Transfer of Ownership of a Casino Part 2
Yesterday we looked at Nevada procedures for the change of ownership at a casino property. Today, we look back at what happens in real-world terms. Our storyteller is veteran casino executive and former regulator Richard Schuetz. He’s such a brilliant raconteur that we have chosen to present his account verbatim.
The story begins back when Richard was the executive vice president of casino operations for the Frontier. He was an eyewitness of and party to the transaction as the hotel-casino passed from Summa Corp. to the Elardi family in 1988.
“The first thing that happened was Summa entered into retention agreements with key people to keep them on the property. While Ms. Elardi said she wanted to keep us all, that was clearly nonsense; she had two sons and they were involved in managing her other properties. I clearly understood that I'd be gone with the close of the store. Plus, I had no interest in working for Ms. Elardi. So, to keep some of the key folks on until the sale closed, Summa guaranteed me a big check to stay until the close. Had it not been for that, I would have been long gone.
“The sale was to close in six months and it's amazing how a job changes when there's no future. Because I oversaw both the casino and marketing, and marketing is planned well in advance, that became a nothing burger. But I really understood how much time is invested in planning for the future.
“There were issues to be resolved, but most were fairly simple. One that became unnecessarily confusing was sports book futures that would be decided after the close. This became confusing because the person I was working with didn't understand futures. I got some help from the Gaming Control Board with that.
“My main emphasis was on maintaining good employee relations, as many people were concerned they'd lose their jobs. My second big issue became asset protection. I was spending a great deal more time on the floor and had beefed up the eyes in the sky. I also brought in several outside employees who understood the reality of Las Vegas and the different teams. In short, I was spending a great deal more time watching the store.
“We stayed open during the transfer and that was funny. A lot of folks came in to watch it and we had guests in the hotel and all of that. There were also a great many NGCB employees in the building. The drop for a table game, for instance, involved about six people, with folks on either side of the transaction and the regulators. When the box was pulled, it belonged to Summa, while the box that replaced it was Elardi's. It was funny how people just kept on playing with this huge drop team working throughout the joint.
“The databases weren't an issue. This was in the early days of slot tracking and the Elardis weren't too interested in that. On the tables side, they let us keep the players’ lists. They just didn't market that way -- they didn't care about special events either. They were much more comfortable with a grind model.
“Regarding keys and all of that, we had excellent controls, so at a designated time, they all became the new owner’s property. It all goes pretty smoothly, with both sides of the transaction involved in every transfer, and the public accountants, auditors, and Gaming Control agents are all over the place.
“What the new owner does is subject to the Control Board’s oversight and that's between them and the Board. Personally, I would adhere to one of the most important realities of the casino business: Know your equipment. In other words, as the new owner, all locks and keys would be handled very quickly and under my control.”
As we said yesterday, every casino handover is a case unto itself.
