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MotorCity Casino is gaining ground

Apr 17, 2001 6:16 AM

Using a wide-range of promotions (some deemed expensive) MotorCity Casino, operated by Mandalay Resort Group (MBG) has been eating into the market share lead held by MGM MIRAGE Inc.’s (MGG) Detroit casino.

For the month of March, MGM Detroit Casino had revenues of $31,969,009, barely topping MotorCity’s $31,890,474, according to figures released by the Michigan Gaming Control Board.

The combined total showed an increase of 2% over March, 2000, despite the addition of a third casino, Greektown Casino, which opened last November.

Officials of MotorCity point to a constant upgrading of their casino floor as the reason their business continues to improve. But, observers have pointed out that aggressive and costly promotions have drawn many players to the property.

Currently, the property has a $25,000 per day giveaway promotion that will last through most of the month of April.

MGM Casino operators have appeared to forego similar promotions in favor of improving their bottom line. MGM MIRAGE will report its first action financial activity on Monday, March 23.

Meanwhile, privately-owned Greektown has seen its revenues move up 32% since its opening.

Another bidder

Entrepreneur Jeffrey Jacobs now has company in his bid to buy out the other stockholders of Black Hawk Gaming & Development Co. (BHWK).

Over the weekend, Robert D. Greenlee, former chairman and CEO of the company made a $12 per share offer to his fellow stockholders. Greenlee owns about 11% of the outstanding stock while Jacobs’ portfolio includes about 33% of BHWK. However Greenlee’s bid was $1 higher than Jacobs’.

Following Jacobs’ proposal last February, the company’s board of directors said it would hire outside legal and investment counsel to weigh the merits of the bid.

At that time, BHWK’s stock was trading at $6.75. On Monday, the share price closed at $9.78, up $0.88 for the day.

Texas competition

As long as President George W. Bush was governor of Texas, adjoining states had little to fear from the Lone Star State getting into the casino business. In fact, Bush had a running battle with an Indian gambling establishment in El Paso that the former governor insisted was using illegal gaming equipment.

But times have changed, and the gambling sentiment, at least for Native Americans, have changed as well. Recently, legislation was filed in Texas to permit three Indian casinos, one of which would be located near Houston. Unfortunately for Louisiana, that’s an area that has provided a lot of customers for the Lake Charles, La., riverboats.

In fact, Isle of Capri executives, who operate two riverboats in that area, say they draw 80% of their business from the Houston area.

No one has been counting votes but certainly the atmosphere in Texas seems to be changing.

Rosemont fights back

Efforts by Emerald Casino Inc. to get a riverboat casino license for the Chicago suburb of Rosemont continues with lawyers for the company alleging that the Illinois Gaming Board used a deep bias to bar the company from being licensed.

When the license was refused, regulators alleged that Emerald officials had developed relationships with organized crime figures. The allegations were strongly denied by lawyers in court papers appealing the decision. In the brief, lawyers contended that the board’s initial denial was "unsupported by even a scintilla of credible evidence."

Next step in the controversy is to have the case heard by an administrative law judge. No date has been set for the hearing.

Beefing up management

Churchill Downs Inc. (CHDN) has beefed up the management team of recently acquired Arlington Park racetrack in Chicago by adding experience racing executive Steve Sexton to the staff.

Sexton, former executive vice president and general manager of Lone Star Park in Texas, will be responsible for the day-to-day business functions at Arlington Park. In addition, as executive vice president he will oversee the track’s finances, human resources, sales, marketing and community relations departments. He moves into the new slot on May 7.

Sexton will report to Scott Mordell, Arlington’s president and CEO.

Heading the racing department will be Frank Gabriel, vice president of racing operations, while Jim Stumpf will continue to manage the track’s five off-track betting sites.

Fewer visitors

Largely because of one fewer day, and the lack of any major holidays or major promotions, fewer visitors were counted in February, according to the Las Vegas Convention and Visitors Authority.

The LVCVA said 2,761,578 visitors were noted in Las Vegas during the month compared to the 2,874,095 registered in February, last year.

This corresponded to the gaming revenues recorded during the period. In Clark County, the casinos recorded gaming revenues that were 7.7% below last year’s numbers. On the Strip, the decline was 13%.

Wynn to speak

Steve Wynn, founder of Mirage Resorts Inc. and one of the giants of the gaming industry, will deliver a keynote address at the 15th annual World Gaming Congress and Expo to be held at the Sand’s Expo Center in Las Vegas Oct. 17-19.

He will be one of three keynote speakers, to be featured on each of the three days of the event.

THE INSIDER: Mandalay Resort Group (MBG) has signed an agreement with E.piphany Inc. (EPNY) to utilize its E.piphany E.5 System as its enterprise-wide customer relationship management solution.

Moody’s Investors Service has placed on review for possible upgrade, the B2 rating on Aztar Corporations’s (AZR) $235 million senior subordinated notes due 2007.

Plans have been unveiled for a $65 million entertainment arena planned by Park Place Entertainment Corp. (PPE) for its Caesars Palace resort on the Las Vegas Strip.