MGM Mirage knocking on door in Macau, Illinois

January 22, 2002 6:00 AM
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For MGM MIRAGE Inc. (MGG), it’s almost a case of which will come first, a license in Illinois or a license in Macau. Not a bad situation to be in if you’re one of the premier gaming companies in the world.

Reportedly, MGM MIRAGE is one of the favorites to win one of three licenses to be granted by the Chinese community.

And, late last week, it was reported that MGM MIRAGE is part of a deal to acquire an Illinois riverboat gaming license from Emerald Casino Inc. The latter’s license may or may not be valid but the deal puts the Las Vegas-based casino company in the driver’s seat.

According to sources, Philip Parenti, who became the Illinois Gaming Board’s chief administrator last fall, has brokered a deal by which MGM MIRAGE will buy out the controversial backers of Emerald Casino and settle a dispute that has prevented Emerald from establishing a casino in the Chicago suburb of Rosemont.

In just about everybody’s mind, the Rosemont site is the “best location in the country,” as one gaming analyst recently stated.

The Rosemont license has been in a legal limbo since a Gaming Board administrator charged that organized crime was involved in the Rosemont project and that the two top Emerald executives had made false and misleading statements to the board in the course of regulators’ investigations.

Lawsuits were subsequently filed while officials of MGM MIRAGE moved in and made a deal to take over the license. That effort was immediately halted by Illinois’ gaming regulators and everything remained on hold while Parenti took the reins of the board last August.

Parenti said he brokered the deal whereby MGM MIRAGE will put up some $615 million to buy out Emerald’s owners. Of that amount, the state will take $160 million to settle the dispute between the board and Emerald’s owners. Minority owners of the Emerald reportedly will get $48 million for their stake in the license.

In Macau, the committee studying the applications submitted by nine finalists said it would announce the winning bidders before Chinese New Year on Feb. 12.

Observers have indicated that oddsmakers have predicted that legendary gaming operator Stanley Ho, whose 20-year gaming monopoly ends on March 31, will receive one of the three licenses and that MGM MIRAGE will receive another. Still a question, they said, was the recipient of the third license.

Hill blocks U.S.

Because of the pressure being applied in growing numbers of areas, William Hill, the British bookmaker and one of the world’s biggest gaming companies, has announced that it will stop accepting online wagers from U.S. citizens as of Jan. 31.

In letters written to their American clients, William Hillsays the company’s decision was based on “the continuing uncertainty of the legality of sports wagering over the Internet by U.S. residents.”

The change in Hill’s policies does not affect U.S. citizens in other countries. NYRA’s plans

Even though current law offers “economics that clearly don’t work,” the New York Racing Association is going forward with a plan to install 2,500 video lottery terminals at Aqueduct Racetrack.

Barry Schwartz, NYRA chairman, said Aqueduct will have both its second and third floors renovated to accommodate the machines. He expects the machines will take up about 200,000 square feet.

As for the costs, he said the law permitting the sites to keep up to 25% of the VLT revenues is insufficient. He said state lawmakers will have to get involved in defraying some of the costs of installation and will have to consider a portion to increase race purses.

Stock repurchase

WMS Industries Inc. (WMS) said last week that its board of directors has authorized a 12-month stock repurchase program that will involve $20 million.

The announcement was made shortly after the company announced that it “would badly miss” earnings estimates for the quarter ending on Dec. 31.

The company said it expects to report earnings of between $0.10 and $0.12 per share for the quarter, far below analysts expectations of $0.25 a share.

Problems have plagued the company over certain software glitches in some of their machines.

The Insider

Boyd Gaming Corp. (BYD) says it will install 1,498 gaming devices at Delta Downs racetrack in Vinton, La. Approval of the installation was granted by the Louisiana regulators last week. Boyd said it expects to have the machines operating sometime next month.

Riviera Holdings Corp. (RIV), operators of the Riviera Hotel/Casino on the north end of the Las Vegas Strip has filed a proposal to build a casino and entertainment complex in Jefferson County, Missouri.

Scientific Games Corporation (SGM), formerly Autotote, has received a five-year extension to its contract with Woodbine Entertainment in Toronto, Canada, for totalizator services.

U.S. Playing Card Co. has contracted with LaserLock Technologies Inc. to develop a tamper-proof deck of playing cards.

Detroit entrepreneur Don Barden, who operates a gaming riverboat in Gary, Ind., and recently acquired Fitzgerald’s Casino in Downtown Las Vegas, has appealed to officials in Detroit and in the State of Michigan to permit the three casinos operating in Downtown Detroit.

A decision to take a piece of northern California real estate in trust for an Indian tribe is being reviewed by the U.S. Interior Department’s Bureau of Indian Affairs. The property is expected to be developed into a casino by Station Casinos Inc. (STN).

The seventh annual Western Indian Gaming Conference will be held Tuesday, Jan. 29 at the San Diego Convention Center. Among the exhibitors will be Sodak Gaming Inc., a subsidiary of International Game Technology (IGT), and Bally Gaming and Systems, a subsidiary of Alliance Gaming Inc. (ALLY).

Shareholders in Colonial Downs racetrack in Virginia have agreed to the privatization of the company by Chairman and CEO Jeffrey P. Jacobs and his GameCo. Inc.

Supporters of slot machines at Kansas racetracks say they expect to have a bill drafted before the end of the month. The measure will have the support of Gov. Bill Graves.

Nevada gambling pioneer Jack Douglass, founder of the Cal-Neva Hotel/Casino in Reno, Nev., died last Wednesday