Arkansas tracks look to voters for slots approval

Sep 6, 2005 4:45 AM

Wall Street gaming analysts have been speculating on the future of the expansion of slot machines use in the U.S. after such places as Florida and Pennsylvania resolve their regulatory problems. But few have focused on Arkansas.

Yet, come Nov. 8, two Arkansas communities will be asked to vote on whether they favor installing slot machines at Oaklawn Park, the horse track in Hot Springs, and at Southland Greyhound Park in West Memphis.

Oddly, both facilities are privately owned. Oaklawn Park has been in the hands of the Cella Family for nearly a century while Southland is owned and operated by Jeremy Jacobs’ Delaware North of Buffalo, N.Y.

The local referendum is being made possible by legislation that was passed last spring. It became law without the approval of Gov. Mike Huckabee.

In their lobbying efforts, the tracks have estimated that the slots will generate tax revenue of $8.6 million for the state; $700,000 for West Memphis County, and $240,000 for Crittenden County.

Still generating controversy, however, is the language of the bill and exactly what types of machines would be authorized. Some believe that all types would be possible while others insist it would be restricted to video lottery terminals.

More products

Continued popularity of lottery products has resulted in the California Lottery ordering a variety of items from its principal supplier, GTECH Holdings Corporation (GTK).

Under the new contract, GTECH will provide the California Lottery with 550 lottery terminals, adding to the 18,500 terminals currently in operation. Other items include smaller terminals, player-activated identification machines and replacement machines.

New contracts

In a filing with the Securities and Exchange Commission, Wynn Resorts, Limited (WRL) and two of its subsidiaries, the company reported on new contracts affecting senior executives that became effective on Aug.1.

In the WRL filing, the company reported a new employment agreement with John Strzemp, executive vice president and chief financial officer. The three-year agreement calls for a base salary of $600,000 per year; a guaranteed annual bonus of not less than $200,000 for the calendar year 2005, and a grant of an option to purchase 50,000 shares of common stock of WRL at $56.67 per share.

Worldwide Wynn LLC, a WRL subsidiary, formed a new employment agreement with Linda Chen, chief operating officer, for a five-year period. During that time she will receive a $600,000 per year salary, increasing to $750,000 per year upon the opening of the Wynn Macau casino; a guaranteed annual bonus of not less than $250,000 for the calendar year 2005 and the grant of an option to purchase 100,000 shares of common stock of WRL at $56.67 per share.

Wynn Las Vegas LLC (WLV) another company subsidiary, agreed to a new three-year employment agreement with Andrew Pascal, executive vice president and COO of WLV. Under the contract, he will receive a base salary of $400,000 per year and guaranteed annual bonus of not less than $125,000 per year.

Pascal, former CEO and chairman of WagerWorks, Inc., a company that was recently purchased by International Game Technology (IGT), has been with WLV since 2003. He is a nephew of Steve and Elaine Wynn.

THE INSIDER: Christine White, former deputy director of the Michigan Department of Agriculture, has been appointed to the Michigan Racing Commission.

Progressive Gaming International Corp. (PGIC), formerly known as Mikohn Gaming Corp. (MIKN), plans to sell 5.7 million shares of its common stock to generate nearly $75 million in cash. The company said it will use the money for strategic development and acquisitions.

Keybanc Capital Markets has initiated coverage of Wynn Resorts Ltd. (WYNN) with a "hold" rating.

Shuffle Master Inc. (SHFL) has entered into a distribution agreement with Casino Solutions S.A.C., a South American casino product supplier.

MGM Grand Detroit Casino continued to lead in total revenues during the month of July. The property took in $38.5 million compared to $37.3 million at the MotorCity Casino, and $31.2 million at Greektown Casino.