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Gaming Guru

Rod Smith
 

Deadline Passes, But Sales Talks Will Continue for Castaways

6 April 2004

The deadline for the partnership of Randy Miller, Rich Gonzales and Rich Ionnone to buy the Castaways passed Monday without a final deal, but with negotiations still in progress, Vestin spokesman Steve Stern said.

The trio, owners of the Longhorn casino on Boulder Highway and the Bighorn casino in North Las Vegas, had signed an exclusive option Feb. 24 to buy the 49-year-old landmark property at 2800 Fremont St. near Boulder Highway.

Sources close to the deal said the Miller group has completed its due diligence and is now completing terms for the sale and financing for the Castaways, formerly known as the Showboat.

Miller, who could not be reached Monday, has said that the hotel-casino can be reopened and operated successfully, but that it needs operators who know the community and have experience here.

While discussions proceed, more than 650 jobs remain in limbo for former Castaways workers put out of work when the casino closed Jan. 29.

Vestin bought the bankrupt 25.9-acre property for $20.7 million Feb. 1 at a foreclosure sale after its bankrupt former owners were unable to satisfy terms of a $22 million-plus mortgage note.

In March, the property's bowling lane equipment and participation, or rented revenue sharing, slot machines were pulled out by equipment lessors. Sources say the pull-outs could deal a blow to the property's purchase value and pose challenges for a timely reopening.

No other equipment has been removed from the properties, although Stern said it would not be surprising if vendors with security interests in leased equipment seek to remove it from the property.

The Castaways was closed after Vestin, acting under authority of a U.S. Bankruptcy Court order, notified Castaways owner VSS Enterprises it would enter the casino and collect its collateral backing a mortgage loan.