On Aug 31, 2010 at 10 am, a civil war is about to erupt at the Comfort Suites in Gettysburg, PA, where the Pennsylvania Gaming Control Board is holding a public input hearing on the Mason-Dixon Resort & Casino project.

Mason Dixon Resort, Gettysburg, PA

The proposed $27 million casino will be operated by Mason-Dixon LP, whose main promoter is local businessman David LeVan. It would offer Gettysburg visitors a casino with 600 slots and 50 tables, plus a 307 room hotel with 20,000 sq ft of event space and all kinds of resort facilities.

The project has split Gettysburg right down the middle, with Civil War preservationists and businesses claiming it will sully Gettysburg’s image, brand it as a casino town and destroy existing tourism. The casino would occupy the site of the current Eisenhower Hotel & Conference Center, just a mile south of Gettysburg National Military Park. 

Local rebels and businesses fighting against the project are supported by outside groups such as the Civil War Preservation Trust (CWPT), National Parks Conservation Association (NPCA), and the National Trust for Historic Preservation.

This coalition put out a well timed report a few days back which systematically tears down all the arguments and statistics quoted by proponents of the project and the Mason-Dixon Local Impact Report. The NPCA’s Cinda Waldbuesser says that “Licensing a casino so close to the battlefield would put a known economic engine at risk in favor of an unknown venture.”

In 2008 (latest available figures) Adams County got over 3 million visitors. Visitors spend over $300 million each year and the County gets tax revenues in the vicinity of $85 million.   

On the other side are the casino promoters, Gettysburg borough officials who expect visitors to spend more and the casino to create more jobs for locals, and Adams County – which has been promised an additional $1 million in tax revenue every year. Gettysburg Park officials have stated the casino does not directly impact the park.

Mason-Dixon Casino map

Promoter David LeVan claims that the casino is actually closer to the Maryland border than Gettysburg.

In a public letter on the project’s website, he says that “Mason-Dixon will protect the jobs currently in place at the Eisenhower and create hundreds more.  That doesn’t even include the number of jobs that will be created by areas businesses that will be hired to assist with construction or provide other goods and services.”

This is LeVan’s second attempt at putting up a casino in Gettysburg. The first project, a 3000 slot casino resort & spa, was rejected by the Pennsylvania Gaming Control Board in 2006 after similar protests.

A casino may be tasteless to those who consider Gettysburg as hallowed ground, but the recession’s impact and drop in tourism revenues mean that the casino project has a better chance of being approved this time.

The 2,995 room Cosmopolitan of Las Vegas, which opens on Dec 15, 2010, represents yet another colossal gamble in Las Vegas where the developer had no choice but to throw in good money after bad.

Cosmopolitan of Las Vegas

Cosmo began as a $1.8 billion project in Oct 2005, being developed by Ian Eichner’s 3700 Associates LLC. When he defaulted on a $760 million loan, Deutsche Bank foreclosed and tookover the project in Aug 2008. Since selling it off in the middle of a recession was not an option, the bank decided to complete it themselves.

As of date, the project has ballooned into a massive $3.9 billion mega-project, and is the costliest project ever in Las Vegas for a single lender. In their latest regulatory filing, Cosmo says they plan to spend another $890 million this year for the opening. This includes $625 million for construction and $265 million for furnishings and fixtures.

There’s also the costs of the lawsuits – one over its name (which has been resolved), and another one filed by condo owners who allege they were misled about the delays and changes. The Cosmopolitan has 1,353 condo units and the holding company (Nevada Property 1 LLC) created by Deutsche Bank has offered to return the condo owners 74% of their deposit to give up their condos.

To add to the cost, they’re only going to be able to open 2000 hotel rooms this year on Dec 15, and the remaining 1000 will be delayed until July next year.

The 50 story twin tower Cosmopolitan, sandwiched on the Strip between City Center and Bellagio, is sure to further depress Sin City’s room rates which are still in the process of absorbing City Center’s 6,291 rooms. In fact, Cosmopolitan’s arc pretty much mirrors that of CityCenter.

Started off during the pre-recession boom years, got mired in lawsuits and financial problems during the recession, and ended up delayed and grossly over budget. When it finally does open, the ‘new’ factor will get it through the first six months, but there’s no real way to recoup the costs after that. Both projects have faced massive writedowns ($749 million for Cosmo) and their values are now far less than the project costs, even though neither is as yet fully open.

For Vegas, it means a prolonged recovery period from the recession as rates will remain low throughout 2011. To make things worse, there’s one more project waiting in the wings whose arc mirrors that of CityCenter and Cosmopolitan –  the 3,889-room Fontainebleau Las Vegas, whose cost now stands at $2.9 billion.

Fontainebleau is about 70% complete, but the project went into bankruptcy and has now been purchased by billionaire Carl Icahn. He will have to spend around $1.5 billion to complete it. Deutsche Bank, owners of the Cosmopolitan, is also one of the lenders to the Fontainebleau project.

Photo – Kris1123

In this month alone, at least four states – Florida, Hawaii, Michigan and Pennsylvania – have made fresh overtures towards the casino sector for allowing entry or expansion. With tourism numbers down and the economy still sluggish, no doubt there will soon be more states lining up to roll the dice.

For destinations looking to gamble all your chips and sell your soul to a casino mogul, there’s a few things you should know first – about how Sin City has refined casino marketing into a fine art. Here’s a few examples:-

Encore Carpet

Sleep Deprivation:- What’s Sin City’s secret sauce that stops bleary eyed gamblers from calling it a night?

From the flashing neon outside and the garish lighting inside to the free flow of alcohol and the magic carpets, everything is meant to be a wake-up call for a gambler about to quit.

These magic carpets don’t fly, but the extravagant color patterns and designs assault the senses and keep casino customers wide awake all night long.

No exit

No Exit:- Once you’re inside, they want you to forget the world outside. So there’s no windows or clocks to remind you of the time of day (or night).

CityCenter’s ARIA casino is an exception, designed to utilize natural light to reduce energy consumption.

They make it easy for you to enter, but not so easy to exit. Casinos in Vegas have many entrances and escalators leading in from all sides, but only a select few leading out.

Airport slot machines

In-flight Entertainment:- If you’re in Vegas or on your way, you can run from the slots, but you can’t hide. McCarran Airport has over 1, 234 slot machines all over the terminals.

Las Vegas Sands Corp. even bought two L-1011 planes which it intends to modify and outfit with baccarat tables, to be used by gamblers being ferried by Sands from Asia to its Las Vegas casinos.

Not to be left behind, even the waters in Las Vegas aren’t immune. The Hard Rock Resort’s swimming pool offers a floating craps table.

Comp City

Comp Clubs:- To reel in a big whale, casinos will offer the world in comps, from free group transport (see above) to hotel suites with butler service, shopping trips, exclusive event tickets and club access, and even loss rebates – where the casino gives you back a percentage of your loss. 

Comp Clubs are a more down-to-earth rewards program which reward casino play for regulars – Sin City’s version of loyalty club memberships. Basically everything else you can get for free, provided you spend enough on casino play.

There’s Harrah’s Total Rewards, MGM Mirage has the Players Club, etc. The Las Vegas Advisor rewards book is a good place to find out what’s on offer.

Everything you see in Vegas – from the monumental exteriors to the fantasy worlds inside, from cheap hotel rooms to comps, all of it is focused on maximizing opportunities for gambling, ensuring that visitors stay and play longer, and keep coming back for more.

Photo credits:- No exit – intergalactic hussy; Encore carpet – David G. Schwartz; Airport slots – Jérôme; Comp City – Max Rubin

Just in time for Super Bowl XLIV, Miami has a heated debate in progress over how to fund over $200 million worth of renovations and upgrades to the Dolphins’ Sun Life Stadium in Miami Gardens.

Sun Life Stadium, Miami

Proposed solution? Hit the tourists with a higher bed tax. The problem? Florida state law caps hotel taxes at 6 percent, and Miami-Dade is already maxed out.

So they need to amend the laws in order to be able to hike the tax. The Dolphins have submitted this plan to state legislators, requesting that the 6% cap on taxes be removed.

The Sun Life Stadium is privately owned by billionaire real estate developer Stephen Ross, so using $200m worth of public funds to fix it is not a good idea to start with. If you top that off by taxing tourists to come up with the funding, that only makes it a lot worse.

To be fair, the existing 6% hotel tax being collected in Miami-Dade County is earmarked for funding  the $442 million debt Miami-Dade County is taking on to build the new Florida Marlins baseball stadium, so there’s no real objection to the concept of hotel taxes being used for stadiums. Even so, hiking taxes on visitors is a fairly extreme move, especially at a time when the state’s tourism economy is right on the edge.

There’s also another equally controversial plan being cooked up by Florida state legislators – to allow the development of massive Vegas style casino resort projects. The Florida Gaming Equalization Act aims to approve 5-7 such casino projects in Florida, with local referendums at selected spots, followed by grant permits issued by a state gaming commission.

The prime mover behind this bill is Sheldon Adelson, chairman and CEO of the Las Vegas Sands Corp. Adelson tells the  Miami Herald that he’s prepared to invest in bringing mega-convention centers and casinos to Florida that would include shopping centers, theaters, spas, hotels, and restaurants.

He’s talking big numbers – a $3 billion casino resort with 7000 new jobs. Preferred locations, as per Adelson, would be in Tampa Bay and Orlando. No doubt the heavy investment, and the additional permanent boost to the economy in terms of jobs, increased visitation and tourism would be a lifesaver for the tourism economies in Florida cities.

On the other hand, Orlando’s biggest mojo is it’s brand as the no.1 family-friendly destination in the US. How these mega-casinos impact that brand will no doubt be a big factor in the legislative debate. Walt Disney Co. is surely not going to be happy about this, and if they step into the debate, it becomes a national issue.

Regardless of the merits or demerits of these individual projects, Florida legislators should take note that changing the law of the land to facilitate billionares’ pet projects isn’t going to win them any votes.

Photo by Seinar