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Playboy Opening Casino

LAS VEGAS — Some 20 years after changing tastes prompted its demise, the Playboy Club is rising again in a city always on the lookout for the next temptation.

Those fabled cocktail waitresses in bunny ears and that hipster lifestyle embodied by aging icon Hugh Hefner will be getting a second chance to woo a new generation of cool cats at the Palms Casino Resort here, starting Oct. 6.

Unlike the Playboy Clubs of the past, done in by mediocre food, boring lounge acts and a dated image, this one is banking on America’s seemingly insatiable appetite for gambling. Its 21st Century bunnies will be dealing blackjack and spinning roulette wheels in addition to their traditional duties of delivering drinks and flaunting cleavage.

Their compact new bunny hutch on the top floors of the Palms’ “Fantasy Tower” will sport custom details that only high rollers could support, from $275,000 black-crystal chandeliers to $300-per-square-foot alligator skin wall coverings. With a capacity of just 500, it targets a more exclusive audience than the original mass-market operation, which had 800,000 “keyholding” members as recently as 1982.

This scaled-down Playboy Club is bankrolled by George Maloof Jr., whose billionaire family owns the Palms, as well as by the N9NE Group restaurant and nightclub chain led by Chicago natives Scott DeGraff and Michael Morton–whose late father Arnie developed the original clubs for Hefner in the 1960s, and whose brother Peter co-founded the Hard Rock Cafe.

Chicago-based Playboy Enterprises Inc. put up no cash but supplied a license, its photo archive and the 80-year-old “Hef’s” creative guidance.

Some of the same qualities that made Playboy Clubs a hit in their early days almost half a century ago will be at work today, the partners say.

“It was a matter of paying homage to the past in a modern, contemporary style,” said Morton. “It’s smaller, more intimate, higher quality. It smells of wealth and money.”

Maloof said the club’s basic proposition should be an easy sell: “Playing blackjack in a very intimate setting with very pretty girls around appeals to people.”

Naturally, not everyone sees a winner in the making.

“People will go for the novelty factor, but in this day and age what’s the staying power of seeing fully clothed women?” asked Marc Bell, chairman of competing Penthouse Media Group, which operates 10 high-end strip clubs and plans to open four more this year. “It’s old thinking. Ours is much more hip.”

N9NE Group’s DeGraff promises that the bunnies will measure up to modern definitions of sexy. “When you see the bunny costume and the women in it … best women in Vegas,” he gushed. “I highly doubt anyone will get tired of seeing our staff.”

The debate over the new venue’s tameness illustrates how times have changed since the Playboy Club first started ushering in the sexual revolution on a frigid February night in Chicago 46 years ago.

Hef already had made Playboy magazine a success, and the club enabled him to bring the sex fantasies of his generation to life, combining cabaret-style entertainment with the lure of the bunnies.

The clubs expanded into a far-flung chain that gradually lost its charm over the years, eventually attracting more conventioneers than swinging singles. By the late 1970s Playboy’s separate casino operation in the United Kingdom paid most of the bills.

When regulators abruptly kicked the company out of gaming in the early 1980s the clubs’ weak economics were exposed. Losses mounted and prized real estate such as the resort at Wisconsin’s Lake Geneva was sold.

A last-ditch salvage effort by Chicago restaurateur Rich Melman fell short, and in 1986 Playboy took a $13.6 million charge to close its three remaining company-owned clubs in Chicago, New York and Los Angeles.

Now, with its clubs long gone and its magazine losing money, Playboy’s biggest single business is selling explicit programming through pay TV. Its stock is under pressure, and the company is counting on its licensing arm to come on strong.

Last week, as she announced a management shake-up, Chief Executive Christie Hefner praised licensing as “our fastest-growing and highest-margin profit center” and voiced high expectations for the Palms opening.

“We think this is the perfect time to bring the Playboy brand to life in Las Vegas with a multifaceted entertainment venue,” Hefner said. “It’s another avenue of allowing fans to experience the Playboy lifestyle first hand.”

At least one institutional shareholder has criticized Playboy for selling a license rather than operating the club itself, but analyst Robert Routh of Jefferies & Co. likes the terms of the deal, especially considering that the clubs failed when Playboy ran them.

“They don’t want to be there again,” Routh said. “They get a cut of sales and winnings, and if it doesn’t work they aren’t economically exposed.”

Indeed, the hospitality business demands an intense focus that DeGraff and Morton are accustomed to providing.

Last week DeGraff supervised the finishing touches at the club, directing a carpenter to cut a space in the side of the bar so bunnies can pick up drinks more easily, and fretting over magnetic wall tiles stamped with the rabbit-head logo that wouldn’t stay tacked down.

Dressed in shorts and sandals, waving at blueprints with an unlit cigar, DeGraff proudly showed off the 60 video screens along one wall displaying pictures of Hef, his youthful girlfriends and Playboy magazine covers from long ago.

A gray-haired contractor working at the site looked up just in time to see a 1978 cover with country singer Dolly Parton flash on a screen. “Dolly?” he mused aloud. “That’s going back a few years.”

The target market for this club is not the college crowd–too poor–but rather 30- to 55-year-old men with money, and the twentysomething women some of them chase.

A similar crowd already frequents the Palms, a boutique property about a mile off the Las Vegas Strip. Besides a casino, the Palms’ big attraction is its Ghostbar nightclub, Rain dance club and N9NE steakhouse, hotspots run by the N9NE Group that draw a sprinkling of celebrities as well as attractive, expensively-clad partyers.

The Playboy Club will be sandwiched between a new N9NE Italian restaurant on the floor below it and a penthouse dance club above with a dramatic retractable glass roof.

Patrons shelling out the $20-to-$50 cover charge will be free to move between Playboy and Moon, the dance club, which also holds 500–much smaller than most new Vegas dance spots.

Playboy may license clubs elsewhere in the future, but this particular format is likely to be one of a kind, said Maloof. “You can’t open it across the country because of the gaming.”

If all goes according to plan the rich, famous and beautiful will sashay in, while the rest hang out at the velvet rope. “There’s going to be very long lines here,” DeGraff predicted.

As DeGraff supervised the final construction details last week his partner was busy scrutinizing wannabe bunnies.

“I’ve interviewed every bunny server and, believe it or not, it’s grueling,” Morton said. “They’ve got to be fun, caring, smart, sexy. It’s a very difficult hire.”

Few of the women chosen to be bunnies had previous experience as dealers or croupiers, so those destined for the gaming tables were hired awhile ago and sent to an intensive gambling-school program. As of last week, though, not all the cocktail-server jobs were filled.

Women from around the world applied, Morton said, drawn by the allure of the brand as well as the prospect of “six-figure-plus” annual earnings.

The club will open at 7 p.m. and close at 4 or 5 a.m. It will be loud, and successful bunnies will need to fight through the crowd with drinks as adroitly as they chat up select customers.

And, of course, looking good in the uniform is essential, even in the wee hours after a long shift of la bunny vita. As Morton noted: “It’s a very strenuous work environment.”



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