What Richard Branson Means for Las Vegas and the Next Generation | Vegas Seven

It took some time to see the light of day, but I hope this lengthy consideration of Hard Rock, Virgin, and Las Vegas is a worthy read:

Richard Branson made a splash on March 30 when he announced that he and a group of investors had bought the Hard Rock Hotel & Casino, with plans to transform it, over the next year and a half, into a Virgin Hotels–branded property. This is the latest evolution for a resort that, in its 23 years, has pioneered in ways that have defined Las Vegas.

Source: What Richard Branson Means for Las Vegas and the Next Generation

It looks like this is the final piece I’ll be writing for Vegas Seven; I got word the magazine is ceasing publication.  It was a great run–I was part of the first issue back in 2010, and I’m really grateful for everyone who worked with me over the years.

I will have something exciting to announce about my next writing endeavor, but that is for another time.

Comparison shopping in AC

Yesterday I wrote a bit about the numbers behind the proposed mini-casinos considered for Atlantic City. Now, with news that Hard Rock is talking about spending $300 million to build a mini-casino, I thought I’d do a little number-crunching and learn if you’d be better off using that money to buy an existing property or build a mini-casino.

Trump Marina’s been for sale; that’s no secret. There’s a $75 million offer on the table for it. Financial analyst William Hardie now values the property at $24 million. We can argue about whether that’s a fair assessment–Trump certainly would–but let’s say we’ve got a choice between buying Trump Marina for even $80 million or building a mini-casino for $300 million. Which should we take?

In 2008, Trump Marina had 72 table games and 1,983 slots, with a 78,535 square-foot casino.

The mini-casino would be restricted by law to 20,000 square feet, which I say pencils out to roughly 24 table games and 512 slot machines.

Right off the bat, something should be obvious: for nearly four times the cost of entry, you get one-quarter the slot machines. In theory.

In theory, I guesstimated that these mini-casinos would earn, all things being equal, about $68 million a year.

Back in the real world, Trump Marina earned $203.6 million in 2008, after a long decline (in 2002, it made $283 million in gaming revenue). It is obviously under-performing, and has the potential to do much better business. It’s near two of the biggest and best-performing properties in the city (Borgata and Harrah’s), much better neighbors than the Atlantic City Hilton near Albany Avenue. It has an existing customer and marketing database and needs no additional infrastructure. At the very least, it’s a turnkey business. Of course, you’d have to invest heavily to bring it up to its potential, but how much would it cost to remodel? It took $150 million to transform the Aladdin into Planet Hollywood. P-Ho is about 2.5 times the size of the Marina.

So instead of starting from scratch and investing $300 million in a new facility with one-quarter of the revenue potential, why not just buy Trump Marina and renovate it–really renovate, almost beyond recognition? Even if you put $100 million into it, you’re still saving money, and you’ve got a much bigger, better-situated Hard Rock casino with way more potential upside.

BTW, in the late 1990s Trump’s Castle was almost re-themed as a Hard Rock casino, but for a few reasons that didn’t happen and we got Trump Marina instead. Maybe that’s why I wanted to run the numbers on this one.

Am I missing something, or when you look at it like this does $300 million for a mini-casino seem like a bad deal to you, too?

New UNLV podcast: Steve Cyr

We’ve got an outstanding new podcast up over at the UNLV Center for Gaming Research. You’ve really got to hear it to believe it:

07-April 30, 2009

Steve Cyr, "From Hotel School to the Celebrity Suite: My Career in the Casino Industry”

Cyr, a legendary Las Vegas casino host, shoots from the hip as only he can in this dynamic, highly-informative talk. Learn how a casino host climbs the career ladder, see behind the scenes of high rollers suites, and much more.

Download audio file (mp3)

Download flyer (pdf)

Whale Hunt in the Desert: Secrets of a Vegas Superhost from Huntington Press

UNLV Center for Gaming Research: Podcasts.

Cyr really cuts loose, as I’m told he usually does in his talks. Did he kick Starlight Express’s ass when he was at the Hilton? Yep. Does he care whether his players win or lose? Yep. If you like going to casinos and are curious about what it’s like to host high rollers, or just want an insight into the business, this one is for you.

From Red Square to Hard Rock

You know your career’s heading downhill when you used to playing parliaments and congresses, but now you’re being booked into bingo halls and casinos. And not even Strip casinos:

Hard Rock Live – Event – Mikhail Gorbachev

At first I thought this was some kind of mistake, or my sleep-deprived brain was playing tricks on me. But no, the former boss of the Soviet Union–remember how well that turned out–is speaking at the Seminole Hard Rock Hollywood Hotel & Casino later this month. You can buy tickets here.

I can guarantee that when he first proposed glasnost and perestroika, Gorby never thought it would end up like this.

So who do you think opens for him? Yakov Smirnoff, maybe?

The new (boneless) buffalo

This is a big story–the Seminole Tribe has bought Hard Rock (but not the Vegas casino). From the AP:

The Seminole Tribe of Florida said Thursday it was buying the famed Hard Rock business, including its casinos, restaurants, hotels and huge collection of rock ‘n’ roll memorabilia, in a groundbreaking $965 million deal with a British company.

The deal with London-based Rank Group PLC is believed to be an American Indian tribe’s first purchase of a major international corporation of its size, the Seminoles said. It includes 124 Hard Rock Cafes, four Hard Rock Hotels, two Hard Rock Casino Hotels, two Hard Rock Live! concert venues and stakes in three unbranded hotels.

The Seminoles were the first U.S. tribe to get into the gambling business in 1979. More recently, they had partnered with Hard Rock in successful hotel, gambling and entertainment complexes in Tampa and Hollywood in tourist-friendly Florida. They now have the ability to expand their gaming interests nationally by partnering with a well-known brand, experts said.

The tribe also will acquire what is said to be the world’s largest collection of rock memorabilia, some 70,000 pieces including Jimi Hendrix’s Flying V guitar, one of Madonna’s bustiers, a pair of Elton John’s high-heeled shoes and guitars formerly owned by Bob Dylan, Eric Clapton and Chuck Berry.

The deal does not include Hard Rock’s Las Vegas casino, however, which is owned by Morgans Hotel Group, or Morgans’ rights to Hard Rock intellectual property in Australia, Brazil, Israel, Venezuela and many areas of the United States west of the Mississippi River, a Morgans official said.

Rank said the sale freed it to concentrate on gambling. It retained the Hard Rock Casino in London and plans to change it to the Rank Gaming brand.

AP Wire | 12/07/2006 | Seminole Tribe of Fla. buying Hard Rock

As usual, when asked to comment, I said something that almost, but not entirely, made sense:
David Schwartz, director of the Center for Gaming Research at University of Nevada Las Vegas, said the Seminoles likely made the deal with gambling expansion at the top of their priorities.

“I don’t think that they bought this because they only want to go into the restaurant industry,” Schwartz said. “I don’t think they want to only serve boneless buffalo wings.

That’s me speaking from experience–the boneless buffalo wings are my favorite item on the Hard Rock Cafe menu. Come to think of it, I haven’t had lunch yet, and the Hard Rock is only about 1/4 mile away. And we do get a UNLV discount there.

If I was a more analytical guy, I could try to play my comment off as superbly astute–after all, casino gaming has been called “the new buffalo,” so there’s a connection with buffalo wings…kind of.

Decades from now, future historians trawling through the news archives may find that article and wonder what boneless buffalo wings were–I like thinking that I’ll make someone very satisfied when, after some more research, they find out. I’m thinking about that because I’ve been looking at some news clippings from the first decade of the 20th century, and it’s almost in a foreign language. The mayor of Atlantic City, for example, led public campaigns against, among other things, roystering, spooning, and horseplay. I doubt whether any newspaper has mentioned “horseplay” or “roystering” for a long, long time. As for spooning…it didn’t mean then what it means now. At least I don’t think so–if it did, there were really some strange things going on back then, because the mayor personally arrested three people for spooning.

Turning whales away

Some casinos chase high rollers, which can be risky–a lucky weekend for them can turn into a quarterly loss, something that shareholders hate to see. The Hard Rock casino (right down the street on Harmon Ave.), apparently burned once too many times by lucky whales, or mega-high rollers, has decided to stop catering to the capricious gamblers. From the LV Sun:

The latest case in point is the Hard Rock, which says it will no longer accept high-roller action from gamblers with million-dollar credit lines who have the potential to lose — or win — millions from the casino.

“That’s not really our core business,” Kevin Kelley, Hard Rock president, said. “We don’t have enough of those customers, nor do we have the type of amenities to handle those types of customers.”

Only a few players make the list of top-tier gamblers in Las Vegas, often called “whales.” For smaller casinos like the Hard Rock, even one player can mean the difference between a quarterly profit and a loss.

In the fourth quarter of 2002, for example, Hard Rock earnings took a hit after one player walked away with $3 million.

Plenty of players and potential customers have credit lines in the $10,000 to $250,000 range and will continue to be welcomed at the Hard Rock, Kelley said.

Las Vegas SUN: Hard Rock takes action to stem unpredictable high-roller wins

I’ve always wondered how much money one would have to make in a year to enjoy a $250,000 credit limit, or to be able to lose tens of thousands gambling and chalk it up to entertainment.

The rest of the article has some interesting stuff on how different casinos cater to high rollers. It’s not stuff I’ve seen in print too much, so I would definitely check it out.

Hard on Hard Rock

The Hard Rock casino is at it again, and snap reporting by the LVRJ has ruined a Die Is Cast exclusive. The Hard Rock has gotten into trouble for its racy billboards in the past, and they are at it again. You can see for yourself, and read a little of the RJ’s take on the “controversy.”

felines and beavers and bunnies, oh my!
Several weeks ago, Hard Rock erected a billboard that depicts a cartoon cat, two rabbits and a wood-chewing beaver next to its hotel-casino at 4455 Paradise Road.

While the sign touts itself as “Another clean & inoffensive billboard from your friends at the Hard Rock,” others claim it’s simply a reprise of the suggestive content that led to the company’s $300,000 Gaming Control Board settlement that was rejected by the Nevada Gaming Commission and then Friday’s commission hearing.

“It’s a pussy, a beaver and some bunnies, and we all know what bunnies do,” Scott Robertson, creative director for local ad firm the Merica Agency, said Wednesday. “Because it’s not so overt, maybe people are OK with that, but given that there’s a looming controversy, it shocked me.

“To me, this is blatant thumbing their nose at the gaming commission.”

That opinion was echoed by Patti Gerace, a Walker Furniture marketer who serves as executive board member of the Las Vegas Advertising Federation. She chuckled at the sign’s use of animals and objects whose names are common euphemisms for genitalia or depict sexual activity.

“Because I know who they (Hard Rock) are and what they’ve portrayed in the past, I know what they’re trying to say,” Gerace said. “I see a beaver and some rabbits doing it. It’s not very nice. … It’s clever, it’s cute, but I still think people will find it offensive if they look at it in that way.”

Robertson compared the billboard to the Las Vegas Convention and Visitors Authority’s “What happens here, stays here” campaign, which hints at untoward activities but never depicts them.

“It’s up to our dirty minds to apply what we know that double meaning is,” Robertson said of the Hard Rock billboard. “The fact that it’s sort of rebelling by still being sexual, without being overtly sexual, intersects with the core values of the Hard Rock brand, which is sex, drugs and rock ‘n’ roll.”

Experts: New billboard lampoons regulators

In this case, the experts are wrong. The billboard doesn’t lampoon regulators. It lampoons all of us.

Hey, if you’re shocked by cartoon cats and beavers, that’s your problem. I see this billboard just about every day, and I was planning to take a picture and talk about it on here. Honestly, driving by it is impossible to determine exactly what species the cartoon figures are–they just look like animals. I know that I couldn’t guess what they were.

This story just keeps on getting more and more ridiculous. Like so much in Las Vegas, it is almost a parody of itself. It seems that people in this city go to great lengths to make everything an oversized mockery, then run around crying, “We’re about more than just gambling and sex! Why don’t people take us seriously?” The fact that the state’s biggest newspaper runs story with advertising “experts” talking about pussies and beavers says it all, as does the mock gravitas tone of the reporting. Seriously, if you ran this article in The Onion or another satire, people would laugh at the joke.

I’ve talked about this issue enough in the past, and I was going to ignore the latest go-round of non-news, but this was just too much.

For news and a picture of one of the initially offensive billboards, see Porn or Advertising?.
I’ll just post the image here:
Hard Rock
That billboard is still proudly visible on Swenson Ave, though it now reads, “Keep your mind on the game.” Why?
For info about the initial complaints see It’s a Hard Rock life, Hard Rock not solid, and Hard sell too edgy.