The casinos in Black Hawk, Colorado account for 70 percent of revenue generated in the state’s three historic mining towns that are allowed to offer gambling. One challenge has been a lack of hotel rooms, but that’s changing as the Monarch Casino Black Hawk prepares to build a 500-room hotel, spa and expanded casino floor. The old parking garage there already has been imploded to make room for the new facilities.
Chief Operating Officer David Farahi, whose family business took over the former Riviera Black Hawk casino in 2012, said initial renovations were “kind of the first phase in our $400 million resort development. Everything was taken down to the studs, from the buffet to the bar, to every slot machine, the carpet, the ceiling treatments, everything has been touched.” He added, “Our hotel project, our resort project, could be a catalyst for another wave of major investment.”
Colin Mansfield, an analyst in the casino division at Fitch Rating, said, “The real key here is the fact that you’re going to add 500 rooms to the market, and a bigger casino, so you’ll be able to serve more customers for longer periods of time.” He added Colorado casinos benefit from the limited gambling options in surrounding states, plus a growing economy; as a result, more rooms will equal more gambling.
Colorado’s gaming industry still has not surpassed its 2007 peak of $816 million. Revenue dropped 12 percent in 2008 as a result of the recession, and finally exceeded $800 million in 2015.
Farahi said he believes an upscale resort hotel will keep in the state some of the estimated $300 million Coloradans spend gambling elsewhere. He noted Denver is the third-largest feeder market for Las Vegas. Other casino operators are anxious to see if Monarch’s expansion actually will attract more gamblers, Farahi said.
Casino revenue is helping the city of Black Hawk to invest tens of millions of dollars to upgrade infrastructure, including roads and buildings. Mayor David Spellman said, “At this point it does seem like we’re in perpetual construction in Black Hawk either from the private side or the public side. I think it’s good. I think it shows that Black Hawk is a dynamic city.”
However, Mansfield cautioned, for the near future Fitch’s casino division has a generally negative outlook for regional gambling. “They believe there’s a difficult demographic shift going on right now, and just more competition in general from broader entertainment options and alternative forms of gambling,” he said. Spellman, a fifth generation Black Hawk resident, agreed, noting young people do not show much interest in gambling, so the so the city is adding more open space for hiking and mountain biking. “It’s an attempt to bring in those other amenities, which we lack right now, and therefore capture that younger demographic,” Spellman says.
