When SLS Las Vegas opens its doors to the public at midnight, gamblers will step into a casino that’s much more intimate than the oceans of slot machines and table games that dominated major Strip resorts in years past.
The amount of gaming space at SLS is relatively small -- about 60,000 square feet, making it closer in size to the boutique Cromwell than, say, the Bellagio. The old Sahara, which was gutted to become SLS, had a casino that was about 80,000 square feet large, and there are several Las Vegas resorts with casinos of 120,000 square feet and larger.
Which raises a question: Will casino size be a liability for the SLS in the hypercompetitive environment of Las Vegas gaming?
More slots and games means more opportunity to haul in gaming revenue, but operators of the SLS aren’t worried about the casino’s size. They say the resort will be fine thanks to a design that makes the most of the space, combined with changes in consumer behavior that have made gaming less critical for the financial health of Las Vegas resorts.
Beyond the modest casino area, the layout of SLS was conceived to provide a seamless transition between gaming and nongaming spaces, even overlapping the two at some points.
Shops and restaurants open up to the meandering casino floor. There are table games inside a nightclub and in a high-end restaurant’s lounge area. The William Hill sports book is connected to a burger joint and a beer garden.
“We’ve learned over time that you can’t just force people into a casino and expect that that’s where people are going to discover gaming,” said SLS President Robert Oseland, who gained extensive experience as a gaming and resort executive under Steve Wynn. “We’ve also created experiences where there’s natural traffic, and so in addition to the main casino floor we’ve decentralized some of our gaming experiences.”
SLS’s strategic commingling of gaming and other activities is indicative of broader tectonic shifts within the gaming industry. Resorts are focusing more on nongaming attractions because a lot of consumers are doing the same.
It’s worked out well — analysts say that the Strip is doing better than other U.S. gaming hubs partly because it attracts visitors to dine, dance, shop and catch a show, too.
“That whole millennial group, they’re not particularly interested in sitting in front of a slot machine all day long with a cigarette hanging out of their mouth,” said John Restrepo, principal of Las Vegas-based RCG Economics. “(Gaming) will always be part of the mix, but there are other reasons why people are coming to Las Vegas now, and SLS is just responding to the changing purchasing patterns of those consumers and what they view as the kind of experience they want to have.”
But the operators of SLS Las Vegas have done more than change the layout of the casino floor.
When the commercial real estate group CBRE sold the Sahara in 2007 — four years before it closed — the property offered nearly 1,070 slot and video poker machines and 56 table games. SLS has trimmed that slot count in favor of table games, offering 800 slot machines and more than 70 table games.
UNLV professor Tony Lucas, author of multiple books about casino management, said it’s a mistake to underestimate the value of slot machines. He said slots are generally more profitable than table games — or even restaurants and nightclubs, in many cases.
“If your hotel isn’t doing well and your slots aren’t doing well, you’re not going to make it,” he said. “In my opinion, the Sahara’s number of slots was too low.”
Lucas emphasized that he’s not hoping for SLS to fail — he said he “absolutely, 100 percent” wants it to succeed. And an extremely popular nightclub would be a big moneymaker, he said.
To that end, the SLS team brings valuable nightlife and hospitality experience to the table.
Sam Nazarian, who bought the property in 2007 and has led the effort to transform it into SLS Las Vegas, is a Los Angeles nightclub tycoon. In addition, his company SBE already operates SLS hotels in Beverly Hills and South Beach, Fla.
SLS also isn’t the only resort that’s felt the need to focus more on table games. The Cosmopolitan had 77 table games when it opened in 2011. Now, it has 126 and will soon raise that even higher to 132, according to CEO John Unwin.
At the same time, Unwin said the Cosmopolitan opened with about 1,500 slot machines but has lowered that number to about 1,350 machines.
“That just reflects what’s happening in the market,” he said. “There was tremendous demand for more tables.”