Issue 339
March 12 - March 18, 2007
Volume 7
page 2

Expansion planned for Hard Rock
Press Release

DLJ Merchant Banking Partners ("DLJMB"), a private equity investment affiliate of Credit Suisse, and Morgans Hotel Group Co. (Nasdaq: MHGC) ("MHG") today announced a large-scale expansion and renovation project for the Hard Rock Hotel & Casino in Las Vegas.

The expansion project will include the addition of approximately 950 guest rooms, including an all-suite 15-story tower with upgraded amenities, approximately 60,000 square feet of meeting and convention space, and approximately 35,000 square feet of casino space. In addition, the project includes the expansion of the Hard Rock's award-winning pool, several prominent new food and beverage outlets, a new and larger "Joint" live entertainment venue, 30,000 square feet of new retail space, as well as a new spa and health club. As part of the project, the Hard Rock's existing suites and common areas will be renovated to revitalize the property and bring it up to MHG's best-in-class brand standard. The project, which is scheduled to begin this year, is expected to be fully completed by mid-2009.

Klai Juba Architects is leading the architectural planning of the expansion. The firm, which led the expansion and upgrade of the property in 1999, has also led other highly successful projects in Las Vegas including the Four Seasons Hotel, Sky Las Vegas, and Mandalay Bay.

"These capital improvements will unlock the value that we've seen in the Hard Rock investment from the beginning," said Steven Rattner, a Managing Director and the Global Head of DLJMB. "DLJ takes an active interest creating value in its portfolio. In this case, we plan to leverage DLJ's successful track record in the gaming industry."

"With the acquisition of the Hard Rock now officially closed, we are pleased to move forward with our transformation of this legendary Las Vegas property," said Ed Scheetz, President and Chief Executive Officer of MHG. "The expansion project we are announcing today will increase the size and scale of the Hard Rock and take the property to a new level of sophistication. MHG has been extraordinarily successful in renovating and redeveloping hotels as it has done in the past with Delano, Mondrian, and Hudson. The Hard Rock represents yet another opportunity for MHG to transform and stylize a property to attract the same hip clientele who appreciate the authentic and unique experience we are known for. As each phase of this project is completed, we will be enhancing the Hard Rock's well-established reputation as one of the most popular destinations in Las Vegas, and we are more excited than ever about its potential."

The expansion, which is expected to begin during the fall of this year and be fully completed during mid-2009, will add approximately 550 guest rooms in a new tower to be constructed on the existing property site, and will use 8 acres of the adjacent 23-acre land parcel to build a new all-suite VIP tower with an additional 400 suites. The project will also include the expansion of the Hard Rock's casino and pool, as well as the addition of a new spa and health club and several new restaurants and bars, and a new nightclub. MHG and DLJMB are currently evaluating several options for the remainder of the 23-acre land parcel.

Renovations to the existing property will begin immediately, with upgrades to existing suites, restaurants and bars, retail shops, and common areas, and a new ultra lounge and poker room. These renovations are scheduled to be completed by the first quarter of 2008, with certain elements to be completed earlier.

Upon completion, the Hard Rock will have approximately 1500 fully modern, state-of-the-art rooms and all of the services and amenities of the larger, impersonal casino hotels, while preserving an intimate and exclusive environment with unique advantages such as its world-class pool and comfortable boutique feel. As previously announced, DLJMB agreed to fund 100% of the equity capital required to expand the Hard Rock property, up to a total of an additional $150 million. MHG will have the option to fund the expansion project proportionate to its equity interest in the joint venture. A credit agreement provides for a loan of up to an additional $600 million for the Hard Rock renovation and expansion.


Breeders bet on VLTs
As reported by The Eagle

GIDDINGS, Texas – "Racing trainer Janet Van Bebber watched intently as a pair of 2-year-old Quarter Horses galloped around her training center's track one recent afternoon.

"…In 2005, Van Bebber made a critical business decision. She moved from Texas to Louisiana to race horses.

"Texas' horse racing industry is struggling. Its trainers, owners and breeders continue an exodus into bordering states to race for more lucrative purses supported by revenues from video lottery terminals.

"…Van Bebber has been a strong voice in the horsemen's struggle to bring video lottery terminals, commonly called VLTs, to Texas' race tracks.

"…The racing industry experienced steady growth after parimutuel wagering was introduced in Texas. The tracks - along with ancillary industries such as feed stores, farriers, trailer manufacturers, veterinarians and barn and fence builders - contributed to the economy and the tax coffers of the state.

"However, the growth ended and the exodus began when bordering states passed VLT legislation

"…State Rep. Kino Flores, D-Mission, chair of the licensing and administrative procedures committee, has filed House Bill 1405. The bill relates to the operation of video lottery games. Its purpose is to provide additional money to fund governmental programs…"

Nevada voters to decide lottery issue
As reported by The Las Vegas Review-Journal

CARSON CITY, Nev. – "Over the opposition of two major gaming corporations, an Assembly committee voted 8-5 Thursday to let voters decide whether to legalize a state lottery.

"All Democrats on the Assembly Constitutional Amendments Committee backed Assembly Joint Resolution 5, while all five Republicans opposed it.

"Passage of the resolution in the committee is the first step in a long process before Nevada would join 42 other states in having a state lottery. The measure needs approval by both houses of the Legislature this year and again in 2009. Then voters in 2010 would decide whether to legalize a lottery, which has been prohibited since 1864 by the state constitution…"

2007 PBA Tournament
of Champions

Mohegan Sun, Uncasville, Conn.: The 2007 Tournament of Champions will feature preliminary rounds at Bradley Bowl in Windsor Locks, Connecticut on Friday, March 30th before moving on to Mohegan Sun Arena for the Round of eight on Saturday, March 31st. Chris Barnes is the defending champion, having captured his second career Major title last season when he defeated defending champion Steve Jaros in the title match.

Mohegan Sun Arena will also be the site of the inaugural PBA Pro-Am Showdown. This will consist of winners of PBA Pro-Ams from the 2006-2007 season, excluding the 2006 USBC Masters and 2007 Motel 6 Classic, teaming with a randomly drawn Tournament of Champions participant to bowl five games of 9-pin, no tap at Bradley Bowl in Windsor Locks, Connecticut on Thursday, March 29th. Scores from both competitors will be added together to determine the two finalists, who will bowl in the PBA Pro-Am Showdown finals on Saturday, March 31st prior to the Round of eight at Mohegan Sun Arena. The two amateur finalists will bowl each other in a best-of-five match play series.

Dates: March 31 - April 1, 2007
Time: March 31, 3 p.m.; April 1, 1 p.m.
Ticket Prices: $15, $20, $30, $45
1 (860) 862-TIXX(8499)

For more information: Official Web site

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