Golden Nugget on their dime.

Quote: Doc

Mr. Martin: How the heck did you come up with this thread? Neither of the previous posters has even visited the forum since making their lone posts ever (more than 16 months ago!)

Quote: Background Story

In May of 2008, I was hired by a group of investors who were looking into purchasing the Fitzgerald Casino which was rumored to go on the market to back a $35 million . See 'For sale' sign could be headed for Fitzgeralds published on May 7, 2008. Fitzgeralds owner Don Barden is pledging his downtown Las Vegas property to generate a $35 million equity stake in a slots-only casino in Pittsburgh, making a sale likely for the Fremont Street hotel. At the time, only January - March data on gaming revenue had been released which showed three worse than average months, but that downtown was still up +0.42% for the fiscal year which would end on June 30, 2008.

People conjectured that downtown was already too cheap to be affected by the oncoming recession (i.e. people need short vacations, and what could be cheaper and easier than downtown Vegas).

By the end of the fiscal year June 30, 2008, gaming revenue had jumped over 10% for the month for downtown and had dropped only -0.37% for the fiscal year. That percentage was better than the strip which had revenue drop by -1.51% for the FY2008. There was no month to month summary non-gaming numbers published for that FY2008, so you had little to go on except the average room rates published by the LVCVA, and they are for the entire city. The only non-gaming revenue published at the time was for the FY2007 ending June 2007, which was well before the recession began.

I went through 20 years of financial data posted on the web (in .pdf form sometimes with a copy/past lock instead of something more convenient like spreadsheets or database files). Too my horror I discovered that the kinds of drops we were seeing downtown, would quickly overwhelm the properties. By that I mean that large scale firings, and reductions in material costs were never going to cover this kind of loss in revenue. There was not much give in the numbers.

Starting in July 2008 gaming revenue started to look worse for the strip and for downtown.

In mid 2008 the only readily data available is the shaded data in the table below, which contains average data for the 11 downtown casinos with gaming revenue over $12m per year. When the non-gaming revenue came in for 2008 by Feb 2009, it showed an average increase over the previous year because it was so old.

FY	#	Gaming	NonGaming	Total
2010	11	$44.4	$34.7	$79.1
2009	11	$48.0	$37.3	$85.3
2008	11	$53.6	$42.7	$96.4
2007	11	$54.3	$41.1	$95.4
2006	11	$55.8	$48.5	$104.3

Since Don Barden had taken the Fitzgerald Las Vegas private, he was no longer reporting financial information. The last piece of data I could find was an SEC document published on 24 Feb 2003 where Don Barden reported For the twelve-month period ended December 31, 2002, Fitzgeralds Las Vegas had net revenues of approximately $48.9 million, compared to $52.5 million in the prior twelve-month period.

So without any obvious public data, I was able to establish to a fair degree of accuracy, the ranking of the downtown casinos, estimates of what they make, and which ones were improving and by how much. It was like finding needles in haystacks. You had to decode data that was desperately trying to protect the rights of the individual businesses.


The investment group decided to pass on the purchase (partly my input) for two main reasons:
(1) Don Barden lost his position in the Pittsburgh casino on July 10 2008, so he lost his urgent need to sell Fitzgerald's downtown to finance the PA casino.
(2) The plans to move Star Trek Experience to downtown were in perpetual limbo. It would have been a major draw towards that side of Fremont Street.

I submitted my report to Ben Spillman, who did news coverage of smaller off strip casinos, and he published his take on the data in the LV Business Press with the incendiary title of Downtown may lose a casino or two, analyst says which turned out to be true.

I have been featured in more than a dozen articles since then, but I try to keep tabs on downtown.