Thursday, February 5, 2009

Troubles Continue For Rhode Island Slot Parlor

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The Twin River racetrack-slot parlor in Lincoln, Rhode Island is in a similar situation to the Mohegan's Pocono Downs racetrack-slot parlor in Pennsylvania.

Both properties have cost their developers nearly $700 million and both properties pay about 60 percent of their slot revenue to the state.

Both properties are losing money. While the Mohegan Sun Casino absorbs the continued losses at Pocono Downs, the owners of Twin River have defaulted on their loans.

The owners of Twin River were the principles for the former casino management company that ran Mohegan Sun and are now are being paid about $75 million annually not to manage Mohegan Sun.

BLB Investors, a partnership that includes Len Wolman and Sol Kerzner, are the owners of Twin River. Wolman and Kerzner are also the principle partners for Trading Cove Associates, who struck the 15-year deal with the Mohegans to receive five percent of Mohegan Sun revenues until December 2014 and are the backers for the proposed Mashpee Wampanoag megacasino in Massachusetts.

The owners of Twin River have two options in the forefront of their thinking: bankruptcy or selling the property to the state.

Rhode Island officials are now studying the option of buying the Twin River property.

According to a Providence Journal article, "Twin River's owners hope to renegotiate their estimated $525 million in debt, or cut a new deal and pay the state less than its current percentage - something state officials have steadfastly refused to do. If they can't do those things, a sale to the state, bankruptcy filing, reorganization, or a post-failure state takeover are all possibilities, said Patti Doyle, a Twin River spokeswoman."

BLB Investors first missed a debt payment last year and is still in talks with its chief lender, Merrill Lynch Capital Corporation.