Red Rock Resorts, owners of 100,000 square-foot Kaos dayclub and nightclub in Las Vegas, have shuttered the club just seven months after the Palms Hotel celebrated the venue’s extravagant grand opening.
The closure comes after the departure of Jon Gray, the vice president and general manager of the Palms, and cancelation of DJ Marshmello‘s $60 million residency.
The decision to shutter Kaos, which recently had a $690 million renovation and features artwork by Damien Hirst, came after a net loss of $26.8 million in the third quarter, down $51.9 million from the same period last year.
Michael Britt, senior vice president of government relations and corporate communications for Rock Resorts Inc., said in a statement: “This afternoon, Red Rock Resorts, Inc. announced the closing of Kaos dayclub and nightclub at the Palms Casino Resort, effective immediately. While Palms has experienced exceptional growth across both the gaming and non-gaming segments of the business, the expense side of the business has been challenging to date, due in large part to the entertainment and fixed cost structure associated with Kaos. Therefore, we have decided to take some time to reassess the programming and use of those venues going forward. In the interim, we intend to use the venues for private meeting space and special events, in addition to everyday resort pool operations.”
“It’s obvious that the nightclub environment in Vegas is extremely competitive. It doesn’t appear that the market has grown enough for the amount of supply in the market,” said Red Rock CEO Frank Fertitta III during a call to investors. “The cost of entertainment is excessively high, and we just made the decision to focus where the fish are and acknowledge that the nightclub business, at least at the Palms, was not working for us.”
The fate of the space is currently being decided. In the interim, it will reportedly used for events.
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