Ameristar rides high on the comeback trail

Jun 26, 2001 10:33 AM

THAT’S LIFE! "Flying high in April, shot down in May!" Those are the words in a song. But thank goodness for Ameristar Casinos (ASCA), the lines that follow - back on top in June - hit home.

At the beginning of the year, the company’s stock was floundering, with the price per share at less than $6. But things have changed drastically.


Mostly because of a beneficial deal with Station Casinos (STN), Ameristar gave up a loser and picked up a pair of winners. They sold off The Reserve hotel in Las Vegas to Station. It was a drag on the company’s balance sheet. At the same time, they picked up two Missouri casinos owned by Station.

Believe it or not, both parties are winning. During the month of May, the two Missouri casinos were up an average of 17%. And The Reserve is doing quite well for its new owners.

Worthy of attention is the fact that of the 20 million Ameristar shares outstanding, only 3 million shares are in play. The other 17 million are owned by Craig Neilson, founder and chairman of the company.

On Monday, ASCA closed at $15.85 a share, up $1.12 for the day. That’s getting close to its 52-week high of $16.45. The 52-week low is $4.

And the stock saw tremendous activity. The volume of 106,400 was almost six times the 200-day average volume of 18,400.

Maybe that’s life ”¦ But ASCA may be worth looking into. 

CALIFORNIA HERE WE COME! Long-time gaming executive Jim McKennon and his family are leaving us so that Jim can continue with his new duties as president and CEO of Action Online Entertainment, a start-up Internet company in Long Beach, Calif.

Jim describes his new venture, which has attracted veteran gaming attorney Ellen Whittemore, as an extraordinary opportunity that will be good for gaming. Whittemore is vice president and general counsel of Action.

The company, through McKennon’s efforts, has received strong financial backing from Crosspoint Venture, a Silicon Valley firm with a highly successful return on investment.

When the Internet company gets the blessing of Nevada regulators (and it will) it will be in a solid position as a firm with a good track record in jurisdictions outside the USA, where Internet gaming is thriving.

’ATTABOYS BY THE NUMBERS! Cast members (that’s what they call employees at the MGM Grand) should be popping their buttons that their recent acts of generosity set a national record. The cast members gave a record $754,155 to United Way. In so doing, a new mark was set for the largest single gaming property. At the same time, it set a record as the largest single property donation in Nevada’s history.

As an incentive for cast member donations, management at the resort purchased a new $40,000 BMW to be given away to a donor. Names were dropped in a hat, and Bill Hornbuckle, the company’s COO, drew the name of Rosalind Pinon, a housekeeper at The Mansion.

Pinon designated a $10 bi-weekly payroll deduction to the United Way. 

RETURN TO THE ROBE? A pipe in New Jersey feels certain that Steve Perskie, the gent who helped author the New Jersey casino legislation, is being considered for a judgeship in the Garden State.

It wouldn’t be anything new for Perskie. He was a Superior Court judge in Atlantic County before his involvement with the casino industry. He served as chairman of the Casino Control Commission at one time, the pipeexplained.

I wonder if the robe still fits?

SAINTS WIN, SLOTS LOSE! A plan for slot machines at the New Orleans’ Fairgrounds is deadsville. Death came in the final hours of the 2001 session of the Louisiana legislature. Furthermore, Louisiana Gov. Mike Foster said that the track might have to wait two more years for another try.

The governor also said that it was highly unlikely that slots would be included in a special session scheduled for October to deal with other issues.

On the other hand, the Louisiana House has already passed one piece of legislation that will enable the New Orleans Saints to get their hands on some money (about $5 million worth) from the sale of naming rights to the Superdome. 

THE OTHER SIDE OF THE STORY! They say there are always two sides to the story. It seems as if nearly everyone has heard about a small group of disgruntled employees who may possibly be on the outside looking in when Randy Black takes up the reins at Si Redd’s not-doing-so-well Oasis in Mesquite.

Allegations went flying and the Nevada Gaming Control Board began a probe. What they found came out loud and clear when the Nevada Gaming Commission met last week in Carson City and gave Black the A-OK. He takes over the casino, which he has renamed the Casablanca Oasis, at 12:01 a.m. July 1.

Black owns three other casinos in Mesquite. At the very outset he went on record telling employees that he would re-hire about 800 of the more than 900 employees at the old Oasis. Moreover, he’s going into his kick for $5 million to spend on upgrades.

The Commission concurred. Brian Sandoval, chairman of the Commission: "I see it as a very positive purchase for the city of Mesquite."

Before the Commission voted for approval, Black gave examples of the duplicity in his three casinos. He said that two of his currently owned properties have a slots department of about 40 people. Si Redd’s Oasis had 71 people working in its slots department. 

BETTORS GOT THE BIRD! While most golf bettors were looking to see if Tiger Woods would make a comeback in the Buick Open at Westchester Country Club, others were high as a kite as golfer Tom Kite made a run at the Senior leaders in the FleetBoston Classic in Concord, Mass.

A week earlier, Kite had made a huge run in the U.S. Open with a record-tying round of 64.

On Sunday, Kite was 7-under after 13 holes and seemed destined to duplicate that 64 round. But a little birdie, not the golf kind, ruined his plans. Kite sent a shot high, and on target, on the 17th hole when, unbelievably, the ball hit a purple martin and dropped into a water hole.

The double bogey killed Kite’s chances, as well as a pretty little purple martin.