Battle is on for three casino licenses in Massachusetts

October 16, 2007 5:13 AM
by

share

Approval may be months away but already the infighting over whether three casinos will be built in Massachusetts has begun. And, in the minds of some skeptical residents, the heat of battle will challenge the contracts awarded for the multi-billion dollar "Big Dig," a typical Bay State boondoggle.

Among the announced license seekers are gaming behemoths Sheldon Adelson, a Massachusetts native who would like to locate a billion-dollar entertainment complex in the Marlboro area, and Harrah’s Entertainment Inc. (HET), whose chairman and CEO is Gary Loveman, a former Harvard University professor who left his post to become a Harrah’s executive.

Then there is Sol Kerzner’s Trader Cove Partnership, the people who funded and developed Mohegan Sun in Connecticut, looking to partner with the Mashpee Wampanoag tribe for a development in Middleborough, while the Mohegans are looking for a casino in Palmer.

Oddly, Harrah’s said it would like to place its entertainment complex on the grounds of Suffolk Downs in East Boston, near Logan International Airport. But Richard Fields, the majority owner of Suffolk Downs and a former developer of a casino for the Seminole Tribe in Florida, hasn’t jumped onto the Harrah’s bandwagon.

A Fields spokesman said last week that his boss is interested in developing the racetrack property into a casino but is not interested in a partner.

Meanwhile Fields has strong support from Boston Mayor Tom Menino who recently visited Suffolk Downs. He said he was a lukewarm supporter of slot machines at the racetracks but was an "all-out" ambassador for a resort casino.

Jersey subsidy

Atlantic City casinos may be hurting from a sharp drop in business but any hope they had of ending a horse racing subsidy for the Meadowlands racetrack seems to have fizzled.

According to a horsemen’s organization, New Jersey Jon Corzine, who until now has been rather reluctant to discuss the horsemen’s plight, has confirmed that he favors continuing the subsidy for at least another three years rather than permit the track to install slot machines.

Following a meeting at the governor’s mansion, the horsemen quoted Corzine as saying, "We hope to have a package relatively quickly, and we are convinced we can deliver a package that will keep the (horse) industry’s purses sustainable for at least three more years."

A prior agreement among the casinos operators, the racetrack people and government officials established a purse subsidy plan that would help the state’s racetracks to remain competitive with nearby states that benefit from slot machine revenue at their tracks. That plan is scheduled to terminate on Dec. 31.

Slots happy

Everyone knows that Las Vegas’ more than 200,000 slot machines lead the nation in slots volume. And there isn’t any surprise to throw in California’s 64,510 and growing as the No. 2 slots center.

But how about the third state? Did anyone say Oklahoma?

According to the North American Gaming Almanac, Oklahoma now has 45,289 slot machines or about one slot machine for every 79 residents. There are 97 casinos in the state and they had gaming revenue of over $2.2 billion in 2006, an average of $617.87 per capita.

A gaming spokesman said that the state’s casinos keep between 60% and 70% of the state’s gaming dollars instate while the rest "go to Vegas, Kansas City or Shreveport."

Earnings

Now that the earnings season, so-called, has begun, major gaming companies have announced the days on which they plan to report their financial experience for the previous quarter.

Among the notices so far are:

Penn National Gaming Inc. (PENN) will release its third quarter results on Thursday, Oct. 25, at 4 a.m. PDT.

Boyd Gaming Corporation (BYD) will report on Wednesday, Oct. 31, at 9 a.m. PDT.

International Game Technology (IGT) will hold a conference call on Thursday, Nov. 1 at 6 a.m. PDT.

Riviera Holdings Corporation (RIV) will report on Friday, Nov. 2, at 11 a.m. PDT.

And on Monday, Nov. 5, Shuffle Master Inc. (SHFL) will hold its third Investor Day in New York City beginning at 10.30 a.m. PDT. The event will be web cast live and will be available by visiting shufflemaster.com.

THE INSIDER: Youbet.com (UBET), owner of the International Racing Group, says it is working internally to determine why federal agents last week took possession of $1.5 million held in Nevada as part of IRG’s accounts. The company will hold an investor briefing on Thursday, Oct. 18, to discuss its online deposit wagering system.

Struggling with its high cost of health insurance coverage, the Jockey’s Guild has file for Chapter 11 bankruptcy protection.

Standard & Poor’s Ratings Services has raised its credit ratings for Wynn Resorts Ltd. due to the company’s strong performance and improved liquidity position.

The West Virginia Lottery Commission has approved round-the-clock operations at West Virginia racetracks. The timing will help Mountaineer Race Track & Gaming Resort which is due to begin its new table game action within the next few days.

Maryland Gov. Martin O’Malley has decided to call for a special session of the legislature to work on a projected budget deficit. He’s hoping the lawmakers, who are expected to meet in early November, will consider his plan to permit the state’s racetracks to install slot machines.

Scientific Games Corp. (SGMS) says it has a contract to provide digital games, venue management and other technology services to four pub retailers in the United Kingdom. Initially, only 75 pubs out of over 11,000 pubs the four groups control, will be converted to digital technology.