So what will 2016 hold for the Las Vegas gaming-tourism complex? Change for certain, although the nature of that change won’t be clear until it’s upon us.
One of the things that defined Las Vegas tourism in the 1990s boom years—and even into the late 2000s slump—was casino openings. Since the Cosmopolitan’s 2010 debut, there has not been a genuine new-construction opening in Las Vegas. The new names that have appeared—the D, Cromwell, SLS and Downtown Grand—are those of renovated, not newly built, properties.
That may change in 2016, if the Lucky Dragon—whose construction is still ongoing but which, in November, failed in a bid to get a $25 million subsidy from the City of Las Vegas—opens on schedule in August.
Whatever its ultimate fate, the Lucky Dragon is a symbol of how casino construction has rebounded from the recession. It is smaller (206 rooms) than the megaresorts that have dominated the Strip, and it is geared toward a potentially lucrative niche—Asian gamblers. Financed in part with EB-5 funds, which open the door for foreign investors to receive green cards, it demonstrates the global nature of all aspects of modern Las Vegas casinos, from finance to cuisine.
What kind of statement will Lucky Dragon make? That all depends on whether it A) opens as scheduled and B) performs well. If it’s a dud, it will stand, like Fontainebleau, as a reminder of failed ambitions. But if it shines, Lucky Dragon will represent the adaptation and perseverance that saw Las Vegas through the slump.
Speaking of which, two larger casino projects will either pick up steam this year—or they won’t. Both Alon and Resorts World, like Lucky Dragon, represent the new importance of international finance in Las Vegas these days, with ties to Australia (via Alon’s James Packer) and Malaysia (the home of Resorts World builder Genting Group).
If Alon and Resorts World do make considerable progress in 2016, the near future of the North Strip will be as bright as it has been in years. The possibilities of openings in 2018 could influence the development of the two remaining prime tracts in the area, the Fontainebleau site and the MGM Resorts Festival Grounds (which hosted its first Rock in Rio USA festival this spring). The opening of two resorts would demonstrate a growing confidence by the investment community in new construction, which could in turn lead to more building.
On the other hand, even if those projects don’t move forward this year, the same fundamentals that got them on the drawing board—higher occupancy and room rates on the Strip—will continue, so it is entirely possible that someone else will roll the dice. With record visitation in 2015, there will be plenty of interest in expanding what Las Vegas offers.
With gaming revenue still lagging its pre-recession highs, resorts will focus more on entertainment, dining and drinking than gambling to lure the millions flocking to Las Vegas to specific hotels. Just like every year, new venues and new restaurants will compete for tourist wallets.
There is one change that is due in Las Vegas gambling; this summer, if all goes to plan, Nevada regulators will give the OK for the first skill-based games to appear on casino floors. Offerings from Gamblit Gaming and NanoTech Gaming have enticed participants at the Global Gaming Expo for two years now, and 2016 will see them go live.
What is that going to look like? Right now, it is hard to say, but skill-based games will most likely be rolled out alongside existing gaming offerings, complementing them rather than seeking to replace them, as electronic table games have. Whether these games debut to some success will have an even deeper importance to the future than the status of Lucky Dragon, Alon and Resorts World. Gambling has sagged on the Strip while the average visitor has gotten younger and non-gaming spending has surged. Is social gaming the next step for casinos to remain relevant to 21st century visitors, or a misstep? As always, visitors to Las Vegas will vote with their feet—and dollars.
So 2016 has the promise of real transformation for Las Vegas: one new resort open, and two more showing meaningful progress, along with a novel form of gambling. One thing seems certain: With more people coming than ever and the final presidential debate in October, more eyes will be on Las Vegas than ever before.