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Arnold M. Knightly

Hard Rock owners given license

25 January 2008

LAS VEGAS, Nevada -- The Hard Rock Hotel's new owners received Nevada Gaming Commission approval for a nonrestricted gaming license Thursday, clearing the way for the company to take over casino operations a year after purchasing the property.

"It will give us and our partner full control of the business enterprise," Morgans Hotel Group Chief Executive Officer Fred Kleisner said after the hearing. "We can manifest the destiny of Hard Rock. Put the rock back into Hard Rock."

The New York-based boutique hotel operator paid $770 million for the niche property in February, bringing in financial firm DLJ Merchant Banking Partner a couple of months later as an equity partner.

Morgans has overseen day-to-day operations of the property's nongaming activities since February.

Locally based Golden Gaming has leased and operated the casino while the new owners went through the licensing process.

The new owners expect to take over the operation of the casino around the middle of February.

The current casino employees will transfer from Golden Gaming to the new owners with no change in wages or medical benefits, Hard Rock President and Chief Operating Officer Randy Kwasniewski told the commissioners.

Two longtime casino executives are being brought in to replace a casino director who is remaining with Golden Gaming.

An expansion of the casino from 30,000 square feet to 65,000 square feet is part of the $750 million property renovation that is scheduled for completion in mid-2009.

The new owners want to market the casino to local players for the first time while using Morgans' national and international database to target its customers.

The casino introduced a player loyalty card, the Backstage Pass, a first in the property's 13-year history. It is connected to a recently installed $1.5 million player tracking system from International Game Technology.

The property has also begun a new advertising campaign in local magazines and on billboards aimed at local players.

The Hard Rock Hotel is the first casino operation for Morgans, which owns hotels in other cities, including New York, Los Angeles, San Francisco and London.

Kleisner said the company is looking to expand the Hard Rock casino brand in Nevada and in the West.

The company is building two nongaming hotels as part of Boyd Gaming Corp.'s $4.8 billion Echelon project.