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Caesars’ Entertainment Game Plan: Virginia Casino News
Caesars Entertainment was slated to open a casino in Danville, Virginia, in 2023, but that has now been postponed to 2024. The main factors entering into the postponement decision were supply chain disruptions, a shortage of skilled labor, and problems with the preparation of the building site. That involves digging up hundreds of years of concrete and clearing the existing structures on the site, which was formerly occupied by a textile mill.
Virginians voted to legalize commercial casinos in 2020, and five developers were approved to build casinos in the state. Which has led to many staying on top of the Virginia casino news trends.
The now-postponed Caesars Virginia project, estimated to cost $500 million, is the largest and most expensive of the five. It is projected to bring the city of Danville $38 million in revenue each year. Additionally, in September 2023, Caesars will begin paying a $5 million annual subsidy to the city, broken into quarterly payments.
When completed, the Caesars complex will include:
- A 500-room hotel
- A spa and pool complex
- Multiple restaurants
- A 2,500-seat concert venue
- 40,000 square foot meeting space
- A casino with 1,400 slot machines, 75 table games, and a 16-table World Series of Poker room
Caesars Entertainment remains committed to completing its Virginia project in 2024.
The First Virginia Casino to Open
Another of the five developers approved for a casino license, Hard Rock International, owned by the Seminole Tribe of Florida, was the first to open a commercial casino in Virginia. It opened in July 2022 and will operate around the clock until construction of the permanent venue, scheduled to open in July 2024, is completed. The temporary casino occupies a renovated store in a Bristol, Virginia, mall.
The permanent 90,000 square foot Hard Rock casino complex, three times larger than the temporary casino, is estimated to cost $400 million and will be in the same mall as the temporary casino. When finished, it will include:
- A 750-room hotel
- A casino with 2,700 slot machines, 100 table games, and a sportsbook
- A 3,200-seat performing arts center
- A 20,000-seat outdoor entertainment venue
- A 50,000 square foot convention center
- Retail space for 50 stores and restaurants
Construction of the permanent casino hotel began in January 2022.
Supply Chain Disruptions and Labor Shortages
In 2022, shortages of materials and labor are widely regarded as the biggest problems impeding the timely completion of construction projects. According to surveys, about 90% of builders report having experienced shortages of appliances, lumber, plywood, windows, doors, and other key materials in 2021 and 2022.
Materials shortages became a significant issue during the COVID-19 pandemic, when transporting goods, including construction materials, especially across borders, became problematic, resulting in rising costs. There have also been severe weather events and climate-related problems that have interrupted shipping, such as the long-term droughts that have made it difficult to transport materials by barge on traditionally heavily used waterways, including the Mississippi River. Such shortages and the resulting price hikes and delays have a negative impact on cash flow and can take a big bite out of profits.
While shortages of sand, cement, and concrete persist, some materials, such as lumber and steel, are more readily available heading into 2023, and their prices are coming down accordingly.
As of October 2022, McKinsey & Company described the current labor shortfall in the U.S. construction industry as historic and widening, with more than 440,000 job openings. There are a number of reasons for the shortfall—Baby Boomers retiring, low net migration, manufacturing and construction competing for some of the same skilled laborers, and so on.
Impact on Planning
One could argue that Caesars Entertainment should have anticipated the impact of supply chain disruptions and labor shortages and taken it into account in their construction planning and scheduling. Their postponement of the opening of the casino in Danville, Virginia, underscores the importance of resilience in the construction industry. It also highlights the need to address the lack of skilled construction workers through such strategies as:
- Reskilling and upskilling existing workers
- Hiring workers from nontraditional population segments, such as the formerly incarcerated
- Offering apprenticeships to younger people, even to high school students in vocational programs
- Bringing people who have left the workforce back into the construction industry
One thing all contractors need to be aware of is the potential for being viewed negatively by surety bond underwriters for acquiring a reputation for construction delays and cost overruns due to poor planning. As a contractor, developer and similar, staying up to date and aware of what current issues companies face is an important part of running a successful construction project. The more success you create, the easier it is to secure the bonds you need to grow.
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