Oklahoma tribe on track to buy La., Miss. casinos
JACKSON, Miss. -- An Oklahoma Indian tribe is moving forward with buying the DiamondJacks casinos in Bossier City, La., and Vicksburg, Miss.
Global Gaming Solutions was the only entity that sought to buy the casinos in the bankruptcy process, averting a possible auction among multiple bidders. The unit of the Chickasaw Nation of Oklahoma plans to pay $27.5 million in cash and $97.5 million in new debt to top-level lenders of current owner Legends Gaming.
Legends filed for Chapter 11 bankruptcy reorganization in Shreveport, La., in July.
Court papers show Legends has $105 million in assets. But even after an earlier bankruptcy, it owes lenders $298 million, almost all secured debt. Wilmington Trust, a Delaware institution, leads a syndicate holding $181 million in secured debt with the first claim on Legends assets. A lawyer for Wilmington Trust wrote in court papers that lenders negotiated the sale before the July 31 bankruptcy filing and that most first-lien lenders agreed to avoid sabotaging the sale.
Wells Fargo & Co. leads another syndicate that holds $115 million in debt.
The new owners won't be able to complete the purchase until a bankruptcy judge approves. A reorganization plan isn't due to the court until late November.
The Chickasaws own 13 casinos in Oklahoma's competitive Indian gambling market. Their Global Gaming unit bought Remington Park Racing and Casino in Oklahoma City in 2010 and an ownership stake in Lone Star Park in Grand Prairie, Texas, in 2011. The tribe says its strategy is to expand regionally.
"This purchase, if successful, would complement our strategy to increase our footprint in the Midwest as it puts us into two more regional markets with close proximity to our operations in Texas and Oklahoma," CEO John Elliott wrote in an email.
Global Gaming plans to keep the DiamondJacks name, Elliott said.
Raymond Cook, president of Legends, says the casinos will operate "as usual" until the sale closes. "We will continue to provide our guests with the same great value and service they have always enjoyed at our properties," he said in a statement. "Upon completion of the sale process, DiamondJacks will be part of Global Gaming and its parent family."
Though tribes in Louisiana and Mississippi operate casinos outside the state regulatory structure, state officials have said Global Gaming would be regulated and taxed just like any other non-Indian casino owner. Elliott said Global Gaming won't seek state regulatory approvals until the sale is finalized.
DiamondJacks is typically last among Bossier City's five casinos in terms of revenue, according to Louisiana state figures. Mississippi doesn't release revenue figures for individual casinos, but DiamondJacks has the second-largest number of slot machines among Vicksburg's four casinos. A fifth Vicksburg casino, Grand Station, closed in March amid its own bankruptcy.
DiamondJacks employs 364 people at its casino and hotel in Vicksburg, according to Mississippi figures. It employs about 650 people in Bossier City, according to Louisiana figures. Elliott said no layoffs are planned.
Both properties were the first casino in their respective cities when opened by the Isle of Capri. Vicksburg opened in 1993 while Bossier City opened a year later. Isle of Capri sold the gambling halls to privately-held Legends in 2006. Legends first filed bankruptcy in 2008 to lower interest rates on $215 million it borrowed to finance the purchases.