Is Centaur cashing its chips?
Debtwire, the same financial news service that reported two weeks ago about Centaur's mounting financial troubles, now reports that Centaur -- which has been trying to build a casino and racetrack in Lawrence County -- may sell its property so it can pay back some of its investors:
Centaur Gaming first lien lenders accepted the company's offer of an immediate $100 million paydown as part of an amendment to cure a default triggered in July, said two sources close to the matter. Centaur also indicated it would seek to sell its Valley View Downs property outside Pittsburgh, they said. Much of the proceeds from those asset sales would also be used to pay back Centaur's $ 770 million credit facility, they added. The first liens agreed to the proposal late last week ...
The Valley View property should fetch at least $100 million, and possibly a lot more, if sold to another gamer since it is one of only seven eligible racino sites in the state, pointed out the first source familiar. It remains unclear whether Centaur will continue with its licensing process in the meantime. At a Pennsylvania Gaming Control Board hearing last week in Harrisburg, Centaur officials reiterated their desire for the board to consider their application and set a hearing for the early fall. The board said it would continue its investigation into the potential licensee.
Centaur, the story noted, has been in default on its loans since failing to obtain a gaming license by a July 15 deadline. Centaur says it is still negotiating with lenders; the gaming board says it hasn't heard one way or another from Centaur, and has yet to receive any notification that Centaur plans to amend or withdraw its casino application.
This is just the start, folks. Stay tuned.
... As long as we're regurgitating stuff that other people have written, here's a letter to the gaming board from several House Republicans (including our own Mike Turzai):
We are concerned about reports regarding Kevin Hayes, the recently departed former Director of Gaming Operations for the Pennsylvania Gaming Control Board. According to the information found on the Board's website, Mr. Hayes is now listed as a Licensed Entity Representative for both Downs Racing, LP and Greenwood Gaming. We have a number of questions for the Board involving this situation in light of various provisions of the Pennsylvania Race Horse Development and Gaming Act (Gaming Act), the Board's own Code of Ethics and the Pennsylvania Rules of Professional Conduct for Attorneys. Further, additional questions will concern last week's letter regarding the Neeb Separation and General Release.
Section 1201 of the Gaming Act, specifically subsection (h), paragraph (13), provides as follows:
"No employee of the board or individual employed by an independent contractor of the board whose duties substantially involve licensing, enforcement or the development or adoption of regulations or policy under this part shall:
(i) accept employment with an applicant or licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of one year after the termination of the employment relating to the conduct of gaming or contract with the board; or
(ii) appear before the board in any hearing or proceeding or participate in any other activity on behalf of any applicant, licensee, permittee or licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of two years after termination of the employment or contract with the board."
Question: How is this relationship (a former employee who, within a few months, becomes a licensed entity representative) permitted under § 1201(h)(13)? Please provide a detailed explanation.
The letter was in response to this story from The Times-Tribune of Scranton:
"A former top-ranking state gambling regulator who left his job three months ago is now a lawyer and registered lobbyist for Mohegan Sun at Poconos Downs in Plains Township and Philadelphia Park casino in Bensalem. Attorney Kevin C. Hayes of Scranton served as director of the Office of Gaming Operations for the state Gaming Control Board until May 29, when he resigned ... The state Ethics Act addresses this issue in part by requiring a one-year waiting period before a former public employee can represent an individual before the agency that had employed them. But attorneys don't fall under this one-year waiting period when it comes to appearing before an agency, Mr. Hayes argued. He provided research of state court cases concerning Ethics Commission regulation of former government attorneys."
Odds and ends
Harrah's gets sued by Indian tribe. Find out why ... On the subject of Indian casinos, tribal casinos are seeing better revenues than non-tribe casinos ... Jockeys' mount fees are set to increase at Pennsylvania racetracks ... Another letter to the gaming board from the GOP, about another former employee who has gone to work in the industry.