New N.J. gov. pushes for slots at Meadowlands

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Envious horsemen at the Meadowlands racetrack in northern New
Jersey have felt squeezed by the growth of slot machine revenue at East Coast
tracks and the slots barrier imposed on them by Atlantic City casino operators.

But, that may all come to an end, and much sooner than they
could have foreseen just a few months ago.

Making changes possible was the unexpected resignation of
Gov. James McGreevey over moral issues and the rise of Sen. President Richard
Codey to the chief executive’s position.

McGreevey used his position to coerce financial concessions
from the casinos by threatening to permit the tracks in northern New Jersey to
install slot machines. He gave only lip service to the horsemen who warned that
the racing industry would suffer from the installation of 62,000 slot machines
at 14 locations in Pennsylvania and between 10,000 and 14,000 slot machines at
Aqueduct and Yonkers Raceway in the New York City area.

Expected to be impacted by these slots installations were the
Meadowlands (just 12 minutes from New York City’s Times Square through the
Lincoln Tunnel) and Monmouth Park, both owned by the state and operated by the
N.J. Sports and Exposition Authority, and privately-owned and operated Freehold
Raceway.

As an aside, observers have been quick to note that the
general manager of Freehold is Don Codey, brother of the new governor.

In a meeting last week with Atlantic City executives, Gov.
Codey said he felt Atlantic City would lose business to both New York and
Pennsylvania with these new installations.

“So the loss to Atlantic City is going to happen,”
Codey told the Newark Star-Ledger newspaper. “If we have machines at
Meadowlands and only at the Meadowlands, not Freehold and not Monmouth, we’re
going to cannibalize New York City, not Atlantic City.”

He also noted that the state could get as much as $500
million a year from 10,000 new video lottery terminals at the Meadowlands, a
figure that was floated around the state by the treasurer’s office last year.

Codey said such revenue would make a dent in the state’s $4
billion budget gap that is anticipated for the next fiscal year.

President of the Atlantic City Casino Association, which has
opposed any efforts by Northern New Jersey legislators to get slots for the
tracks, is Dennis Gomes, who also is CEO of the Tropicana Hotel/Casino for owner
Aztar Corp. (AZR).

New York deal

Interest in the shares of Empire Resorts Inc. (NYNY)
skyrocketed Monday with the dual announcements that New York state has resolved
a land dispute with an Indian tribe and that the company had purchased two
historically renowned hotels in the Catskill Mountains.

The action was triggered by the announcement that New York
Gov. George Pataki and the Seneca-Cayuga Tribe of Oklahoma had signed an
agreement to settle the tribe’s New York land claim, establish a Catskills
casino and provide for tribal collection of sales taxes.

Empire Resorts followed up the announcement by saying it had
purchased both the Concord Hotel and Grossinger’s Resort Hotels and Golf
Course from Concord Associates LPL, a joint venture owned 46% by Reckson
Strategic Venture Partners, and a real estate company that formerly was part of
Frontline Capital Group.

The company said it had individual agreements with the
Seneca-Cayuga Tribe of Oklahoma and the Cayuga Nation of New York to develop and
manage separate Native American gaming facilities in the Catskills.

Previously, Empire Resorts announced plans to develop a $500
million Indian casino on a site adjacent to Monticello Raceway, a harness racing
facility. The company opened Mighty M Gaming at the raceway in June. The
property features 1,743 video lottery machines and amenities such as a 350-seat
buffet and live nightly entertainment.

Commenting on the Native American agreement, Gov. Pataki
remarked, “The agreement allows us to move forward with plans to establish
the first of three new casinos in the Catskills, which would create thousands of
new jobs and provide a tremendous boost to the region’s economy.”

The price of Empire Resorts shares opened on Wall Street
Monday morning at $9.60 a share but was bid up to $11.78 before closing at
$11.39, an increase of $2.10 for the day with 1.9 million shares changing hands.

Alliance in compliance

Alliance Gaming Corporation (AGI) has been lacking an outside
director to comply with the standards established by the N.Y. Stock Exchange.
But, last week, the company received an “informal notification” from
the NYSE that AGY’s efforts to correct the problem will be acceptable.

The company told the exchange that the board of directors
“is currently in discussions with a qualified candidate who meets the NYSE
standards, to join the board in early 2005.”

Casino land sale

Plans for another California Indian casino moved forward last
week when the city council of Richmond agreed to sell about 400 acres of
waterfront land to Upstream Development and a unit of Harrah’s Entertainment
Inc. (HET).

Upstream, the company that represents the Guidiville Band of
Pomo Indians, agreed to pay $50 million to the cash-strapped city. The plans
call for the development of a Las Vegas-styled multi-million dollar casino and
entertainment center that would be operated by Harrah’s.

The Guidiville Band, although recognized as a landless tribe,
has been guaranteed to receive approval by the U.S. government for any parcel of
land of their choice.

Still, the casino could be in conflict with plans by the
Station Casinos Inc. (STN) and the Lytton Band of Pomo Indians for a major urban
casino in San Pablo.

During recent negotiations, Gov. Arnold Schwarzenegger gave
the Lytton Band exclusively rights for slot machines at their casino a move that
prohibits other machines within the immediate vicinity.

New indictments

It’s been a year with no prosecution since the initial
indictments were unsealed involving the executive heads of a Rhode Island
racetrack owned by an English company, but renewed activity relative to
prosecutions has taken place.

The feds have replaced the old indictments with new ones.

A few days ago, Nigel Potter, the former CEO of Wembley Plc.,
and Danny Pucci, the general manager of Lincoln Greyhound Park, appeared in
federal court after the feds produced new indictments charging them with
scheming to pay off a law firm whose principal served as the then Speaker of the
Rhode Island House. At the time, the track sought to increase the number of slot
machines it operated.

Prosecutors said they sought the new indictments to insure
that new federal sentencing guidelines would not be applicable to their case.
Instead of the original 22 charges, the indictments were reduced to 15.

Also at the indictment hearing was a lawyer representing
Lincoln dog track whose corporate ownership also has been charged in the case.

Meanwhile in the U.K., there has been no word on the progress
of takeover bids for Wembley being made by some American companies. With the
expected modernizing of England’s gaming regulations, Wembley has been
considered a prime takeover target.

THE INSIDER: Aristocrat Technologies Inc. of Las Vegas
has named Simon Ashley as vice president of finance with responsibility for all
financial operations in North and South America.

Century Casinos Inc. (CNTY) says it has applied for a casino
license in Iowa with its partner, Franklin County Development Association.

Mandalay Resort Group (MBG) shareholders will vote Dec. 10 on
plans to have the company bought by MGM MIRAGE Inc. (MGG).

Barrick Gaming Corp. has agreed to pay $31 million to acquire
Golden Nugget Laughlin from the Poster Financial Group Inc.

Dover Downs Gaming & Entertainment Inc. (DDE) has begun
its tender offer to purchase more than one million of its common stock and 1.6
million shares of its Class A common stock at a fixed price of $12 per share.

Sands Regent (SNDS) has agreed to sell 1,120,000 shares of
its common stock to institutional investors for $8.25 per share.

The guitar-shaped sign at the Hard Rock Hotel & Casino in
Biloxi, Miss., will rise 112 feet, making it the largest sign on the Gulf Coast.

Attempts to add a racetrack slots amendment to an existing
bill was defeated in the Ohio House 83-6 last week.

 

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