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November 22, 2009

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LOOKING IN ON: GAMING:

No more ‘Wheel’-ing at 2 Harrah’s properties on Strip

By Liz Benston (contact)

Monday, Aug. 18, 2008 | 2 a.m.

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Beyond the Sun

If you’ve been in Bally’s or the adjacent Paris casino recently, you may have noticed a conspicuous absence of “Wheel of Fortune” slot machines.

The disappearance of one of the most popular slots of all time highlights an age-old conflict between casinos and manufacturers over participation machines, which aren’t owned by casinos as regular slots are, but are operated by slot makers, with casinos receiving a percentage of revenue.

Casinos have never been happy with the arrangement, saying such machines are more expensive over the long haul. Slot makers, responsible for paying out jackpots on these machines, say they are worth the added costs, which pay for licensing and jackpot maintenance, among other things. Participation games usually have known brand names, such as “The Price Is Right” and “Indiana Jones,” and typically offer bigger jackpots than generic games by pooling wagers from hundreds of players.

Given the popularity of such games, some companies have recently added them to their casino floors to boost business, said Ed Rogich, vice president of marketing for International Game Technology, maker of “Wheel of Fortune” and other brand-name slots.

The company suspects the owner of Bally’s and Paris, Harrah’s Entertainment, removed some participation slots to cut costs in the wake of the downturn.

Harrah’s, which laid off more than 10 high-level managers a couple of weeks ago, is among many companies implementing cost-cutting initiatives.

Spokesman Gary Thompson says the games simply weren’t popular with players. The change isn’t tied to the downturn, nor is it unusual for an industry that’s constantly trying out new machines and removing those that don’t perform, he said.

• • •

Before there was a credit crunch, there was a credit bubble. And the expansions and deals financed with cheap cash are now in trouble as interest rates rise and revenue falls.

In a report Friday, bond rating agency Moody’s Investors Service said there could be trouble ahead for gaming companies that can’t raise more cash.

Moody’s downgraded seven gaming companies’ liquidity ratings in July. Three, including Station Casinos, earned the agency’s lowest speculative-grade liquidity rating of SGL-4.

Such ratings are assigned to riskier lenders on a scale of 1 to 4 with 4 being the weakest financial position for a company that relies on “external sources of financing, the availability of which is highly uncertain,” according to Moody’s.

Station, along with Las Vegas Sands, Harrah’s Entertainment and MGM Mirage (the latter three carrying a slightly higher rating of SGL-3) has slipped to the level of AirTran, American Airlines and US Airways. Although the outlook for airlines remains grim, gaming companies, traditionally debt-heavy, are expected to rebound once the economy improves.

A record 63 companies carry an SGL-4 rating, compared with 53 a month ago and 25 when the credit crunch began a year ago.

• • •

Score the latest round for the Paris-ites.

Despite all its fans, “Star Trek: The Experience” ends its 11-year run at the Las Vegas Hilton on Sept. 1.

It seemed no match for the explosion of the Paris Hilton-wannabe crowd in Las Vegas that is drawn to nightclubs with celebrity DJs, ultralounges with infused vodka drinks and restaurants with brand-name designers — in other words, everything that the “Star Trek” attraction and its celebration of nerd-dom is not.

Add in the fact that there’s no “Star Trek” offshoot series currently running on TV and you have enough reason for casino executives, who failed to come to terms on a new lease with tenant Cedar Fair Entertainment, to seek a new way to spice up their Barry Manilow-headlined property.

Chad Boutte, operations manager for the Experience, is still shaking his head in disbelief.

“The fan base is only going to get bigger” when a new “Star Trek” movie opens next year, he said.

Thousands of angry fans have informed Boutte that they no longer will come to Las Vegas because the reason for their pilgrimages is disappearing.

We’ll see whether the Hilton can make more money by being more trendy than Trekkie.

Discussion: 9 comments so far…

  1. By neiman1
    8/18/08 at 7 a.m.
    Suggest removal

    The decline in profits at Casinos will further shrink state revenues (federal revenues as well with less corporate taxes). This will leave less for education and services we take for advantage. When will our "leaders" realize without American energy we will be bankrupt. Contact our senator harry and tell him to call the Senate back and vote on drilling, nuclear, coal, solar, wind, and anything else that keeps American dollars here for American jobs.

    email link
    http://reid.senate.gov/contact/index.cfm...

    Las Vegas
    Lloyd D. George Building
    333 Las Vegas Boulevard South, Suite 8016
    Las Vegas, NV 89101
    Phone: 702-388-5020 / Fax: 702-388-5030

  2. By homer
    8/18/08 at 10:08 a.m.
    Suggest removal

    neiman1, Why don't you call George Bush and ask him what he and Cheney did with all of the payola they took from energy compamies and why a real energy policy was not found under his watch?
    These same questions can be asked of Bush. If he had not made the world hate him things would be better than they are now. You must remember before congress adjourned the Republicans refused to talk about energy.

  3. By azsk8fan
    8/18/08 at 10:37 a.m.
    Suggest removal

    yes, 8 yrs Bush had to flush us down the toilet - and for most of that time we did not have the Dems in the majority so put the blame where it really belongs. How nice that the Bush's were able to attend the Olympics when some American's can barely afford to fill their cars just to get to work. Ahhh.....the rich get richer and
    the poor get poorer and
    the middle class get....
    WAIT - what Middle Class???????????????

  4. By scouser
    8/18/08 at 12:33 p.m.
    Suggest removal

    Make ballys the first smoke free casino and watch the gamblers flock to gamble in a pleasant atmosphere.

  5. By DaveS
    8/18/08 at 2:23 p.m.
    Suggest removal

    Old time individual casino operators in Vegas have always strongly opposed "participation" games in thier casino's - it seems to be the Young Turks using [other peoples money] that have welcomed all the participation pieces in recent years. I would guess that the bottom line to the Casino's will be a positive net gain - then watch the scramble for floor space intensify.

  6. By macdaddyg
    8/19/08 at 1:04 p.m.
    Suggest removal

    The last time I saw a casino go smoke-free, it was the Silver City Casino back in the 90's...that site is now a Walgreen's I believe.

    Las Vegas is not called Sin City for nothing. Gambling, smoking and drinking go together. If you doubt me, just take a look at Atlantic City.

    Just my $0.02 worth

  7. By rougie
    8/19/08 at 3:32 p.m.
    Suggest removal

    What exactly happened when Cheney meet with the energy companies to set up an energy policy that he never has wanted to talk about? The Repugs in Washington on the floor trying to make the Dems look bad have had years to do something and now all of a sudden it is a crisis? Then you have McCain saying today on an oil rig that when he is president we will not be sending $700,000,000,000 over seas for oil no more. Where does he expect the oil to come from then? Was it not the Republican Florida govenor, the presidents brother at that, that did not want drilling off the coast of Florida? And on and on it goes.

  8. By SebastianLawrence
    8/21/08 at 2:51 a.m.
    Suggest removal

    It's terrible these slots are going, I don't know much about the logistics of it, but your article really told me what I needed to know. It's crazy that the dreaded credit crunch could even hit casinos, I recently read an article about this in some gambling magazine; that most people expect casinos to just ride it out and quite a few are crumbling. Anyway, I know it's not much and if this classes as spam I'm really sorry, but I've started a petition called "Save Harrah's slots!", which you can sign here: http://www.petitiononline.com/logilots/p... if you have any suggestions, put them in the comments section. Hope this is okay!

  9. By allalee
    8/26/08 at 5:18 a.m.
    Suggest removal

    Why would casino operators want to share gaming revenue with game makers anyhow?

    Wouldn’t it be in the best interest of the casinos to add more perks and comps and give back directly to the customer

    Seems to me that customer good will would bring in more revenue than sharing profits with more fat cats in the business arena

    Who hires these managers who make these decisions anyhow?

    A monkey could figure the mathematics of this

    Donald Engen
    Niland Ca

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