The company purchased several sites that were gaming-entitled, meaning that major casinos can be built at that location without additional approvals. There are only a limited number of such sites available in the Las Vegas area.
Station has also branched out into managing casinos that they do not own.
On December 4, 2006, Frank Fertitta III, Lorenzo Fertitta, and Colony Capital LLC, operating as Fertitta Colony Partners, made a highly leveraged offer to purchase all existing shares at $82 per share and take the company private. The Fertitta brothers, their sister Delise Sartini, and Blake Sartini, her husband, with a combined investment of $870.1 million, purchased a 25% stake in Fertitta Colony Partners. Colony Capital contributed $2.6 billion for a 75% share. As of November 7, 2007, the company’s stock (old symbol STN) was no longer listed on the New York Stock Exchange.
In March 2008, both Frank and Lorenzo Fertitta were listed as billionaires in Forbe’s annual list of the world’s billionaires, but the purchase loaded the company with billions in debt. As of May 2011, Frank was ranked 1057th on the list of world’s billionaires, Lorenzo was ranked at 1140th. Both were tied for these rankings with several others.
On July 28, 2009 Station Casinos filed for chapter 11 bankruptcy. Station Casinos’ filing listed $5.7 billion in assets against $6.5 billion in debt. The filing said the company has 510 holders of unsecured and subordinate debt totaling $4.4 billion. On August 21, 2009, Frank Fertitta Jr., the founder of Station Casinos and father of the Fertitta brothers, died from complications of a heart condition.
Station Casinos finally exited bankruptcy in June 2011 with $4 billion less in debt, and with creditors putting the company’s 18 casinos back in the hands of the Fertitta family. The Fertitta brothers agreed to put nearly $200 million in the reassembled company, and now own 45 percent of its outstanding shares. The other new equity owners include the company’s main secured lenders, Deutsche Bank AG, which now holds 25 percent, JPMorgan Chase with a 15 percent stake, and former unsecured bondholders hold an additional 15 percent, according to lawyers on the deal.
|Brand Name||Casino||Gaming area||Opened or acquired||open/acq.||50%|
|Station Casinos||Boulder Station||89,443 sq ft (8,309.5 m2)||August 23, 1994||open|
|Station Casinos||Green Valley Ranch||133,659 sq ft (12,417.3 m2)||December 18, 2001||open||Yes|
|Station Casinos||Palace Station||84,000 sq ft (7,800 m2)||July 1, 1976||open|
|Station Casinos||Red Rock Resort Spa and Casino||119,309 sq ft (11,084.2 m2)||April 18, 2006||open|
|Station Casinos||Santa Fe Station||156,401 sq ft (14,530.1 m2)||October 2, 2000||acq.|
|Station Casinos||Sunset Station||133,409 sq ft (12,394.1 m2)||June 10, 1997||open|
|Station Casinos||Texas Station||123,045 sq ft (11,431.3 m2)||July 12, 1995||open|
|Fiesta Casinos||Fiesta Henderson||73,450 sq ft (6,824 m2)||January 4, 2001||acq.|
|Fiesta Casinos||Fiesta Rancho||59,951 sq ft (5,569.6 m2)||January 4, 2001||acq.|
|Wildfire Gaming||Wildfire Casino||6,800 sq ft (630 m2)||January 27, 2003||acq.||Yes|
|Wildfire Gaming||Wildfire Lanes||6,750 sq ft (627 m2)||June 26, 2008||acq.|
|Wildfire Gaming||Wildfire Boulder||6,700 sq ft (620 m2)||August 2, 2004||acq.|
|Wildfire Gaming||Barley’s||5,190 sq ft (482 m2)||January 18, 1996||open||Yes|
|Wildfire Gaming||Wildfire Sunset||4,700 sq ft (440 m2)||August 2, 2004||acq.|
|Wildfire Gaming||Lake Mead Lounge||3,500 sq ft (330 m2)||acq.|
|Wildfire Gaming||The Greens Cafe||1,088 sq ft (101.1 m2)||open||Yes|
|Wildfire Gaming||Wild Wild West||11,250 sq ft (1,045 m2)||July 6, 1998||acq.||Yes|
All the Nevada sites below are gaming-entitled, unless otherwise noted. Gaming-entitled means that a casino can be built on that location without special approvals.
Morrison & Foerster is advising Boyd on the transaction with a team that includes corporate partner Brandon Parris, financial transactions partner Kathryn Johnstone, tax partners Stephen Feldman and Remmelt Reigersman, executive compensation partner Michael Frank, employment partner Eric Akira Tate, real estate partner Peter Aitelli, technology transactions partner Paul Jahn and antitrust partner Jeff Jaeckel. The firm previously represented the company on its unsuccessful bid for assets owned by the bankrupt Las Vegas–based Station Casinos.
Brian Larson serves as general counsel for Boyd, which also owns half of the Borgata Hotel Casino in Atlantic City. The company’s executive chairman, William Boyd, is a lawyer who cofounded the company in 1974 with his father. Thomas Girardi, a founding partner of Los Angeles–based Girardi & Keese, serves on the Boyd board.
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Just when it seemed like the push for Internet poker legislation was progressing nicely and all the concerned parties were getting on the same page, Las Vegas Sands chairman Sheldon Adelson has come out against legalizing online poker.
After once opposing Internet gambling, it appeared that all the major Las Vegas casino owners had come to realize that Americans want to play poker online and that their companies could benefit.
Now Adelson, the world’s richest casino executive and a large Republican donor with influence on Capitol Hill, has indicated that he morally opposes online gambling because he doesn’t believe technology is good enough to prevent minors from playing.
It seems hypocritical for someone who operates casinos to oppose gambling on the Internet. Sands’ Las Vegas holdings include the Venetian and Palazzo. It raises the suspicion that Adelson’s real issue is that Sands has fallen behind Caesars and MGM in preparing for online poker.
“He does have young children, in their early teens, and he has raised this concern before,” said John Pappas, executive director of the Poker Players Alliance. “I think he does have some concerns there, but I think he’s somewhat misinformed. There are ways being used very effectively throughout Europe, where this is licensed and regulated, to keep children off Internet gaming sites.”
Opposition from the Adelson could throw a wrench into Rep. Joe Barton’s plans to get poker legislation passed by the end of next year. Getting a bill on the House floor will need the approval of Speaker of the House John Boehner (R-Ohio), and Adelson is very influential among Republicans.
It’s long been thought that a bill getting through the Senate would need the support of Jon Kyl (R-Ariz.). The Las Vegas Review-Journal reported Thursday that Adelson discussed Internet gaming with Kyl in a visit to Washington, D.C., last week.
But Adelson is just one man. The American Gaming Association issued a statement saying that it will continue to support federal legislation to allow states to license and regulate Internet poker. Caesars, Wynn, MGM and Boyd Gaming remain committed to the cause. There is hope that they could eventually convince Adelson to come on board.
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 24, 2007
BOYD GAMING CORPORATION,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer,
WELLS FARGO BANK, N.A.,
as Syndication Agent and Swing Line Lender
DEUTSCHE BANK SECURITIES INC.,
JPMORGAN CHASE BANK, N.A.,
MERRILL LYNCH BANK USA
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
CITIGROUP GLOBAL MARKETS INC.,
DEUTSCHE BANK SECURITIES INC.,
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
J.P. MORGAN SECURITIES INC.
WACHOVIA BANK, NATIONAL ASSOCIATION
WELLS FARGO BANK, N.A.,
as Joint Lead Arrangers and Joint Book Managers
California Casinos Seek More Slots
7 March 2003
by Liz Benston
LAS VEGAS — Two tribal casinos in California managed by Las Vegas companies may seek an increase in the number of slot machines they are allowed under existing state compacts, representatives say.
Harrah’s Entertainment Inc. manages the Harrah’s Rincon Casino and Resort near San Diego for the Rincon San Luiseno Band of Mission Indians. Station Casinos Inc. will manage and is developing the upcoming Thunder Valley Casino near Sacramento for the United Auburn Indian Community.
Both tribes have recently joined a coalition of 21 California tribes that became the first in the state to formally announce their desire to discuss sharing casino revenue with the state in exchange for expanding the number of slot machines at their casinos, among other issues.
California tribes now may offer up to 2,000 devices each.
In a letter to California Gov. Gray Davis last month, the coalition said it recognizes that “the exercise of rights triggers responsibilities, including the obligation to fairly mitigate off-reservation impacts of future development.”
The coalition — representing a cross-section of tribes with both large and small casinos as well as tribes without casinos — expects to negotiate a variety of issues with the governor beginning this month. It also aims to distance itself from other tribes that have been critical of the governor’s plan to extract $1.5 billion in revenue from the state’s tribal casinos.
The Auburn tribe may ask for more slot machines because it is closer to urban areas that can support greater demand, said Howard Dickstein, a Sacramento attorney representing Auburn and other coalition tribes.
John Currier, chairman of the Rincon tribe, said it expects to negotiate the ability to add more slots at some point in the future when the property has matured.
Fees for new slots must be reasonable, however, Currier said.
“If another (tribal casino) open for 10 years is willing to pay more, we wouldn’t be able to afford it at this time.”
Slots have start-up costs and may only be profitable during peak weekend periods, he said. And competition has intensified.
The Rincon casino is within a 20 mile radius of five tribal casinos — the most dense casino market in California.
“It used to be, ‘Build it and they will come,’ ” Currier said. “Conditions have changed. You really have to go out and find new customers. It’s very difficult to get existing casino customers to go to your casino.”
The fact that three California tribes with significant Las Vegas connections have joined the coalition isn’t a coincidence, he added.
“The tribes in this coalition are business-minded tribes,” he said. “They didn’t enter into agreements with expert licensed operators coincidentally.”
On the other hand, many other tribes — whether they belong to the coalition or not — can’t support additional slots because they lack the demand, Dickstein said.
Only about a dozen gaming tribes will likely ask for slot increases to accommodate gamblers, he said.
That means Gov. Davis is unlikely to raise the kind of revenue he wants to help plug the state’s budget deficit — unless he allows tribes to build future casinos away from rural, tribal land and in urban areas that can attract more customers, he said.
Gov. Davis remains opposed to urban casinos. But that may change, Dickstein said.
“I think closing the budget deficit may be a higher priority now than discouraging urban casinos,” he said. “It’s casinos near urban areas that can use profitably more than 2,000 machines and can afford any significant revenue-share on those machines.”
If tribes were to share 25 percent of their casino revenue — similar to a plan underway in New York — California would need to at least double the number of slot machines, he said.
Though doubling machines is unlikely, tribes of all sizes and affiliations appear interested in removing the state cap on slot machines to allow market forces to dictate how many machines their casinos can have, Dickstein said.
Major Las Vegas companies — after fighting an initial effort to legalize tribal casinos in California — have more recently expressed interest in striking management contracts with tribes.
Still, the investment prospects for local companies have diminished as tribes ink deals with management entrepreneurs based outside Nevada, experts say.
Many of California’s gaming tribes already have established relationships with investors and are inundated with offers from others, said Jerry Turk, owner of the management company for the tribal Pala Casino near San Diego.
Linda Roe, vice president of business development for Las Vegas casino developer Marnell Corrao Associates and a tribal gaming expert, says opportunities still exist for management companies that are willing to try harder to form lasting relationships and make a long-term commitment to the well-being of the tribe.
“They’re being careful,” Roe said of the tribes. Some savvy tribes don’t need help. But the ones that do are looking for companies they can develop long-term partnerships with rather than for firms looking to turn a quick buck.
Harrah’s Rincon Casino — which opened last August with 1,500 slots, 200 hotel rooms and six restaurants — is perhaps the most well-known example of a Las Vegas company partnering with an Indian tribe.
Harrah’s hasn’t said whether it expects to expand the resort, deferring instead to tribal leaders. But company spokesman Gary Thompson said it’s possible given the property’s better-than-expected casino performance and hotel occupancy rates in the mid to high 90s.
Station Casinos expects to earn more than $25 million a year for managing the Thunder Valley Casino for the Auburn tribe. Thunder Valley — expected to open in June with up to 1,900 slots, 100 table games, a bingo room and a VIP gambling area — is able to accommodate up to 3,000 slots, Station Casinos executives say.
The neighborhood casino operator bought another 100 acres across from Thunder Valley and has an option to buy another 150 acres nearby. The company has declined to reveal plans for either site, such as whether it would build a hotel for gamblers.
Historically, the company has master-planned its locals’ casinos by buying up a significant amount of surrounding land that has since been developed into retail stores, theaters or hotel rooms.
Major Las Vegas operators including MGM MIRAGE, Park Place Entertainment Corp. and Boyd Gaming Corp. have expressed interest in pursing management contracts with Indian casinos.
MGM MIRAGE has been especially vocal about pursuing tribal relationships. The company last year hired a development chief with a pre-existing relationship with the Agua Caliente Band of Cahuilla Indians who serves as a design consultant for a new casino in downtown Palm Springs. It’s a limited and less-lucrative arrangement that doesn’t involve managing the casino and therefore doesn’t require federal approval.
Besides Harrah’s Rincon and Thunder Valley, two other California casinos have significant Las Vegas connections.
The Pala Casino made headlines when it became the first new permanent casino to open after the passage of a voter initiative in 2000 that allowed Las Vegas-style casinos in California. It also marked the first time a Nevada gaming company was brought in to invest in a tribal casino.
Turk, a former co-owner of Fitzgerald’s casino in downtown Las Vegas, brought in partner Anchor Gaming of Las Vegas to manage the casino. Before consummating its $1.4 billion merger with slot giant International Game Technology last year, Anchor announced it would sell its majority stake in Pala’s management company to Turk.
The Pala tribe — a member of the 21-tribe coalition — will also likely expand its 2,000-slot maximum if Gov. Davis’ revenue-sharing proposal makes economic sense, Turk said.
Adding slots ultimately dilutes the profits produced by existing machines, he said.
And because machines are replaced so often, it’s also difficult to identify which are new machines and therefore subject to the state’s potential revenue-sharing plan, he said.
In the meantime, the casino is anticipating a summer opening for a 507-room hotel, 30,000 square feet of meeting space and a spa.
“The whole objective is to create more of a destination (resort),” Turk said. “When we’re done we’ll have a property that’s equal in quality to anything in Las Vegas.”
Siren Gaming, a business unit of Marnell Corrao Associates pursuing Indian casino management deals, is running the Valley View Casino near San Diego for the San Pasqual Band of Mission Indians. Siren’s team includes former executives of the Rio in Las Vegas. Its president, John Lipkowitz, was the general manager of the Rio when it was owned by design magnate Anthony Marnell.
Still, major Las Vegas companies — wary of the growth of Indian gaming in their largest drive-in market — have been slower to join the competition.
In most cases, business pitches to tribes aren’t coming from the nation’s gaming capital but from entrepreneurs across the nation who are trying to cash in on a windfall of gaming expansion, tribes say.
Coalition member Nicholas Fonseca, tribal chairman of the Shingle Springs Band of Miwok Indians in Northern California, has been inundated with calls and mailers from investors nationwide seeking a deal to manage, finance or otherwise help the tribe develop its upcoming casino.
“There are people trying to break into the industry,” Fonseca. Many are uneducated about Indian gaming law and believe that tribes can simply build casinos on non-tribal land without argument, he said.
The tribe already has inked a deal with Lakes Gaming, a Minnesota company controlled by Lyle Berman, the former president and chairman of the Stratosphere in Las Vegas.
The Mechoopda Indian Tribe of Chico Rancheria Indians doesn’t even have a gaming compact with the state, much less a casino. But the tribe has a business deal with First Nation Gaming, a management company owned by the Tunica-Biloxi Indian tribe in Louisiana, that aims to help the tribe obtain land for a casino.
The tribe joined the coalition to “protect the interests of non-gaming tribes like ourselves and remove some of the market barriers” to casino development, tribal chairman Steve Santos said. The statewide cap on slot machines “prevents even small tribes like ourselves from entering gaming,” he said.
The Alturas Rancheria, which operates a small, 80-slot locals’ casino in the rural, northeast corner of California, says it isn’t looking to expand its machines to a number that would attract interest from Las Vegas investors.
The tribe likely won’t offer more than 350 slots, which could trigger a requirement that the tribe share its slot revenue with non-gaming tribes, tribal administrator Susie Hegsted said.
“We don’t have the market for that,” she said. “I think what the smaller tribes are looking for in these compact negotiations is to continue what the Governor wants, that (larger) tribes share the wealth with the smaller tribes” that can’t build casinos in more-lucrative areas, she said.
The small tribe still is receiving an increasing amount of mailers from investment groups and other companies nationwide seeking casino deals, she said.
Mr. Thomas V. Girardi is Senior Partner at Girardi & Keese, a Member at The Inner Circle of Advocates, a Member at International Society of Barristers, Inc., a Member at American Trial Lawyers Association, and a Member at American Board of Professional Liability Lawyers. He is on the Board of Directors at Boyd Gaming Corp. and SuperGen, Inc.
Mr. Girardi was previously employed as President by International Academy of Trial Lawyers, a Member by Professional Liability Lawyers, and National President by American Board of Trial Advocates. He also served on the board at Coast Casinos, Inc. and Spectrum Laboratories, Inc.
He received his undergraduate degree from Loyola Marymount University, a graduate degree from New York University, and a graduate degree from Loyola Marymount University.