Video poker bar business booming in Las Vegas

David Strow

Wednesday, March 21, 2001 | 10:49 a.m.

The latest addition to the Roadrunners chain of taverns isn't your typical Las Vegas bar and casino.

The 10,000-square-foot complex, opened in Green Valley in February, features such items as a full-size restaurant, a huge TV lounge, a small video game arcade, a three-quarter scale bowling alley -- and, of course, the requisite 15 video poker machines lining the bar.

Though it has a Western theme, it's quickly becoming one of the favored hangouts of hip 20-somethings and 30-somethings in the Green Valley area with its plush cocktail chairs, conversation tables and outdoor fire pit.

Michael Corrigan, who co-owns the six-location Roadrunners chain with brothers Sean and Adam, said it's one of the few taverns in Las Vegas where food revenues outstrip bar revenues, as it averages 1,200 meals a day.

That's what's needed to survive in the most competitive tavern market in the country, Michael Corrigan believes.

"A total entertainment environment is what we're trying to do here," Corrigan said. "There's so many things to do in Las Vegas that you have to know what you're doing and be positioned properly to compete."

Several other companies compete in the local video poker bar market, most notably the PT's Pub chain. It has about 20 local properties, some with unrestricted gaming licenses and others restricted to 15 or fewer machines.

Another big competitor is Big Dogs Hospitality Group, operator of seven local taverns and casinos, including the Holy Cow Casino and Brewery at the Strip and Sahara Avenue. Lynn Osmera, director of marketing for the company, said Big Dogs focuses on its microbrewery and its food to draw customers -- but says competition remains stiff.

"It's tough to compete with the megaresorts," Osmera said. "If it was just a bar, it wouldn't be a problem. With gaming, you're competing for the amount of money these people want to put on the table. You definitely need some kind of niche."

It's getting tougher, as neighborhood taverns spring up about as quickly as homes, office buildings and casinos in the Las Vegas Valley.

Unlike other boomtowns of the West, such as Phoenix, Denver or Boise, Idaho, any Las Vegas tavern can have up to 15 video poker machines, provided the owners can win a license from the state Gaming Control Board. Without that lucrative edge, Corrigan said, there's "not a chance" Las Vegas would have as many taverns as it does.

"It's the allure of the gaming revenues ... everyone hears about the huge weekly gaming drop," Corrigan said. "Many of our competitors say, 'Let's just build a square box, and all we need is 15 at the (video poker) seats and it'll pay for itself.' They are on every corner they can go to."

Osmera believes the popularity also stems from the need for neighborhood gathering places.

"A lot of people move in from other cities ... they're looking for the 'Cheers' mentality, a local neighborhood bar," Osmera said.

At the end of 2000, Clark County had 1,324 "restricted" gaming licensees, which are permitted to operate up to 15 slot machines. Usually, these licensees fall into three categories -- bars, grocery stores and convenience stores.

A restricted license became less lucrative in 1991, when the state reduced the maximum number of slots a restricted licensee could operate from 35 to 15. But that hasn't stopped their growth -- Clark County's base of restricted licensees grew by nearly 250 from 1995 to 2000, a 23 percent increase, control board records indicate. The board's records do not distinguish between types of businesses. In March alone, the Nevada Gaming Commission is considering applications from five new Las Vegas-area taverns -- two in west Las Vegas, two in south Las Vegas and a fifth in Henderson.

Despite the relatively lower number of slots each restricted licensee may operate, Osmera said more than half the revenues of a typical Big Dogs location comes from gaming. The portion isn't as large at newer Roadrunners locations, Corrigan said, but gaming revenues remain "significant."

But competition for those gaming dollars remains stiff. In addition to the numerous taverns, grocery stores and convenience stores within a short distance of Roadrunners' Green Valley tavern lies Sunset Station, the Reserve, Silverton, Vacation Village and the entire south end of the Las Vegas Strip.

But taverns appeal more than a casino to a particular type of gambler, Corrigan said.

"They like the one-on-one attention," Corrigan said. "Bartenders know who they are, what they drink, and they can get in and out very easily."

Because demand remains strong, taverns will continue to pop up throughout the Valley. Osmera said Big Dogs is currently expanding its Draft House Barn & Casino -- a property permitted to have up to 80 machines -- and is eyeing sites for two additional properties over the next several years in Summerlin, southwest Las Vegas and Henderson. In addition to more machines, the Draft House location will probably add a microbrewery and a much larger restaurant.

"We'll probably stick with a smaller, themed type of bar," Osmera said. "We won't make anything as large as the Draft House."

Though its Green Valley property has been open less than two months, Corrigan said Roadrunners is starting the licensing process to build a seventh location on Flamingo Road near the Beltway, with plans to open by early 2002. The next likely location for expansion is North Las Vegas.

But anyone looking to build a new tavern must move quickly -- state law prohibits new properties from being located within 1,500 feet of one another, setting off a gold rush of sorts for new bars in growing areas.

"You can put a place like this in Green Valley and the demand is still there in Summerlin and North Las Vegas," Corrigan said. "But if you don't go after it now, the opportunity will be gone. Someone will beat you to the punch."