Regulators urge licensing of Mesquite Gaming LLC

The state Gaming Control Board on Wednesday unanimously recommended the licensing of Mesquite Gaming LLC, a new company formed following the bankruptcy of Randy Black's Mesquite casino properties.

The company will oversee the Casablanca, Virgin River and Oasis casinos located in Mesquite about 75 miles northeast of Las Vegas. The board's recommendation to allow Mesquite Gaming to operate the casinos will now be considered by the Nevada Gaming Commission on July 28.

"It's been a long and drawn-out process. We've spent $11 million ... over the last three years," Black told the three-member board.

Black, who will be chief operations officer of the new company and hold a 10 percent ownership stake, said the bottom line was once their bankruptcy plan is approved, Mesquite Gaming will be reorganized and recapitalized.

A restructuring, Black said, that would be "great for Mesquite and our properties there."

Under the company's plans, investment company Newport Global Advisors LP of Woodland, Texas, would hold a 40 percent stake, and Anthony Toti, CEO of Mesquite Gaming, would own 25 percent.

South Point owner, Michael Gaughan and his family, would own 25 percent and his casino would operate the race and sports books at the Mesquite casinos.

Black Gaming LLC filed for Chapter 11 bankruptcy in March 2010 and the U.S. Bankruptcy Court in Las Vegas, where Mesquite Gaming will be headquartered, confirmed the reorganization plans four months later on July 21.

Under the terms of Black's bankruptcy filing, a $15 million loan held by Wells Fargo was paid off, while the company's total debt was reduced from $235 million to $62.5 million.

Mesquite Gaming also will have access to a $10 million line of credit from Nevada State Bank once regulators approve the bankruptcy plan, said Greg Garman, an attorney with Gordon Silver of Las Vegas. The reorganization also reduced the company's debt service from $22 million to $5.3 million annually.

Toti said the new company would continue its current business strategy of trying to attract more visitors from Las Vegas and Utah. He told board members that the hotel rooms have been upgraded and the company for the last year has been focusing on direct marketing to 120,000 customers in its database.

"I believe in Mesquite," Toti said. "We were hurt by the recession, but I believe it's rebounding as we continue our current program to ensure a quality experience for every customer."

The Control Board also recommended licensing of five board managers for Mesquite Gaming, including Black, Toti, Timothy Thomas Janszen, and Ryan Langdon for Newport Global and Katherine Banuelos to represent the Gaughan family.

In other business, the board recommended approval of several licenses as well as a loan agreement between American Wagering Inc. and William Hill PLC, which agreed to pay $18 million in April for the Las Vegas-based parent company of Leroy's Horse & Sports Place sports books and kiosks.

Vic Salerno, president and CEO of American Wagering, said the company has pledged common stock as part of a bridge loan that stands on its own and is not a part of the sale price. So far, he said, the company has used $4.25 million and has up to $3 million left to use as needed.

Board Chairman Mark Lipparelli asked Salerno, "What are the odds of an NFL season?"

"We should know by next Wednesday," Salerno told the board. "I think there is going to be a season because there is too much at risk."

He said American Wagering, which offers sports wagering applications for Blackberry and Android smartphones, was set to submit its iPhone application for testing within the next week.

Meanwhile, IKE Gaming Inc. owner Irving Epstein transferred two 3.3 percent stakes in the El Cortez Hotel and Casino to daughters Alexandra Epstein and Katie Epstein.

The board also recommended the licensing of Felix Rappaport as president and chief operating officer of The Mirage and the licensing of J-M Squared LLC and manager John-Martin Meyer to operate the Silver Saddle Saloon.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.