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Park Place on track for Catskills project

Jul 29, 2003 7:23 AM

Despite lackluster second quarter earnings, Park Place Entertainment remains optimistic about the gaming giant’s opportunities outside of Nevada, as well as the future of its flagship, Caesars Palace in Las Vegas.

Most of the optimism is centered in upstate New York, where a state Supreme Court judge two weeks ago ruled to uphold legislation authorizing the construction of six Indian casinos in the state.

Park Place has a contract with the St. Regis tribe to build and operate a $500 million, 750-room casino resort at Kutsher’s Sports Academy in the Catskills. The casino would be less than 90 miles from the potentially lucrative metropolitan New York market.

"The ruling left the Catskills project on pretty good footing," said Wally Barr, Park Place president and CEO. "By the end of this year, there should be a final resolution of legal claims and state issues, and we should be able to start construction."

In the meantime, Park Place is "making good progress" with federal agencies, seeking approvals and finalizing a state-offered compact, in which there is general agreement among tribal members.

The outlook may not be as rosy in Atlantic City, where Park Place has put "on hold" the construction of a $200 million hotel tower and $75 million parking garage.

"We won’t invest with the uncertain taxing climate in New Jersey," Barr said. New Jersey this month passed a new tax package that takes more from casino coffers.

Just a few miles down Interstate 95, Park Place is "reviewing opportunities" in Pennsylvania as well as other states, which have indicated a willingness to consider racinos — casinos built into racetracks.

"Right now, we’re just looking," Barr said.

Another jurisdiction that has registered on Park Place’s radar screen is England, which this year deregulated the commercial casino industry, opening the door to foreign investment.

"We continue to follow the London market but it’s premature to move in right now," Barr said. "We’re watching, but moving cautiously."

Finally, Barr said Park Place is still bullish with its Southern Nevada properties, and refutes published reports that the company may sell hotels to finance other ventures or even pay its bills.

"We don’t need to sell any assets" to finance growth or complete projects or raise capital, Barr said.

He added that, despite the never-ending construction at Caesars Palace, new attractions, such as the Colosseum and signature restaurants are producing "the desired effect."

"Caesars Palace has had an increase in slot and table game volume, visitor traffic, food and beverage revenue and record cash room rates," Barr said. "Looking further into the future, we are very excited about opportunities to capitalize on the strength of our Caesars brand."

Last month, Park Place announced it was changing its name to Caeasars Entertainment because of the widespread recognition of the Caesars name.

The process of changing over should be completed by the end of the year, company officials said.