Year of the Dog brings optimism
January 09, 2018 3:00 AM
by The Analyst
This year Chinese New Year lands on Feb. 16 with celebrations starting on its eve, the 15th. Given the economies of both Asia and the United States, there is more reason for optimism than pessimism that both Macau and Las Vegas stand to do very well for this particular New Year’s celebration.
Macau seems to have evolved past Mainland China’s crackdown on currency outflows and VIP gaming has returned. Even though the Chinese government has recently tightened how much their citizens can spend and take out of ATM machines while traveling out of the country, signs for Macau, barring weather or geo political surprises, are indicating this could be one of the most successful New Year celebrations Macau has seen in many years.
Chinese New Year celebrations usually run seven days. This year the holiday starts on a Thursday and neatly runs into the weekend, which will help feed special events here in Las Vegas. By coincidence the new payroll deduction rates are expected to go into affect around the same time so Las Vegas casinos will likely see a bump from both the New Year celebrations and the sudden bump in discretionary cash available to traditional customers.
With the gains in the stock market, consumer confidence, increases in personal disposable cash from the Tax Reform Act, Super Bowl on Feb. 4, Chinese New Year starting on Feb. 15, Valentine’s Day, Presidents Day on Feb. 19 (coincidentally making Chinese New Year a three-day weekend in the U.S.) February 2018 could be a record setting month in Las Vegas not only for casino revenue but all categories (hotel, F&B, shops, entertainment) of revenue.
In the Chinese zodiac, the sign of the Dog while generally considered playful is also given attributes for the gathering and protection of money. Hopefully, superstition or not, this year of the Dog will mean a great gathering of wealth for our Las Vegas casinos.
Closing before New Year?
On a separate but somewhat related note, on learning of the casino closure of the Lucky Dragon, I for one was surprised, not that it is closing but that they are doing so before Chinese New Year. One would think a Chinese themed property would look to be open during such a potentially busy time.
While company announcements have indicated they will reopen within six months, reformatted for an expanded market appeal, I hope their reformatting includes a unique enticement or two that will stimulate both locals and tourists to make the trek to their uniquely located facility.
While I personally wish them well, 200 hotel rooms is not enough to support a casino, and absent an attraction to pull in tourists or locals, it is likely to remain a property that feeds into neighboring facilities rather than drawing from them.
As was noted in last week’s column, if an over 800-room hotel (the Westin) cannot support a casino, the prospects of a casino surviving with 200 rooms with no material local or walk-in tourist traffic will be challenging. I will look forward to seeing how they solve their seeming dilemma, which I hope they spectacularly do.
February is also expected to see the reconvening of the Gaming Policy Committee and the addressing of the sticky questions around Nevada’s legal marijuana business and the Nevada Gaming Commission’s position on the outright prohibition of any interactivity with any level of that business.
Of course the recent memo from U.S. Attorney General Jeff Sessions, basically green lighting the prosecution by each state’s assigned U.S. attorney, threw another topic into the ongoing discussions. Perhaps Nevada’s newly assigned U.S. attorney, Texas lawyer Dayle Elieson, will be invited to the next meeting and real guidance could be gotten about what to do until Congress finally addresses the marijuana issue – make it legal or leave it illegal – at the federal level.
While there is probably not much in the way of material resolution coming soon to the question of boundaries around the intersection of legal marijuana and the gaming industry, I hope the Committee does come to at least one recommendation to bring harmony to state laws and regulations. The citizens of Nevada, through a change in state law, have made medical and recreational marijuana legal.
While, I am not a fan of its use in casino resorts, I find it silly that gaming operators are at risk from a regulation – not a law, if they overtly or inadvertently do something related directly or indirectly to Nevada’s legal marijuana industry. I do not believe either the Gaming Control Board or the Gaming Commission should be able to set their regulations above the will of Nevada voters, as expressed through the new law, and put gaming operators at a double jeopardy risk between gaming regulations and federal law for an otherwise legal activity within Nevada.