One casino group OK’d, second vetoed

Thursday, Dec. 7, 2000 | 11:10 a.m.

SUN STAFF AND WIRE REPORTS

CARSON CITY -- A Colorado gaming company, which includes the former majority owner of the Cleveland Indians baseball team, won preliminary state approval to purchase a midsized casino in Reno for $26.5 million.

Black Hawk Gaming & Development Co. Inc. said it is looking for other investment opportunities, possibly in Las Vegas.

The state Gaming Control Board on Wednesday recommended approval for Black Hawk to buy the Gold Dust West Casino, west of the downtown area, from longtime owner John Cavanaugh. It has 478 slot machines but no table games.

Stanley Politano, vice president and secretary-treasurer of Black Hawk, said the company was "more optimistic than some" about the future of Reno. "Reno is not as dismal as it's painted," he told the board.

He said he likes the 6.25 percent tax on gross gaming revenue in Nevada, compared to the 20 percent in Colorado, where the company owns two casinos in Black Hawk.

Jeffrey Jacobs, a Black Hawk shareholder and former director of the Boardwalk Casino in Las Vegas, told the board, "We maintain an interest in Las Vegas. We may be back," referring to the possibility of a purchase in Southern Nevada. He said the company is pursuing buying 10-20 truck stops in Louisiana.

The board questioned Richard Jacobs, also a shareholder, as to whether he had any continuing interest in the Cleveland Indians. He said he has sold all his holdings in the ball club. The stadium is named after him.

Board Chairman Steve DuCharme said the company was "very conservative and stable" and would be a welcome addition to Nevada.

It posted $5.5 million in net income in 1999 and expects that to rise 10 percent this year.

The state Gaming Commission will meet Dec. 20 to take final action on the application.

Separately, the Control Board voted Wednesday against plans by a Southern California businessman for Reno casino ventures, saying he had ties to organized crime and a notorious Hollywood madam.

Judah Hertz didn't show up for the state Control Board hearing and his attorney, Jack Godfrey, tried to withdraw an outdated application for licensing at the Flamingo Hilton, Sands Regent and Comstock hotel-casinos.

But Control Board members rejected the withdrawal request and voted to deny his application. The board's parent state Gaming Commission will have final say at a Dec. 20 meeting here.

"With the magnitude of negative information we have, he should not be allowed to withdraw his application,' GCB member Dennis Neilander said of Hertz, who had sought licensing for himself and several family members.

Hertz got the only denial vote. Applications of the other family members were referred back to the GCB staff.

DuCharme said Hertz has a "long and colorful history" that included dealings with Hollywood madam Heidi Fleiss, members of organized crime and Israeli immigrant and accused international drug smuggler Jacob Orgad.

DuCharme added that Hertz didn't detail the source of his funds for the casino ventures and instead "disguised it to appear from legitimate business sources."

Neilander said Hertz didn't mention to investigators 10 of the businesses in which he's involved, and also tried to hide information on scores of lawsuits filed against him.

"There is so much information that would render him unsuitable," said Control Board member Bobby Siller. "That he decided not to come here to discuss it is even more disturbing."

The Hertz Investment Group and an affiliate, Sapphire Gaming LLC, began acquiring the three casinos in 1999, starting with a $5 million deal for the Comstock. Also proposed was a $20 million deal for the Flamingo Hilton, which fizzled last summer, and a bid for a half-interest in the Sands Regency.