Las Vegas Strip casino operator considering major purchase
Entertainment Caesars (CZR) and MGM Resorts (MGM) completely dominate the South and Central areas of the Las Vegas Strip. Between the two casino giants, they have over 20 properties on the 4.2-mile stretch. (The number is debatable as both companies have resorts with boutique brands at larger resorts.)
This large collection of properties allows them to serve all kinds of clients extensively. A value-seeking tourist can stay at Caesars Bally’s or Flamingo while MGM can serve this audience through Luxor or Excalibur. As you move on to mid-tier customers, both companies have a variety of brands to suit needs.
And at the high end, both companies have properties that cater to everyone, from business travelers with expense accounts to high rollers looking for unique suites and other amenities.
Apollo Global Management is the only real competitor that operates amid Caesars and MGM South and Central Strip properties. (APO) which operates the Venetian Exhibition Center as well as the former Sands Exhibition Center (now Venetian).
The Venetian, an upscale property, competes with Caesars and MGM. But it also supports them since many people attending conventions and trade shows at its convention center don’t want to stay put. This means that the Apollo property loses guests to its two rivals as they offer higher prices.
Now the casino operator has suggested that it may seek to change that dynamic.
Venetian owner is open to other casinos on the Las Vegas Strip
Apollo, a private equity firm, hasn’t operated the Venetian (which includes the Palazzo and the Venetian Expo) for that long. Earlier this year it paid $2.25 billion for the rights to exploit the property, while Vici Properties (VICI) $4 billion owns the real estate on which the resort, casino, and shopping/dining area sits.
This means that Apollo took over the Venetian during the period when Las Vegas was beginning to recover from the pandemic. Congress activity hasn’t fully returned, but the new owners are bullish enough about the business to acknowledge their interest in buying other properties, at a meeting of the Nevada Gaming Control Board, Casino.org reported.
“We are always on the lookout (for mergers and acquisitions) to create network effects around the Venetian asset. We think it could be a flagship asset that you can build with other regional assets or Vegas assets, so that’s something we’re also looking at,” the board told the board. Venetian financial director, Robert Brimmer.
The CFO didn’t name any possible deals, but it’s worth noting that the company hasn’t reached a deal for Caesars’ Flamingo, which has now been withdrawn from the market. In addition, the Tropicana was sold recently as well as the Mirage and the Cosmopolitan.
Venetian gets a $1 billion upgrade
Apollo has been aggressive since taking over the Venetian. It plans to invest $1 billion to upgrade all aspects of the property, chief executive Patrick Nichols said. Travel & Leisure.
“We’re looking to elevate our experiences throughout the resort,” Nichols said. “Arrival experiences will be different. For The Venetian and The Palazzo, we plan to renovate, remodel and redesign all of our suites. We will be offering a number of new [food-and-beverage] concepts, we are looking in-depth at the entertainment, nightlife and bar offerings, and the casino floor will also look very different.”
Changes will include a redesigned pool deck, a nearly 50,000 square foot, $50 million TAO Beach day club and several new restaurants.
Additionally, the upcoming $1.85 billion MSG Sphere, a new kind of concert/performance venue, is being built on a Venetian property. It should open — with a residence of U2 — ahead of the November 2023 Formula 1 race on the Las Vegas Strip.