Casinos were quiet on the Strip during the pandemic but boardrooms were busy.
Well-known resorts like the Venetian, Palazzo, and Palms have new owners. Eldorado Resorts took over Caesars Entertainment, keeping the better-known name. And an alphabet soup of investment vehicles like SPACs (special-purpose acquisition companies) and REITs (real estate investment trusts) have been put to use to extract more value out of Strip resorts and the real estate they sit on.
Gaming industry observer Brendan Bussmann recently wrote that today’s rash of mergers and acquisitions “will continue to evolve in pushing the industry forward.”
“Vegas has always continually reinvented itself, and you've seen mergers going back to when Mandalay Resort Group merged with MGM resorts,” he told State of Nevada.
Bussmann said the experience of coping with the pandemic and its related shutdown taught casino operators to better control costs, something that will be valuable going forward with a new environment on the Strip.
“No one ever budgets for zero, and that's literally what people were forced into,” he said, “but as they recovered, I think they've figured out how to become leaner.
“People are looking at where can they get their best value out of their current portfolio,” Bussmann said. “You know, in some cases, they’ll say, ‘Let's jettison a property that we maybe aren't getting a lot out of.’”
He said the pandemic remains a wild card — something evidenced by Friday’s call by the Southern Nevada Health District for the public to resume wearing masks indoors — and additional outbreaks and restrictions could harm an industry just getting its legs.
“In some cases, (companies) have recovered nicely and are seeing record numbers when it comes to gaming,” he said, “but, obviously, there are other segments that haven't fully recovered, but it would definitely stunt that return and really, you know, put us in a bad position towards any sort of recovery.”
Brendan Bussman, partner and director of government affairs, Global Market Advisors
