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Arnold M. Knightly

Tails turn some heads

10 October 2007

LAS VEGAS, Nevada -- Sarah Lockett knew she would be making a trip to the Playboy Club at the Palms with her husband, Steve, when they came to Las Vegas.

The husband and wife from Asheville, N.C., came to the club with $100 to bet. They ended their evening with $300 in chips and a picture of them with one of the Playboy bunnies.

"This is the only place in Vegas that we gambled," said Sarah Lockett, an attorney.

"(Playboy is) a lifestyle that has changed a lot with the times," said her husband, who works for a biotechnology company. "From the beginning, it has embodied a modern sense of men."

The Playboy Club is celebrating its first year this month with a media blitz that includes an eight-page pictorial of some of its dealers in the namesake magazine's November issue.

Palms President George Maloof said the branding partnership with Playboy has increased the property's visibility through television and major events.

"It was part of the reason we were interested in working with Playboy," Maloof said. "There is always different opportunities we can take advantage of."

Playboy, the Palms and N9ne Group agreed in October 2004 to develop the Playboy Club and other entities at the property. The boutique casino, which opened Oct. 7, 2006, has been featured on television programs for MTV, VH1, Lifetime and E!, including Hugh Hefner's reality show "The Girls Next Door."

The media coverage has helped boost the company's bottom line.

Although the Palms is privately held and doesn't have to report its revenue, Maloof said a Playboy Club gaming table averages nearly the same business in eight hours as a table in the main casino does in 24 hours.

Jeff Georgino, senior vice president of location-based entertainment for Playboy Enterprises, said the Palms location works.

"We wanted the association with gaming in a club environment," he said. "We wanted to be able to integrate with a lounge and a nightclub with a casino because it hadn't been done in Vegas before."

The casino is owned and operated by the Palms, which licenses the Playboy brand for a flat fee. Both sides declined to discuss the deal's financial particulars.

In filings with federal regulators, Playboy Enterprises, which has shares traded publicly on the New York Stock Exchange, said its licensing group's income increased 36 percent to $5.5 million for the quarter ended June 30, partly reflecting licensing fees from the boutique casino.

The club also helped Playboy Enterprises' licensing group increase revenues 21.7 percent to from $9.2 million to $11.2 million between April and June.

Playboy also receives a percentage of the beverage revenue from the N9ne Group, which operates the Moon nightclub upstairs from the boutique casino and the beverage portion of the Playboy Club. But Playboy does not hold a gaming license and does not receive any of the gaming revenues.

The club is accessible with a $20 cover charge during the week and $40 on the weekend. The cover charge includes admission to Moon.

Sarah Lockett said she had no problem paying the cover charge because of the experience the club offered.

"If we're going to gamble, we don't mind paying the $20 cover fee," she said between sips of her cosmopolitan. "It is a whole different experience up here."

The casino has 19 slot machines, nine blackjack tables and a roulette wheel. The area opens at 8 p.m. each night and remains open six hours to eight hours depending on the amount of business.

The blackjack dealers are outfitted in vintage Playboy bunny costumes complete with ears, bow tie and bunny tail.

Blackjack dealer Yolanda Butler said the casino has a more relaxed atmosphere with greater interaction with players than other casinos.

"I've noticed players don't mind losing their money as much," said Butler, who was a dealer in the main casino before being brought upstairs.

The marriage between bunny ears and casino chips plans to expand around the world.

Playboy Enterprises signed an agreement earlier this summer to open a Playboy Mansion in Macau in 2009 and is looking at other gaming projects outside Las Vegas.

"It is going to be a handful of very select, high-end projects," Georgino said. "They will all have a gaming component."