More equity funds
for Nev. casinos

Sep 5, 2006 8:30 AM

Nevada casino bosses continue their creative ways, looking for that most necessary of all building materials — funding!

They’ve struck gold again, so to speak.

It’s the money flowing from the equity funds intent on taking advantage of a new look in licensing procedures for big equity investors.

It’s the money that turns dreams into bricks and mortar.

Casino officials opened the door to this new source of investment for the gaming industry when they licensed executives from the Goldman Sachs-sponsored Whitehall Funds to control a 40-percent equity stake in the Colony Capital vehicle that owns the Las Vegas Hilton.

That was about two months ago.

The second application based on this new approach to licensing that focuses on approving certain key executives rather than an entire company — whose people would probably not stand still for the sort of full-body search commonly associated with gaming licenses — is now ready for action.

Oaktree Capital Management goes before the Gaming Control Board this week. The private Los Angeles-based company that manages assets totaling about $28 billion wants approval to invest $65 million and own a third of Cannery Resorts, which owns the Cannery and operates the Rampart Casino in the Las Vegas area and also has designs on many more things.

Bill Paulos and Bill Wortman are the two principals in Cannery and they will own the remainder of the company through their Millennium Gaming. They expect to build more Cannery-style casinos and take advantage of gaming opportunities wherever they may be available.

Paulos got his start with the former Circus Circus Enterprises and Wortman began with Caesars World. They were the first operators of Detroit’s Greektown Casino.

Nevada’s No. 1 industry has traveled light years from that era when the most widely known source of outside development capital was the Teamsters Pension Fund.

The question now is how many other hopeful developers will move to take advantage of this opportunity? It’s hard to say, but there is strong evidence of their interest.

Control Board member Mark Clayton said the Board has periodically heard from individuals wondering if the "Colony structure is suited to their interests."

These people with their desires to take advantage of a red hot market now have something to look at.

Clayton believes the change to licensing regulations is as significant as the action of the late 1960s, when Howard Hughes helped open the door to corporations being approved to do business in Nevada.

Stardust memories

The Stardust is not taking reservations beyond Nov. 1, as the company moves steadily toward the start of construction by next year’s second quarter on the redevelopment of the 60-acre Stardust site.

But Boyd officials say in the next breath that Nov. 1, is NOT the expected closing date. As an official explained, "We simply did this so that when we determine the exact closing date we can minimize the challenges associated with the closing.

What the company has is a very good excuse for one heckuva going-out-of-business party. No one has to be reminded of the possibilities associated with the holidays in Las Vegas.

Maybe they can stretch this year’s possible party as far as the Super Bowl. Few Las Vegas casinos evoke as much nostalgia as the half-century-old Stardust.

Okay, not always for reasons that put a big smile on the faces of gaming officials, but even the darker moments associated with those pre-Boyd days could be part of an out with the old and in with the new theme.

And on the last day, whatever that day is, you let guests back their pickup to the door and take a little piece (or a big piece) of the place home with them.

Can you see Bill Boyd and his people at the door, working up a sweat, their sleeves rolled up, shouting, "Make us an offer. No reasonable offer refused."

Binion to get a
piece of Wynn?

There’s an interesting story hiding out there in plain sight as Jack Binion has gone to work as Steve Wynn’s man in charge of Chinese gaming operations.

Recent SEC filings show Binion, who is being paid a million a year for the next three years, already owns nearly 2.5 million shares of Wynn Resorts stock valued at more than $182 million. This was as of several days ago.

And that’s before we get to those 500,000 shares of Wynn stock that will vest over the three years of Binion’s employment contract.

So why is the former chairman of Horseshoe Gaming who was a very wealthy man before he sold his company to Harrah’s Entertainment for more than $1.4 billion, back to working for a living at the age of 69?

"A million a year is like beer money for Jack," sniffed a gaming industry veteran who is familiar with Binion’s approach to life and good times.

A good bet is that Binion will eventually become not just an employee but a partner as Wynn goes forward with the development of as many as four casinos on the so-called Cotai strip.