The Strip, with few exceptions, is no longer for gamblers.

MGM is at it again.


When they first announced their "profit growth plan" (PGP) the monetary target was $300 Million dollars. This was to be achieved by choking their popular MLife Rewards plan, increasing prices at restaurants (effectively devaluing comps), lowering their theoretical calculations (further devaluing comps), decreasing payouts on slot machines and offering worse odds on table games such as blackjack (6/5 payouts on blackjack is among the worst rule changes in a decade for players) and others.  They also, famously, decided to bring paid parking to the Las Vegas Strip.


Oh sure, there were whimpers of protest. "Free Parking on the Strip is a God Given Right!" some said. High-end gamblers (not Whales, don't confuse the two) swore to never darken the doors of MGM properties again and the savvy mid-to-low level gambler relocated their tacks to Freemont Street.


The thought behind these protests was that MGM would face such an exodus of high-value patrons that they would actually lose profit instead of grow it. The result would be a financial calamity so severe that the executives in charge would be forced to resign in disgrace and the ground from which their PGP idea sprang would be salted and viewed forevermore as a place to dump refuge.


So, how is it all working out?


Swimmingly


MGM raises profit growth forecast by $100 Million. VegasInc.com 

MGM Resorts International said today that its initiative to cut costs and grow revenue should generate an additional $100 million annually before certain costs. 

The company had previously anticipated that, by the end of 2017, its Profit Growth Plan would result in $300 million in annual adjusted earnings before interest, taxes, depreciation and amortization. That target has now been raised to $400 million.

What this means is that, for now, the know-nothing executives did a better job reading the new Vegas clientele than did the customers themselves. MGM understands that they are now a party destination that happens to offer recreational gambling for people who want free (now watered down) drinks while throwing money away at slots and table games with rules that make a positive return highly unlikely.


But they don't care.  Because gaming, on the Strip, has devolved into a short, albeit expensive, party that occurs before dinner and spending even more ridiculous amounts at clubs. The casino floor is just an excuse to get liquored up with your friends before going out and getting rejected by that hottie on the dance floor.


For the serious gambler then, the Las Vegas Strip is an increasing wasteland.


There are, however, a few beacons of hope.


The Cosmopolitan.  After initially opening with MGM's plan in mind, the Cosmopolitan was forced to reverse course after several years of failing to turn a profit.  Many observers pointed to the Cosmo's failure as proof MGM was destined to fail.  What they didn't take into consideration was the economy of scale advantage that the lion enjoyed. 


The Cosmopolitan is one resort/casino, MGM is many.  MGM has the flexibility to offer accommodations and amenities at a wider variety of price-points which caters to a wider variety of guest. Whereas the Cosmopolitan, as nice as it is, limited itself to the Millennial guest who found themselves with high-end options elsewhere, just as good and also connected to a wider variety of options.


On the Middle/South portions of the Strip the Cosmopolitan will be alone in mining their current niche. They're close enough to the Bellagio, MGM Grand and Caesar's that people can stay there and go to the other high-end restaurants and clubs, and they're upscale enough that the high-end gambler will feel sufficiently pampered.


In the early going, the strategy seems to be working. In the 2nd quarter of 2015 the Cosmo finally posted a profit and they've continued that trend in every subsequent quarter.  On my next trip to Vegas (in August) I plan on moving most of my gambling tack there.




The Venetian/Pallazo. These two casinos, owned by the Sands Group and Sheldon Adelson, have always done a pretty good job catering to the high-end gambler and, as a result, have many devotees who will not gamble anywhere else.


The Sands understand how to treat high-rollers and they have a wide variety of games available for the high-end player. They have good high-end lounges and their rewards/loyalty program appears to be fair. They also boast an amenities list that is second to none, and their properties are two of the most beautiful on the Strip.


The drawback to V/P, is two-fold.


First, Mr. Adelson himself. It is possible that he and Steve Wynn (more on him later) are two of the more odious people operating casinos on the Strip today.  Not only is Adelson seemingly a bad guy, but he also is displaying authoritarian tendencies with his online-gambling bill and purchase, and gutting, of the Las Vegas Review-Journal.


His politics aside however he at least appears to not have many of the individual shortcomings as his contemporary.


Second, location. I'll expound on this a little bit more further down. But it's very clear that, in the early battles, the North end of the Strip lost.


Wynn/Encore. Casino Magnate Steve Wynn has always been a trendsetter in Las Vegas.  This is the man who opened the Mirage however and revealed that Vegas could be more than just polyester-clad weekend tourists playing quarter slots. He ushered in and modernized high-end amenities and catering to the high-end gamer on the Strip. To his eternal credit he revitalized the Vegas brand at a time when it desperately need it.


His two casinos are, in a word, opulent. They're two copper-hued towers with a soft golden interior that are a joy to play in. They have amenities that are second to none and high-end gaming that caters exclusively to the biggest players in Las Vegas. He has also built a palace that attracts the true whales*, although you will never see them.


The problems with W/E are almost identical to those faced by V/P.


Steve Wynn is, by all accounts, an odious man with few redeeming values who would think it just fine if the great unwashed stayed away from his casinos and limited their Vegas experience to MGM and Caesar's properties. To many people, giving money to Steve Wynn is as odious as making a political campaign donation to the other party.


W/E shares the same location issues with V/P. They're both located at the North end of the Strip surrounded by partially completed buildings, downscale casinos and low-end strip centers.


All that said, there is hope.


Alon, Lucky Dragon and ResortsWorld International continue to promise that they will be opening, Trump Tower is reportedly in negotiations to open a casino, and there are continued rumors that the owner of Treasure Island, Phil Ruffin, is still interested in purchasing the Mirage if MGM will come to their senses and make the price right.


Should all of this happen then the North end of the Strip could find itself positioned as the independent option to the focus-group, corporate controlled, party zone that the South end of the Strip has become.


If you're a mid-to-low end gambler of course, none of this applies.  I'll expound on that further in a future post.

Sports on TV: How to save TV deals? Look to Gaming.

It's a problem that's sneaking around the edges of College and Professional Sports. Namely, what's going to happen as Millions of viewers "cut the cord" and the dollars that have been flowing into league, team and school coffers begins to dry up?

Changing TV Viewing habits threaten Billion Dollar Deals. David Barron, HoustonChronicle.com ($$$)

But networks are wrestling with recent subscriber declines as millennials reject or trim back on the cable/satellite bundle pricing system that had fueled unprecedented payouts for the rights to broadcast college sports. Investors are skittish as television executives try to read - and monetize - the whims of a generation that is as happy to watch games on laptops or smartphones as their parents are to watch on 60-inch flat screens.

On the college side, athletic directors are scrambling for new money to support non-revenue sports, pay coaches, and expand stadiums and facilities as part of the athletics "arms race," while meeting NCAA demands to increase benefits for student-athletes.

Viewers abandoning TV networks is a problem but it's not THE problem, THE problem is that the schools and leagues don't really have a viable plan for what follows.  The answer to the question is expanding sports gaming, both online and at brick & mortar locations across the country. Currently, most, practically all, online gaming is limited by the Unlawful Online Gaming Act of 2006. Ironically, this act is also what companies such s Draft Kings and FanDuel rely on to justify their business models (for a primer on why this is, see the law of unintended consequences).

Sports gaming regulation goes back even further, to the Professional and Amateur Sports Protection Act of 1992. It was that act that pretty much permitted Las Vegas to operate with a monopoly on Sports gaming, especially since New Jersey (and Atlantic City) neglected to take advantage of an election to opt in within a year after the law took effect, a mistake that the state is desperately trying to undo in order to keep Atlantic City alive.

The 1992 law carved out exceptions for Dog & Horse racing and, in a nod to Florida, Jai Alai. This is why you have horse tracks in say, Texas, that offer pari-mutual wagering via simulcast.  Fast forward to today and you're seeing (again) the unintended consequences of this act.  Now we have Bodog, and 5 Dimes and a host of other off-shore based betting sites that operate illegally, but on an unofficial gray market which the Federal Government is all but powerless to shut down due to the offshore locations of most of the books.

One option is to go after the players themselves, which would result in a disaster and, most probably, the indictment and trials of some high-profile public figures, many of whom are probably on the front-lines in the "fight" against gaming. You would have Millions of people charged, tried and (possibly) incarcerated in an already over-burdened system.  Much like online poker sites, the federal government seems content to leave the players alone, and continue to go after the operators.

They are, as we know, unsuccessful.  Since the passage of the Unlawful Online Gaming Act of 2006 (UOGA) sports gaming has boomed, and not just from Daily Fantasy Sports (DFS). Traditional spread, or side, betting has never been more popular, and even mainstream networks such as ESPN, CBS and NBC frequently mention odds (or lines) in their coverage of live events, sometimes painfully but sometimes brilliantly. In fact, despite their attempts to limit it, Congress and politicians have seen the sports gaming industry boom since 2006.

What does all of this have to do with television?

As less and less people tune into to cable/satellite/content providers who provide the networks with most of their income, the revenues are falling and the anticipation is that the TV money flowing in will as well.  The Networks are going to have to find a supplement for these incomes somewhere, and an expanded gambling network should be ready and willing to act in a manner that allows them to do so.

The fact is this. People are more willing to bet on games that they can actually watch. When ESPN airs a MAC conference football game between two-smallish schools they still draw fairly substantial viewing numbers. Why? Because a lot of gamblers are watching the games.

These online sites/brick and mortar sports books and other outlets would be willing to pay a pretty penny for advertisement, and possibly become partners in broadcasting the games to ensure they have access.

Now, imagine this dynamic greatly expanded.  Because there are casinos in multiple states who are, due to UOGA, not allowed to offer sports betting. Imagine if they could?  Imagine that the illegal off-shore casinos were legitimized and taken off the gray market into a competently regulated one?

Of course, States could still vote to limit (or prohibit) gaming within their borders, but the states that already have casinos aren't going to balk, and many states have already shown a willingness to embrace online services such as Fan Dual and Draft Kings, would sports betting be that much of a reach?

Granted, this is not going to be the golden goose that saves schools or makes the States richer than the dreams of Midas, but it would go a long way to putting a salve on the open wound that are State Lotteries and might provide the leagues and universities money as well.

Yes, there are problems inherent with big-time sports at both the professional and collegiate level. For one, almost all of them survive on the backs of the taxpayer who, in many cases, cannot afford to attend the games in the arenas and stadiums that they paid for. Second, big time college athletics, as administered by the NCAA, exploits the athletes to the extreme, not even allowing them to profit off of their visage while they are "student-athletes" (a term that is, increasingly, meaningless).  The fix for this would be complex and problematic, and it would require municipal leaders who are willing to stand up to the shake-downs by professional sports teams. It would also require reforms by the NCAA. In short, none of that is going to happen barring a disaster.

Then there's the political problem. Many politicians feel that it is their charge to protect the American populace from itself. Gambling can cause addiction and is therefore listed as something that is "bad" and should be outlawed, or tightly contained. That this containment only makes people go to greater, and often-times illegal, lengths to get their fix is something lost on most.

So the proposal I'm making is certainly a non-starter, at least considering today's political and social environment.  That doesn't mean that the conversation cannot be started.  Working (not fighting!) toward a day when sports gaming is more legal. more honest and (yes) better regulated (note that I didn't say 'more' regulated) is something that will always be worth a conversation (or three).

The NFL and Raiders: Leverage.

Las Vegans are no doubt salivating today at the news the NFL is still interested in locating a team in their city.

NFL Official: Don't write-off Las Vegas as possible home for the Raiders. John Breech, CBSSports.com

What happens if Oakland and Los Angeles both fall through?

Viva Las Vegas!

Sin City was a hot topic at the NFL owners meetings this week, and it's starting to look like Vegas is becoming a more attractive option.

"I think it would be a mistake to just write Las Vegas off," a high-ranking league official told the Los Angeles Daily News. "It's all predicated on getting the financing in order, but if they do, considering the Raiders brand and how well it could play in Las Vegas and all the various other dots that can be connected, the Raiders would have a very compelling argument to make."

More here here and here.

Now, before you get all fired up and make plans to either get season tickets or, more likely, try to decipher the NFL's scheduling algorithm to determine when your team is traveling there, please remember that the NFL has a long, long history of setting up cities who are never going to have a serious chance in order the sweeten the deal for the owner currently in negotiations.

Make no mistake about it, NFL Commissioner Goodell would rather sit in the cheap seats and share a beer with the common fan than he would have a team located in the sports-gambling mecca of the United States of America.

Goodell hates sports gambling because the NFL cannot control it.  Unlike DFS, which was an emerging industry and needed the league's participation to grow, sports gambling is already a multi-Billion dollar enterprise. It's ran, and almost totally controlled, by either casinos or off-shore betting houses, who have little reason to partner, and be controlled by, the NFL and their heavy regulatory hand.

It also doesn't help that Goodell, and most of the owners, are still living in the fantasy land of the past where sports gambling is rigged by the mafia and where cars hit transformers mysteriously when the game play is headed against a large interest. In fact, big losses on single games are expected, at times, by the sports books now. Sports gaming has become just like all other gaming. Based on theoretical formulas and based on maths.  In the old days the casinos were nowhere near as savvy at advanced mathematics as they are today.  They still overwhelmingly won, but they were also prone to panic, which is something you never see today.

What the NFL is doing is using Las Vegas for leverage. It's something they've done quite frequently in the past and it's an attempt to get Oakland, or another city, to pony up hundreds of Millions in tax incentives for their playgrounds.

While I think it's a possibility that Las Vegas ends up with an NHL expansion franchise, I don't see any way that the doddering old fools who run the teams ever allow Steve Wynn or Sheldon Alderson into the game of professional football.

Spring Trip 2016: Dinner at Craftsteak

When we were planning the trip for my Mom she had two requests:

1. She wanted to see the Bellagio (Ocean's 11 being her favorite Vegas movie)

2. She wanted to eat at Tom Colicchio's Crafsteak (Mr. Colicchio being one of her favorite chefs)

Taking the 2nd item 1st, here is the recap of our dinner at Craftseak. (In MGM Grand)

First, MiniHam decided to stop for a picture in front of Caesar's. Then he tried a little gambling at Whiskey Down prior to dinner.

MiniHam and My fat arm in front of Caesar's

No pockets, this is a problem.

After a trip down the Strip to MGM, cocktails (not pictured, although on my next trip I'm going to write more about Whiskey Down which is a great place) We finally settled into our table.

MiniHam checks the menu

He liked Whiskey Down quite a bit.

Now that we had the menu, it was time for appetizers.

The wife's: Caprese salad with hazelnuts

Mine: Warm Firsee salad with duck egg

Mom's spinach salad.

Once done with the salad course we moved on to Entrees.

The wife: Strip Steak

Me: Braised Short Ribs

Fingerling potatoes and gratin potatoes

Creamed pea tendrils and mixed carrots.

Then on to dessert..

Monkey bread - House signature dessert

Coconut and orange basil gelato

Not too bad for 4 people.

For our wine selection I ordered a Tenuta San Guido, Guidalberto 2012 which was priced at $125, when he brought the wine the sommelier brought out a 2002 Tenuta San Guido which retails at $550. When I pointed out the error to him he was more than polite.  I've had that particular wine and find it lackluster for the price. All in all I prefer the Guidalberto which is a much better wine for value.

Now that the pictures are done let's talk about it just a bit.

The best meal that I've ever had was eaten at Craftsteak a few years back. That meal included the same short ribs, but prepared as raviolo in a brown butter sauce. I also had the braised prime New York Strip and creamed spinach. That was the first time that I've ever had the Monkey bread and it's so good that I'll never really enjoy a cinnamon roll again. During that meal we had the perfect combination of waiter, assistant waiter and sommelier, it was the most enjoyable dining experience of my life, that I did not cook at home.

Fast forward to this trip and it was just as enjoyable. The wife and I have eaten at restaurants all over the world, from 3 Michelin star palaces to glorified dives. We've found outstanding food in all locations. Saying that I realize that there are more accomplished chefs in Vegas (Robechon anyone?) or restaurants with more status (Nobu, and several others) but when you consider service, food quality and value for money Craftsteak is just about at the top for me.  All of the appetizers, especially my warm frisee salad with duck egg, were excellent, the entrees were outstanding, Colicchio's short ribs are a destination meal, and oh that Monkey bread.

Next time you're in Vegas I suggest you get a reservation (strongly recommended, it's always busy for dinner) dress up (dress is business casual) and give it a try.

Don't forget the monkey bread.

Spring Trip 2016: Introducing MiniHam

I wanted to take just a second to introduce you to MiniHam, the unofficial, official mascot of Las Vegas Central.

Here he is ordering Bloody Mary's for everyone and saving our seats on SW during the February Las Vegas Trip:

You'll be seeing a LOT more of MiniHam in the trip reports to come.

Gambling News: MGM PGP It's bad.

Judging from the scuttlebutt around various Las Vegas Message board the recently announced MGM Profit Growth Plan is starting to cut into gambling compensation in a big way.  Anecdotal evidence, again from the chatter boards, reveals that the cuts are starting hot and heavy.

1. Reduced comp percentages:  This is the option that really seems to be getting everyone's goat, because theoretical-based compensations somewhere around 40% of expected loss has been the law in Las Vegas for a while now. Like free-parking, which we'll get to in a minute, 40-45% is almost viewed as a constitutional right by the seasoned high-roller. It's hard to tell just how far the exact rate has fallen but there are reports that it could be by as much as 10%.

2. Death by 1,000 cuts. - A poster on the VegasBoards forum noted that MGM has cancelled the Sirius XM radio service in their luxury fleet of courtesy cars, have cut the schedules of experienced dealers, as well as implemented a series of other cuts that can only be viewed as gambler unfriendly.

3. Raising comp prices.  Call it the third prong in the gambler-pitchfork that is the PGP, by raising comp prices,  (there is a good discussion on this here) In effect, MGM has decided to reward the players less, reduce how much they can get, and charge them more for getting it.


The effect of this is driving more players to less networked casinos like The Cosmopolitan or Wynn/Encore who, while still making cuts, are not doing so with the speed of MGM.Left out of consideration, for the most part, is Caesar's who really doesn't have anything in it's profile that can really cater to the modern high-end player.

MGM does have hotels that can compete however, in the form of Bellagio and Aria but the company seems content to abandon the deep-pockets gambler in return for courting the younger, clubbing crowd that both don't get, and usually don't ask for, compensation.

There are also rumors that the casinos are altering the calculations on their theoretical loss calculations downward. It's going to be difficult to determine whether or not this is actually taking place because they are treated as trade secrets and not readily available. According to one recent report, they are also loss-amount restricting the loss payback to $100K, which is awful.

In the short-run there's no reason to think that this is going to get better before it gets worse. The more casinos clamp down on the players the less revenue comes from the gaming floor. This is acceptable to the casinos because 1. They're currently making up for the lost revenue in retail (both club and store-front sales) 2. Room renovations mean that they can charge higher rates to millennials, who don't gamble as much, don't ask for free stuff, and just come to Las Vegas to party.

It's not that the millennials aren't gambling, it's that they don't do it very often, seriously.  The typical millennial gambler in Las Vegas is stopping off at a black jack table, craps, roulette or even slots for fun. They're typically with a group of friends and are willing to blow $200-$300 on a lark. The ones with a bigger bank-roll aren't any more serious, but they might think they are, and can waste thousands per night making hunch plays.  For this they typically do not get either rated, or comped for an entire weekends play.

Casinos, being managed by unoriginal people, are both struggling with this and adapting poorly to it by over-correcting the opposite way.  Back in the Aughts and during the so-called great recession, you could roll into Vegas with $4000, generate some play and walk-out, just, with a Jr. Suite and a limo ride to the airport.  Back then the resorts were selling the adventure.  High-end wine prices were reasonable, though not cheap, and high-rollers* were treated with style and panache. The dream was real.

Today, at MGM properties especially, you're thrown into a mechanical world of algorithms and theoretical formulas. For the most part discretionary comps have been removed from the discretion of the host, and upgrades are an auto-fee rather than a perk. They're cutting down on the rate you earn and making it more expensive to redeem. It's the classic vice that players are stuck in.

At the end of the movie Casino, a must-watch if you haven't, Robert DeNiro's character is bemoaning the changes that Vegas underwent in the late-80's. He finishes up by saying this: "Now a high-roller walks into a casino with a briefcase holding a Million Dollars and a pimple faced kid asks him for his ID." The problem for the high-roller is this: Where else are you going to go?



























*It's not right to call high-rollers 'whales'. In fact, using that term will get you branded a 'noob' by those in the know. In fact, there are only around 20-30 true "whales" in the world.  And even they don't call themselves "whales". If someone identifies themselves as a whale, they are lying.

Spring Trip 2016: About those Flamingo FAB rooms...

For rooms that were recently renovated (except for the bathrooms) the FAB (or entry level) rooms at the Flamingo are really odd.

Water Damage on the ceiling

Dead space in the bedroom.

the 80's called

For rooms that were given a courtesy once-over these rooms really are in need of some help. Of course, the bathrooms are old, but there was at least working hot water, the carpet is industrial and the separate sleeping area, off of a living area, was just barren.  Ours had a king bed, two night-tables and the big-assed empty space in the wall that you see above.

That said, having the segregated sleeping area, with no windows, made getting some shut-eye easy. One big problem though is that they didn't vent that sleeping space at all.  Because of this it would be ice-cold in the living room/bathroom area, and sweltering in the sleeping area because of no air-flow. As someone who likes to sleep cool that was a problem for me.

From the window, we had 1/2 a view....

Bad view

High Roller View

LINQ view

Fortunately, the blackout curtains worked well, and the room would get DARK during the early morning, when we were usually sleeping. As far as cost goes, the room, for us, was comped for two of the four nights and $29 for the other two. This does not include the $32/night resort fee that we still had to pay.

Part of the reason for the bad comps is my rather anemic game play on the last couple of trips. Two trips prior, I caught the worst case of food-poisoning I've ever had and spent two days shut-up in my room, shivering, sleeping and yarfing everywhere.  On the trip prior to this one (in October 2015) I played a little more, but the wife and I were staying at the Linq and spent most of our time riding rides.  My play on this trip was much more robust this time, so I'm waiting to see if that has any impact on the offers I get.

I was in a take it or leave it mode with the Flamingo. I'm a guppy, not a big gambler, so I don't expect much in the way of offers.  My chip-porn isn't rated XXX, or even R, compared to others I'd be PG. So when it comes to gaming and service I don't expect much in Vegas when we go.

The thing is though, after about 5 years dedicated to MLife I decided to switch over to Total Rewards last year and have noticed something completely different. Whether or not you are a big roller or no, you at least get treated with something resembling customer service at the TR resorts.  Yes, the hotels/casinos are not as flashy, or gimmicky as are the MLife properties, and TR doesn't have anything that compares with Bellagio, Aria etc.  But when it comes to being treated like a damn human being they run circles around MLife, who have clearly decided that it's perfectly acceptable to plug people into an algorithm, and treat them accordingly.

My next post will be a brief introduction to MiniHam, our new travel mascot and something that the wife and I are having a LOT of fun goofing around with.