Sunday, December 19, 2004
Copyright © Las Vegas Review-Journal
INSIDE GAMING: Hollywood heavies and a pinch of gold dust
Some say high rollers are passé, especially with Caesars Entertainment being bought out by Harrah’s Entertainment for $9.4 billion. However, a glance at Caesars’ corporate office on Wilshire Boulevard near Rodeo Drive in Beverley Hills, Calif., will dispel that notion fast. A steady stream of Versace-clad customers driving Lamborghinis and Bentleys stop by to arrange trips with their casino hosts. Still, upper-crust customers themselves say they stop at Caesars to plan vacations that rival home living — Caesars’ expanded Forum Shops, an Elton John concert or dining at Picasso’s, for example — not for gambling per se.
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Gaming industry brass say the impending Manhattanization of the Strip will be good for business — at least for some casino companies. The best-to-do already have homes in Hong Kong and Gstadt. Maybe Los Angeles and New York, too. Now, they want added hang-outs in meccas where they can stay in their own cloisters, far from the maddening crowds, and still enjoy the best in accommodations, dining, entertainment and retail. Kirk Kerkorian, Steve Wynn, Bill Boyd, Donald Trump, Phil Ruffin, George Maloof, Peter Morton, Robert Earl and Leon Black get it. And that’s why industry insiders say projects like MGM Mirage’s Project CityCenter will be the wave of the future.
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Top insiders are saying there’s nothing secret about MGM Mirage’s expansion plans. Majority owner and takeover maestro Kirk Kerkorian has spent a lifetime building an empire and accumulating billions. Now, with prime gaming real estate holdings and white-hot demand for Las Vegas, he’s pioneering again. This time, he’s forcing the pace for gaming and for the hospitality industry, the fastest-growing industry in the world today.
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Sometimes it just seems easier to merge or acquire than to expand. Picture this. Harrah’s Entertainment is adding 60,000 square feet to the Rio Convention Center, a tiny project by Las Vegas standards. That added show space will require 900 tons of air-conditioning equipment, which is enough to cool 300 homes. The concrete used would be enough to build 83 homes and you could build 53 full-size pickup trucks with the 167 tons of rebar Harrah’s will use.
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The Palms and Texas Station are the most visited locals’ gambling joints, a recent survey by Goldman Sachs said. Station Casinos-owned and Boyd Gaming Corp.-owned properties account for 11 of the top 12 properties mentioned in the survey. More important for understanding trends, the success of the Palms bodes well for Station since the company is going after the same hip, young market segment with its planned Wild Wild West casino redevelopment project.
The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at (702) 477-3893, fax (702) 387-5243 or e-mail at rsmith@reviewjournal.com.
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