Indy Gaming: Trop demise subtracts Vegas rooms. It will be 3 years before supply rebounds
I’ve attended several Strip implosions. The Tropicana event was pretty spectacular.
Between the implosion and other stories, I didn’t get to spend as much time as I would have liked at the Global Gaming Expo. Be sure to check out “What I’m reading” from colleagues who attended G2E.
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Standing roughly a half-mile from where the concrete and steel structures of the former Tropicana hotel towers had been loaded with 1,700 pounds of explosives, Las Vegas Convention and Visitors Authority CEO Steve Hill said he had never been this close to an implosion.
“In most places, building implosions don’t mean anything. We’re a little different,” said Hill, whose public-private agency promotes and advertises Las Vegas to a worldwide audience.
Roughly 75 minutes after Hill spoke, the 23-story Paradise and Club towers came crashing down following several loud explosions toward the conclusion of an eight-minute fireworks and aerial drone display.
As dust clouds rose above the Strip, the drones transformed the Tropicana trademark into logos of Bally’s Corp., which operated the resort, and the Oakland Athletics, which is planning a $1.5 billion, 33,000-seat baseball stadium for 9 acres of the 35-acre site.
What type of non-baseball amenities eventually replace the Tropicana is yet to be determined, but Bally’s CEO Soo Kim said the development will include a hotel and casino.
“There are lots of things we could do and we've already submitted a master plan for something that's pretty decent-sized,” Kim told The Nevada Independent before the implosion. “The question is, what's the scale of the first phase?”
The demolition of the Rat Pack-era Tropicana signaled the latest evolution of the Strip. But along with July’s closure of The Mirage, which will be converted into the Hard Rock Las Vegas, the Tropicana’s demise added to the removal of roughly 4,500 hotel rooms from the market.
Las Vegas has just fewer than 151,000 hotel rooms and suites, a figure that won’t change dramatically for three years until Hard Rock opens with a renovated Mirage tower and a guitar-shaped hotel at the front of the property that will rise 700 feet above the Strip. The company has not said how many rooms and suites will be included in the reimagined resort.
“Sometimes we have plenty of hotel rooms and sometimes we don't,” Hill said of Las Vegas, which on an average weekend last year, filled 91 percent of its rooms. “There has been a steady growth in the number of rooms in Las Vegas, which I think is healthy for the city.”
According to the LVCVA Construction Bulletin, a handful of motel-style projects could add roughly 500 rooms sometime in 2025. A pair of non-gaming hotels under construction in Symphony Park would add close to 500 rooms while M Resort in Henderson is building a 384-room hotel tower expansion that won’t open until 2026.
Hill said it’s “challenging” to build a resort that’s competitive in a market where nightly room rates continue to rise even as the cost to build escalates.
“It’s not just the rooms. It’s everything that goes into an integrated resort,” he said. “When interest rates were higher, it was harder to make that commitment. The financing costs have come down a little bit, which is helpful. But it's going to be one of the challenges moving forward when you get to this scale.”
As of August, the average daily rate on the Strip was $201.64, up more than 6 percent from a year ago. Downtown rooms are averaging $101.92 a night, up 2.5 percent from a year ago.
The openings last December of the 3,700-room Fontainebleau Las Vegas and 200-room Durango Casino Resort helped make up for some of the capacity lost from the Tropicana and Mirage. However, price points are much higher. A room at the Fontainebleau this weekend starts at $700 a night. Tropicana rooms were less than half that cost.
In his weekly Las Vegas room rates report, J.P. Morgan Financial gaming analyst Joe Greff wrote that costs for early November are up 21 percent from a year ago. Properties operated by MGM Resorts International are up a combined 15 percent and hotel rooms controlled by Caesars Entertainment cost 27 percent more than last year.
Greff said the convention calendar drove up room demand for the period given there are six conferences in early November as opposed to three a year ago.
Kim said Bally’s is considering the current Las Vegas market with plans for a new property, but also taking into account the baseball stadium and its effect on the Strip. He suggested the A’s games and other events at the facility will draw customers staying at nearby properties, including the 13,000-plus hotel rooms MGM Resorts controls on three of the four corners of Tropicana and Las Vegas boulevards. But he wants the ballpark site to include a hotel casino.
“The tourists are going to come and walk to the ballpark,” Kim said. “It’s a wonderful location.”
IGT expands its Wheel of Fortune slot brand amid pending merger
It was business as usual at the Global Gaming Expo for International Game Technology (IGT), which unveiled new variations on its wildly popular Wheel of Fortune slot machines even as the company’s future was being discussed in high-level meetings far from the trade show.
Hedge fund Apollo Global Management announced a $6.3 billion deal in July to acquire IGT and rival gaming equipment developer Everi Holdings and merge the businesses into a privately held entity under the IGT name. The deal isn’t expected to close until next year.
In the meantime, IGT displayed 11 new concepts for its Wheel of Fortune slot machine, including merging the theme with a video poker slot machine as a jackpot bonus mechanism utilizing the word puzzle-solving feature.
Also, IGT created a new line of electronic table games that are connected to a 12-foot-7-inch-tall wheel that is used as a bonus feature. The highly visible display resembles the wheel spun on the popular TV game show.
Most of the new games could be in casinos by early next year if they get regulatory approval.
Since launching Wheel of Fortune slot machines in 1996, IGT has created more than 250 variations of the game for casinos around the world. The games have paid out more than $3.6 billion in jackpots.
Last year, IGT extended its licensing agreement with Sony Pictures Television to continue producing Wheel of Fortune games through 2034.
Wheel of Fortune is considered one of the more popular games on most casino floors. It has helped IGT remain part of the troika — along with Aristocrat and Light & Wonder — that accounts for more than 65 percent of all slot machine sales to casinos in the U.S. and Canada, according to Eliers & Krejcik Gaming.
Visitors Authority spends $2M to promote Las Vegas in London
Las Vegas Convention and Visitors Authority CEO Steve Hill said the agency spent $2 million on rights as the presenting partner for the NFL’s three games in London.
In an interview before the Tropicana implosion, Hill said the three games provided a valuable opportunity for the LVCVA to promote the city and target visitors from the United Kingdom.
“It’s a market we’re trying to get back,” Hill said of England’s role in international visitation, which declined following the pandemic. Las Vegas has direct round-trip airline service via British Airways and Virgin Atlantic from London airports.
Hill said the deal with the NFL was for two years but the $2 million figure was just for 2024. The LVCVA is funded by hotel room taxes.
The first two games were played at Tottenham Hotspur Stadium. On Sunday, the Jacksonville Jaguars play the New England Patriots at Wembley Stadium.
What I'm reading from G2E
💸 Nevada Gaming Board chair concerned about money laundering in Las Vegas casinos — Buck Wargo, CDC Gaming Reports
“Our illegal market has been minimized because we have a legal market,” said Gaming Control Board Chairman Kirk Hendrick. But he added that illegal bookies from other states launder money in Nevada casinos as a way to hide their ill-gotten gains.
🤠 Texas resort casino is ‘inevitable,’ stakeholders say — Ryan Butler, Covers.com
“We're not leaving, we're staying until it's done,” said Las Vegas Sands executive Andy Abboud. The company is leading the Texas legalization efforts.
🎰 Once unwelcome, YouTubers now flock to G2E — McKenna Ross, Las Vegas Review-Journal
The rise of influencer marketing drew dozens of content creators to the gaming industry’s largest trade show.
🐊 Hard Rock chairman opens the door to a FanDuel or DraftKings partnership in Florida — Contessa Brewer & Jessica Golden, CNBC
Seminole Tribe-owned Hard Rock is Florida's only sports betting operator. “We've actually developed a great relationship with them,” said Chairman Jim Allen of FanDuel and DraftKings.
☑️ California betting initiative could be as soon as 2026, but ‘probably’ 2028 – Jill R. Dorson, iGaming Business
California Nations Indian Gaming Association Chairman James Siva says tribes want to legalize sports betting, but it will take awhile.