Michigan lawmakers boost
gaming tax to 24% Oct. 1

Aug 10, 2004 6:47 AM

Detroit’s three casinos will pay a higher gaming tax beginning with Michigan’s new budget year that begins on Oct. 1. The current gaming tax of 18% will rise to 24% and will remain at that level until Dec. 31, 2005 when it will drop to 22%.

Michigan’s legislators raised the gaming tax after a two-week vacation during which leaders of both houses were able to work out an agreement with Gov. Jennifer Granholm who insisted further budget discussions would not proceed until the gaming tax was raised.

The tax increase is expected to generate an additional $50 million annually.

Still undecided is a bill that would permit the state’s racetracks to install slot machines. Ironically, if racinos are approved — and they have been strongly opposed by the casinos — the tax rate on the casinos would revert to the original 18%.

Two of Detroit’s three casinos are operated by major gaming companies”¦MGM MIRAGE Inc. (MGG) and Mandalay Resort Group (MBG). Should the proposed acquisition of MBG by MGG receive approval, it is expected that the holders of a minority interest in the Mandalay casino would acquire full ownership.

New alliance

Mikohn Gaming Corporation (MIKN) has joined with International Game Technology (IGT) in a partnership to develop new games through the next five years.

According to a Monday announcement, Mikohn has signed a five-year "strategic partnership" agreement to license segments of Mikohn’s patent portfolio of technology and to develop video slot games based on Mikohn content.

Specifically mentioned in the announcement was IGT’s "Wheel" intellectual property that it has agreed to license to Mikohn for its Garfield games. The two companies also plan joint developments.

As part of the agreement, Mikohn has expressly recognized the validity and scope of the Wheel intellectual property owned by IGT.

Business moves

Four new members of the executive team at the Las Vegas Hilton were introduced last week by Rudy Prieto, CEO and general manager.

Appointed were:

Kevin Karo, vice president/controller; Lou Dorn, vice president/general counsel; Kathy Rybar, vice president/human resources, and Julius Kazen, vice president/hotel operations.

Karo, who received an accounting degree from the University of Southern California, most recently was senior manager of PricewaterhouseCoopers in Las Vegas.

Dorn is a former chief of the corporate securities division for the Nevada Gaming Control Board and also has served as a deputy attorney general for the Nevada Attorney General’s office.

Rybar served six years as vice president of corporate human resources with Boyd Gaming Corporation. She previously served as vice president of human resources for Foxwood’s Resort and Casino in Connecticut.

Kazen had executive positions with the Las Vegas Hilton when it was operated by Hilton Hotels Inc. and more recently by Caesars Entertainment Inc. (CZR).

Aussie Expo

Shuffle Master Inc. (SHFL) says it plans to introduce several new products at this year’s Australasian Gaming Expo to be held in Sydney, Australia, from Aug. 29 through Aug. 31.

Among the products to be introduced are:

The Easy Chipper, a silent chip sorting device that was developed by CARD, a Shuffle Master International Company;

Table Master, an electronic, multiple-player table game that includes five player stations;

Big Raise Hold’em, a new table game featuring head-to-head play against the dealer and a bonus bet;

Four Card Poker, a table game that features head-to-head play against the dealer and an optional bonus bet;

Dragon Bonus, a baccarat side bet;

Royal Match 21, a blackjack side bet that focuses on the first two cards the player receives, and

Casino War.

Texas racinos

Outside gaming interests heavily lobbied, apparently successfully, the Texas legislature while it considered permitting tracks to install slot machines, according to horsemen groups in that state.

Harrah’s Entertainment Inc. (HET) and Boyd Gaming Corporation (BYD), both with Louisiana racetracks that have slot machine emporiums, and New Mexico racetrack operator R.D. Hubbard, were identified with anti-racino lobbying by the Texas Thoroughbred Association. The state’s governor had called a special session of the legislature to consider slots.

"This issue is gaining out-of-state interests, and they are getting very active in Texas," said Dave Hooper, executive director of the horsemen’s association.

No action was taken on the slots proposal and horsemen indicated that the matter might not be considered again until the January, 2005, legislative session.

THE INSIDER: Isle of Capri Casinos Inc. (ISLE) will report its fiscal quarterly experience on Friday, Aug. 13, at 7:30 a.m. PDT.

Argosy Gaming Co. said it had avoided a strike at its Alton Belle Casino in Illinois by securing a contract with its 250 members of its security force.

Pennsylvania has granted a $764,000 contract to Information Services Group to provide consulting services regarding the state’s expansion of gaming.