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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Mesquite, clobbered by recession, works to regain footing

5 February 2013

MESQUITE -- Don't blame Rita Perez for the economic challenges that stalled the boomtownlike growth of this Nevada border city's casino industry over the past few years.

The St. George, Utah, resident travels the 40 miles between her home and Mesquite several times a week to play slot machines and enjoy the casinos' nongaming amenities.

She has made the trek for 20 years to escape "the boredom" of St. George.

On a recent visit in late January, Perez was joined by her son, Bill Job of Idaho Falls, Idaho. He said Mesquite's casinos are an easy getaway for his mother.

"This really is her love," said Job, as the pair sat in front of a slot machine bank at the Eureka Casino Hotel Casino.

For Kelly Carroll and Aleen Lubold of the tiny eastern Nevada town of Baker, the Virgin River Hotel, Casino & Bingo is their own personal Bellagio. Mesquite is better than Las Vegas.

"This place is more our style," Lubold said.

Mesquite is a 294-mile drive down U.S. Highway 93 from Baker -- population 396 residents -- which is about five miles outside the Great Basin National Park. But the couple makes the drive once a month.

"The (Virgin River) casino is self-contained and it has everything we would want," said Carroll, who was playing a few hands of video poker. "Besides, most of the places allow us to bring our dog."

Mesquite Gaming Chief Operating Officer Randy Black said customers like Perez and the couple from Baker are the typical patrons he finds at his company's two casinos, the CasaBlanca and Virgin River.

He wishes there were a few more of them.

"Mesquite is like the rest of the gaming industry," said Black, who has owned and operated casinos in Mesquite since the 1990s. "Our customers are still coming, but they are just not spending what they used to spend."

POISED FOR SUCCESS

Five years ago, Mesquite seemed poised to give Laughlin a run as the next Nevada small-town gaming success story.

The town, located off Interstate 15 and roughly 90 miles from Las Vegas, had grown beyond its days as a truck stop surrounded by farms and dairies. Mesquite developed into a retirement community with affordable single-family homes lining a half-dozen golf courses with a burgeoning gaming market.

In 2007, Mesquite's casinos reached an apex of almost $163.7 million in gaming revenues, more than doubling the market-measuring figure over a 10-year period.

The recession, however, sent Mesquite's gaming industry on four-year downward spiral.

Gaming revenues fell almost 27 percent between 2007 and 2009. One major casino, the Oasis, reduced operations in 2008 and closed in 2010.

Visitation mirrored the gaming figures. In 2007, a record 1,620,804 visitors came to Mesquite. In 2011, the tourist count had dropped to 981,541.

"Our market has not changed," said Anthony Toti, chief executive officer of Mesquite Gaming, which operates the CasaBlanca and Virgin River. "The percentages of where we get our business have changed. We still draw from Las Vegas, St. George and the rest of the nation. But all the sectors are down."

Andre Carrier, CEO of the Eureka Casino, said the Mesquite market has stabilized since the economic free fall.

"Mesquite's journey is not so different from Las Vegas," Carrier said. "Mesquite benefits when Las Vegas is healthy and had a high occupancy. That makes Mesquite a greater value."

Mesquite gaming revenues gained 1 percent in 2011, the first annual increase since 2008. Through November, gaming revenues are up 0.8 percent according to the Gaming Control Board. Visitor volume is up almost 1.8 percent through November.

"It's a very slow comeback," Toti said. "It's going to be a long, tough road."

A PLACE'S CHANGING FACE

Mesquite Gaming was created in 2011 following the bankruptcy reorganization of Black Gaming. An investment company holds 40 percent ownership, Toti owns 25 percent and South Point owner Michael Gaughan has a 25 percent stake and operates the race and sports books at the CasaBlanca and Virgin River.

Black, who still appears in television commercials for the CasaBlanca, owns 10 percent of the company.

For a time, he was the face of Mesquite.

Black, a real estate developer in Las Vegas, built the Virgin River in 1990. Soon after, he acquired the Oasis from gaming pioneer Si Redd. In 1997, he bought the Player's Island from Merv Griffin's company and renamed the property the CasaBlanca Resort, Casino, Golf, & Spa.

Black Gaming operated the unfinished Mesquite Star for a short time as a nongaming hotel, but the building has since closed.

Mesquite Gaming also owns two of the city's golf courses.

With the Oasis and Star closed, Mesquite has 1,759 hotel and motel rooms according to the Las Vegas Convention and Visitors Authority, about 1,000 fewer than it had in 2002.

Toti said the economy will dictate whether the Oasis is eventually reopened or demolished.

"There are many different ways we can go," Toti said.

Meanwhile, Mesquite Gaming has rebounded.

The company has rebranded the businesses and the properties were given a makeover with new slot machines, new carpeting in the casinos, hotel room upgrades, and revitalized restaurant offerings.

But don't ask for specifics.

"It's a trade secret. I'm not going to let my competition know what I'm doing," Toti said. "All the local companies would love to know what we're doing."

Carrier said the Eureka expanded its casino space in 2007. He said the property's core customer has continued to visit.

"Obviously, the spending of our guests was affected by the economy," Carrier said.

To Carroll and Lubold, the couple from Baker, Mesquite is still the affordable alternative to Las Vegas. The pair will take in a movie and do some shopping while spending time in Mesquite.

"For us, it's the perfect getaway," Lubold said.

LOOKING FORWARD

Toti hopes Las Vegas will continue to revive.

Strip and suburban casinos cut into the Mesquite market, especially with customers looking to reduce costs and avoid paying high gasoline prices along Interstate 15.

"All that affects our business," Toti said. "It will be nice when they get out of our backyard."

Mesquite Gaming is still marketing its resorts aggressively.

The CasaBlanca and city of Mesquite offer a heavy special events calendar, with weekends dedicated to a hot-air balloon festival, a classic car show, off-road racing, boxing and amateur golf tournaments.

The CasaBlanca, which has its own golf course, is considered a resort destination. The Virgin River, which is across the street from the competing Eureka, is viewed as a locals property. The Virgin River and Eureka are near housing subdivisions built in the past 15 years.

Black continues to be part of the marketing efforts.

He's on a first-name basis with many long-term customers and his voice is on the CasaBlanca telephone hold message, describing the property's amenities.

Years ago, his folksy television commercials carried the tagline, "it's Mesquite," and advertised the community as being different from casinos on the Strip or the Las Vegas locals market.

"Mesquite is a unique place that always has been the perfect getaway for golf, spa, and great food all priced right, served by nice folks in a small town," Black said. "It's the way Vegas used to be."