When Las Vegas started crawling back to life last summer, it would have been expected that casino operators would want all of their venues operational to make up for lost time. However, Red Rock Resorts, the parent company of Station Casinos, kept four properties closed. That was a definite sign that trouble was ahead and now, with the casino having sat empty and locked for a year, the Palms Casino Resort is being sold in what could be considered a fire sale. Red Rock is letting the resort go to the San Manuel Band of Mission Indians for less than what it had invested in the property.
Red Rock Could Be Cleaning House
The Palms was joined by the Fiesta Henderson, Fiesta Rancho, Palms and Texas Station as the four Stations Casino properties to remain closed at the end of June last year when all other casinos in Las Vegas were scrambling to reopen. The closures fueled a lot of speculation about the casino operator’s future and the fate of the four properties, but Vital Vegas asserted this week that Red Rock has completed the sale of the Palms. The transaction is expected to close within 90 days, provided all approvals are received.
Red Rock had purchased the property five years ago for $312.5 million. Since then, it injected another $690 million through updates and renovations. While sellers will always want to see their investment generate a solid return, this one may not have. Having invested at least $1 billion between the purchase and upgrades, Red Rock’s deal with the San Manuel Band is for $650 million. Perhaps the company can make up some of the difference if it decides to offload the other three shuttered properties.
Tribal Operators Move In On Vegas
The San Manuel Band of Mission Indians has had its eye on Vegas for some time and also has strong ties to the city. The tribe’s chief executive, Laurens Vosloo, is the former executive director of finance for Las Vegas Sands and the tribe is a founding partner of the Las Vegas Raiders. Vital Vegas points out that it has contributed a lot of money to various programs in and around Las Vegas, including a $9-million donation to the hospitality and law schools of UNLV and $250,000 to several area non-profit organizations.
The tribe isn’t the only one to be hot on Vegas. The Mohegan Indian Tribe, through its Mohegan Gaming & Entertainment arm, is in charge of the gaming operations at Virgin Hotels Las Vegas after receiving approval from gaming regulators late last year. The Seminole Tribe, which owns Hard Rock International (HRI), is reportedly discussing the possibility of purchasing Bally’s on the Vegas Strip. Even if it doesn’t proceed with that deal, HRI is confident that it will be able to bring the Hard Rock name back to Vegas in the near future.