Sometimes I listen to earnings calls and find useful information. Today wasn’t one of those days. I’ll share my notes since I took them. I was expecting more from Red Rock Resorts (parent company to Station Casinos) since this was their first call since going public and announcing their intent to buy Palms.
Interest seemed low from the brokerage houses. There were only 3 questions. That’s less than half of what Boyd Gaming received and maybe about 5% of what MGM Resorts receives. Anyway, enjoy.
Palms
Largest non-REIT IPO of the year.
Palms has 1250 slots and 48 table games – no mention of sports book.
Palms is in one of the lowest areas in Las Vegas for Boarding Pass members.
No plans to spend money on Palms today. Will evaluate how to best spend money in future.
View Palms on par with Red Rock and Green Valley Ranch.
Overall
Gaming and non-gaming up. Slots & tables up. No mention of sports.
It was a rumor yesterday and it’s confirmed today.
Red Rock Resorts Announces Agreement to Acquire Palms Casino Resort
LAS VEGAS–(BUSINESS WIRE)– Red Rock Resorts, Inc. (“Red Rock Resorts”, “we” or the “Company”) (NASDAQ: RRR) today announced that Station Casinos LLC has entered into a definitive agreement to acquire the Palms Casino Resort (the “Palms”) in Las Vegas, Nevada for total cash consideration of $312.5 million.
“With the acquisition of the Palms we gain a leading gaming asset in Las Vegas with key strategic benefits in the Las Vegas locals market and close proximity to the Las Vegas Strip,” said Marc Falcone, Executive Vice President, Chief Financial Officer and Treasurer of Red Rock Resorts. “With its appeal to both Las Vegas residents and tourists alike, the Palms is a hybrid gaming property that is uniquely positioned to benefit from the strong economic trends in Southern Nevada and record visitation levels in Las Vegas. With our experience owning and operating other hybrid offerings in Las Vegas, it is a compelling strategic addition to our portfolio of properties and we look forward to welcoming the Palms’ team members to our Company.”
“We are very proud of our team members for their hard work, dedication and commitment to guest service and the community,” said Palms Chief Executive Officer Todd Greenberg. “We are extremely excited for all the great opportunities our team members will have with Red Rock Resorts and Station Casinos.”
Factoring in anticipated synergies, the Company estimates that the Palms will generate $35 million in EBITDA during the Company’s first full year of ownership, resulting in an implied multiple of 8.8 times EBITDA for the transaction. The Company expects the acquisition to be accretive to earnings per share and free cash flow positive in first full year of operations.
Located directly across I-15 from the core of the Las Vegas Strip, Palms features a 95,000-square-foot casino with approximately 1,250 slots and 48 table games, a race and sportsbook, approximately 710 hotel rooms across two towers with 85 suites and 19 penthouses, 599 AAA Four Diamond award-winning condos, 15 fine dining and casual restaurants (including the award-winning N9NE Steakhouse and Nova Italiano), 60,000 square-feet of meeting and convention space, Ghostbar Nightclub, the 2,500 seat Pearl Theater, luxury spa, two acre Palms Pool and year-round Palms Place Pool, and a 14 screen Brenden Theatres & IMAX movieplex.
The transaction is expected to close during the third quarter of 2016, subject to the satisfaction of customary closing conditions, including the receipt of all required gaming approvals and the expiration of the waiting period under the Hart-Scott-Rodino Act.
Milbank, Tweed, Hadley & McCloy LLP served as legal advisor to Red Rock Resorts, Inc. for the transaction. Macquarie Capital served as financial advisor and Willkie Farr & Gallagher LLP served as legal advisor to FP Holdings L.P. dba Palms Casino Resort.
The Company will discuss the transaction during its scheduled first quarter 2016 earnings conference call on Thursday, May 12 at 4:30 p.m. ET.
Speculating on the future of Vegas is fun. Instead of full-blown posts about specific subjects I think it’s more fun to be short and concise. Here’s my take on two potential moves that would shake things up on the Vegas Strip.
Topic: Now that Cosmopolitan has been sold which Vegas casino will be the next to go? LVH,Riviera and Caesars Entertainment have been rumored to have casinos on the market for a while. Caesars may have multiple properties on the market that they need to sell so they can reduce debt and avoid filing for bankruptcy.
Speculation: My guess is that Caesars will be the first to move. Their current fire sale and shell game seems like a brighter fire than the other two possibilities.
If there’s a dark horse in this race it could be Derek Stevens moving quickly to add the Riviera to his portfolio of The D and Golden Gate. On a personal note, I’d love this. The D and Golden Gate are two of my favorite places to roll dice.
Update: On a detail specific note, you may remember that Stevens owns a small percentage of Riviera. (H/T Chris Robbins on Facebook for the reminder that some people may not know this)
Palms
Topic: What is Dan Lee’s next step now that he’s resigned as CEO of Palms after less than a year on the job?
Speculation: I’m going to speculate that Dan Lee’s next job will be something big. If he has a non-compete clause with Palms or just needs time away from work he might look for a major role with Genting as they open Resorts World Las Vegas.
If that’s too far ahead perhaps a move to another independently operated casino in Vegas might make sense.The Cosmopolitan might make sense as they’ll likely add new leadership when Blackstone takes over operations.
If you’re not familiar with Dan Lee, Vegas Tripping had a really detailed post when he was named CEO of Palms last year.
UFC International Fight Week in Vegas is a big deal with MMA fans all over the world. There are meatheads, dudes and bro’s all over Vegas. Lots of light beer will be consumed and fun will be had. There are MMA related events all over town. I’m sure Vegas Chatter will have more information when we get closer to July.
I don’t know what Lion Fight is and I don’t want to know. If you do a google image search for Lion Fight you’ll find all kinds of awesome. Here are the details on Lion Fight at Palms if you love MMA
Press release:
Scott Kent made the biggest and boldest move yet for the sport of Muay Thai and his LION FIGHT organization in joining with the UFC, for the first time ever, to present a world class full Muay Thai rules event, LION FIGHT 16, as part of the UFC’s International Fight Week taking place in Las Vegas July 1 – 6. UFC President Dana White and Kent, LION FIGHT Founder and CEO, today announced to fight fans everywhere that LION FIGHT 16 will take place live Friday, July 4 from The Pearl inside Palms Casino Resort, presented on the UFC’s roster of fan events and activities taking place in the city’s hottest venues and clubs throughout the holiday weekend.
Use my code MMeltzer5 for $25 off. (I also get $25 off)
Recently I decided to check out hotel tonightfor hotel rooms in Las Vegas. There isn’t a week that passes where I don’t get a message asking where to get a last-minute hotel deal. I’ve heard a lot about the app and the travel people I know speak highly of it. In brief, hotel tonight provides last-minute discounted hotel rooms. The rates are for that night (you can stay up to 5 nights but rates may change) and not next month. As they say, they aren’t hotel tomorrow.
Hotel Tonight doesn’t offer rooms at every hotel – just where they can provide discounted rooms. The other day I did a quick check of rates in Las Vegas and found this basic El Cortez room for $20. It was $40 on the El Cortez website. Nice 50% discount. El Cortez doesn’t have a resort fee but if they did you would have to pay that directly to the hotel. Resort fees are noted when you book. Hotel Tonight doesn’t get involved with that nonsense.
There were rooms available from Hard Rock, Palms and a few other hotels in Vegas. None of the options were awesome but were all clean and cheap places to stay in different parts of Las Vegas.
Hotel Tonight is great for locals like me that may need a crash pad after a night of too much fun. The app is also great for last-minute trips to Vegas. If you’re already in Vegas for vacation you can check the app for a 2nd discount party room or suite. Yesterday there was a Palms suite for under $100. That’s the kind of deal I would get for a last-minute $5 Pai Gow rager.
I’m an early riser and I like to plan my day and night as early as I can. Before today Hotel Tonight rooms were only available after noon local time (anywhere you are). Today that switched. Rooms from Hotel Tonight are now available at 9am. I started writing this at 8 something but rooms for today are now available. Here’s a few options for today. The Palms suite I referenced earlier isn’t shown here but is available once again for $99.
Hotel Tonight has room deals in other cities and is definitely an app that anyone traveling should have. You can download for iPhone and Android.
Britney Spears and I go way back. I first saw Britney at the Meadowlands in New Jersey. It was fun be Britney Spears and I didn’t have a special connection until I saw her at Rain at Palms in Las Vegas. Brit and I had a special connection from that night moving forward.
It was an amazing night that I barely remember. The two memories I have of that night were my friend kissing or being kissed on the cheek by Paris Hilton and Britney Spears’ 3 song performance that I was just a few feet away from. It may have been the vodka (it probably was) but something happened.
Britney Spears will be raking in HUGE STACKS in Vegas this winter — a ridiculous $310,000 per show … nearly $15 million per year — but she still doesn’t hold a candle to Celine Dion.
TMZ is privy to the financial details of Britney’s deal. The 2-year contract calls for 48 shows a year at Planet Hollywood. According to the contract, Britney will earn $310,000 per show.
TMZ also looks deeper into the contract.
Britney’s cut of the gate is huge — projected sales per show are $508,514, meaning Brit will be snagging more than 60%.
If the projected gate for the show is correct and the 4,500 seats that the PH Theater now has (according to Johnny Kats) is correct then simple math says that the average ticket price to see Britney Spears at Planet Hollywood will be $113.
The price to see Britney Spears at Planet Hollywood is a little high but it’s not outlandish given today’s ticket prices for shows on the Vegas Strip. For comparison tickets to see Tim McGraw and Faith Hill at The Venetianbegin at $187.50 on Vegas.com while tickets to see Celine Dion at Caesars Palacebegin at $102.
I’m pretty sure the only way I’ll see this Britney show is if someone gives me a free ticket but you never know. This is Las Vegas and things happen. I’m sure I’ll love the show because I love me some Britney but her new song is a steaming pile of dog crap. Maybe I’m just old. Get off my lawn. Bitch.
One of the first people I met when I moved to Las Vegas was Craig Nyman. He does a lot of things but his passion for music is something that I haven’t found in many people in this town and it’s awesome. He has a blog called Do You Hear The Music and has written concert reviews for a couple other outlets.
People often ask me where the best places to see bands in Vegas are so I figured I’d go to someone who’s out seeing bands much more often than me. Craig hit the places that I would recommend and then some. Enjoy and follow him on twitter.
It just so happens that I live in the city known as the Entertainment Capital of the World. And as such, I will never pass up the opportunity to catch live music in Las Vegas. Here’s a list of some of the spots I frequent.
House of Blues
When Mandalay Bay opened in 1999 and brought the House of Blues to Las Vegas, a new era for live music in the city was born. Today, HOB is still regarded as one of the top venues in town to see a concert continuously booking a multitude of acts ranging from rock and blues to metal and electronic artists, no genre of music is shunned. (Photo: UrbanPhotos)
Hard Rock Hotel: The Joint and Vinyl
The “new” Joint has put itself on the map as one of the best concert venues in the country and at a max capacity 4,000 you regularly have the chance to see major bands that typically play 12,000-15,000 seat arenas in an intimate setting. Plus the acoustics and sight lines are second to none so you’re going to have an incredible experience at The Joint. (Photo: Sceno Plus)
The newest live music venue, Vinyl is by far one of the best places to catch a show in Las Vegas. The tiny spot gets rocking with a killer sound system and bands seem to respond well to the intimate confines and getting up close and personal with fans.
Quintuplet threat at The Cosmopolitan
You’ve got the BLVD Pool, The Chelsea, Chandelier, Book & Stage and BOND. All five spots play host to live music from rocking concerts under the neon glow of the Las Vegas Strip to a jazz quartet at the sultry Chandelier, you can’t go wrong. I’ve seen some of my favorite concerts at this hotel. I could list them all but it’d go on for too long. Instead just visit my blog www.doyouhearthemusic.com and do a search. (Photo: Vegas News)
The Pearl at Palms
Real simple, great acoustics, solid sight lines, amazing shows in a small venue. With the ability to scale from 1,100 to 2,400 every show I’ve seen at The Pearl has been great. Cool fact, the venue is hard-wired into the recording studio upstairs at Palms; so you never know if that concert you attended may just be released as a live album by your favorite artist.
Hard Rock Café on The Strip
Chances are you haven’t been and that’s your first mistake. This 1,000 cap venue in the middle of The Strip gets some rocking shows and is a great room to catch a concert.
Double Down
A 24/7 Institution. Grab yourself a Bacon Martini or some Ass Juice and embrace the legendary Double Down. Always open and always a good time with a slew of bands performing each night the only thing guaranteed is really not knowing what will happen when you step foot inside the happiest place on earth! (Photo: Vegas Seven)
Downtown Spots
Beauty Bar: Until recently, Beauty Bar was THE up and coming indie acts and while the competition has been getting a little fierce, the venue still does a kick ass job of bringing in the stars of tomorrow before. With an intimate stage inside and a backyard patio outside, you get two different experiences at Beauty Bar.
Commonwealth: The new kids on Fremont are cracking into live music with Sundays devoted to performances from talented local musicians. Add in the regular appearances by some awesome DJs and Commonwealth is quickly becoming a place to see sheer talent.
Insert Coin(s): Awesome DJs, video games and stiff drinks – in just two years IC has marked its place on the map for entertainment in Las Vegas.
Artifice: I love this place, what else can I say. It’s cozy, the staff is awesome and you can see some kick ass shows in this spot.
The Bunkhouse: If you’ve never been, put this on your list pronto.
Palms has undergone a major facelift in the past year and it’s still happening while they renovate RainNightclub. This is similar to the changes at Mandalay Bay. The casino never closed but a lot has been closed and reopened as something completely new.
But from the Palms’ perspective, Heraea is the latest upgrade — and, so far, the most prominent gearing up — in the hotel’s new direction. Many of the amenities the Palms was known for (including Gardunos, the original sports book, Little Buddha and Island Bar in the middle of the casino) have been taken apart in favor of freshly designed venues. The next highly anticipated opening is Xi Shi, replacing Little Buddha, which is expected to open by spring.
I used to visit Palms every trip when I first started visiting Las Vegas. It was on MTV and it’s where the good looking girls went….it was where Britney performed and hung out. I’m not sure exactly when but Palms lost its spark but at some point my friends and I stopped making it a point to visit Palms and nobody ever gave us a reason to go any longer.
Since I’ve been living in Las Vegas I’ve visited Palms twice. Once for steak and N9NE and once to see a band. I figure if I’m in that area to gamble I’ll get some B-Connected points at Gold Coast or Total Rewards points at Rio. If I want fun I’ll just head to the strip for the chaos.
I’m not sure that the new additions to Palms are going to change the general blah feeling many have but I’m curious to check out Heraea. I’m just not sure that one bar/restaurant is enough to have me, or anyone I know like me, visit Palms regularly but they get a shot. As the poker players say “all you need is a chip and a chair.” That’s about all Palms has right now, a chip and a chair.
Sunday night news broke that the Maloof family have agreed to terms to sell the majority of the Sacramento Kings. The deal will most likely take the Kings to Seattle.
The Maloof family and minority owner Bob Hernreich have reached an agreement to sell its 65 percent stake in the NBA’s Sacramento Kings to a group led by Seattle hedge-fund manager Chris Hansen and Microsoft CEO Steve Ballmer, the NBA announced Monday.
The Maloof family is probably known as much for owning the Palms casino as they are for owning the Kings. Since they owned both properties wagering on the Sacramento Kings at Palms wasn’t possible due to potential conflict of interest between businesses.
When the Maloof family sold the majority of Palms to TGP Partners this banished the Boston Celtics from their sportsbook since TGP has interest in Caesars Entertainment. In this deal for the Sacramento Kings the Maloof family will still have a tiny ownership of the Kings which means that the Nevada Gaming Commission will likely see that there is still a potential conflict of interest.
Don’t expect to see the Sacramento Kings available for wagering at Palms until the Maloof family totally divests its entire stake from the Kings or Palms. In other words don’t look for any Sacramento Kings action at Palms any time soon.
Over the past year or so there has been an influx of walk upsportsbooks in Las Vegas casinos. Most recently Cantor Gaming has introduced a walk up sportsbook at The Palazzo and another at Palms.
The walk up sportsbook at The Palazzo is all about convenience and access. Lagasse’s Stadium is located in the basement of the casino and typically only to be found by people seeking it out. It’s also a relatively long haul for someone staying at the hotel since it’s located on the opposite end of the property. The walk up sports betting desk at The Palazzo is in the center of the casino and will catch the casual sports bettor as well as people that are leaving the casino and don’t want to forget to place their bet.
On the surface, the Walk up sportsbook at Palms is a little more curious since the actual sportsbook is only a 90 second walk away. However, the sportsbook is out of site in the corner of the casino that’s more for Vegas locals then tourists. This walk up section is located near the hotel elevators and table games where the tourists and gamblers are. Again, this will reach casual sports bettors.
William Hill has self-serve sports betting kiosks at bars across the whole state of Nevada and offer the ability to bet on sports outside of a casino without even dealing with people.
Even though sports betting only makes up a small part of a casinos bottom line it is growing in awareness with these non-traditional placements. Don’t be surprised that these walk up sportsbooks and kiosks replace actual sit down sportsbooks in the future.
As fantasy football and betting with apps continue to grow in popularity sportsbooks are being filled with people that aren’t generating any income for the casino or sportsbook. Unless all sportsbooks and/or casinos get into the fantasy football business (like Cantor Fantasy) why would a casino dedicate their real estate to people not spending money with them? They won’t.
