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Binion's Hit with Second IRS Lien

7 January 2004

Las Vegas Sun

by Liz Benston

LAS VEGAS -- The Internal Revenue Service has placed a second tax lien on Binion's Horseshoe for unpaid employee payroll withholding taxes.

The IRS on Dec. 19 placed a federal tax lien on the downtown Las Vegas casino, claiming $2.5 million in back taxes.

The lien alleges that the Horseshoe owes $66,422 for the quarter ended June 30, 2003, and another $2.4 million for the quarter ended Sept. 30.

The notice follows an earlier tax lien issued in November for $5 million in alleged unpaid taxes during all four quarters of 2002.

IRS spokesman Bill Brunson declined to say whether the agency will take action on the lien. The lien merely gives the IRS authority to seize the property but doesn't necessarily mean that the agency will take action, he said.

"It doesn't mean something will happen and it doesn't mean something won't happen," he said.

Binion's Horseshoe owner Becky Behnen and Horseshoe attorneys could not be reached for comment.

Calls to the state Gaming Control Board were referred to board Chairman Dennis Neilander, who could not be reached for comment on the lien. Regulators in the past have said that they are aware of the Horseshoe's financial problems and are monitoring the property.

The lien is the latest bad news for the Horseshoe.

In November, Nevada Power executives said the property was past due on its power bills and was negotiating a settlement with the property. Utility officials could not be reached Tuesday for comment on the status of the issue.

Meanwhile, a lawsuit filed against the property in 2001 by the Fremont Street Experience LLC, the casino-owned company that runs the outdoor mall and lightshow downtown, claims the Horseshoe owes millions in unpaid assessments.

Clark County District Court Judge Michael Douglas is expected to hear the Fremont Street Experience's motion for summary judgment next week. If the motion is denied a trial will be scheduled. Granting the motion would end the lawsuit and require the Horseshoe to fork over the assessments.

The Fremont Street claims the Horseshoe owes about $3.8 million through this month. The Horseshoe has argued it never agreed to the assessments in the first place and has alleged mismanagement of Fremont Street funds. While the financial statements of the Horseshoe have surfaced in the suit, Fremont Street Experience attorney Patrick Reilly declined to comment on those financials, saying they are protected under a court order of confidentiality.

The financial specifics of the privately held casino aren't known.

In a separate lawsuit filed against the Horseshoe last year, the landlord for part of the casino that used to be known as The Mint, Arlington Realty Co. LP, claimed it was owed about $156,611 in rent. A hearing on that case is scheduled in Clark County District Court for later this month.

Behnen also is negotiating with Harrah's Entertainment Inc. over the rights to the Horseshoe brand in Nevada. Harrah's in September announced a $1.45 billion deal to purchase Horseshoe Gaming Holding Corp., a riverboat gambling company owned by Behnen's brother Jack Binion. Harrah's also is interested in acquiring the exclusive rights to the Horseshoe name in Nevada -- rights now owned by Behnen. Harrah's also would acquire a $19 million promissory note held by Binion against the downtown casino as part of the riverboat deal.

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