LasVegasMichael discusses the businss model of third party licensing and leasing of specific areas of a casino to everything from retail and restaurant to poker and sports books.

In today's article, we will discuss the usage of third party management and licensing in Las Vegas, and how this business model is truly nothing new to this city. It allows for continued development and improvement of the player experience in the city's many casinos. A brief bit of the history of third party management in Las Vegas will be discussed as well as how the future of the Vegas economy may very well be its ability to welcome this type of business model.

Recently, it was announced that Cantor Gaming will be managing the poker room and sports book at the Palms Casino Resort. Cantor currently runs the sports books at Cosmopolitan, Hard Rock, Venetian, Palazzo, Tropicana, M Resort, and Plaza in Downtown Las Vegas. This unique partnership relives the need for the casino to manage their sportsbooks and upkeep the facility with the newest technology, something that Cantor invests strongly in. With the recent aquisition of the Palms sports book and poker room, Cantor Gaming is quickly growing as a formidable third party competitor in Las Vegas. Cantor was one of the first companies to receive intrastate licensing for online betting in Las Vegas, and now offers a mobile app on the Android platform for mobile gaming (currently in use at the Stadium Sports Book at Palazzo). These rather new developments show that Cantor Gaming is quickly building its ground share in Las Vegas and plans many more partnerships in the future, with its continued growth.

The idea of using a third party company to manage different areas or sections in a casino is not a new concept. Even when taking into account poker, for many years, the poker rooms were not run by the casinos at all. They were run independently and the operators paid rent and a percentage of the profits to the casino. At one time, many now famous poker players actually managed the rooms around Las Vegas, including Doyle Brunson. This business model faded quite a long time ago, but continues to be seen most commonly through specialized areas such as sports books and retail/restaurant.

Ever wonder why comps earned at certain properties cannot be used at very specific restaurants? This also applies to gift cards that are issued by nationally recognized chains (like Starbucks and California Pizza Kitchen). More often than not, it is due to the management or special lease agreements that these venues have with the casinos. At Mirage, for example, poker rooms comps can be redeemed at all restaurants on the property, except for BB Kings. That restaurant has a separate lease that does not permit the accepting of certain comps from the casino. Conversely, the California Pizza Kitchen, also at Mirage, does not accept CPK Gift Cards because the franchise is not operated by the CPK company itself but by the Mirage. A recent trend in Station casinos was to switch all proprietary coffee shops located on property (known as Grand Café) to the large restaurant chain CoCo’s and Denny’s. This experiment was not successful, however, and all former Coco’s have since been converted back to the Grand Cafes (though some Dennys still exist in certain properties).

With the economy of Las Vegas slowly recovering from the large downswing a few years ago, the idea of leasing out certain areas of a casino to third party is quite attractive to the powers that be. There is significantly less risk and capital needed when the areas are managed by a third party, and the casino is able to save on things such as payroll, physical upkeep, and constant technological advances. Las Vegas will constantly be changing and finding new ways to not be more profitable, but to improve the player experience on many levels. It will be very interesting how this classic business model continues to develop at the years progress.

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--LasVegasMichael