News for the Hospitality Executive
|By Jeff Simpson, Las Vegas Review-Journal
Knight Ridder/Tribune Business News
Jan. 11, 2004 - Unable or unwilling to raise the money required to maintain her casino bankroll, Binion's Horseshoe owner Becky Binion Behnen agreed Saturday to keep her casino closed.
Her deal, approved by an emergency Saturday afternoon meeting of the Nevada Gaming Commission, requires Behnen to keep the 52-year-old casino closed until state regulators agree that it has sufficient funds on hand to cover gamblers' winnings.
But with the casino and its hotel closed, the future of the Horseshoe Club and its 1,000-plus workers remained unclear.
Former owner Jack Binion, who operated the property until sister Behnen assumed control of it in 1998, said Saturday that he won't be returning to control the family landmark.
"I don't see it happening," said Binion, who maintains a small ownership slice of the downtown property. "I've got too many other things going on."
He said, however, he believes the Horseshoe remains a viable property and that "It could be turned around."
But the Horseshoe Gaming Holdings Corp. chairman, currently awaiting federal and state regulators' approval of the $1.45 billion sale of his three-riverboat casino company, which is unrelated to Binion's Horseshoe, to Harrah's Entertainment, was sad that many people who worked for him for "years and years" were losing their jobs.
"Obviously, I'm sad," Binion said. "I'm sad they closed it, that it degenerated."
Horseshoe executives were unavailable to say how many employees have lost their jobs. During the summer of 2002, property bosses said the Horseshoe employed 1,700 workers, but the number of workers has dropped since then.
Saturday's actions came after deputy U.S. marshals armed with court orders authorizing seizure of $2 million entered the Horseshoe casino Friday evening and ordered it closed while an estimated $1 million was seized.
The Horseshoe's hotel was allowed to remain open Friday, but on Saturday the remaining guests were ordered to leave the historic downtown fixture, which was almost empty except for a handful of Binion's workers and security guards.
"It's got a lot of history," Frances McKissick, 41, told The Associated Press. "It's going to take away from the tradition of Fremont (Street)."
Another guest who was forced to pack up Saturday, Jim DiGiorgio, an adult film director, told The Associated Press, "It's the end of an era."
U.S. District Judge Roger Hunt approved the seizure in December to satisfy debts owed to the Southern Nevada Culinary and Bartenders Pension Trust Fund and to the Hotel Employees and Restaurant Employees International Union Welfare Fund.
Elected officials of Culinary Local 226 issued a Friday statement to members who worked at the Horseshoe, explaining why the union planned to seize the money even though it could force the property's closure.
Noting that the Horseshoe owed the union's health and pension plans close to $2 million, the letter said the hotel-casino stopped paying its required contributions to the funds in June.
"The plans have had to provide your benefits even though they were not being paid," the letter noted. "The (plans') trustees ... have bent over backward trying to help the Horseshoe. They gave the Horseshoe extension after extension in the hope that the promises made by Horseshoe ownership about getting substantial new money in the form of loans would come true. ... It is sad that the Horseshoe has come to this."
Culinary officials were unavailable to comment Saturday, but D. Taylor, security and treasurer for the Culinary Union Local 226, told The Associated Press, "This was a desperation measure on our part. It's never good when something like this happens."
Taylor also said if Binion's cannot reopen, the union will help its members find other jobs.
The gaming commission acted Saturday at its emergency meeting after Behnen agreed to sign a stipulation agreeing to keep the casino closed.
"The Horseshoe will close its gaming operations immediately and will not activate any game, gambling game, gaming device, sports pool or race book without the prior administrative approval of (the chairmen of the control board and commission)," the order noted.
The Horseshoe will keep its gaming license but will have to pay applicable gaming taxes and fees while the casino is closed. Prior to reopening, the casino will have to "secure the minimum bankroll requirements," the order noted.
The commission voted 5-0 to approve the order, which meant that the panel didn't have to order the Horseshoe to close its casino, which it was prepared to do if Behnen hadn't signed the deal agreeing to close it without a commission order.
"The Horseshoe has been a prominent, world-renowned licensee for many, many years," commission Chairman Pete Bernhard said after the emergency meeting. "Any time a licensee is in financial difficulty it's a sad situation."
Commission member Art Marshall added the Horseshoe has a special place in the memories of longtime Las Vegans.
"The Horseshoe is an institution," Marshall said. "It's a sad day for the industry, for downtown and for the Binion family. I hope they can work their way out of this."
Behnen didn't appear at the public meeting at the Sawyer Building; she sat at a conference table in an anteroom next to the hearing room while the regulators decided her fate.
Bob Faiss, Behnen's lawyer, observed the brief hearing.
"Mrs. Behnen has agreed to the stipulation (requiring the casino closure)," Faiss said. "It speaks for itself, and I have no further comment."
Becky Behnen was not available for comment. Nick Behnen, her husband and the property's former marketing executive, was reached at home by telephone but shouted a profanity at a reporter before hanging up.
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(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News.