Boyd, Nevada talk Station deal

21 December 2009

LAS VEGAS, Nevada -- Boyd Gaming Corp. executives have been in contact with state casino regulators about its $2.45 billion offer for Station Casinos, the state's top regulator said this week.

Nevada Gaming Control Board Chairman Dennis Neilander said he has talked to representatives for both companies Wednesday, although he did not discuss the nature of the talks.

Boyd is offering $2.45 billion in cash and assumed debt for all 18 of Station's casinos, some land and other assets, a filing with the Securities and Exchange Commission shows. Station Casinos carries $6.8 billion in debt, meaning the deal would cost the company's creditors billions of dollars.

If successful, the deal would give Boyd Gaming 22 casinos in the locals market and three downtown.

Boyd's offer could create antitrust issues, and Neilander said the gaming company will need to submit a plan showing the purchase wouldn't violate state or federal anti-monopoly rules.

State gaming law requires regulators to consider the effect on competition whenever casino owners apply for additional casino licenses.

"State gaming law requires that if Boyd were to be successful, it must submit a multiple licensing criteria analysis," he said.

Rob Meyne, Boyd's vice president of corporate communications, said his company's bid takes into account several regulatory issues that could arise from the acquisition.

"Boyd Gaming took a number of factors into consideration in preparing our offer for Station Casinos, including regulatory issues," Meyne said. "We are committed to working closely with governmental authorities regarding our proposal and do not anticipate any regulatory questions that can't be resolved."

The state's anti-monopoly gaming law was created in response to a federal government threat to intervene to block billionaire Howard Hughes' planned purchase of the Stardust on antitrust grounds. At the time, Hughes had already bought five other casinos on the Strip, including the Desert Inn, Sands and Frontier.

The monopoly issue was raised in 2001 when Station Casinos acquired both Fiestas and Santa Fe Station. Gaming regulators approved those acquisitions, and the later openings of Green Valley Ranch, Red Rock Resort and Aliante Station, after deciding that Station Casinos was competing with other gaming companies in the Clark County market, rather than just a smaller locals market around Las Vegas.

The Clark County gaming market includes not only Henderson and North Las Vegas, but Laughlin and Mesquite.

Station Casinos reported $918.1 million in casino revenues in 2008, equaling 8 percent of the state's nonrestricted casino winning and 9.4 percent in Clark County.

Boyd's casino revenues were not available by market.

On a separate issue, Neilander said parties in Station Casinos' bankruptcy case have been in contact with gaming control board officials since the case was filed in July, something the judge overseeing the case questioned last week.

U.S. Bankruptcy Judge Gregg Zive on Dec. 11 asked why parties in the bankruptcy hadn't talked to regulators after Michael Wilson, chief deputy attorney general of the attorney general's gaming division, told the court that no one involved in the case had contacted regulators.

The judge noted that regulators will need to sign off on a restructuring plan or the selection of any trustee that might be named to oversee Station Casinos during its bankruptcy.

Neilander said gaming attorneys for creditors and Station Casinos had contacted him, although he didn't know whether they had talked to any of the bankruptcy attorneys about their discussions.

"Some of the creditors' gaming attorneys had been talking to me," Neilander said. "But I think the gaming attorneys weren't talking to the bankruptcy attorneys. That's why the judge was a little bit upset. It didn't look like there was enough communication going on."


Related Links
Boyd Gaming Corporation Gaming Vendor Information
Nevada Gambling


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