Genting and Crown Resorts will build mega casino resorts in North Vegas in hopes to take advantage of the upswing and economy and offset disappointing Asian markets.
There was hope in the Vegas air last summer as expectations of new mega resorts were on their way. We were told that Genting Group would start construction on the site of the former Echelon Palace in May. In addition, Crown Resorts had bought the land where the New Frontier casino once stood. Unfortunately, setbacks such as lower gaming revenue and possibly rising interest rates aren’t very encouraging enough for Wall Street to finance heavily into. It doesn’t help that casinos such as Caesars Entertainment are headed towards bankruptcy, according to U.S. gambling news.
In order to instill the confidence needed to attain the billions needed in financial backing, Vegas will have to demonstrate some signs of growth in the future. Las Vegas is more developed, than is Japanese, South Korean and Philippine counterparts, but its lack of performance has put their reliability in question. Regardless, there are some reasons to build. Although there has been a steady decline in gaming revenue since November, Forbes magazine predicts the increasing U.S economy will provide the casino industry with relief. Also, the planned sites of these casinos are in the more profitable north side.
Genting Group to Erect Resorts World Las Vegas
The Resorts World will be Genting Group’s first resort in Las Vegas. The multinational company already has holdings in Singapore and Manila. The 87-acre site, bought from Boyd Gaming Corporation, was originally part of the Echelon project. Unfortunately, it had to be discontinued in 2008 due to the U.S. recession. “We look forward to taking full advantage of this new opportunity,” said KT Lim, chairman and CEO of Genting Group.
• Genting and Crown to build mega casinos
• Despite lower gambling revenues construction is ago
• Genting set to finish first phase of Resorts World in 2016
• Crown set to make third attempt to open casino in Vegas
Well within U.S. gambling laws, the construction of Resorts World is expected to bring tens of thousands of jobs and billions of dollars in economic development to Southern Nevada. State officials, such as Governor Brian Sandoval and U.S. Senate Majority Leader Harry Reid are looking forward to the casino’s construction. “Las Vegas is considered the gold standard in the world of gaming, resorts and entertainment, and this project is an incredible addition to the thriving industries that call Las Vegas and Nevada home,” said Reid.
On the site where the Stardust once stood, the first phase of World Resorts Las Vegas will include more than 3.500 rooms within 8 million square feet. Included will be a 4,000-seat theater, 500,000 square feet of convention space, 250,000 square feet of retail space, 210,000 square feet of dining space and 175,000 square feet for gaming. The completion of phase one was set to occur sometime in 2016. World Resorts Las Vegas isn’t the only project on the way for Genting. In 2013, Resorts World New York was launched. Resorts in Bahamas, Birmingham, Miami and Massachusetts are underway.
The decline in World gambling figures shouldn’t deter these projects because the figures show and slightly incomplete picture. Although the aftermath of the financial crises and a saturation of the gaming industry has affected the U.S. gambling industry, baccarat is the chief culprit for lower revenue in Asia (which reflects most of the overall World figures). The corruption crackdowns on baccarat dealing by the Chinese government have worsened the situation.
Crown Resorts Prepares for Third Attempt at Vegas
Crown Resorts Ltd. plans to open a casino on the Las Vegas strip. The company purchased the land once occupied by the New Frontier casino for $280 million.
James Packer, the billionaire CEO of Crown Resorts Ltd., has met with loan backers including Oaktree Capital Group LLC. Crown will partner up with Andrew Pascal who was the former president of Wynn Las Vegas.
This development will be Crown’s third attempt in Las Vegas. Their other attempts were Fontanebleau Resorts LLC and Cannery Casino Resorts LLC. The company is on a “much stronger footing for another crack at Nevada” reported an analyst from Morningstar Inc. The resort will further diversify global earnings in addition to casinos in Melbourne, Perth and London. The new project “fills a critical hole in its portfolio offering for VIP patrons, especially in Asia.” Such a development would easily make Asian gambling news as another destination to fly Asian high stakes gamblers to.
The previous fallouts for Crown in Vegas happened in the midst of the financial crises in 2009. The company invested $647 million in a 20% stake in Fontainbleau, plus smaller holdings including Stations Casino Group, Harrah’s Entertainment and LVTI LLC which amounted to zero by the time its 2009 financial report was released. That same year, Crown also purchased a 24.5% stake in Cannery, which also owned a North Vegas casino, for $320 million. The company has yet to receive any earnings from Cannery to this day.
Crown holding are feeling a bit a strain from the lower revenue in Macau. The Australian company hit a three-year low last May amidst a 26% decline in high-stakes gamblers. Despite this Packer see this as a great opportunity. “You can’t be in the gaming industry and not have special reverence for Las Vegas- that’s where it all began. While we fell short in the past attempts to enter the market, we now have the idea opportunity.” The site is a next to the Trump International Hotel and Wynn Resorts Las Vegas which earned $528 million in EBITDA. Southern strip casinos are the ones burdened with struggle.