Jacobs Ent. takes major position in MTR Gaming Group

Apr 1, 2008 7:00 PM

Industry Insider by Ray Poirier | Entrepreneur Jeff Jacobs, who studied Gaming 101 while a director of the defunct Boardwalk Casino Inc., may be selling his Colonial Downs in Virginia but he appears to have his sights set on MTR Gaming Group Inc. (MNTG).

During the month of March, while the share price of MTR Gaming kept dropping, the Jacobs Entertainment Inc. firm purchased some 700,000 MNTG shares, bringing its ownership to over two million shares or 15.6% of the company.

MTR Gaming’s CEO Ted Arnault has recently guided the company in the sales of Binion’s Gambling Hall in downtown Las Vegas and the Speedway Casino in North Las Vegas. He also has successfully opened a racino in Pennsylvania and introduced table games at the company’s flagship, Mountaineer Casino, Racetrack & Resort in Chester, West Virginia.

But the expenses incurred in new developments and a drop in business at Mountaineer has reduced profits, at least on a temporary basis. The company’s recent financial experiences has caused another large shareholder, Lantern Lane Capital Management, owner of 600,000 shares, to attempt to place two of its own appointees on the company’s board of directors.

In addition to his Virginia racetrack and its nine off-track betting shops, Jacobs Entertainment runs casinos in northern Nevada and Colorado and truck route slots in Louisiana.

Complicating Arnault’s recent operating activities has been a strike called at Mountaineer over the past weekend. Some 200 cashiers, slot technicians and money room employees are complaining of being paid "poverty wages" that make health care and other basic needs unaffordable.