Las Vegas has a brand-new casino in the valley (NASDAQ:RRR)
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Red Rock Resorts (NASDAQ:RRR) opened its first casino in 15 years on Tuesday with the Durango Casino and Resort aimed squarely at the Las Vegas locals market. Notably, the Durango is the only casino in a five-mile radius of the southwest part of the Las Vegas valley.
The $780M Durango is Red Rock’s (RRR) first new locals casino since 2008, when the company opened Aliante in North Las Vegas. The 15-story Durango complex features a 83,000-square-foot casino, with 2,300 slot machines, 63 table games, and Stations Casinos-branded race and sportsbook.
CBRE Equity Research was impressed with a visit to the casino. "Our first reaction is that RRR nailed it," updated analyst John DeCree. "Management clearly knows what its core customer wants and delivered that with Durango Casino & Resort. The new casino brings much needed entertainment to a neighborhood that has been starved for action," he added. DeCree thinks Durango has all the hallmarks of a high-volume Locals casino and that could boost results for the parent company.
"While a strong opening day doesn’t necessarily guarantee success, it does provide a compelling preview into what the long-term upside could be for the new property. Although we still forecast Durango to ramp to a 20%+ ROI over the next 2-3 years, we wouldn’t be surprised if the property stabilizes much quicker than that and ultimately exceeds the ~20% return threshold."
Looking ahead, Red Rock Resorts (RRR) has six sites similar to the Durango under entitlement or development as the casino operator looks for strong growth in the years ahead.
RRR) gained 3.37% in morning trading on Wednesday and are up more than 9% over the last six weeks.
