Lady Luck receives preliminary approval

Thursday, Aug. 7, 2003 | 11:11 a.m.

CARSON CITY -- The state Gaming Control Board recommended approval Wednesday for a restructured group to run and revive gambling at the Lady Luck Casino in downtown Las Vegas.

The application was turned away two months ago when the board said that Andrew Donner, who would have held 47.5 percent of the operation, would not be approved for a license because he filed improper income tax returns.

The remaining shareholders reorganized and Robert H. O'Neil will hold 83.1 percent and Keith E. Grossman will have 16.2 percent.

Donner will loan the operation $2 million but according to the agreement not have anything to do with the operation of the casino.

Donner will remain as a lender and will be free to apply for a license in the future when he shows the gaming regulators he has straightened out his finances.

Board member Bobby Siller said Donner was a "successful businessman" and he believed Donner would stay out of the operation of the casino.

The state Gaming Commission will meet Aug. 21 to take final action on the application of the Henry Brent Co., which would operate the casino.

Grossman told the board that Donner never intended to be involved in the day-to-day operation but was to handle leasing and finances. He said there is a "strong management team" to run the casino.

Donner said he would not enter the casinos. And he said the action by the board in June was a "wake-up call" for him to get his finances in order. He said he was now paying close attention to his multiple tax returns.

Donner, who has gaming licenses at seven taverns in Clark County named Timbers, was questioned by board members at the June meeting about his prior federal personal tax returns when he listed business expenses as family vacations, a personal trainer, a swimming pool cleaner, a housekeeper, tuition and uniforms for a private school for his children and a building permit for his home.

Donner told the board in June that he had only one bank account and one credit card for both his business and personal expenses. And he provided all the information and expenses to an accountant, William Shine of California, who decided these were business deductions.

He said Wednesday that he will straighten things out and there will be "no areas of concern" when he applies in the future to become a shareholder in the operation. The board had suggested he wait a year before he re-applies.

Grossman and O'Neil are leasing the gaming operation at the Lady Luck from AMX that purchased the casino and the 792-room hotel. AMX plans to convert 300 of the rooms to time share and run the hotel, the restaurants and the bars as well as lease the casino

Board members said Wednesday they were satisfied with new projections about the gaming revenue that could be generated under the new casino operators. They had questioned Grossman in June who had projected the casino revenue would reach $26.4 million this year and that should increase with new attractions.

Grossman had outlined many improvements the casino hopes to make to draw back customers to the downtown club.