First Ohio Casino Opening
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Its in the first 4 floors of an old dept store in
Cleveland. 1600 new jobs, 500 of them dealers.
3 more casinos are set to open later, in Toledo,
and Columbus. This sucks even more tourist $
away from Vegas, the entire country is turning
into one giant casino.
one in Cleveland is being developed by Caesars
and is expected to generate 100 million in revenue
every year. I wonder if there's a way to calculate
how much of that revenue would have been spent
in Vegas if the casino wasn't built. Every new casino
hurts the Vegas bottom line, but by how much, thats
the question.
Quote: EvenBobNone of the new casinos are Indian joints, the
one in Cleveland is being developed by Caesars
and is expected to generate 100 million in revenue
every year. I wonder if there's a way to calculate
how much of that revenue would have been spent
in Vegas if the casino wasn't built. Every new casino
hurts the Vegas bottom line, but by how much, thats
the question.
I'd think this hurts Mountaineer and Pennsylvania more than it hurts Vegas. Then again, you don't know if people who would never enjoy gambling who live a sheltered life in OH now get a taste of gaming and WANT to go to Vegas, whereas they never really did before.
I love the buliding style, very 1930's Art Deco look.
Quote: source: Horseshoe Cleveland Website
Rock Ohio Caesars LLC (ROC) is a joint venture comprised of Midwest-based Rock Gaming LLC, and the world's largest casino entertainment company, Caesars Entertainment Corporation. ROC will develop urban casinos in downtown Cleveland and downtown Cincinnati; Caesars Entertainment will manage the casinos.
ROC is developing the Phase 1 Horseshoe Casino Cleveland in the City’s Historic Higbee building and expects to open in early 2012. The initial phase will create up to 1,600 casino jobs. A Phase 2 casino will also be developed by ROC between the bank of the Cuyahoga River and Huron Road in the heart of Cleveland’s downtown entertainment district. As a truly urban casino, plans call for the development to include outward facing restaurants and retail to engage pedestrians and support existing cultural, nightlife and sports attractions downtown. The gaming operation is projected to attract 8 million visits to downtown Cleveland annually, while creating approximately 8,000 direct and indirect construction and permanent jobs at the casino.
I think this is the best of all scenarios, with the only "drawback" for Horseshoe being that they'll have to honor Total Reward credits earned against dollars that they don't get at casinos that they do own (i.e. Vegas). This likely will have such a miniscule effect, and I'm sure once ROC goes belly-up (which they certainly will), Horseshoe will get to own the casino outright for pennies on the dollar. This is different from the Penn properties where Penn National will actually own and operate them.
Quote: cclub79I'd think this hurts Mountaineer and Pennsylvania more than it hurts Vegas. Then again, you don't know if people who would never enjoy gambling who live a sheltered life in OH now get a taste of gaming and WANT to go to Vegas, whereas they never really did before.
2) I agree with this comment. Erie's casino will probably suffer the most, with Mountaineer a close second. Both casinos draw heavily on the Northern Ohio market. Still, Steubenville and a few other larger cities are closer to Mountaineer, whereas Erie loses Western PA to Horseshoe, and Eastern PA to the NY casinos. As both are owned by the same company with a strange 1920s theme, it seems unlikely anybody will buy them up.
As far as Vegas, I don't think that's a concern. Junkets and airfare really focuses on bring Ohioans to Atlantic City more than Vegas. Shopping and restaurant options are much better in Vegas, and there's the sexy appeal of all the clubs. Besides, Horseshoe will get people with their fantastic room offers, and once Penn fully integrates M Resort into its brand image (which is HEAVILY focused on Hollywood), they can get the Midwest customers too.
3) My prediction is Toledo and Cincinnati struggles. Toledo is too close to Detroit, and its unlikely they will offer low table minimums or great paybacks and promotions. While you take your life in your hands going to Detroit casinos, they are large and deals can be found. Cincinnati will face stiff competition from Hollywood Lawrenceburg, who will HAVE to make concessions to keep their table game customers, especially their poker room. Belterra, which is more of a resort anyway, will sweeten their deals and emphasize their consistently low minimums and "great values."
Cleveland will have a honeymoon like none other. Expect table mins to be ridiculously high (similar to Hollywood Charles Town) early on, backing off a bit later on. Then there will be a post-honeymoon crash like none other. While Cleveland is huge and people will always gamble, it's a city still reeling from the recession. There won't be enough of a draw beyond the city limits, and expect Erie and Mountaineer to offer promotions, cashback, free rooms and comps galore. It will never hurt but it won't be spectacular forever.
Columbus was the huge win. It's in a (relatively) good area, with nearby interstate access and they are already working on roads. A lack of a hotel early on will hurt business outside of the central Ohio area (and lack of hotel options nearby), but they won't rely on that traffic. You have a strong poker business through clubs that will make the poker room packed nearly all the time. Table mins will be high, but not ridiculous as the closest casino will be reeling Wheeling Island who will ramp up efforts to capitalize on those who don't want to be fleeced.
I hope not to be living in Ohio by the time any of these open, but I'm sure I probably will be...
Quote: TiltpoulAs far as Vegas, I don't think that's a concern.
Any new casino opening hurts Vegas, if only a little.
It adds up over time, and a trickle becomes a flood
of lost revenue. I rarely go to Vegas now, and I used
to go all the time. The local casinos are just too darn
convenient. Its going to hurt Detroit, which is less
than an hour from Toledo. Why do you not want to
be living in OH, don't you like casinos?
Cleveland was a mecca for millionaires. The
original John Rockefeller had a mansion there,
as did other robber barons. New York became
the hub of business, and they all moved there
in the 1890's. Cleveland, who woulda thunk..
Millionaires Row
Quote: EvenBobAny new casino opening hurts Vegas, if only a little.
It adds up over time, and a trickle becomes a flood
of lost revenue.
Yeah, all those pretty casinos in Atlantic City, and Laughlin, and the riverboats, and the Native American casinos, and New Orleans, and Detroit really brought LV to its knees. NOT. The newer casinos seemed to be hit just as hard by the recession as the ones in Vegas, only no one city relies on them as heavily. Which is not to say it couldn't happen THIS TIME, but the odds are against it.
I wonder, with the proliferation of new casinos everywhere, two things--how will they all survive and how much real impact will it have on Vegas.
I enjoy reading these threads to hear what others think about these things...
Quote: EvenBobThis sucks even more tourist $
away from Vegas, the entire country is turning
into one giant casino.
I don't think it takes much from Vegas. As others said, it will hurt other local casinos more. It will hurt Erie and might kill Mountaineer or at least put it in the intensive-care unit. Wheeling will feel heat, though Wheeling has something resembling a metro-area to pull from. Mountaineer is more isolated and can't live off Wheeling-dealers going there on their day off. Salameca will be hurt, drive down the dilapidated road that is I-86/NY-17 and count the OH plates going by. Rivers Pittsburgh might lose a few busses as people try the new thing. MI/IN I can't speak for, but should be similar.
But Vegas? Not as much. IMHO, Vegas' current woes are partly because 1990-2005 everybody that ever wanted to visit the place visited. The mystique is gone, and will never return. People are not going to take their $500/yr gambling budget from Mountaineer and spend it in Vegas.
With the Taj Mahal in AC hosting a strip club soon, maybe Vegas will mean something in the future too.
Quote: EvenBobMost people don't know that in the late 1800's,Cleveland was a mecca for millionaires.
Most of the original great fortunes developed after the civil war were in manufacturing. A few people were making money in property development in NYC. The manufacturing centers all had their millionaire rows.
In the "Mansions in the Middle of Nowhere" thread, we discussed the Vermillion mansion near Cleveland, home of the late Donald Brown (who invented the drop ceiling). While Cleveland is not in the middle of nowhere, you can still buy this unique home with 160 acres of lakefront property for $19.5 million.
Contrast that to the ex-wife of Tiger Woods who spent $12.3 million for a single acre of beachfront property in North Palm Beach. The 80 year old 9K sq foot home was just torn down. She'll spend way more than $20 million by the time she's done rebuilding. She is close enough to throw a rock into the windows of the other four mansions on her street.
Quote: FleaStiffVegas rested on its laurels from when it was the only place in the country. Sure Frank Sinatra could have been shooting craps in Cincinatti if he had wanted to but he headlined in Vegas. Sure if the stuffed shirts on the Cincinatti city council had voted for it, they could have had topless shows there, but it was Vegas that did it. And when most of the USA was in a Get Hitched Stay Hitched mentality, a woman could spend six weeks in Reno and get rid of an oaf. Vegas meant something in those days.
With the Taj Mahal in AC hosting a strip club soon, maybe Vegas will mean something in the future too.
Interesting. And I remember an article in the 1990s that stated Vegas was not developing a "new generation of Vegas shows." You had the Rat Pack in the 1960s, Elvis in the early 1970s, Wayne Newton forever, but what else? Sigfried and Roy came on but tragically had to give up the show. There are just fewer shows that ARE Vegas today. And the ones you have IMHO are just too big to make that connection with an audience. The Rat Pack played to 500 or so. The Golden Nugget no more than 1,000. But a 5,000 seat show? Too big to be personal. And to fill those 5,000 seats you see discounts all over the street.
The book on the boys who bought The Golden Nugget were on to something. Keep the place smaller, no more than 1,000 seats. Get acts on their way up or on their way back. Up close and personal. No $100MM stages. Don't build or book a room you cannot fill completely.
Quote: RonCI wonder, with the proliferation of new casinos everywhere, two things--how will they all survive and how much real impact will it have on Vegas.
I think that the impact has been stronger in Reno, Lake Tahoe, Laughlin, Mesquite, Primm (formerly Stateline CA), Boulder Strip, Lake Las Vegas, and the other off-strip Nevada gaming locations. The strip casinos provide 103K jobs for Nevadans, and there are 2 million people in the state. Many of people outside of the strip were dependent on gaming as well. There is little or no reason to go to these places anymore, as they don't have the glitz, and plain old gambling is available everywhere.
I've put this table up before showing the comparison between Vegas strip gaming revenue, and the "Rest of Nevada" which includes urban Vegas that is not on the strip (as defined by the NGC). Gaming revenue from outside of the strip is at a 12 year low and keeps on decreasing.
| Comment | Month | State | Strip $billions | Rest of NV |
|---|---|---|---|---|
| Latest reported | Oct-11 | $10.63 | $6.01 | $4.62 |
| Low for off-strip | Sep-11 | $10.55 | $5.94 | $4.61 |
| Low for the state | Jul-10 | $10.28 | $5.62 | $4.66 |
| Low for the strip | Oct-09 | $10.38 | $5.49 | $4.90 |
| Strip near $6B | Jan-09 | $11.44 | $6.04 | $5.41 |
| Peak of market | Oct-07 | $12.97 | $6.95 | $6.03 |
| Historic | Oct-04 | $10.38 | $5.24 | $5.14 |
| Historic | Dec-99 | $9.02 | $4.49 | $4.53 |
Revenue is for the 12 months ending in the month shown. It is not for just that month.
Quote: EvenBob\Why do you not want to be living in OH, don't you like casinos?
Love casinos, but I don't like Ohio. I'm from the Midwest and to me, Ohio is the East coast. I want to move a bit closer to my family and I hope to be doing that sometime this year. My job here, which should have been around a 1-2 year project, has turned into a great business that doesn't want me to move. But it has nothing to do with not wanting casinos.
Quote: teddysThe Cleveland casino is going to be huge. Cleveland has always been a big gambling town -- they have been a huge Vegas feeder market for a very long time and of course the Central States Teamsters Pension Fund, the Mayfield Road Mob, etc...tons of gambling ties. It will be immensely profitable, just like Detroit's casinos. ROCK ventures is Dan Gilbert's outfit, the guy behind Quicken Loans and the Cleveland Cavaliers, so he has plenty of money. They will be swimming in it.
I know the history suggests that Cleveland will be huge, and I don't doubt that it will be, especially initially. The problem is it will command too high of a price to play. Casinos get greedy when they are new and have a locked market. There will be a correction after a few months of being opened, when Erie/Mountaineer ramps up efforts to get the Cleveland customers back. It may not work; people don't like to travel to gamble if they don't have to, but it will take fringe customers who simply can't afford to play at Horseshoe.
Further, while Dan Gilbert does have a ton of money, history has shown that small casino outfits that try to play with big boys (i.e. Colony Capital) have not been successful. This will be apparent when revenue drops, but they are still forced to pay 33% in taxes to the state. Revenue will of course drop since locals will stop going if table min don't drop, or the drop in table mins will generate less revenue. ROC will bolt from the project, leaving Caesars to buy it up.
If ROC is successful and the casino is making money hand over foot (which I don't think it will) consistently for a few years, it will want to drop the partnership with Caesars in favor of keeping all the money. This will lead to a rebranding (similar to Harrah's Prairie Band in Kansas, which is now just Prairie Band). However, without the venerable Total Rewards program, they lose incentive for people to travel to the property, becoming even more of a locals joint.
Quote: AZDuffmanBut Vegas? Not as much. IMHO, Vegas' current woes are partly because 1990-2005 everybody that ever wanted to visit the place visited. The mystique is gone, and will never return. People are not going to take their $500/yr gambling budget from Mountaineer and spend it in Vegas.
And frankly, while Vegas is constantly reinventing itself in terms of offerings outside of gambling, they have become the absolute worst for gambling. NOWHERE ELSE IN THE COUNTRY HAS 6-DECK, 6:5 BLACKJACK!!! They tried it, once, at Ameristar KC. People played the game because of lower table minimums. I thought for sure this would become the standard. Those tables were gone in a few months... why? People catch on. They hear from other players not to play 6:5 BJ, so they go to the next table and play there.
I'm not implying that gamblers are smart or even that aware. But they know after a while that it does make a bit of a difference. If you get a nice rack to look at while playing, then 6:5 is fine. But Ameristar KC dealers, while proficient in dealing, are not proficient in the chest department.
But as gambling expands, players begin to realize what games are better than others. They may still play them, but if 6:5 shoe games were that profitable, all casinos across the country would offer it. Yes, I know gaming regulators can put a stop to it, but they'd turn a blind eye if the profits meant more tax dollars. As a gambler, you get to Vegas and in a place where there is SO MUCH COMPETITION, the games are usually bad to outright criminal.
Quote: AZDuffman\There are just fewer shows that ARE Vegas today. And the ones you have IMHO are just too big to make that connection with an audience.
I totally disagree. Cirque has carved a very unique niche in the market. I think now, when people think of a Vegas Show, it's Cirque. There are even the knock offs of Cirque, like La Reve. Sure there isn't a traditional headliner that is making waves, but give it some time. One of these American Idol/X Factor/The Voice/Star Search people will hit it big there. It's just bound to happen.
I partly take back what I said about Reno and Laughlin. While growth is almost stopped in these places, they have managed to cut back expenses enough so that they are at least breaking even. They are not taking the huge writedowns that you see in Vegas.
It's too bad we don't know/trust each other 'cause I would definitely take the other side of this bet. I predict a huge initial opening, a slight dip after the initial hoopla but then steady increases until the new place is built, at which point it will spike again.Quote: TiltpoulI know the history suggests that Cleveland will be huge, and I don't doubt that it will be, especially initially. The problem is it will command too high of a price to play. Casinos get greedy when they are new and have a locked market. There will be a correction after a few months of being opened, when Erie/Mountaineer ramps up efforts to get the Cleveland customers back. It may not work; people don't like to travel to gamble if they don't have to, but it will take fringe customers who simply can't afford to play at Horseshoe.
Further, while Dan Gilbert does have a ton of money, history has shown that small casino outfits that try to play with big boys (i.e. Colony Capital) have not been successful. This will be apparent when revenue drops, but they are still forced to pay 33% in taxes to the state. Revenue will of course drop since locals will stop going if table min don't drop, or the drop in table mins will generate less revenue. ROC will bolt from the project, leaving Caesars to buy it up.
If ROC is successful and the casino is making money hand over foot (which I don't think it will) consistently for a few years, it will want to drop the partnership with Caesars in favor of keeping all the money. This will lead to a rebranding (similar to Harrah's Prairie Band in Kansas, which is now just Prairie Band). However, without the venerable Total Rewards program, they lose incentive for people to travel to the property, becoming even more of a locals joint.
Getting away from predictions for a moment, I am very interested in how Caesars/ROC will handle the new casino. It has the potential to be really well done, especially if they utilize the architecture and decor well. It could be as good as MGM Detroit, which is one of the best in the country, IMO. The Hollywood properties in Toledo and Columbus are blah -- know what to expect from Penn National, and it will be the usual Burger King-type casino.
Quote: EvenBobAny new casino opening hurts Vegas, if only a little.
q]
I live close enough that I'll want to at least check-out the
Cleveland and Toledo casinos.
I will still probably go out to LV once or twice a year, and
my HOPE is that this increase in competition ends up being
good for the consumer ( gambler ).
Lower airfare to LV would be nice !There's emptiness behind their eyes There's dust in all their hearts They just want to steal us all and take us all apart
Yep. However a town that is built on tips... doesn't ever want to tip the airlines.Quote: JohnnyQLower airfare to LV would be nice !
Smaller shows? Frank Sinatra would often enter by the same doors the customers did and walk through the table area to get to the stage.
All Vegas is really know for now is slot machines, upscale restaurants, pool parties, drug.. er, uh... rock concert beer swills and Party Clubs where the men think they will get serviced but its only the bottles that get that.
Anything other than slots in a casino is known largely as a backdrop or scene from some popular movie or TV show.
Vdara? Lets go see the Vdara Death Ray, as long as we toke two of those little greenie things, the waitress will bring us some burnt plastic cup, we don't actually have to stay away from the clubs for a full two hours or anything.
Strip clubs... Vegas is full of hype about loose slot and its also full of hype about loose women at strip clubs.
Quote: teddysGetting away from predictions for a moment, I am very interested in how Caesars/ROC will handle the new casino. It has the potential to be really well done, especially if they utilize the architecture and decor well. It could be as good as MGM Detroit, which is one of the best in the country, IMO. The Hollywood properties in Toledo and Columbus are blah -- know what to expect from Penn National, and it will be the usual Burger King-type casino.
The architecture from the pictures shows it will be upscale. I imagine it will be really well done. But while at work today, I thought of other partnership casinos that never worked out for both parties. Borgata (MGM gets the boot from NJ government when they want to open in Macau) is now 50% Boyd, 50% some little group. Boyd only hasn't bought the rest out since AC isn't guaranteed viable and they are sunk in worthless property where Echelon should be.
Monte Carlo never really found its niche as a cooperation between Circus Circus and MGM Grand (ironic that they are now the same company... maybe it was foreshadowing...) MGM Grand at Foxwoods is part of the complex, so casual players may not even recognize the difference between the two. Partnerships just don't work in the long run, especially when one is controlling funds and the other is controlling operations. One side always wants more of the pie, and in this case, once it proves to be viable, I see Caesars gobbling up Gilbert's investment.
Don't get me wrong by the way. I think Cleveland will always be a good market, regardless. I just don't believe that it they will respond to changes in market conditions, causing a dip in revenue which will be perceived as a problem of operations (ROC will want to take full control), or a change in market (where ROC will want to get out.) I predict the latter, as rebranding can have dire consequences if done wrong. I just don't see them ever lowering table mins and increasing cashback, because they see themselves as having complete control over the market. That's fine, at least initially, but people catch on and things level to the right amount.
