- »Caesars Sells Rio and Blackstone Eyes Bellagio and MGM
Caesars Sells Rio and Blackstone Eyes Bellagio and MGM
The past few weeks have delivered big news out of Las Vegas.
Some significant moves, such as Caesars offloading the Rio and an equity firm trying to buy Bellagio and MGM Grand, may not directly affect everyday visitors to Sin City. But new venue fees might affect every Vegas visitor’s wallet.
Caesars Sells Rio to Imperial
The rumors abounded for years. The Rio All-Suite Hotel & Casino, just down Flamingo and off the Las Vegas Strip, was a burden for Caesars Entertainment. The company needed to offload the flailing and aging property.
It didn’t happen when Caesars was filing for bankruptcy protection or when Eldorado Resorts announced its intention to acquire Caesars. But not long after the Eldorado deal took shape, Caesars did sell the Rio.
On September 23, Caesars announced an agreement to sell the Rio to Imperial Companies under the direction of Michael Fascitelli. The price was $516.3 million. Caesars will continue to operate the Rio for two more years while paying $45 million per year in rent.
The deal will close in the fourth quarter of 2019.
Not much is known about Imperial or the long-term intentions for the Rio.
More immediately, however, the burning question for poker players and fans was about the World Series or Poker. It has been held in the Rio’s convention center ballrooms since 2005.
Caesars Entertainment CEO Tony Rodio said, “The retention of the World Series of Poker and retention of Caesars Rewards customers are all factors that make this a valuable transaction for Caesars.” With that, the WSOP stays with Caesars, and with the rental agreement of the Rio, the WSOP will stay at the Rio through 2021.
This was all but confirmed days before the Rio sale when WSOP VP of Corporate Communications Seth Palansky posted on Twitter and followed up with an interview.
Palansky noted that the WSOP requires 62 days in 200,000 square feet of convention space to host the poker tournament series and associated cash games. The Rio has been a solid space for this in past years, complete with off-Strip access and ample parking.
Blackstone May Buy Bellagio and MGM Grand
The Blackstone Group is an asset management and investment firm. In the past several years, Blackstone has acquired everything form Motel 6 to SESAC (music rights group). It has taken huge pieces of companies like Versace and Haynesville Shale.
Its foray into the casino business came into view when Blackstone bought the Cosmopolitan of Las Vegas in 2014 for $1.73 billion.
Now, the firm is looking at buying MGM Grand Las Vegas and the Bellagio, two prime Strip casino/resort properties on the Las Vegas Strip. Bloomberg reported that talks have been in progress.
Since there is no agreement in place, there are no known terms of the potential deal, nor will either company confirm the talks.
However, it has been public knowledge since July that MGM CEO Jim Murren has been exploring the sale of two casino resorts since early 2019. Murren is supposed to receive the results of a portfolio review soon, which may dictate the moves for MGM Resorts.
Venue Fees on the Way
Casinos and resorts in Las Vegas have been working hard to find more ways to charge customers.
As more services appear – like Expedia, Trivago, and Kayak – to find cheaper hotel rooms in Vegas, resorts have had to become more competitive with pricing. However, there are ways that they can advertise great deals on hotel rooms while making money in other ways to compensate for those discounts and deals.
The most frustrating for customers has been resort fees, which can range from $15 to $50 per night at various hotels around town. And shows can charge a 9% live entertainment tax on their tickets.
Casinos are also now charging parking fees, both for the valet services and self-park garages.
According to Frommers, there are other fees as well. Restaurants and bars are now charging concession fees or franchise fees, which tend to simply appear on the bill in addition to tax. The amount can be anything from 3% to 5% of the bill.
The newest one is the venue fee, something that is being added to nightclub bills. People that pay top dollar for party services, bottles of liquor, and seating in clubs may start seeing venue fees on the final bills as well.
Nevada Gaming Revenue Up
The Nevada Gaming Control Board released its August revenue numbers. And for the entire state, gaming revenue came in at $952.4 million for the month, which was a 4% increase from the same month in 2018. It also served as the third consecutive monthly increase after a five-month downswing.
For Clark County, which includes Las Vegas, revenue was $791.56 million, which was also up more than 4% from the previous year.
The Las Vegas Strip alone took in $520.7 million in revenue in August.