CET/El Dorado Going Forward (Was in thread about buffets removed from CET websites)

I agree that El Dorado is trying to apply their locals market approach to Las Vegas. I also completely agree that this won't work. By cutting draw into your property you are relying on a small handful of things to consistently break in your favor. I am not sure that's a great strategy in Vegas. The strange thing is emphasizing they are trying to get back to gambling being the primary revenue stream. It's an interesting thought, but if you eliminate most other revenue sources, it's bound to happen.
The thing working in their favor is their ability to offer local players (who truly are gamblers) free nights in Las Vegas (something not done by mLife as well). It's actually going to resonate with the local player to say hey my play here now gets me comped in Vegas. I know for us if we had a Caesars as our local we would frequent our local often. Instead we don't go at all because they have nothing to offer us. As long as the locals keep taking advantage of the Vegas comps, CET will be fine. However, if the local spends an evening playing the way they normally do at Bellagio and while there have a nice meal and see a show, and then get an offer to stay there, does that hurt CET? This is where I'm not sure of the impact.

My thinking is CET/Dorado will seek to divest a few of their strip properties. Ballys will at least undergo a name change, but probably ownership too. I could see them settling in with Harrah's Linq Flamingo and then Caesars palace. Sell the rest off to increase capital when the plans start to fail, and then eventually cut down on comp room offers because they lost their inventory.

 

The problem with Eldorado’s plan ( if they truly have one, other that gamblers are sooo stoopid and will show up no matter what) with targeting the local Vegas gambler is:
1) Strip gambling conditions are poor in comparison to local resorts
2) Many locals avoid the Strip due to traffic, crowds and parking. Depending where you live, locals probably have three local resorts within ten minutes of thier home. Driving to the strip doubles that.
3) Comps are better at local resorts
4) Food is more reasonable at local resorts. Sure, you can’t eat at Gordon Ramsey off Strip, but how times a year does one eat at GR.
5) Sports and shows would be the one attraction for the local player. While MGM and Eldorado have equal headliners, MGM does has the sports advantage, due to proximity to the arenas.

 

I agree, I realize my last post was confusing. I am referring to the local casino in Indiana giving their players a comp to Harrah's las vegas. I think that's their grand plan. To bring the players from their huge conglomerate of locals to vegas. While I agree local casinos in and around las vegas comp better than the strip, the reality is a local casino in Indiana or windsor or those type of places has little to no competition and virtually no reason to comp. Now they can offer these people a few nights in vegas with negligible impact on their own property.

 

I still don't see them parting ways with Ballys unless they also sell Paris. I think Planet Hollywood is the prime sell and, now that there is a new owner who doesn't care about the 'tradition' of the name, I think you will see Harrah's on the market sooner than later. Cromwell is a likely target in there but the return on Cromwell is nothing compared to the others. Cromwell would be a good target for someone like Derek Stevens to get a spot on the strip that is more 'upscale' and won't cost him too much.

 

The only issue with Ballys is going to be the name. Ballys corp (formerly twin river holding) has acquired the Ballys in Atlantic City and recently purchased the Tropicana in Las Vegas. It's hard to imagine they won't want to use the newly acquired name for their new property. Assuming that, the old Ballys is going to need to undergo a full rebranding, which may not be an expense CET wants to accrue. If they can sell the property at a decent price I think they will decide it's a logical move. I could definitely see Paris going with it.

I know that CET kept the Ballys name for las vegas while selling the Ballys in AC and the brand to Ballys Corp. It just seems logical to me that there will be some sort of move to eliminate that confusion in las vegas.

 

Renaming is a different story. It's more likely that Bally's becomes something like Horseshoe (their most recognized name outside Vegas) while the Tropicana is renamed Ballys to align with the company name.

The real questions for me are 1) will they remodel or just rebrand and 2) which is a more valuable name in Vegas, Ballys or Tropicana?

Side note - CET owns three casinos named Tropicana, just not the Tropicana in Vegas.

 

I don't see renaming Tropicana to Bally's having much benefit other than consistent branding.

I think that would be a waste unless they do a major remodel tear down/gut of the rooms and market it "The New Bally's" or "Bally's at Tropicana".
Or build out shops and restaurants and brand those The Tropicana Shoppes at Bally's.
Horseshoe seems like a boring old name.

 

I just realized that in Vegas, CET owns Bally's, but not the Tropicana. In Atlantic City, CET now owns the Tropicana, but not Bally's.

 

It'd be interesting if Bally's buys up both names in both markets. They probably don't have the balance sheet for it but I guess that would add another player in the space with exposure to 2 top markets.

 

The name has very little value in my book. The Ballys in Vegas is really not a brand at all. Again, just my personal opinion.

 

Bally's and Paris share the same parking structure. It's hard to part with a casino/hotel that doesn't have it's own parking. There's probably space in the back but it's going to require the new owner to build it and won't necessarily be "move-in ready."

 

Bally's Las Vegas is being rumored to be renamed Horseshoe, which is a brand CET owns. CET/ELDO is paying rights to use the name to Bally's Corp now so I can't imagine they want to keep doing that for an extended period of time.

 

I pretty much agree with all your thoughts here, but for the record, my first set of MLife Vegas offers was a result of Biloxi play. I had comp rooms at every LV property prior to ever staying in one or ever doing anywhere near my normal play at any MLife property in LV. Still, they have just a few locals compared to Caesarado's what like 50 or so? So the principle still works, and I see it going the same way. They're alienating their LV gambling business hard, but the people who spend most of their gambling dollars at locals still have a big advantage with CR vs most if not all other player programs.

 

CET has perpetual licensing rights for Ballys LV as part of the deal when they sold the name. No cost for them.

 

No doubt about that with Mlife. I am fairly certain that my excellent and newer offers to Mlife casinos in LV is a result of my increased play at Borgata in AC

 

no one thinks they are trying to be a locals gambling establishment in Vegas. They want to drive their OTHER MARKET LOCALS to their properties in Vegas. They have so many regional casinos, even relative to MLife. It's a distinct difference between them and any other Vegas operator. They want to send high end players to Caesars, grandma slot queens from the sticks to Harrahs, etc. and have them gambling.

 

It is true, but it's also a tired brand with someone else's name on it. Tough to imagine selling the name elsewhere just to run it here. They just wanted to buy time to figure out what to do with the name after the merger is my guess. Plus changing a name requires CapEx, and they were cash needy six months ago.

 

I'd say Penn tried to do this with the LV Tropicana, but failed.

 

CET has been doing this for 20 years now; they know what they are doing. Harrah's, in particular, has long been chock full of regional property players.

 

Not necessarily disagreeing, just noting Penn didn't do well with Tropicana.