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Hilton deal was matter
of timing

Dec 30, 2003 9:02 AM

JUST A MATTER OF TIME: Prior to his untimely death, the late Arthur Goldberg, then president of Park Place Entertainment Corp. tried to streamline the company by shedding properties that were a drain on the balance sheet. As part of his plan, he made a deal with Los Angeles real estate tycoon, Ed Roski (owner of the Silverton Hotel/Casino in Las Vegas and Staples Center in Los Angeles) to sell the Las Vegas Hilton.

But that deal never went through and, in fact, ended in a lawsuit. The rumor at the time was that Barron Hilton, then and now the largest single stockholder in both the Hilton Hotel chain and Park Place Entertainment, passed the word to Steve Bollenbach, chairman of PPE, to nix the deal. Roski sued but the matter eventually was settled.

Now, with Wally Barr sitting on Caesars’ throne, the Hilton is being sold to an affiliate of Colony Capital for about $280 million. PPE says the deal will generate a gain of $85 million and, of course, it will remove a dog from future earnings.

 

IT’S OFFICIAL: MONOPOLY IS OKAY! A federal court in California has made it official: the state’s tribal gambling law violates no federal statutes, even though it assures a monopoly on casinos for Indians.

Last week’s decision followed a lawsuit by card club owners, who argued that the expansion of gambling has killed their business and that they are unfairly prohibited from offering casino-style games — namely, slots and blackjack.

The appeals court decision agreed that the card clubs have been harmed by casino gaming, but ruled there was no violation of federal law.

The court also said granting Indians special favors wasn’t a form of racial discrimination, but simply a privileges that tribes are entitled to as "sovereign nations under the law."

The card clubs in California, as previously reported in GamingToday, have been struggling to compete as tribal gaming has proliferated throughout the state.

 

PENGUINS ARE IN A PICKLE! "If the (Pittsburgh) Penguins want a new home, they’ll have to make the deal work without local tax money!"

That was the word from Dan Onarato, the new Allegheny County executive who takes up his fiscal duties on Jan. 2.

The Penguins have been playing their games in Mellon Arena, the oldest and second-smallest venue in the National Hockey League. When the venerable Art Rooney owned the franchise, he remarked to a friend, "If I fill every seat for every game, I still can’t make money."

Apparently, things haven’t changed.

The Penguins owners put together a plan to build a harness track and fill it with slot machines as a way of generating $60 million for a new stadium that is expected to cost nearly $280 million. But, with politics the way they are in Harrisburg, legislation permitting racinos remains a longshot.

 

CUTTING THE BELTERRA CORD: It took a while to accomplish, but Pinnacle Entertainment Inc., under the leadership of Dan Lee, the former protege of Steve Wynn, has finally removed the last ties to the company held by former chairman and CEO R.D. Hubbard.

Lee announced last week that Pinnacle had repurchased more than 1.7 million shares in Pinnacle still held by Hubbard for an option exercise price of $10 per share.

The elimination of Hubbard from Pinnacle was dictated by Indiana gaming regulators who came down heavily on both the company and Hubbard individually following an investigation into a golf outing, sponsored by the Belterra riverboat casino, for the casino’s high rollers. Allegedly, the company imported party girls to entertain Belterra’s clients. The company paid some $2.4 million in fines while Hubbard had to ante up $750,000. He also lost his Indiana gaming license.

Apparently, the Indiana problem didn’t influence New Mexico gaming regulators who recently awarded Hubbard a license for a new racino in Hobbs, N.M.

Sometimes, people see things differently.

 

COST CUTTING OR SECURITY? Scientific Games Corp., the parent company of Autotote, says it will shut down its Clifton, New Jersey office as it brings its online lottery systems employees together under one roof.

A company spokeswoman said the closing would result in some layoffs, although she couldn’t say how many, as some employees will be offered relocation. There are about 200 employees in the Clifton office.

Readers may remember that Autotote was burned by computer hackers during the 2002 Breeders’ Cup races. The hacker, subsequently caught and prosecuted, was able to "manufacture" a winning pick six ticket by electronically altering his selections.

Scientific Games says there’s no correlation between the Clifton closing and any security concerns. Instead, the company said it expects savings of at least $5 million annually from the closing, which is expected to be completed by June.

The New Jersey closing follows Scientific Games’ $143 million acquisition last month of IGT OnLine Entertainment Systems Inc., which is based in Clifton.