profitable.
'The new bonds will have a coupon of 14 per cent and a maturity of ten years. They will be secured with a first mortgage on the casino, so that if it does not make enough money to pay back debt, then you will become owners of a very attractive property.
'Any questions?' The haughtiness in Cathy's voice rose a notch as she threw this out like a challenge.
There was silence for a minute whilst I quickly looked over the numbers in front of me. The deal did look as though it might be interesting, but there was a lot more I would have to find out.
'I have to admit that I don't know very much about the casino business,' I said. 'And there is a lot more research which I will have to do. But I do have a couple of initial questions. Firstly, what happens to these wonderful forecasts if there is a recession?'
'It's well known that the industry does not suffer in a recession,' said Cathy. 'In fact, occupancy rates increased in the recession of the early eighties. The reason is that people actually like to gamble more when times are hard.' She looked at me, daring me to contradict her.
I looked steadily back at her, and didn't say anything for a moment or two. I don't like being patronised, however good-looking the patroniser may be. I wasn't going to let her put me off. 'I can see that may be true,' I said. 'But hasn't much of the development in Las Vegas in recent years been aimed at making it a destination for the family holiday?'
'Yes. In fact, in addition to attracting wealthy gamblers, the Tahiti is expected to be one of the top destinations for families in the next decade.'
'Little junior has got to learn his poker game somewhere,' said Cash with a laugh.
'I see,' I said. 'But isn't the family holiday one of the first things to be cut back in difficult times?'
'Perhaps.'
'In that case, won't there be fewer people coming to Las Vegas in a recession, and won't profits fall sharply?'
There was a short silence as Cathy shuffled the numbers in front of her nervously. 'As you yourself mentioned, you are new to this business. Analysts are unanimous that the effect of a recession on the gaming industry would be negligible. It is well known that during the depression of the 1930s, gambling actually increased.'
She was floundering, but she clearly wasn't going to concede my point, so I let it drop. 'I have a second question. Whenever you are lending money to someone, no matter what business they are in, it is important to know something about them. Who owns the Tahiti?'
Cathy was quick to answer, on surer ground again. 'A man named Irwin Piper. He is a well-known investor on Wall Street. He is generally recognised as a winner, his purchase of Merton Electronics ten years ago was one of the great successes of the eighties; he quadrupled his money in three years. He has also been involved in a number of leisure projects in the past, and he has made money out of them. He is a good man to back, believe me.'
'I see.' I asked another question, 'Doesn't Las Vegas have a reputation for attracting organised crime? How do I know this man is clean?'
'Just because he owns a casino, it doesn't mean he is a crook,' said Cathy sniffily. 'It's true that there were cases of organised crime in Las Vegas in the fifties and sixties, but nowadays the Nevada Gaming Commission runs very strict checks on people before granting them licences to own or manage a casino. If an applicant has ever been involved, or even been suspected of involvement, in any criminal activities at all, then the Commission won't grant a licence. I can assure you Irwin Piper is clean.'
'Nevertheless, I feel uncomfortable lending someone money if I have never met them,' I said.
'Look, if the Nevada Gaming Commission's thorough investigations aren't good enough for you, then you will never be satisfied,' Cathy snapped.
This was getting seriously annoying. After all, I was the customer. And I wasn't going to buy these bonds until I could get completely
'The new bonds will have a coupon of 14 per cent and a maturity of ten years. They will be secured with a first mortgage on the casino, so that if it does not make enough money to pay back debt, then you will become owners of a very attractive property.
'Any questions?' The haughtiness in Cathy's voice rose a notch as she threw this out like a challenge.
There was silence for a minute whilst I quickly looked over the numbers in front of me. The deal did look as though it might be interesting, but there was a lot more I would have to find out.
'I have to admit that I don't know very much about the casino business,' I said. 'And there is a lot more research which I will have to do. But I do have a couple of initial questions. Firstly, what happens to these wonderful forecasts if there is a recession?'
'It's well known that the industry does not suffer in a recession,' said Cathy. 'In fact, occupancy rates increased in the recession of the early eighties. The reason is that people actually like to gamble more when times are hard.' She looked at me, daring me to contradict her.
I looked steadily back at her, and didn't say anything for a moment or two. I don't like being patronised, however good-looking the patroniser may be. I wasn't going to let her put me off. 'I can see that may be true,' I said. 'But hasn't much of the development in Las Vegas in recent years been aimed at making it a destination for the family holiday?'
'Yes. In fact, in addition to attracting wealthy gamblers, the Tahiti is expected to be one of the top destinations for families in the next decade.'
'Little junior has got to learn his poker game somewhere,' said Cash with a laugh.
'I see,' I said. 'But isn't the family holiday one of the first things to be cut back in difficult times?'
'Perhaps.'
'In that case, won't there be fewer people coming to Las Vegas in a recession, and won't profits fall sharply?'
There was a short silence as Cathy shuffled the numbers in front of her nervously. 'As you yourself mentioned, you are new to this business. Analysts are unanimous that the effect of a recession on the gaming industry would be negligible. It is well known that during the depression of the 1930s, gambling actually increased.'
She was floundering, but she clearly wasn't going to concede my point, so I let it drop. 'I have a second question. Whenever you are lending money to someone, no matter what business they are in, it is important to know something about them. Who owns the Tahiti?'
Cathy was quick to answer, on surer ground again. 'A man named Irwin Piper. He is a well-known investor on Wall Street. He is generally recognised as a winner, his purchase of Merton Electronics ten years ago was one of the great successes of the eighties; he quadrupled his money in three years. He has also been involved in a number of leisure projects in the past, and he has made money out of them. He is a good man to back, believe me.'
'I see.' I asked another question, 'Doesn't Las Vegas have a reputation for attracting organised crime? How do I know this man is clean?'
'Just because he owns a casino, it doesn't mean he is a crook,' said Cathy sniffily. 'It's true that there were cases of organised crime in Las Vegas in the fifties and sixties, but nowadays the Nevada Gaming Commission runs very strict checks on people before granting them licences to own or manage a casino. If an applicant has ever been involved, or even been suspected of involvement, in any criminal activities at all, then the Commission won't grant a licence. I can assure you Irwin Piper is clean.'
'Nevertheless, I feel uncomfortable lending someone money if I have never met them,' I said.
'Look, if the Nevada Gaming Commission's thorough investigations aren't good enough for you, then you will never be satisfied,' Cathy snapped.
This was getting seriously annoying. After all, I was the customer. And I wasn't going to buy these bonds until I could get completely
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