Second Tribal Gaming Company Enters Las Vegas Casino Market
When Virgin Hotels completely renovated the former Hard Rock casino resort in Las Vegas, it turned to Mohegan Gaming & Entertainment to run the property’s casino operations. This historic partnership created the first market entry into Las Vegas by a tribal gaming company.
The second Native American Tribe is now poised to make its presence felt in the casino gambling capital of the US.
The San Manuel Indian Band of Mission Indians recently announced their intention to acquire the Palms Casino Resort. Based in Southern California, this tribal gaming company came to terms with Red Rock Resorts to purchase this off-strip property for $650 million. Red Rock Resorts is part of Station Casinos LLC.
San Manuel Chairman Ken Ramirez was quoted in a company release as saying:
“Today represents an important step for the Tribe and its long-term economic diversification strategy. On behalf of the Tribe, we are thankful for the opportunity to join a community that we have come to know and appreciate.”
Red Rock Resorts spent almost $1 billion in its purchase and renovation of the Palms, so this appears to be a solid economic deal for the San Manuel Tribe. However, there is a clause in the contract that call for an additional $28.5 million payment if the deal is not closed within 18 months.
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Part of the massive discount is tied to Station Casinos decision to keep the Palms closed over the past year. This was actually one of four Stations’ properties that has remained shuttered since last March. The other three are:
- Fiesta Henderson
- Fiesta Rancho
- Texas Station
Industry investment analysists still see this deal as a win-win for both parties. The San Manuel Tribe now has the chance to expand into a major casino gaming market while Station Casinos has the chance to take this under performing asset off the books.
While the Palms will be San Manuel’s first casino property in Las Vegas, the Tribe already has strong financial ties to this gaming market.
They have strategic marketing partnerships in place with the NFL’s Las Vegas Raiders and the NHL’s Vegas Golden Knights. Over the years, the Tribe has donated close to $9 million to UNLV for various initiatives at the university. They have also financially supported the Clark County Public Education Foundation.
Going back to the early 2000’s, the Palms was known as a celebrity hot spot in the Las Vegas entertainment scene. The resort featured multiple entertainment venues and high end restaurants while hosting major parties and events.
Red Rock Resorts paid $321.5 million for the property in 2016. In an effort to return the Palms to its glory days, the company embarked on an ambitious renovation project at a cost of $690 million. Unfortunately, the plan fell short of achieving this lofty goal over the past few years.
San Manuel Gaming Chairwoman Latisha Casas noted that the property has been well maintained by Red Rock while it has sat idle over the past year. She is also confident that the Palms will appeal to many of San Manuel Casino’s loyal guests. This is the Tribe’s flagship gaming property near Los Angeles.