Downtown gaming Las Vegas
Encyclopedia
Las Vegas, Nevada
Las Vegas is the most populous city in the U.S. state of Nevada and is also the county seat of Clark County, Nevada. Las Vegas is an internationally renowned major resort city for gambling, shopping, and fine dining. The city bills itself as The Entertainment Capital of the World, and is famous...
uses for the casinos near the Fremont Street Experience
Fremont Street Experience
The Fremont Street Experience is a pedestrian mall and attraction in downtown Las Vegas, Nevada. The FSE occupies the westernmost 5 blocks of Fremont Street, including the area known for years as "Glitter Gulch," and portions of some other adjacent streets.The attraction is a barrel vault canopy,...
. The Nevada Gaming Control Board NGCB lists the Stratosphere Casino as a downtown casino even though that property is 2 miles (3.2 km) from Fremont Street and is often considered the northern edge of the Las Vegas Strip
Las Vegas Strip
The Las Vegas Strip is an approximately stretch of Las Vegas Boulevard in Clark County, Nevada; adjacent to, but outside the city limits of Las Vegas proper. The Strip lies within the unincorporated townships of Paradise and Winchester...
. The land is part of the 110 acres (44.5 ha) that were auctioned on May 15, 1905 when the city was founded.
Downtown gaming remains closer to Vintage Vegas (inexpensive food, rooms, free entertainment, lower house edges on table games and slots, balconies on at least one major hotel, and no high end shopping). Since 1989 there have been three major changes to the downtown area. The Stratosphere Casino opened in 1996, and built a new hotel tower in 2000. The Lady Luck casino and several smaller casinos shut down. A new hotel tower with 500 rooms opened in the Golden Nugget
Golden Nugget Las Vegas
The Golden Nugget Las Vegas is a luxury casino-hotel located in Las Vegas, Nevada on the Fremont Street Experience. The property is owned and operated by Landry's Restaurants....
on November 2009. The Late-2000s recession is reducing gaming revenue to 20 year lows. Every casino except the California, the Fremont, and the Golden Gate has changed owners in the last 20 years.
Downtown competition
While the gaming revenue of downtown Las Vegas has remained relatively stagnant over the last two decades, the Las Vegas Strip has boomed. In fiscal year 1988 that ratio of revenue for the Strip compared to downtown was less than 3:1. In FY2008 the ratio is over 10:1. However, downtown rode the massive increase in tourist spending from 2004 through 2007 that swelled the non-gaming revenue of the area. Non gaming revenue and income hit an all time high in FY2006.
The population of the city of Las Vegas has increased from 249,000 in 1990 to about 600,000 in 2010. In the interim only three major casinos have been constructed inside the city limits (Stratosphere, Suncoast and Rampart Casino). So the downtown casino district with over 1100 employees has remained important to the city. Since the majority of the casinos remain outside the city limit many people have been promoting the idea of a Consolidated city–county government as a more equitable way to share revenue.
Casinos in City of Las Vegas
This table includes all the casinos inside the city limits. The table, game, and slot count is valid on 31 December 2008. The category of over $1 million and under $12 million are re-evaluated every fiscal year. FSE means Fremont Street Experience. Games refers to table games. License numbers are issued by city of Las Vegas.| License | Name | Category | Owner | FSE | Keno | Bingo | Sports | Poker | Games | Slots |
|---|---|---|---|---|---|---|---|---|---|---|
| G08-00014 | Golden Nugget Golden Nugget Las Vegas The Golden Nugget Las Vegas is a luxury casino-hotel located in Las Vegas, Nevada on the Fremont Street Experience. The property is owned and operated by Landry's Restaurants.... |
>$72m | Landry's Restaurants Landry's Restaurants -External links:*... |
Yes | Yes | Yes | 13 | 71 | 1358 | |
| G08-00032 | Stratosphere Las Vegas Stratosphere Las Vegas Stratosphere Las Vegas is a tower, hotel, and casino located on the Las Vegas Strip in Las Vegas, Nevada, United States. Its tower is also the tallest observation tower, and the 5th-tallest structure, in the United States, as well as being the tallest structure in Las Vegas.It is owned by Whitehall... |
>$12m | ACEP American Casino & Entertainment Properties American Casino & Entertainment Properties is a casino holding company headquartered at the Stratosphere Las Vegas. ACEP was a wholly owned subsidiary of American Real Estate Partners before it was sold to Whitehall Street Real Estate Funds in February 2008... |
Yes | 8 | 56 | 1300 | |||
| G08-00003 | California California Hotel and Casino The California Hotel and Casino, also known as The Cal opened in 1975 at a cost of $10 million with a hotel and casino located in Downtown Las Vegas, Nevada near the Fremont Street Experience. When it opened it had 325 rooms which has since been expanded to 781.The California has been owned by... |
>$12m | Boyd Gaming Boyd Gaming Boyd Gaming Corporation is a Paradise, Nevada based business engaged in the development, ownership and operation of hotels and casinos throughout the United States... |
Yes | Yes | 32 | 1100 | |||
| G08-00023 | Main Street Station Main Street Station Hotel and Casino and Brewery The Main Street Station Hotel and Casino and Brewery is a hotel and casino located in Downtown Las Vegas, Nevada. It is owned by Boyd Gaming Corporation... |
>$12m | |Boyd Gaming Boyd Gaming Boyd Gaming Corporation is a Paradise, Nevada based business engaged in the development, ownership and operation of hotels and casinos throughout the United States... |
19 | 881 | |||||
| G08-00010 | Fremont Fremont Hotel and Casino The Fremont Hotel & Casino is located in downtown Las Vegas, Nevada, on the Fremont Street Experience. The casino is operated by the Boyd Gaming Corporation.-History:... |
>$12m | Boyd Gaming Boyd Gaming Boyd Gaming Corporation is a Paradise, Nevada based business engaged in the development, ownership and operation of hotels and casinos throughout the United States... |
Yes | Yes | Yes | 31 | 1092 | ||
| G08-00009 | Four Queens Four Queens The Four Queens Hotel and Casino is located in downtown Las Vegas on the Fremont Street Experience. Home to the Queen's Machine, the world's largest slot machine, the 690 room hotel and casino is owned and operated by TLC Enterprises, which acquired the property from the Elsinore Corporation in... |
>$12m | TLC | Yes | Yes | Yes | 31 | 1026 | ||
| G08-00075 | Binion's Binion's Gambling Hall and Hotel Binion's Gambling Hall & Hotel is a hotel and casino located in downtown Las Vegas, Nevada on the Fremont Street Experience. The casino is named for its founder, Benny Binion and has 366 rooms, two restaurants and a rooftop pool... |
>$12m | TLC | Yes | Yes | 50 | 52 | 800 | ||
| G08-00051 | Fitzgeralds | >$12m | BDI | Yes | Yes | 6 | 31 | 980 | ||
| G08-00006 | El Cortez El Cortez The El Cortez, a hotel and casino is a relatively small downtown Las Vegas gaming venue a block from the Fremont Street Experience and Las Vegas Boulevard. The official marketing slogan has been "Where locals come to play" since the El Cortez has traditionally attracted Las Vegas residents weary of... |
>$12m | Gaughan | Yes | Yes | 3 | 21 | 1025 | ||
| G08-00078 | Plaza Plaza Hotel & Casino The Plaza Hotel & Casino is a casino-hotel located in downtown Las Vegas, Nevada owned by the Tamares Group and Play LV is the leaseholder and operator of the property. It currently has 1,037 rooms and suites, as well as an casino and there is more than of event space... |
>$12m | Tamares Tamares Group Tamares Group is a private investment group based in Vaduz, Liechtenstein. The company has interests in real estate, technology, manufacturing, leisure and media... |
Yes | Yes | 3 | 23 | 800 | ||
| G08-00060 | Las Vegas Club Las Vegas Club The Las Vegas Club is a casino-hotel located in downtown Las Vegas, Nevada owned by the Tamares Group and operated by Navegante along with the Plaza Hotel & Casino across Main street.-History:... |
>$12m | Tamares Tamares Group Tamares Group is a private investment group based in Vaduz, Liechtenstein. The company has interests in real estate, technology, manufacturing, leisure and media... |
Yes | 15 | 700 |
Monthly executive summary
| CY2006 FY07 | Jul | 5.3% | Aug | 14.3% | Sep | 8.4% | Oct | 1.7% | Nov | 1.7% | Dec | 1.8% |
| CY2007 FY07 | Jan | 5.8% | Feb | 6.2% | Mar | 7.0% | Apr | 8.0% | May | 0.3% | Jun | 1.9% |
| CY2007 FY08 | Jul | 9.6% | Aug | 5.1% | Sep | 12.5% | Oct | 0.7% | Nov | 9.3% | Dec | 0.8% |
| CY2008 FY08 | Jan | 6.7% | Feb | 0.3% | Mar | 2.5% | Apr | 6.6% | May | 17.2% | Jun | 10.2% |
| CY2008 FY09 | Jul | 16.2% | Aug | 9.4% | Sep | 8.1% | Oct | 19.6% | Nov | 1.6% | Dec | 17.4% |
| CY2009 FY09 | Jan | 22.7% | Feb | 11.3% | Mar | 2.7% | Apr | 14.0% | May | 10.7% | Jun | 5.6% |
| CY2009 FY10 | Jul | 11.5% | Aug | 3.9% | Sep | 8.7% | Oct | 16.4% | Nov | 1.3% | Dec | 12.3% |
| CY2010 FY10 | Jan | 2.1% | Feb | 5.8% | Mar | 10.5% | Apr | 9.1% | May | 0.7% | Jun | 11.7% |
| CY2010 FY11 | Jul | 19.2% | Aug | 1.1% | Sep | 3.9% | Oct | 10.3% | Nov | 8.3% | Dec | 4.4% |
| CY2011 FY11 | Jan | 8.3% | Feb | 6.2% | Mar | 0.3% | Apr | 5.7% | May | 7.9% | Jun | 4.0% |
| CY2011 FY12 | Jul | 10.2% | Aug | 8.7% | Sep | Oct | Nov | Dec |
In Nevada a monthly report of gaming revenue is released about five weeks after the end of the month. These statistics are posted in several locations on the Internet. The Las Vegas Convention and Visitors Authority
Las Vegas Convention and Visitors Authority
The Las Vegas Convention and Visitors Authority is a public/private partnership that owns and operates the Las Vegas Convention Center, Cashman Center, and Cashman Field and is responsible for the advertising campaigns for the Clark County, Nevada area....
(LVCVA) posts an executive summary for forty one categories. The number that gets the most attention is the percentage change of gaming revenue from the same month the previous year.
Historical data is released in various formats. The LVCVA maintains year to date and year end tables with on their site back to calendar year 2002. Data presented in graphic form covering several years is easier to visualize.
Nevada Gaming Control Board publications
The NGCB maintains a list of publications. Cumulative data is reported in fiscal years (FY) (1 July to 30 June) instead of calendar yearCalendar year
Generally speaking, a calendar year begins on the New Year's Day of the given calendar system and ends on the day before the following New Year's Day. By convention, a calendar year consists of a natural number of days. To reconcile the calendar year with an astronomical cycle , certain years...
s.
Downtown Las Vegas currently has 16 nonrestricted gaming locations that earn more than $1 million per year in gaming revenue. Since fiscal year 1990 when the Mirage opened on the Las Vegas Strip gaming revenue downtown has been flat. Non-gaming revenue has increased, but income also remains relatively flat. Some of the smaller casinos have since closed, and one major casinos hotel, (The Stratosphere) has opened. On average, the casinos that have less than $12 million per year in gaming revenue have a negative income.
- Based on numbers of hotel rooms, slot machines, and table games the three largest operations are (not in order of revenue) the Golden Nugget, the Stratosphere Las VegasStratosphere Las VegasStratosphere Las Vegas is a tower, hotel, and casino located on the Las Vegas Strip in Las Vegas, Nevada, United States. Its tower is also the tallest observation tower, and the 5th-tallest structure, in the United States, as well as being the tallest structure in Las Vegas.It is owned by Whitehall...
and Boyd GamingBoyd GamingBoyd Gaming Corporation is a Paradise, Nevada based business engaged in the development, ownership and operation of hotels and casinos throughout the United States...
downtown division which consists of the Main Street Casino, the California Casino, and the Fremont Casino. - In 1990 one of the 11 casinos in the over $12 million category was the Golden Gate Hotel and CasinoGolden Gate Hotel and CasinoThe Golden Gate Hotel & Casino is located at One Fremont Street in Las Vegas, Nevada, in the United States. A part of the Fremont Street Experience, it is the oldest and smallest hotel on the Fremont Street Experience.-History:...
, but revenue is now under $12 million. The Stratosphere CasinoStratosphere Las VegasStratosphere Las Vegas is a tower, hotel, and casino located on the Las Vegas Strip in Las Vegas, Nevada, United States. Its tower is also the tallest observation tower, and the 5th-tallest structure, in the United States, as well as being the tallest structure in Las Vegas.It is owned by Whitehall...
has taken its place. - The Lady Luck casino and hotel has been closed since Feb of 2006, but was formerly making over $12 million a year in gaming revenue.
- Of the 5 current licenseholders in the under $12 million category, 3 of them currently offer slot machines only (no table games, poker, racing or sports), and only 2 of them have small attached hotels (100 rooms apiece).
| Area December 2008 |
Locations | Slot Machines | Table Games | Card Games | Calendar Year 2008 Gaming ($m) |
|---|---|---|---|---|---|
| Downtown | 16 | 12,034 | 395 | 50 | $578 |
| Strip Area | 41 | 50,158 | 2,737 | 403 | $6,126 |
| Clark County | 151 | 125,892 | 4,403 | 722 | $9,768 |
| Statewide | 261 | 171,693 | 5,605 | 913 | $11,543 |
9-11 crash and recovery
For Downtown Las Vegas, the total revenue dropped after September 11 attacks in 2001 as it did in most resort areas including the Strip. Total revenue includes all sources of revenue for the property (food, drinks, attractions, etc.). Unlike the strip, income remained slightly positive, but revenue did not recover for three years. Profitability was restored during this period solely through cost cutting measures. An analysis of the data could reveal how much of the cost cutting was payroll, cost of goods (food and beverage), and number of employees.Beginning with December 2001, all of the properties changed ownership, at least once, with the exception of the 3 properties in the Boyd Gaming downtown division. Most ownership changes are accompanied by attempts to upgrade the properties with new restaurants, clubs, renovations, and games.
| FY | Fiscal Year | Income % | Total Revenue $m | Gaming Revenue $m |
|---|---|---|---|---|
| 01 | Jul 2000-Jun 2001 | 1.89% | $1,102.63 | $671.9 |
| 02 | Jul 2001-Jun 2002 | 0.05% | $1,085.73 | $661.4 |
| 03 | Jul 2002-Jun 2003 | 2.20% | $1,085.72 | $655.2 |
| 04 | Jul 2003-Jun 2004 | 3.88% | $1,085.73 | $653.4 |
| 05 | Jul 2004-Jun 2005 | 4.42% | $1,112.60 | $658.6 |
By FY2006 total revenue for downtown exceeded that of FY2004 by $106 million. Margins (income over revenue), income, and revenue all reach record highs for downtown. Margins even surpass the Strip according to NGCB Data. Although the sale of the Golden Nugget is completed after six months needed to earn gaming license, no casino purchases are negotiated this fiscal year. Heartened by the improving economic conditions, the Lady Luck is closed for complete renovations.
On February 21, 2008 corporate raider Carl Icahn sold his four Southern Nevada casinos, comprising American Casino & Entertainment Properties
American Casino & Entertainment Properties
American Casino & Entertainment Properties is a casino holding company headquartered at the Stratosphere Las Vegas. ACEP was a wholly owned subsidiary of American Real Estate Partners before it was sold to Whitehall Street Real Estate Funds in February 2008...
anchored by the Stratosphere Las Vegas
Stratosphere Las Vegas
Stratosphere Las Vegas is a tower, hotel, and casino located on the Las Vegas Strip in Las Vegas, Nevada, United States. Its tower is also the tallest observation tower, and the 5th-tallest structure, in the United States, as well as being the tallest structure in Las Vegas.It is owned by Whitehall...
and realized a gain of $1 billion after a decade of investing in the market. The price for the properties was agreed on the previous April, and was based on an appraised value of $718.443 million for the land. Although revenue drop has been comparatively benign in the recession, the interest on the long term notes for this land speculation has made the company unprofitable.
Revenue since 1 July 2006
Fiscal year 2006 (1 July 2005 through 30 June 2006) set all time records for downtown Las Vegas in terms of total revenue gaming and non-gaming. Revenue in FY2007 and FY2008 dropped. But like the rest of Nevada FY2009 was the most severe fiscal year since downtown gaming peaked in the early 1990s.- Boyd Gaming reported their year end revenue on February 26, 2009. The downtown properties are one of the relatively brightest properties in their portfolio. The total revenue for the calendar year 2009 was $229 million vs $240 million for the year 2008 and $255 million for 2007. Collectively the Boyd Downtown Division is the currently the largest operation inside the downtown region.
- Landry's RestaurantsLandry's Restaurants-External links:*...
, the owner of the Golden Nugget is listed as one of 15 companies that may not survive the calendar year. Total revenue for CY2008 for Golden Nugget group is $253 million. Moody's downgraded the Golden Nugget debt covering $545 million worth of upgrades and the addition of a yet-to-open hotel tower, incurred since Landry's took over in 2005. This is due to the company's persistently weak operating performance and increasing debt levels, which have resulted in deterioration in liquidity and debt protection measures. The severe downturn in the Las Vegas market continues to negatively impact the company's earnings, margins, and cash flow. At the same time, the company is funding a major expansion at its Las Vegas property with additional debt. As a result, we believe that Golden Nugget's capital structure is unsustainable at its current level of operating performance, stated Bill Fahy, Senior Analyst.
In an article in the Las Vegas Review Journal analyst Frank Martin said the downtown market as a whole made about $30 million in profit in the last fiscal year. Martin predicted a $70 million drop in gambling revenue, but the drop was $72.7 million (1 July '08 - 30 June '09). "If room rates drop $5, you are at the point where sales just cover expenses and comps," Martin said. "At this point the rooms department is no longer a profit center, but just a promotion for the casino."
Future prospects
The FY2006 gaming abstract showed that the casino-hotels became extremely profitable when the average room rate for downtown went from $50 to $70 a night. It takes a lot less revenue to make a downtown casino profitable compared to one on the Strip. The average room rate for the Strip hasn't been $70 since 1995.The Lou Ruvo Brain Institute is currently finished construction. The Smith Center for the Performing Arts
Smith Center for the Performing Arts
The Smith Center for the Performing Arts, also known as the Smith Performing Arts Center, located in Downtown Las Vegas Nevada's Symphony Park is a theater facility consisting of three theaters in two buildings. Groundbreaking for the $470 million project was May 26, 2009. The design style is...
will be completed in the year 2012. Certainly, the Golden Nugget is gambling on hundreds of millions of dollars in improvements to the property.
At the abandoned site of the former Holy Cow! casino and brewery which closed on May 2002(across the street from the Stratosphere and The Sahara Casinos a developer received preliminary approval to build a 98 feet (29.9 m)-tall video screen and a new casino. Aspen Highlands Holdings hope that the eye-catching attraction at the entrance to the city of Las Vegas will attract gamblers to the casino without an attached hotel.
Profitability had the potential to increase after March 28, 2010 when the ACE bus rapid transit
Bus rapid transit
Bus rapid transit is a term applied to a variety of public transportation systems using buses to provide faster, more efficient service than an ordinary bus line. Often this is achieved by making improvements to existing infrastructure, vehicles and scheduling...
project comes on line. The ACE rapid transit system will have the appearance and feel of a light rail transit network. Traffic lights will be controlled by a system similar to the one that emergency vehicles use. This modern transit system made travel from Fremont Street to the Convention Center virtually the same as the Las Vegas Monorail
Las Vegas Monorail
The Las Vegas Monorail is a monorail mass transit system located on the Las Vegas Strip, in Clark County, Nevada, United States. It connects the unincorporated communities of Paradise and Winchester, and does not actually enter the City of Las Vegas. It is owned and operated by the Las Vegas...
transit time from in front of the MGM-Grand, making thousands of low cost rooms within easy reach of the convention center. Unfortunately the first four months have shown no increase, and a new low of $32,134,417 was reached for July, 2010.
However, this current crisis is so severe, the revenue decreases are greater than all recent cost cutting or payroll reduction efforts. Some downtown casinos may come on the market in the near future, as an investor will be eager to try to repeat the success of Breitling, Poster and Icahn. In an article by journalist Ben Spillman, he describes a report that looks at historical costs and provides accurate estimates of revenues of the individual downtown casinos.