M Resort’s trial by fire

By Liz Benston

Monday, July 20, 2009 | 2 a.m.

Many Las Vegas casinos have lengthy customer lists built up over years in the business, as well as a fine-tuned sense, after years of trial and error, of what customers want. Not the M Resort, which opened March 1, in the worst economy in the modern casino era.

In its first few months of operation, the M, at the southeast corner of St. Rose Parkway and Las Vegas Boulevard, saw revenue soar as thousands of customers took in the property, hailing its modern yet comfortable design and reasonably priced gourmet restaurants.

Cognizant of the sour economy, the property offered competitive games, a slew of promotional offers and prices that didn’t break the bank. It also offered features designed to draw attention from jaded consumers, including happy hours at all of its restaurants and bars, a wine cellar with self-serve wines by the ounce and a buffet with cooking stations, beer and wine, and a television studio.

But such perks are no match for the crumbling Las Vegas economy, with unemployment that soared to 12.3 percent in June.

The honeymoon is officially over.

“This summer has been the most brutal I’ve ever seen in this business,” resort CEO Anthony Marnell III said last week. “August is going to be one of those months where you want to walk outside, dig a hole, get in and wake up on Labor Day.”

Beyond a few tweaks, the property has hit its marks as well as could be expected in this economy, Marnell said.

A June promotion offering free comp points for calling the casino and coming in the following day didn’t pan out because some deal-hungry gamblers expected to receive lots of points when they hadn’t gambled much to earn them.

A twice-weekly slot tournament has been better received, perhaps because customers have an equal chance to win regardless of points accumulated, he said.

On the casino floor, the property has added shoe games to its blackjack offerings Such games use multiple decks of shuffled cards and are harder for card counters to beat.

Marnell says the games are competitive with those of other properties, which have made similar moves.

The casino also has removed some so-called full-pay and nearly-full-pay video poker machines that allow skilled players a chance to beat the house. One of them, called “super deuces,” is a volatile game in which players can win or lose thousands in a sitting and is rarely offered in casinos.

Marnell says he doesn’t shy away from volatility because he knows the casino will prevail in the long run. (At the M, a single player’s multi-million-dollar win at roulette has been offset by millions lost at blackjack and craps in recent months, Marnell says.)

Simply put, Marnell removed the machines because they didn’t make money.

“We are in business to have an edge and these games are nearly break-even,” he admitted.

Not so for penny slots, whose top payback rates cost more than a dollar to activate but can be played for as little as a cent per spin. They are growing in popularity because they tend to pay out smaller amounts more often, though casinos generally keep a greater percentage of bets over time.

Up to 60 percent of slot players on any given weekend are sitting at penny slots, which make up only 45 percent of the M’s slot inventory — an indicator of more penny devices to come.

Even griping gamblers seem to appreciate the M’s non-gambling offerings, including free self-serve soda, which has generated thank-you letters from people who no longer have to wait to be served.

The soda machines end up costing the casino more money because the hotel employs as many cocktail servers as similarly sized properties without the machines, Marnell says. But they allow cocktail servers to focus on serving alcohol, which yields bigger tips for servers.

The M expects to do better than survive this summer, in part because the people circulating through the property are, in some cases, spending more than the lookie-lou crowds that spent little in the early days, Marnell said.

The property is still attracting new customers, including some 100,000 or so out-of-town residents who have signed up for the casino’s players club, which totals 270,000 members, he said.

“We’ve had an enormous number of people come down from the Strip to play who are now starting to come back,” he said.