Wednesday, November 12, 2008

Aliante Station Opens in N. Las Vegas

The $662 Million Aliante Station opened last night to the usual fanfare of fireworks and celebrities despite the state of the economy in Las Vegas. Located in the far north part of the Vegas Valley, it is intersection of the Beltway and Aliante Parkway. The numbers are typical of a locals place; 202 rooms, 120,000 Sq. Ft. casino filled with tons of (bad?) video poker, heavy on the casual food including a decent sized food court and a 16 screen movie theater.

Ironically, it opens on the same day Station Casinos reported terrible financial numbers. Due largely to the debt it took on to go private earlier this year, they posted a 3rd quarter loss of $23 million with revenue declining 10%. Not a great day to open a casino! I am very eager to check the place out and see what they got for their 650+ mil. With that price tag and the current environment, particularly in NLV, I don't know how they get their money back. By comparison, the Eastside Cannery that opened in August, "only" cost $250 million. The other problem facing Station is that any money made on Aliante will almost certainly come at the expense of Texas and Sante Fe Stations and Fiesta Rancho. With new development at a virtual halt in Vegas, they will just be cannibalizing themselves. As always with any new casino endeavour, I wish them all the luck in the world but like I said... Not a great day to open a casino!

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Thursday, November 6, 2008

Las Vegas Sands, owners of the Venetian and Palazzo, announced today that they were in default of certain convenents on their long term debt. This means that the lenders can call for the debt to be paid back immediately, triggering an almost certain bankruptcy. Sheldon Adelson, who owns 70% of the company, has already lent them a half a billion of his own money and may have to pony up more if he can find additional financing.

Its an amazing fall for a company that just a year ago was on top of the world. Adelson was one of the richest men alive and they had new projects going in Vegas, Macau, Singapore and Philly. All of that construction activity turned out to be the downfall as they took on way more debt than they can handle in the current horrendous environment. While the economic situation on the strip is certainly not Adleson's fault; when the downturn started, instead of trying to lure in the serious gambler he did everything in his power to drive them away by destroying anything even remotely playable in his casinos. Meanwhile, just next door at Wynn, he put in some decent plays and is weathering the storm much better than the guys at LV Sands. Of course, that is a gross over simplification but the point is that Wynn knows how to bring a customer in while Adelson was just good at fleecing them. I personally know of several high-end player who bailed on Venetian long ago. In times like this, a casino needs its regulars who won't think twice about putting in 8 hours a day in front of a machine. When things were good, the Venetian said "the hell with the gambler" and instead banked on the conventioner to pay the bills with $300 dinners. Well those people have stopped coming and his regulars are now playing at Wynn, the Palms and Green Valley Ranch.As the old saying goes... You reap what you sow!

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