Richard Schuetz writes today that “the reality of casino company board rooms is that they are overwhelmed with way too much testosterone.” That certainly seems to be the case at Station Casinos, which has announced seven projects to be executed over the next seven years. Overreach much? A company that took 39 years to reach its present size intends to double it in less than eight. Company President Scott Kreeger told the Las Vegas Review-Journal, “There’s no one more bullish on Las Vegas than Station Casinos.” That much is obvious. And the economic auguries are positive, with credit card delinquencies in the Las Vegas Valley running very low, among other favorable economic indicators. The area population is 24% larger than it was before the Great Recession and gross gaming revenue is 15% higher than before the pandemic (but 8% lower than in 2007).
Once Durango Station is complete, the company plans to build no fewer than three major resorts simultaneously. They’re going up against Michael Gaughan, next door to massive South Point, building out their 46-acre Inspirada site and and developing 47 acres in Skye Canyon. The last time Station tried building even two casinos at once—Red Rock Resort and the former Aliante Station—the result was a disappointment, to put in gently. So you’ll forgive us if we find Kreeger and CEO Frank Fertitta III a bit foolhardy. If the economy goes south (admittedly a big “if”) they’ll be caught with their pants down. Some of the tab is meant to be covered by sales of the non-gaming-entitled sites of Texas Station, Fiesta Rancho, Fiesta Henderson, and some Cactus Lane real estate but there don’t seem to be many takers yet and the Cactus land has been on the market a long time without being snapped up.
Station’s not done yet, having additional pipe dreams in Summerlin, at the far west end of Flamingo Road, the Days Inn at Wild Wild West site and long-in-abeyance Losee Station, about which the company has been more assertive of late. (That project was initially intended as a cock-block to Boyd Gaming‘s planned “Northern Highlands” casino but the latter never got built, leaving Station with 66 acres of scrubland not zoned for gaming.) As though to allay concerns about spendthriftiness, Kreeger says the Inspirada and Skye Canyon projects will be half or a quarter the size of $750 million Durango Station but the proof will be in the pudding. One analyst who is optimistic is the Strategy Organization‘s Josh Swissman, who told the R-J, “they don’t have what I’ll call ‘a false sense of urgency,’ meaning once they acquire a piece of land, they’re quite happy to sit on it for a while until it really becomes the right time to just start to build on that land. The Durango Station project is a great example of that.”
Others, ominously, are raising the $11 billion spectre of Viva, saying that Station might compete with the Las Vegas Strip (again). If Fertitta and Kreeger didn’t learn from the Palms Casino Resort disaster they never will, and another go at Viva might be enough to break the company’s back (again). The San Manuel Band of Mission Indians seems to having a tough go of it at the Palms, so Station might advisedly think twice about revisiting the scene of previous failures. The company’s leadership may be imbibing its bathwater right now but if Viva comes back around like a bad penny then they will have certifiably lost their minds.
The movers and shakers are beginning to be chosen in New York City‘s quest for megaresort casinos. Three members (of an eventual five) have been named to the powerful Gaming Facility Location Board. They are Quenia Abreu, president and CEO of the New York Women’s Chamber of Commerce, Vicki Been, a New York University law professor, and Stuart Rabinowitz, former president of Hofstra University. Assuming the state gaming commission clears all three, Gov. Kathy Hochul (D) will have put a decisive stamp on the board, even should Lee Zeldin pull off an increasingly unlikely upset. Among the criteria are “responsible experience in fiscal matters.” So are significant experience in finance or economics.
Not only are the positions unpaid but those who hold them cannot have any financial interest in the gambling industry. “Nor,” reports The Gothamist, “are they allowed to have any business or family relationship to anyone holding a casino license, or have any holdings in companies that manufacture slot machines or other gambling machines.” This would be Rabinowitz’s second tour of duty (he helped vet upstate casino operators several years ago) but the first for everybody else. Let’s get it right this time.
Jottings: The El Cortez has redone its 47 original rooms, giving them a Cuban flair, in homage to the casino’s mobbed-up origins. Their new look is kind of busy, so bring your Valium if you want to sleep … No, lost gambling revenue due to Covid-19 doesn’t entitle you to insurance reimbursement. The latest gaming entity to get that bad news is the Cherokee Nation. The Oklahoma Supreme Court ruled that the casinos “did not sustain any actual, tangible deprivation or damage to the property.” The Muscogee and Choctaw nations will also be negatively affected by the court’s finding … They’re feeling their oats at Harrah’s Cherokee Valley River Casino & Hotel. The Cherokee are pouring $275 million into a new expansion. Included will be room for 400 more slots, 22 additional table games, a new bar and a new, 296-room hotel tower. As long as Georgia fiddles, North Carolina is making money to burn … December 2023 is the target date for Churchill Downs to complete its Queen of Terre Haute casino. Ground has just been broken and already the cost has crept up to $260 million for 1,000 slots, 50 table games and 125 hotel rooms. “We knew about the soil conditions before we purchased the land. Soil in that part of Terre Haute holds a lot of water and can turn quickly to mud,” explained Ryan Jordan, senior veep of real estate development.
Quote of the Day: “Whatever it is you’re seeking won’t come in the form you’re expecting.”—novelist Haruki Murakimi. Very true.
Management at Station clearly has not learned much from its rather recent rocky past