Park Place Entertainment has finalized its acquisition of the bankrupt Claridge Hotel and Casino in Atlantic City.
The $65 million sale closed Friday after receiving approval earlier in the week from the New Jersey Casino Control Commission.
Proceeds from the sale will be used to satisfy the debts accrued by the resort, which finally emerged from federal bankruptcy protection after nearly two years.
The sale gives Park Place a fourth casino in Atlantic City and adds 500 hotel rooms, 59,000 square feet of casino space and a 600-seat theater to its center-Boardwalk holdings, further bolstering the company’s dominance of the city’s large, primarily day-trip gambling market. With the acquisition, Park Place will own 35 percent of the city’s gaming space and 32 percent of its hotel rooms and will generate nearly 35 percent of the city’s gaming revenues.
Park Place is already the largest casino company in the world, with 29 gambling resorts, counting the Claridge.
Park Place has set aside $25 million to remodel and upgrade the Claridge’s hotel, restaurants and slot floor, according to The Press of Atlantic City, and is considering expanding the casino, the city’s smallest, and adding a parking garage on land Park Place already owns.
A.C. profits down
Atlantic City’s 12 casinos saw a decline in operating profits for the first quarter, despite a slight increase in net revenue.
Unusually severe winter weather and an unfavorable calendar were blamed for the drop-off.
Cash flow was down 5.5 percent for the period to $215.5 million, according to a report in The Press of Atlantic City. Net revenue was up 0.3 percent to $1.1 billion. Only three casinos, Harrah’s, Resorts and Caesars, experienced increases in cash flow. The Sands saw the biggest decline in cash flow, 84 percent.
April revenues were down 4.1 percent citywide, not a good start to the second quarter, although revenues will likely increase substantially with the start of the summer vacation season.
Tribe owes developer
The Narragansett Indian Tribe has agreed to pay former development partner Capital Gaming $10 million which the Phoenix company said it spent on behalf of the tribe’s failed effort to get a Rhode Island casino.
The settlement calls for the money to be repaid in 84 monthly installments of $119,000. However, Capital only gets the money if the tribe does open a casino profitable enough to generate funds for the payments.
The tribe has been trying to get a casino referendum on the state ballot since 1993. In 1999, the tribe fired Capital and found a new partner in Las Vegas-based Boyd Gaming. Boyd subsequently dropped an option on 158 acres of land in West Warwick for a possible casino development. The tribe now says it no longer has a partnership agreement with Boyd. The tribe also said it intends to continue to pursue a Rhode Island casino.
Internet ban advances
The California Assembly has approved a bill making it a crime to gamble or take bets online.
The bill, passed Wednesday by an overwhelming 61-2 vote, specifically bans offering games over the Internet that are not legal in California, which takes in most house-banked, Nevada-style casino games.
Any state resident convicted of gambling online would be fined $25 per bet for a first offense and $100 per bet for subsequent offenses. The bill makes it a misdemeanor for Internet companies to take bets from Californians. The maximum penalty would be 90 days in jail and a fine of $1,000 for every transaction.
Discover says no
Discover Card has signed a court agreement saying it won’t operate merchant accounts with online casinos patronized by California residents.
The deal was reached as part of a settlement of a lawsuit brought by a California man who lost more than $70,000 gambling online.
According a report last week in CNET News, the man sued both Discover and American Express. Discover agreed to write off $700 in gambling debts charged to his card and pay his attorney’s fees. A trial is set for early next year on the more than $10,000 charged to the American Express card.
The agreement might have wider implications. Because of the difficulties in determining the geographic origins of online bets, it could shut off all gamblers with Discover Card accounts. The company said it is trying to do that already, according to CNET News.
If this happens, Discover Card will join a growing list of credit providers that refuse to honor debts incurred from online betting. In the meantime, lawsuits are pending in Oregon and Illinois over online gambling losses in which credit card companies figure prominently among the defendants.
’Net credit attacked
The Oregon House has approved a measure that makes it more difficult to collect online gambling debts by prohibiting the collection of such debts through credit cards, checks or electronic transfers.
Under the proposal, which returns to the Oregon Senate for action on various amendments, credit card providers would not be held liable for debts incurred by Internet gamblers.
Sen. Rick Metsger, the bill’s sponsor, said the intention is to shut down Internet casino sites, which he said are illegal, by cutting off their principal source of income.
Feud in Colorado
Central City is suing the city of Black Hawk, its Colorado gaming neighbor, alleging that the city and several casinos have conspired to monopolize the state’s casino industry.
The suit charges Black Hawk and various casino owners, including Windsor Woodmont Black Hawk Resort Corp., Mardi Gras Casino and Fitzgerald’s, with restraint of trade, breach of contract and racketeering for allegedly blocking construction of an access road linking Central City to Interstate 70.
The suit claims Black Hawk bought up necessary land designated for annexation by Central City for the road project and also threatened property owners and interfered with municipal elections in Central City.
The two towns have been feuding over highway access for months. Black Hawk has pushed for an alternative plan calling for a tunnel that would reach Central City but not before passing through Black Hawk first.
Adding to the dislike is the fact that since the legalization of casinos in the early 1990s, Central City has struggled as a gaming destination while Black Hawk has thrived and currently generates some 70 percent of the state’s gaming revenues.
Boyd closes on track
Las Vegas-based Boyd Gaming finalized its purchase of Delta Downs race track in southwest Louisiana, and has already begun installing up to 1,700 new slot machines.
The racetrack was highly sought after by other casino operators in Louisiana because of its proximity to the rich Lake Charles and Texas markets.
Boyd plans to reopen the refurbished racetrack by early fall. The purchase price was between $115 million and $125 million.
Tourism budget cut
Budget cuts will hurt the efforts of tourism officials to market Mississippi as a vacation destination.
Legislators cut the state’s tourism budget by $2.5 million, a move decried by the gaming industry and businesses dependent on tourism.
Mississippi will spend about $6 million on promoting tourism this year, while Alabama will spend $10 million, Louisiana, $18 million, and Tennessee, $16 million, according to Darienne Wilson, director of tourism development for the Mississippi Development Authority.
“It doesn’t take much to figure out that I’m going to be able to invite less people,” she told the Biloxi Sun Herald in a published report last week.
Motoring in Motor City
April figures released by the Michigan Gaming Control Board show MotorCity Casino leading its two Detroit competitors with $29.7 million in adjusted gross revenues for the month.
The April results boosted MotorCity into a slim lead for the first four months of the year with $117.3 million in revenues. MGM Grand Detroit Casino generated $115.6 million in the same period and finished second in April with $28.1 million in revenues. Greektown Casino finished third with $20.2 million and a year-to-date total of $80.6 million.
Lobbyist or regulator?
The appointment of lobbyist Ira Rogal to the Illinois Gaming Board is generating controversy over possible conflicts of interest.
According to a report last week in the Chicago Tribune, Rogal is a principal in the powerful Springfield lobbying firm of Shea, Paige & Rogal, which has represented various casino interests. In addition, Rogal’s partner Billie Paige was part of a group of investors that had sought a riverboat of their own.
Rogal was named to the post by Gov. George Ryan, with whom his firm has close political and fund-raising ties, and has begun serving on the board although his appointment isn’t confirmed yet by the state Senate.
Anti-gaming interests oppose the nomination, claiming it violates the Gaming Board’s ethics rules. State law forbids regulators from investing in or holding any contractual or economic relationships with Illinois casinos.
Supporters of dockside gaming in Indiana have vowed to renew their efforts in the next legislative session.
“We need to regroup and figure out where we’re going from here,” Joe Domenico said in an Associated Press report last week. Domenico is president of Harrah’s East Chicago Casino and chairman of the Casino Association of Indiana.
Proponents say removal of the requirement to cruise is crucial to their ability to compete with Illinois and other gaming jurisdictions.
Dockside gaming would allow the boats to accept passengers at all times rather than the current limited boarding for scheduled cruises.
Supporters say a projected $1 billion state budget shortfall will increase their chances of getting a dockside bill through the Legislature. Estimates are that dockside gaming will generate an additional $377 million in tax revenues for the state.
A dockside bill passed the Democratic-led House last year but died in the Republican-led Senate after failing to clear the Rules Committee.