Two new glitzy casinos
to pile up profits for Seminoles

Dec 23, 2003 3:55 AM

Gambling properties run by the Seminole Tribe in Florida have turned its 3,000 members into one of the wealthiest group of Indians in America. In recent years, each Seminole has been receiving $42,000 a year, as well as free health care and free college tuition.

But that may look like a penny-ante game when the tribe opens its two Las Vegas-style complexes ”” one in Hollywood and the other in Tampa ”” using the Hard Rock theme for its marketing.

When fully operational, the combined revenues from the two properties are expected to exceed $1 billion.

Seminole leadership said they expect that the two gaming complexes will draw more than 20,000 visitors a day while creating 6,000 full-time jobs for Indians and non-Indians. To finance the two projects, the Seminoles sold $410 million in 30-year bonds with The Rank Group PLC of England, the Hard Rock’s parent company, buying $25 million. The arrangement calls for the Seminoles to pay a licensing fee for use of the Hard Rock’s name but does not involve the restaurant chain in the management of the properties.

The Hard Rock restaurant chain is not affiliated in any way with the Hard Rock Hotel/Casino in Las Vegas that is owned privately by entrepreneur Peter Morton.

The larger of the two properties under construction for the Seminoles will have 130,000 square feet of casino space, a Hard Rock Café, a bar, a spa and 6,000-seat arena. The hotel will be 15-stories high and will have 500 rooms that are expected to average about $150 per night.

Additionally, the property will have 300,000 square feet of retail space and food establishments.

Despite the success experienced by the Seminole Tribe through its gambling activities, dissention continues among its members. Said one member, recently, "We have a severe housing shortage, infrastructure that needs to be updated and a (tribal) government (that has) become a banking institution."

Until two years ago, the Seminole gaming operation was conducted by then tribal chief James Billie who admitted that he and his associates went on multimillion-dollar spending sprees. Billie was ousted from leadership and eventually charged with malfeasance but the charges were thrown out.

Billie, currently critical of the new Seminole leadership, remarked, "When I was there they made close to $3 billion. None of these guys will be able to achieve that."

The new casinos are expected to open early next year.

Decision soon

Three major casino companies will find out on Jan. 15, 2004, whether they will be granted a new license for a casino, or two, in St. Louis, Mo.

Vying for the license are Harrah’s Entertainment Inc. (HET), Isle of Capri Casinos Inc. (ISLE), and Pinnacle Entertainment Inc. (PNK).

Prior to hearing proposals, the five-member committee indicated that it wanted the gaming companies to build two casinos, one in Downtown St. Louis and the other in south St. Louis County. Both Isle and Pinnacle complied while Harrah’s said it would only offer a plan for a casino in St. Louis County. Harrah’s, which already operates a riverboat in the St. Louis suburb of Maryland Heights, feared a second facility would cannibalize that boat.

Isle said it would build a $167 million complex south of Interstate 255 and a second facility in St. Louis’ Laclede’s Landing.

The most ambitious project came from Pinnacle that said it would build a $300 million project in the St. Louis suburb of Lemay, and a second property in Laclede’s Landing.

Meanwhile, Harrah’s announced that it is abandoning lobbying efforts for a casino in Massachusetts and will concentrate its efforts in Rhode Island where the company has an agreement with the Narragansett Indian Tribe.

THE INSIDER: There’ll be no riverboat casino in Spencer, Iowa. Voters of Clay County voted 3,049 to 1,960 in rejecting the proposal.

An initiative calling for permission to place video lottery machines at the state’s racetracks has been filed with the Idaho secretary of state.

Pinnacle Entertainment Inc.(PNK) has completed the purchase of 1,758,996 shares of its common stock from former chairman and CEO R.D. Hubbard. The exercise price was $10 per share.

Hollywood Casino Shreveport, a wholly owned indirect subsidiary of Penn National Gaming Inc. (PENN), has received a $4 million payment that settles an insurance claim for business interruption during a tornado in 2000.

Analysts at Buckingham Research have downgraded the share of Argosy Gaming Corp. (AGY) from a strong buy to neutral.

Isle of Capri Casinos Inc. (ISLE) had opened a casino at the Westin and Sheraton Hotel at Our Lucaya Beach & Golf Resort in Freeport, Grand Bahama. The casino has 19,000 square foot of gaming space that is occupied by 400 slot machines and 21 table games.

Connecticut’s two Indian casinos contributed $32.8 million from their slot machine revenues for the month of November. Mohegan Sun turned over $16.6 million while Foxwoods Resort gave $16.2 million.

The South Carolina Supreme Court is deciding whether a video machine called Chess Challenge is legal. Meanwhile, the court has issued temporary restraining order against its use.

On Friday, the National Indian Gaming Commission removed its closure order and has permitted the Meskwaki Indians to reopen their casino in Iowa.

Following an investigation, the Texas Comptroller Carole Keeton Strayhorn has recommended that the legislature approve electronic gambling to keep all the Texas dollars at home rather than permit them to flow to nearby states.

Evangeline Downs has become the third racetrack in Louisiana to open a video lottery machine parlor. The facility has 1,627 machines and will be open seven days a week.

New York state authorities are advertising for a person to monitor the New York Racing Association during its 18-month probationary period. Among the names being mentioned for the job is that of former N.Y. Gov. Mario Cuomo.

Hoolae Paoa, president of Vernon Downs, the trotting track seeking to become a racino, has given up his position while he appeals the decision of New York regulators to deny him a racing license.