Rio Suites, Greektown to entice
players with marketing plan

Mar 16, 2004 5:55 AM

Craig Ghelfi, the new chief operating officer at the Greektown Casino in Detroit, Mich., reached into his past to develop an alliance between his property and the Rio All-Suite Hotel & Casino in Las Vegas.

Ghelfi, a veteran of the Vegas casino wars, said the two properties will develop a casino marketing program that will assist Greektown customers who are looking to travel to Las Vegas as an alternative gaming destination.

He explained that the alliance will enable Greektown Casino to provide its players an opportunity to enjoy new gaming experiences at "one of Las Vegas’ premier casino hotel resorts, as well as benefit Rio players who live in the Detroit area."

Ghelfi, a former official with the Golden Gate Casino in Downtown Las Vegas, added that he "has always admired the Rio’s ability to maintain its strong presence in the face of a very competitive and growing Las Vegas market. We want Rio to become an extension of the party we started at Greektown."

Illinois license

Harrah’s Entertainment Inc. (HET) not only was the highest bidder for the Illinois casino license last week but also picked up some major political support.

On Sunday, five influential state senators, including Senate President Emil Jones, came out in support of placing the state’s 10th and final casino in Waukegan, the location identified by Harrah’s as the site chosen for its $520 million project.

Second highest bidder was Isle of Capri Inc., whose plans would place a $518 million casino in Rosemont, the site selected by the current owners of the license that will be turned over to the state.

The third preferred bidder, a private group called Midwest Gaming, bid $476 million with Des Plaines as its choice.

A decision on the license was expected to be made by regulators on Monday but its announcement was still anticipated at press time.

Supporting Waukegan, all Democrats, were Jones, Miguel del Valle, Rickey Hendon, Debbie Halvorson and Terry Link.

A UCLA gift

Flush with casino wealth, the San Manuel Band of Mission Indians has donated $4 million to the law school at the University of California, Los Angeles. The money was designated to support American Indian studies.

Officials at the school said the money would be used to establish a center for students from Southern California Tribes. The center will focus its studies on the history of legal disputes that surrounded American Indians.

The $4 million, generated through profits from the tribe’s casino operations, is believed to be the largest gift ever made to an educational institution by an Indian tribe. Last year, the San Manuel Tribe, operators of a casino near San Bernardino, gave $3 million to California State University, San Bernardino.

Class II gambling

A recent U.S. Supreme Court decision not to interfere with a lower court ruling that approved the use of Class II slot machines at Indian casinos has paved the way for the reopening of casinos in Oklahoma and Nebraska.

The Seminole Nation said it plans to reopen three of its casinos, including its most lucrative property, the Mystic Winds Casino. It is expected to reopen this week while two other properties will reopen within 60 days.

The casinos were closed in June 2003 when the National Indian Gaming Commission accused them of operating illegal slot machines, the so-called "pull tab" machines that are classified as Class II gaming devices.

Now that these machines are now "legal," at least until another federal appeal, more Indian casinos are expected to open their doors. Among them will be the casino operations of the Santee Sioux Tribe in Nebraska that awaits federal approval. They were shut down because Nebraska considered the "pull tab" machines illegal.

New York slots

Although MGM MIRAGE Inc. (MGG) has the contract to build and operate video lottery machines at Aqueduct Racetrack for the New York Racing Association, privately-held Delaware North has established itself of the Empire State’s king of the casinos.

The first racino to open was the Saratoga harness track and its designated operator was Delaware North.

On Wednesday, March 17, the state’s second racino, the former Buffalo Raceway now known as Fairgrounds Gaming and Raceway, will open and once again Delaware North, more familiarly known when it was founded by the late Louis Jacobs, as SportsService.

Although Delaware North was more noted for its involvement in providing food services for stadiums, arenas and racetracks, the company entered the racino business when it added video lottery machines at its Wheeling Greyhound Track in Wheeling, West Va.

A fair split

Penn National Gaming Inc. (PENN) had planned to spend $30 million to upgrade the facilities at Bangor Raceway in Bangor, Maine, but company officials have said that could be jeopardized if the track’s share of the split from slot machines is reduced below 63%.

But that’s exactly what is being proposed by the Veterans Affairs Committee, whose members want to reduce that split to 61%, a move that is strongly opposed by Penn National.

Recently, an investment banker who has been called an "anti-gaming advocate" by casino officials, has suggested that the 61% figure would make Maine’s law the most favorable to racino operators outside Louisiana.

When the referendum was placed before the voters by Las Vegas entrepreneur Shawn Scott, the plan called for slot operators to keep 75% of the slot proceeds.

Investment banker Jeff Hooke said racino states usually begin by giving a higher percentage to the operator and reduce the amount with each passing year.

THE INSIDER: Argosy Gaming Company (AGY) has appointed John J. Jones as senior vice president, general counsel and corporate secretary. Jones most recently was managing director of Edward Andrews Group, a N.Y. investment firm.

Pinnacle Entertainment Inc. (PNK) has received the blessing of the City of St. Louis Board of Aldermen for its plans for a casino project at Laclede’s Landing.

Multimedia Games, Inc. (MGAM) has been repaid in full for the $20 million loan it made to the Lytton Rancheria Tribe of California.

Lakes Entertainment Inc. (LACO) is planning to raise $20 million through an initial public offering of World Poker Tour.

Half the pari-mutuel tax paid by New Mexico’s four racetracks will be earmarked for use at the state fairgrounds. The new law, recently signed by Gov. Bill Richardson, is expected to raise about $2.5 million annually for improvements at Expo New Mexico.

Caesars Entertainment Corp. (CZR) has raised its earnings estimates for the current quarter because of better than expected room occupation and a higher hold at its gaming tables. The company says it now expects to earn between $0.17 and $0.19 per share compared to the previous estimate of between $0.11 and $0.13 per share.

BLB Investors LLC, a consortium that includes casino developer Sol Kerzner, Starwood International (HOT) and the English gaming developer Waterford Group has agreed to acquire 8.1% of Wembley Plc, indicted owner of a Rhode Island dog track. The move was seen as a challenge to the $493 million takeover bid for Wembley offered by MGM MIRAGE Inc. (MGG).

A subsidiary of GTECH Holdings Corp. (GTK) is the apparent winner of a five-year contract to provide instant ticket dispensing machines to the Illinois Lottery Commission.

Back Bay Investments LLC is proposing another casino barge to be located in Biloxi, Miss. The proposal calls for a casino on a man-made basin with an adjoining parking garage, convention center, water park and a six-story 300-room hotel.

Kentucky’s horse racing industry was blamed for the lack of action on legislation that would have permitted casinos in that state. But, industry officials denied the charge saying that horsemen and track operators agreed on the language the legislation should have contained but that lawmakers disagreed.

A dispute over the issuance of complimentary food and hotel accommodations has caused a stalemate in negotiations between New Mexico state officials and the operators of nine Indian casinos on new gaming compacts.

New Jersey racetracks won’t be permitted to install slot machines in competition with Atlantic City casinos, but under a plan to be adopted by the state the casinos will pay about $20 million annually to subsidize the purses at the horse tracks.

Iowa lawmakers have voted to permit racetracks to add table games to their slots operations but chose to ban new gambling licenses. However, state officials are still debating the final proposal.

Cash Systems Inc. (CKN) says it has negotiated contract with an additional half dozen locations for the installation of cash advance services.

The Pacific Exchange says it has begun trading options on Chicago Mercantile Exchange for the shares of Midway Games Inc. (MWY).