Closed casinos and declining visits hurt two Clark County gambling markets

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Two northern Las Vegas casinos that were closed for 23 months and a nearly 38% drop in visits to Laughlin prevented communities in Clark County from meaningfully participating in the record year of 13.4 billion dollars in Nevada gambling revenue in 2021.

According to the Gaming Control Board, the markets were the only two of Nevada’s 18 reporting jurisdictions where total gaming revenue in 2021 did not exceed their pre-pandemic results in 2019. North Las Vegas gaming revenue of $285.7 million was 5.5% lower than 2019 levels. Laughlin’s total games of $486 million were 5.1% lower than two years ago.

Every Nevada market topped 2020 revenue totals, hitting the lowest numbers since the 1990s due to pandemic-related operating restrictions and state-imposed health and safety guidelines.

At least one analyst was surprised that North Las Vegas and Laughlin were down from pre-pandemic numbers.

Casinos in the local Las Vegas gaming market, which included North Las Vegas, set a single-year record of $2.9 billion in gaming revenue in 2021. Chad Beynon, gaming analyst at Macquarie Securities, said said the Las Vegas Valley has benefited from customers who have seen home values ​​rise and other economic indicators rebound over the past year.

Residents and others visiting Southern Nevada casinos also spent more money than in previous years.

Clark County’s record gambling revenue of $11.4 billion in 2021 was boosted by the Strip’s single-year record of $7.07 billion, even as the Strip saw around 10 million fewer visitors than two years ago.

Michael Lawton, senior economic analyst for the Board of Control, said slot machine revenue in Clark County grew 21.7% in the last three months of the year. In October alone, slot machine revenue at Clark County casinos surpassed a monthly record of $725.1 million. For the calendar year, Clark County slot machine revenue reached a record $7.5 billion.

“Further, underlying the strength of the Clark County slot (revenue), in each of the past eight months the slot (revenue) has exceeded the previous monthly record set in October 2007,” Lawton said. .

But those results didn’t trickle down to North Las Vegas and Laughlin.

Lawton blamed the North Las Vegas declines on the two closed casinos, which are operated by Red Rock Resorts. Together, Texas Station and Fiesta Rancho, both located on the east side of Rancho Road, have nearly 3,200 slot machines, or about 41% of the pre-pandemic casino market in North Las Vegas.

The properties never reopened following the state’s 78-day gaming shutdown that ended on June 4, 2020.

Laughlin, who also saw a casino – Golden Entertainment’s Colorado Belle – not reopen, was hit by the decline in tourism. The drop in visits included a 59.7% drop in the number of charter airline passengers to and from Bullhead City, Arizona’s small airport, located directly across the Colorado River from Laughlin.

The community’s 10 commercial casinos are geared toward an older clientele, which analysts said was a contributing factor given the pandemic.

Beynon said casino patrons aged 55 and older have been sidelined for much of 2021, not just in Laughlin but across the country.

Brendan Bussmann, partner at Global Market Advisors based in Las Vegas, said Laughlin is considered a regional market, but attracts residents from the Bullhead City area and surrounding communities.

“There remains an opportunity with North Las Vegas, Laughlin, and even East Side Las Vegas and Henderson, to dive into this local market that hasn’t been able to return to its prior patterns,” Bussmann said.

Closed casinos don’t hurt Boulder, South Tahoe

North Las Vegas and Laughlin weren’t the only markets with casinos that remained closed even after the shutdown ended.

The Boulder Strip, which includes Henderson, saw gaming revenue in 2021 hit a single-year record of $967.2 million, 12.2% more than 2019, despite missing two casinos year-round – Red Rock’s Fiesta Henderson and Boyd Gaming’s Eastside Cannery. Properties are still closed.

South Lake Tahoe casinos collected $250 million in gaming revenue in 2021, nearly 11% more than in 2019. Lakeside Casino never reopened after closing, leaving the market with just four casinos in resort.

South Tahoe’s gambling numbers could have been bigger, but Caldor’s fire in California shut down businesses for nearly a week over the normally busy Labor Day weekend.

The Palms Casino Resort, which Red Rock sold to the San Manuel Indian Tribe, is set to reopen by the end of next month after a two-year closure. The property’s game totals are included in Strip results, given its location on West Flamingo Road in the resort corridor.

Boyd Gaming’s Aliante Hotel Casino in North Las Vegas on Monday, August 31, 2021. (Jeff Scheid/The Nevada Independent)

North Las Vegas casinos remain closed

For now, it looks like the two Red Rock casinos north of Las Vegas won’t be reopening anytime soon.

During the company’s fourth quarter earnings call on Wednesday, Chief Financial Officer Stephen Cootey said Fiesta Rancho and Texas Station will not resume operations until “we are confident that we can bring additional value to the portfolio. global”.

Cootey said the company spent $2 million in the last quarter on costs associated with the company’s three closed properties. He said 94% of the revenue associated with closed casinos was recovered by the company’s six existing properties in the Las Vegas Valley.

Boyd Gaming operates two casinos north of Las Vegas, Aliante and Cannery North Las Vegas. Combined with the two Red Rock properties, the four casinos make up the bulk of the North Las Vegas gaming market, which includes several smaller stand-alone properties.

Financial results for Boyd’s North Las Vegas properties are reported with Sam’s Town, Orleans, Suncoast and Gold Coast in its Las Vegas Residents category.

“We’re not talking about individual properties,” Boyd Gaming CEO Keith Smith said in an interview following the company’s fourth quarter earnings conference call Thursday. “But I would say the decline must be largely related to the fact that these properties are not in operation.”

Smith speculated that Aliante and Cannery may have taken over some of the Texas and Fiesta business. Other customers may have migrated to Red Rock’s Santa Fe station, located north of Rancho Road.

“We know the company was dispersed and went elsewhere in the valley,” Smith said. “It could have gone to some local bars and taverns.”

North Las Vegas Mayor John Lee said he has not spoken to Red Rock Resorts representatives about reopening or selling closed casinos. But his worries about lost businesses and jobs have been mitigated given the changes that have taken place in the North Las Vegas business environment in recent years.

“It would be nice to get those jobs and the amenities back. It was very good for us,” Lee said. “I learned from the Great Recession here that relying strictly on gambling is just too problematic. Our priority has been to create a diverse economy. I have no problem with gambling following growth.

Lee said North Las Vegas has focused on attracting manufacturing businesses over the past two years, with the top 10 companies accounting for some 1,800 jobs. In the last three months of 2021, city officials said another 1,000 manufacturing jobs would shift to North Las Vegas.

According to data from Home Builders Research, North Las Vegas led the Valley in new home construction in 2021 and planned additional developments account for 11,500 new homes. Over the past two years.

Smith said business at both Boyd properties had picked up due to activity.

“We’re pretty happy with our portfolio in this part of the market,” Smith said. “You look at housing and what’s happening there, it’s a growing market and there are a lot of positive signs.”

Cootey said Red Rock continues to evaluate the reopening of casinos and has not considered a sale. For the past two years, the Texas Station parking lot has been used as a COVID-19 testing center and food distribution point.

The company has six vacant sites in Southern Nevada slated for expansion, including a 71-acre site on Durango Drive and the 215 Ring Road. Red Rock has a 57-acre site on Cactus Avenue and Las Vegas Boulevard that is set on sale.

Colorado Belle still closed

Laughlin’s only closed casino isn’t set to reopen either.

In response to an email question, Sean Hammond, General Manager of Golden Entertainment’s Laughlin Properties, said he did not have an update on the status of the Colorado Belle. The nearly 1,200-room hotel and casino sits between the company’s two other casinos along the river, the 1,900-room Aquarius and the 1,100-room Edgewater.

According to the Las Vegas Convention and Visitors Authority, Laughlin had more than 1.8 million visitors and 9,875 total hotel rooms in 2019. By 2021, numbers had dropped to 1.2 million total visitors and 8,635 bedrooms.

Hammond declined to comment on several questions about visits to the company’s two Laughlin casinos in 2021 or any expected booking trends in 2022.

Visiting Laughlin is dependent on special events, but one of its biggest annual gatherings, the Laughlin River Run Motorcycle Rally, did not take place in 2020 or 2021 due to COVID-19.

“However, due to the destination and the great driving weather, we still had many motorcycle enthusiasts visit,” Hammond said.

Golden Entertainment also operates the Laughlin Events Center, an outdoor facility that can accommodate up to 21,000 people.

“Last year the concerts didn’t come back until the fall,” Hammond said. “We have already announced several spring and summer concerts between the Laughlin Event Center and the E Center (in Edgewater) and are looking forward to a great fall concert season.”

Laughlin’s casinos had a record $625.4 million in gambling revenue in 2007, before the recession. In 2019, the market brought in $512.2 million.

Caesars Entertainment also operates two resorts in Laughlin, the 1,500-room Harrah’s Laughlin and the 1,450-room Tropicana Laughlin. A company spokeswoman did not provide a representative to comment on the deal.

Neither Caesars nor Golden Entertainment are disclosing Laughlin’s results in their quarterly results.

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