When is a casino a casino?
That question probably will end up in the courts following
the filing of a lawsuit Monday by Harrah’s Entertainment Inc. (HET) against
Penn National Gaming Inc. (PENN).
The dispute involves Charles Town Race Track that was
bought by Penn National from the former Showboat Inc., now owned by Harrah’s.
When Penn National bought the track in 1997, the agreement
gave Showboat the continued right to operate “a casino” at the Charles Town
property. Actually, the agreement said Showboat would operate video lottery
terminals, linked to the West Virginia Lottery, at the racetrack in return for a
management fee.
Penn’s reply says the terms of the agreement it had with
Showboat “do not specify what activities at Charles Town Race Track would
constitute operation of a casino.”
Penn National also said it believed that the installation
and operation of video lottery terminals at the track “does not constitute the
operation of a casino under the Showboat option or under West Virginia law.”
Slots revenue at the Charles Town Race Track has been a
bonanza for the former horse racing company that has branched out into casino
gaming with the acquisition of two properties on the Mississippi Gulf Coast.
The company’s stock has risen from a low of
$8 to a high in the mid-20s.
Since news of the lawsuit was made public, the price of
PENN dropped to $17.06 but investors moved in and pushed the price up to $18.45
Monday.
Progressive purchase
Looking to enhance its position in the development of
progressive systems, WMS Gaming Inc., a subsidiary of WMS Industries Inc. (WMS),
has acquired Carson City, Nev.-based Big Foot Software Research and Development
Inc.
The strategic acquisition, initially announced in the
company’s recent year-end conference call, supplements WMS’ internal efforts
to launch its own wide-area progressive system. The company expects the first
wide-area progressive system to be submitted for regulatory approval in the fall
of 2002, making products available to its customers in the fall of 2003.
Big Foot Software was founded in 1997. No sale price was
announced.
“Big Foot’s principals have a proven record of
designing and developing unique proprietary client server systems, including
wide-area progressive systems currently operating in many casinos in major
gaming jurisdictions,” said Brian R. Gamache, president and CEO of WMS
Industries Inc.
“The experienced team of developers at Big Foot adds
further depth and bench strength to our product development team, positioning us
well for our future growth,” he added.
Italian lottery
Scientific Games (SGM) said
The announcement came on the heels of SGM and its Italian
partner, Lottomatica, winning the bid to provide Italy’s lotto system with
instant tickets. In the past, as many as two billion Gratta e Vinci tickets have
been sold annually and Scientific Games expects the market to return to those
levels with the installation of a new instant ticket system.
Lorne Weil, SGM chairman and CEO, said he views Italy as
representing a “very large potential market for lottery games and we are
confident that the market will grow rapidly once the customers realize the
benefits our system brings to them.”
Sonoma casino
Nevada Gold & Casinos Inc. (UWIN) has formed a limited
liability company to develop a casino in California’s wine country for the Dry
Creek Band of Pomo Indians.
The tribe already has negotiated a gaming compact with Gov.
Gray Davis and will build the Class III casino on trust land known as the Dry
Creek Rancheria. It will be located on a hill overlooking Alexander Valley
vineyards and the Russian River, near Geyserville, Cal., in Sonoma County.
UWIN is a 51% owner of the LLC. Its development and loan
agreement was ratified by the Tribal Council on Sunday.
When operational in May 2002, the casino will feature slots
and table games, as well as dining and entertainment facilities.
Other members of the limited liability company are Jenkins
Entertainment Group LLC, Wintun Lodge LLC, and Pathways Consulting LLC.
UWIN President H. Thomas Winn said this would be the first
of three gaming projects the company hopes to develop during the next five
years.
Oregon connection
VLC, a subsidiary of Anchor Gaming (SLOT), has received a
contract from the Oregon Lottery for slot machines and their support.
The agreement calls for VLC to deliver 2,000 video lottery
terminals to the Oregon Lottery between Oct. 15, 2001, and April 15, 2002.
Following the deliveries, VLC will establish support and service through March
2010.
“VLC’s management and employees are extremely pleased
to expand our relationship with Oregon Lottery,” said Mike Tessmer, VLC
general manager. “We look forward to the opportunity to serve the Oregon
Lottery in the years ahead.”
Connecticut revisited
In the late 1980s, following the passage by Congress of the
Indian Gaming Regulatory Act, a small Connecticut tribe challenged the state’s
contention that all-out gaming was prohibited in the Nutmeg State.
Lawyers for the Mashantucket Pequot Indians said that under
the law they had the right to conduct the same type of gaming permitted within
the state’s borders. And, since the state permitted gambling for charitable
purposes, the Indians had the right to conduct the same types of games.
Then-Gov. Lowell Schweiker was adamant so the matter was
taken to federal court. The Pequots won and shortly afterward Foxwoods Resort
Casino was born.
Now, a similar situation has erupted in Texas where former
Gov. George W. Bush and his successors have been attempting to shut down the
Speaking Rock Casino in El Paso. The casino, operated by the Tigua Indians,
opened in 1993 and now makes between $50 million and $60 million annually for
the tribe.
“We believe,” said an assistant to the state attorney
general, “the Speaking Rock Casino is without question a bona fide, big-time,
high-stakes gambling casino, illegal under Texas law.”
Not so, says the tribe. A Tigua attorney has presented to
the court a chart listing the types of gambling that have been going on within
the state, including a lottery online and scratch games, bingo, raffles,
carnivals, and horse and dog racing. He said some of the lottery games are
structured the same as the casino-style games offered by the Tiguas.
In 2000, the lawyer said, the state recorded gambling
revenues of nearly $1 billion.
“Gambling is big-time business in Texas,” he told the
court.
THE INSIDER: Alliance Gaming Corp. (ALLY) has been
selected by Harrah’s Entertainment Inc. (HET) to install its slot management
system from Bally Gaming and Systems at three casinos that Harrah’s recently
acquired from Harveys Casino Resorts.
Atronic Americas LLC has received approval from Mississippi
regulators for its Crazy Fruits slot machines.
Approved in Nevada is the new Evolution Series (EVO)
operating platform developed by Bally Gaming and Systems, a subsidiary of
Alliance Gaming Corp.
