Indy Gaming: A’s still looking to close stadium financing deal
Here are some development highlights. Nine months before shovels are supposed to go into the ground, the financing for a baseball stadium on the Strip is still up in the air. The 8-month-old Durango is expanding, New York City’s casino process is a mess and Sands has a new target — Thailand.
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The Oakland Athletics need to bring in a closer to shut down rampant speculation about their future $1.5 billion stadium on the Strip.
We’re not talking about A’s relief pitcher Mason Miller, who is enjoying a breakout season with 15 saves and was the winning pitcher for the American League in this month's Major League Baseball All-Star Game.
We’re talking about a financial closer ahead of the expected April 2025 stadium groundbreaking.
With about nine months to go, the A’s are still seeking equity investors to help offset a portion of the $850 million that owner John Fisher needs to secure for the 33,000-seat ballpark project (the state and Clark County are kicking in about $380 million in public funds to help fund construction).
“The Oakland A’s new stadium currently remains in a holding pattern,” JMP Securities analyst Mitch Germain wrote in a research note last week. “The last piece of the puzzle was private financing obtained by the owner for the remaining cost of the stadium. Chatter suggests this may have hit a roadblock.”
Sandy Dean, a partner with the Fisher family and a representative for the A’s, told the Las Vegas Stadium Authority earlier this month that the team was in “good shape” on securing financing for the ballpark. But he didn’t offer specific details on how the franchise will fund its expected $1.2 billion share of the construction costs. According to Forbes, Fisher has a net worth of $3 billion.
Dean said the team intends to borrow $300 million, but a lender or lenders weren’t named. Sports financing company Galatioto Sports Partners has reportedly been retained to find investors.
Meanwhile, other partners on the stadium site are moving forward.
Bally’s Corp., which owns the rights to replace the now-closed Tropicana Las Vegas, reached an agreement last week to shore up its financial structure. Gaming and Leisure Properties, a real estate investment trust that owns the future stadium site, kicked in $175 million for the Tropicana’s demolition, including the expected implosion of the two hotel towers in early October.
“I'm sure any developer would like to be moving faster,” Gaming and Leisure Chief Operating Officer Brandon Moore said on the company’s second-quarter earnings call last week. “Progress is being made on the site. If you've been out there, you would see that.”
Gaming and Leisure Chairman Peter Carlino told analysts that he was still confident a stadium would be built on the site and that Bally’s would be able to replace the Tropicana.
“I am happy with what they're now doing,” Carlino said of Bally’s, without getting into specifics. “They've got a first-class team assembled. We've got a big seat at the table since we own the ground.”
As for the A’s, Moore said the team was “making progress,” citing the comments from the Stadium Authority meeting.
“The timeline remains tight and the A's will probably say that time is of the essence,” Moore said. “I think this is still a project that can get delivered on time and we're still optimistic about the potential.”
Funding for the A’s ballpark is shaping up to be a much different ball game than how funding for the construction of the $1.9 billion Allegiant Stadium played out in 2016.
Raiders owner Mark Davis pledged $500 million toward the project, $750 million room tax revenue was agreed upon by state lawmakers and the late billionaire and Las Vegas Sands founder Sheldon Adelson pledged $650 million. When Adelson pulled out of the deal, the Raiders lined up bank financing to cover his promised share of the stadium costs.
Durango targeted for expansion
Red Rock Resorts executives credit the 8-month-old Durango Casino Resort with the company’s 17 percent increase in revenue and nearly 16 percent jump in pretax cash flow in the second quarter.
The results are a reason the company plans to begin the resort’s second phase before its first birthday.
Much of the discussion during Red Rock’s second-quarter earnings conference call last week focused on Durango, which opened in December and cost $780 million. Red Rock is planning to add 25,000 square feet of casino space, which would increase the size of the gaming floor to 108,000 square feet. Nearly half of its additional 230 slot machines — 120 — will be dedicated to the casino’s high-limit gaming room, boosting its current allotment of 2,300 games.
Red Rock Chief Financial Officer Steve Cootey did not provide a cost for the expansion, which will also include a 2,000-space parking garage.
“We're still going through the design and planning process, Cootey said. “We expect to have a budget in the next month or so, and we'll be announcing that on our next earnings call [in October].” He added the construction would have “minimal effect” on the resort’s business.
Cootey and Red Rock President Scott Kreeger said Durango has exceeded expectations since its opening. The resort was the reason the company signed up more than 55,000 new members to its loyalty program since the beginning of the year, he said.
It also helped offset revenue losses from Palace Station, which was hurt by roadwork that limited access to the property, and Sunset Station, where development of a new sportsbook disrupted operations.
Thailand could be next on Sands’ plate
Las Vegas Sands President Patrick Dumont barely mentioned the company’s efforts to gain a casino license in New York or its push to legalize gambling in Texas during the company’s second-quarter conference call last week.
Instead, he focused his comments on Thailand.
“We've been looking at Thailand,” Dumont said in response to a question about casino expansion. “The market there is very strong for different types of tourism.”
In March, Thailand Prime Minister Srettha Thavisin said the government was considering drafting a casino bill that would generate jobs and state revenue. Casinos are illegal in Thailand.
“Depending on the way it's set up and the opportunity that's there in terms of structure, it could be very interesting for us,” Dumont said.
All Dumont said about plans for New York and Texas is that company representatives have been “spending a lot of time” in the two states.
In New York, Sands has agreements to lease a 99-acre site that houses the vacant Nassau Veterans Memorial Coliseum for a casino project. However, the casino has been challenged in court by residents and Hofstra University.
In Texas, Las Vegas Sands is part of a committee of business and community leaders that will push for casino legalization in the state’s 2025 legislature. Late last year, Sands controlling stockholder Miriam Adelson spent nearly $3 billion to acquire 73 percent of the NBA’s Dallas Mavericks to fortify the company’s interest in pushing for Texas casino legalization.
What I'm reading
🛑 Hudson Yards casino juggernaut runs into a roadblock — Nick Garber, Crains New York …
… 🎭 Theater workers’ union opposes Jay-Z-backed casino bid for Times Square: ‘Not good for Broadway’ — Carl Campanile, New York Post
The New York City-area casino process is unclear (see Sands item above). Bad news for Wynn Resorts’ casino proposal at Hudson Yards and bad news for Caesars Entertainment and its plans for Times Square. MGM Resorts (Empire Casino) and Resorts World (Aqueduct Racetrack) could be the only winners.
💲New Hampshire has no locally owned casinos, state eyes new regulations — Sruthi Gopalakrishnan, Concord Monitor
Las Vegas-based Full House Resorts emerges as a bidder for a closed New Hampshire casino.
News, notes and quotes
Grand Sierra Resort updates its arena project with additional amenities
The planned 10,000-seat arena at Grand Sierra Resort in Reno will be attached to the hotel-casino as the Meruelo Group unveiled new details and renderings last week. The planned $1 billion development will include an ice rink, a dedicated parking garage and a fan zone. The arena will become home to the University of Nevada men’s basketball team.
- Press release from Grand Sierra
Station Casinos facing an NLRB hearing in Las Vegas
The National Labor Relations Board began a federal court hearing in Las Vegas on Tuesday against Station Casinos, the operating arm of Red Rock Resorts. In the complaint issued April 13, 2021, the NLRB alleged Station Casinos undermined the attempts of workers at Boulder Station and Palace Station to unionize.
- Press release from Culinary Union Workers Local 226