Downtown Grand CEO Seth Schorr is nobody’s idea of a stoner. We’ve met him a few times and never observed Schorr to sport Rastafarian dreadlocks nor light up a spliff. But the Downtown Grand boss would rather be blowing smoke than (as his casino is currently doing) sucking wind. Nobody wants to buy the place, even though it’s been on the market for aeons. Nor do they want to go there. If you want some peace and quiet in Las Vegas, try the Grand’s gaming floor.
Big Gaming gives legal marijuana a wide berth, deferring to the federal government’s stern disapproval. With the current administration spoiling for a fight on every conceivable battlefront, circumspection appears particularly wise. However, Nevada is a cannabis-friendly state and one that’s about to be in a world of hurt: “financial experts cut their projections for state revenue receipts over the upcoming biennium by $191 million and lawmakers anticipate declining room tax revenue in the coming fiscal year.” The answer, per Schorr, is marijuana tourism. He’s a little light on specifics at the moment but his heart is in the right place.
Dispensaries as a casino amenity seem eminently logical. Open consumption on casino property is more problematic, but gamblers are forced to gag on cigarette and cigar smoke as things now stand. Would little clouds of reefer be that much worse? Operating on-premise dispensaries would require repealing a Nevada statute that keeps them 1,500 feet from casinos. (Why? It’s not like they’re schools.) As lawmaker turned pot impresario David Goldwater says, that statute was as arbitrary as it looks, “just numbers we picked out of the air.”
Right now, the idea of Big Gaming getting a buzz on is just at the talking stage, unlikely to make it out of Carson City this year. But it’s an overdue conversation. It’s tough to argue with Schorr when he says, “We’ll never know how big the opportunity is until we allow operators to embrace it.”
Elsewhere in Downtown, maverick operator Derek Stevens had his cover loudly blown when Las Vegas Mayor Shelley Berkeley (D) revealed the existence of “Circa II,” a Symphony Park plot of land quietly snapped up by Stevens in the wayback. (2017, to be precise.) Mind you, Berkeley wasn’t out to raise any hackles: She’s all for a casino in the prestigious neighborhood. And that’s the problem. Unless you hang out in Boulder City, there’s nowhere you can go in the Las Vegas Valley and be free of clanging slot machines and their attendant inconveniences. Now Berkeley has decided, in her infinite wisdom, that what the Smith Center, the Las Vegas Philharmonic and the Elaine Wynn-founded art museum need most for a neighbor is a casino, the gaudier the better. If there is a crying need being answered by this, we’re unaware of it. It could also drive upscale residents out of the area.
There goes the neighborhood. Instead of peacefully enjoying an evening of, say, The Book of Mormon, you’ll have—if Berkeley gets her way—to contend with traffic jams, noise pollution, litter, drunkards and yard-long margarita containers. It sodomizes the entire Symphony Park experience at one fell swoop. It also says something about the sadly supine state of Sin City journalism that “Circa II” flew so far under the radar for so long.
We don’t blame Stevens. He saw an opportunity to make a buck and he took it. It’s what successful businessmen do. To his credit, he seems somewhat embarrassed to have been outed by Berkeley and has been stressing that another iteration of Circa is way, way down the road. Still, it’s an idea whose time has not come and hopefully never will. With Ms. Wynn gone, there’s no obvious civic leader to pass the hat to buy Stevens out of his land, but that seems like the only way to avoid a civic debacle. Nice going, Ms. Mayor. She says a big-ass casino in the fine-arts district “is our future.” No, Shelley. It’s the past.
We won’t belabor the point, but Las Vegas casino moguls are in the first inning of an economic ballgame and are already taking victory laps. That is to say, because tariffs and stock-market gyrations haven’t eaten into their bottom lines yet, they’re assuming the worst is passed. That’s the Big Gaming we know and love. Basically, as long as convention and meeting business (the mainstay of Fontainebleau, for instance) are solid, they’re out of the woods. We can’t help being reminded of the fellow who fell of a skyscraper and, as he passed open windows, kept yelling, “So far, so good!”
If we still have jobs two years from now, we’ll be able to enjoy the undoubted lift the Las Vegas Strip will get when The Mirage reopens as Hard Rock Las Vegas. Then again, Hard Rock International is making money hand over fist at its existing casinos, so if we hit another Great Recession, they can alway wrap the megaresort until such time as business improves. But without question, Hard Rock LV will eventually lift all surrounding boats and the industry is right to be licking its chops.
On the plus side, utility costs are down of late and locals business is mostly solid. (Tourism, not so much. See below.) Tavern business, which depends on Strip employees for its lifeblood, is worrisomely soft, but retirees are keeping the off-Strip casinos aloft. And tipped employees will shortly see a near-term income boost when withholding on tips goes away. Boyd Gaming and Station Casinos are said to be sanguine, The Rio and Palms Casino Resort less so, to judge by their aggressive promotional activities.
On the Strip, operator bullishness is shading into fretfulness. Operators were reported to be “somewhat reserved, though constructive, while conversations with non-public industry participants were a bit more cautious, specifically as it related to leisure demand over the May through August period.” At the moment, Sin City is bracing for a big Memorial Day weekend but a three-day sojourn does not a summer make. When people have to start paying more for health insurance and consumer goods, will the Vegas vacation remain sacrosanct? Fortunately for the industry, it’s so regionally diversified that its ass will almost always be covered.
Quote of the Day: “One area of acknowledged [Las Vegas] softness relates to the declines in international demand, specifically from Mexico and Canada, where operators acknowledged, at a minimum, double-digit declines in room night bookings.”—Deutsche Bank analyst Carlo Santarelli, in a brand-new report. We’d hate to see triple-digit declines, wouldn’t we?