Last week we found out that the Hard Rock Hotel and Casino was in foreclosure and that the property would be put up for public auction. This week we come to find that this was much ado about nothing and the lenders and Hard Rock have come to a settlement on the finances and that the auction was canceled.
The agreement removes the need for a last-minute hearing before Nevada gaming regulators to approve Navegante Group to run the property should the lenders have succeeded in foreclosing on the Hard Rock.
Oh well, the Hard Rock will not be changing owners or names or anything. That’s too bad, I was hoping for a new Ed Hardy Presents: Hard Rock Hotel. Maybe another time.
Tropicana renovations have been fun to watch and are probably fun to be a part of. However, in the short term they’re having very little financial effect as people are still discovering (re-discovering) the casino. In fact, the casino is losing more money than they were a year ago.
Net revenue of $13 million was down from $18.8 million during the third quarter of 2009 and the property lost $11.3 million vs. a loss of $9.6 million in the year-ago quarter.
Renovations are still only about halfway done and from everything I read they are fantastic. Still, one has to wonder if they will ever have a positive effect on this property that was dying a year ago. I hope and expect only good in the future as it’s hard to get worse than death.
The New York Times had a not-quite-news article about the poor economy in Las Vegas this weekend. Most that read ECG know that Las Vegas, like every other casino market in the USA, is down.
Las Vegas was hit particularly hard as they had the largest real estate crash to go along with everything else. On top of that, Las Vegas isn’t the only gambling market in the country any more.
“Am I worried?” Mr. (Billy) Vassiliadis, (the chief executive of the advertising agency that represents the Las Vegas Convention and Visitors Authority) continued. “Hey, listen, I wish we could go all the way back to before Atlantic City opened. By my nature, I like monopolies as long as they are my clients.”
Everything in the article is fact, but like most newspaper articles it had an angle. That angle is that Las Vegas’ economy is doing poorly.
Of course, Las Vegan’s (I thought a Vegan was something different) took objection pointing out the positives in the market. Doug Elfman from the Las Vegas Review Journal got super defensive in response to protect his home town.
I’d quote the article, but I don’t want to get sued by the LVRJ. Elfman is generally a very good writer but this piece comes as whiny as it does protective of the city. So, I’ll quote myself for emphasis.
So? The truth? Like everything in life it’s in the middle. Yes, things in Las Vegas are down but clearly some of the market has learned how to move forward and are doing so.
Of course, I’m rooting for things to get better in Las Vegas. There’s no better place in the country to lose yourself for a day, night or week. There are so many things that I can root for in Las Vegas.
Sports betting definitely has an effect on an peoples pockets, but Las Vegas’ legal sports betting is have a a nice effect of their economy. At face value it’s a little lower than one might think.
Last October, for example, Clark County’s 109 sports books accepted about $59 million in straight-up wagers on football (both pro and college) a week. They took about $2.9 million more in parlay-card action per week. The books kept more than $2 million a week of the nearly $62 million wagered on football. Multiplied by the 17 weeks of the NFL regular season, that’s more than $34 million of football sports-betting revenue—and that doesn’t include the playoffs.
The vig alone on sports betting at casinos is 10%, so if the books are able to get even money on both sides they should see a nice profit from sports betting. The current pace is well below that at about 3.4%. Still the casinos are making significant money and the winnings should go back to the norm at some point.
The Veer Towers at CityCenter opened this week. The towers are the kind of cool, crooked looking condo buildings at CityCenter. About 100 of the 600 units have been sold and closed with just 6 having moved in. The Las Vegas Sun looks at overall condo sales at CityCenter.
With no casino and no gambling, I don’t see myself reading and sharing much about Veer Towers. Keep up with the towers at their website.
There have been rumors about an NBA team moving to Las Vegas for at least five years. Those rumors are fueled again with talks of a deal being in place if Las Vegas builds a new arena for a team.
“We have an NBA team under contract,” Milam (Chris Milam, CEO of International Development Management LLC) said, declining to name the franchise. But the deal will take effect only if “other pieces of the puzzle fall into place: One of those pieces will be that a building (arena) is approved,” he said.
Detroit Pistons: The Pistons are mentioned specifically in the article because Karen Davidson, the widow of the long-time owner Bill Davidson, has said the team is for sale. Detroit’s economy, of course, is getting killed, and that, combined with the team’s increased struggles, has caused the Palace of Auburn Hills to be sparsely populated, even though it’s outside of the city. Odds: 3-1
New Orleans Hornets: The Hornets’ money problems are no secret, and they just fired the very competent Jeff Bower as their GM. Oh, and they might trade away their best asset in Chris Paul. Also, they’re probably for sale, though you never know with George Shinn. Odds: 3-1
…because this is a Chapter 11 filing backed by the key creditors, it’s likely the Riviera Las Vegas and the Riviera Black Hawk will operate normally through the bankrupty process.
This is backed by the bulk of the companies creditors, so don’t expect Riviera to go away too quickly. Hopefully this reorganization includes renovations and cleaning up of one of the last remaining casinos from the old strip. Sometimes I’m nostalgic.
It shouldn’t be a surprise that Las Vegas earns more than Atlantic City on things other than gambling. However, it’s a little shocking – not surprising – to see how much Las Vegas’ percentage of revenue comes from sources outside of gambling versus Atlantic City.
…But Atlantic City still has a long way to go before it can reach Las Vegas’ level, where about 60 percent of revenue comes from nongaming ventures, said Cory Morowitz, of Morowitz Gaming Advisors LLC, in Galloway Township.
Last year, nongaming revenue in Atlantic City was probably less than 10 percent after discounting comped goods, Morowitz said.
“I don’t think we can get to 60 percent,” he added. “We just don’t have the room size that Las Vegas has. Rooms are the biggest driver.”
As I mentioned there’s no surprise that the nongaming revenues are greater in Las Vegas than Atlantic City. Las Vegas has put a lot of effort into creating those revenue streams for better or worse.
Borgata was the first casino to really put effort into creating nongaming revenues and Harrah’s Resort and Tropicana have followed suit by enhancing their club experiences. Bally’s is starting down that road by renovating their properties (Claridge and Wild Wild West) and Harrah’s is considering rebranding Showboat.
These are all good steps to separating Atlantic City from the rest of the East Coast casinos that have been popping up over the past few years.
In addition to expanding their club scene I think (actually, I know) that better restaurants and more shows need to follow to grow this revenue stream and separate Atlantic City from the rest of the casinos.
The time has come for advertisers to find another way into your head. It was only a matter of time before idle slot and video poker machines at your favorite casino had ads running.
Enter Reel-TV, a Henderson company that has patented technology enabling television ads and other marketing messages to appear on slot machine video screens while not in use. Last month, frosty bottles of Bud Light began materializing on video poker screens inside the main entrance of the Palms, like hallucinations induced by the desert heat.
Over the past few years advertisements have popped up in almost every free space marketers can find. No area is sacred anymore. This shouldn’t surprise anyone. Like TV’s in supermarket lines, I expect to see this spread rapidly, so get ready for ads and casino promos everywhere you look in a casino.
The Las Vegas Sun is reporting that $1.2 billion in construction permits for Fontainbleau were pulled earlier this month.
The permits listed a variety of projects, including casino, hotel and restaurant remodelings, miscellaneous commercial structure work and parking structure modifications.
All the permits were issued June 10 and the total value of all 47 permits exceeds $1.2 billion.
Representatives of Icahn Enterprises and Taylor International did not return calls clarifying whether there are any plans to resume construction at Fontainebleau..
I’m not sure that the market needs more room supply, but there may end up being room for Fontainebleau. Carl Icahn seems to keep his hotel and casinos in the mid-level price range. Most of the new casinos/hotels built over the past few years are high end, so Fontainebleau wouldn’t likely be direct competition.
This looks to be a forward looking move as construction likely wouldn’t be finished for another 18 months or so. I wouldn’t imaging construction would start in the summer, but ya never know.