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Closed Casino: Castaways Likely Finished
LAS VEGAS -- The Castaways is unlikely to reopen, Las Vegas casino
industry executives predicted on Monday after the 49-year-old
hotel-casino was sold to Vestin Mortgage, the property's biggest
creditor.
Vestin was the lone bidder in Monday morning's foreclosure auction
held in the lobby of Vestin's El Camino Avenue offices, winning the
property with a bid of $20.7 million.
The Castaways closed Thursday afternoon after Vestin exercised its
right to foreclose on the property and collect its cash as collateral
for its $22 million-plus mortgage note.
The closure put an estimated 800 people out of work.
Vestin plans to sell the Castaways quickly, company spokesman Steve
Stern said after the auction.
"Vestin owns the property and they're going to sell it as soon as
possible," Stern said, declining to be more specific about Vestin's
timetable.
He also declined to speculate on the future of the property and
whether it has seen its last days as a hotel-casino site.
Casino industry insiders doubted the property's future as a casino,
and said the big three locals operators, Station Casinos, Coast Casinos
and Boyd Gaming, almost certainly would pass on an opportunity to buy
and operate the Fremont Street hotel-casino.
"It's hard to imagine that someone would want to operate at that
location," said one knowledgeable executive who spoke on condition of
anonymity. "It's in a dreadful location."
Another top casino executive who declined to be named said the
Castaways' contract with the Culinary union includes successorship
clauses that would force a new owner to hire the property's union maids,
cooks and porters.
"The unions are one of the big reasons the property's closed," said
the executive, who noted that the Castaways' nearest competitors in the
Boulder Strip market don't have union contracts. "Boulder Station, Sam's
Town and Arizona Charlie's don't have Culinary contracts, and cleaned
the Castaways' clock."
That executive suggested that Station or Boyd may want to buy the
property and its grandfathered casino gaming entitlement, and then sell
the site with a stipulation that it not be used for gaming.
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entire article at:
RGT Online
2004 Online Casino News Archive
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