One thing about Las Vegas: you have plenty of role models to choose from when it comes to building a new property. What works, what doesn’t work, what makes money, and what flops on its you-know-what.
Learning from Missteps
With that in mind, the under-construction SLS Las Vegas – going up on a key Las Vegas Strip corner, where once stood the iconic Sahara of Rat Pack fame – is determined to learn from the successes and failures of other recent projects, including the financially tanking Cosmopolitan of Las Vegas, a property that, despite having a 100,000-square-foot gaming floor, has apparently not focused enough energy on it, resulting in a combined $44.6 million loss in their second and third quarters this year. Word is that a lack of experience in the gaming arena led to too much focus on amenities and not enough on gaming; though having seen the Cosmopolitan, we also wonder if some Donald Trump designers from the 1980s were brought in to style it, with its gaudy lucite chandeliers and things like tin foil dinosaur skulls decorating the passageways.
SLS is being built by L.A.-based SBE Entertainment, which is spending $415 million to bring the dated Sahara property into a more modern, sleek vibe; SBE is a company best known as being the brains behind several Hollywood and Beverly Hills projects; none of which, obviously, include any kind of gaming. That’s leaving some industry insiders wondering if the new SLS – which is slated to include just under a dozen eateries and nightclubs – will put sufficient emphasis on their gaming sector to be able to turn a profit and avoid the pitfalls of the Cosmopolitan.
Rob Oseland – SLS’ Las Vegas vice president – says they have observed and learned, and will not be repeating the Cosmo’s grave business model errors. Modeling the general consensus in Las Vegas these days – that gaming is no longer the top component, but nonetheless a key one – Oseland noted that “gaming is no longer the primary source of revenue or income, but we are going to take a very serious approach to providing SLS customers with a high-level gaming platform.”
Oseland says that 30 percent of SLS’ revenues are projected to come from the gaming floor. With that in mind, SBE has gutted the former casino floor and is reconfiguring the 60,000-square-foot space to accommodate some 800 slots, 80 table games and a sports book to be managed by top-level provider William Hill. Oseland noted that in early 2014, his company will do a thorough review of which key slot games, brands, titles and themes will be most alluring to potential customers, and select those for his casino.
Could Move Online as Well
Moreover, SLS is considering offering online poker in Nevada, which would place them in the company of land operators Stations Casinos and Caesars Entertainment, both of which already have an online poker presence in the Silver State.
“It’s a tool that will be available to us,” Oseland said.
The company plans to start out with a free-play website, to launch the brand, and will eventually convert it to a real-money site, most likely.
SLS will be using Bally Technologies to manage their casino products and create slot marketing loyalty programs – always a kingpin business practice for bringing in and keeping customers in a casino.
Oseland says that, based on Gaming Control Board statistics for the most recent fiscal year, about 35 percent of Las Vegas Strip casino revenues now come from their gaming floors alone. Nonetheless, he is not planning to overlook its importance.
“I can’t underscore enough that we’re going to appeal to the gaming customer,” he said.