Fire at Boyd Gaming’s new A.C. tower could delay opening

September 25, 2007 5:37 AM
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Boyd Gaming Corp. (BYD) officials named their new $400 million tower in Atlantic City "The Water Club" not realizing that water is exactly what firefighters needed on Sunday to extinguish a substantial fire at the new construction.

Boyd Gaming’s Borgata became the showplace of gaming in Atlantic City when it was completed more than a year ago and it encouraged management, and its partner MGM Mirage Inc. (MGM) to go forward with a second facility.

The 800-room tower suffered enough damage on Sunday to cause management to reconsider its development timeline.

"While we have been planning for an early 2008 opening, it is too soon to know what impact this will have on the development timeline, if any," the Borgata said in a statement released Monday.

Boyd Gaming officials said they were still working on an assessment of how much of the 43-story building was damaged. Fortunately, the fire had no effect on the Borgata operation.

The Borgata held a "topping off" ceremony for The Water club in July, hailing it as part of the next generation of luxury hotels in Atlantic City. It will not have casino space, but is designed to add more badly needed hotel rooms to the market.

Chicago casino

Chicago Mayor Richard Daley may get his casino after all.

For the past few years, Daley has supported the construction of a casino in the Windy City as a way for the State of Illinois to generate the many billions of dollars it needs to fund important projects.

For quite awhile, expanding gaming was either opposed by members of the legislature or by Gov. Rod Blagojevich. But that has changed.

Last week, the Illinois Senate approved by a 37-15 vote a deal worked out by the governor and top Senate leaders to create three new casinos, including one in Chicago, and allow existing casinos to expand to pay for a roughly $13 billion state construction program.

However, the plan now faces its biggest battle”¦the House of Representatives where a Democratic majority has consistently rejected expanded gaming.

Still, the Senate plan includes some attractive features. Among them are $300 million for education, millions more for school construction projects and a $200 million bailout for the Chicago area’s struggling mass transit system.

To the opponents, Senate supporters pointed out that the best way to provide money for long-overdue improvements in the state’s roads, bridges and schools is to add a few gambling houses.

"It’s the only game in town right now," said one senator.

Blagojevich challenged the House to approve the gambling plan while acknowledging its flows. He called it "imperfect means to get to good ends."

Two years ago, a similar Senate plan died in the House and if Speaker Michael Madigan has his way this latest plan will suffer the same fate.

And, in Boston

While Gov. Deval Patrick’s plan to license three mega-casinos in Massachusetts has attracted the interests of nearly every major casino company, even supporters admit it will take years before gambling could begin.

To begin with, Patrick has yet to draft potential legislation that would face intense debate in both the House and Senate.

Then, if the bill is passed (lawmakers have until next July 29 to act on it) it would take months, if not years, for the administration to evaluate the proposals and submit the bidders to public scrutiny. Assuming the proposed locations are welcomed by its residents, it probably would take a vote for final approval of the taxpayers.

The hundreds of millions of dollars in tax revenue being waved under the noses of opponents may look attractive but the money seems to be a long way off.

Competition

Two West Virginia racetracks can’t wait to introduce table games at their facilities to offset some of the losses they have incurred since slots were introduced at the Meadows Racetrack & Casino in nearby Washington, Penn.

In less than two months Mountaineer Race Track & Gaming Resort, owned by MTR Gaming Inc. (MNTG) and privately-owned Wheeling Island Racetrack and Gaming Center have lost nearly $22 million in gross revenue.

Also, the decline in revenue has cost the state nearly $10 million in tax revenue.

Spokesmen for both affected tracks said they predicted that nearby racinos in Pennsylvania would impact their businesses and added that they hoped the addition of table games will offset the loss.

Table games are expected to be introduced later this year.

Malfunction

It’s happened at a number of casinos in the U.S. but the first report of a malfunctioning slot machine caused a Macau player a 42 million Hong Kong dollar headache.

The player thought he had hit the jackpot while playing an Australian-made Stargames slot machine but when Shuffle Master Inc. (SHFL), the current owner of Stargames, called in the Gaming Laboratories International, an investigator found that the machine had indeed malfunctioned and that the player had not really hit the jackpot.

There are 47 Stargames machines currently sitting on casino floors in Macau and all were ordered shut down by the Macau Gaming Inspection and Coordination Bureau.

Shuffle Master said the regulators are reviewing the software that it had submitted to fix the machines and planned to do so once it receives regulatory approval.

THE INSIDER: Macau gaming mogul Stanley Ho is being widely acclaimed in China for his recent purchase of a famous Chinese artifact — a stolen imperial palace bronze horse head — for $8.9 million. He says by returning the artifact to Beijing he hopes "to promote patriotism and nationalism."

Ameristar Casinos Inc. (ASCA) has completed the acquisition of Resorts East Chicago Casino and has installed Timothy Wright as the general manager. He previously was at the company’s Kansas City, Mo., casino.

Magna Entertainment Corp. (MECA) has exercised its option to become sole owner of the Maryland Jockey Club by paying $18.3 million to the De Francis family members.

Scientific Games Corporation (SGMS) has been designated as the primary vendor of lottery tickets and services by the Iowa Lottery.

PokerTek Inc. (PTEK) has appointed Chris Halligan as the company’s second CEO, succeeding Lou White, one of the company’s co-founders.

Hoosier Park in Anderson, Ind., says it is on a fast track to complete its $30 million slots machine expansion by next June.

Analysts at Jefferies & Co. have downgraded the shares of Wynn Resorts Ltd. (WYNN) from buy to hold.

Shares of Isle of Capri Casinos Inc. (ISLE) were up a bit last week following an upgrade from the analysts at Stifel Nicolaus & Co. who raised their rating to buy from hold.