Mandalay Resort Group (MBG) Monday warned that its earnings for the second quarter would be between $0.40 and $0.42 a share compared to the $0.50 reported during the corresponding quarter a year ago.
The pre-announcement was nearly 20 percent below the Wall Street Consensus of $0.50 a share.
The company also said Monday that operating cash flow would be down by approximately 8 percent.
Not only did operating cash flow on the Las Vegas Strip trail last year’s results but utility costs rose more than $5 million during the period.
On the positive side, the company said, revenues per available room (RevPar) was up slightly across the company’s five properties on the Strip with a 10 percent increase at its Mandalay Bay Resort Hotel/Casino.
The company’s official results for the quarter will be released on Aug.23 with a telephone and webcast conference at 1:30 p.m. (PDT).
Mandalay Bay owns Circus Circus, Excalbur and others.
Executives of Pinnacle Entertainment Inc. (PNK) can’t understand what’s taking so long for Louisiana officials to complete their investigations and award the state’s 15th and last gaming license.
The company believes it has made the best proposal and has the local parish (county) behind it. In fact, last week, the Calcasieu Parish Police Jury passed a unanimous resolution asking Gov. Mike Foster and other politicians involved to move the process along so that Pinnacle can move forward with the project.
Pinnacle, formerly known as Hollywood Park Inc. (HPK), is one of three bidders for the license. The other two are Jack Binion for his Schreveport property and Louisiana Horizons for a riverboat in Morgan City.
The matter was on the agenda to be acted upon at the Aug. 21 meeting of the Louisiana Gaming Control Board but was stricken from discussion, thus postponing action until, at least, the board’s September meeting.
Speaking for the Port of Lake Charles, city attorney Mike Dees remarked, “Hopefully it will come up in September. This is important to the area. It is important to the state.”
Pinnacle plans call for a $220 million resort on 225 acres of port property north of Interstate 210. The resort would include a 19-story hotel featuring 521 suites; a 220,000-square foot pavilion building, four restaurants, retail shops and a showroom.
Dees added, “I think we are going to win on merits”¦we’ve got the best proposal.”
Using the prestigious $1.5 million Haskell Invitational at Monmouth Park Sunday as the backdrop, N.J. (Acting) Gov. Donald DiFrancesco signed two bills affecting the state’s horse racing industry: the first permits off-track betting and the second expands simulcasting race betting.
Under the bill, the state’s tracks will be permitted to set up to 15 off-track betting sites around the state.
Principal beneficiary of off-track betting will be the state operated N.J. Sports and Exposition Authority, and the partnership of Greenwood Racing and Penn National Gaming (PENN) operators of Atlantic City Race Course and Freehold Raceway.
Charges of financial malfeasance have caused the FBI to begin investigating the activities of the Seminole Tribe of Florida.
And, it all stems from the money being made by the tribe with its gaming operations. These have been so successful that a Seminole family of four picks up about $120,000 a year and free healthcare from the tribe. This, regardless of whatever other income the family might have.
However, the investigation will focus on the tribal leaders who are responsible for spending millions providing for the Seminole community. The Tribal Council reportedly has been spending quite a bit on fancy cars, expensive tickets to gala events and even chartered jets.
Focus of the probe will be whether these luxuries have been reported as personal income by those receiving them. According to one source, some of the tribal leaders have run up tens of thousands of dollars in charge-card items, drew thousands of dollars in cash, as well as acquiring the luxury autos or renting limos.
Now that the council’s activities have received publicity, some Seminole tribal members have been requesting financial records so that they might review their leaders’ activities.
Debt under review
Moody’s Investors Service has placed the ratings of Station Casino Inc. (STN) under review for possible downgrade based on the expectation that the company may not reduce leverage at a pace or amount to bring the debt consistent with its ratings.
The company said it originally anticipated that Stations would be able to reduce debt once the Fiesta and Reserve properties were fully renovated and integrated. However, the combined effect of a slowing economy, increased competition and a recently announced share repurchase program will most likely keep leverage about 4.0 times debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) through the end of the fiscal year 2002.
Hilton Hotels Corp. (HLT) announced over the weekend that it would discontinue the practice of adding an energy surcharge to the bills of its guests. This was the third major hotel chain to drop the surcharge. Marriott International Inc. (MAR) said earlier that it also would remove the five-month-old energy surcharge that its rival Hyatt Hotels has ended.
As of Monday, there were no announcements from the majority of the Las Vegas hotel/casino operators that they also would be eliminating the ÂÃ‚Âsurcharge.
No more freebies
The practice of Greektown Casino in Detroit sending its best customers to the Atheneum Hotel or the popular Fishbones restaurant for complimentary rooms and dinners must stop, according to a decree of the Michigan Gaming Control Board.
Seems the hotel and several restaurants near the casino are owned by 400 Monroe Associates, the firm that represents Jim Papas and Ted Gatzaros, the two people most responsible for the passage of a casino bill in Michigan. However, they were disqualified from receiving a casino license and sold their interests.
Officials said 400 Monroe Associates had been denied an exemption from the requirement of a suppliers’ license and since they were not licensed they could not do business with the Greektown Casino.
Casino officials said they would use other nearby facilities for their comps.
Gaming slowed down during the month of July in Atlantic City where the casinos noticed a particular decline in table play.
In a report issued by Bill Schmitt, chief gaming analyst at CIBC World Markets, it was noted that unofficial figures for the month indicated gross gaming revenues declined 2.5 percent to $419.6 million from last year’s $430.6 million. Affecting the results was a drop of 9.1 percent in table game revenue. Record as win for table game play was $112.3 million whereas last year it was $123.6 million.
Casino officials said the table game drop was down 14.4 percent from last year but that this could be attributed to the different holiday weekend whereby Independence Day (July 4th) fell on a Wednesday whereas last year it made for a long holiday weekend.
THE INSIDER: When Missouri lawmakers passed a riverboat gambling bill they expected riverboats to be the gaming venues. That’s the way it was originally but things have changes. In fact, with the departure of Harrah’s North Star riverboat for a new berth in Illinois last week there remained only one actual riverboat, the Argosy IV, still operating. All the other boats have been replaced by floating barge platforms.
John Huxley, the English gaming supplies company that recently opened an office in Las Vegas, has announced that it will showcase its newest game, Rapid Roulette, at the 15th Annual World Gaming Congress and Expo.
Aztar Corporation (AZR) has completed the offering of $175 million in senior subordinated notes in a private placement.
Scientific Games Corporation (SGM) has signed a contract with the French Pari-Mutuel Urbain (PMU) for both software and hardware valued at more than $1 million.
The Sands Regent Co. (SNDS) says it is interested in building a hotel/entertainment/casino project in the Carson/Minden/Gardnerville area.
Harrah’s Entertainment Inc. (HET) says it will spend $80 million to expand its property in Atlantic City. The hotel/casino in the Marina District is expected to benefit from the recently-opened new road and underpass.
Apparently real estate mogul Donald Trump had some spare change he didn’t know what to do with so he picked up about 255,000 shares of Trump Hotels & Casino Resorts Inc. (DJT). The price was a shade under $2 a share.
Starwood Hotels & Resorts Worldwide Inc. (H