Tilman Fertitta, that is. The Landry’s Restaurants CEO has sussed out a bargain on the Boardwalk, in the form of the unprofitable Atlantic City Hilton. No doubt Fertitta’s interest has not a little something to do with the fact that the Hilton began life as the Golden Nugget, 30 years ago. The Hilton’s present — but not for long — owner, Colony Capital, borrowed an insane amount of money against the property. Creditors have tired of dickering with Colony CEO Tom Barrack and are attempting to take control of the Hilton through the courts. Enter Landry’s, which wants to buy the place out of potential receivership. Its CEO has a not-unwarranted reputation for micromanagement, so dreaded A.C. Hilton boss Nick Ribis will be outta there. Landry’s two existing Nuggets (one in Laughlin) showed slightly improved revenues in 2Q10 and represented 24% of the company’s total revenue base.
Once Tilman fixes his eye upon a quarry, he’s not easily discouraged. Also, unlike some of his colleagues in the industry, when Fertitta vows that he’ll reinvest in and improve the Hilton, you can take it to the bank. The expansions and upgrades he’s performed at the Nugget in downtown Las Vegas have made it the Rolls-Royce of Fremont Street casinos. That’s not quite the compliment it ought to be, through no fault of Landry’s. Too bad there’s not a property of that caliber servicing middle-class customers on the Strip, although the Tropicana Las Vegas shows signs of regaining its erstwhile luster.
Anyway, an operations-oriented owner, no more Colony, no more Ribis … what’s not to like here?
Ditto the new Starbucks that’s the latest attraction at the Tropicana Atlantic City. The management team inherited by Carl Icahn continues spiffing up the place. Regardless of whether they or Starbucks get credit for the eco-friendly design concept that uses recycled brick- and ironwork, it’s a splendid notion.
Showing the flag. The U.S. government has opened diplomatic relations with three American-owned casinos in Macao, as it were. Consul General Stephen Young has been paying closer attention to the former Portugese colony, in part because Wynn Resorts, MGM Resorts International and Las Vegas Sands have so many billions invested there. Unfortunately, slave-trafficking, drugs and money-laundering (and the risk that U.S. companies could become tainted by the latter, especially) are other major reasons for Young’s higher profile.
“I’ve been assured by [Macanese strongman Fernando Chui] and others that the necessary workers that these guys need to do their jobs to both build and run casinos will be available,” said Young, without offering specifics. Since the “necessary workers” cannot be obtained in sufficient number without relaxing Macao’s 1:1 ratio of guest workers to residents, there’s no other way to construe Young’s remarks than that he’s obtained a wink-and-nod indications that the quota will be relaxed or he’s negotiating toward that end.
Closer to home, Sheldon Adelson got a boost from news that the addition of table games is providing an enormous boost to previously underperforming Sands Bethlehem. (Sands officials did have the nerve to say the casino would do better once its long-delayed hotel opens next spring — the hotel Sands recently threatened to leave unfinished indefinitely.) That helps make up for slot grosses which are very middle-of-the-pack, at best.
Statewide, table games drove a 24% increase in casino revenues. Top performers in the tables department were — no surprise — Parx Casino and Harrah’s Chester Downs, with Sands finishing third. After a sputtering start, Mohegan Sun at Pocono Downs, moved from ninth place to fifth in table revenue. And no, I don’t know why the Pennsylvania Gaming Control Board reports slot grosses on a weekly basis but table revenues on a monthly ones, especially when it results in slot dollars from two discrete months getting muddled together.
The Plaza shutdown still doesn’t look entirely kosher. A large number of the employees getting the sack are reported to be housekeepers — i.e., Culinary Union members. This would explain why casino boss Bobby Ray Harris felt it imperative to shut not one but both hotel towers down. It’s a salary dump. Thanks, Tamares Group for doing your part to raise to Nevada‘s 14.4% unemployment rate even higher. Question is, will a human sacrifice of this magnitude appease the financiers who are holding a $56 million note on the Plaza? If you’re Harrah’s Entertainment you can wring a mortgage-restructuring out of your lenders. If you own three third-rate casinos in Downtown … eh, not so much. If Mr. Harris shows up to run your casino once his tenure at Tamares is done, I’d suggest consulting the “Help Wanted” ads.
It’s merely my opinion but … Sharron Angle is kind of a dick. (Speaking as a sufferer from mental illness, I’ll bet she’d put air quotes around that malady, too.) However, given the way we Nevadans shamelessly freeload off of tourists, the lady’s selfish attitudes are but an exaggerated version of our own. As Pogo sagely observed, we have met the enemy and it is us.
Regarding your last point about Sharon Angle — has the gaming industry really weighed in yet for Reid? I know he has raised mega-bucks from the big shots but I wonder if people in Nevada really understand what the loss of Reid will really mean for the gaming industry? There isn’t a special interest industry anywhere with more at stake. If Nevada gives Harry Reid a pink slip I hope the holy rollers, etc. go with another Commission to study the “problem” — Sen. Angle sure won’t be able to stop it and for good measure I hope they revive Yucca Mountain too.
Financiers are holding a $56 million note on the Plaza?
That’s good, right? I mean, couldn’t they take it over and sell it to somebody who cares?
I guess Sharron just lost the “Parents of Autistic Children for Angle” group vote. Awww.
I am very excited that Tilman has set his sights on the AC Hilton. I have always thought that the Hilton was a wonderful asset, in a good location, with (at times) good management but has for the foreseeable past been completely over-levered. Remember; when Colony purchased the Harrah’s portfolio? They actually divested some assets for HUMUNGO profits. Two of those assets consist of land owned by the AC Hilton (now a proposed Hard Rock casino site) and the Harrah’s/Resorts East Chicago riverboat. Why they never de-leveraged the company with those proceeds is beyond me. I have been told that they took their money out of the deal and left the rest to fund operations for the rest of the portfolio. In the real estate world the Colony folks are known to be quite savvy investors, but this one I could never understand. Enter Tilman. He has shown a very encouraging management and investment style in the industry when others have taken pause. I think he would be a good owner for the Hilton and a great addition to the city which desperately needs new ideas, fresh capital and a new direction. Here’s hoping that they can help make AC “Golden” again! Best of luck.
Interesting comments on the Angle story on the paper’s page. Very surprised to see no pro-Angle comments yet, but it’s very early I guess. Maybe there really is a line that regular people that disagree politically can meet in the middle on.
Howard, aside from Jim Murren, nobody in the industry has come right out and made that argument. Steve Wynn sort of did but then he backpedaled into some self-righteous noncommittal b.s. when Angle started getting traction. Given the extremity of Angle’s Southern Baptist beliefs, I believe she very likely disapproves of gambling and is being coy about it.
Efforts have been made at the federal level to enact gaming-specific taxes. It was floated during the Clinton administration and a 30% levy is hidden in the so-called “Fair Tax Act.” Were such a bill to come before the next Congress, there’s still no telling where a Sen. Angle would stand.
You *can* get elected in Nevada without casino-industry help, although the big bosses don’t like it. Several are backing the challenger to Rep. Dina Titus (D-NV), who defeated their boy, Jon Porter, in the last go-round. Reid has carried vast quantities of water for the casino industry, something Angle has shown no inclination of doing — and that’s got to be causing some boardroom *agita.*
Regarding the Tropicana in Las Vegas turning things around and being a middle class destination, I noticed that the property is making great strides in TripAdvisor ratings and is up to #51 today recently leap frogging TI, MGM Grand, Aria, Mandalay Bay and NY/NY all in the 50s but below the Trop. They have a Guest Relations Manager, Nicole Marshall, responding to many of the reviews and the refurbished rooms seem to be getting mostly positive feedback. Maybe they will be the one to fill the void between the extremes on the strip.
Breaking news: Steve Friess reports that Steve & Elaine Wynn have apparently withdrawn their support from Harry Reid, and that other prominent gaming-industry supporters (most notably Jim & Heather Murren) have gone AWOL. Gary Loveman and George Maloof are still aboard but it looks like rats — big, fat, juice-laden rats — are scurrying off the Reid ship.