Quarterly casino earnings calls and reports often have information that we can use to look at the current and future state of the companies. The calls, specifically, don’t have major breaking news. This week Red Rock Resorts (AKA Station Casinos) dropped a news bomb that was news but not all that surprising. Let’s just get to the Vegas News because this is probably the biggest story to hit Las Vegas during the week. Plus, we will be talking (again) about Vegas fees.
Red Rock Resorts Closes KAOS At Palms
During its third quarter earnings call, Red Rock Resorts announced that the company was closing the KAOS dayclub and nightclub at Palms immediately. The news was shocking since the earnings press release prior to the call doesn’t mention KAOS at all. However, the press release details financial losses at Palms. It also notes positive revenue at all other Station Casinos properties.
The closure of KAOS isn’t a total surprise. There have been rumors about the club struggling on days without Marshmello and nights without Cardi B or other big name entertainment. There was also news that Red Rock Resorts canceled entertainment contracts at Palms early.
KAOS had been closed for about five weeks while Palms built a dome over the pool. The club officially closed just days after reopening for the winter. KAOS will be used for private events such as parties and meetings going forward. The pool will remain open for hotel guests.
The nail was placed in the coffin during the weeks KAOS was closed. Red Rock Resorts didn’t see a change in revenue in any other part of the casino (gaming, dining, rooms, etc.) while the club was closed. Club guests spent money at KAOS but didn’t generally have money to spend elsewhere else at Palms. That conflicts with the other entertainment venue at Palms. The reps on the call mentioned that events in the Pearl Theater have a positive effect on revenue outside of the theater.
Besides KAOS, the rest of business at Palms seems to be profitable. Red Rock Resort is closing the club to focus on the parts of the casino that are generating positive revenue. There’s already early demand to use KAOS for private events next year. For what it’s worth, there was a private party at KAOS during my last visit to Palms and it appeared as though those guests were spending money at the bars and restaurants.
Red Rock Resort spent almost $700 million renovating Palms. The property is as nice as its been in years. This isn’t entirely news, but I’m not sure that the Station Casinos marketing database can market as effectively to club-goers as they can traditional casino guests.
Rolling Stone has a good overview of the drama around KAOS at Palms if you’d like to read more.
More Red Rock Resorts Earnings
Most of the news from Red Rock Resorts earnings was about KAOS inside Palms. Reps on the call mentioned that Palace Station is slow to ramp up to maximum revenue after its major makeover. The other Station Casinos property near the Vegas strip is showing nice revenue growth but not as good as they’d like to see.
There isn’t much more news about Station Casinos from the earnings report. Besides the renovated properties, everything seems fine. You can read the earnings report here.
Eldorado Is Getting Caesary
Both Eldorado Resorts and Caesars Entertainment reported earnings this week. Caesars’ third quarter earnings report was without much news. I don’t expect much news from Caesars until the merger with Eldorado is complete in 2020. Tom Reeg from Eldorado Resorts expects the deal to close sometime in the first quarter of next year.
The Eldorado earnings call touched on the Caesars merger almost as much as the existing properties. Since this is a Vegas news column, that’s good for us.
Eldorado staff has been visiting Caesars properties all over the country for the past few months. The company is learning what’s good and bad about how Caesars does business. Eldorado is increasingly confident about hitting the $500 million in consolidation synergy. The consolidation and merging of jobs will take place sooner than later.
Caesars’ quarterly revenue made the Eldorado staff happy. So did the sale of Rio. They did note that Caesars has excess real estate that could be used for future development – both inside and outside of Las Vegas. This real estate could also be sold or developed with a partner.
Eldorado still plans to sell a Caesars asset in Las Vegas after the merger is complete. The note about excess real estate in Las Vegas makes me think that a sale of Bally’s and the nearby land to Hard Rock (see 10/29 news) could be a reality.
When asked about what Caesars does well, Reeg (I’m pretty sure it was him) mentioned that Caesars Rewards Loyalty Program is light years ahead of Eldorado Resorts players club. He also mentioned that Caesars does online commerce, social media, and table games better than Eldorado Resorts. Speaking about table games, Caesars Las Vegas Pai Gow progressive jackpot is over $2 million.
As you’d imagine, Eldorado is doing a lot of planning for the merger with Caesars. There will be plenty to do when the deal is done. I look forward to seeing how Eldorado transfers its culture to the existing Caesars casinos in Las Vegas and around the country.
You Love Fees
Vegas Fees
The LA Times wrote about the concession fees in Las Vegas. Evidently, the Vegas fees are a way of transparently raising prices. Beer Park at Paris Las Vegas has been “transparently raising prices” since the day it opened. How can a new bar and restaurant raise prices since opening day? Sounds like PR spin.
Speaking of PR, the rep for Alexxa and Hexx at Paris says “Should a guest be uncomfortable with the surcharge, our policy is to explain it and, if appropriate, remove it.” This might not work at all bars and restaurants but it’s something you can try if you’re charged a fee.
Mama Rabbit no longer charges an additional service fee for drinks. It seems as though shaming a venue on twitter and Instagram many get them to rescind Vegas fees for you and other guests.
UK RESIDENTS
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Quick Hits – Vegas News
- Carnegie Deli at The Mirage is closing in February. Read more here.
- The Cosmopolitan sued a hockey player for not paying back his marker. The best part of this story is that he was gambling in between playoff games earlier this year. Read more here.
- Speaking of lawsuits and the Cosmopolitan…OJ Simpson is suing the casino. Read more here.
- Shin Lim is doing some kind of magic show pretty often at The Mirage next year. Read more here.
- Wynn Resorts reported earnings this week. There wasn’t anything too interesting as it relates to Las Vegas. You can read the earnings report here.
- Hey yo! A new ice cream shop is opening in the Fremont East section of downtown Las Vegas. Read more here.
- New Jersey is now taking eSports bets. That reminded me that EVO is returning to Las Vegas in 2020. Maybe Las Vegas sports books will take bets on this year’s tournament. Read more here.
- Red Square at Mandalay Bay is closing. Read more here.
- Bluetech has a press release. Read that here.
- Wynn Resorts has special holiday deals. Read more here.
- Psycho is returning to Mandalay Bay next year. Read more here.
- Professional lacrosse from San Diego is coming to Vegas for Super Bowl weekend. Read more here.
- The Plaza renovated its William Hill Sports Book. Read more here.
- Gordon Ramsay is opening another restaurant in Las Vegas next year. Read more here. I can’t think about Gordo and not think about this commercial.
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