The State Line and Silver Smith resorts in West Wendover, Nev., may have a new owner.
Peppermill Casinos Inc., owner of the Peppermill and Rainbow casinos in West Wendover and the Peppermill Hotel Casino in Reno, confirmed it signed an agreement on March 28 to purchase the State Line and Silver Smith resorts.
The terms of the sale were not disclosed and are subject to approval by the U.S. Bankruptcy Court in Reno and the Nevada Gaming Commission.
The State Line and Silver Smith resorts, owned by descendants of William Smith, declared Chapter 11 bankruptcy in January. Michael Devine, chief executive officer of the resorts, then said national economic woes and cash-flow problems stemming from a $50 million casino expansion in 1997 put the resorts in the red.
Devine was unavailable to comment about the Peppermill deal. When interviewed in January, he maintained the bankruptcy declaration, along with employee layoffs and other cost-cutting measures, would give the company a "fresh start" to make improvements and boost profitability.
However, Peppermill spokesman Rob Winkel said Tuesday that Peppermill began negotiating to buy the casinos last year.
"The negotiations began around last August," Winkel said. "They've been negotiating for a long period of time, even prior to the bankruptcy filing."
The bankruptcy court is scheduled to hold a hearing to consider the sale on May 21 in Reno. If the court approves the sale, Winkel said the matter will go before the gaming commission. If given the green light there, the Peppermill hopes to finalize the purchase by late June, Winkel said.
Randall Sayre, chief of investigations for the Nevada Gaming Control Board, said the board has a "level of comfort" with the Peppermill, a fact that may help the company as the sale is being reviewed.
"In this particular instance we have currently licensed individuals in good standing with the commission in Nevada," Sayre said. "We don't have new people that are coming into the licensing arena. . . . We'll look at their business plan and make ourselves comfortable that the plan they present is viable. But these are seasoned operators that have a long track record here in Nevada. My presumption is that they'll have a pretty clean plan as to how they'll operate these two casinos."
Ownership of the State Line and Silver Smith resorts would give the Peppermill a dominant presence in West Wendover. Of the major casinos in the small Nevada town, the Peppermill would own all but one — the Red Garter Casino.
Sayre said the board would investigate to make sure the Peppermill doesn't muscle competition out of the area or take advantage of its market share.
"Any time you've got market saturation such as that, you want to make sure that what's going on is viable for the local economy, and that we don't have an organization that would take advantage of that great a market share," Sayre said. "We'd want to make sure that it's not something that would hurt Wendover."
E-MAIL: jnii@desnews.com