Viva Like Vegas!
Casinos across America are taking their cues from Las Vegas's destination-style resorts, to much success
From the Print Edition:
Cuba, May/June 2007
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If you spend enough money gambling in casinos, the weeks leading up to Super Bowl Sunday will come to resemble a prelude to Christmas. Every day, the mailboxes of high rollers practically burst with offers from gambling emporiums that span the Las Vegas Strip. With hopes of attracting prized players for the big game, casinos dangle come-ons that center around lavish parties, gourmet dinners, prize-enriched golf tournaments, the presence of retired NFL stars and, for the most desired whales of all, private jets that'll get them and their buddies to Vegas in style. At ground level, of course, this is simply a gambit to attract customers who will risk large sums of cash against daunting odds. Hence, competition for the best players is fierce. So fierce, in fact, that a casino outside of Vegas—where being able to legally bet on the Super Bowl is a major part of the draw—doesn't stand much of a chance. In short, the Big Game ranks as the sort of event for which only the strongest and toughest should bother suiting up.
Apparently the guys at Beau Rivage Resort & Casino failed to get the memo.
Situated in Katrina-ravaged Biloxi, Mississippi, rebuilt to luxe standards by its parent company MGM Mirage, and fortuitously located just 90 minutes by air from Miami, where the Super Bowl was held this year at Dolphin Stadium, Beau Rivage went after the same mega rollers that the big boys of Vegas aim to woo. And they got them. Players from as far north as Toronto, Canada, were flown to Biloxi, transported via private jet to Miami, granted access to the stadium's VIP entrance, treated to a private party before the kickoff and escorted to prime seats for the game. "We promised our players that all they have to do is show up at the airport and everything will be taken care of for them," says George P. Corchis Jr., president of Beau Rivage. "They received the kind of treatment that even movie stars have a hard time getting at the Super Bowl."
Over the course of that weekend, Corchis filled the tables in his brand new high-limit room with people who think nothing of signing on for six-figure lines of credit. Many of them were newcomers to Beau Rivage. "That weekend," he says, "we had more casino business in table games than a good casino in our state does during a full third of the month."
This success story is reflective of gambling's latest evolution: the "Vegasizing" of America. That is, turning the once disparaged regional casinos into the kinds of places that hold a sparkling candle to those shimmering glitz palaces on the Strip.
Of course, for sheer muscle mass, you can't beat Las Vegas. It's unparalleled to be able to eat dinner at MGM Grand's Joél Robuchon at the Mansion, catch a championship fight at Mandalay Bay, gamble like a fiend in the crystal-bedecked high-limit room at Caesars, twist the night away at Wynn's Tryst and finish up with a nightcap inside the Palms' Playboy Club, 52 stories above the glistening sprawl. You can't do all that in Biloxi or Atlantic City or Southern California. But you can have fabulous casino experiences in those places—albeit, without a Strip's worth of options—that just didn't exist 15 years ago, back when the Indian casinos were spreading bingo, operators of run-down, slot-intensive joints in A.C. were content to attract busloads of day-trippers (who paid $18 for the transport and received $20 in quarters upon arrival), and permanently moored riverboats served as havens for low rollers.
The poster child for this seismic shift in the gambling biz, arguably, is Borgata Hotel Casino & Spa, which is situated a discreet distance away from the oceanfront casinos that all but define gaming in Atlantic City. Unlike most of its local competitors, which still seem a bit tatty, the Borgata looks, smells and feels like a high-end Vegas operation. Its design is grand, contemporary and stylish without being cheesy. The rooms are large, nice and modern. Amenities include a first-class spa and indoor pool; at its top end, the Borgata attracts a clientele that would not look out of place in the Bellagio's high-limit room. "Bob Boughner was smart enough to know that there were people in the New York area who wouldn't even consider going down to Atlantic City," remembers Saverio R. Scheri III, whose WhiteSand Consulting worked on the project with Boughner, then the Borgata CEO. "At the time [prior to Borgata's opening in 2003] there were no hot restaurants, no cool nightclubs, nothing that could compete with New York."
Scheri, who is now the general manager of Morongo Casino Resort & Spa in Cabazon, California, and continues to be managing director of WhiteSand, remembers feeling skeptical about Boughner's bold ambitions. Then he saw Boughner's plan for converting the people that Boughner had taken to calling "Atlantic City rejectors." Remembers Scheri: "Bob did his homework and realized that it's not a matter of 'if you build it, they will come'—because they won't necessarily. It's more, 'if you build it right, they will come.'"
And Boughner did, employing contemporary design motifs, soaring ceilings, dramatic lighting and the importation of brand-name restaurants—Old Homestead Steak House was on board right from the start; and Wolfgang Puck, Michael Mina and Bobby Flay recently opened outposts there, making the Borgata a go-to place for action-hungry New Yorkers. Rather than describing his casino-to-be as Vegas-esque or some such, Boughner worked hard to imbue it with very specific qualities. He preferred showing to telling. "Our plan," he says, "was to give Atlantic City's customers what they want by bringing in a product that was fun, upscale, energetic, sensual and international. We used Las Vegas designers and the result reflected our view toward the product." It worked. From December 2004 through much of 2006, the Borgata's return on capital investment exceeded 21 percent.
Now the Borgata is in the midst of an expansion that has seen the poker room doubling in size, additional dining options put into place and more table games installed on the casino floor. Topping it all off will be a hotel within the hotel, called the Water Club, which is scheduled to open late this year. It will have 800 new rooms at a cost of $325 million (according to Boughner, twice the money that Donald Trump is spending, per room, on his A.C. build-out). "The new rooms will be a slight uptick," says Boughner. "The Water Club will be part of a separate, boutique hotel with very luxurious suites and highly amenitized rooms. It will have its own separate arrival area, room service and spa." After hesitating for a beat, he adds, "We figured somebody would kick things up to the next level, so we figured it might as well be us."
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."
Things have gotten so good in the Vegasizing world that even riverboats, long viewed as the epitome of low-end gaming, are getting in on the action. Ameristar Hotel Casino in Council Bluffs, Iowa, has spent the last 10 years with a coveted Four Diamond rating from AAA. It keeps the designation by providing 42-inch plasma-screen TVs, high-thread-count linens and an indoor pool walled off by glass that opens when weather permits. The idea is to stand out from the two other casinos in Council Bluffs. "This past year we have maintained 38 percent of the market share," says general manager Teresa Meyer, emphasizing that the challenge is particularly acute because one of her competitors is land-based, which is generally considered more desirable by players. "Our casino has a clubby feel to it, and we've made ourselves into the area's entertainment destination."
Whether they are in Connecticut or Council Bluffs or Nevada itself, the best of the non-Vegas resorts turn their remoteness from the Strip into an advantage. At Red Rock Casino Resort Spa, in the Summerlin neighborhood of Las Vegas, this is slightly ironic. Situated just 20 minutes from the Vegas Strip, its rooms offer breathtaking Red Rock Canyon views and a location that feels surprisingly rustic. The property capitalizes on this by offering a fitness program that has guests hiking through the adjacent peaks, riding horses and kayaking on Lake Las Vegas. Though it was built by Frank and Lorenzo Fertitta (of Station Casinos fame and Las Vegas's reigning kings of local action), Red Rock aspires to be something very different from what people normally associate with the brothers (who, overall, generate 86 percent of their revenue from slot machines).
Red Rock boasts its own cool nightclub, a Strip-worthy steakhouse and a state-of-the-art sports book with the biggest game-viewing screens in town. Rooms here are large, the design is chic and Swarovski crystal seems to be everywhere. In keeping with its scale and vision, Red Rock has attracted hosts and marketing executives who are aiming to fill its seductively sleek and swingy high-roller suites—one of which contains its own DJ booth—with suitably bankrolled players. "You have casinos in Vegas catering to guys who are capable of losing millions of dollars," says Lorenzo Fertitta, vice chairman and president of Station Casinos. "We take the guy who can lose $500,000 or $1 million, and with us he is king. We provide a boutique resort experience where guests can detox during the day and retox at night."
Fittingly, with Red Rock's opening a year ago, the boom in Vegas-izing non-Vegas casinos has come full circle, landing right on the doorstep of the mighty Strip itself. Whether Red Rock will be able to consistently lure business away from its neighboring monsters of neon and gilt has yet to be fully seen, but clearly it is moving in the right direction and serves as an exemplar of the transformation taking place across America. "There is a new generation of properties coming along and capturing a significant market share," says MGM Mirage's Alan Feldman, who's clearly bullish on expansion. "They're doing it by paying attention to design and service and the delivery of experiences. Operators who don't respond will feel the pressure accordingly."
Michael Kaplan is a Cigar Aficionado contributing editor.
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