Despite the Headwinds, People Still Want to Invest in Las Vegas
Credit: Andreas 06/Wikimedia Commons
Las Vegas is facing headwinds on a variety of fronts, from political to competitive to environmental. Yet despite all of the obstacles that continue to crop up, the proof is in the investment pudding. People still want to invest in Sin City, and gambling in Nevada at large.
In many ways, gambling in Nevada has never been less appealing or necessary. Resort fees continue to plague customers, driving up prices with little discernible boost in the experience. The Strip casinos seem to care only for the high-value whales. Old-school value standbys like casino buffets are disappearing.
Meanwhile, tribal casino properties are popping up everywhere, giving gamblers outlets even in traditionally gambling-averse areas. Sports bettors can whip out their phones, tap a few buttons, and be in action from almost anywhere in the country thanks to prediction markets. It’s never been easier to access gambling outside of Nevada than it is right now.
The tourism numbers are starting to reflect these issues. In no small part thanks to the current animosity built into U.S. foreign policy under Donald Trump, foreign visitors in particular have begun eschewing Las Vegas. The situation has gotten troubling enough that Nevada congresspeople are proposing bills aimed at boosting tourism and trade with neighboring Canada and Mexico.
None of this even touches on the area’s environmental risks, as ongoing drought has forced continued water conservation efforts and drastically depleted Lake Mead.
Yet, despite all of these seeming indicators of alarm, investors still seem interested in pouring money into Nevada gambling projects.
Investor Interest in Las Vegas Runs the Gamut
Deep-pocketed entities have made waves with a couple of huge acquisitions of casino empires with major Las Vegas presences. Barry Diller is looking to take MGM private. He’s proposing a cash takeover worth $18 billion. Meanwhile, Tilman Fertitta seems close to a $17.6 billion takeover of Caesars.
These highly successful individuals clearly see something undervalued in Las Vegas. They’re willing to put a considerable amount of money and resources behind these opinions as they seek to privatize arguably the two most prominent gaming companies in the U.S.
But those headlines don’t tell the whole story. Of course, people are interested in MGM and Caesars, pun intended. Those are international gaming giants.
The border town of Primm is a far less tantalizing asset. But when that dusty last stop before the California border was set to become a ghost town, Terrible’s swooped in to revitalize it. Locals reportedly flocked to the reopening, which enjoyed a happy first chapter.
An investor just received approval from county commissioners to build a bizarre “heart-shaped hotel and casino” on a plot of land near Mandalay Bay.
It will go up on the site of the former Skyvue Las Vegas Super Wheel. That abandoned project was supposed to include a 500-foot observation wheel, a roller coaster, and a casino resort with 1,300 hotel rooms. It resulted in little more than a couple of “matchsticks” jutting out of the ground, ones that were supposed to hold a 500-foot Ferris wheel.
Even a mostly undeveloped property with a couple of eyesores that has been untouched since 2015 generated investor interest.
Another dreamer is proposing a $550 million thoroughbred race track on the Strip.
The Cycle of Life, Vegas-Style
If selling 20,000 seats per night to horse racing in Las Vegas sounds far-fetched, well, that’s kind of the point.
Las Vegas, for all its failings, is still a place that inspires dreams. People still go there because they want to get lucky and have a good time. And that, in turn, inspires the entrepreneurial minds to chase their own dreams of monetizing those tourists.
Let’s face it: Constructing a massive Ferris wheel in a desert to go against established casino industry giants is objectively crazy. Yet, someone was willing to do it. It didn’t pan out, but some other, equally strange ideas have.
And now, someone is willing to take over the failed ruins of that project and turn it into a massive heart-shaped hotel. That’s also kind of crazy. But the fact that people are seeing the decay of these projects and not only being willing to overlook it when constructing the next one, but actually buying that same decay and repurposing it, says a lot.
The past few decades have seen some notable failures in Las Vegas. The Fontainebleau project went through fits and starts, sitting abandoned for years, before someone finally took it over and finished it after almost two decades. Even now, ongoing drama and mystery surround the construction of the Las Vegas A’s complex.
But like a weird, gambling-centric version of the cycle of life, projects rise, fall, and then rise again in this city. There’s always someone willing to take a chance on Vegas.
Image credit: Andreas 06/Wikimedia Commons (license)
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