‘Earl of Pearl’ eyeing casinos?

Dec 19, 2000 7:29 AM

THE EARL OF PEARL! Remember? That’s the name we hung on Ronald Perelman when he was very much in the casino news in Nevada and New Jersey. Now comes word that The Earl has filed to renew his gaming license with the New Jersey Casino Control Commission.

Perelman also has the green light to move forward in Nevada.

Could it be that the Earl of Pearl is reviewing the casino situation once again?

Stay tuned.

THE MONEY WILL LAST and the dice will pass! That’s what is being

heard out of the Aladdin Resort Casino in light of the financial crisis that has hit the 40% investors, London Clubs International (LCI).

"Don’t be surprised if there is a rights offering made by the property’s investors in order to raise liquidity to get them over the immediate hump," said a pipe familiar with the operation.

"And the sooner it happens, the better it will be since the London Clubs folks have to protect themselves against vultures who are looking at a company that has seen its stock value drop by 60%," he said.

To clear up matters recently reported in this column, London Clubs International stock is selling at 57.5 pence, down from 1.40 pence. That’s pence, English money; not dollars, American money.

THE PRICE OF MONEY! The price of doing casino deals presently isn’t favorable in most cases. Ask Ed Roski, the wealthy L.A. businessman who is still shopping for a better price on borrowing money to buy Las Vegas Hilton from Park Place Entertainment (PPE).

However, things are much better for Boyd Gaming Corp. (BYD) and MGM MIRAGE (MGG). It was announced that the two gaming companies completed a $630 million financing with a bank consortium to build the $1 billion Borgata in Atlantic City.

And — hold your hat — the price is right.

I hear there is $380 million in senior debt, which carries about 9.6% at today’s rates.

It gets better. The $250 million junior debt is priced at about 11.1%.

The Borgata bank consortium: Bank of America, Deutsche Banc, Lehman Brothers, Fleet National, Bank of Nova Scotia, Wells Fargo and Oak Brook Bank.

Look for the Borgata to open in the summer of 2003.

COAST IS CLEAR! Bear Stearns gaming guru Jason Ader isn’t buying the long-standing rumors that Harrah’s Entertainment (HET) will abandon New Orleans and move to the Mississippi Gulf Coast.

"I learned a long time ago that you’ve got to be a fool to predict politics in Louisiana," Ader was quoted as saying.

More: ". . . Whatever you think rationally will happen, will go the other way."

From a Mississippi in-the-knowster: "Stories floating around that HET will buy the Isle of Capri hotel/casino in Biloxi, Miss., are full of hot air. Forget that, too!"

He went on: "Harrah’s has a non-compete clause in its contract with Louisiana that would stop them from operating a casino within 100 miles of the French Quarter, where Biloxi falls."

So now what?

"There will be a deal struck. Pay no attention to all the current rhetoric!" said the source.

OUCH! Adam Mayberry knows. The Reno airport spokesman — in trying to explain a sharp decline in passengers — tells it like it is: Direct service to major cities captures incoming passengers. Reno Air flew the coop with its non-stop service to the Northern Nevada city. American Airlines bought them out and cut 16 flights a day (57% of its Reno flights).

What happened?

Casino revenues took a nosedive. Fares went up.

Some — not all — Las Vegas casino leaders see the importance of National Airlines to the local casino industry.

"We can’t afford to lose non-stop, long-haul service to Las Vegas . . . We need to make it easy for customers to get here," said an insider. He thinks the industry should help National Airlines survive.

"Without National there would be little, if any, non-stop service, and fares would fly upward," he added.

BAD NEWS for Aristocrat Leisure. The giant slot maker failed to make the December agendas of the Nevada Gaming Control Board and Commission. Therefore, they may be delayed until the second half of 2001 before they begin competing in Nevada casinos. A review of the products to be offered usually takes up to six months.

MORE BAD NEWS! Paul-Son Gaming (PSON) announced that it will no longer be able to trade on NASDAQ’s National market and will transfer to NASDAQ’s SmallCap market.

Why? They didn’t meet the minimum market value of the company’s public float.

TAKING CARE OF BUSINESS! That’s what Mike Ilitch, Detroit’s sports czar, plans to do.

Ilitch, whose wife is a principal investor in the MotorCity Casino, operated by Mandalay Resorts Group (MBG), owns the Detroit Tigers, Red Wings, and Detroit’s new ball field, Comerica Park.

So when other Major League baseball clubs start paying zillions of dollars to attract so-called superstars to their teams, Ilitch put a lock on his cash register. His reason was simple: "We’ve never tried to masquerade that we want to operate responsibly and operate as a business.

"If we don’t make a profit as a business, we’re not going to last long," one of Ilitch’s spokesmen was quoted.

"And besides, no one can maintain the argument that these high salaries are good for baseball’s economic health or future as a whole," he said.

HILL & BILL PROP! The really clever offshore people at Carib Sports are offering a new kind of proposition.

Will Bill and Hillary Clinton separate or divorce by Aug. 31, 2001?

The price? No, -$1.40. Yes, +$1.20.

"We expect a fair amount of action . . . Hopefully, it will be two-sided," said a company spokesman when we asked about the betting proposition.

NOTES: If it’s not too early to make New Year’s predictions, let me tell you that there’s reason to believe Joe Torre, one of my heroes, will at least go into early retirement as one of the all-time great skippers of the New York Yankees . . . There will be no late night last call for customers aboard gambling boats in Illinois.

"If they want to wet their whistle in the wee hours, they’ll have to go elsewhere," a rosebud reported.

When? After the first of the year, probably. It would affect two casinos, Casino Queen and Alton Belle . . . Slots revenue at Foxwoods Resort in Connecticut for the month of November hit $60.3 million. That’s an increase of $1.5 million over the same period in 1999. And with 22 fewer machines (5,843 vs. 5,865) . . . How do you like the world’s biggest Internet portal (Yahoo!) running second to the NFL? It happened! Yahoo! announced that it is taking advertising for gambling related sites off of its football web pages to keep the NFL happy . . . Unconfirmed at deadline: Sommer Family trust’s 57% ownership of Aladdin Gaming may be sold.