Court rules NYSE can sue New York-New York hotel

April 02, 2002 7:24 AM
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When so-called “day traders” eye their computers in hopes of seeing a slight up-tick or down-tick on a stock they are trading, are they gambling? Are they much different from a slot machine player hoping to see those favorable symbols stop on the pay line?

When does “investing” in the market become gambling on Wall Street?

Were the Enron employees who lost their retirement money “gambling” by having all their funds “invested” in their company stock?

Answers to some of these questions may be forthcoming now that the 2nd Circuit Court of Appeals has reinstituted a claim by the N.Y. Stock Exchange that MGM MIRAGE’S New York ”” New York Hotel/Casino in Las Vegas has tarnished its image.

The Dow Jones newswires reported on Monday that the suit, filed in 1997 and rejected by a lower court in 1999, was re-instated by a three-judge appellate panel who wrote in an 18-page opinion that the “NYSE could sustain a theory of tarnishment” against the casino.

NYSE had charged that the casino’s use of the term “New York $lot Exchange” in the midst of a themed casino that depicted a number of Big Apple icons disparaged the Wall Street stock trading location and improperly equated gambling with investing.

In the appellate opinion, the judges wrote, “A reasonable trier of fact might therefore find that the casino’s humorous analogy to its activities ”” deemed by many to involve odds stacked heavily in favor of the house ”” would injure NYSE’s reputation.”

Brits expand gaming

There were few surprises last week when British officials accepted most of the recommendations of the Budd Report recommending the easing of restrictions on gaming. Made public several months ago, the Budd Report suggested, in effect, that the U.K. open the door to Las Vegas-style casinos.

The move, especially with the introduction of slot machines, was expected to be a bonanza for manufacturers such as International Game Technology (IGT). But, as Robin Farley of UBS Warburg noted in a recent gaming report, such benefits to manufacturers might be as much as two years away since the proposed changes in gaming regulation won’t be considered by the British Parliament this year.

Under the gaming “revitalization program,” a gambling commission will be set up with tough powers to oversee the whole industry. Casino licenses will be more readily available and the operators will be able to offer live entertainment and serve alcohol on the casino floors.

Also being added will be the availability of online gaming with licensing to be introduced for the first time.

Gaming Summit

Another in a growing series of “gaming summits” is being scheduled to address problems to be encountered with the introduction of casinos in New York State. The conference, the first of its kind in the area, will be held April 8-9 in Albany, N.Y.

Subjects to be addressed are: “Regulatory: The Rules of the Game; “Economic and Social Impact: Gaming and Local Communities” “The Future of Indian Gaming in the Empire State” “The New York Gaming Market: A Regional Perspective,” and “How VLTs will Transform New York’s Racing Industry.”

Listed among the speakers and seminar moderators are: Jan Jones, senior vice president, government affairs and communications for Harrah’s Entertainment Inc; Atty. G. Michael Brown, of Brown, Previtt & Carroll; Jacques Cornet, CIBC World Markets; Michael Hoblock, chairman of the N.Y. State Racing & Wagering Board; John Kempf, Goldman Sachs; Sebastian Sinclair, Christiansen Capital Advisors; Andrew Zarnett, managing director, Deutsche Banc Alex.Brown, Inc., Ron Sultemeier, president, Sportsystems Corp., and Bill Nader, senior vice president, N.Y. Racing Association.

The conference is being sponsored by Gem Commmunciations.

Stock split

Dover Downs Entertainment Inc. (DVD) completed its tax-free spin-off of its gaming company over the weekend so that on Monday, shareholders had two shares to watch on the New York Stock Exchange.

Dover Motorsports Inc., which retained the DVD trading symbol was listed at $7.80 a share, up $0.68 from its Monday opening. Trading separately was Dover Downs Gaming & Entertainment Inc. (DDE) which was listed at $12.80, down $0.22 from its opening split price.

Prior to separating the two activities within the Delaware company, the stock had a 52-week high of $17.23 and a 52-week low of $10.90.

Record set

A record number of automobiles crossed the California border into Nevada during the month of February, according to counters placed at the state line by the Nevada Department of Transportation.

Over 35,000 vehicles per day were recorded during the period, officials said, marking a 5% increase over January and a 17.9% jump over February of 2001. This was the largest month-to-month increase in the last 10 years and the third highest since The Highway Stations started keeping records in 1985.

Also during the period, total arriving and departing passenger count at McCarran International Airport increased 2% over January but was down 8.5% versus the numbers recorded last ­­February.

The Insider

Last year, after the Nevada legislature approved the study and possibly implementation of online gaming, The Venetian’s Sheldon Adelson went on record as strongly supporting online gaming for his company. In a recent SEC filing, the company indicated it was pursuing the possibility of running an Internet gaming site.

Shuffle Master Inc. (SHFL) is suing VendingData Corp. and two subsidiaries alleging violation of gaming patents.

A legislative effort is underway in Rhode Island to siphon off some of the video-lottery revenues designated as supplements to greyhound race purses. Track officials have warned that cutting purses would adversely affect revenues for both the track and the state.

Plans by the Pokagon Band of Potawatomi Indians for a casino in southwestern Michigan were back on track this week as a federal judge threw out a lawsuit aimed at blocking the project.

GTECH Holdings (GTK) has awarded a $2 million contract to TransAct for a custom impact printer.

Penn National Gaming Inc. (PENN) has agreed to pay $1 million to the Showboat Development Company, a subsidiary of Harrah’s Entertainment Inc. (HET) to end litigation involving the slots activities at Charles Town Racetrack.

The N.J. Casino Control Commission has ordered Atlantic City casino operators to terminate their relationships with embattled auditor Arthur Andersen Co.

Stanley Ho, the Macau casino tycoon, has signed a new gambling contract with the former Portuguese colony on China’s southern coast. Still awaited are contracts between Macau officials and the other two license designees, Steve Wynn, and Galaxy Casino Co., a partnership involving Sheldon Adelson.

Moody’s Investors Service has assigned a B1 rating to $200 million senior notes offered by Boyd Gaming Corporation (BYD).