Thursday, April 2, 1998 | 10:09 a.m.
Concerned over what they called "aggressive" financial projections and "thin" financing, the state gaming board Wednesday deferred approval of Nevstar Gaming & Entertainment Corp.'s bid to open Mesquite's fifth casino, a $7 million project that would include a 210-room Western-themed hotel affiliated with the Best Western chain.
Construction of the casino, the Mesquite Star Hotel and Casino, is nearly complete, officials said. The Mesquite Star is scheduled to open Memorial Day weekend.
Board members grilled Nevstar executives about their daily win forecast for the Mesquite Star hotel-casino that would include 446 slots, most nickel and quarter machines, live table games and a sports book.
Nevstar President Jeffrey Gilbert said he'd relied on Control Board gaming win figures, which are published monthly but don't break out results by individual properties, in an attempt to forecast financial results.
"I realize [financing is] thin, but you've got me in trouble before I'm in trouble," Gilbert said.
Board member Steve DuCharme reminded Gilbert that the board had access to numbers that are not available to the public. According to those numbers, and a review of Nevstar's capital arrangements, "You have absolutely no margin for error," DuCharme said.
Control Board Chairman Bill Bible was clearly concerned about approving a casino project that could end up in bankruptcy "three months down the road." He said he had never voted against a casino project due to lack of financing, but that the Mesquite Star "comes just about as close as I've ever seen."
"We have a statutory obligation to make sure you're adequately capitalized," Bible said.
He suggested Nevstar seek funding for a $1 million contingency reserve to cover one month's operations in case cash flow falls below projections. Officials of Las Vegas-based Nevstar said they would have additional financing by the board's May meeting.
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