When Frank Sinatra penned the song "Luck be a Lady," he probably never dreamed it to be a swan song for his own Cal Neva Lodge and Casino.
In the face of stacked economic odds, it appears the chips are truly down for the once-prosperous and revered casino, which closed Wednesday - and its future might be tough to bet on.
Last week, Canyon Capital Realty Advisors - which owns the entire resort - announced it would close the casino and search for a new outside operator to manage gaming operations, effectively cutting ties with casino operator Luna Gaming Tahoe, owned by Luna Entertainment.
The casino's last day was Wednesday.
According to a memorandum - obtained last week by the North Lake Tahoe Bonanza - from Jim Oegema, President of Luna Entertainment, to Cal Neva casino employees on March 11, the casino closed because it was not making money.
"As many of you know the Cal Neva Casino has lost money since the day Luna began operating it in January of 2007," Oegema wrote in the memo. "The only reason the casino has remained open for the last three years is because the owner of Luna provided funds to the casino to allow it to pay its operating expenses."
He continued to say the casino's employees would be laid off and receive no severance packages. In a previous Bonanza story, former Cal Neva Casino Gaming Manager Wayne Thompson said he was among 29 Luna Gaming Tahoe employees to be laid off.
Modernization can be tough
For Bill Wood, general manager of the nearby Crystal Bay Club casino, the closure serves as a grim reminder of current economic trends for the gaming industry. It will take more than luck for the Cal Neva to turn things around, Wood said.
"The new Cal Neva operator is going to have to make quite a large investment, and with the economy and gaming economy the way it is right now it's, going to limit the options out there." Wood said.
According to a previous Bonanza story, a Canyon spokeswoman said management feels a new operator will help boost the resort's value by investigating new gaming strategies, something Luna Gaming Tahoe was unwilling to do.
In order for modern casinos to be competitive, Wood said they require modern slot machines that can track a player at any given time, record how long they've been playing and note the frequency of their use. This, he said, is far from cheap and estimated a single slot machine replacement to range from $17,000 to $22,000; a player tracking system would cost a little more than $1 million.
"It would be very difficult to compete in the market without upgrading your machines to the newest technology," he said.
Gaming woes don't help
Nevada gaming is on the decline, said Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada in Reno.
Since 1992 to 2009, gambling revenues have dropped by more than half when adjusted for inflation, he said.
"The realities are when you have that kind of decline the weakest operators typically get pushed out," Eadington told the Associated Press. "The older, tired casinos - and the Cal Neva is a great example - don't have much to offer for gaming."
Heather Bacon, an executive with the Tahoe Biltmore in Crystal Bay, said the Cal Neva could be in for an uphill battle.
"I just hope they can find someone who would be interested in marketing to the strengths of the property," she said, adding that the casino's rich history and authentic architecture dating back to Sinatra's hay days in the 1960s when names like Marilyn Monroe, Dean Martin and Sammy Davis Jr. strolled the casino's famous halls shouldn't be forgotten.
Cal Neva bartender and resort tour guide Carl Buehler agreed.
"This was one of the hottest casinos in Nevada when Frank owned it," he said. "Frank had all the stars coming in and out of here, and it was always packed with people. I think the history is what keeps the Cal Neva going."
