Casino operator Boyd Gaming (NYSE:BYD) unveiled Wednesday its highly anticipated plans for the redevelopment of its aging Stardust property and the 63 acres of land it occupies at the north end of the Las Vegas Strip. The massive $4 billion development, Echelon Place, is scheduled to open in 2010. It will include 350,000 square feet of retail space, four separate hotels with a total of 5,300 rooms, and a new convention and exhibition center with 650,000 square feet of exhibition space and 175,000 square feet of meeting and conference space.
Boyd will own two of the hotels outright -- the flagship 3,300-room Echelon Resort, which the company will operate itself, and the 400-room Shangri-La Hotel, which will be operated by Shangri-La Hotels and Resorts. For the other two hotels, the Delano and the Mondrian, Boyd has entered into a 50/50 joint venture with the Morgans Hotel Group. Those two hotels will feature a total of 1,600 rooms and cost a combined $700 million.
Echelon Place represents the next generation of megaresort development on the Las Vegas Strip. In November 2004, MGM Mirage (NYSE:MGM) revealed plans for Project CityCenter, an "urban metropolis" spanning 66 acres between the Bellagio and the Monte Carlo. Upon completion in 2010, Project CityCenter will feature a 4,000-room hotel, three boutique hotels with 400 rooms each, 550,000 square feet of retail space, and 1,650 units of luxury condominiums, hotel/condominiums, and private residence clubs. Harrah's Entertainment (NYSE:HET), which last month closed on the $370 million acquisition of the Imperial Palace, is expected to announce plans sometime this year for its own massive redevelopment of its stretch of casinos at Center Strip.
Boyd expects to operate the Stardust through the end of 2006, and said it will take a pre-tax impairment charge of approximately $50 million to $60 million in the first quarter.
More on the Lipscomb letter
I got an email last week from one of a handful of poker players who boycotted a recent World Poker Tour (NASDAQ:WPTE) event at MGM Mirage's Bellagio in Las Vegas, due to controversy over the broad and aggressive nature of the language used in the filming release the WPT makes players sign when they play in a WPT tournament. In his opinion (one shared by many in the community), that controversy -- along with the possibility of further player defections -- prompted WPTE CEO Steven Lipscomb's recent "Open Letter to the Poker Community."
The release in question basically allows WPT Enterprises "and its successors, assigns and licensees" to use a player's image, likeness, actions, conversations, etc. to promote all WPT-related products -- not just the TV show -- without further player consent or compensation, "by any and all means, media, devices, processes and technology now or hereafter known or devised in perpetuity throughout the universe." That includes such things as books, home videos, and video games.
Contrast that with ESPN's release, which -- as I understand it -- limits use of your image and such to promotion of the show itself.
Beyond that, however, it seems to me that the bigger issue is that WPT now has its own online gaming site. When the WPT makes players who carry sponsorships from competing gaming sites such as Poker Stars, Ultimate Bet, or Full Tilt Poker sign agreements which might technically allow the WPT to use their images to promote its own site, you can see where there might be conflict.
Naturally, some players feel more strongly about the release than others, and the highest-profile players are affected the most. That said, the WPT hasn't completely turned its head: When a WPT affiliate used a banner ad featuring three "prominent" players to drive traffic to WPT Online (the company's gaming site), the company had the banner removed within an hour at those players' request. Moreover, Lipscomb's letter at the very least shows the desire to retain the participation of top players on the tournament circuit.
When a tough competitor stares you in the face, if change is what's required to keep your business partners from defecting, you'll have to make that change -- or else.
Speaking of WPT's competition .
Showdown in Tunica
Thus far, Harrah's World Series of Poker Circuit (excluding the World Series of Poker in Las Vegas, which is by far the biggest event of the year) has yet to put much of a dent in WPT's crown. That said, I suspect that might change this month, as the WSOP Circuit and WPT go head-to-head in Tunica, Miss., for the first time.
From Jan. 4 to Jan. 27, Harrah's Grand Casino Tunica will host the Jack Binion World Series of Poker Circuit. Meanwhile, MGM Mirage's Gold Strike will run the World Poker Open -- a WPT tournament -- from Jan. 9 to Jan. 23. Both tournaments' $10,000 buy-in championship events run back-to-back, and -- filming release controversies aside -- I fully expect that both events will be well-participated. But the biggest change this year is which tournament carries Jack Binion's name.
Prior to Harrah's acquisition last year of Caesars Entertainment -- which included the Grand Casino Tunica -- the Gold Strike and Horseshoe next door co-hosted the Jack Binion World Poker Open, as Binion's Horseshoe casino didn't have the space to host the tournament itself. But Harrah's now owns the Horseshoe via a $1.45 billion acquisition in 2004, with Jack Binion's support. It's also got the Grand, the largest casino and hotel in Tunica with 1,356 rooms. (The Gold Strike has 1,156 rooms, while the Horseshoe has more than 500 rooms.) With all these assets, Harrah's now has the means to use Jack Binion's name for itself.
So this year, the Jack Binion WSOP Circuit replaces the Grand's annual Grand American Poker Classic. Where the Grand Am last year had a mere $1,500 buy-in championship event and was a far distant second to the Jack Binion World Poker Open (one of the biggest poker tournaments in the world), this year, the Jack Binion WSOP has a legit $10,000 buy-in main event.
More strikingly, the World Poker Open's mix of games is gone. Where the WSOP Circuit has a sweet mix of games -- including two Pot Limit Omaha events, Seven Card Stud, and even a HORSE event (a mixed-game event) -- this year's World Poker Open consists entirely of no limit hold'em tournaments, most of them on a two-a-day basis.
All in all, the World Poker Open may end up having higher participation in its tournaments, as no limit hold'em tournaments appeal to a greater amount of garden-variety poker players. But at the same time, I think there is no question that the WSOP Circuit will gain brand points in Tunica, which may have greater implications in the long run.
For more gaming coverage by Jeff Hwang, check out:
- Gaming Roundup: Pennsylvania Slot Madness
- Gaming Roundup: Two New Shows Hit Las Vegas
- The New WMS Industries: Part I and Part II
- Gaming Roundup: Harrah's Bets on Europe
- IGT: Time to Buy?
Fool contributor Jeff Hwang owns none of the companies mentioned above. The Motley Fool has a disclosure policy.
