Nevada Gold & Casinos Inc (UWN) filed Annual Report for the period ended 2010-04-30.
Nevada Gold & Casinos Inc has a market cap of $12.2 million; its shares were traded at around $0.953 with and P/S ratio of 2.1. UWN is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:As of June 30, 2010 the aggregate market value of the voting stock held by non-affiliates of the registrant based on the closing price per share of $0.88, as reported on the New York Stock Exchange, was $11,025,751.
On April 25, 2005, we acquired the Colorado Grande Casino located in Cripple Creek, Colorado, from Isle of Capri Black Hawk (IC-BH) for $6.5 million. The Colorado Grande Casino is located at a primary intersection, near the center of the Cripple Creek market. The property currently consists of a casino with approximately 191 slot machines, four table games, two restaurants with bars and 44 parking spaces. The friendly atmosphere is enhanced as good customers are treated to "comps" in the form of free drinks, free meals, or other benefits. In November 2008, Colorado passed Amendment 50 which effective July 2, 2009, increased bet limits from $5 to $100, permits craps, roulette, poker, blackjack, and other table games, allows 24 hour gaming, and lowered gaming tax rates. To take advantage of this and remain competitive in the market, we invested an additional $600,000 in the property to provide blackjack, roulette, house-banked poker, and a food outlet on the casino floor.
As of January 1, 2009, the maximum bet for each facility was increased from $200 to $300 and the law was changed to allow casinos to be open 24 rather than 20 hours per day.
We owned a 51% interest in Route 66 which we accounted for using the equity method. We received no cash distributions from the Route 66 Casinos venture. Our portion of the earnings of the Route 66 Casinos venture was estimated and recorded based on available financial information. In April 2008, we signed a settlement agreement with American Heritage, Inc. and Fred Gillman, the principal of American Heritage, Inc. (“The Gillmann Group”). Per the agreement, The Gillmann Group paid us $1 million on May 1, 2008, $1.3 million on June 2, 2008 and was obligated to pay us $2.3 million by April 15, 2010. There was an offsetting $0.7 million liability previously netted against the $2.3 million, resulting in a net balance of $1.6 million. The $2.3 million was not received as of April 30, 2010, as a result we elected to establish a valuation allowance against the remaining $1.6 million receivable on the balance sheet. We are pursuing legal action to collect the receivable. See Note 16 to the accompanying Consolidated Financial Statements for a discussion of our current legal position and accounting of the settlement agreement and our former investment in this joint venture.
The Colorado Constitution permits a gaming tax of up to 20% on adjusted gross gaming proceeds, and authorizes the Gaming Commission to change the rate annually. As of July 2, 2009, any increase in the gamming tax rate requires statewide voter approval. The current gaming tax rate is 0.25% on adjusted gross gaming proceeds of up to and including $2 million, 2% over $2 million up to and including $5 million, 9% over $5 million up to and including $8 million, 11% over $8 million up to and including $10 million, 16% over $10 million up to and including $13 million and 20% on adjusted gross proceeds in excess of $13 million.
On July 23, 2010, the Company acquired six of the seven casinos, and their related operating center. The casinos are the Silver Dollar Seatac, the Silver Dollar Renton, the Silver Dollar Mill Creek, Club Hollywood, located in Shoreline, the Royal Casino, located in Everett, and the Golden Nugget Casino, located in Tukwila, collectively “Silver Dollar Casinos”. All of the casinos are located in western Washington. The casinos were previously owned by subsidiaries of Evergreen Gaming Corporation, a British Columbia Corporation, which is under bankruptcy court protection. The Company purchased the six casinos from Fortress Credit Opportunities I, LP and Fortress Credit Funding II, LP, (the “Sellers”) for $11.07 million, $6.0 million which was paid in cash and $5.07 million by a credit agreement, issued by the Company to the Sellers that is due July 23, 2012, and bears an interest rate based on the 30 day LIBOR at the end of each calendar month, plus 9%, with a floor of 11.0%. Interest is due monthly.
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