In the wake of the Ausaf Umar Siddiqui case, I’ve gotten a few calls from reporters about casino credit gone bad. Since individual casinos don’t generally release lists of which of their credit players are deadbeats and which aren’t, I had a hard time estimating just how common it is for players to run up multi-million dollar debts with casinos. Looking at the lawsuits filed tells you how many of them go to court, but what about those that don’t?

Looking at the Nevada Gaming Abstract I got something of an answer. According to the 2007 edition, page 2-19, in 2007 the 23 casinos in the Las Vegas Strip area that made more than $72,000,000 had total casino revenues of about $5.9 billion, and wrote off about $112.5 million to “bad debt expense.” So 1.9% of total casino income is lost to bad debts.

To put it in perspective, that’s more than the sports books made in the entire year ($83 million). It’s also roughly ten percent of the total spent on casino comps (about $1.3 billion). Unfortunately, I can’t tease out what percentage of markers end up unpaid, but as you see it’s clearly statistically significant.

Another interesting tidbit–casinos lost about $5 million to bad debts in the rooms department, $1.1 million in food, and $47,000 in beverage. Is this a case of credit card chargebacks or something? I know that restaurants are getting expensive, but I don’t think they offer in-house payment plans or layaway.

Here’s something to make you feel better: no matter how bad things are going for you at your job, I’m pretty sure you didn’t make $5 million in bad loans during the year, as the average Strip credit manager apparently did.

The Nevada Gaming Abstract is full of such enlightening numbers, which is why it’s the inaugural featured resource over at gaming.unlv.edu.

If you can make it, we’re hosting a provocative talk at UNLV in two weeks. Here’s the info:

January 29, 2009
Gaming Research Colloquium Series:
Leslie Nino Fidance
William S. Boyd School of Law, UNLV
“The Mob Never Ran Vegas”
Thursday, January, 12:15 pm
UNLV Special Collections
Download flyer (pdf)

Center for Gaming Research: Special Events

If you can’t make it, I should have the audio posted as part of the UNLV Gaming podcast series. This is definitely a talk to remember–I’ve read the paper it’s based on and the author makes many good points.

Even if you don’t plan on going, click through to see the flyer, which I will accept full blame for. It’s the kind of thing that a serious academic probably wouldn’t come up with, but c’mon, the talk is about the mob in Vegas.

At last I’ve gotten a chance to photograph the carpet at Encore. I didn’t make it into the mysterious sky casino (which was not on our opening tour), but I managed to get some shots of the high limit room. Neat stuff. Check it out on the Strip carpet gallery.

I’ve also tweaked my background a little, making it a bit less busy and incorporating some of the new images. Look for that to keep evolving.

Because we can’t wait for the future, everyone wants to know what’s going to happen. Spectrum Gaming has a 21-point list of what to expect, but I’ll give you my own views, focusing mostly on Las Vegas.

This is all with the caveat that, as I often say, “my work is not predictive.” That’s just a fancy way of saying I can’t tell the future, and a more polite one, too.

With energy prices and room rates down, I can see a rebound in business, but depressed room rates (relatively speaking) might reverse the steady trend of gaming revenue’s decline as a portion of total revenues.

That’s wordy–let me put it plainer: in 1984, Strip casinos made more than 58% of their total revenues from gaming. That number held fairly steady until 1994, when it began an unprecedented slide. In 1999, the figure dipped to 48.1% percent, and from 2005-7 it hovered between 40 and 41%.

With room rates down and consumers spending less freely on shows, expensive meals, that number may start to move in the other direction. If gaming revenues decline proportionally to room rates, we are in trouble. Year to year, they were down more than 14% in October, and occupancy was down more than 6%. That means a 20% total drop in room revenues. If gaming revenues fell by one-fifth for the year, the state’s budget would probably implode.

So, to borrow a phrase from Mr. Mom, somebody better figure out a way to get people gambling in Las Vegas pretty fast.

Slashing room rates and offering generous comps may do the trick, but what will the consequences be?

When analysts pencil out expected return on investment for future properties, they’ll note the trend of falling room rates. So builders won’t be able to borrow as much money to build higher-end rooms, since you can’t justify spending the same on a room that’s going to earn $110 a night as one that will pull down $160. The next wave of casinos might be a step down in terms of detailed finishes from what we’ve been seeing.

With casinos making more money, proportionally, there will be a greater drive to maximize revenues, which in the end will mean more labor-saving devices, fewer employees with their pesky wages and benefits, and, in the end, greater control over comps. It might be easier to give away a $90 room than a $250 one, but I think casino departments will have their feet held to the fire to maximize their revenues. In the long run, this might not be the same as optimizing them.

Since gas prices have fallen quicker than airlines have added capacity, I see a quicker rebound in drive-in traffic than fly-ins, which means generally stronger results for companies sensitive to value shoppers. The question is, once people have $250 a night to spend on a room, will they be willing to do so if they’ve just spent $90 a night? Or will they feel gouged?

While 2009 will see some great deals for people coming to Vegas, I think that everyone should be aware of the unexpected consequences of cheaper rooms. It may change the face of Vegas in ways that will please some, but not others.

I could do some official-sounding retrospective on the year in gaming, but that’s been done better elsewhere, by people with more time. Instead, I thought I’d take a moment to flip through my archives and pick out a few of my favorite posts from 2008.

January
Things you need to tell the GCB

Best name ever?

February
RJ says: Be more sadistic!

Could casinos become free? (this one is totally rendered moot by the plunging room rates on the Strip, but is still interesting, I think)

March
Too funny (Remember those halcyon days when our biggest problem was Columbia Sussex not cleaning their bathrooms enough?)

April
Parity Hedge System explained

It’s all in the name

May
Why is Vegas Vegas?

June
Aria alternatives

Inconspicuous luxury? (this gives you some insight into my take on Encore, which I think is a perfect example of this phenomenon)

July
Fake Vegas explored

August
Las Vegas song

September
Arrogance

Whining professor

Bombastic living

October
To boldly go where no analogy has gone before

A very quotable newsletter

Diff’rent strokes for casino folks (see me reference Hayek)

November
Gambling with word choice

Of rats and machine players

December
Funniest photo ever?

Guess the year

That last one says it all, I think.

Have a safe New Year’s Eve, and best wishes for a happy 2009.

With 2008 almost history, I’ve got a new Atlantic City history article in Casino Connection to tell you about:

Casino Connection Atlantic City | AC History | Curtain up.

It’s all about the proliferation and disappearance of theaters along the Boardwalk.

My Las Vegas Business Press piece on Encore is up. It’s an expansion of my original post on this site. Here’s my grand conclusion:

Encore, in its essence, is hopeful. Even the name is a reminder that something came before, and something will come after. It’s both a great new resort and a call to remember that as long as it continues to change, Las Vegas will survive.

Wynn should take a bow for Encore and its essence of hope.

Insomuch as it’s possible to plumb a casino opening for a deeper read on the current American mindset, I’m giving it a shot. I’d really like to develop this into a 2000-word or so essay that pulls in the history of the Strip, speculation, consumerism, much more. Any editors out there want to pay for such a piece? Just checking.

Together, I think Wynn and Encore are the first Vegas resort that’s not looking backward: there’s no nostalgia for the past or for imagined versions of other, more notable, places. It looks like City Center and Fountainebleau will be in the same mold. Whether you love or hate the Wynn suite of properties, you’ve got to admit that stylistically they are a world away from, say, the Palazzo and Venetian, which are supposed to evoke the glories of a city whose heyday passed before Columbus sailed. They are original without making a fetish of their modernism.

If we don’t have the airline capacity to deliver people to town, though, does any of this make a difference in 2009? Later in the week I’ll be developing my year-in-review/looking ahead columns, and I think that will be the big question.

This Christian Science Monitor editorial argues with some logic that gambling isn’t the best thing for the economy. But I think the last line is a bit utopian:

One bright spot in this deep recession is that gamblers might be saying "Enough" to the lure of easy money and calling it quits. States, too, should call it quits on lotteries and not peddle this vice.

Lottery’s lure lost | csmonitor.com.

I’d like to meet the state legislator who proposes eliminating the lottery and either cutting school budgets even further or raising taxes to offset the difference. It may very well be that, long term, funding would be better secured without a lottery, but I don’t think there’s a politician left who thinks past the next election.

See, for example: David Patterson’s formula for New York’s continued prosperity: more gambling in bars, restaurants, and racetracks!

A recent case of kickbacks opens up an interesting public policy question that will probably not be answered. From the LV Sun:

A vice president of Fry’s Electronics who is accused of swindling the company out of more than $65 million has long been on the radar of Clark County prosecutors.

The Internal Revenue Service accuses Ausaf Umar Siddiqui, who has since been fired as Fry’s vice president of merchandising and operations, of helming a kickback scheme to help pay off his enormous debts amassed at Las Vegas casinos.

…

Since 2001, the bad check unit of the Clark County district attorney’s office has filed criminal complaints against Siddiqui in connection with at least $12.2 million in unpaid markers, according to the head of that unit, Bernard Zadrowski.

Siddiqui, Zadrowski said, is a whale — someone who bets in excess of $100,000 — and is among the top five debtors ever to pass through the bad check unit.

The Palo Alto, Calif., resident has repaid his $1.71 million debt to Binion’s and paid another $4.8 million to Caesars, but still owes Caesars Palace about $5.7 million, Zadrowski said. “Mr. Siddiqui has been paying back his restitution according to negotiations,” Zadrowski said.

It’s unclear whether these debts are related to Siddiqui’s alleged kickback scheme. Siddiqui repaid the Binion’s and Caesars markers documented by the bad check unit through cashier’s checks, said Zadrowski, who added he does not know the origin of those funds.

DA says Fry’s executive was major debtor in Las Vegas

Maybe as a supplement to the Gaming Hall of Fame exhibit over at gaming.unlv.edu we should put up a “Las Vegas Bad Marker Hall of Fame.” It would certainly add some spice to the site.

I like the part about how it’s “unclear whether these debts are related to Siddiqui’s alleged kickback scheme.” Ya think?

According to the SF Chronicle article about the same story, Siddiqui’s paid $120 million to Vegas casinos since 2005, even though his annual income is only $225,000.

Do casinos have the obligation to make sure all of their customers earned their money on the up-and-up? Right now, they don’t, and unless we want to subject high rollers to intrusive background investigations by privately-hired auditors and investigators, I don’t see it happening. The casinos already have their hands full keeping up with Title 31 filings, which they see as doing their part to prevent money laundering. They can say, with some justification, that no other business is asked to investigate its clientele to mitigate the possibility of previous malfeasance. If Nevada casinos were required to verify that all of their clients were completely law-abiding, many players would visit other jurisdictions rather than submit to lengthy investigations.

As a practical retort, though, critics can respond that most other businesses don’t take $120 million from customers over three years. And most lenders, before loaning out their money, ask for some kind of income verification.

From a law-enforcement perspective, it would probably be a better world if guys like Siddiqui could get caught before they had swindled others out of $65 million. Politically, though, neither the casinos nor the players, nor, I suspect, the states have any strong desire to rewrite the regulations to prevent someone from doing what he did. To the extent that anyone in Nevada actually talks about the issue, the need for revenue will likely trump criminal justice here.

There’s another question that I’ve always wanted to know the answer to, but don’t think there’s a practical way to find out: what percentage of money gambled in legal casinos is illegitimate–either embezzled or otherwise obtained unlawfully? That’s a subset of the bigger question of how much money circulating in the American economy is dirty. The answer can’t be zero, because we know that there is a great deal of crime that’s quite lucrative, and those criminals have to spend their money somewhere, unless they’re stashing it all in the Caymans. I guess if you totaled the entire amount of money that’s been discovered to have been embezzled, stolen, seized in drug raids, etc, you’d have an idea of what’s been detected, but how many criminals, particularly smaller ones, never get caught?

If you’re familiar with your gambling history (some of which you can find, in a single volume and at an outrageously affordable price, in Roll the Bones) you already know that, going back to the Romans, gambling was permitted, even encouraged, during the Saturnalia festival at the end of the year. Saturnalia evolved into Christmas, and the relaxation of gambling prohibitions during the Christmas season became enshrined in law several times over.

Now, of course, states let, and even encourage, people to gamble as much as they want, whenever they want. Apprentices never have to worry about their masters beating them for dicing, and no one goes to the stocks for playing too much whist. But if you want to really live history, go all out over the next few days (betting with your head and not over it, naturally), secure in the fact that if you were living eight hundred years ago, the king’s law would protect you from punishment for doubling down.

If they’re still doing the Sands casino in Bethlehem, maybe they should play up that angle. Or not.

Can you guess the year that an article appeared in Forbes magazine with these quotes?

– “Las Vegas is showing signs that it is becoming overbuilt.”

–”With traffic growing more slowly than capacity, older casinos have been hurting. Atlantic City casinos fared much worse last year.”

– “Steve Wynn put it this way: ‘The old formulas don’t work anymore. Customers won’t come just to see a Sinatra. You’ve got to give them an entire resort experience with spectacular scenery.”

–”Nevada Gaming Board [sic] data show that 42% of Las Vegas’s casinos were unprofitable last year. Casino bond issues totaling $612 million are in deafult with a number of others on shaky ground.”

Read after the break for the answer…. Read the rest of this entry »

There’s been quite the buzz for Encore over the Internet. This quote from Oskar Garcia’s AP piece explains, I think, why Wynn gets it more than anyone except Jack Binion and a few others:

Wynn expected thousands to jam the entrances to the casinos on Monday night, as some of his best customers ceremoniously pull the first slots and play the first hand at each machine and table with $2 million in house money.

If they win — at prices of $1,000 to $25,000 — they get to keep the winnings, but Wynn says he expects they’ll play some more no matter what happens.

“I’ve never met a gambler that would win a bet and retire from gambling,” he said.

Wynn’s Encore opens during tough times for Vegas

There’s something else about the place that I didn’t mention yesterday–like Wynn, it has a sense of humor about itself. Many of the other luxury joints take themselves way too seriously. I don’t get the feeling that Encore does. There’s a real sense of whimsy running throughout the place. I’m sure a guy that’s just blown $25,000 at mini bacc would beg to differ, but I can see it.

I’ve got an idea that I will hopefully get to develop more in an essay somewhere: Encore is a themed hotel, but it’s themed around ideas, not a time or place. It’s not homogeneous, but it all ties together because it comes back to the idea of change, metamorphosis, and reinvention…which is the essence of Las Vegas, after all.

After much anticipation, I got to see the inside of Encore. My expectations were high. As I said in the RJ, Steve Wynn’s been opening casinos for a while now, and he does it better than anyone in the business. I tried not to read the pre-opening press too closely because I’m in no hurry to see the future–I’d rather experience it as it happens.

I was enormously lucky this morning, since the group I was in (which included fellow Vegas Gang members Hunter, Chuck, and David) was conducted around the property by Roger Thomas, the hotel’s Executive Vice President of Design. He designed himself or had a hand in the realization of just about everything we saw, and had fascinating anecdotes about how he acquired many of the pieces on display throughout the property. It was a real treat.

I’m amazed at how well everything came together. When I ran past the place during the marathon (which was about 2 weeks ago but feels like 2 months), I thought that there was no way the hotel would be ready to open on the 22nd–and that was just the porte cochere. When I got there at quarter of 11 this morning, there was still work going on, but the place is absolutely ready. There’s something to be said for a hard opening: much more dramatic impact and excitement than doing it in dribs and drabs.

And that’s what it all comes down to: visual theater. It’s hard not to get jaded about casinos when you live in Las Vegas, and even tougher when you’ve worked in one. Encore really impressed me in a way that few hotels or casinos have. To explain the genius of the place, let me tell you about Mr. A and Mr. B. Mr. A has been coming to Las Vegas for thirty years and has gone from Caesars Palace to Mirage to Bellagio, with stays at Bally’s, MGM Grand, and Paris mixed in. He loves Vegas and everything about Vegas, especially the gambling. Mr. B came to Vegas once, in 1999, and hated everything about the city. He doesn’t gamble. I really think that both Mr. A and Mr. B would be equally wowed by Encore for completely different reasons.

Encore is the ultimate Vegas and the anti-Vegas, both at the same time. The colors are rich without being gaudy. The interiors deliver luxury without pretension. I didn’t get the feeling that it was trying to impress: instead, it felt like some folks with an unlimited bank account and excellent taste got together and decided to build. I can see how it’s the logical product of Wynn’s three decades plus in the casino business, but also a departure.

I won’t bore you with the petty details: the chambered casino, the unique finishes in each restaurant, and the square footage of the guest rooms. That’s been better told elsewhere. I’ll just relate some of my impressions of what I saw.

At first, I didn’t think that I was going to be very impressed with the restaurants. After all, they’re just places for people to eat, right? How creative can you get with that? Sinatra, for example: when I heard the idea of a Sinatra-themed Italian restaurant, I thought, ugh. I pictured Piero’s with Rat Pack photos and gold records on the walls. I couldn’t have been more wrong. The restaurant is actually a gem, a fantastically-designed space with brilliant details, and a few tasteful photos of Frank Sinatra that don’t look out of place at all. It’s really the opposite of everything I’d imagined it would be.

Switch, too, was a real shock. When I heard the concept of a restaurant whose walls changed, I cynically thought that they must not have much optimism for the menu if they have to use gimmicks like that. Seeing the concept in action, though, it all makes sense. Roger Thomas says that Steve Wynn’s idea was “dinner theater without the actors.” He absolutely achieved it: the switch effect is flawless, and the musical cues give it a true sense of drama. I can see now how it will complement, not distract from, your meal.

More cynicism exploded: you would think that opening a nightclub called “XS” in the midst of an economic slowdown is the height of hubris. Do we really need another gilded night spot? Walking through the space, I can say “yes.” It feels like a celebration of movement, of life, particularly the gold leaf body forms in the foyer, another detail that must be seen to be appreciated. It’s not hubris, it’s optimism, a bold statement that there still are moments in life worth celebrating.

Set against “the downturn,” the entire resort takes the shape of a manifesto, a declaration that there’s only one way ahead, and that’s to move forward. Granted, none of this was planned: Encore was conceived when it looked like smooth sailing ahead. Today, it has a relevance far beyond any other casino. It’s a profound cultural statement.

We’re not going to gamble or pamper our way out of our current societal predicament, but Encore is a bellwether nonetheless because it is forward-looking. There are elements from the past and from various parts of the world, but nothing sentimental or nostalgic. Sinatra, for example, looks like a room that the singer would be comfortable in, but like nothing that he would have seen during his life. It’s not about presenting Rat Pack nostalgia–it’s creating a space around the symbolic core of Sinatra’s music.

In short, next time you’re in Las Vegas, plan to spend some time in Encore. It will be something to remember.

You might have noticed that I do a great deal of writing. Whether it’s the daily blogging, the articles for the Las Vegas Business Press, Casino Connection, and elsewhere, or the books, writing is something that is very important to me, both professionally and because I like to do it.

Since it means so much to me, I try to keep minimum standards in the quality of my prose. I’m not saying that everything I write is flawless, but it generally gets the job done and isn’t egregiously bad. You’ll notice typos in blog posts here, but that’s a failure in execution, not purpose. Generally, I strive to write well.

So imagine my surprise when this quote in the Jewish Times of Southern New Jersey, attributed to me, came into my mailbox:

Where would Atlantic City be if casino gambling wasn't authorized in 1976? Probably AC would be a ramshackle fishing village and a shallow summer retreat. Native David G. Schwartz, director of the Center for Gaming Research at the University of Nevada in Las Vegas, said in a recent column he wrote for the Casino Connection, "AC received a Second Chance with gaming, freeing the town from years of decline.The days before the rolling of the dice and the slot machine, were dark days but some residents didn't give up hope," wrote Schwartz, "since without gaming, they argued, the city could not reverse its decline. While casino revenues are down, gamblers are still coming here, in smaller numbers and some monies are coming in." It's still an uphill battle for the town but optimism has not been lost

Honorable ‘Menschen’ | www.jewishtimes-sj.com | Jewish Times of Southern New Jersey.

I honestly couldn’t believe what I read there. Did I really pen something that dreadful? With a sinking heart, I checked out the original Casino Connection article, Second Chances, which was about the 1976 gaming referendum:

The city had fallen far from its former standing as the “world’s playground.” Jobs had disappeared, infrastructure was decaying, and tourism had dwindled. In 1968, at a testimonial for 500 Club owner Paul “Skinny” D’Amato, city power brokers first discussed casino gambling as a cure for the city’s ills. Within six years, they managed to get a measure on the New Jersey ballot.

The 1974 referendum would have allowed casinos to open anywhere in the state after a local vote. But gambling opponents, including clergymen, advised their constituents to vote no, and the referendum failed.

These were dark days, but some didn’t give up hope. A small citizen contingent pressed for casinos. Without gambling, they argued, the city could not reverse its decline. Some considered them impractical dreamers, but they refused to take no for an answer.
Second Chances

I was profoundly relieved that I hadn’t actually written a sentence like, “The days before the rolling of the dice and the slot machine, were dark days but some residents didn’;t give up hope, since without gaming, they argued, the city could not reverse its decline.”

Why am I writing about this? It’s mostly defensive. I don’t want one of my students who I’ve upbraided for poor writing coming back at me with, “Yeah, but at least I didn’t write about ‘the rolling of the dice and the slot machine.’” It’s also professional pride. I happen to still know many people in South Jersey, and I’d hate for something like that to go out there uncorrected.

Usually, when I get mis-quoted, the journalist makes me sound better than I really do: they’ll clean up something like, “oh well you know the uh casino industry, many times in the past, like 1978-82 or 1991-1992, they’ve had hard times, you know” into: “The casino industry, Schwartz claims, ‘has been through hard times before, particularly in 1978-82 and 1991-92.’”

There’s another issue here: I never sounded an optimistic note about “some monies coming in.” I ended the piece on my usual optimistic, slightly ambiguous note, as I said that without gaming, “it’s a fair bet none of us would be where we are today.” That’s true, because I can say with absolute confidence that if Atlantic City didn’t get casinos, there is no way I’d have decided to study gambling.

I ordinarily wouldn’t belabor the point so much, but again, it’s all about professionalism. I partially earn a living through my writing, and I can’t have anything that absolutely sub-standard being ascribed to me without protest. While you’re going to find some clunkers in the thousands of pages worth of stuff I’ve written over the last ten years, you won’t (I hope) find anything that as stupidly awful as that quote up there. Going through the few sentences I really did write, I can name at least five revisions I’d make if I had another shot at it. But at least it’s not moronic.

Much ado about nothing, I’m sure, I’m going to use this in class for a while, so at the very least this post has some real pedagogical value.

Bill Zender. Casino-ology: The Art of Managing Casino Games. Las Vegas, Huntington Press, 2008. 313 pages.

Casino management might really be more of an art than a science. With a variety of factors from game pace to possible cheating affecting game performance, casino managers have no clear-cut path to profitability. As a result, virtually any “expert” peddling a theory can set himself up as a consultant. Finding someone who truly understands the complex mix of variables in the gambling business is both rare and valuable.

Bill Zender, a seasoned live-gaming veteran who’s written several books on game protection, explains the math behind the art in Casino-ology. The book starts out with a three-part analysis of blackjack. Zender emphasizes from the start the importance of time and motion issues to the casino’s bottom line: by dealing an extra round per hour on each game can add more than $128,000 to the casino’s revenue stream. He makes a compelling argument for speedy game play. The first section of the book, which is devoted to blackjack, should be a wake-up call for many anxious gaming executives: Zender convincingly argues against excessive protection schemes like prohibiting mid-shoe entry and over-zealous anti-card-counter measures. He wants a casino where games are quick, efficient, but attractive to the player. 6 to 5 blackjack is a particular bete noir, and Zender demonstrates that any gains in hold percentage are offset by player backlash once they learn that they’re getting trimmed.

In the next section Zender assesses general issues, like game mix and player tracking, as well as specific ones like marketing to Asian customers and the pitfalls of a non-negotiable chip program. Next, he explores game protection, trying to objectively determine how many skilled card counters actually exist and whether casinos should be hyper-vigilant against them. He’s got great chapters on detecting both counters and shuffle trackers and a detailed look at the false-shuffle baccarat scam that’s been plaguing casinos for several years now.

Finally, Zender wraps up with some thoughts on live game management, including the proper utilization of multiple-odds craps, the effect of eliminating the boxperson on the game, and an exploration of rhythmic rolling, a craps technique that partisans claim virtually guarantees winning.

Casino-ology makes tremendous sense: it is hard to argue against Zender’s plea for a more logical, more player-friendly gaming put. I like the fact that the book starts off cold with the blackjack material instead of a long introduction that stresses the importance of proper game management–we already know that it’s important to run a casino well, just tell us how you think we should do it. Zender’s book is almost completely devoid of theory and jam-packed with practical suggestions for better play and better results. It’s a definite must-read for the casino games executive or anyone further up in the management hierarchy.

There’s a bet of repetition towards the end, but Casino-ology is so densely-laden with valuable insights into live gaming that it doesn’t mar the book’s value at all. It’s easy to see why Zender’s a sought-after casino consultant, and readers should be happy to get his thoughts on gambling management in such a great package. Obviously, with chapters like “Metrics for Determining Live Game Pace” it’s not going to appeal to your casual gambler who bets the table minimum at roulette twice a year, but I’d strongly recommend this book for both casino managers and serious players, who would benefit from knowing the mindset on the other side of the tables.

Casino-ology is a rare find–a book that’s got a high expected return for both the house and the player.

If you haven’t popped over to gaming.unlv.edu lately, give it a shot in the next few days.

I’m in the middle of totally overhauling the site and, like I usually do, I’m making the changes on the fly and posting them as they’re done. I figure that since the site is free and the worst that can happen are broken links or weird-looking pages…which isn’t always that much different from what’s already up there.

Today’s changes: I’ve started to reformat the Gaming Hall of Fame pages (that’s going to take a while) and, more importantly, I’ve made some serious changes to the main page. Gone are the long-to-load feed.informer feeds–I’m now using Yahoo pipes to bring in content. I’m still experimenting, but I have high hopes. Look for some great stuff soon.

Reading David McKee’s post on the TI sale to Phil Ruffin, something clicked that made me realize the transaction made perfect sense. For a while now, MGM Mirage has been positioning itself as a casino builder and hospitality brand manager. The international moves are ample evidence of that, as are the City Center partnership with Dubai World and the only-on-hold JV with Kerzner. Let’s look at the Treasure Island “sale” in that light.

Ruffin is going to be leasing his employee parking garage and access to the MGM Mirage loyalty program, in effect, from MGM Mirage. The property will still be connected to Mirage. That means that it will remain in the MGM Mirage family of properties, and 99% of visitors won’t even notice that it has a different owner.

Isn’t this exactly what the various branding and JV efforts are doing, as well? For a half-billion dollars in cash, MGM gives up absolute ownership of TI, but they maintain a relationship with the casino on several levels. If MGM had announced that they were partnering with Ruffin to build a new casino and that he’d be providing $750 million in cash to build (I know that a new resort would cost twice that, but bear with me) and MGM was offering the land, everyone would say it was a smart move for both sides. This isn’t deconsolidation, so much as divesting an asset while retaining significant operational interest in it.

On another note, I think that the price absolutely vindicates those who thought the Tropicana Atlantic City was not worth $1 billion. If a newly-renovated property designed by one of the best teams in the business a stone’s throw from two of the busiest market’s newest casinos isn’t worth more than $800 million, why would a tired, thrown-together property at the slow end of a market under considerable competitive pressure go for more? I think that $650-$700 million is a more realistic valuation. Of course, I haven’t studied the EBITDA and all that fun stuff, but this seems to be what the market suggests.

Go ahead and use my new, registration-free, comment system–I’d like to hear what others think.

After several requests and some recent downloads of anti-comment spam plug-ins, I’ve decided to allow comments by non-registered users. The spam-blockers are passive, so you don’t even have to answer challenge questions or type in weird twisty letters.

So go ahead and comment. It will still take some time for new comments to be approved, but you no longer have to register.

Big news from the LVRJ this morning. Treasure Island is about to be sold:

Former New Frontier owner Phil Ruffin is buying the Treasure Island from MGM Mirage for $775 million, sources confirmed Sunday night. The deal is expected to be announced today.

Ruffin, a Wichita, Kan., businessman, sold the New Frontier in May 2007 for more than $1.24 billion to Elad Group. The aging casino was closed in July 2007 and demolished in November 2007.

MGM Mirage officials would not comment on the deal and Ruffin could not be reached. The transaction is a surprise, coming in the middle of the current global credit crisis that has dried up lending markets to the gaming industry. Also, other development projects have stalled, most notably Boyd Gaming Corp.'s $4.8 billion Echelon, which was shut down in August and may be postponed until 2010.

Ruffin owns the seven acres of land that houses the $1.2 billion Trump International Hotel & Tower. He is considered a part owner in the 1,282-unit hotel and condominium tower with New York billionaire Donald Trump. He appeared at the property's opening ceremony in April.

MGM Mirage acquired Treasure Island as part of the company's $6.4 billion purchase of Mirage Resorts in 2000. The pirate-themed casino was opened in 1993 by Steve Wynn at a cost of $450 million as a sister resort to The Mirage.

Treasure Island has 2,885 rooms, including 220 suites, and a 90,000-square-foot casino.

ReviewJournal.com - News - Treasure Island deal set.

Get ready for a deluge of stories about de-consolidation on the Strip. That’ll probably be the trend for a few years, until the surviving players begin to expand again, for the time being at least.

I don’t quite get how the Trump International condo, which is less than half the size and has none of the amenities or a casino is valued at $400 million than the TI, but real estate is a crazy game, I guess.

You’ve got to wonder what else could be in play here? I would have tagged New York-New York as a far less important asset than Treasure Island, which is linked to the Mirage, the company’s putative co-flagship. What if they sold Mirage next and reverted to “MGM” or “MGM Resorts?” It’s not unthinkable.

If deconsolidation is the new trend, I have a million-dollar question that I don’t know the answer to: is it a matter of companies selling off assets because they are desperate for cash, or is there something structurally wrong with owning so many casinos? Are the cost savings negligible, and are there hidden diseconomies of scale? Like I said, I don’t know the answer, but it’s an important question to ask if you run a casino company, since this should determine your strategy over the next few years.

Seth Davis. When March Went Mad: The Game That Transformed Basketball. New York: Times Books, 2009. 307 pages.

Today, college basketball is big business, with massive TV contracts and incredible hype. During the annual NCAA tournament, college basketball mania reaches its apex with “March Madness.” Every red-blooded American fills out a bracket or ten and watches raptly as Cinderellas, dark horses, and favorites vie for supremacy.

But it wasn’t always this way, and Seth Davis’s When March Went Mad tells the story of the single game that arguably made college ball such a big deal: the 1979 tournament final, which pitted Magic Johnson’s Michigan State Spartans against Larry Bird’s Indiana State Sycamores.

Davis has done his research, with nearly 100 interviews and extensive trips to the radio and television archives. The result is a well-written, informative account of the season that led up to the crucial game. He provides ample background on Bird, Johnson, their teammates, and coaches, and puts the reader on the team bus as they crisscross the country over the 1978-9 season.

The Bird/Johnson classic came at a crucial time: the UCLA dynasty that dominated the sport in the 1960s and 1970s had begun to fade and television executives wondered if the public would continue to watch a game with no obvious favorite. With coverage limited, most of the country did not get to see many of the smaller schools play. With the advent of cable television, though, the game could get more exposure. The question is, would anyone watch?

After reaching into the backgrounds of the two principles, Davis charts the entire season in a way that keeps the reader’s interest. By midway through the book, you’ll be eager to learn what happened at the Michigan State/Northwestern game thirty years ago. Davis keeps it interesting enough to get you through the season and into the tournament.

Even if you already know the results of the final game (and most sports fans do), the book is still a fun read. Davis makes a strong case that this game not only set the stage for the Celtics/Lakers rivalry of the 1980s, but profoundly changed the way Americans watched college basketball.