State of Nevada

I was a guest on KNPR 88.9 (Nevada’s Public Radio) this morning, in particular on State of Nevada, the daily public affairs show hosted by Gwen Castaldi. The subject was gaming expansion, and I think the panel gave a very good summary of where the industry is and will be going. You can read about or listen via RealAudio here.

I’m strapped for time, so I’ll just give you a few headlines with no commentary today:

Online Gambling Needs Regulation (press release on yahoo.com)

Nevada gambling regulators confiscate $26,000 in fake chips (watch this story disappear)

New, younger fans revive the old riverboat gambling game of poker (and not just because your humble correspondent is quoted towards the end of the article)

Enjoy!

Porn or advertising?

The Nevada Gaming Control Board still hasn’t decided whether racy Hard Rock billboard ads are legitimate advertising, pornography, or inducements to cheat. There is now a trial (!) set for November. Commissioners had already rejected a $300,000 settlement of a three-count complaint, and now the adventure continues. From the LVRJ:

Hard Rock Hotel President Kevin Kelley said for now all the billboards that caused the initial fuss have either been taken down or the wording in the advertising has been modified.

However, the billboards now around town still show models engaged in the physical activities that precipitated the uproar. But the written messages on the signs have been altered so they cannot be construed to suggest illegal activities, which the Gaming Control Board in May claimed was the real issue.

Cowan said Thursday the attorney general’s office have been making “gratifying” progress in settlement negotiations since then, but admitted it appeared impossible to resolve two issues.

The stumbling block is the extent to which gaming regulators should be involved in private sector advertising decisions, which has been the focus of public comments on the case. Civil liberties attorneys have argued against any infringement on First Amendment rights of casino operators.

Hard Rock ad issues unresolved

If you are curious, here is one of the offending ads:
temptation to cheat

If I was on the Commission, I too might decide that this issue, and material like this, must be studied with scrupulous attention to detail–particularly the female model.

It’s funny that this guy has hit blackjack, has a huge stack of chips, and is practically on top of a topless, gorgeous blonde (added bonus: biting the card, signifying an oral fixation), and he has this look on his face like he’s reading an actuarial table. Lighten up, man. At least grin a little. If I was in that situation, they’d have to surgically remove the smile from my face.

I also like the subtle messages the ad sends. Note that the determined-looking gambler is simultaneously drinking (martini glass), smoking, gambling, and rubbing up against a topless girl. I think that he hit a veritable grand slam of vices there.

That’s the great thing about how Las Vegas is promoted. In most cities, you can go to a bar and get sloshed, smoke, play at least bingo, or sit out in the sun. In Las Vegas, you can do all of them–simultaneously. This is why the people who market the city are geniuses–something for everyone.

The other funny thing is looking at this from a gaming perspective. When I was in surveillance, I had occasion to see many things transpire at the blackjack tables, but nothing like this. Of course, in New Jersey, players aren’t allowed to touch the cards, let alone bite them. Still, I can just imagine getting a call: “You might want to keep an eye on table 6, one of the players has taken off her top and sprawled herself across the layout.”

In closing, the commission’s response gives you a window into the Nevada psyche. Playing blackjack topless in a pool, smoking, and drinking is no problem at all, but the mere mention of “cheating” sends everyone into panic mode. While “what happens in Vegas stays in Vegas,” don’t you dare try to mess with the games: they are sacred.

I still don’t understand how this thing is going to trial. It’s not like this is Inherit the Wind or something. I’m a little confused as to why this advertisement has sparked a controversy that will end up in court, but another case of casino employees rigging a game of chance (not a casino game, but a raffle drawing), ended with only a fine.

For info about the initial complaints see It’s a Hard Rock life, Hard Rock not solid, and Hard sell too edgy.

Girls’ night out!

In an effort to cater to women, the Rio is building “The Ultimate Girls’ Night Out,” an entertainment complex geared towards women seeking a fun night out.  From biz.yahoo.com:

Billed as The Ultimate Girls’ Night Out� destination, the Rio’s new complex will be the first in Las Vegas to offer such a venue. The multi-faceted entertainment experience will be a place where women of all ages may come together and celebrate occasions such as bachelorette parties, high school/college reunions, 21st birthday celebrations, office parties and just about any other instance when a “girls’ night out” is in order.

Slated for a December 2004 opening, Ultimate Girls’ Night Out� will feature a 400-seat Chippendales� Theater (50-foot-wide stage with private sky boxes) housing the Rio’s popular show, a spacious cocktail lounge, retail area and plush ladies’ room.

“Our decision to build this complex is based on research we believe indicates a demand for female-targeted entertainment in Las Vegas,” said Marilyn Winn, senior vice president and general manager for the Rio. “Chippendales� is the premier brand in women’s entertainment. We’ve seen a significant increase in show counts over the past two years, and believe the timing is right to introduce an entire entertainment experience dedicated to women.”

Architecturally, Ultimate Girls’ Night Out� will be a virtual theme park for women. Designed with a subtly feminine chic, the space itself will be a true testament to “girl power.”
“The design has been a collaborative effort,” Winn said, “relying heavily on the input of women in our organization and women closely affiliated with our Chippendales� partners. We’ve put a great deal of thought into to the shape of the structure, the fabric textures and colors, bathroom fixtures, and even the floor finishes. Every detail of this project has been developed with women in mind.”

At Ultimate Girls’ Night Out�, the women’s bathroom will be an integral attraction, complete with plush “gossip pit” and other special features not found in any ordinary “girls” room.”
“We paid particular attention to the design of this facility, knowing women want a private, comfortable place to freshen up their appearance, exchange fashion advice and tell secrets,” Winn said.

Ultimate Girls’ Night Out� will be located on the second floor, within the Masquerade Village, adjacent to the East parking garage. In addition to the theater, there will be a spacious 1,500-square-foot ultra lounge with a walk up bar offering a stylized, intimate feel. And a 2,100-square-foot retail boutique will feature a variety of items that appeal to women, such as Chippendales� merchandise, bachelorette party gear, makeup and lingerie, among others.

Rio and Chippendales to Build Entertainment Complex for Women

This seems well-intentioned, but almost a parody of fem-centric marketing.  A women’s bathroom with a gossip pit, so women can exchange fashion advice and tell secrets?  This whole thing is basically a theater, a bathroom, a bar, and a store, but with the right spin it becomes an “ultimate destination.”  Now that’s marketing.

Misguided loyalty?

As I reported earlier, the Venetian was rather quietly fined a while back for several violations, including the rigging of a contest–a game of chance.  I would think this would tend to discredit the legal casino industry in Nevada and would provoke a few license revocations, but it actually only garnered a million-dollar fine. 
 
Well, one employee responsible has been lectured by the Gaming Control Board.  From the LV Sun:

Roger Chuen Po Mok, formerly the senior vice president of Asian marketing for The Venetian, acknowledged that what he did was wrong in an emotional appearance before the state Gaming Control Board. Flanked by attorney Bill Curran, Mok — identified publicly for his role in the incident for the first time — said he schemed to rig drawings for prizes out of loyalty to his employer and his desire to please a good customer.
Mok and three others were fired after the scheme was uncovered in 2002. Earlier this year, The Venetian was ordered to pay a $1 million fine after a 12-count complaint against the resort was settled.
“Some poor choices were made in being loyal to my employer,” Mok read from a prepared statement.
Regulators never named the employees who were responsible for the rigging of the drawings for a Mercedes-Benz sports utility vehicle and two gambling chips, valued at $20,000 and $10,000, during a 2002 Chinese New Year celebration.
Mok said he rigged the drawing because a high-roller he was hosting lost $5 million gambling and the employee “didn’t want to see him go home empty-handed.”

But that’s not all.  Mok was also rapped for trying to cover up:

“What you did not only discredited you, but it discredited the state of Nevada,” said board Chairman Dennis Neilander.
Board member Bobby Siller said while the scheme to rig the drawing was a major judgment error, Mok worsened it by lying to state gaming investigators summoned by The Venetian. Siller compared the additional damage inflicted by attempting to cover up the scheme with the trouble former President Richard Nixon brought upon himself during the Watergate burglary investigation.
“You are now living with the consequences of your actions,” Siller said. “There were consequences to your employer, which had to pay a severe fine, and there were consequences to your co-workers, who were fired along with you.”

 
Venetian contest rigger lectured by regulatorsLet me put this into personal perspective.  When I worked in a casino doing security, I was in mortal dread of having my license revoked, which could have happened for virutally anything, it seemed.  To this day, if I am walking in a casino and I see a quarter on the ground, I will not pick it up, because if I had been seen doing so as an employee I would have been immediately fired and had my license yanked.
 
Gaming violations are very serious, because they threaten the integrity of the business.  If the games of chance aren’t really run by chance, why bother playing? 
 
I didn’t read anywhere in the article that investigators had conclusively proved that Mok was alone planning and executing the contest-rigging scheme.  The phrase that bothers me is: “he schemed to rig drawings for prizes out of loyalty to his employer.”  Does that mean that someone higher up asked him to do so?
 
We may never know the complete story, but this telling of it seems a bit…incomplete.

Merger update

Here’s a great capsule summary of the Harrah’s/Caesars merger proposal, and a breakdown of Harrah’s Caesars, MGM MIRAGE, and Mandalay Resort group, from Yahoo Finance:

Casino operator Harrah’s Entertainment is close to buying bigger rival Caesars Entertainment in a $10 billion deal that would form the world’s largest casino empire with $8.8 billion in annual revenue and as many as 54 casinos.

The merger would be the gambling industry’s second major takeover in a month – MGM Mirage last month agreed to buy Mandalay Resort Group for $4.8 billion plus debt.

A list of properties owned by and select financial information on all four companies follows:

PROPERTIES AND BRANDS:

CAESARS ENTERTAINMENT INC.: Operates 28 properties in five countries and 26,000 hotel rooms. Brands include Caesars, Bally’s, Paris, Hilton, Flamingo and Grand Casinos. Properties include Bally’s, Caesar’s Palace, Flamingo and Paris Las Vegas in Las Vegas.

Atlantic City properties include Atlantic City Hilton, Bally’s Atlantic City and Caesar’s Atlantic City. Also operates properties in New Orleans, Mississippi, Indiana.

International locations include South Africa, Australia, Uruguay and Canada.

HARRAH’S ENTERTAINNMENT INC.: Operates 26 casinos in 13 states. Brands include Harrah’s, Harveys, Rio and Showboat. Properties include Harrah’s Lake Tahoe, Harveys Lake Tahoe, Harrah’s Reno, Harrah’s Las Vegas, Rio All-Suite Hotel & Casino and Harrah’s Laughlin in Nevada.

Also operates properties in California, Iowa, Kansas, Louisiana, Missouri, Illinois, Mississippi, North Carolina and New Jersey.

MANDALAY RESORT GROUP: Owns and operates Mandalay Bay, Luxor, Excalibur, Circus Circus and Slots-A-Fun in Las Vegas. Other Nevada properties include Circus Circus in Reno, Colorado Belle and Edgewater in Laughlin, Gold Strike and Nevada Landing in Jean and Railroad Pass in Henderson.

– Owns and operates Gold Strike, a casino in Tunica County, Mississippi.

– Owns 50 percent stakes in Silver Legacy in Reno, and Grand Victoria, a riverboat in Elgin, Illinois, and Monte Carlo in Las Vegas. Monte Carlo is jointly owned with MGM Mirage.

– Owns 53.5 percent stake in MotorCity casino in Detroit.

MGM MIRAGE: Owns and operates 12 casinos in Nevada, Mississippi, Michigan and Australia, and has stakes in two other casino resorts in Nevada and New Jersey.

– Owns the Bellagio, MGM Grand Las Vegas, Mirage, Treasure Island, New York-New York and Boardwalk casinos as well as 50 percent of the Monte Carlo on the Las Vegas Strip.

– Owns three golf courses as well as Whiskey Pete’s, Buffalo Bill’s and Primm Valley Resort in Nevada, Beau Rivage in Mississippi, and MGM Grand Detroit casinos.

– Owns a 50 percent stake in the Borgata casino in Atlantic City, New Jersey and a 25 percent stake in Triangle Casino, a local casino in Bristol, United Kingdom.

EMPLOYEES:

CAESARS ENTERTAINMENT has 52,000 employees.

HARRAHS ENTERTAINMENT has nearly 48,000 employees.

MANDALAY RESORT and its consolidated subsidiaries together employed about 28,000 people as of January 31.

MGM MIRAGE has more than 45,000 employees.

REVENUES, NET INCOME:

CAESARS ENTERTAINMENT: For the year ended Dec. 31, 2003, it reported revenue of $4.46 billion and net income of $46 million.

HARRAH’S ENTERTAINMENT: For the year ended Dec. 31, 2003, it reported revenue of $4.32 billion and net income of $292.6 million.

MANDALAY RESORT: For the year ended Jan. 31, it reported revenue of $2.49 billion and net income of $149.8 million.

MGM MIRAGE: For the year ending Dec. 31, 2003, it reported net revenue of $3.91 billion and net income of $243.7 million.

FACTBOX-Harrah’s, Caesars may merge to form No. 1

There are the numbers. Both boards have approved the merger.

This deal was not unforeseen, and I think that the only place where there will be real issues will be in New Jersey, and Harrah’s can probably avoid undue concentration there by selling the Hilton. After all, Donald Trump briefly owned four casinos, so there is a precedent for it.

For more information, see the New York Times or Bloomberg.com.

Sevened out?

People like reality TV, and people like Vegas. So, the plan seems to be, let’s keep on combining the two until there is nothing else left on television. For good measure, throw in Paris Hilton’s dad, millionaires, and high stakes gambling. Incredibly, this is the story from Reality TV World:

According to Daily Variety, Rick Hilton, the Hilton Hotels heir better known as the father of “celebutantes” Paris and Nicky Hilton, is preparing a reality-competition show focused on gambling entitled 777. The show will feature seven Las Vegas high-rollers who each ante up $1 million of their own cash to play, with the winner walking off with the entire $7 million pot.

Filming for the show would take place over seven days, with the contestants sharing a suite and engaging in several games of chance overseen by 777′s resident “pit boss.” The project is currently being pitched to networks, although it has yet to find a home.

The show came together as Rick Hilton talked to Jason Hervey, who is a producer (along with Endemol USA) of Rick’s wife Kathy’s upcoming NBC reality show, The Good Life. Hervey, part of Bischoff-Hervey Entertainment, connected Rick with producer Scott Sternberg (Rock & Roll Jeopardy), who was looking to make a Vegas show, and 777 was the result.

Sternberg says that he has been on the prowl for “whales” willing to ante up $1 million in return for (i) the publicity of reality TV and (ii) the chance to win $6 million. We note that this may be difficult, since they would be the real financiers of the show, but they aren’t being cut in on any part of the production payments.

Paris Hilton’s father Rick launches gambling reality-competition show ’777′

The problem with this is that TV already has a reality show where people compete for a $5 million prize–this year’s World Series of Poker. It would be better to see a “reality” show about seven millionaires who blow all of their money gambling and then have to take jobs at a casino to make ends meet. Or not. All I know is that if you’ve got any kind of reality TV idea connected to gambling, this is your moment.
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Best Vegas Story…

I’ve read in a newspaper in a while. While I’m quick to pounce on what I perceive as uninspired or erroneous reporting (check out USA 5 minutes ago or Dogs not playing poker), I’m also the first to recognize excellence.
The piece in question concerns a lesser-known Las Vegas casino, the Western. Adam Goldman, an AP writer whose work has not gone unnoticed here, has wriiten a real gem about that casino. Here’s a sample, from the LV SUN:

On a stretch of despair that tourists in Las Vegas seldom see, the Western Hotel-Casino stands out as a beacon for the broke and nearly broken.

With their crumpled dollars and gloomy gait, they stumble in off Fremont Street through the wide, doorless entrance, beckoned by the sounds of penny slot machines and cheap table games.

The Western is a poor man’s dream, a downtown casino where sad Las Vegas cliches collide.

“This is the underbelly of Vegas,” said 28-year-old Byron Hilton, who was playing $2 blackjack on a recent Friday night. “This is not the Strip.”

There is no uniformed valet parking Porsches here. Instead they come on foot, in beat-up cars and wobbly bicycles. For many, it’s been a short journey to the Western.

The boxy structure is planted among a slew of low-income houses and budget motels — the Downtowner, the Uptown and the incongruous Lucky. The Western feeds from one of the city’s bleakest ZIP codes, stained by high poverty and unemployment rates.

Inside they gamble, pouring nickels and quarters down the throats of always hungry machines.

The roulette table sees an occasional gambler, but the blackjack tables — marred by cigarette burns and beer stains — get plenty of action at minimum $1, $2 and $5 bets.

“You can’t win no money here,” said 38-year-old Ace, who has frequented the Western since 1995, the same year he said he “pulled a job” in Reno, and had to get out of town “real quick.”

In the early morning weekend hours, the smoke hangs in the air like a veil, a giant gray cloud that wraps itself around the customers. The booze is working its sleepy magic.

Gritty Western casino survives in ‘the underbelly’ of Las Vegas

Seriously, this deserves better than a daily newspaper–I could definitely see it expanded in the New Yorker. This is about a thousand times better than most of the casino stories running today. Click through and read the entire story–you will be glad you did.

For some visuals, I have a photo I took of the area around the Western a while ago:
East Fremont
It isn’t much, but you get the idea.
This is the Vegas that you won’t see on reality TV, but these stories are just as important as those of high rollers, vacationing frat boys, and ambitious executives.
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Out of this world?

At the risk of being self-aggrandizing, I’ve got to put this in here. A while ago, I spoke with a Texas reporter about a company that claims to have developed a system to add pheromones to ventilation systems in stores and casinos. These pheromones would, allegedly, cause people to spent/gamble more. From the Galveston County Daily News:

Enhanced Air’s Director of Development Nigel Malkin said the company’s product, Commercaire, makes consumers feel comfortable and secure so they shop longer and spend more.

Ethicists at the University of Texas Medical Branch and the University of Houston Clear Lake said the practice is offensive if consumers aren’t told the system is in use, and one of the country’s leading experts in pheromone research questioned the validity of the company’s scientific claims.

But Enhanced Air promises big sales boosts and spiking customer loyalty. The compound doesn’t cause consumers to get into a spending frenzy so much as it causes them to feel more at ease in an environment and more receptive to sales messages, said Malkin.

Malkin claimed that he originally developed the product for “a Las Vegas casino,” and the reporter asked me about this possibility. I was predictably quite skeptical, pointing out that casinos go to great lengths to keep air clean. But I couldn’t stop there–I had to go for broke:

Manipulating gamblers’ behavior surreptitiously would pose too great a risk for a public relations nightmare, Schwartz said.

Something like that would seem so boldly predatory it would raise that issue, do you want to take all their money?” he said.

“Schwartz also contends that rumors of casinos pumping oxygen through the vents to keep players awake at night is nothing more than urban legend. He said the idea that a casino would infuse a ventilation system with a chemical, even an organic one, was hard to believe.

“They work pretty hard to try to keep the air as clean as possible,” Schwartz said. “But who knows, there could be a giant alien base under the Strip.”
Company claims pheromones boost retail sales

That’s right, a “casino expert” finally said in print what many had suspected for years–that the real alien presence in Las Vegas is not out at Area 51, but in a subterranean base underneath the Strip. I’ve always said that if I didn’t have fun at my job, I wouldn’t do it, and here’s proof. I obviously didn’t literally mean that I thought aliens were at work, but it’s just as ridiculous as other stories I hear.

Anyway, it’s all in a day’s work.
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Welcome to Vegas, enjoy your stay

Getting the VIP treatment is one of the best things about Las Vegas. Ornate hotels surround their guests with everything they desire. Of course, if you are already a celebrity, it must be that much richer, right?
Being part of a major awards show must be an absolute thrill, but nothing compared to the joys of returning to your room to find your personal possessions have been rifled through and/or thefted. The genie of the Aladdin apparently made more than things like casino revenue and room rates vanish, as two guests of the Radio Music Awards there discovered:

Nelly and Michelle Branch Burglarized in Las Vegas: “LAS VEGAS–(BUSINESS WIRE)–Oct. 28, 2003–Last night, multi-platinum recording artists Nelly (Cornell Haynes) and Michelle Branch’s hotel rooms at the Aladdin Hotel in Las Vegas were burglarized while they attended the Radio Music Awards. Mr. Haynes claims that over $1 million dollars worth of jewelry was taken from his room while Ms. Branch claims that computer equipment was stolen from her room. Reports have been filed with the local police department and a police investigation is currently under way. “

How did this probably happen? The best guest is a simple push-door theft. Often, when guests leave their hotel room, air pressure prevents the door from closing completely. It is no secret that groups of push-door theives have been working the Strip for years–in fact, Metro tries their best to educate visitors about the problem.

This is great news for people who are looking for a new laptop or some bling and don’t want to pay retail, but very bad for hotel guests who happen to value their personal property. Don’t let push-door theft happen to you–make absolutely sure the door is closed behind you.
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Red Rock, Strip West?

I had to work a Red Rock West reference in there. There is some debate over Station Casinos’ planned Red Rock Station casino at the 215 and Charleston Blvd, which would feature a 300-foot hotel tower. From theLas Vegas SUN:

Station conducted a community meeting at D’Vorre and Hal Ober Elementary School to try to win more public support for the project. Attendees examined a series of photos, drawings and maps. Station’s representatives answered questions.

There appeared to be more opponents than supporters at the meeting, but a true count was difficult because hundreds of people wandered in and out of the meeting. Many said they were concerned about the height, 300 feet, of one of the proposed towers, and dozens wore stickers that said, “Don’t Bring the Strip to Red Rock.”

The casino would be a little more than five miles from Red Rock National Conservation Area’s visitors center, and would not be visible from there, casino officials said….

“Station should learn to play by the rules, which allow a 100-foot casino,” said Glen Arnodo, political director for the Culinary Workers Union, which is fighting the proposed casino.

“It’s a bad idea to put a Strip-sized casino in a neighborhood, especially next to Red Rock Canyon,” Arnodo said.

The union, working with the Sierra Club, mailed 16,000 color pamphlets to area residents and produced the anti-casino stickers that were handed out Tuesday night. Arnodo said the union is interested because Red Rock is a natural treasure that needs to be protected.

But Station Casinos Vice President of Corporate and Government Relations Lesley Pittman said the union management has ulterior motives for fighting the project: Station Casinos are non-union shops; its employees don’t belong to the union.

FULL STORY

It’s not surprising at all the the union is against the plan. I have the feeling that if Station was building a charity hospital, the union would block it, given that Station is non-union. To be fair, Station would probably block anything that would benefit the union, as well.

In any event, there are legitimate views on both sides, and this debate highlights the “development vs. environment” discussion that increasingly takes place when new projects are proposed.
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