In an unprecedented move, Station Casinos has announced that they will be acquiring the Palms Hotel and Casino Resort located in the heart of Las Vegas. They have agreed to the purchase for $312.5 million, which they made during an earnings call on May 10. This was done in an aggressive effort to expand their brand across Nevada, as their main competitor, Boyd Gaming, is doing the same.
Dividing the Las Vegas Casinos
It was just last month that the Red Rock Resorts, Inc. IPO went through, getting them $531.4 million, and they will be using part of that money to expand, and their first purchase is the famous Palms Casino. As mentioned earlier, this is an all-out battle to secure a strong foothold in Las Vegas against their main competitor. Boyd Gaming has already made several acquisitions, including:
- Aliante Casino Hotel and Spa
- Cannery Casino Hotel in North Las Vegas
- Eastside Cannery Casino and Hotel
VP and CFO of Red Rock Resorts, Marc Falcone, believes this is the best move they could have made currently, stating,
“With the acquisition of the Palms, we gain a leading gaming asset in Las Vegas with key strategic benefits in the Las Vegas locals market and close proximity to the Las Vegas Strip. With its appeal to both Las Vegas residents and tourists alike, the Palms is a hybrid gaming property that is uniquely positioned to benefit from the strong economic trends in Southern Nevada and record visitation levels in Las Vegas.”
Fertitta Brothers Looking for Big Profits
With the 710 hotel rooms, 85 suites, 19 penthouses and 599 condominiums between two towers of the Palms, it seems that the Fertitta brothers are looking to get a hefty profit from the start. They are expecting that the casino will bring in $35 million in profits in the first year alone. This isn’t their only plan to help expand, as they are looking to sell the Ultimate Fighting Championships (UFC). They bought the UFC for only $2 million in 2001, and since then it has become a powerhouse, which is why they are looking to sell it for $3.5 to $4 billion.
Between the IPO and the sale of the UFC, Station Casinos could look towards acquiring many more properties in Las Vegas, and may even set their sights on operations outside of the state.
