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Rumor: Seminole Hard Rock to buy Cosmopolitan?

Discussion in 'Casino Industry & Development' started by Grid, May 2, 2018.

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  1. nostresshere

    nostresshere Mr. Anti Debit Card

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    To all those that say MGM would damage their other properties... think about this:

    If somebody else buys it, they get NOTHING from the money spent at Cosmo. By buying it, they hold onto that money. Not saying it would be a smart move, but somtimes being in control is better than letting somebody else do it.
     
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  2. Grid

    Grid Well-Known Member

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    True. But the way I look at it is, someone else is already in control. If they buy it, it would open that resort up to the rest of the Mlife portfolio of guests. Instead of Bob booking his stay at Bellagio, he would take the comp at Cosmo since its new to him. Betty would try Cosmo that trip instead of Aria where she already stays.

    They would pay over $2BIL and chances are a good chunk of rooms would be handed out for free to players they already have currently staying in town.

    In other words, not enough new blood to justify the buy. Maybe the same reason they haven't built anything in over a decade. Too much canalization of the base they current have.

    A sucker like Hard Rock would need a place to move their current players once it turns into Virgin. And they need a place to move their huge national database of players that would otherwise chose a competitor on the Vegas Strip when they vacation.

    It just makes more sense for one then the other. It's not like Blackstone is holding a fire sale. They want close to true value for what they are holding.
     
  3. VegasSchemer

    VegasSchemer VIP Whale

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    For the Seminoles to try to keep the Hard Rock players, they'd need to buy the player database from the current owners on Paradise, right? Was that already included in the Virgin deal?
     
  4. Grid

    Grid Well-Known Member

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    I don't know. I'm just speaking of players loyal to the brand. Not the actual coding of players itself. If they dont get a list, I'm sure something like a "Show me your old Hard Rock Offer" system would keep people happy enough.
     
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  5. smartone

    smartone VIP Whale

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    I'm sure for some this'll be an issue, but not for me. The Las Vegas Hard Rock was a maverick property for a long, long time from the Seminole Hard Rock brand only cozying up a couple years ago. Speaking as one of the only pro Hard Rock folks here on VMB, I'm not loyal to the brand, I'm loyal to the staff and the property, but then I'm also not the kinda gamer they'd care about much either.
     
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  6. Patman

    Patman VIP Whale

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    Well at least one person will be happy if this is true. O.J. He won't be barred from the property anymore.
     
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  7. h0llywood

    h0llywood VIP Whale

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    Timeline of Cosmopolitan:
    2004 - Joint venture 3700 Associates purchased 8.5 acres for $90 million
    2007 - $3.9 Billion project begins.
    2008 - One of the partners in the join venture of 3700 defaulted (Ian Bruce Eichner), resulting in foreclosure and being bought out by Deutsche Bank AG for $1 billion
    2014 - Blackstone purchases Cosmopolitan for $1.73 billion from Deutsche Bank AG
    2018 - Cosmopolitan sells to Hard Rock?
     
  8. Chump

    Chump Low-Roller

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    The Seminole Tribe purchased Hard Rock International back around 2007. HRI owns, franchises, brands, joint ventures with numerous restaurants, hotels and casinos around the world. They have interest on every continent. It is a much larger venture today than when the Seminoles acquired it. The company is managed by hospitality and gaming professionals. They don’t actually own and operate anything west of the Mississippi that I am aware of. Native casinos don’t publish their financials as they are not required to do so except provide them to the Indian Gaming commission and to the federal government. However, from everything I hear or read, they have been very profitable. Could they purchase the Cosmo? Sure. I hope they don’t. I have yet to see any operation pay two billion for a hotel with a 100,000 sq ft casino and be able to offer any gaming attractive to a player. You can add on restaurants, clubs, shows, spas, whatever and a resort still doesn’t make enough to offer good gambling. I saw MGM ruin the old Mirage Group and then the Beau Rivage in order to pay for City Center. I hated to see HR make a move in AC as it will probably result in a lesser experience in their Florida casinos as HR will never make the money there that they do here. I feel the same would be true in Vegas unless they then make a move on into Asia to pay for it all as Wynn and Adeleson did. HR already has hotels there so that might make more sense for them.
     
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  9. Nittany1

    Nittany1 VIP Whale

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    Vital Vegas implies it is pretty much a done deal.Makes sense
    I guess the Hard Rock on Paradise will be rebranded with the Virgin name?

    Can't help thinking about my original host at Aria who resigned to become a host at Seminole Hard Rock in Fla.
    He did not like it after a few months and resigned and was hired back at Aria.
    Then he followed Bill McBeath to Cosmo.
    You just never know!
     
  10. Grid

    Grid Well-Known Member

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    Spot on Chump!

    Just in Florida, the tribe won roughly $2.3 billion in gross gaming during the 2016 fiscal year. I have seen reports claiming over $3BIL in 2017 now. Again, this is just gaming in Florida and not all of their other revenue driving endeavors! They have the money to do this in a blink.

    As for the casino size, Cosmo has always been about "other" amenities. But their 110,000 SQFT casino space is only 35,000 SQFT less than Aria next door. So I doubt the casino square footage would scare off a buyer with all those other revenue sources. If they really wanted to, they could move the sports book and all High Limit gaming to the 2nd floor. Plenty of open space up there. Sort of like the London Club at Planet Ho.

    I think the move into AC (after they tried building a new casino in Northern Jersey) proves that they really want to expand. And that they have the resources to do so.
     
  11. shokhead

    shokhead No big spender unless eating drinking having fun!

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    110,000 SQFT casino is a nice size but I wouldn't complain if it was a little bigger.
     
  12. The Rumor

    The Rumor VIP Whale

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    they probably don't have the footprint to do much more
     
  13. spdandpwr

    spdandpwr VIP Whale

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    Would've been nice to have another indie casino on the strip. If anything, I would love private equity to buy this, keep it as is. Had Borgata not been bought by MGM, that would've made for a great second property. These big holding companies just make things operate like crap
     
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  14. Chump

    Chump Low-Roller

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    Grid,
    It may be easier to find some HR financial data outside of Florida than it is here. LOL HR seems to be trying to look smaller while they’re negotiating to renew their Florida compact for the third year going. HR wants Class III exclusivity but the racinos here are aggressively fighting them at every step. The dog and local horse tracks here have gone the way of the black and white television so they are routing their last dollars to lobbyist hoping to expand their minimal gambling operations to survive. Perhaps HR has become frustrated with the whole thing and are ready to move on. Most all of HR’s casino management is from either AC or Vegas so they know what they’re getting into. I lived in Evanston during grade school in the late 50’s early 60’s. My best friend’s dad was the athletic director at Northwestern and we got to see every game we wanted to. He went on to the front office of the White Sox for years. I have many fond memories growing up in the Chicago burbs.
     
  15. Grid

    Grid Well-Known Member

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    Borgata was always 50% owned by MGM. The other 50% was owned by Boyd. In other words two of the largest casino operating corporations in the world owned the Borgata. And now just one of them owns it outright. Nothing was ever Independent or private about that joint.
     
  16. Grid

    Grid Well-Known Member

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    100% true about HR! They are trying their best in negotiations. But they do hold leverage in all of it, which means Florida will get dicked in the end.

    Most tribes do not have to state their gambling revenue publicly. One outlet I found took the percentage they had to pay to the state (it was disclosed as a sum) and did the math backwards to figure out total revenue.

    I hear their machines are crazy tight in FL, which happens when you are pretty much the only game in town.

    PS, glad to find another Chicago pal on here! Even an ExPat is not bad.
     
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  17. bnlphan

    bnlphan Degenerate In Training

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    Just out of curiosity i was looking at casino related job openings in las vegas last night. Several positions posted by Seminole Hard Rock so could be some truth to this rumor or atleast that they may be looking to jump into LV market.
     
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  18. shokhead

    shokhead No big spender unless eating drinking having fun!

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    The Growing Economic Might of Indian Country - Indian Country ..
     
    Last edited by a moderator: May 15, 2018
  19. Nittany1

    Nittany1 VIP Whale

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    Earlier post I wondered about my original Aria host who left for Seminole HR then back to Aria then to Cosmo.
    He is an excellent host.
    Have not talked to him in a couple years.
    My phone rings tonight ,it’s him.Just resigned from Cosmo.
    He is back with MGM Resorts as a VP of marketing for all properties.
    Meeting him for a couple drinks next weekend.
     
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  20. Tonyfromjersey

    Tonyfromjersey High-Roller

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    The HR in Tampa sucks if you ask me. I’m about 45 minutes away and have gone their twice in 6 years. VP paytables are appalling . Drink service is spotty and by law their limited to the types of table games they can offer. Im not familiar with their food offerings, I’ve never stayed that long.The three stooges could run that casino and make money. It’s the only game in town. There’s no local competition so they can do whatever they want. It’s not that they haven’t thought of this I’m sure but AC and Vegas there’s some real competition . We’ll see how they do.
     
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