Red Rock Sees $120M Durango Expansion Completed by Early 2026

Posted on: February 12, 2025, 11:07h. 

Last updated on: February 12, 2025, 11:32h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • The expansion at Durango Casino & Resort is expected to be finished by January 2026
  • Durango’s cannibalization of other Red Rock properties is in line with estimates
  • The property’s margins are robust and expanding

Red Rock Resorts (NASDAQ: RRR) said its $120 million expansion of the Durango Casino & Resort in Southwest Las Vegas is scheduled to be finalized by January 2026.

Durango
Durango Casino & Resort in Southwest Las Vegas. Operator Red Rock Resorts said the venue’s expansion will be completed in January 2026. (Image: Eater Las Vegas)

The operator made that announcement in conjunction with the release of its record-breaking fourth-quarter results, noting that the cannibalization of its other venues by Durango is in line with expectations. Owing to proximity, Red Rock’s namesake casino hotel in Summerlin is likely the operator’s property that’s lost some business to Durango.

Like we’ve seen in the past, we expect to backfill this revenue over the next few years, given the strong long-term growth in the Las Vegas Valley, especially in Summerlin where downtown Summerlin and Summerlin West are set to bring in around 34,000 new households,” said CFO Stephen Cootey on a conference call with analysts.

The Durango expansion effort, which was announced last year, includes the addition of nearly 2,000 parking spaces as well as 25K square feet of new casino space. The latter component features a fresh high-limit room and 230 new gaming machines.

Durango Paying Dividends for Red Rock

The $750 million Durango opened in December 2023 as Red Rock’s effort to serve a fast-growing part of Las Vegas that was previously underserved when it comes to casinos.

In its early innings, Durango has proven to be a hit among Las Vegas locals while generating impressive margin. It’s also been a thorn in the side of some rival operators’ venues, but the property is on its way to becoming one of the stars of the Red Rock portfolio.

“With a full year under our belt, the property continues to increase visitation, that theoretical win, from our target customers in the surrounding area while signing up over 85K new customers to our database,” added Cootey. “The property continues to ramp up and remains on track to become one of our highest margin properties, as well as generate a return of almost 16% net of cannibalization in 2024.”

In a note to clients, Stifel analyst Steven Wieczynski said Durango’s database expansion is an encouraging sign because it indicates the casino isn’t having widespread, negative cannibalization effects within the Las Vegas locals’ market. He rates shares of Red Rock a “hold” with a $54 price target.

Durango Beating Expectations

New casinos are always risky ventures for operators, but Red Rock is known for taking calculated, usually rewarding risks. Durango appears to be living up to that billing.

With the one-year anniversary of Durango now in the past, the property continues to outperform our expectations and the related/expected cannibalization across the rest of RRR’s properties seems to be in line with expectations,” adds Wiecyznski.

Looking more broadly at the stock, the analyst said the operator lowering leverage, potentially via real estate sales, would be a catalyst. However, Red Rock, which owns all of the property on which its gaming venues reside, only sells land to nongaming entities, and the company has signaled no interest in selling acreage currently in use.