Concerns about the Las Vegas economy, particularly slow business on the Strip, have been simmering this year. Financial analysts are asking if it’s tariffs, weather, or something structurally shaky with how Las Vegas works. Caesars Entertainment CEO Tom Reeg has not had an answer this summer. However, there have been some interesting observations over the past weeks as leaders from Station Casinos, Caesars, and MGM Resorts International have been peppered with questions about what’s wrong with Las Vegas this year.
Red Rock Resorts, the publicly traded face of Station Casinos, has seen improvements in the local market, including high-limit slots and VIP gaming areas. The company’s renovations at Sunset Station are turning it into the Red Rock Resort of the East Valley, accomplishing a long-term goal that has been crucial to the company’s future.
New players, also known as “retail” players, have increased over the past year, which is the opposite of casinos’ efforts to create a “digital wallet” that would be convenient for some gamblers. Casinos are noticing that they are opting out of these retail players, which could be due to their lack of interest in earning points toward comps or not wanting the casino knowing their business.
The timing of the downturn in Las Vegas has been accelerating, with Caesars’ revenue dropping by 3.7% over the April-June second quarter and MGM seeing a 4% drop in Las Vegas over the three months. Early suggestions that the drop in travel from Canada was to blame only explain part of the decline this year.
