Cosmo takes a tough stance: Smoking on the terraces only

By Liz Benston

Saturday, March 5, 2011 | 2 a.m.

The Cosmopolitan may be the only casino-resort in town to prevent guests from smoking in their hotel rooms — private areas exempted under the state’s partial smoking ban. Yet an unusual feature in the rooms makes them a haven for smokers.

Unlike the many nongaming hotels across the country that are going smoke-free, Las Vegas hotels generally allow people to smoke in designated guest rooms. Cosmopolitan guests may only smoke outside their rooms on terraces.

Cosmopolitan doesn’t need “smoking police” to make sure people aren’t lighting up. Ashtrays printed with a message informing guests that they may only smoke on the terrace seem to do the trick, spokeswoman Amy Rossetti said.

Both smokers and nonsmokers like the policy, she said.

The resort’s small, vertical footprint also makes it easier for the staff to navigate and ensure that people aren’t puffing in nonsmoking areas of the resort, she added.

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The Hard Rock Hotel is living to fight another day after what might have been the fastest financial restructuring in casino history last week.

Lenders to the financially troubled resort managed to accomplish in two weeks what took Herbst Gaming’s lenders nearly three years in Chapter 11 bankruptcy. Station Casinos will soon exit bankruptcy after more than a year and a half in Chapter 11. Borrowers and lenders lost hundreds of millions of dollars on the Hard Rock when the recession hit during a pricey expansion. But they also saved untold time and money by agreeing to settle their financial woes outside a courtroom.

The speedy negotiations will keep thousands employed, vendors paid and the property open. It might not have happened, though, without a loan provision making owners Morgans Hotel Group and DLJ Merchant Banking Partners liable for repaying the money had they sought bankruptcy protection for the Hard Rock. Such loan guarantees have become more common in the real estate slump to ensure that deep-pocketed investors are on the hook for defaults.

The settlement lets Morgans walk away from the Hard Rock by paying up to $3 million in interest to a group of secondary lenders.

Primary lender Brookfield Asset Management will take ownership of the Hard Rock and reinvest another $30 million in the property. Warner Gaming will manage the property in the hope of turning it around so lenders — entitled to receive any extra profits, after fees and expenses — can recoup their investment. To expedite a process that normally takes up to a year, regulators tacked waivers onto the gaming license that require the parties to submit documentation over time.

“A group of lenders in financial demise got together and worked out a deal,” Gaming Commissioner Tony Alamo, a physician, said after the meeting. “They kept the patient — the hotel — from bleeding out. The patient is now on life support, which is a good thing.”

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It may be no revelation that the longer you gamble, the more you tend to lose. One gambling writer is using stronger language to describe the so-called penny slot machines that are all the rage.

Many players bet the maximum per spin on penny machines to qualify for higher jackpots than they would otherwise get by wagering as little as a penny, otherwise labeled on the machine as a credit, per spin, Frank Scoblete writes in Slots Conquest. Higher jackpots aren’t enough to offset the bigger losses players will rack up betting the maximum of $1 or more per spin on these games. Because penny slots have worse odds than higher-denomination games, players who bet the maximum per spin stand to lose at least $200 more every two hours than their counterparts, he says. Over dozens of gambling sessions, Scoblete says the difference in expected losses between the two styles of play can reach into the thousands of dollars.

“Not only are you now playing with the big boys and big girls, but the casino is truly milking you like a farmer milking a slow-witted cow ... The casino has suckered you into playing a lot more money with a much bigger house edge,” he writes.