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Hbos Loses Millions On Vegas Casino

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http://www.guardian.co.uk/business/2010/oct/12/hbos-loses-millions-las-vegas-casino

Value of state-owned Lloyds' overseas portfolio questioned after Penn National Gaming paid $230m for $860m debt

Lloyds Banking Group, the partially state-owned lender, has lost more than $500m (£317m) on loans to M Resort Spa Casino in Las Vegas – the second massive financial hit the bank has taken in America in as many months.

News of the deal has started attracting attention to the value of Lloyds's overseas portfolio, much of which it acquired during the unpopular takeover of HBOS is 2008. Market watchers had previously attributed most of the woe associated with that acquisition to lending within HBOS's UK corporate division, headed by Peter Cummings.

Penn National Gaming, a US gambling group, paid $230.5m for about $860m owed to HBOS International, which included $700m the bank loaned to M Resort plus another $160m loan that HBOS had acquired from MGM Resorts at an undisclosed price.

The debt sale comes two months after it emerged that HBOS International was set to lose "tens of millions of pounds" from dealings with another US client, Sea Island, the exclusive Georgia holiday retreat that filed for bankruptcy in August. In that case, court documents said Sea Island was unable to pay back close to $600m in debts owed to a consortium of banks that included HBOS, which were taken out to fund an ambitious expansion plan. The company said it planned to sell its coastal resorts to investment funds Oaktree Capital Management and Avenue Capital Group in a $197.5m.

The deal to buy the HBOS debt has given Penn a Las Vegas casino for a fraction of what it cost to build the 390 room resort. Opened in March 2009, the M Resort is located well away from the main Las Vegas Strip, which is considered the heart of the casino city. It lies about 10 miles south of the Mandalay Bay casino and is surrounded by planned housing communities.

The resort features more than 92,000 sq ft (8,500 sq metres) of gaming space including 1,900 slot machines, 64 table games, 14 poker tables and a race and sports book. It also has nine restaurants and five bars, more than 60,000 square feet of meeting and conference space, a 4,700 space parking facility, a spa and fitness centre and a 100,000 sq ft events piazza.

Las Vegas has been one of the cities hardest hit by the financial crisis. However, Penn chief executive Peter Carlino said: "M Resort is a unique, differentiated property that we expect will continue to improve its operating results even without the benefit of a rebound in the local Las Vegas economy."

Penn presently operates 23 sites in 16 jurisdictions, including Florida, Mississippi, New Jersey, New Mexico and West Virginia.

The mounting US losses at HBOS are thought to have been incurred in the division previously run by Colin Matthew, a former HBOS board member whose responsibilities included the bank's international business. He retired from the newly formed group in January 2009 with a pension entitlement of £416,000 a year, having been paid £652,000 in 2008 and £905,000 in 2007.

Luckily as a UK taxpayer I really don't mind dipping into my pocket to pick up the tab for this, after all that's all we are here for.

At least everyone will have got their bonus and it's only money after all....

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http://www.guardian....as-vegas-casino

Luckily as a UK taxpayer I really don't mind dipping into my pocket to pick up the tab for this, after all that's all we are here for.

At least everyone will have got their bonus and it's only money after all....

I agree, it get a positive warm feeling from it. And I say tish to all  those cynical journalists and their talk of casino banking.

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This "resort" is in the middle of no where. Wonder why the developers couldn't find a local bank to fund their absurd scheme?

I would say that the bankers at HBOS didn't have a clue what they were doing by making investments in Las Vegas (why would a UK bank understand the place more than a local US bank?), but the bankers knew exactly what they were doing -- find a speculative investment on the other side of the world that no one else in the bank will understand, talk up it's value, collect your bonus, then let other people pick up the pieces.

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This "resort" is in the middle of no where.  Wonder why the developers couldn't find a local bank to fund their absurd scheme?

I would say that the bankers at HBOS didn't have a clue what they were doing by making investments in Las Vegas (why would a UK bank understand the place more than a local US bank?), but the bankers knew exactly what they were doing -- find a speculative investment on the other side of the world that no one else in the bank will understand, talk up it's value, collect your bonus, then let other people pick up the pieces.

I'd almost go as far as to say that could be treated as a fraud.

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I'd almost go as far as to say that could be treated as a fraud.

Financial fraud is the cornerstone of the British economy and our biggest export.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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