Alliance Gaming Corp. announced today that it has signed a definitive
agreement for the sale of 100% of the stock of Rail City Casino located in
Sparks, Nev., to The Sands Regent .
The total consideration, based upon a multiple of trailing twelve months
EBITDA, is expected to be approximately $38.0 million, consisting of $35
million in cash and $3.0 million of subordinated debt provided by Alliance
Gaming. Following normal regulatory review process, the transaction is
expected to close in the first half of 2004.
“The sale of Rail City is consistent with our strategy of divesting non-
core assets when both the timing and the selling price multiple line up to
provide a very attractive deal for both parties,” said Robert Saxton, Sr.
Vice President and Chief Financial Officer of Alliance Gaming. “Rail City
has been a remarkably productive property for us and the decision to sell
it has been a difficult one. The Sands Regent in-depth knowledge and
experience in the Reno-area market, we feel, will provide Rail City the
greatest opportunity to reach its full potential.”
Alliance Gaming purchased Rail City in 1990 and the current management
team has guided the property to steady growth and strong profitability
over the past six years even in the face of growing competition from
California Native American casinos. Located just off Interstate 80 near
the Reno-Sparks border, Rail City features a 16,000-square foot casino
with 550 gaming machines, live table games, keno and a sportsbook. The
property also features a 250-seat restaurant and a large lounge area that
offers live music and televised sporting events.
“The acquisition of Rail City Casino makes a powerful statement about The
Sands Regent`s plans for future growth while giving us an immediate impact
in the Northern Nevada locals market,” said Ferenc B. Szony, President and
CEO of The Sands Regent. “Our previously announced strategy to expand
operations within the Reno-area market is being realized once again with
this agreement. Rail City has the loyal customer base, convenient
location, a great team of employees, and proximity to our other two
properties that we have been looking for in selecting potential
Alliance Gaming announced in July 2003 that it had signed definitive
agreements for the sale of its entire gaming route operations, consisting
of Las Vegas-based United Coin Machine Co. (UCMC) and New Orleans-based
Video Services, Inc. (VSI), as well as its Bally Wulff subsidiary. The
Bally Wulff sale closed in late July 2003 and the route operations sale
remains on schedule to close in early calendar 2004.
Alliance Gaming is a diversified gaming company with headquarters in Las
Vegas. The Company is engaged in the design, manufacture, operation and
distribution of advanced gaming devices and systems worldwide, and is the
nation`s largest gaming machine route operator and operates two casinos.
Additional information about the Company can be found at
The Sands Regent owns and operates the Sands Regency Casino and Hotel in
downtown Reno, Nev., and Gold Ranch Casino and RV Resort in Verdi, Nev.
The Sands Regency is an 850-room hotel and casino with 29,000 square feet
of gaming space offering table games, keno, bingo and slot machines. In
addition to complete amenities and on-site brand-name restaurants, the
property also includes a 12,000-square-foot convention and meeting center
which seats close to 1,000 people.
The Gold Ranch Casino and RV Resort is located in Verdi, 12 miles west of
Reno. Gold Ranch offers approximately 300 slot machines in an 8,000-square
foot casino, two restaurants, two bars, a 105-space RV park, a California
lottery station, an ARCO gas station and a convenience store.
This news release may contain “forward-looking” statements within the
meaning of the Securities Act of 1933, as amended, and is subject to the
safe harbor created thereby. Such information involves important risks and
uncertainties that could significantly affect the results in the future
and, accordingly, such results may differ from those expressed in any
forward- looking statements. Future operating results may be adversely
affected as a result of a number of risks that are detailed from time to
time in the company`s filings with the Securities and Exchange Commission.