Owning a Las Vegas Strip casino has become a bit like buying a professional sports franchise. There are only so many of them to go around and few ever come up on the open market,
Many of the properties on the famed 4.2 mile stretch of road are owned by Caesars Entertainment (CZR) – Get Caesars Entertainment Inc. Report and MGM Resorts International (MGM) – Get MGM Resorts International Report. These two giants each own an array of properties that let them serve everything from the highest of high rollers to the person looking to do Las Vegas on a tight budget.
Until recently, Las Vegas was a city where new construction — at least for large-scale projects — was expensive and fraught with peril. A lot of new casinos were announced, but few were ever actually built.
Fontainebleau Las Vegas, for example, has been on a nearly 20-year odyssey, under multiple owners now appears on track to actually open in late 2023. Perhaps even more impressive is that Resorts World Las Vegas was built from the ground up and opened on the North Strip during the pandemic.
It has become a Las Vegas arms race where a variety of players (including Hard Rock International which bought The Mirage from MGM) want a piece of the action. That has pushed available land on the Strip to incredibly high prices and attracted interest from billionaires looking to make their mark on what may be the world’s hottest real estate.
Another Billionaire Wants a Las Vegas Strip Casino
Tilman Fertitta, the billionaire who owns the NBA’s Houston Rockets as well as the downtown Las Vegas casino the Golden Nugget has closed on a 6.2-acre piece of land on the Strip for $270 million. That’s $43 million per acre, according to a story in the Las Vegas Review-Journal.
A sometimes reality TV star who made his fortune in the restaurant business, Fertitta has kept his Las Vegas Strip plans close to the vest.
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“It could also lead to a ground-up project by Fertitta on Las Vegas Boulevard, an ultra-competitive tourist corridor that regularly sees fresh development plans, albeit with a mixed record of projects actually getting built,” the paper’s Eli Segall speculated.
The property currently is home to retail including souvenir shops as well as a Tex-Mex restaurant and a motel that’s currently closed. Fertitta could build a casino resort on the property or opt for a luxury hotel without a casino.
The Las Vegas Strip Is Hot
Caesars and MGM have not been idle on the Strip while new players including Fertitta look to move in on their turf. MGM has not only sold The Mirage, it has also acquired Cosmopolitan.
“The Cosmopolitan is an iconic brand with a loyal and complementary customer base that will further enhance our Las Vegas Strip portfolio,” MGM CEO Bill Hornbuckle said during the company’s first-quarter earnings call.
Caesars also has plans to sell its Flamingo property (although it could still end up operating it).
“Well, we’re 23,000 rooms today. You’re taking out the Rio rooms, and then you take out a property, depending on which property it is, let’s say 3,000 to 4,000 rooms,” Caesars CEO Tom Reeg said during his company’s fourth-quarter-earnings call, in response to a question about selling a Strip property.
Caesars is also working on rebranding its Ballys Casino to its gambler-friendly Horseshoe brand.