Executives and corporate executives of
Pinnacle Entertainment Inc. (PNK) breathed a collective sigh of relief Saturday
when the voters of Calcasieu Parish approved the company’s plans for a $225
million gambling complex on Lake Charles, La.
The project was proposed by Pinnacle
Entertainment after the company was chosen by Louisiana gaming regulators to
receive the 15th and final riverboat gaming license. The award was subject to
receiving approval from the parish, or county, voters. The final tally showed
57% or 20,413 in favor against 43% or 15,321 opposed.
The area in southwestern Louisiana
already is a hotbed of gaming enterprises with riverboats, a “racino” and an
Indian casino. To overcome the competition, Pinnacle Entertainment plans to
include a hotel and a championship golf course as amenities to its riverboat
Success for Pinnacle Entertainment
didn’t carry over to Webster Parish where voters opposed expanded gambling for
Louisiana Downs at Bossier City. The track hoped to construct an off-track
wagering facility in the town of Minden. The project had the support of some
community leaders who felt the Minden entertainment complex including a
restaurant, sports bar and big screens telecasting of horse races from across
the country would have meant both jobs and tax revenue.
Pinnacle Entertainment, formed by
Chairman R.D. Hubbard as a successor to the racetrack dominated Hollywood Park
Inc. (HPK), struggled through 2001, especially getting its Indiana riverboat in
Belterra moving forward in a competitive
area. The company also owns and operates casinos in Nevada, Mississippi and
Louisiana. Also, the company has two card clubs in California.
Praise for Aztar
Paul Rubeli, chairman and CEO of Aztar
Corporation (AZT) has to be smiling these days as nothing but praise is heard
from the residents of Evansville, Ind., where his company operates Casino Aztar
Despite major concerns seven years ago,
the city leased Riverfront Park to the gaming company for its riverboat
development. Even before the gaming facility got underway, Aztar was providing
funds to the community as a good will gesture.
Since the boat was launched on Dec. 7,
1995, Aztar has provided millions of dollars in revenues. During the next five
years, it is anticipated that the company will provide the city with an
estimated $20 million in lease payments.
But, that hasn’t been all. Aztar has
been a good corporate neighbor by contributing to such projects as the
renovation of Victory Theatre; the conversion of the Vanderburgh into the
Evansville Centre; the construction of Pigeon Creek Greenway, and the United
“I don’t know what we would do if
we didn’t have the casino here,” said one official. “We definitely would
not see the growth we have.”
Las Vegas investor Shawn Scott and the
board of Mid-State Raceway (also known as Vernon Downs) still don’t know
whether the track will be licensed for its harness racing meeting beginning on
Members of the N.Y. State Racing and
Wagering Board were still studying over the weekend the request by the track to
begin its 2002 season next month. Under scrutiny, officials said, was the $8.5
million two-year loan that has been made by Scott, a successful buyer/seller of
casinos and racetracks.
State officials have said they wanted
to be sure that if the racing dates are granted the track will be
financially-stable to meet its obligations. Reportedly, a copy of the Scott lawn
agreement was not filed in time for the state regulators to act on the date
request last week.
“The board is still reviewing the
issue,” said a board spokesperson who noted that no date was set for a meeting
at which action could be taken.
Stan Fulton’s Sunland Park Racetrack
and Casino in New Mexico has been booming since a Texas judge closed down an
Indian casino in nearby El Paso, Texas.
“Since the Tiguas closed down,”
remarked a Sunland customer, “sometimes it gets hard to grab a machine on the
The track has been operating its full
complement of 600 machines since the law became effective last year. Now, it is
negotiating with Ruidoso Downs to add 150 more slots to its casino floor. The
New Mexico law permits racetrack operators to lease machines from other tracks
that can’t use their full allotment. Ruidoso Downs has a seasonal business and
doesn’t need all the machines provided by law.
Fulton is the founder and former
chairman of Anchor Gaming. When he sold his interests in the slot machine
manufacturer, he retained the right to acquire Sunland Park which was an
under-performing asset in the Anchor Gaming portfolio.
Arthur Andersen’s woes continued to
mount over the weekend when state officials in Louisiana banned state and local
agencies from using the auditor firm’s services because of the Enron scandal
and subsequent indictment.
Following receipt of the state
directive, Hillary Crain, chairman of the Louisiana Gaming Control Board advised
all gaming companies doing business in the state that the Andersen would no
longer be acceptable.
This followed the steps taken a few
days earlier by the N.J. Casino Control Commission that banned casinos in that
state from doing business with the Andersen firm.
And, on Friday, the Mohegan Tribal
Council ruled that it would terminate its relationship and that of the Mohegan
tribal Gaming Authority with Andersen. A Council spokesman said the board felt
it had no other choice.
Actions by other gaming states were
being reviewed by regulators in Nevada where Andersen is a prominent player in
dealing with the major casino companies.
Detroit investors made pikers out of
Sun International Hotels (SIH) in their efforts to get legislative approval for
the establishment of two casinos on the Hawaiian Island of Oahu.
According to records maintained by the
state Ethics Commission, Marketing Resource Group of Lansing, Mich., an
organization that was funded by investors in the MotorCity Casino in Detroit,
poured $108,679 in their failed effort to get lawmakers to support the
legalization of gambling during the current session.
Among the investors listed as part of
Marketing Resource Group was Marian Illitch, whose family owns the Detroit
Tigers baseball team and the Little Ceasars pizza chain.
The commission said that the Coalition
for economic Diversity, the group backed by Sun International Hotels spent
$9,832 in its lobby efforts.
Shares of Magna Entertainment
Corp.(MIEC) rallied Monday in trading that followed the company’s announcement
that it would sell 20 million shares of its Class A Subordinate Voting Stock.
Lead underwriter, Bear Stearns, priced
the offering at $6.65, substantially below the company’s recent high price of
$9.10 achieved on March 25.
With 1,875,000 changing hands Monday,
the stock price closed at $7.80, an increase of $0.38 for the day.
The company said in its offering that
it would make available as an over-allotment option up to three million shares
to its underwriters.
Looking to strengthen its intellectual
property portfolio, Acres Gaming Incorporated (AGAM) announced it had received
another patent covering its proprietary bonusing and player loyalty technology.
The new patent brings to five the
number of patents the U.S. government has issued since July 1, 2001.
The most recent patent involved the
dynamic threshold for pool-based bonus promotions in electronic gaming systems.
The others covered the following areas: method and apparatus for promoting play
on a network gaming device; method and apparatus for controlling cost of playing
electronic gaming device; two patents for computer network for controlling and
monitoring gaming devices, and networked credit adjust meter for electronic
During the past week, the company was the
subject of an article in Business Week in which writer Gene Marcial notes
that Acres Gaming holds 10% of the bonus market and has an order backlog of $20
million and cash on hand of $12.6 million or $1.15 a share.
Horse purses eyed
While arguments go on relative to how
the state of Illinois should handle the riverboat license that appeared headed
to the suburb of Chicago called Rosemont, some legislators are arguing over the
amount of money that would be applied toward race purses at nearby Arlington
Actually, the law that was passed in
1999, with the political assistance of Richard Duchossois, then owner of
Arlington International, provided that 15% of the state’s tax revenue from the
riverboat casino. Current projections have the casino taking in $450 million,
thus generating about $65.5 million for purses.
That number has one lawmaker livid. He
has proposed that purse reimbursement be limited to $25 million.
Lobbyists for the track call the effort
“pledge reneging” on the part of lawmakers. No one was prepared to predict
how the law amendment would fare once it is brought to the entire House.
Shares in International Game Technology
(IGT) and other gaming machine manufacturers fell last week following a warning
from a Merrill Lynch analyst.
David Anders cautioned that rejections
of slot machine efforts in both Kansas and Kentucky where early indications
favored such legislation boded poorly for gaming device manufacturers. Also, he
said, similar efforts had failed in other states as well.
IGT’s share price fell on the warning
and has been struggling ever since. On Monday, IGT shares closed at $59.35, an
increase of $0.12 for the day with only 633,000 shares changing hands.
MGM MIRAGE Inc. (MGG) will hold a first
quarter conference call via the Internet on Wednesday, April 17, at 8 a.m.
After reporting strong results for the
fourth quarter of fiscal 2002 (earnings per share of $0.93 versus last year’s
$0.79), GTECH Holdings Corporation (GTK) saw its share price surge $2.50 on
Monday to a closing price of $56.
Macao’s casino licenses were highly
sought after in a recent bidding round even though the Chinese holding will tax
gaming revenues at 35%.
Ainsworth Gaming Technology Ltd of
Australia has received approval to supply its gaming devices to the Sydney Star
Coinless Systems Inc. (CLSY) has signed
a licensing agreement with Atronic Americas LLC.
The Connecticut Supreme Court has
upheld the sovereign nation status of recognized American Indians and has ruled
that casino patrons must bring their grievances to the tribal courts.
Silver Legacy Capital Corp. has issued
$160 million in notes at 10.125%.
The Ontario Lottery and Gaming Corp.
has put the Fort Erie, Ont., slots operation on round-the-clock status for
weekends only beginning last weekend. Operational hours for Mondays through
Thursdays will be 9 a.m. to 3 a.m.