Gulfstream Park could become the nation’s next racino (a racetrack with slot machines) now that the track’s owner, Magna Entertainment Corp. (MECA), and the Florida Horsemen Benevolent and Protective Association have agreed on a division of revenues from the new enterprise.
Located in the south Florida community of Hallandale, Gulfstream Park was the premier racetrack for winter patrons until a year and one-half ago when it was demolished and rebuilt into a facility that could accommodate 1,500 machines slots parlor.
Officials expect to have 500 machines installed by Oct. 15 with another 1,000 machines approved by the Florida legislature, following a successful referendum, to be installed immediately afterward.
The split approved by both parties calls for the horsemen to receive in purse monies 7.5% of the machine revenues from the first 500 machines. Once 1,500 machines are in operation, the horsemen’s share changes to 6.75% of the first $200 million and 12.6% of revenues that are over that amount.
The Florida law levies a 50% tax on all slots revenues.
Purses at Gulfstream Park have averaged $300,000 per racing day. This is expected to rise to $400,000 initially and as much as $500,000 when the racino is in full swing.
The agreement was necessary because the gaming law requires that the racetrack and the horsemen’s association have a signed agreement before slots can be unveiled.
Other facilities in south Florida scheduled to operate slot machines are Pompano Park, Hollywood Greyhound Park and Dania Jai-Alai.
Pressured by critics to release the details of its financial arrangements with the Narragansett Tribe of Indians, Harrah’s Entertainment Inc. (HET) last week made available a two-page document listing some of the arrangements between the two.
However, Harrah’s said it would not release the full contract because is contained proprietary information.
Both Harrah’s and the tribe hope to get a favorable vote from the residents of West Warwick, R.I., in November that would approve a constitutional amendment to permit a casino to be built in that community.
In the two-page summary of the arrangement, Harrah’s said it will pay the tribe 5% of the casino’s adjusted gross revenue. That was defined by a tribal lawyer as the casino’s gambling and non-gambling income minus state gaming taxes and community levies.
The percentage would increase to 5.5% when and if the adjusted gross revenue exceeds $800 million in a year.
Tribal officials indicated that casino revenues could generate some $20 million in the casino’s third year of operation, easily exceeding the $6.4 million the tribe received in federal funding in all of 2003.
Still to be determined is the state tax rate. In prior language, a constitutional amendment had specified a tax rate of between 25% and 40%. However, that language was scrapped.
The taxes paid on gaming revenues at the Lincoln Greyhound Park racino approaches 60% but Harrah’s has indicated that the legislators should be looking more at the 25% level.
The recently-shuttered Belle of New Orleans riverboat casino, now owned by Columbia Sussex Corp., will be moved to Morgan City, La., now that the voters of St. Mary Parish have approved the move.
For years, the Belle of New Orleans operated unprofitably on Lake Pontchartrain while carrying the banner of Bally’s Park Place Entertainment. It became part of the Harrah’s Entertainment portfolio following the merger with Caesars Entertainment Inc.
The boat, sold to Columbia Sussex Corp. for $24 million, suffered heavy hurricane damage and was moved to Mobile, Ala., where repairs were made.
THE INSIDER: PokerTek Inc. (PTEC) has signed a three-year contract to provide electronic poker tables to Carnival Corp, the world’s largest cruise ship operator.
Pinnacle Entertainment Inc. (PNK) has agreed to make a tender offer for all notes held by creditors of President Casinos Inc. (PREZ). The company has agreed to acquire President’s Casino St. Louis riverfront for $31.5 million.
Kerzner International Limited (KZL), in the process of being acquired by its two leading executives, Sol Kerzner, chairman, and his son, Butch, president, for $81 per share, has joined with Capitaland Limited in a multi-million dollar proposal for a casino license on Sentosa Island in Singapore.
Unexpected success of the Diamond Jo Worth Casino in Northwood, Iowa, has triggered a $20 million expansion project. The expansion will add 300 slots and 11 table games to the casino floor.
Analysts at Thomas Weisel Co. have upgraded the shares of Boyd Gaming Corp. (BYD) from peer perform to outperform.
Boyd Gaming has scheduled a quarterly earnings conference call for Tuesday, July 25, at l:30 p.m. PDT.
Youbet.com Inc. (UBET) will hold a conference call for its earnings report on Thursday, Aug. 3, at 8 a.m. PDT.
Aztar Corporation (AZR) has set Wednesday, July 19, at l:30 p.m. PDT for its quarterly conference call.
Nevada casinos won $1.13 billion during the month of May, an increase of 9% over the corresponding month of a year ago.