Gaming execs, regulators pow wow at Summit

January 17, 2001 2:40 AM
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The "suits" who shape casino policy, the solons who set it and the regulators who enforce it swapped ideas at last week’s highly successful American Gaming Summit at Bellagio in Las Vegas.

They paused in their two-day session to honor J. Terrence Lanni, executive board chairman of MGM Mirage, with a lifetime achievement award.

Overshadowing the seminars, though, was concern about what direction the new White House administration would take; the likes and dislikes of whoever becomes the nation’s next chief law enforcement officer; and what Congress might or might not be able to do in gaming legislation.

Ease up on the regs

Overhaul the regulations. That’s what former Caesars World mega-boss Henry Gluck urged Thursday morning. Tough gaming rules scare away many board members of publicly traded companies, Gluck told the Summit meeting.

"We need to attract new industry, new investors to our state," he said, "to increase and inspire" the reluctant companies. He urged regulators "to establish a system of waiving (licensing) requirements under prescribed conditions."

Perhaps, he suggested, Nevada’s governor could name a blue-ribbon panel to study an overhaul of those regulations, or the state’s Gaming Policy committee could do the review, as was done 10 years ago under then-Nevada Gaming Commission Chairman John O’Reilly.

O’Reilly, in the audience, introduced Gluck — the Transcontinental Properties co-chairman — at the start of the session.

The requirements for licensing directors of publicly traded companies should be given priority in the regulatory review, Gluck stressed. He asked if it was appropriate to hold directors of a New York Stock Exchange listed company, "in business for more than 50 years, to the standards we apply to smaller businesses."

He added that directors of one $23 billion-a-year diversified company were reluctant to go through Nevada’s licensing process, "resisting our efforts for seven years to lease international tenants to Caesars Palace shops."

Venetian to expand

William P. Weidner, president of Las Vegas Sands Inc., parent company of The Venetian, said the resort is positioned to add a 1,000-room tower in the wake of high demand for rooms and an increasing daily room rate.

"We are very pleased with the property’s past and present performance and are eagerly looking toward continued success," Weidner said. "The Venetian has the strength and capability to expand with the growth of visitors to Las Vegas and reap the benefits of being such a desirable destination resort."

Weidner cited substantial increases in room revenue and occupancy. For the fourth quarter of 2000, average daily room rates reached $197, up from $176 a year earlier. The news was even better for convention and group sales, which posted average daily rates of $218, compared to $181 during the fourth quarter of 1999.

The Venetian’s overall occupancy reached 94.4 percent during the fourth quarter, a substantial increase over the previous year’s 82.9 percent.

Rob Goldstein, president of the Venetian, said Las Vegas is "uniquely positioned" to avoid a slump in the nation’s economy.

"I don’t think Las Vegas was founded on any one economy," he explained. "It always had diverse and unique aspects. (With its growth), "We’ve overcome the pitfalls of being a regional destination."

Weidner said other projects being contemplated at The Venetian (besides the 1,000-room addition), were expansion to the baccarat gaming area and upgrades to certain suites.

Help wanted: pinstripe suits!

Four hotel presidents with their fingers on some 20,000 Strip hotel rooms agreed they’re always looking for managers. Plus it keeps them on their toes.

"There’s a high premium on agility," Summit panelist Felix Rappaport said Friday. "We don’t wait for the end of the month, the end of the quarter" at New York-New York, where he’s president.

"Any company today is working hard to build up its management strength," agreed Hector Mon, Tropicana Las Vegas president. "Smaller properties have to be more entrepreneurial in management development”¦ but there is a lot of room for bright young managers who want to work their way up."

"We need to groom two or three people who can take my position," said Tony Santo, Bally’s-Paris Las Vegas president. That way, he indicated, they learn to make tougher decisions, which leave fewer (but the really big ones) for him to make.

After the merger of MGM and Mirage, added Rappaport, "We really have a pool of talent we can draw from. We need to surround ourselves with strong people (and) give them the opportunity to make mistakes."

Latest newcomer

Thomas Gallagher, Park Place Entertainment’s new president and CEO, "didn’t join Park Place to be a caretaker," he told a Summit luncheon crowd Friday. First, he said, PPE must finish assimilating the properties acquired after Hilton Hotels spun off its gaming properties into PPE.

However, he said, PPE "will continue to be a major source of growth and investment in Las Vegas and Atlantic City." It was his first major address since taking the job.

Gallagher promised "imaginative things in front of Bally’s in the next few years." He was "especially optimistic" without being specific, about plans for Caesars Palace.

"I don’t see us rushing to look at every possible acquisition, every possible deal," he said, adding PPE wouldn’t pass up a good deal if it came along.

He felt completion of the Borgata property in Atlantic City, repositioning the Harrah’s property in Mississippi, acquired along with Caesars Palace, and the Mohawk property in New York, will soon add to PPE’s bottom line.

He made no mention of Ed Roski’s attempt to purchase the Las Vegas Hilton property; but said most Americans disagree with "a part of our society that believes gaming is morally offensive. We should respect the right of sincere and honorable people to disagree with us."

Gaming properties are willing to pay their fair share of taxes to state governments," Gallagher said, "but fairness is a two-way street."

He added that he and his wife had just moved into their new Las Vegas home last weekend after having lived "all over the world. Unfortunately, we still own some of those houses."

What slowdown?

It’s too soon to tell whether or not there’s an economic slowdown," Mandalay Resort Group president and CFO Glenn Schaeffer told gaming executives Friday at the Summit, "but there is no correlation between GDP (generally, the economy) and visitor counts to Las Vegas.

He enumerated the successes of Mandalay’s various properties, saying that "with $3.50 free cash flow per share, we intend to shrink our capitalization." He will announce a few months from now "a project that will bridge the two (Luxor, Mandalay Bay) properties." He said it would be a major retail center, but ruled out speculation that upscale London retailer Harrods would have space in the mall.

"We control 80 acres of ”˜beachfront’ (vacant) property on the Las Vegas Strip, but have no plans for it," Schaeffer said. And the 77 acres of mostly Strip frontage being shopped to prospective casino builders? asked GamingToday after the talk.

"I hope they find someone," Schaeffer said.

WMS poised for new growth

WMS Gaming earlier this month moved into new corporate headquarters and manufacturing facilities in Waukegan, Illinois, about 30 miles north of Chicago.

"The successful, seamless move represents another significant advance in our efforts to position WMS for further growth and emerge as the employer of choice in our industry," said Brian R. Gamache, president and chief operating officer. "We now have the right environments ”¦ that allows employees to thrive and achieve optimal productivity."

WMS’s productivity has skyrocketed in recent weeks with its announced sale of its 3,000th slot game in California. Moreover, the company continues to outpace its internal sales goal of 4,000 units for fiscal 2001 (ending June 30).

"With a rapidly growing number of installations, WMS Gaming’s products have increased visibility and sales momentum in California and we continue to capitalize on the tremendous growth potential that the California market offers," Gamache said. "The brisk sales pace, which continues to exceed our expectations, is both a strong vote of confidence in our products by the California Native American casino operators and testament to the popularity and earning power of our products."

Downtown LV rules different

Strip hotel moguls had finished explaining to Summit attendees how they raised their bottom line: adding a dollar here and there to their room rates and making their food prices cover the costs.

That approach won’t work in downtown Las Vegas, Fitzgeralds g.m. Bill Noonan told GamingToday after that seminar.

"We can’t do that," Noonan said. "If the economy goes soft, the value-hunters will still head downtown." With Fremont Street in the doldrums, "we can’t raise room rates or food prices, since they’ll be looking for value, and they’ll find it downtown."

MGM lion roars

Jim Murren, MGM Mirage president and CFO, was very bullish on the company’s outlook for this year. He expects it to outshine the other Las Vegas Strip heavyweights because of its key resort holdings.

Murren predicts better cost controls will be made; that its Beau Rivage property will continue to improve its performance; and that its Detroit casino will do well despite increased competition there.

Proximity helps

Half the people in the nation live within three hours of a Harrah’s casino, noted its treasurer, Charles Atwood. "People who like to play in casinos like to play in more than one market."

To keep them coming, Harrah’s has a database with 19 million names, many through its Total Rewards slot club program. Harrah’s tries to fill its rooms with Total Rewards clubbers, snaring more than a third of their budgets for gambling.

Still scouting for acquisitions

Station Casinos hasn’t finished its shopping spree in the Las Vegas Valley, according to its CFO and executive vice president Glenn Christenson. "We continue to think there are opportunities for acquisitions in this market."

Station just added the Santa Fe and Fiesta hotel-casinos to its string, is adding the Reserve in nearby Henderson; has spent or will spend millions of dollars to "Stationize" the properties.

Station has 600 acres zoned for gaming around Las Vegas, Christenson noted, and it’s seeking federal approval to build a casino near Sacramento, Calif., in partnership with the United Auburn Indian Community. "A casino there the size of Palace Station, with 2,000 machines ”¦ in that market is a slam dunk."