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Benjamin Spillman

Binion's negative cash flow widens

16 May 2007

LAS VEGAS, Nevada -- First-quarter losses widened at one of the most recognizable casinos in downtown Las Vegas.

Binion's posted a negative cash flow of $682,000 for the quarter, an increase from first-quarter losses of $609,000 in 2006.

Operators MTR Gaming of Chester W.Va., blamed "softness in the overall downtown Las Vegas market."

But the company didn't offer any ideas to turn around the casino.

Chairman Edson Arneault didn't even mention Binion's in written comments about the company's financial performance, choosing instead to comment on racing, card rooms and casino operations in West Virginia and Ohio, among other ventures.

According to the earnings statement filed with the Securities and Exchange Commission Binion's net revenues were down $1.4 million to $15.1 million for the quarter, a difference of 9 percent.

The development of the Pres- que Isle Downs race track and casino in Erie, Pa., hurt overall cash flow for MTR, according to the earnings report.

The report blamed $2.9 million in pre-opening costs at Presque Isle for a 14 percent decline in earnings before interest, taxes, depreciation and amortization to $12.5 million for the quarter.

MTR did, however, post an overall increase in net revenue of 13 percent to $107.1 million.

Even before MTR bought Binion's for $20 million in 2004, the 56-year-old casino fell on hard times. In 2004 gaming regulators swooped in on Binion's Horseshoe, founded by Nevada gaming pioneer Benny Binion, and forced a shutdown to ensure former owner Becky Binion Behnen could pay mounting debts.

Harrah's later bought the property primarily for the Horseshoe name and the lucrative World Series of Poker.

It sold the casino a month later to MTR, which rechristened the property Binion's Gambling Hall and Hotel last year.

Binion's isn't the only downtown casino having trouble. Downtown gaming win has declined or remained flat every year for more than a decade. In 2006 it declined 3.6 percent to $630.4 million and was in decline during the last seven months of the year.

In March, William Robinson Jr., vice president and chief operating officer of Speakeasy Gaming, a subsidiary of MTR which runs Binion's, told the Nevada Gaming Control Board the casino would recover but probably not to the level it enjoyed during its heyday.

"I don't know if we'll get back to where it was when Jack Binion (Benny's son) ran it, but we're going to try," said Robinson, who was before the board for approval for a key employee license.

He told the board the company planned to remodel the casino.

"We want to get Binion's back to where it used to be," Robinson said then.