Vegas Strip Sees Blow as Chilean Casino Company Pulls Plug on Deal

A Chilean casino operator that had begun working towards developing a new casino on the Strip has stepped away from a deal reported to be worth a massive $120 million. That is according to Steve Hill, the CEO of the Las Vegas Convention and Visitors Authority (LVCVA), who confirmed that the proposed deal fell through as a December 15, 2022, deadline for closure of the deal was passed.

By brandon - January 9, 2023

This will come as a blow with locals and regulars to Las Vegas always keen to see the continued development of the iconic boulevard. The new casino was to sit on the former home of the Riviera hotel and casino. It would have become the first new occupant on the site since the 2016 demolition of the structure; some of which was the oldest remaining on the Strip at that time.

 

CB Investment’s transaction for the land had been announced back in October 2021 and, it was believed that the deal would go through in June of 2022. There was later a postponement of payment to November of 2022 before the company asked for a further push back of the schedule to December of the same year. It was on the 29th of that month that CB Investment finally announced their intention to leave the agreement.

 

Why Did the Deal Fall Through?

The main man at the helm of CB Investment is Claudio Fischer, a Chilean businessman with a portfolio consisting of a range of properties in South America – most importantly, casino hotels. In fact, he helped co-found the largest casino chain in the Latin American region in Sun Dreams. It was this experience and expertise that made the prospect of a new casino on the Strip of particular interest.

 

However, the problems began with 2022’s precarious financial environment and what that meant for developers. It is believed that Fischer’s concerns were around the current state of play when it comes to interest rates in the US. These jumped a whole 4% from 0.25% to 4.25% in less than a year, which meant that the businessman’s returns would be quickly eaten into when taking it account the financing needed to conclude the purchase and begin construction.

 

Where Does the Deal Now Stand?

 

It would appear to most that the deal is now very much dead in the water, especially after Steve Hill announced that the property was back on the market. LVCVA ”terminated the agreement, received the $7 million non-refundable deposit, and re-listed the property”. However, it apparently isn’t necessarily the case that we’ll be seeing a whole new party involved in the purchase of the land.

 

While the increased value of debt has put Fischer off at present, reports suggest that the Chilean would consider making another approach should the US Federal Reserve lower interest rates and fixed mortgages drop from their two-decade record highs. It’s known that this opportunity was a dream for the businessman and it’s not beyond the realm of possibility that this will see him return to the negotiation table in time.

 

Despite This, the Strip is in Good Health

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The world over, the Las Vegas Strip is renowned for being the home of casino gaming and because of that, it’s unlikely that this unfortunate setback will be of much detriment to Nevada’s gaming Mecca. To the contrary, this may allow for the existing businesses in the area to flourish, especially with other new openings on the horizon.

 

There are a number of big names looking to establish themselves on the Vegas scene in 2023 and beyond. The long-forgotten Fontainebleau Las Vegas looks to finally be opening its doors, over a decade since it was first set to open in 2009. It changed hands a couple of times but is set to be open later this year under the original company. Beyond that, in 2025, it looks like there will be the return of a Hard Rock Casino and Hotel, with the Mirage’s operations in the process of being sold by MGM to Hard Rock International.

 

So, while it’s undoubtedly a disappointment for all involved in the proposals for the old site of the Riv’ that the deal fell through; 2023 and onwards looks like it will continue to be healthy for Las Vegas, no matter what transpires between CB Investment and the LVCVA in the future.