Black Gaming temporarily closes Oasis' casino3 December 2008
MESQUITE, Nevada -- Mesquite operator Black Gaming will temporarily close the Oasis' casino, restaurants and night clubs on Friday in a cost-cutting move for the financially struggling company.
The closing will cut the company's work force by 500, according to a Monday filing with the Securities and Exchange Commission.
The Oasis' 900-room hotel, RV park, neighboring golf course, gun club and time-share facilities will remain open.
Majority owner and Chief Executive Officer Randy Black Sr. said Tuesday the company wants to drive customers to its other two properties: the 480-room CasaBlanca and the 710-room Virgin River.
"We're all hopeful the economy comes back," Black said. "Because, if it doesn't, things are just going to get worse."
While the filing's language described the move as temporary, an accompanying statement signed by Black warned "the length and depth of the challenging gaming market" means "no assurances can be made about" when the Oasis' facilities would be reopened.
Black Gaming's third-quarter revenues dropped 23.6 percent with the property showing a negative cash flow of $900,000.
Visitor volume to the town 80 miles northeast of Las Vegas is down 6.6 percent through September, with occupancy rates down 5.5 percent, according to the Las Vegas Convention and Visitors Authority.
Daily room rates for the city dropped 35.8 percent through September, and gaming revenues are down 9.9 percent, according to the visitors authority.
Mesquite Mayor Susan Holecheck said the loss of 500 jobs in a city of 20,000 surrounded by smaller communities is devastating anytime of year but especially at Christmas time.
"Laying off 500 people has a huge domino effect," Holecheck said. "At Christmastime, if people are out of a job and not making money, then they are not able to go to the stores and restaurants. If people don't have the money, they in turn aren't helping our businesses."
The Oasis will give the laid-off workers a packet with information on applying for social services such as unemployment and food stamps, Marty Rapson, Black Gaming's marketing vice president, said Tuesday.
The workers will also be put on a list to be rehired when the property reopens, Rapson said.
Before the layoffs, CasaBlanca, Oasis and Virgin River ranked as the top three employers in Mesquite with a combined 2,278 workers, according to a city economic development report released in April.
The company will have approximately 1,500 workers following the layoffs, according to Monday's federal filing.
The Oasis will keep a few slot machines open at the front counter to maintain the property's nonrestricted gaming license.
The property began shutting down the casino's table games on Monday and will continue to phase out casino and restaurant operations this week.
The restaurants will close Friday after dinner, Rapson said, but no time has been set.
The company's ability to close portions of the Oasis was part of a Nov. 3 update to a bank agreement after it defaulted on a loan.
The current bank agreement expires Jan. 15, which means it would have to be updated if the Oasis' facilities remain closed past that date.
Black said the company is negotiating with the banks, but no decision as been made on what will be done in January.
Black Gaming is operating under $188.7 million in debt with interest rates near double digits.
Black is also getting hurt by his sole competition -- the 215-room Eureka hotel-casino which recently completed a $30 million expansion and renovation.
Black said this year that "the other guy" controls 30 percent of the market.
Majority-owned by Las Vegas real estate developers the Lee Family, the Eureka added 300 new slot machines, expanded its buffet, and added a new poker room and new sports book.
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