Ameristar Casinos, the owner of Mountain High casino in Black Hawk, announced last week that its third-quarter net income fell from a year earlier, hurt by construction delays in Colorado.
Ameristar said it earned $16.1 million for the three months ended Sept. 30, down from net income of $16.6 million a year earlier.
Mountain High casino had a $1.5 million operating loss in the quarter. The company said an expansion-related construction disruption hurt the casino’s operating results.
In addition, the temporary closure of a principal highway connecting Black Hawk and Denver also hurt Mountain High’s results in the quarter, Ameristar said.
Also last week, Las Vegas-based Ameristar Casinos said that it will drop plans to seek a slot-machine license on Philadelphia’s riverfront because the state’s high taxes will prevent it from making enough money to warrant the expense.
The company, citing Pennsylvania’s 54 percent tax rate on slots revenues, said it will not apply during the application period.
"We concluded we can’t earn an adequate return on our investment to justify the kind of investment we’re talking about," Steve Eisner, Ameristar’s vice president for development, told the Las Vegas Review-Journal.
Regardless of an profits or losses, Ameristar says it is proceeding full-bore with the expansion at Mountain High.
"We continue to make progress toward the completion of the first phase of capital improvements at Mountain High," a company official said.
The expansion of the parking garage, which will nearly double the capacity to 1,550 parking spaces, will be completed this month, and the remodeling of the casino and non-gaming venues on the first floor is slated for completion in December.
In February 2006, Ameristar expects to complete the second floor of the casino, which will include an additional 700 slot machines. Additionally, in order to fully capitalize on the opportunities in the Black Hawk market, Ameristar has expanded the scope of the hotel construction project by increasing the number of rooms to be built from 400 to 537.
The hotel project is planned to begin in early 2006 and is expected to be completed in mid-2008.
After weighing the added cost of the hotel expansion, the company now expects the cost of its planned capital improvements at Mountain High to be approximately $260 million, which will bring the total investment in the property to approximately $380 million.
"We believe the quality and scope of our property will enable us to significantly expand the market and become the market share leader in Black Hawk after these improvements are completed," the official said.