The dean of Nevada’s gaming attorneys said the casino industry couldn’t be doing much better and sees nothing slowing it down in 2024 as the state is on pace for record gambling revenue in 2023.
The latest economic reports have turned positive with impressive GDP growth, the Federal Reserve contemplating rate cuts as the rate of inflation declines.
The stock market has hit record highs, and predictions of a recession in 2024 have faded.
“The industry is clicking on all eight cylinders,” said Frank Schreck, a partner with Brownstein Hyatt Farber Schreck who was a one-time member of the Nevada Gaming Commission. “I don’t know how it can be better right now. We have gone from the Entertainment Capital of the World to the Sports Capital of the World in just a few years. It wasn’t that long ago a casino couldn’t even advertise on the Super Bowl, and now the Super Bowl is going to be in Vegas in February. At this point in time, you couldn’t be more optimistic about the industry in Vegas.”
The NFL has gone from shunning Las Vegas and gambling to the relocation of the Raiders in 2020 and now NFL stadiums are even operating sportsbooks, Schreck said.
“The fact that there’s sports betting in a lot of other states is not hurting Nevada, but cultivating a new group of people that want to come here and bet and come to the city itself and go to sporting events, shows and restaurants,” Schreck said.
Schreck said there’s a lot more to come for Las Vegas with Major League Baseball approving the relocation of the Oakland A’s and the team’s plans to build a $1.5 billion stadium on the Tropicana Las Vegas. There are also plans to build a $1 billion arena for an NBA team across from the Las Vegas Premium Outlets.
“Vegas is going to be the sports mecca and with that there will be several games played a week that will bring tens of thousands of people, and most of those supporters are gamblers,” Schreck said. “If they are not, they will be spending (on) room(s), food and beverage. That is a big growth in tourism for Nevada. For Raiders games at Allegiant Stadium, half the fans are from out of state. It’s incredible. Sports can’t be underestimated with the number of people coming into town and new people it’s bringing into town.”
For 14 years, Schreck has represented the various owners of the $3.7 billion Fontainebleau Las Vegas that opened Dec. 13 on the Strip after being stalled by the Great Recession and bankruptcy over the years.
The Fontainebleau is adjacent to the Las Vegas Convention Center and that will help bring in customers.
Schreck said conventions bring more than accountants and computer geeks but many also bring high-end executives and big money makers and people willing to spend money while they are in Las Vegas.
“They have done a beautiful job with it,” Schreck said. “Their convention facilities are probably from the standpoint of moving people in and are better than anybody on the Strip. They can turn a convention around in 24 hours.”
There’s a place for another luxury resort like the Fontainebleau, Schreck said. Wynn Resorts showed Las Vegas how to operate differently and that properties don’t have to give money away to attract people to the Strip, Schreck said. Casinos could make money on rooms, food and beverage, retail, banquets and gaming.
The latest report from the Las Vegas Convention and Visitors Authority shows 44 percent of the visitors in the city during the quarter had household incomes of $100,000 and greater. That’s up from 33 percent a year ago.
The Fontainebleau also has a partnership in Hyatt that will serve as a database to bring in customers as well, Schreck said. He said it’s likely the last major resort in Las Vegas for a while as land prices and costs continue to escalate on the Strip.
“People asked me about the Fontainebleau the other day and said just another one on the Strip, but this is the last really big megaresort on the Strip for a while,” Schreck said. “There’s nothing on the drawing boards I know of right now. (Billionaire) Tilman Feritta is going to build his place (on the Strip), but it’s going to be smaller. Can it be absorbed? Every time one of these opens it doesn’t cut up the same piece of pie. It brings more people and expands the base of people who come here. The Hyatt connection is not to be underestimated because they have high-end clientele, too.”
The Nevada Gaming Control Board is scheduled to release November gaming revenue numbers on Thursday, which will paint a picture of the impact of the Formula One Race. The Las Vegas Convention and Visitors Authority will release visitation numbers on the same day.
“F1 came into town and disrupted everybody, but from all reports, a dead weekend turned into one of the best weekends they’ve ever had,” Schreck said. “The (National
Finals Rodeo held every December) has signed up again and don’t discount how much money those guys spend. A lot of them are craps players and 21 players.”
Coming out of the COVID-19 pandemic, while Las Vegas has seen fewer visitors than in 2019, the people who continue to come are spending more, Schreck said. That’s about Las Vegas reinventing itself.
“Before Steve Wynn opened the Mirage and changed the marketing of Las Vegas, it used to be 70 percent gaming revenue and 30 percent non-gaming, but now that’s flipped,” Schreck said. “Once they come here and get a nice room they see it’s half as much as other cities. They see the food with every choice you can ever have with the greatest gourmet chefs, and see the shows and other entertainment. If they want to gamble, they can gamble.”
When Las Vegas was hit by recessions in the past, Schreck said people hoped that the industry would come back from it. Today, it’s hard not to be optimistic where the gaming industry is positioned not only in Nevada but in the U.S.
“The edge we have is we are always finding something new to generate interest in Las Vegas,” Schreck said. “Being the focus of professional sports is bringing so many people into town that would not otherwise be here. The Super Bowl highlights the city to another group of people that haven’t seen it. It’s been an unbelievable year for Las Vegas, and I see that continuing.”