Management deal: Mohegan Gaming to operate casino at new Virgin Hotels Las Vegas

Management deal: Mohegan Gaming to operate casino at new Virgin Hotels Las Vegas

  • Howard Stutz, CDC Gaming Reports
September 17, 2019 1:00 PM
  • Howard Stutz, CDC Gaming Reports
  • Other

Connecticut-based Mohegan Gaming & Entertainment will operate the casino at the planned Virgin Hotels Las Vegas, becoming the first tribal gaming company to manage a resort in the nation’s largest commercial gambling market.

The company, which is controlled by the Mohegan Indian Tribe, will partner with Miami-based Virgin Hotels on the rebranding of the off-Strip Hard Rock Las Vegas, which will close in February for more than eight months to transform into Virgin Hotels Las Vegas in 2020.

In an announcement Tuesday, Mohegan Entertainment said they’ve entered into a multi-year agreement with JC Hospitality, owners of the Hard Rock, to oversee the remodeling of the facility’s 60,000-square-foot casino space. Mohegan Entertainment will have to be licensed by Nevada gaming regulators.

Mohegan CEO Mario Kontomerkos said in an interview that the company will have input on “other entertainment aspects” that will be part of the casino. Virgin Hotels will operate the property’s 1,500 guest rooms, which will be part of Hilton Hotel’s Curio Collection.

“This new and exciting relationship brings together two ‘Best in Class’ organizations and continues the Mohegan Tribe’s tradition of blazing new trails for others to follow,” James Gessner Jr., interim chairman of the Mohegan Tribe, said in a statement.

Mohegan Entertainment owns the tribe’s flagship Mohegan Sun Resort in Uncasville, Connecticut and the Mohegan Sun Poconos in Pennsylvania. The company also manages the gaming operations for Resorts Atlantic City and two Indian casinos in Washington and Louisiana on behalf of other tribes.

Internationally, Mohegan is developing a planned $5 billion resort at Incheon International Airport in South Korea and is biding on a potential integrated resort license for the former Hellenikon International Airport near Athens, Greece.

However, the move into Las Vegas establishes the tribe’s presence near the Strip.

“Las Vegas has always been viewed in our minds as a potential target market,” Kontomerkos told CDC Gaming Reports. “This is an amazing opportunity to find partners that share our philosophy and are aligned with our vision.”

Kontomerkos did not discuss the structure of the management deal – a space-lease or revenue share agreement – and did not say if the casino would carry the Mohegan name.

“We have a lot of time and we look forward to many additional announcements,” he said.

Kontomerkos, who joined Mohegan in 2011 as CFO and was elevated to CEO in 2017, viewed the company’s entrance into Las Vegas as way to expand its reach play add additional benefits to its customer base. He said the addition of the data base from Virgin “offers a great opportunity to pump new blood” into the renovated property.

“When you look at our data base, our customers come from high density affluent markets,” Kontomerkos said. “Our customers would love the opportunity to come to Las Vegas and we will be able to offer them that choice.”

Added Kontomerkos, “Aligning the (Mohegan Gaming and Entertainment) brand with Virgin Hotels Las Vegas extends our growing reach into yet another legendary global entertainment capital. Together with Virgin Hotels, experience seekers all over the world will have the opportunity to partake in an extraordinary guest journey that only our strategic alliance can deliver.”

Richard Bosworth, CEO of JC Hospitality, said the agreement with Mohegan “expands our commitment to partner with best-in-class operators for the Virgin Hotels Las Vegas transformation.”

He added, “We are excited that Virgin Hotels Las Vegas will be (the tribe’s) first entry in the Las Vegas market.”

Tuesday’s announcement is the latest in plans for the project, which is located east of the Strip at Harmon Avenue and Paradise Road.

An agreement was reached with AEG Presents to assume the management, operations and booking for The Joint concert venue once property is re-branded.

Last week, Virgin Hotels said five companies would be the design partners to redevelop the property: Rockwell Group, Klai Juba Wald Architecture + Interiors, Studio Collective, Taylor International Corp. and McCarthy Building Companies.

In July, former Vdara General Manager Mary Giuliano was named managing director of the property to help oversee the transition. She is the first female managing director for a Virgin Hotels brand property.

Guest rooms, restaurants and public spaces at the Hard Rock – including the five-acre pool area and the casino – will undergo an extensive facelift. New nightlife venues and Virgin’s flagship restaurant, bar and lounge, Commons Club, will be added, along with 110,000 square feet of newly renovated meeting, event and convention spaces.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.