Posted on: May 15, 2024, 04:10h.
Last updated on: May 15, 2024, 04:10h.
The Las Vegas Valley is home to hundreds of bars, pubs, restaurants, and taverns at which customers can play keno, slots, and video poker. As the owner of more than 70 such venues, Golden Entertainment (NASDAQ: GDEN) is the dominant operator of Sin City gaming bars, but it could face new competition and it could be familial in nature.
On its recent first-quarter earnings conference call, Red Rock Resorts (NASDAQ: RRR) President Scott Kreeger said the gaming company could entertain establishing a footprint in the Las Vegas tavern business.
It’s a great place to invest in,” said Kreeger on the call. “It’s a unique customer with a different profile than our core customer. So, it skews younger and skews toward the sports bettor. We like that kind of customer.”
As reported by Howard Stutz of The Nevada Independent, should Red Rock pursue direct gaming bar competition with Golden, it could make for some interesting family gatherings because Golden CEO Blake Sartini is the brother-in-law of Red Rock CEO Frank Fertitta III and Vice Chairman Lorenzo Fertitta. In 1983 Sartini married then Delise Fertitta and one of their three children is named Lorenzo, presumably after her brother.
Red Rock Has Clear Tavern Ambitions
It’s not a matter of “if,” but when Golden and Red Rock butt heads on the tavern front. The latter already has seven such locations under contract with a pair slated to open later this year with the rest following in 2025.
On the conference call, Kreeger said Red Rock wants to bolster its Las Vegas tavern footprint, but he didn’t comment if the operator’s Wildfire Casinos would be candidates for transitions to gaming bar status. It’s expected that should Red Rock forge further into the gaming bar space, its venues would be comparable to Golden’s SG Bar and Sierra Gold concepts, which are considered upper echelon gaming bars.
“We think it’s an opportunity for us to kind of expand into what we call the micro-market within the [Las Vegas] valley,” added Kreeger.
In Nevada, gaming taverns feature bars and restaurants and are classified as restricted venues because they are allowed a maximum of 15 gaming devices.
Golden Ready for Gaming Bar Fight
Owing to Red Rock’s status as one of the largest operators of casinos catering to Las Vegas locals, the company is a credible competitor in the gaming bar business. However, Golden has advantages of its own. Those include its level of name recognition among Las Vegas locals, a strong balance sheet, and a prudent acquisition strategy. That includes Golden often getting first crack at gaming pubs that are put up for sale.
“In April, we purchased two additional taverns, growing our tavern portfolio to 71 locations, with 68 of them in the Las Vegas Valley. We anticipate opening our 72nd tavern by the end of Q2, and we still target growing the portfolio to over 90 locations within the next few years,” said Golden CFO and President Charles Protell on that company’s May 8 earnings conference call.
In terms of Las Vegas casino hotels, Golden’s portfolio consists of The Strat near the Strip and two Arizona Charlie’s locations — a significantly smaller portfolio than Red Rock’s. However, Golden is one of the top operators in Laughlin and Pahrump — two markets in which Red Rock doesn’t have venues.
