Wednesday, Feb. 27, 2002 | 11:03 a.m.
Blake Sartini, a former top executive with Station Casinos Inc., is buying the Las Vegas Valley's largest chain of video poker bars.
Sartini's company, Golden Gaming, has filed an application with the state Gaming Control Board to acquire 23 PT's Pubs scattered throughout the area, said Randy Sayre, chief of investigations for the control board. The deal cannot be consummated until both the board and commission approve the deal; Sayre said a hearing could come as early as April.
"Blake Sartini is buying the PT's," Sayre said.
The chain of bars is now jointly owned by Canadian firm Revenue Properties Co. Ltd. and local businessmen Phil and Tom Boeckle. The application on file with the board did not include PT Mining Co., a 163-slot casino located on Boulder Highway in Henderson.
Nineteen of the PT's being acquired by Sartini are "restricted" locations, which caps the number of slots they can have at 15. Another four are non-restricted locations, which have no such caps.
Golden Gaming officials declined comment, as did the Boeckles. Revenue Properties officials could not be reached for comment.
The deal would mark Sartini's second since he stepped down as chief operating officer of Station last September. Upon his departure from Station, Sartini acquired Southwest Gaming Services Inc., a 900-machine slot route, from Station for $14 million in stock. Sartini is the brother-in-law of Station Chairman and Chief Executive Frank Fertitta III.
Video poker bars have spread across the Las Vegas Valley almost as quickly as new locals' casinos over the last several years, as new development constantly pushes the valley's boundaries outward. And once they open, said one local observer, they usually stay open.
"You don't see much attrition in these places," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. "They open up, and they stay open through thick and thin. They give away beer like water, so you know they're making money off their games. It's a very powerful market we never read about."
And PT's might be the most profitable of the bunch, Curtis said.
"PT's is absolutely enormous," Curtis said. "It is smack dab in the middle of the locals market. Everyone talks about the locals ... a lot of locals go to the local bar, and PT's is dotted all over the city."
But PT's hasn't performed to the expectations of Revenue Properties since the Toronto firm bought a 50 percent piece of the company in 1998 for $9 million.
Revenues from the PT's chain have been increasing since the buyout -- Revenue Properties reported C$21.7 million in revenue from its 50 percent stake in PT's for 2000, up 48 percent from 1999.
But over the same period, operating income fell 17 percent to C$1.8 million. Revenue Properties said it took a loss of C$7.5 million from PT's in 2000, but much of this came from the write-down of assets to prepare for a sale of the chain.
Both 1999 and 2000 results came in below Revenue Properties' expectations, the company said in financial reports. The company blamed a "disappointing" 2000 primarily on PT Mining casino, opened in March 2000, as well as "the slow pace of expansion due to a lack of suitable sites (in the Las Vegas area)."
Revenue Properties and the Boeckles found their first potential buyer last May, when they entered into a pact to sell the bars to PDS Gaming Corp., a Las Vegas-area company that finances and leases gaming equipment. This deal also did not include the PT Mining casino.
The PDS deal fell through two months later, however, after PDS was unable to meet a deadline for finalizing financing agreements. At the time, however, Revenue Properties officials indicated they remained interested in finding a new buyer for the chain.
Meanwhile, the performance of the chain has been improving. Over the nine-month period ending Sept. 30, 2001, Revenue Properties reported revenues of C$20.5 million from its 50 percent PT's stake, up 31 percent. Net income was C$1.1 million, compared to a net loss of C$1.5 million in the year-ago period.
Curtis hopes the sale will mean better deals for Las Vegas video poker players.
"They don't have particularly good (payout) schedules at PT's," Curtis said. "With Sartini coming from a (company) where they know the value of a good video poker schedule, maybe we'll see something good at these places."