Why Las Vegas Casinos Need Better Infrastructure

Recent power outages highlight just how critical a backup plan is

It’s not as sexy as a new restaurant opening or a big winner in a sports betting contest, but infrastructure—all the stuff that needs to work for any large building to operate—has been in the news quite a bit lately for Las Vegas casinos.

A pair of power outages at two Caesars Entertainment properties, one at Palace Station, and one at MGM Grand and New York-New York demonstrate just how critical attention to infrastructure is. In November, Paris Las Vegas was evacuated after an errant drilling severed its main power line; customers were not cleared to return for nearly a day. Shortly before New Year’s Eve, an unfortunate series of events that began with an overflowing sink sparked an outage that darkened the Rio’s Masquerade Tower (the tall one). The tower wasn’t fully reopened for a week, straddling both the New Year’s holiday and the start of CES, two peak occupancy periods.

The Caesars events were caused by mishaps on property, but resorts—just like homes and businesses everywhere—are also vulnerable to the loss of power due to conditions outside of their walls. Earlier this month, Palace Station fell victim to an interruption in Nevada Power service that darkened the property for about 90 minutes. A similar outage had affected power at Palace Station—also for 90 minutes—in July. The MGM/New York-New York outage this month, reportedly caused by a windstorm blowing debris into a substation, lasted just over an hour.

Whatever the source of the outage, resorts need two things on hand before the power goes out: a backup power source and a plan.

Backup power is important for both safety and regulatory reasons. Providing minimal lighting so that guests and employees can navigate their way around the massive complexes of the Strip is what first comes to mind, but more important (after all, most people have figured out how to use their phone’s flashlight function) is the continuity of power to fire safety systems and related infrastructure. HVAC systems, too, are not optional in Las Vegas.

With millions of dollars in cash and chips on hand, casinos also need to maintain power to their surveillance systems. Slot machines have their own backup power batteries, which ensure that, even in the case of anything unexpected, players will not lose their credits.

A contingency plan, however, might be more important than all of the hardware needed to keep guests safe. Whatever the cause of the outage or its ultimate length, two things will happen: the situation will be chaotic, and guests will be inconvenienced. A thoughtful emergency action plan, well communicated to all employees and quickly acted on, can be the difference between a minor slip-up and hours of guest annoyance and frustration.

Because Las Vegas resorts are, first and foremost, hospitality businesses, they must safeguard not just their guests’ health and safety, but their guests’ perceptions of their concern, as well. To do otherwise is disrespectful and, in the end, counterproductive. Casinos invest a great deal of money in convincing visitors to return to Las Vegas. Once they are here, breaking the illusion that their comfort and happiness is everyone’s first priority wipes that investment out.

It’s more real than that, of course: missed flights, canceled weddings, lost business opportunities on the convention floor are all very real outcomes of the physical plant meltdowns in resorts. Having a once-in-a-lifetime (or once in a fiscal year) Vegas moment ruined because of a power failure might sour someone on returning. Even more, it’s a betrayal of the idea behind Las Vegas: in exchange for your money and time, you can have something you can’t get anywhere else.

With the shareholder-driven focus on this quarter’s bottom line, it is often difficult for casino executives to allocate the funding that infrastructure deserves. After all, there’s only so much money for capital expenditures and shiny new trinkets like a restaurant refresh can immediately bump earnings. No one is going to make a trip to a resort just because it has rehabbed creaky plumbing or bought more reliable generators.

But they will, quite possibly not make a return trip if that infrastructure fails during their stay, so there is a definite return on investing in nuts and bolts, wires and pipes. Because while it is tempting to kick the can down the road, to wait until next year before improving areas that no guest will ever see, the costs of ignoring it, as the latest outages have shown, is great.