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Viva Like Vegas!

Casinos across America are taking their cues from Las Vegas's destination-style resorts, to much success
Michael Kaplan
From the Print Edition:
Cuba, May/June 2007

(continued from page 1)

The success of Boughner's approach has clearly encouraged other non-Vegas operators to go upscale—so much so that the term "Borgata-like" has entered the vernacular of those describing non-Vegas hotels with Vegas-style amenities. Caesars Atlantic City has brought in its own passel of star restaurateurs and opened up a first-class shopping mall called Pier Shops. (Taking things a step further, Caesars' player rewards program has been retrofitted so that customers can earn points based on their gaming activities and spend those points, as if they're dollars, in Pier stores that include Hugo Boss, Gucci and Armani.) Harrah's Atlantic City debuts what promises to be a high-style tower and indoor pool this summer, and MGM Mirage is considering building a couple of Vegas-worthy hotel-casinos on property it owns near the Borgata.

In Detroit, where none of the three existing casinos amount to much more than gambling halls without hotel rooms, MGM Mirage will be opening an $800 million Art Deco—inspired luxury casino resort by the end of 2007. According to Alan Feldman, MGM Mirage's senior vice president of public affairs, "Detroit has not seen anything like this." He rattles off the amenities—restaurants, spa, nightclubs, bars—says that the project is going for a Five Diamond rating from the American Automobile Association, and explains the financial realities of such an undertaking: "The economic model of a casino resort is different from that of a plain resort. When you have a casino there, you know you can spend $20 million on a nightclub and $10 million on a restaurant and easily put $50 million into a spa. You have people drawn to the amenities because they like to gamble, and you have people drawn to the gambling because they like the amenities."

Back in 1989, when Steve Wynn opened the Mirage in Las Vegas, he was the first to see the potential for generating revenue from more than just gambling. But it took a while for everyone else to catch on. According to Frank Fahrenkopf, president and CEO of the American Gaming Association, 10 years ago MGM Mirage (which did not own the Mirage back then and was known simply as MGM) was earning 65 to 70 percent of its revenue from gambling; today that number is 43 percent. That's due, he says, to the infiltration of celebrity chefs, exotic spa treatments and spectacular shows that rival Broadway fare—and have combined to attract customers who care less about gambling, more about everything else, and happily pay for it all.

That approach has worked great in Vegas, and now the amenity boom is resonating across the country as well. "There is a sea change and a financial change," says Fahrenkopf. "Amenities are being added [outside of Vegas] because they make good financial sense. If you can attract people to your place of business and get them to spend money on things other than gambling, you have diversified your revenue stream. That has got to be a good thing."

Operators outside of Vegas don't expect to consistently compete with the mecca of gambling, but they can provide enough treats to keep people from wandering too far from home on a regular basis. According to Beau Rivage's Corchis, the very people who travel to Vegas twice a year visit his casino six or 10 or 15 or even 24 times a year and they'll keep doing it as long as they have a good reason to. Just as the Vegas casinos use their ever-changing amenities to differentiate themselves from the competition and draw repeat business by evolving into destination resorts that stand on their own, places in the hinterlands benefit by following suit.

In terms of casino golf courses, for example, the Tom Fazio—designed Fallen Oak course at Beau Rivage ranks among the best in the country; and if you want to be challenged by the fat sand bunkers and rolling fairways of Fallen Oak, you need to be a guest at the hotel. But quality doesn't come cheaply and no expense was spared in the creation of this course. "The people at MGM Mirage didn't give us a number [in terms of a budget]," says Fazio. "They asked us what it would cost to build the best possible golf course on this property. We considered everything and came up with a budget. Going into the project, we started at home base with a 10 in terms of their expectations." Like a great restaurant or spa, Fallen Oak serves as a powerful magnet that draws players to check into the hotel and gamble in the casino.

But it's not just luxurious links that function as gilded catnip for high rollers outside of Vegas. Take Connecticut's Mohegan Sun, for example. One of the world's top-grossing casinos (largely due to its close proximity to both New York City and Boston; and in spite of it's being a short drive from Foxwoods, the world's largest casino), Mohegan Sun offers something for its big players that you rarely find in Las Vegas: private gaming. In most Vegas casinos, gambling commences only in open-doored rooms. The Sun finds itself in rarified company by providing its biggest players with a 4,500-square-foot suite that comes with an adjacent private casino.

This means that you can wake up in the morning, walk a couple yards down the hall and play blackjack in your jammies if you so desire. "We keep it staffed 24/7 for our top-level players and it's like having your own casino," says Mitchell Estess, president and CEO of Mohegan Sun, which is owned by the Mohegan tribe of Native Americans. "We'll bring up dinner from any of our restaurants [one of which is Todd English's Tuscany], so you can eat in there; you can choose the music, if you feel like it, and the ambience. Maybe you don't want phones to ring or people to walk in. It's your room and you control it." Plus, he adds, Mohegan Sun is totally in line with the limits of Vegas (where certain players might be allowed to gamble upward of $100,000 per hand at blackjack). "The idea is for you to have the same experience at Mohegan Sun as you will have at any single property in Vegas."

Across the country, near Palm Springs, California, Morongo Casino Resort & Spa has its own slice of uniqueness: gorgeous mountain views by day and, for nighttime revelers, a spin-off of Hollywood's infamous Key Club (complete with a sprawl of VIP accommodations above the dance floor). On a Sunday morning, over breakfast alongside the already bustling gambling floor, Morongo general manager Saverio Scheri explains the importance of imbuing a casino with the kinds of features that allow it to transcend the gambling component. "When people talk about where to go for a gaming experience, they don't go somewhere because it's got a certain slot machine," says Scheri, acknowledging that Vegas is close enough to be a competitor of his. "Everyone's got the same slot machines. It's more about rooms, restaurants and the pool." He should know: on Saturday nights Morongo gets so packed that slot machine vacancies are rare and its machines rake in more revenue per unit than the Borgata's do.

Though Morongo's already got a state-of-the-art spa, luxe casitas alongside the pool and a sense of casual, low-slung style that is reminiscent of the Palms in Vegas (not surprisingly, both properties share an architect in Jon Jerde), Scheri anticipates a slew of improvements. They'll include a larger high-limit room, new restaurants, more slot machines, additional table games and one impending addition that will sound especially alluring to Cigar Aficionado readers. "Morongo is among the few places in California where you can smoke indoors," says Scheri, a cigar lover who describes himself as "a Davidoff Double 'R' man." "We're going to put in a very nice cigar lounge and retail shop."

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