A few more insights

Implications: There are quite a few issues that Herbst needs to address, some they can fix and some they can't

Analysis: Herbst Gaming is in a quagmire as to what to do with their business model. Basically, Herbst has a 4 -pronged business model, southern nevada casinos, northern nevada casinos, sloute routes and midwest casinos. Let's take a look of each of these revenue centers. Southern Nevada casinos, they have no destination property where people would want to earn gaming points to go to (Bellagio, Caeasars Palace, for example) and they have inherent weaknesses in Pahrump (more updated properties), Primm (Indian Gaming, cheaper strip room rates) and Terrible's off the strip which has no vision or quality reputation. They purchased Primm for 10 times EBITDA which now translates, at current earnings to 14 times. The northern nevada market and the Sands Brand, and I am being kind, has very little value. Any quality Indian casinos arriving in this market will devastate the Sands properties. Actually 2/3 of the midwest properties do fairly well and have held up decently in the current economic environments (Iowa being the exception due to new and expanded competition). The slot routes are hurting due to the smoking ban and they have done a good job of getting better deals from their "landlords" however 20% of their business is gone and it isn't coming back. Ron is correct, they need to refinance (good luck) and come up with a solid marketing plan. the good news is their new President has a marketing background and should be able to effectuate some of those needed changes. I wish them well as they are between a rock and a hard place and it isn't going to get any easier in the near future.