Boyd Gaming CEO Keith Smith thought a $305 million, two-year project to redevelop and expand the interchange between Tropicana Avenue and Interstate 15 was nearing an end.
He was wrong.
It’s going to take much of the next year for the Nevada Department of Transportation to finish rebuilding an important intersection that allows future widening of I-15 — the highway connecting Las Vegas with Southern California — while adding more travel lanes to provide better access to the southern end of the Strip.
The project, often referred to as “Dropicana” by department officials and television traffic reporters, is expected to improve Tropicana Avenue’s connection to Harry Reid International Airport while accommodating additional vehicular access to the 18,000-seat T-Mobile Arena, 65,000-seat Allegiant Stadium and a planned 33,000-capacity Major League Baseball stadium.
But continued work on the project means continued business disruptions at the Orleans, Boyd’s largest Las Vegas hotel-casino.
Smith wasn’t pleased when he found out a few months ago construction would continue well into 2025, adding more road closures, overnight and weekend shutdowns of I-15 and traffic tie-ups that have impeded customer access to the nearly 2,000-room hotel-casino, which is less than a mile and a half west of the interchange on Tropicana Avenue.
The loss of business at Orleans has become evident in its financial reporting. The Las Vegas market, which includes Orleans and six other properties, is Boyd’s only operating segment to show a revenue decline in all three quarters of 2023. Boyd’s three downtown casinos have combined for a 3.4 percent revenue increase over the same nine months.
“We didn’t talk about it much because we were hopeful it was going to be over with this year,” Smith told The Nevada Independent in an interview last month following the company’s third-quarter earnings announcement. “But now we got another year of this.”
He said the Orleans’ business is heaviest during the last six months of the year, which is why he hoped the interchange project would be completed by then.
One saving grace for the Orleans, he said, has been Las Vegas Raiders home games at Allegiant Stadium, which boost weekend traffic. The seven Boyd casinos in the Las Vegas segment have a marketing agreement with the team as the “official locals casino partner” for the Raiders.
Boyd’s Las Vegas market is down $30.5 million to $663.5 million, or nearly 4.4 percent, over the year’s first nine months. It’s one of only five divisions in the company’s only one of five divisions where revenue hasn’t increased year-over-year. The segment is also Boyd’s second-largest revenue producer behind its 17 regional properties in nine states, which reported $1.5 billion over nine months.
In an email, Kelsey McFarland, a spokeswoman for the Nevada Department of Transportation, said the completion date for the I-15/Tropicana project was shifted to 2025 because “challenges aligning schedules across multiple utility agencies added complexity to the project timeline.”
Also, major Las Vegas events, such as last year’s Formula One Las Vegas Grand Prix and Super Bowl LVIII in February, were announced long after the transportation department set the project construction schedule, “requiring full-site shutdowns, further impacting our timeline.”
McFarland said the department distributes weekly updates to businesses in the area that show traffic restrictions and closures.
According to the transportation department’s website, interchange work will include a reconstruction of the Tropicana bridge above I-15. The I-15 southbound flyover ramp to Tropicana eastbound will be closed, partially demolished and rebuilt, limiting access to several casinos, including the MGM Grand Las Vegas, Excalibur and New York New York.
In a research note, Truist Securities gaming analyst Barry Jonas wrote that MGM Resort International executives said they weren’t seeing any of the same effects from I-15 interchange construction that Boyd noted.
Smith said the traffic disruption has been especially hard on visitors from Southern California, a key feeder market to the Orleans. He said Orleans executives tried to work with customers on alternate routes to the hotel-casino.
“We’ve been doing this for more than a year and we’ve tried to instruct [hotel guests] to come in the back way,” Smith said. “When they do the pave-a-thons and they shut it all down, it gets even more complicated.”
Adding to Boyd’s woes are efforts by the new owners of the Palms Casino Resort and Rio Las
Vegas, who Smith said have launched “aggressive promotional efforts” such as gaming incentives, two-for-one meals at restaurants and other incentives to draw customers into their properties.
The operating arm of the San Manuel Indian Tribe reopened the Palms in April 2022 while Dreamscape Cos. took over the operations of the Rio in late 2022 and has been remodeling and renovating the resort with new restaurants and other attractions.
The campaigns have cut into business at the Gold Coast on West Flamingo, which is adjacent to both off-Strip properties, and the Orleans, which is less than a mile from the Gold Coast.
Smith told analysts last month the company will not get into a bidding war for customers.
“Boyd is remaining disciplined and waiting out the impact, maintaining normal promotional levels,” Jonas wrote in a research note, calling the campaigns “aggressive.”
