Massachusetts now more
likely to consider casinos

Feb 20, 2007 5:23 AM

A changing landscape in recent weeks could result in casino gambling finding a home in the Commonwealth of Massachusetts, say gaming supporters.

Last month, anti-gambling Gov. Mitt Romney exited the gubernatorial chamber to be replaced by Deval Patrick. Not that Patrick is a card-carrying casino supporter but only that in search of more revenue to balance an ever-growing budget he has indicated he is not above considering gaming.

Last week, the Mashpee Wampanoag Indian tribe won a 32-year battle for federal recognition. The tribal council has agreed not to try to build a casino on Cape Cod but that apparently won’t stop them from attempting to take other land into trust for a gaming operation.

After all, it has cost the tribe more than $8 million to get the Bureau of Indian Affairs to recognize that they are the same people who greeted the Pilgrims at Plymouth nearly 400 years ago. For two decades, the tribe used its own funds to seek recognition but finally realized it would take a larger effort, and more money, to get the job done.

Among the tribe’s investors is Herb Strather, a Detroit real estate and casino developer who reportedly has given the tribe some $15 million since 1999. Also helping fund the project was the Mohegan tribe of Connecticut.

The Massachusetts legislature hasn’t addressed the issue of casino gambling recently but for several legislative sessions the lawmakers have been besieged with requests for slot machines at the state’s four racetracks. With Romney as governor, the slots efforts were defeated but with Patrick at the helm supporters are more encouraged that some form of gaming will not be far off.

Revenue drop

Atlantic City casinos have been hit with a double whammy of late causing state officials to wonder just how badly the state’s gaming revenues will fall.

To begin with, Pennsylvania has awarded slot licenses to a half-dozen racetracks. Three of the tracks — Philadelphia Park, Harrah’s Chester Casino and Racetrack, and Mohegan Sun Pocono Downs — are up and running with the others to come online in the near future.

With only the three tracks operating slots, Atlantic City saw its first decline in gaming revenue last month since casino gambling began in 1978. There also is a racino operating at Yonkers Raceway in New York that is adding to the competition.

And come April 15, all Atlantic City casinos must turn 75% of their properties into non-smoking facilities. The non-smoking impact is expected to also have an adverse effect on casino revenues.

New Jersey casinos pay an 8% tax on their gross revenues and another 1.25% to a development fund. Last year, that worked out to $417.5 million for the state and another $65 million for the fund.

British gaming

There is a "supercasino" gaming license to be awarded by the city of Manchester, England, and some of the world’s major gaming firms are lining up to make their presentations.

According to press reports, Sol Kerzner’s privately-held Kerzner International, Las Vegas Sands Corp. (LVS), and Harrah’s Entertainment Inc. (HET) are among the company’s eyeing the license.

Harrah’s recently completed the $530 million purchase of London Clubs International, giving the company a major foothold in the British Isles. The company is building a Caesars resort in Spain that is expects to be completed in 2009.

The selection of Manchester caught all prospective bidders off-guard since it was generally accepted that the "supercasino" license would be granted to London.

Dispute settled

A potential lawsuit was averted by American Wagering Inc. (BETM) with the announcement that the company had entered into a severance agreement with Timothy Lockinger, who had resigned his post as CFO and a member of the board of directors.

The agreement specifies that Lockinger’s position with the company would end on Dec. 14, 2006, and that he would receive a severance payment of $270,000.

As part of the deal, Lockinger has agreed to "not solicit employees of the company or to be employed by or perform independent contract services in Nevada for any entity engaged in the race and sports business, including but not limited to, offering financial services or project management services to an entity that desires to exploit Lockinger’s knowledge of the race and sports business gained as a direct result of his employment with the company."

THE INSIDER: PokerTek Inc. (PTEK) says its agreement with Princess Cruise Lines calls for the company to install 22 PokerPro tables on Princess ships by the end of the calendar year.

Ameristar Casinos Inc. (ASCA) has declared a quarterly dividend of $0.1025 on March 15 to shareholders of record on March 1. This represents a 9.3% increase in dividends over fiscal 2006.

Analysts at Stifel Nicolaus have upgraded the shares of Dover Downs Gaming & Entertainment Inc. (DDE) from sell to hold.

Arrangements are being made for Queen Elizabeth II of England, a longtime devotee of horse racing, to attend this year’s running of the Kentucky Derby at Churchill Downs on Saturday, May 5.

Financier Ron Perelman, the largest single stockholder in Scientific Games Corp. (SGMS), has added to his holdings by purchasing another 4 million shares. His holdings now represent 27.4% of the company’s outstanding shares.

Louisiana casinos won $196.9 million in January, down slightly from a year earlier when the casinos had a post-Katrina boom.

International Game Technology (IGT) plans to webcast its annual shareholders meeting that is scheduled for 10 a.m. PST on Tuesday, March 6.

Station Casinos Inc. (STN) has declared a quarterly cash dividend of $0.2875 per share to be paid on March 12 to shareholders of record on Feb. 26.

Atlantic City casinos won $394.5 million January, a 2.9% decline from 2006.

The Connecticut Lottery Corporation says it plans to award a lottery systems contract to Scientific Games Corporation (SGMS).

Harrah’s Entertainment Inc. (HET) will release its fourth quarter fiscal results on Tuesday, Feb. 27, at 8 a.m. PST.

Station Casinos Inc. (STN) will hold a conference call at 9 a.m. PST on Wednesday, Feb. 28, to discuss the results of the fourth quarter of fiscal 2006.