ISLE’s casino bid for Rosemont
critized by Illinois A.G.

Mar 30, 2004 5:10 AM

A climate of suspicion was enough to motivate MGM MIRAGE Inc. (MGG) to abandon a deal last year to buy Emerald Casino’s bankrupt riverboat license and build a casino in the Chicago suburb of Rosemont, Ill.

Possibly the executives of Isle of Capri Casinos Inc. (ISLE) should have consulted with MGG before submitting its $518 million bid for the same license and a plan to utilize Emerald’s site for the state’s 10th riverboat casino.

Once having been chosen by the Illinois Gaming Board, over a competing $520 million bid for a casino in Waukegan, ISLE’s selection was challenged by the state’s leading Democrats, from Gov. Rod Blagojevich on down.

Particularly upset by the choice of Rosemont was Attorney General Lisa Madigan who charged that in her view "there appeared to be connections between the city of Rosemont and organized crime." She added that any casino operator that planned to locate in Rosemont had to show that it could do so without being influenced by organized crime.

Members of the gaming board reacted immediately by suggesting that Madigan "should have made her viewpoint clear at the beginning rather than after her process yielded a result she clearly disliked." They added that, "our analysis determined that Rosemont clearly is the best location for many reasons."

The board said it supported the effort of Gov. Blagojevich to clear the air by appointing an individual to conduct an independent investigation of the decision.

"We trust the process that has been put into place by Gov. Blagojevich to review the Illinois Gaming Board’s decision. We urge Ms. Madigan to trust that process as well, and to wait for the report by special investigator Eric Holder before rushing to judgment."

In announcing its decision, the board said Rosemont was picked for its proximity to O’Hare International Airport, the area’s abundance of hotels and restaurants, and, in part, to avoid a $45 million suit filed by the city over its losses related to Emerald Casino.

Dogging it

The battle over greyhound track owner Wembley Plc began to heat up last week when it was suggested that MGM MIRAGE Inc.’s (MGG) bid to acquire the English company would be topped.

According to the London Sunday Times, a consortium that included Kerzner International Ltd. (KZL), Starwood Capital, a subsidiary of Starwood Hotel and Resorts International (HOT), and gaming developer Waterford Group, was discussing offering 288 million pounds ($523 million) for Wembley. This would top MGM MIRAGE’s bid of 270 million pounds.

The newspaper said it was possible that the BLB Investors consortium could decide to forego bidding for the company but more likely it would submit its bid sometime this week.

Representatives of BLB met last week with Rhode Island Gov. Don Carcieri to discuss Wembley’s prized possession, Lincoln Greyhound Park in Lincoln, R.I. Wembley and two of its officials were indicted last year when state officials charged they were involved in a scheme to bribe a high-ranking politician. Carcieri said he would not discuss additional slot machines for the track as long as it was owned by Wembley.

While in Rhode Island, the BLB members said British law prohibited them from commenting on their plans regarding Wembley. However, "Butch" Kerzner was quoted as saying that the meeting with Carcieri was part of the "due diligence" the investors were conducting regarding Wembley’s biggest asset.

Meanwhile, lawyers representing Wembley, its former CEO Nigel Potter, and track chief executive Dan Bucci, filed several motions in federal court seeking to have the charges against them dismissed.

The lawyers argued that since no attempt to bribe the official, identified as ex-House Speaker John Harwood, was ever made there was no violation of the law. Prosecutors said the matter before the court revolved around the matter of whether discussions or planning related to a scheme are susceptible to a wire fraud charge.

Mikohn contracts

Mikohn Gaming Corporation (MIKN) reported that it has been selected to provide its TableLink automated chip tracking system at two Minnesota casinos operated by the Mill Lacs Band of Ojibwe Indians.

The properties involved are the Hinckley and Mill Lacs casinos. The TableLink system allows the casinos to automate the tracking of player activity, game action and tables games accounting through the use of patented casino chips embedded with microchips. Also, the casino can monitor the players’ bets, create drop forecasts and validate redeemed chips in real time.

This was not a new relationship for these casinos and Mikohn’s TableLink system. Earlier this year, the tribe’s Grand Casino Coushatta completed an expansion of their system and now have 71 of its 82 tables utilizing TableLink.

"These additional contracts for our TableLink product confirm the industry’s growing acceptance of table tracking technology," said Russ McMeekin, Mikohn president and CEO.

THE INSIDER: Boyd Gaming Corporation (BYD) plans to offer $300 million aggregate principal amount of 10-year senior subordinated notes in a private placement.

Also making a private placement of securities is the Sands Regent (SNDS). The company said it had issued to a private investor $1.4 million promissory note with a fixed interest rate of 7.5%. Also, the company issued 500,000 shares of its common stock and sold these privately for $5.22 to an investor.

Aztar Corporation (AZR) has scheduled a conference call for its first quarter earnings report to be held on Wednesday, April 21, at l:30 p.m. PDT.

The City of Baton Rouge, La., has agreed to offer incentives to Allegiant Airlines to scheduled four nonstop flights per week between Baton Rouge and Las Vegas, Nev.

The Tennessee House of Representatives has approved by vote of 61-32 to allow charities to hold gambling fundraisers. The bill now goes to the Senate where a similar bill was previously approved.

Legislation that would permit Kentucky to establish a wagering hub for horseplayers, similar to TVG interactive horse racing network, has been proposed by the state’s commerce secretary.

The Cherokee Nation plans to purchase a second thoroughbred racetrack. The tribe announced it will acquire Will Rogers Downs in Claremore. Last year, the Cherokee Nation acquired Blue Ribbon Downs in Sallisaw.

Looking to add more slot machines to its racing, the Dubuque Greyhound Park has increased the size of its planned expansion with a $27.7 million plan to add 400 slot machines to its current 600 slots.

Midway Games Inc. (MWY) reported that one of its holders of its series D convertible preferred stock has agreed to pay $1.79 million to buy another 179 convertible shares.

Ameristar Casinos Inc. announced that based on preliminary results of operations to date it was increasing its previously issued earnings guidance for the quarter ending on March 31. The new guidance is for earnings of $0.57 a share compared to the previous guidance of between $0.40 and $0.44.

Century Casinos Inc. (CNTY) reported on Monday that it had opened a casino about the Silver Cloud, a 296-passenger ultra luxury vessel. The boat will offer cruises in the Mediterranean and Northern Europe throughout the summer.