Q&A With Vegas Insider: Deutsche Bank's $4 Billion Hangover

Yesterday the New York Times ran a piece about Deutsche Bank's $4 billion Cosmopolitan Casino, located on the famed Las Vegas Strip. The casino, the most expensive ever to go up in Vegas, has apparently not been doing as well as the Germans had bet when they opened the hotel and casino this past December. According to the Times, "On a recent Saturday night, the casino was almost empty as visitors flocked up one flight to the Marquee nightclub, where one inebriated partygoer threw up in line."

Of course, the problem Deutsche Bank's having with the Cosmopolitan is not so much with the vomiting patrons (standard at any Vegas casino) but the lack of losers -- that is, the lack of patrons gambling away their hard-earned (or easily-inherited) millions.

And so, attempting to better understand why no one's splitting eights at DB's Nevada outpost, I put a few questions to a long-time resident of Vegas who's been around the Strip for more than a decade.

Is the Cosmopolitan considered "cool" in Vegas?
Yes, people generally think it's a cool place to hang. It's in the spirit of the Hard Rock and Palms: a younger, hipper crowd, less focused on gaming than on nightlife and the scene. It's definitely considered one of the places to see and be seen. But unlike the Hard Rock and Palms, it's located on the Strip, adjacent to the CitiCenter hotel casino complex.

What about the Cosmopolitan's restaurants? Word is there's a Blue Ribbon Sushi and Jaleo and some other fancy joints?
The restaurants are considered good. But just about everyone I know who's been to their steakhouse or Greek restaurant felt like they'd literally been blindsided when the bill came -- they're very expensive. Steakhouses are a dime a dozen here, and Greek food should not cost four people $500. Myself, I'd shy away from the restaurants. And they're actually under boycott in my house, given that we felt like we'd been robbed every time we ate there. But in general, people seem to like the restaurants.

Is the casino usually crowded?
The Cosmo's still fresh and new, which is probably why it's usually packed. Word on the street is it's taken considerable business away from the Hard Rock.

But according to some reports, the tables are empty.
Not that I've seen. But the gaming area is a long, narrow corridor, with fewer gaming tables than one might expect. It gives the impression of being jammed pack, even overcrowded, since it's small. It's not like the other bigger casinos where gaming is a focus, with big rooms, high ceilings, many tables, varying limits, etc.

What about the design of the place?
Overall, the design is not my favorite. It's jammed into a small area on the Strip. But it is cool, with that artistic chandelier as the centerpiece. Still, despite the opulent and cool appearance, the narrow and small design as well as the escalators going up to the second and third floors where the restaurants and stores are (gaming is on the main bottom floor) give the feeling of a high-priced mall.

What about the Cosmopolitan's clubs? If I'm throwing a bachelor party, do I definitely need to schedule a stop at the Marquee?
I haven't been to the clubs since my married-life-with-three-kids scene is more favorable to the club scene. But the buzz is good on the Cosmo clubs. They seem to be doing just fine, and have no shortage of celebrity guest hosts and top DJs.

How's the future looking for the Cosmo?
Since there won't be another big casino opening up anytime soon, they have the market cornered on fresh and new. It'll remain a place of interest, until the novelty wears off.

(DealBook: Deutsche Bank's $4 Billion Bet)

(Related: What Deutsche Bank Has That Goldman Sachs Doesn't)