Consortium gains rights to British racing simulcasts

December 05, 2000 8:36 AM
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Go Racing, the English partnership that has been reaching out to Autotote for simulcasting services, has successfully won the bid for the media rights to all of horseracing in the United Kingdom.

Reportedly, the successful bid was 750 million pounds, or the approximate equivalent of $1.07 billion.

Partners in the project are Arena Leisure, Television Channel 4, and News Corporation.

According to Lorne Weil, chairman and CEO of Autotote, News Corp. will begin the simulcasting with about eight hours of television. But, this will be expanded to a 24-hour television project when the signal is sent worldwide to all jurisdictions where horseracing wagering is legal.

"In its annual report, Arena Leisure noted that it was coordinating its efforts through Autotote," explained Weil. "And, it is our expectation that the other two groups will go along with this relationship. In fact, we expect them to do just that."

Weil said the project will be world encompassing with people from the various countries, including the U.S. where permitted, to be wagering on these televised races.

"It’s potential is so great," Weil said, "It’s hard to imagine just how big it will be."

Analyst downgrades hotels

Jason Ader, chief gaming and hotel analyst for Bear Stearns, created a major stir on Wall Street Monday morning when he issued a full downgrade for hotel industry stocks. But, he drew the line for gaming stocks.

"We’ve seen a consumer slowdown in vacation packages for next year," Ader said, adding that it’s the economy that will determine the fate of these hotel companies. In earlier remarks, Ader had used the "R" reward, or "recession" in his down grading of such stocks as Starwood Resort and Hotels Worldwide Inc. (HOT), Hilton Hotels Corp. (HLT) and Marriott International (MAR).

Ader said he could see the hotel sector losing 30% of its value because there’s "not a whole lot of good news" forthcoming.

That’s not the case for gaming stocks, however. Ader said the fourth quarter will be a great one for the major gaming companies primarily because of special events taking place in Las Vegas, as well as higher bookings for New Year’s Eve.

As for the first quarter of 2001, he said, the calendar will work against gaming companies since both the Super Bowl and Chinese New Year’s – which occurred on separate weekends last year – fall on the same weekend this year.

Returning to his views of the hotel industry, Ader said, "There seems to be little doubt that the economy is slowing, and history has shown that when the economy suffers, so do hotels."

However, Ader qualified his remarks by noting that it won’t be "a total disaster." By no means, he said, is he predicting a cataclysmic downturn in the lodging industry.

"In fact," he said, "we believe the industry is better positioned to weather a downturn than it was during the last major economic slowdown in the early 1990s.

"Investors should not lose faith in the lodging industry…there are a number of strong companies that will thrive in good economic times. It’s just that this is probably a good time to take a breather," he concluded.

New Orleans study submitted

The long-awaited recommendation of the New Orleans special study committee relative to the state tax imposed on the Harrah’s New Orleans Casino appears to satisfy neither side.

JCC Holding Co., and its partner, Harrah’s Entertainment Inc. (HET) have indicated they will close the state’s only land-based casino on March 31, 2001, if tax relief is not forthcoming. However, they were looking for a reduction of $50 million, or half the state’s mandated $100 million, plus the opportunity of building a hotel and adding some restaurant facilities.

The study committee recommended a tax cut to $60 million, plus the elimination of some restrictions concerning hotel and on-site eateries. But, the recommendation did not include a reduction in the amount of taxes paid to the city. Legislative leaders are already on record as insisting any tax adjustment for the casino would have to include a reduction in city aid.

Pequots to pay more

Ask and you shall receive. That’s what a spokesman for the Mashantucket Pequot Tribe, operators of Foxwoods Resort and Casino, told surrounding towns in a public statement last week.

"I’m going to let the cat out of the bag," said Tribal Councilor Michael Thomas. "We have believed for a long, long time that the level the towns are funded is not sufficient. And when their representatives ask, we will do something about it. All we’ve been waiting for is a respectful request.

Aid to the towns of Ledyard, North Stonington and Preston may come from the state, as well. The casino paid the state 25% of its gross slots revenue. The money is paid out to Connecticut’s cities and towns with the larger communities getting the bulk of the money. That could be changed, according to Gov. John G. Rowland.

Thomas said the Tribe would be willing to work with state officials to provide additional funds to the communities most impacted by Foxwoods’ business.

Atlantic City battle continues

The battle for bankrupt the Claridge Casino Hotel in Atlantic City may be ebbing. Both Park Place Entertainment Corp. (PPE) and private investor Carl Icahn have submitted competing plans to take over the property.

But, before a bankruptcy judge can rule on the two plans, the state’s Casino Control Commission must rule on when does one company have too many casino properties on the Boardwalk. Park Place Entertainment already operates three properties while Icahn has recently taken over the bankrupt Sands Hotel/Casino. If the CCC should decide that PPE should not be permitted to expand beyond the properties it currently operates then the Claridge dispute will become moot.

For the time being, however, members of the Claridge Casino Hotel Corp. board of directors have favored the PPE plans because their $83 million offer would be all cash while Icahn’s offer of $85.8 would include $79.1 million in common stock payment. The CCC is expected to discuss the project at a meeting on Dec. 13.

Expensive snub

Analysts said last week that it was the snub of billionaire Kirk Kerkorian by DaimlerChrysler Chairman Juergen Schrempp of Germany that resulted in the filing of a $8 bill lawsuit.

Kerkorian, principal stockholder in both MGM MIRAGE, (MGG) the casino company, and MGM, the movie and video company, holds 4% of DaimlerChrysler stock as a result of the merger of Daimler-Benz and Chrysler Corp. When the merger of the two companies was proposed, Kerkorian agreed to vote his 13.7 percent Chrysler shares in favor, only because the Germans had promised that Chrysler would retain its autonomy.

Recently, however, Schrempp retracted that promise and dismissed most of the top-level Chrysler executives and replaced them with DaimlerChrysler officials.

Kerkorian reported asked for a meeting with Schrempp. One was arranged but at the last minute Schrempp elected to cancel the session. Kerkorian responded with the suit, thus promising that a good deal of insider dealer linen will be aired publicly.

More gambling proposed

With Connecticut reaping a harvest from its major casinos – Foxwood and Mohegan Sun – the state’s neighbors to the north continue to look longingly at the "painless" form of tax benefits. Both Massachusetts and New Hampshire will see legislation proposed next year for additional forms of gambling.

In Massachusetts, a senator from the northeast part of the state is proposing three "state-operated" casinos, one each in the northeast; southwest and far western parts of the state.

New Hampshire, meanwhile, still struggling to find enough money to pay for education, will see several bills, the most prominent of which will be to permit slot machine installation at the state’s four racetracks. These bills are expected to have the backing of Gov. Jeanne Shaheen.

THE INSIDER: A Louisiana judge will decide on Wednesday whether the corruption convictions against former Gov. Edwin Edwards should be quashed based on a recent ruling by the state Supreme Court, saying that mail fraud laws do not apply to riverboat licenses that have not been awarded, but that such fraud requires the property be taken.

Harveys Casino Resorts, a wholly-owned subsidiary of Colony Capital, has received sufficient consents to amend the indenture relating to its outstanding senior subordinated notes, as well as the indenture relating to similar notes issued by Pinnacle Entertainment Inc. (PNK).

Also, Moody’s Investors Service has assigned new ratings to PHCasino Resorts Inc.’s $575 million guaranteed, subordinated notes at B2 and assigned a "b3" rating to the company’s senior exchangeable preferred stock.

The Detroit City Council has granted Mayor Dennis Archer a one-year extension toward the acquisition of the Riverfront land to be used for the city’s three permanent casinos.

Shuffle Master Inc. (SHFL) won’t announce the results for its fourth quarter and fiscal year ended on Oct. 31 until mid-December, but the initial indications are that the company will report both record revenues and record earnings per share.

Station Casinos Inc. (STN) has settled its dispute with the Missouri Gaming Commission by agreeing to pay a $1 million fine and to turn in the company licenses for two gaming properties. These riverboat casinos are expected to be sold to Ameristar Casino Inc. (ASCA) for $475 million.

At its meeting last week, the Nevada Gaming Commission approved the acquisition by Station Casinos Inc. of the Fiesta Hotel Casino from the Maloof Family. Purchase price was $185 million.

PlayWin Inc., the company that offers Racingo, a combination of horse racing and bingo, has signed a deal with Penn National Gaming Inc. (PENN) whereby Penn National will serve as the hub for the Racingo wagers.

Both the Aladdin Resort & Casino and the Riviera Resort & Casino in Las Vegas have signed on with CAPS, Certified Airline Passenger Services, to provide onsite airport check in before leaving the hotel.

The President on the Admiral, located in view of the famous Gateway Arch in St. Louis, Mo., on the Mississippi River, will be towed this week to Laclede’s Landing, just a few blocks north of its current location.

Isle of Capri Casinos (ISLE) said it would terminate its franchise agreement with Crowne Plaza Resorts in Biloxi, Miss.

Bill Schmitt, gaming analyst for CIBC World Markets, has reiterated his "strong buy" rating on Isle of Capri and on MTR Gaming (MNTG).

Bob Cashell, a former Nevada lieutenant governor and a long-time gaming executive, has purchased the Topaz Lodge casino at Topaz Lake, Nev. He and his son, Rob, operate the Cashell Enterprises Inc.

PurchasePro (PPRO) has named Wattage Monitor as a preferred supplier on the PurchasePro marketplace. Wattage Monitor, a free service, offers residential and commercial electric consumers the option to become more informed and subscribe to deregulated electricity companies nationwide.

Alliance Gaming Corp. (ALLY) has completed regulatory submission of its Evolution Series advanced gaming platform to the Nevada Gaming Control Board.