Nevada's casino regulators are forming a special team of securities experts, auditors and other staffers to handle what they fear could be several bankruptcy and major debt restructuring moves within the gambling industry.
State Gaming Control Board Chairman Dennis Neilander said in a letter to Nevada's industry licensees that the special team's activity could disrupt some of the board's usual routine, but is needed to help bring resorts out of bankruptcy.
"Unfortunately, Nevada gaming and tourism have not been spared consequences of the ongoing economic challenges facing the country," Neilander said, adding, "The duration of the current recession and how quickly recovery will occur are unknowns."
"Already, there are a few large gaming companies in bankruptcy, along with a few smaller licensees," Neilander said. "More are anticipated."
Neilander said the board and its parent Nevada Gaming Commission may have to handle several cases "within a limited timeframe," and that's where the special GCB team will be most needed.
The team will include staffers drawn from the board's seven divisions, covering areas including corporate securities, audits, tax and license, technology, enforcement and investigations.
In recent weeks, Las Vegas-based Herbst Gaming Inc. announced plans to give up control of its casino businesses while it seeks to restructure its debt in bankruptcy court. Under the plan, Herbst will give up ownership of 15 casinos in Nevada, Iowa and Missouri, but will keep 90 percent control of its slot machine route operations across Nevada.
Also, Tropicana Entertainment LLC said that it could emerge from bankruptcy protection this spring.
Regional casino operator Station Casinos Inc. recently extended its deadline to work through a plan to restructure its debt. Station wants to swap high-cost debt for low-cost debt and a
$244 million capital infusion through a prepackaged bankruptcy filing.
MGM Mirage Inc., struggling under a heavy debt burden, last month made a $200 million equity contribution to its CityCenter development in the Las Vegas.
Privately held casino operator Harrah's Entertainment Inc. recently extended a deadline and eliminated a cap on its latest offer designed to lower its debt and give the company more time to pay back lenders.
Also last month, casino operator Riviera Holdings Corp. announced it may be headed into bankruptcy.