Black Gaming reducing Oasis operations21 May 2009
LAS VEGAS, Nevada -- Mesquite-based Black Gaming cut its operations at the Oasis back further Wednesday as the casino company continues to struggle with declining visitor numbers and revenues.
Black Gaming will close the Denny's restaurant on May 31. It closed a go-kart track and miniature golf course Wednesday at the property, which is 80 miles northeast of Las Vegas on Interstate 15.
The Oasis' 900-room hotel, recreational park and convention facilities will stay available on an overflow basis for the company's other Mesquite resorts.
"This is an action that was taken only after significant consideration and implementation of other steps to increase revenues and reduce operating costs," Black Gaming majority owner Randy Black Sr. said in a statement. "While unprecedented for our company, it is an action that is essential to preserve the employment of the majority of our work force."
The Oasis' golf course, gun club and time shares will remain open. The company's two other Mesquite hotel-casinos -- the Casablanca and the Virgin River -- also are still open.
The property reduced the number of operating slot machines from 750 to 144 and closed its table games, nightclub, and company-owned restaurants and bars Dec. 19, through an agreement with the company's creditors in an effort to cut costs. The filing Wednesday said the Oasis could cut the slot count to 16 machines.
The filing also said that the company's 1,700-employee work force will be reduced by nearly 147 workers by July 19. Chief Accounting Officer Sean McKay said that this number reflects the total worker count affected by the reduction of Oasis' operations since December.
The majority of the 340 workers laid off in December were rehired at the company's two other area properties, CasaBlanca and Virgin River, McKay said Wednesday. Black Gaming will record between $500,000 and $600,000 in charges related to the reductions primarily because of employee severance costs, the filing said.
Black Gaming is in default on $205.8 million in debt and has been negotiating a restructuring plan that could end in a Chapter 11 bankruptcy.
The Mesquite City Council has extended the Oasis' city liquor and gaming permits through July 31, which allows the property to keep its bars closed and run reduced hotel operations without losing its licenses.
The city of nearly 20,000 has suffered steep declines in visitors the first three months of the year, posting a 28.7 percent decrease after a 10.5 percent decrease last year, a report by the Las Vegas Convention and Visitors Authority shows.
Black Gaming's losses widened in the first three months of the year with the company posting a $5.2 million loss, according to the company's Friday earnings statement.
The loss was an increase from the $4 million loss posted last year. Revenues in the quarter dropped 27.5 percent, driven by a 25.2 percent decrease in casino revenues.
The company, however, trimmed operating expenses by 26.1 percent in the quarter.
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