Harrah's Entertainment Inc. has decided not to extend a one-year option to manage Binion's Horseshoe in downtown Las Vegas and will instead transfer management of the historic casino to MTR Gaming Group Inc. in March.
MTR Gaming purchased Binion's Horseshoe for $20 million from owner Becky Behnen in March. Harrah's bought the property's World Series of Poker tournament and the rights to the Horseshoe name in Nevada for $44.3 million from Behnen and also assumed the Horseshoe's debt.
Under that agreement, MTR will take control March 11 but Harrah's will honor an earlier deal to hold the final two tables of the 2005 World Series of Poker at Binion's Horseshoe. Harrah's agreed to that arrangement to coincide with the city's Centennial celebration next year. The rest of the tournament will take place at Harrah's Rio resort, which will host the event exclusively in future years.
During an conference call Monday to discuss MTR's third quarter earnings, company President and Chief Executive Ted Arneault said the end of the World Series' 34-year-run at Binion's Horseshoe next year won't mean the end of poker at the downtown landmark.
MTR expects to develop its own poker tournament using the Binion's name, he said.
Though the company doesn't own the rights to the World Series of Poker, it will still reap "an awful lot of marketing benefit" from the final game of the tournament next year, Arneault said. The casino also will benefit as poker players and tournament observers play other games, he said.
Harrah's and MTR reopened Binion's Horseshoe April 1, two-and-a-half months after it was forced to close for lack of funds. Under Behnen, the property endured several IRS liens, a multi-million-dollar lawsuit and other financial woes. Harrah's said the property was losing money before the company took over.
Monday, MTR reported a return to profitability for the property. Under Harrah's management, Binion's Horseshoe generated $34 million in revenue at $1.8 million in cash flow from April 1 through Sept. 30 excluding revenue from the World Series of Poker and rent payments to MTR.
Harrah's pays a rental fee of at least $200,000 a month to MTR, fees that were due to increase if Harrah's exercised its option to continue managing the property, Thompson said.
Because the property was operating profitably, Harrah's decided to turn it over to MTR early rather than pay more money to MTR, he said.
The Horseshoe brand will be removed from the property's name after the management agreement expires March 11 and MTR takes control, Thompson said.
MTR spokeswoman Tamara Pettit said the company has the right to use the Binion's name but declined to comment on what the property would ultimately be called.
In its earnings release, MTR reported a third-quarter profit of $5.9 million Monday. That translates to 20 cents per share on revenue of $85.2 million for the period ending Sept. 30, the company said.
Join the Discussion:
Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.
Full comments policy