All roads lead to Vegas's hedonistic past

Caesars Entertainment has been a bit lost amid all the hype about the MGM/Mandalay merger. But that doesn't mean that big things aren't happening at Flamingo and Las Vegas Blvd. For one, CZR has just completed the sale of the Las Vegas Hilton to Colony Capital.

Caesars is also in the midst of recreating the magic at its flagship property, Caesars Palace on the Strip. From Businessweek:

"An icon like Caesars is not something I want to disappear," says Wallace R. Barr, the longtime casino executive who took over Caesars Entertainment last year. Created in 1998 when Hilton Hotels Corp. Spun off its casinos, Caesars Entertainment is a disparate, some might say disorganized, collection of 29 hotels and casinos operating under six different names on four continents. It earned $150 million last year on sales of $4.5 billion, a 7% decline in profits from the year before and way less than its main competitors.

Barr has kicked up the marketing with a campaign that plays on Vegas' recent rediscovery of its hedonistic past. So much for the Strip's attempt to go wholesome. Kiddie rides are out these days; topless revues are back. To get the right tone for the Caesars ads, Barr hired R&R Partners Inc., the local ad shop that has generated national attention with its "What happens here, stays here," campaign for the Las Vegas Convention & Visitors Authority. One magazine ad for Caesars features a tousled, unshaven man being fed an olive by a woman at 2:13 a.m. The copy reads: "Ah. Nothing starts the day like a good breakfast." For this, Barr makes no apologies. "That's what Las Vegas is all about," he says.

Barr is backing up his ads with serious capital investment. A new $95 million Colosseum that features long-running shows by Celine Dion and Elton John opened last year. In July, a $21 million "Roman Plaza," including an amphitheater, will be unveiled. And Barr is spending $289 million on a hotel tower and $76 million for additional meeting space that should be ready next year.

Still, Barr has a ways to go. Return on investment is low, just 6%, compared with an average of 13% for other properties on the Strip, according to UBS Warburg's Robin M. Farley. And some investors don't believe Caesars Entertainment knows quite what to do with all those other casinos and hotels. "I talked myself out of buying it," says San Francisco money manager Frank Husic. "It's still a hodgepodge of assets."

Barr is hoping to ease those worries by differentiating the casinos with sharply defined marketing and attractions. Caesars Palace is trying to lure high rollers with higher betting limits. Television ads for the Paris in Las Vegas sell it as a romantic getaway, while the Flamingo, across the street from Caesars, is party central. In December it opened a branch of singer Jimmy Buffett's Margaritaville restaurant chain, where -- several times a night -- a comely waitress is shot out of a volcano into a giant margarita glass.

The casinos in Las Vegas are just part of Barr's revitalization. He has signed a deal with Gordon Group Holdings to build a $145 million mall on a pier his company owns across from the Caesars in Atlantic City. And he is looking to manage new casinos in California and Minnesota, which would get the Caesars name. Maybe not everything that happens in Las Vegas has to stay there.

Rebuilding The Roman Empire

I say they should go all out with the Roman empire stuff: rename the Board of Directors the Senate, create a Praetorian Guard, and start having actual gladiator shows in the Colosseum. From there, it's a short step to creating an alternate captial in Atlantic City (isn't that where Barr spends most of his time, anyway?)that will eventually supplant the original, western center of the empire.
___________________________________

The OTHER mega merger

It's important enough to headline the local papers, but not quite a story nationally. Still, it's quite significant: Boyd Gaming has moved one step closer to acquiring Coast Casinos. From the LVRJ:

A $1.3 billion merger of Boyd Gaming Corp. and Coast Casinos was approved on a 4-0 vote Thursday by the Nevada Gaming Commission.

The combined company will consist of 19 gaming properties, have revenues of $2 billion a year and unite the Boyd and Gaughan families, whose lineage in Las Vegas gaming stretches back to the 1940s.

The new Boyd Gaming Corp. will be the fifth-largest gaming company in America. Coast Casinos will be a wholly owned subsidiary of Boyd Gaming and retain its brand name. Coast shareholders will be given $495 million in cash and $325 million in new Boyd shares. Boyd will assume $460 million in Coast debt.

If New Jersey gaming authorities approve the plan next week, the merger will go into effect July 1. Approval already has been given by gaming regulators in four other states where the companies have casinos.

"These two guys represent the American dream," Commissioner Art Marshall said after an hour-long hearing.

Commissioner Augie Gurrola added: "It is truly a momentous occasion. It is one of those marriages made in heaven."

In a special presentation, Boyd Chairman William Boyd and Coast Chairman Michael Gaughan alternated in telling the history of their families in Nevada gaming.

They mentioned their fathers, Jackie Gaughan and Sam Boyd, worked together as co-owners of the Union Plaza when it opened in 1971. Boyd noted the Union Plaza was the first casino in Nevada to have all-female blackjack dealers.

"I think the people in Las Vegas can expect about the same," Michael Gaughan said after the hearing. "I think they are happy with us now."

William Boyd added: "Michael will continue to operate Coast Resorts as he has done so well in the past. We are excited we received our approval today and excited about the future."

After his appearance before the Gaming Control Board two weeks ago, Boyd said his company was interested in getting a larger foothold in the locals market in Las Vegas. With the merger, the combined company will have 12 hotel-casinos in Clark County and employ more than 15,000 workers.

NEVADA GAMING COMMISSION: Panel backs Boyd-Coast deal

Before the Union Plaza hired all-female blackjack dealers, did other casinos hire partly-female dealers? That seems to be the intimation. Maybe that explains what happened on The Casino last Monday. If Eats, Shoots & Leaves: The Zero Tolerance Approach to Punctuation didn't make the importance of punctuation clear enough, that thought certainly does.

Seriously, this is a huge deal that unites two of the most storied families in Las Vegas gaming history. I can't see New Jersey's regulators objecting to the merger.
______________________________________
posted by Dave at 8:41 AM

Looking ahead

The big question I had after news of the MGM/Mandalay merger was what the impact would be on future expansion, particularly in my hometown, Atlantic City, NJ. Well, the Star-Ledger has some answers:

After years of on-again, off-again plans and will-they-or-won't-they speculation, MGM Mirage is once again planning to build a casino next to Borgata, the $1.1 billion resort that has reshaped Atlantic City.

The ink is barely dry on MGM Mirage's $7.9 billion agreement to buy Mandalay Resort Group, creating the biggest casino company in the world and the largest operator on the Las Vegas Strip. But MGM Chairman Terry Lanni said yesterday the company is still looking to expand in A.C., as well as Nevada, Britain and Singapore.

In Atlantic City, MGM co-owns the year-old Borgata with Boyd Gaming, and owns another 75 acres in the city's Marina District, a property it calls "Renaissance Pointe." It is the largest plot of developable land in the city.

Lanni said MGM and Boyd will meet in early July to finalize plans for an expansion of Borgata, which opened last July. Once the company determines how much land is needed, MGM will decide whether to build the second casino on its own or find another joint venture partner, he said.

"We're going to do exactly what we had planned to do regardless of (the Mandalay) transaction," Lanni said in a conference call with investors.

Although Lanni said MGM will proceed "in phases," a source familiar with the Atlantic City strategy said the company is further along in its plans. MGM already has decided to partner again with Boyd to build a casino next to Borgata, the source said....

Still, many in Atlantic City, used to broken promises, have become skeptical of MGM. The company inherited 120 acres in the Marina District when it bought Mirage Resorts in 2000. Previously, Mirage Chairman Steve Wynn had envisioned three casinos on the site and promised to remake Atlantic City the way he remade Las Vegas when he opened the first mega-resort in 1989.

At the time of the Mirage purchase, MGM had been assembling property next to Showboat and had plans for a $700 million casino. But it dropped those plans and said it would focus instead on building Borgata, followed by a $1.5 billion casino next to it. The plans for a second casino were tabled, however -- first, when it looked like Pennsylvania would legalize slot machines in 2002, and again after Gov. James E. McGreevey raised casino taxes last year.

But Lanni insisted yesterday MGM has been consistent in its desire to expand in Atlantic City. And he said Atlantic City is still very much a part of MGM's future, even though by buying Mandalay MGM is rolling the big dice in Las Vegas. The combined company will control half of the hotel rooms on the Strip and own the fifth-largest convention center just as Wynn gears up to open a $2 billion creation next year. Regulators and shareholders still have to approve the MGM-Mandalay merger.

MGM turns attention back to A.C.

Good news for Atlantic City. If another company came in to develop another new casino--maybe on the boardwalk--that would really provide a tipping point and pull the rest of the city into the future.
__________________________________
Speaking of tipping points, I guess my recent flurry of media activity has paid off (I was on a few local TV stations talking about the Mega Merger). I checked the Suburban Xanadu sales rank on amazon this morning, and it has broken 100,000. That's not really news for anyone but me, but it's still news.

And it looks like there is still plenty of space for reviews. If you want to surpass Newt Gingrich as a Top 500 Reviewer, this could be your chance!
_________________________________
posted by Dave at 9:29 AM

I'f you're not a vegetarian...

...before seeing this piece of casino PR, you may be afterwards. I get lots of casino press releases. Sometimes they make for interesting reading. But rarely has one made me lose my appetite like this one.

Now, Prime Rib specials are a staple in Las Vegas. As someone who's never been a huge fan of red meat, I've never really understood it, but I guess that's the market talking. People want their 12 ounces of meat, starchy potato, and boiled veggies.

But this promotional photo might have turned me against ever EATING again.



If a radical vegan group wanted to do a parody of a meat ad, they couldn't have done better. The puddled grease glistening under the lights looks so appetizing, and with nary an edible green in sight!
______________________________
posted by Dave at 8:57 AM

My book is a buzz word

I have to admit that every now and then I google "Suburban Xanadu" to see if anyone new has reviewed it. Imagine my surprise when I found this, in an article written by Steve Winn of the San Francisco Chronicle about motivational seminars:

With its promises of financial potency for the working single mothers, go- get-'em pluck for salespeople squeezed by the economy and a bullish Bush- Rumsfeld determination for the rest of us -- "Iraq isn't nearly as bad as the media makes it seem," Ziglar assured his audience, with Jessica Lynch in the wings to prove it -- this feel-good-athon built a shining bridge to some mythical, impregnable suburban Xanadu. There everyone lives in big houses and drives nice cars, plays golf or rides horses, sits down for quiet cups of coffee with spouses of 57 years who love them more than ever and enjoys a casual proximity to the immortals.

For the record, I don't live in a big house, drive a nice car, play golf, ride horses, drink coffee, or have a casual proximity to anyone immortal, though I don't begrudge anyone who does.

And then there is this, from the confessions of a copy-writer for Martha Stewart:

With let's-get-this-over-with zeal, I dug into my task. Martini glasses, turned out by the billion by some factory in Asia, had been imbued with specialness by virtue of Martha's name on the box. This wasn't your everyday glassware; these were "a subtle, modern design ideal for casual entertaining." Blankets became "exquisitely soft, stain-resistant, in a variety of designer hues." I trumpeted the virtues of non-stick surfaces, coordinated colors and patterns, ergonomic friendliness, and of course style. Over and over. For scores of items, which even if I had wanted them, I could never afford on these wages. Over the days and hours, it became an exercise in self-mockery: Taken in the aggregate, my brief lines of copy became descriptors not only of products but of a mythic lifestyle marked by opulence, comfort, taste, and convenience - a suburban Xanadu designed to be clearly visible, yet tantalizingly, eternally out of reach. Martha's world of perfect kitchen accessories was, like the gates of the law in Kafka's The Trial, forever beyond my station.

I know I should have trademarked that phrase. There are a few idiosyncratic phrases I have that I'm trying to get into the public consciousness, but I never thought that "suburban Xanadu" would resonate with anyone.
Googling has also taught me that Hans Ostrom, an English professor at the University of Puget Sound, has written a poem called "Suburban Xanadu" that will be published this year in a journal called Hadrosaur Tales. I've always liked dinosaurs, so I'm OK with this.

The strangest discovery I made is on a website called "cheapshop4U." It says that my history of casino gaming is a "similar product" to a myster thriller called 96 Tears. Other "similar products to buy" include a biography of Martha Washington, a book about fishing, and one about Nazi math. Bizarre.

The Suburban Xanadu page is no less random. "Similar products" include books about Nazis, vampires, and crocodiles. Needless to say, Suburban Xanadu is about none of these. They also included a book about nutritional supplements. I actually get asked about supplements a lot, and I'll say it again--I don't use any, and never have. I'll have a protein bar or shake for post-workout recovery, but that's it.

And then, at the bottom, is the revelation that if someone didn't find "the David G. Schwartz--Suburban Xanadu" interesting, they might like a Kaiser Noblesse 8-Inch Loaf Pan, 5-1/2-Cup. So is that saying that me and my work are of less interest than a baking accessory, or just that you can't use my book to bake banana bread?

I couldn't make this stuff up if I wanted to.
____________________________________________
posted by Dave at 3:57 PM

Winning the gold war

Both the boards of MGM MIRAGE and Mandalay Resort Group have agreed to MGM's buyout offer. Barring any regulatory roadblocks, the deal will create the world's largest gaming company, with 28 casinos in Nevada, Michigan, Mississippi, Illinois, and New Jersey (well, half a casino there). But MGM MIRAGE is more than a gaming company, according to Jim Murren. From CBS Marketwatch:

"Ten years ago, we were a gaming company," said Murren, the president of MGM Mirage and one of the key movers behind the deal. "But our platform has changed dramatically," as more and more of MGM Mirage's revenue comes from other sources including rooms, food and entertainment.

Thus, the merger is designed to help a combined company "compete against the whole hospitality arena -- Disney and all the other leisure destinations."

As "people's leisure time has contracted," he continued, there has arisen "an arms race to stay relevant. We have got to be on that larger stage."

In addition, the increase of Indian casinos in California -- one the biggest feeder markets for Las Vegas -- has "put us under increasing pressure. That is a juggernaut we are only beginning to understand" and has cost the company customers and employees....

Concerns have been raised that the deal could be derailed -- or at least delayed -- by any one of the industry's various state regulators or by federal antitrust laws. Those issues were widely reported to have played a role in Mandalay's rejection of an initial offer late last week.

Murren bluntly called that talk "a distraction, a sideshow, to what was going on" in the negotiations and said regulatory risks had been weighed for quite some time.

"We are not impulsive people. We have been looking at Mandalay on and off for couple of years and we have phenomenal antitrust attorneys," he said.

MGM Mirage deal bigger than Vegas

So this is about more than just consolidation of casinos on the Strip--it is an "arms race" pitting the Strip against Disney, cruises lines, and Indian casinos. I'd guess that we won't have to worry about Goofy and Donald Duck blockading Laughlin in this struggle for the consumer dollar, but it's an interesting analogy.

Murren was a bit more specific about the competition posed by California casinos in the Las Vegas Sun:

"Nevada is not an island in the middle of the Pacific," Murren said Monday. "It is competing ever intensively with California and other states with gaming and it's increasingly apparent to us that not only are we in direct competition with these casinos for customers but we're also losing employees to California, Arizona and elsewhere."

MGM MIRAGE cites 'juggernaut'

Now, the fun begins. It will be quite a while before the merger becomes official, but let's just say that this marks the official start of the countdown to 2005, when Steve Wynn's new resort will open. Look for more changes in the business along the way.
________________________________________
posted by Dave at 9:09 AM

Reality reviewed

I don't usually do TV reviews, but because The Casino debuted last night and I actually watched it (well, watched it while doing some editing work), I'll take a shot out of it here.
First of all, let me just say that, for the most part, I agree with Jim Rome's dictum that if you like reality TV, you're not very smart, and I find the whole idea completely un-compelling. But, as a "casino expert," I figured I'd give the show a chance. After all, it's not every day that, as a historian, you get to see the business you study documented in this way.
There seem to have been 4 major stories here:

1. Tim Poster and Tom Breitling, the owners: This was absolute gold. I would have liked to have seen even more of the licensing hearing. I think that there is a great story here--two relatively young guys buying a casino older than them. They obviously have great chemistry--I thought the scene where they are walking down the hall and hear noise from a room, look at each other, and say "we don't want to know" what's going on was great--it was the kind of thing that two guys would actually do. But somehow I don't see Terry Lanni and Jim Murrin walking around the Bellagio doing this.

2. Matt Dusk, lounge singer:For those who haven't been there, Zax is a great restaurant and a fantastic venue for this kind of music. We get to see Matt performing in Zax, doing his retro/nouveau lounge thing, until Lt. Gov. Lorraine Hunt and Dennis Bono pry their way onstage and completely suck the oxygen out of the air. Dusk was right to be upset--this was his big moment, not theirs. We don't get to see the entire performance, but from what was shown it didn't look good for him. Will Dusk "get a room" and live his dream? Or will he end up using his newfound fame to upstage other people's acts? Only time will tell.

3. Big Chuck, "professional gambler:" It's been my experience that actual professional gamblers fly pretty low to the ground, but I've seen plenty like "Big Chuck." After watching just one minute of this guy, I became convinced that this whole thing has to be a set-up, that this guy has to be an actor parodying the most obnoxious guy you could find in a casino.
But then I reflected on some of my experiences working in a casino, and I realized that the guy was probably for real. And then I was actually impressed. I've dealt with a lot of hammerheads* before, but this guy was incredible. I wanted to call him and ask if I could sign up for hammerhead lessons.
The sad truth is that people like this really do thrive in casinos. Maybe off-screen the guy is a great humanitarian and friend to the working man, but his on-screen persona was just so completely obnoxious that I can't imagine anyone thinking that this was a cool guy. It seemed like he received his comeuppance when he made out with a guy, but he didn't seem that perturbed.
The most annoying thing about hammerheads like this is that they tend to win.

4. Hammerheads in training: I don't know these guys' names, and I don't care. Again, the saddest thing is that there really are people like this in casinos. They are learning early in life to treat women like trash--good thing, too, because some day they might end up like Big Chuck and have a lot of money, so people have to laugh at their jokes. If you lived in Vegas, you'd run into people like this every time you went out to clubs.

That one guy's chyron read "the virgin" only highlights something else that Jim Rome has said: If you are on TV, and haven't written a book or something, they are going to make you look bad.


Overall thoughts: There certainly were some shocking moments: a guy maybe making out with a tranny off-screen, something to do with whipped cream, and a guy not losing his virginity.

I thought that the Tim and Tom stuff was great, and that this made the show something worth watching. Also, a nice peek inside the surveillance room showed what the places really look like. In most movies, you've got something that looks like the NORAD command center--this was just a small, dusty room with a lot of monitors.

Besides that, I didn't see too much of interest. I guess I'm spoiled, because anytime I want to I can get my fill of hammerheads by heading down to the Strip. I am afraid that maybe they did too good a job of capturing the "real Las Vegas."

If you're interested in following the story of Tim and Tom and have a high tolerance for the other hammerheads they jam into the show, I highly recommend you tune in Mondays at 9 on Fox for the next three months.
____
* If you're wondering,"hammerhead" is a euphemism--this is a family-friendly blog. If you saw the show you probably know the word that first came to mind.
__________________________________________
posted by Dave at 8:38 AM

Need a sign?

Resorts Atlantic City is auctioning off its old sign. From the AC Press:

Recognizing their symbolic importance, Resorts' President and CEO, Audrey Oswell, recently decided to auction on eBay two sets of letters that spell R-E-S-O-R-T-S.

Those letters comprised the bright red Resorts sign that, from hundreds of feet in the air, advertised the hotel to all who traveled the Atlantic City Expressway.

"What would Atlantic City have been without the casino industry?" Atlantic City historian Robert Ruffolo said Monday. "You need only drive up the street to Asbury Park and see how they fared.

"It all began here with Resorts."

All proceeds from the auction are earmarked for the Atlantic City Boys and Girls Club and the Atlantic County Special Services School District.

If the letters don't sell, Resorts still will make a monetary donation to both charities, Resorts' Vice President of Marketing Trish Gilbert said.

"That's great news," said Dave Messier, the executive director of the Boys and Girls Club. He said the money could help send disadvantaged city children to the club's summer camp. "This is the first I've heard of it."

The letters, weighing between 300 and 400 pounds each, were removed by crane two weeks ago to make way for Resorts new, multi-million-dollar "Rendezvous Tower" expansion.

The minimum bid price per letter is $250, and they come in two sizes - 8 feet and 10 feet tall.

As of 10 p.m. Monday, no one had cast a bid, but Resorts had fielded some inquiries - one of which came from a person in Kansas.

"For someone who wants a piece of Atlantic City history and Day 1 of the casino era, it would make a great collectible," Gilbert said.

The letters originally were placed outside the Chalfonte-Haddon Hall hotel after Jim Crosby bought the building in 1976 with hope that New Jersey voters would pass casino gambling in the referendum.


Atlantic County News: The Press of Atlantic City

It's not like Resorts would want to donate them to a museum or something foolish like that. Someone quoted in the article said that "people may want to use their initials...to decorate their front yard." That's just perfect...it's not like the letters are historically significant or anything.

Sometimes I wonder why I even bother trying to document the history of the gaming industry.
________________________________________________
posted by Dave at 8:38 AM

Gambling in the UK

The United Kingdom is definitely changing the way it gambles. Las Vegas-style casinos are on the way, and the city of Blackpool, among others, is looking to them for urban redevelopment, much as Atlantic City did in the 1970s. But the changes in gambling law will do more than just open the door for casino resorts; they will tighten access to slot machines. From the BBC:

The proposals, which could become law by 2006, include banning fruit machines from unlicensed premises, such as take-away outlets.

Unlimited money slot machines would be restricted and councils would be given powers to prevent new casinos.

The bill received a mixed response from gambling addiction groups, but councils which want resort casinos welcomed it.

Culture, Media and Sport Secretary Tessa Jowell said she hoped to bring the Gambling Bill before parliament later this year.

The new gambling laws have been drawn up in response to a report from the parliamentary joint scrutiny committee, which said the draft bill would lead to an increase in problem gambling.

Ms Jowell said the government would "always put the interests of children and vulnerable players first, second and third."

Las Vegas-style slot machines which offer unlimited prize money will only be allowed in the biggest resort casinos, with a limit of 1,250 machines permitted in each.

The culture secretary said casinos would be required to have non-gambling "chill-out" rooms, and small casinos would not be allowed to run bingo games.

Local councils would be given powers to prevent new casinos opening up in their area, she said.


BBC NEWS | UK | Politics | Gambling laws shake-up announced

I don't know about you, but I'm having a hard time imagining a take-away outlet without fruit machines.
Many American casinos also have a non-gambling "chill-out room." It's called the parking garage.
___________________________________
posted by Dave at 10:57 AM