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00:00This is a story about taking a chance, having a shot at wealth and success,
00:05something at the heart of what many consider the American dream,
00:08and something built into the very foundation of Las Vegas, Sin City,
00:13which for over a century has drawn visitors from all walks of life.
00:25What brings me to Vegas? Well, my husband and I were married here.
00:29We're here on a girls' bartender.
00:31We came here to party. We partied.
00:33You see, we've got pirates coming from all around the world.
00:39Beneath the bright lights and the constant buzz of the Strip,
00:42the city itself is taking a chance at reinvention,
00:45as signs of slowdown in its core business start to surface.
00:49To understand the Las Vegas of today, you have to go back to where it all began.
00:54And few have followed that story like screenwriter and journalist Nick Pelleggi.
00:59After the Second World War, with the air conditioning allowing these places to remain open 12 months a year,
01:09and aviation advancing, it changed the whole economy of going to Las Vegas,
01:15and it allowed people to begin to invest money.
01:18It was the only place in America where you could gamble legally.
01:21Every illegal bookmaker all around the country, all of whom were fully operational
01:27and had all the political and police connections they needed to operate in the open, really.
01:35They all went to Las Vegas where they were legit.
01:39It was an amazing moment.
01:42It was the start of the infamous mob era,
01:45a world Pelleggi would later chronicle in the Academy Award-nominated film, Casino.
01:50Who could resist?
01:52Anywhere else in the country, I was a bookie, a gambler,
01:55always looking over my shoulder, hassled by cops day and night.
01:58But here, I'm Mr. Rothstein.
02:00I'm not only legitimate, but running a casino.
02:03And that's like selling people dreams for cash.
02:05All of us have heard about the time of the mob in Las Vegas.
02:08How much of that is myth and how much of that is reality?
02:11Well, it's mostly reality.
02:13When it came time to open casinos, maybe,
02:17or expand casinos in Las Vegas because of air conditioning and the new aviation,
02:23where were you going to get that cash?
02:25Who was going to invest?
02:27Banks were not investing in casinos because casinos were immoral.
02:32So you couldn't go to a real bank.
02:34You couldn't go to Jamie Dimon and say, I need $200 million.
02:38So the only cash you really had came in cash from the men
02:43who had originally made their wealth in prohibition.
02:47And they were doing legitimately what they had been doing basically illegitimately.
02:51It's really a sort of slice of the free enterprise system at work.
02:57And it just kept getting bigger and bigger until it got so damn big,
03:02the government said they're making too much money.
03:04And the government legalized illegal gambling and has taken it over.
03:09And of course, not dealing with it as well as the mob guys did.
03:15From mob money to corporate capital, Las Vegas kept evolving.
03:20But now, in the age of online gambling, when a casino fits in your pocket, what's next?
03:25Fed President Mary Daly oversees the Federal Reserve's western region.
03:30The economy of Las Vegas is the kind of economy that if the U.S. sneezes, it usually gets a
03:35cold or maybe the flu.
03:37And so we're seeing some of the things that are playing out in the U.S. economy play out here
03:41in Vegas.
03:42I think that the Vegas residents are a little worried about that.
03:45But, you know, Vegas reinvents itself regularly, so they're not depressed.
03:50At the center of Las Vegas' latest reinvention is entertainment.
03:54And one of the biggest players is the Tao Group, a hospitality and entertainment company known for operating restaurants and
04:01nightclubs.
04:02Jason Strauss is the group's co-founder.
04:04You didn't start in Las Vegas?
04:06No, we started in New York City.
04:08Our first two venues was Tao Restaurant in Midtown and Marquee Nightclub, which I'm proud to say 21 years later
04:14is the longest running nightclub in New York City history.
04:17And we have one here in Las Vegas.
04:19Why did you pick Las Vegas?
04:20Because we mostly think about Las Vegas for gambling.
04:23Well, back then we saw a small inkling of nightlife and the need for stylized dining.
04:28It was just starting.
04:29There was a lot of celebrity chefs back then, and nightlife was maybe one or two nightclubs on the strip.
04:34But we saw a real need for it.
04:35And frankly, we were right.
04:37We hit it right on the nose.
04:38The timing was amazing.
04:39This is going back 20, 21 years.
04:41We opened with the first restaurant and nightclub combination together.
04:45We were the first really to, like, merge and marry those two concepts.
04:49And within the first year, we were the highest grossing restaurant in the United States.
04:52So we had a lot of success with that.
04:54Tell us about the evolution.
04:55I mean, how fast did it happen?
04:57How big has it got?
04:58Oh, man.
04:59In 20 years, it's been an evolution.
05:01When I was out here, maybe two or three nightclubs.
05:03We now have 16 to 17 venues on the strip, depending on how you classify a lounge or a dayclub
05:09or a nightclub.
05:09Now there's, this is the nightclub capital of the world and the stylized dining capital of the world.
05:14Is it continuing to grow?
05:16I mean, what's been the pattern of growth?
05:17Just measuring by how many people you have come in.
05:20Well, yeah, it has continued to grow.
05:22We're dealing with a particular segment.
05:24We say premium segment.
05:25That's really looking for experiential.
05:27I mean, this nightclub that we're in right now, Omnia, is the highest grossing nightclub in the country.
05:31And we have hit our best number every year for the last three years here at Omnia.
05:37So this is a really good indication of where things are and where it's going.
05:40When you say best number, is that both in total revenue and in revenue per customer?
05:46Gross net sales.
05:47Gross net sales.
05:48Gross net sales.
05:49And you measure also how much revenue you get per customer?
05:52Yeah, there's a price point.
05:54There's a price per head, but that differs on day of the week.
05:57You know, there's a different customer in Vegas every weekend based on convention, scheduling.
06:02So it depends on the time of year, who the talent is, sort of other factors that come into town,
06:08if there's a UFC fight in town.
06:10So all those things factor into different sort of per head numbers.
06:14A lot of the people who follow Bloomberg are concerned about business cycles.
06:18They go up and they go down.
06:20Are you vulnerable to business cycles or are you outside of business cycles?
06:24You know, I think we live in a particular demo of premium where people have disposable income for experiential.
06:32So I think we're insulated a bit.
06:33But listen, Vegas as a whole is extremely elastic.
06:37Vegas isn't going anywhere.
06:40Look at this.
06:41And now Tau is doubling down.
06:43I get it.
06:44Yeah, that's pretty nice.
06:45Making its biggest bet yet with its newest venture, Omnia Day Club, set to open later this month.
06:5146,000 square feet of cabanas, day beds, pools.
06:55And up on that platform up there is our Omnia Sky Deck.
07:01Dayclubs have become one of the biggest entertainment formats in Las Vegas.
07:05Daytime party venues that combine elements of the city's famous nightlife scene with its pool culture, featuring DJs, cabanas and
07:13high energy crowds.
07:15But even as Las Vegas leans further into entertainment, the signs of softening demand are hard to ignore.
07:23Visitor numbers are down 7 percent in 2025, the sharpest annual decline outside the pandemic.
07:29There are reports of some softness and occupancy and things like that.
07:33How true are they?
07:34Because you monitor these things.
07:35What do you look at?
07:36It's definitely weaker than it was last year.
07:39And they have many factors that are affecting it.
07:41There's international tourism has just dropped to the United States.
07:45Then you have, you know, the households who are making 50th percentile or less in household income.
07:51They're just making tradeoffs.
07:52You know, they have to.
07:53Gas prices are higher.
07:54Other goods and services are higher and they get here and they're like, OK, I'm going to pay for this
07:58experience, this show, but maybe I'm not going to spend as much at restaurants.
08:02Maybe I'll bring food into my hotel room.
08:04And so other aspects of this are hurting a little bit.
08:08But again, Las Vegas is used to this.
08:12In a city built on volume and discretionary spending, even small pullbacks can have an outsized impact.
08:19Since the pandemic, Las Vegas unemployment has remained roughly a percentage point above the national average.
08:25As you look from your perch at the Federal Reserve at the economy of Las Vegas, what are the major
08:32component parts?
08:33What do you really pay attention to?
08:34There's gaming, obviously, and you say not so much gaming, some other things.
08:37Yeah, so I look at travel and leisure.
08:39So what are they doing in travel and entertainment?
08:41How are these different pockets doing?
08:43Then I also look at technology and not so much the coding and things, but the infrastructure.
08:48You know, are they attracting investments in things like data centers or they have a technical interest here?
08:54They want to build technology out because it's just a great place to put technical things.
08:59So they're working on that.
09:00Then there's all the support parts of the economy that are here to help the gaming and entertainment industry thrive.
09:07So even if you're not directly working in travel and leisure on the strip, you're actually supporting the broader economy
09:13by doing distribution and supplies.
09:15And so their economy is really built on that.
09:18But if you ask what's the one thing they would get worried about, it's are the flights coming in, are
09:23the guests coming, because that drives a lot of their economy.
09:26The technology is something they're looking to build to, but it's not something that's driving their economy.
09:31We see a lot of development always in Las Vegas.
09:33You said it's always reinventing itself.
09:35It is always reinventing itself.
09:36The buildings are getting torn down and big buildings being built up.
09:39One of the things we've heard is that Las Vegas has been sort of advanced in minimizing the regulatory constraints,
09:46the permitting of things.
09:47And we've talked to people who say they're building things here much faster than they would in some other parts
09:51of your district.
09:52Yes.
09:52Like Los Angeles or San Francisco.
09:54Absolutely.
09:54How true is that?
09:55It is true.
09:56So one of the things that we know is that there's federal laws about zoning and other things.
10:00But most of the zoning and where you can build and how you can build and what kind of light
10:05fixtures you have to have, that all comes from localities or states.
10:09And Vegas, because they need to reinvent themselves and bring these new buildings along, that's part of their attraction.
10:15They have to be faster.
10:16They have to be better.
10:17They have to be less expensive.
10:21That combination of speed, quality, and affordability sets Las Vegas apart.
10:26And Jason Strauss says it's why projects at the size and scale of Tao's new day club can happen here.
10:32Well, I don't think I need to tell you anything more.
10:34You can just look at where we are and how we are just dead center of the middle of the
10:38strip.
10:39All the famous lights and sound that make Las Vegas strip famous were right in the middle.
10:44And here on the Omnia Sky Deck, you're completely immersed in it.
10:47You can have food and drink.
10:49You can enjoy it any day of the week, open seven days a week.
10:52And this, we think, is going to be a really special experience.
10:54It's experiences like these that have long drawn people to Las Vegas, a city built on reinvention, risk, and the
11:02willingness to take a chance on what comes next.
11:05I think it's the most American thing we've got.
11:10Isn't it?
11:10I mean, it's kind of frontier.
11:11It has the cowboy world to it.
11:14It's got everybody's got a shot.
11:17It's sort of like it's America in miniature.
11:23Because so many different people go there, right?
11:26From all over the country.
11:28So it's like an America for America.
11:30It's like an America for America.
11:32It's like an America for America.
11:32It's like an America for America.
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