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Nov. 01, 2006
Copyright © Las Vegas Review-Journal


Herbst Gaming to buy Primm properties

MGM Mirage expected to sell three casinos, stores for $400 million

By HOWARD STUTZ
GAMING WIRE

Herbst Gaming has struck an agreement with MGM Mirage to purchase the three casinos in Primm on the Nevada-California border off Interstate 15 for $400 million, sources said late Tuesday.

The deal, which is expected to be announced this morning, will give the privately held Las Vegas based casino company control of Whiskey Pete's, Primm Valley and Buffalo Bill's, along with three gasoline station-convenience stores and a mini-market located on the California side of the border that sells state lottery tickets. Primm is situated about 35 miles south of Las Vegas.

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The 36-hole Primm Valley Golf Club, which was designed by award-winning golf course architect Tom Fazio, is not included in the transaction.

Officials at Herbst and MGM Mirage would not comment on the transaction Tuesday.

The deal, which would be subject to approval by Nevada gaming regulators, would be the second expansion this year for Herbst Gaming, one of the state's largest slot machine-route operators with more than 8,400 games in noncasino locations such as grocery stores, drugstores, convenience stores, bars and restaurants.

In May, Herbst announced its was entering Northern Nevada's casino market when the company spent $148 million to buy Sands Regent, which operates four casinos including the Sands Regency in Reno. That deal is expected to close in December.

Once completed, the transaction would give Herbst Gaming control of 12 casinos in Nevada, Missouri and Iowa. Herbst Gaming now operates eight casinos, including the off-Strip Terrible's Casino on East Flamingo Road, two casinos in Pahrump, one in Henderson and one in Searchlight.

The purchase of the Primm properties is the company's most significant move. Combined, the Primm casinos include more than 2,600 hotel rooms and more than 138,000 square feet of casino space.

The 6,000-seat Star of the Desert Arena is at Buffalo Bill's along with Desperado, recognized in 1996 by The Guinness Book of World Records as the world's tallest roller coaster.

Herbst Gaming, which has public debt, began in 1987 as an offshoot of the family business, Terrible Herbst Oil Co., which operates more than 80 all-inclusive service stations in Nevada, California and Arizona.

The stations offer gasoline pumps, convenience stores, oil and lube services and car washes.

The gaming operations have grown steadily over the past few years, beginning with maintaining and repairing the slot machines in the Terrible Herbst stores.

In February 2005, the company bought a Midwest casino operator, which included the St. Jo Frontier in St. Joseph, Mo., Mark Twain Casino in LaGrange, Mo., and the Lakeside Casino in Osceola, Iowa.

Terrible's Casino in Las Vegas is undergoing a renovation that will expand the casino and add a second hotel tower and a parking garage.

MGM Mirage purchased the Primm properties from the Primm family in the late 1990s. Whiskey Pete's, the original Primm casino, opened in 1977.



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