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Proposed Miami casino could deal blow to Strip
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LAS VEGAS REVIEW-JOURNAL
A Malaysia-based gaming company plans to fill a proposed Miami casino complex with would-be Las Vegas gamblers, siphoning an estimated $1 billion to $2 billion in annual gaming revenues away from the Strip.
It's still unclear whether Genting Americas, a subsidiary of the Genting Group from Malaysia, will even have an opportunity to build its $3.8 billion waterfront hotel-casino in downtown Miami. Florida lawmakers are debating whether to legalize casinos in the state, and experts have placed odds on the passage of a casino bill at less than 50 percent.
But casinos in Miami pose the greatest threat to Las Vegas and the Strip's recovery after years of economic turmoil, analysts said.
Credit-Suisse gaming analyst Joel Simkins said Miami is a "compelling market" for casino development and could hurt Las Vegas, attracting business from the East Coast and other key areas that feed the Strip.
"I think Miami could take a decent amount of East Coast business from Las Vegas," Simkins said. "Someone who might take three or four trips a year to Las Vegas could divert one or two of those trips to Miami."
Genting operates Resorts World Sentosa, one of two hotel-casinos in Singapore, and the recently opened Resorts World New York, a slot machine casino attached to New York City's Aqueduct Race Track. Genting does not have a casino in Las Vegas and is not licensed in Nevada.
In a presentation to Florida lawmakers during a hearing on the casino legalization issue, Genting officials said Resorts World Miami would target customers from Latin America and the Asia Pacific region.
But Genting also would look at what it termed the "Las Vegas Export Market," which the company defined as 47 percent of Las Vegas's 37 million annual visitors. Genting said those visitors live closer to Miami than Southern Nevada, and the potential is worth $4 billion in gaming revenue.
Genting told Florida lawmakers its Resorts World Miami could attract at least 20 percent of those visitors to the Biscayne Bay project, which would have six hotel towers totaling 5,200 rooms, 50 restaurants, a retail development and other entertainment options. The project would have two casinos, a 550,000-square-foot primary casino and a 250,000-square-foot secondary venue. The larger of the two would be the largest casino in the world.
In an economic study that was part of the proposal, Spectrum Gaming Group predicted Genting's casinos could generate $4.5 billion to $6 billion in annual gaming revenues. In 2010, Strip casinos generated $5.7 billion in gaming revenues.
In a separate letter to Florida lawmakers, Las Vegas-based Union Gaming Group subsidiary Union Gaming Analytics endorsed Genting's market-wide revenue projections.
"We believe the Genting's assumptions on the various market drivers are reasonable," Union Gaming Group Principal Bill Lerner said in the letter. Among the three items cited in the endorsement was "the potential for incremental gaming play generated by purpose-based visits from domestic and international tourists."
How much a Miami gaming scene would cut into Las Vegas's business is up for debate.
Vince Alberta, vice president of public affairs for the Las Vegas Convention and Visitors Authority, said in an emailed statement that the Strip is more than just gambling.
"While Las Vegas will always be viewed as the origin of modern-day gaming, visitors have many more amenities and attractions to select from today," Alberta said. "The fact that less than half of resort revenue in Clark County comes from gaming is evidence that Las Vegas has evolved into a world-class destination that offers more than one reason to visit."
Alberta said visitors come to Las Vegas for the "total experience offered."
The prospect of casinos in Florida has attracted much of Nevada's casino industry. Representatives from Las Vegas Sands Corp., MGM Resorts International, Caesars Entertainment Corp., and Wynn Resorts Ltd., have visited Florida to explore gaming expansion prospects.
Company representatives said they didn't think two or three Florida casinos operated by Las Vegas-based gaming companies would hurt the Strip.
"Obviously, we're not in the business of cannibalizing our own properties," Las Vegas Sands spokesman Ron Reese said. The company, which is exploring a hotel-casino and convention complex in Miami, operates The Venetian and Palazzo on the Strip.
"We believe Miami is a complementary market for our convention business," Reese said. "Our guys in Florida also believe there should be a slower approach in Florida, maybe starting with one or two casinos and moving forward."
MGM Resorts spokesman Alan Feldman said there was room for growth in attracting visitors from South America and Latin America. Miami could serve as a gateway for tourists bound for Las Vegas, where MGM Resorts operates 10 Strip hotel-casinos, including Bellagio, MGM Grand and CityCenter's Aria.
Feldman said MGM Resorts "has no interest" in replicating the business plan put forward by Genting.
"There is an East Coast market, but in our view, Las Vegas continues to operate a unique product for anyone from Asia, Latin America or anyone from the Northeast," Feldman said. "A couple of casinos in Miami is not going to be the same."
The argument might be all for naught, but Genting already has spent roughly $450 million for the real estate without knowing whether Florida would approve casinos.
There is strong opposition to casinos from theme park operator Disney, which is worried about the impact gaming in Miami might have on Orlando's convention business, and the Seminole Indian tribe, which operates the Hard Rock Casino in Tampa. Both groups have strong representation in the Florida statehouse.
"They are vigorously going to defend their position," Simkins said. "In the end, we just don't know if Miami could support three megaresorts."
Contact reporter Howard Stutz at hstutz@reviewjournal. com or 702-477-3871. Follow @howardstutz on Twitter.
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Alert & WAKE UP Las Vegas & get out of denial!! SOON - every State in the Union WILL legalize gaming and with every casino opening - so goes - "a SLICE of Las Vegas - NEVER to return! (Bank on that!). Once again - UNLESS every Casino owner AND operator "wake up" and smell the dead-roses...this great town is doomed to ever being the mecca of gaming and we will continue to shrink in size, population & reputation. "Inticement" AND "incentives" (minus massive GREED) must replace the $175 per night hotels, $250 dinners and making Las Vegas, Nevada an "affordable destination stop" or we will see casino after casino "close", downsize and be blown away by the competion. Soooooo sad....
What idiot would come to Las Vegas to gamble, when they could go to Miami? Bums on every Strip street, illegals handing out cards for hookers, and gangbangers from LA stirring up trouble in the casinos. Not to speak of the people puking in the garbage bins from the first minutes you get off the plane in LAS.This would be a stake through the heart of Las Vegas.
But we shouldn't be so sour. Never offer up bad news without offering up a bit of good news.
McCarren is far superior to Miami Intestinal.
let's see-boston is getting casino's, Ohio has a couple Harrah's joints popping up soon. Colorado passed a bill for gaming last year(as I recall) so they should have a joint up and running soon. Oh yeah this is about miami-sorry I get so confused with all these new markets opening up, I cant keep them straight. yeah what do we have to worry about in vegas? those out-of-state markets cant compete with the "Vegas experience". Look at Macau its just a fad, soon the Hong kong high-Rollers will be right back at the DI, Oh wait? they blew it up. I forgot about that. Well I'm sure the Fountain Blue will be open real soon-oops they just sold their furniture to the Plaza-in donwtown the business Mecca of the West. LOL RIP Vegas....
Agreed Vegasdude. I lived in that toilet (Miami) for 37 yrs. It can never compete with the same aura as Vegas on any level. I know it well, and that's the reason I'll never go back.
Time to diversify and reopen Yucca Mountain... Charge other states billions and do like Alaska with the PFD and give our residents Nuclear Dividends
soon casinos in 7-11 store near you. Vegans are a stubborn lot, most will hang till the town turns back to rocks and sand.
From the standpoint of someone that lived in Vegas for 5 years, moved out after Harry Reid's re-election, and has since moved back to Miami.
If all this materializes, Vegas can say goodbye to at least 95% of customers from the Central and Eastern time zone (U.S. and Canada) as most convention and tourism business from New York, Toronto, Boston, Philadelphia, Southern Ontario, DC, Chicago, Minneapolis, Dallas, Houston, and Atlanta will take a much shorter flight to Miami and will enjoy all Miami has to offer such as the beaches, nightlife, restaurants, sporting, and cultural events - all in addition to gaming and Cruises that originate from South Florida. Plus Miami's additional target markets will be the Caribbean and South America, as the Miami and Fort Lauderdale airports has direct flights to almost all major airports in Central and South America.
But don't worry Vegas, yall still have California, Hawaii and points west of Denver that yall could have to yourselves, until LA gets the NFL back. And "No one can do more than Harry". wink-wink nudge nudge.
Hey! hey! Yogi. We got metal cactus.
My home state had very nice local casinos.......but they weren't Vegas...the one thing that they can't offer is simple ....more than one place to gamble.......here if you feel your luck is bad you can go down the street to the next casino...that you can't do any where else.
VegasDude, it's tantamount to saying 'why pay full price for that bottle of Tide at Alberstons when you can get the same product at WalMart, only cheaper.'