CARSON CITY, Nev. (AFX) - The Nevada Gaming Commission gave final approval Thursday to a change in the way the Las Vegas Hilton is licensed, making it easier for private-equity groups in invest in Nevada resort projects.
Under the deal, three executives of New York-based Whitehall Fund entities will share one seat on the board of Colony Resorts LVH Acquisitions LLC, which bought the Hilton in 2004 for about $280 million. The Whitehall entities, investment units of Goldman Sachs Group Inc., are investing $60 million in an upgrade of the facility.
Without the policy change, regulators could have required licensing of Whitehall or Goldman Sachs. By licensing the three executives, the state has a handle on responsible individuals and private equity groups and big companies that don't want to submit to a cumbersome review don't have to, said Frank Schreck, an attorney for the licensees.
Gaming Commission Chairman Pete Bernhard said the approval marks 'an important day' for Nevada's gambling industry because of the potential to expand its sources of capital.
The three licensees -- Stuart Rothenberg, Brahm Cramer and Jonathan Langer -- own WH/LVH Managers Voteco LLC, which holds a 40 percent voting interest in the Las Vegas Hilton. While Schreck said they're independent of Whitehall or Goldman Sachs, any one of the three who might leave the venture would be bought out by the other two -- ensuring protection for Whitehall investors.
When the proposal was reviewed by the commission's investigative arm, the three-member state Gaming Control Board, board member Bobby Siller cast the lone 'no' vote. He expressed concern that major private equity investors would be able to avoid licensing but still have boardroom influence over the entrepreneurs who run the resorts.
Siller also said Nevada's robust casino industry isn't having trouble attracting capital, and expressed concern over the potential for big investors to make global decisions to the detriment of their 'flash in the pan' Nevada holdings.
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