Nick's Picks 2008 : Interview With Nick Christenson from Las Vegas Casino Death Watch

Turn your head and cough Las Vegas, the Doctor is In

Posted by Chuckmonster

Palazzo Las Vegas PIcture

VT: The Las Vegas Sands Corporation unveiled a new addition to the Venetian MEGACENTERô - The Palazzo. Do you have any thoughts about their new property?

NC: Well, the Venetian has been very successful, and Palazzo looks like more of the same. They've got an impressive array of new restaurants going in there for those who are willing to spend the price of a used car on dinner. I think it will be successful. Heck, the new parking area can't be any worse than what's in use for the rest of the Venetian.

VT: Casino Royale sits on one of the last pieces of property in the heart of The Strip that hasn't been engulfed by Harrah's Entertainment. Do you see this piece of prime real estate being acquired any time soon? If so, when and by whom?

NC: Casino Royale is a very funny piece of property. To the direct south, you have Harrah's. To the direct north, you have the Venetian. I can't believe they haven't both expressed interest in it, and Margaret Elardi, the owner of the Casino Royale knows it. My guess is that she's delivered both of these folks her asking price, and the responses have included at least one four letter word. In the mean time, she's making some money on the place and figures that some day someone will pay her exorbitant asking price.

On the question of "when", I'm guessing "not for a while." The Venetian doesn't need the extra space to the south. Harrah's isn't tearing down its namesake casino any time soon, and in any case, they don't need the extra space either. Moreover, Harrah's is now privately held and in a bit of a cash squeeze, so they're in no hurry to buy additional over-priced Strip property. So, my prediction is that the place is basically unchanged when we get to 2010.

Now, as to who will eventually buy it, I'd expect it would be Harrah's. Why? Well, it would be hard to fit it in to the Venetian plan except as additional parking, and I think Sheldon Addelson would rather have an elective root canal than shell out his own money to pay for parking spaces.

VT: Speaking of Harrah's, barely three years since they bought out Caesars Entertainment to become the largest gaming company on the planet, they themselves were purchased by Hamlet Holdings LLC, a subsidiary of Apollo Management/Texas Pacific Group Capital. How much more consolidation is possible in the gaming business?

I think one more round is possible. Will it happen? I don't know. I don't think it will happen soon. But, maybe three or four years from now, companies will be able to borrow money at reasonable terms again, and another round of consolidation will occur.

VT: With Harrah's buyout now complete and their stock delisted from the NYSE, might we expect Harrah's to aggressively move forward with their seemingly shelved "Super Harrah's America" that is rumored to include implosions of Harrah's Las Vegas, Imperial Palace, repurposing large chunks of the Flamingo's real estate and better integrating Bill's Gamblin' Hall and Saloon into the south side of the Flamingo?

NC: No. Here's the telling piece of information. This year they're incorporating the Imperial Palace into their Total Rewards slot club program. They're in no hurry to revamp that tract. Maybe they'll release a plan this year. I doubt that it will have a specific timetable associated with it if they do.

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