Banks Keep Opening Casinos For Some Reason
November 19, 2010
If Casino taught us one thing, it’s to not marry Sharon Stone. If Casino taught us two things, it’s to not marry Sharon Stone and to not bring money into a casino, because it will get taken. That’s just what they do. Banks hold money, casinos take it.
But what if one institution served as both banker and bookie? Surely nothing could go wrong with such an arrangement. We’ll get an answer in three weeks time when Deutsche Bank’s Cosmopolitan casino opens on the Las Vegas Strip. Deutsche Bank was originally just supposed to fund construction on the 3,000 room Cosmopolitan, but ended up taking on the $4 billion project themselves after the original investor defaulted on a $1 billion loan. The opening will come months after Morgan Stanley sold off its 90 percent stake in an uncompleted Atlantic City casino called Revel, a deal that netted the company a loss “somewhere between $800 million to $1 billion” and a letter from the SEC.
While the Cosmopolitan will have the advantage of actually being able to open its doors, not even The Wall Street Journal seems particularly enthused about Deutsche Bank’s chances to see a return on its Vegas investment.
“Even in the optimistic scenario that the Cosmopolitan should garner the same cash flow as the larger Bellagio, one of Las Vegas’s most successful casinos, it would still take Deutsche 15 years to earn back its investment, based on the current economic conditions,” writes The Journal’s Alexandra Brezon and A.D. Pruitt.
On the plus side, Jay-Z and Coldplay are performing at the hotel’s New Year’s Eve party next month. And, as Brezon and Pruitt point out, the Cosmopolitan’s ads featuring a “trouser-less bellboy” are nothing if not memorable. That has to be worth two or three billion right there.
(H/T to VF Daily)
<a href="http://www.theatlanticwire.com/features/view/feature/Banks-Keep-Opening-Casinos-For-Some-Reason-2557/tag:news.google.com,2005:cluster=http://www.theatlanticwire.com/features/view/feature/Banks-Keep-Opening-Casinos-For-Some-Reason-2557/Wed, 17 Nov 2010 17:58:43 GMT 00:00″>Banks Keep Opening Casinos For Some Reason