As those of you who follow my Twitter stream know, I spent a good chunk of yesterday down at the Rio, cruising around Day 1A of the World Series of Poker.

Oskar Garcia has the action cover here. I thought I’d share a few of my thoughts.

The story I was looking for at the WSOP was to profile the first person to bust out of the main event for next week’s Green Felt Journal in Vegas Seven. Luckily I’ve got a great deal of latitude with my subject material there. I thought that it would be interesting to share the experience of someone who came to Las Vegas, plunked down $10,000, and left the game quickly.

I’ve been seriously planning this column for over a month, and it never occurred to me that there might be a logistical problem or two. After all, it’s not like I was planning to interview the winner, who’s readily accessible to the media and usually in a mood to talk. Instead, I had to patrol somewhere around 150 tables, look for an all-in and a call, and quickly grab the unlucky one.

It sounds a lot easier than it is.

After about 20 minutes, I settled into one of the quads of the Amazon ballroom, loosely shadowing a poker supervisor who promised to let me know if he heard anything from one of the other quads.

By 20 minutes, my mouth was dry, and I was noticing how hot it was, with the lights and the excitement. It felt about 10 degrees cooler by the rail than it did at the tables.

I got a heads-up that a player was down to 200 dollars, and sped over. Turns out it was Greg Raymer, who kicked off the action with the official “Shuffle up and deal.” He bounced, and didn’t look anywhere close to being eliminated by the time I got to him.

32 minutes in, I felt like an undertaker waiting for a customer, circling the tables, looking for short stacks, or any inkling that someone might go all-in. This is around the time I started collecting a few statistics. In my section, about 10% of the players wore sunglasses; 25% wore baseball caps, mostly with the bill forward; 3.5% were women.

(someone busts out in another quad 35 minutes in, but I’m not there, and he wasn’t talking, anyway)

41 minutes in, I swear that the players know what I’m here for, and I can’t even look them in the eye. It’s like I’m a poker angel of death or something.

53 minutes in, I’m convinced that this is the worst story idea I’ve ever had. It’s the same feeling that I usually get around mile 22 of a marathon.

62 minutes in, I start to consider that I’ve crossed over into the Twilight Zone. No one will ever bust out, and I’ll spend eternity circling the tables, waiting for an interview that never comes, while a thousand players continue to push chips around the table without ever losing or winning.

68 minutes in, someone goes all in, but made the right call: he doubles up, and lives on.

70 minutes in, this is the idea from hell. Why did I ever think it was a good idea to write a column about failure?

71 minutes in, another all-in call, and this one wasn’t the right call. The player, who looks vaguely like Oliver Stone, busts out. I ask him if he wants to talk, and he says no before scooting out the door. Maybe he’s staying ahead of the snipers on the grassy knoll.

74 minutes in, another all-in call, right in front of me, and it’s another unhappy outcome. This time, the player is shell-shocked, but personable, and we find a few chairs in the media section to do a quick interview.

Turns out his name is Peter Turmezey, he hails from Budapest, Hungary, and he’s a professional poker player. Nice guy, too.

You’ll be able to read all about it in next week’s Vegas Seven.

It’s Thursday, and if you like my writing for Vegas Seven, it’s a lucky Thursday, since I’ve got my usual Green Felt Journal column and a more in-depth Latest Word.

The Latest Word piece takes a philosophical and even theological look at poker, winning, and losing:

In other words, poker isn’t always fair. Of course, it’s all about perspective. The best hand at the showdown wins the pot. It doesn’t matter that it wasn’t the best hand pre-flop, or that someone with a better hand folded on the turn, or that your opponent made a miracle draw to fill his inside straight and won a pot he had no business playing for. That, as they say, is the luck of the draw. And it has absolutely nothing to do with whether you’re a better friend, lover or parent than your opponent, or whether you need the money to save a life and he’s just going to blow it at the craps table. The cards have no conscience.

The Winning Hand is Not to the Swift …

For the Green Felt Journal, I took a look at the business and organization behind the World Series of Poker. It’s considerable.

If you’ve watched the World Series of Poker on ESPN, you might think that it’s a pretty laid-back event. Sure, there’s plenty of tension at the final table, but it’s basically just a bunch of guys and gals getting together to play cards, right?

Actually, the two-month tournament at the Rio is all about the cards, but it is orders of magnitude more complicated than your Tuesday night home game. With 57 bracelet events, daily satellites and nearly 80 cash games going on over the course of the tournament, the World Series of Poker is more than an event.

“It’s an organization, not an event,’ says Jack Effel, vice president of international poker operations and director of the World Series of Poker for Harrah’s Entertainment. “It’s got to be that way to be successful.”

Inside the WSOP

Two very interesting columns to write. Enjoy.

Lawyers for Terrance Watanabe how say that the high roller’s losses in 2007 were nearly 69 percent higher than they claimed in their original lawsuit. From the LVRJ:

Lawyers for Nebraska philanthropist Terrance Watanabe say in a new lawsuit that his losses at Harrah’s Entertainment casinos were much larger than they previously reported, making him what some experts call the biggest high roller of all time in Nevada.

…

"No one has ever lost this much money in a casino before," said Bill Thompson, a UNLV public administration professor who specializes in the gaming industry. "It’s just a fantastic amount. He’s the biggest whale of all time."

via Losses may make bettor state’s biggest whale – Business – ReviewJournal.com.

I’m not understanding how the amount of his losses could go up by nearly 69 percent six months after the original complaint was filed. Did he really have no idea of how much money he lost during the year? Because that’s a pretty significant margin of error.

That aside, I take issue with Professor Thompson’s claim that Watanabe is “the biggest whale of all time.” The reporter talked to me for this story, and asked me if the $189 million loss made him the biggest gambler of all time (or words to that effect). My response? Since I don’t have a stack of win/loss statements for every player, I can’t say that he is or isn’t, even though that is a lot of money, and I would guess that he would be one of the biggest players of all time. There’s a difference between “the biggest loss that anyone’s written about in the newspaper” and “the biggest loss of all time,” because there has always been a certain discretion around high-end play, and individual wins and losses are not part of the public record, unless they go to court, as in cases like this. As I told him, the only people who could tell you that definitively are working for the casinos, and I can imagine that they aren’t feeling particularly talkative on this subject.

So I’d like to know what Professor Thompson bases his “fact” on. Does he have a master list somewhere of trip and lifetime win/loss records for every high roller at every casino in the state? If he can state so confidently that Watanabe is number one on the list, it shouldn’t be too hard for him to tell us who is number two, and what his/her lifetime and average trip losses are. Who had the previous record for the biggest annual loss in a casino. When did the first player lose more than $10 million in a single year? If you can say without a doubt that no one’s ever lost money like this before, you should be able to answer these questions easily.

Ordinarily I wouldn’t critique someone else’s statements to the media, but the more I thought about this the more I felt I had to. These days, statements like that in a newspaper are automatically assumed to be “true,” particularly on the web, and especially by Wikipedia editors, and it becomes an established “fact.” But unless Thompson has access to a secret cache of data that he’s never used in any publication, there’s no real source for his statement–it’s just an opinion, no matter how sure of himself he sounds.

Harrah’s is being sued for making workers show up early without overtime pay. From the LV Sun:

A federal lawsuit filed Tuesday is the latest in a series of class-action pay claims filed by Nevada workers.This week’s case is against Harrah’s Entertainment. The suit alleges Harrah’s requires workers to arrive 10 to 15 minutes before their shifts start but doesn’t pay them for the extra time.

“Ten minutes before each shift may not sound like much” but multiplied by thousands of workers and their daily shifts, the unpaid wages could add up to tens of millions of dollars, says Reno labor lawyer Mark Thierman, who filed the suit on behalf of Harrah's Las Vegas dealer Kimberley Daprizio.

Pre-shift meetings, which include pep talks by managers and reminders about job standards and expectations, are common practice in the casino business and other customer service industries.

via Pay for pre-shift meetings spurs suit against Harrah’s – Wednesday, April 28, 2010 | 2 a.m. – Las Vegas Sun.

I used to grumble about this back when I worked security, and I think that my experience there gives me some perspective.

First of all, you’re going to have to be in the building before your official start time to get changed. For a shift starting at 3, I’d usually show up at 2:40, have time to change into my uniform (a striking electric blue blazer, white shirt, and black pants), grab a quick soft drink at the employee cafeteria, and head down to the pre-shift meeting, which we called roll call. At roll call, we learned what was going on in the casino that night, which was helpful, because if guests are asking you where an event is, it’s nice to know it beforehand and not have to call around. Also, the shift manager could run down the schedule and confirm that everyone scheduled was in fact in the building and ready to take their post.

Roll call would usually start at about 10 minutes of, be done by 5 minutes of, giving us time to get down to our posts and relieve day shift promptly by 3. Officers on escorts could radio in their positions and be relieved directly by officers dispatched from roll call. The system wasn’t perfect, but it worked well. I don’t remember ever being asked to sing or dance. I was willing to accept the cost of reporting to work 10 minutes early as the price of being relieved on time at the end of my shift; if everyone showed up at the exact start of their shift and then found their assignments and went out to them, the shift they were relieving would be leaving late every day.

I said the system wasn’t perfect, but we had a better deal than the supervisors, who had to get in at least a half an hour early and, since they were salaried, didn’t get overtime. But they did usually get an early out on their Friday, meaning that things more or less worked out.

So if you require hourly workers to clock in early each shift, why not compensate them with an early out (paid) on their Friday? By the end of the shift, most departments have personnel to spare since their breakers are done giving breaks. It costs the company marginally in increased wages (fewer spaces for unpaid early outs), but probably would generate good will in employees who feel that their time is valued.

It’s probably not a perfect system, but it’s better for both sides than rolling the dice in court.

I would also keep pre-shifts to a minimum–maybe five minutes at the most. Let them know what’s happening in the building, any big events, any HR stuff they need to do, give out commendations, and send them on their way. If you want employees to sing and dance, sponsor a quarterly talent show. I honestly can’t imagine any chain of events in which doing a song and dance before starting work would make me a more effective employee, and I don’t see how it would help other people either, unless their job was singing and dancing.

Remember my thoughts about tiered pricing a while ago? In it, I theorized that there would be a convergence between resort fees and “cost certainty” restaurant pricing schemes, like prix fixe at the high(ish) end and buffet passes at the low end. Harrah’s is rolling out a stay-and-buffet deal that I think qualifies. Check out the promo:

Take advantage of great room packages featuring the best buffet offer in years! Stay at least three nights at the Vegas resort of your choice, and enjoy two all-day, unlimited-access buffet passes to any of seven world-class buffets.

via City Wide Buffet of Buffets Lander.

There’s a pretty informative comment thread on AccessVegas about my original proposal. My favorite comment? “This will never work, it is too logical, reasonable, and honest to be accepted by the industry.”

Although I think that if something is profitable, it will be accepted, no matter how logical or illogical it is.

This buffet pass/room combo seems like a great casino marketing idea, since if you’ve convinced the person to stay at your hotel and give them a pass to eat at your buffets throughout the Strip, it follows that they’ll be spending most of their time in your casinos, and if they want to gamble, they’ll gamble there. Of course, you’ve got to deliver gambling options that are at least equal to everyone else’s for this to work with players who know what they are looking for (i.e., 3/2 blackjack and full-pay video poker).

It will be interesting to see how this pans out. As I suggested in my original article, these cross-property passes are a logical way for the big companies to leverage their presence in the market.

A week ago today, Planet Hollywood officially became a Total Rewards property. In my latest Vegas Seven column, I talk a little about the behind-the-scenes work that made this possible:P

If you didn’t notice anything unusual at Planet Hollywood recently, don’t feel bad: You weren’t supposed to. But behind the scenes, and occasionally in front of them, a massive operation transformed the property into the eighth Las Vegas casino under Harrah’s Entertainment’s Total Rewards umbrella.

Since its relaunch in 2007, Planet Hollywood has offered players its A-list club, which, like other casino loyalty programs, lets them earn points redeemable for meals, lodging and entertainment with each dollar wagered.

Harrah’s Total Rewards does the same thing on a national scale, letting players bank rewards credits from 35 properties across the United States and Canada. Even before the Planet Hollywood acquisition, Harrah’s has been planning its conversion to the Total Rewards system.

Conversion required more than installing an update patch on a few computers. Technicians had to remove all existing systems, including the core casino management system (which tracks and records play), the lodging management system (which lets the hotel take room reservations) and back-of-the-house systems that track everything from employee hours to ordering and receiving.

via Total Rewards program expands with inclusion of Planet Hollywood | Vegas Seven.

I was able to walk the floor while they were doing the work and talk to many of the people involved in it, and two things struck me: the sheer amount of work involved and the minimal impact it had on customers.

It’s not exactly the Manhattan Project as far as major engineering efforts go, but it’s still pretty impressive.

That’s the trajectory at Bill’s Lake Tahoe. From the LVRJ:

Harrah’s sells Bill’s Lake Tahoe casino site

It’s hard to say what Bill Harrah would have thought about this. On one hand, he was by no means shy around women–he was married seven times. On the other hand, he wanted Harrah’s Lake Tahoe to be, above all, a classy facility, and insisted on things like two bathrooms in a guest room. I think they still have the original commode-view TVs installed, but that’s beside the point. Somehow having a strip club out front doesn’t scream “class” to me, but times have changed since Bill was running the place.

From an economic point of view, that’s 310 slot machines that Lake Tahoe and the state won’t be getting back, and a further sign of the area’s decline as a gaming spot. It’s still a very attractive destination, though it’s hard to really reconcile a strip club with Tahoe as I see it.

It’s Thursday, which means another edition of the Green Felt Journal in Vegas Seven magazine. This week, as whether the “little guy” still has a chance on the Strip:P

Last year at around this time, “deconsolidation” was the buzzword along the Strip. MGM Mirage had just announced its sale of Treasure Island to Phil Ruffin, formerly of the New Frontier. Investment bankers and industry analysts announced that, just as the previous 10 years had seen Strip casinos swept into progressively larger corporate empires, the next era would see them splinter into smaller fiefdoms fortified by hedge-fund and private equity investment.A year later, it’s now clear that the pundits couldn’t have been more wrong. Rumors of an MGM Mirage fire sale proved immature. Harrah’s Entertainment has actually added a casino to its portfolio, having taken over the management of Planet Hollywood after acquiring a substantial stake via debt purchases.

via Does the little guy still have a shot on the Strip? | Vegas Seven.

As I promised before, this column also has my first overt Star Trek reference.

Also, only in Vegas would a multi-million dollar company with thousands of employees be considered “the little guy.”

Some other highlights from the issue:
- Nicole Lucht talks to Tony Marnell about the M Resort’s first year
–Mericia Gonzalez looks into the future of Vegas nightclubs
–Jeff Haney, formerly of the Sun, writes about HORSE at Aria. He’s a great poker writer, and hopefully this is the first of a regular series of column.
–and if you didn’t catch it last week, check out Jessica Prois’s talk about statistics with author Jeffery Rosenthal (Struck by Lightning: The Curious World of Probabilities)

Tons of other great reading in there–these are just the ones that have the biggest gambling/Strip connection.

Harrah’s Entertainment plans to go public again, but not for a few years. This isn’t really a surprise, but the timeline is noteworthy, as are the “developments” that the company awaits. From Reuters:

Harrah's Entertainment, which was taken private by TPG and Apollo Management in January 2008, could launch an initial public offering five to seven years from that buyout, Chief Executive Gary Loveman said on Monday.Speaking at the Reuters Travel and Leisure Summit in New York, Loveman said the 2013 to 2015 timeline is speculation on his part, adding there have been no talks with TPG and Apollo on an exit timeline yet.The two private equity firms bought the hotel/casino company for $31 billion in 2008.Loveman said Harrah's would gradually work its way back to a more public position, as opposed to doing it in “one fell swoop.” He added that the company would wait for a few developments, including an economic recovery and the legalization of online poker, before going public.

via Harrah’s could do IPO in 2013-2015, says CEO | Reuters.

This is generally the plan with private equity investments–they take a company private, spin off under-performing assets or otherwise increase the company’s profitability (or, at the very least, the perception thereof) and then roll out another IPO.

It’s interesting that the IPO is apparently contingent on the legalization of online poker, which speaks volumes to how much Harrah’s believes online poker will help the company. Whether that’s an accurate assessment of the eventual market remains to be seen. It’s also interesting that while a general economic recovery is predicted, there’s nothing–at least at this distance–about the recovery of the Las Vegas market and the development of the under-used Strip and adjacent properties.

In the midst of all the talk about Vdara, I thought I’d mention my latest article in the LVBP:

While doing some research, I recently happened across an article in the July 1997 issue of Casino Executive magazine in which then-Harrah's Entertainment CEO Phil Satre sounds downright oracular.

“If you're the last person to build that last $1 billion project in Las Vegas,” he told the magazine, “you might be wishing you hadn't spent your money that way.”

Today, it seems obvious that he spoke correctly. Many people still come to Las Vegas, but their numbers don't seem as boundless. Those who bet on a constantly expanding market for what Las Vegas offers look to be guilty of irrational exuberance at best, while most of the rest of us are wondering why so few people were betting against that kind of growth.

via Las Vegas Business Press :: David G. Schwartz : The last billion-dollar casino marks end of an era in Las Vegas.

It’s an elaboration of an idea I started in a post here two weeks ago. Interesting timing in regards to two events this week: the opening of City Center and Harrah’s looking to buy Planet Hollywood.

As for my thoughts on the latter, I don’t think that when you look at Harrah’s Entertainment you can say that one of the company’s problems is not having enough hotel rooms on the Strip. On that level, this move just doesn’t make a lot of sense to me. Do having another 2,500 rooms to fill justify taking on additional debt to buy a traditionally troubled property? Since Planet Hollywood is clearly not a “turnkey opportunity” with a guaranteed cash flow, I don’t understand why the company would use this money to buy another Strip property as opposed to expanding a regional operation somewhere else and diversifying their cash flow.

Also, this is a very 1990s type of expansion, in that the company is spending a great deal of money to buy an asset that may produce revenue. Contrast this deal with MGM Mirage’s latest moves, signing development agreements and management contracts overseas that don’t require it to buy any assets but will allow for cash flow. Like I said in my review of Managed by the Markets, this is what companies in other sectors are doing and, within the constraints of today’s markets, seems to be a better strategy for delivering value to shareholders (or bondholders).

And it’s amazing that twelve years ago Harrah’s CEO was so hesitant to buy or build a second property on the Strip, while now the company is charging ahead to buy its tenth casino there. It’s a totally different company.

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.

Today’s Sun has an interesting piece about how different corporate cultures work on the Strip:

As it turns out, the industry’s giants, MGM Mirage and Harrah’s Entertainment, have evolved into different animals at the top of their respective food chains.

Customers will be familiar with some of these differences.

While most MGM Mirage resorts are located on the Strip, Harrah’s has a national chain of mid-market casinos linked by the Total Rewards loyalty card.

A few months ago, MGM Mirage executives told investors they haven’t fully capitalized on technology-based marketing and the company’s loyalty card program. By contrast, Harrah’s in 2000 launched Total Rewards and has continued to improve its technological marvel.

Some differences go undetected by the majority of customers.

MGM Mirage executives are proud that their Strip resorts compete fiercely with one another for business. The fight for customers is especially stiff among similarly situated properties, such as, say, the neighboring Mirage and Treasure Island. Once an MGM customer is ensconced at a company casino, management also does its best to keep its guest’s dollars at the property.

Encouraging in-house competition keeps management on its toes and boosts results, executives say.

Yet Harrah’s says it has a different approach. Most of the company’s profit comes from customers who are members of the Total Rewards program, which allows gamblers to choose where they redeem their rewards card credits. A Chicago area gambler, for example, could redeem her credits by dining at the Flamingo and staying at Caesars Palace.

MGM Mirage, Harrah’s take separate paths – Las Vegas Sun.

Hmmm. The first thing I thought was, “If someone is staying at Caesars, why on earth would they want to eat at the Flamingo?” But I guess it’s just a hypothetical, like “If a Wynn guest wants to skip the Country Club Grill, take a cab and hit the Sahara buffet after playing 18 holes.”

But seriously, there is a fundamental issue here that I will leave to the economists to dissect: central planning versus market economics. Harrah’s is using a classic argument for central planning–experts will be able to better coordinate resources and get better results. Of course, we know how well command economies worked in the Soviet bloc.

MGM Mirage, on the other hand, seems to encouraging a market approach among its casinos: each of them competes for players by offering the best possible package to them. This is the approach that gave us the Las Vegas Strip: before you had such a small ownership pool, you just had individual casinos trying to out-do each other.

While the command system may be more “rational,” in the long run it’s not as efficient, because individual property managers don’t have any incentive to exceed expectations. Why should managers at the Flamingo ask for millions of dollars for upgrades, when they know Caesars will get all the high-end customers. Those on the bottom have absolutely no reason to try to spruce up their places, since they’ll be getting everyone else’s crumbs no matter what they do. By the same token, those at the top don’t have to face internal competition–if players are committed to spending their comps on a Vegas vacation, they don’t have much of a choice about where to go.

I knew that, eventually, reading Hayek would give me some kind of insight into casinos. Go ahead and read “The Use of Knowledge in Society” if you want to see what inspired me.

In a story that has only one obvious typo–nice work, editors!–we learn that, if you give people something besides warmed-over singers and comics in your showrooms, you can actually attract new people to Atlantic City casinos. Outstanding! From the AC Press:

Casino shows used to feature aging crooners and old comics like Henny Youngman, who peddled ancient jokes like, “Take my wife. Please.”

More recently, national celebrities – such as Dr. Oz, Giada DeLaurentis and Guy Fieri – are coming to town.

“What we’re trying to do in Atlantic City is really differentiate ourselves,” said Jennifer Weissman, regional vice president of marketing for Harrah’s Entertainment, especially since Pennsylvania slot parlors started pulling Philadelphia customers.

So casinos now feature lifestyle celebrities – people who will coach you about everything from the food you eat to the clothes you wear and the relationship you’re in.

“It gives greater, more diverse reasons to visit Atlantic City. We want to change the mind-set of someone who has never come to Atlantic City,” Weissman said.

And it seems to be working.

Customers filled showrooms for a “Food and Wine Spectacular” at the four Harrah’s Entertainment Inc. casinos this weekend.

Atlantic City casinos feature more “lifestyle celebrities”

It’s nice that someone’s on the ball over there. If you’re wondering about the typo, it’s not that big a deal–they just got the one of the most recognizable brand names in the world wrong in a particularly embarrassing way. No, they didn’t call it “Caesar’s Atlantic City,” which is an interesting idea, but actually is grammatically correct, though it violates the standard apostrophe-less usage. They called it “Caesers.” Ugg,

Also, I’m a little surprised that the Press’s editors assume that all of their readers know who “Dr. Oz” is and why he’s a celebrity. Personally, I had no idea who he was, but a quick google revealed that he’s a cardiologist who’s been on Oprah and spreads the revolutionary message that people should be “take charge of their health” or something like that. If he can get people to push away from the buffet without hitting max bet on the prime rib, maybe he really is America’s Greatest Doctor.

There’s a little bit of irony in a casino hosting an event where the speaker tells you how to get healthy because when you look at it critically, casinos can be very unhealthful places: rich food, free-flowing alcohol, second-hand smoke (oops! not in Atlantic City anymore), and lots of sedentary recreation. I guess you could argue that the adrenaline rush of gambling speeds your pulse and is somehow exercise, but you could say the same thing about getting mugged.

I know the above paragraph is laden with casino stereotypes–I may get an angry email or two reminding me about all of the “healthy alternatives” in casino restaurants and the impressive exercise facilities available. But I think that in this case, these stereotypes are rooted in reality. As always, though, I’m happy to hear evidence to the contrary.

Christina Binkley. Winner Takes All: Steve Wynn, Kirk Kerkorian, Gary Loveman, and the Race to Own Las Vegas. New York: Hyperion, 2008. 304 pages, hardcover.

Over the last decade, the Las Vegas Strip has become increasingly consolidated. Once, there were a host of casino owners: Aztar, Bally Gaming, Boyd Gaming, Circus Circus Enterprises, Grand Casinos (if you count Grand’s stake in the Strat) Hilton Hotels, Mirage Resorts, MGM Grand, Inc, Primadonna, the folks who owned the Frontier, Riviera, Sahara, Imperial Palace, and a few other “non-aligned” casinos. Today, the list is smaller: MGM Mirage, Harrah’s Entertainment, Wynn Resorts, and Las Vegas Sands, Inc. dominate the market, though a number of “non-aligned” casinos remain, and Boyd is set to return to the Strip soon with the mega-development Echelon Place.

In Winner Takes All, Binkley examines a few of the major players in the Strip consolidation sweepstakes. She parlays her access (she’s the former lead Vegas reporter for the Wall Street Journal) into a truly insightful book. Unless you’ve spent the past few years sitting in the executive offices of MGM Mirage, Wynn, and Harrah’s, you’ll definitely learn something from reading this. Binkley does a solid job of pulling back the curtain on the motivations and rivalries that unite and divide the movers and shakers on the Strip.

Binkley goes beyond petty corporate politics, though, and discusses the underlying business strategies that differentiate Wynn, Kerkorian (and his executives), and Loveman. Wynn believes in luxury above all; Kerkorian thinks that size matters (he’s opened the world’s biggest casino hotel three times) and is a consummate deal-maker’ and Loveman brings scientific management to the wild west of the casino floor. If you are an aspiring entrepreneur, you might learn a few lessons from each of these three approaches. If you’re just a person who likes to come to Vegas, you’ll get an insider’s peek into some of your favorite resorts.

As a historian, I’ve got to grouse at a few historical inaccuracies. The most egregious is on page 16, where Binkley contends that the original MGM Grand had “shoddily built rooms” and that the tragic 1980 conflagration was the result of a “grease fire,” making it sound like this was a roadside greasy spoon that went up in smoke after the deep-fryer was left unattended. Actually, it was an electrical fire that sparked the blaze, and though construction faults did exacerbate the fire (smoke was able to get into the guest tower, and sprinklers were not installed in the deli or casino), the casino was, when it opened, the biggest and most expensive building in the history of Las Vegas. Though we now know that its builders cut corners, at the time few disputed that it was a “grand” casino. There are a few other minor issues I have, but I won’t go into them here. Suffice it to say that Binkley is an outstanding source for the material that she personally reported on, but might have relied on lesser sources for some of the background.

Although (or maybe because) the book is about Las Vegas, 1999-2007, it is dominated by Steve Wynn. Even when he’s not there, he’s there, haunting the thoughts of the author and the principals. In simple terms, MGM Grand, Inc. wants to be like Wynn, so the company buys Mirage Resorts. Harrah’s realizes it can’t compete with Wynn, so it relies on “propeller heads” (management wonks) rather than exploding volcanoes to better its bottom line. Las Vegas, it seems, is divided into wanna-be Wynns and anti-Wynns, but there is no one who is unaffected by Wynn.

This is, of course, unfair to the men and women who’ve built up Harrah’s, MGM, and even Wynn, to say nothing of the crowd at Las Vegas Sands. There are a host of principals in this book who deserve to stand on their own: Terry Lanni, Jim Murren, Bobby Baldwin, and Glenn Schaeffer are not “title characters,” but each has contributed significantly to the creation of modern Vegas, so it’s not entirely accurate to dismiss them as Wynn clones or antitheses. But Wynn’s all-pervading presence in the book is unavoidable.

Which leads to the big question: how is Wynn treated? Like the people she writes about, Binkley is hardly agnostic when it comes to Wynn. I’m not giving much away here: the prologue features Wynn, apoplectic with rage, screaming at Binkley that the MGM Grand buyout of Mirage was a friendly deal. So it’s obvious that Binkley isn’t going to be disinterested. But she veers into caricature at times (“His capped teeth gleam white, white, white.”), which paradoxically makes Wynn even more of a larger-than-life character. Wynn-haters will glory in the chronicles of corporate extravagance; Wynn-lovers will say, “So he likes plastic surgery–he still knows how to build the best casinos in the world.”

Winner Takes All is a valuable look inside the boardrooms of Las Vegas during one of its most explosive eras. I recommend it to those interested in a behind-the-scenes look at the titans who have rebuilt the Las Vegas Strip.

An interview I recorded a few weeks back is airing on NPR’s Justice Talking this week:

Casino gambling has undergone a boom in recent years as cash-strapped states and Native American tribes have opened casinos and entertainment complexes across the nation. In this edition of Justice Talking, we’ll take a look at who is profiting from these developments. Will casino gambling raise the state revenues that have been promised? How will gambling affect local neighborhoods and gamblers? Tune in this week as we look at whether casinos are a win or loss for communities.
Justice Talking: Casino Gambling

If you click through and listen to the show, you’ll hear me happily rattling on about gambling and history, an update from an Illinois state senator, and a debate between Rev. Tom Grey, who hates casino, and Harrah’s Entertainment’s Jan Jones, who presumably doesn’t.

I spend most of my time researching and interpreting the past. I think this has some relevance for us today, and it interesting on its own merits as well. But I usually get asked to prognosticate about the future: where will Las Vegas be in fifty years, which new casino will be most successful, etc, etc, etc. I usually beg off, because it’s a lose-lose proposition: if you successfully predict the future, people will say the answer is patently obvious. For example, I boldly predicted that I would not win the 2005 New Las Vegas Marathon, and I was correct. It would be easy to say that was an easy prediction to make: after all, I run about half as fast as the average marathon winner, and several elite runners were entered in the race, along with hundreds of recreational runners who are also way faster than me. Similarly, I’ve said that if current trends continue, Las Vegas will continue to grow, but that any one of a number of events, some of which we probably can’t foresee, could be harmful to the city and the gaming industry. Yes, that’s a vague, wishy-washy thing to say, but it’s about all I can say about the future with confidence because, unlike history, we don’t know what happened. But if I tried to dress this up as a “prediction,” people would rightfully say it was a waste of time.

The other possibility is that someone confidently predicts something, and the person is completely wrong. I heard that I guy said that air travel would never be possible, a few years after the Wright Brothers flew. We’ve all heard examples of this. Arthur C. Clarke even came up with a law describing the phenomenon.

Well, all that is just a long-winded way for me to say that I just might have seen the future. You might laugh, but if anyone thought televised poker games would be big entertainment back in the 1990s, you would have said they were crazy. I got this tidbit from the Las Vegas Hilton’s Hot Sheet:

The 2005 World Domino Tournament, which was held at the Las Vegas Hilton November 18-20, 2005, will begin airing on ESPN Deportes on March 21, 2006 at 10 p.m. ET. The telecast was produced in a reality show format and will include seven one- hour shows. The 2005 World Domino Tournament featured more than 40 teams from the United States, Latin America, and the Caribbean competing in a two-day tournament that featured the most skilled professional players. The 2005 World Domino Tournament is also scheduled to air in English on ESPN II in June.

You never know–this could be the next WSOP.

Speaking of the poker tournament, Harrah’s has a new World Series of Poker slot machine out:

No Bluff.
The World Series of Poker is now available as a video poker game. Try your hand at the World Series of Poker branded slot series.

See a Sneak Preview of the Game!

I didn’t sit through the whole Flash animation sequence, but it seems like every video poker game variant out there, but themed with the WSOP.

The Harrah’s eNewsletter is always a font of information, some of it quite useful. The latest one, for example, let us know that we can now register for the 2006 World Series of Poker, and suggests that by doing so our names will ring through the halls of history along with those of Alexander the Great, George Washington, Johnny Moss, and Hal Fowler.

Reserve Your Place in History.

Pre-register for the 2006 World Series of Poker.

Who will win the richest prize in Poker history? One of the legends of the game? Or you? The 2006 World Series of Poker features a wide range of games and buy-in amounts, wall to wall ESPN coverage, and every top poker player in the world. Follow this link to reserve your seat at the table.

Pre-register Today! Right here

The “terms and agreement” are interesting, to say the least:

1. The Player or third-party registrant understands that the Player’s ability to participate in the Tournament is conditioned upon compliance with the Tournament General Rules and that the above-described Player must appear in person to complete the registration process. The Rio reserves the right to refuse anyone entry into the Tournament in its sole and absolute discretion.
2. Any person or entity paying a registration fee for himself, herself or on behalf of another player warrants and affirms that he/she/it is not engaged in illegal activity and that no funds derived from such activity will be used to pay the registration fee.
3. Prior to entering and playing in the Tournament, each participant must execute a Player Release Form. Failure to do so may, at the option of Harrah’s subject the player to immediate disqualification at any point in the Tournament.
4. The deposit is non-refundable per Section 4, of the WSOP General Rules or as determined by the Rio, in its sole and absolute discretion.

Item #2 is the one that I find interesting. Harrah’s spokespeople have been mum on the issue of online tournaments sending players, saying basically that they don’t care to know anything about it. This sentence seems to me to be a way to shield the company from charges that it is encouraging online poker play, which, depending on who you ask, might be illegal.

The World Series of Poker is getting bigger and bigger. With so much attention drawn to the tournament, you need someone to lay down the law. Hence, Harrah’s Entertainment has appointed a commissioner of the WSOP. From Yahoo:

Harrah’s Entertainment, Inc. (NYSE: HET – News) today announced that Jeffrey Pollack, vice president of sports and entertainment marketing for subsidiary Harrah’s Operating Company, Inc., is taking on the added role of commissioner of the World Series of Poker, subject to the receipt of any necessary regulatory approvals.

“The World Series of Poker is a unique event in the gaming and sports industries and, as such, requires special oversight and management,” said Ginny Shanks, Harrah’s senior vice president of brand management. “Designating Jeffrey as commissioner will further empower him to develop a strong sense of community among our players, tournament organizers, event staff, media partners, sponsors, licensees, and corporate management team.”

Pollack is the first commissioner in the tournament’s 36-year history.

Jeffrey Pollack Named Commissioner of World Series of Poker

It seems like a rather vague set of job responsibilities, but they could have a lot of fun with this.

I’m thinking that this should go in a whole WWE (WWF for you old-school die-hards) direction with this. Have him come out to main table in a blaze of pyro and announce, like Shawn Michaels, that there’s a new sheriff in town–wasn’t he commissioner for a while? Or it could be like Mick Foley–have him set up a makeshift office backstage and, during WSOP telecasts, spice up the poker-playing with comedic skits that introduce new players.

My whole reaction to the appointment of a commissioner probably says a lot about the influence of professional wrestling on pop culture. Anytime I see an “official contract signing,” I expect it to end with someone being laid out in the middle of the ring while the announcers mercilessly shill the pay-per-view. And, of course, anytime someone is given a birthday cake, the odds are that they will have it smashed in their face.

This whole commissioner thing could really work. But players should be on their guard if someone tries to give them a birthday cake.

With poker sets, poker video games, and every other conceivable sort of poker paraphernalia available at toys stores across the world, I thought that poker had gone as mainstream as it could. But I was wrong. Thanks to Harrah’s Entertainment, you can go “all in” to the exciting world of consumer debt with the official World Series of Poker Visa Card.

Here’s the email come-on:

Play Your Cards Right

You’ll have the best hand in the house when you carry the
World Series of Poker(R) Visa(R) Credit Card with
WorldPoints(R) rewards.

Use your NO ANNUAL FEE card for everyday purchases,
recurring bills, or major expenses, and watch your
WorldPoints grow even faster!

Plus, enjoy an introductory 0% Annual Percentage Rate(APR)+
for Balance Transfers and Cash Advance Checks for 15 billing
cycles.

Now that’s a great deal.
…
It’s the only card that earns you one point for every
purchase dollar you spend using your card and allows you to
redeem for:
- Exclusive World Series of Poker merchandise: poker chips,
poker table, and more
- Buy-in to World Series of Poker No Limit Texas Hold ‘em
World Championship or Circuit Events
- Flights on major U.S. airlines with no blackout dates
- Gift Certificates for shopping, dining, and more
- Quality brand name merchandise
- Unlimited cash back

Redemption Option Examples
2,500 points – Two decks of WSOP players cards in a
collectable tin case
5,000 points – $25 check for cash
10,000 points – World Series of Poker Pro 11.5 Gram Poker
Chip Caddy-200 chips
13,00 points – $100 gift card
25,000 points – Fly anywhere in the continental United
States
50,000 points – World Series of Poker $500 Buy-in
999,000 points – World Series of Poker $10,000 Buy-in

So if you spend only $999,000, you can get a “free” buy in for the World Series of Poker. What a bargain!

If you’re interested, check the ONLINE CREDIT CARD APPLICATION.

There was a time when professional gamblers were considered just above Las Vegas snowplow operators on the finance foodchain–no right-minded banker would lend them money. This reluctance even carried over to the gaming industry, where Nevada casinos found it difficult for many years to get start-up capital.

Now, you’re supposed to go into a store and buy things with a poker-chip emblazoned credit card. Times certainly have changed.

If the anti-gambling lobby gets a hold of this, it would be a PR disaster.

On the other hand, how about this for next year’s Cinderella WSOP story: a guy buys $999,000 worth of stuff, redeems his points for a tournament buy-in, then runs the table and wins millions.

Yes, I realize that someone with a credit limit of $999,000 wouldn’t need to win a poker tournament to pay off his debts, but it’s just about the only rags-to-riches story still out there.

It would be really great if storekeepers who accept charges on the WSOP Visa get mailed casino chips instead of a regular check. They then get the option of going to the nearest Harrah’s Entertainment casino and going double-or-nothing.

I never thought of this until now, but wouldn’t it be funny if, in keeping with the success of Spamalot, they tweaked Caesars Palace to be more like Life of Brian than Gladiator? That’s just a thought as I prepare to go to the grand opening of the Augustus Tower.
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