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I suggested some time ago that I expect Circus Circus to be razed for a new modern Casino.

Discussion in 'Misc. Vegas Chat' started by fischer, Aug 10, 2019.

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  1. 44inarow

    44inarow VIP Whale

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    I wouldn't swear to this, but I thought the "no debt" thing was no longer the case after they took out a mortgage in connection with CityCenter debt. That said, it's still profitable -- it fills a very specific niche (families with children) that doesn't really exist elsewhere in Vegas anymore, is incredibly popular within the Hispanic market, and has various non-casino cash flows (Adventuredome, the Steakhouse, the midway, etc.). If it were owned by another company then I might think it plausible, but MGM has so much existing space that it would make no sense for them to knock down a huge, profitable property.
     
  2. UKFanatic

    UKFanatic The Arbiter of Taste Caviar Kid

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  3. jon_vegas

    jon_vegas High-Roller

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    Title edit - Razed instead of Raised. kinda opposite meanings.
     
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  4. azlefty

    azlefty VIP Whale

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    But he is often correct, so I interpret this as either someone has shown interest in buying or MGMM has floated the notion of selling. Doesn't necessarily mean it will happen.

    An asset with $60 million in free cash flow with potential for upgrading or rebranding and across the street from the expansion of the convention center (former Riviera) could probably sell in the ball park of $1 billion.

    If it does happen, it is a signal that MGMM has some serious issues, and is most likely scrambling to figure out how to pay off debt. Selling off highly profitable assets is an act of desperation.

    It's also close to the peppermill. What idiot would want to get rid of that?
     
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  5. Gaggles

    Gaggles VIP Whale

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    Exactly.
     
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  6. ken2v

    ken2v Wish I was in Bend

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    What is this need for some to sound like Carnak with their implosion pontifications? And the "sources" so often cited, and that's before even accounting for the ripe age of some ...

    Here, one from me: "I predicted, in 2017, that Bellagio was being replaced with a new casino-hotel." Please let me know if anything happened in, oh, 40 years.

    If we ever get into that nuclear exchange with the damnable Russkies, the only three things to remain on Earth will be rats, roaches and Circus Circus.
     
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  7. dmr

    dmr Registered Abuser

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    What does Casino Death Watch say?
     
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  8. azlefty

    azlefty VIP Whale

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    It's obviously so one can imagine oneself rocking the world's coolest hat.
     
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  9. IxAccDnf

    IxAccDnf VIP Whale

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    Lucky is the only clown I ever liked besides Bozo.
     
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  10. bubbakitty

    bubbakitty Doing retirement again and happily so....

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    Vigilant with some hope. (Public face)
     
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  11. pressitagain

    pressitagain High-Roller

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    Of course this thread is speculation.....the entire site is compromised of speculators (gamblers)....that’s what we do..:

    Never been to CC. But if they aren’t doing anything as far as property upgrades. I can almost guarantee that a major plan is in the works. It could be a renovation, an implosion or a sale.
     
  12. Breeze147

    Breeze147 Button Man

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    I honestly think CC gets a bad rap from people who have never been there. The casino is far from being the worst in Vegas. So, tons of kids. Go to any pool besides the topless ones and kids outnumber adults 5 to 1.

    OTOH, a funny line I heard somewhere is that Circus,Circus would be the favorite casino of Nazis if Germany had won.
     
  13. Paul K

    Paul K VIP

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    Circus Circus rooms were renovated within the last decade. No reason to renovate the casino and common areas, the target demographic doesn't care. Why spend money on something that literally your customer base doesn't want or need?

    MGM does need cash flow, if it were a person it would be getting chemo right now. Doing everything possible to try to hid it of course, like wearing wigs.
    This is exactly why CC won't be sold, won't be renovated, and will continue to soldier on for many more decades in roughly the same form it is now.
     
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  14. The Rumor

    The Rumor VIP Whale

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    It is one of their least profitable properties (it and Park MGM are the bottom two in LV)

    But, they make money off of an asset where they don't have to spend very much, plus MGM has a massive land footprint there for if they ever decide it makes sense to develop a mega resort. And it's steady, easy cash flow.
     
  15. The Rumor

    The Rumor VIP Whale

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    You could have said this ten years ago.

    Why would you go spend $200 M or something at Circus Circus right now? What is the logic?
     
  16. Mitkraft

    Mitkraft VIP Whale

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    Ever hear the phrase "even a broken clock is right twice a day?" That doesn't mean I'm going to keep checking that clock for the current time though.
     
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  17. azlefty

    azlefty VIP Whale

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    I believe he does better than random chance. I believe most of the rumors he reports are deliberate leaks that either the potential buyer or seller uses to signal interest to the other side of the transaction. The interest is of course not always reciprocated. If the alternative is to go through an intermediary such as a broker or investment banker, they will want a cut. All Scott seems to want is to get on TV and draw eyeballs to his website and eardrums to his podcast.

    It's not a risk free strategy for a potential buyer. If anyone else was also considering buying, this could spark an auction, which would raise the price above a bilateral transaction. So it's probably more likely to come from the seller.

    Vital Vegas is for sure an unusual venue for this kind of high finance dealmaking, but Vegas is kind of a small town and it probably works as well as any other. Also, Scott is pretty well connected and knowledgeable.
     
  18. pressitagain

    pressitagain High-Roller

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    Two words....easy credit.

    Ten years ago...good luck...they were OVER extended.

    If they don’t secure something during the (uptick in the cycle), they wait another 10 years. Is plugging and patching makeshift solutions the answer for the next ten years?

    Risking quite a bit for pennies. Yes, it brings in a reasonable amount of cash right now. How about when the economy slows and nobody is handing out money?

    The logical solution is one of the three choices. The rest are short sighted. Especially, with the new casinos coming online!!!
     
  19. woodsie

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    I can't imagining that anything will happen until there is a paradigm shift on the north strip though it is possible that Resorts World could be the harbinger of a paradigm shift. If they prove that a mega resort can work up there then it might change the calculus of redeveloping CC even if it is a profitable resort as is.

    There is a point where 3,700 rooms selling for $50 per night can't compete with the opportunity to build 4,000+ rooms that can sell for $250 per night. You can justify A LOT of investment on a room rate delta like that never mind the additional opportunities in food, entertainment, gambling and retail.

    People were doing that same math when The Dunes, Desert Inn, and The Sands were ultimately imploded. The Stevens brothers had to be doing that math when they acquired and lit up an entire block on Fremont Street.

    But yeah, I wouldn't hold my breath. We are late in the current business cycle and consumer trends are cascading in Vegas' favor like they were in the 90s and early 00s.
     
  20. The Rumor

    The Rumor VIP Whale

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    Credit was super easy from 2004-2007 and has been easy for years.

    The issue isn't credit. It's whether or not it makes sense to spend money up there. Why can't Fontainbleau get finished? Why did alon and countless other things not happen? Etc. Maybe - maybe - maybe Resorts World + Convention Center could give them a nudge. But no one else on earth besides Genting seems to think spending a dime up there makes any sense, especially after SLS turned out to be a furnace for cash.
     
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