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Mar. 01, 2008
Copyright © Las Vegas Review-Journal

GAMBLING REVENUE: Downtown snaps long slide

Area's win 0.4 percent higher in '07 than '06, ending three-year string of declines

By BENJAMIN SPILLMAN
REVIEW-JOURNAL

Pedestrians pass Binion's in downtown Las Vegas on Thursday. Gaming win in downtown casinos improved in 2007 compared with 2006, Gaming Control Board statistics show.
Photo by John Locher.

Gamblers lost nearly $632.9 million in downtown Las Vegas casinos in 2007, slightly more than the year before, ending a three-year slide for the historic Glitter Gulch gambling market.

But the operator of the Golden Nugget, the biggest and fanciest casino in the Fremont Street area, is claiming credit for downtown's surpassing of the 2006 results, which amounted to $630.4 million.

That leaves the other players to scramble for what's left in 2008, a year that looks like it will be difficult for the Las Vegas economy thanks to a residential real estate meltdown and waning consumer confidence.

Owners of Binion's and the Gold Spike downtown have promised to upgrade their properties soon, but their neighbors in Glitter Gulch appear destined to remain in a revenue rut for at least another year.

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    • "You're thinking that downtown was up. It's not. The Nugget was up," said Tilman Fertitta, president, chairman and CEO of Landry's Restaurants, the Houston-based owners of the Golden Nugget.

    Landry's hasn't reported earnings for 2007, but Fertitta said revenue at the Golden Nugget was up more than 10 percent. He suggested the double-digit uptick saved the overall downtown numbers from another decline in 2007.

    "That's what the gaming numbers show," Fertitta said of the Nevada Gaming Control Board's final tally of gambling revenue for 2007.

    Since 2005, when Landry's bought the Golden Nugget and a sister property in Laughlin for $295 million, the company has spent about $170 million on upgrades and additions. It rebuilt the pool from a concrete rectangle to an aquatic playground around a water slide and giant shark tank. It remodeled the casino, added restaurants, convention space and a nightclub and refurbished the hotel rooms.

    By 2010, when Landry's completes a 500-room hotel tower, the company will have spent more on upgrades than it did to acquire both Nevada properties.

    Improvements to neighboring properties downtown have been modest by comparison.

    Four Queens owner Terry Caudill spent about $20 million to upgrade the casino, restaurants and hotel rooms in that property. Owners of the El Cortez spent roughly the same on similar changes to their historic hotel.

    The El Cortez and Four Queens are privately held and don't report earnings. But Caudill said the Four Queens has posted double-digit earnings increases under his watch. Owners of the El Cortez say that property remains in the black.

    Other properties downtown held pat or regressed in 2007.

    Boyd Gaming Corp., which owns the California Hotel, Fremont and Main Street Station, reported a 2.7 percent decline in earnings before interest, taxes, depreciation and amortization at its downtown holdings.

    The Plaza, Western Hotel and Las Vegas Club casinos continued their slide under the ownership of Tamares Las Vegas Properties. Officials from Tamares have declined interview requests and haven't announced major plans for the three properties once owned by downtown casino operator Jackie Gaughan.

    Binion's also suffered a tough year in 2007, posting revenue declines regularly under the ownership of MTR Gaming Group of Chester, W. Va.

    Binion's, once admired as one of the best-run casinos in Las Vegas, was sold to Caudill for $32 million. He expects a turnaround once he puts the finishing touches on the deal and enacts plans for improvements on the casino floor and upgrades to the hotel rooms.

    But it is the Gold Spike, downtown's dowdiest casino, that appears to have the most to look forward to in 2008.

    The property has changed hands twice since mid-2007. Miami-based developer Gregg Covin bought it from Tamares in July for $15.6 million. Covin then sold the property in early February to Stephen Siegel and John Tippins of Las Vegas for $21 million.

    Siegel and Tippins immediately embarked on plans to remake the Gold Spike, along with the adjacent Travel Inn, a shuttered hotel they bought last year for $5 million.

    Michael Crandall, the Siegel Group's business affairs director, said the Gold Spike owners wouldn't be daunted by Fertitta's bleak assessment of the downtown properties other than the Golden Nugget.

    "When people say we can't do something, that is when we like to do it," Crandall said.

    Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.



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    brett wrote on March 01, 2008 11:35 PM: I think all the casinos should have a social security day. Let all the elderly come in and lose their only income. I'm sure you parasites would have a great big party and laugh it up. Personally I would like to see all of the casinos imploded by a terrorist group. Praise Bin Laden!!!!!!!!!!!!


    douglas wrote on March 01, 2008 07:47 PM: not "spoiled", rather gullible.

    games of chance which permit skilled attack are rare, for sure rare in clark county.

    those who think that some venue is beneath them are welcomed customers at the thick rug joints.

    doyle brunson's occasional interviews reveal the conditions he chose to play under. the reason ? to win using his mental skills. so it is in many of today's live poker games in town and in only a very few 21 games.

    bravo to those who play in the fanciest joints with the highest house edge games. without those "customers", the rest of us would have a state income tax. did i forget to say, thank you ?


    kevin b smith wrote on March 01, 2008 05:30 PM: Down town is a very nice place . People are very spoiled in this world


    douglas wrote on March 01, 2008 04:03 PM: it is wonderful, in fact without that attitude, we all might by now have an income tax.

    21 players of worth, just as today's successful poker players, ignore the value of the checques, the surliness of the dealer, the ineptitude of the pitstiffs, the foolishness of the other seated players, the thickness of a joint's rug [or lack thereof].

    otoh, those who for example play a video poker slot with in inferior pay table because it's nearer to... the keno display board, a cocktail server's station, the lavatory, carry the load for the industry.


    David wrote on March 01, 2008 03:29 PM: as to the western [and the 'cortez], they offer the only couple of legit, mostly original 21 games in clark county

    If you don't mind sharing a table with drug dealers, addicts and women of the night.


    douglas wrote on March 01, 2008 02:24 PM: had the 12 step mayor engineered a monorail from the airport with a terminus downtown, no doubt visitor traffic would have been dramatically higher. instead we have the neonopolis and a couple of furniture mausoleums.

    as to the western [and the 'cortez], they offer the only couple of legit, mostly original 21 games in clark county. while they sweat the games something fierce, at least the player employing his brain can actually exceed the house vig.


    David wrote on March 01, 2008 10:40 AM: They can close the Western today as far as I am concerned. What a dump. the scum that hangs out there can deal their drugs elsewhere.


    GOD wrote on March 01, 2008 09:25 AM: George - I agree with you.

    This feed the machine mentality will eventually end when people will realize their money can be spent or invested more wisely. Oh, who am I kiddin' - the dolts that come and go in this town will never realize that.


    JLOKC wrote on March 01, 2008 08:42 AM: Mr. Fertitta's statement seems to be missing the other half-"We need other owners Downtown to continue to reinvest and upgrade the area, follwing our lead."
    Tamares is becoming more of an embarassment by the day. Their properties are drying up in front of our eyes. Even Navengante is getting out of operating their games later this year. What are they going to do then? They aren't licensed, are they? I hope we aren't headed for another Lady Luck situation.


    GEORGE wrote on March 01, 2008 04:06 AM: Gamblers lost $600 million in downtown casinos in 2007. That is good news for the casinos and state government but bad news for gamblers and their families. This is further evidence that a sucker is born every minute.