More Signs of Bad Times at Horseshoe

LAS VEGAS -- In what casino industry observers believe is a sign of a near-term sale or closure of Binion's Horseshoe, the husband of property owner Becky Binion Behnen has asked state regulators to withdraw his gaming license application.

Behnen's spouse, Nicholas "Nick" Behnen, applied to the Gaming Control Board for a "key employee" license on Feb. 24.

Behnen said earlier this year that he worked in "marketing" at Binion's Horseshoe, and state officials said he had applied for and received a gaming work card, separate from the key employee license, which requires an extensive background investigation.

On Dec. 2, Behnen formally asked the control board to withdraw his key employee license application, said Michael Lackey, Investigations Division supervisor.

Lackey, control board Chairman Dennis Neilander and board member Scott Scherer declined to comment on the withdrawal of the application, and both Becky and Nick Behnen failed to return several phone messages.

Requests to withdraw license applications are frequent, officials said, but one industry source cited the Horseshoe's precarious financial shape as the likely reason for the withdrawal.

"This would have been an expensive investigation, the Horseshoe would have had to pay the state for the investigation's cost, and with their financial problems, paying for the license was like throwing good money after bad," one former Horseshoe insider said. "I believe the property's financial problems are the reason he withdrew."

When the Nevada Gaming Commission approved the 1998 transfer of Binion's Horseshoe control from brother Jack Binion to Becky Behnen, regulators warned Nick Behnen that he could not be involved in managing the downtown property.

In 1977, Behnen withdrew an earlier application for a Nevada gaming license after state investigators discovered that he had been arrested in the 1960s on charges of operating an illegal gambling room in Michigan and then failed to accurately complete his Nevada application, according to control board records.

Las Vegas gaming lawyer Bob Faiss, representing Becky Behnen, assured commissioners at the 1998 transfer hearing that Nick Behnen would not be involved in the Horseshoe's daily operations.

Since then, there have been frequent allegations that Nick Behnen remains involved in management of the property, but the control board has yet to file a complaint against him.

Industry insiders believe gaming regulators forced Behnen to apply for a license, probably because of the persistent charges about his involvement at the property.

Among the Horseshoe's recent high-profile legal disputes are battles with the Fremont Street Experience over $3 million-plus in unpaid fees; the Internal Revenue Service, which on Nov. 5 placed a tax lien on the 52-year-old gambling hall, claiming the Horseshoe has yet to pay $5 million in past due payroll taxes; and the Culinary union, for unpaid health care contributions.

One possible solution may be for Becky Behnen to sell the downtown property, but industry insiders believe the likeliest buyer, Harrah's Entertainment, only wants the rights to the Horseshoe brand name in Nevada, now owned by Becky Behnen.

Harrah's, which in September signed a $1.45 billion deal to buy Jack Binion's Horseshoe Gaming Holdings and its three central U.S. riverboat casinos, wants to use the Horseshoe brand on a new Strip project, as well as for its Harveys property in South Lake Tahoe and possibly for other properties in the central United States, industry insiders say.

For Binion's Horseshoe, a sale seems to be the likeliest scenario, but closure can't be ruled out, said the former insider.

"It's tough to put 900 workers on the street, so I'm sure the (state regulators) are trying to engineer a sale," the source said. "The Behnens have been an embarrassment, and the sooner they're out of there the better."