Red Rock Resorts, doing business as Station Casinos, on Tuesday agreed to pay 2.5 million to buy the Palms Casino Resort.
TPG Capital and Leonard Green & Partners currently own the Palms, with original owners the Maloof family holding a 2 percent stake in the casino that was built in 2001.
Red Rock Resorts CFO Marc Falcone said the deal gives the company a top asset in the Las Vegas gaming market.
“With its appeal to both Las Vegas residents and tourists alike, the Palms is a hybrid gaming property that is uniquely positioned to benefit from the strong economic trends in Southern Nevada and record visitation levels in Las Vegas,” Falcone said in a statement.
Red Rock Resorts said it expects to generate an additional $35 million in gross earnings during its first year owning the Palms.
The casino is located about a mile west of the Las Vegas Strip on Flamingo Avenue, has a 95,000-square-foot casino, 710 hotel rooms, a race and sportsbook operated by CG Technology, a 60,000-square-foot events area, the Pearl Theater, several restaurants, and a movie theater chain, among other amenities.
Developer George Maloof and his family spend $265 million to build the casino and positioned it to Las Vegas locals as well as tourists.
The Great Recession brought on financial hardships, forcing the Maloof family to restructure, with TPG Capital and Leonard Green & Partners becoming its majority owners in 2011.
Red Rock Resorts said the deal awaits regulatory approval and should be completed during the third quarter, after a federally mandated waiting period expires to ensure compliance with antitrust laws.
The deal helps Station Casinos to stave off recent acquisitions by Boyd Gaming, which competes directly with Station Casinos in the Las Vegas locals market.
Boyd Gaming in April agreed to buy the Aliante in North Las Vegas for $380 million and both Cannery casinos in the Las Vegas Valley for $230 million. The Aliante originally was a Station Casinos property, lost when the company resolved bankruptcy issues.
Boyd Gaming CEO Keith Smith in April told analysts economic growth has diversified the local economy, and record tourism numbers have boosted local employment, making the locals market more lucrative.
North Las Vegas in particular is experiencing an economic boom and is to be home to the Faraday Future electric car plant, among other developments.
Smith says such developments make the North Las Vegas segment of the locals market particularly promising. The Nevada Gaming Control Board indicates gambling revenues have grown by 2.6 percent so far this fiscal year, outpacing the Boulder Strip’s 1.6 percent growth, while Las Vegas Strip gaming revenues declined.
For Red Rock Resorts, buying the Palms puts it in the position of owning another casino targeted for organizing by the Culinary Union, which has been trying to organize Station Casinos workers.
“The workers at the Palms have made it clear that they want a fair process to choose whether to unionize. We will continue to work with the Palms employees until they achieve their goal,” union Secretary-Treasurer Geoconda Arguello-Kline said in a statement.
