Nevada casino operator to buy Louisiana riverboat

Sept 1

In Louisiana Monday, Penn National Gaming Inc. agreed to sell the financially burdened Hollywood Casino in Shreveport to a small casino operator from Nevada.

Conditions of the agreement between the casinos managing partner, HSC Inc. and Eldorado Resorts LLC were not brought to light, but HSC said the casino would undergo a financial overhaul. The casino plans to file for federal bankruptcy protection during the 4th quarter.

The disappointing dockside casino-hotel is employer to approximately 1800. It originally opened in 2000.

Shortly after its acquisition by Penn National in March 2003, the casino went into default on $189 million dollars worth of notes and bonds. Penn National listed the casino for sale last February after talks with noteholders failed.

Penn National puts the value of the resorts assets at $118 million dollars, significantly below the debt the project carries. HSC stated the reorganization plan would cut that debt by far.

A competitive casino market and higher taxes are what the project is ailing from, states Penn National.

Hollywood battles against four other riverboat casinos in the Shreveport-Bossier City market as well as a slots casino at the Louisiana Downs race track in Bossier City.

Eldorado Resorts owns and operates the Eldorado Hotel and Casino, which is in Reno and is also a joint venture partner with Mandalay Resort Group in the Silver Legacy Resort Casino, also situated in Reno. The two casinos combined net operating revenue in 2003 was $285 million dollars.

The plan will have to be approved by a federal bankruptcy judge and the Louisiana Gaming Control Board.

The sale does not incorporate the Hollywood Casinos in Tunica, Mississippi and Aurora, Illinois. Penn National owns the Casino Rouge dockside casino in Baton Rouge as well.