Voters reject Penn National’s bid for table games

Jun 12, 2007 5:25 AM

Voters in two counties in West Virginia told the racino operators exactly how they feel about adding table games to their gaming operations over the weekend.

For privately-held Wheeling Island Racetrack and Gaming Center the results were positive but for publicly-traded Penn National Gaming Inc. (PENN) it was a major rejection.

In Ohio County, located in the economically-troubled Northern Panhandle, voters saw a positive vote as a chance to add 400 new jobs. The vote favored the gaming expansion by a whopping 66 percent to 44 percent. Wheeling Island officials immediately announced they would hold job fairs next week.

However, the economy is not suffering in Jefferson County. The voters were described as worried about the possibility of an increase in crime. The vote against table games at Charles Town Races & Slots was 56 percent to 44 percent.

On June 30, voters in Hancock County will decide the issue relative to Mountaineer Racetrack & Gaming Resort in Chester, a facility owned by MTR Gaming Group (MNTG). And the Tri-State Racetrack & Gaming facility will learn its future when voters in Nitro County cast their ballots on Aug. 11.

Claiming victory for the table game defeat in Jefferson County was Kevin McCoy, director of the Christian group West Virginia Family Foundation. He said, "We really feel that we’ll be able to carry the day in Hancock and Kanawha counties, as well."

The legislature endorsed permitting the racinos to add table games to their facilities provided the voters in their areas approved the moves.

Bidder emerges

Dennis Gomes, the veteran casino executive who formerly worked for Donald Trump, has emerged as a bidder for the three Atlantic City casinos owned by Trump Entertainment Resorts Inc. (TRMP).

He has partnered with JEMB Realty Corp., a real estate firm that is operated by Morris Bailey.

The bid was in response to a move by TRMP that hired Merrill Lynch & Co. last March to explore strategic options for the company. Following Gomes announcement, there was no confirmation from the Trump organization.

The Gomes partnership bid was believed by Wall Street to be one of several bids that are being contemplated by casino-hungry companies.

Gomes, a former investigator for the Nevada Gaming Control Board, was a top employee of Las Vegas casino mogul Steve Wynn when he was lured away by Donald Trump, a move that resulted in a protracted lawsuit. Gomes worked in Atlantic City for Trump and later moved to Aztar Corp., then the owner of the Tropicana properties in Atlantic City and Las Vegas.

Brakes applied

Steve Wynn caused a stir among investors last week when he announced that he was delaying his Macau plans because of travel restrictions in the area and the addition of new gaming properties later this year.

"We are wary of the future effect of newly restrictive visa requirements”¦In addition, management recognizes and will continue to monitor the effect on our business of the dramatic expansion in supply represented by the openings of the Venetian Macao and the MGM Grand Paradise in November," Wynn was quoted as saying.

The travel restrictions he referred to were imposed on travelers from Guangdong Province to the nearby Macau resorts where gaming last year generated more revenue than did the Las Vegas Strip and is considered the world’s fastest growing gaming area.

Wynn Macau currently competes with casinos operated by Las Vegas Sands Corp. (LVS), and Melco International Corp. (MPEL), as well as properties operated by privately-held Galaxy and gaming magnate Stanley Ho.

Decision delayed

Officials of Churchill Downs Inc. (CHDN), Magna Entertainment Corp. (MECA) and other bidders for the New York racing franchise will have to wait, possibly until the fall, to learn who will run New York racing in the future.

Initially, Gov. Eliot Spitzer was to make a decision in May after a committee had listened to the presentation of the four bidders. But, Spitzer scrapped that plan.

Last week, people from the governor’s office met with three of the bidders — Empire Racing, Excelsior Racing and Capital Play of Australia — and told them Spitzer was considering splitting the operation. One group would run the horse races while the other would have charge of slot machine operations.

Rating changes

Two of Las Vegas’ largest gaming operators were the subject of ratings changes among the analytical minds of Wall Street.

MGM MIRAGE Inc. (MGM) received a boost from Harry Curtis of JP Morgan Securities while Wynn Resorts Ltd. (WYNN) was downgraded by David Katz of CIBC World Markets.

Curtis said he believed MGM could trade anywhere from $97 to $136 per share if the company ended up selling off parts of itself. He said he was looking at the company selling City Center and Bellagio tax free for $29 to $36 per share and breaking up the rest of the company into international operations; a real estate company that owns the remaining MGM assets; and operating company that manages casinos and a development company.

This scenario, he said, could boost the price up to $136 each.

Katz said he was lowering his 2007 earnings for WYNN to $2.35 from his previous estimate of $2.44 and his 2008 estimate to $2.39 from $2.53 per share.

THE INSIDER: Isle of Capri Casinos Inc. (ISLE) said Monday it had completed the acquisition of Casino Aztar in Caruthersville, Missouri from Columbia Sussex Corporation for $45 million.

Two pari-mutuel operations in Miami-Dade County have asked for another vote on whether they could install video lottery machines. In a March 2005 referendum, voters turned down their requests for the gaming devices while voters in Broward County approved.

Canterbury Park Holding Corporation (ECP) has announced a special cash dividend of $0.25 per share to be paid on July 13 to shareholders of record on June 22.

Magna Entertainment Corp. (MECA) says it will sell the San Luis Rey Downs training center in Bonsall, Cal., to MI Developments Inc. for $24 million.