Prior to its scheduled foreclosure auction, the Lucky Dragon Casino, just off the Strip, has filed for Chapter 11 Bankruptcy.
Why Are they Filing Chapter 11 Bankruptcy in Las Vegas?
The Lucky Dragon opened in 2016, and its primary focus was to attract baccarat clients — a strategy which may have contributed to its lack of success, as the casino did not contain a poker room at all.
The struggles began after the 2008-2009 recession — and then again later when Las Vegas faced a citywide decline in baccarat winnings. Nevada casinos were reported to collect over $1.5 billion from baccarat players in 2017 alone, but apparently, that was not enough to sustain a baccarat-only casino (the $1.5 billion was a 5.6% decrease from the previous year.)
This downturn is a trend that has hit not only the Lucky Dragon but casinos all over the valley and especially on The Strip. However, the Lucky Dragon’s gamble on targeting only one segment of potential customers likely impacted how they were affected by the downturn.
A Risky Strategy Proves to be a Mistake
The developer of the casino, Andrew Fonfa, reported to the Las Vegas Weekly that the Lucky Dragon was targeting one particular demographic of customer.
“The best player in the world right now is the Chinese gambler,” Fonfa said. “If you take a sample of 200,000 people, with Americans, probably 10 percent are gamblers, but probably 100 percent of Asians are gamblers. It just makes sense to go after this customer. Even if you look at the local casinos here, you see mostly Asian faces gambling. That’s our customer, and we think we’ve really hit on something.”
Fonfa also reported that he believed his boutique hotel would “…per square foot, will be the most successful casino ever built in Las Vegas.”
Moving Forward with Chapter 11
Unfortunately for him, less than two years later, the Lucky Dragon has filed for Chapter 11 bankruptcy in Las Vegas. This type of bankruptcy will allow them to restructure and reorganize their debt and other obligations without ceasing operations or liquidating entirely. Hopefully, the Lucky Dragon will be able to regain profitability and continue driving business to an otherwise sparse area of the city.