Station scores highwith Wall St. analyst

May 30, 2006 3:42 AM

Goldman Sachs last week issued a report in which it forecast Station Casinos is "distancing" itself from the competition in the Las Vegas locals market.

Specifically, Station properties are garnering more local customers and "also catching a greater mix of higher end customers" because of their "better non-gaming amenities," according to Goldman Sachs analyst Stephen Kent.

The report was based on visits to Station’s Green Valley Ranch and Red Rock casinos and Boyd Gaming’s Suncoast and South Coast casinos.

"We came away from the visit more confident in Station’s position in the locals market and more concerned with Boyd’s position," Kent said.

Kent said that the Station casinos slot floors and table games were "considerably more crowded" than the Boyd casinos, and were "fresher looking."

Kent added that Station casinos "clearly dedicate more time and effort to high-quality amenities — like restaurants, entertainment and nightclub scenes" than the more gaming-focused Boyd properties.

The Wall Street analyst also expressed concern over South Coast’s position in Las Vegas.

"We are still unclear on the mark South Coast will make in the locals market even after our now third visit," Kent said. "For being so new, the property itself lacks a number of the qualities that Boyd used to make Borgata so successful in Atlantic City — high quality restaurants, a trendy nightclub scene, décor in the main atrium, etc."

An executive with Coast Casinos, the Boyd subsidiary that operates South Coast and Suncoast, said an initial drop-off from Suncoast was expected following the opening of Red Rock, but the "newness" will wear off.

The executive, who asked to speak on condition of anonymity, added that South Coast offers a different kind of entertainment experience with its equestrian center and other amenities, and that the Goldman Sachs report failed to include two of Coasts’ strongest performing properties, the Orleans and Gold Coast.

"Those two properties are operating at peak levels," he said. "It’s unfair that they were left out of the equation."