The Palms Casino has announced that it will be closing KAOS, it’s latest mega club, after just seven months in business. The palms underwent a $690 million dollar renovation and rebrand in the last couple of years, finally opening its doors again in early 2019 to reveal a modern luxury resort, complete with dining, nightlife, and spa options each worthy of their own Instagram post. The closure of KAOS, while significant, represents an overall change to the nightlife industry in Las Vegas. Could it be that there is just not enough room for one more mega club on the strip?

It wasn’t long ago that the mega clubs of Las Vegas were the hottest party you could even attempt to get into. The clubs, which represent much of the strip’s iconic nightlife scene, have become synonymous with the EDM industry in recent years. Headliners like Diplo, Skrilles, Calvin Harris, and dozens of other dance music acts earn millions of dollars each year with residence contracts between the different clubs. For an act like Diplo, the name alone brings thousands of partygoers each week, giving one club a competitive edge over another.

But with the oversaturation of the dance music industry and music festival culture in recent years it almost seems as if the novelty of seeing a massive DJ in a Las Vegas night club has lost its glamour. Why spend $20 on drinks (and potentially hundreds or thousands on entry or a private table) to see the same DJ you saw at Coachella or any one of the dozens of festivals on the summer circuit this year.

Las Vegas Mega Club Industry Is Highly Competitive—And Expensive

While the cost of running a nightclub may be fairly low normally, the luxury nightclubs on the strip are some of the most expensive to run venues in the world due to the cost of entertainment. Residency contracts for major artists like Calvin Harris and Diplo can run into the half-million territory for a single gig. When nightclubs operate several nights per week, this can make the cost of hosting some of the worlds top DJ’s several million dollars—and that’s just for the entertainment.

“While Palms has experienced exceptional growth across both the gaming and nongaming 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,” said a spokesperson for The Palms, Michael Britt in a statement to the Las Vegas Review-Journal. The club shut down in September for a small renovation and never opened back up after the company realized that the venue’s pause in service did not impact the local industry enough to warrant keeping it in business.

There may be a demand for mega-clubs, but it’s clear that it may be time for new venues to come up with concepts that will get people into the venue for a lower entertainment cost. Over at the Wynn, a new concept for a smaller, more intimate nightclub brought a venue called Intrigue. Many touted the club’s opening back in 2016 as the future of Las Vegas nightlife, as it offered a more intimate experience than the mega clubs that adorn the strip. For now, the venue will continue to operate as part of the hotel’s pool area and be available for private events—but The Palms did hint that it could make a comeback in a new way sometime in the future.