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Sunday, Aug. 9, 2009 | 2 a.m.
Gaming Roundtable
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The Sun invited three former casino executives to sit down for a Sunday Conversation, to candidly reflect, with the benefit of 20-20 hindsight, about the gaming industry -- then, now and its future. The trio: Phil Satre, former CEO of Harrah's Entertainment; Don Snyder, former president of Boyd Gaming, and Glenn Christenson, former chief financial officer of Station Casinos.
Sun Coverage
Sun Archives
- How Vegas could weather a recession (1-27-2008)
- Getting past the crises (12-16-2007)
- Satre announces he'll step down as Harrah's chief executive (9-5-2002)
Imagine that you’re a retired gaming executive and you’re watching the industry crash all around you, in the biggest recession in the modern casino era.
You take a deep breath, counting your lucky stars you’re retired but wondering: What could I have done differently? What would I do now?
The Sun invited three former casino executives to sit down for a Sunday Conversation, to candidly reflect, with the benefit of 20-20 hindsight, about the gaming industry — then, now and in the future.
Together, they talked about bad assumptions, questionable decisions and getting caught up in the go-go boom years, second-guessed shifting strategies and talked about what can and should be learned about the industry and its customers.
The trio: Phil Satre, former CEO of Harrah’s Entertainment; Don Snyder, former president of Boyd Gaming; and Glenn Christenson, former chief financial officer of Station Casinos. Each is still active in corporate, civic and philanthropic life in Southern Nevada, but it was their days in the casino board rooms that we wanted to explore.
We wanted to get inside their heads, and they let us.
The following is based on a transcript that was edited for length and clarity.
We launched this Sunday Conversation by asking whether they were glad they are out of the business.
Former gaming executives Don Snyder of Boyd Gaming, left; Glenn Christenson of Station Casinos, center; and Phil Satre of Harrah's shared thoughts, memories and stories during a round-table discussion last week. All agree the gaming industry will undergo wrenching changes as it adapts to the collapse of the economies of the nation and of Las Vegas.
Phil Satre, retired from Harrah’s: It’s much more difficult to be an executive in this business and have as much fun as I had in the 25 years I was at Harrah’s. We had ups and downs, we had layoffs from time to time, we had projects that didn’t meet our expectations, we had significant stock price drops and, fortunately, increases, but never did I experience this sustained economic malaise that my colleagues are facing now.
Don Snyder, retired from Boyd: We’ve been through some ups and downs over the years but we’re faced with an intensity now that’s unprecedented and has to be taking a lot of the fun out of what we had done in years past. It’s a triple witching hour: Companies are highly leveraged, have high cost structures and are stuck in a tough operating environment.
Glenn Christenson, retired from Station: The conditions we have today are somewhat outside of our control. Who could have predicted this kind of global financial meltdown? I still keep in touch with people on Wall Street and they second-guess the leverage and the construction of these projects — all of which they supported at the time they were proposed. I don’t think things would be this bad had the recession been less severe.
Satre: What people didn’t recognize, including those in Las Vegas, was how much the town’s appeal was based on the discretionary income that people had developed through 401(k)s, appreciated home values and easy access to financing. It sustained us at a period when we were focused on building great restaurants, entertainment and hotel rooms. We were building compelling products but living off consumers who had a discretionary spending level that was probably unsustainable once you removed some factors, like home values, access to credit and a sense of having wealth.
Snyder: The loss of wealth and perceived loss of wealth were a significant factor. At more normal levels of leverage we probably could have gotten through this a little bit better. The operating costs that go with these very large and expensive properties was taken to the extreme. People were living beyond their means, which created a false sense of security for those of us building in those days.
Christenson: Consumer confidence is key. As an industry, we were previously resistant to recessions and now we’re very highly correlated with what’s going on in the national economy. When people are worried about having a job or have seen their 401(k)s decimated, if your home’s value is half what it used to be, it’s hard to say, “I’ve got to run out to Las Vegas or run down to my favorite local casino.”
If you were in the hot seat at your companies, would you have detected any early warning signs? Is there anything you could have done to soften the blow?
Christenson: Some of this was beyond our control. All of us, when we looked at acquisitions or other deals, examined pro forma figures reflecting a base case, an optimistic case and a pessimistic case. We didn’t look two or three standard deviations out at how bad things could be, which is where we are now. In hindsight you can argue about leverage ratios but I don’t think anyone could have planned for this.
Snyder: I remember years ago saying, “Boy, things have gone up for so long. Can it really continue?” and then rationalizing all the factors that suggested that growth could continue. I think we all got caught up in that. Current management didn’t do a better or worse job than we would have on any of those issues.
Satre: In 1990, when I was on the board at Harrah’s, we turned down an opportunity to own what is now the New York-New York site because the board at the time was concerned about overbuilding in Las Vegas. We had second thoughts about expanding and improving some of our properties in the mid-1990s because we saw riverboat gaming and Indian gaming expanding. The big question was, “Can Las Vegas withstand this competition?” The board went through many years of being exceedingly conservative on plans for Las Vegas and kept pulling back on capital spending plans. We turned that corner after we bought the Rio and did acquisitions that increased our footprint here and became very bullish on Las Vegas, like everybody else. If there was a criticism of the company and my tenure there, it was that we didn’t invest enough here and in upscale product. That was a legitimate criticism through the early 2000 period. Right now I look pretty smart. We kept looking at the thousands of rooms being added here and said, “This can’t continue” and we kept being proven wrong. Our conservative estimates of the ability of this market to absorb new supply kept biting us and analysts kept digging at us for that.
Snyder: Before the recession, each new building cycle in Las Vegas would create more demand. Most industries don’t work that way. That reinforced future decisions. As we moved into this latest building cycle and reinvention phase for Las Vegas, we said, “Of course we can create new demand and fill all these rooms, no matter what happens.” Now we’re dealing with a backlash that we’ve never felt before.
Christenson: It’s a Catch-22 because what drove that demand is the quality of these products. We’ve all looked at projections for average room rates of $250 to $300 and that’s not happening right now. The debt that went along with this growth is very difficult to service now. And I’m not sure anyone could build what I’d describe as a B product today and be successful.
Satre: Not when the A product is now priced below the B product. Not when you look at quality rooms going for $100 to $150 a night plus coupons and everything else.
Snyder: One of our greatest challenges is that we’re moving back to a value-oriented proposition, which is great for the consumer but doesn’t leave a lot of value for shareholders.
Satre: The problem for our industry is this enormous investment in bricks and mortar which is really hard to change. The retail and auto industries can cycle through their inventory in a year to a year and a half and can scale down their product and pricing to meet that inventory. It’s hard in this industry to re-price your inventory once you’ve opened because your cost per square foot is embedded into those rooms, restaurants, the casino floor. In some cases you can bring in a more inexpensive show or re-price a high end restaurant. If someone said I could build a new product in Las Vegas, I’m not sure what I would do. If I knew I could compete on pricing I wouldn’t scale up to the prices of the past five years. I’d come in with a product that on a per-square-foot basis could earn a return on the rates I’d get in the hotel and what people were spending elsewhere in the property. The problem with that is you’ve got to compete with all the A product already out there.
Snyder: The current generation of executives has a tougher job. It’s tough to dig out from under the cost structure built into these projects, but that needs to happen somehow. It happened when Phil Ruffin was able to pick up the Treasure Island for what would have been a bargain basement price three years ago. A more painful process is happening at Station Casinos, which will reduce its leverage in bankruptcy.
Christenson: There is a window of perhaps six to 18 months. If these companies can’t make it through this window during which the economy probably isn’t going to improve much they will have to look at significantly reducing debt, putting more equity into their companies or selling them. I foresee a significant change in ownership in the gaming industry over the next few years. These operations can only generate so much cash flow.
Satre: When you look at how hospitality economies were made obsolete there were two factors involved: A new competitor came in with a lot of new product and declining investment in the existing product. Atlantic City was a vibrant hospitality economy in 1930 and then Miami developed a hospitality economy and it took all the business out of Atlantic City. The owners of those properties stopped investing in them. There wasn’t a hotel in Atlantic City fit to stay in by the time casinos arrived in 1978. Then Las Vegas took a tremendous amount of business out of Miami. The same thing happened in Miami: They pulled back on investment because the returns kept dropping. The danger for Las Vegas would be a new competitor with a new pricing structure that didn’t have these embedded costs. Even after you pull out of this recession, you could see the money reinvested in these businesses decline. Here’s an extreme case: If the California coastline, for example, became a casino resort area — you’ve got a heavily populated, beautiful location with easy access by air, and I’m not trying to give any suggestions to Gov. Schwarzenegger — that would be a very challenging situation for Las Vegas.
Christenson: The one thing we have going for us is our business climate, which is a lot better and a lot more receptive than California’s.
Snyder: The magnitude of investment that’s been made in Las Vegas gives us a footprint that’s very difficult to challenge, but it’s also why we need to build new properties that are vibrant. The cost structure of some of these new projects is just too far over the edge to make a return.
Christenson: The challenge is to continue to provide a great customer experience. We have trained customers to expect the highest quality there is, arguably in the world, and you can’t do that on the cheap and make it work.
Is it a smart strategy to pursue the high end when Las Vegas was built on mass-market business? Is there enough business to support luxury properties?
Snyder: The luxury properties can get the lower end of the market to come to their properties. But they aren’t spending enough money to pay all the bills.
Satre: If this continues ultimately you have new ownership. It’s like commercial real estate, when the owners of office buildings developed during a bull cycle can’t hang on to their buildings and someone else comes in. Sometimes you cycle through three or four owners before the property can make money.
Christenson: This downturn will also create new opportunities. New blood can be helpful.
Satre: For the next 10 years, I don’t see the upscale customer coming back with the discretionary income we saw two years ago. The economy can recover, jobs can recover, but the customer’s sense that he will have as much wealth and access to credit as before, that’s gone. If there is anything new built in this market and they revise their cost structure, they are not going to go up but down. They’re going to cater to customers who want to spend less for a room, food, drink and entertainment even if they have the money.
Snyder: I agree. Nor are we going to see the middle market customer who spent like the high-end customer. The wealth effect has eroded, even for Mom and Pop folks who had a lot of equity in their homes and felt good about that. It’s going to take a long time for that sense of wealth and confidence to be restored before we have spending that’s anything close to what we were used to.
Christenson: I’m not as pessimistic, though I wouldn’t bet on an increase in consumer confidence anytime soon. You’re also going to have to get the finance people comfortable in lending and investing here. It’s hard to know what’s in store after being pounded for 18 months straight.
Satre: We haven’t talked about a huge part of what made Las Vegas successful: convention and group travel. I think that’s cyclical and there will be a time when we’ll see these groups return. I think that business will come back stronger than the free and independent travelers who came on their own and spent at high levels.
Christenson: It wasn’t so long ago that we hated conventions as an industry and now it’s critical to our operations. We’re severely damaged by that loss.
Snyder: The business traveler will help us get out of this slump, but it’s going to take a while. It’s important for us to continue marketing broadly to those markets that are so critical.
Some economists believe the local economy will lag recovery in the national economy. What’s your take?
Snyder: For the first time ever in our professional lives, that’s probably the case. Traditionally we were always the last in and the first out of an economic slowdown. We fell deeper this time because of the tremendous escalation in housing and speculators who were playing the field.
Satre: After 19 straight years as the fastest growing city in the United States we fell further than most parts of the country. The farther you fall the bigger the climb.
Christenson: We’re down 50,000 or so jobs from a year ago. The new properties that will open here won’t make that up. Our population is down — people aren’t moving out here like they were. Consumer confidence is low.
Snyder: The silver lining is that we’re going back to our roots. We’re a much more affordable place to live. When jobs come it will be easier to recruit workers. Teachers used to be priced out of the market years ago. I also think we’ll see a return of retirees because prices will be lower for an extended period. It will take a while for people to realize these benefits.
Satre: The worry is that the image of Las Vegas will have suffered at a time when consumers are ready to enjoy Las Vegas again. The state of the economy and the media coverage of the downturn present a challenge. We need to continue to offer a great experience here and protect our image as a very special place to visit. Even with the changes operators have made, it’s still a remarkable place. We just had visitors from Denmark and they said, “You have to see Las Vegas if you want to see what this country has to offer because it’s unique and remarkable — and it’s pretty affordable right now.”
Snyder: I’ve talked with so many visitors who have been surprised by the activity that’s still here. They hear on the news about how beat-up the economy is and expect to see empty streets. It’s packed over the weekend. They aren’t spending as much but it still creates that Las Vegas experience as a fun getaway.
Christenson: That also creates opportunities for us. Don and I are also involved with the Nevada Development Authority and we have a new marketing program to lure businesses to Southern Nevada. As California is imploding we become an attractive alternative. If there was ever a reason why we need to diversify our economy away from gaming, this is it.
Snyder: This is one of the lessons we should have learned. We have the chance to develop a more broadly based economy that can benefit from a vibrant gaming industry, including a cultural infrastructure and quality education. Businesses expect us not to be at the bottom of every bad list. We have immense challenges but tremendous opportunities, especially when you consider our neighbor to the west.
Christenson: This gets into a broader question of leadership in Nevada and the direction of Carson City. To attract businesses here we need leaders to address education. We’ve made a lot of strides in our community but aren’t close to where we want to be. The Nevada Cancer Institute and the Cleveland Clinic Lou Ruvo Center for Brain Health are helpful but I don’t think any of us are happy with the state of health care. Don, what you’re doing with the Smith Center for the Performing Arts downtown is spectacular and it’s going to help us attract businesses. We’re making progress, but this community can do better.
Satre: We still need to maintain our core business. The Las Vegas Convention and Visitors Authority and the operators here have to continue to get the message out that there’s no better time to visit Las Vegas. Don’t let people forget that and don’t let others define who you are. This is a great time for other cities to define Las Vegas in a way we don’t want to be defined. We have to continue to define the casino and hospitality industry as a remarkable thing.
Las Vegas built its success on an adult image — “What Happens Here, Stays Here.” Doesn’t that hurt efforts to attract other kinds of businesses?
Satre: Those sort of tag lines have a shelf life. We may have to think about whether there’s a new tag line we want for Las Vegas — something more fitting for the current economy. More significantly than whether you stick to a certain way of describing Las Vegas is that you don’t reduce your advertising.
Snyder: We’re a city of 2 million people – large by any standard. A vibrant gaming industry gives us an opportunity to do other things if we thoughtfully go about it. When I came here 22 years ago I made a decision that this is where I was going to be part of the community. Part of living here is having an obligation to make it the kind of place where you want to raise your kids and grandkids. We are a tale of two cities to some extent. But this encourages us to work harder on the community side of things.
Christenson: To put this in perspective, we’ve had two bad years on top of a great run of 35 or 40 years. We have to start thinking ahead. We’re talking to businesses about moving here. There are a lot of great things we can bring to the table.
Nevada’s gaming-dependent tax system doesn’t work. How do you fix it?
Snyder: It’s time for us to decide where we want to be as a state and as a community 10, 15, 20 years from now. Once you know where you want to be it’s like running a business: You develop a strategy for how to get there. The tax structure was created a few decades ago, before we were the fastest growing state in America for 20 out of the last 22 years, and isn’t designed for where we are today, let alone what we want to be 10 or 15 years from now. The governor and Legislature have tremendous challenges and opportunities. The political process is tough, but it’s incredibly important for Nevada that they work better. We need a governor and Legislature that can come together. If there was ever a time to do things differently, now is the time. I think a lot of the dialogue in the last session was focused on that. We need to continue that dialogue between elected officials and the private sector.
Christenson: We need leaders that can credibly discuss these things. Difficult decisions need to be made. I get very tired of hearing about a Republican or a Democratic solution when what we need is a Nevada solution. That’s going to require raising revenues or reducing the services we provide. We need credible information. Many people moved here because of the low tax environment but there’s no free lunch.
What are some fond memories of the good old days, before the recession?
Satre: I think of the people I used to work with, including Claudine Williams, who recently passed away. These were interesting people who enriched my life. Others include Bill Boyd, the Fertitta family, Bill Harrah. I know Jack Binion and wish I’d met Benny Binion. The other part was being part of an industry in transition. My first trip to Las Vegas on business was in 1978. I was doing some work for the Union Plaza as a lawyer and then I got involved in the Holiday Inn casino with Claudine and then we purchased that casino. You left some of the characters of that era behind but things were always getting better. If you look at what we and others were building — that was an exciting time.
Snyder: There’s a tremendous amount of characters that built Las Vegas. The three of us came from other industries — banking, accounting, legal.
Satre: And we’re the guys who they say ruined the business!
Snyder: We were part of the transition to more professional management. I think the industry benefits from that mix of old-timers and professionals from other industries. When I transitioned from the banking business to the gaming business I worked for an interim period with the Fremont Street Experience. We’d have strategic meetings before the idea for the district emerged and you’d sit around a table with Steve Wynn, Bill Boyd, Jackie Gaughan and Mel Exber. The personalities who built this state and this town were incredible.
Christenson: When I came to Las Vegas 37 years ago as a rookie accountant our responsibility as a firm was to keep track of Howard Hughes’ interests. He dominated everything. One of my clients was Bill Boyd and the Boyd Group. I was there the night regulators took over the Stardust, which was the last vestiges of those days. I saw some accounting controls — and I use that term loosely — that I’d never seen in all the time I’d been here. When I first went to work for the Fertitta family people wondered what I was thinking. I’d been a partner with a big accounting firm; Palace Station was the entire company, and it was half the size it is today. I was fortunate to spend time with Mr. Fertitta, who really created the concept of locals casinos. Watching the company grow from a single casino to 16 has been unbelievable.
Satre: It’s been a bit like watching the NFL. The egos get bigger. The scuttlebutt was who’s got the winning team, whom Wall Street liked the most, who’s gossiping about the other team and stealing players and strategies. About 15 years ago people were taking each other’s hosts and customers. At the time we were wringing our hands, but it was all part of the game and the desire to be seen as a winner.
Snyder: I came here in 1987, just before the reinvention of Las Vegas, when Steve Wynn was working on the Mirage. At my office at the top of the First Interstate Bank tower, now Wells Fargo, we’d take visitors out to the patio and, like just about every other commercial banker in the world, would point to the Mirage and say, “There’s no way this property can be successful. They have to generate a million dollars in cash flow just to service the debt on a $640 million property!” They generated $2 million a day. The guts that Steve Wynn had to bite off such a big chunk in those days was incredible. You had to be a strong personality to do that, and I have great regard for the people who built this city.
Would you ever build or operate a casino, together or separately? Do you see gaming ventures in your future?
Snyder: I’ve turned the page. I enjoy my board work with three public companies and a couple of private companies. It’s nice to share our experiences in the boardroom but walk away and realize you don’t have to implement policies, deal with personnel problems and things like that. We’re all applying our expertise by being involved in community projects. The gaming industry is the most intense I’ve ever encountered. It’s a cash-based, 24-hour, seven-day-a-week business. You layer in today’s challenges on top of it and it’s a tough job.
Satre: I don’t foresee it, but I’m reluctant to say never. I don’t seek out opportunities. I’m busy with other things and have built a new lifestyle around that, so it would be a challenge to go back to those day-to-day responsibilities.
So it’s good to be retired?
Christenson: I prefer to think of myself as a free agent. I did it for 17 years and had a blast. But I’m really enjoying learning about new industries and confronting new challenges.
wow, now wasn't that informative. yeah i'd really want to hire these 3 bozo's again. ton of mistakes made by a ton of greedy people. never really heard from 1 of them about loyal patrons they helped leave behind. your whales are getting extinct and ceo's can't stomach to go back to their base. sorry their stupidity is taking the rest of the town down the drain. maybe the sun needs to get some people on these blogs to ask tough questions.
LET'S SEE... in the last three elections previous to this one, Gaming strongly supported the election of school district puppet candidates to remove intelligent free thinking candidates that weren't "owned" by a public employee union or the school district. Such legislators as Ann O'Connell, Sandra Tiffany, Bob Beers, Joe Heck, etc. The idea behind getting in bed with the teacher's unions was the skewed thinking that if gaming helped the school district get their people in to tax small business and everyone else, that those installed candidates would not support an increase the gaming tax.
So gaming, the CCSD, and the NSEA are reminiscent of the fable about the scorpion and the frog where the scorpion (gaming) asks the frog (the public employee unions) for help crossing a river. It is the nature of the unions to screw Nevadans INCLUDING gaming, so of course, they bit them. Turns out that those shill candidates don't care WHERE the money comes from. Once they've milked everyone else, they have all eyes on the gaming tax - not that it matters now since we're sunk regardless at this point thanks to the brain dead legislature that we just "enjoyed".
So I would say these three's biggest mistake was assisting in the ousting of excellent knowledgeable legislators that were in Carson for reasons OTHER than increasing pay for police, fire, and school union employees - and raising taxes on the rest of us. They also assisted in perpetrating the lies about Nevada's substantive but immaterial "per pupil spending" figures.
If you give the Scorpion a ride across the river, you're going to get stung. Isn't that right guys?
If casino industry was hurting so bad, why would Boyd gameing want to buy stations casino? I already know who will buy stations. It will be a private front Company that already owns Harrahs. Do a little research stupid Americans.
These exec's said nothing about attracting customers back using basics. I've read recently in the Sun about strip casino's worsening blackjack rules for players to suck more dollars
out of visitors. I realize thats what LV is about but with todays exingencies pay attention to the basics such as loosening game rules, cheaper food and rooms and tourists will be back
They have built themselves into a hole and will have to sacrifice if they want to flourish again.
Flash:
I am going to be typically American right now, a "stupid" American, and tell you to stick it where the sun doesn't shine. I'd say more but I will be "censored".
Your opinion is ignorant. And on what do you base your knowledge of who will be buying Station (yes STATION not stations) Casinos? Don't spew words without backing up your statement with facts. If you cannot do that - then YOU are the stupid one.
PS Learn how to write English properly. Use your Spell Check since you can't do it any other way.
bmaisel:
"The following is based on a transcript that was edited for length and clarity"
Maybe it was discussed on what they would do now to attract customers, but it was edited out.
I, too, would have liked to hear their ideas on that. They do touch on that subject a little, but not in great length.
"Snyder: There's a tremendous amount of characters that built Las Vegas. The three of us came from other industries -- banking, accounting, legal.
"Satre: And we're the guys who they say ruined the business!"
And I read nothing which changed my mind.
Not to mention...the big owners all wanted a piece of Macau so they borrowed against the Vegas properties and shipped all that leveraged capital to China. The Wal-Mart Syndrome...destroy America's manufacturing and Main Street USA just so we can ride the cheap- junk-consumer-zombie train over a cliff. These clowns were never smart or shrewd business executives. They simply flourished when America flourished and they did not have the vision to see the storm on the horizon. Any 1st year UNLV bean-counter can raise room rates, cut odds and tighten slot payout and then proudly waive spreadsheets at the board meetings...All while the house is burning down around them.
Over Leveraged...Sounds like the airlines..There
might be room for a nimble operator who realized
the customer should be first...
Las Vegas was better when the Mob ran it. There is to much corporate greed here.
it's nothing more than arrogance.
go back to around this time last year. all the guys in their nice suits were saying "well, vegas is recession proof".
they got arrogant.
they figured they were immune to the economy.
how do you spell C-L-U-E-L-E-S-S?
No mention of taking care of the customers.
Amazing.
These are three of the idiots that got us here.
Dear tvegas, you must have missed this line:
Christenson: The challenge is to continue to provide a great customer experience. We have trained customers to expect the highest quality there is, arguably in the world, and you can't do that on the cheap and make it work.
Didn't miss the line.. saw it for what it was..bs
They all lost focus on the game, instead they set their sights on winning the superbowl. I first noticed in the opening of MGM grand in the 70's. Entering the the casino it was huge, glamorous, busy but quiet, yes quiet, the bells, whistles, hooping and hollering was noticeably missing.
The attention was to make big money on fewer players, rather than making pennies on thousands.
Instead of bonus jackpots, how about just consistent 98% slots, still the casino has the odds though smaller. Switching all slots to non coin receipt spitting machines was clearly only to benefit the casino. Dealing with all those coins must have been a real pain, but the players didn't mind.
Lower minimum bet tables, the higher the minimum the fewer players. Sure you can have high stakes tables. Again these casinos have forgotten about odds. With table games the casino always has the odds on their side.
The WPT has been such a huge success that instead of the $10k buy-in it's been raised to $15k buy-in. Here they go again, they've taken their eye off the game.
One would think casinos hate to have winners, completely forgetting that if you can keep them longer they'll play longer. Most visitors leave Las Vegas with empty pockets, even the players know it, but they come back.
Finally start up new non-union casinos. Offer competitive pay and compensation with advancement opportunities. You will have happy employees resulting in happy customers. Employment is "at will" meaning nobody's job is guaranteed, but rather a mutual agreement. Your backlog of job applications will be larger than any union shop.
Aside from debt and high operating costs, what also is really killing Vegas casino's are big new casinos opening around the US and around the world. Las Vegas has lost its gaming monopoly.
Wow. I know Vegas has been able to survive and thrive after hard times before, and I just hope we can figure out a way to do it again. I think we've learned our lesson that we can't build an entire economy on "money" that doesn't really exist. We need a plan for real smart growth, more investment in renewable energy that will help diversify our economy, and real tax reform that helps our state in not relying so heavily on volatile casino revenue.
And regarding The Strip, the "Big 4" (Harrah's, MGM Mirage, Wynn, & Las Vegas Sands) need to make sure they are providing real bang for our consumer bucks. I don't mind going out for a nice meal every once in a while, just as long as I know I'm not paying $50 or $100 for a "gourmet meal" that isn't really "gourmet" and isn't even worth half that price. I don't mind recommending Strip hotels to my friends so long as I know they won't be ripped off for something that Days Inn would be ashamed to call its own property in another city. If something has real value, I'll be willing to pay for it. That's what they need to learn to win more of us consumers back.
i recently came to las vegas for a 3 day weekend.
i stayed at the riviera because it was cheap.
period.
however...i still feel like i got ripped off.
why?
my room had a view of a concrete wall. no strip, mountains, anything, just a concrete wall.
this was after waiting almost an hour in line to check in at a kiosk that of course..."we are unable to find your reservation"...so the girl at the counter ended up having to come around and help me and ended up taking more time than if she would have just said "welcome to the riviera! how can i help you?" and just checked me in.
and of course it seems anyone over the age of 65 has never seen, touched, or used any kind of computer. so, nearly every old person in line was unable to use these kiosks to check in.
and please, it is 2009. why charge me for wi-fi? huh?
just make it free, put a little "log in" page on it to advertise the hotel and let me surf for free.
i ended up going to a coffee place, surfed for free AND ended up giving them business by buying some coffee.
it's just a perfect example of why people don't want to come here anymore.
the nickel and dime stuff has to stop. if the la quinta in santa rosa, new mexico has free wi-fi, there is no reason a hotel in las vegas can't offer free wi-fi.
These guys talked about a new market that will take business away from LV. They've already done it with Macau, Indian gaming and River boats not to mention other areas (Europe, Singapore etc). The gaming companies have diversified THEIR business by bringing it closer to the markets. And they did that due to the cheap taxes on their enormous profits here in LV.
Oh wait... Las Vegas will always be LAS VEGAS. That line will go right up there with Las Vegas is recession proof. The execs keep spinning that line so we'll believe it why they keep all the money and we'll never diversify Nevada or LV economy. No matter what stupid commercials that the NDA comes up with.
Same thing for Mining too.
The number crunchers put Las Vegas where it is today and only some old fashioned I hate to say it, "Mob Type" thinkers will get it back to where people are ready are to go, have fun and ENJOY loosing their hard earned dollars. Vegas was a place where blue collar workers could sit next to millionairs and be treated the same. Only your bet counted. Back to basics Vegas! Nothing wrong trying to catch whales, just remember it's the little fish that made you what you were. Easier to catch one whale than 50 thousand little fish but what if the little fish aren't there when you need a big catch? Las Vegas is a perfect example as to what is happening to our country, we have forgoten the bacics that it was founded on and made it the best in the world. Be back in Vegas in five weeks and am looking forward to having a good time. Staying at The Venetian and The Excalibur, not giving up on "The Strip" yet.
Vegas, don't give up on yourself; get back to bacics!
The fact that these three guys barely mention their customer bases, let alone make any distinction about the different types of casino customers, is in direct contrast to their supposed heroes Bill Boyd, Benny Binion or even Steve Wynn (in his early years).
Such disrespect and disregard for their customers has led the major casino companies into the quagmires they now face. All three of these guys are indicative of the kind of out-of-touch corporate suits that continue to cater to Wall Street rather than their (shrinking) base of customers.
Instead of doing more to attract customers, the clones of Christenson, Satre and Snyder are now "training" the customer to accept 6-5 blackjack payouts in a sagging economy. Such a decision-making is incredibly stupid, but, like AIG, I'm sure many undeserving suits will be richly rewarded for their poor performance. Anyone familiar with any gaming floor in town will tell you that 6-5 blackjack is just one more short-sighted profit grab that will only result in fewer customers, fewer arrivals at the airport, fewer booked rooms and ultimately, even fewer jobs. The only thing that will go up is residential foreclosures. Yet, these clowns are getting paid and paid well to ruin our little neon oasis.
I hope mavericks like Anthony Marnelli and Phil Ruffin swoop in for the next MGM/Mirage, Harrah's and Stations fire sale. Otherwise, Vegas will certainly follow in the footsteps of Atlantic City and Miami if vapid mouthpieces like Christenson, Satre and Snyder continue to call the shots in this town.
I agree, let's get back to basics. This city really got started with them mob and it's time we bring them back. They can run things better and more efficiently than publicly listed corporations. While they're at it, they get rid of all the gang members who took over the streets after the Feds got rid of the mob. I don't see this being any different than outsourcing our wars to Haliburton, KBR, and Blackwater (if anything, the mob has better manners and higher standards).
I think the interviews highlight several key factors:
1. Vegas is vulnerable right now. It sits in roughly the same position as Atlantic City in 1930 and Miami in 1970.
2. Vegas has built an "A" product, and cannot afford to sell it at a "B" rate. This will lead to the big corporations selling off pieces. The buyers of these pieces may be able to profit by offering product at a "B" rate, or they may go bust and need to resell. The danger is that Vegas will be caught in a downward spiral of poorer quality product chasing a lower-spending consumer.
3. Vegas must recapture the hospitality/convention business.
4. Vegas must diverify it's economy.
5. Nevada must improve its eduction system.
The Las Vegas Raiders. Don't laugh it is possible and would be a windfall for LV and the Raiders. Their fans (contrary to stereotypes most make a decent living-you have to in order to buy NFL tickets) would love it. The lease with the ultra crappy Oakland Coliseum runs out next year. I know, the NFL and pro sports have a bugaboo about gaming and the bad influences of LV. Al Davis and the Raiders don't care. New modern stadium, super bowls, big bowl games in America's party town. It is a win for everyone involved.
These guys are given a license to steal and they still can't make it.
Everybody is a genius in a bull market.
Amazing! All I can say is Greed on top of Greed! These guys (Retired Executives?)don't give a
s??t, other than to get there picture and article in the sun.There bank accounts are not hurting, there houses are not be forclosed on, they are able to pay there bills and live the high life. If they were so concerned with what is going on with the people of Nevada, then they would be working on how to keep people from losing there jobs and homes. It is nothing but B.S.
once again, someone thinks a pro sports team will turn things around.
#1. sports teams only create low paying service jobs.
#2. las vegas does not have enough of a population with enough money to make a sports team work. that's why no matter how hard oscar goodman tries...none of them have come here.
let it go.
"They simply flourished when America flourished and they did not have the vision to see the storm on the horizon" I like this point of view !!!The latest Rolling Stone has an article about the Wall Street show "Mad Men' and how their banded cigar smoking, Scotch drinking days were totally blind to the future. The article states: In a few years their daughters will be going to Haight Ashbury, the Viet Nam war will be the focus, and big culture changes. How much was caused by them?? These guys too were blind and dont care now.
Instead of the Raiders MOVING from city to city to relocate while they keep losing games....
Why don't they just try to..MOVE THE BALL instead ?
It's hard to say whether or not LV can support a pro sports team. Portland for instance is also a city of 2M souls looking for an identity in a chaotic world and they (at least) have sustanined the very viable Blazers over the last several years.
SlipperyPete might have an old idea worth considering because clearly the entrenched "players" are operating in an alternate reality.
Most people worry about hooligans at soccer matches, but now it's starting to surface that conservatives are fielding hooligans at Town Hall style meetings, especially the ones that are related to health care reforms. Protesters are being dispatched to meetings where health care, or Obamacare as it's called, is being discussed in order to stifle discussion. A recent episode of the Rachel Maddow show got a memo from Think Progress intercepted from conservative think tank, Right Principles in which they outline how to do it. This tactic has been used before, notably during recounts in the 2000 election. No one likes hooligans, and the rest of us end up needing <a rev="vote for" title="GOP Thugs at Town Halls: Paid By Healthcare Industry" href="http://personalmoneystore.com/Personal-Loans/quick-Loans/fast-Cash/ ">fast cash</a> to undo their damage.
I can just imagine how the mob would handle this situation we are facing today. First they would have coctail waitresses flying thru the casinos giving out free drinks so everyone was having a good time and spending cash. Second they would LOOSEN the slots so there would be big winners everyday and make sure this made the news.They'd cut show ticket prices to get people to come inside and the same with food prices.They knew to do anything you had to to get people gambling
I'm visiting relatives in western Pennsylvania.
A 3,000 slot machine casino was just opened in the heart of downtown Pittsburgh. I hear it pays back on average 91%, not good, but probably about the same as some of the Vegas casinos.
Gaming is now readily available throughout Pennsylvania and on the East Coast.
Vegas better offer something for the average player if they want to entice people to spend the money and time on a trip to Vegas when ample slots are in their own backyard now.
Many states are allowing casinos in the hopes of increasing tax revenues. These huge casino operations aren't limited to Las Vegas, they're opening casinos in many other states and even countries. The unfortunate part is that Las Vegas has been famous for gambling but now that the corporations have lobbied other city and state governments they know they can earn money regardless of Las Vegas gaming industry being successful. It's kinda like America off-shoring jobs to China and India.
Flying into Vegas from a mid-size east coast city is a 2 flight, all day affair, with security , connecting, etc. Make that a two day travelling affair counting the return. With online sports betting avaiable in the comfort of my own place, I need a decent incentive to travel to Las Vegas. Not surly workers, half assed food, and crappy odds. Time to dust off the welcome mat L.V. Maybe a brand new one that leads to some old fashion hospitality.
About time we listen to the people who visit and take time to comment.People want convenience and value. FAIR value. Value used to mean provide good food and fair gaming and people would come, enjoy a great meal and drop a few bucks while taking in the lounge acts or games at the sports books. When 1 corporation owns 10 casinos on the strip there is no way they are going to be in touch with what the people want.I am a builder who has spent almost my entire life in Las Vegas. I am 1 of the few who believes that growth is overrated. Why? I believe that you sustain your business not grow so big you can't stay hands on. If you make $5-$6 million a year or pick a number, why do you get greedy and think you need to make more?. Corporate greed!! I keep hearing comments about "bring the MOB back".
Granted the town was alot more fun then but bottom line you couldn't afford the graft.We need to provide fair value!! Food, fun, Fair value. And remodel some of the dated, worn out,themed venues so they present a positive image of Las Vegas instead of same old same old.
My home town built a brand new Indian Casino that is VERY nice. They are doing layoffs 3-4 months after it opened. WHY...there are no good deals on food/ drinks or entertainment that make a local want to go there.... Let alone drive along distance to get there. People want the deals and gambling is the afterthought, in many cases.
I suppose there are those that could say Las Vegas has always represented image without alot of substance. I don't think that was necessarily true in the past but now I have my doubts. With that in mind I would have to say that when I started to visit in 1990 it was a vastly different town in the level of hospitality received. The Mirage was new and the employees there were exceptional in their level of customer service. You could tell they loved their jobs, living in Las Vegas and serving the public. I know this for a fact because I always make it a habit when there to talk to service people. I noticed this positive attitude in employees at other properties. Even the cab drivers were fun and enthusistic about living there and happy to be transporting you. This was before the huge boom and I can't help but notice how everything may look glitzy and new on the surface now but the level of customer service has fallen quite a few notches. I no longer visit as often due to these changes. Beautiful buildings, great shows and Restaurants are great but it is time for Las Vegas to once again step up to the plate, serve the customer and provide value for their experience.
Well, what is the net worth in tens of millions of these 3 casino execs? I know Christenson made at least 200 million working for Fertittas as his pay with stock options was always listed annually. So these guys are all 3 admitting they messed up with overleveraging casino properties but you can kinda tell they did whatever their bosses said, and were beholden to Wall Street scumbags that wanted to blow Vegas open with new extremely expensive "resort destinations" that they all admit can't make money unless they shaft the bondholders and debtholders of the current properties (the suckers) who helped blow up the debt bubble that has now exploded in our collective faces...What we need are these 3 very wealthy execs to go to the Strip and dump their retirement millions at a slot machine, a fitting end as they helped steal the money from others. I'd be just as proud of helping to create the local casino vampires destroying people's life savings, they have no remorse, they are proud of their accomplishments, how do they look in the mirror and live with themselves? At least the tourists can leave this living Hell of slot addiction/alcoholism, us locals got preyed upon by Boyd & Fertittas thanks a lot guys!!!!!!!!
Oh yea, and Sy Redd and the IGT guys that invented video poker should burn in Hell along with anyone involved with local casinos and preying upon locals, the Mob never allowed this to happen, the locals were always left alone, zoning laws prevented neighborhood casinos from destroying locals financial health! Well, the locals are abandoning your casinos, we're sick and tired of dumping our paychecks every week, we're mad as Hell and we're not going to take it anymore! I hope every stupid local casino is dark shuddered and taped off as one by one they close down. Prey on the tourists not the locals! I just laugh every time I see more layoffs at the locals joints, I hope you all burn in Hell!
Yea, they hated the business conventions cause those guys were smart, they did their shows, had some drinks and got the hell out of this town and didn't get drunk and lose their life savings gambling as their boss might see them making an ass out of themselves. Let's face it, 50% of the revenue of casinos is from compulsive gamblers. I'd put these casino execs in a special place in Hell, with child molesters, drug dealers, and other disgusting people! You don't see these 3 bean counters gambling now do you? And for Christs sakes, let's quit making the national news for chasing down Charles Barkley or all these pro athletes who won't pay their stupid markers! It's making this town look petty! Haven't we ruined enough people's lives already! It's just a matter of time before sports betting is legal throughout this stupid country, there is too much money involved, literally hundreds of millions swinging on whether or not a guy drops the ball in the endzone or catches it. Hey, let's all drop everything and just gamble and drink all day long! yee ha!
Dont beat around the bush gonefishin65...tell us how you really feel :-)
Yea, but nobody is listening! Man there are more posts on OMG about some Hollywierd star's ass itching than on this LVSun posting. What a shame. What is up with this Jon & Kate plus 8 crap? And how the hell does Glen Beck make 23M a year and that idiot Bill O'Reilly made like 80M last year! Go Figure! We need these clowns to come to Vegas and blow their life savings on high limit sluts (I mean slots)...
Interesting article. The responses are also interesting (sometimes very predictable). Those suggesting a sports team may have something. A steady supply of tourists will fill some seats, but who is going to build a BILLION dollar stadium? It takes decades for the cost to be recouped, and these days, the team will demand "nicer" facilities before the mortgage is paid on the stadium. The cost of tickets has skyrocketed to pay the salaries, and fewer people are willing to pay. Lots mentioned about odds on blackjack, but nothing mentioned on those horrible video penny slots taking over the casinos. Bring back the single line 3 reel slots for those of us who just want to play the slots without all of the confusing junk on the video type slots (simple video poker is o.k., I'm referring to the cartoon machines).
Yea, have you seen these new quad penny slots like Cleopatras Barge, and Wolfs Run you can play 4 at a time! The hold is like 20% on these things. Look, they're going after women who are hypnotized on these things, the colors, the lights, the incredible graphics on LCD screens, the players have no chance. You won't see any decent machines. I like some at the Palms, the 10 play with bonus 2-10 multiplier is interesting, but lets face it, they WANT you to play other things...Palms had Star Trek looked really cool but I think they 86'd it. OH WELL..Easy solution, do 4 consecutive shots of Jack, put $500 or so on red or black (maybe $10 each on 0 & 00 just in case) and let it rip, and live with it...if you win, then go party on these stupid slots, if you lose, well then you lost...
Yea, roulette is the one to play...Red or black, just follow the patterns and try to guess is it streaking a color, or is it bouncing back and forth in a pattern, then jump in! Don't play anything else! Dont play BJ, one hand in sucks, as you may get a 12-16 against a 7,8,9,10,J,Q,K,A and you HAVE TO HIT and if the dealer would have busted, it just drives you MAD, INSANE, or CRAZY...red or black, its not personal, there is no strategy to forever wonder about. I HATE BLACKJACK!!!!!! & don't drink, smoke and play slots unless you are a billionare and losing doesn't matter, or you want comps and are bored with life *(you better be rich)*
HA HA HA
now the faggot Frank Fertitta Jr. is dead rotting corpse...F&^* HIM!!!!
F*^KING SCUMBAG