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Best of Liz Benston

Gaming Guru

Liz Benston

Downtown's Plaza fights for its name with upscale Strip resort

3 December 2007

LAS VEGAS, Nevada -- Owners of the famed Plaza Hotel in New York have run into a little problem opening a Las Vegas version of their Manhattan landmark. Las Vegas already has a Plaza Hotel, a downtown, down-market establishment that no one would mistake for the original.

The owners of the existing hotel own the local rights to the name and have filed a lawsuit to stop its use on the planned $5 billion Plaza Las Vegas resort.

While trademark disputes in Las Vegas are common, the downtown property's lawsuit against the New York developers is intriguing because of its cultural implications in a city that values its homegrown brands even as it destroys historic casinos for luxury resorts.

Elad Group, owner of the New York Plaza, paid more than $1 billion just to buy the land for its Plaza Las Vegas resort.

But so far, the company has been unwilling to negotiate for the name, even if spending billions to build a resort without a recognized name or a built-in customer base would be risky.

Executives at Tamares Group, the Liechtenstein-based conglomerate that bought the existing Las Vegas Plaza along with a handful of other historic downtown casinos in 2004, are frustrated by the silence. Their Plaza has existed for more than 35 years - an eternity in casino years. Also, the Plaza is not some no-tell motel seeking to profit from a name buyout. It's a well-known property that has been featured in dozens of films and TV shows.

That will likely get you a chuckle or at least a smirk in New York, where the Fifth Avenue hotel has hosted celebrities and heads of state for more than a century. And how many movie references? Fuhgedaboudit.

A Google search of "Plaza Hotel" first brings up two references to the New York icon. The casino is third - indicating a fame well beyond its means given the number of Plaza-named hotels across the country.

To win a trademark case, a company typically has to show that consumers would somehow confuse their brand with the incoming brand. That seems like a tough task given that few would confuse a $5 billion resort and a tired downtown property. And therein lies the problem for Tamares - and the reason for its claim. Although confusion could be a good thing, benefiting its hotel by associating it with a glamorous Strip resort, a new Las Vegas Plaza could make the Plaza look frumpier than it does now - like standing your plain cousin next to Angelina Jolie.

"The ... very viability of our extremely substantial investment depends on our exclusive use of this name in Las Vegas," Tamares' attorney said in a statement.

While the "extremely substantial investment" may be questionable - the company has yet to make major improvements that have been expected for years - the desire to avoid becoming a running joke is very real.

But there's more to Tamares' frustration. Tamares and Elad executives have known each other for years and each has ties to Israel, where the top bosses spend some of their time.

The dispute is playing out in a city that has some history of settling such things with a check and a handshake.

In 1988 Steve Wynn approached the owners of the Mirage and La Mirage motels to acquire local rights to the name before opening his megaresort the following year. The price tag - $250,000 to each owner - was steep even back then.

Elad's attempt to transfer the lawsuit to federal court was thwarted a couple of weeks ago when a judge remanded the case to Clark County District Court, where Tamares filed the complaint in August. The company declared a minor victory.

Trademark cases are often settled in federal court but state court is preferable for local companies on the theory that state court judges are more beholden to local interests and especially gaming companies.

But Elad says Tamares is jumping to conclusions.

"The change of venue ... won't affect the case," Elad spokeswoman Michelle Tsang said.

A settlement conference will take place in a couple of weeks before a hearing on whether Elad should be prevented from marketing the Plaza name until a trial.