Tilman Fertitta, the billionaire who owns five Golden Nugget casinos across the US, says inflation and ongoing distribution disruptions caused by the pandemic have rendered king crab financially obsolete.
Appearing on CNBC’s “Power Lunch” yesterday, Fertitta expressed his belief that the food prices of 2019 are forever a thing of the past. The Landry’s owner, worth an estimated $5.7 billion, said COVID-19 has resulted in permanent higher food costs.
“King crab is up 100% [from 2019],” Fertitta explained of what was a buffet staple at Gulf Coast casinos before the pandemic. Asked whether he sees prices easing in the future, Fertitta answered, “No. I do not see a lot of your proteins coming down drastically.
We’re definitely in a huge inflationary period — the biggest I’ve ever seen, and I’ve been around a long time,” Fertitta continued. “It’s never going back to where it was in ’19.”
Crab legs on casino buffets in Louisiana and Mississippi were a major draw for the resorts for decades. But the crustaceans and drawn butter disappeared because of exorbitant costs and supply interruptions after the riverboats were allowed to reopen in the summer of 2020.
Today, no casino buffets on the Gulf Coast include endless crab legs with dinner standard fare. But some, like Hollywood Casino Gulf Coast in Bay St. Louis, Ms., offer all-you-can-eat crab legs for a higher price. Hollywood charges $49.99 for its buffet, with crabs offered Friday through Sunday, up from the $21.99 standard dinner buffet.
Fertitta Says ‘Business Very Good’
High food costs might be here to stay, but Fertitta says his entertainment and hospitality business is otherwise good.
Business is very good,” Fertitta said.
He explained that operations have rebounded in the south and Midwest while revenue at his restaurants and casino resorts are down roughly 10% on the east and west coasts. Fertitta’s empire includes Golden Nugget casinos in Las Vegas and Laughlin, Nv., Atlantic City, Biloxi, Ms., and Lake Charles, La.
Last year was a record year for Nevada casinos. Gross gaming revenue totaled $13.4 billion, which easily eclipsed the state’s previous all-time best mark of $12.8 billion set in 2007.
Fertitta is rumored to be in late-stage negotiations to acquire roughly six acres of land on the Las Vegas Strip for around $200 million. The property in question is located across from CityCenter and Aria. The land is presently occupied by a Travelodge motel, strip mall, and parking lot.
Fertitta also chatted about his pending Golden Nugget Online Gaming (GNOG) sale to DraftKings. The deal is an all-stock trade that was supposed to be valued in the neighborhood of $1.5 billion. But since the two sides agreed to the deal last August, DraftKings shares have plummeted from $52 to less than $14.
Though Fertitta and his GNOG shareholders will not receive the same value as they thought they would last summer, he says the deal remains a go. He’s also optimistic regarding DraftKings’ future.
Fertitta says he will be one of DraftKings’ largest shareholders for the long term. He believes once the company turns profitable, the tech stock will take off, not unlike Tesla.
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