The Palms Casino Resort is celebrating two years since it reopened as the first Native American-owned property in the tourist corridor of Las Vegas and transformed itself to cater more to gamblers and an older crowd.
The resort a mile west of the Strip was purchased for $650 million by the southern California-based San Manuel Band of Mission Indians in 2021. It will soon go back to being the only tribal-gaming entity operating in Las Vegas after the Mohegan tribe exits as operator of the Virgin casino later this year and the Seminole Tribe shutters the Mirage in July.
The Palms general manager, Cynthia Kiser Murphey, was approved for a gaming license Thursday by the Nevada Gaming Commission. She is the former president and COO of the New York-New York Hotel & Casino.
“The Palms in the last two years and 18 days has been working to bring locals, visitors, and San Manuel customers to our wide array of restaurants, vibrant gaming floor, and Pearl Theater,” Kiser Murphey told the commissioners. “By the end of this year, we will have had 201 performances in the Pearl Theater and it’s growing every day. We’ve been very happy to have the community support us.”
Kiser Murphey said they’ve been working to improve the West Flamingo Road corridor with cooperation from Clark County and state authorities to clean up the neighborhood and create a pedestrian flow.
“We’re unique property, just off the Strip and catering to about half locals and half visitors. In situations like F1 or the Super Bowl, you’re just minutes away from all the action, but not necessarily in the traffic so you can get in and out. We’ve been getting busier and busier every month and building our reputation. Reopening a property that had been closed for two years, it has taken some time to build up. Getting some large group events has been very important to the Palms.”
Commissioner Rosa Solis-Rainey commented that the Palms seems to have gotten away from its past as a nightlife hotspot for the 21 to 30 crowd.
“We’re really working toward a gaming-centric customer,” Kiser-Murphey said. “San Manuel has a very successful casino (in southern California) and loyal database, so we’re welcoming them to Las Vegas. We’re pivoting our assets to the older crowd, but still providing something for everyone.”
In an interview with CDC Gaming, Josh Swissman, founding partner and managing director for GMA Consulting, said it takes time to change direction.
“Cynthia is an expert in that field with that type of customer, given the time she spent at New York-New York,” Swissman said. “It’s not something you can turn on a dime, but she and the team have been methodical and thoughtful about how to transition their primary customer base from a younger group to more older gaming-centric ones. They’ve done a good job at it, but there’s always room for improvement. She has her sights set on growing that base even more.”
Swissman said what helped make the Palms attractive to the San Manuel Band of Mission Indians when they bought it was that they could “extensively leverage” their southern California database. He said they’re starting to “see the fruits of those efforts and that cross-selling from southern California to Vegas.” He added they have room to grow.
“I can’t imagine they’ll invest capital to change a lot, because the place was in essence brand new when they bought it. What I see is the continuance of efforts she has put in place over the last two years — remaining focused on the core customer base and continuing to drive cross-utilization between southern California and Las Vegas to continue to grow top line revenue. I imagine they have a pretty good operating model this far in.”
Swissmann pointed out the multi-million-dollar renovations underway at the Rio across Flamingo Road from the Palms, which will help both properties with “the gravitational pull” to the west, because it is hard to pull people off the Strip. “To the extent there are more reasons to do that, I think that will benefit the Palms in the long run as well.”
In recent earnings calls, executives of locals casinos pointed out the competition from properties like the Palms in offering promotions that are taking away their customers.
Swissman drove past the Palms on Saturday and saw a billboard promoting a car giveaway, effective in luring the older core-gaming customers who are savvy about and motivated by promotions.
“It makes sense for the Palms to be in that mode,” Swissman said. “They’re a bit away from where a lot of locals live, so it takes a little more to pull them away from closer casinos. That’s the nature of the business. You need to get someone to go past a competitor to your place, so you have to give a compelling reason to do it. The Palms is a great facility that delivers great service but the promotions are that extra incentive to drive past a Boyd or Stations property.”
The Palms is one of the few locals casinos that still offers a buffet, including a twice-weekly all-you-can-eat lobster spread that’s popular with locals.
“With all ramp-up periods, sooner or later there’s a point of improved performance and profitability,” Swissman said. “Sometimes you have to change ownership hands a couple of times to get there, but with San Manuel and their experience in operating in Southern California, they will get there. They’ll figure it out.”
The San Manuel Band of Mission Indians has also provided $4 million to local charitable organizations.
“They’ve made an impact,” Commissioner Solis-Rainey said at the licensing meeting. “The amount of their contributions alone shows the level of commitment to the community and I’m very appreciative of that.”
In response to underreported revenue at the property, Dan Habel, vice president and general counsel at the Palms, told the Commission it was a personnel issue, since the finance team had been rebuilt since it reopened. All of the tax implications related to that have been corrected, he said.
