In Business Las Vegas, October 27th, 2006
The Nevada Gaming Commission has approved the split that enabled Michael Gaughan to take sole possession of the South Coast casino property.
Commissioners, meeting in Carson City, approved the transfer of interest from Coast Hotels and Casinos Inc., a subsidiary of Boyd Gaming Corp., to Gaughan South LLC, Gaughan’s new company.
Gaughan, who decided last summer to leave Boyd’s board and strike out on his own, changed the name of the property to the South Point when the transaction closed Tuesday.
Gaughan relinquished his Boyd stock in exchange for the property in a deal estimated to be worth around $575 million.
The transfer was approved with one abstention.
The Gaming Commission approved the initial licensing of the property 11 months ago.
Under terms of the transfer, Gaughn and Coast will share revenue of a shared bingo system through Nov. 30 and Gaughan, Coast and Boyd will share revenue on sports pools through Feb. 11, the end of the National Football League season.
Gaughan also was licensed to operate a race and sports book and conduct off-track pari-mutuel race wagering.
The Federal Trade Commission already has signed off on the split. Commissioners questioned Gaughan about his initial operation of the property. He told the board that the casino’s equestrian center, one of the showcases of the facility, had its best weekend ever at a recent horse show it hosted. Gaughan said he expects the South Point’s market will be half locals and half tourists.
Asked about traffic snarls at the property, Gaughan said he expects some problems to be eliminated when a freeway interchange on Interstate 15 at Silverado Ranch Parkway is completed in March. He said he was uncertain about a timetable on the widening of Las Vegas Boulevard South as more properties develop south of the casino.
Commissioners also approved the licensing of Las Vegas-based Golden Gaming Inc.’s Golden Pahrump Nugget LLC to operate the Pahrump Nugget Hotel and Gambling Hall.
Blake Sartini, chief executive of Golden Gaming, said the company sees growth potential in the Pahrump market as housing becomes less affordable in Las Vegas and homes remain affordable in Pahrump.
“It works well with our current portfolio,” Sartini said. “We’ve had some success in out-ofthe-mainstream markets.”
In addition to the Pahrump property, Golden operates three casinos in Black Hawk, Colo.
The Pahrump Nugget, built in 2001 by the Ensign and Richardson families which chose to divest the properties, is Pahrump’s largest property and has additional acreage adjacent to the casino. The property is located near the intersection of major highways, including the one leading to the heavily traveled Death Valley National Park.
Sartini said there are no plans to expand at this time.
“We don’t want to get too far ahead of the market out there,” he said.
In other business, the commission:
• Appointed Gaughan as a representative of the South Point to the 11 member off-track parimutuel horse wagering advisory committee, replacing a representative from the Stardust, which will soon cease operations. Commissioners considered representatives from Harveys in Lake Tahoe and Sam’s Town in Las Vegas, but agreed that their parent companies — Harrah’s Entertainment and Boyd Gaming, respectively - already were well-represented on the committee.
• Approved an ownership transfer of a restricted license to the new owners of Play It Again Sam, an unusual operation because it has a license grandfathered from the days when strip clubs were allowed to have gaming. Robert Davis, the secretary-treasurer of the holding company for the club and who holds a 45 percent interest, said the property’s focus would be more on the tavern and its food offerings and the slot machine revenue and not on topless dancers. Former owner Randall Kiefer is transferring his interest to Davis and partners Denise Isabella, who has a 45 percent interest, and Donald Newhouse, who has a 10 percent interest.
• Approved a manufacturing and distribution license for Next Gaming LLC, which is developing a server-based gaming system. Chief executive Bruce Merati said he knew he would be competing with some of the giant manufacturers of the industry with his system, which he said he is about halfway completed with developing. The company plans to field test the system at the Four Queens property in downtown Las Vegas.
Richard N. Velotta covers tourism for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4061 or by e-mail at velotta@lasvegassun.com.
