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Gaming Guru

Arnold M. Knightly
 

Speedway Casino sold away

14 February 2007

LAS VEGAS, Nevada -- An out-of-state gaming operator is selling one of its two local interests.

Chester, W.Va.-based MTR Gaming Group announced Tuesday that it had entered an agreement to sell the Speedway Casino to Mandekic Cos., a local privately held company, for $18.2 million in cash.

The sale still needs approval from the Nevada Gaming Commission and the city of North Las Vegas. The sale is expected to close within 30 days, but the regulatory process could take a year to complete.

"I'm very bullish on these types of transactions," said Jeremy Aguero, a principal at Applied Analysis, a Las Vegas-based financial consulting company. "I think as the community continues to expand, redevelopment opportunities closer to the urban core are going to be highly valuable."

MTR Gaming President and Chief Executive Officer Ted Arneault did not return calls seeking comment.

MTR Gaming still owns and operates Binion's, formerly Binion's Horseshoe, which it acquired in March 2004 for $20 million.

A search of the state's business license database listed Theodore Mandekic as the sole officer of Mandekic Cos. Calls to a phone number listed with his business address were not returned late Tuesday.

A check with the Gaming Control Board's Licensing Application Department showed that Mandekic does not hold a gaming license.

The Speedway Casino and accompanying 95-room Ramada Inn sit on 6.1 acres on the northwest corner of Civic Center Boulevard and Cheyenne Avenue near Interstate 15 in North Las Vegas. The racing-themed casino is five miles south of the Las Vegas Motor Speedway.

The property operates with a nonrestricted gaming license with 400 slots and seven table games. It employs about 180 people, which the new owner intends to keep employed, according to a statement.

Although MTR Gaming has yet to report year-end earnings, earlier filings showed a 15.3 percent increase in operating revenue to $9 million for the first nine months of 2006.

The property reported net revenues of $10.8 million in 2005 and $9.8 million in 2004.

If the sale is approved, it will be the second gaming property in the North Las Vegas redevelopment area to change hands within a year.

On Jan. 18, local entrepreneur Jeffrey Fine completed the purchase of the Silver Nugget and Opera House casinos for $19.5 million.

Fine has not revealed his plans for the properties, which are both on North Las Vegas Boulevard.

"There is substantial investment going on in North Las Vegas and there will continue to be investment in North Las Vegas," Aguero said. "Realistically speaking, the ability to obtain a very finite amount of gaming property is highly valuable."

Mike Majewski, the city's economic development director, said he hadn't heard of the sale of the Speedway. But he added that he was optimistic that the new owner would upgrade the property.

"That is one of the gateways to our city," Majewski said. "I believe it has real possibilities as the Cheyenne corridor continues to develop."

The Speedway sits across the street from the nearly finished $18 million Cheyenne Pointe Neighborhood Shopping Center, the largest construction project undertaken in the city's redevelopment area so far.

MTR Gaming Group shares rose 23 cents, or 1.87 percent, Tuesday to close at $12.56 on the Nasdaq National Market.