Yup, it’s true. Blackstone Group is shopping the real estate assets of Bellagio as it draws down its Las Vegas Strip exposure. At least one Wall Street analyst thinks this would send a signal to the REIT industry that Strip real estate is “undervalued.” MGM Resorts International still holds 5% of the $4.3 billion megaresort and there’s no word whether that sliver is in play, though apparently not. At any rate, CB Richard Ellis analyst John DeCree decreed that a “Bellagio sale could be positive for valuation signal. Given the iconic nature of Bellagio, we suspect any real estate investor with the financial means would likely be at the table, even for a minority stake in the asset.” He added that “a partial sale could appeal to a broader set of interested buyers, considering the potential price tag,” which he did not specify. DeCree strongly implied that Blackstone would get its 2019 purchase price back, which hardly seems like a strong incentive to sell.
Even so, DeCree thinks a Bellagio flip “should be a solid signal to public markets, particularly for companies with significant real estate exposure on the Las Vegas Strip.” However, 15 years after Steve Wynn erroneously predicted an “unbundling” of the Strip, resorts remain agglomerated in precious few hands. Caesars Entertainment seems either unable or (more likely) unwilling to pull the trigger on a Flamingo sale, nor do the Phil Ruffins or Wynn Resorts of this world appear interested in liquidating their enviable real estate. Even DeCree seemed to question his argument, calling a Bellagio sale “a quick way to raise money. There are probably a lot of interested parties, but only a handful of buyers that are equipped to get that done quickly for Blackstone.”
In a subsequent interview, DeCree allowed that there was ” big disconnect. I think that if Bellagio traded, that would be a big enough M&A–a multiple that would remind people what Las Vegas Strip casinos could be worth. It’s probably short lived, given the turbulent market conditions we’re in, but M&A is always a good reminder to public markets what a strategic or financial buyer would be willing to pay and what the real value of some of these assets is.” Even so, his preferred scenario had several partners carving up Bellagio into small fiefdoms of ownership, 20% here and 50% there.
Whatever happens, don’t expect a Cosmopolitan-sized payday for Blackstone. It may have garnered that distressed asset for $1.7 billion and sold it for $5.6 billion, but that was a special, bankruptcy-influenced case. Your average Strip resort simply doesn’t accrue value exponentially, no matter how great it is.
Las Vegas. It’s not just for the beautiful people anymore. For the second time in a week, Sin City gets to take a victory lap, this time courtesy of LawnLove. The latter just deemed Vegas to be America’s fifth-geekiest city. (Where was this accolade when we were living there and nerding out at the annual Star Trek Convention?) The metrics for this honor are solid. Las Vegas is fourth in the nation in the number of comic book stores, third in stores participating in Dungeons & Dragons events, as well as third in costume stores. Plus it’s fifth in the number of comic cons. As geekdom gradually gains respectability, let’s hope these numbers cause the Las Vegas Convention & Visitors Authority to get in touch with its inner geek. Sports teams are all well and good but nerdism never goes out of season. With a 42.76 geekiness score, Las Vegas is breathing down the neck of Chicago (43.35), if far behind leader New York City (84.44).
Cretinous Maine gaming regulator Milt Champion did the absolute minimum to keep his job—and got away with it. The fossilized Champion admitted that calling women “bitches” and slurring Black Lives Matter protestors was “a mistake” (ya think?) and claimed that such language was intended to be “humorous.” We see nothing funny about the matter, even if he used his personal account to disseminate his bigotry. Champion got a slap on the wrist in the form of five days’ unpaid leave, accompanied by training on workplace harassment and social media apologies. Champion was born in 1951 and his social attitudes seem to be stuck back in that era. The State of Maine would do well to find a more credible, less out-of-touch leader for its regulatory regime.
Who polices the police? That’s one of the questions raised by the impending trial of suspended Las Vegas Metro officer Caleb Rogers. The cop-turned-crook allegedly robbed three Las Vegas casinos to the tune of $165,000 while serving as an active-duty police officer. And he used his service weapon as an instrument of persuasion. We’ll give casino security a pass on this one, as confronting an armed robber is a bad idea, especially for the Paul Blarts of this town. Prosecutors says Rogers robbed The Rio and Aliante Casino to relieve the press of debts brought on by degenerate gambling, and their case is pretty compelling. Perhaps Metro should vet its personnel more carefully in the future.
Jottings: Seen at Red Rock Resort last weekend—convicted sexual abuser and failed casino owner Donald Trump. While Red Rock owners the Fertitta Brothers could have given Trump some valuable advice for running his planned Florida casino, it’s doubtful that The Donald would have listened … Congratulations to RuPaul’s Drag Race. The Flamingo-based show racked up its 500th performance Saturday night, in what’s called “the most sickening eleganza extravaganza in Las Vegas herstory” … What does the latest ruling in the Seminole Tribe‘s running legal battle for sports betting mean? Gaming attorneys Daniel Wallach and I. Nelson Rose reach completely opposite conclusions (and that’s a close as we’re going to get to sports betting today) … Bart Blatstein‘s new water park in Atlantic City flew under the radar, opening quietly on July 4. This relaxation of a mandated July 7 opening enabled the Showboat to take advantage of holiday crowds, albeit without the benefit of advance publicity.