Red Rock Resorts is turning its attention to Las Vegas Valley.
JP Morgan recently had discussions with company executives and according to a note from the finance and investment company, Red Rock views the Durango area in the growing southwest Las Vegas Valley as the “most underserved’ market in the region.
Although a Red Rock spokesman refused to confirm the company’s plans to revisit its plans to build a Las Vegas casino in its Durango property, the signs point to it going that direction.
Per Macquarie analyst Chad Beynon:
“Durango remains one of the remaining attractive return opportunities in the Las Vegas Valley, given its location, close-in population base and lack of competitive options.”
The Station Casinos project in Durango has been in the company’s pipeline for the last two decades. In 2000, Red Rock Resorts-which operates Station Casinos, bought 71 acres of land in the southwest valley, specifically at the intersection of Durango Drive and the 215 Beltway. The initial plan was to build a casino with a 201-room tower at the property but unfortunately, the Great Recession forced the company to scrap the project.
Three years ago, a sign that was put up in the area revealed a proposed development of a Station Casino resort with a gaming area of 120,000 square feet and 1,000 rooms. In its annual report filed earlier this, Red Rock noted the undeveloped Durango property as one that has “excellent visibility and access from interstate 215” with “no major competing casinos within five miles of the site”.
Four of Red Rock’s Las Vegas casino properties remain closed to date and there is uncertainty as to when or even whether the Palms, Texas Station, Fiesta Rancho, and Fiesta Henderson will open. Despite that, Red Rock says that clients of its four closed Las Vegas casinos have found their way to the casinos that are open. And while business has not returned to normal, the “new normal” figures are encouraging.
During its third quarter earnings call, Red Rock Resorts reported net revenues of $353.2 million for the third quarter of 2020 which is 24% lower than its 2019 counterpart or a difference of $112.7 million. However, if they base the profits on the Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA), the company has a 44.8% increase in profits. Net income for the third quarter of 2020 was $72.0 million which is a huge increase from the net loss of $26.8 million for the same period in 2019.