On Monday I addressed Vancouver City Council during the third night of public hearings held to consider Paragon Gambling Corp’s massive megacasino proposed for downtown Vancouver. My presentation challenged some of the core economic assumptions the proponents have used in trying to sell their project to the city.
Councillor Deal asked for additional information in relation to my observation that approximately half of the casinos in the United States are in bankruptcy or receivership.
In response to the good councillor’s request, I spent a few hours perusing respected news journals, financial reports and court bankruptcy documents. It is only partial and not meant to be comprehensive – I don’t have a city staff of 1000 to do my research – but it’s certainly representative. My brief research was limited to the past twelve months. There wasn’t time to include casino bankruptcies in 2009, a year that saw many others.
The result is a compilation of 50 major destination casinos across America that are in bankruptcy or receivership awash in billions of dollars of debt.
Unemployment in Las Vegas reached 15% last October and remains well above 13% today. And future prospects for the industry are worse, according to the chairman of the Nevada Gaming Control Board, who reported on February 8 that “he expects more casino bankruptcies in the stagnant economy.”
According to the Las Vegas Sun, abandoned casino projects litter Las Vegas:
The mothballed and postponed construction projects on the Strip are making the recession even rougher on one end of Las Vegas Boulevard. This no man’s land contains fenced-off lots with resorts stalled by the cratering of the economy — the exposed steel skeleton of the partially built Echelon and the empty and unfinished Fontainebleau Las Vegas. It’s an uninspiring view for tourists walking the Strip — a foreboding one even.
These findings should greatly alarm those who have championed this reckless bid for gambling expansion at the heart of our city, one that risks leaving Vancouver businesses vulnerable and taxpayers on the hook:
Bankrupt Casinos #1 – 20: STATION CASINOS Bankruptcy Filing
$1.8 Billion in debt
Owns Red Rock, Palace Station, Boulder Station, Sunset Station, Santa Fe Station, Texas Station, Fiesta Henderson, Fiesta Rancho, Green Valley Ranch, Atlanta Station, Palace Station, Boulder Station, Fiesta Rancho, Fiesta Henderson, Days Inn @ Wild Wild West, Wildfire Casino group, Barley’s Casino, The Greens Gaming & Dining, Gold Rush Casino, Lake Mead Casinos
Bankrupt Casinos #21 – 38: Herbst Gaming Reorganizes Under Bankruptcy Protection
$1.2 Billion in debt
Owns 17 Casinos including: Buffalo Bills, Primm Valley, Whiskey Petes, Terribles, Terribles Town, Terribles Searchlight, Terribiles Town (2), Terribles Lakeside, Sands Regency, Terrible’s Rail City, Terrible’s Gold Ranch, Terrible’s Casino, Terrible’s Lakeside (2), Terrible’s Mark Twain, Terrible’s St Jo Frontier
$ 270 million in debt
Riviera Hotel on the Strip, and Riviera Black Hawk Casino in Colorado.
$1.36 billion in debt
$ 160 Million in debt
$3 Billion in debt
The developer of the stalled Fontainebleau resort on the Las Vegas Strip filed for bankruptcy protection Tuesday in Miami and disclosed more jobs will be cut at the company.
The Fontainebleau’s implosion showered economic wreckage on contractors and suppliers such as Summit Partners on a scale well beyond what even long-timers can remember. Mechanics’ liens and contractor claims stand at $424.3 million, with another $41.3 million in suppliers who were totally unsecured by collateral. One list of liens numbered 338 companies. The creditors list covers a broad swath of the construction industry, including material suppliers for everything from the floor to the roof and services ranging from overall design to the sports book system to green building techniques.
2.4 Billion in debt
$1.45 Billion in debt
#46 – 48: Donald Trump Casinos in Atlantic City
$1.74 Billion in debt
Tropicana Casino & Resort, Trump Taj Mahal Casino & Resort and the Trump Marina Hotel & Casino:
Filed For Bankruptcy more than 3 times:
More than 400 employees of the Plaza Hotel & Casino face layoffs in the next 60 days as the downtown Las Vegas property closes its 1,037-room hotel and portions of its casino in early November. The Plaza will be “minimizing operations” on Nov. 11, property manager Bobby Ray Harris told employees in a memo last week.
#51: Too Big To Fail? – MGM’s City Center Neared Bankruptcy last March
Project was $8.6 billion in debt
MGM was $13 billion in debt.
According to CEO James Murren, quoted in the Financial Times of London: “If City Center had filed for bankruptcy, there was a high probability that MGM would have followed it within 12 months,” he says. 10,000 construction jobs were at risk. Murren credited Senator Harry Reid and the government with helping to bail the project out, an eventuality I warned Vancouver may yet face in a recent editorial for the Vancouver Observer: “Too Big To Fail.”
From March 2009: “MGM Resorts owns 19 American casinos and City Center, a 67 acre development right in the centre of Las Vegas. The $8.7 billion CityCenter project, billed by MGM Mirage as the most expensive commercial development in U.S. history, could end up in bankruptcy as early as this weekend, some nine months before the project is scheduled to fully open. prepared last March for a potential bankruptcy filing that could bring the massive project to a halt, according to people familiar with the situation.
#52: Vancouver’s Edgewater Casino Entered Bankruptcy in 2006
$52 Million in debt