Casinos make sure to keep their high rollers in-house all night long with posh new clubs
It is midnight in Las Vegas. On the second floor of the Cosmopolitan, in an out-of-the-way corner, a stylish, well-heeled looking crowd filters into a round room with three unmarked doors. They open into different pockets of a curious nightclub called Rose. Rabbit. Lie. It’s also a restaurant as well as showroom and cocktail lounge. Marketing people at Cosmo have dubbed the place “a grand social experiment that blurs the line between restaurant, bar, club and show.” But, more importantly perhaps, it also serves as the latest lure for attracting and keeping hard-gambling high rollers while aiming to be a moneymaker in its own right. The performances here are compelling and fresh and leaning toward the avant garde.
Cocktails rank among the best in town, and postmodern takes on chateaubriand and oysters Rockefeller keep you engaged. The whole operation shimmers with vintage-style élan and a glamorous, vaguely futuristic sensibility.
Most alluring for some is that you can pull up to the place at 2:00 a.m. and select from a list of 300 Champagnes to wash down an early-morning caviar taco or prosciutto burger if that’s your kind of thing. It’s great if you’ve been clubbing and require sustenance in a decidedly non-coffee-shop atmosphere. But it’s even better if you’ve been firing it up at the craps table and want to celebrate, drown your sorrows or burn through your comps. Bow-tied David Bernahl is half the brain behind the food and beverage program, along with his partner Robert Weakley. They can usually be found buzzing around with glasses of bourbon and bottles of Krug, palling it up with friends, playing consummate hosts and making sure that things flow properly.
Mysteriously monikered Rose. Rabbit. Lie. is the latest, most inventive nocturnal gambit in Las Vegas, an immersive hospitality hybrid in a city where casino executives have come to recognize the value of nightlife. They see potential that goes beyond obscenely priced bottle service or revenue generated by celebrity clientel. Similarly, clubs, which used to be throwaway amenities, are now viewed as magnets for a certain breed of high roller—perception enhancers for properties and “stickies” that prevent people from leaving the casinos for other entertainment options after the sun goes down. Additionally, with blackjack tables conveniently located inside many of the clubs, they turn into even bigger profit centers and allow gamblers to always be in action.
None of this is lost on John Unwin, Cosmopolitan’s CEO, who first conceived Rose. Rabbit. Lie. as a modern incarnation of classic Vegas joints with a sprinkling of Copacabana and a touch of Havana’s pre-Castro Tropicana. Sitting in his retro-tinged office, Unwin explains, “Rose. Rabbit. Lie. is one of our biggest strategic moves to drive gaming. For example, we recently had gaming customers in town from China. They wanted to come over here specifically for Rose. Rabbit. Lie. They called, we knew who they were [even though they were not Cosmo customers], offered to host them and our gaming hosts spent some time with them. We knew that they would be valuable gaming customers.” Recognizing that the Chinese gamblers might not have popped in if not for Rose. Rabbit. Lie., Unwin adds, “We told them that they have to stay with us and we will take care of them. Customers know the expectation of them being here.”
It’s a daisy chain of revenue that goes round-and-round between casinos and their nightlife operators. That the Cosmopolitan is partner/primary investor in Rose. Rabbit. Lie. and has a piece of Marquee (the casino’s big-box disco that Nightclub & Bar magazine deems 2013’s top-grossing club in America, tied with Vegas competitor XS) keeps things cozy. “In each of our venues, casino executives are there every night, entertaining their guests,” says Jason Strauss, co-founder of Strategic Group, which owns Marquee at Cosmo and Tao at the Venetian. Acknowledging that a splashy club can create a room full of opportunity for a casino executive, he adds, “I remember at Tao, one of the Venetian’s younger casino marketing guys used to go around on Saturday nights. We would make introductions, and he would convert club customers into gaming customers. Casino marketing teams go out, offer perks and privileges and then convince people to go out and game.”
To hear it from a nightclub host, a guy who earns his living by hooking people up at clubs and making sure they have fun, casino gambling be damned, it’s a bit of a jungle. “We’re always getting swarmed by casino-gaming hosts. Me and my guys are trying to stop them from swooping in and taking our customers away.”
A few years ago, Las Vegas was in the doldrums. Anyone who visited the city could see what was going on. Hotel numbers were off, gaming revenue was bad enough that even the mighty Encore at Wynn had instituted a clutch of $10-minimum blackjack tables. This told an ugly story about expectation and reality colliding in the face of a multibillion-dollar hotel. Equally impossible to miss was that the clubs at Wynn—top-grossing XS, Surrender, Tryst—seemed to be operating in an alternate universe. It was as if nobody told their thousands of young patrons that the country was in a recession and that Las Vegas was enduring the brunt of it. As the casinos floundered, the clubs rocked hard and righteous, with patrons moving to the beats of house music and DJs (who would soon be earning six-figure sums per night) developing arena-worthy followings. Managing partner Jesse Waits ingeniously turned the stage of XS into a club within the club, making it a spot for his most elite customers who want to party right alongside the DJ. Augmenting a handful of highly desirable tables, it became the place to be on a Friday or Saturday night.
Jason Strauss points out that Vegas clubs did more than just earn money during the downswing. To a good degree, they also bolstered the perception of the city as a vibrant getaway rather than a ghost town that had fallen out of vogue with Middle America, big business and even the President of the United States. “When Obama went on TV and made some statement about it not being the time to go to Vegas while real estate here was crashing and hotels were at 60 percent occupancy, the casinos lowered their room rates,” says Strauss. “Suddenly, Vegas was affordable luxury. It engaged a younger demographic that could not have afforded Vegas before. But they were not into gambling. They were into clubs. In my opinion that brought in the younger demographic that loves the clubs. It’s 24-hour partying. It kept Vegas busy during that low ebb time.”
Those very same people solidified their Vegas habit. Now they continue to visit and their very presence does not exactly serve as a deterrent for returning, older high rollers who like to gamble, who like to spend money, who like to be surrounded by pretty young girls and couldn’t care less if Avicii is from Sweden or Secaucus.
The first to recognize what clubs could do for a casino, especially during the high-and-dry times, reportedly, was Steve Wynn. Though sources at the Wynn have declined to comment for this story, give them the credit for recognizing the potential in nightlife before anyone else did. “Steve committed to nightlife,” says Andy Masi, CEO of Light Group, which had been a restaurant/nightclub partner of Wynn’s and is now partnered with MGM Resorts International on a number of projects. “He decided to drive nightclub business. He went at it and positioned his clubs as cool places to party. Steve gets it. He sees that it’s the business. I think he saw a decline in the slot customer and filled that business with nightclubs. He filled the gap with kids spending money on booze instead of gray-haired women putting money into slot machines. When XS opened for $75 million, that took nightlife to a whole other level. He got guys who could position products for a new generation and they did a great job.”
Inside his club, Light, which is situated at Mandalay Bay and features Cirque du Soleil performers swooping above the dance floor, Masi shows how far a Vegas club will go for a valued gambler. “We had a great casino customer coming to town,” recalls Masi. “He was going to propose to his girlfriend with a half-million-dollar engagement ring. We wound up arranging for a Cirque performer to fly across the dance floor and float down to present the engagement ring to the table. The guy had a pretty big tab that night, but he also had an unforgettable experience and had spent $500,000 on a ring. So I’m sure he’s okay.”
Things shifted again at the start of 2013. That was when Abu Dhabi billionaire Sheikh Mansour bin Zayed Al Nahyan (who also owns the British soccer club Manchester City) decided to get into the game with his opening of Hakkasan at MGM Grand. He spent over $100 million to build a super club outfitted with a cocktail lounge and restaurant designed to steal thunder away from the other big clubs in town.
The Sheikh succeeded to the degree that he outspent everyone else on the Strip and managed to use massive paydays to lure the biggest DJs. Superstars like Calvin Harris, Tiësto and deadmau5 suddenly realized jacked-up six-figure fees per performance. While entrenched spots such as XS and Marquee seem to have managed just fine in the aftermath, Hakkasan brought crowds that had been elusive to the generally out-of-fashion MGM Grand. “I think MGM totally hit the goldmine with Hakkasan,” says Brandon Roque, a nightclub host who is valued for procuring famous athletes and celebrities and is now (only in Vegas…) in the process of helping to turn the Crazy Horse III strip club into a de facto after-hours spot for that same set. “I wouldn’t have set foot in MGM before. It’s an old product. Now I go there because of Hakkasan. Hakkasan has made MGM cool again.”
It should be noted, though, that Hakkasan didn’t come out too badly in all of this either. In less than a year’s time, it went from being a rather unknown chain of high-end Chinese restaurants to a brand name with youthful resonance. So much so that the player who finished second in the World Series of Poker, Jay Farber, wore a Hakkasan hat all through the tournament.
Emphasizing the synergy between gambling and clubbing, Hakkasan Group president Nick McCabe explains that the club and casino have had a hand-in-glove relationship from the start. “If we have a customer coming to the nightclub that we know is a consistent gambler [but not yet a gambler at MGM], we offer incentives for him to come across and stay at the property; we assist MGM in converting those people to MGM customers,” he says. “We try to make introductions and make relationships before the nightclub. In the club, they’re not looking to have conversations about their gambling habits. We make the offering in a way that is elegant, outside of the club. But big nightclub customers tend to be big gambling customers. They’re often one and the same.”
All that said, though, the stew of big-time gamblers and big-time DJs can sometimes get a little too spicy for all parties concerned. An extreme example took place in 2011, when a high roller supposedly offered to pay deadmau5 $200,000 if he would play the Jon Bon Jovi song “Livin’ On A Prayer.” Obviously, this isn’t part of deadmau5’s usual cutting-edge repertoire. But a supposed 200K is a supposed 200K. After deadmau5 played the song, the high roller refused to pay the money. Recently, the high roller in question told me, “I know Jon Bon Jovi’s brother, Matt. If I wanted to hear ‘Livin’ On A Prayer,’ he’d get Jon to play it for me.” Reportedly, deadmau5 eventually received his money, but not from the high roller, who claims that he never made such an offer in the first place. The money came out of the pockets of deadmau5’s manager as well as the club owner. Clearly, it’s the kind of mishap that can occur when you mix big-time guys with big-time bankrolls, celebrity DJs who charge $200,000 to spin something off the playlist and club owners who want to make everyone happy.
The high roller in question is a man with the unlikely name of Don Johnson. In gambling circles, he’s an action hero best known for having gone on an ungodly tear in Atlantic City, taking some $15 million out of casinos there during one of the greatest blackjack runs in history. Among those in the casino business, he’s recognized for wagering super high. If you’re in the nightclub industry, he’s a favored customer who has been known to drop six-figure sums in a single night of partying.
Johnson is a gold-star player and he gets treated as such. When the superstar DJ and poker fanatic Steve Aoki happened to be performing in Surrender nightclub at the Wynn, says Johnson, “I said that I would like to meet this guy. Sean [Christie, managing partner of Surrender] said that it would be no problem. I just went right on stage and it became a tradition. Then we began hanging out together.” He met Afrojack, a top DJ from Holland, when Jesse Waits and his brother Cy made the introduction. “Deadmau5 wasn’t a gambler until he started gambling with me. I met him backstage at Borgata [in Atlantic City] with Matt, and I told him that if he has time after the show he should think about joining us at the blackjack tables. He’s been playing ever since. I posted his original bets for him. They happened to hit. When you’re risking nothing, and you win, it’s easy to have a good time gambling.”
For Johnson, it’s easy to have a good time doing everything. He acknowledges that a favorite DJ or club will keep him from leaving the property where he’s staying and would be gambling. “I can play at the tables of any casino and it really doesn’t matter,” says Johnson. “But the more things Steve [Wynn] can create around the super player that keeps him from leaving Steve’s property, the better it is for Steve. If I have to leave his property to go to the Cosmopolitan [for a particular DJ], I might not stay at the Wynn next time. Steve can’t afford not to have a top nightclub just like he can’t afford not to have a top chef.”
Where all of this ultimately ends up is the nine-figure question for casino executives, club operators and the gamblers that they go out of their way to attract. There is chatter that electronic dance music is reaching its expiration date, though with spinners like Avicii landing top-10 songs such as “Wake Me Up,” it may just be the beginning of another, maybe even bigger, stage. Andy Masi envisions customers wanting more multidimensional evenings that go beyond just watching DJs dancing behind consoles and waving their arms—convenient for him, of course, since he has his Cirque component. Nick McCabe of Hakkasan talks about creating personalized experiences for his best customers, which can include dressing cocktail waitresses in favorite colors or presenting, say, a football helmet signed by the players of a spender’s favorite team. For the best customers, says McCabe, “It’s a well-managed experience.”
Keeping everything cool and, indeed, well-managed, guys like Brandon Roque, can, as he cagily puts it, “sometimes maybe” be hired by the casino operator to make sure that a gaming client is not only having a good time but also winds up back at the hotel that is hosting him. Nobody wants to make lavish accommodations for a client only to have him stay somewhere else. “I’ll hang out with the guy and make sure he is having fun; some of these people need somebody holding their hands,” says Roque. “Then, after the club closes, I take him to the strip club. After that, I bring him back to his casino and practically tuck him in.”
In Vegas, so long as the guy is primed for another day of gambling, that’s a good night for pretty much everyone.
Michael Kaplan is a Cigar Aficionado contributing editor.
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