Blame It On Rio
April 25, 2010
I didn’t see this coming, but it seems kind of promising:
Harrah’s Entertainment Inc., the casino company owned by Apollo Management LP and TPG Inc., is seeking bids for the Rio All-Suite Hotel & Casino in Las Vegas, people with knowledge of the situation said.
Starwood Capital Group LLC and Colony Capital LLC are among the companies that are weighing bids for the resort, said the people, who declined to be identified because the talks are private. Some bids value the Rio at about $500 million, two of the people said.
Harrah’s, the world’s biggest casino company, is exploring a sale of the off-Strip property two months after buying Planet Hollywood Resort & Casino. Las Vegas is coming out of a two-year slump that took casino operators to the brink of bankruptcy. Chief Executive Officer Gary Loveman cut Harrah’s debt by $4.2 billion in 2009 by offering creditors new bonds at a discount. He extended maturities on another $5.5 billion this year.
Planet Hollywood gave Harrah’s a Strip property close to most of its other Vegas resorts for less than it would cost to build.
Rio is west of the Strip across Interstate 15, on about 89 acres behind Caesars Palace, which is Harrah’s biggest Las Vegas property. Rio has a 117,300-square-foot casino, with 1,100 slot machines, 90 gaming tables and 2,520 rooms, according to regulatory filings.
Las Vegas Rio Hotel and Casino
For the first time in recent memory, one of the duopoly conglomerates may actually de-acquire a property and sell it to an “independent” company.
This assumes that the two potential buyers could be called “independent”.
Personally, I consider that term to mean any owner who is not Harrah’s or MGM Mirag, I mean MGM Oheverybodywaskungfufighting Freaktastic International (or whatever their name is now).
I think it’s safe to say that it would be impossible for an “alternative” or “independent” company to acquire a casino in Las Vegas, because the amount of money required to maintain such a property is beyond the scope of a company that could operate in an ethical manner.
This is why I’ve always wanted to open my own property. I would be the first benevolent casino owner to ever exist. I wouldn’t strive to be the most profitable. Instead, I would strive to be the best, most entertaining casino in Vegas. Sure, I’d stash money away to survive the cyclical lean years, but instead of buying a third private jet and a 9th summer home, I’d invest heavily in front-line employee salaries, good entertainment, and good gambling. I’d pay my people so they didn’t have to beg for tips like children on the streets of Calcutta. Instead of being a greedy asshole, I would recognize that I can’t take massive wealth with me into the dirtnap, and I would take a large amount of pride in creating something original.
I would also beg every visitor to take photographs and post them online. I would invite every “blogger” in town (the entire handful of them) to come down and play on my nickel for a week. I wouldn’t fight the free publicity, I would embrace it. I wouldn’t lick the Review-Journal’s nuts, I would lick my customer’s nuts.
Wait, that sounded wrong.
Oh well, I stand by it.
I don’t think I could make a more entertaining property than exists in Las Vegas now, I know I could. The only thing that stands between saying it and doing it is a few billion dollars and a hopelessly corrupt local government.
“We’re sorry Mr. VegasRex, but your application for a gaming license has been denied since it was submitted on a weekday that ends with the letter ‘Y’”
I digress.
While I would be thrilled for the Rio to be taken out of Harrah’s hands, it would kind of suck if those who acquired them were worse. This being the case, I decided to wiki both of the Rio’s potential suiters to see if I would have a preference as to their new owners.
Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) is a hospitality ownership and management organization. One of the world’s largest hotel companies, it owns, operates, franchises and manages hotels, resorts, spas, residences, and vacation ownership properties under its nine owned brands. As of December 31, 2008, Starwood Hotels & Resorts Worldwide, Inc. owned, managed, or franchised 942 properties employing over 145,000 people, of whom approximately 36% were employed in the United States.
Colony Capital is a private, international investment firm based in Los Angeles, California. The company, founded in 1991, has offices around the world. The company focuses on real estate opportunities around the world either on its own, through funds run by the company, or in joint ventures. The company is run by businessman Tom Barrack. In 2010, Colony was reported to manage about $30 Bn in investments.
So, they’re both greedy corporate fucks, but it looks like Starwood is a bigger greedy corporate fuck, so … go Colony Capital.
I guess.
I’ve always enjoyed the Rio. I enjoy it much less now than I used to, but I feel that it’s always had a lot of potential that hasn’t been fully tapped.
Perhaps under new ownership, it will finally reach that potential.
Dare to dream.
Written by ColinFromLasVegas on April 25, 2010 at 9:09 pm
Sounds like a great idea. Buy the Rio as a starter casino.
I think you could actually save money with this transaction.
Look at it this way…. All you’d have to do after buying it is change two letters. Not hard to change “Rio” to “Rex.” Look at the cost efficiency in just that!!!!
The only disadvantage is the billboard facing towards the Strip that says “STEVE WYNN SUCKS MONKEY SCROTUMS” probably can’t be seen from the Wynn, so it will create less of an impact.
Written by NavinR on April 25, 2010 at 9:32 pm
This is not a new phenomenon–what about MGM selling TI? Or is that not on your recent memory?
Written by Jason A on April 25, 2010 at 10:25 pm
For the first time in recent memory, one of the duopoly conglomerates may actually de-acquire a property and sell it to an “independent” company.
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The first for Harrah’s, but the second in recent memory (Treasure Island sold last year to Ruffin).
I liked the RIo at the opening and their remodeled rooms are a good value but their Harrah’s poor video poker / payout table games and newly introduced male cocktail waitresses are two of the things I would like changed with new ownership.
Starwood previously managed hotel operations at the PHo until Harrah’s by out and still manages (and also owns) the PHo Condos / Towers.
Colony Capital are Station Casinos partners with the slimy Fertitta “La Casa Nostra” family.
I’m hoping a third bidder emerges and purchases the property. The original builders (and current owners of the M Resort), the Gaughans (South Point / Jackie), and or Ruffin would be my top three choices.
This move makes sense in light of Harrah’s early purchase of Palms debt in their quest to replace full pay video poker at the Palms with their standard 7/5 JOB.
Written by james h on April 26, 2010 at 3:37 am
other than having possibly the best view of the strip at night, i dont think the rio has much to offer…everytime i go there it seems a little more dingy, a little less inviting and just less fun. as a tourist who likes to stay on the strip, the rio and the palms both are just out of the loop,,,sure the taxis like to take you there but gitting back sucks…the taxi line is long and slow.
the rio and palms would like to be thought of as strip properties but its never going to happen…so value is really their only ace in the hole…and possibly customer service. a new owner who focused to these two items may get a part of the tourist business, but still, their location will be the hardest to overcome. im not even sure if they are viable locals properties…i know the palms likes to cater to the so-cal crowd, but that doesnt seem to be going as well as it once was.
these casinos are just too far from the strip….now before all you “locals” get your panties in a bunch, remember, if you want to satisify the tourist, you have to think like a tourist,…”its all about what we want” as long as you are a tourist based economy thats just the way its going to stay!
Written by Ron from MI on April 26, 2010 at 4:36 am
Looks like Harrah’s is now taking action on the Rio.
P-Ho and Palms are now getting to Harrah’s head.
The only question: if Colony or Starwood take over the Rio, do they think they can bring back what it was during the Marnell years, or are they going to fuck it up to a point they will bury it in the ground?
Written by Ted Newkirk on April 26, 2010 at 6:27 am
The Rio was an AMAZING property when the Marnell’s owned and ran it. You only have to walk through the place and think that if it wasn’t the little sister to other properties, it could be put over the top.
I still think the Steve Wynn posturing about leaving town combined with MGM’s name change and MGM’s possible need to focus on CityCenter and surrounding properties — combined with Steve Wynn bailing out of PA so suddenly — is a huge “Wynn is serious about re-acquiring his baby” perfect storm.
Written by tully on April 26, 2010 at 11:09 am
Would it be fair to suggest that The Rio was, what Marnell’s M Resort is now, done with a Brazilian Rio theme? M Resort has become very popular, and from what I’ve read, it was the same with Rio. Wasn’t it actually the first truly “resort” type locals’ property, predating GVR and RR by several years?
Back in it’s day, it pulled some tourists because of it’s good gambling and good prices. The caliber of the CWs probably didn’t hurt, either.
What you see at Rio now is what HET can do to the property in roughly ten years of ownership—-take a great place, and turn it into a mediocre joint.
Written by keith on April 26, 2010 at 2:12 pm
any feelings if the Maloofs (who own the Palms) buy it?
they might make the odds a little better, akin to what they do at the Palms.
Written by DoubleDownNow! on April 26, 2010 at 4:28 pm
Yep, the Rio was what the M resort is now! Hopefully, the Marnells will buy it back
Written by thlf on April 27, 2010 at 3:36 pm
I don’t see why I keep seeing/hearing Phil Ruffin should buy it. I went into TI last weekend and their poker paytables were even worse than Harrah’s.
Written by leo21 on April 27, 2010 at 6:32 pm
Colony Captial? Do you know how many fucked up casinos they have had their hands on? The idea of Starwood isn’t appealing but I don’t think they will run Rio into bankruptcy, I am hoping someone else enters the fray, though.