UNITE HERE warns investors on Station Casinos’ new $1.6-billion term loan B offering
Potential citywide strike and other risks could affect the Las Vegas locals casino operator
LAS VEGAS--(BUSINESS WIRE)--UNITE HERE Gaming Research has issued a warning to institutional investors interested in the new $1.6-billion term loan B offering by Station Casinos LLC of Las Vegas. Last week, union workers from many of the city’s casinos voted overwhelmingly to terminate contract extensions, and a strike vote is scheduled for March 13.
“[has] relied on locals as the backbone of [its] business. And the majority of those folks were people who worked in the hospitality industry.”
In the words of a former top executive, Station Casinos “[has] relied on locals as the backbone of [its] business. And the majority of those folks were people who worked in the hospitality industry.” Lenders considering the term loan B offering should consider carefully the potential impact of a citywide strike by approximately 10,000 of the city’s hospitality workers on the company.
There are other risks that should be evaluated, according to Ken Liu, a UNITE HERE gaming analyst.
Station Casinos LLC’s Ultimate Gaming online business had contributed negative adjusted EBITDAM of approximately $3.3 million through the first nine months of 2013. A recent credit opinion on the company does not mention Ultimate Gaming, and the company itself also does not describe results from online operations when it disclosed estimated fourth-quarter and full-year results of 2013 two weeks ago. Potential investors are invited to visit www.UltimateSucker.org to learn more about Ultimate Gaming.
The labor dispute at Station Casinos LLC continues. Station Casinos has broken federal labor law eighty-eight times, making it the worst labor law-breaker in the history of Las Vegas gaming. Last June, the Great Place to Work Institute was alerted to the labor dispute, and Station Casinos is no longer on the “FORTUNE 100 Best Companies to Work For” list the institute produces every year. Recently, workers picketed the company again.
UNITE HERE represents hospitality workers in gaming, hotel, and food service industries in North America. UNITE HERE Gaming Research provides analysis of the gaming industry from the perspective of those who work in it.