Illinois lawmakers fighting deadline with gaming bills

May 20, 2003 4:17 AM

It may be time for gaming’s biggest companies to start sharpening their pencils as they prepare to bid on one or two new licenses that could become available in Illinois.

Now that one legislator has opened conversation on a variety of gaming proposals that could put slot machines (some 47,000 of them) on just about every street corner in the state, the more serious proponents are beginning to refine their plans.

Approved last week by the Illinois House Gaming Committee were three bills sponsored by the committee’s chairman, Rep. Lou Lang of Skokie. The bills proposed everything: video poker machines in bars and restaurants; casino licenses for Chicago and its suburbs, and slots at the state’s racetracks. Also approved was an amendment to add more machines at the state’s riverboats.

The move was enough to get Gov. Rod Blagojevich involved. He called video poker machines, "the crack cocaine of gambling," and vowed to veto any such legislation that reached his desk.

However, the governor is believed amenable to expanding gaming by creating a Chicago casino license and permitting the tracks to install video lottery terminals.

The big problem facing gaming proponents is the calendar. Without a deal in hand, the legislature is supposed to pack up at the end of the month. With the prospect of a major budgetary shortfall and the governor’s promise not to cut state programs and services, more lawmakers were leaning toward some form of gaming legislation.

"We’ve all come to the realization that we can’t do this without gambling," said Sen. Miguel del Valle, echoing the sentiments of many of his colleagues.

Temporary halt

The courts intervened Monday on New York Gov. George Pataki’s plan to sign a new casino-land accord with the St. Regis Mohawks.

Issuing a temporary injunction blocking the move was State Supreme Court Judge Joseph Teresi who is hearing an appeal from an Albany lawyer who says the state constitution bars all gambling except for certain bingo games, horse race wagering and lotteries.

The judge said he was giving Pataki and his legal advisors until Friday to show cause why his blocking order should not be made permanent, at least until he has ruled on the constitutional challenge.

Affected by the order was Park Place Entertainment Corp. (PPE), the company chosen by the Mohawks to build and run its casino in Monticello.

Cash is king

Lakes Entertainment Inc. (LACO) announced Friday that it has received $16.6 million in cash as payment for the previously announced sale of the Polo Plaza property in Las Vegas. The property was purchased by Metroflag Polo LLC.

Also being locked up in the company’s cash register, according to Lyle Berman, chairman, is $5.9 million that was released to the company from a trust account it had established following certain lawsuits involving the company’s predecessor, Grand Casinos Inc., and its merger with Park Place Entertainment Corp. (PPE).

The company also has announced the sale of the Shark Club property in Las Vegas, a move that should generate some $16 million.

"Although the Shark Club sale is not final," Berman said, "the increase in available cash of over $22 million plus another $16 million when the Shark Club sale is completed, provides Lakes additional resources to continue to support our Native American owned casino projects. Our book value of approximately $15 per share will include over $40 million in cash, or approximately $4 per share after the potential Shark Club sale."

The Insider

Full House Resorts, the gaming company founded by the late thoroughbred enthusiast Allan Paulson, joined with two of its partners on the weekend to sell the real estate on which they had built the bankrupt Gold Shore Casino in Biloxi, Miss. No sale price was given.

Beginning on June 1, the legal gambling age in Arizona will be raised from the current 18 years to 21-years-old. The age regulation will affect the state lottery, Indian casinos and the state’s racetracks.

Acres Gaming Inc. (AGAM) announced that on June 16 the company’s 1.4 million principal amount of debentures will be converted into 303,000 shares of the company’s common stock. After conversion, the company will have no long or short-term debt outstanding.

Analysts at BB& T Capital Markets have raised their rating on Crescent Entertainment Inc. (CEI) to strong buy.

As part of the tax-cut bill passed by the U.S. Senate last week, a provision requiring foreigners to have 30% withhold from pari-mutuel winnings will be eliminated. The change will permit foreign tracks to participate in this country’s common-pool wagering.

Station Casinos Inc. (STN) says it will open the Thunder Valley Casino near Sacramento, Calif., on June 9. The property, owned by the United Auburn Indian Community, will have 1,900 slot machines and 94 table games.

Banc of America Securities has raised its investment rating for Argosy Gaming Co. (AGY) to a "buy" from the previous "neutral."

The Louisiana Senate has approved a bill that will permit the New Orleans Fair Grounds to operate slot machines at its racetrack. Previously, the track was prohibited form having slots because of the law that created Harrah’s New Orleans Casino.

Pinnacle Entertainment Inc. (PNK) has signed an amended $235 million bank credit facility that will help the company finance the construction of a $325 million casino/hotel project in Lake Charles, La.

A Megabucks progressive slot jackpot worth nearly $5.5 million was hit Sunday at the Grand Casino Biloxi, Miss. The winner, from Hernando, Fla., said he "always plays Megabucks and finally it paid off." This was the fourth jackpot in the Biloxi area won on an IGT Megabucks machine in the past two months.

Frustrated in their efforts to get state approval of a casino, the Narragansett Indian Tribe in Rhode Island are threatening to open a tax-free tobacco shop to spur economic development. State officials believe such a move would be illegal.