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The approval was expected, and the 40,000-square-foot casino is scheduled to reopen May 26.
Jon Berkley, former chief executive of the defunct Las Vegas Gaming Inc., will run the management company, Intrepid Gaming.
"We are honored to be in this position to reopen the casino," Berkley said. "We believe adamantly that we will be successful."
Berkley said Casino MonteLago will be operated with less overhead than before and 283 slot machines. He also told regulators the company was excited about creating "100 jobs in a pretty tough economic environment."
Berkley said the demographics of Lake Las Vegas have changed dramatically with the recent reopening of the 340-room Ravella in February. The closure of the former Ritz-Carlton led to some tough times for Lake Las Vegas, he said.
He told the commission there are also more residents looking to move into an area where "homes that were selling for $1,000 per square foot (now sell) for $100 per square foot."
Commission Chairman Peter Bernhard questioned Berkley's commitment to the project given his lack of a personal investment in the casino.
"You have no skin in the game," the chairman said.
Berkley assured regulators that there were no outstanding regulatory issues with his resignation from Las Vegas Gaming. Berkley also said he's committed to the success of MonteLago, which has a financial structure focused on "positive cash flow."
Commissioner Tony Alamo called Berkley's projection of slot revenue -- which was not made public -- "optimistic" in light of the region's battered economy.
The Casino MonteLago has been shut since March 2010.
In other business, the five-member commission Thursday also approved Penn National Gaming Inc.'s takeover of M Resort for $230.5 million and a new slot machine route business established to reclaim part of the reorganized Herbst Gaming operations.
"This transaction doesn't stop our interest in Las Vegas. We are open to other acquisitions," Penn National President Tim Wilmott told regulators.
Penn National, which was licensed by Nevada regulators last June, struck a deal in October to acquire the two-year-old M Resort's $860 million debt for $230.5 million.
Wilmott also said the property's debt will be retired with the transfer of ownership later this month. With the M Resort, Penn National will own or operate 18 casinos and racetracks in North America.
Alamo asked Anthony Marnell III, who built M Resort for almost $1 billion and opened it in March 2009, how long he would remain as chief executive officer of the property.
Marnell said he has a five-year deal, but "we'll see how that goes." He said he is negotiating with Penn National for an equity position in the resort.
In an interview with the Las Vegas Review-Journal, Wilmott said the gaming company is constantly looking for Las Vegas properties to buy and had a long-standing desire for a Strip hotel-casino.
But don't look for the Wyomissing, Pa.-based gaming company to build a Las Vegas resort from scratch anytime soon, he said.
Penn National's Hollywood Casino in Tunica, Miss., remained closed Thursday as Mississippi River floodwaters shutdown the region's 10 casinos.
"The water is receding at a faster rate than expected. I bet we'll be open for the Memorial Day weekend," said Wilmott, adding that employees were "still accessing the casino by boat."
He said the company is "assessing the cost to the property right now."
The Hollywood Casino in Tunica generates $20 million annually in EBITDA, or earnings before interest, taxes, depreciation and amortization.
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