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Sin City Shake-Up
 Over
the past couple of months, a rapid succession of
casino deals has shocked followers of the gambling
biz. Here are the newspaper headlines that heralded
each development: "Station Casinos Buys Santa
Fe; " "Fiesta Is Sold To Station;"
and the almost otherworldly "Silverton Buys
Las Vegas Hilton." Anyone with a stitch of
slot savvy will realize that these developments
are bound to have a bearing on the Las Vegas machine
scene. Is this consolidation, which we’ve
been told to expect for the past couple of years,
really that bad? I’ve always maintained that
from the consumer’s point of view, any reduction
in competition is unfavorable. Hence, any one casino
company buying another–even megaresorts buying
megaresorts–is bad. And the worst form of consolidation
is megaresorts buying locals joints. Happily, none
of these deals involves that. But the second-worst
is locals buying locals, and the two "Voracious
Station" deals fall into that category. Station
Casinos, which began as the little Bingo Palace
20 years ago, now controls eight neighborhood joints,
which account for more acres of Las Vegas gaming
property than any other casino company, including
the giants on the Strip.
Throwing
a monkey wrench into the mix is the Silverton/Hilton
affair. That’s probably as close as we’ll
ever come to a scenario that most pundits never
even dreamed of: a locals joint buying a megaresort!
Let’s take a closer look at each deal.
Station
Casinos Buys Santa Fe
Of the
three sales, this one was the least surprising.
In fact, it was all but inevitable; the little Santa
Fe controlled too much that the Big Train coveted.
The purchase price was $205 million. It’s believed
that the casino’s name will be changed immediately
to Santa Fe Station, which is a pretty good indication
that everything will be converted to the Station
style. Net result: Bad news for video poker players.
One of the ways Santa Fe competed was with its loose
video poker schedules, and though its powerful claim
to having "more 100% machines" than anywhere
else never quite hit the mark in the market, Santa
Fe ranked with the best for good games. Don’t
expect that to last.
Fiesta
is Sold to Station
This
one caught most observers, including me, by surprise.
Station paid $185 million for the Fiesta, a fierce
independent that captured market share by offering
an excellent buffet and an even better marketing
slogan: "The Royal Flush Capital of the World."
The market loved this slogan, a fact not lost on
the Station honchos. Rather than convert it to a
"Fiesta Station," plans call for the Fiesta
to remain its own brand, possibly with new Fiestas
(under Station control) being built throughout the
valley. Net result: They took out
the Fiesta! Say it ain’t so! Actually, this
should turn out fine in the long run, especially
since the principals from the Fiesta are staying
in the game (see below).
Silverton
Buys Hilton
Was this
a ruse? The Silverton has 304 rooms; the Las Vegas
Hilton 3,174. How could it happen? The kicker is
Silverton’s owner, Ed Roski, Jr. He paid $365
million for the Hilton (one mil for each day of
t he
year). Why not? He ranks among the wealthiest men
in America. All indications are that the Hilton
will go midscale, which means toning the resort
down a bit. For example, early speculation is that
the Hilton’s famous trio of high-roller suites
on the top floor will be converted into restaurants
and a nightclub–possibly a Playboy nightclub.
Net
result: This has to be good for players. Silverton
knows how to compete. They offer good video poker
and a great slot club, and there’s every reason
to believe that they’ll bring their locals-friendly
philosophy to the Hilton. The whole package may
not be quite as loose as it is at Silverton, but
it’s sure to be better than anything seen that
close to the Strip in a long time.
Bottom
Line: Player Wins
Surprise! The player will come out ahead when all
is considered. Here’s why:
•
Video poker aficionados are quaking in their boots,
but there’s still plenty of competition out
there. Don’t forget about the Coast casinos,
including the new Suncoast, which will be open by
the time you read this. Plus, there’s Arizona
Charlie’s East and West, the Reserve, and the
good casinos Downtown.
•
The knock on the Station group is that their floors
aren’t flooded with 100%-return video poker
machines. But that’s where the complaints end.
These are the original "good-deal" casinos.
They’ve got great restaurants, bars, and concert
venues, along with an excellent slot mix and slot
club. Look hard and you can even find good VP schedules.
The expansion of the Fiesta brand is also something
to look forward to.
•
Not included in the Fiesta deal was land held by
the Maloof family (former Fiesta owners) on Flamingo
across from the Rio. Work has already begun on a
new casino on that site, and I’d wager it’s
going to be great.
•
The Silverton Hilton will rock. ’Nuff said.
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