Red Rock Resorts, also known as Station Casinos, revealed its agreement to sell the Palms Casinos Resort to a subsidiary of the San Manuel Band of Mission Indians (San Manuel). The agreement includes all amenities within the casino and hotel, such as restaurants and a movie theater, as well as the neighboring Palms Place condominiums.
The company has stated that the sale of the Palms will yield $650 million in cash. However, the deal is yet to be adjusted and receive regulatory approval. The transaction is expected to finalize in late 2021. The casino has been closed since the onset of the pandemic.
Hours before the company reported its first-quarter earnings for 2021, the announcement of the Palms sale was made.
Palms became a Station Casinos property in 2016
In 2016, Palms was acquired by Station Casinos for $312.5 million. The company invested over double this amount on refurbishments and enhancements of the property situated close to the Vegas Strip. With the addition of $690 million spent on renovations to the purchase price, the company’s total investment in the Palms exceeded a billion dollars.
The extensive modifications to the property initially excited Palms. However, this enthusiasm was short-lived. In October 2019, General Manager Jon Gray stepped down. Following Gray’s departure, the multi-million dollar dayclub and nightclub, KAOS, was shut down.
Station Casinos revamped the club and pool area for special events. However, the new space was short-lived. As with all other Nevada casinos, Palms shut down in early 2020 to contribute to the containment of coronavirus.
Palms has been closed since March 2020
The properties of Station Casinos were reopened in stages. However, Palms was not included in the initial reopening phase. The future of Palms as a Station Casino was uncertain.
The company declared in a 2020 earnings call that approximately 80% of its income is generated from the properties that were reopened. The properties of Station Casinos that were reopened last year contribute to this revenue.
- Ranch of Green Valley
- Casino Red Rock
- Station Palace
- Station Santa Fe
- Station Sunset
- Station Boulder
Texas Station, Fiesta Rancho, Fiesta Henderson, and Palms never reopened.
The company stated that it had not planned to sell Palms before the coronavirus-induced shutdown. However, this week, Station Casinos shifted its focus from Palms to its other revenue-generating casinos. As of now, Station Casinos has not revealed any plans to re-open its other closed venues.
Durango Station plans coming soon
The cash flow from the sale of Palms will assist Station Casinos in reevaluating their plans to construct Durango Station near the I-215. The company asserts that this is the most valuable piece of land it possesses in Las Vegas.
The company is still finalizing the plan for Durango Station, focusing on what they aim to create. The reveal of the Durango Station plans is expected later this year.
During its earnings call, the company provided some insight into Durango Station. It appears that it won’t be a mega-resort. Instead, Station Casinos will concentrate on what yields the highest revenue for the company.
Durango Station will feature slot machines, table games, and a variety of restaurants. However, it’s important to note that there will be no buffet at Durango Station.
Construction on the Durango Station project by Station Casinos won’t commence until 2022 if they decide to proceed with it.
San Manuel will soon enter Nevada
Before the year ends, the Palm’s sale to the San Manuel and the San Manuel Gaming and Hospitality Authority is projected to be finalized. This will make San Manuel the second Native American tribe to join the Nevada gaming market this year. Mohegan Sun, which runs the casino at the newly inaugurated Virgin Hotels Las Vegas, was the first.
San Manuel, which has been running a casino in Highland, CA for 35 years, is making a significant step forward with this move.
“Today marks a significant milestone for the Tribe and its long-term economic diversification plan,” stated San Manuel Chairman Ken Ramirez. “As representatives of the Tribe, we express our gratitude for the chance to become part of a community that we’ve grown to know and value.”
For several years, San Manuel has been establishing its presence in Las Vegas. The company has recently donated to numerous non-profit organizations and institutions in Las Vegas, such as UNLV’s William F. Harrah College of Hospitality and William S. Boyd School of Law, the Public Education Foundation, and Shade Tree Shelter.
In 2019, San Manuel became a founding partner of Allegiant Stadium and the Las Vegas Raiders, putting them on par with other partners such as Caesars and MGM Resorts.
What to expect at the new Palms
San Manuel has not yet disclosed specific plans for Palms. However, they do intend to incorporate Palms into their casino family. “Our Board is of the opinion that Palms is a casino resort that many loyal guests of San Manuel Casino would find enjoyable,” stated SMGHA Chairwoman Latisha Casas.
It seems San Manuel is prepared to connect its Club Serrano Rewards program with Palms. The San Manuel Casino in California is very proactive with its promotions. Presently, the casino provides up to $1,000 for new members of their rewards club.
San Manuel shouldn’t have to undertake many renovations at Palms, given that Red Rock Resorts already spent nearly $700 million renovating the property. However, some changes should be expected from the property that was closed in 2020.
New sportsbook operator and restaurants for Palms?
Previously, the sportsbook inside Palms was operated by CG Technology. However, William Hill has since purchased the company, with William Hill itself now under the ownership of Caesars. Therefore, it would not be unexpected to see a new, third-party sportsbook operator at Palms.
New restaurant brands ought to expand to Palms. For instance, San Manuel’s Rock & Brews could conveniently fit into one of the existing restaurants at Palms. The coffee shop branded as Lucky Penny by Station Casinos is also set to get a new name.
Celebrity chef restaurants from the likes of Bobby Flay, Marc Vetri, and Michael Symon may not make a comeback. Flay has launched two new establishments at Caesars Palace, while Vetri is now at the helm of the Italian eatery at Red Rock Casino.
Also, don’t anticipate seeing the artwork that was exhibited at Palms. It was owned by the Fertitta family, who are in control of Red Rock Resorts.
A spokesperson from San Manuel informs PlayNevada, “We are unable to disclose specific information regarding leadership and operations until we have completed the licensing process. However, we intend to provide updates as we progress through the process.”
Keep watching, more news is on the way for Palms and Durango Station.
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