Gaming officials say market stagnant

By Richard N. Velotta

Thursday, July 8, 2010 | 9:03 p.m.

The state Gaming Control Board recommended approval of a slew of new licenses today from an all-star list of Southern Nevada’s biggest casino companies.

In the process, regulators checked the pulse of the state’s dominant industry, finding it to be stagnant.

The three-member board unanimously recommended licenses for representatives of MGM Resorts International, Harrah’s Entertainment, Wynn Resorts, Boyd Gaming and Colony Resorts, gleaning information from each applicant.

Most of the prospective licensees had prior dealings with regulators and clean records, giving the board the opportunity to ask about business in general. The Nevada Gaming Commission will consider the recommendations July 22.

Among the highest ranking executives before the board was Marilyn Winn, senior vice president of Harrah’s Entertainment, who is seeking licensing as company officer and key executive.

Winn oversees Harrah’s Paris-Las Vegas, Bally’s and Planet Hollywood properties. She said the company has spent the last four months transitioning Planet Hollywood into a Harrah’s operation after regulators earlier this year approved its acquisition from a team headed by Planet Hollywood co-founder Robert Earl.

“In four months, (Planet Hollywood’s) revenue is up and gaming revenue is up,” Winn told board members. “What we’re trying to do is to turn it from a high reliance on leisure customers to gamers. With its location nearly across the street from CityCenter, we think it’s a great opportunity to sign people up for Total Rewards (Harrah’s loyalty card program).”

Board member Randall Sayre questioned Winn about the company’s efforts to reopen Prive, Planet Hollywood’s controversial nightclub.

A year ago, Planet Hollywood agreed to pay a $750,000 fine — $250,000 of which would be waived if the property stayed out of trouble for a year — for lax oversight of procedures.

Operators were accused of serving alcoholic beverages to minors, removing drunken patrons from the nightclub and leaving them unsupervised in the casino and assault.

The nightclub was operated by the Florida-based Opium Group, but Planet Hollywood was punished as the gaming license holder.

The Opium Group has since filed for Chapter 11 bankruptcy protection and when Harrah’s became the new owner of the hotel, it terminated the company’s lease.

Winn said her company has issued a request for proposals to operate the nightclub but has yet to reach a decision on an operator.

“We think Planet Hollywood needs a nightclub and hopefully by early next year, we’ll have one,” she said.

She said the Harrah’s security team would oversee activities at the nightclub when operations begin.

In a separate matter, an applicant for a license as a key executive for Wynn Las Vegas also sang the praises of the nightclub industry.

Scott Peterson, senior vice president and chief financial officer of Wynn, said nightclubs “have been a revenue home run” for the company and that by percentage they outshine all other revenue streams in the resort.

Peterson, who has been with Wynn for 17 years and spent four years starting up Wynn’s operation in Macau, said it’s a good thing the Chinese property is doing well because in Las Vegas, “we’re making less now than we were three years ago when we only had one property.”

He said the American influence in Macau has made it a better gaming destination because local operators are getting more accustomed to Western ways.

In an earlier hearing on an amended order of registration for Wynn, Matt Maddox, chief financial officer for the company, told regulators that baccarat play has saved the company’s gaming revenue for several months and that Las Vegas “has been doing about the same for months and months and months.”

In other business, the board recommended approval of:

• The suitability of Dominick Ragone, secretary and chief financial officer of Icahn Enterprises, as an officer of the company. Ragone did not disclose any new details about Icahn’s plans for the dormant Fontainebleau property on the north end of the Strip.

• The licensure of David Monahan, CEO and general manager of Colony Resorts’ Las Vegas Hilton property. Monahan told regulators “it’s a fight every day” to make money at the property adjacent to the Las Vegas Convention Center, but future bookings are strengthening and that convention attendance is growing. “We’re bullish on the convention side for the coming year,” he said.

• The licensure of Donald Thrasher, president of Circus Circus Casinos, Jean Development Co. and Railroad Pass Investment Group, as an officer and key executive. Thrasher said Boulder City retirees, one of the core markets for the Railroad Pass Casino, have pulled back in their spending like most casino customers.

• The licensure of American Wagering to establish a Leroy’s Horse and Sports Place location only for sports wagering at The Poker Palace in North Las Vegas. Current Poker Palace owners will continue to operate the casino’s race book.

• The licensure of United Coin Machine Co. to operate a temporary casino on July 27 at the site of the Queen of Hearts Hotel in downtown Las Vegas to preserve a grandfathered gaming license at that location. City officials still hope to develop the site into a new City Hall building, but property owners decided to preserve the ability to host gaming if the City Hall project doesn’t get off the ground.

• The licensure of Christopher Fiumara, vice president and general manager of the Santa Fe Station, as a key employee, and George Hirsberg, treasurer, senior vice president and chief financial officer of Boyd Gaming, for suitability as an officer. Fiumara said the locals gaming market continues to be one of the hardest hit in the industry because thrifty customers are continuing to search for value.