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Indy Gaming: F1 a boon for the Strip, a bust for downtown casino revenue

Road closures and high hotel room rates kept locals and tourists away during the Las Vegas Grand Prix.
Howard Stutz
Howard Stutz
A's stadiumEconomyFormula 1GamingSports
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Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how the events tie back to Nevada.

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Strip casinos, which saw their highest gaming revenue figure for November and the second-largest of all time, clearly benefited from hosting the inaugural Formula One Las Vegas Grand Prix.

Away from the Strip was a different story. 

Downtown casinos saw a nearly 2 percent decline in gaming revenue in November and a 5 percent drop in hotel occupancy. Still, downtown hotel operators collectively had a 10.6 percent increase in the average daily room rate for the month as well as a 2.5 percent increase in revenue per available room, a metric used to gauge profitability. 

“Downtown was negatively impacted during F1 weekend with patrons avoiding traffic in the area,” JMP Securities gaming analyst Jordan Bender wrote in a research note last Thursday.

Despite November’s gaming revenue decline — the fifth in the last seven months — downtown casinos are still trending more than 2.7 percent ahead of the $880.2 million in gaming revenue the market produced in 2022.

CBRE Equities gaming analyst John DeCree said in a Thursday research note the gaming revenue decline downtown was not unexpected, given its core customers were deterred from visiting properties due to road closures for locals and high hotel room rates for out-of-town guests.

He said the “higher-end” locals casinos, such as those operated by Red Rock Resorts and Boyd Gaming, saw some benefit from Formula One. DeCree also noted the locals casino market as a whole in Clark County saw a 1.4 percent increase in gaming revenue, which included a 2.2 percent gain in the Boulder Strip reporting area, which includes Henderson. 


Oakland Athletics President Dave Kaval, right, inside the Legislature for a meeting in Assembly Speaker Steve Yeager's office on Wednesday, April 26, 2023, in Carson City. (David Calvert/The Nevada Independent)

Update: Still waiting on the A’s stadium renderings 

It’s been one month since the Oakland A’s postponed an unveiling of renderings for the Major League Baseball team’s $1.5 billion stadium on the Las Vegas Strip.

The event hasn’t been rescheduled.

Two days after announcing plans for the unveiling at UNLV, the team called off the announcement in deference to the deaths of two Nevada state troopers, who were killed by a hit-and-run driver on Dec. 1. The A’s postponed the unveiling late the next day.

New renderings of the 33,000-seat ballpark — which may or may not have a retractable roof — have been widely anticipated since last summer. The A’s said at the time the renderings the team provided to lawmakers and the media at the Nevada Legislature in May were no longer applicable. 

Team officials have been showing renderings to community leaders. 

"They showed me the design, which was spectacular, I might add,” said MGM Resorts International CEO Bill Hornbuckle. 

A’s President Dave Kaval, who attended the ribbon-cutting ceremony for the opening of the Fontainebleau Las Vegas on Dec. 13, told The Nevada Independent the team hadn’t decided on when the new stadium renderings would be unveiled. 

Kaval said the team might wait until the weekend of March 8-9, when the A’s play the Milwaukee Brewers in two spring training games at Las Vegas Ballpark in Summerlin.


Mark Cuban speaking with attendees at the 2019 Arizona Technology Innovation Summit at The Duce in Phoenix, Arizona. (Gage Skidmore/Creative Commons BY-SA 2.0 DEED)

Sands partner Cuban: Casinos would be ‘the right thing’ for Texas

Dallas Mavericks minority owner Mark Cuban doubled down on his interest in seeing Texas legalize casinos, saying it was “the right thing for the state.”

The NBA Board of Governors unanimously approved a $2 billion purchase of a 73 percent stake in the Mavericks by Miriam Adelson, the controlling stockholder in Las Vegas Sands Corp., and the family of Sivan and Patrick Dumont, her daughter and son-in-law. Patrick Dumont, the president of Las Vegas Sands, will join the league’s board of governors.

Cuban, who retains control of the team’s basketball operations and saw his ownership stake reduced from 100 percent to 27 percent, reiterated his interest in bringing legal casinos to Texas during an impromptu media gathering after Christmas.

Las Vegas Sands has unsuccessfully sought casino legislation for Texas during the last decade and spent more than $12 million combined during the state’s past two legislative sessions on lobbying for ultimately failed casino legalization measures.

Cuban, who wants a new arena for the Mavericks, suggested to the Dallas Morning News the venue could be part of an overall master plan for 259 acres in the Dallas suburb of Irving that was acquired by Las Vegas Sands.  

“I don’t want to speak for Miriam and Patrick. I’ll let them speak for themselves,” Cuban said. “But if you look at destination resort casinos, the casino part of it is tiny relative to the whole destination aspect. Can you imagine building The Venetian in Dallas, Texas? That would be insane.”

The combined size of the parcels is more than four times larger than the 63-acre Las Vegas Strip site where the company built The Venetian, Palazzo and Venetian Expo. 

“I think that type of impact is equivalent of what we tried to do with technology back in 2000, about 24 years ago,” said Cuban, a technology billionaire who paid $285 million for the Mavericks in 2000. The team is now worth an estimated $3.5 billion.

On the other hand, Cuban said he has zero interest in legalizing sports betting in Texas.


Signage for STN Sports, Red Rock Resorts' sports betting business, is seen at the under-construction Durango Hotel and Casino on Tuesday, Oct. 17, 2023. (Jeff Scheid/The Nevada Independent)

Betting platform STN Sports transitions to new platform after glitches

Sports betting technology provider GAN Ltd., which was licensed by Nevada gaming regulators in October, replaced Red Rock Resort’s troubled sports betting platform just before the end of the year.

In a Dec. 27 statement, the California-based company said it began a field trial in conjunction with state gaming regulators at all Red Rock properties under the STN Sports brand. A new mobile sports betting app was also launched.

Terms of the deal were not disclosed.

STN Sports is considered one of the top four sports betting providers in Nevada along with Caesars Entertainment’s William Hill, BetMGM and Circa Sports, according to research by Eilers & Krejcik Gaming, a Southern California-based advisory firm. 

Red Rock, through its Station Casinos subsidiary, needed to replace its sports betting technology, after it agreed to pay an $80,000 fine to state gaming regulators in June 2022 to settle a two-count complaint alleging serious glitches in the company’s sports wagering system. 


A view of the Las Vegas Strip taken from Treasure Island on Thursday, Nov. 16, 2023, shows resorts controlled by VICI Properties. (Jeff Scheid/The Nevada Independent)

Strip landlord giant VICI expands real estate portfolio outside of gaming

VICI Properties, the Strip’s largest land owner, increased its investment in non-gaming businesses, spending $670 million just before Christmas.

The real estate investment trust (REIT) expanded its business relationship with Cabot, a luxury residential and golf course developer to finance the development of golf and residential locations in Scotland and the Caribbean Island of Saint Lucia. In 2022, VICI helped finance Cabot’s golf and residential community in Florida. 

The latest commitment brought VICI’s total investment to $330 million.

Also, VICI said it was acquiring Chelsea Piers in New York City for $340 million in a sale and leaseback agreement. In 2020, VICI provided $80 million to the entertainment facility along the Hudson River through a seven-year loan. 

VICI owns roughly 660 acres on the Strip covering 10 resorts operated by MGM Resorts International, Caesars Entertainment, Apollo Global Management (The Venetian and Palazzo) and Hard Rock Entertainment (The Mirage). 

In total, the REIT owns the land associated with 54 gaming properties across 17 states and Canada.


Customers stand in Caesars Palace Race and Sports Book to place wagers on Super Bowl LVII on Thursday, Feb. 9, 2023. (Jeff Scheid/The Nevada Independent)

News, notes and quotes

Consultant: ‘Zero chance’ California legalizes sports betting 

Following next month’s Super Bowl LVIII at Allegiant Stadium and Super Bowl LIX in New Orleans at the Caesars Superdome in 2025, two California cities will get the big game — Levi Stadium in Santa Clara for Super Bowl LX in 2026 and SoFi Stadium in Los Angeles for Super Bowl LXI in 2027.

That will end three straight years of the Super Bowl taking place in a state with legal sports betting. Super Bowl LVII was in Phoenix. Gaming industry consultant Brendan Bussmann told Sports Handle last month California won’t have sports betting in time for either game.

“Hell no. Unless there is a Festivus miracle and sports betting gets passed in 2024, there is zero chance that sports betting will get passed before 2027,” Bussmann said. 

***

Three Nevada gaming, tourism and entertainment legends die before the new year 

Just ahead of 2024, Nevada saw the deaths of three icons who influenced the gaming, tourism and entertainment markets.

Bill Paganetti, who founded Peppermill Casinos, died Dec. 29 at the age of 85, according to a statement from the Reno-based company.

Paganetti's casino and hospitality portfolio included his first property, the Peppermill Resort in Reno, as well as the Western Village Inn & Casino in Sparks, three casinos in West Wendover, and the Peppermill Restaurant and Fireside Lounge in Las Vegas.

In Las Vegas, Charolette Richards, who earned the nickname of the “Wedding Queen of the West” after helping thousands of couples get married at “A Little White Wedding Chapel” in downtown for more than 60 years, died Dec. 13 at age 90. 

On Dec. 31, Las Vegas showroom legend Shecky Greene died at age 97. A Las Vegas resident and contemporary of many Strip headliners, Greene entertained audiences for more than six decades. 

***

Sale of Golden Entertainment slot routes to be completed in January

Illinois-based J&J Ventures Gaming will acquire the slot machine route business of Golden Entertainment this month and become Nevada’s largest operator of games in bars, taverns and other non-casino locations.

J&J will pay $213.5 million and $34 million in purchased cash for the businesses. J&J previously bought Golden’s Montana route operations for $109 million, plus $5 million in purchased cash. 

Nevada gaming regulators signed off on the agreement in December. 

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