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Gulfstream fought for slots; opens race meet without them

Jan 8, 2008 5:26 AM

As state and federal officials argued over the dispute regarding a tribal casino compact, Gulfstream Park, owned by the troubled Magna Entertainment Corp. (MECA) opened its thoroughbred racing meet last week without its slot machines.

Company officials, who had announced earlier that they were reducing the number of machines that they would have on their gaming floor, said they were still testing new slot machines, mostly video poker games, and were waiting for certification of the machines from the Florida Division of Pari-Mutuel Wagering.

The machines, many of them Class III machines as found on the casino floors in Las Vegas, are located on the ground floor of the newly-rebuilt facility.

Although attendance seemed to be smaller than attended last year’s opening, Gulfstream reported an increase in horse racing betting, primarily due to the addition of revenues from simulcast betting at other Florida tracks, Calder and Pompano.

The simulcasting activity was cleared by the state Supreme Court last September after Gulfstream had been denied the opportunity of sending its racing signals to the other tracks by the state regulators.

Meanwhile, Atty. Gen. Bill McCollum lost his effort to prevent the federal government from approving a gambling compact between Gov. Charlie Crist and the Seminole Tribe prior to a ruling from the Supreme Court.

A federal judge in Washington said it was his opinion that the state would suffer no harm by letting the agreement go into effect.

"If the Supreme Court says it’s void, it’s void," the judge said, adding, "While there may be a theoretical problem, it’s unlikely to be a real problem."

The agreement permits the Seminoles to install Class III machines, identical to the kind scheduled to be used at Gulfstream, in operation at its seven south Florida casinos. In return, the tribe will pay the state a minimum of $100 million annually.

MECA shares fell to $0.95 each in action on Wall Street Monday.

Fed denial

David Hanlon’s plans to bring Las Vegas to upstate New York were dealt a damaging, although not necessarily lethal blow, last weekend when the Department of Interior rejected a tribal casino development plan at Monticello Raceway.

Hanlon, whose gaming experience was gained as an executive at Caesars Palace, the Rio and International Game Technology (IGT), had worked months to get federal approval for a $600 million casino to be owned in partnership by the St. Regis Mohawk Tribe and Empire Resorts Inc. (NYNY).

"Clearly, the Department of Interior’s decision, particularly coming after so protracted and meticulous a process in which we cleared all other administrative hurdles, is very disappointing to us and our partners," Hanlon said in a statement.

The Interior Department said the plan, which had been approved by Gov. Eliot Spitzer, was denied because of what the land would be used for and the distance between the land and the tribe’s reservation.

Approval was needed since the land adjoining Monticello Raceway would have been taken in trust by the government for the tribe.

A St. Regis Mohawk spokesman said the tribe would appeal.

In trading on Monday, NYNY shares fell 55% to $1.39 per share.

Is he staying?

Gary Loveman, who gave up a career teaching students at Harvard University in Boston to become a senior member of the executive staff at Harrah’s Entertainment Inc. (HET) under former chairman and CEO Phil Satre, has been the subject of speculation since it was announced that the company was being acquired by a pair of private equity firms.

Will he stay as CEO under the new ownership or not?

Last week, the company issued a press release saying that Loveman had agreed to a contract extension to June 1 or until the takeover by Texas Pacific Group and Apollo Management LP is executed, expected to occur before the end of next month.

In a filing with the Securities and Exchange Commission last week, Harrah’s Entertainment said Loveman "is expected to remain" in his present positions "following the completion of the proposed merger."

It has been reported that following the merger, Loveman will receive upwards of $100 million in salary and stock option awards.

THE INSIDER: Century Casinos Inc. (CNTY) says it is acquiring the 35% interest in CC Tollgate LLC it doesn’t already own. Tollgate owns Century Casino & Hotel in Central City, Colo.

Las Vegas Sands Corp. (LVS) announced it has secured some $4 billion in loans to construct its proposed hotel-casino in Singapore.

Illinois Gov. Rod Blagojevich called a special session of the legislature last week to address the transportation problems in Chicago and other budget items. The session was cancelled when only 10 people showed up.

Lightning Poker Inc., wholly-owned subsidiary of Lightning Gaming Inc. (LTGM) says it has been granted a new patent on its automated poker tables. The poker tables are distributed exclusively by Shuffle Master Inc. (SHFL).

Analysts at Morgan Joseph gave a mixed signal relative to the shares of Boyd Gaming Corp. (BYD) last week. They lowered their earnings estimates but maintained a "buy" rating on the stock.

A Minnesota tribal casino has been warned to stop showing National Football League games on their television sets as it violates the league’s copyright law. Casino officials apologized saying they were not aware the video had a copyright.