Tilman Fertitta Remains Undecided on Las Vegas Strip Casino Ventures; Aims to Acquire Golden Nugget Company Holdings
Tilman Fertitta hasn't committed to going ahead with plans to establish a casino hotel project on a 6.2-acre plot at Las Vegas Boulevard and Harmon Avenue, which he purchased last year for $270 million.
After appearing before the Nevada Gaming Control Board (NGCB) on Wednesday, Steven Scheinthal, a vice president with Fertitta Entertainment, informed The Nevada Independent that escalating inflation is causing construction costs to soar, making it challenging to prosper with the project to Fertitta's standards.
"We're looking at our options and trying to figure out what the development process will necessitate," Scheinthal told Howard Stutz of the Independent. “Tilman can, at some point, decide whether he wants to proceed or not.”
Last October, the Clark County Commission authorized Fertitta's plans to erect a new gaming establishment adjacent to MGM Resorts’ CityCenter. Since then, some businesses on the land have been displaced, while a few are still hanging on - their leases were terminated after Fertitta purchased the property.
Fertitta's Wynn Stake May Be the Culprit
High inflation, resulting in increased labor and materials costs, is a possible explanation for Fertitta's tardiness on his inaugural Strip project.
Another possibility could be the 6.1% stake Fertitta took in Wynn Resorts (NASDAQ: WYNN) last year, which made him the second-largest individual shareholder in Wynn. Notably, this position was disclosed just days after the Clark County Commission approved Fertitta's plans to introduce a casino resort to the previously mentioned location.
This investment could imply that Fertitta may, in the future, intent to acquire the Encore operator. Under this scenario, Fertitta might sell the Strip acreage he purchased and utilize the funds from such a sale to partially finance a Wynn acquisition.
He hasn't made any public comments about his intentions to acquire Wynn, and for now, this investment is considered passive. However, Fertitta has a record of taking passive stakes in companies only to later acquire those firms outright.
Golden Nugget Holding Company
Apart from the speculation surrounding Fertitta's Strip plans, the Nevada Gaming Control Board (NGCB) has recommended approval for a holding company consisting of the Golden Nugget casinos in downtown Las Vegas and Laughlin, Nev.
The Nevada Gaming Commission (NGC) is set to make a conclusive decision on this matter in two weeks. It's unclear whether this decision signals a public listing for the holding company, nor is it clear whether other Golden Nugget casinos will eventually be incorporated into this corporate structure.
Besides Nevada, the other Golden Nugget casinos are located in Colorado, Lake Charles, La., Atlantic City, NJ, Biloxi, Miss., and there's one on the way in Illinois.
