Thursday, March 4, 2004 | 11:11 a.m.
Downtown landmark Binion's Horseshoe is set to reopen on April 1 after state gaming regulators approved the $50 million sale of Binion's Horseshoe to West Virginia-based MTR Gaming Group in Wednesday hearings.
Regulators approved a complicated three-way deal that will allow an estimated 900 Horseshoe workers to return to work and the World Series of Poker to go on as scheduled beginning April 22.
The sale is expected to take place Friday, and will mark the end of Becky Binion Behnen's rocky 4 1/2 year tenure as the property's owner. New owner MTR plans to keep the "Binion's" name on the hotel-casino after Harrah's Entertainment Inc., which is buying rights to the Horseshoe brand name in the state as well as the World Series of Poker, eventually removes the Horseshoe name.
Las Vegas-based Harrah's will manage the casino for at least one year, with options to extend the arrangement for another two years.
"It is a difficult and complicated transaction, (but) it protects the public," Nevada Gaming Commission Chairman Pete Bernhard said before voting to approve the sale and licensing.
The state Gaming Control Board considered the deal for almost two hours before voting 3-0 to recommend approval to the commission, which then met for about 45 minutes before voting 5-0 to approve it.
The commission met in a special session called to allow the transaction to take place before the five-member panel's regular March 18 meeting; the commission meeting was tacked on to the end of the Control Board's regular Wednesday session.
The board insisted on doubling the amount Behnen had to set aside to make sure the property would redeem all outstanding Horseshoe gambling chips.
Though Behnen and her lawyers told regulators that an agreed-on $1.5 million fund would be more than enough to cover all outstanding chips, control board members weren't convinced.
"Many, many things have happened (at the Horseshoe) that have shocked all of us," board member Bobby Siller said. "Nobody in this room was comfortable in terms of surety about how many chips are out there."
Behnen hurt her own case when she tried to explain why she was confident there is much less than $1.5 million in unredeemed legitimate chips, telling regulators that they had already redeemed "more $1,000 chips than we issued."
The board voted to tack on an additional $1.5 million reserve to cover unredeemed chips onto Behnen's post-sale obligations.
Most board and commission members focused on the importance of getting Horseshoe workers back on the job and the hotel-casino in operation.
"I'm not worried about timing," commission member Arthur Marshall said. "I think it's important to get the hotel opened, people back to work, and downtown back into action."
But a few pointed out the extraordinary nature of the hearings, noting that many details of the deal were getting ironed out at the last minute, during the hearing, and that regulators hadn't been provided with sufficient information about the transactions to make good decisions.
"It seems like we're just patching here," Siller told Harrah's and MTR lawyers who failed to provide regulators with mandatory projections for the property's gaming performance. "I just expected you to be better prepared."
Board member Scott Scherer said the unusual hearing shouldn't be viewed as a precedent.
"This is a very unique set of circumstances," Scherer said. "I don't intend to consider a matter like this in the future."
Board Chairman Dennis Neilander explained that the Horseshoe's tenuous financial situation and its Jan. 9 closure prompted the panel to modify its usual procedures to accommodate the sale.
"A lot of the stuff we've done here has been on the fly," he admitted, before noting the importance of getting the property reopened and employees back to work.
Harrah's plans to bring about 18 Harrah's Las Vegas or Rio managers to the Horseshoe to operate the property.
The rank-and-file employees Harrah's brings back or hires would officially be MTR employees, but Harrah's will make all employee-related decisions until it relinquishes control of the property.
MTR Gaming would take over operation after Harrah's provides six-months notice.
The actual sale is scheduled to take place Friday after a few last-minute details are ironed out, including agreements with the final two holdouts of the seven property owners who own the land under the Horseshoe and have a right to block the transfer of the lease from Behnen to the new owners.
Harrah's lawyers said they were confident the necessary deals would be finalized to allow the sale to take place as planned.
MTR Chief Executive Ted Arneault said after the commission voted to approve the sale that the chance to partner with Harrah's was a golden opportunity for his company.
"I think Harrah's is as fine an organization as there is anywhere, and that's one of the key advantages (of the purchase)," Arneault said. "I think downtown is ready for a resurgence."
Behnen declined to comment on the sale of the property her father, Benny Binion, opened 52 years ago, but her lawyer spoke for her to the commission.
"The Horseshoe Club has always been the passion of Becky Behnen's life," lawyer Bob Faiss said. "It was her dream, but today marks the end of that dream."
In other action at the Control Board's regular monthly meeting, the panel:
Board member Scott Scherer cast the dissenting vote after questioning Bloch's moves to pay off debts and rebuild his real estate portfolio in the aftermath of the '80s savings and loan scandals.
"It may have been completely legal, but it doesn't reflect good honesty and character," Scherer said, but his two colleagues disagreed and voted to recommend Bloch.
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