Thriving locals market in Las Vegas propels Red Rock Resorts to its most profitable quarter in a 49-year span.
Red Rock Resorts Shines Amidst Las Vegas Casino Landscape
In the bustling world of Las Vegas casinos, Red Rock Resorts, a prominent off-Strip operator, is making waves with its focus on catering to locals. The company's strategy of repeat visits, loyalty, and affordable amenities is proving to be a successful formula, as evidenced by its recent financial performance.
In Q2 2025, Red Rock Resorts reported a record-breaking quarterly net revenue of $526.3 million, a 8.2% increase year over year. This growth was driven by a surge in frequent visits and an expanded local customer base, with over 108,000 new customers at Durango alone since its December 2023 opening.
Stephen Cootey, the chief financial officer, called the quarter "exceptional." The adjusted EBITDA margin stood at 46.7%, an increase of 47 basis points from a year ago, indicating a stronger financial performance.
The strength of Red Rock Resorts was evident across all business lines. The company is seeing strong growth in its VIP and core customers, regional and national customers, and non-rewards customers. The food and beverage division delivered near record results, while the hotel division at Red Rock Casino Resort delivered its highest second quarter revenue and profit.
Red Rock Resorts owns several off-Strip locals casinos, including Red Rock, Green Valley Ranch, and Durango Casino Resort. Green Valley Ranch is currently undergoing a $200 million refresh of guest rooms and suites, with work expected to be completed by the end of the year. Meanwhile, the $120 million expansion at Durango is on track, with the casino floor being expanded and a parking garage being built, set to be completed in late December.
Sunset Station is also undergoing a $53 million renovation, which includes the casino, and is expected to be completed in 2025 and 2026. The resort's hotel and food-and-beverage divisions are expected to be strong in the remainder of 2025 and beginning of 2026.
The federal tax legislation passed this year is also expected to boost the casino industry, with taxes eliminated on much tipped and overtime income, and a new senior tax credit. Cootey estimated $5 million would flow into Clark County from the elimination of taxes on tips.
In contrast to the locals casinos, Strip casinos are experiencing falling tourism, lower foot traffic, and decreasing room rates. However, Red Rock Resorts is not only attracting locals but also out-of-town guests, showcasing its ability to adapt and thrive in the ever-changing Las Vegas casino landscape.
Boyd Gaming, another major operator with locals-focused properties, has also seen growth and resilience by appealing to locals, offsetting declines in the tourist market. Their Orleans property uniquely serves both locals and tourists, demonstrating how bridging these markets can stabilize revenue.
In conclusion, locals casinos like those under Red Rock Resorts focus on community engagement, affordability, and steady consumer loyalty, weathering economic and tourism downturns better than tourist-centric Strip casinos, which rely heavily on fluctuating visitor volume and higher spending levels.
- The success of Red Rock Resorts in the Las Vegas casino landscape is not limited to the local market, as they also attract out-of-town guests, showcasing their ability to adapt in the changing business environment.
- Apart from casinos, Red Rock Resorts also operates in various business sectors, with the food and beverage division delivering near-record results and the hotel division experiencing its highest second-quarter revenue and profit.
- In the banking-and-insurance sector, the federal tax legislation passed this year is expected to benefit the casino industry, with taxes eliminated on much tipped and overtime income, and a new senior tax credit that could potentially boost revenue.
- Investing in real-estate development is another aspect of Red Rock Resorts' strategy, as they are currently undertaking expansions at Durango, Green Valley Ranch, and Sunset Station, with the goal of completing these projects by the end of 2026.
