Polled Pennsylvanians favor racetrack slots by 63%

Sep 17, 2002 6:43 AM

   A recent poll indicating that 63% of Pennsylvania residents favor the installation of slot machines in the state’s racetracks did nothing but support the conclusions made by the principal beneficiaries of such a move.

   Both Penn National Gaming Inc. (PENN) and Magna Entertainment Inc. (MIEC) operate Pennsylvania racetracks in addition to England-based, privately-held Greenwood Racing. All would benefit greatly from such a move since they would be able to improve their competitive position with both Delaware and West Virginia where slot machine revenue has permitted both Charles Town Racetrack, owned by PENN, and Mountaineer Park, owned and operated by MTR Gaming (MNTG) to upgrade their racing stock.

   The sampling of public opinion was conducted by Millersville University’s Center for Opinion Research.

   Since both gubernatorial candidates — Democrat Ed Rendell and Republican Mike Fisher — are on record as supporting the slot proposition, such legislation is given the best chance of passing since it was first proposed in the mid-90’s.

   The only difference between the two candidates is the state usage of whatever revenues are derived. But, both have indicated their primary goal is to keep state residents from traveling out-of-state to gamble.

   Expected to be determined within the next few weeks is whether MTR Gaming will build a new track in Erie, Pa. Company CEO Ted Arnault said he would announce his decision shortly.

Connecticut slots

   Once again, slot machine revenue from Connecticut’s two tribal casinos grew in July with Foxwoods Resort Casino reporting the second best month in its history.

   Totally, Foxwoods and its neighbor generated $36.4 million in state tax revenue, representing 25% of their total gross. Foxwood, which reported $74.3 million, paid the state $18.3 million while the Mohegan Sun Casino tallied $72.5 million and turned over $18.1 million to state officials.

   Foxwoods said it recorded its highest month of $76.8 million during August, 2001.

Boat controversy

   Can the Isle of Capri Inc. (ISLE) legally move its riverboat operations from its present location in Lake Charles, La., to a berth in the Sabine Pass, placing it closer to its Texas customers?

   Obviously, the company thinks so and it has proposed moving its two riverboat casinos to Sabine Pass. But, a state legislator contends that the law permitting riverboat gambling in Louisiana limits riverboat gaming to two designated waterways, the Calcasieu River and Lake Charles. Not permitted, he said, was gambling on Sabine River south of the Toledo Bend Reservoir Dam.

   Local officials in Cameron Parish, La., hoped to correct the problem by passing a referendum on Nov. 5 but officials had indicated that such a move would be fruitless. Nevertheless, Cameron Parish (County) has approved a $50,000 a year option to Isle of Capri for a 38-acre parcel of land owned by the parish. In return, the company said it will pay the parish at least $750,000 a year or 4% of net gambling revenue if it gets an exclusive riverboat casino berth on Sabine Pass. Assuming, of course, that the regulators approve.

   Even Hillary Crain, head of the Louisiana Gaming Control Board has said he believes that only the legislature can approve the casino’s relocation.

Joining the Indians

   Despite previous contentions that it was not interested in tribal gaming, officials of MGM MIRAGE Inc. (MGG) announced last week it would aid the Agua Caliente Band of Cahuilla Indians to develop a casino in downtown Palm Springs.

   The move actually was suggested a month ago when the company announced that it had re-written the employment contracts of its top executives and had added its South African gaming developer, Kenneth Rosevear, to its executive roles.

   As part of the deal, Rosevear agreed to turn over to the parent company his agreement with the Agua Caliente that now calls for MGM MIRAGE to develop the new casino and to remain as a consultant but not as its manager.

   This will be the third casino to be built by the tribe. It currently owns the Spa Resort Casino in downtown Palm Springs and the Agua Caliente Casino near Rancho Mirage.

Appeal rejected

   Any hopes objectors to an Indian casino had to stop the casino that has been proposed near Sacramento, Calif., were dashed last week when their appeal for an emergency stay to a federal court order permitting the casino was rejected by a federal court in Washington, D.C.

   The casino project, to be constructed and financed by Station Casinos Inc. (STN), was approved initially by a lower court. The opponents then appealed to the Ninth Circuit Court of appeals that refused to block the initial order.

   Anti-gamers from the Citizens for Safer Communities and the cities of Roseville and Rocklin then attempted to get the higher court to block the beginning of construction while it appealed the lower court decision.

   A spokesman for the tribe said he hoped to begin construction “within the next month or two.”

Companies sue

   Just a few days before the start of the 2002 Global Gaming Expo, two major manufacturers and distributors of gaming machines filed suit against each other over an alleged trademark violation.

   WMS Industries Inc. (WMS) charged that Shuffle Master Inc. (SHFL) with violating WMS’ trademark rights while Shuffle Master alleged that WMS was merely trying to interfere with its ability to do business lawfully with its customers.

   The dispute was over a Shuffle Masters’ upgrade kit for the WMS 550 video slot machine. Shuffle Master stated that it had received several letters from WMS last week asserting that the kit violated several laws.

   “Clearly,” said Mark Yoseloff, chairman and CEO of Shuffle Master, “this action on the part of WMS is intended to disrupt our business relationships with our customers and to damage our credibility by creating a cloud of controversy over our product . . . We stand ready to indemnify our customers against any similar frivolous claims that may be brought by WMS in an attempt to damage our business.”

Account wagering

   California legislation earlier this year that permitted account betting over the telephone or the Internet has resulted in over $90 million being wagered through this system so far this year.

   But the numbers, say some observers, is not setting the house on fire.

   “For people who thought account wagering was going to turn everything upside down, that hasn’t happened, Mike Marten, a spokesman for the California Horse Racing Board was quoted as saying. “It’s new money, but it’s not a gold mine yet.”

   Several reasons have been put forth to explain the relative slow growth of account wagering but few focus on what has been characterized by some horse players as a rip-off. That is the business war between TVG, a division of Gemstar-TV Guide, and XpressBet, the system being operated by Magna Entertainment Inc. (MIEC). Each has control of the television signal from major racetracks but they have not found an accommodation that would offer all the tracks to all account holders regardless of which system they currently use.

   Until the differences between the two companies are resolved, say some, the growth of account wagering in California will be slow indeed.

Detroiters eyeballed

   Not only were two Detroiters denied a license to operate a casino but they continue to come under the scrutiny of the Michigan Gaming Control Board.

   Dimitrios Papas and Ted Gatzaros, who played important roles in getting legislation that permitted three casinos in Detroit but who were forced to sell their interest in the Greektown gaming license, now operate two restaurants, Fishbone’s and Pegasus. Up until recently they had been accepting meal coupons issued by Greektown Casino.

   Gaming regulators didn’t like the idea they were doing business with the casino and denied them the necessary exemption that permits hospitality providers to do business with casinos.

   The two restaurateurs took their case to court and found relief. A Wayne County circuit court judge ruled in their favor.

The Insider

   Isle of Capri Casinos Inc. (ISLE) has agreed to purchase The State Line and Silver Smith Casino Resorts in Wendover, Nev. for $30 million in cash.

   Alliance Gaming Corp. (ALLY) announced it had received its largest combined order in its history. The order, from the Borgata Hotel Casino & Spa in Atlantic City, was for the ACSC integrated slot marketing and casino management system and about 1,100 Bally Gaming slot machines.

   International Game Technology (IGT) has appointed Connie Jones as its director of responsible gaming. She previous held the same position with Anchor Gaming, a company that was merged into IGT last year.

   Copa Casino in Gulfport, Miss., has been closed while the operators shift their gear to a new 150,000 square foot barge that will replace the old riverboat. The new three-story floating casino barge will open on Thursday, Sept. 19.

   Paul-Son Gaming Corporation (PSON) says its majority takeover by Etablissments Bougogne et Grasset and B&G’s subsidiary, the Bud Jones Company, has been approved by its stockholders.

   Century Casinos Inc. (CNTY) reported it has increased its credit facility with Wells Fargo Bank from $20.2 million to $26 million.

   A Las Vegas woman won $194,000 and a new Harley Davidson while playing the new slot machines early Sunday at Palms Casino.

   Scientific Games Corporation (SGMS) announced that its subsidiary, Autotote Systems, has received contract extensions from the N.Y. Racing Association; Nassau Regional Off-Track Betting Corporation and Suffolk Regional Off-Track Betting Corporation. The extensions were valued at $15 million.

   Kerzner International Limited (KZL), formerly known as Sun Hotels International (SHI), announced last week it had acquired the 115-room Palmilla Resort in Cabo San Lucas for $38.75 million.

   The N.J. Casino Control Commission indicated last week that gaming revenue for the month of August increased 0.9% from $423 million to $427 million.


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