Red Rock Eyes Bigger Casino, More Parking in Durango Expansion

Posted on: June 27, 2024, 04:32h. 

Last updated on: June 28, 2024, 09:03h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Following a fast start by Durango Casino & Resort in Southwest Las Vegas, operator Red Rock Resorts is already eyeing expansion of the venue, which opened last December.

Durango
Durango Casino & Resort in Southwest Las Vegas. Operator Red Rock Resorts is planning to expand the venue. (Image: Eater Las Vegas)

Next week, the Clark County Zoning Commission will consider a request by Red Rock to slightly adjust plans for Durango’s second phase, which were approved in October 2021. Additions to Durango are expected to include more hotel rooms and casino space. A second hotel tower could result in the property having nearly 580 rooms.

Durango expansion plans also include more banquet space, a bowling alley, and a movie theater — the latter two of which are staples of many Red Rock-operated gaming venues throughout the Las Vegas valley.

Parking, always at a premium at Las Vegas gaming venues, is also on the list of priorities at Durango. Red Rock is reportedly asking the Zoning Commission for permission to add another 6,000 spaces across two new garages and new outdoor space. The casino would abut one of the new parking garages to the northwest and feature dining space as well as an outdoor patio. No renderings of the expansion plans have been released as of yet.

Durango Expansion Could Pay Dividends

One of the reasons Red Rock opened Durango is that it viewed Southwest Las Vegas as relatively underserved regarding credible casino options.

While there’s been some evidence of the venue pilfering business from other Red Rock properties, the operator believes that scenario will smooth out over time and data confirm the validity of opening a casino resort in that area of Las Vegas. The population growth in Southwest Las Vegas far exceeds that of the already fast-growing city at large, and recent data indicate Southwest surpassed Henderson as the most affluent part of Las Vegas.

The $750 million Durango is already home to 73,000 square feet of gaming space, a sportsbook, 2,000 gaming machines, and 40 table games. Following Durango’s first full quarter of operations, Red Rock told analysts and investors the property is on track to meet margin and return on investment objectives sooner than forecast.

In addition to its namesake venue in Summerlin and the Green Valley Ranch in Henderson, Red Rock operates multiple gaming properties under the Station brand throughout the Las Vegas area. The company also runs 10 Wildfire casinos, including seven in Henderson, according to its website.

Macro Headwinds Could Impact Durango, Rivals

Last month, Nevada casinos notched a combined gross gaming revenue (GGR) haul of $1.32 billion, the industry’s best showing on record in the state in the month of May. That data is undeniably bullish, but some macroeconomic issues could affect locals’ casinos such as Durango.

A new report by the National Association of Realtors (NAR) and Redfin indicates the median Las Vegas household needs more than $61K to afford the average rental rate in the Valley, but median income in the region is $56,066 per year.

Said another way, just 46% of Las Vegas renters live in a property that they can afford. That could imply that the gap between rent obligations and income could weigh on locals’ consumer discretionary spending, including the amount they choose to spend or not spend at casinos.