though people in the industry have been admitting that it’s not recession-proof since the late 1970s.

I’m not even convinced the industry was recession-proof in the early 1970s. Part of the reason that revenues were rising, I suspect, is that skimming was slowing down. For all we know, Las Vegas casinos actually made less in the early 1970s, but their reported revenues just kept climbing. It’s frustrating that this can never be proven, since evidence of the skim is, by its very nature, non-existent.

Claiming that the events of the past 18 months have, for the first time, made people realize that Las Vegas isn’t recession-proof is like saying that, before Columbus, everyone thought the world was flat. Some people did, but those who cared to study the problem already knew the world was round, long before Columbus sailed. The evidence has been there, if we had cared to look.

Jack Sheehan. Quiet Kingmaker of Las Vegas: E. Parry Thomas. Las Vegas: Stephens Press, 2009. 346 pages.

Wow. That was my reaction to finding out that a biography of Parry Thomas was coming out. Thomas, the man who it said said “flipped the switch that turned on the lights in Las Vegas,” is easily one of the most important figures in the city’s first hundred years. Thomas was the banker to the casino industry during its most formative period–the 1950s to 1980s–and one of the guiding forces in the city’s philanthropy.

Let’s try to imagine Las Vegas without Parry Thomas. From the mid-1950s, no banks lend money to casinos, so they can’t grow any bigger than two or three hundred rooms. Mainstream financiers aren’t interested in investing in such dodgy joints, so its possible that, in the 1960s, there’s no influx of outside capital into the business. Without Thomas’ intervention, it’s possible that Howard Hughes doesn’t choose to stay in Nevada after Moe Dalitz tries to evict him from the Desert Inn in December 1966. Steve Wynn still comes to Las Vegas in 1967 at the Frontier, but without Thomas’ encouragement it’s entirely possible that he and Elaine decide that they’re going to return to the East Coast and try their luck in another business. At the very least, there’s no Roger Thomas to help design Wynn’s resorts (Roger is Parry’s son). In the late 1960s, there’s no one to champion the corporate gambling acts, or to persuade Bill Harrah to drop his opposition to them, so you don’t get publicly-traded companies owning casinos. UNLV is likely either crammed into 55 acres on Maryland Parkway (instead of the 400 it currently operates) or divided into several campuses throughout the valley.

There’s still a city there, and it probably has a casino industry, but it’s going to look much different, and probably not for the better. That’s the impact that Thomas had.

Onto the book itself: it’s not a biography in the usual sense, but rather a combination autobiography and oral history. Basically, Thomas talks about his life, and friends, family members, and business associates chime in. Sheehan, as an author, yields the spotlight to Thomas and the others. It’s hard to imagine that there was a better way to do this book. Thomas, like Steve Wynn, is a master storyteller, with a keen recall and an eye for detail that will gratify the reader.

There is introductory material about Thomas’ youth and young adulthood in Utah, and closing material on Thomas’ family life, but most of this book is a personal history of Las Vegas 1955-1995 or so, as told by Thomas with others adding their perspective when appropriate. As such, it might be one of the most important books about Las Vegas history that you’ll ever read. Thomas sets the record straight on many fronts and is candid about his battles with the IRS and his dealings with alleged organized crime figures.

Without Thomas, Las Vegas as we know it would not exist. It’s fortunate that he was persuaded to share the story of his life and career, both so that his contributions are not forgotten and so that students of history have a better idea of what really went on in Las Vegas as it grew into prominence.

I saw this back on Sunday in the LVRJ and thought I’d share it:

The Vegas Club has introduced a new low-limit “Fetish Pit” beginning at 7 p.m. every Thursday through Saturday. Dealers are dressed as “naughty nurses,” “sexy school girls,” “risqué female cops” or “leather-clad biker chicks” while pole dancers perform on a raised platform.

via PLAYER’S EDGE: M Resort offers free slot tournaments; Orleans has Christmas in July – Neon – ReviewJournal.com.

Sounds fun, doesn’t it? As fetishes go, those might be the ones most in keeping with the “Sin City” image and the Nevada Gaming Control Board’s ideas of what should and shouldn’t go on inside a licensed casino. I’m surprised they let the “sexy school girl” thing go, what with pedophilia not exactly being the sort of thing that tends to promote a law-abiding image. But since the age of consent in Nevada is 16, I guess they could be theoretically be older high school students. Still, it’s creepy.

Interesting story on the M resort a few days ago in the LV Sun. My eyes lit up when I saw this bit, because it answered a crucial question: what’s been going on with the Boulder Strip’s roulette hold percentage since March?

Marnell says he doesn’t shy away from volatility because he knows the casino will prevail in the long run. At the M, a single player’s multi-million-dollar win at roulette has been offset by millions lost at blackjack and craps in recent months, Marnell says.

via M Resort’s trial by fire – Las Vegas Sun.

In 2008, the annual average for roulette win percentage on the Boulder Strip was 21.21%. The statewide average was 20.13%, which is in line with previous years. Across the various reporting areas, roulette hold percentage tends to bounce between 17 and 22%.

In February 2009, with 34 locations reporting, the Boulder Strip casinos had a combined hold percentage of 20.85. Again, that’s well within the normal parameters. Together, the casinos lumped into the Boulder Strip reporting area won about $431,000 at their 24 roulette tables.

But in March, with 27 tables in 35 locations (that’s the M opening), Boulder Strip roulette had a mind-boggling win percentage of -63.19%. That’s right–a beyond-double-digit negative win percentage. Instead of winning about $400,000, Boulder Strip roulette tables lost nearly $1.9 million. If we assume that the rest of the area won its usual amount, that means that Marnell’s casino had a player win about $2.5 million in roulette in a single month. How is this possible? High bets, with lots of volatility.

But what about Marnell’s claim that the casino made up for the roulette loss with better-than-expected play at craps and BJ? We can take his word for it, or we can see if the numbers back him up.

The opening of the M bumped the number of blackjack tables from 169 to 217, an approximately 28% increase. Year-to-year, BJ win nearly doubled, from $2.92 million to $4.795 million. Month to month, with a 28% increase in tables, the win increased by about 80%, with a slightly lower win percentage. Everything else being equal, it seems likely that someone had a very bad month playing blackjack somewhere on the Boulder Strip. It makes sense that this high-end play went down at the M.

Craps, on the other hand, saw a modest bump in overall win, February to March (5%), with a 21% or so drop in win percentage (from 17.17% to 13.60%). This was a bit higher than the state’s average for the month (13.23%), which lends credence to the assumption that someone lost heavily, though not nearly as badly as in February.

Since March, the numbers for the Boulder Strip have bounced around quite a bit. In April, the roulette tables had a 29.52 win percentage, indicating heavy losses outside of the usual range, while craps tables lost $271,000, for a negative win percentage of about 2.6%. In May, the win percentage on craps had soared back up to nearly 30%, with roulette tables again falling into the red: they lost more than a million dollars in that month, for a win percentage of about -21%.

If this is all attributable to the M (and word on the street backs up Marnell’s claims of heavy action there), then it confirms that this is the “sky’s the limit” Horseshoe of Benny Binion’s day, redux. Of course, Benny didn’t pay so much attention to interior design, but these are different times. At the high end, at least, Marnell is running an honest-to-goodness gambling joint.

With his commitment to volatile high-end play, Marnell is at odds with the mentality that’s sought profit certainty. In the past 25 years, slots, which are much less volatile, have pushed out tables as the dominant piece of the gambling puzzle for most casinos. In the past 15 years, non-gaming parts of the resort, which are less susceptible to nightly swings, have outpaced the growth of gambling revenues.

It remains to be seen whether Marnell’s let the chips fall where they may philosophy catches on. I don’t think it will become the industry standard, simply because too many people on the admin and finance sides will think that this is a lousy business model. They want good, solid cash flow that makes shareholders happy. On the whole, they’d rather see $200/night rooms filled to 94% occupancy with less action on the casino floor.

I have a pretty vivid mental image that I’m going to share. It won’t make much sense if you haven’t seen the new Star Trek movie, but bear with me. Jim Kirk and Leonard McCoy have this exchange:

McCoy: Space is disease and danger wrapped in darkness and silence.
Kirk: Well, I hate to break this to you, but Starfleet operates in space.

I’m imagining something like that an a casino executive committee meeting:

CFO: Gambling is disorder and volatility wrapped in panic and fear.
Casino ops: Well, I hate to break this to you, but casinos are in the gambling business.

That may be something else that was funnier in my head than on your computer screen. If you imagine Karl Urban as the CFO, it sounds a lot better.

Eight hundred words later, I’ve said most of what I wanted to say about casino volatility…for now. Seriously, the M will make a great case study for someone’s thesis.

Inspired by Gerald Davis’ Managed by the Markets, I wrote an LVBP column about similarities between gaming companies and other ones. My bold suggestion is that the gaming industry is more like than unalike others:

As big as the companies that run Las Vegas casinos seem in this town, they're really on the small side compared with the corporate giants that dominate major national industries — the ones pundits say are “too big to fail” just as poor management and declining demand push them to the brink of failure.

Casino companies tend to follow the pack, doing what the bigger companies do. So to get a handle on what's coming to the Strip, we should look at the trends that have been shaping corporations throughout the world.

The first is finance: Most of the companies running casinos today have taken on huge debt to finance new construction, acquisitions, or taking the venture private.

Being heavily leveraged isn't necessarily a smart business decision, but many companies have found themselves in similar situations. The reason? Relatively cheap money that banks were lending, plus a stockholder imperative to maximize short-term profits and thus drive the stock price higher. Thus, rapid expansion and debt accumulation became a logical, if not always sensible, strategy.

via Las Vegas Business Press :: David G. Schwartz : For clues on gaming’s corporate future, follow other industries.

You can click through and read the whole thing.

To me, the corporate/financial aspects are the least interesting part of gambling (I’d rank it third, after operations/CCTV and marketing), but the general public seems far more interested in reading about this aspect of the business. Partially it’s because far more people are investors in gaming companies through stocks and bonds than are interested in the nuts and bolts of how casinos operate.

But there are, luckily, some folks who are fascinated by the operational side of things. I’m talking to a few of them at the Player Development Summit today, in a session I’m doing with Bill Zender on research and ethnic marketing.

On Tuesday, there’s a session called “21st Century Casino Marketing Tools That You Probably Aren’t Using Yet” I hope will tie into with Chuckmonster’s discussion of sponsored conversations.

It’s never too early to start planning your next writing workshop, particularly if you’re planning to be in Cape May, New Jersey next January 15-18. If you’re inclined towards brief non-fiction (and who isn’t…except for those of us who like lengthy fiction?) you may want to consider beating the crowd and registering now for one of the eight seats in this session:

To the Point: Short Creative Nonfiction – NEW!

Limited to 8 participants

Have an idea for a story or article but not sure how to get started? Have a mix of personal experiences and outside research but don't know how to combine them? Thoughtful prodding, expository exercises, group workshopping and inspired revision will help you build your ideas and notes into a finished 500-2,000 word piece suitable for publishing in a magazine or newspaper. (Led by Dave Schwartz)

via Prose Workshops | Winter Poetry & Prose Getaway in Cape May, NJ.

Visit the Winter Poetry and Prose Getaway site to learn more about this and every thing else that goes on at the Getaway. There are a great many other workshops, including one led by Pulitzer-Prize winning poet Stephen Dunn. The faculty is an incredibly diverse and talented group of poets and writers, so no matter what your literary interest, you should be able to find something to suit your tastes and level.

If you are an educator, you can get professional development credit for attending, and you can even earn graduate credits through Rutgers University. Even if you’re not, it’s a relaxing, rewarding weekend writing retreat that stacks up pretty well next to a weekend in Las Vegas. Registration and a single room package (which includes three days of breakfast and lunch and evening receptions) is $795. If you want to share a room, the price per person drops to $635. Register by November 15 and get a $25 Early Bard discount. That’s not bad for three days of dining, writing, and entertainment. The only extra thing you pay for is dinner. No exorbitant charges for bottle service, no need to try the $20 trick to get a sweet room (most have ocean views), and no worries about getting trick-rolled by your new “friend” who wants to “party” with you. Good times.

There are some great deals in Las Vegas right now, but this is a pretty good deal, too. The Grand Hotel in January is sort of the anti-Strip, so this might be a nice change of pace for some of my readers who usually gravitate to the glitz of the Strip.

John Buntin. L.A. Noir: The Struggle for the Soul of America’s Most Seductive City. New York: Harmony Books, 2009. 409 pages.

In this lengthy exposition of Los Angeles police and corruption, John Buntin examines the career of two Angelenos: Bill Parker, who became one of the LAPD’s most important–and controversial–chiefs, and Mickey Cohen, who occupied a similarly influential position in the city’s criminal underworld. Buntin positions the men as bitter enemies, structuring the book with alternating chapters (for the most part) charting the me n en route to their inevitable collision course. But while neither man liked the other, and both’s paths crossed several times, they weren’t really destined to clash in a final, terrible battle. Cohen ultimately went to jail for tax evasion, not for any crime that Parker’s LAPD had investigated, and Parker was more seriously threatened by larger social problems (chiefly LA’s changing demographics and larger social issues that led to an increase in crime) and interdepartmental and city-level political sniping. So the set-up, while well-executed, eventually rings false, as neither man figures heavily in the demise of the other. Nor did they have, it seems, a truly personal antipathy. Cohen would have been harassed by any LAPD chief who wasn’t on the take, and Parker attempted to crush criminal kingpins, subversives, and garden-variety criminals with the same zeal.

That being said, this is an interesting book. Buntin has researched both men well, and does a good job of re-creating the Los Angeles and the LAPD, circa 1930-1970. He’s obviously spent a great deal of time poring over newspaper accounts, LAPD files, and several biographies and memoirs in recreating the world that Cohen and Parker rose to power in. Those interested in the history of American organized crime will likely be generally familiar with Cohen’s career, but they will still learn some interesting tidbits about him, the LA organized crime scene, and the LAPD. Likewise, Los Angeles history buffs will find this great reading and may see the city in a new light.

I found several insightful things in the book that relate directly to Las Vegas gambling history. When Cohen arrived in Los Angeles as an adult (after a childhood in LA, he had lived in Cleveland and Chicago, among other places), he assumed a place in the city’s organized criminal hierarchy below Ben “Bugsy” Siegel, who’s obviously got some connections to Vegas. Buntin correctly identifies Siegel’s true role in the Flamingo, not as its founder, but as usurper. He also puts Siegel into his proper context, as a criminal entrepreneur with many irons in the fire, some of them (such as the wire service) more lucrative than the Flamingo. Siegel’s murder in Beverly Hills isn’t linked concretely to the Flamingo, as many in Las Vegas would have it, but instead is treated as the unsolved crime that it is. Dozens of people had good reason to see Siegel dead, and most of them had nothing to do with Las Vegas.

Buntin also brings in, for a few moments, two integral Los Angeles figures who transitioned to Las Vegas. Gambling boat operator Tony Cornero and formed LAPD captain and gambling hall owner Guy McAfee. Cornero built the Meadows in Las Vegas in 1931, but is better known for starting work on the Stardust, though he died before it was completed. McAfee owned shares in several Vegas casinos but is most closely associated with the Golden Nugget, over which he presided for many years. Both are interesting figures, and while there probably isn’t enough material to justify a full-scale biography of either, each deserves at least a chapter or two in a prospective book about the connections between LA and LV.

For me, this book was a good read, and if you are interested in Las Vegas history you’ll probably like it for fleshing out the LA crime scene in the years that Vegas was ascendant. The “story” of the book–the struggle between Cohen and Parker–actually takes a back seat to their separate lives.

Along with word that business in Las Vegas is “bouncing along the bottom,” the big news today is the latest in celebrity bad marker cases, former NBA star Antoine Walker. From the LVRJ:

Walker faces three felony counts related to writing bad checks at Las Vegas casinos between July 2008 and January 2009. According to the criminal complaint, Walker wrote six checks worth $100,000 each at Caesars Palace around Jan. 19. Before that, the 12-year NBA veteran wrote $400,000 worth of checks for chips at Red Rock and Planet Hollywood, prosecutors say.

Walker has paid back a portion of the money but still owes $822,500.

via Walker charged with writing bad checks to casinos – Sports – ReviewJournal.com.

I did a quick interview on this subject with KVVU (Fox 5) this morning, so I’ve got a few thoughts.

First, for some reason, as I read the story, I kept thinking that he got a marker for $400,000 in red chips. And the old CCTV operator in me said, “That’s four thousand stacks.” I assume that even though he was playing at Red Rock, he did not receive the money in $5 chips.

Anyway, the serious stuff starts here. Why do casinos even offer credit play? That’s a common question. The answer is that we’re talking about sums so big, few people are going to be bringing in cash, and if they are, the IRS may start to get suspicious, since most legitimately high-wealth individuals don’t walk around with hundreds of thousands of dollars on them. There is a detailed process, filled with internal controls and external checks, before someone is granted credit. Generally speaking, the casino investigates the player’s credit history and, if they seem to be good for it, lets them sign a marker.

Why are unpaid markers considered bad checks? That’s a very good question, and the best answer is that this is because that’s what the law is. Why is that the law? I haven’t been able to find much on the legislative debate over the bill that made gambling debts legally collectible in 1983, but I imagine that the casino industry had a fair degree of input into the process.

How much money are we talking about? In 1998, attorney Bob Faiss estimated that between 5 and 15 percent of all money wagered at all Nevada casinos is bet on credit. If you’re interested in the mechanics of casino credit, Faiss’s testimony before the National Gambling Impact Study Commission is as good a summary of any of the process.

For fiscal year 2008, gamblers wagered about $232.4 billion dollars in Nevada casinos.* Five percent of that is about $11.6 billion. Fifteen percent is approximately $34.9 billion. For the sake of argument, let’s assume that the number is ten percent of all money wagered in Nevada casinos. In that case, we can say that Nevada casinos extended about $23.2 billion in credit during fiscal year 2008.

According to the Nevada Gaming Abstract, in that year casinos statewide reported a total of $132.1 million as “bad debt expense,” i.e., uncollected markers. That seems like a lot of money, and it is. Compared to annual gaming revenues of about $12 billion for that period, though, it doesn’t look so big (“only” 1.1 percent). Next to the estimated total credit play, $23.2 billion, it’s tiny: 0.56 percent. Just over one-half of one percent of casino markers end up as bad debts.

That’s probably worse than a commercial bank’s lending rate, but isn’t that bad. According to a recent news story, Bank of America, one of the largest banks in the US, is writing off more than 10 percent of its credit card loans.

While more alarmist elements may imagine that there’s a tidal wave of bad credit decisions and unpaid markers coming from Nevada casinos, looking at the numbers shows that this isn’t true. Only a small percentage of markers end up unpaid, and it seems that casinos do a pretty good job of due diligence before letting players sign markers. Of course, a few high-profile cases gives a much different impression.
_____________________________________________
*If you want to check the math, divide the total table and slot revenues by their respective win percentages, then add them.

You’ll have to wait until September, but you’ll be able to hear surveillance expert Derk Boss discuss current trends in casino surveillance and loss prevention. Here’s the summary:

September 3, 2009
Gaming Research Colloquium Series: Derk Boss, DJ Boss and Associates
“Behind the Camera: Current Trends in Casino Surveillance and Loss Prevention”
Thursday, September 3, 2:00PM
Extended Study Area, Lied Library
View flyer (pdf)

For more information, see the UNLV Center for Gaming Research events page.

Harrah’s had announced–in very unspecific terms–what it plans to do with its fantastic assortment of Strip acreage. From the LV Sun:

They didn’t announce their intentions at the time. The economy was still humming, and with tourism booming and new resort construction expected by consumers and demanded by investors, the decision was something of a dirty secret.

Their plan was nothing less than a rejection of the implosion-punctuated business model that has defined Las Vegas for decades. In place of a new casino resort, Harrah’s came up with an idea that was more Bourbon Street than Las Vegas Boulevard.

Internally dubbed “Project Link,” the plan calls for a collection of about 20 restaurants and bars to be built along a winding corridor between the company’s O’Sheas and Flamingo casinos, on the east side of the Strip.

With a mix of “eclectic” and “mostly casual” restaurants and bars opening to the street, it’s an attempt to create the kind of entertainment district that has developed organically in cities such as Los Angeles, Memphis and New Orleans yet is lacking on the Strip, with its enclosed, casino-centric zones.

via Harrah’s plans new ‘street’ of bars, eateries near Strip – Las Vegas Sun.

This may be a great idea. Or it may be an underwhelming under-utilization of an expensive, unbroken swath of Strip real estate that stretches from Harrah’s to Paris and just about the I-15 and Koval.

Positives: Harrah’s built itself as a company that caters primarily to the middle market. This move caters to the middle market. Harrah’s isn’t going to be borrowing a great deal of money anytime soon. This project sacrifices minimal cash flow and should be less expensive than building something from scratch. Between Wynncore, Bellagio, and Aria, there is going to be a great deal of competition for the finite high-end market in the near future. This doesn’t threaten to intrude into that market.

Negatives: Harrah’s has assembled a pretty big portfolio on the Strip, and it’s hard to see how Project Link takes advantage of this. As the first phase of something bigger, this could be a great idea. Indeed, the artist’s rendering shown in the Sun article has a great deal of undeveloped space fronting Koval. But if this is it, it doesn’t seem to take advantage of all of that land. Besides that, there really aren’t any.

On the other hand, things don’t look so hot for Imperial Palace. Its Strip frontage seems to be replaced by a massive billboard for a show across the street, kind of like when Bally’s was wrapped with a mega-size ad for “The Producers.” Clearly the casino is still there, but it’s not going to be as visible a part of the Boulevard as before.

I think that Project Link is, overall, a positive, in that it rejects the cookie-cutter thinking that’s permeated the industry. Just because Steve Wynn can profitably cater to the high end doesn’t mean everyone can. I think it’s about time that companies started focusing on their strengths and presenting distinct products as opposed to trying to do the same thing.

In a sense, I think that Project Link will solidify Harrah’s Strip holdings as the anti-City Center. Instead of a newly-built collection of luxury hotel space with a single big casino, you’ve got an assembly of already-built mid-size and larger casino hotels. Outside of Caesars Palace, there’s not much retail. If the Crystals and Aria are the axis of City Center, you couldn’t pick a better contrast than Project Link’s food court (which is essentially what it sounds like) and O’Shea’s/Flamingo.

Whether Project Link is heralded as a brilliant strategic move in ten years depends, I think, on how City Center does. If it’s successful, then this will probably be scuttled mid-way in about 2 years and replaced with plans for something more upscale. If it doesn’t, this will be seen as genius.

Will City Center be a success? We don’t know yet. There are just too many variables. Room rates are down, but high-end play seems to be up. What’s that going to mean in December? It’s anyone’s guess. The political and economic situation is just too fluid to make any predictions with any real confidence. Even if the project comes in under budget and is executed flawlessly (neither of which seems to be true), if gas rises to $5/gallon and airline capacity continues to fall, it’s hard to see how it would be a success. On the other hand, if 42 million people have the means and desire to visit Las Vegas in 2010, it’s hard to see how it wouldn’t make a ton of money. The most frustrating thing about making this kind of gamble has to be that most of it is out of your hands. Casino executives should be watching the players down at the WSOP for some tips on how to handle bad beats…or not to handle them. Because if the past two years have taught us anything, it’s that there’s a far bigger element of gambling to the casino-operating business than anyone’s been willing to admit for the past twenty years.

And yes, that is a Deep Space Nine reference in the title.

Hey! What passes for good news on the casino revenue front: the decrease in revenue isn’t as bad as it’s been. Who would have thought we’d be saying that back in 2007? From the LV Sun:

Casinos along the Las Vegas Strip won $480.8 million in May, making it the 17th straight month of a fall in revenues.

The state Gaming Control Board said the win, before taxes and business expenses, dropped by 6.3 percent at the 41 casinos on the Strip compared to May 2008. But it ended a seven-month string of double-digit declines.

Positive signs were the wins in baccarat, up 38.5 percent, roulette increased 24.1 percent and the penny slot machines inched up 4.1 percent.

The board reported the win statewide dropped to $889 million, down 8.34 percent from the same month of a year ago. And that compares to May 2008, when gross win was down 15.2 percent.

And the past fiscal year the state has collected $655.4 million in taxes from the casinos, a decrease of 15 percent.

via Strip casinos see 6.3 percent drop in winnings – Las Vegas Sun.

Looking at the statewide numbers, table win actually improved by 1.1%, thanks to that robust growth in baccarat. Part of this was because of more play, but part was because the casinos got luckier. I’ll break that down in the Strip section below. Statewide, slot win was down almost 13 percent. That’s a major dropoff by any standard. The total number of slots in Nevada casinos has, since May 2007, fallen by about 5,000, to 170,316, which fits into my previous assertion that Nevada casinos have to do more with less. The unheralded shrinkage of Nevada’s casino industry continues. This has major budget implications. Even if we magically returned to 2007 levels of gambling, the state would be bringing in less in taxes since the casinos collectively have fewer machines. Aria opening later this year will reverse the decline, but if other casinos close, it won’t do much good.

I’m going to take some time to lay this trend out. These are statewide slot and table number from the Nevada Gaming Revenue Reports, May 2005-2009:

May 2005: Tables: 5,936 | Slots: 179,144
May 2006: Tables: 5,965 | Slots: 178,701
May 2007: Tables: 5,857 | Slots: 175,077
May 2008: Tables: 5,851 | Slots: 168,497
May 2009: Tables: 5,714 | Slots: 170,316

In the past five years, we’ve had a 3.7% decline in the number of table games and a 4.9% decline in the number of slots. So even if people were gambling as much as they did a few years ago, the state would still be earning less in gaming taxes because revenues would be proportionally lower. Those who argue that the state needs to re-examine its tax structure should consider that point: it seems to be logical to assume that, with a smaller industry, the state will have to ease its reliance on gaming revenue taxes.

Now…on to those Strip baccarat numbers. Here how they compare with last year’s:

May 2008 bacc win percentage: 11.29% | win: $69,723,000 | total play: $617,643,000
May 2009 bacc win percentage: 13.35% | win: $96,519,000 | total play: $722,988,000

Strip bacc gamblers were about 2% more unlucky this May than last. If the house had maintained its 11.29% win percentage, the total bacc win would have been about $81.6 million for the month. Any way you slice it, that’s a legitimate increase. If the trend holds, the outlook for City Center starts to look better: if high-end play is on the rise, there will be room for Aria to take some of that market. Just how much room there is, however, remains to be seen.

Slot play in general on the Strip was weak: there were declines in every denomination but pennies and Megabucks. With 21 more Megabucks machines on the Strip in May 2009 vs May 2008 (about a 13% increase), total win more than doubled.

The bump in penny slot revenues, though, is less impressive. The total number of penny slots on the Strip increased by about 21%. The total win, however, was up by only about 4%. Monthly revenue per machine in May 2008 was $6,193.51. In May 2009, it was $5,318.93. That’s a 13.3% decline in win per unit for the month–not good indicator of strengthening demand. On the other hand, quarter machine win per unit this May was only $3,278.87, so it looks like, all things being equal, a slot manager could boost his monthly numbers considerably by replacing some quarters with pennies.

I could keep on analyzing this for the next few hours, but I’ve got other things to do, so that’s all for now.

Trisha Ashworth and Amy Nobile. I’d Trade My Husband for a Housekeeper: Loving Your Marriage after the Baby Carriage. San Francisco: Chronicle Books, 2009. 176 pages.

It’s another Amazon Vine review, and another advice book. If you wonder why I review so many of these, its because there seem to be a lot of them published.

Ashworth and Nobile have geared this book for the married mother who’s finding that, amid rushing out to play dates and managing the household, she’s lost the magic in her marriage. Their ideal researcher is probably a formerly-professional, stay-at-home mom who’s not struggling to make ends meet. It’s not just the authors’ own stories and opinions–they draw on “authorities” (mostly other authors, not all of whom have obvious academic or professional credentials) and have interviewed more than 200 married women with children (as well as a few men). This gives the book a broader feel than a simple personal reminiscence.

It’s not a particularly dense book, with super-sized quotes, short quizzes, and checklists of important points filling up much of the space. Essentially, it’s a guide to how to make a marriage succeed, and it feels like a combination of the management-success book with the matrimonial advice tome, with key takeaways highlighted and repeated for emphasis.

There isn’t much revolutionary in here. Basically, it comes down to: don’t have unrealistic expectations, be patient with each other, and listen to each other. Though it’s not new, that’s never bad advice, and reading about how other people have navigated the obstacles in their marriages–or haven’t–might give married couples some advice for overcoming adversity in theirs.

That being said, you might find some of the stories similar to your own situation, or not at all. There’s a tendency to pit the valiant overworked mom against the stereotypical SportsCenter watching, emotion-denying, dinner-demanding ogre-husband. Luckily, input from real husbands counter-acts some of this bias, but the assumption is, more often than not, that the husband is a big part of the problem. If you’re a guy, it’s an interesting look into how you might seem to your wife, but it’s not necessarily going to correspond to your situation.

Bottom line: it’s an interesting read, but doesn’t have any magical secret or anything revolutionary to say about marriage. If you’re having doubts about your marriage, you will probably benefit from the perspectives found within this book.

The casino industry has lost one of its major innovators with the passing of Bernie Goldstein this weekend. From the Quad City Times:

Bernard “Bernie” Goldstein, 80, who got his start in business as a scrap metal dealer and became a major player in Americas gambling empire, died Sunday in Trinity Pathway Hospice, Bettendorf.

“Im just a scrap dealer who did good,” Goldstein once said.

He was considered to be the father of riverboat gambling who wore a gruff exterior, but was a softie when away from the business table.

His stake in the gambling industry – and other businesses – is said to have created jobs for as many as 100,000 people.

Cancer, which was diagnosed last autumn, slowed Goldstein down, associates said, but only a month ago he was at a Bettendorf City Council meeting to receive a special honor and salute from the city.

He looked pale and wan at the meeting but graciously smiled and shook hands all around as he received the honor.

via Riverboat gambling mogul Bernie Goldstein dies.

Goldstein was behind the 1989 legislative drive to get casino gambling approved on riverboats in Iowa, the nation’s first riverboat casinos. He saw riverboat gambling as a way to attracts tourists and revive economically depressed areas of the state, particularly the Quad Cities region. On April 1, 1991, the first dice were tossed on his “Diamond Lady” boat, making it the first legal riverboat casino. In 1992, the company that owned the riverboat was renamed Casino American, and it opened the Isle of Capri in Biloxi, that state’s first riverboat (actually barge) casino. Over the next few years, Goldstein opened a spate of Isle of Capri casinos across the south (Vicksburg, Bossier City, and Lake Charles) and expanded into Colorado. As a result, the company was renamed Isle of Capri Casinos, Inc.

There are few owners who had as much an impact on the proliferation of gaming in the 1990s, and it’s amazing to think that for Goldstein this was a third career. And it’s possible to imagine that without Goldstein’s determination to champion riverboat gambling in the late 1980s, casino history might have turned out very differently.

Gerald F. Davis. Managed by the Markets: How Finance Re-Shaped America. Oxford: Oxford University Press, 2009. 304.

We live in a world where finance has outstripped production, where it is more important to make money than to build cars or refrigerators. In Managed by the Markets, Gerald Davis tries to make sense of this transition. He raises some interesting points, but ultimately the book is short-sold by needless repetition. It would make an intriguing 30-page article, but there’s not nearly enough material here for a 300-page book.

Case in point: an 8-page preface introduces the arguments of the book: “finance had become the new American state religion,” and citizens had been transformed into investors, as “the expansive use of financial markets has shaped the transition from industrial to post-industrial society in the United States over the past three decades.” This is followed by a chapter-by-chapter outline of the book’s structure. Fair enough. But then, the 30-page first chapter does the same thing, in expanded form, including an even longer summary of the chapters to come.

The author has a tendency to, as Gorilla Monsoon might have put it, “go to the well once too often.” For example, on page five he describes the change to a financial-market based capitalism as a “Copernican revolution.” It’s a fine analogy for the world-shifting rise of markets as the arbiters of capital. But he then re-uses the metaphor three more times in the next 50 pages. It’s overkill. He also has a tendency to find amusing instances of finance run amok–David Bowie issuing $55 million in bonds against future royalties, or a Norwegian town investing in American mortgages–and use them repeatedly, suggesting that there’s not much depth to his research outside the small circle of factoids that are rotated in and out of the text. There is some really interesting material here, but it’s run into the ground over the course of the book.

The book’s highlights are Davis’s analyses of the rise and fall of corporate “social responsibility,” the profound impact of the shift from bank financing (loans) to market financing (stocks and bonds) on the world’s business, and the rise of the vendor state. Each of these developments has serious implications for public policy, and Davis advances thoughtful ideas, though they are rooted in the concept that bigger is better (there’s a great deal of nostalgia for the big corporations of the mid-20th century) and it is difficult to see how any amount of regulation or planning could put the genie of finance back into the bottle at this point.

In short, the ideas are of interest, but the presentation leaves something to be desired.

The book is interesting to me because it informs recent developments in the gaming industry. Massive over-leveraging and what now seems a foolish optimism in the real estate market aren’t unique to the Las Vegas Strip–these trends have shaped American (even global) business for the past decade. Is there anyway that this mess could have been avoided? With shareholders demanding value, and executives having few options to create value but mergers and expansion, probably not–companies that didn’t try to grow quickly were, for the most part, acquired by others or threatened with shareholder revolt. Nor is there much to suggest that the future will be any different, though as I’ve suggested before managers could learn a thing or two from the players at their tables: they need to understand that, no matter how hot the dice have been, it’s just as possible to seven out five times in a row, so it’s best to take some chips off the table during a lucky run. Letting it ride–whether on the pass line or on condo-hotels–can be rewarding, but it’s a risk that often ends badly.

Another interesting point was Davis’s discussion of OEMs, or “Original Equipment Manufacturers.” With the market demanding companies that have few assets and high profits, many manufacturers have outsourced the actual production of the goods that they sell, allowing a second party to own the factory and build the equipment to their specs before slapping their label on it. The original manufacturer, then, is primarily concerned with advertising and brand management, not the headaches of production. This sounds a great deal like what MGM Mirage is doing with its brand name overseas. You can see that the company is positioning itself not as a hotel builder, but as a hotel brander–which is smart, given the vicissitudes of the real estate market and construction. Seeing what the company is doing against the context of what other companies are doing, you can see the logic in the process, though it remains to be seen whether a company that has no physical control over the products bearing its name will, in the long run, have a recognizable brand.