With the northern Nevada economy on the upswing and gambling numbers improving, look for Eldorado Resorts Inc. to ramp up investment in its portfolio of Reno hotel-casinos.
Right off the bat, the family-run publicly traded company last week officially completed its $72.5 million acquisition of MGM Resorts International’s holdings in Reno, which makes it a dominant player in the town’s gaming industry.
The transaction, announced this past summer, gives Eldorado an expanded business footprint in the Biggest Little City in the World with complete ownership in Circus Circus Reno and the remaining half of the Silver Legacy. The hotel-casinos already are connected with covered walkways and will now be managed as a single entity.
“It’s one team, one direction. We’re all now on the same page,” said Eldorado CEO and chairman Gary Carano in an interview with the NNBW. In terms of market share, Eldorado has 4,000 “team members,” over 4,100 hotel rooms and nearly 20 restaurants across nine city blocks in the Arch district in downtown Reno, said Carano, whose family started the business over 40 years ago.
“Doubling down in Reno couldn’t come at a better time,” said Carano, referring to the region’s stronger economy, which is attracting new employers and residents “to the beautiful city we call home” as well as tourists.
The construction of Tesla Motors Inc.’s Gigafactory for mass-producing electric car batteries just east of Reno has spurred new hope for economic growth, Carano added. People here call it “the Tesla effect,” and the region’s biggest boosters like Carano are looking for ways to harness the fresh enthusiasm and profit with a more diversified economy.
He said Eldorado’s fortunes are strongly tied to a local economy where more people are working and companies are bringing new jobs to the area. “That means more people collecting paychecks” at our properties, said Carano, who said the recent consolidation will not affect employment numbers, but will bring some efficiencies of scale with vendors, which should reflect positively on the bottom line.
“Obviously, the power of purchasing is top of our list,” said Carano, which not only includes northern Nevada but the company’s seven properties in five states.
That careful optimism is playing out through subtle and necessary improvements now — with the option to build on them in the near future.
The casino boss said the company has sunk millions into its casinos and racetracks every year since the recession started. But most of those improvements have been essentials such as remodeling hotel rooms, new roofs and updated HVAC systems — which don’t add extra enticement for guests but keep the buildings in good working order.
Carano said some major investments are planned for Circus.
“Topsy needs some love,” said Carano, referring to the property’s iconic Topsy The Clown sign designed by Gordon Tietjen. Remodeling of the gaming floor, hotel rooms and restaurants is clearly on the agenda, said Carano, after consulting the management team at Circus.
“We see a big opportunity to grow revenue and increase the quality of guest services,” said Carano of the hotel-casino whose towers punctuate the Reno skyline. He doesn’t want to change things too much.
“Circus has its niche,” he said of the property, which also features free circus acts on a regular basis throughout the day over the midway, and also offers numerous carnival games.
Carano said the business plan is to monetize the company’s gaming and non-gaming amenities.
With gaming revenue in Reno up 3.3 percent year-over-year through September, Carano said the properties are looking to keep the slots and table game experiences and race and sports book action dynamic and cutting edge for both locals and those “players coming over the hill.”
It’s also important to emphasize and expand the menu offerings of the Eldorado Resorts’ 23 restaurants — as well as attracting more customers to nightclubs and bars.
“It’s something for people to do when they’re not gambling,” Carano said. Most people come up with a set amount they’re willing to spend. If they do that in the first couple hours and they’ve driven all the way up here, they’re looking for something else, he said.
And something simple like a live band and cocktails could be the key to helping people go home happy from Reno.
Carano said the team also realizes the potential by kicking up its retail offerings. “That’s one of the things on our list in terms of non-gaming amenities,” said Carano.
Looking towards the future, Carano said he wouldn’t rule out future acquisitions in the Reno market if the right opportunities presented themselves. “We are a growing company,” said the business owner. “We are always looking.”