Binion interested in selling Horseshoe Gaming

Friday, Sept. 22, 2000 | 11:12 a.m.

SUN STAFF AND WIRE REPORTS

BILOXI, Miss. -- The owner of Horseshoe Gaming, declared unfit to hold a license for a riverboat casino in Illinois, has had his license in Mississippi renewed.

The decision came Thursday during a Mississippi Gaming Commission meeting.

Jack Binion, head of nation's largest privately held casino company, operates hotel-casinos in Illinois, Indiana, Mississippi and Louisiana.

In June, Illinois regulators criticized Binion's business practices and internal operational controls as well as his relationship with high rollers at Binion's Horseshoe Club in Las Vegas.

Binion deeded over the Horseshoe casino in Las Vegas to his sister last year as settlement of a family legal dispute.

Binion is appealing the Illinois board's ruling.

"Most of the Illinois allegations include old issues that were known at the time Mr. Binion was found suitable in Nevada, Louisiana, Indiana and Mississippi," said Chuck Patton, executive director for the Mississippi Gaming Commission.

"In our investigation, we have found no basis to question the suitability of Mr. Binion."

Horseshoe generates $1 billion a year in revenue and employs 9,000 people.

Binion, however, said prior to his appearance before the state Gaming Commission that he has recently discussed selling all or part of Horseshoe Gaming to Las Vegas-based Park Place Entertainment Corp., which owns Grand Casinos in Gulfport and Biloxi.

"We crunched some numbers," Binion said of a meeting several weeks ago with officials of Park Place Entertainment. "There have been no subsequent meetings," Binion said.

Such a deal would make sense for Park Place as well as Las Vegas-based competitor MGM MIRAGE, said Lehman Bros. gaming analyst Stuart Linde.

"If you're Park Place, why wouldn't you do it?" Linde said. "They would love to have the (Horseshoe) Chicago assets. These are high-end assets ... they (the casinos) just need some capital."

Despite MGM MIRAGE's previous lack of interest in riverboat properties, the attraction of entering markets like Chicago, Tunica and Shreveport, La., would be difficult for MGM MIRAGE to dismiss, Linde said.

"MGM trades at nine times cash flow. They could just offer Jack Binion stock," Linde said.

For Park Place, one difficulty would be Horseshoe's Indiana boat. A buyout would give Park Place two Indiana properties, something that's currently not allowed under Indiana gaming regulations. However, Linde said, it's believed that law will soon be changed.

While the Tunica casino is also quite valuable, it would give Park Place two properties in that market, raising the possibility Park Place would try to divest it if it acquired Horseshoe, Linde said.

Most of the Horseshoe assets are "protected," Linde said, meaning they are located in jurisdictions that don't plan to permit any further expansion of gaming. That would mean that future growth would at least keep pace with inflation, he said.

Another often-mentioned Horseshoe suitor is Desert Inn owner Steve Wynn, who visited the Joliet casino in early August. When asked about the visit by the Sun in early August, Wynn denied any interest in buying the property, saying he was there merely to visit Binion, who he described as a friend of more than 30 years.

On Thursday, Binion did hint that a deal could be in the works with someone soon.

"I'm 63. I'll soon be 64. Nothing is forever," Binion said.

Mississippi regulators renewed the standard two-year license for Horseshoe to operate its Tunica County hotel-casino with little discussion.

Industry analysts consider that gaming boat to be the most profitable of Mississippi's 29 state-regulated casinos. Horseshoe generates about 20 percent of the $1 billion in annual revenue generated by Tunica County's nine casinos.

The Silver Star Resort & Casino, operated by the Mississippi Band of Choctaw Indians on a tribal reservation in Philadelphia, is the only casino more profitable than Tunica's Horseshoe.