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Gaming Guru

Jeff Simpson

Columnist Jeff Simpson: 2006 Can Only Get Better for Las Vegas Gaming

3 January 2006

I expect major Las Vegas business - especially big casino industry news -- to be the norm again in 2006, with some of the most significant events taking place during the first part of the year.

My predictions appear to have been written with the aid of rose-tinted lenses, but they come with a caveat echoing what Steve Wynn, Terry Lanni and other top Las Vegas executives have told me in recent months: A significant terrorist attack -- elsewhere or especially here -- could derail the gravy train Las Vegas has been riding in recent years.

I'm no psychic and am certainly not predicting any catastrophic events.

One of the biggest -- and first -- major gaming stories of the year should be Bill Boyd's announcement of his company's plans to redevelop its prized 63-acre Stardust property on the north Strip.

Boyd Gaming Corp. executives have been tight-lipped about what they'll do the property, but I expect them to announce plans to create a project similar to MGM Mirage's Project CityCenter. Boyd told me a few months ago that he intends to build a property that will appeal to the high-end customers who are generating record numbers at hotels like Bellagio, Wynn Las Vegas and the Venetian.

And Boyd's proven its ability to do just that in Atlantic City. The Borgata, co-owned with MGM Mirage and operated by Boyd, has been an incredible success story and demonstrates Boyd's ability to compete in the rarified air of the top-end megaresorts.

With a chunk of land as valuable as the Stardust site, expect Boyd to build and operate its own signature megaresort -- the "Boyd" perhaps? -- and to partner with a number of boutique hoteliers and retailers to create a multibillion-dollar project that will continue the amazing transformation of the northern end of the Strip. With the large number of Strip-side condominium projects already on the drawing board, I'd be surprised if Boyd plans much of a condominium component to the project, if any.

I don't expect Boyd to close the hotel and implode the Stardust's main tower until 2007.

The World Market Center's impact on Las Vegas has yet to be fully appreciated. I think that the twice-a-year expos will demonstrate the dramatic contribution the wholesale furniture shows will have on the Las Vegas Valley. The market opened to furniture-industry acclaim last year, and I expect this year's events to cement the reputation of Las Vegas as an ideal spot for permanent international and national sales operations.

Station Casinos plans to open Red Rock Resort in the first part of the year, and I expect the property to be a rousing success. With its clean look and stellar location in the valley's most succulent sweet spot, Red Rock should immediately supplant Green Valley Ranch as the valley's most luxurious locals casino.

Wynn Resorts opens its second branded Wynn hotel in Macau in September, and I expect the billion-dollar resort to immediately become the most successful American-owned casino in the Chinese enclave. Not only will Wynn Macau's business dwarf that done by Sheldon Adelson's functional Sands casino in Macau (what Wynn called "Sheldon's box of baccarat") but it will also generate considerable business for Wynn Las Vegas.

One of the side effects of Wynn's competition for the biggest bettors with Strip titan MGM Mirage has been an evolving cooperative relationship with national casino goliath Harrah's Entertainment. Harrah's has only one super-premium property in Las Vegas, Caesars Palace, and Wynn has only his one property until his planned Encore resort opens next to Wynn Las Vegas in 2008. Both companies see MGM Mirage as their chief competitor and see the partnership as a logical tactic. The two companies have already cooperated on boxing match promotions, but I expect to see much more cooperation between Harrah's and Wynn, probably including a joint-venture deal to develop a multi-casino project on Macau's Cotai Strip.