Nevada Gaming Commissioners Praise
Circa Resort & Casino for Successful Opening Despite Pandemic
McDonald Carano congratulates client Circa Resort & Casino for the accolades it received during the March 17 Nevada Gaming Commission meeting in which Commissioners complimented Circa on its successful opening during the pandemic. The $1 billion Circa Resort & Casino opened in October and December of 2020, is the tallest building in the Fremont Street area, and the first new hotel-casino to be built on the Fremont Street Experience since 1980. McDonald Carano Partner Greg Giordano provides gaming regulatory and compliance advice and counsel to Circa.
As reported by CDC Gaming Reports in an article titled “Nevada Gaming commissioners praise Resorts World and Circa for their success despite opening during pandemic,” Commissioner Rosa Solis-Rainey stated “I know the property itself and I’ve heard nothing but positive things. It has added so much to the downtown area and brought a younger crowd into downtown.” Representing Circa at the meeting, Greg Giordano also provided information about Circa’s successful construction loan refinancing efforts to reduce interest costs. In response, Commissioner Ogonna Brown stated “I think an aggressive paydown on a portion of the debt and the principal is quite impressive.”
The complete CDC Gaming Reports article is available here and below.
“Gaming commissioners praise Resorts World and Circa for their success despite opening during pandemic,” CDC Gaming Reports, March 17, 2022
It’s a challenge to open a new casino. It’s even tougher to open it during a global pandemic when tourism numbers are down. The Nevada Gaming Commission recognized Resorts World Las Vegas and Circa Las Vegas for doing just that during its Thursday meeting.
Nine months after Resorts World opened, Genting Berhad executives received their formal licensing from the Gaming commissioners, who heaped praise on the $4.3 billion property for fighting through COVID. It did the same for the $1 billion Circa that opened its casino in October 2020 and the 777-room hotel that December.
When Resorts World opened in June, the Gaming Commission had given temporary approval for licensure of company executives, due to the difficulty of conducting investigations during the pandemic. “Things are going well, especially since the mask mandate was lifted (by the state in mid-February),” said Resorts World President Scott Sibella. “Before that, things were going okay. It was a struggle. Every time we gained momentum, another COVID (variant) came out and though it was challenging, we managed to get through that. We’ve been cash-flow positive since day one. The property is doing well. We knew it would take a little time to build up the momentum and our database. Again, we’re happy with where we are and excited about our future here in Las Vegas.”
Resorts World, which has been cash-flow positive for 75% of its budget, ultimately plans to expand the resort with more hotel rooms and convention space on the 88-acre site. Genting reported Resorts World Las Vegas generated $362 million in revenue in 2021 and $54 million in adjusted earnings. Resorts World is counting on its proximity to the Las Vegas Convention Center to bolster the property as conventions continue to return in greater numbers. Sibella said the resort will get another boost in April when the Las Vegas Loop, connecting the casino to the Las Vegas Convention Center, opens. Cars that hold four people will carry about 2,000 people an hour, he said. “Our guests will go downstairs to the station and be at the Convention Center in two and a half minutes,” Sibella said. “We’re really excited about that and shooting for the opening ceremony on April 20.”
Resorts World has nearly 5,000 employees and Sibella told commissioners it’s been easier to hire and retain employees recently. Commissioner Steven Cohen commended Sibella and his team for what they’ve been able to accomplish. “When you were here the first time being licensed, you talked about your numbers and gave the board some reasonable numbers. You’ve exceeded the reasonable numbers,” Cohen said. “And that’s with the start and stop. Good for you. Good for the company. It hasn’t been easy for you to open with a couple of hands tied behind your back. It’s a phenomenal property and I commend you.”
Commissioner Rosa Solis-Rainey said she’s heard “nothing but positive things” about the property, especially from younger guests. Sibella told commissioners the property tried to attract the type of customer who would go to Wynn Resorts and The Cosmopolitan. Resorts World has a 117,000-square-foot casino and 70,000 square feet of retail in its entertainment corridor called the District. The property has nine pools for different types of guests, ranging from VIP to families.
Cashless gaming is going well, but its adoption is a work in progress, Sibella told commissioners in response to a question. “So it’s about 15% right now,” Sibella said. “We continue to educate the table-game customers. They’re not used to it. But the ones who aren’t, we educate. You don’t need to take the chips from the game. We can give you a ticket and put it on your phone and go to the next game and buy in. It’s gradually growing.” It’s the younger generation that’s adopted cashless wagering, Sibella said. “They like it and want to do it,” Sibella said. “It’s educating the older generation, since they have been doing this for a long time. We know in time it will come, just like getting rid of all the coins (in slot machines).”
The Commission also approved Circa Las Vegas, which opened downtown in late 2020, in its application to pledge the membership interest to Western Alliance as collateral in conjunction with a credit agreement. Greg Giordano, an attorney for McDonald Carano representing Circa, said the pledges are in connection with refinancing a construction loan for better rates to reduce interest costs. “I think an aggressive paydown on a portion of the debt and the principal is quite impressive,” said Commissioner Ogonna Brown.
Cohen credited Circa for their efforts to reduce their interest payments in today’s market. “I think this will help your cash flow for the next 40 years.” Giordano told commissioners Circa is happy with its policy that restricts access to the property to those 21 and older, a policy that is about to be adopted by El Cortez Hotel & Casino, also downtown. “I just read an article this morning that quoted (Circa owner) Derek Stevens that the only downside is with weddings involving minors (in the parties),” Giordano said.
Solis-Rainey said she was concerned, because the property opened during the height of the pandemic. “I’m glad it’s well received,” Solis-Rainey said. “I know the property itself and I’ve heard nothing but positive things. It has added so much to the downtown area and brought a younger crowd into downtown.”
In other action, the Commission approved a pledge-of-membership application for the operating subsidiaries of MGM Resorts International in Nevada for financing of a revolving credit facility in the amount of $1.675 billion. Pat Madamba, senior vice president and legal counsel, told the Commission that MGM’s acquisition of operations of The Cosmopolitan for $1.65 billion remains on track during the second quarter. “The Las Vegas Strip operations dipped earlier this year because of the omicron variant, but since then, that business has generally rebounded for our properties and our competitors as well,” Madamba said. “The business outlook looks promising. There’s a lot of world events we don’t have any control over and we’ll have to see how that turns out. Hopefully, everything will be okay.”
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