Is ‘Bootycoin’ the next big thing on the Strip? Or a tease?
By Todd Prince
Las Vegas is making cryptocurrencies sexy.
Keeping true to its motto, “What Happens in Vegas, Stays in Vegas,” the city will become home to the Legends Room, the nation’s first gentlemen’s club accepting digital tokens.
It theory, this would enable patrons to eliminate the embarrassing paper trails that can destroy a reputation or a relationship. But for the club’s creators, it’s a marketing tool, tapping into people’s desire for something new in the bumps and grinds of a very old profession.
Men can slip a $20 bill into a dancer’s thong at any of the two dozen strip clubs in Las Vegas. But only at the Legends Room will they be able to use their phone to scan a QR code on her body and watch their account instantly decrease as the cryptocurrency lands in her digital wallet.
Nick Blomgren and Peter Klamka, the men behind the idea, are hoping this cryptocurrency experience will attract enough visitors – especially the hundreds of thousands of technology-convention attendees – to make the business profitable. They expect to own the “bitcoin nerd crowd” almost by default.
“Other than this club, there aren’t many places where you can spend your bitcoin,” said Klamka, who has been involved with digital currencies since 2013.
Blomgren and Klamka are offering up to 6,000 “lifetime memberships” to the Legends Room for $5,000 each, payable in cash or bitcoin. The new cryptocurrency, LGD, will trade on the Bittrex digital currency exchange.
The club has raised nearly $2 million since launching the offering in March – including $900,000 in bitcoin – according to Klamka, who is managing the initial LGD coin offering.
Members include Charlie Shrem – a bitcoin evangelist who served 18 months in prison for unlicensed money transmission – as well as a rap star, a venture capitalist, and a wealthy 70-year old, according to Klamka. He said he has never met Shrem, a fellow New Yorker.
Members will receive a Legends token on an app that will give them access to the VIP room, where porn stars and Ultimate Fighting Championship (UFC) fighters will hang out. The VIP room will also include two smaller rooms with booths, where strippers can perform private dancers for $500 or more, said Blomgren.
While he expects guys to pay the hefty fee for the booths, he doesn’t expect the girls to do much private dancing. “Guys just want to hang out and talk with them,” he said as he showed off the booths.
The Odd Couple
Blomgren, 53, and Klamka, 48, at first look make for an odd business couple (pictured left to right).
Blomgren, a martial arts trainer, has the imposing presence of a club bouncer. Sporting a shaved head and dragon-tattooed arms, he stands 6’2” and weighs in at 205 pounds of mainly muscle. But he puts you at ease with his soft speech.
Klamka, a former credit-card promoter from New York, makes up for his smaller frame with a commanding voice that belies his marketing background. He is sporting a black “King of New York” t-shirt with a photo of Laurence Fishburne brandishing a gun. He wears khaki pants with no socks and dark red moccasins.
Blomgren and Klamka met in 2014 as the latter began promoting his bitcoin ATM machines on the shorts of MMA fighter and fellow New Yorker Phil Baroni, one of Blomgren’s trainees. It was a cheap way to get nation-wide TV exposure for his product, he said.
Klamka then teamed up with another fighter from New York to help him sell bitcoin ATMs. His Mike Tyson-themed bitcoin ATM launched in Las Vegas in 2015 with some media fanfare, but hasn’t expanded yet as promised. Klamka said it is unclear when more Tyson bitcoin machines will appear.
Klamka will operate three cryptocurrency ATMs at the Legends Room, but he admits there is little demand for the machines to really scale a profitable business.
Rather, his focus at the Legends Room is on repackaging the digital currency-based membership for other companies and industries. If he can build it, they will come, he believes. “I just need to prove the concept,” he says. “Companies have said to me, ‘we will be there when you execute on the strip club.’”
But before that can happen, Blomgren first needs to complete reconstruction of the strip club and open the Legends Room after multiple delays.
An Initial Canceled Offering
Earlier this year Blomgren bought the closed-down Striptease on Valley View Boulevard, near the Rio Hotel and Casino.
The search for the right location caused Klamka to cancel the first initial public offering of the Legends Room’s LGD tokens… raising the suspicious of some bitcoin enthusiasts about the project’s legitimacy.
“We were selling a membership and needed a facility to do that,” Klamka said in defense of the cancelation.
Blomgren and Klamka said the investment in Striptease, including the upgrade, will be in the seven-digits. That would indicate that they raised at least 20% of their investment needs through the sale of the tokens.
The 16,000-square-foot club will have one room for the general public and another VIP room for members. Both will have a lounge area, bar, and cryptocurrency ATM.
The Legends Room is expected to open at the beginning of August. The club will definitely be ready for the fight between Floyd Mayweather Jr. and Conor McGregor in Las Vegas on August 26, Klamka and Blomgren said.
The club hopes to create a marketplace for its LGD coins by allowing its members to rent out their tokens on a rotating basis. LGD trades freely, and its price is expected to rise on certain days when there is extra demand for access to the VIP room – like when popular adult entertainers, such as Tasha Reign, or UFC athletes make their regularly scheduled visits. Reign has agreed to come once a month to hang out in the VIP room, she said.
Tasha Reign will be paid for her services, of course… in cash.
Todd Prince is the business and gaming reporter at the Las Vegas Review-Journal. He previously worked for Bloomberg News and Merrill Lynch in Russia.