Harrah's may join tribal gaming at Alabama site

August 27, 2002 8:02 AM
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Alabama may be next for Harrah’s Entertainment Inc. (HET). Of course that can only happen if and when the Poarch Creek Tribe sign a gaming compact with Alabama Gov. Don Siegelman.

That may not be as easy as it sounds since Siegelman has strongly opposed any casinos in his state, whether they be for the benefit of Native Americans or for private business.

But, the Poarch Creek Tribe’s plans "are not for a casino," says Tribal Chairman Eddie Tullis. He said the project will be an "entertainment center" with video gaming machines and traditional bingo rather than casino-type games.

He said plans, which have not been finalized with Harrah’s Entertainment as yet, includes a multilevel gaming center with 1,000 high-stakes video gaming machines; progressive jackpots as high as $60,000; a 200-room motel, and a riverboat landing for use by potential customers.

The entire project will cost about $100 million and be located on 50 acres of land owned by the tribe that sits between a federal highway and the Coosa River.

Tulis says he has had discussions with Harrah’s representatives but the company would not comment on the project other than to say they have a relationship with the tribe that goes back to 1995.

Harrah’s Entertainment has had a series of successful operations running gaming properties for Indians. They currently operate Indian casinos in North Carolina, California, Arizona and Kansas.

Farley’s picks

Robin Farley, chief gaming analyst for UBS Warburg, who has been designated as a 5-star analyst by Zack’s investment Research, has designated her favorite picks among the stocks she follows.

Designated as her top selections were Argosy Gaming Corp. (AGY) and International Game Technology (IGT).

Argosy, she believes, will benefit greatly from the recently approved change in operating procedures for the riverboat casinos. Dockside operations, she said, "will unlock greater revenues for AGY, as it did for companies in Illinois." She has set a 12-month price target at $32.50 a share.

IGT, she said, reported a very strong third quarter during which the company repurchased 3.5 million shares and paid down all the debt from its acquisition of Anchor Gaming. Her target price is $70.

Firm chosen

A Philadelphia marketing firm has been chosen by the operators of The Borgata, the destination resort being built in Atlantic City by the partnership of Boyd Gaming Inc (BYD) and MGM MIRAGE Inc. (MGG).

Named was Breslow Partners, whose list of clients includes several Philadelphia restaurants. The Borgata will have 11 restaurants.

Breslow Partners’ responsibility will include marketing and public relations for all food-and beverage operations in the new property. Listed as new restaurants are a version of Philadalphia-based Susannah Foo; the Metropolitan, an all-night oyster bar; Old Homestead Steakhouse, based on the New York restaurant that bears that name; Specchio and Ombra, two places run by renown chef Luke Palladino from The Mirage in Las Vegas, and a few other ethnic-food facilities.

Track action delayed

New Mexican officials have decided to delay consideration for a horse track license for the town of Hobbs. Both R.D. Hubbard, owner of Ruidoso Downs, and Las Vegas entrepreneur Shawn Scott, have applied for the license.

At a meeting of the state racing commission, last week, officials said they wouldn’t make a decision on the license until further investigations are made regarding the applicants.

Hubbard, former chairman and CEO of Pinnacle Entertainment Inc. (PNK), recently paid a fine of three-quarters of a million dollars to the Indiana Gaming Commission, which determined that the company had provided party girls to high-rollers at the Belterra riverboat casino.

As for Scott, who recently acquired racetracks in upstate New York and in Maine, the commission said it wanted to look into his alleged legal problems with the group from which he purchased Delta Downs in Louisiana.

Air traffic declines

Passenger traffic at McCarran International Airport declined by 6% to 3.1 million in July, according to figures released by airport officials.

Reviewing the numbers, Jason Ader, chief gaming analyst at Bear Stearns, noted that comparisons were challenging since they had to measure up to a month when passenger levels were the third highest of the past 19 months.

Yet, Ader notes, "with the exception of March, 2002 (a heavy convention period), July 2002 passenger levels are the highest since August 2001.

Declines in year-over-year comparisons were substantial at the four largest carriers servicing Las Vegas but were only minimal for National Airlines, which posted a 0.3% increase in traffic National Airlines greeted 225,413 passengers during the period.

Lower numbers were reported by Southwest Airlines which fell 7.7%; America West, minus 10.1%; United, minus 7.8%, and Delta Airlines, minus 10.5%.

Poor cash flow

Not all Colorado casinos have been challenging the local banks. Place the $150 million Black Hawk Casino run by Hyatt Gaming in that category.

In a recent filing with the SEC, the owner of the state’s largest casino, Windsor Woodmont Black Hark Resort Corp, said it was not generating enough cash flow to ensure repayment of more than $13 million in debt and other obligations. The privately-held company said it is working to restructure the debt.

It also was reported last week that Deloitte & Touche told Windsor it would not accept the position as auditor since it had a company policy not take on as a client any company that appeared to be at risk of failure.

Still, a company spokesman said it had not been decided whether the casino operators should file for bankruptcy protection. A decision is expected soon.

The Insider

President Casino on the Admiral in Biloxi, Miss., attempting to continue operating under the protection of the bankruptcy court, hasn’t been paying its bill lately and the riverboat’s vendors are threatening to stop providing goods and services

After 17 years with The Sands Regent in Reno, Nev., David Wood is giving up his positions as executive vice president, chief financial officer and treasurer.

Jeffrey Logsdon, gaming analyst for Gerard Klauer Mattison & Co. has lowered his ratings on several gaming stocks. He has put a rating of "neutral" on MGM MIRAGE Inc. (MGG), Park Place Entertainment Corp. (PPE), and Harrah’s Entertainment Inc. (HET). He placed an "underperform" rating on Station Casinos Inc. (STN) and a "hold" rating on Boyd Gaming Corp. (BYD).

Shuffle Master, Inc. (SHFL) set a record quarterly performance during the third fiscal period, reporting revenue of $15.1 million, a 20.3% increase over last year. Operating income increased 27.1% rising to $5.8 million while earnings per diluted share reached $0.22 a share compared to last year’s $0.17.

The Racing Symposium at the University of Arizona, scheduled for Dec. 11 through Dec. 13, will add a day this year to produce a Racing and Gaming Summit on Dec. 10.

Terry Lanni, chairman and CEO of MGM MIRAGE Inc. and a prominent owner of thoroughbred horses, will be the keynote speaker at the National Thoroughbred Racing Association annual meeting to be held at The Mirage Sept. 29-Oct. 1.

Indiana gaming revenues jumped 9.2% to $172,7 million during the month of July. Showing particular strength was the Caesars property in southern Indiana which led the market with a 25% gain.

In Louisiana, July gaming revenues increased by 5% to $173.5 million.

And, in Mississippi, the state’s 12 casinos reported winning nearly $120 million, an increase of 9% over July of 2001.

Viejas Casino and Turf Club of Alpine, Cal., has placed an order with Vision Gaming & Technology Inc. of Norcross, Ga., for the company’s "Pot-O-Gold" video gaming machines.

Mississippi gaming officials have granted an "international gaming" waiver to MGM MIRAGE Inc. so that the company can go forward with its internet gaming plans for the Isle of Man.

Donald Trump is personally buying a 2,570-acre golf course and residential development known as Ocean Trails in Ranchos Palos Verdes, Cal.

Louisiana Gov. Mike Foster plans to reinstate a rule that will keep intoxicated people from gambling in the state’s casinos.

It’s being called a ploy to participate in potential racetrack slot machine business but a former Pennsylvania state legislator has applied for a license to build a trotting track in the town of Chester, Pa.

Nebraska officials said last week that sufficient signatures have been returned supporting a ballot item to change the state constitution to permit slot machines.

Aladdin Hotel/Casino has been granted approval by the U.S. Bankruptcy Court to extend its debtor-in-possession financing facility through Dec. 31.

Part of a recent settlement with the Indiana Gaming Commission, to settle allegations about party girls being imported to patronize with high rollers, has Pinnacle Entertainment Inc. (PNK) agreeing to add a new $30 million hotel tower to its $225 million facility.