Thursday, February 5, 2009

Will I Have to Make the Bed?

Station Casinos is reportedly considering filing for bankruptcy. I'm reportedly considering whether to be troubled by this news, as Station Casinos just so happens to own the Red Rock Casino in Las Vegas, where I plan to stay on January 28-29, 2010, as I compete for the National Handicapping Championship. Rather than a comfy stay as a pampered guest in the lap of luxury, I am picturing stained sheets, threadbare carpets with cigarette burns, and day-old room-service leftovers festering in the hallway.

But realistically, a bankruptcy filing would be a capital-structure reorganization to get Station Casinos out from under its massive debt load and should not have any meaningful impact on the day-to-day operations of the facility. In the service industry, any competent management team knows that cutbacks are dangerous and can quickly lead to a no-return downward spiral in revenue. Who knows, the potential bankruptcy is supposed to be a "prepackaged" arrangement, which typically moves quicker than an out-of-the-blue filing, so Station Casinos may well have already emerged from bankruptcy come next January.

So while my fears of the Red Rock deteriorating into a roach motel were stated tongue-in-cheek, the turn of events goes to show how times have changed. As the Wall Street Journal reported, just a couple years ago Station Casinos sought to "carry out ambitious expansion plans to upgrade its profile from middling casinos for Las Vegas locals, to luxury properties that lured out-of-towners." Surely, landing the NHC was part of those expansion plans -- wonder if either side will have qualms about renewing the deal when the time comes.

1 comment:

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