Vegas Dancing To The Bank

Las Vegas casino revenues rose by 5 percent in 2012, and at least part of that uptick can be credited to the proliferation of lavish dance clubs springing up in the city.

One such dance club, XS, cost $100 million to build and is the top-earning club in the country with annual revenue estimated at about $90 million. And it’s not alone – Las Vegas boasts seven of the country’s Top 10 moneymakers.

“We learned a long time ago that in order to continue to attract people from around the world, we have to provide things that are hard to find anywhere else,” MGM Resorts International CEO Jim Murren said. “These clubs, if done correctly, are tremendous magnets.”

The clubs and beverage segments of the resort business might be what is standing between gaming and bankruptcy for some. Macau actually surpassed Vegas as the world’s top gambling destination in 2006. Singapore is on track to oust Sin City as No. 2.

Overall, Strip revenues fell by 16 percent during the heart of the recession, but nightclubs saw more business than ever. By 2011, Las Vegas Strip beverage departments earned more than $1 billion, and casinos began remaking themselves to draw the club crowds.

XS nightclub has a capacity of 5,000, and may see 8,000 people – half the capacity of Madison Square Garden – come and go over the course of a night. Surrender, a nightclub at Wynn on the Strip, charges $25-$55 just to get in – with women who “out-dress the dress code” getting in free – just to weed out people not likely to spend on booze, says managing partner Sean Christie.

The clubs have figured out how to monetize the seating space, too – on one night superstar David Guetta was performing at Surrender, banquette seating required a $10,000 beverage minimum up front. The dozen banquettes were full, along with the “cheap seats” and  an “uber-VIP” table on the stage.