Another chance for Trump’s casinos

May 24, 2005 5:18 AM

For the second time, the casino company founded by real estate mogul turned television star Donald Trump has emerged from bankruptcy with hopes that lower debt, smaller interest payments and a few extra bucks in the till will help it prosper.

However, the company, now called Trump Hotels & Casino Resorts and scheduled to trade under the new symbol DJTEV retains its prior management with Trump still its $2 million a year chairman and CEO and Scott Butera, president. Changed is the board of directors now made up of people chosen by the bondholders whose agreement made the company transformation possible.

The company operates three hotel/casinos in Atlantic City and a riverboat in Gary, Ind.

Singapore bidder

If Singapore company CapitaLand Ltd. isn’t successful in its bid for a gaming/entertainment license in Singapore, it won’t be because it failed to attract established companies with the types of backgrounds that should appeal to the Chinese decision makers.

In one of its bids for a property to be located on the Singapore Marina (one of two suggested locations), CapitaLand has formed a partnership with MGM MIRAGE Inc. (MGM), whose recent acquisition of Mandalay Resort Group has made it the largest gaming company in the world, a position it will hold until Harrah’s Entertainment Inc. (HET) completes its purchase of Caesars Entertainment Inc. (CZR).

For its second proposal, CapitaLand chose Kerzner International Ltd. (KZL) as its partner. Well known throughout Europe and Africa, Kerzner’s best-known achievement was the creation of the Atlantis Casino Resort on Paradise Island in Bermuda. Kerzner’s Atlantis has been cited by the Singapore government as a business model where only a quarter of earnings are generated by gambling, making it consistent with one of Singapore’s previously identified favorable factors.

Dire need

The desperate struggle by Illinois lawmakers to find the necessary money to balance the budget seems to be motivating leaders to once again look toward gaming as a way of easing their problem.

Senate President Emil Jones, a well-known supporter of expanded gaming, has offered a new proposal that may be more palatable to Gov. Rod Blagojevich whose attitude toward gambling resulted in the state setting the highest gaming tax rate — 70% — in the country.

Under the Jones plan, Illinois would allow 20,000 new slot machines, tables and other gaming positions at the state’s nine riverboat casinos and permit the horse tracks to install slot machines as well. It was estimated that the additional machines would generate about $580 million, or a little more than half the budget shortfall of $1 billion.

Churchill’s dilemma

Churchill Downs Inc. (CHDN) not only wants to install slot machines at the Fair Grounds racetrack in New Orleans but it also wants to operate the facility longer than what its neighbors have demanded.

Looking to resolve the problem, the New Orleans City Planning Commission last week voted unanimously to operate Sunday through Thursday from 10 a.m. to midnight and on Fridays and Saturdays from 10 a.m. to 2 a.m. These hours were longer than what neighborhood leaders had recommended but still shy of the hours Churchill Downs officials have said they need to make it work.

In fact in an interview with the Times-Picayune newspaper, Andrew Skehan, Churchill’s chief operating officer, said the track’s casino needs to operate at least 16 hours per day. If that were approved, he said, the company would agree to pay for 24-hour police patrols of surrounding neighborhoods.

The New Orleans City Council is expected to address the matter at its meeting on June 16.

Riverboat opening

After months of anxiety, Pinnacle Entertainment Inc. (PNK) raises the curtain Thursday on the $365 million gambling resort in Lake Charles, La.

This will be the 15th and final riverboat to be licensed in the state of Louisiana.

It also will be the company’s best hope of becoming a major player in the gaming industry, at least until it completes construction of two casinos in the St. Louis, Mo., area.

The Lake Charles resort, called the L’Auberge du Lac Hotel & Casino, features a 26-story hotel containing 743 rooms, suites and private villas. It will have 30,000 square feet of gambling space, the total amount permitted by law, and will feature 1,600 slot machines and 60 table games.

Competition for the Texas gambling dollars will be fierce, however, since the area already has two riverboats — operated by Harrah’s and by Isle of Capri Casinos (ILSE), and a racino at Delta Downs owned by Boyd Gaming Corp. (BYD).

Striking gold

It looks like R.D. Hubbard has struck gold again. The former chairman and CEO of Hollywood Park that was converted from a horse racing business to a major gaming company now operates a new racino in New Mexico called the Black Gold Casino at Zia Park.

Hubbard, owner of New Mexico’s Ruidoso Downs, used his political influence to win a racino license in the community of Hobbs. The facility has been operating since last November and has recorded slot machine revenue of $17 million. This ranked Black Gold Casino behind the state’s leader, Sunland Park.

The state collects a 25% tax from non-tribal slot operations. Since opening, Black Gold Casino has contributed nearly $6 million in taxes.

THE INSIDER: The former official of Racing Services Inc. of North Dakota who pleaded guilty to illegal gambling charges and who testified against company founder Susan Bala has been sentenced to a halfway house. A judge ordered Raymundo Diaz Jr. to serve 90 days in a halfway house and to perform 100 hours of community service. Bala, convicted of a number of charges related to the company’s operation, will be sentenced in July.

Louisiana casinos won $189.4 million in April, an increase of just under $13 million over the previous year.

Also during April, the three Detroit casinos saw their gaming win fall 7.3%, primarily due to poor weather conditions. MotorCity Casino was flat while MGM Grand was down 9.9% and Greektown was down 13.9%.

Business was better in Connecticut where the two Indian owned and operated casinos showed a jump in slot win of 9% to $146.7 million. Foxwoods was up 10% to $70.2 million while Mohegan Sun was up 8.5% to $76.5 million.

Cleveland Mayor Jane Campbell has launched a drive to obtain 322,899 signatures of registered voters to authorize a Constitutional amendment for casino gambling in Ohio.

Racing at newly-opened Evangeline Downs in Louisiana has been halted while the operators attempt to repair a racing surface that has been blamed for horse injuries. COO Jonathan Swain said he hopes to have the repairs completed within six weeks.

Las Vegas Sands (LVS) says it will invest about $400 million in a proposed casino project with the English soccer club Manchester United Club.