Mirage Is Being Sold

MGM made it official yesterday. They have a buyer and it is not a lease back arrangement. Based upon my recent stay, I'd say that is a good thing. Parts of the property including the rooms are overdue for an update/upgrade. 

I fell ass backward into  their Penthouse Suite back in 2008 in the heart of the financial crisis.....best upgrade I ever got.   Good story behind that one.    I remember one feature - it had a remote control that would pop the TV out of a box at the foot of the bed....and the dinning room table had seats for 12 people.

Anyway - it will be nice to see some new players on the strip.  According to the LVA weekly video update Caesers is looking to sell one of its properties on the strip too.  Anthony opined it might be Planet Ho

The casinos are certainly seeing the handwriting on the wall: their current gouge mode can only be sustained for so long. Maybe six months from now, visitation will drop like a rock, as people who came here and were ripped off at every turn won't want to come back. The feeding frenzy will subside as casino patrons realize: hey, this experience wasn't all that fun, and it cost me two arms and two legs.

So they're smart to sell. I'm sure the Mirage's numbers look great right now.

Of course, I rarely set foot on the Strip, let alone stay or gamble there, so this endless game of Monopoly the casino megacorporations play doesn't affect me.

I recall when Kevin predicted that the Venetian would sell for $6000, but it instead sold during Covid for $6 billion.

1. Do you know what a "joke" is?

2. Please confine your personal attacks to the Sink.

Wow! Over a Billion Dollars for the right to manage a destressed property.  It is going to be rebranded as the Hard Rock. Guess the valcano and dolphins will soon be history.

Who cares?  You have in the balance of the US to visit.

Hopefully Hard Rock knows how to create an inviting table games environment because most of the LV Strip operators do not--at least not on the main floor. I am referring to 6:5 BJ games and continuous shufflers. They will probably hire local management "talent" and implement the LV Strip standard which is currently 6:5 for lower minimum games--however it is possible they'll get creative and attempt to increase volume by offering only 3:2 as a competitive differientiator. Because 6:5 is a +1.4% additional edge for the house, this would, roughly speaking, require the player to play 1.4 times longer (actually 1.8 to 3+ times longer--see correction in following post) in order for the hold to equal a 6:5 game. Drop also needs to be considered and it's important. If 3:2 BJ creates more interest in the game, drop will increase compared to 6:5. As for continuous shufflers they are just not really very smart to use imo especially for 6:5 games where the game is practically speaking unbeatable (who is going to count down a 6:5 game and call in the BP to play $5000 at the bottom of the shoe?) and studies have shown that continuous shufflers do not actually get more hands/hr. although the operators assume they do. In the end continuous shufflers lose play because the more discriminating customers won't play them--this may be a minor percentage, however in today's competitive environment the operator needs all the players they can get. Do any of the beautiful California resorts have any 6:5 or continuous shufflers? If not, are they stealing business from the LV Strip as a result of offering more attractive BJ games? Maybe.

South Point is one LV resort that cleans up with 3:2 BJ (and no continuous shufflers). Yes, it is a different clientele than the Strip, mostly local and more odds savvy, the players will not play 6:5 because they know better, but still it's an example where increased "time on the game" helps make up for the lower house edge and the games are profitable. I bet the South Point BJ games have a higher hold than on the Strip resulting from higher time on game, however the drop is far less especially compared to that coming from high limit buy-ins meaning BJ revenue is higher at Aria than at the South Point. Wendover, NV single deck games (hit soft 17/double 10 and 11 only) have a 20% hold (Nevada statewide BJ hold is 13.75% for the last three mo.)--yet another example of where offering better odds increases the hold because time on game increases. Since 6:5 has been widely implemented on the Strip, the Nevada statewide BJ win has been decreasing--the two events may be unrelated but still suggestive that 6:5 BJ does not increase BJ revenue.

Anyways we can look forward to a Hard Rock in place of the Mirage which in my view has been stale and uninviting for many years.

In taking a closer look at time on table required for 3:2 hold to equal 6:5 hold it would be actually be 1.8-3+ times more depending on player skill (I'll spare the calcs). I admit 1.8-3+ times is hefty, however it's still achievable, and if not quite, then the higher drop in a 3:2 game will further help offset the lower hold. 

Do operators really understand the impact of bets per hour in BJ compared to the other games? BJ is a high turnover game averaging about 100 bets/hr. (less at a full table but far more in 1-2 player games), which is 2.5 more bets per hour than the 40 bets per hour carnival games and roulette. So assuming an average 3:2 player plays @ -1.1% (.5% error to BS)  @ 100 bets per hour, that is effectively a -2.75% house edge compared to a 40 bets per hour game. 1-2 player games are 150-200+ bets per hour which further increases the effective house edge compared to 40 bets per hour games--in this example to an effective house edge of 4.13% to 5.5+% compared to 40 bets per hour games. One can see 3:2 BJ is a profitable game due to bets per hour. What the operators need to "get" is that hold is not "everything"--drop is actually more important and 3:2 games drop more.

I don't think Hard Rock has ever offered 6:5 BJ and it's not in Connecticut or AC. Unfortunately they are likely to hire local management "talent" who will assume 6:5 BJ is higher revenue even if they aren't really sure. Mohegan Sun made the move using a local management team to offer 3:2 only (and no continuous shufflers) and so far it has not helped. Over there they can't get business, but if and when they do, 3:2 will hopefully be a differentiator for them.

It will be interesting to see if they do a total implosion and start from scratch.  The articles I am reading say they are going to build a guitar-shaped hotel which would imply a teardown.  Either way, I think it will go over about as well as the last version of the Hard Rock in Vegas and the newly opened Virgin did. I hear the Virgin is a ghost town. 

Catering to that younger hipster crowd will ensure they lose all of the current Mirage customer base. My recent stay indicates despite the current need for a renovation the Mirage still packs them in. There were lots of older folks and families with kids. I can't see an "adults hipster hotel" appealing to those folks. I think the Circa is the only place that successfully pulls that off.