The centerpiece casino of the Lake Las Vegas development announced today that it will be closing. Following the news that the Ritz Carlton is soon to close, this raises even more questions about the future of the development–and ties into a Nevada gaming trend that pre-dates the recession. From the LV Sun:
Casino MonteLago at Lake Las Vegas will close at midnight March 14, the casino owner announced today.The closure is a direct result of last week’s announcement that the Ritz-Carlton would be closing on May 2.The casino is owned by CIRI Lakeside Gaming LLC and is leased through Village Hospitality LLC, which is an arm of Deutsche Bank and owner of the Ritz-Carlton at Lake Las Vegas.More than 170 people will be out of work as a result of the closure. Employees were informed by management today.John Tipton, a spokesman for the company, said the casino was in the middle of negotiations with other investors when the announcement of the Ritz-Carlton closure hit, resulting in those investors pulling out of the casino.
Obviously, this is awful news for the 170 people who work there, and it’s hardly a bellwether of economic recovery. With luxury on the Strip selling so cheaply, luxury on the lake is difficult to sell.
As far as the state goes, I’m currently in the middle of crunching the numbers for 2002 to 2009 to get a handle on where gaming is going. I’ve noticed some interesting macro trends.
The total number of gaming positions (slots + seats at tables) is down again in 2009; the number has fallen every year from 2002 (221,476) to 2009 (217,962). Nevada’s casino footprint is 8.11% smaller than it was eight years ago, and continues to shrink. Casino Montelago will be part of that trend continuing in 2010: its 635 slots and 12 tables will probably not be the only ones missing come next January. All told, Nevada has lost 16,558 casino slot machines since 2002, a total reduction of nearly 9 percent. As I’ve said before, the implications of this shrinkage for the state’s tax structure are significant, even if they are not commented upon.
Decreases in volume have partially been offset by net increases in win per unit. The average gaming position made $139.90 in 2009, an decrease again from the 2007 high of $168.04, but still an improvement from 2002 ($116.87). All told, the average gaming position makes 19.7% more money today than it did in 2002, which may or may not have more to do with inflation (money is “cheaper” now than it was eight years ago) than increased operational efficiency.
In 2009, table games got slightly looser (from 12.51% to 12.04%) and so did slots (6.16% to 6.10%). The overall trend has been for slots to get tighter and tables looser, which is likely a result of slot players gravitating towards lower-denom, higher hold machines, while baccarat, which has a lower hold than the table games average, continues to gain as other tables fade.
I haven’t finished crunching everything yet, but expect an update within the week.