One gaming mogul with a Midas touch is Neil Bluhm, owner of Rush Street Gaming. He’s had one of the more successful casinos in the Philadelphia area, SugarHouse, and his Rivers Casino in Des Plaines, Illinois, is and long has been far and away the top-grossing property in the Land of Lincoln. Right now, he’s building a Rivers-branded casino in Schenectady, New York, and is pressing the Massachusetts Gaming Commission to approve his proposal for the Brockton Fairgrounds. To that end, he’s also underwriting a lawsuit to challenge the right of the Mashpee Wampanoag tribe, his principal rival, to open a casino in nearby Taunton.
If there were such a thing as a reverse-Midas touch, Sam Nazarian would have it. The Los Angeles nightclub mogul ran the Sahara into the ground and his reinvention of the property as SLS Las Vegas has been nothing short of an unmitigated disaster. (Three nightclubs? Really?) Isolated way at the top of the Strip, the property has failed to draw the throngs of pretty young things who are Nazarian’s customer base, while subsequent efforts to woo locals to the Strip -- always a tough call -- have been hit and miss.
Nazarian charmed Stockbridge Capital Partners into backing his dream of a half-billion-dollar hipster hangout. However, after a strong opening weekend, customers apparently began avoiding SLS in droves. The buffet was summarily closed, as was the largest of the nightclubs, and retailer Fred Segal pulled out its significant, multi-store presence overnight. The hotel-casino has been performing so poorly that it has generated a sub-zero return on investment.
Nazarian himself just barely got a gaming license and now has liquidated his stake in the casino, with his only remaining presence being an enormous, abstracted statue of him out front, known to tourists as "the Happy Blob." Now with ex-Station Casinos veteran Scott Kreeger at the helm, it remains to be seen whether SLS can turn things around in time before the financiers pull the plug. A deal with Starwood Resorts Worldwide to manage the hotel inventory and put the first W-branded hotel on the Strip could be a good step in the right direction, and the dining offerings are still fresh and impressive, with star chef José Andrés bringing his pulling-power to the culinary lineup.
Someone who came out of the restaurant business and proved to be a natural as a casino owner is Tilman Fertitta, whose Golden Nugget brand has been true to its name. After several years of successful operation – and considerable reinvestment – in the Las Vegas and Laughlin markets, Fertitta started thinking nationally. He acquired financially destitute Trump Marina in Atlantic City. The first few quarters of business were a struggle, but as other casinos along the Boardwalk folded, their suddenly ‘homeless’ customers gravitated to the Nugget, which is now one of Atlantic City’s most reliable performers.
When Ameristar Casinos was absorbed by Pinnacle Entertainment and the latter had to divest itself of an in-progress casino in the Lake Charles market, Fertitta swooped in and repeated his Golden Nugget magic. The casino not only grew business in Louisiana, it has become a steady second-place rival to Pinnacle’s L’Auberge du Lac. Fertitta’s most recent project has been to reinvent a former Isle of Capri Casinos property in Biloxi as a Golden Nugget and we have no doubt that it will repeat the success that follows Fertitta wherever he goes.
Speaking of success, bankruptcy may have been best thing that ever happened to Station Casinos. While it clipped the company’s wings, it also sharpened its focus. White elephant Aliante Station was sold, the Greenspun family was bought out, other projects for which there was no market demand went onto the back burner for an indefinite period of time, and Station concentrated on spiffing up flagship properties like Green Valley Ranch and Red Rock Resort. As of last week, Station had piled up 11 straight quarters of net-revenue growth and 19 (!) consecutive quarters of improved cash flow. Station may have caught the expansion fever that gripped the casino industry a decade ago, toying with megaresort and timeshare projects, but it has stuck to its knitting for the past several years and the results speak impressively for themselves. Its consolidated net revenues are at their highest point since 2008 and the company continues to prosper from its profitable side business in Native American gaming management.
The only blip of late has been a postponement of a proposed IPO, which would have seen the company publicly traded under the new name Red Rock Resorts and would've enable Frank and Lorenzo to buy out operating company Fertitta Entertainment, to which they currently pay a management fee. However, shortly after the plan was announced, Deutsche Bank, which holds a 25 percent stake, issued a statement confirming that the IPO was to be delayed due to weakness in the stock markets.
Tomorrow we conclude with the Titans of the Strip: Adelson and Wynn.
