JOHN L. SMITH: Las Vegas strip clubs waging high-stakes cash-for-customers war

When the cab pulled up outside Rick's Cabaret Gentlemen's Club, the driver might not have fully appreciated he was about to set a Las Vegas record in the ongoing topless/taxi war.

He delivered four customers over the weekend and was tipped $100 by the club for each one. That's right: a $400 "tip" for dropping off riders.

While casino resorts are slashing prices and bringing out bargain rates for rooms, food and fun, Treasures and Rick's are leading an unprecedented increase in the cash-for-customers game. One industry source says Treasures upped the ante as high as $105 per customer. (A Treasures manager said $105 was "high," but "we are very competitive. That's all I can really tell you.")

At the moment, the top rate is a C-note per paying customer. Customers pay an average of $30 apiece to enter the club, and some clubs have taken to charging up to $25 for two Coronas in an effort to recoup the tip out.

Now that they've raised the stakes, other clubs must follow suit or suffer a drop in business. Like a high-stakes poker player, Rick's CEO and President Eric Langan says he has no intention to be outbid in the topless-taxi war and is willing to write off the expense as the cost of marketing his publicly-traded chain of topless cabarets.

Other club owners, not all of whom are comfortable identifying themselves out of a concern for being blackballed by drivers, are watching their profits take a beating as the taxi and limo drivers play one topless joint against the other.

It can't last forever; there will be plenty of casualties as clubs fall back and fade to black.

"It's escalating, that's for certain," Langan says. "It was locked at 50 bucks forever. You know what happened is, a lot of the other clubs started basically cheating on the agreement. ... I just got tired of it. I said, 'We're done with this.' We tried to play fair. We tried to play by whatever everyone agreed to do. Basically, we were forced to use the nuclear option. We're a big company. We'll pay more than you guys until everyone wants to play fair."

At Sapphire Gentlemen's Club, managing partner Peter Feinstein shrugs at the run-away tips, but he admits his 70,000-square-foot Industrial Road cabaret will continue to pay to play. He wonders aloud whether Rick's is upping the ante to increase its name recognition.

"They're new here in town and maybe they're trying to make a statement," Feinstein says. "I don't know exactly what their overall marketing philosophy is. They must be trying to make a statement because that's a big statement."

From such statements are bankruptcies made. If not from the larger clubs that can afford to fade the increase, then from those that fall behind. Without cabs dropping off a steady supply of cash-and-credit-card customers, many of the clubs can't make it.

Not surprisingly, cab and limo drivers are taking advantage of the opportunity. They'd be silly not to.

But it's not all gravy.

They're forced to tip Strip resort door personnel. The drivers' score is slashed substantially by the curbside concierges.

Informed sources say the increased competition is leading to heated arguments as drivers and doormen cut their deals.

Another twist: Casino hosts are entering the lucrative game. Club owners recently told me they've received calls from hosts who once asked for high-roller favors but now want a piece of the action.

"We're here for the long term," says one owner who asked not to be identified. "We believe in hospitality. We're truly interested in guys coming back and recommending their friends. I'm just afraid the industry as a whole is going to be hurt by this."

Whether they're being hurt more from the recession overall or the local topless/taxi war, there's no shortage of stories of local clubs quietly being placed on the market.

Why should you care what goes on in the topless racket and the underground Las Vegas economy?

It's simple. The local economy depends heavily on the success of the adult nightlife business. Cabarets rake in millions, and the cash circulates constantly throughout the valley. Strippers, cabbies and limo drivers pay a lot of bills in Southern Nevada.

So where will the topless/taxi war end?

A Treasures manager whispers, "I don't think anyone knows at this point."

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith/.