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MGM MIRAGE has big plans
for Little Rhody greyhound park

Mar 23, 2004 4:57 AM

MGM MIRAGE Inc. (MGG) has great plans for Lincoln Greyhound Park if and when it takes control of the Rhode Island racino.

Company chairman and CEO Terry Lanni told Rhode Island officials last week that his company plans to spend at least $200 million in upgrading and expanding the existing facility. The plan would expand the property’s slots lineup from the existing 2,341 machines to the 3,002 authorized by the Rhode Island Lottery Commission.

But that can only happen if the company’s cash offer of $493 million for Wemblcy Plc, the British gaming firm that owns Lincoln, is the winning bid. Although there has not been a competing bid submitted as yet, a consortium involving Kerzner International Inc., (KZR), the company that owns the Atlantis Resort in the Bahamas, and real estate giant Starwood Hotels and Resorts (HOT), has taken a major position in Wembley.

The consortium, known as BLB Investors, has bought out the 22.3% interest in Wembley held by Active Value Fund Managers, a move that observers felt indicated the consortium will make a run at Wembley. If so, they must submit their offer by March 30.

In addition to Lincoln Greyhound Park, Wembley owns four dog tracks in England and four dog tracks and one horse track in Colorado. However, nearly all the company’s revenues in 2003 came from the Rhode Island racino.

Wembley and two of its former executives have been indicted in Rhode Island on charges of establishing a scheme whereby a political official would be bribed. No trial date has yet been set for the officials, both of whom resigned following indictments.

As he explained to lawmakers, Lanni’s expansion plans called for a $50 million to $100 million expansion to take place immediately while a second phase would take place in 2006.

Illinois license

The surprising selection of Isle of Capri Casinos Inc. (ISLE) to operate the 10th riverboat in Illinois has resulted in a political uproar in the state, particularly among the Democrats who control the state Senate.

Prior to the official selection, the five top Senate leaders, all Democrats, suggested strongly that they wanted the license to go to Harrah’s Entertainment Inc. (HET) with their $520 million plans to build a facility in Waukegan, Ill.

Isle of Capri, with a bid of $518 million, said it would locate its riverboat in Rosemont, the original location of the bankrupt Emerald Casino group. State officials rejected the plans proposed by Emerald and forced the group to sell its assets.

According to reports, Gaming Board chairman Elzie Higginbottom said Isle of Capri was selected because the Rosemont site is near Chicago O’Hare Airport where an abundance of hotels and restaurants would be available to casino customers.

Also, the state faced a potential lawsuit from the City of Rosemont whose officials sought to recover $45 million that was spent to build a parking garage for the Emerald riverboat. Since Rosemont had already made plans for a riverboat, the Isle of Capri plans could be implemented more swiftly.

A concerned Gov. Rod Biagojevich, also a Democrat, said he would appoint a special investigator to help the gaming board conduct a heightened review of both Isle of Capri and Rosemont.

Scott bypassed

Vernon Downs harness track in upstate New York will get back into the racing business next month now that controversial Las Vegas entrepreneur Shawn Scott has agreed to step aside.

Scott, whose Mid-State Raceway owns the track, was denied a racing license by the New York Racing and Wagering Board, a decision he is appealing. However, the track was prohibited from opening its live racing meeting as long as Scott was involved.

An agreement was ironed out last week with Dennis Dowd, former chairman of the N.J. Racing Commission, assuming the position of interim general manager.

Still unresolved is when the track will be permitted to open its video lottery machine facility. State officials are hopeful that the slot machines will be activated soon after live racing begins.

Stock split

Shuffle Master Inc. (SHFL) has announced that the company’s directors have approved a 3-2 split of its common stock. The new shares will be issued on April 16 to shareholders of record on the close of business April 5.

Under the plan, each shareholder will receive an additional share of Shuffle Master common stock for every two shares owned. Cash will be distributed in lieu of fractional shares.

As of Feb. 29, the company had 16,611,912 shares outstanding.

Commenting on the announcement, Dr. Mark Yoseloff, company chairman and CEO, said, "We are pleased to announce this three-for-two stock split. Our decision responds to the positive investor interest in Shuffle Master stock. With the increase in our market capitalization to the $700 million range, we are on the radar screens of an ever broadening group of institutional investors."

More hotel rooms

The impact of the Borgata Hotel/Casino in Atlantic City, especially with its strong showing during the winter months, has triggered increased talks within the boardrooms of competing properties.

Last week, Harrah’s Entertainment Inc. (HET) indicated it was considering adding more hotel rooms to its properties in Atlantic City where it operates two gaming properties, Harrah’s Atlantic City, a neighbor of the Borgata, and the Showboat on the Boardwalk.

"We have been turning people away in the last couple of months," said Gary Loveman, company CEO. He added that the company was considering adding 1,000 to 2,000 new rooms in Atlantic City.

Positive forecast

GTECH Holdings Corp. (GTK), whose shares have more than doubled during the past year, says it expects both revenue and earnings to rise annually through 2008.

For the next four years, the company said it expects annual revenues to grow by an average of between 12% and 15%. It also expects earnings per share to grow even faster, more like 15% to 18%.

The forecast for the company, whose 2003 earnings were $142 million, was made at a recent gathering of analysts and investors. During the conference, the company said it would use its growing cash flow to fund future acquisitions.

Investment in Quebec

Looking to expand its growing list of racetracks, Magna Entertainment Corp. (MECA) has proposed to the Province of Quebec that it be given the opportunity to invest in the area’s four stardardbred racetracks.

The non-binding proposal suggested the company would invest in the tracks located in Montreal, Quebec City, Trois Rivieres and Aylmer, as well as a training track in St. Basile le Grand. However, the company did not indicate what position it would take after the investment.

Awaited by the company is advice from the Quebec government as to a specific timeline in which a procedure for replying will be identified. Nor was information given regarding the types of negotiations it would enter.

Magna Entertainment Corp. operates a dozen pari-mutuel facilities in the U.S. and Canada and has proposed building a racetrack in the suburbs of Detroit, Mich.

THE INSIDER: Boyd Gaming Corporation announced it has scheduled its annual meeting of stockholders for Friday, April 30, at the Borgata Hotel casino and Spa in Atlantic City, N.J. The record date for admission has been set for March 31.

Pinnacle Entertainment Inc. (PNK) will hold its annual shareholders meeting on Tuesday, May 4, at 10 a.m. at the Four Seasons Hotel in Las Vegas. The meeting will be open to shareholders of record on March 31.

Almost identical slots revenues were reported by Foxwoods Resort Casino and the Mohegan Sun for the month of February. The casinos reported that slot machine revenue at Mohegan Sun totaled $68.8 million while Foxwoods had $68.5 million in revenues. The combined revenues resulted in the state of Connecticut adding more than $34 million to its coffers.

Caesars Entertainment Inc. (CZR) says it plans to invest $5 million in a Newark, N.J., redevelopment project. The investment will be made through the New Jersey Casino Reinvestment Development Authority.

Mikohn Gaming Inc. (MIKN) will conduct a conference call to discuss the company’s fourth quarter earnings on Thursday, March 25, at 8 a.m. PST.

Frank P. Ciuffetelli is the new vice president of information systems for Isle of Capri Casinos Inc. (ISLE). He previously performed the same functions for the Mid-South region of Caesars Entertainment Inc. (CZR).

Scientific Games Corporation (SGMS) announced it had named Brad Mohs as senior vice president for software engineering. He previously was senior vice president and chief technology officer for AutoTrader.com.

President Casinos Inc. (PREZ) says it has sold the 179-room Broadwater Tower Hotel in Biloxi, Miss., to a local partnership for $6.5 million.

Plans to have the University of Southern Mississippi offer classes on managing and marketing casinos are on hold while the state’s College Board awaits a written opinion from the Mississippi attorney general.

James Packer, executive chairman of Publishing and Broadcasting Ltd., the Australian media group, dislocated his shoulder while playing polo at the family’s property about 90 miles from Sydney. He is the son of Kerry Packer, the legendary higher-roller gambler.

BMM Test Labs of Las Vegas, Nev., has been authorized by the Mississippi Gaming Commission to test ticket-in, ticket-out payment systems for slot machines.

Fairgrounds Gaming & Racing, formerly known as Buffalo Raceway, has become the third racetrack in New York State to offer gambling on video lottery machines. The other two are Saratoga Raceway and Finger Lakes.