The three major casinos in downtown Reno, other than Harrah's, are now under unified ownership. Eldorado Resorts, owner of the Eldorado and half owner of the Silver Legacy, has bought Circus Circus and half of the Silver Legacy from MGM Resorts International. Eldorado already owned half of the Silver Legacy. The deal closed in November.
The projected cost of the Silver Legacy, which opened in 1995, was $230 million. Eldorado purchased half of this 1,700 rooms plus the entire 1,572-room Circus Circus for a total of $72.5 million.
This clearly shows the strain the Reno gaming market has been under as Indian casinos in California have intercepted its customers from northern California. Another victim of this competition is the Siena Reno, a downtown hotel which was sold in May and closed its casino in June.
Of course, Reno is not alone gaming markets in suffering from increased competition. Atlantic City and the big Indian casinos in Connecticut are among others in the same boat. Foxwoods, in Connecticut, is hoping to make itself more attractive by adding an outlet mall. Atlantic City has been adjusting in large part by closing casinos.
I have no inside information, but my guess is that Eldorado resorts will close the Circus Circus casino, which should shore up business for its other two properties. Video poker pay tables at Circus Circus have been drastically downgraded, which suggests a short-term orientation toward the casino business.
What could Eldorado do with Circus Circus, which originally was built as a department store? My first thought was that the casino could be converted to a different type of attraction, such as an indoor water park. But it's possible that the property, which is near Interstate 80, a hospital and the University of Nevada - Reno, might bring in more money if used for a purposed unrelated to tourism.
Experts say that the key to revitalizing city centers is to get people to live downtown. I could see the Circus Circus site as a massive mixed-use project that could accomplish this goal for Reno. The housing element could be attractice to downtown casino workers, hospital nurses and other workers, and students and university staff.
It will be interesting to see how big Eldorado Resorts and "the biggest little city" will think in deciding on the future of Circus Circus.
Tuesday, December 29, 2015
Friday, December 18, 2015
A challenge to Sheldon Adelson
The Las Vegas Review-Journal, Nevada's largest newspaper, is now owned by Sheldon Adelson, who controls Las Vegas Sands Corp., owner of the Venetian and Palazzo on the Las Vegas Strip as well as major casinos elsewhere in the United States and in Asia.
Adelson is a major donor and therefore influence in Republican politics. In the last presidential election cycle, he backed Newt Gingrich for the GOP nomination. He is a strong supporter of Israel and in particular its current conservative government. He owns a newspaper in that country.
Locally, he has been known for his battles with the Las Vegas Convention and Visitors Bureau, which he regards as a competitor for his convention business that unfairly enjoys the advantage of access to tax revenue. Adelson has opposed organization of workers in his Las Vegas hotels by the Culinary Union, which represents employees at most other Strip properties.
He is also known for his litigiousness, having sued among other people R-J columnist John L. Smith, driving him into bankrupcy.
Adelson says, laughably, that he bought the R-J for $140 million as a business investment. His pledge that he will not interfere with thepaper's editorial operations must be viewed with skeptcisim. The R-J itself just reported on a mysterious review of the perfomance of three Clark County (Las Vegas) judges, one of whom is hearing a major case involiving Adelson, that was ordered by the former owner of the paper but may have been done at the behest of the soon-to-be owner.
It has been noted that the R-J is already a conservative, libertarian-leaning newspaper in line with Adelson's political orientation. That is true of the paper's opinion pages. But the potential problems concern the paper's newsgathering function. The independence of the paper's reporters and editors is threatened not only by Adelson's political involvements, but also by his business interests.
Las Vegas Sands is a major player in a major industry that affects the Las Vegas economy but also the economies of cities and regions throughout the country. The R-J has been a major source of news coverage of that industry. Imagine the challenges the Detroit Free Press would face if the Ford family bought that newspaper. That's about the same situation with a different industry in Las Vegas.
The big problem in judging a newspaper's performance is what then-Defense Secretary Donald Rumsfeld called "unknown unknowns." Many of the biggest shortcomings in news coverage involve not what is covered, but in what doesn't appear in the paper at all. Unbalanced or inaccurate coverage is relatively easy to spot; more difficult is imaging what the paper should be covering that it isn't. Yes, there are competing media in the Las Vegas market, but none with the resources and reach of the Review-Journal.
If Adelson is to gain the confidence of the community in spite of the obvious potential for conflicts of interest, he must not only assure the indepence of the R-J's news operation, he must appoint an indendent ombudsman and give that person absolute independence to investigate, report and comment not only on readers' issues and complaints, but also on the paper's internal operations and the news judgment of its editors.
A second thing he could do is to create a position that the general interest Las Vegas media have always needed and never really had -- that of a consunmer-oriented gaming columnist/critic, someone with the expertise to give competent advice, answer reader questions, analyze industry trends affecting gamblers and investigate possible abuses in the industry.
If Adelson can't tolerate an indendent staff, his paper will lack credibility and therefore any value to the community. Eventually the community will reject it and his "investment" will fail.
I hope Adelson rises to the occasion, but I have to say I'll be surprised if he does. The best outcome for the community probably will be if Adelson decides the hassles of owning the paper aren't worth the trouble, and sells it to someone or some company legitimately in the news business.
Adelson is a major donor and therefore influence in Republican politics. In the last presidential election cycle, he backed Newt Gingrich for the GOP nomination. He is a strong supporter of Israel and in particular its current conservative government. He owns a newspaper in that country.
Locally, he has been known for his battles with the Las Vegas Convention and Visitors Bureau, which he regards as a competitor for his convention business that unfairly enjoys the advantage of access to tax revenue. Adelson has opposed organization of workers in his Las Vegas hotels by the Culinary Union, which represents employees at most other Strip properties.
He is also known for his litigiousness, having sued among other people R-J columnist John L. Smith, driving him into bankrupcy.
Adelson says, laughably, that he bought the R-J for $140 million as a business investment. His pledge that he will not interfere with thepaper's editorial operations must be viewed with skeptcisim. The R-J itself just reported on a mysterious review of the perfomance of three Clark County (Las Vegas) judges, one of whom is hearing a major case involiving Adelson, that was ordered by the former owner of the paper but may have been done at the behest of the soon-to-be owner.
It has been noted that the R-J is already a conservative, libertarian-leaning newspaper in line with Adelson's political orientation. That is true of the paper's opinion pages. But the potential problems concern the paper's newsgathering function. The independence of the paper's reporters and editors is threatened not only by Adelson's political involvements, but also by his business interests.
Las Vegas Sands is a major player in a major industry that affects the Las Vegas economy but also the economies of cities and regions throughout the country. The R-J has been a major source of news coverage of that industry. Imagine the challenges the Detroit Free Press would face if the Ford family bought that newspaper. That's about the same situation with a different industry in Las Vegas.
The big problem in judging a newspaper's performance is what then-Defense Secretary Donald Rumsfeld called "unknown unknowns." Many of the biggest shortcomings in news coverage involve not what is covered, but in what doesn't appear in the paper at all. Unbalanced or inaccurate coverage is relatively easy to spot; more difficult is imaging what the paper should be covering that it isn't. Yes, there are competing media in the Las Vegas market, but none with the resources and reach of the Review-Journal.
If Adelson is to gain the confidence of the community in spite of the obvious potential for conflicts of interest, he must not only assure the indepence of the R-J's news operation, he must appoint an indendent ombudsman and give that person absolute independence to investigate, report and comment not only on readers' issues and complaints, but also on the paper's internal operations and the news judgment of its editors.
A second thing he could do is to create a position that the general interest Las Vegas media have always needed and never really had -- that of a consunmer-oriented gaming columnist/critic, someone with the expertise to give competent advice, answer reader questions, analyze industry trends affecting gamblers and investigate possible abuses in the industry.
If Adelson can't tolerate an indendent staff, his paper will lack credibility and therefore any value to the community. Eventually the community will reject it and his "investment" will fail.
I hope Adelson rises to the occasion, but I have to say I'll be surprised if he does. The best outcome for the community probably will be if Adelson decides the hassles of owning the paper aren't worth the trouble, and sells it to someone or some company legitimately in the news business.
Saturday, December 12, 2015
Restaurants and the rodeo
I've been meaning for some time to write about a real restaurant find, the Second Street Grille in the Fremont downtown. This small art deco style room serves some very imaginative variations of steakhouse fare, including Mongolian rack of lamb, Thai Cioppino (all right, not usually served in a steakhouse) and Paniola rib-eye steak, with a southwestern-influenced sauce. The service is excellent and there's rarely a wait to get in. The staff says very few locals ever eat there, which is a shame.
The Rio was the only casino I know of that had two completely separate buffets -- the Carnival World Buffet and the Village Seafood Buffet. Until a couple of weeks ago, they were at opposite ends of the very large casino. Now the seafood buffet has been moved to the Carnival World location. The new setup works like this: There are separate entrances for each buffet. The new seafood buffet contains only seafood items. If you pay for the seafood buffet, you also get access to entire Carnival World buffet. You can also, for less, buy access to only the Carnival World, which does include some seafood, including crab legs at dinner. This makes sense to me because it avoids the duplication of offering non-seafood items at both buffets and gives seafood customers a much wider choice of other items. The spouse and I sprung for the seafood buffet recently and were a bit disappointed. Many of the seafood items had been left out too long. Now is a good time to try the Carnival World Buffet; you can get in free by earning 50 tier credits ($500 coin-in) and swiping your player card at a special promotional kiosk outside the buffet. The ticket is good for a couple of days.
The National Finals Rodeo is in town, and South Point has been full people who may be cowboys or may be just Walgreens managers from Laramie and accountants from Boise dressed up like cowboys. One sign the rodeo is in town is the sign in front of Don Vito's, the casino's Italian restaurant, which states that it will be serving the Silverado Steakhouse menu while the cowboys are in town, due to the high demand for steak during the rodeo.
The Rio was the only casino I know of that had two completely separate buffets -- the Carnival World Buffet and the Village Seafood Buffet. Until a couple of weeks ago, they were at opposite ends of the very large casino. Now the seafood buffet has been moved to the Carnival World location. The new setup works like this: There are separate entrances for each buffet. The new seafood buffet contains only seafood items. If you pay for the seafood buffet, you also get access to entire Carnival World buffet. You can also, for less, buy access to only the Carnival World, which does include some seafood, including crab legs at dinner. This makes sense to me because it avoids the duplication of offering non-seafood items at both buffets and gives seafood customers a much wider choice of other items. The spouse and I sprung for the seafood buffet recently and were a bit disappointed. Many of the seafood items had been left out too long. Now is a good time to try the Carnival World Buffet; you can get in free by earning 50 tier credits ($500 coin-in) and swiping your player card at a special promotional kiosk outside the buffet. The ticket is good for a couple of days.
The National Finals Rodeo is in town, and South Point has been full people who may be cowboys or may be just Walgreens managers from Laramie and accountants from Boise dressed up like cowboys. One sign the rodeo is in town is the sign in front of Don Vito's, the casino's Italian restaurant, which states that it will be serving the Silverado Steakhouse menu while the cowboys are in town, due to the high demand for steak during the rodeo.
A false economy
If Las Vegas were a country, video poker would be the national pasttime. Many people play, but few know much about pay tables and strategy. I used to wonder how these "ploppies" managed to stay in the game.
Over the years I've come to the unscientific conclusion that most do it by playing for small stakes. They think that, by doing so, they are minimizing their costs (losses). But in many cases it's like always buying the smallest box of laundry detergent rather than the economy size, You pay less in the short run, but a lot more in the long run.
Actually, with video poker, it can be worse than that. The difference can be between losing money and making money.
A case in point: The Station Casinos and Fiestas all have machines labeled "up to 99.8 percent payback." These machines carry a variety of games at denominations ranging from nickels to dollars.
The key words in the labeling are "up to." Most of the games pay back less than 99.8 percent, and the lowest denomination games in particular. This makes sense because the casino wants to make a certain amount of money off each machine, and to accomplish that it has to take a larger percentage when a player is putting less money through.
I was playing "not so ugly" deuces on one of these machines yesterday, when the Stations were giving six times points on video poker. The game pays back just over 99.7 percent. With the point multiplier, it paid back 100.3 percent. I was playing for dollars.
The man next to me was playing for nickels. But the version of deuces wild he was playing was very ugly -- "Colorado deuces," which pays back 96.77 percent. At least he was playing maximum coin, which for this game was 10 coins. Had he been playing fewer coins, the return would have been even less.
He appeared to be playing at a moderate pace; let's assume 700 hands an hour. At 50 cents a hand, he was putting $350 an hour through the machine. Let's further assume, probably unrealistically, that he was playing near perfect strategy and was achieving a long-term return of 96.7 percent. (The reason it's unlikely he was playing this well is that Colorado deuces is a game nobody serious about video poker would play, let alone study and practice.)
If he was getting back 96.7 percent of his money, the house was getting the rest -- 3.3 percent. That comes to $11.55 an hour. By contrast, I was playing $5 a hand (max coin of five). Assuming the same speed of play, I was putting $3,500 through the machine. But the house was getting only 0.3 percent -- or $10.50 cents an hour! The dollar game is actually cheaper than the nickel game!
But wait, there's more. As noted, we were both earning points at the rate of 0.6 percent. That gave the nickel player $2.10 an hour, cutting his loss to $9.45 an hour. On my $3,500, the points added $21, giving me a profit of $10.50. (I actually play a bit faster than the rate in this example and therefore earn more.)
Although in this case playing for dollars is obviously better than playing for nickels, you need more money to survive the larger swings of the dollar game. I wouldn't recommend that a nickel player switch to dollars because of the larger bankroll required. But many nickel players would be comfortable moving up to the quarter deuces game on the "up to 99.8 percent payback" machines.
But even for nickels, there are much better options at Station properties and some other casinos in Las Vegas. Stations has machines with 100 percent payback games, including games for nickels. The deuces game on these machines is full pay deuces wild, which pays back 100.76 percent with optimum play. These machines are not eligible for point multipliers and points accrue at a much lower rate than on the 99.8 percent machines, but who cares? With the full pay deuces you're making money rather than losing money.
Over the years I've come to the unscientific conclusion that most do it by playing for small stakes. They think that, by doing so, they are minimizing their costs (losses). But in many cases it's like always buying the smallest box of laundry detergent rather than the economy size, You pay less in the short run, but a lot more in the long run.
Actually, with video poker, it can be worse than that. The difference can be between losing money and making money.
A case in point: The Station Casinos and Fiestas all have machines labeled "up to 99.8 percent payback." These machines carry a variety of games at denominations ranging from nickels to dollars.
The key words in the labeling are "up to." Most of the games pay back less than 99.8 percent, and the lowest denomination games in particular. This makes sense because the casino wants to make a certain amount of money off each machine, and to accomplish that it has to take a larger percentage when a player is putting less money through.
I was playing "not so ugly" deuces on one of these machines yesterday, when the Stations were giving six times points on video poker. The game pays back just over 99.7 percent. With the point multiplier, it paid back 100.3 percent. I was playing for dollars.
The man next to me was playing for nickels. But the version of deuces wild he was playing was very ugly -- "Colorado deuces," which pays back 96.77 percent. At least he was playing maximum coin, which for this game was 10 coins. Had he been playing fewer coins, the return would have been even less.
He appeared to be playing at a moderate pace; let's assume 700 hands an hour. At 50 cents a hand, he was putting $350 an hour through the machine. Let's further assume, probably unrealistically, that he was playing near perfect strategy and was achieving a long-term return of 96.7 percent. (The reason it's unlikely he was playing this well is that Colorado deuces is a game nobody serious about video poker would play, let alone study and practice.)
If he was getting back 96.7 percent of his money, the house was getting the rest -- 3.3 percent. That comes to $11.55 an hour. By contrast, I was playing $5 a hand (max coin of five). Assuming the same speed of play, I was putting $3,500 through the machine. But the house was getting only 0.3 percent -- or $10.50 cents an hour! The dollar game is actually cheaper than the nickel game!
But wait, there's more. As noted, we were both earning points at the rate of 0.6 percent. That gave the nickel player $2.10 an hour, cutting his loss to $9.45 an hour. On my $3,500, the points added $21, giving me a profit of $10.50. (I actually play a bit faster than the rate in this example and therefore earn more.)
Although in this case playing for dollars is obviously better than playing for nickels, you need more money to survive the larger swings of the dollar game. I wouldn't recommend that a nickel player switch to dollars because of the larger bankroll required. But many nickel players would be comfortable moving up to the quarter deuces game on the "up to 99.8 percent payback" machines.
But even for nickels, there are much better options at Station properties and some other casinos in Las Vegas. Stations has machines with 100 percent payback games, including games for nickels. The deuces game on these machines is full pay deuces wild, which pays back 100.76 percent with optimum play. These machines are not eligible for point multipliers and points accrue at a much lower rate than on the 99.8 percent machines, but who cares? With the full pay deuces you're making money rather than losing money.
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