Maybe investors were influenced by his television persona or his successful real estate resume but apparently they poured their money into Trump Entertainment Resorts Inc. (TRMP) expecting that the company would receive one of two slot licenses to be granted by the Pennsylvania Gaming Control Board for the Philadelphia area.
They were wrong.
And their investment in TRMP shares suffered, accordingly.
In fact, shares of TRMP were hammered on Wednesday when the license decisions were announced. Shares fell $3.02 to end the day at $19.78. But the carnage didn’t stop there. On Thursday, TRMP shares fell more than another dollar shortly after the beginning of trading and closed in the mid $18 range.
Also losing out on the Philadelphia license was Pinnacle Entertainment Inc. (PNK) whose shares dropped nearly a dollar before closing at $34.65 each.
Oddly the two winners in Philadelphia were privately-held companies. One license was awarded to the Mashantucket Pequot Indians who operate the Foxwoods Casino/Resort in Connecticut. The other went to Chicago developer Neil Bluhm whose partners include Richard Sprague, former State Supreme Court Justice William L. Lamb, and auto sales magnate Robert Potamkin.
Bluhm’s project is a $550 million Sugerhouse Casino that will be located on 22.6 acres at the intersection of North Delaware Ave. and Shackamaxon Street. Plans call for 3,000 slot machines, restaurant, a plaza and a pedestrian promenade.
The Foxwoods Casino Philadelphia will cost some $560 million and will be located in South Philadelphia on a 30-acre parcel near a Home Depot and a Target store.
Foxwoods partners include Grammy-winner Quincy Jones, Comcast chairman Ed Snider and 76ers president Billy King.
A board spokesman noted that the move places stand-alone casinos in both the north side and in the south side of the city. Also serving the community will be two racinos, Philadelphia Park and Harrah’s Chester Racetrack and Casino.
Another major surprise occurred in the battle for a license in Pittsburgh. The winner was Detroit entrepreneur Don Barden, whose project was selected over two other prominent bidders, Isle of Capri Casinos Inc. (ISLE) and Harrah’s Entertainment Inc./Forest City.
Coupled with the Isle of Capri bid was the promise of a $290 million arena that would have kept the NHL Penguins franchise in the city. By awarding the license to Barden, the city now faces the loss of the team. Lead owner Mario Lemieux announced that he and his partners would immediately begin looking for another site to locate the franchise.
Being chosen to receive the license turned into a birthday present for Barden who was celebrating his 63rd birthday.
The elated owner of casinos in downtown Las Vegas and Gary, Ind., was quoted as saying, "My heart skipped several beats. It was an exhilarating, incredible feeling." He added that he has made a commitment to pay $7.5 million annually into a fund for 30 years to assist in the financing of "a new multipurpose arena."
Barden’s PITG Gaming facility will be located on Pittsburgh’s North Shore, near Heinz Field and PNC Park. He plans to install 5,000 slot machines, making it the largest gaming facility in the state.
Also receiving slots licenses were Las Vegas Sands Corp. (LVS) for a stand-along casino in Bethlehem, and businessman Louis A. DeNaples for a casino at his Pocono Mountain Resort.
Battle of N.O.
Harrah’s Entertainment Inc. (HET) thought that the state’s restriction on land-based casinos would provide a monopoly for its New Orleans casino but it may have to re-think its marketing strategy.
Pinnacle Entertainment Inc. (PNK) announced last week it plans to build a casino complex on 54 acres of the West Bank neighbor of New Orleans that will include a single-story dockside riverboat, a 200-guestroom four-star hotel, a pool and spa at the company’s Boomtown Casino location.
The $145 million project will copy the company’s highly-successful casino at L’Auberge du Lac in Lake Charles, La.
Pinnacle said construction will begin in the first quarter of 2007 with completion expected in the second quarter of 2008.
There was good news for Full House Resorts (FLL) from Washington, D.C., recently. The Bureau of Indian Affairs has agreed to take into trust a 79-acre parcel in Battle Creek, Mich., that will be used for a casino by the Nottawsaseppi Huron Band of Potawatomi Indians.
The tribe has a gaming compact that was negotiated with the state government in 1998 but has been hampered from going forward with its casino plans by court challenges from a local antigambling group.
"Instead of spending so much time on legal matters," said a tribe spokesman, "we look forward to economic matters, like creating 2,500 jobs.
The casino will be 150,000 square feet in size and will be located near Interstate 94. It will feature 2,000 slot machines and 50 table games.
FLL said the National Indian Gaming Commission is reviewing the management contract it has negotiated with the tribe.
THE INSIDER: The Indian casino proposed for the Catskills, adjacent to Monticello Raceway in upstate New York, has received environmental approval from the federal government. The casino will be built and managed for the Mohawks by Empire Resorts (NYNY).
John Boushy, the former Harrah’s Entertainment executive who is now president and CEO of Ameristar Casinos Inc. (ASCA) has been appointed to the company’s board of directors.
Two Atlantic City casinos — Boyd Gaming Corp. (BYD) and Harrah’s Entertainment — have signed a contact that will bring train service between New York City and the New Jersey casinos beginning in late 2007.
Analysts at Brean Murray Co. have downgraded the shares of Isle of Capri Casinos Inc. (ISLE) from buy to hold.
PokerTek Inc. (PTEK) says its new PokerPro Heads-Up system providing a table for Texas Hold’Em heads up play, has been certified by the Gaming Laboratories International.