That squares with the anecdotal information we've been receiving.
Paragon Gaming was brought into the Westgate to improve its casino operation, but it sounds like it's having a hard time of it. A relatively isolated location – a mile off the Strip – doesn’t help and never has. However, since Westgate is privately held, it’s not obligated to disclose financial results.
In the case of SLS Las Vegas, it used to release quarterly financial data. However, that ended in early 2016 when the Nevada Gaming Commission adopted a regulation that allows casinos owned by investment houses to keep their financials secret. In the Las Vegas area, this affects not only SLS, owned by Stockbridge Capital Partners, but also the Cosmopolitan , property of Blackstone Group, and the Hard Rock, owned by Brookfield Asset Management. Their financial data is disclosed privately to the Nevada Gaming Control Board now.
Rationalizing the decision, NGCB Chairman A.G. Burnett said, "There was some concern about confidentiality, where competitors can see their numbers." Yes, but wouldn’t the same hold true for publicly held corporations like Red Rock Resorts (Station Casinos) and Caesars Entertainment?
Gaming attorney Frank Schreck analyst, advocate of the new rule, argued that unlike single-property companies, like the owners of the Westgate and SLS, "publicly traded competitors are able to consolidate their financial information and gaming statistics by market and not by individual property."
He added that firms like Stockbridge and Blackstone could save hundreds of thousands of dollars in maintenance charges, in addition to keeping proprietary information quiet. Stockbridge pegged its SEC-filing costs at $1 million a year. "As you probably have seen from our state filings, that is a lot for us. So any change we can make to that would be incredibly helpful," said Stockbridge attorney Lou Dorn.
Schreck has long been a water-carrier for private-equity firms. He once proposed that an exception be made to Nevada's casino-licensing rules, so that a private equity firm could own 20% of a casino before it had to be licensed (the longtime threshold has been 10%). That idea went nowhere.
Back when SLS was still filing SEC reports, it was losing money hand over fist, to the point where Stockbridge was having to subsidize the property. Struggling casinos like Westgate and SLS will probably continue to keep their performance data a deep dark secret unless they have good reason to report it – as when Blackstone started turning a profit at the Cosmopolitan. Until such a day, we're as much in the dark as you.
(Special thanks to Howard Stutz, formerly of the Las Vegas Review-Journal, for providing key information.)
