B of A tabs New England
as a $5B gaming market

Oct 28, 2003 4:05 AM

While Wall Street was evaluating the impact of the Bank of America announcement Monday that it was acquiring Fleet Boston for $47 billion in an all-stock acquisition, the gaming industry was reviewing the BOA report that indicated the $650 million proposed casino for Maine was a safe bet for investors.

In the opinion of BOA Securities, the New England casino market is worth about $5 billion with only about one-half of it being served by the two Connecticut casinos ”” Foxwoods Resort and Mohegan Sun.

BOA’s managing director, William S. Newby, said that although the market can easily accommodate other casinos Maine would benefit from being the first to establish a foothold. At a news conference, Newby said, "There’s clearly a first-move advantage" for Maine to beat other potential casinos to the market place.

It was noted that Bank of America Securities has not been retained to provide the financing for a proposed casino that will be owned by the Penobscot Nation and the Passamaquoddy Tribe. The developers, Marnell Corrao Associates of Las Vegas, probably would utilize the sale of bonds to private institutional investors to fund the project.

If the Maine voters approve the casino in a referendum on Nov. 4, the Two Tribes Enterprises will exercise an option it has on 360 acres of land near the Sanford Regional Airport.

According to the existing plan, the casino would pay 25% of its slot revenues to the state, an arrangement that is similar to the one that is operational in Connecticut.

Impact of taxes

A study by the University of Saint Louis (Missouri) has warned lawmakers that an increase in gaming taxes could put one or more riverboat casinos out of business.

Writing in the Kansas City Star, Rick Alms said the study pointed out that the state could improve its revenues by eliminating the existing state’s mandated loss limit of $500.

The study was commissioned by the Associated Industries of Missouri and urged lawmakers to "tread lightly" in trying to increase the amount of tax dollars the state extracts from gaming companies.

"Loss of employment and revenue could result in significant economic development challenges for the local communities that lose a casino," the study warned.

Casino industry executives said they hope the study’s conclusions could serve as a "wake up call" to those advocating higher casino taxes.

Crackdown urged

The method in which gamblers are granted credit has to be addressed by Macau regulators, according to a message sent by Las Vegas gaming executive Steve Wynn.

Wynn, and another Las Vegas gaming entrepreneur, Sheldon Adelson, were granted licenses to build and operate major casinos in competition with Stanley Ho who held a gaming monopoly in the Chinese enclave just 40 miles from Hong Kong.

According to the South China Morning Post, Wynn said, "It’s in the public interest to grant credit to gamblers, but it must be according to the law." He called for a crackdown on triad-backed loan sharks that have operated in Macau for years.

The report indicated that Macau has already approved new laws allowing casinos to grant credit but Wynn also is seeking to have lawmakers permit casino operators to offset bad debts against taxes, thus reducing gambling revenues.

The Insider

The Sonoma County Board of Supervisor has voted 4-1 against an Indian casino in Rohnert Park. The casino, to be owned by the Federated Indians of Gaton Rancheria, would be built and operated by Station Casinos Inc. (STN).

A Detroit man has been charged with attempting to bilk the MotorCity Casino in Detroit out of more than $1 million through a scheme involving scratch tickets used in a spring promotion.

The Atlantic City Hilton, owned by Park Place Entertainment Corp. (PPE) has been fined $800 for permitting busses to idle too long in its transportation center. The company has warned bus operators that they must limit idling both when delivering customers and when they load them to return home.

A Philadelphia businessman, who again is running for mayor of that city, has reportedly sold his interest in a company attempting to get a casino license for the Lytton Band of Pomo Indians near San Francisco. Sam Katz has been involved in the Indian project for seven years.

FBI agents are involved in an inquiry into the Maryland Senate president’s fund raising and his support for slot machine gambling. According to investigators, they are looking into a $225,000 donation made by racetrack executive Joe De Francis to a political group headed by Senate President Mike Miller.

All it took was one visit to Las Vegas for a lawmaker from Baltimore, Md., to fall in love with the operation of airport slot machines. He saw the Coast Resorts operation of slots at McCarran Airport and now wants slot machines installed at Baltimore-Washington International Airport.

Delta Downs in Louisiana, owned by Boyd Gaming Corp. (BYD) has been granted approval to enlarge its slot machines floor to 40,000 square feet. The company operates 1,462 machines at the property.