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StumbleBlack Gaming warns again of possible bankruptcy
Friday, Aug. 14, 2009 | 11:08 a.m.
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- Black Gaming announces layoffs, business closures (5-20-2009)
- Black Gaming moves closer to bankruptcy (2-20-2009)
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With business down about 22 percent at its Mesquite hotel-casinos, Black Gaming LLC warned again today that it's in default on its loans and may be headed for bankruptcy protection.
The Las Vegas company said in a regulatory filing that for the quarter ended June 30, it lost $4.829 million on revenue of $27.3 million.
In 2008's second quarter the company lost $20.3 million on revenue of $36 million. Those results included a $12.5 million charge against earnings to write down the value of the company's assets.
In the latest quarter, Black said its liabilities totaled $233.5 million -- including $205.7 million in debt that's in default.
Casino revenue during the quarter fell year-over-year 22.4 percent to $16.5 million, while hotel revenue fell 24 percent to $6 million as the Mesquite properties entertained fewer visitors and hotel-casinos 80 miles away in Las Vegas offered stiff competition.
Black Gaming owns the CasaBlanca and Virgin River hotel-casinos as well as the Oasis, where business has been suspended due to the recession.
Black said that on July 15, it failed to make two interest payments due at that time of $5.625 million and $4.208 million.
"If the company is not successful in obtaining a forbearance agreement, a restructuring agreement or entering into a transaction to address its liquidity and capital structure, the company will likely be required to seek protection under Chapter 11 of the U. S. Bankruptcy Code," Black Gaming said in today's filing.
"The broader economic slowdown being experienced in Nevada and the region will likely adversely impact discretionary spending for leisure and other recreational activities, such as gaming and resort services offered by our resorts. Markets with which we compete, such as hotel-casino resorts in Las Vegas and elsewhere, are offering discounted room and other packages in an effort to attract customers, including customers who traditionally might have come to our resorts," the filing said. "Because our hotel-casino resorts are heavily dependent on the drive-in market, especially leisure travelers traveling on Interstate 15 and Las Vegas area residents, the factors identified above have had and will continue to have an adverse impact on our business. We believe that the operating results discussed below reflect the impact of such macroeconomic factors on our business, and, in the short-term, we do not anticipate the macroeconomic conditions to improve. As a result, we anticipate continuing pressure on our operating results."
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there is no way in the world these places are going to get things turned around.
just yesterday they showed something like a 30% drop in visitors to mesquite.
Maybe Mr. Black should give away 2 nights like primm did. That would generate some "stay-cation" vegas people. You now how you make money giving away free nights right??? You do it in volume!!!! That was a joke....
stratboy...YOU have the right idea, but i personally know the'll never do it.
why?
i was their advertising account rep for the "other paper" in las vegas.
the only thing they ever, ever, ever advertised was "spa and golf", "spa and golf".
no cinco de mayo, st. patrick's day, nothing.
we had a "day trip" magazine all about going to utah and northern nevada to hike and camp and i bet 80% of the people that read that magazine drive right by their casinos and they didn't spend one dollar advertising in it.
penny wise = pound foolish.
So if Wynn offers $150 a night rooms, this impacts sucky little resorts. Who would have thunk it.
While I believe that Black Gaming are not very good operators, there is little they can do to save themselves. Maybe with innovative management they could increase revenues by 10% and lower costs by 5%, but I don't think this will be enough. I have been to these casino's and they are clearly under-managed. Problems can be seen everywhere. But...the economy sucks, so it's kind of like repairing the sails on a sinking ship.
The point is:
banks/insurance companies/investment funds, etc. need to stop buying the crap paper any of these crap companies operating on crap business models use to to raise money. Even the big boys here in Vegas over-expanded and sold everyone on a bill of goods that they could all charge exorbitant room rates, over-charge visitors for mediocre meals, spas, shopping,etc. There were never enough high-end visitors to support all the excess capacity coming on line, even during the go-go years. Now that things have come down to earth, they're all bleeding red-ink and will never justify all the capital they have obliterated.
But the rinky-dink dives located miles and miles away? What a joke! Why did ANYBODY...EVER... sink good money into them? With a price war among the big boys the only possible outcome, and obvious for the last few years now, the joke otherwise known as Mesquite has been a most obvious goner. I'd laugh that fools deservedly lost their investment over this, except that our tax dollars always get stuck covering their behinds.
Here is a living example as to why you should never put all your eggs in to one basket....
We have used Mesquite as a stop over on long trips. Leave early, stop in Vegas, see what we want to see, have dinner, then head out to Virgin River and stay in a 20 dollar room. Next morning, we have a head start compared to staying in Vegas. Sure Mesquite doesn't get rich off of us, but as another post mentioned "It's volume". Although he was joking, I suppose 20 bucks is better than an empty room. And the casino will get something from most of us too.
mesquite, primm, and to some extent Laughlin need something innovative to stay alive.
Also, tribal gaming is definitely crimping down on revenues - when that can of worms opened the Vegas execs should have known to go slow and cautious. Many Americans are gambling but it is in tribal joints near their homes.
Mesquite's seven golf courses, available outdoor activities include skeet shooting, horseback riding, hiking and nine miles of bike/pedestrian/ATV trails.
If Black Gaming ends up filing Ch.11, It may allow them to restructure to get the expenses in line with income.
Moved to Mesquite nearly 2 years ago after over 40 in Las Vegas watching the population in LV grow, as well as the increasing traffic, smog,and rude people in that go-go adult disneyland.
Living in Mesquite is GREAT with clear skies, no traffic, speed limits the same all over (35mph ex. a few school zones), Very friendly people, 35 miles from St. George which can offer numerous business's not in Mesquite, should such be needed, great medical care, etc,etc.
On accasion each re-visit to LV reminds me the move was the greatest and should have done it years ago. The temperatures are but a few degrees from LV also. Water? Plenty and even have grass, front and rear and can water anytime I desire. Ah! A great place to retire.
freecation seems to be the way to get people into the "empty rooms".
we always look for great deals to get out of Mesquite. we put money into meals, gambling, shopping & gas. We can afford this because the room is free or "next to being free".
It beats NOTHING for the hotel/casinos.
Laughlin,Vegas and Primm have the combination to get us and many friends and family there.
Try it Mr. Black
L1,
"Ah! A great place to retire."
I'm quite sure the Titanic started out it's voyage as a great ship to take a cruise on, too.
Room rates at the Plaza in downtown Las Vegas can be had for as low as $17. The Luxor, for $29. They're well on their way to becoming free. Only the strong will survive. Mesquite was fool's gold glistening under the desert sun. It can't compete, never could (it just appeared that way during the go-go years), and never will.
Mid 21st century school children from Las Vegas and St. George will take field trips to visit the ghost town called Mesquite.
We have been regulars since 1975 to Mesquite, buying a winter home in the area in 1991. We have watched Mesquite grow & felt that it was over expanding over the past 15 years that couldn't be justified other then by greed, which of course didn't pay off in the end.
Two decent size casinos under different ownership is sustainable & maybe even a 3rd smaller one tops. However 5 casinos at its peak a few years ago was pushing past the point of ridiculous. We still prefer Mesquite as the place for a decent amount of play for our dollar, Vegas seems like they shake out my pockets in no time & send me home broke.
Hopefully a restructuring is possible & off loading of dead properties. The trouble is that once built a Casino & Hotel is pretty much all a property is good for. With the Federal bank rate at 1% you would think that a far more reasonable interest rate should be able to be negotiated, however I imagine the banks are charging 7 or 8% & likely don't want to cut it. So Maybe we'll be playing at the Wells Fargo or some other bank named casino in future.
The St. George & Mesquite area still offers some of the best in retirement & general quality of life living. So while many are hurting the area will rebound as the economy improves. Bad mouthing Black, The Casino Industry etcetera won't do anyone any good.If you live in the area invite friends & family to visit & enjoy all we have to offer, & if you don't live in the area well come on down & stay awhile I'm sure you'll enjoy yourself. Lets pull & promote our area together for the betterment of everyone.