Sherlock’s ‘pent-up demand’ comments right on target

Jul 22, 2003 6:32 AM

In a speech before tourists specialists last month, Bill Sherlock, president and CEO of Foxwoods Resort Casino said he foresaw good things ahead because of pent-up demand for entertainment.

His prediction was right on the money based on the results of slot machine winnings reported by officials for the month of June.

Both Foxwoods and Mohegan Sun reported strong play during the month with Foxwoods winning $66.9 million, an increase of 2.7% over June, 2002, and Mohegan Sun recording $65.6 million, or 8.3% more than last year. The two casinos report only their slots winnings since they must pay the state 25% of their slots totals.

For June, Foxwoods paid Connecticut $16,735,166 while Mohegan Sun turned over $16,404,235. For the fiscal year, Foxwoods paid the state $196 million and Mohegan Sun paid $190 million.

Commenting on the business, Sherlock noted that "we had some great weather and some great events at Foxwoods during June. We got summer off to a good star, and we did it with one fewer Saturday compared to last year."

Mitchell Etess, executive vice president of marketing for Mohegan Sun credited the opening last year of the casino’s Sunburst expansion for the increase in numbers of visitors. "There’s no doubt now," said Etess, that the two properties are showing they are capable of drawing the same amount of volume."

Indiana booming

Gaming in Indiana showed strong improvement during the month of June, according to numbers released by state regulators.

Northern Indiana gaming revenues grew at a 7% level while the riverboats in southern Indiana reported a 13% increase.

Leading the pack was Argosy Gaming Inc. (AGY) that reported a 17.7% increase in revenues for the month and a 16% increase overall for the quarter. It was followed closely by Casino Aztar with a 17.4%.

Other notable increases included Belterra, operated by Pinnacle Entertainment Inc. (PNK), up 13.8%, and Blue Chip Casino, operated by Boyd Gaming Corp. (BYD), up 13.7%.

New York rules

After months of stalemate, the New York Lottery has issued ground rules for the operation by racetracks of video lottery terminals, authorization for which was granted by the legislature nearly two years ago.

The operational guidelines were distributed shortly after a state judge reassured the racing industry that they could legally go forward with the installation of the machines despite arguments from anti-gamers who charged the state constitution prohibited such gaming devices.

The judge ruled that even though the VLTs have the characteristics of slot machines there was enough of a difference to make them eligible for authorization as lottery games.

The first track to take advantage of the ruling will be Vernon Downs, where owner Shawn Scott of Las Vegas, and his associates plan to have 1,100 operating this fall. Vernon Downs will be followed by Saratoga Raceway, which hopes to be underway on New Years Eve.

The largest concentration of slot machines will be at Aqueduct racetrack near JFK Airport on Long Island with MGM MIRAGE Inc. (MGG) operating the machines for the New York Racing Association.

The Insider

Century Gaming Inc., a Montana-based gaming company, has agreed to buy the 8,200 video poker machine slot route from United Coin, a division of Bally Gaming Systems that is wholly owned by Alliance Gaming Inc. (ALLY). Part of the sales agreement provides that the slot route must generate a minimum cash flow of $21 million during a specific period prior to the deal closing.

Mikohn Gaming Corporation (MIKN) has received approval from the Mississippi Gaming Commission for the gaming device Battleship Winning Encounter. This is the second approval received for a machine in the Battleship series.

Kersner International Limited (KZL) will hold its quarter conference call on Thursday, July 24, at 6 a.m. PDT.

Colorado gaming authorities have reported that the net gaming win at its limited stakes casinos totaled $707.2 million, down $600,000 for the fiscal year ended on June 30.

Maryland lawmakers have begun a "microscopic" review of gambling and its potential impact on state revenues. The study’s report is expected to be available by the end of the year.

The Pennsylvania State Horse Racing Commission has reinstated the track license it granted to MTR Gaming Group Inc. (MNTG) for a track in Erie. However, the track is not expected to be built until lawmakers approve slot machines at racetracks.

Mississippi reported a 7% jobless rate for the month of June, the highest in 15 months. However, gaming supporters say the jobless rate before the development of casinos on the Gulf Coast and in Tunica ranged as high as 40%.

Isle of Capri Inc. (ISLE), the Biloxi, Miss., based gaming company has agreed to pay $1.5 million to 36 former housekeepers at a Black Hawk casino who were ordered by a former casino owner not to speak Spanish on the job.

The number of international visitors to southern Nevada plunged some 30% during the year following the 9/11 terrorist attack.

Atronic Gaming says it has installed its wide-area progressive gaming machines at Native American casinos in both New Mexico and in California.

The Louisiana Gaming Control Board has approved plans submitted by Pinnacle Entertainment Inc. (PNK) for a $325 million casino resort in Lake Charles.

The Illinois Gaming Board is considering changes to its code of ethics in light of a former executive who quit his job and announced he would immediately begin employment with Harrah’s Entertainment Inc. (HET).

According to Mississippi Gulf Coast casino operators, they have begun catering to the Vietnamese gambler because although Vietnamese represent only 1% of the population they are responsible for 20% of the action in Pai Gow poker, blackjack and roulette at its casinos.

GTECH Holdings Corporation (GTK) has been awarded a two-year contract extension by the Idaho Department of Fish and Game to provide products and services to operate its licensing system.