A New Sign for New Times


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CEO John Unwin waves to spectators on the CityCenter bridge from atop the Cosmopolitan of Las Vegas marquee.

There is a new sign in Las Vegas, the Cosmopolitan, which is under construction and scheduled to open in December has turned the power on in its sign. The sign is 65-feet tall and looks boldly and challengingly across the Strip at CityCenter; the two CityCenter and Cosmopolitan are in and of themselves a sign – a sign of the times.  They were planned in the boom years, but missed that opportunity and opened (or will open) in the most severe downturn the country and certainly Las Vegas has seen since the legalization of gaming in Nevada during the depression.

Reflecting that downturn are the casino earnings; it is earnings season; and while many gaming companies reported last month, the remaining ones are scheduled to report August. So far this month five gaming companies have released their earrings reports – four are down, the lone exception is not a casino company, but Williams, a manufacturer of slot machines.  Each casino company had a different reason for its declining profits, Ameristar blames a closed bridge in Indiana, Harrah’s a dismal economy, Boyd includes competition with the economy in its explanation.  The best explanation comes from MGM; MGM is a company in transitition – its is no longer Grand and no longer Mirage, now it is International – and that too is a sign of the times.  MGM blames the necessary write-down of CityCenter for its poor results;  CityCenter was very expensive to build, and the estimates vary from $8.5 to $10 billion, but it is now worth $2.5 billion.  However, CEO Murren says the company has turned the corner and he also promises future growth and expansion – not however on the Las Vegas Strip, but in Macau and the rest of Asia.

That may help MGM, but the Cosmopolitan has no Asia presence and its success will in part depend on its taking more value away from its Strip neighborhood – CityCenter.  As Malthus said – and Darwin restated – the growth and expansion will continue until the food runs out; the food to fuel another growth spree in Las Vegas that is like the last one is going to be a long time coming.  In the meantime we have a new sign on the Strip – a sign-of-the-times.

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