N.J. budget solution fails
to inspire gaming investors

Jul 11, 2006 4:30 AM

With the end of the political shenanigans in New Jersey, and a compromise budget agreed to by the legislators and Gov. Jon Corzine, the Atlantic City casinos were able to once again do what they do best”¦make money.

But the return of lights to the casino floors failed to strike an exuberant mood on Wall Street with the major casinos showing minor improvements in relatively-quiet trading early on Monday.

Boyd Gaming Corp. (BYD) and its partner, MGM MIRAGE Inc. (MGM) were able to hold a second ”˜grand opening" for the $200 million expansion of Borgata Hotel Casino and Spa. The initial "grand opening" was thwarted by the political forced closing.

In early trading Monday, Boyd Gaming was up $0.44 to $38.96 per share while MGM showed an increase of $0.39 for each share that was trading at $38.63.

Harrah’s Entertainment Inc. (HET), operator of four Atlantic City Casinos, was up $0.22 per $66.93 share while Trump Entertainment Resorts Inc. (TRMP) was on the losing side, down $0.24 at $19.07.

Things didn’t improve as the day wore on. By closing Monday, the shares stood as follow: BYD $38.18; HET $65.76; MGM $38.09 and TRMP $19.00.

In signing the new budget bill, Corzine called the shutdown of state services, including the casinos, "regrettable."

During their 28 years of operation, the Atlantic City casinos had never before been forced to close.

Further delay

Slot machine manufacturers looking to provide their devices to pari-mutuel tracks in Hot Springs and West Memphis, Ark., will have to wait a little longer for machine orders. Seems like Arkansas can’t decide who will audit the racinos once the gaming revenue flows in.

At a meeting last week, the state Racing Commission failed to approve regulations governing electronic games of skill because it felt the language of the new law did not specify whether the audits would be conducted by commission personnel or by the Department of Finance and Administration.

The machines were authorized by the voters last November but state officials have found a number of excuses to delay implementing the will of the people.

Expanding relations

Looking to take advantage of a growing bingo market in Mexico, WMS Industries Inc. (WMS) has expanded its existing relationship with Multimedia Games Inc. (MGAM).

Under the terms of the new relationship, Multimedia Games will distribute certain WMS products in Mexico and in Oklahoma where Indian casinos have been using Class II gaming devices.

The agreement provides that Multimedia will have the right to distribute WMS’s Bluebird gaming machines equipped with WMS game themes in Oklahoma and authorizes Multimedia to place WMS OEM cabinets and game themes in the electronic bingo market in Mexico.

THE INSIDER: International Game Technology (IGT) notified the SEC in a filing on July 7 that the board of directors had amended its corporation governance guidelines to implement a new policy regarding director elections. Also the company scheduled an earnings conference call for Thursday, July 20, at 6 a.m. PDT.

Penn National Gaming Inc. (PENN) will release its 2006 second quarter financial results at 4 a.m. PDT on Thursday, July 27.

During the month of June, Atlantic City’s 12 casinos won $418.1 million, an increase of 5.9% over June of 2005.

Century Casino & Hotel in Central City, Iowa, opened on July 10, a month earlier than had been scheduled. The property is owned by Century Casinos Inc. (CNTY).

Scientific Games Corp. (SGMS) has received a contract for sports betting systems from the Norway state owned Norsk Tipping. Also, the company said it had been granted a one-year extension from the Massachusetts State Lottery for its instant tickets.

Shuffle Master Inc. (SHFL) has reported buying more than 1.66 million shares of Sona Mobile Holdings Corp. at a price $0.60 per share.

Former Las Vegas gaming executive Peter Simon and his Mississippi partners have received approval from Mississippi regulators for a proposed casino development on a site in D’Iberville.

May was another good month for the casinos still operating in Louisiana. According to officials, the casinos won $220.2 million in May of this year compared to $199.5 million in May of 2005.

Privately-held SunRay Park and Casino in Farmington, N.M., has been fined $7,500 by state regulators for failing to notify state officials that a key executive had faced criminal charges in December, 2003.

Harrah’s Entertainment Inc. (HET) will hold an earnings conference call on Thursday, July 27, at 6 a.m. PDT.

Landry’s Restaurants Inc. (LNY) has declared a regular quarterly dividend of $0.05 per share paying on July 25 to shareholders of record on July 14.

Riviera Holdings Corporation (RIV) will hold an earnings conference call on Friday, July 28 at 11 a.m. PDT.

Despite press reports, said the Jockey’s Guild, Rev. Jesse Jackson will not be a co-manager of the association with designated manager Dwight Manley. Guild Chairman John Velazquez indicated that there were ongoing negotiations for Manley’s employment contract. Jackson, he said, "is an advisor."