Envious horsemen at the Meadowlands racetrack in northern New Jersey have felt squeezed by the growth of slot machine revenue at East Coast tracks and the slots barrier imposed on them by Atlantic City casino operators.
But, that may all come to an end, and much sooner than they could have foreseen just a few months ago.
Making changes possible was the unexpected resignation of Gov. James McGreevey over moral issues and the rise of Sen. President Richard Codey to the chief executive’s position.
McGreevey used his position to coerce financial concessions from the casinos by threatening to permit the tracks in northern New Jersey to install slot machines. He gave only lip service to the horsemen who warned that the racing industry would suffer from the installation of 62,000 slot machines at 14 locations in Pennsylvania and between 10,000 and 14,000 slot machines at Aqueduct and Yonkers Raceway in the New York City area.
Expected to be impacted by these slots installations were the Meadowlands (just 12 minutes from New York City’s Times Square through the Lincoln Tunnel) and Monmouth Park, both owned by the state and operated by the N.J. Sports and Exposition Authority, and privately-owned and operated Freehold Raceway.
As an aside, observers have been quick to note that the general manager of Freehold is Don Codey, brother of the new governor.
In a meeting last week with Atlantic City executives, Gov. Codey said he felt Atlantic City would lose business to both New York and Pennsylvania with these new installations.
"So the loss to Atlantic City is going to happen," Codey told the Newark Star-Ledger newspaper. "If we have machines at Meadowlands and only at the Meadowlands, not Freehold and not Monmouth, we’re going to cannibalize New York City, not Atlantic City."
He also noted that the state could get as much as $500 million a year from 10,000 new video lottery terminals at the Meadowlands, a figure that was floated around the state by the treasurer’s office last year.
Codey said such revenue would make a dent in the state’s $4 billion budget gap that is anticipated for the next fiscal year.
President of the Atlantic City Casino Association, which has opposed any efforts by Northern New Jersey legislators to get slots for the tracks, is Dennis Gomes, who also is CEO of the Tropicana Hotel/Casino for owner Aztar Corp. (AZR).
New York deal
Interest in the shares of Empire Resorts Inc. (NYNY) skyrocketed Monday with the dual announcements that New York state has resolved a land dispute with an Indian tribe and that the company had purchased two historically renowned hotels in the Catskill Mountains.
The action was triggered by the announcement that New York Gov. George Pataki and the Seneca-Cayuga Tribe of Oklahoma had signed an agreement to settle the tribe’s New York land claim, establish a Catskills casino and provide for tribal collection of sales taxes.
Empire Resorts followed up the announcement by saying it had purchased both the Concord Hotel and Grossinger’s Resort Hotels and Golf Course from Concord Associates LPL, a joint venture owned 46% by Reckson Strategic Venture Partners, and a real estate company that formerly was part of Frontline Capital Group.
The company said it had individual agreements with the Seneca-Cayuga Tribe of Oklahoma and the Cayuga Nation of New York to develop and manage separate Native American gaming facilities in the Catskills.
Previously, Empire Resorts announced plans to develop a $500 million Indian casino on a site adjacent to Monticello Raceway, a harness racing facility. The company opened Mighty M Gaming at the raceway in June. The property features 1,743 video lottery machines and amenities such as a 350-seat buffet and live nightly entertainment.
Commenting on the Native American agreement, Gov. Pataki remarked, "The agreement allows us to move forward with plans to establish the first of three new casinos in the Catskills, which would create thousands of new jobs and provide a tremendous boost to the region’s economy."
The price of Empire Resorts shares opened on Wall Street Monday morning at $9.60 a share but was bid up to $11.78 before closing at $11.39, an increase of $2.10 for the day with 1.9 million shares changing hands.
Alliance in compliance
Alliance Gaming Corporation (AGI) has been lacking an outside director to comply with the standards established by the N.Y. Stock Exchange. But, last week, the company received an "informal notification" from the NYSE that AGY’s efforts to correct the problem will be acceptable.
The company told the exchange that the board of directors "is currently in discussions with a qualified candidate who meets the NYSE standards, to join the board in early 2005."
Casino land sale
Plans for another California Indian casino moved forward last week when the city council of Richmond agreed to sell about 400 acres of waterfront land to Upstream Development and a unit of Harrah’s Entertainment Inc. (HET).
Upstream, the company that represents the Guidiville Band of Pomo Indians, agreed to pay $50 million to the cash-strapped city. The plans call for the development of a Las Vegas-styled multi-million dollar casino and entertainment center that would be operated by Harrah’s.
The Guidiville Band, although recognized as a landless tribe, has been guaranteed to receive approval by the U.S. government for any parcel of land of their choice.
Still, the casino could be in conflict with plans by the Station Casinos Inc. (STN) and the Lytton Band of Pomo Indians for a major urban casino in San Pablo.
During recent negotiations, Gov. Arnold Schwarzenegger gave the Lytton Band exclusively rights for slot machines at their casino a move that prohibits other machines within the immediate vicinity.
It’s been a year with no prosecution since the initial indictments were unsealed involving the executive heads of a Rhode Island racetrack owned by an English company, but renewed activity relative to prosecutions has taken place.
The feds have replaced the old indictments with new ones.
A few days ago, Nigel Potter, the former CEO of Wembley Plc., and Danny Pucci, the general manager of Lincoln Greyhound Park, appeared in federal court after the feds produced new indictments charging them with scheming to pay off a law firm whose principal served as the then Speaker of the Rhode Island House. At the time, the track sought to increase the number of slot machines it operated.
Prosecutors said they sought the new indictments to insure that new federal sentencing guidelines would not be applicable to their case. Instead of the original 22 charges, the indictments were reduced to 15.
Also at the indictment hearing was a lawyer representing Lincoln dog track whose corporate ownership also has been charged in the case.
Meanwhile in the U.K., there has been no word on the progress of takeover bids for Wembley being made by some American companies. With the expected modernizing of England’s gaming regulations, Wembley has been considered a prime takeover target.
THE INSIDER: Aristocrat Technologies Inc. of Las Vegas has named Simon Ashley as vice president of finance with responsibility for all financial operations in North and South America.
Century Casinos Inc. (CNTY) says it has applied for a casino license in Iowa with its partner, Franklin County Development Association.
Mandalay Resort Group (MBG) shareholders will vote Dec. 10 on plans to have the company bought by MGM MIRAGE Inc. (MGG).
Barrick Gaming Corp. has agreed to pay $31 million to acquire Golden Nugget Laughlin from the Poster Financial Group Inc.
Dover Downs Gaming & Entertainment Inc. (DDE) has begun its tender offer to purchase more than one million of its common stock and 1.6 million shares of its Class A common stock at a fixed price of $12 per share.
Sands Regent (SNDS) has agreed to sell 1,120,000 shares of its common stock to institutional investors for $8.25 per share.
The guitar-shaped sign at the Hard Rock Hotel & Casino in Biloxi, Miss., will rise 112 feet, making it the largest sign on the Gulf Coast.
Attempts to add a racetrack slots amendment to an existing bill was defeated in the Ohio House 83-6 last week.