Â Â Gaming analysts were quick to jump on the Station Casinos Inc. (STN) bandwagon last week following the announcement that the courts rejected opposition to the construction of an Indian casino in the Sacramento area of California.
Â Â Both UBS Warburg and Fulcrum analysts listed the stock as a “buy” after recognizing that the company’s seven-year-old contract to build and manage the casino for the United Auburn Indian Community would have additional value for the casino company that has developed the so-called “locals” market in Las Vegas. Those who have seen the initial plans say the facility will look like Green Valley Station, the company’s most recent development in Henderson, Nev.
Â Â The United Auburn contract calls for Station Casinos to receive 23.5% of Thunder Valley casino’s pre-tax income and in the opinion of Robin Farley, chief gaming analyst for UBS Warburg, should add $3 to $4 a share during the life of the contract.
Â Â Farley noted that plans call for the property to operate 1,900 slot machines, provided they get into operation before the end of June, 2003, which will not happen since the property isn’t expected to open until the latter part of the year. Such a delay could reduce the property’s slots allocation to 1,250, although plans are being developed for the property to qualify for the larger number. Farley estimates that each machine could win an average of $450 daily.
Â Â Fulcrum analysts noted that they believe Station Casinos’ underlying fundamentals will continue to improve through the first quarter of 2003, “particularly as employment on the Las Vegas Strip build and Strip gaming volumes approach normalized levels.”
Â Â Investors agreed with the analysts on Monday by pushing up the value of a share to $16.99, an increase of $1.32 on trades of 993,700.
Â Â Also popular with investors during trading on Monday were the shares of Mandalay Resort Group (MBG) that was up $0.62 to $32.81, and MGM MIRAGE Inc. (MGG), that closed at $35.32, up $0.20.
Â Â Ed Rendell, Pennsylvania’s Democratic gubernatorial nominee, told the Associated Press last week that he strongly favors slot machines at the state’s racetracks but he sees no reason to immediately consider the expansion of gambling that would include riverboats or casinos.
Â Â Racetrack slots, he said, would be a major factor in the state’s annual budget that he says will have an even greater deficit because of the treatment it received from prior administrations.
Â Â “You can’t manufacture money,” he said. “I think I can produce a lot of new revenue but not enough to balance the budget and do all the early childhood education stuff. I’m hoping to be able to do part of it, but we’ll see.”
Â Â The only other gaming expansion being considered, he said, would be the addition of video keno to be operated by the state lottery. He noted that 11 states currently offer keno games.
Isle plan approved
Â Â A Cameron Parish Police Jury last week approved the referendum that would permit Isle of Capri Gaming (ISLE) to move one of its Lake Charles riverboat to the Sabine Pass.
Â Â Previously, it was felt that such a move would require the approval of a bond commission. Not so, said the jury that said it planned to hold a special local election on Nov. 5 to see if the voters would approve the riverboat move.
Â Â By moving a boat to Cameron Parish, Isle will be closer to the much-sought after Texas market.
Â Â August continued the trend at McCarran International Airport that has seen traffic fall for 12 consecutive months. According to airport officials, passenger traffic was down 3.8%, representing 3,240,000 people compared to the 3,370,000 recorded a year earlier.
Â Â Despite the slowdown, National Airlines showed an increase of 10.2% as the Las Vegas-based airline flew 263,073 passengers during the month. This placed National Airlines third among the airlines flying out of McCarran.
Â Â The top airline, Southwest Airlines, carried 978,250 passengers but this represented a decline of 6.1%. In second place, America West Airlines, was down 5.4% with its total passenger count of 549,459.
Â Â Other major airlines are United Airlines who flew 230,226 passengers, off 13.6% from last year, and Delta Airlines, down 5.1% with its 221,219 passengers.
Â Â How times have changed. For years, America’s racetracks complained that their businesses were adversely affected by the growing number of casinos in their areas.
Â Â But last month, the proverbial shoe was on the other foot. The riverboat casinos in southwestern Louisiana reported that their revenues were impacted by the new kid on the block: Delta Downs in Vinton, La.
Â Â Overall, Louisiana officials reported, gaming revenues were virtually unchanged but the two-boat casinos complexes in Lake Charles, which compete with the “racino” operated by Boyd Gaming Corp. (BYD) saw their revenues decline by 17.6%. The boats reported revenues of $28.8 million while the track casinos took in $11.6 million.
New plan approved
Â Â The initial reaction to a proposed riverboat casino in Lake Charles, La., was less than enthusiastic. In fact, Hillary Crain, chairman of the Louisiana Gaming Commission, said, “It looks more like a tugboat pushing a barge.”
Â Â That was all Pinnacle Entertainment Inc. (PNK) needed. They immediately went back to the drawing board and came up with a new concept. The plan now calls for a 19th Century riverboat that actually looks like a boat, although it’s attached at one end to a proposed 1,000 room hotel and the other pumps up against a parking garage.
Â Â The entire project, when completed, is expected to cost $325 million.
West versus East
Â Â In an attempt to increase interest in its racing program, Magna Entertainment Corp. (MIEC) has originated a new series of thoroughbred races that will pit California-bred horses against Florida-bred horses.
Â Â Called the Sunshine Millions, the promotion will feature races run at Santa Anita Park in California and at Gulfstream Park in Florida. The starting field for each of the eight races will be comprised of an equal number of Florida-bred and California-bred entries with purses ranging from $250,000 to $1,000 000 per race.
Â Â Magna Entertainment owns both racetracks.
Â Â Arrangements for the racing series were made with the collaboration of the horsemen’s associations in the two states.
Â Â In announcing the series, Frank Stronach, MIEC’s CEO and largest single stockholder said, “This event will allow two of the country’s best thoroughbred breeding states to compete against each other in an exciting and unique way.”
BETM’s quarterly loss
Â Â The share price of American Wagering Inc. (BETM) declined last week following the announcement that the company had experienced a net loss during the quarter ended on July 31.
Â Â In the announcement, American Wagering said it had a net loss of $136,987 or $0.03 per share during the period as compared to a net profit of $120,154 or $0.01 last year.
Â Â “The decrease in revenues experienced during the last six months,” said Vic Salerno, company chairman, CEO and COO, “is not believed to be a trend and is not expected to continue in the future. I believe the positive strides the company has made in the past six months far outweigh this short-term decline in revenues.”
Â Â He noted that the company’s Leroy’s Horse and Sports Place division had added six new locations, including two with pari-mutuel racing, and expects to add yet another location in October.
Â Â “The opening of these locations in time for the professional football season should immediately add to the revenue base,” Salerno noted.
Â Â The shares now trade at about $0.19 each compared to about $0.28 a share in mid-September.
Hearings to reopen
Â Â It was supposed to be a dormant issue but last week the New Mexico Racing Commission announced that it was preparing to re-open the hearings regarding a track license for the community of Hobbs.
Â Â There are three applicants for the license that the commission has said it may or may not award. Some $30 million facilities have been suggested for Lea Downs, a facility being proposed by Las Vegas businessman Shawn Scott, and for Saddlebrook Park, the vision of Ken Newton and his group. R.D. Hubbard, former chairman of Pinnacle Entertainment Inc. (PNK) and owner of Ruidoso Downs in New Mexico, has suggested spending $27.5 million for a track he would call Zia Park.
Â Â No dates were set for the hearings but the commission announced it could award the license while the hearings are going on even without hearing the proposals from all three petitioners.
Â Â Park Place Entertainment Corp. (PPE) has asked regulators to approve their plan to join recently acquired Claridge Casino Hotel with its Bally’s Atlantic City property on the Atlantic City Boardwalk.
Â Â Colorado casinos had August revenues of $64.6 million, an increase of 6.4% over the same period last year.
Â Â Innovative Gaming Corporation of America (IGCAD) will hold a special stockholders meeting on Oct. 15.
Â Â Standard & Poor’s Ratings Services has revised its outlook on Pinnacle Entertainment Inc. (PNK) to stable from negative.
Â Â Mikohn Gaming Corporation (MIKN) reports new contracts for its TableLink table game tracking system with the Barona Casino in southern California and Casino Niagara in Ontario, Canada.
Â Â Aristocrat has opened its new American headquarters with a facility in Las Vegas.
Â Â New Jersey lawmakers last week rejected the proposal that the state’s racetracks be permitted to install slot machines.
Â Â Both PurchasePro and Paul-Son Gaming Corp. have been warned that they have failed to meet the requirements for continued listing on the Nasdaq.