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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Golden Gaming to Run Hard Rock's Casino

13 July 2006

LAS VEGAS -- Hard Rock Hotel purchaser Morgans Hotel Group announced Wednesday it will contract with a small Las Vegas-based gaming company to manage the iconic casino.

Golden Gaming, best recognized as the operator of the PT's taverns and restaurants in Las Vegas, will operate the Hard Rock's 30,000-square-foot casino once Morgans' $770 million purchase of the rock 'n' roll themed property closes.

According to a statement by New York-based Morgans, Golden Gaming will have the opportunity to make an equity investment of up to $100 million in the Hard Rock.

A letter of understanding between Morgans and Golden Gaming said the casino operator would provide general management services for the gaming side of the Hard Rock for up to two years.

Nevada Gaming Control Board Chairman Dennis Neilander said he was unfamiliar with the terms of the deal. However, if the agreement is structured so that Golden Gaming pays Morgans a flat fee to operate the casino, the hotel company would not have to be licensed.

"As long as (Morgans) doesn't share in the gaming revenues, the company does not have to submit for licensing," Neilander said.

It's expected that Morgans will operate the hotel portion of the Hard Rock, along with the casino's food and beverage operations. The Hard Rock is also known for its collection of rock 'n' roll memorabilia and the property's The Joint concert venue, that has hosted such acts as the Rolling Stones, Tom Petty, David Bowie, Bob Dylan and Neil Young.

In a statement, Morgans President Edward Scheetz said bringing a casino management company on board will help speed along closing the Hard Rock transaction by early 2007.

"Lining up a casino operator was a top priority for us and we now have put into motion a key element of the Hard Rock transition," Scheetz said.

Golden Gaming President Blake Sartini could not be reached for a comment. In a statement, he said the company anticipates "a creative working relationship with Morgans Hotel Group to continue to establish the Hard Rock as one of the premier gaming an entertainment resorts in the city."

The move is Golden Gaming's first venture with a full-fledged hotel-casino. The company, which was formed in 2001, has three different operations.

Golden Gaming owns three casinos in Black Hawk, Colo., near Denver, with a combined 1,200 slot machines, and a Nevada tavern operation with 38 locations under seven different names, the most recognizable being the PT's bars and restaurants in Las Vegas. Golden Gaming also has a statewide slot machine route operation on which it manages more than 2,500 machines in convenience stores, bars, restaurants and taverns.

The company employs more than 1,300 workers.

Sartini is former top executive with Station Casinos, having served as the company's chief operating officer for more than four years. He left the company in 2001 to take over Golden Gaming, which at the time was known as Southwest Gaming.

Morgans agreed in May to purchase the Hard Rock, an adjacent 23-acre parcel and other assets from Hard Rock developer Peter Morton for $770 million. Some gaming analysts expected the company to bring in an outside casino manager, rather than seek licensing on its own to operate the Hard Rock.

The Hard Rock sits on almost 17 acres at the intersection of Harmon Avenue and Paradise Road.

Morgans will add the 11-story, 647-room Hard Rock Hotel into its operating group that includes hotels in Miami, Los Angeles, Scottsdale and London.

Scheetz said Morgans is exploring alternatives for developing parts of the Hard Rock site.