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Vacation Village Buyer A Vegas Unknown

LAS VEGAS, Nevada -- Dec. 15, 2001 -- The Las Vegas man set to buy the bankrupt Vacation Village next week is one of the less visible players on the Las Vegas casino scene despite a number of significant deals he's made buying and selling gambling businesses.

Shawn Scott, 35, has made tens of millions of dollars on the purchase and sale of underperforming gambling operations in Nevada and in the Southeastern U.S.

"He is an interesting case," said a source, who spoke on condition of anonymity and is familiar with many of Scott's business dealings. "He's kind of a nerdy little kid with a youngish face, but what he's done has been startling."

What Scott's done was buy and then sell a number of gambling properties, including a Louisiana race track, the Flamingo Reno and a previous incarnation of what is now the Speedway casino in North Las Vegas.

He also invested in South Carolina and Louisiana video poker operations before those state's lawmakers had decided whether to permit the practice.

Now the Las Vegan holds the fate of about 350 Vacation Village workers in his hands.

Scott's $17.8 million offer for the southernmost hotel-casino operating on the Strip was chosen Nov. 20. The transfer of ownership is slated to take place Thursday.

Scott did not return several phone messages, but Ed Merkey, chief executive officer of Capital One LLC, one of Scott's real estate development companies, said Scott plans to keep the property open, at least in the short term.

"We are making every effort to keep it open," Merkey said Friday. "It has a great location and a loyal local-player following. It also has lots of surface parking and can draw on traffic from Las Vegas Boulevard, Interstate 15 and the beltway."

If Scott keeps the property, he'd have to find a Nevada-licensed operator to run the Vacation Village casino, as Scott relinquished his state gaming license in 1997 after regulators said his operation of the Cheyenne Hotel & Casino, now the Speedway, suffered from sloppy accounting practices.

Then-Gaming Control Board Chairman Bill Bible said at the time that Scott hadn't lived up to promises he'd made to the panel to hire experienced casino managers and accountants.

"I agree to a large extent ... that (the Cheyenne's) financial statements are really, to a large extent, smoke and mirrors," Bible said.

"It's not that he's a crook, it's that he's a flake," explained the anonymous source.

Merkey said Scott has narrowed his search for an operator to run the Vacation Village casino to about five candidates, but Merkey declined to name them. Some of the Nevada-licensed companies run slot routes, others own small casinos, but none are prominent Las Vegas operators, he added.

"The long term plans are to keep it open," Merkey said. "We plan to make a modest amount of investment to smooth out some rough edges and make a few procedural changes we think will improve the Vacation Village's operation."

Vacation Village filed for Chapter 11 bankruptcy protection in November 2000 to prevent the efforts of the property's largest creditor, Foothill Capital Corp., to foreclose on the 24-acre, 325-room operation.

If Scott keeps Vacation Village for an extended period, it will be a departure from his usual practice.

He made a deal to buy the Flamingo Reno for $5 million from Park Place Entertainment Corp. in October, less than two years after the gaming giant's deal to peddle the aging downtown property to a different buyer for $20 million collapsed.

Merkey said Scott had intended to close the property, remodel and then reopen it.

Instead, Scott bought the property from Park Place and then immediately sold the 604-room Flamingo for $6.75 million to hotel operator Vista Hospitality Co., netting a quick $1.75 million profit.

"We don't go into the project as a flip attempt," Merkey said, referring to a real estate insiders' term for buying a property and quickly selling at a profit. "Flips occur when opportunities arise."

Scott's biggest financial coup was his $125 million sale earlier this year of the Delta Downs racetrack in Bossier City, La. after buying the track for $10 million in May 1999.

The racetrack's value escalated after voters in Delta Downs' parish voted in November 1999 to allow slot machines at the track. Las Vegas-based Boyd Gaming Corp. bought the track from Scott and received a license from Louisiana regulators in October to operate slots at Dover Downs.

Boyd announced Friday it hopes to begin slot operations at the track in January.

Scott also applied this year to New Mexico officials for permission to build a racetrack and slot casino in Hobbs, N.M.

Scott, a native Southern Californian who moved to Las Vegas eight years ago, is single and has no children, Merkey said.

"He's a deal junkie," he said of his boss, noting that Scott reviews about 10 separate deal proposals each month and scours trade publications and daily newspapers for gambling industry news.

"Shawn Scott is very creative and very aggressive," Merkey said. "He sees niche opportunities, looking under the radar scopes of the big guys.

"Shawn prefers a low profile," he said, citing Scott's 4-year-old Lexus as an example of the multi-millionaire's modest living style. "He flies coach and he doesn't own his own airplane, even though he loves to travel."

Merkey wouldn't say how much Scott is worth, but did speculate that Scott might apply for a new Nevada gaming license, a prospect the anonymous source found amusing.

"I think (Nevada gaming regulators) would hold a grudge against Scott," said the source. "He didn't have his act together before, and they would probably think he'll screw it up again."

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