Saturday, June 06, 2015

Caesars Fortune Article

Anyone interested in the business side of Las Vegas should read the article A private equity gamble in Vegas gone wrong by William D. Cohan. In addition to being available online, the article will be in the June 15, 2015 issue of Fortune magazine with the headline Losing Las Vegas.

The article chronicles the misfortune of Caesars Entertainment, which is currently going through a partial bankruptcy.

Gary Loveman was instrumental in the growth of Caesars (then Harrah's). He was able to grow the company by using math to perfect the Total Rewards loyalty program. At the top of the market the company was taken private, saddling the company with a large amount of debt. With the economy crashing around 2008 the debt load was too large to handle, leading Caesars into a downward spiral they are still trying to fight their way out of.

Friday, June 05, 2015

MGM Wynn Merger Rumors

An interesting tidbit came out when Jim Cramer mentioned on CNBC that there is speculation of a possible Wynn Resorts merger with MGM Resorts International.

This scenario would be very similar to 15 years ago when MGM boss Jim Murren was instrumental in a takeover of Steve Wynn's Mirage Resorts.

Merger talk was also in the air at the Las Vegas Sands stockholder meeting today. A shareholder asked if a LVS takeover of Wynn Resorts was a possibility due to Wynn's decreased share price. Sheldon Adelson answered the question by saying (paraphrasing) without Steve Wynn running the show, Wynn Resorts would be worth a lot less. He also mentioned that he and Wynn are good friends and a takeover wouldn't be a comfortable situation for the two.

Mergers, acquisitions and buildings changing hands are common occurrences in the casino business. It will be interesting to see what happens to these companies over the next few months, and years. Throw a possible Caesars bankruptcy into the mix and things could get crazy on the Strip.

Thursday, June 04, 2015

Imagine Dragons Stratosphere Video

Las Vegas band Imagine Dragons released a video for their song Shots (Broiler Remix) which features the band members at Stratosphere. They went on all of the Stratosphere thrill rides - Big Shot, Insanity, X-Scream and Sky Jump. Equipped with Go-Pro cameras they got some amazing footage of what it's like to experience these rides.

Wednesday, June 03, 2015

Hard Rock Meadowlands

Hard Rock International has announced plans (via Press Release) to develop a casino project in Northern New Jersey at the Meadowlands.

There will be many legislative hurdles to cross, but it seems like gaming in Northern New Jersey has a lot of momentum.

The biggest question is how this will affect Atlantic City. The press release claims that a portion of the tax revenue "could go directly to aid in the development and reconstruction of Atlantic City's casino and hotel industry" but who knows how that would play out.

I don't think Atlantic City would be hurt by the increased competition, because there's already so much competition from surrounding states that the market's pretty well saturated. Maybe AC's best hope is to get some kind of subsidy from Northern New Jersey casinos.

Tuesday, June 02, 2015

Caesars Stock Down to start June 2015

Caesars Entertainment stock has taken a huge hit to start off June 2015 - down 18.8% over the past two days.

The dive comes from bankruptcy fears. It's no secret that one part of the Caesars company is bankrupt. The company hopes they can contain the bankruptcy to that singe subsidiary so the rest of the company wont be affected. A judge's ruling recently put doubts on that plan though, so now there's a thought the bankruptcy could "spread" throughout the company.

It's likely that customers won't even notice these bankruptcy proceedings. Total Rewards will probably still be there, and hotels will operate as usual. It's possible that the company will be going through some major changes behind the scenes in the upcoming months, which might not be a bad thing.

Monday, June 01, 2015

Penn buys Tropicana

With the news that Penn National has bought Tropicana, it got me wondering what changes will come to the property. My conclusion: not much. Sure Penn will spend some money to make Tropicana their own, and converting to Marquee Rewards will likely be the first priority, but I don't see Penn making any huge changes in the short term.

Penn bought Tropicana because of location. They needed a Las Vegas Strip property to funnel their loyal mid-level locals players, and Tropicana fits the bill.

Although it's probably not going to change much, it's nice to see Tropicana in the hands of a proven operator like Penn. Nothing against the current (soon to be former) owners, but they just weren't getting it done, despite a recent renovation.