Inside Gaming: Sahara Closing Marks End of Era, Ho Family Reconciliation Means Good News for Macau, Bad News for Tabloids
The Sahara hotel and casino in Las Vegas announced that it will be closing in May, bringing an end to one of the last of the Rat Pack's haunts and adding itself to a long list of failed projects on the strip's north end. It was a better week for icons of Macau gaming. The Ho family has been involved in a bitter feud over their $3 billion gambling empire. The family reached a deal to end the fighting and keep the battle out of court last week, which means that Asian tabloids will have to find a new family to stalk.
Sahara to Desert Las Vegas
The iconic Sahara hotel and casino is shutting its doors after nearly 60 years. Executives, who announced last Friday that the property will close on May 16, said, "the continued operation of the aging Sahara was no longer economically viable." The Moroccan-themed casino on the north end of the Las Vegas strip opened in 1952 and is the last Rat Pack-era hotel still standing.
Sam Nazarian, CEO of SBE Entertainment, which owns the Sahara, said the company is still looking into ways to redevelop the Sahara and use the 18-acres it occupies. In a statement given to the press, the company said, "We are working with our partners to assess a variety of options for the property, including a complete renovation and repositioning." Gaming insiders have said that SBE was unable to find the financing necessary to act on its original plans to implode parts of the hotel and renovate it.
SBE Entertainment took over the 1,720-room hotel and 85,000-square-foot casino in 2007. SBE and partner Stockbridge Real Estate Group, a private equity firm, bought the property from the family of deceased gaming mogul William Bennett in a deal valued between $300 and $400 million.
The Sahara couldn't compete in an ailing economy and its older hotel rooms weren't in high demand because of the glut of new hotel rooms on the Las Vegas market. The Sahara closed two of its three hotel towers in 2009, but the cuts weren't enough to streamline the property. A Middle East-themed casino no longer conjured the same images of luxury as it did in the Casablanca era. And let's face it, you don't need to bring sand to the desert.
The Sahara faced an uphill battle trying to attract new customers when the properties around it failed one by one. The neighboring Riviera hotel and casino is in bankruptcy, and Boyd Gaming's Echelon project was paused in 2008 and is still just an empty dirt lot. And construction was halted on the Fontainbleu when it went bankrupt in 2009, leaving a half-built skyscraper. Gaming analysts are concerned that another shuttered property will spell disaster for the nearby Stratosphere Hotel and Casino and cause further problems for the already bankrupt Las Vegas Monorail.
SBE has a loyalty rewards partnership with MGM Resorts International. Nazarian said the company is working with the MGM to accommodate both displaced customers and the 1,050 employees who will be out of a job in May. "We will work together to try to find jobs for Sahara employees in cases where there are open positions in MGM Resorts properties," he said. "We will also work with MGM Resorts to accommodate Sahara hotel and group customers with reservations following our closure."
Hos Find Class, Settle Dispute Privately
What do you get when you combine a geriatric billionaire, 16 children, four wives, and the world's biggest gaming fortune? Throw in some television cameras and you've got a drama that rivals Charlie Sheen's winning ways for coverage in China. But the media will need a new salacious story now that 89-year-old billionaire Stanley Ho put an end to the family feud and called off a lawsuit against two of his daughters, Pansy and Daisy.
Ho issued a joint statement with other family members last week, saying the dispute had been "fully resolved." According to the statement, Ho personally filed a notice on Feb. 21 dropping the lawsuit that he had filed the previous week against two of his 16 children and two of his three ex-wives. The statement also said that the entire family reached an agreement about the distribution of Ho's assists on March 8. "We have agreed that we will work together and continue to develop the gambling business in Macau founded by Dr. Ho and operated by the Ho family to enable it to flourish," it said.
Ho had filed a lawsuit against several members of his family disputing the way control of his stake in casino operating company SJM was distributed to his second and third wives and his children with them. Ho's lawyer said that his client had been misled into signing over control of some of his assets while he was hospitalized following brain surgery in 2009. Inside Gaming brought you that installment in the drama a few weeks ago.
The end of the lawsuit is good news for the Ho fortune, estimated at around $3.1 billion. Stanley Ho and his associates built their empire during the 50 years that SJM held a government-granted monopoly over gaming in Macau. The government didn't renew the monopoly when it expired in 2001, allowing foreign gaming operators to enter the market. SJM still takes in more than half of the gaming revenue in Macau. The company operates 17 casinos, four slot-machine parlors, two other hotels and an airline in Macau. Shares of the stock, traded on the Hong Kong exchange, have fallen steadily since the beginning of the year amid all the family drama.
Casino analyst Aaron Fischer told Bloomberg that, "This should remove the overhand for SJM shares, which have been very weak since the dispute began. It is in the best interests of all Ho family members that this matter is finalized."
The statement issued by the Ho family said they reached an agreement through "mutual understanding and mutual accommodation." Good to know that the threat of losing billions of dollars can remind a family of what's really important.
Forbes has more on the story.
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