Casino News Today

Phillip Morris

Plain Dealer Columnist

I hope it fails miserably.

I will do my part to make sure Keno, the state’s latest lottery offering, is a royal bust.

And I’m a committed gambler.

But I’m sick of the state spinning lemons and calling them royal flushes. I’m sick of the state pretending to cater to my gambling appetites while working hard to keep private enterprise from giving me what I really want.

I’m tired of Ohio spoon-feeding me games of chance, marketed with slogans like “chances are you’ll have fun,” when the truth is most of these games are awful and considerably less fun than a traveling carnival.

What it really comes down to is that I’m tired of the state of Ohio being my numbers man. I’m tired of Ohio’s monopoly on gambling and its shameless huckstering of its games as the golden goose for public education.

Ted Strickland may have been a heck of a country preacher and world-class prison shrink before becoming governor. But as a pit manager, he stinks.

So do his games.

What really steams me about Keno, Strickland’s latest gambling offering, is the fact that it’s about as close to casino gambling as you can get without calling it casino gambling. Keno is “casino lite.”

Except Strickland and his pit boss, Lottery Director Michael Dolan, don’t call it that. Strickland opposes casino gambling. So he has to pretend that Keno is not a casino game.

Dolan once described Keno, which has a drawing every four minutes, as similar to an arcade game, a game of skill: Man versus machine.

But walk into any of Ohio’s 700 or so smoke-free bars and restaurants that started offering Keno Monday (many out of desperation) and tell me that those bright flat-screen monitors plastered to the walls don’t look like casino terminals.

In fact, tell me they don’t look just like some of the flat-screen Keno terminals found in the casinos in the states that ring Ohio.

With Keno, Ohio has dipped its big toe into the casino market. We just won’t call it that. While surrounding states have embraced casino gambling and hungrily look to Ohio’s betting tourists to fill their coffers, we continue to piously putter along, pretending that the state - and the Catholic Church - will fulfill all of our gambling needs.

With Keno, the farce has reached ridiculous proportions.

Ohio voters probably will see a casino proposal on the ballot this November, the fourth since 1990. The other three failed.

If this referendum passes, tiny Clinton County in southwest Ohio will get a $600 million casino. It will share its revenue with each of the other 87 counties.

More importantly, the casino would create 5,000 full-time jobs in a region that has struggled with significant job loss and business defection.

The move would be good for Ohio’s struggling economy. It would keep gamblers at home.

But don’t look for Strickland, Ohio’s Keno chief, to back the casino and the prospective jobs. He’s too busy protecting his own numbers racket.

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CHEROKEE, N.C. — Police said they are investigating a ring aimed at cheating a casino out of nearly $300,000 in three weeks.

The money was stolen from Harrah’s Cherokee Casino in Cherokee County, N.C.

Police said a 26-year-old Blackjack dealer was at the center of the scam. They said the dealer would pay out wins that did not really happen to 11 players in exchange for kickbacks from their so-called winnings.

Over a three week period, the group stole $286,000 from the casino, police said. “Our extensive regulatory system and rules are primarily responsible for detecting this scheme,” said the Cherokee Tribal Gaming Commission in a statement Wednesday. “We actively pursue enforcement and will be pushing for full prosecution of all those involved in this theft.”

A spokesman for the Cherokee Indian Tribe Police Department said no arrests have been made yet, because they are waiting to see if the FBI will take over the case.

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The Echelon, a massive Las Vegas casino and hotel building project, has been suspended by Boyd Gaming. Like pretty much all of Vegas they are feeling the pinch of reduced gambling and hotel revenue. While normally when a company halts a project that is already under construction it’s a bad sign, but investors were actually encourage by the move and Boyd (nyse: BYD) saw shares go up 19.4% to $11.92.

Boyd stated that the halt would probably only last one year, assuming market conditions have improved by then.

Echelon sits on the 87 acres where The Stardust, Westward Ho and Budget Suites once were.

The Stardust, which was imploded on March 13, 2007, was surprisingly new with its main tower constructed in 1991. But that’s how things work on the Las Vegas Strip, especially when real estate prices were sitting at around $34 million per acre.

But now Vegas has become one of the hardest hit cities in the American real estate slump.

According to Forbes.com, “Developers have plans to add more than 40,000 luxury hotel rooms to the Las Vegas Strip - about one-third more than today - but scarce credit and the slowing U.S. economy have led to reassessment of some projects.”

The Echelon, which was originally to be completed in 2010, was to be the crown jewel of the north end of the Strip with a building cost of $4.8 billion and the third largest casino in Vegas.

Here are the details on what the Echelon is supposed to have: 57 floors (eight are currently finished), 4,713 rooms, five towers, 140,000 square-foot casino, 300,000 square-foot shopping venue, 750,000 square-foot convention center, 30 restaurants and bars and a 4,000 seat stadium-style theater.

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STEVE WYNN casually plops a 231-carat, plum-size, pear-shaped diamond into my greedy little paw. Seated in his office in the Wynn casino resort here, and flanked by two German shepherds, he won’t tell me how much he paid for his rock.

But he quickly points out that it’s better than a 218-carat diamond that the godfather of Chinese gambling, Stanley Ho, displays in one of his casinos in Macao.

“I turned that diamond down,” Mr. Wynn allows, before asking if I’ve toyed with his bauble long enough and prying it from my hands.

The give and the take. The grand gesture. The over-the-top glitz. The invocation of magic in a brew of 24/7 gambling, resort excess, ultrahigh-end shopping, fine dining and routine pampering. These are all part and parcel of a toolkit toted around for decades by the man credited with changing the landscape of the Strip and bringing a semblance of class to Sin City.

Later this year, Mr. Wynn, 66, will open his latest project: the $2.3 billion Encore casino resort, a fantasy land featuring 2,034 luxury suites, a glass-encased casino overlooking several pools, and penthouse baccarat tables for high rollers.

The Encore is also an outsize gamble by a man who has made a lucrative, freewheeling career out of such moves, and it comes just as an economic malaise that has been seeping across the country is starting to slam the gambling industry.

Like other businesses dependent on consumers and consumption to make a fast buck, the gambling trade looks particularly vulnerable.

While revelers still fill the streets here and can be found even on a hot summer afternoon pulling slot machine levers, conventioneers are spending much less time in the city and vacationers are shelling out less on restaurants, nightclubs and gambling than they did last year.

“The recession we’re seeing in the United States is affecting Las Vegas more this time around than in any previous cycle,” says Dennis I. Forst, a gambling analyst at KeyBanc Capital Markets.

Nervous investors have already pummeled casino stocks. The share price of the largest publicly traded casino company, Las Vegas Sands, headed by Sheldon Adelson, has plunged almost 70 percent from its 52-week high. The stock of another big company, MGM Mirage (which, along with its majority shareholder, Kirk Kerkorian, bought Mr. Wynn’s old company eight years ago), has fallen by almost exactly the same amount.

Las Vegas Sands and MGM Mirage are also hobbled by the fact that they are undertaking huge and expensive hotel casino developments in China and Las Vegas, respectively, that have investors worried about rising debt levels on their balance sheets.

MGM, for example, has its $9.2 billion CityCenter development under way here. It boasts as many as 8,000 construction workers erecting seven high-rise buildings on 76 acres. Projected to be completed late next year, CityCenter is to be a densely organized “city within a city” with a casino, luxury hotel properties, numerous luxury retailers and about 2,650 condominium residences — yet another megaproject in a town that is already bursting at the seams and has led the nation’s housing downturn.

On Friday, Boyd Gaming, which owns several middle-market casinos here and co-owns the more upscale Borgata in Atlantic City, said it was delaying construction of a partially built, multibillion-dollar casino on the Strip. The Boyd development is a sprawling endeavor undertaken in partnership with the Morgans Hotel Group. Boyd cited the credit crisis and the “challenging economic conditions” as reasons for the delay. Boyd’s stock is down 73 percent over the last year.

But even smaller companies operating in Atlantic City and elsewhere are hurting: shares of Pinnacle Entertainment are down 62 percent over the last year, Riviera Holdings is down 73 percent and Trump Entertainment Resorts is off 83 percent.

Although the stock of Mr. Wynn’s company, Wynn Resorts, has fallen 45 percent, it is faring much better than those of his rivals. And despite the bleak times facing Las Vegas, Mr. Wynn has a rather devil-may-care demeanor when asked about the economy.

“What am I doing opening one of these places in a bad economy?” he asks, leaning forward in his chair. He answers his own question by strumming his lips like a banjo, making a noise that one of his seven grandchildren might make if they were confused, before laughing uproariously.

Joking aside, Mr. Wynn, one of the most magnetic and polarizing figures in the gambling industry, has always thrown himself into his ventures with passion and purpose. And even when embellishing his thoughts with Hollywood-like bravado, he is a wily, singular competitor who, after making hundreds of millions of dollars here, rolled the dice again. He now owns stock valued at about $2.3 billion.

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