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Revenues drop for slimmed-down Horseshoe Gaming

Aug 6, 2002 9:38 AM

A slimmed-down version of Horseshoe Gaming Holding Corp., a company founded by former Las Vegas gaming executive Jack Binion, reported both revenues and income substantially smaller than last year. The company was reporting results without the Empress Casino Joliet that was sold to Argosy Gaming Inc. (AGY).

For the second quarter ending on June 30, Horseshoe Gaming had net revenues of $213.4 million compared to the reported $262 million in 2001. These numbers resulted in net income of $5.4 million versus last year’s $22.5 million.

However, net revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) before corporate expenses for the company’s three properties, excluding Joliet in 2001 period, increased 11% and 19%, respectively, in the second quarter of 2002 as compared to the prior period.

Officials said that the 2002 net revenue increases were the result of a combination of both volume and hold improvements at the company’s three properties. The Bossier City, La., riverboat increased 12% during the period while Hammond, Ind., was up 15%. Showing a 6% increase in the highly-competitive Tunica, Miss., area was the Horseshoe-Tunica property.

The company noted that recent legislation in Indiana has changed dockside gaming taxes to a graduated rate ranging from 15% to 35%. The Hammond, Ind., riverboat has notified state officials that it will remain dockside beginning this month.

Fitzgeralds Las Vegas

Don Barden’s Fitzgeralds Las Vegas, a casino that is located in Downtown Las Vegas, reported net revenues of $12.6 million for the quarter ended on June 31. This represented a decline of $1 million from the comparable period of a year ago.

Official owner of the property is Majestic Investor Holdings LLC, a company controlled by Barden, a Detroit entrepreneur who also operates a riverboat casino in Gary, Ind.

Despite the downturn in revenue, the company’s CFO, Michael Kelly, said the property was performing above expectations and that the ownership was pleased with the performance of the property during the past quarter. He noted that Fitzgeralds "continues to adjust staffing and marketing initiatives."

Riviera Holdings Corp.

A drop both in occupancy and in the daily average rate per room resulted in a decline of $5.6 million or 13.1% at the Riviera Hotel & Casino in Las Vegas, according to officials of Riviera Holding Corp. (RIV). The company, whose operation includes a casino in Black Hawk, Colo, reported its second quarter financial experience last week.

During the period, the Colorado operation contributed $2.7 million in EBITDA, an increase of $930,000 or 33% from the second quarter of 2001.

While our Las Vegas operations continue to be pressured by the economy and competitor actions," said Bob Vannucci, president of Riviera Las Vegas, "they have improved each quarter since Sept. 11, 2001. Our fourth quarter 2001 EBITDA was down 54.6% compared to same period prior year, while second quarter 22002 EbITDA was down 17.2%.

"Our marketing efforts to boost gaming activities have resulted in increased visitations from our loyal slot customer base," he said, adding that the company had added lower rated in-house conventions, increased business from tour operators and loyal gaming customers.