You probably haven’t heard of Landry’s Restaurants, but you have heard about some of the many restaurant chains and entertainment facilities they own. They’re the parent company for Joe’s Crab Shack, the Rainforest Café, The Crab House, Landry’s Seafood House, the Chart House and Saltgrass Steak House. They also now own aquariums in Galveston Texas, Houston Texas, and Denver Colorado, and quite a bit of additional property in Galveston, including the convention center and Pleasure Pier.
Diversification isn’t anything new in the restaurant business, and certainly one thing that all of these restaurants have in common is an entertainment theme, so the synergy is pretty natural. But today Landry’s announced that it’s branching out in a rather serious way: It’s buying the Golden Nugget Casino in Las Vegas.
One of the stated goals that Landry’s Restaurants Inc. shared when they acquired the Denver Aquarium was that they were going to make it more “fun” and “entertaining”, and they have indeed added more food outlets (no surprise) and non-aquatic animals like tigers to the facility, making it a more engaging destination. With their acquisition of the Golden Nugget, can slot machines be far behind, however?
Skeptical of what I say? Consider this: Landry’s CEO Tilman Fertitta is quoted on the Reuters Newswire as saying “we love the brand name…[and we’ll] use the brand for other casino projects.” Landry’s also now expects to develop casinos in Atlantic City, New Jersey and Biloxi, Mississippi…
The rise of so-called riverboat gambling in the United States seems to make this an inevitability, though since there’s no river in Denver, that particular approach seems like it would be difficult. However, there are plenty of Native American reservations in Colorado and you won’t be surprised to find out that they’re all now just big Indian Casinos.
And if the name Fertitta is familiar, it’s because the family controls the Station Casinos, Inc., a Las Vegas property that’s ostensibly aimed at local Las Vegas residents rather than the tourist trade. Given that the Golden Nugget was purchased only last year by Travelscape.com founders Tim Poster and Tom Breitling, one can only assume that the books aren’t in very good shape and that far from being a bargain at $140 million, it might just be the crab without the golden claw.
One way or another, the overlap between entertainment and dining has become considerably more pronounced in the last decade or so and it’s no surprise that large restaurant firms are now moving into the next logical facet of entertainment, gambling. It will be interesting to see how this plays out in the next few years…
Reuters has a very interesting followup on this story as the Landry’s purchase makes the rounds of news media:
“Gaming has become more acceptable as an entertainment source similar to going to the movies or out to dinner,” said Marc Falcone, a stock analyst at Deutsche Bank.
Today, gaming revenue accounts for just over half of a casino operator’s bottom line, compared with 70 percent 10 years ago, said Frank Fahrenkopf, chief executive of the American Gaming Association.
“The dynamic has changed,” he said, noting that more money is now made on hotel rooms, food, and things like golf course fees.
The business is certainly booming, as publicly-traded casino operators report record earnings and casinos run by Indian tribes continue to multiply.
Last year, 26 percent of U.S. adults gambled at a casino, up from 20 percent five years ago, according to study commissioned by casino operator Harrah’s Entertainment Inc. (HET.N: Quote, Profile, Research) .
Houston-based Landry’s, operator of chains like Rainforest Cafe and Joe’s Crab Shack, agreed to pay $295 million in cash and debt for the Golden Nugget, considered the premier property in downtown Los Vegas.”
Where is the Rainforest Cafe located in Denver, CO? I am not able to find their phone# or address.
As far as I know, there’s no Rainforest Cafe in Denver. The closest I know of is in Kansas City, actually.