- Red Rock Resorts is selling The Palms Las Vegas to the San Manuel Band of Mission Indians and the San Manuel Gaming and Hospitality Authority for $650 million USD.
- The San Manuel Band of Mission Indians own and operate the San Manuel Casino in Highland, California.
- The tribe will carefully assess the property before making any decisions on how it will operate under their ownership.
The Palms Las Vegas never reopened following the COVID-19 shutdown of Nevada’s gaming industry but has been given new life. Last week, Red Rock Resorts announced that they are selling The Palms to the San Manuel Band of Mission Indians and the San Manuel Gaming and Hospitality Authority for $650 million USD. These are the same tribal interests that own the San Manuel Casino in Highland, California located approximately 70 miles from Los Angeles. The process will take some time to play out from both a financial and regulatory perspective and this is giving the San Manuel tribe an opportunity to assess the property before making any plans for changes or operational strategies.
Barring anything unforeseen, the deal is expected to close later this year. Once it does, the new owners will obviously want to get the doors open as soon as possible so they’ll be using the time between now and then to figure out exactly what they have. Their timing is impeccable–Red Rock Resorts put $690 million into renovating The Palms after purchasing it from the Maloof family in 2016. Red Rock can’t be pleased that they’re selling the property for less than they spent on remodeling it though they’re likely glad to get it off their hands. The San Manuel tribe, on the other hand, is getting a great value on a property that was once a major player in the market. Much of what Marc Falcone, executive VP of Red Rock Resorts, said at the time his company purchased The Palms is still true today:
“With the acquisition of the Palms, we gain a leading gaming asset in Las Vegas with key strategic benefits in the Las Vegas locals market and close proximity to the Las Vegas Strip.”
“With its appeal to both Las Vegas residents and tourists alike, the Palms is a hybrid gaming property that is uniquely positioned to benefit from the strong economic trends in Southern Nevada and record visitation levels in Las Vegas.”
In announcing the sale to the San Manuel tribe Red Rock Resorts Executive Vice President and Chief Financial Officer Stephen Cootey expressed satisfaction with the work his company did on The Palms:
“We are incredibly proud of how we transformed this iconic property. We determined that the sale of the property is the best way to create shareholder value and enables us to emerge from a pandemic on a more accelerated timeline.”
The San Manuel tribe’s plan is to give the property a full assessment before formulating a theming and operating strategy. San Manuel CEO Laurens Vosloo said that ‘every and all things are on the table’ but also added that the plan will be to build on what is already there. The observation that the property will be ‘gaming focused’ suggests that they won’t be going after the nightclub/dayclub crowd. Hopefully, they’ll either operate the sportsbook ‘in house’ or bring in a new operator to run it for them. If the Nevada sports betting ecosystem can end up with a new ‘out’ it would be ‘best case scenario’.
Although it’s likely the San Manual tribe will not focus on the club scene the property has a great concert venue (The Pearl theater) along with a wide array of restaurants and bars. The Palms has always had a reputation for high quality dining and that’s something that the San Manuel tribe would be well served to leverage. Their marquee property, the San Manuel Casino has a reputation for quality dining so that will likely be a focus once the tribe takes over the operation of the Palms.
With some of the major casino operators looking to divest properties (Caesars Entertainment almost certainly will sell at least one casino by the end of the year) there’s rumors afoot that other tribal interests could join the Las Vegas market. One tribe that has previously been mentioned as having an interest in the Southern Nevada market is the Seminole Tribe of Florida which owns Hard Rock International. More tribal interests coming to Las Vegas can only serve as a positive for the relatively stagnant gaming scene.