If you don’t get your slot jones on in the airport and can’t wait to get to a casino, you will soon be in luck: the county commission has approved a proposal for slots at the unified car rental center, even though the bid seems a bit high. From the LVRJ:
Anxious to get revenue wherever they can find it, Clark County commissioners approved a construction proposal that will make way for slot machines at an airport rental car facility despite a recommendation to reject all the bids.
Commissioners voted unanimously on Tuesday to approve a $375,553 bid to complete office space at the Rent-a-Car Center at McCarran International Airport even though the bid was 41.6 percent higher than an engineers estimate of what the job should cost.
The office space is important in terms of generating revenue because it will house an area to supervise slot machines, a requirement under Nevada gambling regulations.
Slot machines are a major revenue-generating concession at the airport, earning about $38.5 million from more than 1,300 slot machines in the last fiscal year. Operating revenue for the entire year at McCarran and four smaller county airports was $376 million.
Officials hope to install 40 slots at the Rent-a-Car Center, although they dont have an estimate of how much money they will generate. With the vote Tuesday, the project could be complete by fall.
County approves Rent-a-Car Center slot machine bid despite cost – Business – ReviewJournal.com.
I crunched the numbers and got a win/slot/day of about $81 for the airport slots–way lower than the Clark County average, but not too bad for an operation with minimal overhead.
A commissioner spoke of the need to get the slots clanging as soon as possible. According to my calculations, if we assume the same win/slot/day metric for car rental slots as airport slots (which is being a bit generous, I think), with 40 slots online, each day that the car rental slots aren’t up, the county loses $3240 in revenue. If taking a re-bid would push the slot opening back by a month, this is about $100,000 in revenue that will be “lost.”
But wait–according to their engineer’s estimate, the job really should cost 41.6% less than the high bid, or, according to my arithmetic, $219,355.95, which is $156,197.05 in real cash money that the county is overpaying.
If putting it out to bid meant a month’s delay but produced a bid in line with the engineer’s recommendation, the county would save about $56,000, which I think they could definitely use. That’s salary + benefits for a full-time employee who could be out there working (or not).
And that’s assuming that car rental slots are as profitable as airport slots. I don’t think they will be, because people at the airport are a captive audience–they have an hour or two to wait for their plane to take off, and nothing they do will make it take off faster. They don’t have anything to do but sit around and wait. People waiting for rental cars, though, have to stand in line. I don’t know many people who’ve been on a plane for hours and are loaded down with luggage who’d rather play 8/5 Double Double Bonus Poker than get their car and get to their hotel.
If the actual win/machine/day is substantially below that of airport slots, that makes this an even bigger waste.
It’s funny that a guy with no vested interest in the project and about five minutes to spare was able to come up with some estimates of how much money the slots could make, based on nothing more than information included in the article and basic arithmetic, but the public officials who are charged with safeguarding the public interest–and taxpayer dollars–“don’t have an estimate” of how much the slots would generate so they accepted a bid that was far higher than their own experts suggested was tenable.