Casino Queen bought by its own Employees for $170m
The Casino Queen in East Saint Louis, Illinois has been struggling mightily for the past few years. And apparently, the casino’s 700 employees believe they can turn things around after collectively purchasing the establishment for $170 million.
What’s interesting is that this is believed to be the first employee stock ownership plan (ESOP) used at a multi-million dollar casino. And Casino Queen general manager Jeff Watson believes that this precedent will ultimately result in success as he stated:
To my knowledge, it’s the first ESOP casino in the country. It allows employees to become beneficial owners in the company. The more successful the company is, the more value employees have individually in their retirement accounts.
Casino Queen’s primary investors used to be the Konman family as they owned a 20% stake in the company, while various private investors comprised the other 80%. However, the Konman family and other investors had been looking to sell the casino for the past few years. At one point, a deal was lined up where Columbia Sussex would purchase the business for $200 million; however, this offer fell apart and investors were eventually willing to take the $170m ESOP deal.
The employees will certainly have some work ahead because Casino Queen has been declining since 2007 – a year where the company made a record $172.1 million in casino revenue. Contrast this to 2012, where the establishment pulled in just $120.9m. This being said, the employees can’t do much worse running Casino Queen than previous management did.
The workers will inherit a very large gaming floor which includes 1,100 slot machines and 27 tables. Armed with plenty of games to start out with, the new Casino Queen ESOP management has a fighting chance to turn things around.