Online bookies: Clinton going to the White House

By Liz Benston (contact)

Sunday, Jan. 13, 2008 | 2 a.m.

The political pundits had all but written off Sen. Hillary Clinton when she pulled out a victory in the New Hampshire Democratic primary. Online bookies, meanwhile, have Clinton winning her party’s nomination as well as the presidential election.

Though there’s plenty of evidence that betting action has been a more reliable indicator of results than polls, it’s possible Clinton’s popularity in the books is a fluke.

These days online books are based offshore, and for the non-Americans who run them, figuring out the byzantine American election process is probably a lot tougher than trying to understand Australian-rules football. Those dedicated gamblers who have set up foreign bank accounts to gamble online may also be voting with their hearts rather than with their minds.

Some gamblers lost their shirts in 2004 betting on Sen. John Kerry, who was favored in exit polls. Opinion polls, after all, aren’t votes though the discrepancies were significant enough to spawn investigations of potential fraud. “Maybe the Democrats are more willing to stop and answer questions than Republicans,” said Steve Fezzik, a professional handicapper in Las Vegas.

(Vegas bookies can only fantasize about taking action on political races, which is verboten, but, if legal, might have shed more light on the mess.)

Many gamblers, even die-hard Republicans, will be voting Democratic this year because of their desire to overturn Republican-sponsored legislation further criminalizing Internet gambling, Fezzik said. The Republican Party’s anti-gambling stance didn’t much matter to poker players until the government crackdown, which has made it harder for players to ply their trade, he said.

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The Morgans Hotel Group-DLJ Merchant Banking Partners buyout of the Hard Rock Hotel isn’t any more highly leveraged than the takeovers of Harrah’s Entertainment or Station Casinos. But it’s a lot riskier because it involves spending a record amount of money on a property that never made all that much to begin with.

And yet Hard Rock’s New York owners are nothing but bullish about plans to spend more than $800 million over the next year and a half on 950 hotel rooms and other amenities: Operating cash flow soared 26 percent last year, driven by nongaming amenities, and per-room revenue rose by about $19 a night, or 11 percent, while revenue for the rest of Las Vegas rose less than 10 percent, executives told regulators at the Gaming Control Board meeting this week to approve management’s takeover of the casino.

Morgans customers, apparently, are accustomed to paying up for haute surroundings and will likely be doing even more of that this year as the property completes a makeover of hotel rooms.

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What, exactly, is in store for the Stratosphere now that it’s one step closer to getting a $25 million upgrade under a new owner? And when will it happen?

Chief Executive Richard Brown, who will remain in charge of the property, doesn’t know yet.

The property just wrapped up its budget without the benefit of the new cash infusion. And big plans take, well, time.

Brown has mulled over several ideas for the property, including the long-envisioned remodeling of its third-floor mall into meeting space and developing 17 acres of vacant land purchased nearby.

The future owner, a $5 billion real estate fund affiliated with Goldman Sachs, is listening, Brown said.

With more attention focused on the north end of the Strip, “we’re at a crossroads in the property’s history,” he said.