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Four months later, the regional casino giant struck a deal to acquire the debt covering the 2-year-old M Resort at a nearly 75 percent discount. By January, Penn was marketing M Resort to its 2.2 million-customer database.
The new marketing partnership has already shown success. The Gaming Control Board was told Wednesday that M Resort added more than 1,300 room-nights in the first quarter, which increased occupancy by almost 4 percent at the 390-room hotel-casino.
"We mailed out some 150,000 mail pieces to our customers," Penn National President Tim Wilmott said after the control board gave preliminary approval to the company's takeover of M Resort. "The property gives our regional customers a great Las Vegas gaming experience."
Wilmott told regulators during a half-hour hearing the company plans to leave M Resort's management in place as employees of Penn National, which operates nearly 20 casinos and racetracks in regional markets. Penn, which is based in Wyomissing, Pa., has more than 15,000 employees companywide.
M Resort employs about 1,200 workers.
"We like the management we have on the ground," Wilmott said.
Anthony Marnell III, who built M Resort for nearly $1 billion and opened the hotel-casino in March 2009, will remain in charge of the property as president. He said Penn allows M Resort to operate with more financial flexibility than before.
In the first quarter, with Penn's marketing help, M Resort had revenues of $39.8 million and cash flow of $6.2 million, both slight increases from the same quarter a year ago.
"This is a phenomenal position for M Resort to be in," Marnell told gaming regulators. "I don't think we could find ourselves with a better company and resources, especially a company that wants to be in Las Vegas."
While operations remain local, Penn National supplies various corporate services, including legal, public affairs, human resources and marketing oversight.
"The synergies between M Resort and Penn National benefit the property," said control board member A.G. Burnett. "I, for one, am glad Penn has come into the state of Nevada."
M Resort spent $230.5 million to acquire M Resort's $860 million in debt in October. Wilmott told gaming regulators Penn's ownership stabilizes the property's previously uncertain financial future.
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