A deal has been struck to stave off the possible bankruptcy of the Hard Rock Hotel and Casino Las Vegas.
A special meeting of the state’s Gaming Control Board and the Nevada Gaming Commission was called on Thursday during which a potential takeover was discussed.
Under the proposed agreement, DLJ Management and Morgans Hotel Group are to transfer their ownership to one of the property’s lenders, Brookfield Asset Management.
The regulator has agreed to give the green light to Brookfield’s takeover and to allow Warner Gaming, a company founded by former Station Casinos executive William Warner that obtains public and private financing for the acquisition or development of casinos, to assume control of casino operations at the resort.
Brookfield is understood to be setting aside $30m to reposition the property, which has struggled to make its mark in recent years.
In addition to well publicised financial problems, the property has also been involved in a dispute with the owners of the Hard Rock brand name, Hard Rock International.
At the end of December, the Nevada Gaming Control Board filed a complaint against the operator of the resort over alleged violations of gaming regulations.
The Control Board claimed that a joint undercover operation in partnership with local police revealed the direct involvement of Hard Rock Hotel and Casino employees or agents in the sale of controlled substances, as well as providing private restrooms for patrons to engage in sex or use of drugs.
The operator’s failure to prevent these activities constituted a "failure to conduct gaming operations in accordance with proper standards of custom, decorum and decency", the board stated, adding that such conduct is to the detriment of the state’s gaming industry.
Hard Rock Hotel and Casino settled the matter by paying a $500,000 fine, plus additional expenses - although it neither admitted nor denied the allegations.
Hard Rock International, the owner of the Hard Rock brand name, said it had been made aware of the complaint. In a statement it said that the conduct described in the complaint was "wholly at odds" with the company’s corporate policies and contrary to the values of the brand, and that it had no operational involvement in the business.
