A SUITOR FOUND? "Only a few insiders know anything about it," said an in-the-knowster, "but I have the scoop. It has to do with Los Angeles businessman Ed Roski Jr. and International Game Technology (IGT) Chairman Chuck Mathewson. They’ve been huddling to see if there’s a fit to close the $300 million-plus purchase of the Las Vegas Hilton."
Knowster: "It’s hush, hush, but it’s up on my radar screen. Believe me, they are talking to see if a deal can be struck. Roski has been beating the pavement looking for investors to finalize the sale by Park Place Entertainment (PPE).
Heard broke the story of Roski buying the Hilton in its July 4 issue. A week later when everyone else caught up with the story, it was widely reported that the sale price was $365 million. Heard quickly came back and shot a hole in the story and said the price was slightly over $300 million.
"Ever since, rumors have been flying that Roski was not getting the job done in raising the money. They said the deal was very iffy. I didn’t believe it for a minute. First of all, Roski didn’t become big and rich not knowing what he was doing. And secondly, I think he would be too smart to fork over $20 million to Park Place if the deal isn’t completed in February.
"I can name at least six eligible suitors he has been courting. Mathewson is a new one. And, I am told, has the most promise. The skinny I’m getting is that Mathewson would be coming in on his own with Roski. It would have nothing to do with IGT, the giant slot maker.
"That makes sense to me. At 71, Mathewson still has a twinkle in his eye for deal making. He recently announced that his long-time sidekick, Tom Baker, 57, is moving up as president and CEO of the company and Mathewson would remain on as chairman of the board.
"There was once a taboo about casino suppliers getting into the casino business as did Bally Gaming when it bought Bally’s casino.
"Chuck seems to be having less to do with the company and could possibly make the deal with Roski and the Las Vegas Hilton his last hurrah."
Still more knowster: "I don’t know how the two parties (Roski and Mathewson) got together. But, I intend to find out. Don’t forget, Mathewson got his education early on Wall Street. He could very well be the perfect ingredient Roski needs to bake his cake. At 61, Roski wants to transform the Las Vegas Hilton into a middle-market slot house with upscale restaurants and entertainment.
"Slot house? I wonder what Chuck knows about slot houses?"
Efforts to reach Roski and Mathewson proved fruitless over the holiday weekend.
TOUGH GAME TO FADE! Harrah’s Entertainment’s (HET) New Orleans casino won $19.6 million in November.
"Forget that it was the lowest revenue since April," said a pipe. "That’s bad enough, but when you discover that the ill-fated casino handed over $8.2 million of that win to the state in taxes, it shows that the music in Jazz City is getting too loud for clear thinking.
More pipe: "The company executives were in New York City the week before Christmas negotiating with creditors and bondholders. It’s a last-ditch effort to secure an agreement to financially reconstruct before it files for bankruptcy in January.
"What can anyone expect from a casino that has been losing about $8 million a month since it opened October 1999?"
From another source in the bayou: "Expect Gov. Mike Foster to call a special legislative session by early February. Don’t lose site of the fact that the casino’s main money is coming from Harrah’s Entertainment. They say they will cut off the guaranteed tax liability for the casino on March 31, 2001."
That’s the final date of its obligation.
WHO WILL BUY? Now that International Game Technology (IGT) told of its acquisition of Silicon Gaming (SGIC) for $45 million (81/4 to 9Â½ cents per share) in cash, what happens to Silicon’s online gaming division ”” WagerWorks?
"You can bet MGM MIRAGE (MGG) is standing in line," said a rosebud. "I hear Silicon will sell all but 4.9% of WagerWorks. How much will the online gaming division bring? Good question. If it gets more than something, look for the sale price to increase."
HOT SLOTS! Casino players in Connecticut shopped the machines at Foxwoods Resort casino and Mohegan Sun. Foxwoods led November slot revenue ”” $60.3 million, up 2.6%. Mohegan Sun ”” $43.2 million, up 9%.
Farther south in Delaware, slot revenue at three Delaware racetracks jumped over 9% to $36.3 million in the month of November. Leading the pack were Delaware Park ($17.9 million, up 8.9%) and Dover Downs ($11.7 million). Both Delaware and Dover have the 2000-slot maximum in place.
HILTON ON THE MOVE! "The announcement that Hilton Group PLC is streamlining operations came as no surprise to me," said a reliable source.
"It will sell its Ladbroke casinos ($375 million) to Gala Group. Also, 27 British casinos, one in Gibraltar and one on the Isle of Man.
Gala Group is the owner of bingo halls of the same name in Great Britain.
In the USA, the Meadows racetrack in Pennsylvania, as well as four off-track betting theaters are being sold. The latter are being purchased by Magna Entertainment Corp. for $53 million.
"The way I see it," the source added, "it’s all about Hilton overseas merging with Hilton Hotels!"
Then, what? Stay tuned.
MORE INDIAN GAMING IN CALIFORNIA? "Yes, yes," said a pipe.
Oakland Mayor Jerry Brown is talking with Muwekma Ohlone Indians to build a full-scale casino on an old army base nearby.
At the same time, Indian gaming proponents are on the move to open casinos in urban areas of California.
"It’s going to get dicey for Gov. Gary Davis. He gave his blessings to state Indian tribes to operate Nevada-style casinos in California, but on their own land," said a pipe.
THE PRICE AIN’T RIGHT! So don’t be surprised when you learn that Colony Capital is having trouble finding the right price for bonding financing to buy the venerable Resorts Casino, Atlantic City’s first casino.
Colony’s Harvey’s Casino in Lake Tahoe, Nev., postponed its purchase of Pinnacle Entertainment Inc. (PNK) recently when it said the price of money was too high.
On the Pinnacle page, expect to see the company going back on the blocks now that Colony has kissed them good-bye.