Pennsylvania’s slots revenue
described as ‘tremendous’

Jan 16, 2007 4:26 AM

The slot machine industry in Pennsylvania is "up and running," said a gaming board representative, "and the amount of revenue at these facilities has been tremendous."

So successful has the slots business been in just a few short weeks that Anne Neeb, executive director of the Pennsylvania Gaming Control Board, said she plans to issue weekly reports.

"Citizens are very interested in seeing exactly how much money is being generated," she explained, adding, "and it is important that this information be available."

Of the two recently opened racinos, Philadelphia Park Racetrack & Casinos is setting the pace. The property reported that for the first three weeks of slot-machine gaming, its 2,076 machines have generated total wagering of $175.2 million. This resulted in more than $15.1 million in gross revenue.

According to the gaming law in Pennsylvania, the racetrack operator is allowed to keep 45% of adjusted gross revenues while 34% is turned in to the state. Additional monies are used for racing purses and a breeding development fund.

Using these percentages, it was determined that the track banked nearly $7 million and the state more than $5 million. Another $1.8 million went to the racing side of the operation.

The state’s first track to add slot machines — Mohegan Sun at Pocono Downs, a small harness track in the northeastern part of the state — reported gross revenue of $98 million, during the same three-week period previously noted.

There were six racetrack slots licenses granted late last year after nearly four years of wrangling among lawmakers. Harrah’s Chester Casino is expected to open its slot facility later this month while The Meadows, now owned by Las Vegas casino operators Bill Paulos and Bill Wortman, has scheduled its slots operation for later this spring.

The other two thoroughbred tracks that have been granted slots licenses are Penn National Racetrack & Casino and Presque Isle Downs. They are constructing their facilities with future plans for their slots operations.

Who’s next?

Now that Pennsylvania has jumped into the slots business, joining Delaware, West Virginia, Florida, Arkansas, Rhode Island and Iowa, observers have speculated on what other states will use slot machines as revenue tools.

In New England, it is expected that both Massachusetts and New Hampshire will review their gaming positions. Both states permit pari-mutuel racing as well as off-track betting and both states have undergone political changes.

Massachusetts Gov. Mitt Romney, a strong anti-gambling opponent, has been replaced by Gov. Deval Patrick, who has indicated a willingness to review racinos, or even, casinos, as a means of raising revenue.

And in New Hampshire, both the House and Senate now have Democrat majorities, a political atmosphere that could change the previous attitude of opposing any expansion of gambling.

Last week, Indiana’s House leaders indicated that they will hold hearings on at least one proposal for slots at the state’s two horse tracks.

Share offering

Pinnacle Entertainment Inc. (PNK) has arranged with underwriters Bear Stearns & Co. and Lehman Brothers, Inc. for a public offering of 10 million shares of company stock at $32 per share.

Following the announcement, shares in the company moved up in value while trading on the New York Stock Exchange, reaching a value of $33.95 per share in Friday trading.

Underwriters of the offering received an additional discount of $1.25 per and the potential of acquiring 1.5 million shares, an option that must be exercised within 30 days.

Jumping the gun

A report from a gaming analyst dealing with the Chinese approval of a development plan submitted by Las Vegas Sands Corp. (LVS) apparently was premature. But that didn’t stop investors from boosting the company’s stock by some 11 percent.

Larry Klatzkin of Jefferies & Co. said in a client note that he had learned the company had received approval to develop the Hengqin resort. On that report alone, LVS shares moved up more than $10 to close at $102.81 after trading at more than double their normal amount.

Some time later, the company clarified the situation by issuing a statement that said China had not given final approval to the proposal but had established a project coordination committee to assist in advancing the development.

The clarification, however, didn’t deter investors. On Friday, at the close of trading and awaiting a long holiday weekend the share price reached $103.74 per share.

Hasbro deal

Scientific Games Corp. (SGMS) has announced that its licensing subsidiary, MDI Entertainment, has signed a multi-year agreement with Hasbro Inc. that has the potential of bringing some 20 Hasbro brands to a number of Scientific Games activities.

The company said it planned to add the Hasbro themes to instant and pull-tab tickets, on-line terminal generated games, mobile, internet and interactive television.

The financial arrangements were not made available.

Some of the key properties on tap for lottery games, the company said, were Monopoly, Battleship, Clue, Yahtzee, Boggle, Scrabble and the Game of Life.

Lorne Weil, chairman and CEO of Scientific Games Corp., said, "Entertainment is the key to successful lotteries and Hasbro game’s products are synonymous with fun."

THE INSIDER: Ameristar Casinos Inc. (ASCA) says it will release its fourth quarter earnings report on Thursday, Feb. 1, at 1 p.m. PST. A conference call will be held at 2 p.m. on that day.

Landry’s Restaurants Inc. (LNY) has declared a cash dividend of $0.05 per share to be paid on Thursday, Jan. 25, to shareholders of record on Jan. 15.

A planned expansion of Wynn Macau casino resort will open in one phase in the third quarter of 2007 rather than in stages throughout the year, according to an announcement by Wynn Resorts Ltd. (WYNN).

Melco PBL Entertainment Ltd. (MPEL) says the underwriters of its recent initial public offering had exercised their rights to an additional 9,037,500 American Depositary Shares (ADS) representing 27,112,500 ordinary shares at the public offering price of $19 each.

Progressive Gaming International Corporation (PGIC) says its Casinolink Enterprise system was installed and is being used at the Airport Casino in San Juan, Puerto Rico.

Station Casinos Inc. (STN) has been ranked as No. 18 on Fortune Magazine’s 10th annual "100 Best Companies to Work For." This is the third time that the company has been chosen for the honors.

Full House Resorts Inc. (FLL) has received approval from the Nevada Gaming Control Board for its plan to acquire Stockman’s Casino in Fallon.