Herbst expands with slot route deal

Friday, Dec. 6, 2002 | 11:10 a.m.

Herbst Gaming Inc. of Las Vegas has signed an agreement to purchase the Nevada slot route operations of slot making giant International Game Technology, a deal that would put No. 2 ranked Herbst in line with the largest slot route operator in Nevada.

Terms of the deal announced today weren't disclosed. The sale, expected to close in the first quarter of next year, is subject to Herbst Gaming obtaining financing and regulatory approvals.

The acquisition of Anchor Coin will add 1,000 slot machines at Smith's grocery stores and a variety of other limited gaming operations, bringing Herbst's total route to 8,200 slots.

Herbst Chief Executive Officer Ed Herbst said the transaction is aimed at boosting profit rather than size.

"Our goal is not to be the largest, our goal is to be more profitable," Herbst said. "We've grown through reputation and we've grown through service, it's come naturally."

The company continues to look for acquisition opportunities, he said.

The acquisition would further reduce the number of competitors in the slot route market. Alliance Gaming Corp., which last year called off a plan to sell its United Coin Machine Co. subsidiary, claims to be the largest slot route operator in the country with more than 8,100 machines. United Coin and Herbst would become the two major operators in Nevada, with a third operator, Golden Gaming, a distant third, Herbst said.

Reno-based IGT acquired the Anchor Coin slot route when it took over slot manufacturer Anchor Gaming last year. In August, IGT announced plans to sell the Anchor subsidiary to focus on its core slot manufacturing business.

Herbst said he doesn't anticipate any problems financing the deal or obtaining regulatory approvals.

The Herbst family is the owner of the four Terrible's casinos in Las Vegas, Henderson and Pahrump. It expanded in the slot route business with its 2000 purchase of the Jackpot Enterprises slot operation for $45 million.