MTR Gaming Signs Definitive Agreement
to Buy Binion’s Horseshoe Property;
Harrah’s Entertainment, MTR Plan Joint Operation of Las
Vegas Property;
World Series to Begin at Horseshoe April 22
LAS VEGAS and CHESTER, W. VA. – February 19, 2004 – MTR
Gaming Group, Inc. (Nasdaq NMS:MNTG) and Harrah’s Entertainment,
Inc. (NYSE:HET) today announced the signing of a definitive
agreement for MTR’s wholly owned subsidiary Speakeasy
Gaming of Fremont, Inc. to purchase Binion’s Horseshoe
Hotel & Casino in downtown Las Vegas and plans for joint
operation of the property. Terms were not disclosed.
Harrah’s said the parties plan to open Binion’s
Horseshoe on or about April 1, pending regulatory approval.
Binion’s Horseshoe will host the 35th annual World Series
of Poker at the casino beginning April 22.
The transaction, which is subject to completion of due diligence,
governmental approvals and other customary conditions, is expected
to close in early March. MTR has obtained the necessary approval
of its lenders but anticipates that it will close using its
cash on hand. Upon closing, MTR will acquire title to the property
(concurrently with the closing of the previously announced
agreement by Harrah’s to buy Binion’s Horseshoe)
and enter a Joint Operating License Agreement pursuant to which
Harrah’s will serve as the primary day-to-day operator
of the property on an interim basis, subject to certain oversight
and review by a joint committee of the two companies. The Joint
Operating Agreement will have an initial term of one year --
which Harrah’s may extend for up to an additional two
years -- during which MTR will receive certain guaranteed payments,
net of all of the property’s operating expenses.
Pursuant
to an Intellectual Property License Agreement, Harrah’s
will retain the rights to certain intellectual property,
including the names "Horseshoe" and "World
Series of Poker"; MTR will retain the right to use
the name "Binion’s" in
Clark County, Nevada. Upon termination of the Joint Operating
Agreement, MTR will take over operation of the property and
will re-brand the property in accordance with the Intellectual
Property License Agreement.
MTR and Harrah’s have applied
to Nevada gaming regulators and to the City of Las Vegas
for approval of the transaction.
A hearing on the applications has been scheduled for March
3 with gaming regulators and March 4 with the City.
"We are excited about the opportunity to own this Las Vegas
landmark and to work with Harrah’s, a leader in our
industry, to reopen the property for its loyal patrons,
employees, and
the city of Las Vegas," said Edson R. (Ted) Arneault,
president and chief executive officer of MTR Gaming. "While
our primary growth strategy remains the continued development
of our flagship Mountaineer Racetrack & Gaming Resort
and pursuit of other racetrack and racino opportunities,
the Binion’s
acquisition fits squarely within our previously announced
goal to opportunistically acquire middle market gaming
properties
that complement our existing operations. We expect Binion’s
to allow us to leverage the expertise of our management
team and provide critical mass within the Nevada market
and thus
improve our overall financial performance."
MTR Gaming
Group, Inc., through subsidiaries, owns and operates the
Mountaineer Casino Racetrack and Resort in Chester,
West Virginia, Scioto Downs in Columbus, Ohio, the Ramada
Inn and Speedway Casino in North Las Vegas, Nevada, and
holds a
license (judicial review pending) to build Presque Isle
Downs, a thoroughbred racetrack with pari-mutuel racing
in Erie, Pennsylvania.
The Mountaineer facility currently encompasses a thoroughbred
racetrack with off-track betting and export simulcasting,
3,200 slot machines, 359 hotel rooms, golf course, spa & fitness
center, theater and events center, convention center and
fine dining and entertainment. MTR is included on the Russell
2000® and
Russell® 3000 Indexes. For more information, please
visit www.mtrgaming.com.
Founded 66 years ago, Harrah’s
Entertainment, Inc. owns or manages through various subsidiaries
25 casinos in the United
States, primarily under the Harrah’s brand name.
Harrah’s
Entertainment is focused on building loyalty and value
with its target customers through a unique combination
of great
service, excellent products, unsurpassed distribution,
operational excellence and technology leadership.
More information
about Harrah’s Entertainment is available
on the company’s Web site, www.harrahs.com.
This release includes "forward-looking statements" intended
to qualify for the safe harbor from liability established by
the Private Securities Litigation Reform Act of 1995. You can
identify these statements by the fact that they do not relate
strictly to historical or current facts. These statements contain
words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or
the negative or other variations thereof or comparable terminology.
In particular, they include statements relating to, among other
things, future actions, new projects, strategies, future performance,
the outcome of contingencies such as legal proceedings and
future financial results. We have based these forward-looking
statements on our current expectations and projections about
future events.
We caution the reader that forward-looking statements involve
risks and uncertainties that cannot be predicted or quantified
and, consequently, actual results may differ materially from
those expressed or implied by such forward-looking statements.
Such risks and uncertainties include, but are not limited
to, the following factors as well as other factors described
from time to time in our reports filed with the Securities
and Exchange Commission:
•
the effect of economic, credit and capital market conditions
on the economy in general, and on gaming and hotel companies
in particular;
•
construction factors, including delays, zoning issues, environmental
restrictions, soil and water conditions, weather and other
hazards, site access matters and building permit issues;
•
the effects of environmental and structural building conditions
relating to the company's properties;
•
our ability to timely and cost effectively integrate into
our operations the companies that we acquire;
•
access to available and feasible financing;
•
changes in laws (including increased tax rates), regulations
or accounting standards, third-party relations and approvals,
and decisions of courts, regulators and governmental bodies;
•
litigation outcomes and judicial actions, including gaming
legislative action, referenda and taxation;
•
ability of our customer-tracking, customer-loyalty and yield-management
programs to continue to increase customer loyalty and same-store
sales;
•
our ability to recoup costs of capital investments through
higher revenues;
•
acts of war or terrorist incidents;
•
abnormal gaming holds, and
•
the effects of competition, including locations of competitors
and operating and market competition.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak
only as of the date made. We undertake no obligation to publicly
update any forward-looking statements, whether as a result
of new information, future events or otherwise.
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