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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Herbst Gaming announces name change

24 May 2011

LAS VEGAS, Nevada -- Herbst Gaming is out and Affinity Gaming is in.

Members of the founding Herbst family lost control of the company's casinos and slot machine route operation in December after a bankruptcy court-administered reorganization. They no longer have any involvement in the business.

New management and the new board of directors decided to drop the Herbst title in favor of a new name.

"In order to reflect our new corporate identity, we have changed our corporate name to Affinity Gaming," Chief Executive Officer David Ross said in a statement. "We believe it is in the interest of the employees and management to make a fresh start."

Affinity Gaming LLC operates 15 casinos in three states, including 12 in Nevada, and a 6,000-slot machine Nevada route operation.

Ross hinted earlier this year at a change in name because he expected the Herbst family to return to the gaming industry. Nevada gaming regulators this month approved a new slot machine route business, JETT Gaming, a company controlled by Herbst Oil Co. Chief Executive Jerry Herbst. The company will begin operations with three locations in Nevada.

Herbst Gaming had been operated by Ed, Tim and Troy Herbst, the sons of Jerry Herbst. The company was a separate entity from Herbst Oil, but continues to oversee the slot machines at Terrible Herbst convenience stores in Nevada.

Jerry Herbst told gaming regulators the idea behind JETT Gaming was to reacquire the slot machine route operations at the convenience stores when the contracts with Affinity expire.

After emerging from bankruptcy, reconfigured Affinity Gaming is owned by a group of former lenders, including SPH Manager LLC with an 18.4 percent ownership stake. Highland Capital Management owns 8.3 percent of the company.

Z Capital Partners acquired a 6.7 percent ownership stake this month in Affinity, which made the investor the third largest shareholder.

The bankruptcy reorganization reduced the company's long-term debt from about $1.1 billion to $350 million. Affinity Gaming will continue to operate the casino properties under their familiar local names.

The "Terrible's" name will remain at certain casinos under a licensing agreement. Among Affinity's 12 Nevada casinos are the three Primm resorts at the Nevada-California border and the off-Strip Terrible's Hotel and Casino. Affinity also operates riverboat casinos in Iowa and Missouri.

The company recently signed a four-year deal to provide consulting services to the Rampart Casino Resort at Summerlin in Las Vegas, which is owned by Hotspur Casinos Nevada Inc. Affinity won't manage the casino once Cannery Casino Resorts LLC's management contract expires next year. Instead it will work with Hotspur Casinos as the company begins to manage its own casinos.