Despite high tax rate,
Illinois gaming license
draws seven bids

Jan 27, 2004 4:18 AM

Illinois has the highest gaming tax rates in the country but that hasn’t stopped seven companies from bidding on a gaming license that the state is expected to hold up for auction.

For instance, one of the companies that has indicated its plans to bid for the license, recently told Rhode Island Gov. Don Carcieri that his plan to offer one casino license but the operator would have to agree to pay 60% of revenues in taxes that the rate would be too high. Harrah’s Entertainment Inc. (HET) said the Rhode Island rate would be too expensive since the casino would have to compete with two hugely successful Indian casinos in Connecticut, Foxwoods Resort and Mohegan Sun.

Joining Harrah’s in bidding for the Illinois license are Caesars Entertainment Corp. (CZR), Isle of Capri Casinos Inc. (ISLE), and Penn National Gaming Inc. (PENN), all of which indicated they would locate their facility in Rosemont, a Chicago suburb; Mandalay Resort Group Inc. (MBG) and its partner, Hyatt Hotels Inc., who have selected a site in Summit; Wynn Resorts Inc. Midwest in Des Plaines, and the privately held Southland Development Group with plans for Country Club Hills.

Probably the most elaborate plans were submitted by Caesars Entertainment which would not only have a casino but an entire complex that would include a convention center, a 6,000-room hotel an 18,000-seat arena and a 4,300-seat theater.

The license that the state will auction is held by the bankrupt Emerald Casino. The state has been negotiating to acquire the license since it declared Emerald ineligible to operate a casino.

Apparently the bidding got too rich for Donald Trump whose Trump Hotels & Casino Resorts (DJT) bowed out of the bidding.

Trump issued a statement that read, "Rather than submitting a non-conforming bid for a bankrupt company, we will continue to work with the South Suburban communities" to try for a riverboat license for their area.

THE INSIDER: Harrah’s Entertainment Inc. (HET) has agreed to sell its Shreveport, La., hotel/casino to Boyd Gaming Corporation (BYD) for $190 million.

Among the companies that will be providing quarterly fiscal reports soon are: Ameristar Casinos Inc. (ASCA) Monday, Feb. 2 at 6 a.m. PST; Penn National Gaming Inc. (PENN) Tuesday, Feb. 3 at 7 a.m. PST; Argosy Gaming Company (AGY) Wednesday, Feb. 4 at 8:30 a.m. PST; Boyd Gaming Corp. (BYD) Wednesday, Feb. 4 at l:30 p.m., and Scientific Games Corporation (SGMS), Feb. 26 at l p.m. PST.

MGM MIRAGE Inc. (MGG) says it has completed the previously announced sale of the Golden Nugget Hotel/Casino in Downtown Las Vegas and the Golden Nugget Hotel/Casino in Laughlin, Nev., to the Poster Financial Group Inc. for $215 million.

Rocky’s Casino and Sports Bar in Reno has announced that it will close on Jan. 31. The company, PDS Gaming Corp., said it lost nearly $1 million during its first 12 months of operation. The property has 29 employees.

Because of a surplus in the New Jersey Casino Control Fund, Atlantic City casinos will receive a $5 million rebate.

Pinnacle Entertainment Inc. (PNK) plans to offer eight million shares of common stock in a new round of financing. The company said it will use the proceeds, estimated to be around $8.5 million, to build new resorts.

Boyd Gaming has announced a cash dividend of $0.075 per share to be paid on March 2 to shareholders of record on Feb. 13.

Operators of Evangeline Downs, Louisiana’s newest racino, reportedly is pleased with the initial results it has seen for the recently installed 1,627 slot machines. For the first 13 days of operation, the machines generated an average of $261,000 in revenue per day.

The Penobscot and Passamaquoddy Indian Tribes, whose effort to open a casino in Sanford, Maine, was voted down last November, have asked that lawmakers open up the process of selecting a slot machine operator in Bangor. Currently, Penn National Gaming Inc. (PENN) has the franchise to operate slots at Bangor Raceway.

The Mississippi Gaming Commission has approved plans for a $235 million Hard Rock Hotel and Casino Resort in Biloxi. The property will be adjacent to Beau Rivage Hotel/Casino owned by MGM MIRAGE Inc. (MGG).

Also on the Mississippi front, the state’s chairman of the House Gaming Committee, Rep. Bobby Moak, announced last week that the state likely will not raise gaming taxes during the next four years.

Oklahoma Gov. Brad Henry has endorsed the plan to authorize electronic gaming machines to be placed at the state’s three horse race tracks.

Macao gaming magnate Stanley Ho has opened his 12th casino in that community. The property was opened in time to benefit from the Chinese lunar New Year.

A bill to provide funds that would be used to lower the workmen’s compensation costs for horse owners and trainers in California was vetoed by Gov. Arnold Schwarzenegger.