RSS 2.0 FeedVol. 3, No. 5, May 2007, Tumbling Dice
May 2007
The Fast Lane
Red Rock Casino, Resort and Spa is adding to its entertainment offerings with a 72-lane state-of-the-art bowling alley called Red Rock Lanes.
The bowling alley opened to the public on April 18 in celebration of the property’s one-year anniversary.
Red Rock Lanes is open 24 hours a day, seven days a week for open bowling and fall and winter weekend bowling leagues. It can also accommodate private parties and meeting groups.
The venue features a pro shop, arcade, lounge and bar with dart boards, billiard tables and shuffleboard, meeting rooms and a deli. It was designed to match the property’s theme, including a panoramic image of Red Rock Canyon at the end of the lanes above the pins.
Red Rock Lanes can be transformed instantly into party central, with glow lighting effects, strobe lights, fog machines, image generators and disco balls. There is also a 12-lane VIP suite that combines bowling with a nightclub experience.
Pearl of the Palms
The Palms Casino Resort celebrated the opening of the city’s newest concert venue, the Pearl, with a star-studded private party and enough spot lights to set a world record.
Gwen Stefani provided the entertainment with a sold-out show that celebrated the casino’s state-of-the-art music venue. Celebrities on hand for the event ranged from musicians like Scott Weiland and Slash of Velvet Revolver, Tommy Lee and Vince Neil of Motley Crüe, and local alt rockers Panic! at the Disco. The usual celebutants like Nikki and Paris Hilton, Kimberly Stewart and Caroline D’Amore were on hand, as were actors Luke Wilson, Nicolette Sheridan and Brian Baumgartner.
In addition to rolling out the red carpet, the Palms wanted the whole city to know that something big was happening. To achieve this, owner George Maloof rolled out a world-record-setting 160 skytracker lights.
“Fireworks were a bit too cliché for this opening—we wanted to do something as breathtaking and visually stunning as the Pearl is in its design,” Maloof said.
Tip Tussle
The tax collection arm of the U.S., the Internal Revenue Service, wants Las Vegas casino employees to pay their fair share of taxes, which will require a new agreement between the organization and the city’s casino operators.
The IRS is negotiating with casinos to determine the expected amount of income the employees receive through tips. The two parties have had an agreement on how much employees should declare since the early 1990s. The agreement allowed employees to enter into tip agreements with their employer wherein the employer would withhold taxes on the estimated amount of tips the employee was expected to make during any given pay period. The agreement prevented employees from having to keep meticulous records of tips received in the likely event that they are audited.
The agreement was beneficial to the employees because many made considerably more in tips than the IRS estimated—like, for example, the dealers at Wynn who report six-figure incomes based almost exclusively on tips.
The IRS will want more money, but the casinos are fighting tooth-and-nail to limit the increase. Some casinos have said they would scrap the deal entirely if the proposed increase is too high. While that could cost the IRS billions in unreported tip income, it would increase the pressure on tipped workers to record their tips, as the IRS is expected to follow such a move with increased “attention” to tax reports from casino employees.
The Culinary Union is working to create a defense fund to help employees who forgo the tip agreement and are audited by the IRS.
Tropicana hits 50
When it opened on April 4, 1957, the Tropicana Resort and Casino was unlike any other property in Las Vegas. As the property celebrates 50 years on the Strip—a remarkable feat considering the modern preference to demolish and rebuild every 10 to 15 years—it is in store for some drastic changes.
The property was perhaps the nicest in Las Vegas when it opened, but years of service as one of the mob’s piggy banks followed by numerous management changes have put the property behind the pack on the busy corner of Tropicana and Las Vegas Boulevard.
In 1979 the Ramada Corp. came in to rid the property of its ties to organized crime. Ramada spun off its casino operations in 1989. The property was recently the subject of an intense bidding war in which Pinnacle Entertainment’s $1.45 billion offer fell short of the offer from Columbia Entertainment—an affiliate of Columbia Sussex Corp.—to take over parent company Aztar Corp. for $2.1 billion.
Columbia Entertainment has announced plans for a $2.5 billion renovation project that will completely change the face of the aging property.
“It’s a relic of the past we admire and respect, and we would like to see it work out going forward, but I don’t think it will, “ said Rich FitzPatrick, Columbia’s senior vice president and CFO.
Columbia’s plans call for destroying the low-rise motel wings to make room for new towers that will increase the room count from 1,880 to more than 10,000 by 2010, operated by independent hotel companies.
The only thing likely to remain is the longest running production show in the country featuring the original showgirls of the Strip, Folies Bergere.
“It’s a great link to the past,” FitzPatrick said.
Primm gets Terrible-ized
While puns abound about the “terrible” new owner of the former MGM Mirage casinos in Primm, Nevada, the fact is that the deal is good for everyone involved.
It gives MGM Mirage, which sold the three properties—Primm Valley, Buffalo Bill’s and Whiskey Pete’s—for $400 million, the ability to focus on its residential development project in nearby Jean. For Herbst Gaming it’s the chance to expand a growing gaming enterprise that started with a small Nevada slot route. For the employees, it’s a return to the family-style operations from the old days in Primm.
“My brothers and I are extremely pleased about the acquisition of these three great assets,” said Herbst Gaming President Ed Herbst. “We look forward to continuing and building upon the legacy started at these properties by the Primm family. We believe that the Buffalo Bill’s, Primm Valley and Whiskey Pete’s assets and their customer base fit in extremely well with our existing eight casino portfolio, and that the ‘Terrible’s’ brand will bring added excitement to the I-15 corridor.”
Herbst Gaming, founded by Jerry Herbst and run by brothers Ed, Tim and Troy Herbst, has more of a family feel to its operations than corporate giant MGM Mirage, a fact that is not lost on the employees of the properties, who transferred companies with the transfer of ownership of the casinos.
“We’re excited to have the Herbst family come down here to run these properties,” said Shana Gerety, an executive casino host at Primm Valley Resort. “These are smaller properties, but there is a real family feel among the customers and employees and Herbst Gaming fits into that perfectly.”
Ed Herbst said the properties are in excellent condition, and MGM Mirage did an excellent job of keeping up the three casinos. The first order of business will be to revamp the gaming floors, including the addition of coinless slot machines using ticket-in/ticket-out technology, getting the players club running and immediately implementing promotions and marketing efforts to introduce the Terrible’s brand to Primm.
In addition to the three gaming properties, the deal also gives Herbst Gaming the 6,000-seat Desert Arena at Buffalo Bill’s, but it does not include the Primm Valley Golf Club, which remains under MGM Mirage ownership.
While the increasing number of tribal casinos in Southern California saw casino cash flow fall to almost 60 percent of figures in 2000, Ed sees potential in the area to expand the Terrible’s customer base.
“Primm is not that far a commute any more, especially from the southern part of the valley,” he said. “The Terrible Herbst service stations have about 100,000 customers a day and we’ll be reaching out to them.”
He is looking forward to restoring the family feel for which the properties were known under the founding Primm family.
“We’ve always admired these locations and how the Primm family operated them,” he said. “I think they fit perfectly with the Terrible Herbst brand.
“I’m excited this opportunity presented itself. The employees and travelers on I-15 will be very happy Terrible’s has come.”
The Primm acquisition is the second major move for the company in recent months. The company closed the $119 million purchase of the Sands Regent—which included the Sands Regency in Reno, the Rail City Casino in Sparks and two other, smaller northern Nevada casinos—in January.
Nevada Landing Shuttered
With most employees heading to different jobs within the MGM Mirage family of casinos, the company closed its Nevada Landing casino in Jean, Nevada, a month early on March 20.
The company announced it would close the property in late April as part of a redevelopment plan for 166 acres it owns in Jean, which is about 25 miles south of Las Vegas.
About half of the employees transferred to MGM Mirage’s other Jean property, Gold Strike, while the rest were transferred to various properties on the Las Vegas Strip. Others took positions at the company’s holdings further south in Primm.
Those properties, Primm Valley, Whiskey Pete’s and Buffalo Bill’s, have been sold to Herbst Gaming for $400 million, and the jobs will transfer to the new owned.
“There wasn’t a single MGM Mirage property in Southern Nevada that didn’t pick up a former Nevada Landing worker,” said company spokesman Gordon Absher.
Going Up
A traditional Japanese blessing and sake pouring ceremony marked the start of steel placement at the Cosmopolitan Resort Casino in Las Vegas.
Cosmopolitan owner Ian Bruce Eichner, along with representatives from Perini Building Company, Schuff Steel, DeSimone Engineering and JFE Engineering took part in the event. The ritual is traditional in Japan—where JFE is headquartered—and it is considered bad luck not to hold such ceremonies.
The ceremony marked two major construction milestones: the completion of the excavation of 800,000 cubic yards of dirt and the start of vertical construction.
When completed, the Cosmopolitan will consist of two 600-foot towers with a total of 3,000 condo-hotel units. It will also have a 75,000-square-foot casino, 150,000 square feet of convention and retail space and a 50,000-square-foot spa. The property will also connect the neighboring MGM Mirage Project CityCenter.
“It is not encroaching on our design,” said Cosmopolitan Chief Operation Officer Audrey Oswell. “We were able to achieve the design we were looking for and build the amenities into the project we wanted to with the footprint that we have.”
The Cosmopolitan will be located between the north end of CityCenter and Bellagio, and across the street from the redeveloped Planet Hollywood—formerly the Aladdin.
“I think it is safe to say when construction is completed, it is going to be ‘the corner’ in Las Vegas,” Eichner said. “I think the Strip-centric architecture and program is unique.
Planet Hollywood Arrives
It’s taken nearly three years but the Planet Hollywood Resort and Casino has finally arrived on the Las Vegas Strip.
Work to transform the Arabian-themed Aladdin hotel-casino has been ongoing since OpBiz bought the bankrupt property for $500 million. OpBiz co-chairman Robert Earl, who founded the Planet Hollywood restaurant chain, was joined by several high-profile celebrities last month to welcome the property’s new theme.
“Here we are, standing in the ultimate location in Las Vegas, in the center of the Las Vegas Strip to unveil Planet Hollywood Resort and Casino,” said Earl. “This project is the fulfillment of a dream, and I am very proud to say that the Planet is rising!”
The celebration marking the grand opening will be held at the end of September.
“We will be throwing the biggest party that Las Vegas has ever seen,” said actor Bruce Willis, who joined Earl and actress Carmen Electra, baseball star Roger Clemens, tennis star Pete Sampras and boxer “Sugar” Ray Leonard in introducing the revamped resort.
The $1 billion makeover will eventually bring 2,600 movie-themed guest rooms, and 1,200 time-share residences scheduled top open in 2009.
The property will also feature an expanded lineup of restaurants and nightclubs, all in an effort to bring some youth and vitality to a property sitting on what could become the hottest corner in Las Vegas across from MGM Mirage’s Project CityCenter.
The revamped property will also see some changes at the Desert Passages, the Arabian-themed shopping mall that has been dubbed the “Deserted Passages” by some. Last month, Boulevard Invest announced that the mall will begin operating as Miracle Mile Shops in May.
Icahn Selling Casinos
Investor Carl Icahn has agreed to sell his American Entertainment Properties Corp. gaming operations to Whitehall Street Real Estate Funds for $1.3 billion.
The deal will send 17 acres of Strip land and the properties operating under subsidiary American Casino and Entertainment Properties—the Stratosphere Casino Hotel and Tower and Arizona Charlie’s Decatur and Boulder in Las Vegas, and Aquarius Casino Resort in Laughlin—to Whitehall, which is a group of real estate investment funds affiliated with Goldman, Sachs and Co.
“Our gaming investments are a successful example of our strategy of acquiring undervalued and out of favor assets and improving operations and enhancing value,” Icahn said. “The management team has done a great job turning this business around. We believe that this sale represents an opportunity to take advantage of the current favorable market environment for gaming assets and to realize significant gains on our multiyear investment in the industry.”
The transaction, subject to regulatory approval, is expected to close in about eight months.
Red Rock Casino, Resort and Spa is adding to its entertainment offerings with a 72-lane state-of-the-art bowling alley called Red Rock Lanes.The bowling alley opened to the public on April 18 in celebration of the property’s one-year anniversary.
Red Rock Lanes is open 24 hours a day, seven days a week for open bowling and fall and winter weekend bowling leagues. It can also accommodate private parties and meeting groups.
The venue features a pro shop, arcade, lounge and bar with dart boards, billiard tables and shuffleboard, meeting rooms and a deli. It was designed to match the property’s theme, including a panoramic image of Red Rock Canyon at the end of the lanes above the pins.
Red Rock Lanes can be transformed instantly into party central, with glow lighting effects, strobe lights, fog machines, image generators and disco balls. There is also a 12-lane VIP suite that combines bowling with a nightclub experience.
Pearl of the Palms
The Palms Casino Resort celebrated the opening of the city’s newest concert venue, the Pearl, with a star-studded private party and enough spot lights to set a world record.Gwen Stefani provided the entertainment with a sold-out show that celebrated the casino’s state-of-the-art music venue. Celebrities on hand for the event ranged from musicians like Scott Weiland and Slash of Velvet Revolver, Tommy Lee and Vince Neil of Motley Crüe, and local alt rockers Panic! at the Disco. The usual celebutants like Nikki and Paris Hilton, Kimberly Stewart and Caroline D’Amore were on hand, as were actors Luke Wilson, Nicolette Sheridan and Brian Baumgartner.
In addition to rolling out the red carpet, the Palms wanted the whole city to know that something big was happening. To achieve this, owner George Maloof rolled out a world-record-setting 160 skytracker lights.
“Fireworks were a bit too cliché for this opening—we wanted to do something as breathtaking and visually stunning as the Pearl is in its design,” Maloof said.
Tip Tussle
The tax collection arm of the U.S., the Internal Revenue Service, wants Las Vegas casino employees to pay their fair share of taxes, which will require a new agreement between the organization and the city’s casino operators.
The IRS is negotiating with casinos to determine the expected amount of income the employees receive through tips. The two parties have had an agreement on how much employees should declare since the early 1990s. The agreement allowed employees to enter into tip agreements with their employer wherein the employer would withhold taxes on the estimated amount of tips the employee was expected to make during any given pay period. The agreement prevented employees from having to keep meticulous records of tips received in the likely event that they are audited.
The agreement was beneficial to the employees because many made considerably more in tips than the IRS estimated—like, for example, the dealers at Wynn who report six-figure incomes based almost exclusively on tips.
The IRS will want more money, but the casinos are fighting tooth-and-nail to limit the increase. Some casinos have said they would scrap the deal entirely if the proposed increase is too high. While that could cost the IRS billions in unreported tip income, it would increase the pressure on tipped workers to record their tips, as the IRS is expected to follow such a move with increased “attention” to tax reports from casino employees.
The Culinary Union is working to create a defense fund to help employees who forgo the tip agreement and are audited by the IRS.
Tropicana hits 50
When it opened on April 4, 1957, the Tropicana Resort and Casino was unlike any other property in Las Vegas. As the property celebrates 50 years on the Strip—a remarkable feat considering the modern preference to demolish and rebuild every 10 to 15 years—it is in store for some drastic changes.The property was perhaps the nicest in Las Vegas when it opened, but years of service as one of the mob’s piggy banks followed by numerous management changes have put the property behind the pack on the busy corner of Tropicana and Las Vegas Boulevard.
In 1979 the Ramada Corp. came in to rid the property of its ties to organized crime. Ramada spun off its casino operations in 1989. The property was recently the subject of an intense bidding war in which Pinnacle Entertainment’s $1.45 billion offer fell short of the offer from Columbia Entertainment—an affiliate of Columbia Sussex Corp.—to take over parent company Aztar Corp. for $2.1 billion.
Columbia Entertainment has announced plans for a $2.5 billion renovation project that will completely change the face of the aging property.
“It’s a relic of the past we admire and respect, and we would like to see it work out going forward, but I don’t think it will, “ said Rich FitzPatrick, Columbia’s senior vice president and CFO.
Columbia’s plans call for destroying the low-rise motel wings to make room for new towers that will increase the room count from 1,880 to more than 10,000 by 2010, operated by independent hotel companies.
The only thing likely to remain is the longest running production show in the country featuring the original showgirls of the Strip, Folies Bergere.
“It’s a great link to the past,” FitzPatrick said.
Primm gets Terrible-ized
While puns abound about the “terrible” new owner of the former MGM Mirage casinos in Primm, Nevada, the fact is that the deal is good for everyone involved.It gives MGM Mirage, which sold the three properties—Primm Valley, Buffalo Bill’s and Whiskey Pete’s—for $400 million, the ability to focus on its residential development project in nearby Jean. For Herbst Gaming it’s the chance to expand a growing gaming enterprise that started with a small Nevada slot route. For the employees, it’s a return to the family-style operations from the old days in Primm.
“My brothers and I are extremely pleased about the acquisition of these three great assets,” said Herbst Gaming President Ed Herbst. “We look forward to continuing and building upon the legacy started at these properties by the Primm family. We believe that the Buffalo Bill’s, Primm Valley and Whiskey Pete’s assets and their customer base fit in extremely well with our existing eight casino portfolio, and that the ‘Terrible’s’ brand will bring added excitement to the I-15 corridor.”
Herbst Gaming, founded by Jerry Herbst and run by brothers Ed, Tim and Troy Herbst, has more of a family feel to its operations than corporate giant MGM Mirage, a fact that is not lost on the employees of the properties, who transferred companies with the transfer of ownership of the casinos.
“We’re excited to have the Herbst family come down here to run these properties,” said Shana Gerety, an executive casino host at Primm Valley Resort. “These are smaller properties, but there is a real family feel among the customers and employees and Herbst Gaming fits into that perfectly.”
Ed Herbst said the properties are in excellent condition, and MGM Mirage did an excellent job of keeping up the three casinos. The first order of business will be to revamp the gaming floors, including the addition of coinless slot machines using ticket-in/ticket-out technology, getting the players club running and immediately implementing promotions and marketing efforts to introduce the Terrible’s brand to Primm.
In addition to the three gaming properties, the deal also gives Herbst Gaming the 6,000-seat Desert Arena at Buffalo Bill’s, but it does not include the Primm Valley Golf Club, which remains under MGM Mirage ownership.
While the increasing number of tribal casinos in Southern California saw casino cash flow fall to almost 60 percent of figures in 2000, Ed sees potential in the area to expand the Terrible’s customer base.
“Primm is not that far a commute any more, especially from the southern part of the valley,” he said. “The Terrible Herbst service stations have about 100,000 customers a day and we’ll be reaching out to them.”
He is looking forward to restoring the family feel for which the properties were known under the founding Primm family.
“We’ve always admired these locations and how the Primm family operated them,” he said. “I think they fit perfectly with the Terrible Herbst brand.
“I’m excited this opportunity presented itself. The employees and travelers on I-15 will be very happy Terrible’s has come.”
The Primm acquisition is the second major move for the company in recent months. The company closed the $119 million purchase of the Sands Regent—which included the Sands Regency in Reno, the Rail City Casino in Sparks and two other, smaller northern Nevada casinos—in January.
Nevada Landing Shuttered
With most employees heading to different jobs within the MGM Mirage family of casinos, the company closed its Nevada Landing casino in Jean, Nevada, a month early on March 20.The company announced it would close the property in late April as part of a redevelopment plan for 166 acres it owns in Jean, which is about 25 miles south of Las Vegas.
About half of the employees transferred to MGM Mirage’s other Jean property, Gold Strike, while the rest were transferred to various properties on the Las Vegas Strip. Others took positions at the company’s holdings further south in Primm.
Those properties, Primm Valley, Whiskey Pete’s and Buffalo Bill’s, have been sold to Herbst Gaming for $400 million, and the jobs will transfer to the new owned.
“There wasn’t a single MGM Mirage property in Southern Nevada that didn’t pick up a former Nevada Landing worker,” said company spokesman Gordon Absher.
Going Up
A traditional Japanese blessing and sake pouring ceremony marked the start of steel placement at the Cosmopolitan Resort Casino in Las Vegas.Cosmopolitan owner Ian Bruce Eichner, along with representatives from Perini Building Company, Schuff Steel, DeSimone Engineering and JFE Engineering took part in the event. The ritual is traditional in Japan—where JFE is headquartered—and it is considered bad luck not to hold such ceremonies.
The ceremony marked two major construction milestones: the completion of the excavation of 800,000 cubic yards of dirt and the start of vertical construction.
When completed, the Cosmopolitan will consist of two 600-foot towers with a total of 3,000 condo-hotel units. It will also have a 75,000-square-foot casino, 150,000 square feet of convention and retail space and a 50,000-square-foot spa. The property will also connect the neighboring MGM Mirage Project CityCenter.
“It is not encroaching on our design,” said Cosmopolitan Chief Operation Officer Audrey Oswell. “We were able to achieve the design we were looking for and build the amenities into the project we wanted to with the footprint that we have.”
The Cosmopolitan will be located between the north end of CityCenter and Bellagio, and across the street from the redeveloped Planet Hollywood—formerly the Aladdin.
“I think it is safe to say when construction is completed, it is going to be ‘the corner’ in Las Vegas,” Eichner said. “I think the Strip-centric architecture and program is unique.
Planet Hollywood Arrives
It’s taken nearly three years but the Planet Hollywood Resort and Casino has finally arrived on the Las Vegas Strip.Work to transform the Arabian-themed Aladdin hotel-casino has been ongoing since OpBiz bought the bankrupt property for $500 million. OpBiz co-chairman Robert Earl, who founded the Planet Hollywood restaurant chain, was joined by several high-profile celebrities last month to welcome the property’s new theme.
“Here we are, standing in the ultimate location in Las Vegas, in the center of the Las Vegas Strip to unveil Planet Hollywood Resort and Casino,” said Earl. “This project is the fulfillment of a dream, and I am very proud to say that the Planet is rising!”
The celebration marking the grand opening will be held at the end of September.
“We will be throwing the biggest party that Las Vegas has ever seen,” said actor Bruce Willis, who joined Earl and actress Carmen Electra, baseball star Roger Clemens, tennis star Pete Sampras and boxer “Sugar” Ray Leonard in introducing the revamped resort.
The $1 billion makeover will eventually bring 2,600 movie-themed guest rooms, and 1,200 time-share residences scheduled top open in 2009.
The property will also feature an expanded lineup of restaurants and nightclubs, all in an effort to bring some youth and vitality to a property sitting on what could become the hottest corner in Las Vegas across from MGM Mirage’s Project CityCenter.
The revamped property will also see some changes at the Desert Passages, the Arabian-themed shopping mall that has been dubbed the “Deserted Passages” by some. Last month, Boulevard Invest announced that the mall will begin operating as Miracle Mile Shops in May.
Icahn Selling Casinos
Investor Carl Icahn has agreed to sell his American Entertainment Properties Corp. gaming operations to Whitehall Street Real Estate Funds for $1.3 billion.
The deal will send 17 acres of Strip land and the properties operating under subsidiary American Casino and Entertainment Properties—the Stratosphere Casino Hotel and Tower and Arizona Charlie’s Decatur and Boulder in Las Vegas, and Aquarius Casino Resort in Laughlin—to Whitehall, which is a group of real estate investment funds affiliated with Goldman, Sachs and Co.
“Our gaming investments are a successful example of our strategy of acquiring undervalued and out of favor assets and improving operations and enhancing value,” Icahn said. “The management team has done a great job turning this business around. We believe that this sale represents an opportunity to take advantage of the current favorable market environment for gaming assets and to realize significant gains on our multiyear investment in the industry.”
The transaction, subject to regulatory approval, is expected to close in about eight months.
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