Inside Gaming: Union vs. UFC, Plaza Reopening, and August Stock Slump
This week, Inside Gaming brings you the strange tale of the local Las Vegas Culinary Union picking a fight with the UFC, good news of a downtown Las Vegas casino reopening, and some grim data on last month's gaming stock performances.
Culinary Union Takes Stations Feud into the Octagon
Last week, Culinary Local 226 asked the Federal Trade Commission to investigate the operations of the Ultimate Fighting Championship, accusing the UFC of violating antitrust laws and putting unfair restrictions on the league's fighters. The union's request is the latest salvo in its ongoing battle with Frank Fertitta III and Lorenzo Fertitta, whose company, Fertitta Gaming, operates Station Casinos. The Fertitta brothers are also majority owners of Zuffa LLC, which operates the UFC.
UFC president Dana White said, "The Culinary obviously knows nothing about the fight business and this is aimed solely at the Fertittas." The Fertittas, who have sunk significant personal assets into the restructuring of Station Casinos, hit the jackpot with their investment in the UFC. The brothers paid $2 million for majority ownership of the fighting league in 2001. Forbes Magazine valued the UFC at over $1 billion in 2008.
The Culinary Union's fight to unionize Station's 13,000 employees has dragged on for years and involved protests, arrests, and lawsuits. In this episode of the saga, the union's research director, Ken Liu, wrote to the FTC complaining that UFC fought out four rival mixed martial arts companies, giving it a monopoly that it's using to restrict fighters' rights. Liu's letter says, "Zuffa has preserved and strengthened this dominant market position through exclusionary conduct by refusing to co-promote events, as well as anti-competitive contractual restrings that severely limit a professional athlete's freedom of movement." The letter cites contract clauses that prevent UFC champions from becoming free agents or from retaining the rights to their likenesses.
The letter to the FTC does not mention Station Casinos, and the Culinary Local 226 says it isn't interested in unionizing UFC fighters. Last year, the New York Hotel and Motel Trades Council, which is affiliated with the Culinary Union, lobbied against legalizing mixed martial arts events in New York. White also spoke out then against the "union idiots" striking out at the Fertittas through the UFC.
For more on the political cage match, check out the Las Vegas Review-Journal.
Renovated Plaza Back in Action
The Plaza hotel and casino in downtown Las Vegas reopened on Friday after being shuttered for nine months of renovations. Owners spent $35 million to fully renovate the property, $15 million more than originally planned. The upgrades to the 40-year-old hotel included redone guest rooms, new bars and restaurants, and an 80,000-square-foot gaming floor and hotel lobby with a new look. "Everything we've done is considerably different than it used to be," said Michael Pergolini, vice president of hotel operations.
The Plaza, one of the largest downtown hotels with over 1,000 rooms, was able to furnish all of them for a steal with the high-end contemporary furniture and carpeting originally purchased by the Fountainebleau high-rise, which stopped construction in 2009.
While 400 people were laid off when the Plaza temporarily closed in November, 800 employees were hired to staff the renovated hotel. Pergolini said 300 of them were returning employees. New restaurants include Vegas favorite Hash House a Go, a sushi bar, and a cupcake cafe. They will be joined in November by Oscar's, a steakhouse owned by Oscar Goodman, a former Las Vegas mayor and husband of current Las Vegas mayor Carolyn Goodman, who spoke at the Plaza's opening ceremonies last Wednesday. Perhaps the most unusual addition to the Plaza is the Swingers Club, a dueling piano bar ringed by a nine-hole indoor mini golf course.
The Plaza also announced that it has hired Cantor Gaming to run its sports book. Cantor won't replace the Lucky Race & Sports Book until March 1, 2012, to avoid losing any of the football season to the switch. Cantor will also provide its mobile gaming technology, which enables in-running bets and depending on state legislation, could allow Plaza guests to place bets from their cell phones.
The Las Vegas Sun has more information and a photo tour of the renovated Plaza.
August Heat Rough on Gaming Stocks
Casino and slot manufacturer stocks went 0 for 10 in August. All 10 publicly traded gaming stocks saw their daily stock prices fall from July to August. But hey, at least they showed solidarity. Eight of the companies' stocks dropped by more than 10 percent. Boyd Gaming Corp. took the biggest hit with a 31 percent decline. MGM Resorts International fell 24 percent, hurt largely by news of billionaire founder Kirk Kerkorian's massive mid-month sell off of the company's stock.
Compared to those dismal numbers, the Las Vegas Sands Corp. can almost book its 4.2 percent August dip as a win. The Sands and Wynn Resorts Ltd. were able to cushion the effects of the U.S. market slump with strong returns from their properties in Asia.
Despite the August slaughter, gaming company valuations are still higher than they were two years ago.
The Las Vegas Review-Journal has the price breakdown and perspectives on the month that was from a variety of market analysts.