Hotel investors are so bullish on the gaming front, they aren't waiting for the outcome of next month's presidential election or any further economic indicators. In this past week alone, new properties and developments from Massachusetts to Macao, China, have been announced, which will add thousands of rooms to hotel inventory, as well as destination appeal.
First, MGM Resorts China announced it has secured a 17.8-acre land lease from the Chinese government to build a US$2.5 billion resort on Macao's glitzy Cotai Strip. MGM China's initial payment of US$56 million green-lights a massive development project that will include a 1,600-room hotel, 500 gaming tables, 2,500 slots, as well as luxury entertainment and retail options. With plans for the resort indicating that 85 percent of its gross floor area will be dedicated to nongaming offerings, it's safe to say the hotel's meeting and event space could be extensive, although no plans have yet been divulged. Not to be outdone, just one day later, Macao casino operator SJM Holdings, which operates 20 of that city's 35 casinos, announced it, too, has inked a deal with the Chinese government securing a land lease. That move will give SJM Holdings, founded by billionaire Stanley Ho, a 2,000-room casino resort, its first on the Cotai Strip.
Closer to home, in Springfield, Mass., several casino hotel operators are duking it out for a license from the Massachusetts Gaming Authority. At an on-site affair, complete with giant screens and a live band, Las Vegas gaming operator Ameristar Casinos unveiled details for a $910 million casino resort and spa development to be built on a 40-acre site just minutes from downtown Springfield. The project would include a 500-room luxury hotel with 50 suites, a conference center, a 150,000-square foot casino, several restaurants (including one by world-renowned chef Wolfgang Puck) and retail space. In a statement, Ameristar CEO Gordon Kanofsky said the resort was "immediately ready for construction," and the company said it expected just an 18-month construction timeline.
Should the project be deemed the winner, it would give Ameristar a major stake in the region's highly competitive gaming market, which includes Foxwoods Resort & Casino and Mohegan Sun, both in nearby Connecticut. However, it faces stiff competition from MGM Resorts International, which this past August plunked down the required $400,000 nonrefundable application fee when it filed a proposal for an $800 million casino resort development, and then this month sweetened the pie by announcing it would create a $5 million loan fund to help surrounding businesses, should it win the bid. Penn National Gaming also has proposed to build the $807 million Hollywood Casino Springfield in the city's downtown, partnering with Peter Picknelly, CEO of Springfield-based Peter Pan Bus Lines, to construct its new facility on 13.4 acres of land. Ameristar has until the Dec. 14, 2012, deadline to submit its application fee.
Meanwhile, in July of this year, Ameristar, which operates eight casinos in seven markets, broke ground on its ninth casino, the 700-room Ameristar Casino Resort Spa Lake Charles in Louisiana. That $500 million project, which includes a conference center, an 18-hole golf course, a casino with 1,600 slot machines and 60 gaming tables, and a tennis club, is slated to open in 2014.
While most destinations still are recovering from the economic downturn, which has resulted in deep cuts in marketing budgets, the Las Vegas Convention and Visitors Authority announced that business has been so good, it plans next month to ask its board for a $10.6 million increase of the general fund budget. According to the LVCA, the city is in its third year of recovery, and room tax and gaming fee revenue increased by over $20 million in fiscal year 2011 over 2010. The agency said it plans to allot $5 million of the increased funds toward advertising.