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Gaming Guru

Jeff Simpson
 

Jeff Simpson makes predictions about how the gaming industry will shake out in 2008

2 January 2008

LAS VEGAS, Nevada -- Although my crystal ball often ends up being about as transparent as a bowling ball, this week I'm going to look forward to likely casino industry developments in 2008.

Las Vegas Sands has scheduled its grand opening of Palazzo for Jan. 17, after a soft opening of some elements of the new resort took place Sunday.

Most resort companies don't do it the way Sands does, preferring to open the entire property with a big splash, a method that worked well at Red Rock Resort and Wynn Las Vegas, among many others.

But Sands prefers to avoid making clear when it will open its properties, and it is hard to criticize the company's decision, given its eventual success with the Venetian in 1999 and Venetian Macau last summer.

Some have wondered whether Sands' method will hurt Palazzo's ability to quickly become known as one of the city's top resorts, but I don't think it will matter.

The property has Las Vegas' first Barneys as the anchor of its retail offerings, and will be the home of the smash musical "Jersey Boys," both of which will be huge pluses.

I think Palazzo will be a big success for Las Vegas Sands and is likely to quickly take a spot near the top of the resort pecking order.

One of the big developments that was supposed to take place in 2006 and then in 2007 has apparently been pushed into 2008: New Jersey's gaming regulatory decision about whether to permit Borgata half-owner MGM Mirage's Macau partnership with Pansy Ho.

I expect New Jersey to accept MGM Mirage's argument that the company has an effective veto over all significant decisions in Macau and to permit the MGM-Ho partnership, but I wouldn't be stunned if the decision goes the other way.

Many folks are wondering how Harrah's Entertainment's takeover by two giant private equity firms will affect the company's long-delayed Las Vegas redevelopment plans.

Last year I predicted the takeover would slow down Harrah's expected closure and implosion of the Imperial Palace. I think it already has slowed down the IP's demise, but its stay of execution won't last forever.

In fact, I believe Harrah's will announce plans for the IP site in 2008 - a redevelopment that might also include the next-door site of Harrah's Las Vegas.

On the casino labor front, I have long been perplexed by the meat-cleaver approach to staffing employed by Tropicana owner Columbia Sussex.

In May 2006 I wrote that Tropicana workers should prefer Pinnacle Entertainment's effort to buy the property to that of eventual winner Columbia Sussex, and throughout the last year I've written about the company's ham-handed operation of the Trop.

Now the company has lost its Atlantic City license and is the lone Strip property with a Culinary Union workforce that has yet to renegotiate a contract. Columbia Sussex's last offer to the Culinary would force workers to abandon the Culinary's health care plan and a guaranteed 40-hour work week.

I don't know whether the company's A.C. woes will prompt it to abandon its cliff-diving bargaining approach in Las Vegas. It should, but it probably won't, and a strike is a strong possibility in 2008.

And for casino dealers, I expect dealer staffs at more casinos will join dealers at Wynn Las Vegas and Caesars Palace in opting for representation by the Transport Workers Union.

It will be a good news, bad news result for dealers and hotel owners.

For dealers, I predict they'll get a contract with Wynn Las Vegas - the first non-Culinary union contract Wynn will have agreed to - but they won't get Wynn Las Vegas to abandon its controversial tip-sharing policy.

For some hotels, they'll get a unionized dealer force, but with the relatively weak TWU, not the United Auto Workers, a tougher union that has had success organizing dealers in Atlantic City.

Last year at this time, when Wall Street types were identifying Boyd Gaming Corp. as the next likely takeover target in the rapidly consolidating casino business, I predicted that Boyd Chairman Bill Boyd would rebuff such efforts, at least until after the company opens its Echelon resort in 2010.

So far, so good with that prediction.

I met with Boyd in his Hughes Center offices last week, for an hourlong interview that will eventually make its way onto an improved Sun Web site.

The affable, soft-spoken executive told me he plans to remain working full time after the start of the new year, when he relinquishes his chief executive officer title to Keith Smith.

Boyd plans to spend a lot more time visiting company properties, talking with employees and sharing the history of Boyd Gaming Corp. with company managers, moves that Boyd expects will enhance the company's already strong sense of family and commitment to friendly customer service.