HORSESHOE OWNER MISLED REPORTERS ABOUT FINANCIAL CONDITION

Las Vegas Tribune was first to report cash flow problems denied by Behnen

Las Vegas Tribune

FRONT PAGE

September 5, 2001

By Steve Miller

On January 10, 2001, the Las Vegas Tribune headline read "Downtown Horseshoe may be in financial trouble." The exclusive story described how the downtown Las Vegas gambling hall was experiencing financial difficulty and not paying its dues to the Fremont Street Experience, LLC, or rent to its landlords for over a year.

On January 19, 2001, the Las Vegas Sun ran a story under the headline "Casino denies report alleging financial woes" in an attempt to rebuke the Tribune's report.

The Sun exclaimed that the owner of Binion's Horseshoe Club, Becky Behnen, denied the veracity of the front page Las Vegas Tribune story. Behnen said at the time "I'm certainly not going to complain" about the Horseshoe's current financial performance. "The gaming authorities are so stringent that you can't fall behind ... you can't do anything wrong. They know your financial situation at all times. If you're in any kind of financial trouble, they'd step in."

However, a lawsuit filed in District Court last week proves that Behnen was not being truthful with reporters. Last week the Fremont Street Experience Limited Liability Corporation's Attorney Joseph S. Peek filed the long-expected lawsuit against the Horseshoe Club Operating Company in the District Court of Judge Gene Porter.

The suit charges Binion's Horseshoe Hotel and Casino with failure to pay $1.5 million in monthly assessments to the mall -- exactly what was earlier reported in the Tribune. The suit does not address lack of rent payments to the landlords.

Even before the front page Tribune story appeared, a column in the Tribune predicted that the Horseshoe was having financial woes. In the October 4, 2000, column by Steve Miller it stated "In apparent retaliation for declining revenues, one downtown club, the Horseshoe, has reportedly stopped paying the Fremont Street Limited Liability Corporation (FSE LLC) its yearly million dollars in assessments. If this is proven correct, are the other FSE casinos soon to follow? Downtown sources report that FSE Executive Director Mark Parris was recently confronted by the unlicensed owner of the Horseshoe, Nick Behnen, and told in no certain terms that his wife Becky's casino was no longer going to pay dues to support the canopy. The same sources say that Parris was intimidated by Behnen and has taken no action to collect the money."

Calls made to Parris to verify information were not returned though this reporter did receive calls of protest from Nick Behnen about my Oct. 4 column. However, he did not protest the later front-page story also penned by this reporter.

As a harbinger of what was to come, the Tribune front page story stated "One of the landlords who owns the property under the casino told the Las Vegas Tribune that he has not received his rent payments from casino owner Becky Binion-Behnen for over a year. The amount owing is reportedly in excess of one million dollars. It is also reported that other Horseshoe landlords have not received their year 2000 rent payments indicating that the casino may be experiencing cash flow problems."

The Tribune story went on to describe alleged reasons for the financial problems including the bitter battle for control of the casino that raged between Becky and her brothers Jack and the late Ted Binion.

The Tribune story described how Ted Binion died under questionable circumstances in 1998 shortly after witnesses reported that Binion ordered Nick Behnen and nephew Benny Binion Behnen off his Palomino Lane property at gunpoint. A drive-by shooting at Ted Binion's home occurred one week later. Ted Binion accused his nephew Benny of being the shooter in police reports.

Speculation that the Horseshoe was in financial trouble first began in 1998 just after the death of Ted Binion when the casino began refusing to cash its $5,000 chips. After several complaints by gambler Bob Stupak, a close friend of Jack and Ted Binion, the Nevada Gaming Control Board stepped in and ordered the casino to cash the chips. It was reported that Jack and Ted Binion removed all of the $5,000 "chocolate chips" from the casino cages on their last night as owners of the casino.

On August 30, 2000, an exclusive front page Tribune story described how 23 year old Benny Binion Behnen, son of Horseshoe Club owners Nick and Becky Behnen, assaulted Stupak and his 23 year old daughter Summer at Piero's restaurant. According to witnesses, Behnen interrupted the Stupak's dinner to accuse Bob Stupak of "stealing chips" from his parent's Horseshoe Club.

Then reports indicate that Behnen and two accomplices grabbed 58 year old Stupak and began beating him while restaurant managers and employees stood by and watched. Stupak's daughter was injured when she tried to intervene.

Gaming authorities were informed of the incident, but took no action. One of Behnen's accomplices was later arrested and charged with aggravated assault but police refused to arrest or charge Behnen even though the Stupaks had filed complaints against him.

The Horseshoe Club is well known as a generous political campaign contributor.

Soon thereafter, the Horseshoe dismantled its famous Million-Dollar display causing further questions about the club's financial viability.

Recently, former Horseshoe owner Jack Binion reportedly told friends that he no longer wants to own or run the property in the event the Behnens fail to meet their financial obligations.

The landlords have not verified if they intend to file default against the Behnens. The casino has long-term ground leases that if not kept current could result in the repossession of any improvements built upon the land. Bankruptcy protection does not stop such repossession from taking place.

The Fremont Street Experience LLC, a private corporation, receives $1million per year in county park funds. It is not known whether the other FSE LLC partners will request additional tax funding to make up for the deficit caused by the Horseshoe.