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Slots a proven winner at tracks - going away

Jun 19, 2001 10:13 AM

Experience has shown that racetracks and slot machines mean big bucks. Yet, politicians in places such as Ohio, Massachusetts and New Hampshire would rather see their tracks founder than admit the obvious.

Racino (race tracks with slot machines) success stories abound. Take West Virginia, where Charles Town and Mountaineer Park struggled for years to remain afloat. Enter slots, and what a turnaround. Now the tracks are paying such large purses that they are more than competitive with their neighbors.

And it’s been a heady ride for the stockholders as well.

Mountaineer Park, owned by MTR Gaming Group (MNTG), has seen its shares rise from a modest $4 on January 1 to Monday’s price of $12.07. Not to be left out of the casino business, company executives have expanded their gambling activities to include two small Nevada casinos. They operate the Ramada Inn and Speedway casinos in North Las Vegas and the Ramada Inn and Speakeasy Casino in Reno.

Penn National Gaming (PENN) took over Charles Town and its slot machines two years ago and has watched its race purses increase to a level where they are competitive with Maryland, where slots are not allowed. Again, the shareholders benefited as the stock price moved from $10 a share on January 1 to $22.65 a share, just down from its 52-week high of $24.

Penn National has also joined the club of casino operators by acquiring two Gulf Coast casinos in Mississippi from Pinnacle Entertainment (PNC).

Other examples of tracks that have been rejuvenated by the addition of slot machines include: Delaware Park, Dover Downs and Harrington Raceway, all in Delaware; Prairie Meadows in Iowa; and the country’s most successful dog track, Lincoln Downs Greyhound Track in Rhode Island.