BestCraps.com

Nevada Casinos in financial woes

Posted on July 14th, 2010

Ma

News Sponsored by Online Vegas Casino

Rated 5 Stars by BestCraps.com

Read Review

Visit Casino

Download Software

————————————————

jor casinos in Nevada are in deep financial woes throughout the month of July. The Riviera Holdings Corporation has filed Chapter 11, bankruptcy, on Monday. The company’s subsidiaries, Riviera Operating Corporation and the Riviera Black Hawk Incorporated have also filed for reorganization.

The Riviera Hotel and Casino on the Las Vegas Strip and Colorado’s Riviera Black Hawk are assets of Riviera’s subsidiaries. Shareholders of about two-thirds of the company’s debt agree to the restructuring. Because of this the Vegas and Colorado hotel casinos may be able to undergo normal operations while under the bankruptcy process.

Riviera Holdings has a reported debt of over $240 million and over $27 million in other liabilities. The recession has also hit the company hard, and now its assets are valued less than its liabilities. According to Riviera lawyers “Debtors were faced with declining hotel and casino revenues based on reduced consumer spending, a tightening credit market, and an overall weakening economy.” Riviera Holding lost a staggering $4.5 million in the first part of 2010.

Shares of the company dropped 36 cents per share. Around the same time in 2009 , shares were down by 8 cents. Room revenue dropped for the Las Vegas strip by 18.4% and average daily room rate was also down by 20%. sA streak of lucky high stakes baccarat players also had an unlucky effect on the Las Vegas casino. Gaming revenues dropped by 6.4 % due to a rather unusual run of lucky players that won more than the house did. Nevada casino’s revenues are also down throughout the state by 4.7%.

“The players were luckier than the casinos,” according to Nevada Gaming Control Board member Frank Streshley, explaining the unfortunate turn of events in the casino. Usually, Baccarat give big winnings to the Las Vegas Casinos, however for the month of May, this wasn’t the case. A 7.1 % increase in baccarat play was seen on May of this year, however, the casino reportedly lost almost $36 million or a drop of 37.1 percent. May 2010 gambling revenues were listed as $450.2 million, down of about 6.4 percent as compared to May 2009 revenues of $480.8 million. If the baccarat wins were not included in the revenue assessments, the casino would have gained instead of reporting losses. Smaller, downtown casinos who are not frequented by big time baccarat players reported only a .7% decline in revenues. This is the smallest reported decline since June, two years ago.

In Station Casinos, fourth of July celebrations were full of extravagant and explosive fireworks. A 9 minute display was seen all around the Las Vegas casino, much to the delight of tourists and guests in the facility. The yearly tradition was carried on despite the company’s bankruptcy status made last year. Station casinos faces a debt of almost $6 billion and is in the middle of a controversial reorganization plan. As much as possible, Station would like current patrons satisfied while on the transition period. Station Casinos Chief Operating Officer Kevin Kelley explained “We have marketing money that we spend every month toward events to bring people to our properties, just because we have a lousy corporate capital structure doesn’t mean we stop running our properties…To us, it’s a good business decision” Fireworks display is a tradition started by Kelley on 1997.

A group of Station Casinos’ holders of unsecured debt are now renewing requests to sue the company. The group is owed about $2.5 billion and are unlikely to get paid under the reorganization plan. Currently, owners of Station Casino are able to retain ownership of 5 properties and can bid for 11 more properties in the upcoming August auction. In 2007 Station Casinos became privately owned, and more bondholders are saying this is what caused the financial struggles. The company however believes the buyout did not cause the financial woes, the recession is to blame. Bondholders say that company insiders received a huge amount of money, even hundreds of million in profit from the buyout deal. “Various insiders clearly understood that the assumptions underlying Station Casinos’ management projections were way off, but, because of their personal monetary interest in seeing the LBO transaction successfully closed (with all the risks on the backs of unsecured creditors), they ignored all the warning signs.” This is according to the proposed suit of the bondholders against Station Casino.