Leroys in trouble?

[EdTeach]

I can only hope so!!!

Posted by CowboyDan at LVA...

http://biz.yahoo.com/e/081215/betm.ob8-k.html

Form 8-K for AMERICAN WAGERING INC

15-Dec-2008

Creation of a Direct Financial Obligation or an Obligation under an Off-Bal


Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Victor Salerno, the Company's President, Chief Executive Officer and Chief Operating Officer, loaned the Company an additional $500,000 on December 1, 2008 due to the cash flow needs of the Company. Due to the urgency, the funds were advanced on an expedited basis without board approval. As reported in the Company's Form 10-Q for the quarter ended July 31, 2008, Mr. Salerno had previously loaned the Company $500,000 pursuant to a loan agreement dated April 21, 2008. The independent directors of the Company are considering for fairness a proposed amendment to that loan agreement to cover the total $1,000,000 that has been loaned by Mr. Salerno as well as other proposed terms and are considering other alternatives.

On December 11, 2008, U.S. Bank gave the Company verbal approval to extend the maturity date of the Company's $500,000 revolving line of credit for 90 days after the original maturity date of December 31, 2008 and to further negotiate the terms of the line of credit. However, until definitive agreements are signed, there can be no assurance the line of credit will be extended or that the terms of the line of credit can be renegotiated on terms atleast as favorable to the Company.



Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 2, 2008, Mr. Salerno agreed to reduce his annual base salary to the amount sufficient to cover payroll deductions for benefits, effective November 24, 2008. Pursuant to the original terms of his employment agreement, Mr. Salerno is entitled to an annual base salary of $240,000.

Melody J. Sullivan, the Company's Chief Financial Officer and Treasurer, agreed to reduce her annual base salary by 20% effective January 3, 2009. Pursuant to the original terms of her employment agreement, Ms. Sullivan is entitled to an annual base salary of $180,000.

The salary reductions are intended to be temporary pending an improvement of the Company's cash flow.

[Samo]

They closed up shop at the Golden Gate.

Interesting that they've been in southern NV the longest of the chain sportsbooks, but now downtown they have 1 shop, Lucky's which is new in so. NV has 1 shop downtown, and Cal Neva which used to have little so. NV presence has 2 shops downtown.

[EdTeach]

There was on there last fall when I was in there. I will never go back in there.

[Railbird]

Frustration is driving 90 mph to Gold Strike in Jean only to have the Leroys flunkee on an extended lunch break for a 1pm NFL start.

[Jeff Jones]

I rarely use Leroy's as an out because of the inconsistency of information or knowledge of the writers. Acknowledging that a few of the stable outlets are knowledgeable, I realize that there is an out-of-control turnover of writers in the smaller boutiques, so any venture into an unfamiliar shop is gonna be an adventure.

But you can say the same thing about the Cal-Neva remotes in town. You draw some Lulus behind the counter.

Last year, I lost my blue Leroy's card. I went to the Golden Gate to get a new card, and the goofball told me I would have to give him the information, and they would mail me a new one. I said never mind.

So, on the way home, I stopped at the Silverton, and the guy made me a new one on the spot.

Quality is not Job 1 here.

In defense of the Silver Nugget, one afternoon two seasons ago, I put in more stuff there than at any other Leroy's since. Competency is not always the goal.

[EdTeach]

Jack, who used to work at Golden Gate, could often be found in the alley smoking a cigar, or at the craps table shooting dice.

[Always+EV]

Nevada Gaming Control Board
Enforcement Division
555 East Washington Avenue #2600
Las Vegas, Nevada 89101

Request for emergency audit of Lucky’s Race & Sportsbook; possible violation of Regulation 22.040: Reserve requirements, and other regulations

It appears that this licensee is frequently operating without sufficient money on hand to pay winning patrons, in apparent violation of Regulation 3.050.1, which states:

No license will be issued for use in any establishment until satisfactory evidence is presented that there is adequate financing available to pay all current obligations and, in addition, to provide adequate working capital to finance opening of the establishment.

There have been at least five incidents within the last thirty days of Lucky’s at Plaza Las Vegas and Lucky’s at Terrible’s Las Vegas being unable or unwilling to promptly pay winning patrons. Patrons have had to wait as long as eight hours to get paid. In at least one case known to me, a patron was asked to return to Plaza in “a couple of days” to get paid. One patron at Terrible’s was told to “mail in your ticket if you want to get paid.” He subsequently was paid after Board intervention. Most of these failures to promptly pay were for relatively small amounts, no more than four figures. It is hard to understand a sportsbook trying to operate with less than $10,000 in cash on hand to pay winning patrons.

In addition, there has been an apparent attempt by Lucky’s to cheat a patron by deliberately misgrading a Super Bowl prop in favor of the side that had the least action. The resulting patron complaint is presently being handled by Agent Willie Waters.

The totality of circumstances would indicate that Lucky’s simply no longer has adequate capital to operate, and may now be essentially operating a Ponzi scheme, transferring a day’s incoming revenues to other locations to pay off previous winners. If this is correct, and is allowed to continue, the damage to patrons and the embarrassment to the industry and the State of Nevada will be significant when the scheme eventually unravels.

Action by the Board pursuant to Regulation 3.050.2 would appear to be appropriate:

The commission or the chairman of the board may require a licensee to provide security in the form of a reserve for the payment of all amounts held by the licensee on the patrons’ behalf, all amounts held by the licensee for the account of the patrons, all amounts owed by a licensee but unpaid to gaming patrons, future wages, salaries or other obligations, either as a condition precedent to issuance or renewal of any license or at any other time the commission or chairman determines that such requirement would be in the public interest. The security required shall in all respects, other than amount, comply with the requirements and provisions of the reserve made applicable to race books and sports pools by Regulation 22.040.

Of particular relevance is Regulation 22.040.8:

A book must calculate its reserve requirement each day. In the event a book determines that its reserve is not sufficient to cover the calculated requirement, the book must, within 24 hours, notify the chairman of this fact in writing and must also indicate the steps the book has taken to remedy the deficiency.

Based on the frequency of delayed payments, it is reasonable to suspect that this regulation is not being complied with by Lucky’s. Otherwise, there would be sufficient cash on hand at its locations to pay winning patrons, unless it lacks the cash, in which case it is in violation of the reserve requirement itself.

The circumstances causing Lucky’s recent mistreatment of winning patrons cry out for a Board investigation. Please initiate it as quickly as possible and advise

[Railbird]

I told anybody who would listen at PrimmValley not to get involved with Jimmy Vaccaro. They say he is just a marketing guy, but still. Ruined a great out.

[sundown]

as for lucky's...i have had to wait for an armored truck (2-24 hours) on more than 5 occassions over the last 3 months. i have been paid in full, but clealry something is amiss.

recommendation: turn all uncashed lucky's tickets into cash immediately.

[EdTeach]

Either ridiculously poor customer service, which they should be shamed for, or they are running on fumes.

[Jeff Jones]

Been kicked out of, been threatened to be kicked out of more in Las Vegas...

Lucky's may have problems, but they aren't customer service problems...Great front-line writers. They don't have anything to do with a delay.

So if you want to big-time them for the sake of an Internet post, go for it.

[Railbird]

JJ,

you obviously havent been to Buffalo Bills, the lucky employees there are not nice, wont update lines, wont stay open past 7pm to cash tickets, wont smile. They hate their jobs, I dont blame them. They went from Glennyis who is very nice to Luckys management who is the worst. The morale at Primm Valley sports books is at an all time low. They to a man hate Luckys and wish they had the old scenario back.

[EdTeach]

The writers are Plaza and Terribles are awesome, except for Jack at Terribles who insists on saying "its runner time" every time I walk up to to the counter, which pisses me off enormously ( I don't run bets, I bet my own money and I have partners).

Railbird- You seem to spend a lot of time in Primm, the only reason I can think of is you are from Cali?

[ahearnb]

LOL, runner time. If you are young and bet big, you are a runner. Makes sense to me.

[Jeff Jones]

JJ,

you obviously havent been to Buffalo Bills, the lucky employees there are not nice, wont update lines, wont stay open past 7pm to cash tickets, wont smile. They hate their jobs, I dont blame them. They went from Glennyis who is very nice to Luckys management who is the worst. The morale at Primm Valley sports books is at an all time low. They to a man hate Luckys and wish they had the old scenario back.

No, I haven't been to Primm in years.

My point is: Don't walk to the counter with some hifalutin' attitude that "I am a big shot gambler and anything I say or do is cool" no matter how hifalutin' you might think you are.

It is not in your best interests long term.