News - November 24, 2020 - by Ray Hagar
The wealth and power associated with the Las Vegas Strip has been consolidated into a few companies, which is not good for Nevada, Sig Rogich said on Nevada Newsmakers.
"I think The Strip, in total, has issues," Rogich told host Sam Shad. "I think you could see some bankruptcies. I think we made fundamental mistakes as an industry years ago when we allowed casinos to own more than four or five (properties) at a time. Now, we've got three companies that basically run the state," Rogich said.
Rogich, president of Rogich Communications and internationally-known business facilitator, said he is concerned about three of the major players in Las Vegas -- Station Casinos, Caesars Entertainment and MGM.
"We've got Station Casinos. They've been bankrupt twice, I think," Rogich said. "We've got Caesars. They've been bankrupt at least once. We've got MGM, who are always on the verge with all of their debt load. And so, they control our destiny. so I think we need to, potentially examine how business is done in that regard.
"Having said that, Vegas has always found a way to re-invent itself and I think it will here too," Rogich said.
Two of those companies -- MGM Resorts and Caesars Entertainment -- own 17 of The Strip's 29 casinos. Station Casinos owns many of the "locals casinos" in the Las Vegas Valley and also owns land for two future properties in Reno.
Caesars became in largest gaming company in the United States earlier this year when it merged with Eldorado Resorts of Reno.
The merged gaming entity, which retained the internationally known Caesars name, has 55 casino properties under its umbrella, including international properties, according to the Reno Gazette-Journal.
MGM has 12 major properties on or near The Strip, according to Foursquare city guide. The MGM Grand, on The Strip, is the largest hotel in Las Vegas, with 6,852 hotel rooms.
Although Station Casinos filed for Chapter 11 bankruptcy in 2009, it proved bankruptcy could be a winning experience. When the company exited bankruptcy in 2011, it came out with $4 billion less in debt with the original owners, the Fertitta family, and their partners controlling 18 company casinos.
In the past, Nevada governors recognized the potential trouble of having one company control too much of Las Vegas, Rogich said. He referenced a time when Howard Hughes was buying Las Vegas casinos in the late 1960s.
"Democrats and Republicans, Laxalt and O'Callaghan come to mind, they said no to Howard Hughes when he tried to buy the Stardust because they thought it would be too big and bad for the industry itself and bad for labor and management," Rogich said. "And so they said no and stopped him from buying it."
Rogich sees Las Vegas returning to the days of being a less-expensive travel choice.
"I think these days of gouging are gonna be gone, that means hidden room rates, coupled with other charges for things like parking, which was a horrible thing to do for the city, from a PR standpoint," he said.
"An MGM focus started that thing (paid parking) and I think they reluctantly pulled it even though it meant a lot of revenue loss for them," Rogich said.
"But the town is going to change," he said. "You are going to find a consolidation of services. Streamlining and efficiencies will come into play here."
Rogich has concerns for the future of front-line workers in Nevada's gaming/hospitality industry. Many are currently out of work due to the economic shutdown caused by the Covid virus.
"I worry about the culinary workers who may not be rehired," he said. "Maybe as much of a third of them, I heard, may not have their jobs back in the final analysis. It is sad for me to think we are at a stage here where that could occur."
Rogich sees changes in entertainment offerings.
"You can't pay superstars these big salaries if you can only fill a third and maybe half the showroom," he said. "You can't pencil it out. And it goes on from there. People are looking more and more for efficiencies and bargains and I think competition is going to be significant."
He is bullish on Las Vegas' newest mega-resort -- Resorts World. It is scheduled to open in the summer of 2021, with a total price tag of $4.3 billion. It will be the first major property to be built on The Strip in more than 10 years.
"It will be a must see by everybody who comes to Las Vegas," Rogich said.
Resorts World has already began the hiring process for more than 6,000 employees in hotel operations, food and beverage, casino, nightlife and finance, according to published reports.
"Resorts World is uniquely positioned to be well receive by the public," Rogich said. "They have a brand new, beautiful facility and I do work for them, in terms of disclosure, and I'm really proud to say that they are building a fantastic facility and I think it will be well-received by tourists."