Red Rock Resorts (AKA Station Casinos) announced it has an agreement with a subsidiary of the San Manuel Band of Mission Indians (San Manuel) to sell the Palms Casinos Resort. The deal between the two parties includes everything inside the casino and hotel (restaurants, movie theater, etc.) along with the adjacent Palms Place condominiums.
According to the company, the Palms sale will bring the company $650 million in cash. As always, the deal is subject to adjustments and regulatory approval. The Palms sale should close sometime in late 2021. The casino has been shuttered since the start of the pandemic.
The announcement of the Palms sale came hours before the company reported first-quarter earnings for 2021.
Palms became a Station Casinos property in 2016
Station Casinos purchased Palms in 2016 for $312.5 million. The company spent more than twice as much to renovate and upgrade the property near the Vegas Strip. Palms became a billion-dollar investment for the company when you add the $690 million in renovations to the purchase price.
The massive changes to the property brought excitement to Palms but that didn’t last very long. General Manager Jon Gray resigned in October 2019. Shortly after Gray’s resignation, the multi-million dollar dayclub and nightclub KAOS closed.
Station Casinos repurposed the club and pool area for special events. The new space didn’t last very long. Like all other Nevada casinos, Palms closed in early 2020 to help slow the spread of coronavirus.
Palms has been closed since March 2020
Station Casinos properties reopened in phases. Palms was not part of the first phase of reopening. The future of Palms as a Station Casino was in doubt.
During a 2020 earnings call, the company stated that it generates about 80% of its revenue from the properties that have reopened. The following Station Casinos properties reopened last year.
- Green Valley Ranch
- Red Rock Casino
- Palace Station
- Santa Fe Station
- Sunset Station
- Boulder Station
Palms, Texas Station, Fiesta Henderson, and Fiesta Rancho never reopened.
The company says it had no intention of selling Palms prior to closing for coronavirus. This week, Station Casinos moved on from Palms to focus on its revenue-generating casinos. Station Casinos has not announced plans to re-open the other closed Station Casinos.
Durango Station plans coming soon
The influx of cash from the Palms sale will help Station Casinos to revisit its plans to build Durango Station just off the I-215. The company says this is the best plot of land the company owns in Las Vegas.
The plan for Durango Station is still coming together. The company is zeroing in on what they would like to create. Plans for Durango Station should be revealed later this year.
The company did share some insight into Durango Station during its earnings call. By the sound of it, this will not be a mega-resort. Station Casinos will focus of what generates the most revenue for the company.
Durango Station will have slot machines, table games and some restaurants. Most notably, Durango Station will not have a buffet.
If Station Casinos moves forward with Durango Station, construction on the project won’t begin until 2022.
San Manuel will soon enter Nevada
The sale of Palms to the San Manuel and the San Manuel Gaming and Hospitality Authority is expected to close before the year is over. San Manuel will become the second Native American tribe to enter the Nevada gaming market this year. Mohegan Sun operates the casino at the recently opened Virgin Hotels Las Vegas.
This is a big move forward for San Manuel which has been operating a casino in Highland, CA for 35 years.
“Today represents an important step for the Tribe and its long-term economic diversification strategy,” said San Manuel Chairman Ken Ramirez. “On behalf of the Tribe, we are thankful for the opportunity to join a community that we have come to know and appreciate.”
San Manuel has been setting up its entry to Las Vegas for a few years. In recent years, the company has made contributions to a variety of non-profits and Las Vegas institutions including UNLV’s William F. Harrah College of Hospitality and William S. Boyd School of Law, the Public Education Foundation, and Shade Tree Shelter.
In 2019, San Manuel signed on as a founding partner of Allegiant Stadium and the Las Vegas Raiders. This put San Manuel in the same company as Caesars and MGM Resorts.
What to expect at the new Palms
San Manuel has yet to announce specific plans for Palms. However, San Manuel does plan to make Palms part of its casino family. “Our Board believes that the Palms is a casino resort that many of San Manuel Casino’s loyal guests would enjoy,” said SMGHA Chairwoman Latisha Casas.
San Manuel appears to be ready to link its Club Serrano Rewards program with Palms. San Manuel Casino in CA is very active with promotions. The casino currently offers up to $1,000 for new rewards club members.
There shouldn’t be too many renovation for San Manuel to do at Palms after Red Rock Resorts spent nearly $700 million on renovating the property. That said, there should be some changes from the property that closed in 2020.
New sportsbook operator and restaurants for Palms?
CG Technology used to operate the sportsbook inside Palms. The company has been purchased by William Hill which is now owned by Caesars. It wouldn’t be a surprise to see a new third party sportsbook operator at Palms.
New restaurant brands should make their way to Palms. For example, San Manuel’s Rock & Brews could easily slide into one of the existing restaurants at Palms. Station Casinos Lucky Penny branded coffee shop will have a new name as well.
Restaurants from celebrity chefs like Bobby Flay, Marc Vetri, and Michael Symon may not return. Flay has two new restaurants at Caesars Palace and Vetri has taken over the Italian restaurant at Red Rock Casino.
Additionally, don’t expect to see the artwork that was on display at Palms. That was owned by the Fertitta family who controls Red Rock Resorts.
A representative from San Manuel tells PlayNevada “We cannot begin to share specific details about leadership and/or operations until we get through licensing, but we plan to share updates as we move through the process.”
Stay tuned, there’s more news to come for Palms and Durango Station.