After the chair of the Nevada Gaming Control Board Thursday expressed “great concern,” the CEO of Affinity Gaming assured Nevada regulators Thursday that the company is working closely to help with a potential sale of the properties in Primm on the California border where Affinity will cease casino operations on July 4.
When Affinity’s Scott Butera appeared before the Control Board Thursday morning on an unrelated matter, regulators sought explanations for the company’s actions. Affinity was scheduled to appear before the Nevada Gaming Commission later Thursday.
Affinity informed state officials in a letter that it will permanently close operations in Primm. Affinity’s has been leasing and operating the properties for nearly 15 years on land owned by the Primm family.
“As you can imagine, myself and the Board are watching what’s going on in Primm with grave concern for the property and community,” said Board Chair Mike Dreitzer.
“We have run a very large facility there and for numerous years the property has been declining and losing money,” Butera said. “We’ve invested a lot of money in that asset over the years, to no avail. We tried many things there, including building a new sign and (adding) new slot machines. The long and short of it is that it’s just not viable as a casino operation and as such, we informed the landlord that we’re no longer able to operate.”
Butera said they’re working closely with the landlord, the Primm family, which is looking at taking over the assets or selling them to a potential suitor. Although those details weren’t disclosed, it was brought up during the meeting. There’s a bid by Las Vegas-based LV Petroleum, a developer and operator of travel centers and convenience stores.
“We’re exiting as the tenant,” Butera said. “My team has been working tirelessly to provide voluminous information to the Primm family to support that cause. I hope it’s going well, and it’s in our best interest if we can have that orderly transition.”
Dreitzer asked Butera if Affinity “is doing everything it can in good faith” to support an opportunity for a successor planned at the site. Butera said they “have done everything possible” to work with the Primm family.
Dreitzer then delved into the corporate governance of Affinity Gaming, owned principally by Z Capital, an asset-management firm in New York City founded by James Zenni, who serves as CEO. Butera said Zenni serves on their board and that a special committee was formed in October, in which Zenni is not a member, that that handles all strategic matters. Butera said he handles day-to-day operations, along with general managers.
“Mr. Zenni doesn’t get a vote (on what happens),” Butera said. “He’s obviously informed and provides input, but no decision making.”
“I would assume to close this out on behalf of the board that you pledge as you have in the past to full good-faith cooperation with this process to allow for the landlord and all other individuals to fully vet this opportunity and give it every chance to succeed,” Dreitzer said. “Do I have your commitment and that of the board?”
“Absolutely, yes Mr. Chair,” Butera said in response. “If the LV Petroleum bid is not acceptable to the landlord, we’re definitely open to any alternative termination of the leases and transition of the operations to the landlord or any third-party operator. All the human beings involved want to do what they can to maintain maximum jobs and continuity at the property.”
Dreitzer said they’re talking about more than 300 jobs and a town on the border of California. “It’s of critical importance to the state and good faith is not only requested, but required. “I understand there are many challenges at the property, but there must be a good-faith event to give us every opportunity to have that community continue in the fullest way possible. As a licensee, we expect you to continue to support this to the extent that we will keep a close eye on to make sure that’s the case.”
Gaming Control Board member George Assad said what’s happening in Primm “is a major concern to all of us, and we want to be kept apprised of everything that’s gone on,” and maybe everyone can work together to find someone to run the property.
There was no detailed discussion during the Commission meeting. Commissioner Brian Krolicki called Primm the “gateway to Nevada” and urged Butera to do all he can to help the community, people, and highway activity. “This is really important and as a licensee we appreciate you doing that,” Krolicki said. “We’re all in this together and we need to make sure we take care of Nevada and the people who live in it.”
Butera told Krolicki it’s a difficult lease and expensive property with increased competition in California. “We’ve been losing money for years.”
Butera said they allowed the Primm family to host town hall meetings to reach out to residents and employees and they’ve had many agencies there to assist employees in either continuing their employment or finding new jobs. Affinity employs 330 to 340 people.
