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Gaming Guru

Howard Stutz

Station Casinos gains tentative OK to be treated like other casino companies

14 May 2015

Station Casinos gained tentative approval Wednesday from Nevada gaming regulators to be treated by like any other casino company.

The locals casino operator asked the Gaming Control Board to remove a condition to the company’s gaming license that was a holdover from when its was owned by a private equity firm. The change would allow Station Casinos to pay financial distributions to the company’s owners without approval from gaming regulators.

The board unanimously signed off on the change. The Nevada Gaming Commission will make a final ruling May 28.

“We just want to be treated no differently from casinos with private owners, such as South Point and Treasure Island,” Station Casinos General Counsel Richard Haskins told the Control Board.

The provision was put into place when private equity ownership took over Station Casinos in 2007. After the company’s bankruptcy reorganization in 2011, the ownership structure changed.

Brothers Frank Fertitta III and Lorenzo Fertitta control 58 percent of the company. Deutsche Bank owns 25 percent, and bondholders control the other 17 percent.

Control Board Chairman A.G. Burnett said he no longer views Station Casinos as a company owned by private equity.

Station Casinos Chief Financial Officer Marc Falcone told the Control Board the company’s balance sheet has improved after emerging from bankruptcy. He said the company has overall debt of $2 billion after reducing the figure by $400 million.

Also, the company has just one capital structure, rather than four.

“The balance sheet has a consistent approach to reduce debt, reinvest in our assets and return capital to our investors,” Falcone said.

Station Casinos canceled plans announced in March to raise $300 million in new debt. Falcone said the reasons were “off the record.”

But he said the Las Vegas locals gaming market was one of the strongest in the United States.

Station Casinos, which has reported 16 straight quarters of increased cash flow, isn’t reliant on high-end baccarat play from Macau.

“Las Vegas has improved,” Falcone said.
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