Just to make sure you’re not piggybacking onto its mobile-gambling systems, Cantor Gaming is partnering with Locaid to provide “geo-fencing” for its pocket casinos, which can now be played damn near anywhere on a casino property. (The real endgame, however, appears to be to have these fences in place when Internet gambling goes “live” in Nevada and other U.S. states.) While Cantor will be able to determine where you are, I’m still not convinced that it can safeguard its portable devices from being played by Little Johnny up in the hotel room. The largest Cantor-affiliated property, the Venetian, seems to have given up on trying to peddle e-wagering as a substitute for actual table games and its pushing it solely as a sports-betting aid.
While we’re on the subject of Internet commerce, taxation of same will rear its ugly head in Nevada. Mind you, Gov. Brian Sandoval’s just doing his job, which includes finding new and creative ways to keep the state solvent — especially since the non-gaming business sector is a whiny, irresponsible bunch of freeloaders when it comes to paying its share of the civic freight. However, I have to agree with Mitt Romney that Internet taxation is a sticky wicket. For instance, when I used my wife’s laptop to make hundreds of dollars’ worth of Amazon.com Christmas purchases from a coffee shop in Cameron Park, California, to what state would I have owed the theoretically resultant sales tax?
My e-commerce has risen sharply in the last couple of years, in order to protest Nevada’s relatively high (8.1%) and regressive sales tax. So I’ve got until 2014 to keep making my point. Lord only knows what agita my wife will experience if her eBay store also gets snared in Gov. Sandoval’s butterfly net.
Colony Crap. Those dumbf**ks at Colony C(r)apital may have been chased out of the former Las Vegas Hilton, but they managed to torpedo the place real good before they left. CEO and Twilight fanboy Tom Barrack’s casino-management monkeys succeeded, by losing the hotel’s Hilton flag (a screw-up of literally extraordinary seriousness), in achieving occupancy rates that cratered in January at 54%, Colony’s last month at the helm. Goldman Sachs-appointed receiver Ronald P. Johnson is aiming for an average of 75% for March-December … but the Las Vegas Review-Journal’s Tim O’Reiley points out that this would still leave the LVH well below Vegas’ 87% hotel-occupancy average. Between 2008 and 2010, LV Hilton rooms rates went from above-average to below it. (NB: The hotel’s projected 2012 operating loss would only be $4.9 million were it not for Johnson’s $2,500/day pay packet.)
If I read O’Reiley correctly, Hilton cash flow in 2010 was $1.2 million in the red. Yes, Barrack is such a boob that he managed to achieve negative ROI on one of his flagship investments. And the worst isn’t over: By Johnson’s calculations, by year’s end LVH revenue will have fallen another 19% from where it stood wobbled on Dec. 31, 2010. He also inherits a staggering deferred maintenance tab from Colony: $1.1 million to get the building up to code, and nearly $900K more to replace broken equipment and update the gargantuan marquee. Don’t expect notably improved room product anytime soon: Johnson has only $200 per room budgeted for updates. When it comes to the casino industry, not even Donald Trump has the reverse-Midas touch of Tom Barrack: Everything he touches turns to rubble.
Business is also down at the Riviera, despite considerable effort to bring the place into the 21st century, and with that decline goes the company’s debt rating. Moody’s Investors Service particularly looks askance at owner Barry Sternlicht’s decision to cut loose the Colorado sister property in Black Hawk. Moody’s would like to see that money rolled into debt retirement but, as Riviera CEO Andy Choy discloses in a forthcoming Desert Companion story, those sale proceeds are what’s underwriting much of the Vegas Riv’s ongoing makeover.
Contrary to my prediction, the new owners of Hooters Casino Hotel aren’t drawing down operations in preparation for liquidating the place, although they did take a whacking great axe to the entertainment budget. Diversions at the bosomy casino now consist mainly of house bands, DJs and casino-floor performances by the likes of the violin playing Alizma Triplets. At least that solves the mystery of what happened to the buxom threesome when Don Marrandino moved to Atlantic City, leaving them without a date for the evening.
Back in 1990, Dallas had a mini-arc about racinos coming to Texas (in which JR Ewing turned out to be a closet NIMBY). Twenty-two years later, the TNT revival of Dallas could recycle that plotline and not change a thing. It’s as theoretical now as it was then. The odds against casino legalization in the Lone Star State are still formidable, but Pinnacle Entertainment is wagering $22.5 million anyway. It bought 75% of a Selma racetrack, both to protect its Louisiana flank and to have a head start on potential Texas gambling — the horsey set being the soft underbelly of the state.
Retama Park Racetrack sits 20 miles northeast of the Alamo, roughly. As Deutsche Bank’s Carlo Santarelli dryly observes, “San Antonio has over 2.1 mm people in the surrounding area, inclusive of Tim Duncan. As such, we believe Retama Park could potentially generate attractive returns should Texas legalize gaming at racetracks.” However, he reads those prospects as, at best, a wash for Pinnacle, with its Shreveport and Lake Charles casinos “actually at risk for cannibalization,” and no additional cash flow to be gained. What the purchase incontestably does for Pinnacle — as two similar acquisitions did for Penn National Gaming — is give it a hefty chit with legislators. Sheldon Adelson may indulge in Texas-sized palaver about casino development but Pinnacle and Penn actually have skin in the game. They can say they invested in Texas when casino gambling wasn’t anywhere near happening, without fear of refutation.