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Chris Jones

MTR Gaming to Takeover Binion's

12 November 2004

LAS VEGAS -- A blackjack dealer oversees a hand Monday at Binion's Horseshoe in downtown Las Vegas. MTR Gaming Group, which owns the downtown hotel-casino, said it will take over management and rename the property simply Binion's on March 11.

For more than five decades, the Horseshoe name has been synonymous with high-stakes action in downtown Las Vegas. But shortly before the city celebrates its 100th birthday, what's arguably its most-recognized gambling hall will take on a new moniker -- and new management team -- following a tumultuous 2004.

Owner MTR Gaming Group said Monday it will assume control of the downtown hotel-casino effective March 11, less than 10 weeks before Las Vegas' May 15 centennial. At that time, Binion's Horseshoe will also adopt a shortened name: Binion's.

"The Horseshoe name will come down," said Roger Szepelak, vice president and chief operating officer for MTR Gaming Group, whose company sold the rights to the Horseshoe name earlier this year to Harrah's Entertainment.

Per that agreement, Harrah's will also end the World Series of Poker's ties to its longtime home after next year's finals are held at Binion's. Its departure won't be the end of poker at Binion's, however.

"We definitely plan on keeping poker and making it a big part of our marketing program," Szepelak said, adding another poker championship is in the works. "This won't be called the World Series of Poker, but we certainly hope" it develops a similar following, he said.

That idea is a likely winner for MTR and downtown Las Vegas, Barrick Gaming President and Chief Executive Officer Stephen Crystal said Monday.

"A lot has been said about the World Series of Poker leaving downtown, but ... the truth is the magic is not in the name, it's in the location," said Crystal, whose company recently acquired several downtown hotel-casinos including the Plaza, Las Vegas Club and Gold Spike.

"That is a famous location on Fremont Street, and that's what will live on regardless of the Horseshoe name." Crystal believes hands-on ownership is better for downtown than third-party management by a company whose attention is focused elsewhere.

"Harrah's was just a place-holder and wasn't really going to invest a lot of energy in downtown," Crystal said. "But we know for certain MTR will join the other new owners like Barrick and (the Golden Nugget's) Tim Poster and Tom Breitling in bringing new energy."

The first improvements planned for Binion's will likely be upgraded slots, Szepelak said, adding it's too soon to speculate on other changes. MTR owns thoroughbred and harness horse tracks in West Virginia and Ohio, respectively, and hopes to expand with similar holdings in Michigan, Minnesota and Pennsylvania.

Despite those ties to racing, Szepelak said the company won't decide to reopen Binion's race and sports book until Harrah's has departed. Financial shortcomings under then-owner Becky Binion Behnen caused the iconic downtown hotel-casino to close on Jan. 9. Less than two weeks later, Harrah's said it would buy the property from Behnen for an undisclosed amount. Harrah's ownership plans were short-lived, however.

On Feb. 19, it announced a deal to sell Binion's Horseshoe to MTR's wholly owned subsidiary, Speakeasy Gaming of Fremont. Financial terms were not disclosed, but Harrah's kept ownership of the Horseshoe brand in Nevada, and the popular World Series of Poker event. It also agreed to manage the downtown casino for MTR for at least one year.

That management contract, which expires March 11, , called for Harrah's to pay MTR management fees of $200,000 per month during its initial year, with Harrah's keeping any revenue in excess of that amount. If extended, those fees would have increased to $400,000 per month in the second year and $450,000 in year three, Szepelak said. Binion's Horseshoe reopened April 1 and has since returned to profitability.

Excluding World Series-related fees and revenue, and management fees paid to MTR, the property generated $34 million in revenue and $1.8 million in cash flow from April through September, MTR reported. Harrah's decision to exit was influenced by its pending $9.4 billion acquisition of Caesars Entertainment, a deal expected to close next year pending regulatory approval.

"We're going to need all of the management talent we have," Harrah's spokesman Gary Thompson said Monday of the Caesars merger.

A dozen or so management-level employees based at Binion's Horseshoe will transfer within the company before the MTR deal expires, Thompson added.

The rest of the property's 980 or so employees are employed by MTR and will not be affected by the changes.

MTR Gaming to Takeover Binion's is republished from