Changing the face of gambling landscapes
Hard Rock expands to Las Vegas; deal will not affect sports betting in Florida
Hard Rock International, which is owned by Florida’s Seminole Tribe, flexed its financial, branding and technology muscle this week as the company announced it will scoop up its latest acquisition: the operations of the Mirage Hotel & Casino in Las Vegas for nearly $ 1.1 billion.
As the deal was unveiled on Monday, Mirage executives called the plan “transformational” for their company. But at the end of the day, it was Hard Rock driving the transformation, displaying its ability to create thousands of jobs, spark millions in economic activity and change the face of gambling landscapes in Florida and elsewhere in the U. S.
“What it means to the company is it underscores their financial power,” said Daniel Wallach, a gaming and sports betting attorney in Hallandale Beach. “They’re one of the most profitable gambling operators in the entire world. Their revenue generation is $ 2 billion annually. This is an acquisition that is commensurate with their financial might.”
American Indian tribes have long held an advantage over local non- tribal gambling operators as they are free to pursue their business on their sovereign land.
Hard Rock International has the financial punch to expand almost at will. The company says it maintains venues in 67 countries spanning 249 locations that include owned/ licensed or managed hotels, casinos, Rock Shops, live performance arenas and cafes. Besides the 450- foot guitar hotel at its Hollywood resort, it oper
“What it means to the company is it underscores their financial power. ... They’re one of the most profitable gambling operators in the entire world. Their revenue generation is $ 2 billion annually. This is an acquisition that is commensurate with their financial might.”
Daniel Wallach, a gaming and sports betting attorney in Hallandale Beach
ates a theater that can seat more than 6,000 people, or roughly just as many people as New York’s Radio City Music Hall.
Sports betting
Among other t hings, the Mirage deal gives the company another sports betting operation. The Hard Rock currently operates them in Atlantic City, New Jersey. Nevada, Mississippi, and Iowa. But it will have no bearing on the tribe’s sports betting aspirations in Florida, where it was recently disallowed by a federal judge.
In 2020, Hard Rock thought they had an agreement with the state of Florida to bring online sports betting to the Sunshine State, and launched a joint venture named Hard Rock Digital, an online sportsbook, retail sportsbook and internet gaming platform. The deal would generate $ 2.5 billion in revenue to the state of Florida over five years.
But a federal judge recently rejected the compact. U.S. District Judge Dabney Friedrich ruled last month that sports betting, which took effect in Florida on Nov. 1, violated the federal Indian Gaming Regulatory Act because it allowed bets to be placed online from anywhere in the state. The gaming act requires that any state- sanctioned gambling must take place on tribal land.
The Seminoles have appealed the ruling.
Wall ac hand other analysts said Tuesday that the prospective Mirage buyout deal won’t be bringing sports betting to Florida. Although the Mirage comes with its own sports betting operation — complete with mobile device access — Floridians can’t play from afar. State law won’t let them.
“It has no impact on the compact in Florida or sports betting,” Wallach said of the takeover deal. “Their footprint nationally and potentially globally doesn’t impact the legality of the compact or the speed to market in Florida.”
New to Las Vegas
Hard Rock CEO James Allen, who also chairs Seminole Gaming, was not immediately available for comment Wednesday.
In October, Allen told the Global Gaming Expo in Las Vegas that the Hard Rock was interested in establishing a Las Vegas presence.
“We recognize Las Vegas is the entertainment capital,” Allen said at the conference, according to the Nevada Independent. “If the opportunity comes up, yes, we would be interested.”
Later at the conference, according to the publication, Allen discussed a potential deal with MGM Resorts International CEO Bill Hornbuckle. “Frankly, we’ve been having conversations about it for quite some time,” Allen told the Independent.
The company says it will build a guitar- shaped hotel tower, similar to the one in
Hollywood, at the front of the Mirage along the Las Vegas Strip. The property will be renamed Hard Rock Las Vegas.
“When complete, Hard Rock Las Vegas will be a fully integrated resort welcoming meetings, groups, tourists and casino guests from around the world,” Allen said in a statement.
On Tuesday, Allen also told the Nevada Independent that the company is still determining how many rooms the Guitar Hotel tower in Las Vegas will have and what types of amenities it will offer.
The first guitar hotel opened in 2019 in Hollywood with 683 rooms at a cost of more than $ 1.15 billion.
The tower emits 12 beams of light, six on each side of the guitar, to mimic the neck and strings of the guitar.
The hotel also boasts a 13.5- acre pool, private cabanas with plunge pools, water sports, lazy rivers, canoes and multiple waterfalls. For nightlife activities, there are 30 restaurants, lounges and bars.
Another f our Guitar Hotels are being planned for other Hard Rock locations outside the U. S., Allen told the publication.
Real estate investment trust VICI Properties, a real estate investment trust that is acquiring the real estate beneath The Mirage site and will be the Hard Rock’s landlord, intends to spend up to $ 1.5 billion on renovations.
The p owerf u l Hard Rock brand is responsible for the prominence and money the company boasts today, analysts say. And COVID pandemic or not, the company is capable of spending big to get what it wants when it believes the timing is right.
The Seminoles bought Hard Rock International in 2006 from the Rank Group of Britain for $ 965 million. It was one of the largest purchases ever by an American Indian tribe.
“The Hard Rock is definitely one of the most known brands across the globe,” said Brendan Bussmann, a partner with Global Market
Advisors in Las Vegas.
Business is picking up
Bussmann said Las Vegas, while still recovering from the economic havoc wreaked by COVID, is seeing a pickup in key visitor sectors.
“The leisure customer has returned very significantly,” he said. “Meetings and conventions are in a rebound mode. The international customer hasn’t fully returned.”
The Seminole Indian Tribe, which operates six of Florida’s seven tribal casinos, including Hard Rocks in Hollywood and Tampa, is the third non- Nevada Indian tribe to enter the Las Vegas gambling market within the last year. It is the first snag a resort on the Strip, Bussmann said.
Last March, Connecticut’s Mohegan Indian Tribe opened the casino inside Virgin Hotels Las Vegas. The San Manuel Indian Tribe is buying the Palms Casino Resort.