Las Vegas land-based casino landscape has come a long way since 1931, when Nevada repealed the ban on gambling. Among many factors contributing to rising success, notwithstanding legislators and gamblers, are pioneer financiers and innovators which explored opportunities, visions, resources, and created foundations of the gambling capital of the world.
An equal amount of recognition is reserved for investors that followed and eventually took over legendary casinos. Driven by the synergy of players and technological advances, they’ve continued to build the legacy establishing a new perspective of the entertainment industry, setting the trend, as well as the benchmark for worldwide casino scene.
What is, then, to be expected when a renowned innovator and trendsetter, an entrepreneur at large and business alchemist becomes the new owner?
In taking over the Hard Rock Hotel and Casino in Las Vegas, Richard Branson is about to provide the answer.
The acquisition is part of large expansion plans of Virgin Hotels in America. In the span of three years, new inns will be opened at Dallas, Nashville, New Orleans, New York City, Palm Springs, Silicon Valley, and Washington D.C., in addition to already operational Chicago and San Francisco.
Having in mind an English billionaire’s achievements thus far, and considering comment in the statement announcing takeover — “Las Vegas has long held a special place in my heart… I’m really looking forward to painting the town Virgin red” — it shouldn’t be surprising to see hospitality and gambling reinvented, at least to a certain extent.
Until the rebranding of the icon into Virgin Hotel Las Vegas is complete, though, we can only wonder and ponder so much as we take an additional look into all elements of this story.
From Hard Rock Café to Casino
The hotel resort near the Las Vegas Strip in Paradise, Nevada, was established by Peter Morton, co-founder of the Hard Rock Café, in 1995. Featured as the first “rock ‘n’ roll hotel and casino” in the world…
Hard Rock Hotel and Casino pack an enticing mix of relaxation, entertainment, and convention space in the best manner of customary “play where you stay” philosophy.
Before Branson stepped in, the site went through three expansions (1999, 2007, and 2010) and ownership group change (2006). All of them played part in shaping the venue into the property that nowadays occupies 16.7 acres.
Three hotel towers offer customized and one-of-a-kind accommodations in 1,500 guest rooms, including suites and penthouses. Guests can further enrich their sensory feast at a Tahitian-style beach and a pool, an approximately 21,000 square-foot spa and beauty salon, and in 8,000 square-foot fitness center.
Full-service restaurants are to satisfy even the most demanding tastes of Japanese, Mexican, Asian, and American dishes, with the addition of classic pub, juice bar, and all-present pizza and Dunkin’ Donuts eateries.
Whether the visitors seek new look for the night or something more durable, retail stores provide anything from designer clothing and luxury jewelry, up to lingerie store and a tattoo parlor.
The exquisite party-life scene includes The Joint rock club, plus Vinyl and Vanity nightclubs, and goes under the unofficial motto “you have the rest of your married life to be good”.
On the business end, approximately 80,000 square feet of banquet, meeting, and event facilities host a number of the annual event on a regular basis.
However…
The crown on this Las Vegas jewel is the 60,000 square-foot casino.
Uniquely styled, the brick and mortar gambling hall consists of 75 tables (five for poker) with close to 600 slot machines.
The high limit gaming area, a lavish enclave for high-rollers, features blackjack and baccarat tables, as well as video reels and video poker games.
The in-house sportsbook is hallmarked by signature trading stations, mobile wagering tables, and multiple HDTVs, all set in the casual sports bar, in conjunction to sports wagering apps to be downloaded and used on any smartphone device.
As Virgin Hotels President and CEO Richard Bosworth told Las Vegas media, renovations undertaken by new ownership group are expected to begin after 2020 Super Bowl and conclude in following November, after the U.S. elections.
The venue will cease operations during the second and third quarters of next year, with the strategy to steer away from the political season while focusing on the property-wide project of a major rebranding.
Updates will see practically every aspect of Hard Rock Hotel massively overhauled, including the expansion of the 5-acre pool deck. The casino is to be fully renovated.
Virgin Hotels is determined to keep more than 2,000 employees on board during the reconstruction, offering compensations to all employees and allowing them to get back to work in current positions without having to go through reapply process.
Beyond Rebranding: High-Speed Railroad
At this moment, the total cost of the operation exceeds $200 million. Considering the previous estimation set the price tag at $150 million, it would not be surprising to see the final budget way above the current projection.
Particularly in lights of Virgin Group brand plans for Las Vegas. Namely, Richard Branson is looking to leverage the presence of Virgin Atlantic, his international airline, and Virgin Hotels with…
The high-speed passenger train service.
Incorporated under the umbrella of Virgin Trains USA, the only privately owned and operated intercity passenger railroad in America, the intentions are closely related to hotel remodeling.
As Las Vegas media reports, Branson purchased Brightline, the Florida train company that previously acquired XpressWest “which has worked since 2005 to acquire the permits necessary to build a $7 billion, 185-mile dual-track high-speed rail line between Victorville, California, and Las Vegas”.
Terms of the deal are not disclosed. Brightline — currently transitioning to Virgin Trains USA — “has indicated it could build the Southern California line for less because of rail industry relationships it already has”.
Current business operations are focused on the inter-city rail system in Florida that runs between Miami and West Palm Beach on 129-mile track. The railroad is to be extended 40 miles to connect it with an intermodal facility in the new South Terminal at Orlando International Airport, in addition to being upgraded to operate high-speed trains.
In April 2019, Virgin Trains USA closed on $1.75 billion in private activity bonds underwritten by Morgan Stanley, purchased by 67 private investors, bringing the total investment in the sunshine state to $4 billion. Construction is to begin shortly, with completion planned in 2022.
On the other side of the country, Virgin Trains USA is transitioning permits for the high-speed passenger train project in Nevada and California. The idea behind this western prong is to transport people to Las Vegas by plane and then to Los Angeles by train.
Virgin Atlantic has two flights a week between Manchester, England, and McCarran International, the primary commercial airport serving the Las Vegas Valley, with six weekly flights connecting it to Gatwick International Airport, London.
Short of building the railway starting in Victorville, situated 85 miles north-east of the City of Angels, plans include the construction of Las Vegas train station “adjacent to the Vegas Strip,” with aspirations to develop it into an intermodal transportation hub.
Visiting the kickoff of Virgin Trains USA in Miami in April 2019, Branson said that “there’s no question we send a lot of people to holiday in Vegas on Virgin Atlantic and a lot of those people want to go on to Los Angeles”.
Losing and Finding Virginity
While the project as a whole will surely contribute to commuting between two points, when considered in conjunction with Hard Rock Hotel and Casino takeover — it may provide a boost for gambling in Las Vegas.
On one hand, the situation resembles the 1940s and 1950s, when the flood of Los Angeles gamblers and players from all over America increased demand generation for a variety of games to choose from in the Sin City.
The new railroad might provide more fluctuation in the city (always a valid gaming opportunity) and offer an expedient mean of transportation for all aspiring patrons.
This time, though, it happens on the heels of nationwide gambling legalization wave in America reshaping existing legal framework in the most advanced and matured way, in a technologically integrated world on a scale we’ve never seen before — all of which can be interpreted as an additional positive sign.
More than that…
The man behind the operation has surely proved to be an extraordinary business visionary, enough to be knighted by Buckingham Palace in 2000, for “services to entrepreneurship”.
Richard Branson’s track record is nothing short of amazing.
What started as a mail-order record business in the 1970s quickly expanded into Virgin Records, music label, and Virgin Megastores, entertainment retail chain; Virgin Atlantic, an international airline company followed in 1980s, with Virgin Trains in 1990s, and later Virgin Fuels, as a way to respond to climate change.
Virgin Mobile, a wireless communication company, was established in 1999. Virgin Galactic, a commercial spacecraft company offering suborbital spaceflights to tourists, was founded in 2004, with backings from Paul Allen, Microsoft co-founder.
Virgin Comics, an entertainment company with a goal to create new stories and characters for a global audience, was launched in 2006. Virgin Media, a telephone, television and the internet services provider, emerged in 2007.
Virgin Healthcare was incorporated in 2008, providing for a chain of health care clinics offering conventional medical care in the UK. In 2010, Virgin Hotels commenced its operations.
This corporate highlight reel is only to provide a glimpse into the diversified business eco-system nowadays consisting of over 400 companies operating under Virgin Group aegis.
A number of companies have changed ownership structure in the meantime, some of them seized to exist, but the core business remained intact.
Branson turned out to be not shy when it came to trimming his empire, just as he was not afraid to be involved in unsuccessful business ventures (carbonated soft drinks, an online automotive retail company, publish and clothing industry).
As of 2019, a net-worth of this adventurer at large and a serial philanthropist, a man looking forward to painting Las Vegas into his colors, is estimated to be close to $5.3 billion.
Positive Chain Reaction
When Branson’s quite diversified background and generalist approach to business are taken into account, Virgin Group indeed possesses the necessary ingredients to positively reflect on gambling scene of Nevada.
Which is another good thing since Las Vegas gambling is on the rise and might welcome new opportunities to increase it even further.
In 2018, total land-based gambling volume in the city was $144.51 billion, according to H2 Gambling Capital, of which 3.65% was generated by sports betting.
Only for the second time in the last eight years, the turnover went above the $140-billion line (the other one was in 2012, exceeding it for a slim $234 million). The healthy spike in Las Vegas handle lasted for a couple of years (2004-2007) and ended in 2008-2009; the line remained rather flat until last year.
If H2 Gambling Capital estimations are to be proven correct, Las Vegas’ 2024 turnover will be close to 2005 handle.
The recovery curve is steady but also slow, thus it may benefit from large capital investments which Virgin Group involvement surely represents.
On the other side of the spectrum is a potential social impact of the whole endeavor. If it is to be evaluated by the expected outcome in Florida, more good things are coming to Las Vegas and Nevada.
Extending the railroad to Orlando and upgrading it for high-speed trains is to create additional “10,000 jobs, and is anticipated to generate more than $650 million in federal, state and local tax revenue”.
According to Patrick Goddard, Virgin Trains USA President, company is “revolutionizing train travel [through] a transformational project that generates sustainable increased economic activity, reduces traffic congestion and benefits the environment”.
Hopefully, the effects won’t stop there.
Considering Branson’s experience with the services industry and healthcare, one might have big expectations on new gambling hall in terms of…
Multimedia, gamification elements, innovative and highly professional staff on the casino floor, and above all, players being well taken care of and protected.
To fully grasp potentials of his intentions, we will have to wait for Virgin Hotels Las Vegas to open in late 2020, and take it from there.
One thing is for sure — Sir Richard Branson knows how to dream big.
With only responsible patience at our disposal, for the time being, knowing all too well that “in dreams begin responsibilities,” we are looking forward to the day when we just might win a spaceflight in the casino game.
