Inside stuff: Bollenbach sells lots of PPE shares!

Feb 13, 2001 6:41 AM

DO YOU LIKE READING BETWEEN THE LINES? I do. So when I found out that Steve Bollenbach, chairman of Park Place Entertainment (PPE), made nearly $21 million as an inside seller, I got curious. I discovered that of the 4 million shares he had options on, he sold 3,750,000 (94%) at less than $12.86 per share. A hefty profit after exercising the options at $6.75 per share.

However, Bollenbach is hanging onto 250,000 shares.

How do you read? Does that mean he thinks the quarter-million shares will be worth more than $12.86 each? Or does it mean he was satisfied with the $20.5 million profit?

What do I read? He pocketed his money and ran.

Bollenbach took control of the world’s largest casino company upon the death of Arthur Goldberg last fall. He named long-time casino executive Tom Gallagher to oversee things. The company is in a legal battle with Los Angeles businessman Ed Roski, who was unable to finalize the $300 million-plus acquisition of the Las Vegas Hilton, the largest of its five Las Vegas casinos. Roski charges that Park Place took away many of its high rollers and created a sea of red ink, with the high rollers being ushered to one of the company’s sister properties, Caesars Palace. Roski charges that the Hilton is worth far less than he had been led to believe.

EVEN BEING FIRST HAS ITS PROBLEMS! Two of Las Vegas’ last living legends ”” Jackie Gaughan and Barron Hilton ”” have business problems like anyone else. Gaughan pioneered casinos more than 50 years ago in downtown Las Vegas. Hilton was the first to bring his hotel family into the gambling business nearly as long ago. Both gaming giants appeared before Nevada gaming authorities last week for different matters.

Gaughan, who recently celebrated his 80th birthday, is seeking permission to merge his multi-downtown Las Vegas casinos into one large holding company. When asked how things were in downtown, Gaughan was frank:

"Downtown business is weak. Things could get a little better."

The merger is expected to be finalized come July.

Hilton was seeking approval to be licensed with Park Place Entertainment (PPE), the world’s largest casino. He was spared from being asked how his favorite, 3,000-room Las Vegas Hilton, was doing. It’s not doing well; there was no need to ask. A pending sale with Los Angeles businessman Ed Roski has all but fallen through. Rather, a board member asked Hilton how things were at his 30-acre Yerington, Nev., cattle ranch. Hilton was also frank:

"The rule at the ranch is, we never discuss the cattle business. It hasn’t made a profit in 30 years."

TIME IS RIPE! That’s right, it may only be February, but we’re ready to make an early prediction for this year’s Kentucky Derby ”” A P Valentine. Actually, we were concerned about the coming race since our track record for picking the Derby winner has been pretty solid, as our readers know. After last weekend, however, we regained our confidence.

A P Valentine probably would have been the early favorite for the Run for the Roses until his poor performance in the Breeders’ Cup Juvenile when just about everybody beat him. But the reason for the poor performance was obvious to trainer Nick Zito, who found that the colt had bucked shins during the richest race of the year.

But "he’s baaaaaaaack," says Zito.

Last Saturday at Hialeah, A P Valentine blew past his workmate while stopping the clock in 59 seconds flat for the five furlongs, making it a bullet work.

The colt is owned by Rick Pitino. It’s the same Pitino who insiders say is on the front burner again as coach of the UNLV Running Rebels after failing to open the doors at UCLA.

A P gets his first test on Saturday in an overnight allowance race at Gulfstream Park. Win or lose, as long as he comes out of the race without a physical problem, we’ll still be whistling, "My Old Kentucky Home."

HARRAH’S AND ITS HOTEL ROOMS AND RESTAURANTS! From Atlantic City to New Orleans, executives at Harrah’s Entertainment Inc. (HET) have hotel rooms and dining space on their minds.

Its New Jersey Showboat hotel is closing down a 60-lane bowling alley to make room for two restaurants and ”” possibly ”” 500 more hotel rooms.

In New Orleans, its financially troubled, only land-based casino has no rooms nor any restaurants, but needs both ”” not to mention more casino business. The governor and gaming regulators have given the green light to a stiff tax cut, 450 rooms and possibly some restaurants. But the casino company must still muster up enough votes in the Legislature to change the law to allow it all to happen. It could be a close call.

At the seashore, the famous bowling lanes will soon be history. Although bowling worked quite well for the Las Vegas Showboat ”” now owned by another company and renamed the Castaways”” it’s been a flop in Atlantic City.

THINGS ARE JUMPING AT HARVEY’S! William Ray Stephens, seeking a key employee license at Harvey’s Lake Tahoe Hotel & Casino, told Nevada regulators last week that business is booming at the lakeside resort in Northern Nevada. The former top gun at the Hard Rock Casino in Las Vegas was seeking approval from regulators to become senior vice president and general manager of Harvey’s. He said January’s occupancy was a record and, so far in February, it’s 10% above last February.

When asked why business was so strong, he said people now view Lake Tahoe as a total destination resort.

Harvey’s parent company is Colony Capital LLC. It took Harvey’s private following its acquisition.

PIPE TELLS ABOUT GOOSE AND GANDER! "Don’t think for a second that there isn’t a difference in the casino business between a goose and a gander," a pipe told Gaming Today.

The in-the-knowster said Mikohn Gaming’s (MIKN) Tre Card Stud game "is good for the goose, but not necessarily for the gander." He explained that the goose represents the smaller casinos where Tre Card Stud is expected to be a big hit. But, the game has laid an egg at Caesars Palace, its test site, which he regards as the gander. Tre Card Stud is likely to have a great deal of appeal at smaller casinos, but at Caesars ”” where the action is bigger ”” the game didn’t draw much play during its test.

More pipe: "Not to worry. It will be a smash at smaller clubs. Bet on it!"

Stay on the game kick! Dakota Stud, a new one submitted by Shuffle Master (SHFL), was a smasheroo during its test at the Four Queens in downtown Las Vegas. The game is a seven-card stud version of Let It Ride. Payouts are lower because the game uses seven cards instead of five. The dealer has four community cards and the player can pull back one of three bets made before the fourth community card is dealt. Test outcome? Both players and dealers enjoyed the game.

CAJUN COUNTRY CONUNDRUM! "Gov. Mike Foster says his support for a tax break for Harrah’s Entertainment’s (HET) New Orleans casino is strictly a business decision, but he’ll have to play hard politics to get 20 senators to agree with him," reported a pipe.

"Foster is looking at the 2,500 jobs the casino offers as well as about $60 million in state tax benefits. Also, there is growing pressure from the teachers clamoring for a raise.

"But a lot of politicians are saying more than 2,500 jobs were lost when the state failed to bail out other businesses. Also, the way the laws are written, not all teachers in the state will get the raise if the money becomes available.

"With only a few days remaining before Foster calls the Legislature into special session, time for arm-twisting is growing short," the pipe said.