The Margaritaville Casino and Restaurant in Biloxi, MS closed its doors on Monday after just two years in operation. Failure to build helped lead to the casino’s closure. A day after closing the casino, the property’s parent company filed for bankruptcy.
First reported by SunHerald.com, MVB Holdings filed for Chapter 11 bankruptcy protection on Tuesday afternoon. The company had operated the now defunct Margaritaville Casino and Restaurant.
This filing comes just one day after the Margaritaville closing. The property had announced back in July that they would close down. The facility opened in 2012 and was the first new casino to open since 2007.
Closure Not Unexpected
When the Margaritaville opened in 2012, owners knew that their future depended heavily upon building a hotel. Back in July, facility President Doug Shipley had been quoted saying, “You need to have the amenities to be able to compete. It’s a fact that people play where they stay.”
After the opening of the casino, the Mississippi Gaming Commission made a rule requiring new casinos include a hotel with at least 200 rooms so that the property would provide a well-rounded gaming experience for customers.
Executive Director of the MGC, Alan Godfrey, was quoted back in July as saying, “This is a pretty good example of why we put that rule in place. Without a hotel, they (Margaritaville) knew it was going to struggle.”
Attorneys Blame Landlord – License Now Void
Margaritaville attorneys were laying much of the blame on the property’s landlords on Monday. According to Michael Cavanaugh, attorney for MVB Holdings, the casino had been attempting to reach an agreement with Clay Point LLC, the landowners of the property, to build a hotel. Unfortunately, that deal fell through.
Now that the casino is closed, the landowners cannot just take over the property and operate a new casino. When the property shut down on Monday, the license was null and void. Any new operator would have to go through the standard licensing process and build a hotel.
Bankruptcy Filing Paints a Different Picture
Sunherald.com listed the top 20 unsecured debts owed by the casino with more than $4.47 million owed to creditors. Of that figure, over $1.37 million is owed to Roy Anderson Corp of Gulfport, the builder of the casino.
Other creditors owed money according to the filing include Bally Gaming of Las Vegas, Sysco Food Service of Jefferson, LA, WMS Gaming Inc. of Chicago, and Bally Gaming of Los Angeles.
One debtor of note in the report was the aforementioned Clay Point LLC. The landowners of the Margaritaville property claim that they haven’t been paid rent since the casino opened back in 2012. If this is true, that would explain the lack of cooperation on a new hotel.
A hearing on the bankruptcy is scheduled for Wednesday morning. At this time, it is unclear if anyone will step up to purchase the casino, but any interested future owner will have to invest significant funds to bring the property up to regulation.