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Station Casino Warns Shareholders of Strike's Impact

LAS VEGAS - Station Casinos executives told company shareholders attending the company's Wednesday annual meeting at Green Valley Ranch that a major casino strike would be devastating for the Las Vegas economy, not just the 10 locals gaming operations run by the company.

"Even the talk of a strike isn't good for the Las Vegas Valley," Chairman Frank Fertitta III told a shareholder who asked if a strike could drive additional business to the nonunion Station Casinos properties.

Fertitta noted that 24 percent of Southern Nevada employees work in tourist-dependent jobs.

"A strike would adversely affect every company and every employee in Las Vegas," he said. "The best thing for us would be a quick settlement."

Station Casinos shares fell 71 cents Wednesday, or 4.1 percent, to close at $16.65.

The company's shares have recently traded at the high-end of the stock's 52-week trading range that has fallen between $7.50 and $19.20, pleasing a number of the 300 Station shareholders who attended the meeting.

"In general, I'm pleased with the way the company's being run," said Las Vegan Barbara Jacobs, a Station Casinos investor for the past three years. "I don't just own shares, I also play at the Station Casinos."

Shareholders heard Lorenzo Fertitta, the company's president and younger brother of Frank Fertitta, explain why the company is ideally suited to tap into the growth of the valley, which is expected to see its population grow from about 1.5 million people today to about 2 million by 2010.

No new major locals casinos are set to open for at least three years, he said, noting that the $2.1 billion locals gaming market is expected to generate about $3 billion annually by the end of the decade.

State and local laws designed to curb the growth of neighborhood gaming have reduced the number of sites available for the development of locals casinos.

"There are only a limited number of these viable sites left," Lorenzo Fertitta said. "It just so happens we control a majority of those sites."

Company executives said they don't plan to let competitor Coast Casinos dominate the locals casino market on the rapidly growing west and southwest sides of the city.

Coast's Suncoast has captured much of the business in northwest Las Vegas since it opened in 2000, much of it at the expense of Station's nearby Texas Station, Palace Station, Fiesta Rancho and Santa Fe Station.

Coast also operates the Gold Coast and the Orleans, just west of the Strip.

Several shareholders asked executives why the company has yet to establish a significant presence southwest of Rancho Road, with one investor asking about plans to develop a Station-owned parcel near Rhodes Ranch where Durango Drive meets the Las Vegas Beltway.

"We think it's a great site, but we're going to wait until the surrounding area fills in a bit more," Frank Fertitta said.

Asked after the meeting about the company's timetable for westside development, Frank Fertitta said the company's next major casino project would almost certainly be at one of three beltway-locations, with two additional options coming near Flamingo Road and Charleston Boulevard.

"It's always tough to be last in a market," Lorenzo Fertitta said, "but we build quality projects, and Las Vegans are familiar with our brand."

Station executives say it will take at least three years to open a new casino once the decision is made to build. The company would most likely open a westside casino in about four years.

The younger Fertitta noted that when Station builds a new casino it wants to expand a neighborhood gambling market, not cannibalize the existing market by stealing market share from competitors.

"Just building a plain vanilla casino won't grow the market," he said. "When we build again, we'll do what we've always done. We'll improve on what we've already done."

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