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California slot win could hit $5 billion

May 22, 2001 11:27 AM

West

California’s Indian casinos are on the verge of winnings second only to Nevada and could soon overtake the world’s casino capital.

Figures compiled by California’s new gambling commission and reported by The Press Enterprise newspaper project that tribal casinos will earn more than $5 billion in the year ahead on slot winnings alone, which make up about 80 percent of California’s win. The projections are based on reports from the tribes that their slots are winning $300 a day on average.

The total win was derived by multiplying win per machine by the statewide limit of 45,206 machines. The tribes are disputing that cap. The commission, in the meantime, considers the win per machine total supplied by the tribes to be conservative.

Nevada’s casinos reported slot winnings of $6.2 billion last year, with win per machine at a mere $88. Atlantic City’s casinos won $4.3 billion from slot machines for the 12 months that ended March 31.

Sixty-one tribes have signed federally mandated compacts permitting them to operate casinos with up to 2,000 slot machines. So far, 47 tribes have opened casinos. The tribes also operate Nevada-style card games and high-stakes bingo.

New tribal casino

The Pauma Band of Mission Indians in California opened North County’s fourth tribal casino.

The 65,000-square-foot facility opened with about 25 percent of its slot machines not operating and a 200-seat restaurant scheduled to open this week.

Also, the casino is unable to serve alcohol pending a decision by state officials. The county has opposed the casino’s application for a liquor license, citing traffic concerns.

The casino is only about seven miles from the larger Pala and Rincon casinos. The county’s fourth casino, San Pasqual’s Valley View, is about 12 miles away.

A fifth tribe, the La Jolla Band of Mission Indians, also has a compact with the state to build a casino but has not announced plans to do so.

East
Catskills suit proceeds

A lawsuit against Park Place Entertainment over a proposed Indian casino in the Catskills will be allowed to proceed.

In a statement released last Wednesday by Alpha Hospitality, the plaintiff in the suit, Alpha said its $2.1 billion claim against Park Place will be allowed to proceed, according to a ruling issued in U.S. District Court for the Southern District of New York.

Alpha is suing Park Place claiming the Las Vegas-based casino giant interfered with its agreement with the St. Regis Mohawk Nation to develop a $500 million gambling resort in the Catskills. Park Place is currently operating under an agreement with the tribe to develop and manage the planned resort.

Connecticut slot win

Despite having 260 fewer slot machines last month, Foxwoods Resort Casino reported a 1.9 percent increase in slot handle compared with April 2000.

Slot win was down slightly, 0.7 percent, or $481,945, at the southeastern Connecticut resort, while the handle topped $14.5 million. Daily win per machine was up 4 percent to $393.

At nearby competitor Mohegan Sun, slot win was up 6.4 percent to $48.4 million, thanks to the addition of 637 new machines. Average win per machine was down 2.4 percent to $489.

The two casinos paid $28.4 million to the state last month. Both casinos pay 25 percent of their slot win to the state under an agreement that gives them a gambling monopoly.

New Casino Niagara

Site preparation work has begun on a permanent $800 million complex for the Casino Niagara gambling resort in Niagara Falls, Canada.

Construction of the facility is scheduled to begin in August, according to the Ontario Lottery and Gaming Corp. The permanent casino will have 3,000 slot machines, 150 table games, meeting and convention facilities, shopping and a 368-room Hyatt hotel.

Ontario officials say the resort will create 800 to 1,000 new jobs and will employ a total of 5,000 people.

Borgata on target

The Borgata, Atlantic City’s new $1 billion super-resort, is on target for completion in summer 2003.

Borgata CEO Robert Boughner told Reuters that construction of the 4 million-square-foot casino hotel, located in the city’s Marina district, is proceeding without problems and is on schedule. More than 3,000 pilings have been driven into the sandy soil of the site, which is a former municipal dump, and construction has begun on the second floor of the resort’s hotel tower.

The Borgata, a joint venture of Boyd Gaming and MGM Mirage, will be the first entirely new gambling resort to open in the city in more than a decade.

A.C. land settlement

A jury in Atlantic City awarded a landowner $225 per acre for a 5,905-square-feet parcel sought by MGM Grand Resorts for a casino on the Boardwalk.

The award is more than double what the company, a division of Las Vegas-based gaming giant MGM Mirage offered to pay. The landowner originally sought $2,000 per square foot. MGM was offering $100. To end the stalemate, the city used its power of eminent domain to take the land. MGM had assembled 35 acres for the proposed casino.

MGM Grand President John Redmond said the company was not happy with the award and told The Press of Atlantic City that such valuations would impede the commercial development the city desperately needs.

The company is now looking to sell the site and said it intends to build a casino across town in the Marina district.

Claridge sale OK’d

A U.S. Bankruptcy Court has confirmed the Claridge Hotel’s reorganization plan, which includes sale of the financially troubled Atlantic City resort to Park Place Entertainment.

New Jersey’s Casino Control Commission will review the purchase plan at its May 30 meeting. The commission is expected to approve the deal.

South
Boyd gets racetrack

Boyd Gaming last week received approval from Louisiana regulators to operate Delta Downs racetrack in Vinton. Regulators rejected a request by Isle of Capri Cainos to block the sale.

Boyd, which owns 11 casinos, including the Treasure Chest in Kenner, La., wants the track because of its potential for slot machines. Delta Downs is 22 miles closer to the Texas state line and the lucrative Texas gambling market.

Isle of Capri, which owns two riverboats in nearby Lake Charles, said it made a higher bid than Boyd Gaming. President Jack Gallagher vowed to keep fighting the transaction.

Costly license

The Louisiana State Gaming Board has ruled that Casino Magic must pay $450,000 to renew its casino license as part of an ongoing investigation into influence peddling by the son of former Gov. Edwin Edwards.

Edwards, his son Stephen and three others were convicted last year in a wide-ranging casino corruption case. All three are free on bail pending appeals.

Casino Magic, now owned by Pinnacle Entertainment, had paid Stephen Edwards $45,000 a month for 10 months for purported legal work which was never performed, according to State Police.

In a similar ruling, Players Island casino in Lake Charles was assessed $10.2 million for its license renewal. The Players casino figured prominently in the investigation into the Edwards’ casino dealings. Harrah’s paid the assessment when it bought Players.

Pinnacle, meanwhile, has applied for the state’s 15th and last gaming license. The company wants to build a $220 million riverboat casino in Lake Charles.

Midwest
Governor says no

Wisconsin Gov. Scott McCallum has rejected plans for an Indian casino at the St. Croix Meadows greyhound track.

In a letter to the U.S. Bureau of Indian Affairs, McCallum said the state has enough legal gambling and the addition of an 18th casino would not serve the public interest.

The racetrack is not part of an Indian reservation, so the bureau had placed the track’s land into trust for three tribes that proposed to operate a casino with 1,500 slot machines. Governors, however, have veto power over off-reservation Indian casinos. The three tribes have filed a lawsuit, claiming that veto power is unconstitutional.

The same tribes were involved in an investigation in the late ’90s into influence peddling in the U.S. Department of Interior under Bruce Babbitt. The investigation was launched after the department rejected a bid by the three tribes to build a casino in Wisconsin. The tribes claimed the department rejected the casino on orders from Babbitt after competing tribes made huge campaign contributions to the Democratic Party. The investigation was concluded with no charges filed.

Less is more

Visitation is down at Kansas City’s four riverboat casinos, but losses per patron are rising, according to figures compiled by the Missouri Gaming Commission.

Ameristar Casino Hotel reported that its win per patron has risen from $38.45 last July to $45.93 in April. Harrah’s North Kansas City reported per patron win at $53.89, up from $46.89. Isle of Capri Casino reported $44.79 win per patron, up from $35.11. Argosy Riverside Casino reported a win of $54.69, up from $47.97.

At the same time, visitation was down to 1.9 million per month from the 2 million average for 2000.

The casinos won $45.8 million in April, off the pace of March’s record $54 million win, but still the fourth-best month in the casinos’ history.

Tribal casino nixed

A federal appeals court has dealt a blow to the hopes of an Oklahoma Indian tribe looking to build a casino in Kansas.

In response to a state lawsuit opposing the casino, the 10th U.S. Circuit Court of Appeals has ruled that a 35-acre site in Miami County does not qualify as legitimate Indian land for gaming purposes despite earlier rulings by the U.S. Interior Department endorsing the site.

The tribe relinquished the land more than a century ago.

The tribe and its development partner, Butler National, said they’ll appeal.