Landlord rejects Binion’s rent request, sues for back rent

Thursday, April 30, 2009 | 5:14 p.m.

Headlines from the Vegas gaming industry

Binion's

Map of Binion's Gambling Hall and Hotel

128 Fremont St., Las Vegas

A landlord has rejected a plea from Binion's hotel-casino that its rent be lowered to help it survive the recession, and instead has filed a lawsuit seeking back rent and the appointment of a receiver to take over the historic gambling hall.

And, an attorney said Thursday, a similar situation is emerging across the street at the nearby Four Queens hotel-casino.

The landlord, a group of individuals and trusts that own some of the land in downtown Las Vegas where Binion's sits, filed a lawsuit Tuesday in Clark County District Court against Binion's Gambling Hall & Hotel and its parent companies Speakeasy Gaming of Fremont Inc. and TLC Casino Enterprises Inc.

These companies are controlled by Terry Caudill, owner of the Four Queens and the Magoo's slot bar chain, who bought Binion's last year from MTR Gaming.

Binion's, founded on Fremont Street as Binion's Horsehoe by legendary gaming figure Benny Binion in 1951, for years hosted the World Series of Poker before it was moved to the Rio. In recent months, Binion's appears to have suffered from the recession along with other Las Vegas properties. The property has 362 hotel rooms and an 87,000-square-foot casino.

In its lawsuit, filed by attorney John Peter Lee, the landlord says Binion's is supposed to pay $252,000 per year in rent.

But, the landlord says, Binion's is behind on rent and has proposed a restructuring of the rent downward.

Lisa Robinson, a spokeswoman for TLC, on Thursday said the company could not comment on the pending litigation.

The suit says Binion's -- which also sits on adjacent land owned by other property owners -- has been asking for rent concessions since February.

Attached to the suit are letters from Brian Arlin, TLC's senior executive director of finance, who wrote: "Operating revenue from our casino has substantially declined and it is no longer possible for TLC Casino Enterprises to meet its obligations under the lease."

The letters indicate TLC has made similar requests for concessions from other landlords and that it has cut staff and expenses to the point where additional cuts would hurt customer service and drive business away.

The letters suggest that TLC's analysis indicates the land at issue is worth $609,800, which would fetch annual rent of $36,588 at a 6 percent rate of return. But TLC offered to pay 8 percent, or $48,784, and to give the landowner a preferred stock certificate allowing it to participate, along with other landowners, in a pro-rata share of up to 5 percent of any distributable profit from a sale of the property during the lease period.

"Without an adjustment of rents to a fair market level, our hotel-casino operation faces an uncertain future," one of Arlin's letters said.

The landlord, however, said in its lawsuit that the defendants have failed to pay the entire lease payment and that a receiver should be appointed to supervise the property.

"The defendant has not confirmed and cannot confirm the allegations made by the defendant of its inability to pay the rent called for by the lease agreement and plaintiff is accordingly unable to determine whether it's in its best interest to allow the defendant to continue in possession without payment of the full amount due under the lease agreement," the lawsuit says. "In order to assure that the income from the defendant operation, including the hotel, gaming casino and other income-producing activities on the leased property be utilized to the best possible benefit, a receiver of the affairs of the defendant should be appointed so that its affairs can be monitored and reported to plaintiffs and the court."

Complicating the issue, the lawsuit said, is that the hotel sits on various adjacent leased properties, but the hotel is not physically divided to correspond with the underlying leased properties. That makes eviction or re-leasing of the land impractical.

Lee on Thursday said that besides the Binion case, he's preparing to file a similar suit involving different landowners that he said TLC's Four Queens is seeking rent concessions from. The Four Queens has 690 rooms and casino with 27,389 square feet of space.

Discussion: 16 comments so far…

By spartacus84

4/30/09 at 10:44 p.m.

Suggest removal

The landlord should work with Binion's. An empty lot does neither any good and, as a fan of downtown, I'd like to see the place that put the WSOP on the map stick around.
By gold1020

4/30/09 at 11 p.m.

Suggest removal

$252,000 divided by 12 months is $21,000 rent per month for Binion's. There's gamblers that lose that much in one night at Binion's. For Binion's to claim that they can't cough up $21,000 in monthly rent is a bunch of Bull.
By bighitter1

4/30/09 at 11:49 p.m.

Comment removed by staff.
By hooloogoo

5/1/09 at 1:09 a.m.

Suggest removal

.
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...It was my favorite downtown stop until they moved the parking a block away and I rarely visit downtown anymore. I loved the daily ham and bean specials at the snack bars...
By CynicalObserver

5/1/09 at 1:56 a.m.

Suggest removal

The management of Binion's and the Four Queens are profoundly stupid for not paying their rent. All over Las Vegas, businesses are being evicted because they haven't paid their rent. Why should the courts treat these two casinos any differently?
By vegasj

5/1/09 at 6:40 a.m.

Suggest removal

Perfect place to turn into a brothel, I'm sure hookers could bring in more than $16/night.
By poker_ray

5/1/09 at 6:44 a.m.

Suggest removal

I can't believe they can't pay $21,000 a MONTH. Ruff said that Treasure Island pays $20,000 a DAY in property taxes. Renters don't pay property tax. I know that TI is on the strip but Binion's is part of history here. They have to have a strong enough following to pony up the rent. I still play there.
By American_Gaming_Guru

5/1/09 at 2:17 p.m.

Suggest removal

Pretty unbelievable to me too. Lets face it though. Binion's has never been the same since Jack Binion was forced out of the place....and probably will never be.
By davidwayneosedach

5/1/09 at 4:30 p.m.

Suggest removal

If they can't afford that rent they must be pretty shaky. I hope the employeesare getting paid.
By Bakersfield

5/1/09 at 6:22 p.m.

Suggest removal

Maybe they should buy the property. In fact, why would anybody build on a property they do not own. I love the old Horseshoe. It IS Las Vegas. Even with the slowest elevators in town. Of Course, I agree with the person who said Jack Binion made that place special. I met him in the gift shop there one day. Seemed like a decent man.
By dcesen

5/2/09 at 4:18 a.m.

Suggest removal

Binions and 4 queens are great properties the only thing they need is a good mastermind to run them ,I have an insight on how to make these two places popular given the chance so u people think about it, I have been keeping an eye on binions and gave it alot of thought process.440-466-8831
By smoke14

5/2/09 at 5:48 a.m.

Suggest removal

I bet they will call you for advise HAHAHAHAHAHAHAHAHAAH
By homer

5/2/09 at 7:48 a.m.

Suggest removal

Go to your landlord and tell him his land is not worth as much as it was and you want a rent deduction from the signed lease and he will shut the door on you. Some nerve.
By meterman

5/2/09 at 2:29 p.m.

Suggest removal

It use to be the best place to play craps.....not anymore.
By duluth

5/2/09 at 4:54 p.m.

Suggest removal

I have been playing downtown since they built the domeshow and I will continue to play there I have no interest in playing on the strip. so whatever it takes dont mess up a good thing and get this rent thing figured out!