Isle goes Idle: Capri opts to concentrate on debts

March 05, 2002 1:34 AM
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Midwest

In sports terms, Isle of Capri is in a rebuilding mode for next season.

The mid-size gaming company plans to use its finances to pay down debts this year, instead of focusing on new acquisition, according to Capri president and CEO John Callaway.

The Mississippi firm, based in Biloxi, owns and operates ­­riverboat, dockside and land-based casinos at 14 locations across the United States. Isle also runs Pompano Beach Harness Racing Track in Florida.

“Over the next year, we’re not planning to spend any cash,” Gallaway said in a Reuters story Friday. “We want to pay down debt so we have nothing on the books, although as our stock price goes up we could use that as currency.”

For the past several years Isle has grown through its acquisitions. The firm purchased Lady Luck Gaming’s four casinos in Mississippi and Iowa and upgraded the Lady Luck Casino in Las Vegas, The Flamingo Hilton Riverboat Casino in Kansas City and the Rhythm City in Davenport, Iowa.

Galloway suggested that there may be another wave of consolidations in the offing.

“Consolidation is the way of things,” he said. “I wouldn’t be surprised to see another wave. Everything has its price.

Shares of Isle of Capri closed at $16.64, near its 52-week high of $17.90 That price is well up from a year low of $6.40. Third-quarter earnings last month were $0.27 per share.

Fort Wayne interest

Last week’s passage of a bill that would expand gambling in Indiana has sparked interest about placing pull-tab machines in Fort Wayne.

The House voted 55-43 to approve a bill that would allow dockside gambling on the state’s riverboat casinos. The legislation would also allow slot-type machines at two Indiana horsetracks and two off-track betting parlors in Indianapolis.

A machine is estimated to net about $240 a day in profits, which means schools and governmental units in counties with pull tabs would reap millions in wagering and admission taxes.

Area lawmakers mostly voted along party lines for the legislation, with Republicans against gaming and Democrats supporting the plan.

South
Sunshine snag

The latest attempt to legalize gaming in Florida took a giant step backward when State Attorney General Bob Butterworth said he will support ­­Osceola County in any effort to keep out casino gambling.

Butterworth also cautioned county leaders to trust the Seminole Tribe of Florida when it insists against establishing gaming on the 1,100-acre land purchased last year near Florida’s Turnpike.

Kissimmee is the main city in Osceola County, located a few miles from Disney World. The city also is the spring training home for the Houston Astros.

Florida voters have rejected ballot measures on three occasions that would  have legalized casinos, the last time in 1994.

There was some positive news on the gaming front with the passing of a proposal to expand the state’s gambling laws to allow slot-machine style video lottery machines in Florida’s 31 racetracks, dog tracks and jai alai frontons.

The legislation moves from a House committee to the State House floor in Tallahassee.

Kentucky gains

State Representative Jim Callahan introduced legislation last week that would allow Kentucky’s eight existing racetracks to operate electronic gaming devices or slot machines.

Kentucky is losing a billion dollars per year to border states like Indiana that have riverboat casinos, according to supporters of the bill.

West
Zona backs compact

After three years of negotiations, the Arizona Indian Gaming Association reached an agreement last week with the Office of the Governor on the terms and conditions of gaming compacts on Indian lands.

AIGA includes 17 tribal governments, which represent over 90 percent of Indian members in the state. The current compacts begin to expire in 2003.

The new agreements guarantee that gaming on Indian lands will continue. A portion of gaming revenues would assist in providing funds for education, healthcare and tourism.

East
Miss America wins

The power of the Miss America pageant in Atlantic City won out, with the second consecutive resignation of the beauty contest’s CEO.

Robert M. Renneisen, a former casino executive, ended a stormy reign in which he threatened to move the famed pageant out of the New Jersey resort. Renneisen took over the position two years ago at a salary of $250,000 per year.

George Bauer, Renneisen’s No. 2 man, will serve as interim CEO, the pageant told the Associated Press.

Renneisen’s predecessor, Robert L. Beck, was fired in October 2000 after proposing to eliminate the pageant’s long-standing ban on contestants who had been married or had abortions.