Partner in betting operation charged
By Jeff German
LAS VEGAS REVIEW-JOURNAL
A partner in a multimillion-dollar sports betting operation started by gambler-developer Billy Walters has been arrested on charges of stealing $482,883 from the group.
Ezekiel Rubalcada, 35, who police allege staged a phony carjacking to cover up a series of thefts, was in custody at the Henderson Detention Center on $131,000 bail. He will be arraigned in Henderson Justice Court at 9 a.m. Monday on a 33-count felony complaint charging him with theft and burglary.
Earlier this year, "60 Minutes" gave its viewers a peek into the prolific sports betting activities of Walters, who was described in the report as "the most dangerous bettor in the history of Nevada."
Walters, also known as a golf course developer, told the CBS news magazine that his gambling operation puts as much as $2 million at risk at Las Vegas sports books during pro football weekends, sometimes moving the betting lines. He said he has never had a losing year.
The thefts occurred between Jan. 18 and April 14 from an M Resort betting account belonging to ACME Group Trading, a sports wagering company Walters incorporated in July 2005, according to the 10-page complaint against Rubalcada obtained by the Las Vegas Review-Journal.
Records on file with the Nevada secretary of state's office show that until October Walters was president, secretary and treasurer of Veg Corp. Inc., the company listed as the sole manager of ACME Group Trading.
A Henderson police affidavit in Rubalcada's arrest identified Mike Luce, the longtime president of Walters' main corporation, the Walters Group, as "one of the members of ACME Trading Group."
Walters could not be reached for comment, and Luce did not respond to several calls for comment.
Both District Attorney David Roger and Chief Deputy District Attorney Brian Rutledge, who is prosecuting the case, declined to comment.
Rubalcada, who invested $2,500 in ACME for a small share of the profits, placed wagers for the company with money deposited into the M Resort account, the police affidavit said.
Between January and April, the affidavit alleged, Rubalcada withdrew money from the account in amounts ranging from $2,000 to $130,000 on 16 occasions without notifying the company's manager, Robert Ward.
Then on April 14, in an effort to divert attention away from his role in the thefts, Rubalcada staged a carjacking and reported it to police, the affidavit alleged.
Rubalcada told officers that as he pulled away from valet parking at M Resort in his 2004 Chevrolet Avalanche, a black four-door sedan pulled in front of him and a man wearing a ski mask got out and pointed a gun at him. He said the suspect ordered him out of the pickup, then stepped inside and sped away with nearly $360,000 in company sports betting money left in the vehicle.
Resort surveillance video confirmed that Rubalcada's truck was commandeered, but police believe the man who took it was working with Rubalcada.
When Henderson detectives arrived at the M Resort to question Rubalcada, they found him evasive and reluctant to provide them with basic information they needed to investigate the carjacking story. They later found serious flaws in the story.
In a subsequent interview with private detective David Groover, who police said oversaw security for ACME Group Trading, Rubalcada acknowledged that he had taken money from the M Resort sports betting account for three months, but had been "trying to make the account right."
He told Groover that a man he identified as "Big Mike" was the brains behind the phony carjacking and that he owed money to him, the police affidavit alleged.
Groover could not be reached for comment.
Rubalcada refused to talk further with detectives who are attempting to identify and find "Big Mike" in the ongoing investigation.
Ward told detectives that Rubalcada had orders on April 14 to close the M Resort account and move what the company thought was $360,000 to the Palazzo.
In reality, however, only $54,366 was left in the account by that time, and that money is now missing, according to detectives.
A few weeks later, police recovered Rubalcada's undamaged pickup locked with the keys inside. There was no cash inside the vehicle.
Ward described for detectives the security precautions the company puts in place to transfer money from one casino account to another. The partner transporting the money generally sets up a preplanned route with a company official serving as a "spotter," who follows the partner along the route to the casino where the money is to be deposited.
In Rubalcada's case, Ward told detectives he was the spotter for what was thought to be a large transfer of funds.
He said Rubalcada didn't follow the planned route this time, and Ward eventually lost sight of his truck.
Ward told police he later got a phone call from Rubalcada indicating that his vehicle had been stolen.
M Resort surveillance video showed that Rubalcada did not immediately report the carjacking when he returned to the casino, the arrest affidavit said.
Showing posts with label M Resort. Show all posts
Showing posts with label M Resort. Show all posts
Sunday, August 7, 2011
Monday, July 4, 2011
Reshuffles of Bankrupt Vegas Casinos
Familiar faces stay despite overhauls
Howard Stutz INSIDE GAMING
The near financial collapse of several Las Vegas-based gaming companies didn't shake the system.
Gaming revenues in the Las Vegas locals market have spiraled downward some 15 percent since 2008, pushed by the recession, record unemployment, a declining housing market and the diminished construction industry.
The lost business compounded the already shaky corporate financial structures that several casino operators brought upon themselves through leveraged buyouts, development projects or other ill-timed decisions.
Creditors and banks, however, didn't want to run the casinos.
For the most part, debt was restructured and financing was acquired. Management, however, remained in place.
That's why it's not shocking that George Maloof will continue to operate the Palms.
Maloof's ownership in the 1,300-room off-Strip hotel-casino will drop from 85 percent to 2 percent once gaming regulators approve a restructuring of $400 million in debt. The casino's creditors, investment firms TPG Capital and Leonard Green & Partners, will each own 49 percent of the property.
Without Maloof's marketing skills and vision, the Palms is just another attractive Las Vegas casino. The private equity firms are banking on Maloof keeping the Palms on track while the economy recovers.
The same scenario holds true for Station Casinos. The company emerged from bankruptcy last month largely intact.
Creditors had ample opportunity through bankruptcy to dump the founding Fertitta family and break up the 18-casino company. Boyd Gaming Corp. stood ready to acquire all or part of Station Casinos during the restructuring proceedings. Regional gaming operator Isle of Capri Casinos was prepared to manage several of the company's resorts on behalf of the lenders.
In the end, the banks and unsecured bondholders decided to stick with brothers Frank Fertitta III and Lorenzo Fertitta and their existing management.
The Fertittas put $200 million into the deal and own 45 percent of the new company, their largest stake ever. When Station Casinos was publicly traded, the Fertittas held 9.9 percent. Following a $5.4 billion deal to go private in November 2007, the Fertittas had 25 percent.
But the brothers are not in control. It's presumed Deustche Bank AG (25 percent), JP Morgan Chase & Co. (15 percent) and the former bondholders (15 percent) would vote as a bloc on any matter.
The lenders forgave $4 billion of the company's previous $6 billion in debt through restructuring. So it's likely they have the Fertittas on a leash. How long or short is anyone's guess.
The lenders are wagering that the Fertittas and their management team will do what they have done best -- operate the casinos. Before the economy fell apart, the Fertittas were known as decent managers.
That's what the debtholders want to see again, which is why Southern Nevadans have been inundated with the company's "We Love Locals" advertising campaign and a hefty promotional environment. Station Casinos is trying to win back the love of the consumer.
Same with M Resort.
Anthony Marnell III and his family spent close to $1 billion to build M Resort, opening the stylish property during the heart of the recession. The first few months -- helped by a heavy promotional effort -- provided a false sense of security.
Penn National Gaming bought M Resort's $860 million in debt for $230.5 million, a nearly 75 percent discount, less than two years after the resort opened.
At first, it seemed Marnell was out of the picture. Penn executives, however, liked the way he ran the property and gave him a reported five-year deal to serve as the casino's president. Marnell told Nevada gaming regulators he was negotiating with the company for an equity position in M Resort.
Herbst Gaming is the only troubled company that didn't follow the model.
The Herbst brothers, facing $1.15 billion in debt, proposed keeping 90 percent of their slot machine route business while giving creditors 100 percent of the company's casinos. The noteholders objected and the bankruptcy court approved a reorganization that gave senior lenders control of the entire company. The brothers were removed and Herbst Gaming is now Affinity Gaming.
Recently, family patriarch Jerry Herbst formed a slot machine route business -- JETT Gaming -- with the idea of reclaiming the slot machine operations at his company's Terrible Herbst convenience stores.
The more things change, the more they stay the same.
Howard Stutz INSIDE GAMING
The near financial collapse of several Las Vegas-based gaming companies didn't shake the system.
Gaming revenues in the Las Vegas locals market have spiraled downward some 15 percent since 2008, pushed by the recession, record unemployment, a declining housing market and the diminished construction industry.
The lost business compounded the already shaky corporate financial structures that several casino operators brought upon themselves through leveraged buyouts, development projects or other ill-timed decisions.
Creditors and banks, however, didn't want to run the casinos.
For the most part, debt was restructured and financing was acquired. Management, however, remained in place.
That's why it's not shocking that George Maloof will continue to operate the Palms.
Maloof's ownership in the 1,300-room off-Strip hotel-casino will drop from 85 percent to 2 percent once gaming regulators approve a restructuring of $400 million in debt. The casino's creditors, investment firms TPG Capital and Leonard Green & Partners, will each own 49 percent of the property.
Without Maloof's marketing skills and vision, the Palms is just another attractive Las Vegas casino. The private equity firms are banking on Maloof keeping the Palms on track while the economy recovers.
The same scenario holds true for Station Casinos. The company emerged from bankruptcy last month largely intact.
Creditors had ample opportunity through bankruptcy to dump the founding Fertitta family and break up the 18-casino company. Boyd Gaming Corp. stood ready to acquire all or part of Station Casinos during the restructuring proceedings. Regional gaming operator Isle of Capri Casinos was prepared to manage several of the company's resorts on behalf of the lenders.
In the end, the banks and unsecured bondholders decided to stick with brothers Frank Fertitta III and Lorenzo Fertitta and their existing management.
The Fertittas put $200 million into the deal and own 45 percent of the new company, their largest stake ever. When Station Casinos was publicly traded, the Fertittas held 9.9 percent. Following a $5.4 billion deal to go private in November 2007, the Fertittas had 25 percent.
But the brothers are not in control. It's presumed Deustche Bank AG (25 percent), JP Morgan Chase & Co. (15 percent) and the former bondholders (15 percent) would vote as a bloc on any matter.
The lenders forgave $4 billion of the company's previous $6 billion in debt through restructuring. So it's likely they have the Fertittas on a leash. How long or short is anyone's guess.
The lenders are wagering that the Fertittas and their management team will do what they have done best -- operate the casinos. Before the economy fell apart, the Fertittas were known as decent managers.
That's what the debtholders want to see again, which is why Southern Nevadans have been inundated with the company's "We Love Locals" advertising campaign and a hefty promotional environment. Station Casinos is trying to win back the love of the consumer.
Same with M Resort.
Anthony Marnell III and his family spent close to $1 billion to build M Resort, opening the stylish property during the heart of the recession. The first few months -- helped by a heavy promotional effort -- provided a false sense of security.
Penn National Gaming bought M Resort's $860 million in debt for $230.5 million, a nearly 75 percent discount, less than two years after the resort opened.
At first, it seemed Marnell was out of the picture. Penn executives, however, liked the way he ran the property and gave him a reported five-year deal to serve as the casino's president. Marnell told Nevada gaming regulators he was negotiating with the company for an equity position in M Resort.
Herbst Gaming is the only troubled company that didn't follow the model.
The Herbst brothers, facing $1.15 billion in debt, proposed keeping 90 percent of their slot machine route business while giving creditors 100 percent of the company's casinos. The noteholders objected and the bankruptcy court approved a reorganization that gave senior lenders control of the entire company. The brothers were removed and Herbst Gaming is now Affinity Gaming.
Recently, family patriarch Jerry Herbst formed a slot machine route business -- JETT Gaming -- with the idea of reclaiming the slot machine operations at his company's Terrible Herbst convenience stores.
The more things change, the more they stay the same.
Sunday, October 17, 2010
Casinos sold for bargains
Low going: Casinos sold for bargains
HOWARD STUTZ
INSIDE GAMING
Let's recap recent headlines.
M Resort, which cost $1 billion, was essentially acquired by Penn National Gaming, which picked up the property's $860 million debt load for $230.5 million.
MGM Resorts International's 50 percent stake in Atlantic City's Borgata was sold to a yet-to-be-named buyer for just above $250 million -- almost half the figure analysts expected.
CityCenter, which had an $8.5 billion budget, has an equity value of $2.65 billion. That means MGM Resorts' 50 percent share is worth $1.325 billion.
With apologies to Harry Belafonte, the question asked is, "How low can we go?"
Clearly, the recession and falling revenues have devalued casinos.
Penn National picked up M Resort's debt for basically 23 cents on the dollar and will wait out a Las Vegas recovery.
"We view this deal as something Penn just could not pass up," Morgan Joseph gaming analyst Justin Sebastiano said.
As companies like MGM Resorts ($13 billion in long- term debt) and Harrah's Entertainment ($19 billion) deal with liquidity issues, it could be a buyer's market. MGM Resort officials have said none of their company's properties are for sale. But never say never.
The Borgata deal is key to MGM Resorts' debt-payment plans. The casino operator is counting on the $250 million. Another $114 million sitting in trust will go to the company once the sale is final.
Boyd Gaming Corp. has right of first refusal on the deal. FBR Capital gaming analyst Jane Pedreira told the Press of Atlantic City that she didn't believe the casino operator would match the offer because Boyd doesn't want to increase its market exposure.
The way the Atlantic City is heading, MGM Resorts should be happy it found a buyer.
The same day the deal was announced, it was revealed that Atlantic City suffered its 25th straight month of declining gaming revenues with an 11.6 percent drop in September.
Borgata's gaming revenues fell 16.1 percent in the month. Revenues at the casino are down 7.7 percent for the first nine months of 2010.
Deutsche Bank gaming analyst Andrew Zarnett said the numbers would continue to fall. The SugarHouse Casino in Philadelphia opened and slot machines start up in April at New York's Aqueduct Race Track.
Last month, the troubled Resorts Atlantic City was sold to gaming veteran Dennis Gomes for $35 million, the lowest price ever paid for a New Jersey casino. Gomes plans to capitalize on HBO's "Boardwalk Empire" and run the property with a Roaring '20s theme.
I didn't know the theme was going to include the purchase price.
HOWARD STUTZ
INSIDE GAMING
Let's recap recent headlines.
M Resort, which cost $1 billion, was essentially acquired by Penn National Gaming, which picked up the property's $860 million debt load for $230.5 million.
MGM Resorts International's 50 percent stake in Atlantic City's Borgata was sold to a yet-to-be-named buyer for just above $250 million -- almost half the figure analysts expected.
CityCenter, which had an $8.5 billion budget, has an equity value of $2.65 billion. That means MGM Resorts' 50 percent share is worth $1.325 billion.
With apologies to Harry Belafonte, the question asked is, "How low can we go?"
Clearly, the recession and falling revenues have devalued casinos.
Penn National picked up M Resort's debt for basically 23 cents on the dollar and will wait out a Las Vegas recovery.
"We view this deal as something Penn just could not pass up," Morgan Joseph gaming analyst Justin Sebastiano said.
As companies like MGM Resorts ($13 billion in long- term debt) and Harrah's Entertainment ($19 billion) deal with liquidity issues, it could be a buyer's market. MGM Resort officials have said none of their company's properties are for sale. But never say never.
The Borgata deal is key to MGM Resorts' debt-payment plans. The casino operator is counting on the $250 million. Another $114 million sitting in trust will go to the company once the sale is final.
Boyd Gaming Corp. has right of first refusal on the deal. FBR Capital gaming analyst Jane Pedreira told the Press of Atlantic City that she didn't believe the casino operator would match the offer because Boyd doesn't want to increase its market exposure.
The way the Atlantic City is heading, MGM Resorts should be happy it found a buyer.
The same day the deal was announced, it was revealed that Atlantic City suffered its 25th straight month of declining gaming revenues with an 11.6 percent drop in September.
Borgata's gaming revenues fell 16.1 percent in the month. Revenues at the casino are down 7.7 percent for the first nine months of 2010.
Deutsche Bank gaming analyst Andrew Zarnett said the numbers would continue to fall. The SugarHouse Casino in Philadelphia opened and slot machines start up in April at New York's Aqueduct Race Track.
Last month, the troubled Resorts Atlantic City was sold to gaming veteran Dennis Gomes for $35 million, the lowest price ever paid for a New Jersey casino. Gomes plans to capitalize on HBO's "Boardwalk Empire" and run the property with a Roaring '20s theme.
I didn't know the theme was going to include the purchase price.
Friday, October 15, 2010
Las Vegas: $18 billion loans
HBOS played leading role in £11.5bn loans to US gambling industryFull extent of failed bank's lending to Vegas casinos and resorts revealed
HBOS, the lender now subsumed into partially state-owned Lloyds Banking Group, played a major role in loaning $18.4bn (£11.5bn) to the struggling US casino industry during the height of the credit boom.
The level of the bank's involvement in the US gaming sector has emerged after it made a loss of more than $500m last week on loans it provided to M Resort Spa Casino in Las Vegas – the second massive financial hit Lloyds has taken in America in as many months. Loans to casino groups accounted for 35% of the value of all US deals on which HBOS acted as an agent between 2004 and 2007, according to data held by financial information group Thomson Reuters.
It is not clear how much HBOS lent to US casinos in total, although it will be only part of the $18bn as most of the loans would have involved a syndicate of banks. However, in 2004 and 2005, the US division of HBOS was one of the main banks in a syndicate arranging loans of $1bn and $2bn to Station Casinos, which filed for Chapter 11 bankruptcy protection last year, as well as the bank being involved in a 2007 loan of $430m to Aliante Gaming, a Station subsidiary.
Furthermore, in 2004, HBOS was also among the banks leading a $680m loan to casino operator Aztar Corporation. Aztar's owner, Tropicana Entertainment, filed for bankruptcy protection in 2008. Other HBOS casino customers during the period included MGM Mirage, Wynn Las Vegas and Penn National Gaming.
Lloyds declined to comment on specific deals but it is understood that its US casino portfolio has been passed to the bank's "business support unit" – where the lender is reducing its exposure through sales, restructurings and writedowns. Lloyds has previously said that impairments on group loans have peaked and are starting to fall.
The frequency of HBOS's dealings with US gambling reveals how it entered the financial crisis with large bets placed on Las Vegas, the centre of the country's casino industry, which proved to be one of the American cities hit hardest by the credit crunch.
Las Vegas's ongoing troubles were again illustrated this week when MGM Resorts reported third-quarter figures in which casino revenue declined by 9%, slot machine revenue was 3% lower and revenue per available room on the Las Vegas Strip decreased by 2%. Michelle Chang, an equities analyst at Morningstar in Chicago, said: "We believe these figures reflect continued struggles in the Las Vegas market, as the region is dealing with excess capacity while an economic recovery is still in the early stages."
Last week, Penn National Gaming paid $230.5m for about $860m owed to HBOS, which included $700m the bank loaned to M Resort plus another $160m loan that HBOS had acquired from MGM Resorts at an undisclosed price. The deal gave Penn a Las Vegas casino for a fraction of what it cost to build the 390-room resort.
The debt sale came two months after it emerged that HBOS was set to lose "tens of millions of pounds" from dealings with another US client, Sea Island, the exclusive Georgia holiday retreat that filed for bankruptcy in August.
Lloyds is understood to have already written down the value of the M Resort loans and does not expect to make further material downgrades on its US casino portfolio. Lloyds has been winding down or selling HBOS-owned assets ever since acquiring Britain's largest mortgage lender. The acquisition, which was encouraged by the UK government, helped Lloyds book losses of £6.3bn last year.
The mounting US losses at the bank are thought to have been incurred in the division previously run by Colin Matthew, a former HBOS board member whose responsibilities included the international business. He retired when HBOS was acquired by Lloyds TSB in January 2009 with a pension entitlement of £416,000 a year, having been paid £652,000 in 2008.
HBOS, the lender now subsumed into partially state-owned Lloyds Banking Group, played a major role in loaning $18.4bn (£11.5bn) to the struggling US casino industry during the height of the credit boom.
The level of the bank's involvement in the US gaming sector has emerged after it made a loss of more than $500m last week on loans it provided to M Resort Spa Casino in Las Vegas – the second massive financial hit Lloyds has taken in America in as many months. Loans to casino groups accounted for 35% of the value of all US deals on which HBOS acted as an agent between 2004 and 2007, according to data held by financial information group Thomson Reuters.
It is not clear how much HBOS lent to US casinos in total, although it will be only part of the $18bn as most of the loans would have involved a syndicate of banks. However, in 2004 and 2005, the US division of HBOS was one of the main banks in a syndicate arranging loans of $1bn and $2bn to Station Casinos, which filed for Chapter 11 bankruptcy protection last year, as well as the bank being involved in a 2007 loan of $430m to Aliante Gaming, a Station subsidiary.
Furthermore, in 2004, HBOS was also among the banks leading a $680m loan to casino operator Aztar Corporation. Aztar's owner, Tropicana Entertainment, filed for bankruptcy protection in 2008. Other HBOS casino customers during the period included MGM Mirage, Wynn Las Vegas and Penn National Gaming.
Lloyds declined to comment on specific deals but it is understood that its US casino portfolio has been passed to the bank's "business support unit" – where the lender is reducing its exposure through sales, restructurings and writedowns. Lloyds has previously said that impairments on group loans have peaked and are starting to fall.
The frequency of HBOS's dealings with US gambling reveals how it entered the financial crisis with large bets placed on Las Vegas, the centre of the country's casino industry, which proved to be one of the American cities hit hardest by the credit crunch.
Las Vegas's ongoing troubles were again illustrated this week when MGM Resorts reported third-quarter figures in which casino revenue declined by 9%, slot machine revenue was 3% lower and revenue per available room on the Las Vegas Strip decreased by 2%. Michelle Chang, an equities analyst at Morningstar in Chicago, said: "We believe these figures reflect continued struggles in the Las Vegas market, as the region is dealing with excess capacity while an economic recovery is still in the early stages."
Last week, Penn National Gaming paid $230.5m for about $860m owed to HBOS, which included $700m the bank loaned to M Resort plus another $160m loan that HBOS had acquired from MGM Resorts at an undisclosed price. The deal gave Penn a Las Vegas casino for a fraction of what it cost to build the 390-room resort.
The debt sale came two months after it emerged that HBOS was set to lose "tens of millions of pounds" from dealings with another US client, Sea Island, the exclusive Georgia holiday retreat that filed for bankruptcy in August.
Lloyds is understood to have already written down the value of the M Resort loans and does not expect to make further material downgrades on its US casino portfolio. Lloyds has been winding down or selling HBOS-owned assets ever since acquiring Britain's largest mortgage lender. The acquisition, which was encouraged by the UK government, helped Lloyds book losses of £6.3bn last year.
The mounting US losses at the bank are thought to have been incurred in the division previously run by Colin Matthew, a former HBOS board member whose responsibilities included the international business. He retired when HBOS was acquired by Lloyds TSB in January 2009 with a pension entitlement of £416,000 a year, having been paid £652,000 in 2008.
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