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We were going to title this story, “You Get a Bankruptcy, You Get a Bankruptcy, You Get a Bankruptcy,” but realized Oprah’s show has been off the air for more than a decade and the kids would’ve had no idea what we’re talking about.<\/p>\n
Let’s start with the low-hanging fruit first.<\/p>\n
1. The Sphere at Venetian<\/h2>\n
The Sphere cost $2.2 billion to build. The projected budget was missed by more than $1 billion. U2 is the venue’s first residency, which sounds great, but the band is keeping 90 percent of the box office. The Sphere’s owner, Madison Square Garden, sold its stake in Tao Group to help pay for the venue. It won’t be enough. The business model is $50 movies.<\/p>\n
2. Fontainebleau Las Vegas<\/h2>\n
Somebody has to say it. Everyone is thrilled Fontainebleau is opening. We’ve heard it’s gorgeous inside. People will love it. Love is unlikely to be enough to help Fontainebleau, especially with massive debt and overly-ambitious and optimistic expectations for business levels at a resort without a database (other than from its Florida hotel, which doesn’t have a casino). Fontainebleau is throwing money around like crazy, over-hiring, over-paying for the people its recruiting (Wynn threatened a lawsuit for poaching, since shelved), and reported luring DJs away from Resorts World. We’ve heard lots of wild numbers about what Fontainebleau will need to make just to break even, specifically, upwards of $4 million a day. The owner, Koch Industries, has deep pockets, but reality is going to set in very quickly after opening. There’s too much room supply and too little demand. Gird your loins.<\/p>\n Virgin Las Vegas is struggling badly, and even laypersons can see the problems at the often-empty resort. While there’s a glimmer of hope with the hiring of a new resort president, Cliff Atkinson<\/a> (who was the president of Fontainebleau for a few months before parting ways due to friction with ownership), it seems likely Virgin is going to need a financial restructuring to stay in business.<\/p>\n Resorts World is beautiful. It’s massive. It’s ambitious. And it’s in trouble. The resort cost $4.3 billion, and while management claims its results are improving, it’s far from being a success. Resorts World suffers from the aforementioned database challenges, and has also taken a hit because international travel and conventions haven’t recovered following the pandemic. The opening of Fontainebleau complicates things even further for Resorts World, along with the rumored nightlife shake-up. A rent-paying attraction, Transfix<\/a>, recently closed (soon to file bankruptcy itself), and the resort’s leadership is once again in hot water<\/a>.<\/p>\n So many great resorts, so much chatter about “not meeting expectations.” Palms isn’t really a “possible bankruptcy” situation, so much as an ongoing fight to meet even modest revenue goals. Palms is owned by the San Manuel tribe, which has more cash than it knows what to do with, but its foray into the Vegas market wasn’t intended to be a non-profit. There have been rumors of a looming leadership shake-up at Palms. There’s a lot to love about Palms, but its location is tough, ditto Rio. Rio didn’t make our list, because it’s looking more like a fixer-upper that owner Dreamscape is going to flip, so while it’s likely to be on a future list of financially-challenged casinos, for now, it’s all about the renovation and getting our beloved Rio back.<\/p>\n When was the last time you heard anything about Sahara? Exactly. We stopped talking about it after being the target of a baseless lawsuit (we beat their collective ass and Sahara paid substantially more than $95,000 of our legal fees), and everyone else stopped talking about it, too. At the time, the rumor was the resort could close. It didn’t. (Nobody said it would.) Honestly, nobody really understands how it’s still operating. If any casino ownership deserves the scrutiny of gaming regulators<\/a>, it’s Alex Meruelo, the guy who took advice from a parade of idiots (including his P.R. and legal teams) and sued one of the resort’s biggest supporters. Meruelo has sunk a lot of money into Sahara, and we look forward to visiting again when new, better ownership picks up the pieces of this otherwise great resort. We assume Sahara’s EB-5 investors will never see a penny (SLS, the previous owner, got $399 million from 798 EB-5 investors, Meruelo presumably inherited the debt), and unless Sahara is a giant tax write-off, we can’t imagine it can continue much longer. Oh, and to be clear: Nearby Fontainebleau isn’t “rejuvenating” the north end of The Strip, the A’s aren’t going to the Las Vegas Festival Grounds (across the street) and All Net Arena (next door) is never happening.<\/p>\n Those are the biggest players with trouble on the horizon, but there are other venues with glaring financial challenges. We made our first visit to BrewDog on the Las Vegas Strip and it’s an amazing venue. It was also largely empty. There’s zero visibility from the street, the location is strange (it sits above an Olive Garden and Target store) we shared an internal document saying its hours are decreasing and rumblings of management chaos has been ongoing. Also, the place cost $17 million to build. We enjoyed it, but it just screams desperation.<\/p>\n![\"\"](\"https:\/\/www.casino.org\/vitalvegas\/wp-content\/uploads\/2023\/05\/circus_circus_refresh_fontainebleau-423x635.jpg\")
3. Virgin Las Vegas<\/h2>\n
4. Resorts World<\/h2>\n
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5. Palms<\/h2>\n
6. Sahara<\/h2>\n
7. BrewDog<\/h2>\n
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