25 years ago, fighting for control of the Las Vegas Strip meant killings and bombings, but today big corporations, private equity firms and billionaires are fighting for control of the heart of the gambling world. Crime and violence are over, but with a competitive hotel casino on the Las Vegas Strip costing well over a billion dollars, the stakes are higher than ever.
After two major mergers, one between MGM Grand and Mirage Corporation and one between MGM Mirage and Mandalay Corp, MGM Mirage Corporation controls over half of the hotel rooms on the Strip. Their hotel casinos include, from south to north when traveling the Strip: Mandalay Bay, Luxor, Excalibur, New York-New York, MGM, Monte Carlo, Bellagio, The Mirage, Treasure Island, and Circus Circus. MGM Mirage is also developing CityCenter, an incredible cluster of high-rise condominiums between Bellagio and Monte Carlo on what was once the Dunes Golf Course.
Harrah’s Entertainment, formed when Harrah’s acquired Caesars Entertainment, is the second largest hotel owner on the Las Vegas Strip. Their casino hotel holdings include, from south to north: Paris, Bally’s, Bill’s Gamblin’ Hall, Caesars Palace, Imperial Palace, and Harrah’s. They also own the Rio, which is west of the Strip. In late 2006, two private equity firms, Apollo Management and Texas Pacific Group, bought Harrah’s Entertainment for over $15 billion. Before the sale, it was rumored that Harrah’s would implode all of its hotels from Bill’s Gamblin’ Hall to Harrah’s and build a massive casino complex. Whether the rumor was true and whether the new owner will take this bold step remains to be seen. Recently, Harrah’s announced that they would spend a billion dollars renovating the venerable Caesars Palace, and they would also build a modern, 20,000-seat sports and entertainment center behind Bally’s.
After MGM Mirage and Harrah’s, the remaining players are currently limited to one hotel-casino each, at least until the Sands Corporation completes Palazzo, sister hotel to the successful and opulent Venetian Hotel. Major shareholder Sheldon Adelson is America’s third-richest man, thanks in large part to his wildly successful holdings in Macau. The Wynn is the stunning hotel built and expanding by Wynn Resorts under the direction of Steve Wynn. Another billionaire, Carl Icahn, is the controlling shareholder of the Stratosphere Tower. The hotel formerly known as the Aladdin is now Planet Hollywood; The already beautiful hotel has made necessary changes and upgrades that make it competitive. Other hotels include the aging Tropicana, Riviera, and Sahara.
Boyd Gaming is developing Echelon, a multi-hotel, entertainment and convention center located on the legacy Stardust estate and adjacent properties. As the owner of the Coast Hotels, Sams Town, California, Fremont and others, Boyd is a major player in downtown and around Las Vegas, but also wants to be involved on the Las Vegas Strip.
In addition to MGM Mirage’s CityCenter, there are numerous other high-rise condominium complexes under development on the Las Vegas Strip, including one being built by Donald Trump on land owned by the owners of the recently closed New Frontier. The success of many of these projects is not guaranteed at this time, although most look set to sell their condos for a hefty price. Trump seems like a safe bet and plans are being made for another tower.
Gone are the days of the Vegas mob. Government control and the incredibly large amounts of capital required to open a casino put an end to that era. But the days of quirky ownership aren’t over yet, with the likes of Sheldon Adelson, Steve Wynn, Carl Icahn, and Kirk Kerkorian still involved (although none of them own a casino), but it seems like big corporations or incredibly well-heeled private equity firms are the future of the Las Vegas Strip.