Casino news from http://www.lasvegassun.com/
CARSON CITY, Nev. (AP) - The Nevada Gaming Commission gave final approval Thursday to a Las Vegas Hilton licensing change representing a big policy shift that could lead to greater investor funding for Nevada resort projects.
Under the deal, three executives of New York-based Whitehall Fund entities will share one seat on the board of Colony Resorts LVH Acquisitions LLC, which now controls the Hilton.
Without Colony board member status, a $60 million investment in Colony by the Whitehall entities, investment arms of Goldman Sachs, likely wouldn't have been made. The investment follows Colony's purchase of the Hilton in 2004 for about $280 million.
Gaming Commission Chairman Pete Bernhard said the approval marks "an important day" for Nevada's gambling industry because of the potential to expand its sources of capital.
Without the policy change, regulators could have required licensing of Whitehall and even Goldman Sachs. By licensing just the three individuals, their attorney, Frank Schreck, said the state has a handle on responsible individuals while big companies that don't want to go through a cumbersome review can avoid that process.
Schreck, representing applicants Stuart Rothenberg, Brahm Cramer and Jonathan Langer, said the state's approval "is opening another large area of potential investment funds" by long-term investors who want to pump money into Nevada assets.
"We don't run for the hills when things go wrong," Langer said. He also said that while he, Rothenberg and Cramer would have veto authority over various budget areas, there's no intent to "skimp" on upgrades needed to draw gamblers to the Hilton.
The three licensees own WH/LVH Managers Voteco LLC, which holds a 40 percent voting interest in the Las Vegas Hilton. While Schreck said they're independent of Whitehall or Goldman Sachs, any one of the three who might leave the venture would be bought out by the other two - ensuring protection for Whitehall investors.
When the proposal was reviewed by the commission's investigative arm, the three-member state Gaming Control Board, board member Bobby Siller cast the lone "no" vote. He expressed concern that major private equity investors would be able to avoid licensing but still have boardroom influence over the entrepreneurs who run the resorts.
Siller also said Nevada's robust casino industry isn't having trouble attracting capital, and expressed concern over the potential for big investors to make global decisions to the detriment of their "flash in the pan" Nevada holdings.
At the board's June 7 meeting, Schreck countered that Nevada's gambling industry has seen exponential growth thanks to "progressive" regulators willing to take some risks.
|
|
