Posts

The Myth of the Las Vegas Locals Market Recovery

Red Rock Resorts is heavily dependent on the health of the Las Vegas locals gaming market. In this report, we examine key gaming metrics in the Las Vegas locals market – going beyond simple measures of gaming revenue – in order to gauge the company’s potential to grow back up to the peak levels of 2007.

Read more

Fallow Land, Hollow Claims

Red Rock Resorts has been talking up its Las Vegas development sites and master-planned expansions in its presentations to investors and SEC filings. However, after a review of local real estate listings and planning agency documents, we found development sites for sale and no approvals on file for some of the company’s master-planned expansions.

Read more

How Will Red Rock Grow in a Saturated and Stagnant Market?

The flip side of Station Casinos’ saturation of the locals market means growth in its core Las Vegas business would have to come from significant increases in (1) the population of Las Vegas and/or (2) customer spending per capita. Facing low population growth and a decline in locals’ gaming behaviors, the company is unlikely to experience much, if any, upside in its core Las Vegas locals business.

Read more

More Growth Questions about the Las Vegas Locals Gaming Market

Economic data from federal agencies and gaming data from the Gaming Control Board suggest the current recovery in the Las Vegas area is moving slower than a previous post-recession recovery. Furthermore, we identify a potential limit to the current recovery in terms of the slot win percentage. Growing casino revenue through tighter slots has its limits.

Read more

Red Rock Resorts is a Second-Class Gaming IPO

Investors who buy Red Rock’s second-class shares on offer will gain a minority (33%) stake in the once-bankrupt Las Vegas casino and tavern operator, Station Casinos. The terms of the offering beg questions about company insiders’ confidence in its long-term prospects. Prospective investors should ask management the following questions

Read more

Why is Station Casinos Selling Valuable Casino Sites?

Investors should ask Red Rock Resorts/Station Casinos and its IPO underwriters: Why is the company selling valuable casino sites? Where will growth come from if the company is selling off future casino sites? Do the Fertittas and other executives of Red Rock have confidence in the company’s core Las Vegas locals business?

Read more

Selling Growth While Cashing Out

As one gaming analyst recently said about the Red Rock Resorts IPO, “there is going to be an appetite for them to grow.” However, economic conditions in Las Vegas and little revenue growth by Red Rock suggest hungry investors might not find the company very appetizing, especially as they see company insiders planning to take out a substantial amount of cash concurrent with the IPO.

Read more