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Howard Stutz | INSIDE GAMING
Report reveals grim news for Binion's
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Updated: Jun. 5, 2007 | 2:27 p.m.
Binion's showing a negative cash flow of more than $3 million was bad enough. But the news got worse for the Fremont Street hotel.
In addition to reporting cash flow deep in the red Binion's parent company, MTR Gaming Group of Chester, W.Va., said operating losses at Binion's were nearly $5.4 million -- more than 20 percent of the $20 million MTR Gaming spent to purchase the property from Harrah's Entertainment.
William Robinson, the man MTR Gaming put in charge of operating Binion's, didn't return calls for comment. But MTR Gaming's assessment of prospects for the 56-year-old casino were grim.
After describing plans to upgrade the casino's appearance and marketing, the MTR Gaming earnings report says, "there is no guarantee that these efforts will enhance revenue growth and/or improve operating performance."
News of Binion's dire straits comes just in time for the expiration of labor agreements for some of the property's 430 union workers. The earnings statement reports that agreements for some of the workers expire May 31; it does not say how many.
While private equity firms Apollo Management and Texas Pacific Group were not involved in Monday's court hearing between Harrah's Entertainment and stockholders, they still sent a big-name attorney to observe on their behalf: Samuel Lionel, founding partner of Lionel, Sawyer & Collins.
It is too early to tell what effect Monday's resignation by Starwood Hotel & Resorts Chief Executive Officer Steven Heyer will have on a partnership working to develop 50 acres on Harmon Avenue.
Starwood is a joint-venture partner in the Edge Group to develop W Las Vegas as part of a mixed use project west of the Hard Rock Hotel.
Reagan Silber, co-chairman and chief executive officer of the Edge Group, said he was surprised by the announcement's suddenness. But he added that it was better that the resignation happened now than in couple months, when the partners would be closer to announcing a project.
"I would think, by June or so, we would have some really clarity," Silber said. "The timing of this is such that we can redefine and figure out the partnership going forward."
Edge Group has been seeking a third equity partner that is scheduled to be announced during the summer.
W Las Vegas still holds reservation agreements and deposits but no hard contracts for 750 hotel-condominium units.
The Inside Gaming column is compiled by Review-Journal gaming and tourism writers Howard Stutz, Benjamin Spillman and Arnold M. Knightly. Send your tips about the gaming and tourism industry to insidegaming@reviewjournal.com.
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