Texas remains behind the eight-ball when it comes to gambling. As long as it bans most gambling in the state, billions of dollars that would have gone to Texas continue to flow to other states.
Texas company secures loan for massive Vegas resort
Texas-based investors are spending billions of dollars on gambling ventures in other states that would probably be spent in Texas if gambling were legal. The most recent example is Texas company Koch Real Estate Investments working with Fontainebleau Resorts. The companies are working together to complete the Fontainebleau Las Vegas resort and casino project.
To assist Fontainebleau, Koch worked to acquire a $2.2 billion construction loan with J.P. Morgan as its administrative agent. Now, a project that was dormant for years has new life, said Jacob Fransis, president of Koch Real Estate Investments.
“We secured the construction loan through J.P. Morgan, SMBC, Blackstone Real Estate Debt Strategies, Goldman Sachs, Guggenheim and real estate investment trust VICI Properties. … We thank them for recognizing both the potential of this property and the expertise of those involved in its capitalization, design and construction. Securing $2.2 billion in financing in today’s market speaks to the widespread confidence in this project, and the team that’s come together to bring it to Las Vegas.”
Hotel will have 3,700 rooms
The 67-story resort and casino project began in 2009. Then, the original owners ran out of money. After that, two other owners attempted to get the project across the finish line. That process ended in a bankruptcy foreclosure sale. Now, the project is back in development. The plan is for the 3,700-room Fontainebleau Las Vegas resort to open in the fourth quarter of 2023, according to Brett Mudson, Fontainebleau president.
“This is a milestone for Fontainebleau Las Vegas and stands as a testament to the tremendous dedication of our team and our partners at Koch Real Estate Investments. We are eager to bring our iconic Fontainebleau brand – timeless beauty, unparalleled service and innovative design – to the Las Vegas Strip.”
Fertitta spending billions outside Lone Star State
Texas-based billionaire Tilman Fertitta owning hotels and casinos in several states other than Texas is another example. The owner of the Houston Rockets recently purchased land for $270 million to build a new hotel and casino on the Las Vegas Strip. The project will sport 2,420 rooms, a multitude of restaurants and an auto show room. It will also have a 2,500-person theater, an elite spa and nearly 100,000 square feet of convention space.
The 43-story hotel and casino project will cost around $3 billion. The plan is to open it in 2025.
Fertitta also purchased 6.9 million shares ($385 million in total) of Wynn Resorts stock, which is a 6.1% stake in the company. The investment is large enough for some to speculate whether Fertitta has plans to take over the company. Wynn Las Vegas is one of the premier hotels and casinos on the Las Vegas Strip with an immense global reach.
Fertitta also sits on the board of DraftKings Sportsbook, which is growing rapidly as much of the country legalizes sports betting and online gaming. DraftKings is the exclusive partner of Fertitta’s Rockets despite sports betting still being illegal in Texas.
Fertitta’s involvement in gaming and gambling does not end there. His companies also own Golden Nugget hotels and casinos all over the country.
- Las Vegas
- Lake Charles, LA
- Atlantic City
- Biloxi, MS
- Laughlin, NV
- Cripple Creek, CO
Texas suffers as other states prosper
That is an incomprehensible amount of money lost from just two Texas-based companies. Imagine if Fertitta and all of his gaming business ventures invested in casinos and gaming in Texas. The revenue the state would reap would be incredible and would help fund community services throughout the state.