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Renovated properties in Missouri help boost Argosy, Ameristar

Feb 17, 2004 4:36 AM

Major renovation and expansion programs at two Missouri riverboat casinos helped the state show an increase of 10.2% in gaming revenue during the month of January.

Contributing to the revenue jump were renovations at both the Argosy Riverside casino in Kansas City, owned and operated by Argosy Gaming Inc. (AGY), and Ameristar St. Charles, the facility that is owned and operated by Ameristar Casinos Inc. (ASCA). The Argosy property showed an increase of 23% and the Ameristar riverboat a boost of 17% during a period that is normally sluggish.

Suffering because of the increase in competition was Harrah’s North Kansas City Casino & Hotel, owned by Harrah’s Entertainment Inc. (HET). The company said revenues in January were down 7.8% while admissions fell 4.5%.

Slight gain

Continuing its slow recovery from the effects of the 9/11 terrorist attacks, Nevada casinos won $9.63 billion during the 2003 calendar year, an increase of 1.9% over the previous year, according to the Nevada Gaming Control Board.

The 2003 revenues were described by Frank Streshley of the gaming board as "really still flat" when compared to the rapid growth period of the 1990’s. "We’re still in a very slow recovery mode," Streshley was quoted as saying.

Of the total Nevada gaming revenues, $4.76 billion was credited to the Las Vegas Strip casinos, an increase of 2.3% over 2002.

Lawsuit settled

Station Casinos Inc. (STN) has agreed to settle a Missouri lawsuit that claimed it had used improper contacts to obtain a Missouri gambling license in 1997 by paying the plaintiffs $38 million.

The suit was filed by Fitzgeralds Sugar Creek Inc. which later was joined by the city of Sugar Creek, Mo. The owner of Fitzgeralds was listed as Philip D. Griffith. Under the agreement, Griffith will receive more than $25 million while the community will receive $2.83 million. The remainder of the payment will be going to the attorneys involved.

Focus of the lawsuit was $500,000 in bonus payments made to the company’s now disbarred lawyer in Missouri, Michael Lazaroff. A 2000 inquiry by the state’s gaming regulators in 2000 found no wrongdoing on the part of Station Casinos, but did find more than 200 undisclosed phone calls between Lazaroff and then-Gaming Commission president Robert Wolfson.

Station Casinos, whose executives admitted no wrongdoing, was granted a license in 1977 but later sold its casinos in St. Louis and Kansas City to Ameristar Casinos Inc. (ASCA). Fitzgeralds was not granted a license and its parent company, Fitzgerald Gaming Corp. of Las Vegas, later filed for bankruptcy.

The Fitzgerald Hotel/Casino in Downtown Las Vegas was purchased out of bankruptcy by Detroit entrepreneur Don Barden.

Refinancing

For years, Donald Trump’s Atlantic City casinos have been troubled by a heavy debt load, resulting in the company’s shares, Trump Hotels & Casino Resorts (DJT) struggling for recognition on the New York Stock Exchange.

Hoping to resolve the problem, Trump has joined with a Credit Suisse subsidiary, DLJ Merchant Banking Partners III, to refinance $1.8 billion of the company’s debt.

If approved, the restructured company will be called Trump International Corp. but "The Donald" would remain as its chairman. However, the board of directors would include representatives of the DLJ group.

In order for the refinancing plan to go forward, bondholders in Trump Hotels would have to agree to accept a discount on the face value of their notes.

Meanwhile, Moody’s Investors Service has downgraded the ratings on the casino’s debt.

THE INSIDER: Both MGM MIRAGE Inc. (MGG) and Sun Tak Holdings Ltd. of Hong Kong have denied that an agreement between the two to build and operate a casino in Macau is imminent.

GTECH Holdings Corporation (GTK) has signed a new contract to supply the Beijing Welfare Lottery Center with the hardware and software needed to operate a computerized keno game in Beijing, China.

A racino referendum in Maine that sought approval to install slot machines at a facility to be built in either Saco or Westbrook resulted in nearly $1.4 million being spent by both the proponents and opponents to the measure. The voters rejected the racino proposal.

Tim Hinkley, president and CEOO of Isle of Capri Casinos Inc. (ISLE) has received the 2003 Tourism Achievement Award presented by the Mississippi Tourism Association.

Shuffle Master Inc. (SHFL) has announced that Paul C. Meyer, current president of the company, has agreed to add the duties of chief operating officer to his responsibilities.

Moody’s Investors Service has confirmed Boyd Gaming Corporation’s (BYD) debt ratings following the announcement of its acquisition of Coast Casinos Inc.