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IGT, Anchor Gaming await merger approval from FTC

Nov 27, 2001 6:26 AM

Will the Federal Trade Commission (FTC) approve the merger of International Game Technology (IGT) and Anchor Gaming (SLOT)? The answer may be known within the next couple of days.

“Their decision could be made known at any time,” said Robert McIver, investor relations director for IGT. “There’s no advance word”¦they just announce their decision,” he said.

It all began about four months ago when IGT said it would merge with Anchor Gaming in a $1.3 billion deal. At the time of the announcement, IGT said it would swap one share of its firm for one share of SLOT. Monday, IGT shares closed at $61.62 a share while Anchor Gaming was at $61.04 a share.

A spokesman for Anchor Gaming said that although the company had not heard anything from Washington, D.C., “we are confident we’ll receive approval.”

In anticipation of favorable action, both companies have scheduled shareholders meetings for Dec. 18 at which time they will be asked to approve the merger.

The FTC normally takes about 30 days to act on proposals of this kind but without indicating a reason the federal reviewers said they wanted to extend the review process while requesting further information from both companies.

While awaiting a decision, both companies said they have received SEC approval to issue new shares if federal clearance is granted.

Poker at Greektown

Looking to establish an edge in Detroit, where three casinos are competing heavily for patronage, Greektown Casino has opened a poker room.

The property is devoting 1,296 square feet on the first floor of its casino to the poker room, the only one available to Detroit players. Both MotorCity and MGM Grand Detroit have put off poker rooms for either lack of space or emphasis on other promotions.

At Greektown, a chalkboard at the entrance to the poker room lists the games that are available that day, explained Craig Ghelfi, vice president of table games. He said the property also offers beepers for the players who are waiting for a table seat in order to get into the action.

Slot machine glitch

Gaming analysts of Deutsche Banc Alex Brown blew the whistle on a slot machine glitch last week and lowered their rating on the machine manufacturer, WMS Industries Inc. (WMS).

The analysts said the machines problems were not systemic and “can be remedied easily” but they reduced their rating from a “buy” to “market perform” and lowered their estimate of 2002 earnings from $1.35 to $1.18.

WMS officials said the problem did not affect any players. It had to do with recently modified machines that displayed unearned credits following the modifications. But, since technicians were on hand to make the modifications, they also were able to deal with the credits. All jurisdictions were advised that supplemental software modification for these machines would be forthcoming upon receipt of gaming regulators approvals.

International slowdown

The Sept. 11 terrorist attacks took place in the U.S. but the impact was felt around the world, according to recent information published by England’s Hilton Group, formerly known as Ladbroke.

The company, operators of hotels throughout the world, said its hotel revenues slumped after the attacks, with RevPar, revenue per available room, falling 10.7% in September and October.

And, not only the hotel revenues were affected. The company said its gaming business dropped precipitously, as well.

Hardest hit was the company’s London five-star hotels, the Hilton Park Lane and the Langham, where revenues were down 32.7%. Recovery is not expected to take place for at least six months.

Loss-limit battle

The fight has been going on for several years but the heat of battle has intensified during the past week as advocates of eliminating Missouri’s $500 loss limit regulation made a major assault on the state’s General Assembly.

At a public hearing on the measure in North Kansas City, only one person spoke against the proposal. That was Mark Andres of the St. Louis-based anti-gambling lobby, Casino Watch. He warned of the “social costs” of eliminating the loss limit regulation, citing recent studies regarding compulsive gambling.

But, many others charged that the loss limit had little or no effect on those considered compulsive gamblers. However, the regulation did deprive the state of from $40 million to $100 million in taxes.

Following the hearing, the chairman of the legislative gambling oversight committee said he believed his group would endorse repealing the gambling provision that was imposed when the General Assembly approved riverboats in 1992.

Bankrupt casino auctioned

Capital One, owned by Las Vegas developer Shawn Scott, will pay $17.8 million for the Vacation Village Hotel/Casino on the south end of Las Vegas Boulevard.

Scott, embroiled in a controversy over the addition of slot machines at Delta Downs which he sold to Boyd Gaming Corp. (BYD) for between $115 million and $125 million, indicated he had no immediate plans for Vacation Village, although he indicated he would like to keep it open for the time being.

This is the second purchase of a Nevada casino for Scott’s company. He previously agreed to acquire the Flamingo Reno Hotel/Casino from Park Place Entertainment Corp. (PPE). No sales price was given.

Scott bought Delta Downs in 1999 for $10 million and was successful in getting the community to approve the installation of slots at the track. However, he never went before the state’s gaming regulators for licensing prior to selling the property to Boyd Gaming. This, said a recent court decision, was enough to cause the court to enjoin Boyd from opening its slots operation.

The Insider

Primarily due to the success of its newest property, Suncoast Hotel/Casino, Coast Resorts Inc. showed net operating revenues for the quarter ending Sept. 30 of $128.2 million and net income of $8.73 million, a jump of 178% from last year. The company also noted that it had acquired 50 acres of real estate on the south end of Las Vegas Boulevard that could be used for future gaming development.

Delaware North, the privately-held Buffalo, N.Y., company controlled by the Jacobs family, has agreed to pay $105 million to buy out its partner, WHX Corp., in the Wheeling Downs Race Track & Gaming Center in West Virginia.

Alliance Gaming Corp. (ALLY) will hold its annual shareholders meeting on Dec. 11 at 10 a.m. at the Four Seasons Hotel in Las Vegas.

Nebraska Gov. Mike Johanns said he strongly opposes any plan to expand gambling in the Cornhusker State.

Innovative Gaming Corp. of America (IGCA) reported a loss of $10.2 million or $0.57 a share for the quarter ended on Sept. 30. The company said it had earned $148,000 or $0.02 a share in the comparable period of 2000.

Even some of the Indian casinos have been feeling the effects of a slowdown in tourism. Desert Diamond Casino in Tucson announced a layoff of 16 employees from its staff of 703.