While optimistic about the city’s future as a global vacation destination beyond gaming, the board chair of Wynn Resorts said a big threat to Las Vegas has been the sale of casino properties and subsequent leasebacks that can potentially hinder reinvestment crucial for attracting guests from around the world.
Phil Satre addressed the OpCo PropCo model that has been deployed on the Strip by MGM Resorts International, Caesars Entertainment, and others following his address to the Economic Club of Las Vegas this past week. He noted that the separation of ownership, the physical assets from the operation, is still being evaluated and has its upsides and potential downsides for Las Vegas.
“If you have a softening of revenue for whatever it might be — COVID, tariffs, or whatever impacts value — and suddenly revenue streams are declining, you don’t have any choice but to pay the rent first,” Satre said. “It has to be done that way. If you don’t, then it’s a far bigger problem. What that might create is an environment where the guest no longer sees the value, anymore, because either the prices go up or the capital improvements (go down).”…