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Gaming Guru

Jeff Simpson

Golden Nugget Takeover Approved

23 January 2004

LAS VEGAS -- Two weeks after their trial by ordeal at the hands of the Nevada Gaming Control Board, Tim Poster and Tom Breitling received approval from the Nevada Gaming Commission on Thursday for their $215 million takeover of the downtown and Laughlin Golden Nugget hotel-casinos.

The change of control at both properties was slated to take place very early today, shortly after midnight, when representatives of seller MGM Mirage, the control board and the buyers are slated to finish a complete accounting of the casinos' cash, chips and markers.

"I feel privileged and proud," Poster said after the two-hour hearing. "I intend to live up to regulators' expectations."

Commission member Sue Wagner, who along with her colleagues voted 5-0 to approve the licenses, told Poster and Breitling she appreciated their attitudes.

"Your enthusiasm is a positive and you have a clear idea about where you want to go," Wagner said.

Compared with their control board appearance on Jan. 7, Thursday's commission meeting was a lovefest for Poster and Breitling.

Unlike the earlier appearance, the commission barely touched on the duo's extensive past friendships with strip club owner Rick Rizzolo, who is under investigation by the FBI.

Instead, the five-member panel approved licensing Poster Financial Group as the new owner of the two Golden Nuggets, but changed the control board's recommendation for a one-year limitation on Poster and Breitling's licenses to a four-year limitation at the buyers' request.

The control board had added the one-year limitation to Poster and Breitling's licenses because of concern over their past friendship with Rizzolo and his associates, a move that would have required the duo to appear before regulators in one year and prove their continued worthiness to hold a privileged license.

Moody's last week downgraded its outlook on the $155 million in secured notes that Poster and Breitling agreed to sell to partially fund their $215 million purchase of the Golden Nuggets, and the buyers' lawyers hope that the extension of the limitation by the commission will alleviate any Wall Street concerns.

Commission Chairman Pete Bernhard offered both license applicants a chance to explain why they need to be concerned about their friendships and associations.

"I fully appreciate the consequences of my actions and decisions," Poster said. "A gaming license is a privilege and not a right. I believe a gaming licensee needs to avoid even the appearance of impropriety."

Bernhard accepted Poster and Breitling's explanations.

Commission member Art Marshall, a longtime successful retail store owner and bank chairman, questioned the absence of gaming experience on the new company's five-man board of directors and advised the new owners to add someone with gaming experience.

"I'm suggesting very clearly you expand your board," Marshall said. "You need independence, someone in the gaming industry independent of the company."

"I agree with you," Poster responded. "We'll act on that soon."

After the meeting, Poster and Breitling said they were relieved to be past the licensing hurdle and look forward to taking over the hotel-casinos.