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Jul. 16, 2008
Copyright © Las Vegas Review-Journal

Owner of Fitz under attack

Senators call for license revocation

By BENJAMIN SPILLMAN
REVIEW-JOURNAL

Legislators in Pennsylvania want to revoke Las Vegas casino owner Don Barden's license to run a casino in their state.

Barden recently lost control of a casino project in Pittsburgh when he couldn't line up financing to retain a majority stake in the deal and now seeks to shift control to new investors.

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    • Now state Sens. Jane Orie and Jim Ferlo want Barden to give back his gaming license.

    They say Barden, who owns Fitzgeralds on Fremont Street in downtown Las Vegas, participated in a "last-minute bait-and-switch" when he handed the reins of the Pittsburgh casino to investor Neil Bluhm.

    "His financial credibility has evaporated very quickly," Ferlo said.

    Barden did not respond to a message left with an assistant at the Detroit headquarters of his firm, Barden Development.

    In 20 pages of documents with the Pennsylvania Gaming Control Board, the senators criticize Barden's effectiveness as a businessman and urge the board to seek new bidders for the Pittsburgh license.

    They argue Barden and the new investors are trying to circumvent the state's casino regulations by transferring a license among themselves instead of starting the process anew and allowing for new bidders.

    The investors' effort "is a clear attempt to avoid any competitive application process for the Pittsburgh slots license," they wrote. "This is unacceptable."

    Although Fitzgeralds is a separate business entity from the Pittsburgh deal and Barden's other casinos in Indiana, Colorado and Mississippi, the downtown Las Vegas property was dragged into the fray.

    In May, when Barden was seeking to retain control of the Pittsburgh project, he promised to contribute $35 million and used Fitzgeralds as collateral. The idea was to convince bankers that he had a sufficient stake in the outcome of the project.

    At the time it appeared Barden was destined to sell Fitzgeralds in order to raise the money because it is unlikely the property could produce enough income to generate $35 million for the Pittsburgh deal by the first quarter of 2009, the deadline for Barden's cash contribution.

    When Barden announced he would relinquish his majority stake last week, it also meant he no longer needed to offer his Las Vegas casino as collateral.

    But Ben Bubeck, a Standard & Poor's analyst who has written extensively about the Pittsburgh deal, said selling Fitzgeralds could help Barden offset financial troubles with his other companies.

    As for Pittsburgh, the project is stalled and it isn't clear when it will get back on track.

    After being selected over Harrah's Entertainment and others for the Pittsburgh license in 2007, Barden has missed construction deadlines and scaled back plans for the property.

    He attributed the problems to the upheaval in the credit markets prompted by the national economic downturn and the mortgage lending crisis.

    Ferlo said people in Pennsylvania are anxious to get the project back on track.

    "(Barden) made a lot of great statements about commitment to the community. That has melted away pretty quickly," Ferlo said. "You see a half-built shell of a parking garage and a steel frame of a building."

    Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.

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    LVBear wrote on July 19, 2008 09:27 PM: Mr. Barden has run his slum Fitzgeralds property in downtown Las Vegas into the ground. The place is a joke. I hope he loses all his properties, and is forced into bankruptcy.
    ---------------------

    Opinions and Commentary on the Gaming Industry: www.TheBearGrowls.com


    abc wrote on July 16, 2008 09:00 PM: This project should be awarded to a reputable casino company. The PA Gaming Commision members should resign for not discovering that this guy had inadequate financing, and for awarding it to him based on race.


    abc wrote on July 16, 2008 07:16 PM: This project should be awarded to another (reputable) casino and the members of the PA gaming commision should resign or be punished... when they awarded this contract, they apparently didn't notice, or care, that this guy had inadequate financing, and they even hinted that race would be a factor in the award. If it is illegal to discriminate by race, then this should apply to ALL races. One of the major casinos bidding for the job even offered to build the Penguins a new stadium as part of the deal! Affirmative action is such a terrible thing... punishing reputable, qualified bidders because they are not the 'politically correct' race, and forcing the taxpayers to suffer the consequences! When will this end?


    douglas wrote on July 16, 2008 11:00 AM: just a view from the cheap seats, but this deal sounds like what they call a "house of cards".


    jnn wrote on July 16, 2008 09:08 AM: Exactly Denise, I'm from Detroit. He is a Scumbag. I haven't lived there in a long time, but that's the general consensus. His own city wouldn't give him a casino license when they put in their casinos!! What was Phili thinking???


    Vegas Gang wrote on July 16, 2008 08:20 AM: We discussed Barden at length in a segment of our most recent episode of the Vegas Gang Podcast:

    You can listen here if you'd like:

    http://www.vegasgangpodcast.com/2008/07/vegas-gang-12-july-11th-2008/


    Denise M wrote on July 16, 2008 08:00 AM: Ask anyone in Detroit, where Barden made his millions, about him, and the usual immediate response is "Scumbag".


    Thomas wrote on July 16, 2008 07:36 AM: "After being selected over Harrah's Entertainment and others for the Pittsburgh license in 2007, Barden has missed construction deadlines and scaled back plans for the property."

    Can you say affirmative action??? As usual, affirmative action once again rewards underachievement.


    Harris wrote on July 16, 2008 06:57 AM: Here comes jesse and Al