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Major breakout as Gaming Lab
approves WMS’s new machines

Nov 25, 2003 4:58 AM

During the recent G2E gaming expo in Las Vegas, officials of WMS Gaming Inc., a subsidiary of WMS Industries Inc. (WMS) strongly indicated that they expected a major breakout of their machines in the December Âí­quarter.

That appeared to be the case last week when the company announced it had received regulatory approval from Gaming Laboratories Inc. (GLI) for the company’s Bluebird gaming platform.

Covered by the approval were casinos in Iowa, Missouri, Alberta and Manitoba, Canada, as well as Indian casinos in Arizona, California, Connecticut, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, New Mexico, North Dakota and South Dakota.

The approvals represented the first regulatory approvals for the commercial version of this new platform.

The company said that consistent with previous guidance, it expected over 700 Bluebird video gaming devices to be shipped next month.

Earlier this month, Nevada regulators gave initial approval of the new WMS operating system. Company officials said they hope to receive Nevada approval for their commercial versions of the Bluebird system in January.

"The on-schedule receipt of GLI regulatory approval for Bluebird and Nevada regulatory approval of the initial version of CPU-NXT represent key milestones in our re-emergence plans," stated Brian R. Gamache, president and CEO.

"Of the 50,000 WMS gaming devices installed in North America gaming venues, we believe over 50% are in casinos that require the GLI lab approval," said, adding that each such approval "opens new markets for our new products."

Rincon expansion

Barely more than a year old, the Harrah’s Rincon Hotel/Casino near San Diego, Calif., is in for an expansion that will run some $165 million.

Harrah’s Entertainment Inc. (HET), the operating company, said the expansion will more than triple the size of the hotel, add space to the gaming floor and have additional amenities such as a spa and a parking garage. The project is expected to be completed by the end of calendar 2004, the company said.

Commenting on the expansion, John Currier, chairman of the Rincon San Luiseno Band of Mission Indians, "this expansion marks another milestone for the Rincon Tribe. We knew from the outset that Harrah’s was the absolute best partner for us. We look forward to what this new chapter will bring."

Also as part of the announcement, it was noted that the National Indian Gaming Commission has approved the Tribe’s extension of its agreement with Harrah’s to manage the hotel casino through 2010.

Wembley talks

With the managerial problems that have beset Lincoln Greyhound Park in Rhode Island, state officials have been strongly urging the owners, Wembley PLC of England to pack it in and go home.

Wembley may be getting the message since reports have developed indicating the U.K. gaming firm has been in talks with Penn National Gaming Inc. (PENN) relative to the potential sale of some or all of its assets. The company also owns four dog tracks in Colorado and a half-dozen greyhound tracks in England.

Penn National revealed it was negotiating with Wembley for the purchase of some of its assets strictly for cash.

On its end, Wembley acknowledged that it was having conversations with more than one company relative to the sale of its assets. Analysts have indicated that Wembley has also spoken to representatives of Harrah’s Entertainment Inc. (HET), MGM MIRAGE Inc. (MGG), and Kerzner International Inc. (KZ), as well as others.

Double pressure

Shawn Scott, the Las Vegas gaming business entrepreneur who gained national attention when he sold Delta Downs in Louisiana to Boyd Gaming Corp. (BYD) for $130.5 million, is feeling pressure on two fronts as he attempts to create two new racinos.

In upstate New York, Scott is being sued by three shareholders of Mid-State Raceway Inc., the company that owns Vernon Downs. The suit alleges that Scott was charging exorbitant loan fees and excessive interest payments.

A year ago, Vernon Downs, a harness racing facility, was choking on its debt and losing some $5 million a year. Without a cash infusion, the track was going under. In stepped Scott who loaned the operating company $9 million. The loan and others that followed gave Scott the opportunity to buy a majority interest in the track.

Now, the track is on the verge of opening a video lottery terminal addition to the track, provided the necessary licenses are approved by state officials.

In Maine, Scott is attempting to block state officials from releasing private records submitted as part of his license application for a racino at Bangor Raceway. The records are being sought by newspapers and other news sources.

THE INSIDER: A subsidiary of Harrah’s Entertainment Inc. (HET) has won city approval to build a 27-story hotel next to its Harrah’s New Orleans Casino in New Orleans, La.

At least 10 California Indian Tribes have indicated that they would be willing to give the state a portion of their gaming revenues provided they can negotiate compacts with Gov. Arnold Schwarzenegger.

At least a dozen groups met the filing deadline last Friday in submitting their intention to acquire Rosecroft Raceway in Maryland. The track would become a key player should the state approve slot machines at racetracks.

New Jersey state officials are attempting to broker a deal whereby Atlantic City casinos would partner with the New Jersey Sports and Exposition Authority in installing slot machines at The Meadowlands racetrack.

The Mandalay Resort Group (MBG) will release its quarterly fiscal report on Wednesday, Dec. 3.

Also on Dec. 3, the voters of Romulus, Mich., will cast their ballots to determine whether they favor the building of a $350 million casino by an Indian tribe. Also part of the gaming question is whether they would approve building a multi-million horse track by Magna Entertainment Corp. (MECA).

Ron Perlman’s MacAndrews & Forbes Holdings Inc. has completed the acquisition of Cirmatica Gaming, holder of a 24% stake in Scientific Games Corporation (SGMS). Purchase price was listed at $199 million.

MGM MIRAGE Inc. (MGG) has entered into a joint venture with Newcastle United PLC to build an entertainment complex, including a casino, above St. James’ Metro Station in Newcastle, England.

Colorado casino revenue rose 2.4% in October when compared to the previous year, according to state officials. Gaming proceeds reached $56.8 million.

Louisiana’s casinos won $163.3 million during the month of October. This represented an increase of about 6% over the same month last year.

Tulane University in New Orleans has developed a casino resort management program at its Biloxi, Miss., campus. The program, offering associate degrees, will have six core courses.

The two Connecticut casinos ”” Mohegan Sun and Foxwoods ”” generated $33.6 million in state funds with their slot machines during the month of October. Mohegan Sun reported slots revenue of $68.3 million and Foxwoods reported $66.6 million.