Siegel Group got a steal of a deal on the north Las Vegas Strip: 10 acres for $75 million. The vacant land used to be occupied, in part, by the La Concha Motel (pictured). It was also once destined for the Triple Five failsino, a project that went bust long ago. How did Siegel get such strategic acreage—across the street from Resorts World Las Vegas—for such an absurdly low price? Because Siegel could pay cash on the barrelhead, unlike rival bidders who reportedly offered even more but couldn’t write a check for the whole enchilada. “We’ve been waiting years to acquire a large piece of land in the Strip, and have been watching this site for a long time,” Stephen Siegel told the Las Vegas Review-Journal.
According to entertainment reporter John Katsilometes, Siegel’s plans cover the gamut of “a hotel-casino, multifamily apartments, a condo tower and retail outlets.” Apartments on the Strip? Given Siegel’s (low) purchase price, the company doesn’t have to spend billions to justify the real estate outlay. Besides, high-end development isn’t in Siegel’s DNA. Never has been, never will be. The company operates myriad (literally) low-rent motels in the Las Vegas area, ensuring its Strip project a steady stream of cash flow. But it tried to compete with the then-Hard Rock Hotel and fell on its face. Color us somewhere between downright skeptical and guardedly optimistic.
Of course, this could be the prelude to a lucrative flip. It’s happened before. Midwest motel baron Gary Tharaldson bought up the Westward Ho—remember that?—and its little sister The Ho (yes, that really was its name) and feigned that he was going to build a megaresort. Then he cleaned out gullible Gary Loveman for a megabuck payday. Siegel Group could do the same. As Stephen Siegel says, he’s got “The last great piece of land available on the north Strip.” And there’s folks who’d pay exponentially more than $75 million to get their hands on it.
Full House Resorts has been doubling down on the Cripple Creek market in Colorado and Tilman Fertitta evidently smells money to be made there too. He’s bought the Wildwood Hotel & Casino for $43 million. If Tilman times it right—as he seems to be doing—he can cash in on the additional business generated by Dan Lee‘s new Chamonix resort. He also inherits 528 slots and 12 table games. If he can, he’d be wise to add a hotel, a department in which Cripple Creek is underserved. Oh, and bring on that Golden Nugget brand. Meanwhile, the Denver-focused Black Hawk market ain’t chopped liver either.
That sordid Spectacle Entertainment scandal is winding down in Indiana. Former state senator Brent Waltz copped a perjury plea after taking 20 grand in illegal campaign contributions from Spectacle. Still remaining to be tried is former Spectacle exec John Keeler, charged with orchestrating the seamy scheme. Not only has former CEO Rod Ratcliffe has driven from the gaming industry, Spectacle has been kicked out of the Gary and Terre Haute markets. It’s basically the equivalent of a leper in the casino biz. Don’t feel sorry for Waltz, who looks to benefit from class privilege. He’ll serve maybe a year or two in the pen. They’d throw the book at any of us, dear readers.
Both Resorts World New York and MGM Empire City are sitting pretty after the New York State Lege essentially juiced them into a pair of Big Apple casino licenses. After flirting with pricing licenses at $1 billion apiece, the Lege was clement and settled upon ‘only’ half that … whilst the leaving the door open for bidding wars over licenses, from which the state would benefit. Slots will be taxed at 25% and table games at 10%—but that could be escalated, too. Licenses would be at least of 10 years’ duration … but maybe as much as 30. (We’re getting dizzy from all these escalator clauses.) Thankfully, flooding the Empire State market with new sports betting licenses was nixed. Sorry, Gary Pretlow.
“Demonstrating evidence of local support and zoning approval is required for all applicants,” wrote CBRE analyst Richard Ellis, adding, “This could be the most challenging part of the process, which is one of the reasons we believe Empire City and RWNYC are front-runners for two of the three licenses.” He doesn’t think either will have much trouble funding that licensing fee, pegging their potential revenues at $1.3 billion/year (MGM) and $1.5 billion (Resorts World). And we can’t think of one good reason for passing these two good corporate citizens over for licensure.
Jottings: A casino megaresort isn’t a done deal in Osaka (yet) but city fathers are proceeding as though it is. Some of their constituents are bridling at having to pick up the tab for keeping Yumeshima Island from sinking back into the sea, a burden they feel should fall upon beneficiaries Orix and MGM Resorts International instead … Pennsylvania state Sen. Tommy Tomlinson (R) turns out to have been a sock puppet for Parx Casino in its crusade to extirpate black-market slots from the Keystone State. A bill introduced by Tomlinson was actually written for him by Parx lobbyists (with some revisions from Gov. Tom Wolf [D]), which would be no big deal in Nevada but Pennsylvanians have higher standards … Southland Casino in Arkansas is going all-in with 2,400 slots and 60 table games. It can afford to open the throttle as it is sitting on the doorstep of Memphis … Poker is on the comeback in Illinois. A new, 22-table poker room is the star attraction of Rivers Des Plaines‘ $87 million enlargement, making it the fourth room in the state … Support for banning smoking in casinos continues to gain traction in the New Jersey Lege. To keep the pressure on, workers will hold a protest today.
Very interesting that Tilman is bringing the GN to Cripple Creek. I guess it makes Dan Lee’s big bet valid that CC is an untapped market. GN will bring some good notoriety via player network etc to the market.
I agree Mr. Siegel can sell that land near the Peppermill restaurant for a healthy profit. Great pic of La Concha Motel.