Red Rock Tavern Biz Approved, Nears Tussle with Golden Entertainment

Posted on: August 10, 2024, 10:01h. 

Last updated on: August 10, 2024, 10:01h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Earlier this week, the Nevada Gaming Control Board (NGCB) recommended for approval a plan by Red Rock Resorts to enter the gaming bar space in the Las Vegas Valley.

Red Rock
An image of the Red Rock Resort, Casino, and Spa. The operator is nearing entry into the competitive Las Vegas gaming tavern scene. (Image: Station Casinos)

That sets the stage for the casino operator to enter into even more direct competition with rival Golden Entertainment as well independent tavern purveyors 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. The gaming company is aiming to open its first limited license bar in North Las Vegas by the end of September. From there, Red Rock’s gaming bar business could rapidly expand.

So the first one will come online in September, the second one in January and the third in June of next year. So we have contracted 7 units,” said President Scott Kreeger on the company’s second-quarter earnings conference call last month. “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 because they are allowed a maximum of 15 gaming devices. Those machines feature keno, slots, and video poker, but there are no live table games in the venues.

Red Rock Pub Entry Could Spark Family Feud

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 reside on the Strip. Its Stations brand is one of the recognizable in the locals market indicating the company could leverage it for success in gaming pub space.

That also means more direct competition with Golden Entertainment, which is the largest operator of gaming taverns in the Las Vegas Valley, and perhaps 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 owns gaming bars in Nevada 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 it expects that tally to increase by at least one by the end of this quarter.

Specific to Red Rock’s tavern plans, the Seventy Six brand is a reference to the year in which 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.

Las Vegas Tavern Biz Competitive, Sensitive to Consumer Trends

Golden and Red Rock have the financial resources needed to expand their gaming tavern footprints, but the space is nonetheless competitive. In Las Vegas, competitors included 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 is often seeking a no frills but still comfortable and familiar experience and many are sensitive to macroeconomic trends.

On the gaming company’s second-quarter earnings conference call, Golden President Charles Protell  said spending and visitation among lower-tier customers at its Nevada casinos declined during the April through June period. That’s meaningful because those trends often carry over to consumer spending at gaming pubs.