Columnist
Jeff Simpson: Gaming Industry Hit Some New Highs,
But Natural Disasters Caused Real Lows
The casino industry's stocking
is full this morning. Mostly gifts, but a few
lumps of coal. The past year has been a great
one for the Las Vegas market, and 2006 looks
to be strong as well.
A
look back at 2005.
The
biggest news in Las Vegas was the finalizing
of the two biggest purchases in the history
of the casino industry: MGM Mirage's $8 billion
takeover of Mandalay Resort Group and Harrah's
Entertainment's $9 billion acquisition of Caesars
Entertainment.
The
deals reduced the Strip's "Big Four"
to only two, although a few big players with
plans to grow -- Venetian owner Las Vegas Sands,
Wynn Resorts and Boyd Gaming Corp. chief among
them -- are likely to make their own waves in
the years to come.
MGM
Mirage emerged from its deal as the clear leader
on the Strip, the state's biggest employer,
largest casino operation and controlling the
lion's share of the city's high-end market,
best restaurants and production shows, and first-class
resorts.
Harrah's
purchase cemented the company's status as the
world's biggest and most profitable casino operator
-- and as Nevada's second largest.
The
April opening of the $2.7 billion Wynn Las Vegas
was the other major event. No megaresort had
opened in Las Vegas since the Aladdin debuted
in 2000, and the public's pent-up demand for
a new property was palpable. Wynn Las Vegas
itself has been spectacularly successful, but
its effect on the rest of the city has been
even more remarkable.
Tourism
numbers have spiked, sales taxes spiked and
the money won from gamblers on the Strip fueled
statewide records month after month.
Boyd
Gaming's savvy 2004 purchase of Coast Casinos
continued paying dividends, with the latest
being last week's opening of the $600-million-plus
South Coast.
A
few 2005 developments caused some short-term
pain that will hopefully result in future gain.
The Bourbon Street and Westward Ho casinos were
closed, and closures of the Boardwalk and Lady
Luck were planned for early 2006. All of the
moves are intended to make way for future redevelopment,
but the loss of jobs -- at least in the near
term -- will make for a tough holiday season
for hundreds of workers. And Harrah's purchase
of the Imperial Palace likely means that casino
will also face near-term closure.
Outside
of Las Vegas the 2005 news wasn't very good.
The
industry's worst news of the past year was the
devastation from hurricanes Katrina and Rita,
natural disasters that destroyed many of the
casinos on the Gulf Coast of Mississippi and
damaged the economies and many casino properties
in and around New Orleans and Lake Charles,
La.
Although
much of the damage was insured, the catastrophic
devastation will take years to rebuild and recover
from. But the most lasting hit to the broader
casino business may be the fallout from politicians
reacting to the growing scandal surrounding
disgraced tribal casino lobbyist Jack Abramoff.
Outside
of Nevada, many people already view casino industry
lobbying money as being about as dirty as can
be, and by the time the Abramoff mess shakes
out, the industry's reputation could be much
worse.
A
few stories likely to happen next year will
be big pluses for the Las Vegas casino industry.
Station
Casinos plans to open its Red Rock Resort in
Summerlin early next year; construction will
continue on the Palazzo, Sheldon Adelson's second
megaresort; Steve Wynn plans to break ground
on Encore, Wynn Las Vegas' companion resort;
George Maloof expects to open the completed
Fantasy tower at the Palms; and MGM Mirage expects
serious work to get under way on its $5-billion-plus
Project CityCenter, south of Bellagio.
Wynn
Macau is slated to open in September, and Singapore
is expected to announce its choices to build
two casinos in the city-state. Industry insiders
would be surprised if at least one of the big
Las Vegas operators isn't tabbed to build there,
with Harrah's, Venetian parent Las Vegas Sands
and MGM Mirage among those in the running.
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