ONLINE GAMBLING AND CASINO GUIDE

Well, the writing was on the wall, and I doubt this will surprise or shock anyone.

I suppose this would fall under “Breaking News”, and I don’t usually get into the breaking news game … but this one effects me somewhat directly given that I can throw a rock three times and hit the place.

I just found out mere moments ago that The Fontainebleau has officially filed for Chapter 11 bankruptcy.

I, my neighbors, and pretty much everyone in this town was hoping beyond hope that we read the scrawled words “failure” incorrectly, and it was possible that things could turn around, but it looks a bit bleak right now.

It’s been nearly a month since I have seen a full team of workers present at the Fblue site, and little to no visible improvement has been made to the structure in that time.  I happened to drop by and took a full set of pictures just last week and over the weekend, but I didn’t know this was coming.  At least not this soon.

The sign on the fence still says “Coming Fall of 2009” which now just seems a little bit sad.

Fontainebleau Las Vegas LLC has issued a press release stating that:

“It is unfortunate that our lenders forced us to take this step. By reneging on the revolving credit facility, they effectively shut down the project and put thousands of people out of work.  Our goal now is to secure funding to complete this world-class project and restructure our existing debt. Fontainebleau Las Vegas will continue to aggressively prosecute claims against these lenders for failing to honor their contractual commitments.  The damage caused by the bad faith of these lenders has not only caused financial hardship to Fontainebleau Las Vegas and its employees, but also to the company’s creditors throughout the United States, when economic circumstances are such that they can least afford it.”

It’s hard to argue with their statements.

I paid for the Fontainebleau to be financed, and so did you, but the banks are simply hoarding the cash.  The American people have provided trillions of dollars in bailout money to US banks, and the banks have turned around and displayed their middle finger right back to us.

Of course, this is not a rare thing.  Recipients of charity always grow to resent their benefactors.  Just ask the airlines who were yanked up by the scrotum and saved from insolvency by taxpayers during their darkest hours.  You could not find their appreciation with an electron microscope.

Of course, the argument could be made that we did not bail out the banks simply to make bad loans, but that argument is somewhat specious in and of itself.

I doubt the struggling American people provided this capital to give no-risk loans to people who didn’t need it, because it is likely that those people and businesses had capital anyway.  As is often the case in the USA, banks typically only loan money to people who don’t need loans, and are reticent to provide capital to people who depend on loans.  This is a paradox.

Under no circumstances should there have been a bailout in the first place, but if one was going to be instigated anyway, it should have absolutely been under the condition that the banks uphold their own agreements to borrowers.

Since banks only have a fraction of the money that they lend anyway (fractional reserve banking), and create a large amount of it out of thin air, the actual risk associated with funding the remaining amount of the Fontainebleau is not intrinsic.

As a matter of fact, even if they think the loan would be assumed to be bad, it might still make more sense to make the loan, because even if the banks end up owning the property, they will need to complete it anyway.  What are they going to do with a completed 700′ tower that has not been finished?

Obviously there is something strange afoot with this entire situation.

Fontainebleau Las Vegas is making specific allegations that Deutsche Bank Trust Company Americas was “seeking to destroy the Fontainebleau in order to minimize competition” with the nearby Cosmopolitan Resort and Casino, which is wholly owned by a Deutsche Bank subsidiary.

This really would not surprise me in the slightest.

Chapter 11 is not the only news to come out about the Fblue.  In the same press release, the company indicated that they were dropping the lawsuits against their lenders.  This is the same press release where they stated that they would “aggressively prosecute claims against these lenders for failing to honor their contractual commitments”.

Perhaps I’m slow, but I don’t have the slightest idea how one goes about prosecuting the lenders by dropping the lawsuit.  “Hey Fred, really want to scare these guys?  Drop the lawsuit!” The Fontainebleau seems to be a little weak in its resolve.

Or perhaps they realize that Bank of America and JP Morgan Chase own the United States (and by proxy the US Courts), and that this would be like prosecuting the queen with the king sitting as the lone juror.

In any event, one thing is absolutely certain.  The Fontainebleau is not opening in 2009.

This is a shame.  I am looking over my monitor as I type this, and I can see the tall building looming in the foreground.  The tower looks just about finished, and it is hard to believe that this is what I am going to be staring at for the foreseeable future.

While I certainly posses a high level of anticipation about City Center, given a choice of one or the other, I would preferred to have seen the Fblue completed.  The area around City Center is already flush with casinos.  Nice ones.  The Bellagio, Planet Hollywood, Paris, etc.

The area around the Fblue is not so fortunate.  The area feels like it is slowly dying, and the north strip can ill afford this misstep.  Especially with the skeleton of Echelon a few hundred yards to the south.

Obviously, the Fblue will open eventually under someone’s ownership.  The place is already more than halfway built.  It’s going to be something at some point.  Just what and when … we do not know.

If there is a grain of hope left, it is that Chapter 11 bankruptcy is not Chapter 7.  It’s certainly not promising, but this can be a viable tool and companies can emerge in a much stronger position from where they entered.  We simply have to hope that the Fblue’s assets exceed its debts.

In any event, we now know where the project stands.  Without money, without a lawsuit, and the only hope being that of a bankruptcy judge.

It could be worse.

It’s a bit sad when the sentence immediately preceding this one is the most optimistic thing you can say about the entire situation.

Fontainebleau, we hardly knew thee.

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