Barrick buying Golden Nugget in Laughlin for $31 million

Wednesday, Nov. 10, 2004 | 11:01 a.m.

A casino company changing the face of downtown Las Vegas is expanding to Laughlin and has big plans for other Southern Nevada investments.

Barrick Gaming Corp., which owns six downtown properties, is acquiring the Golden Nugget Laughlin for $31 million from one of its downtown neighbors, Poster Financial Group Inc.

A Barrick executive said today that he doesn't expect the acquisition of the 300-room Golden Nugget Laughlin to be the last property the company will purchase in the Colorado River resort community 90 miles south of Las Vegas.

"We feel Laughlin would benefit from consolidation in the same way it's occurring in Las Vegas," said Stephen Crystal, president and co-founder of Barrick.

"There are a number of other markets we like within the state of Nevada, some in close proximity to Las Vegas," he said. "I think you will see some additional acquisition activity from us because we're in an active acquisition process."

Crystal also said the company is negotiating a deal with a Midwest-based tribal gaming property that he did not name.

According to a statement issued today announcing the deal, the move gives Barrick -- owner of the Plaza, Vegas Club, Western, Gold Spike, Nevada and Queen of Hearts properties -- a foothold in Laughlin.

The sale, subject to regulatory and government approvals, would enable Poster to focus on its primary asset, the Golden Nugget Las Vegas, downtown's largest hotel with 1,907 rooms and about 3,000 employees.

The Golden Nugget is the smallest of Laughlin's nine hotel properties and has a 32,000-square-foot casino. The property is on the southern end of a strip of casinos along the Colorado River.

"The purchase of the Golden Nugget Laughlin is an opportunity to enhance our portfolio with a property that is accordant with our mission to offer value and quality to our core customer, as well as provide a stronger foundation for future acquisitions," Crystal said in the statement issued today.

"That we were able to work together with one of our neighbors in downtown Las Vegas on this transaction was an added bonus," he said.

Barrick will receive a two-year license agreement for the limited use of the Golden Nugget Laughlin name and brand. But Crystal said he expects to rename the property sooner than that.

"The Golden Nugget name is not as crucial for those locals who frequent the establishment," Crystal said.

He said he is not worried about visitation downturns in Laughlin in the early 2000s, attributed primarily to the increase of Indian casinos in California and Arizona.

"Most of the current analysts' reports say Laughlin is growing against and the increase in Indian casinos in California has actually increased the number of participants in gaming and by virtue of that potential market, Laughlin is still the preferred value destination of people coming from California," he said. "It was depressed for awhile, but it's growing again. Revenue and cash flow for the Golden Nugget Laughlin was up 50 percent last year."

Crystal said the company would reposition its new Laughlin property with some of the same attractions it is using in downtown Las Vegas -- boxing matches, pool party events and quarterly slot machine tournaments pitched by celebrity spokesman Ed McMahon.

Poster acquired the Golden Nugget properties in Las Vegas and Laughlin in January from MGM Mirage for $215 million. Owners Tim Poster and Tom Breitling immediately boosted the profile of the downtown Golden Nugget by turning it into the centerpiece location of a Fox network television show, "The Casino."

The partners also set out to develop an "old Vegas" environment with its entertainment offerings and opened a poker room.