User profile

appeal2

Welcome to the Bernie Economy. MGM is dead man walking with 13 billion in debt. They only have a couple of options, restructure or chapter out. The mall at City Center really sucks. You can see that they ran out of money just before they got to the interior finishes. Aria is a very cold place to play with long corridors. It is really the warehouse of gaming experience. The layout of the place is terrible. And all its done is cannibalize business from other properties. It hasn't expanded the market at all, like it was originally intened to do.

MGM needs the money and selling its share of the Borgata gives them a face saving way to get it. Yes AC is a dump and the regulations are incredibly onerous, however the Boragata is a major success. Its the only place down there worth going to.

Bankruptcy court is a clubhouse. It's sole purpose is to feed the various constituencies that make their living off of it. The auctioneers, trustees, lawyers, etc. The last people on the bankruptcy food chain are the creditors, except perhaps, sometimes the shareholders.

Of course debt is a major part of the problem. The problem with debt is that it has to be paid back. During periods of economic expansion, this isn't a problem, however during recessions and depressions, like now, this is the problem. If a company is cash-flow positive then a debt-equity swap will relieve the pressure. However, the take in Nevada is going down every month. It is just a matter of time until these places are cash flow negative. Then the liquidations will begin.

Part of Vegas's problem is competition from other markets. This has lessened the allure of Vegas as a gaming destination. However, there is a further problem. The quality of the Vegas experience has been diminishing over the years. The reasons Vegas has become less fun is: 1)Casino beancounters cutting back on comps and increasing the house advantage of games 2)The impersonal nature of most casinos, 3)Increasing costs of a Vegas trip as casinos attempted to increase non-gaming revenues and 4)Corporatization of casino ownership.

I live in the East Coast. I can have a mediocre experience in CT or AC. Vitually all those casinos are either in bankruptcy or heading there, also as a result of debt.

For Vegas to prosper in the current down times, it must get back to basics. Use technology to restore the customer relationship, get more generous with comps, go back to the Frank Rosenthal way of doing business, less the broken bones. Innovate more. I haven't seen a new gaming concept the equal of Rosenthal's Sports Book, the buffet, the blockbuster show, etc., in 20 years. Beancounters only know how to cut costs at the expensive of the business. They are clueless as to how to create excitement and buzz.

Even Wynn is run by beancounters. Steve is not running that show anymore.

De-emphasize slots as a business model. I know they are less labor intensive than table games, but they are completely homogeneous. You can play them anywhere. I know they are profitable, but they increase the depersonalization of the business and over reliance upon them has damaged the Vegas experience.

Next, Vegas is sin city. Nevada should immediately legalize marijuana. This is a multi-billion dollar industry. People travel to Amsterdam and other places for the hashish bars. Vegas should have them. Depressions are the best time to end prohibitions.

There are many more things to be done, but this would be a start.

Vegas must return to its roots. Once upon a time the little guy came to Vegas to get treated like a big shot. Everyone knew your name and personal service was the hallmark of Vegas. Then it went mass market, impersonal service. This worked for a while, but now that gambling is no longer an infinite market and that there are so many outlets around the world, people want to go where they are treated well. And unfortunately, with a few notable exceptions, that hasn't been the case in Vegas. The M marks a true return back to what made Vegas great. While the mob were tough taskmasters, they knew what it took to make people comeback, year after year. I remember my parents would go to the Dunes at least twice per years. Everything was comped and they would rave about their trip for weeks, especially if they won.

But the bean counters took over the town. Comps became harder to get and the town really lost a lot of its allure.