IGT spreads its wings to Canada in Hi-Tech style

Jan 11, 2005 6:51 AM

International Game Technology (IGT), leading manufacturer and distributor of gaming devices in the U.S., looked to expand its dominance to the entire North American area last week with the announcement that the company was acquiring Hi-Tech Gaming, the top gaming equipment supplier in Canada.

No financial arrangements were disclosed.

Hi-Tech Gaming has been the Canadian distributor of IGT products in Canada and has over 80,000 machines of various designs in operation in provinces throughout Canada.

IGT also announced that Duane Frahm, director of video lottery terminals product sales for IGT, will assume the position of managing director of IGT-Canada and will move to Toronto to work out of the Hi-Tech, now IGT-Canada offices. Most of the 43-person Hi-Tech workforce has agreed to join the new company and Hi-Tech principals Owen MacNeil and Bill Hennessey have agreed to serve as consultants.

In making the announcement, TJ Matthews, IGT chief executive officer, remarked, "IGT-Canada will offer Canadian customers the best of both worlds with the same uninterrupted support they have been receiving from Hi-Tech, along with additional resources provided by IGT."

Conference calls

It’s the beginning of the earnings season and a number of gaming companies have announced the dates on which they plan to hold conference calls relative to their fiscal quarter.

Among those that have made announcements were:

Station Casinos Inc. (STN) Monday, Jan. 24 at 9 a.m. PST

Multimedia Games Inc. (MGAM) Thursday, Jan. 27 at 7 a.m. PST

MGM MIRAGE Inc. (MGG) Tuesday, Feb. 1 at 8 a.m. PST

WMS Industries Inc. (WMS) Tuesday, Feb. 1 at 8 a.m. PST

Alliance Gaming Corp. (AGI) Tuesday, Feb. 1 at 1:30 p.m. PST

Harrah’s Entertainment Inc. (HET) Wednesday, Feb. 2 at 6 a.m. PST

Aztar Corporation (AZR) Wednesday, Feb. 2 at 1:30 p.m. PST

Penn National Gaming Inc. (PENN) Thursday, Feb. 3 at 8 a.m. PST

Boyd Gaming Corp. (BYD) Wednesday, Feb. 9 at 1:30 p.m. PST

Buyout amended

Alliance Gaming Corp. (AGI) reported in a statement to the Securities and Exchange Commission that it has amended its buyout agreement with Sierra Design Group by paying $40 million in cash and promissory notes.

Originally, the company said it would make additional payments, up to $95 million, provided the acquired group reached certain revenue and earnings targets.

The amendment brings the total purchase price of Sierra to about $165 million.

The company will pay $12 million in cash to the sellers and provide $28 million in unsecured promissory notes payable over five years.

Another Ho casino

Macau gaming guru Stanley Ho hasn’t let his age, 83, slow him down. Last week, he opened another gaming establishment in the former Portuguese enclave giving him 14 in the gambling mecca just a few miles from the bustling city of Hong Kong.

Not bad for a guy who was considered politically dead four years ago when Macau passed new gaming laws that expanded the horizons for other companies to move into his former monopoly. Taking advantage were Sheldon Adelson, who now owns the Las Vegas Sands Macau, and a private group that operate the Galaxy Waldo Casino. Under construction is a Las Vegas-styled casino being built by Steve Wynn.

But Ho’s new Golden Dragon casino will not be the only one he opens this calendar year. Scheduled to open later in 2005 are two more Ho properties.

Sale possible

Even while lawyers try to untangle arguments affecting the forthcoming trial of dog track personnel in an alleged bribery scheme, Rhode Island state officials have indicated that negotiations regarding the sale of U.K. gaming company, Wembley plc, have resumed.

Wembley, its former CEO Nigel Potter and Lincoln Park CEO Dan Bucci have been charged with participating in a scheme to bribe the law partner of former House Speaker John Harwood in order to gain approval for more slot machines and to squash efforts at developing an Indian casino.

The only source of income for Wembley has been the Rhode Island dog track and that has been the goal of potential acquirers. MGM MIRAGE Inc. (MGG) initially offered $490 million for the property but was eventually outbid by an investment group called BLB Investments that offered $555 million. The deal was put on hold, however, when it appeared the state would permit a casino referendum on last November’s ballot. That effort was thwarted by court order.

In comments recently, Gov. Donald Carcieri said he knows no deal has been agreed upon but that BLB Investments is still interested in the project. He said he advised them to "work a deal with Wembley (then) come back to me and come to the legislature and say this is what you need."

Meanwhile, the trial judge has been asked to sever the attempted bribery trial of Bucci and the others. Wembley defense lawyers are concerned that Bucci statements could be used against their clients without them being given the opportunity to cross-examine.

BLB Investments is 50% owned by hotel giant Starwood Capital with the other half divided by partners Kerzner International Ltd. (KZN) and Waterford Group LLC, the two entities that helped develop Mohegan Sun casino in Connecticut.

Stadium money

Indianapolis loves the Colts. So it’s no surprise that a couple of politicians are looking at expanded gambling to fund a new stadium for its National Football League franchise.

In a plan sponsored by Sen. Michael Murphy, the city would generate $46 million by installing slot machines at Indiana’s two horse tracks, Indiana Downs in Shelbyville and Hoosier Park in Anderson. The $46 million was identified by Indianapolis Mayor Bart Peterson as the minimum needed to pay the 30-year loan. A second proposal would only provide $30 million and Peterson is on record as saying, "$30 million won’t get it done."

Sponsors said the measure would permit 2,500 gaming devices at each track. A suggestion that the machines be restricted to Class II types was rejected with the argument that Class III gaming machines are already in use at the state’s several riverboats.

THE INSIDER: Monarch Casino and Resort Inc. (MCRI) announced Monday that it expects to report record results for its fourth quarter and fiscal year that ended on Dec. 31, 2004. The company operates the Atlantis Casino Resort in Reno, Nev., just across the street from the Reno-Sparks Convention Center.

Argosy Gaming Company (AGY) says it has selected Stellent Inc. to assist it in complying with the requirements of the Sarbanes-Oxley Act.

Century Casinos Inc. has contributed $3.5 million for a 65% stake in a casino and hotel in Central City, Colo.

Progressive Gaming International Corp., formerly known as Mikohn Gaming Inc., now trades on the NASDAQ under the symbol PGIC.

Forbes Magazine has named MGM MIRAGE Inc. (MGG) among the top 400 best performing big corporations.

Morgan Stanley gaming analysts have upgraded their investment rating on Station Casinos Inc. (STN) from "equal weight" to "overweight."

In a filing with the SEC, Wynn Las Vegas LLC noted that Steve and Elaine Wynn have signed a lease for a villa suite at the new property on the Las Vegas Strip. The first year lease is for $580,000.

MTR Gaming Group Inc. (MNTG) has successfully resolved a challenge to the company’s Pennsylvania racing license for a racetrack in Summit Township.

GTECH Holdings Corporation (GTK) will pay a quarterly cash dividend on its common stock of $0.085 per share, payable on Jan. 28 to shareholders of record on Jan. 14.

American Gaming and Electronics, a wholly owned subsidiary of Wells-Gardner Electronics (WGA), has received a manufacturer/distributor gaming license from the Colorado Limited Gaming Control Commission.