Question of the Day - 26 July 2020

Well, yes and no.

In March of last year, Station Casinos announced to JP Morgan stock analysts that it had several projects coming down the pike. In addition to a Red Rock Lite in Reno, the construction of Allegiant Stadium gave Station the motivation to announce a teardown of its Wild Wild West/Days Inn rickety motel-casino.

And yes, Durango Station — which had been on, then off, for two decades, since Station bought the land — was said to be back on again. “Durango is seeing a growing population with no proximate gaming competitors,” wrote Morgan analysts.

Fast-forward 10 months and we’ve not heard anything further from Station about its Durango site or any of the above, for that matter.

What happened?

Well, Station has its hands full with the Palms and its nearly $700 million remake, with lots of successes, especially in the food-and-beverage department, but one fairly spectacular failure with its night- and dayclub, KAOS. 

For the last three quarters, Station has been laser-focused on the Palms, which has pushed other projects off the table again. Also, the Fertitta brothers, majority owners of the company, are said to be mulling a sale of at least some Station assets, possibly to a real estate investment trust, a scenario under which the Fertitta family would probably continue to run the casinos, but would be leasing the physical properties (similar to what MGM Resorts has been doing of late, with Bellagio, MGM Grand, and Mandalay Bay). Station Casinos, known as Red Rock Resorts on Wall Street, is also rumored to be shopping its extensive bank of undeveloped real estate, which could put Durango Station up for grabs, even if Station/RRR is likely to remove the gaming entitlement before selling it.

All of this has held Durango Station in abeyance, even though the Las Vegas locals market is booming right now. It might eventually get built, but our projection is that it won't be be anytime soon.