Two of the Las Vegas companies re-opening Gulf Coast casinos this month are keeping the promises made to employees when Hurricane Katrina put them out of business a year ago.
Fifty-five percent of the pre-Katrina employees at Biloxi’s Beau Rivage will be returning to their jobs when the Gulf Coast’s largest casino resort re-opens Aug. 29.
About 95 percent of the 1,500 men and women going to work at the Harrah’s-owned Grand Casino Biloxi previously worked at Harrah’s facilities in the Gulfport-Biloxi area.
The appetite for jobs in the area is a big one as illustrated by the fact MGM Mirage received 18,000 applications.
The "entire" Beau Rivage has been upgraded, according to Mirage resorts President Bobby Baldwin, who says additions include new restaurants, a totally redone hotel tower and a poker room.
The Grand Casino re-opening later this week is in a temporary facility. The company is working on plans for a permanent resort that will take advantage of the new ability to build up to 800 feet farther inland.
The right zip code?Wall Street bankers try not to miss a beat when the time comes to question casino operators.
But an occasional question leaves you wondering if some of the analysts ever get away from the numbers long enough to visit a casino or look at a map.
It was easy to imagine Pinnacle Chairman Dan Lee doing one of those giant eye rolls when he was asked during a recent Q&A if the re-opening of the Beau Rivage in Biloxi this month will impact Pinnacle’s casino near Lake Charles, Louisiana.
Lee said he doubted that it would since Biloxi is about four hours away to the east and most of Pinnacle’s business in Lake Charles comes from Houston about two hours to the west.
Atlantic City ripe
Atlantic City’s getting careful looks from entrepreneurs looking for the chance to become casino owners but who are turned off by the sky-rocketing entry prices associated with the Las Vegas Strip market.
Recent additions to this crowd may include Penn National President Kevin DeSanctis who has announced his departure from the company by the end of the year to form what will be known as Revel Entertainment.
DeSanctis has nothing to say for the moment, but there are signs he may be teaming with Morgan Stanley, the Wall Street banker that has purchased twenty-something acres next to the Atlantic City Showboat. This includes some of the property on which MGM was once planning to build a hotel and casino.
Trend continues for
Las Vegas resorts continue showcasing an emphasis on non-gaming revenue.
Other U.S. markets are showing the same trends. A Biloxi executive says with a tone that suggests things aren’t as easy to figure out as they used to be, "It’s pretty clear now that a new project can’t open without a lot of the touristy stuff," meaning amenities outside the casino.
But the gambles associated with companies trying to exploit this new reality are huge.
They were recently giving away a lot of tickets to the Elton John and Phantom of the Opera productions at Caesars Palace and The Venetian, respectively. Steve Wynn dumped Avenue Q, NOT because it wasn’t making money but because it wasn’t filling the showroom.
When expensive shows such as these have a lot of extra seats, the pain is felt throughout the casino. Caesars, for instance, benefits from the presence of the big shows only to the extent that showroom crowds are spending money elsewhere on the property.
How many millions of dollars do you suppose were eventually viewed as squandered on MGM’s failed early efforts to create a theme park in Las Vegas?
But the company found its footing under the leadership of Terry Lanni and has since headed off in much more productive directions.
MGM Mirage reported $27 million as its share of second quarter profits from the closings on more than 300 residential units in the first of three condominium towers built on the former MGM theme park property. About 65 percent of these residences have been turned back to the company for inclusion in The Signature, a hotel project which treats the residential units in the three distinct towers as rooms and suites available to the general public at a very premium rent.
And over at Wynn Las Vegas, Steve Wynn says the estimated 65 percent return on investment in the resort’s restyled Tryst nightclub makes it one of the most profitable such ventures in the country.
It may not be the biggest, Wynn concedes, but he challenges anyone to find a club with a better return on investment.
Locals-oriented Station Casinos has jumped on this trend with its new Red Rock which, as executives have been reminding analysts, has a different revenue equation than other company casinos because of the number of clubs and restaurants it owns and operates.