The Business An intimate, old West casino, five hours outside Las Vegas, with 84 slot machines and four blackjack tables. The sale includes a 65-room hotel, the land underneath, and 17,000 square feet of parking. The slots generate 37% of revenues; blackjack accounts for 17%; hotel stays make up only 4%. The coffee shop, lounge, and entertainment receipts account for the rest. The owner is retiring.

Financial Summary 1990 1991 1992
Gross revenues $2,253,000 $1,032,000 $1,788,000

Recast earnings before $760,000 $240,000 $354,000

interest, taxes, depreciation,

and owner compensation

Price $2,261,000

Outlook Casino gambling is on a roll -- total U.S. revenues went up about 150% from 1982 to 1992. Casinos are now legal in four states (and casino gambling is spreading to many other states, on riverboats and Indian reservations), but Nevada is still the undisputed gambling leader, with nearly 60% of total U.S. gaming revenues. The revenues of this particular casino are greatly affected by the boom-and-bust cycles of the local mining industry, but in general we're talking about a highly lucrative industry here; gaming-industry experts claim casinos (if successful) make more money per square foot than any other business in the United States.

Price Rationale According to insiders, casinos tend to sell at five to six times earnings, but the multiple decreases as earnings get smaller, so three to four would be more fitting here. Apply that to a straight average of the past three years' earnings ($451,000), and you get a projected price ranging from $1,353,000 to $1,804,000. However, since the deal includes real estate -- which is likely to appreciate -- the multiple of five reflected in the asking price may not be out of line.

Pros Gambling is hot; casinos, when they thrive, are a license to print money. And where else could you fulfill your lifelong fantasy of dressing like Wayne Newton every night?

Cons Vegas this ain't. It ain't even Reno. The hours couldn't be longer (24 a day, seven days a week); that money-press license is expensive and difficult to get (thanks to the zealously inquisitional Nevada Gaming Commission); and you'd be perilously dependent on the fortunes of local mining. The patrons of this casino won't be the only ones gambling.

-- Christopher Caggiano

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to the Business Brokers, Las Vegas, 702-735-2133. n