Thursday, June 26, 2003
Copyright © Las Vegas Review-Journal

TRANSACTIONS: Historic LV casino faces sale

Price for two Golden Nuggets expected to top $200 million

Industry sources said late Wednesday that MGM Mirage had reached a deal to sell the Golden Nugget Las Vegas, above, and the Golden Nugget Laughlin to a pair of entrepreneurs. Photo by Gary Thompson.

MGM Mirage has agreed to sell its Golden Nugget Las Vegas and Golden Nugget Laughlin casinos to two Las Vegas Internet entrepreneurs, casino industry sources said.

The buyers, Travelscape founders Tim Poster and Thomas Breitling, are expected to pay more than $200 million for the two properties as well as the Golden Nugget brand. An announcement is expected today.

The downtown Golden Nugget is believed to be the oldest continuously operating gaming establishment in the state since it opened in the mid-'40s. It remains downtown's most profitable casino.

Poster and Breitling are expected to "try to make the Nugget a new-age version of 'Old Vegas,' " an industry source said. "They want the owners to be part of the scene, recapturing the sense of personalized service Las Vegas' smaller properties were famous for."

MGM Mirage executives were unavailable Wednesday to comment on the expected deal. Poster and Breitling were likewise unavailable.

The deal requires Nevada gaming regulators' approval, and would take place after Poster and Breitling are OK'd by the Nevada Gaming Commission.

The property is expected to change hands in six to nine months if regulators approve.

MGM Mirage has been looking for a buyer for both properties for some time, sources said. The Golden Nugget resorts are too small for a company as big and profitable as MGM Mirage and a drag on earnings.

Both properties, still profitable, wouldn't have a similar effect on private operators such as Poster and Breitling. The two are expected to realize substantial tax savings on the deal as well, sources said.

Almost all of the rooms at the Golden Nugget in downtown Las Vegas have been remodeled in the past couple of years, another plus for the buyers, sources said.

Poster and Breitling took their Travelscape online travel reservations company live on the Web in 1999 and sold it in 2000 for about $90 million to Microsoft Corp. subsidiary Expedia.

Industry sources were not familiar with financing details for Poster's and Breitling's proposed Golden Nugget purchases.

The two are expected to retain the Golden Nugget's estimated 3,000 Las Vegas and 1,000 Laughlin employees.

Golden Nugget's maids, cooks and waitresses are Culinary Union members and have a contract that protects their rights in the event the property is sold, which means that the buyers won't be able to replace the unionized staff, Culinary Secretary-Treasurer D. Taylor said Wednesday.

One casino industry source suggested that the buyers will likely have to add workers, because the new owners would have to assume functions such as marketing and purchasing now handled by MGM Mirage corporate departments.

The pending announcement is the most recent in a string of recent downtown deals, including announced sales of the Four Queens, Las Vegas Club, Plaza and Western. A proposed sale of the Lady Luck still awaits regulatory approval.

Steve Wynn acquired downtown's Golden Nugget in August 1972 and opened the Laughlin property in 1988.

The Golden Nugget Las Vegas has 1,907 rooms and a 34,680 square-foot casino, while the Golden Nugget Laughlin has 300 rooms and a 32,600 square-foot casino, Bear, Stearns & Co. reports.

Both resorts were bought along with the rest of Wynn's Mirage Resorts properties and merged into MGM Mirage in May 2000.