Earlier this week, the Nevada Gaming Control Board (NGCB) recommended approval for a plan by Red Rock Resorts to enter the gaming bar space in the Las Vegas Valley. This move sets the stage for Red Rock Resorts to enter into direct competition with rivals like Golden Entertainment and independent tavern operators such as Dotty’s. The Nevada Gaming Commission (NGC) will soon consider Red Rock’s request to launch the Seventy Six by Station Casinos brand, with the company aiming to open its first limited license bar in North Las Vegas by the end of September.
According to Scott Kreeger, President of Red Rock Resorts, the first gaming bar will come online in September, the second in January, and the third in June of next year. Speaking on the company’s second-quarter earnings conference call last month, Kreeger noted, “We have contracted 7 units. We’re always out there looking and trying to cut deals on new development opportunities. So that’s an ongoing effort, but that’s the timing of the first 3.”
In Nevada, gaming taverns feature bars and restaurants and are classified as restricted venues, allowing a maximum of 15 gaming devices, including keno, slots, and video poker, but no live table games. Red Rock is already one of the largest operators of casinos that target the Las Vegas locals segment, and none of the company’s venues are situated on the Strip. Its Stations brand is widely recognized in the locals market, indicating that the company could leverage this for success in the gaming pub space.
This move also means more direct competition with Golden Entertainment, the largest operator of gaming taverns in the Las Vegas Valley, and potentially a family feud. Golden CEO Blake Sartini is the brother-in-law of Red Rock CEO Frank Fertitta III and Vice Chairman Lorenzo Fertitta. Sartini and his wife Delise even named one of their sons Lorenzo. Golden’s PT’s Pubs units operate under the Lucky’s, PT’s Gold, PT’s Pubs, PT’s Ranch, and Sean Patrick’s brands, among others. As of the end of the second quarter, Golden owned 71 gaming bars and expects that number to increase by at least one by the end of this quarter.
Specific to Red Rock’s tavern plans, the Seventy Six brand references the year Station Casinos was founded. Frank Fertitta took the company public in 1993, and today there are four Las Vegas-area casinos bearing the Station name. While Golden and Red Rock have the financial resources needed to expand their gaming tavern footprints, the space remains competitive. In Las Vegas, competitors include recognizable brands such as Dotty’s and Jackpot Joanie’s, as well as hundreds of independent stores.
The core customer for many of these venues often seeks a no-frills but still comfortable and familiar experience, and many are sensitive to macroeconomic trends. On Golden Entertainment’s second-quarter earnings conference call, President Charles Protell noted that spending and visitation among lower-tier customers at its Nevada casinos declined during the April through June period, a trend that often carries over to consumer spending at gaming pubs.
