Casino mogul Steve Wynn’s company is under investigation for violating the Federal Corrupt Practices Act stemming from its efforts to enter the Macau market. Wynn is tangled in a messy lawsuit with a former business partner in which both men have lodged bribery allegations. He once poked an elbow through a Picasso painting, which he recently sold. Wynn also and faced off with a kidnapper who took his daughter and paid a ransom before the men were caught.
But Wynn now faces his biggest battle with his ex-wife, Elaine.
Elaine Wynn filed a lawsuit in federal court seeking to sell her shares of Wynn Resorts, which she was awarded as part of their $750 million divorce. The sale of half of her 9.6 percent stake could trigger a series of events that would threaten her ex-husband’s control over the $13 billion casino company and possibly his personal fortune, reports BusinessWeek.
If Wynn’s ex-wife wins in court, that may force the company to buy back $3 billion in bonds. The company is already deep in debt and would likely have to borrow more money to finance such a buyback. That could lead to a lower credit rating and complicate the completion of a $4 billion casino project in Macau. Despite Wynn’s problems, it is tough to feel sorry for a billionaire who made his fortune stripping wealth from gamblers, many of whom can least afford to gamble.
Tags: casino, Elaine, ex-wife, Federal Corrupt Practices Act, investigation, Las Vegas, Macau, Picasso, Steve Wynn
We did a post last week detailing how casinos were not paying off as expected for many states. Now here comes more evidence that there are not enough gamblers to fill all of the casinos that have opened in recent years.
Revenues were down 9 percent at casinos in Mississippi. The amount of money the state pulled in from the casinos was the lowest it has been since 1997.
The decrease in revenue was blamed in part by increased competition from casinos in Arkansas. The weak economy was also blamed. Revenues were down almost 8 percent at a casino in Illinois. Revenues were also down at the two large Indian casinos in Connecticut. Even Las Vegas and Atlantic City recently saw a big drop in revenues.
The drop in revenues does not bode well for other states, like New York and Massachusetts, that are scrambling to get in the casino game. While those states may do well when the casinos first open, history shows the revenue numbers will eventually trail off, forcing states to do more to replace the unsustainable casino revenues. The growing casino glut is adding to the problems for many states.
Tags: Arkansas, casinos, competition, Illinois, Las Vegas, Mississippi, New Jersey, revenues decline, states
The former mayor of San Diego wagered more than $1 billion at casinos over the last decade, forcing her to liquidate her savings, sell off real estate, auction belongings, borrow from friends and take more than $2 million from a charity set up by her late husband, according to The New York Times.
Maureen O’Connor, 66, made repeated visits to casinos in Las Vegas, Atlantic City and San Diego. Her wagers totaled more than $1 billion but her actual losses were $13 million. Even still, her gambling addiction amounted to wagering an average of $300,000 a day, every day, for nine years. O’Connor’s game of choice was video poker, a highly addictive gambling game and one of the more lucrative games.
Friends were shocked by O’Connor’s gambling addiction. She didn’t drink and as mayor was described by a reporter as a “goodie two shoes.” O’Connor blamed her addiction on depression from the loss of her husband and later a brain tumor. Her addiction fits a pattern known as “grief gambling.” Indeed, many slots addicts tend to be widows.
O’Connor’s story underscores the addictive hold gambling can have on individuals. It also underscores how little casinos do to try to stop addicts. It is virtually impossible to imagine the casinos were not aware O’Connor was spending an average of $300,000 a day for nine years. In fact, casinos target problem gamblers. The casinos likely teated O’Connor like a VIP, offering her a variety of incentives, including free rooms and meals, to keep coming back and to stay for hours on end.
Indeed, casinos make a large percentage of their profits from repeat and problem gamblers. One study found as much as 62 percent of a casino’s slot machine revenue comes from problem gamblers. Studies also show that the closer a casino is to someone’s home the more at risk they are of developing a gambling problem. That’s what makes the spread of convenience casinos in many states and small towns all the more troubling.
Most elected officials and casino supporters ignore or deny the fact that a casino’s business model is essentially built on problem gamblers. Then again most elected officials and casino operators don’t gamble. They know it is a sucker’s game. But now the former mayor of San Diego has been ensnared in the predatory gambling venture that is being enabled and pushed by many other mayors and governors.
Tags: Atlantic City, casino, gambling addiciton, grief gambling, Las Vegas, Maureen O'Connor, San Diego, slot machines
The management at a Las Vegas casino wrote a comical letter defending its handling of a customer who it says fell asleep at a slot machine. The issue in dispute is silly: lost winnings of $15.
But the casino’s letter is telling for what it does not address: problem gamblers logging long hours at slot machines.
The fact that some gamblers fall asleep at slot machine should be a shock, but apparently not to casino operators. (See photo here of another sleepy slots player.) The casino points out this particular gambler is a “regular” at the casino who often falls asleep at the machine. (He initially wrote a letter claiming his gambling winnings were stolen and the casino did nothing but asked him to leave, which prompted the casino’s response claiming the gambler nodded off.)
Call us crazy, but a regular gambler who repeatedly falls asleep at a slot machine may single a person who gambles too much, or at the very least for too long. It sure undermines the notion that gamblers go to casinos for fun and entertainment. The fact that the casino is aware of the issue but does nothing about it shows how little casinos police issues of problem gamblers. The truth is casinos are designed to lure customers back again and again and to keep them gambling for as long as possible. Hence, no clocks or windows in casinos, and plenty of free drinks and cheap buffetts. (Gambling late at night is the most dangerous time and sleep deprivation adds to gambling risk.)
But that is the casino business model. The industry even has a name for it: “Play to extinction.” The troubling tactic is even more alarming when you consider that governments – which are supposed to protect the public – sanction and essentially partner with casinos in a business that is designed to empty the pockets of taxpayers.
Tags: Las Vegas, play to extinction, Roger F. Kinsey, sleeping, slot machine
Eight months ago, most people never heard of Sheldon Adelson, the billionaire casino mogul that controls the Las Vegas Sands empire. But many are now getting a fuller picture of how one of the GOP’s biggest donors mixes politics and profits to get what he wants both here and abroad. (Coincidentally, Paul Ryan, the GOP vice presidential pick, will be at a fundraiser today at the Sands’s Venetian casino in Las Vegas, where Adelson is expected to attend.)
A page-one story in The New York Times today details how Adelson used cash, connections and clout to expand his casino empire into China’s Macau region. The story details how Adelson turned to a mysterious businessman named Yang Saixin to help win friends and influence top officials in China. Those often-murky efforts included hiring the daughter of a leading international trade official; trying to buy a Chinese basketball team; and calling former U.S. Rep. Tom Delay regarding a resolution condemning China’s human rights record.
Along the way, Adelson’s company has spent millions of dollars to get better connected in China. Questions of where all the money has gone has led to lawsuits and a federal investigation of whether the Sands has violated bribery provisions in the Foreign Corrupt Practice Act. Adelson denies any wrongdoing.
In addition to the detailed account in The Times, other publications have weighed in with investigative pieces of Adelson’s casino company, including The Wall Street Journal and Pro Publica. (See here and here.) For a list of seven surprising facts about Adelson see here. Before throwing his support behind Mitt Romney, Adelson backed Newt Gingrich in a bid to “destroy Romney,” as The Atlantic detailed here. Connie Bruck’s profile of Adelson in The New Yorker in 2008 also provides excellent into how he operates.
Tags: Foreign Corrupt Practices Act, fundraiser, Las Vegas, Macau, Mitt Romney, Paul Ryan, Sands, Sheldon Adelson, Yang Saixin
Gov. Martin O’Malley has spent the summer working behind the scenes on a deal to expand gambling in Maryland. His goal is to clear the way for MGM Resorts to partner with a local developer to build a large casino in Prince George’s County.
One issue that has not been addressed: MGM is partners with a family in China that has alleged ties to organized crime? Those ties were enough for New Jersey gambling regulators to balk at MGM’s co-ownership of a casino in Macau with Pansey Ho, the daughter of China casino magnate Stanley Ho who has been linked to organized crime in China.
An investigation by New Jersey gambling regulators did not accuse Pansey Ho of illegal activity but found her “unsuitable” as a business partner because of her financial dependence on her father, who provided 90 percent of the funds she contributed to the MGM casino in Macau. The scrutiny prompted MGM to sell its stake in an Atlantic City casino, choosing instead to keep doing business with Ho in more lucrative Macau.
The question raised by The Washington Post is whether Maryland gambling authorities would have the same concerns as New Jersey regulators. Some think it won’t be an issue, pointing to Las Vegas where MGM owns casinos.
Elected officials all talk about making sure that casinos avoid doing business with organized crime. But in Maryland, where casinos are just getting off the ground, the governor is working overtime to change the state laws to pave the way for a casino company with alleged ties to organized crime. That says all you need to know about how lawmakers look the other way when it comes to doing business with casinos.
Tags: Atlantic City, casino, Las Vegas, Macau, Martin O'Malley, MGM, mob ties, Pansey Ho, Prince George's County, Stanley Ho
Sheldon Adelson isn’t the only billionaire casino mogul giving tens of millions dollars to back efforts to defeat President Obama and elect Republicans to Congress.
Steve Wynn, until recently a Democrat, has been giving millions to Crossroads GPS, a political group founded by GOP strategist Karl Rove, according to Politico. Rove and other conservatives plan to spend $1 billion to defeat Obama, Politico reports.
The story details how Rove courted Wynn, who attended Rove’s wedding and provided a private jet to fly the newlyweds to Italy. Wynn’s lobbyist also has close ties to Mitt Romney. Rove divorced in 2009.
The casino companies controlled by Adelson and Wynn are both under federal investigation for violations of the Foreign Corrupt Practices Act, stemming from their lucrative casino operations in the wild west Chinese territory of Macau. Both casino moguls have emerged as two of the more high-profile GOP supporters who are upending election-year spending in the wake of the Supreme Court’s Citizens United decision that has opened the door to unlimited campaign giving from corporations.
Tags: casino, Crossroads GPS, Foreign Corrupt Practices Act, Karl Rove, Las Vegas, Macau, Politico, Sheldon Adelson, Steve Wynn
A former executive in China for the Las Vegas Sands Corp. alleged in a lawsuit that chairman Sheldon Adelson approved a “prostitution strategy” at the casino’s Macau properties.
The allegation turns up the heat on the Sands and Adelson, which federal prosecutors are investigating for alleged violations of the Foreign Corrupt Practices Act. Adelson has also emerged as the leading contributor to the Republican Party and Super PAC’s backing Mitt Romney.
The prostitution allegations add to what is already an explosive lawsuit. Former executive Steve Jacobs previously sued the Sands, alleging he was fired for objecting to demands by Adelson to extort senior government officials in Macau. The company denies the extortion and prostitution allegation.
In the latest filing, Jacobs alleged senior executives were concerned about a project he launched in May 2009 called “Operation Clean Sweep” that was designed to rid the casino of loan sharks and prostitutes. But executives were concerned with his plan because “the prior prostitution strategy had been personally approved by Adelson,” Jacobs alleged.
If true, the allegations offer a window into the way casinos do business in Macau. That would come as no surprise, given the Chinese territory has long been known as a haven for gangs and corruption. In fact, in December 2010, police rounded up more than 100 suspected prostitutes at the Sands’ Venetian Macao casino-resort while Adelson was in town.
Jacobs also alleges the company offered special deals through an elite “Chairman’s Club” to a select high-rollers that included leaders of Chinese organized-crime rings known as Triads. Adelson controlled the club and sent personal letters to its members, according to Jacobs’ filing. The allegations put a harsh light on Adelson at a time when he is essentially trying to buy the White House.
Tags: casino, China, extortion, Foreign Corrupt Practices Act, Las Vegas, Macau, prostitution, Sands, Sheldon Adelson
The passing of the great Nora Ephron brought to mind her excellent essay on the time she was in Las Vegas with Steve Wynn who was showing off a famed Picasso painting he was getting ready to sell for a record $139 million.
That was, of course, until Wynn accidentally poked his elbow through the canvas.
“I felt that I was in a room where something very private had happened that I had no right to be at,” Ephron wrote. ”I felt absolutely terrible. At the same time I was holding my digital camera in my hand – I’d just taken several pictures of the Picasso – and I wanted to take a picture of the Picasso with the hole in it so badly that my camera was literally quivering. But I didn’t see how I could take a picture – it seemed to me I’d witnessed a tragedy, and what’s more, that my flash would go off if I did and give me away.”
Ephron had a great eye for detail. The essay is worth reading though it is not as good as her classic piece in Esquire about breasts. But this is a gambling blog so it is best to stay as close to the subject matter as possible.
The New Yorker magazine also did a beautiful job chronicling Wynn’s colossal screw-up, which can be read here as well. Ephron’s writing is brilliant and she will be missed. But one detail worth noting in her essay is how little time she spent gambling in Vegas. It seems as if the trip was built around one of her other passions: food.
Tags: Las Vegas, Norah Ephron, Picasso, Steve Wynn
New Jersey lawmakers want visitors to enjoy Atlantic City – just as long as they keep gambling.
The state Assembly voted 77-0 to approve a measure that would allow casino and racetrack customers to use mobile devices to gamble anywhere they want on the property. State senators are expected to vote on the bill Thursday. It would take effect once Gov. Chris Christie signed it.
Essentially casino customers could take the mobile device to gamble by the pool, at a show, dinner or back to their hotel room. Got to go to the bathroom? Take the mobile gambling device with you. At least that will provide some, ah, relief for slot machine addicts who have been known to wear adult diapers so as not to lose their lucky machine.
And that’s what this measure is really all about: Keeping gamblers, gambling in order to generate more revenue for the struggling casinos and the state. The Jersey lawmakers tried to spin it as some sort of customer-friendly service, which they can’t even bring themselves to call gambling.
“There are so many enjoyable things to do at Atlantic City’s casinos and hotels, it just makes sense to allow guests to take their games along with them,” said Assemblyman John Amodeo, R-Atlantic. Assemblyman Ruben Ramos, D-Hudson, chairman of the Assembly Regulatory Oversight and Gaming Committee, said: “If a couple or a group of friends … wants to lounge by the pool, or take in a show or dinner, those who want to take advantage of gaming attractions can now have it at their fingertips so they don’t have to miss out on any of the action.”
But the bottom line is the measure is not going to help the casinos much. (Not to mention, by reading some of these comments this is not a service average citizens want or support.) Nevada approved mobile gambling in 2009. So far, the move has only contributed $84,000 – or 0.01 percent – to the state $865.5 million in gambling tax revenue.
In other words, New Jersey lawmakers should not feel good about enabling a service that will mostly keep gambling addicts gambling.
Tags: adult diapers, casinos, gambling, gambling addicts, Gov. Chris Christie, hotel, Las Vegas, mobile gaming device, New Jersey