Demand, prices way up on the Strip; Big casino push in Texas

Emboldened by a combination of new, 50% capacity limits in Nevada and $1,400 stimulus checks, visitors poured into Las Vegas and resorts were quick to profiteer, er, monetize the nascent demand. The Strat more than tripled room rates, from $50/night to $179, this at a place that was just breaking even a few months ago. Paris-Las Vegas vaulted from $55/night to $284. The Cosmopolitan of Las Vegas was even bolder, charging as much as $610 a night for a room. Prices were described as being “at pre-pandemic levels,” which is manna in the desert to hoteliers. Whether this bounce is sustainable—jobs, jobs, jobs—remains to be seen but if it is, it would mean a Vegas recovery much sooner than we (or the industry) expected. In this return to the Good Old Days, resorts reverted to some of their bad old ways: Bally’s was charging $13 for a bottle of Dos Equis. Really? If there’s one thing that can nip a recovery in the bud it’s price-gouging, although demand for Sin City could be so unabated that customers are willing to suffer anything for it.

Mask mandates were honored more in the breach than the observance and, man, is contact-tracing going to be a bitch if there’s another Covid-19 spike. (Cases are declining in only New York State, Georgia and Kentucky.) Will resort owners and Gov. Steve Sisolak (D) look the other way while the greenbacks are flowing? We tend to think so. On the positive side, it was a mellower crowd that came to town, with three-foot margaritas in evidence rather than gunplay, and Las Vegas Metro reporting generally well-ordered tourists. The Sahara, which appeared to be in dire trouble last year, took the opportunity to pat itself vigorously on the back for $150 million in capex, while Caesars Entertainment—which had been discounting rooms aggressively—announced a fare sale between now and Tax Day. Said one tourist, “The future is bright.” Las Vegas businesses certainly hope he’s prophetic. Meanwhile, we’d like to reiterate our opposition to renaming the Sin City airport after Harry Reid, a divisive choice. How about someone with an aviation background in Las Vegas, like Howard Hughes or (better still) man of the people Kirk Kerkorian? Not that we’re expecting the Powers That Be to listen.

One Vegas hotel that may not be feeling the love at the moment is Trump International. It just got dumped by Virtuoso, a hotel-booking network that caters to high-end clientele. According to Chekitan Dev of Cornell University this “is a very big deal because the hotels or hotel brands lose exposure to a vast network of agents who are very skilled at booking business for their most discriminating and high-net-worth customers who are typically also frequent travelers.” Atlantic City has already seen how toxic the Trump brand can be and it’s not exactly been a roaring success on the Strip.

Speaking of Atlantic City, our Boardwalk correspondent is underwhelmed by the promotions being offered by Philadelphia Live. For instance, $3,000 in slot play gets you—wait for it—a baseball cap. Wager $50,000 and you get a winter jacket. (Why not just buy one?) And with spring weather coming on, $10,000 in play earns you a free umbrella. Cordish Gaming needs to stop sweating the comps if it’s ever going to give Parx Casino a run for its money.

Pro-gambling legislation is making its way through the Texas Lege, giving us at least momentary optimism. State Sen. Carol Alvarado (D) and state Rep. John Kuempel (R) have crafted a package that would legalize sports betting, along with four casinos (Dallas–Fort Worth, Houston, San Antonio and Austin) and upgrade tribal gaming to Class III. That last bit isn’t as “george” as it sounds as it’s merely compliance with the Indian Gaming Regulatory Act. Slots would be taxed at 25%, tables at 10%. Mandatory investment would be $2 billion in large cities, $1 billion in smaller ones. Racinos would be also juiced in, subject to certain conditions.

Since the bill would be an amendment to the Texas constitution, it’s going to need two-thirds of lawmakers to support it, not to mention being voted upon by the general electorate. Said Alvarado, “Texas loses billions of dollars a year to our neighboring states that allow gaming and this measure would bring that revenue back to Texas, create tens of thousands of jobs and cut down on illegal gambling.” No argument there.

With Karen Rove and a fleet of lobbyists descending upon the capitol, Las Vegas Sands is the spearhead of the operation. While Sands formerly spoke of one Texas megaresort, probably in Dallas, CEO Rob Goldstein is now thinking in terms of multiple category killers, which LVS certainly has the money to build. Kuempel faces a tough sell with his GOP colleagues in the Lege, whose tendency is to frown upon the more-blatant iterations of gambling (although the state has a lottery and parimutuel dog racing). Voters are more favorably disposed, with polls showing majority support. Gov. Greg Abbott (R, left) is keeping his powder dry but Lt. Gov. Dan Patrick (R) has already voiced skepticism, largely over the prospect of achieving an acceptable compromise. He’s got a point because the sports teams backing sports betting aren’t on board with casino gambling. (The bill prescribes a 10% sports-wagering hold, like Tennessee‘s, with the state’s cut going toward special ed.) Sheldon Adelson sprinkled a lot of diñero on the Texas GOP during the last election cycle. Now we’ll see if that investment pays dividends.

Gambling expansion in Alabama may have expired in the state senate but Sen. Dale Marsh (R), alluding to the economy, isn’t giving up. “I’m not convinced this issue is a dead issue. I think it’s one we’ll have to address sooner or later,” he told reporters. He’d also like a state lottery, which hasn’t been put before voters in 22 years, to get another shot. Gov. Kay Ivey (R) has Marsh’s back, perhaps since her own polling shown strong pro-gaming sentiment in the state.

Jottings: Ground has been broken for the $500 million Sky River Casino, in California, to be built and operated by Boyd Gaming. It will play host to 80 table games and 2,000 slots, and be owned by the Wilton Rancheria, which has withstood years of legal challenges for Cali prudes. Former governor Jerry Brown, who attended the ceremony, called the casino “an opportunity to take back what has been taken from you.” … Non-resident casino employees in Macao are now eligible for the Coronavirus vaccine. That’s 30% of the workforce. Wynn Resorts is incentivizing unvaccinated workers with the prospect of two additional vacation days if they get their shots. We like it … Macanese visitor arrivals are trending upward, passing 26,000 a day on weekends. This comes despite backlash against the inefficacy of two China-produced Covid-19 vaccines … Choctaw Casino & Resort in Oklahoma is thinking big, as in a $500 million enlargement that would double the property’s capacity. New amenities would include a lazy river and a second hotel tower … Rush Street Gaming says sure, yeah, we’ll build a hotel to go with our casino in Portsmouth, Virginia—someday. The $300 million first phase (pictured) focuses on a casino and sports betting, plus amenities. Construction will take 15 months. Rush Street is an indirect beneficiary of the Pamunkey Indian Tribe casino in nearby Norfolk. Since the latter incorporates a hotel tower, River is temporarily off the hook. “Our goal is … to be the first permanent casino open in the state of Virginia. So we are really focused on getting the casino as open as quickly as possible,” Rush Street veep Mike Tobin explained. The hotel requirement/contingency depends on a complex set of revenue metrics and benchmarks. Fumed Vice Mayor De’Andre Barnes, “If the casino is not performing, who will build the hotel?” Now there’s a multi-million-dollar question.