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.
Each sports book will include new television screens at individual seats and improved electronic displays for betting lines. Some will receive entirely new viewing screens.
Green Valley Ranch won’t be the first Station Casinos sports book to be upgraded. The renovations will roll out beginning this week at Boulder Station where you’ll see new TV screens just in time for the NCAA basketball tournament.
The big change at Palace Station and Boulder Station is that sports book staff will no longer that to update odds and point spreads by hand. Welcome to 1985!
The most interesting note from the article unrelated to the renovations is this: “The growing influence of mobile sports wagering has led to a nearly 53 percent increase in Nevada’s sports betting handle since 2010.”
Station Casinos owns a lot of land all over Las Vegas. Eventually they’ll use at least one of these plots of land to build to build a new casino.
According to the Las Vegas Review Journal these are areas of land Station Casinos will still own to develop a casino.
70 acre site near the intersection of Durango Road and the 215 Beltway
58 acres near the intersection of Flamingo Road and the 215 Beltway
45 acres on Via Inspirada near Bicentennial Parkway in Henderson
30 acres at the intersection of Boulder Highway and Oakey Boulevard
76 acres adjacent to the Wild Wild West, which is on a 20-acre site near Tropicana Boulevard and I-15.
There are no plans to develop a new casino or to expand the Wild Wild West property but it’s interesting to see that Station Casinos has a good amount of land all over Vegas. Despite possible traffic congestion in some of the areas each location is fairly easily accessible.
Station Casinos is selling land that they own that’s south of South Point. That’s farther away from the Vegas Strip than South Point and towards California. I live on the opposite side of Vegas and think that this land would better used for a mall than a casino (since I’ll never go out there).
If I had to choose the location of a new project I would like to see Wild Wild West expanded. The location would be good for tourists and accessible for locals who want to be near the Vegas Strip.
Red Rock Sports Book Screens Coming To Green Valley Ranch Soon
It seems like every week there’s news about a sports book in Vegas getting an upgrade. That’s wonderful news to me! Last week Station Casinos said that they will be installing the same amazing screens from the Red Rock Resort sports book into another property.
The next Station casino to get the beautiful screen experience is none other than Green Valley Ranch.
Green Valley Ranch is the other top-tier Station property besides Red Rock so this renovation makes sense. The sports book at Green Valley Ranch is already one of the best things about that casino and this upgrade will only make it better. These new screens will probably make the Green Valley Ranch sports book the best you’ll find in the Henderson area.
Station Casinos says that installation on the new screens at the Green Valley Ranch sports book will be in the “near future.”
Each screen at Red Rock took a week to install. I’m not sure I see Green Valley Ranch potentially missing a screen during football season. I’m guessing Green Valley Ranch’s “near future” will be closer to February or March and in time for March Madness, but that’s just a guess.
Not to sound too hyperbolic but between the screen renovations at Red Rock, Green Valley Ranch and Westgate sports books there’s almost no reason to watch a game on the Vegas Strip.
Station Casinos just announced that they’re adding a new football contest to go along with the two popular contest that have been around for years.
The entry fees are so low that there are a ton of entrants. That makes winning the contests difficult. I played the year I moved to Las Vegas but not since. Maybe that will change this year.
Details on all three contests from Station Casinos in the press release below:
Station Casinos introduces the “$750,000 Free Gridiron Glory” Football Contest New contest offers more flexibility and games as well as four ways to win; College and Pro Football “Last Man Standing” elimination contest returns
LAS VEGAS (August 3, 2015) – Station Casinos gears up for football season and moves into the next football contest evolution with the $750,000 Free Gridiron Glory. The new pro-football contest, based on guest feedback, offers many firsts for Station Casinos. The interactive contest utilizes the Boarding Pass Rewards Kiosk to track play in addition to the contest being free to enter. It also gives guests the opportunity to include picks from Thursday games and continues into the Playoffs and Championship game. Station Casinos’ popular Last Man Standing Pro and College Elimination football contests are back and will offer up to $250,000 in cash prizes.
There’s also no better place in town to watch and enjoy all of the excitement of professional and college football games than Station Casinos’ sports books.
$750,000 Free Gridiron Glory Football Contest
Free to enter; each contestant can register for one entry upon visiting a Rewards Kiosk
Players must have a Boarding Pass card or Jackie’s Club Cortez card for signing up at the El Cortez
Registration begins Wednesday, Aug. 5 at 10 a.m.
Guests may make their first picks beginning August 28 for games Weeks 1 through 4
The interactive contest is designed for play via the Rewards Kiosk
Guests make selections and track progress throughout the life of the contest with a personalized “team helmet” that gains yardage across the football field with each correct pick
Players receive instant prizes including Boarding Pass points, free slot play and more each time a touchdown is scored by their “team helmet”
Players advance by making correct weekly team picks; picks can be made on Thursday, Sunday and Monday Pro Football games
Added flexibility allows players to make or change a pick until the sports book closes the lines
Cash prizes and progressing through the football contest
$750,000 awarded in total cash and prizes over the Pro Football season and through the Championship game
Up to $15,000 in cash prizes awarded each week; first place wins $10,000
Additional $5,000 split amongst tiebreakers, in the event of a tie
Advance to playoffs by:
Playing all 17 weeks OR
Scoring four “touchdowns” during the regular season
Playoffs picks include prop bets, over/under and game outcomes for an additional $50,000 in cash prizes
Championship Game
All post-season contestants will be entered to play in the Big Game
Awards another $50,000 in cash prizes
First place winner receives $25,000
Gridiron Glory is available for play throughout 20 sports book and sports lounge locations including all Station Casinos, the Fiestas, Wildfire Gaming properties as well as the Station Casinos-managed El Cortez sports book. Season standings will be available via both the Rewards Kiosk and online at www.sclv.com/gridironglory.
Last Man Standing Pro and College Elimination Football Contests
Contestants will have the ability to win up to $250,000 in the“winner takes all” sports book contest
Available for both professional and college football
The fee is $25 per entry
Each contestant may purchase up to four entries total with a fifth entry for free for both contests
Registration begins in early-August
The weekly contest card will be available in the sports books beginning Monday, September 7, and then available every Wednesday during the 2015 contests
The deadline for signing up is:
College football: Saturday, September 12 at 7:30 p.m.
Professional football: Sunday, September 13 at 9 a.m.
Cash prizes and progressing through the football contest
Pick one winning football team against the contest line weekly
Selections will be made against the point spread listed on the weekly contest card
If a winning selection is made, that entry will remain in the contest for the following week
$75,000 will be the minimum guaranteed aggregate prize for the professional football contest
$40,000 will be the minimum guaranteed aggregate prize for the college football contest
$135,000 winner’s bonus will be awarded to a player who individually wins both the professional and college Last Man Standing contests
100-percent of all entry fees will be returned as prize money and will be awarded to the last contestant remaining
Last Man Standing is available for play at all Station Casinos; the Fiestas; Wildfire Gaming properties including Wild Wild West, Barley’s, Wildfire Sunset, Wildfire Rancho, Wildfire Casino & Lanes and Wildfire Boulder; El Cortez; and Baldini’s Casino in Northern Nevada.
All Station Casinos’ football contestants must be 21 years and older, present valid identification to participate and be a Boarding Pass or Club Cortez cardholder. Complete rules, details and prize redemption information for all of the football contests are available in the respective sports books and at the Rewards Center at all participating properties. Management reserves all rights. For more information about Station Casinos, visit www.sclv.com.
When I first moved to Las Vegas I had a choice of 3 casinos to call home. Red Rock Resort, Suncoast and Rampart are all within the length of a song of where I live. I chose Red Rock for a few reasons (there’s an old blog post on it somewhere) but you probably know one of the major reasons is because the sportsbookbar is almost like my local bar.
This kind of philanthropy is almost as endearing as their 9/6 Jacks or Better video poker. I feel a little less awful when I lose money with Station Casinos. Just a little.
The “Month of Honor” promotion with Veterans Village is a huge expansion on the offers they’ve given to military persons in the past. Instead of trying to paraphrase the information I’ll offer the details in the HUGE press release:
LAS VEGAS (April 27, 2015)- Station Casinos will launch a month-long fundraising effort to raise awareness and funds for homeless veterans and their families who reside at Veterans Village located in Downtown Las Vegas. Proceeds raised throughout May will benefit Southern Nevada’s only 24/7 crisis intervention and housing facility that cares for our local homeless veterans and their families. From May 1-31, all 19 Station Casinos properties and venues including the cafes, casino bars, bingo rooms, spas and gaming areas including designated slot machines, designated blackjack and poker tables will be themed patriotic to signify where the Company will donate a portion of its proceeds and gaming winnings.
MyVegas rewards work differently for me than most people since I live in Las Vegas. Locals receive different rewards so the change in room reward terms for MGM Resorts hotels don’t affect me. I’ll take my one night at a Station Casino and be happy. However…
…the MyVegas group on Facebook was flipping out because they can no longer redeem 10 days of free hotel room rewards for an almost free 2 week vacation. See below for more information on the new MyVegas room reward terms.
Effective April 1st, all comp room rewards from all MGM properties will be limited to one redemption per trip. This change was necessary to ensure an appropriate balance of value between our players and our partners. Rewards offered through myVEGAS are provided by our rewards partners who may at their discretion attach certain restrictions based on their business needs.
For players who purchased a comp room reward from MGM prior to the change of terms: you will be allowed to redeem under the previous terms on the reward. Just read your confirmation email for the exact terms and conditions of your reward.
Special Rate and Percentage Off Room Rewards can still be combined with our room comp rewards for multi-night stays.
Please know that we value you as a player and hope that you agree that even with restrictions, our program provides benefits of a substantial value. We truly regret if the limitations are problematic and you have been unable to take advantage of some rewards that you had planned to purchase. As always, we appreciate your feedback and always take it into account when planning our future rewards offerings.
Caesars spokesman Gary Thompson couldn’t comment on the debt restructuring efforts but said that, if the company does go through bankruptcy, there wouldn’t be any change in the way properties are run. He said the Total Rewards program would remain intact as well.
This should be true. When Station Casinosemerged from bankruptcy back in 2011 their Boarding Passplayers club remained in tact. The restructuring may have changed which properties the parent company owned but it didn’t affect most of the operations. If anything it’s safe to think that Total Rewards will change after bankruptcy like Boarding Pass did but it won’t just go away.
Things won’t be the same when Caesars emerges from bankruptcy but, based on this previous casino bankruptcy case, you shouldn’t have to rush and cash in your Total Rewards points.
If you take the Caesars spokesman at his word (you probably shouldn’t as it’s his job to spin things positively for his company) you have nothing to worry about with your Total Rewards account. That said, this isn’t guaranteed and Caesars has a fairly sketchy reputation (i.e. “we’re charging resort fees because you asked for them”).
If you’re concerned with your points then you should use them. If you’d like to use your Total Rewards points but can’t make it to a casino you can now use them to buy various non-casino related items. See more info here.
I’m connected to a mobile device or computer all day so it’s not too surprising that I’d be so active with my sports betting apps. Mobile sports betting is only a few years old and I didn’t think that it was catching on too quickly. I think that thought can go out the door.
In an interview with Vegas Seven magazine Station Casinos Race & Sportsbook Director, Chuck Esposito, estimates that almost 1/3rd of their handle comes from mobile wagering.
Station Casinos was one of the first to offer mobile wagering within Nevada’s borders with its Sports Connection. How much of a game changer has that been?
It’s been a huge game changer. It’s a phenomenal piece and added a new dimension to what we have to offer. It enables a guest to have the sportsbook in the palm of their hand; they’re able to get on their smartphone exactly what they get when they come into [a sportsbook]. Educated guess, mobile wagering probably makes up roughly 30 to 33 percent of our overall handle. And it’s going to continue to grow. We’ve only scratched the surface of it right now, but there are things coming down the pike that are going to expand that offering industry-wide.
Before reading this I would have guessed that Station Casinos handle from mobile would have been closer to half that number. Station tends to have an older and less sophisticated customer who doesn’t seem to be very mobile-centric.
Looking for a comparison I checked in with William Hill to see how their mobile hold compared. William Hill has a slightly larger hold of 36% from mobile wagering. This isn’t too surprising in hindsight since William Hill is an independent sportsbook operator they have less ties to land-based casinos.
It looks as if mobile sports betting is catching on faster than I thought. These hold numbers are only going to increase as more people get used to mobile wagering. Betting with apps will never take over all sports betting in Nevada since most tourists don’t want to have an account sitting around with funds in between trips but this is a step forward for mobile sports betting.
