Indy Gaming: Despite three closed properties, Red Rock expanding in Vegas
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Red Rock Resorts expects to begin construction in the first quarter of 2022 on a $750 million hotel-casino development geared toward the southwest Las Vegas locals market.
According to the company’s leadership, it’s not the last new Las Vegas-area casino Red Rock has in the pipeline, even as three of its older properties remain closed some 20 months after gaming reopened in Nevada following a 78-day shutdown because of the pandemic.
Red Rock Resorts CEO Frank Fertitta III said the three closed properties – Fiesta Rancho and Texas Station in North Las Vegas and Fiesta Henderson – represented less than 10 percent of the company’s annual cash flow.
His comments during Red Rock’s third-quarter earnings conference call last week hinted that the closures would last indefinitely.
“We've been very successful at moving a lot of the business at those closed properties to the six open properties, which has resulted in higher margins,” Fertitta said. “We're confident that we can deliver incremental, absolute profitability. We're not going to go and open something and cannibalize our other properties and end up making less money.”
A fourth closed Station Casinos property, Palms Casino and Resort, is in the process of being sold to the gaming arm of Southern California’s San Manuel Band of Mission Indians for $650 million. The transaction is expected to close by the end of the year.
Meanwhile, Red Rock Vice Chairman Lorenzo Fertitta said SB386 adds uncertainty about who the company is required to hire to fill jobs when a new casino opens.
Passed during the 2021 Legislative session, SB386 was dubbed the “Right to Return” bill because it guaranteed the rights of gaming and tourism industry workers who were laid off during the pandemic to return to their jobs.
Red Rock Resorts, through its Station Casinos operating subsidiary, opposed the legislation, which was backed by Culinary Workers Local 226 and several Strip casino operators. The Nevada Resort Association took a neutral stance on the measure, which passed both houses on straight party lines with Democrats in support and Republicans opposed.
Station Casinos laid off 39 percent of its full-time workforce in May 2020 because of the pandemic. According to Red Rock’s 2020 annual report filing with the Securities and Exchange Commission, the company had approximately 7,600 employees at the end of January 2021.
In Red Rock’s 2019 annual report filing with the SEC, that employment figure was approximately 14,000 at the end of January 2020.
Under SB386, Station Casinos would have to offer the laid-off workers their jobs back at the three closed casinos if they were to reopen.
What’s unclear is whether the company will have to make the same offer when the new Durango Station opens 18 to 24 months after groundbreaking. The property at the 215 Beltway and Durango Road is expected to house a 200-room hotel, a 73,000-square-foot casino, four restaurants and other amenities.
“It would be all speculative discussion points, which we won’t do,” Red Rock spokesman Michael Britt said in an email.
The Office of the Labor Commissioner for Nevada is tasked with overseeing the implementation of SB386. Spokeswoman Teri Williams said in an email said the office “would need to undertake a complete evaluation of the specific circumstances presented in each individual case in order to adjudicate any claims pursuant brought under this law. The specific facts of each case would be determinative in the Labor Commissioner’s findings.”
Culinary Union spokeswoman Bethany Kahn said the labor group “proposed standard recall language in negotiations with Station Casinos” in which laid-off workers would be rehired first at the new Durango property. The language wasn’t accepted.
Khan said in an email that SB386 wouldn’t require Station Casinos to offer jobs at Durango to workers laid off at other company casinos, but the company “should follow the good union standard and keep worker seniority as casino ownership changes and development continues.”
Red Rock Chief Financial Officer Stephen Cootey said Durango will service an area of the Las Vegas Valley that does not have a locals gaming property other than tavern operations limited to 15 slot machines each. The location is “within a five-mile radius to approximately 350,000 people,” he said.
The Fertitta brothers, who are the largest shareholders in Red Rock Resorts, said the Durango project was the beginning of a company effort in Southern Nevada toward “doubling the size of our current operating platform.”
Red Rock has six development sites in the Las Vegas Valley totaling 315 acres. The 71-acre Durango site is the second-largest parcel. Lorenzo Fertitta said the location might provide a business model going forward by selling off an unused portion of the land to another developer that would enhance the total project.
At Durango, a 23-acre parcel behind the casino site is being sold for $23 million to a developer who would probably build apartment-type housing, “which will be good for the property,” Lorenzo Fertitta said.
He said Red Rock “will take basically the heart of each of the properties and sell off the remaining real estate surrounding those development sites.”
The parcels include 96 acres near the intersection of Interstate 15 and Tropicana Avenue that was once slated for Viva, a Strip resort-sized development that was cancelled during the recession, and five acres at Boulder Highway and Oakey Boulevard that had been part of the former Showboat Hotel Casino site.
A timeframe for adding another six hotel-casinos to the company’s portfolio wasn’t offered.
Hard Rock/Seminole’s Jim Allen becomes first tribal gaming executive to lead AGA
For the first time in its nearly 28-year history, the American Gaming Association’s board will be led by a representative from a tribal gaming operation.
Hard Rock International Chairman and Seminole Gaming CEO Jim Allen was elected by the board of directors last week to serve a two-year term as chairman beginning in January. Allen has served on the board of the Washington D.C.-based organization since 2015.
Also, the AGA announced that the board’s executive committee extended the contract for CEO Bill Miller by three years. He took over the group in 2019.
In a statement, the AGA said Allen’s leadership and experience has played an integral role in driving association priorities.
“This is a pivotal juncture for the gaming industry, and I’m honored to serve as the AGA’s next chairman,” Allen said. “The AGA has played an essential role in uniting the industry throughout the pandemic.”
Miller said Allen brings “decades of experience” to the chairmanship in both commercial casino operations and tribal gaming. Miller said his perspective “will be invaluable as we work to set the industry’s agenda, accelerate gaming’s comeback and strengthen our value to communities across the country.”
The AGA was formed 1994 to lobby against attempts at federal oversight into the rapidly expanding U.S. gaming industry. But two decades later, the organization changed direction and became more proactive in a campaign to clear up misconceptions and untruths about the regulated industry.
Then-AGA CEO Geoff Freeman reached out to the tribal gaming community in order to expand the organization’s membership, reach and influence. Seminole Hard Rock Gaming became the organization’s first American Indian-owned casino company-member.
Allen, 61, has spent 20 years directing the gaming, hospitality, and entertainment operations for Florida’s Seminole Indian Tribe – which acquired Hard Rock International in a groundbreaking $1 billion deal in 2007.
Hard Rock’s casino business has grown beyond Florida, where Seminole Gaming operates six of the state’s seven tribal casino properties, including Hard Rock Tampa and Hard Rock Hollywood near Fort Lauderdale. In 2019, Hard Rock opened the $1.15 billion Guitar Hotel expansion at the Hollywood resort. The 638-room tower is shaped like the body of a guitar.
Hard Rock lists 14 casino properties in the U.S., including on the Atlantic City Boardwalk. Hard Rock casinos are also in Canada and Punta Cana in the Dominican Republic. Three of the casino projects are in development. Allen said in a 2020 interview that Guitar Hotels are planned for the proposed integrated resort ventures in Barcelona, Mexico City, and Japan.
Allen and Miller thanked outgoing AGA Chairman Trevor Croker for his two years of service. Croker is CEO and managing director of gaming equipment provider Aristocrat Technologies.
“Trevor has been a tremendous chairman of the AGA and trusted advisor to me over the past two years, guiding the industry through the most challenging time in its history,” Miller said. “The AGA and the entire gaming community are indebted to his service to the industry.”
Las Vegas airport name transition from McCarran to Harry Reid is underway
Clark County Director of Aviation Rosemary Vassiliadis said last week that $4.2 million in private donations had been raised to fund the initial phase to change the name of McCarran International Airport to Harry Reid International Airport.
In a presentation to the Clark County Commission, Vassiliadis spelled out several steps in the works to transition the name of the nation's seventh-busiest airport to that of the former Senate majority leader who retired in 2016 after representing Nevada on Capitol Hill for 30 years.
The changes, however, won’t happen overnight.
Work is underway to create renderings for new north porte-cochère and monument signage the airport wants to unveil during a renaming celebration in December with Reid.
There are already subtle changes taking place, such as removing and/or replacing McCarran references from thousands of online pages, including changes to wording, imagery and data. Last week, the airport’s press release detailing September passenger numbers utilized the airport’s secondary logo with the airport code, “LAS,” rather than the McCarran logo.
Vassiliadis said the name of most of the airport’s business and social media sites can be changed within seven days. However, some online content requires updates by outside parties, such as Facebook, Google Maps and the websites of airlines that fly in and out of Las Vegas.
The airport’s primary website URL will change to HarryReidAirport.com.
She said the Department of Aviation is working with the Clark County Museum to include an in-airport display within the Cannon Aviation Museum that highlights Reid’s contributions and achievements.
Additional phases for the name change, such as designations from “curbside to the airport’s gates” and airport operations, including uniforms and vehicle decals, require another $3 million in private donations.
The Las Vegas Review-Journal reported in October that three $1 million donations were made to the name change fund, including from businessman Stephen Cloobeck; professional gambler Billy Walters and his wife Susan; and Boyd Gaming Executive Chairman Bill Boyd and his wife, Judy. The Boyd’s donation came from their personal funds.
The Brownstein Hyatt Farber Schreck law firm donated $75,000; The Murren Family Foundation, headed by former MGM Resorts CEO Jim Murren and his wife, Heather, contributed $50,000; and former Rep. Shelley Berkley donated $5,000.
NFL Shield and team logos will soon replace cherries and 7s on certain slot machines
The National Football League has embraced sports betting. Now, the NFL shield will soon be popping up on a slot machine.
The league and Las Vegas-based Aristocrat Gaming announced a multi-year licensing agreement under which the gaming equipment provider can develop NFL-themed slot machines. The deal is the first of its kind for the NFL.
The NFL was the last professional league to sign on with official sports betting partners when it announced agreements in April with Caesars Sportsbook, DraftKings and FanDuel. In August, the NFL named FOX Bet, BetMGM, PointsBet and WynnBET as approved sportsbook operators by the league, so the companies can advertise during NFL broadcasts.
Adding a slot machine partner allows the NFL to bring its logos and trademarks out of the sportsbooks and onto casino floors.
“The world of casino gaming is transforming,” Rachel Hoagland, the NFL’s vice president of gaming and partnership management,” said in a statement. “Today’s slot machines offer engaging experiences akin to popular video game consoles that our fans adore. We believe with Aristocrat’s vision, we can bring that exciting gaming experience to fans on the casino floor looking to show their love of football.”
The NFL-themed slot machines, which will offer fans the ability to customize games based on their favorite teams, are expected to be on casino floors during the 2023 NFL season.
“This agreement presents a new opportunity to reach tens of millions of NFL and Aristocrat fans with exciting new entertainment options on the casino floor and beyond,” Hector Fernandez, president of Aristocrat Americas, said in a statement.
Other items of interest
UFI, the Global Association of the Exhibition Industry, announced the 90th UFI Global Congress will be held in Las Vegas in November 2023, marking the first time the largest annual gathering of exhibition leaders will take place in the U.S.
The announcement was made last week at the 2021 UFI Global Congress in Rotterdam, The Netherlands. The 2023 UFI Global Congress will be held at the ARIA Resort and Casino and hosted by the Las Vegas Convention and Visitors Authority (LVCVA).
In a statement, the LVCVA said the conference will expose Las Vegas to key decision makers in the global exhibition industry, which could lead to future convention business coming to the market.
“We are honored to have been selected as the host city for UFI Global Congress’ inaugural U.S. show,” Brian Yost, chief operating officer for the LVCVA, said in a statement. UFI is the leading global association of international trade show organizers and exhibition center operators with more than 50,000 industry professionals working with member companies worldwide.
Former Nevada Gaming Control Board Chairwoman Sandra Douglass Morgan, who was recently appointed to the boards of Caesars Entertainment and Allegiant Airlines, has joined Covington & Burling, a Washington D.C.-based law firm, as Of Counsel.
She will be part of Covington’s gaming industry practice. According to the firm’s website, Covington has represented gaming equipment provider Aristocrat Technologies and casino operator MGM Resorts International on various matters.
“Sandra is well-versed in the emerging issues at the crossroads of the gaming, sports, and technology industries,” Ed Rippey, co-chair of Covington’s gaming industry practice, said in a statement. “Sandra brings unparalleled experience and will be a valuable resource to our gaming industry clients looking to navigate this changing and highly-regulated industry.”
Covington cited Morgan’s two decades of experience in the gaming industry, both as a regulator and as a litigation attorney.