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Best of Liz Benston

Gaming Guru

Liz Benston
 

Keeping up with the new Cannery

16 September 2008

LAS VEGAS, Nevada -- When the Eastside Cannery opened last month on Boulder Highway, you could almost see the sweat breaking out on the well-worn surfaces of nearby Boulder Station and Sam's Town.

The casinos, in the most competitive gaming zone in the suburbs, were spiffed up just in time for their shiny new neighbor.

Station Casinos is spending $50 million to upgrade Boulder Station — about a fifth of the property's original cost. It recently renovated the sports book and will open a new bingo room this month and a remodeled buffet in the fall. The slot floor, the poker room and hotel rooms also are getting face lifts.

The upgrades, accelerated by the Eastside Cannery's debut, are designed to "keep everything fresh and current," Station spokeswoman Lori Nelson said.

Boyd Gaming Corp.'s Sam's Town, even closer to the Eastside Cannery, is no slouch in this race.

Last fall the property spent $20 million, primarily to upgrade its sports book with 10-foot projection screens, plasma-screen TVs, touch-screen betting terminals and small screens broadcasting races. There's also a larger, centrally located poker room in the old sports book area.

The company updated a nearby bar and deli and expanded the casino by 15,000 square feet. A Dunkin' Donuts franchise opened in April and a TGI Friday's will debut next month.

Both companies aim to upgrade their properties every few years.

Sam's Town, which opened in 1979 as the first big casino for locals in the suburbs, has been overhauled more than half a dozen times.

"This is part of remaining competitive," Boyd spokesman Rob Stillwell said. "We're mindful of the fact that we have a new neighbor and we look forward to building off the additional energy and marketing dollars they are adding to the Boulder Strip."

•••

What didn't make headlines in the Culinary and Bartenders contracts struck with Strip casinos last year was language clarifying the rights of union workers to transfer to new, third-party venues such as restaurants and bars.

The proliferation of venues run by nightclub operators necessitated the clarification. Union workers have long been able to bid into new venues based on seniority, though workers say this has clashed with the process third parties use to find workers among the public, shutting them out of jobs at new venues.

Nightclubs are exempted from these rules, allowing them to bypass union workers and giving them more flexibility in the hiring process.

•••

Several months ago, billionaire Kirk Kerkorian, through his Tracinda Corp. investment company, funneled 10 million shares of MGM Mirage into a charitable organization.

Some shareholders misread the notice as a move to accumulate MGM Mirage shares — fueling old rumors about the company's going private and escaping the whipping it has received on Wall Street. These rumors have only deepened as MGM Mirage stock continues to sink amid the economic downturn.

Meanwhile, MGM Mirage's 50 percent partner in CityCenter, Dubai World, intends to accumulate up to 20 percent of MGM Mirage stock. Once that's consummated, these two entities would control more than 70 percent of company shares.

Although MGM Mirage hasn't broken ground on its proposed CityCenter East resort in Atlantic City or its planned joint venture resort at Sahara Avenue on the Strip, the company says it's focused on long-term growth, as evidenced by its commitment to CityCenter — an expensive monolith that isn't loved by Wall Street.

Going private would no doubt upset shareholders who already have their money tied up in a hoped-for rebound in MGM Mirage shares.

The company has opened another door involving a division, MGM Mirage Hospitality, that is pursuing hotel management contracts. Management has discussed the possibility of spinning it off as a separate company, which could command a higher stock price commensurate with less risky and more mainstream hotels rather than casinos.