The resort and gaming industry is in a state of flux and sometimes it’s hard to keep up with all the latest news. Here’s a quick run-down in case there’s a pregnant pause at your next cocktail party or blackjack table and you need some conversational lighter fluid:
Las Vegas is not a company town. There are several different companies that carve up and run our main industry, tourism. Thus, it would be more accurate to call us an industry town. But of course, not everyone who lives in Las Vegas works in the tourism industry, just like everyone in Los Angeles doesn’t work in the film and television industry (wait? they don’t?!). But in a nostalgic nod to the old days when mining towns popped up over night and a single mining company was typically the main employer, often controlling the hotel, saloon, housing and retail enterprises too, I’m going with the vernacular and calling Las Vegas a company town out of respect for the new green and health care industries striving to diversify our economy.
Many Las Vegas locals haven’t set foot inside a casino in years. But just like the non-actors and actresses living in Los Angeles are expected to know a little about the ups and downs of Holly-weird by virtue of living in close proximity to the entertainment business, so too are we Las Vegas residents expected to know a little about what’s going on in our #1 industry.
This point was driven home to me this past week-end when friends from Palm Springs, Scottsdale and Chicago came into town and started asking questions. “Shut up. Just drink your beer and look at all the gorgeous tourists hanging out at Encore,” I urged. But a few of them are married and so we had to have a conversation….
Here goes, a quick run-down of recent news items and events involving the sexy, succulent, sin-licious resort and gaming industry here in Las Vegas:
1a) Yes, a few casino chains have filed for bankruptcy lately. Most notably, Station Casinos declared bankruptcy on July 28, 2009. But all of their properties remain open and appear, at least from the outside, to be operating normally. They own all of the “Station” properties (Sante Fe, Boulder, Palace, Texas and Sunset), Fiesta Henderson, Fiesta Rancho, and have controlling interest in Red Rock, Alliante, Green Valley Ranch, Wildfire casinos, the Barley’s Casino and Brew Pub on Sunset, Gold Rush casino, the Wild, Wild West casino and the Lake Mead casino. They’ve reported about a 20% drop in revenue from a year ago, but arguably the main reason they went into bankruptcy is because they couldn’t afford to service the remaining debt on the $8.7B leveraged buyout that took them private in 2007.
1b) Herbst Gaming, owners of Terrible’s Casino on Flamingo, Terrible Town in Henderson, as well as Buffalo Bill’s, Whiskey Pete’s and Primm Valley, along with a few smaller casinos outside of Vegas, declared bankruptcy back on March 22, 2009 but all of their properties remain open for business too. Over eager expansion before the economic downturn, most notably the acquisition of the three Primm properties from MGM/Mirage for $394M in early 2007 could be blamed for their financial morass.
Conversation lighter fluid? “Should Station Casinos be chopped up and sold off to the highest bidder?”
2) Treasure Island was sold to Phil Ruffin, the former owner of the New Frontier, in March of 2009 for $775M by MGM/Mirage to finance construction costs on the City Center project. Ruffin, a real master of timing, sold the dumpy New Frontier for $1.24B in 2007, paid cash for TI and still has plenty left over to weather these rough economic times. So Treasure Island joins the Palms, Planet Hollywood, the Wynn and Venetian as the most high profile, independently operated casinos on or near the Strip.
Conversation lighter fluid? “What MGM or Harrah’s Strip property will be sold next? My bet’s the Rio. What’s yours?”
3) Casino construction projects currently on hold: Echelon, the Plaza, Caesars Palace Octavius Tower and Fountainebleu.
Conversation lighter fluid? “Do we need to support the construction industry by building more resorts or more solar energy power plants?”
and everyone is holding their breath. Photo courtesy of Walter Bauer.
4) Casino projects NOT on hold: Project City Center, due to open in mid-December; Golden Nugget’s Rush Tower downtown, due to open November 20, 2009.
Conversation lighter fluid? “Is MGM/Mirage really going to reduce the price of the City Center condos they already sold? Did they reduce yours yet?”
5) Most recent casino openings: the second tower at Hard Rock (July 31, 2009); the M Resort (March 1, 2009); Encore at the Wynn (December 22, 2008).
Conversation lighter fluid? “Have you seen the suites at Encore? They’re amazing and like only $100 per night!” or, “Have you been to Hostile Grape yet? It’s the best name for a wine bar ever!”
6) Most recent scandals: closing the nightclub Prive at Planet Hollywood and the topless pool Sapphire at the Rio for suspected prostitution and narcotics sales.
Conversation lighter fluid? “Are casinos responsible for what goes on inside their nightclubs?” or, “If ‘what happens in Vegas stays in Vegas’ turns into ‘what happens in Vegas gets reported to the police’ is my house going to be worth more or less in five years?”
So there you have it, a half a dozen topics of conversation sure to illicit strong opinions. If nothing else, they’re good for throwing out there like a cocktail hand grenade. Walk back over to the bar for another drink and watch the sparks fly ;- )
MLB bets: (last week big upsets on Friday and taking the Nationals even against a AAA Brewers pitcher hurt me. But this week I’m playing my Friday and Saturday picks as parlays.)
Friday:
Red Sox
Dodgers
Rockies
Saturday:
Yankees
Cubs
Dodgers
Phillies
Sunday:
Dodgers
Yankees
Cardinals RL
Tigers
Last Week: 5-4
YTD: 26-19
NEXT WEEK: A LOOK AT FOOTBALL POOLS AND BIG PRIZE CONTESTS!
In the narrow definition of a “company town” I’d concede your point — but in the reality of how things really are here, Las Vegas is part and parcel of how a company town has traditionally behaved. Certain news items tend to be handled with kid gloves in this town and without the leveling-of-the-playing-field in the Twitteresque way, some events would never reach the public domain in terms of current events.
It is challenging to stay current with all of the corporate reorganizations currently underway — which reminds me that I really, really need to update the Who’s Your Host section of this web site.
Mark
Other hot news…. Since so few of the million dollar suites sold at the Trump Tower, most of them have been placed in the hotel inventory list and I’ve spoken with people who’ve stayed in some of these ultra chic and uber modern mini-palaces for as low as $80 per night. I really, really, think I need to explore the notion of staycations and go experience one of these suites myself….
Is it really true, as I’ve heard, that to get the real, unfiltered news about Las Vegas, you are better off reading the Los Angeles Times than either of the local newspapers?
Tom – Well, yes probably. Like Mark mentioned in his post above, Vegas at least in part is run like a company town. Bad news, or news that reflects poorly on the major players is sometimes handled with “kid-gloves” and sometimes it’s only reported by outside media channels..
As regards Prive, I was shocked. Shocked! to learn that, in a place full of liquored up 20 somethings, such things could be going on. 😉