Neilsen Estate puts ‘For Sale’ sign on Ameristar shares

Oct 23, 2007 5:04 AM

A filing with the Securities and Exchange Commission by the family of the late Craig Neilsen regarding their holdings in Ameristar Casinos Inc. (ASCA) immediately caught the attention of investors on Monday.

By mid-morning traders, seeing the possibility of a takeover of the company by one of the larger gaming firms, kept boosting the share price upward throughout the trading day.

Neilsen, confined to a wheelchair by catastrophic injuries suffered in an automobile accident in the 1980s, was still able to take the company to a major level in the gaming industry. In 1954, the company’s only property was an obscure little casino in Jackpot, Nev. But at the time of Neilsen’s death two years ago, the company had eight casinos operating in seven jurisdictions.

Just recently, the company took over the operation of Resorts in East Chicago, Ind.

On Monday, the Neilsen family, whose holdings in Ameristar amounts to a bit over 50%, notified the SEC in a 13D filing that it was "exploring strategic alternatives" for their investment.

"Since the passing of Craig H. Neilsen, the co-representatives (of the estate) have undertaken, and intend to continue the evaluation of strategic alternatives that may become available with respect to the Estate’s holdings in the company," the statement read. It further identified these alternatives as a "merger or other form of business combination."

Responding to the filing, John Boushy, company president and CEO, said:

"We read the filing to indicate the estate wishes to preserve various options regarding its holdings in Ameristar stock. We continue to operate our business as usual and our management team remains focused on delivering outstanding operating results."

The share price of ASCA at the opening of trading on Monday was $24.46 but the end of the day the price has risen to $28 per share.

Losing bookies

When Rudy Giuliani was mayor of New York City he characterized the N.Y.C. Off-Track Betting operation as "the only bookie around that loses money."

Current Mayor Michael Bloomberg feels the same way and is threatening to close up the city’s 60 dingy, smelly betting shops.

Problem is the shops’ profits end up going to the state while the city is left with the operating deficits. Last year the city comptroller issued a report noting the operation had ended multiple fiscal years with an operating deficit, and its financial future was bleak.

When state lawmakers drafted the legislation creating the bookie shops, they insisted the wagering be raked so that a certain amount of money would go immediately to the state’s coffers.

A frustrated Bloomberg recently was quoted as saying, "The state uses it as a cash cow, and the city has been subsidizing the state, and we are not going to continue to do that."

Shuffle, deal

Looking to attract Ohio customers, as well as home folks, two West Virginia racinos opened their newly-authorized poker rooms last weekend. And to hear them tell it, business was booming.

Wheeling Island, a subsidiary of Delaware North Companies of Buffalo, N.Y., began their poker operation with 20 tables on Friday morning. During the afternoon, Mountaineer Race Track & Gaming Resort, owned by MTR Gaming Group Corp. (MNTG) began dealing at their 37 tables.

Both noted that a good many of the players had traveled from Youngstown and other Ohio cities where such gaming is not permitted.

Maryland dilemma

Maryland residents face the prospects of new taxes and racetrack slots or major cuts in state services.

Those are the issues that will be taken up at a special session of the state legislature, a controversial session called by Gov. Martin O’Malley.

The session was called to deal with an expected $1.7 billion deficit and the need for an additional $400 million for transportation projects.

Since taking office, O’Malley has been trying to get slots approval without success. He is hoping the financial crisis facing the state will get slots opponents to reverse their opinions.

But, anti-gambling supporters have already indicated that getting slots approval will be a hard sell.

Quarterly earnings

Gaming companies continue to schedule dates for their quarterly reports. Among these are:

Dover Downs Gaming & Entertainment Inc. (DDE) set for Thursday, Oct. 25 at 6:30 a.m. PDT.

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

Progressive Gaming International Inc. (PGIC) on Thursday, Nov. 1 at 8 a.m. PDT.

Scientific Games Corporation (SGMS) on Friday, Nov. 2, at 5:30 a.m. PDT.

WMS Industries Inc. (WMS) on Monday, Nov. 5 at l:30 p.m. PDT.

THE INSIDER: Pennsylvania’s first standalone casino opened Monday. The Mount Airy Casino Resort, one of the most storied resorts in the Pocono Mountains, will have 2,500 slot machines.

Also, Pennsylvania gaming authorities revealed that the commonwealth had surpassed the $1 billion mark in gaming revenues. The first of five slots parlors opened in November, 2006.

Lakes Entertainment Inc. (LACO) announced that its financial results for 2006 and any subsequent financial reports should not be relied upon since the company has found accounting errors.

Progressive Gaming International Corp. (PGIC) says it plans to periodically sell company shares to raise $50 million.

Permira Funds, one of the largest private equity groups in Europe, has agreed to buy a 20% interest in the operations of Galaxy Entertainment Group Ltd. The $837 million investment gives Permira a stake in Galaxy’s StarWorld Casino in Macau