Nevada casinos growing events business as non-gaming revenue increases | nnbw.com

Nevada casinos growing events business as non-gaming revenue increases

RENO, Nev. — On any given day inside Reno's Atlantis Casino Resort Spa, a single banquet room might see business owners networking over breakfast, then community leaders brainstorming over lunch, followed by industry executives absorbing a keynote speech over dinner.

"We are so busy right now with events as far as meetings and events and galas, that we're turning rooms up to three times a day in order to accommodate the need," said Renee McGinnes, director of catering/banquets at the Atlantis.

In other words, Atlantis staff is constantly setting up and tearing down banquet rooms: "That's unheard of. And it's happening daily."

The Atlantis Casino filling up its meeting space like clockwork is a microcosm of how Northern Nevada casinos are shifting the way they do business. With more and more casinos popping up across the country, kicking up the competition for gamblers' dollars, non-gaming revenue has been an emphasized focus for the industry for more than a decade.

“The model of the casino business has definitely changed. We’re now in the entertainment business more than the gaming business.”Anthony Carano

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While hotel rooms, dining and shows make up a large portion of casino's non-gaming revenue, a growing slice of their business is hosting special events and conventions.

"The model of the casino business has definitely changed," said Anthony Carano, chief operating officer at Eldorado Resorts, which has 20 properties in 20 states, including the Eldorado. Circus Circus and Silver Legacy properties in Reno. "We're now in the entertainment business more than the gaming business."

There was a time when gamblers primarily hit three cities, Carano said: Reno, Las Vegas and Atlantic City. That's no longer the case. Today, 23 states are dotted with commercial casinos, according to the American Gaming Association.

A bigger piece of the pie

The business model shift to non-gaming revenue started in Las Vegas roughly a decade ago. According to the UNLV Center for Gaming Research, from 1999 to 2017, Las Vegas Strip casinos' non-gaming revenue has risen from 52 percent to roughly 66 percent.

Over that same span, non-gaming revenue has gone from 46 percent to 49 percent for the average Reno-Sparks casino.

"We're not where they (Vegas) are, but non-gaming revenue has been a much bigger piece of the pie in Reno and much more important," Carano said. "We've closed the gap over the years … we definitely have an eye on increasing the non-gaming part of our business."

In fact, Carano said Eldorado Resorts is currently remodeling all of its convention space at its three Reno properties. All told, the corporation is the middle of a $100 million-plus renovation of all three casinos.

"A lot of that is geared toward bigger conventions and better special events," Carano said. "We definitely want to continue to grow our convention business."

Across town at the Peppermill Reno, the resort/casino property has expanded in an effort to garner more revenue through hosting conventions, special events and the like.

In 2007, the casino completed its Tuscany Tower expansion, a massive $400 million development that included 106,000 square feet of meeting and convention space. The 62,709-square-foot Tuscany Ballroom, the largest convention space in Northern Nevada, anchored the expansion.

Prior, the Peppermill had 40,000 square feet of meeting space total, said Stephen Ascuaga, director of business development at the Peppermill.

"It's really become a larger piece for us — it's a strongpoint for our business," Ascuaga said. "We've really seen a nice growth in our non-gaming revenue over the last 10 years."

For the Atlantis, it expanded in 2009 to boost its meeting space, carving out the 14,261-square-foot Grand Ballroom. In all, the casino boasts 50,000 square feet of meeting space.

After a dip in hosting conventions and events during the recession, the Atlantis now has no trouble filling its space, said McGinnes.

"We are really seeing that we're busting at the seams as far as the events that we're booking and the conventions and meetings that come every week," she said. "We are riding high occupancy compared to an average hotel as far as conventions go."

A growing trend

McGinnes said she sees the trend of increased event-hosting as a non-gaming revenue stream only continuing from here.

Ascuaga agrees, pointing to the region's economic boom as an indicator.

"I think the convention business is going to be a substantial piece moving forward," he said. "I think as Reno grows, you're seeing the business demand."

He said Reno's rebranding as more than just a gambling destination has led to casinos diversify their offerings, whether it's by building a spa, boosting its entertainment quality or carving out more convention space.

"The product is much nicer," Ascuaga said. "And you're also seeing, I feel, the properties are working very well together in bringing different groups to the community."

To that end, Carano credited the Reno Sparks Convention and Visitors Authority (RSCVA) and the city of Reno for helping grow the convention business in the area.

"The RSCVA through the leadership of their new CEO (Phil DeLone) has done a fantastic job of bringing new conventions to Reno," Carano said. "City-wide conventions are great for us, great for the Atlantis, great for the Peppermill. If conventions are in town, it's going to help everybody because it drives increase room rates and occupancy. So what's good for one is good for all."

Notably, Nevada casinos are on a hot streak gaming-wise, reporting total win exceeding $1 billion for three straight months to start off 2018. This hasn't happened since 2008, according to the Nevada Gaming Control Board.

By the numbers

52 percent: Non-gaming revenue for Las Vegas Strip casinos prior to 1999

66 percent: Non-gaming revenue as of 2017

14 percent: Increase over past 20 years

46 percent: Non-gaming revenue for Las Vegas Strip casinos prior to 1999

49 percent: Non-gaming revenue as of 2017

3 percent: Increase over past 20 years

Source: UNLV Center for Gaming Research