Magna on track after 3Q hurdle

November 06, 2001 4:57 AM
by

share

Coming off a rocky third quarter, Magna Entertainment expects a strong kick to finish this year. The Canadian-based horse track operator reported a loss of $6.2 million, compared with a loss of $5.1 million in the third quarter of 2000.

“The third quarter is typically our weakest quarter because our four largest racetracks, collectively, have the fewest live race days during this quarter,’’ President and CEO Jim McAlpine said, noting that three of the company’s biggest tracks ”” Santa Anita, Gulfstream and Golden Gate Fields ”” had no action during the three months.

He added that the comparative results did not reflect operations of Bay Meadows, MEC Pennsylvania or Portland Meadows, which were acquired since last November. And Terror Tuesday took its toll by temporarily closing other Magna tracks and OTBs.

Nonetheless, revenue for the first nine months and third quarter of 2001 increased 24.9 percent to $423.6 million and 31.1 percent to $65.8 million, respectively. Net income increased 92 percent to $18.5 million for the first nine months.

“We expect to see further improvements in our operating and financial performance,’’ McAlpine stated. “We plan to expand our account wagering operations utilizing our ”˜Call-A-Bet’ telephone system and the Internet following the recent favorable legislative amendments in California.’’

Gaming analysts say Magna appears to be on the right track. David Anders of Merrill Lynch believes that a number of states, including Pennsylvania, Maryland and Ohio, are likely to consider placing slot machines in racetracks to generate more tax revenues.

“Because they are installed in establishments that already offer an accepted form of gaming, devices at the racetracks have come to be viewed as more acceptable than riverboat or land-based gaming,’’ Anders stated.