Peter Carlino negotiating for Fontainebleau
There’s a new tough guy on the block in Vegas, a hard-hitter with a long winning streak, very smart, and very, very rich.
He is Peter Carlino, a heavyweight out of Reading, Pennsylvania, more recently doing business out of Wyomissing, a suburb of the state capital, Harrisburg, where he built an empire from a single thoroughbred racetrack once called Mountainview Racing in the nearby town of Grantville. It is now an ever-expanding enterprise known across the gambling world as Penn National Gaming (PENN).
Carlino is new to Las Vegas, but not to almost everywhere else in the U.S.
His company operates 23 gaming and racing ventures in 12 states – Colorado, Illinois, Indiana, Louisiana, Maine, Mississipi, Missouri, New Jersey, New Mexico, Ohio, Pennsylvania, West Virginia – and the province of Ontario.
Their total assets, at last count, were worth more than $5 billion, and the Carlino operations employ more than 15,000.
Penn National is cash rich, and Carlino, 63, runs the show as chairman and chief executive officer. Forbes last pegged his annual compensation at $7.2 million.
He has been eyeing Vegas for years, and last week announced Penn National was, in essence, offering $101.5 million for the bankrupt, stalled and shuttered Fontainebleau at the north end of the Strip.
The deal calls for $50 million in cash as an opening stalking horse bid, entered through its subsidiary Nevada Gaming Ventures, and a $51.5 million line of credit of debtor-in-possession financing to get the halted construction underway. The sellers have agreed, Carlino said, to a Jan. 15 auction, but stumbling blocks were immediately tossed into the arrangement by contractors claiming they are owed $450 million for work already done but not paid.
Carlino told the press, "It is uncertain whether our proposal will be accepted or whether we will be the successful bidder at an auction," but said he currently is in discussions with a potential partner who "can bring strategic value in addition to economic contribution."
Estimates on the costs of completing the Fontainebleau run as high as $2 billion, but that number is not likely to frighten Carlino. Penn National paid $2.2 billion four years ago to buy Argosy Gaming and tried, but failed, to buy Harrah’s a year later.
Commenting on the cost of finishing the Fontainebleau, Carlino said he is aware of the chorus of skeptics who joined voices last week when Penn National’s bid for the mammoth project was announced. "Our view is that despite impressive scale, its value is little to nothing because the cost to complete is at the edge of value in our judgment."
Carlino, like a lot of smart kids in Pennsylvania, went to Penn State, and graduated from there in 1969 with a bachelor of arts degree in general arts and sciences.
He had a ready-made job waiting in the family’s Penn Title Insurance company, an underwriting company in his home town of Reading, and he took it, becoming president of the company three years later. In 1976 he formed Carlino Financial Corporation, a holding company for various family businesses, including the Mountainview track near Harrisburg.
In 1983 he left Carlino Financial to found Carlino Development Group, building and operating residential and commercial real estate projects in eastern Pennsylvania, according to the biography published by Penn State on its website in 1993, when it announced Carlino as winner of the university’s Alumni Award.
Carlino returned to the racing wars and took Penn National Gaming public in 1994, and by 2002 it was listed as one of America’s fastest growing companies by Fortune.
He and his wife Marshia have been active in philanthropy, serving on the board of the Milton S. Hershey Medical Center, where they endowed a professorship in inflammatory bowel disease and a nursing excellence award honoring Peter’s late mother, a registered nurse.
Peter Carlino makes an interesting addition to the movers and shakers of Las Vegas. He may or may not get the Fontainebleau, but his presence in this town will be felt. It already is, and if the unfinished towers are to be completed, it is likely he will have a hand in finishing them.
The Fontainebleau’s fate "ultimately will be decided by the courts and a judge," he told zoominfo.com, adding, "We believe in the future of Las Vegas. The current economic crisis will not last forever."
Question? Comment? E-mail me at: Stan Bergstein