When Caesars World launched its Indiana riverboat, across
the river from Churchill Downs, the track operators were worried about the
competition. It took a while for the casino to reach its potential but numbers
continue to grow.
Now parented by Park Place Entertainment Corp. (PPE), the
Caesars riverboat has benefited greatly from the opening in August of its new
hotel, even exceeding analysts’ expectations.
It was expected that the attendance and revenues at Caesars
riverboat would increase but the jump appears greater than what was forecast. In
November, the boat had revenues of $20.3 million, an increase of 36% over the
November, 2000, take of $14.9 million. As for the number of people enjoying the
festivities, admissions were up by nearly 40%.
And particularly frightening for Churchill Downs’ Twin
Spires racing operation, Caesars November performance was the first time any
Ohio River casino other than the Argosy at Lawrenceburg exceeded $20 million in
one month’s revenue.
But, the numbers might actually help if they frighten the
Kentucky politicians enough to push them toward expansion of their gaming
program. The tracks have been hammering for slot machines while others have been
suggesting that the state needs its own riverboats.
Legislation is expected to be heard early in the new year.
Gaming in the Midwest states has been flourishing through
the late months of the 2001 calendar year, thus suggesting to some that the
activity is recession proof.
Revenues from gaming activities in Illinois, Indiana and
Missouri seem to bear out that fact.
Commenting on the record year being experienced by the
Empress Casino in Joliet, Ill., Doug Ferrari, general manager, was recently
quoted as saying, “Gaming’s been pretty recession-proof...Maybe it’s just
the escapist angle. That’s what we hear most.”
That prompted a comment from Frank Fahrenkopf Jr., CEO of
the American Gaming Association who said, “An old gambler in Las Vegas told me
years ago that during the Depression, no matter who bad things were, people
always saved enough to go to the movies. Movies are an escape. He was making the
analogy that even in difficult times, people save their money for
Probably the biggest change in slot play during the past
three years has been the growth of action on the nickel slot machines.
In his most recent report on Nevada gaming, Frank Streshley
of the Nevada Gaming Control Board noted that the revenue from the five-cent
machines jumped 18.4% to $1.7 billion for the period ending Oct. 31.
Because of the popularity of these nickel machines, casinos
have been cutting back on higher denomination devices in order to make more room
for five-centers. Making it even more desirable has been the hold on nickel
machines which has been running at 7.2%, as much as three points higher than $1
Although called nickel machines, the actual amount played
can easily exceed $2.00 since the designers have made multiple plays more
Information provided to Casino Data Systems by
International Game Technology (IGT) in a patent agreement five years ago has
become the subject of a patent lawsuit.
Casino Data Systems has since been acquired by Aristocrat
Leisure Ltd., the Australian company that has been enlarging its North American
activities, particularly in Nevada.
In its lawsuit, IGT alleged that Casino Data did not have a
license for the IGT information and did not have the right to transfer the
information to Aristocrat.
Aristocrat responded by saying it felt IGT’s action “is
groundless and without merit.” The company added that “Aristocrat always has
in the past and will continue in the future, to honor all legitimate patent
claims. This action does not fall in that category.”
In a Friday announcement, Great Bay Casino Corp. said it
had filed for bankruptcy and expected to use the proceeds from the sale of its
gaming technology business to offset a $63.5 million liability owned to
Hollywood Casino Corp. (HWD).
Based in Dallas, Texas, Great Bay said it expected to close
the sale of its primary asset, Advanced Casino System Corp. to Alliance Gaming
Corp. of Las Vegas (ALLY) for $14.6 million during the first quarter of the new
In return for the sale proceeds, Hollywood Casino Corp. has
agreed to cancel its debt, the company said. Also, because the money owed to
Hollywood “far exceeds the value of its assets,” shareholders’ equity
interest in the company will be canceled.
A waste of money?
Attempts to get the electorate to change the California
constitution in favor of expanded gaming is “a waste of money,” in the
opinion of noted gaming law authority, Nelson Rose.
“There is no way that this is going to get close to
enough votes to change the Constitution,” said Rose, a law professor at
He was referring to a political action group called The De
Ville Group, which is seeking to solicit enough signatures to put the measure on
next November’s ballot. It will require 670,000 signatures to put the Gambling
Control Act on the ballot as a constitutional amendment.
The effort is in support of putting slot machines in
racetracks and card rooms, as well as permitting such games as craps and
roulette to be played in Indian casinos.
Opponents have suggested that such an effort would cost at
least $10 million, with one observer suggesting that “If Las Vegas opposes it,
I would say $50 million.”
Before it merged with International Game Technology (IGT)
on Sunday, Anchor Gaming (SLOT) agreed to sell its 68% interest in a management
contract for a Southern California casino.
That will leave Jerry Turk, former owner of the Fitzgerald
casino in Downtown Las Vegas, in complete charge of the management of the Pala
Actually, it’s the Tribe of Pala Band of Mission Indians,
owner of the casino, that asked Anchor to give up its position for $77 million.
The tribal council felt a potential conflict of interest to have IGT as majority
owner of the management contract while doing business in selling machines to the
Under the agreement, the Indians will pay $14 million cash
and sign a $63 million promissory note for the remainder.
Officials of the Louisiana Department of Revenue have filed
suit against Harrah’s Entertainment Inc. (HET) for taxes and interest owned by
Players Lake Charles, Inc., a company that was bought by Harrah’s in 1999. The
$4.7 million due was for the period July, 1995 to December, 1996.
GTECH Holdings Inc. (GTK) has received a five-year contract
to provide a new central computer system for the Rhode Island Lottery’s video
Acres Gaming Inc (AGAM) says it has sold $5 million in
convertible bonds in a private placement.
After increasing its earnings expectations for both 2002
and 2003, Salomon Smith Barney has raised its share price target on IGT to $80
Slow growth has been noted in purses paid by racetracks in
the U.S. and analyst, Gene Christiansen says that the only reason there has been
any real growth in purses paid has been because of slot machines at racetracks
in Delaware, West Virginia, Iowa and New Mexico.
Station Casinos Inc. (STN) has sued to have two offshore
online gaming companies end the practice of using domain names kenomania.com and
sunsetcasino.net, both claimed as company trademarks.
GameTech International Inc. (GMTC) reported flat revenues
for the fourth quarter as well as a net loss of $0.37 a share compared to a net
loss of $0.13 in the comparable quarter of a year ago.
Moody’s Investors Service has downgraded the debt rating
of Hilton Hotels Corporation (HLT) from Baa3 to Ba1 reflecting the significant
negative impact on the lodging industry following the events of Sept. 11. A
recent study by a research firm indicated that hotel room revenues declined by
16.3% during the month of November. This continued a sharp decline that began
following the terrorists attacks.