A Southern California tribe is set to close on its $650 million acquisition of the Palms Casino Resort on Friday, becoming the first Native Americans to own a Las Vegas casino.
The Nevada Gaming Commission Thursday gave the green light to the San Manuel Band of Mission Indians to take over ownership of the Palms from Red Rock Resorts, which does business as Station Casinos. Commissioners welcomed the tribe to Nevada and said they’re excited about what it might bring to Las Vegas.
The signoff and closure of the deal come the same week the San Manuel Tribe opened its 432-room hotel at Yaamava’ Resort & Casino at San Manuel in Highland, California. A casino expansion was completed last summer to culminate growth that started when a bingo hall opened on the reservation in 1986. It’s all part of a $760 million expansion that will be completed in 2022 with an entertainment facility.
“There are no words to describe what a privilege it is and how humbling it is to be before you today,” Palms General Manager told the Commission. “My role as general manager is to assemble a powerful team, get 1,200 Nevadans back to work, reopen the beautiful Palms, and bring it back to life.”
The Palms will not have access to Stations Casinos’ database to attract customers. Kiser Murphey said the tribe, however, plans to implement a strategy to fill the Palms by attracting its customers from Southern California, along with tourists and local Las Vegans.
“We’re putting together a very strong plan,” Kiser Murphey said. “Locals are certainly an important part of it. As you know, 67% of Las Vegas visitor volume is coming from Southern California. Yaamava’ is an extremely successful resort and as wonderful as it is, Las Vegas is still Las Vegas. We hope to provide a home-away-from-home for Yaamava’ customers. With the restaurant and entertainment program, we will be appealing to tourists. We’ll be building a three-part marketing strategy with our team, who we’ll be hiring in the next few weeks.”
Kiser Murphey said the tribe’s properties “are very different” and that they will be targeting many Southern California visitors. They will also focus on the rest of the West Coast, Arizona, and Utah. The Yaamava’ reported room rates were starting at $600 on weekdays and $800 to $1,000 on weekends to target VIP clients.
“We will be pricing according to market conditions and our room product,” Kiser Murphey said. “We’re working on that now, launching our website. I don’t think our rate strategy will be very much tied to theirs (in Southern California).”
Tribe CEO Laurens Vosloo said the big difference is the limited number of rooms at Yaamava’ versus demand and 150,000 rooms in Las Vegas. He called the Palms a “high-quality near-Strip asset” priced below replacement cost.
“We believe Las Vegas is the gaming mecca of the United States and is poised for a rebound as we have seen over the last six months, and we’re very excited about being a part of this rebound,” Vosloo said. “The Palms represents the next phase of San Manuel’s long-term diversification strategy and has the potential to be a generational asset for the tribe.”
Kiser Murphey called it a “beautiful property,” after a nearly $700 million remodel by Red Rock Resorts prior to the pandemic’s closing the property in March 2020.
“Suites in this property are like none in any other city,” Kiser Murphey said. “It’s important to bring this product back to Las Vegas.”
The Palms has a 100,000-square-foot gaming floor with more than 1,400 slot machines and 55 table games, 1,300-plus hotel rooms, 23 restaurants, and a 14-screen movie theater. The plan is to reopen as much as possible in the beginning.
Kiser Murphey said the property has started reaching out to former Palms employees by launching a website and will be advertising for other potential employees in early 2022. The Palms has a team of 23 in place and will grow to 1,200 to 1,400.
“In this labor market, we’re hoping 500 to 600 employees come back,” Kiser Murphey said. “We will secure that workforce first by restoring their benefits and seniority; we’ll hire from the community after that.”
The tribe also announced plans to bring in William Hill, which is owned by Caesars Entertainment, to operate its sportsbook. It will be updating the book’s technology.
The tribe will use $200 million from its sovereign wealth fund and $550 million in a revolving line of credit. Some $100 million is targeted for working capital for the reopening.
The one issue that arose during the hearing involved San Manuel Tribal Chairman Ken Ramirez. Commissioners brought up the fact that he had a previous arrest for drug possession and a probation violation more than a decade ago. Ramirez is not part of the licensing process and the control of the casino falls to the San Manuel Hospitality & Gaming Authority, of which he is not a member. A letter to the Commission said Ramirez will not interfere.
The Palms Place condo tower has remained open during the casino’s closure and more of its facilities will be brought back online.
