Las Vegas Review-Journal: Caesars signs deal for online poker

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL
Posted: December 22, 2010 | 2:52 p.m.

Caesars Entertainment Corp. has expanded its online presence in Europe, signing a contract with an Italian network provider to promote online and offline poker tournaments under its World Series of Poker brand.

The Las Vegas-based company’s subsidiary, Caesars Interactive Entertainment Inc., said it had come to terms with Microgame, which operates the largest online poker network in the newly regulated Italian market.

Terms of the deal were not disclosed.

“There is plenty of upside to this deal if we execute it properly,” Seth Palansky, a spokesman with Caesars Interactive, said Wednesday.

The European Commission, which is the executive body of the European Union, opened the Italian online gambling market to offshore firms after a ruling in May.

Before Italy changed its law, the Italian Olympic Committee and the National Horse Breeders Enhancement Society had the exclusive right to organize sports betting, including online gambling.

“This agreement is a logical step in our European and global expansion strategy to partner with leading local companies as we look to expand the WSOP brand,” said Caesars Interactive CEO Mitch Garber. Garber is former chief executive officer of PartyGaming, an online gambling site founded in 1997.

Microgame’s People’s Poker, a network of over 120 sites, will be co-branded using the WSOP brand and will serve as the online hub for poker in the Italian market.

As part of the agreement, Microgame become the exclusive satellite provider in Italy of WSOP events, a spokesman said. Microgame will also act as the exclusive pre-registration booking office for Italian players for the WSOP even in Las Vegas.

The company, formerly Harrah’s Interactive Entertainment, already has agreements to brand three gaming websites in the United Kingdom. Palansky said the company’s British properties are WSOP.com, caesarscasino.com and caesarsbingo.com.

“We do expect at least one more European Union market next year,” he said. “Our mind set has been to look at expansion (possibilities) market by market.”

Palansky said Nevada gaming regulators were aware of the company’s European partnerships. The company’s latest expansion comes less than a month after a bill to legalize online poker in the U.S. introduced by Senate Majority Leader Harry Reid, D-Nev., failed to be voted on in the Senate.

Palansky declined to discuss Reid’s bill or online gaming regulations. The Italian online poker market that Caesars has entered is considered to be one of the biggest and most lucrative in the world, according the European Commission.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

 

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Las Vegas Review-Journal: Cosmopolitan condo owners still upset

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL
Posted: December 29, 2010 | 12:00 a.m.
Updated: December 29, 2010 | 8:18 a.m.

Buyers of condominiums at The Cosmopolitan of Las Vegas will get the opportunity to tour and close escrow on completed units next month, according to a company spokeswoman and lawyer representing a number of investors.

But all is not what it appears to be, said Lisa Lawrence, an attorney with Lurie & Park LLC in Los Angeles, which represents about 150 condominium buyers.

“What appears to be happening is that buyers will be given an hour or two to inspect their condominiums before they have to close on their purchase,” Lawrence said. “But they still haven’t received all the required real estate disclosures.”

She said her clients still had not received a soundproofing report commissioned by The Cosmopolitan and recently completed.

“We have to know if the units are soundproofed to residential standards,” she said. “It’s required from what I understand. They seem to be pushing buyers into closing on their condominiums.”

Lawrence said she had been give different dates in January for when the first units were expected to be ready for inspection and then occupancy. She didn’t know how many of her clients would be willing to close on their purchases.

Amy Rossetti, public relations director for The Cosmopolitan, said Tuesday that all Phase 1 units are completed.

She said closing notices started going out last week and tours will begin next month.

“The closings will be sequenced to allow for orderly closings and staffing, beginning in mid-January,” said Rossetti, who declined to comment on matters of pending litigation.

An arbitration hearing had been scheduled for Tuesday. Messages left with Andre Sherman, an attorney with the Los Angeles-based law firm Girardi Keese, were not returned.

Sherman, Lawrence and Sigal Chattah, a Las Vegas-based lawyer with the law firm Sigal Chattah P.C., represent condo buyers in their case against the owners of The Cosmopolitan, Deutsche Bank AG and Nevada Property 1.

On Dec. 14, Clark County District Judge Elizabeth Gonzalez granted an injunction that prevents The Cosmopolitan from renting any of the 214 condos still under escrow until the potential owners had a chance to see those units.

Lawrence said the injunction remains in place. She said it was possible she would seek another court order to force the owners of The Cosmopolitan to turn over the soundproofing report.

The condominiums were not included in the 2,000 units that opened on Dec. 15. In April, Cosmopolitan developers competed a $60 million settlement with more than 400 buyers involved in a class action lawsuit.

When Deutsche Bank paid about $1 billion for the half-finished development in August 2008 buyers had paid deposits of 20 percent to secure one of the planned condominiums, which ranged in price from the high six- to low-seven-figures.

One of those buyers was Benny Perry, owner of Perry Enterprise LLC, a Las Vegas-based real estate brokerage firm. In May 2005, he put down a $116,000 deposit on a condominium valued at around $600,000.

“I want them to repay all of my deposit,” Perry said Tuesday. “Did they perform on time? Did they deliver the product they promised? I would have to say no. I have a problem with that.”

He said his escrow was scheduled to close in early 2008, even though the resort didn’t put a completion date in his contract. Perry, 57, said he bought the condominium as an investment.

“I don’t know what games they are playing. But this is the worst of the American dream when they try to use their size to force individuals to settle for less,” he said.

Perry, who has been negotiating a settlement and the return of his deposit on his own for three years, was undecided Tuesday about whether to hire an attorney to negotiate on his behalf.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

Las Vegas Review-Journal: Moody’s analysts project stable outlook for U.S. gaming industry

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL
Posted: December 23, 2010 | 2:32 p.m.
Updated: December 24, 2010 | 9:09 a.m.

Moody’s Investors Service has increased its expectations for the U.S. gaming industry, issuing a “stable” outlook while projecting revenues will grow 1 percent to 2 percent and casino operator profits will increase 2 percent to 4 percent in 2011.

But, Moody’s analysts expect Las Vegas hotel-casinos to continue to struggle because of an oversupply of gaming and hotel rooms.

The increased expectations are a revised estimate from a previous report by the rating agency, which estimated 2011 gaming revenues would be flat, between a 1 percent decrease and a 1 percent increase. Moody’s analysts expected operating profits to decline by as much as 2 percent or grow by 2 percent.

“The stable outlook expresses our view that fundamental credit conditions in the gaming industry will neither erode significantly nor improve materially over the next 12 to 18 months,” said Moody’s Senior Vice President Keith Foley, a co-author of the report.

The recovery in the gaming sector will be uneven, the report said. More mature and built-out markets like Las Vegas and Atlantic City will continue to struggle, the report said, while newer destinations like Pennsylvania will drive industry growth.

Foley expects further gaming proliferation, resulting in more companies competing for the same customers rather than more expansion of the industry.

Growth on the Strip will continue to be affected by a decline in consumer spending. However the Strip has an added challenge because of an oversupply of gaming and room capacity.

Foley wrote that the Strip will struggle to absorb the new supply that has entered the market, especially the 11,000 rooms brought on line in December 2009 with the opening of MGM Resorts International’s CityCenter, and the 2,995 rooms at The Cosmopolitan of Las Vegas.

The new rooms were expected to increase the number of Las Vegas hotel rooms to approximately 149,000, the Las Vegas Convention and Visitors Authority said.

“Even if general U.S. economic conditions continue to improve, the oversupply is likely to slow the prospects of a recovery in Las Vegas because it will keep considerable pressure on hotel room rates,” the report found.

Foley said the slow recovery on the Strip would affect larger gaming companies, including MGM Resorts and Caesars Entertainment Corp. Although impacted by their Strip properties, Las Vegas Sands Corp. and Wynn Resorts Ltd. have been less affected because of their holdings in Asia, which have experienced strong consumer demand trends.

Strip gaming revenue for the month ended Oct. 31 was nearly $494.8 million, up from $426.3 million for the same period a year earlier.

However, the report found a large portion of the increase was due to higher-than-average “table hold percentage” for baccarat. Foley cautioned that, on a normalized basis, the monthly increase would have been in the low single-digit range.

Year-to-date as of Oct. 31, Strip gaming revenue rose to $4.8 billion from $4.5 billion a year earlier.

Las Vegas visitor volume grew 5.7 percent in October to 3.33 million from a year earlier, while the occupancy increased 2.3 percent to 84.9 percent in October compared with a year earlier.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.