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Why Cosmopolitan Loses The Whale Wars

By MikeE on Monday, 16th May 2011 2:06am
  » filed under Las Vegas  comments: 19


Cosmopolitan High Limit

The numbers are out on Cosmopolitan's first full quarter of operations: $34 million in room revenue, $58 million in food and beverage, and $31 million in gaming. As reader Chris77 mentioned on the board, the overall performance is weak and the gaming numbers are downright worrisome.

Such little casino action seems strange. Sure, a few tables might not have the best blackjack odds, but they've definitely got some decent games, a nice variety of slots, possibly the best comp club in the city, gobs of feel-good-even-when-you're-losing atmosphere, and a strip presence that sucks pedestrians in like a vortex. Just stand by Bond and count how the majority of strip foot traffic naturally gravitates into Cosmo - it's downright eerie.

The issue, at least in my suspicion, is the six-figure-and-up bankroll club who in the last few years, has been placed on an even higher pedestal. Responsible for a vastly increased share in gaming revenue, those Russian arms dealers and Japanese degenerates we all know and love - and who were least affected by the recession - are the single most responsible customers in helping the major luxury resorts ride out these financial times.

And Cosmo can't handle these guys.

There's a problem that arises with that much wealth - a problem that is hard to sympathize with, but nevertheless, a serious issue: anonymity. Let's put aside the marketing talk of exclusivity found in Wynncore's Tower Suites and posh privacy of Aria's Sky Suites. These concepts serve a real function: to expose foreign dignitaries and other ultra-wealthy patrons to as few people as possible.

This isn't a new concept exclusive to Wynncore and Aria. Bellagio's got a villa entrance in addition to an unmarked VIP lounge with its own set of speedy elevators. Mirage's Industrial Road entrance is heavenly, serene, and ultra-secluded. Top players at Caesars rarely see the main port cochere and are frequently dropped off at both Augustus and Octavius Towers, while MGM's Mansion is a world unto its own.

Now imagine if any one of the patrons that frequent the above hideaways took a top floor penthouse at Cosmo with a million in credit and anywhere from, say, $100-$500K in their coat pocket at any point. A crowded main entrance, elevators at capacity, a consistently packed third-floor commons, not a single private room, and a high limit salon that's impossible to access conveniently from any elevator - all this makes for one nervous whale, even with a security detail present.

I still admire Cosmo for doing the best they could with the sliver of land provided, even if it doesn't lend itself to securing the biggest fish in the sea. Hopefully this just means better comps for those of us who aren't afraid to take our wallets out in public.

Tagged: cosmopolitan   whales   despite all my rage   


Comments & Discussion:

Where's Bellagio's Villa enterence?

MikeE, you are such a great writer! Love reading you. I'm suprised Cosmopolitan doesn't have a private, underground limo entrance with separate elevators to the most desireable accomodations. How did this happen, or is it a byproduct of trying to convert Ian Bruce Eichner's condo hotel into a high-end property?

MikeE, That's really a great point. Having just visited Cosmopolitan for my first time on Thursday, the high limit area was totally empty (as was most of the casino) while the 2nd and 3rd floors were uncomfortably crowded. Plus the high limit area is right at the bottom of the main escalator, hardly an exclusive location.

I'm going to break with what most folks seem to be saying...Cosmo's just not as nicely designed as the other new-ish places, Encore and Aria. The folks I was with called it "cheesy." I wouldn't go quite that far, but I was underwhelmed for sure. Maybe it's atributible the narrow parcel, but I think it's more troublesome than that alone.

You also run into the "move one over fatigue" idea too - the average tourist to vegas doesn't mind casino hopping, checking out different places, and playing at differnt tables in a good number of casinos on their trip. The whales don't do this. They go to one place and stay there their entire trip, with the exception of getting tickets to an event or dinner or something at another place. Whales will usually time & again go to the same casino on every trip based on the host, the feel of the place, their luck, that one great run and hopes to repeat it, etc.

When Wynn opened, a bunch of whales jumped over to see the new place. A lot probably stayed there. Then CityCenter opened, and a bunch probably moved over there to check it out as well. Same for Encore. All three of those had this "bigger than big" feel, which Cosmo doesn't have. I can picture a lot of whales just saying "meh, i've seen 3 really nice places open in the past few years, and i'm comfortable where i'm at".

Excellent points, and I can't disagree with any of it, I will add, in addition to not having private access for the high limit room, I think it was a huge design mistake to have it so open. As much as I loved that the bars worked in conjunction with the floor, if there was one area they needed to add some enclosure, in my opinion, it was the high limit area.

Cosmo is just a bar. Nothing more.

Great topic Mike. After seeing those numbers last week the same thought crossed my mind.
I agree with Detroit that the whole Cosmo business model is an after the fact change horses in midstream kind of thing. Even if they take Jinx' idea and try and shield or privatize the HL area, it's never going to have the necessary exclusivity.
They will definitely need to boost their casino hold numbers. I'd love to see some type of approach to cultivate the $50-300 a hand player who appreciates good value games. Wishful thinking perhaps.

My opinion,
Cosmo is owned by bankers and scared money. If they wanted the whale action; it would have been built into the plan. Cosmo (investors + backers) don't have the *balls* to lose $5million to $20million after a weekend of (lucky) whale action.

@detroit1051 The East tower was planned to be more exclusive.. It has its own entrance and was supposed to have its own hotel lobby.. Not sure why this plan was axed, big mistake IMO

For the record, even Planet Hollywood has a private entrance.

Good points. It's true, the whales aren't biting. Cosmopolitan is getting a nibble now and then, but nothing strikes. Imagine arriving on a busy Friday night. You sit in traffic waiting on Harmon waiting to reach the porte cochere, then wait in a tiny VIP registration area with no privacy or security. Then wade through the sea of sub-humanity to reach supposed High Limit. Or perhaps you go straight to the elevators to reach your room, only to find your bags haven't arrived because the bellman didn't know you from Adam and threw everything into the holding area. Good luck getting that sorted out. Maybe you could order a bottle of booze, just make sure it isn't Grey Goose, Patron or Dom, since the room service storage closet runs out of each every weekend. Screw that, head to STK...wait, they don't hold reservations for anybody not featured in US Weekly, and your reservation has just been bumped for Mario Lopez.

Cosmopolitan does have a semi-secluded East valet. There you can take Las Vegas Blvd from Flamingo to Jockey Club Lane and ride the elevator to the second floor, where you switch elevators to get to your room. Or, you can check in at the Identity Membership Lounge along with every Platinum player and condo owner on property. Imagine a high roller at Ceasars checking in at the Diamond Lounge and you've got the right idea.

However, I'm told by a reliable source that there is room for change. 6 floors of onstruction shell exist above the penthouses on 70. The top floor of the West tower is empty and was originally designed to be one massive unit for the previous owner. Perhaps a Playboy Club-gaming parlour high above the Strip could be in the future?

I must be missing something if they have, "possibly the best comp club in the city". I am Diamond at CET and fluctuate between Gold/Platinum at MGM. I don't see how I could possibly maintain my Platinum status (that was 'matched' when I signed up) at Cosmo unless I focus ALL of my play there. Even then, it might be a stretch. If I'm doing the math correctly, it takes over 7-times the play to reach Platinum at Cosmo versus Diamond at CET. Nearly 4-times the play (of Diamond) for Gold.

While I appreciate the fact that they have some of the best rooms on the strip, and they're willing to comp them, and they also reward your spending, I don't see myself chasing to reach Platinum there. Additionally, website is a joke when it comes to viewing your Identity information (not that MLife is much better). Because I was upgraded to Platinum, it doesn't show me my points. Just says a host will square everything away. That's great except, how do I know how much play I need to put in to maintain that level without stepping foot inside the building???

I hope I'm wrong and I'm not understanding the program. Someone please correct me if I'm wrong, because if I'm not, I think they're alienating players down to even my bankroll level.


Did you take into account that Identity points are accrued not only through play, but every dollar spent in retail, hotel, and F&B?

The Bellagio villa entrance for limos is part of the taxi cab tunnel structure - when you drive up you see the ingress and egress points - basically under the normal porte cochere.

Thank you for answering my question. I would love to see a picture of villa enterence.

and its just plain silly when you think about it, it wouldnt have been that hard to avoid this problem. not THAT hard even now, just requires more money, and some disruption. but its probably going to happen at some point.

@MizzouGypsy: In a word, yes. The amount I spend on rooms, retail and food & beverage is insignificant to the amount I spend gambling. That amount is reduced even more when those things are being comp'd and don't earn any points anyway.

The way I've figured it, I run over $100k/year through at CET between VP & tables. This gets me Diamond. That same $100k would only get me 10,000 Identity points ($10 on tables = 1 point per their literature). That's still their base level. You need 40,000 for Gold & 80,000 for Platinum.

"Cosmopolitan said it sold 15 condominium units...As of March 31 there were 199 condominium-hotel units under sales contracts"

@missmonkay - I'm with you. Can't wait to see QOTSA on the roof of the bar. :) Will be second to seeing them @ CBGB's back in the day.

FWIW, there ARE some whales who frequent Cosmo. And there are also plans to build a high limit salon on the 2nd floor. The salon should be open before the end of summer.

The location and size of the current high limit room is problematic. On my last trip there, out of the 6 tables reserved for blackjack, 4 of them were reserved for whales, leaving only a shoe game and a double deck. All of the baccarat tables - except for one - are at the end of the pit closest to the entrance, meaning that high limit players there are uncomfortably exposed to general passerby. As noted in the article, there is no sense of neither exclusivity nor anonymity.

Worse, because of its lack of size, it also fails to attract your $100-$500 bettors. This is only exacerbated when tables are reserved. If the slot and $15-25 bettors are your bread and butter, then I'd say the whales are the extra toppings, but these $100-500 bettors are the "jelly". They may not provide the huge wins, but they'll also not expose the casino to huge losses (variance is a double-edged sword), and their trips may be more frequent than those of the whales.

It will be interesting to see how the numbers look once casino hosts can start having a better feel for their players, the additional high limit room is built, and visitors stop by not to visit, but to actually gamble.

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