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CR78-p56&57-Business3&4:SJC-Casino Review 22/3/09 00:31 Page 1
Terrible to restructure
Owner of the Terrible casinos, Herbst Gaming, is to enter
bankruptcy proceedings in order to restructure its debt. The
pre-arranged move should allow it to complete the process
more quickly than if it had been forced to the courts by
creditors. Herbst Gaming, owned by three brothers, has
more than $1bn (E788m) outstanding. Herbst operates 12
NEWS casinos in Iowa, Missouri and Nevada, including Buffalo Bill’s
and Whiskey Pete’s.
The protection of the courts
has helped Tropicana
‘to exit from
Entertainment formulate a
restructuring and business
Chapter 11
plan that could see it emerge
once again as a fully-fledged
in Nevada
operator. Lenders to the
by May’
company will, if they agree,
and New
now become owners of it.
changedgame ating licence on its most outgoingtide
cana in Atlantic City. That
The Delaware Bankruptcy venue is still owned by the Figures released by Nevada
Court has approved the company but currently Gaming Control Board show
restructuring plans of Ken- operated by a trustee. that gaming revenues in the
tucky-based Tropicana Enter- Under the restructuring state fell for the 13th straight
tainment LLC as it attempts plan, $2.3bn (E1.81bn) of month in January, down 14.8
to appease its creditors and the company’s senior secure per cent on the Strip and
move out of the Chapter 11 debt would be converted 14.6 per cent overall.
bankruptcy protection meas- into common stock in a new Casino revenues are now
ures it has been operating entity OpCo, which will only reaching levels last
under since May 2008. comprise the five riverboat seen five years ago. The
The company, which is venues, the four casino January results include part
one of the largest operators resorts in Nevada outside of Superbowl weekend,
in private hands and which Las Vegas and the Atlantic If creditors agree the sure statement means that prepare our people and which spanned two months
at the moment operates five City venue. The remaining
restructuring plan, the
we move another step closer systems to compete in today’s (Superbowl took place on
casino resorts in Nevada, $442m (E348.5m) will be
Tropicana Las Vegas will be
to emerging from Chapter 11 challenging entertainment Sunday 1 February) and the
including the Tropicana converted into equity in
detached from the rest of the
operations in the company
and implementing our busi- and gaming market.” Chinese New Year celebra-
resort on the Las Vegas Strip, another new entity LandCo, ness plans. The ruling marks The next step in the tions – both traditionally
and five riverboat casinos in which will encompass the the culmination of an intense process is for the company to strong for casino operators.
Mississippi, Louisiana and operations of the Tropicana that of William Yung, the ten-month process during solicit creditor’s votes to Nevada revenues were
Indiana, defaulted on almost resort in Las Vegas. former CEO of the company which the new board and approve the plans in April. A $908.6m (E716.4m), com-
$2.7bn (E2.13bn) in bonds Current common stock who resigned last year. senior management team vote in favour could give pared to $1.06bn (E836m)
last year after the New and equity interests would The man who replaced have worked hard to repair Tropicana the ability to exit in January 2008, of which
Jersey Casino Control Com- be eliminated in the deal, him, Scott Butera, said: “The our regulatory and commu- Chapter 11 as early as May $510.4m (E402.4m) was
mission withdrew the oper- including and in particular court approval of our disclo- nity relationships and to 2009. generated on the Strip.
In Atlantic City, February
revenues from the 11
casinos fell by 19.2 per cent
TWC bucks the trend to post higher profits
year-on-year, the steepest
annual drop in 30 years of
gaming in New Jersey. Rev-
enues were $310.3m
routetosuccess company said: “Our double- Savannah, a four-star (E244.7m), $73.8m
TRANS WORLD CORPORATION digit improvements were property connected to the (E58.2m) less than in Febru-
largely due to our proven Route 59 casino, which is ary 2008.
The US company that owns operational and aggressive also linked to a new full- While the general eco-
and operates the American marketing strategies and service spa and wellness nomic malaise is, like every-
Chance casino chain in the promotional events.” centre. The hotel, which is where, a huge factor in the
Czech Republic has Rami Ramadan, chief located 45 minutes driving decline in Atlantic City, it is
reported significant growth executive of Trans World, distance north of Vienna on also suffering from hugely
for 2008, one of the few in commented: “We are very the main highway to increased competition from
the world for whom things pleased with the revenue Prague, has begun to liberalised gambling in
are going right at the and profitability milestones attract new patrons to its neighbouring Pennsylvania.
moment. achieved in 2008 versus facilities as well as to the Even the Borgata, which has
Revenues from the five 2007. We believe that this Route 59 casino.” occasionally managed to see
venues totalled a record
The brand new Hotel Savannah which Trans World believes
positive business slight annual revenue
US$36.4m (E28.7m) in the will boost revenues at the Route 59 casino even more momentum can be growth in the last year, was
year, a rise of 19.5 per cent sustained through 2009, hit by a 5.8 per cent decline
over 2007. That generated a per cent to $1.3m (E1m). the company. It was also which will help us to in February. Caesars saw its
net profit of $3.7m (E2.9m), The growth came as a helped by an improvement weather the global revenues go down by 29.6
up 36.5 per cent on the result of an increase of 6.3 of two per cent in the win economic crisis.” per cent.
previous year. In the final per cent in table game percentage on the live He added: “In January The highest revenue level
three months of the year, players and 12.6 per cent in games. 2009, we opened our in February was in 2006 at
net profit rose by almost 80 slot machine players, said In its statement the newest operating unit, Hotel $397.4m (E313.3m).
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56 April 2009 • businessnews
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