Casino Connection Nevada

Herbst Gaming looking for help

by Staff

A statewide smoking ban in Nevada bars and taverns that took effect in January is exacting a toll on Herbst Gaming.

The company is carrying $1.15 billion in debt, in part because of a weakening economy, but largely because of reduced income from the company’s slot route. Since the smoking ban went into effect, slot route revenue is down 20 percent.

“The recent impact from Question 5, the Nevada smoking ban, and general economic weakness has required us to explore our alternatives,” said Ed Herbst, company president and CEO. “We are confident that our retention of a financial adviser will help us capitalize on the strength of our brand and position the company to maximize long-term value.”

Herbst has asked Goldman Sachs to assist in identifying how the company should proceed, and one option is to sell the business. Other options include recapitalization, refinancing, restructuring or reorganizing the company’s debt.