It is clear that the new power players in Vegas are no longer swaggering casino executives but bankers. Cosmopolitan of Las Vegas is about to be opened under the ownership of Deutsche Bank after the original developer defaulted. And, there are many other resorts that exist at the mercy of their bankers. It will be very interesting to see what a Las Vegas run by bankers looks like. But unlike casinos, banks have stayed massively profitable. So, while announcing losses in millions of Euros on Cosmopolitan of Las Vegas, the bank was able to place that in the context of a profit that beat a billion Euros.
The Hard Rock is a case where I am not the first to wonder about its future. The casino has just finished a wonderfully done and totally expensive renovation. And, it has already begun taking things apart, announcing that Wasted Space, the totally underused nightclub, instead of realizing its potential, will close. From my perspective it seems the casino has been increasingly taking a locals approach rather than competing head on with the Palms and the Strip. That make sense if you don’t have a bunch of loans that require a Strip sized revenue to payoff.
There are very few resort companies in Vegas now that on some level don’t have their futures in the hands of bankers.
But just try to imagine what Las Vegas would be like if a lot casinos begin to be operated by banks? Actually, so far the Cosmopolitan has been doing some interesting things. And, as Cosmopolitan is showing, banks are businesses with the cash to spend (from being profitable elsewhere) to absorb the cost of waiting for the recession to end in Vegas.
Still, it is an odd thought: the corporate era of Vegas eclipsed by a new paradigm of bank ownership of casinos. (photo: Lanie Crossman)