pacomartin
pacomartin
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September 11th, 2010 at 11:54:12 AM permalink
The July 2010 Gaming revenue was reported. Downtown was an incredibly low $32 million. I am really not sure how these places are staying in business. I would have thought the weakest ones would have closed by now.

The five downtown casinos that make between $1 and $12 million per year, split revenue of a mere $1.4 million for July.
1) Mermaids (slots only, shared ownership with Glitter gulch topless club)
2) La Bayou (slots only, shared ownership with Glitter gulch topless club)
3) Golden Gate Hotel and Casino
4) Gold Spike Hotel and Casino on Ogden Avenue
5) Western Casino

The 11 larger casinos made $30.7 million in gaming revenue between them
Golden Nugget
Stratosphere
California, Main Street, Fremont (Boyd Downtown properties)
Binions, Four Queens (owned by Terry Caudill)
Fitzgeralds (owned by Don Barden)
Plaza, Vegas Club (owned by Poju Zabludowicz)
El Cortez

The staggering amounts of money that Landry's Corporation put into the Golden Nugget, and the huge amount of money that Goldman Sachs paid for the Stratosphere must be causing major heartburn.
mkl654321
mkl654321
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September 11th, 2010 at 12:16:42 PM permalink
What matters is what their profits were for that period. If the weakest of them are losing money, that's not terribly surprising--they don't offer anything anyone would want. Downtown used to be about offering value, because the downtown casinos couldn't compete with the Strip's glitz, nor could they draw locals in. Therefore the emphasis was on cheap rooms, inexpensive meals, and low-limit gambling. However, they went off the rails in the last few years: the Golden Nugget had delusions of grandeur and tried to make itself a "high-end" property (ha!); Fremont, Four Queens, and Fitzgeralds all tightened up their games and raised their limits, and we all know what happened to the once-proud Horseshoe once Becky Binion Bunion Behnen got hold of it. The Lady Luck died; the Plaza is an animated corpse. California and Main Street Station hang on by sticking with their core audience, i.e., Hawaiians. El Cortez survives by catering to repeat clientele, though they've made the awful mistake of gutting their formerly excellent video poker inventory.

The casino industry is the only one I can discern that has responded to the recession by raising prices and lowering service and quality. They must really think that people would come to gamble no matter what. Maybe they're right.
The fact that a believer is happier than a skeptic is no more to the point than the fact that a drunken man is happier than a sober one. The happiness of credulity is a cheap and dangerous quality.---George Bernard Shaw
FleaStiff
FleaStiff
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September 11th, 2010 at 12:58:40 PM permalink
Well, I'm not going to say that investing millions in a shark tank was a worse blunder than the Edsel but its sort of high up there on the list of blunders. Wouldn't you hate a place that spent millions on an aquarium and then tries to cut payroll to save money? Value differs with different players but some semblance of understanding their market is expected of casino executives.

I think the Mermaids etc. is a totally different market than a real casino, even one with a party pit. I doubt these labels about Downtown and The Strip will really hold true much longer. Decades ago downtown offered what I considered to be better buffets than the lavish strip affairs. Decades ago rooms were real bargains. Now, we have lines to check in, keys that don't work right and we have some really thick glass in that aquarium to go with the really thick heads who dreamed up that particular feature for a casino. Come take a water slide through a donut hole in a shark tank ... just what instantly comes to mind when someone says "Vegas": an aquarium!
pacomartin
pacomartin
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September 11th, 2010 at 3:15:05 PM permalink
Quote: FleaStiff

Well, I'm not going to say that investing millions in a shark tank was a worse blunder than the Edsel but its sort of high up there on the list of blunders.

Decades ago downtown offered what I considered to be better buffets than the lavish strip affairs. Decades ago rooms were real bargains.



(1) When Tim Poster and Tom Breitling bought the Golden Nugget in 2004 their vision was in a return to yesteryear. They lowered the house edge on some games (and increased the table maximum bets tenfold), they got some good old fashioned talent, like Tony Bennet , Gordie Brown, and Matt Dusk. What really broke them was the table limits. After 9 months a whale waltzed in and won $8.5 million over the course of two weeks.

They ended up losing money their first year, but sold the casino for $113 million profit in month 13 to Tilman Fertitta for his vision of shark tanks.

(2) Tilman envisioned the Golden Nugget as a huge advertising billboard. His real dream was to franchise the name and build a chain of Golden Nuggest first in Louisiana and hopefully in Texas where he is one of the richest people in Houston. Of course, LA became overbuilt, and TX never legalized gambling. Tilman figures that he is still young. The shark themed casino would probably play better on the Kemah Boardwalk in Texas.

Have you ever heard the saying turnarounds rarely turn around ?

(3) Downtown can no longer beat the north end of the strip (Circus Circus, Sahara, and the cheap rooms at Imperial Palace on price. The casinos are simply not earning anything on gaming. I have said before that I thought the new transportation system would be the key. So far it looks like there is absolutely no effect.

Downtown might be better off without it's trio of slum casinos (Plaza, Vegas Club, and the Western). Perhaps someone will renovate the Vegas Club, but the Plaza requires too much money for anyone to risk. I seriously doubt that anyone will ever put money into the Lady Luck (Oscar Goodman says otherwise).
pacomartin
pacomartin
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September 11th, 2010 at 3:57:59 PM permalink
Quote: FleaStiff

I think the Mermaids etc. is a totally different market than a real casino, even one with a party pit.



They are sort of like the county fair, with daquiris. You stroll in and get your deep fried twinkie, your yard long drink, and you pop some quarters in the machine. These places are no longer open on weekday nights.

La Bayou is in the building that got one of the first four casino licenses in 1931. Railroad Pass was one of the other ones.
FleaStiff
FleaStiff
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September 11th, 2010 at 4:48:45 PM permalink
>What really broke them was the table limits.
>After 9 months a whale waltzed in and won $8.5 million over the course of two weeks.
And no other whales were waiting in the wings because the place didn't really have much of a following. It should have kept the limits at the high end and relaxed them at the low and mid levels. That one whale was so obnoxious that probably no one wanted to play where he had been anyway.

>to Tilman Fertitta for his vision of shark tanks.
Its a "vision" when its successful, its a ridiculous absurdity when its not.

>Tilman envisioned the Golden Nugget as a huge advertising billboard.
He should have envisioned it as a casino. Any billboard would have been solely the exterior wall.

>Have you ever heard the saying turnarounds rarely turn around ?
No, but I would believe it. Everyone thinks they can buy a business and do better with it.

>Downtown can no longer beat the north end of the strip
>(Circus Circus, Sahara, and the cheap rooms at Imperial Palace on price.
Ofcourse not, Sahara recently auctioned off One Dollar Rooms via Twitter on Sept 9th.
Several wags immediately chimed in: Overpriced even at that sum!

>The casinos are simply not earning anything on gaming.
Do those downtown casinos offer gambling any more? I thought it was a new format: All Tits All The Time.

>I thought the new transportation system would be the key. So far it looks like there is absolutely no effect.
Hookers make money too fast to ride public transportation. Panhandlers have no incentive to go anywhere, so who in the downtown area would want to go anywhere?
Anyone contented with staying at the Stratosphere will do just that: stay there. Anyone who contemplates visiting other casinos will not stay at the Stratosphere. People who stay at the Imperial Palace either stay there for the sex or stay on the throne because of the food and won't be traveling at all. (Okay, its not QUITE that bad, but ...).
pacomartin
pacomartin
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September 11th, 2010 at 5:11:54 PM permalink
Quote: FleaStiff

>What really broke them was the table limits.
>After 9 months a whale waltzed in and won $8.5 million over the course of two weeks.
And no other whales were waiting in the wings because the place didn't really have much of a following. It should have kept the limits at the high end and relaxed them at the low and mid levels. That one whale was so obnoxious that probably no one wanted to play where he had been anyway.



It was Tim Poster who drove the high end limits. He was almost egomaniacal about getting in the high rollers. Nothing else made him happy. Tom Breitling was the more nervous of the two partners.

As one employee stated to me "The two of them really wanted to be famous, that drove everything".
FleaStiff
FleaStiff
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September 12th, 2010 at 2:53:46 AM permalink
Quote: pacomartin

"The two of them really wanted to be famous, that drove everything".

So what are they now? I think each has some no-show job with Steve Wynn as Consulting Oracle of Trends or something.
pacomartin
pacomartin
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September 13th, 2010 at 11:20:37 AM permalink
Tom Breitling shows up on the travel channel. I think they wanted to produce video and lost cost exploitation movies. They advertise their jobs with Steve Wynn on their website.

I don't think they are the potential billionaire types. When they met Tilman Fertita they thought he was the ultimate egomaniac. They are content to live life well, but are not driven to try and get to the top of the heap.
pacomartin
pacomartin
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September 13th, 2010 at 1:13:03 PM permalink
Golden Nugget (downtown and Laughlin properties) usually makes $11 a month gaming revenue. Figure $9 million for DLV.
Stratosphere makes less than $6M a month on average.
Boyd Downtown (3 properties) reports about $19 million for total revenue. Figure on $16 million for gaming.

So on an average month these three companies should be pulling in $30 million in gaming.

Now if the whole downtown makes $32 million (with $1.4 million for the 5 small properties) in July 2010, then this is really poor performance.

The debt on Golden Nugget is $506.1 million with $116.5 million for the Rush Tower project alone.

Talk about putting "lipstick on a pig".

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