Stronach tabs two new leaders for Magna Entertainment Corp.

January 22, 2008 4:12 AM
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Multi-millionaire Frank Stronach, chairman and CEO of Magna Entertainment Corp. (MECA), has been a huge success in developing a Canadian-based auto parts company, and in the U.S. as a horse breeder and owner.

In 2007, his Adena Springs breeding operation produced thoroughbreds that won more than $11.6 million in purses while his racing stable banked nearly $6.8 million in earnings, both placing Stronach at the top of the industry’s leaders.

But some six years ago, Stronach formed Magna Entertainment with the goal of acquiring horse tracks, refurbishing or rebuilding them into attractive entertainment centers and providing a return for the company’s shareholders.

Unfortunately, the success he had in selling auto parts and in horse breeding and racing wasn’t repeated by his racetrack acquisitions. Beyond that, his executive office has had a revolving door.

Investors abandoned the company in droves as the share price fell below $1.

Now the company hopes the bad news is all behind it, beginning with the appointment of racing people to the top executive posts.

Taking over as chief operating officer is Ron Charles, a long-time owner and breeder of thoroughbred race horses and a past chairman of the Thoroughbred Owners of California.

And moving in as executive vice president for racing is Scott Borgemenke, an Ohio political power broker and former chairman of the Ohio State Racing Commission.

To racing fans, the name Borgemenke recalls the riding exploits of a former jockey, Ralph Borgemenke, who rode at racetracks throughout the country, including Churchill Downs when he participated in the 1956 Kentucky Derby.

Ameristar Casinos

Ameristar Casinos Inc. (ASCA) has announced the promotion of Michelle Shriver to senior vice president of operations. She has been serving the company as senior vice president and general manager of Ameristar Black Hawk in Colorado.

In her new position, said John Boushy, president and CEO of Ameristar Casinos, Shriver will be responsible for all gaming and hotel operations, with a focus on generating industry-leading operating results.

"During her 11 years at Ameristar," said Boushy, "Michelle has demonstrated a track record of excellence at both the property and corporate levels."

Shriver joined the company in 1996 as a member of the corporate marketing department.

Ivanka OK’d

The N.J. Casino Control Commission has given final approval to Ivanka Trump serving on the board of directors of Trump Entertainment Resorts Inc. (TRMP).

The 26-year-old daughter of Donald and Ivana Trump received temporary approval in July, pending completion of an investigation into her background and finances — a standing practice for pending casino board members.

The company noted that Ivanka serves as vice president of development and acquisition of the Trump Organization LLC and is assuming a greater role on "The Apprentice" television show.

Ivanka holds a graduate degree from the famed Wharton School of the University of Pennsylvania.

In another matter, Trump Entertainment Resorts announced that John P. Burke, the company’s executive vice president and corporate treasurer, has been appointed to serve as interim chief financial officer.

Hot slots

While casinos in Atlantic City report substantial declines in their slot machine business, gaming regulators in Pennsylvania report that the six racinos currently operating have been doing terrific business.

In 2007, they reported, the so-called slots parlors generated about $353.3 million for the state that has been applied toward property tax relief. Gov. Ed Rendell, who fought for three years to get the machines approved, believes that when all 14 casino licenses are operating the state will bank more than $1 billion.

Leading the field in money generated per machine/per day, according to Spectrum Gaming research firm, is the Mohegan Sun at Pocono Downs, whose machines have generated more than $400 per day.

Other properties reporting included: Philadelphia Park, $369 per machine; The Meadows racetrack, $347, and Harrah’s Chester, $322.

THE INSIDER: Shares of Scientific Games Corp.(SGMS) plunged 40% last week when it was announced that the company had lost the Pennsylvania Lottery online systems contract to GTech. The change will take place on Jan. 1, 2009.

Canterbury Park Holding Corporation (ECP) has announced that its directors have approved a plan for the company to repurchase 250,000 of its shares.

Looking forward to the awarding of casinos operating licenses, the Kansas Racing and Gaming Commission says it plans to triple its staff to insure having sufficient personnel to monitor and regulate the four casinos and two racinos.

Louisiana officials say the state’s casinos took in $228.1 million in December, slightly higher that the $223 million reported a year earlier.

Don Kornstein, who at one time was CEO of Jackpot Enterprises Inc., has announced his resignation from the board of directors of Cash Systems Inc. (CKNN). He said he wanted to devote more time to other business interests.

Penn National Gaming Inc. (PENN) said it expects to open the Hollywood Casino at Penn National Racecourse in Grantville, Penn., on Feb. 12.

Landry’s Restaurants Inc. (LNY) has declared a quarterly dividend of five cents per share to be paid on Jan. 31 to shareholders of record on Jan. 24.

Moving forward with plans for a mega-resort in Atlantic City, MGM MIRAGE Inc. (MGM) has filed an application with the N.J. Department of Environmental Protection for approval of its development site next to The Borgata Hotel/Casino & Spa.

Groundbreaking for the Majestic Star Casino in Pittsburgh, owned by Detroit entrepreneur Don Barden, has taken place and the property is expected to be ready for action in May, 2009.

The gaming/real estate firm of Colony Capital reportedly has given the opening bid of $850 million for the Tropicana Hotel/Casino in Atlantic City.

According to the U.S. Market Risk Index, published by the PMI Mortgage Insurance Co., Las Vegas ranks just behind the leader, Riverside-Bernardino-Ontario, Cal., as most likely to experience a decline in home prices over the next two years.

Interactive Systems Worldwide, developer of SportXction Systems, says it is in negotiations with the Ontario Lottery and Gaming Corp. relative to a license to place the system in two Canadian casinos.

Shuffle Master Inc. (SHFL) says it has amended the employment agreement it has with Brooke Dunn, senior vice president, so that it will terminate on Oct. 31, the same termination date as the employment agreement it has with Mark Yoseloff, president and CEO.

Maryland Gov. O’Malley’s approval rating fell to 35% following the tax increases voted by the legislature during a recent special session. O’Malley had hoped approval of slot machines would ease the tax pain but the gaming matter has been delayed for a referendum vote in November.

Mississippi gaming officials, waiting to make it official, believe 2007 was a record year for gaming revenue, coming in just shy of $3 billion.