Indy Gaming: The heat is on Resorts World Las Vegas
We know it was hot this year. But this is the first time I can recall that a Strip resort has blamed the heat for a poor quarterly financial performance.
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Southern Nevada’s excessive heat this summer broke numerous marks for all-time high temperatures, including a record 112 days over 100 degrees.
The weather also broke Resorts World Las Vegas.
At least, that’s the rationale cited by the Malaysia-based ownership of the $4.3 billion Strip resort, which said the sizzling Las Vegas heat helped deliver the property’s worst quarterly financial performance since its June 2021 opening.
According to a securities filing with the Bursa Malaysia Stock Exchange, Genting Berhad, which is headquartered in Kuala Lumpur, said Resorts World’s third-quarter revenue declined 46.3 percent to $117 million compared to the $218 million in the previous quarter.
In a statement, Genting Berhad said “an abnormally hot summer in Las Vegas and economic uncertainty in an election year” caused the hotel’s occupancy rate to decline to 85.1 percent, down from 91.1 percent in the prior quarter.
In conference calls during the past few months by Strip and locals casino operators, not one company mentioned excessive Las Vegas heat having any effect on quarterly results.
The average daily room rate at Resorts World Las Vegas was $244, down by just $2 from the previous quarter.
However, two gaming analysts from an Asia-based global financial group suggested the 12-count disciplinary complaint filed in August by the Nevada Gaming Control Board against Resorts World might be putting additional heat on the property.
According to Inside Asian Gaming, Nomura Holdings analysts Tushar Mohata and Alpa Aggarwal said the charges of allowing known illegal bookmakers to gamble millions of dollars at the Strip resort for more than a year “will likely remain an overhang until a regulatory action is decided.”
Resorts World Las Vegas and Genting Berhad were named in the 31-page filing, with regulators seeking an undisclosed but likely multimillion dollar fine and action against the ownership and property operators.
According to the analysts, Genting executives said on a conference call the company had until Dec. 9 to respond to the complaint. “Discussions are ongoing,” they wrote.
Much of the illegal activity occurred during the stewardship of former Resorts World Las Vegas President Scott Sibella, who was fired in September 2023 and was sentenced in May after pleading guilty to federal charges of violating the Bank Secrecy Act while overseeing MGM Grand Las Vegas. He was given probation.
In July, when Las Vegas set or tied 13 daily record highs including hitting 120 degrees on July 7, Strip casinos experienced a 15 percent gaming decrease during the month. However, the market was going up against its single-month record revenue high of $834.9 million that was set a year ago.
According to an email from a spokesperson for the Las Vegas Convention and Visitors Authority (LVCVA), the agency doesn’t have data that would specifically quantify if the excessive heat affected visitation numbers. In July, visitor volume was 3.5 million, essentially flat compared to July 2023.
The LVCVA noted that visitor volume from July through September increased by a little more than 1 percent from 2023.
As to Resorts World’s comments specifically, the LVCVA spokesperson said, “The individual resorts know their customers well. We cannot comment on individual property performance as we are not privy to their transaction data or customer feedback.”
In its statement, Genting said Resorts World Las Vegas would benefit from additional dining, entertainment and retail changes, as well as a new lineup of performances in the property’s 5,000-seat theater “to drive significant foot traffic in the remainder of 2024 and beyond.”
Reid Airport draws 5.3 million passengers in October
October has become a busy month for Harry Reid International Airport. The facility drew almost 5.3 million passengers throughout the month’s 31 days this year, the second-highest all-time monthly total, according to the Clark County Department of Aviation.
However, the figure will be recorded as a month-to-month decline of 3.5 percent, given that October 2023 saw the airport’s highest-ever single-month total of more than 5.4 million passengers. In October 2022, Reid Airport drew more than 5.2 million passengers, the first time it topped the 5 million mark.
Through October, Reid Airport has drawn 48.8 million passengers this year, up 1.7 percent from a year ago.
A year-over-year increase in international passenger volume of 8.3 percent during October helped offset a 4 percent decline in domestic passenger totals. For the first 10 months of 2024, Reid has drawn more than 3 million international travelers, an increase of 13 percent from 2023. Domestic passenger volume of almost 45 million is up 1.1 percent.
J Resort bringing outdoor festival grounds to downtown Reno
J Resort owner Jacobs Entertainment signed a five-year agreement to have JMF Presents, a Northern Nevada events and production company, take over the outdoor entertainment activities at the Reno resort.
In addition to growing the J Resort’s Glow Plaza concert schedule, J Resort will open a new venue for festivals with audiences of as many as 15,000 on a more than 10 acre site between North Arlington and Ralston streets, creating downtown Reno's first outdoor festival grounds.
Jacobs Entertainment Regional Vice President Jonathan Boulware said the company is investing $5 million into site improvements for the festival grounds and $125 million into the hotel-casino, including a new front entrance off West 4th Street.
Construction on the J Resort’s north expansion will begin in January and will include expanded parking, additional gaming floor space, a new restaurant and a 400-seat banquet hall.
What I'm reading
🎰 Doug Burgum as Secretary of the Interior could limit plans for tribal gaming expansion — Derek Helling, PlayUSA
Burgum has been skeptical about the legality of tribal casinos offering online gaming, which could signal a reversal of current policies favorable to that practice.
💰 Miriam Adelson, Las Vegas Sands continue to bankroll pro-gambling efforts in Texas — Aarón Torres, The Dallas Morning News
Miriam Adelson gave $3.3 million in political contributions during 2023 in a failed effort to legalize casinos in Texas. She has already donated $13.7 million for a similar effort with the state’s 2025 legislative session looming.
🏔️ New Vegas-style hotel and casino holds promise of attracting more gamblers, investors to Cripple Creek — Wayne Heilman, Colorado Springs Gazette
The 300-room Chamonix Casino & Hotel was built by Las Vegas-based Full House Resorts and opened in phases starting at the end of 2023.
News, notes and quotes
🏨 Rio is now part of the Hyatt customer loyalty program
The Rio Hotel & Casino was added to Hyatt Hotels’ customer loyalty program, which allows members to book rooms at the off-Strip resort to earn and redeem points. The Rio completed its first phase of a $340 million renovation that included redesigning the 1,500-room Ipanema Tower, a food hall that replaced the buffet, new restaurants, a redesigned pool area and revisions to the casino floor. The next phase will focus on redesigning the Masquerade Tower.
♣️ Macau casinos continue post-pandemic rebound
Macau’s gaming market extended its 2024 comeback with $2.3 billion in gaming revenue during November. For the first 11 months of the year, the industry has collected $26 billion, higher than any 12-month total since 2019. Still, Stifel Financial gaming analyst Steve Wieczynski said expectations about Macau — a special administrative region of China that was once the world’s largest casino market— remain subdued. Wynn Resorts, MGM Resorts International and Las Vegas Sands are the only U.S.-based operators with casinos in Macau.