Casino Watch - January

26 December 2006

Hard Rock Sold to Seminoles

U.K.-based leisure company Rank Group announced on Dec. 7 that it has agreed to sell its Hard Rock Café and casino business to the Seminole Tribe of Florida for $965 million. Rank said the Hard Rock disposal was part of its plan to overhaul, focusing instead on the impending casino liberalization in the United Kingdom. Following the sale, Rank intends to return $688 million to shareholders via a special dividend, equivalent to $1.27 a share. Seminole Gaming Chief Executive Jim Allen was reported as saying the group intended to expand the hotel and café business through selected vacation destinations around the world, and would expand Hark Rock casinos internationally, but not in Britain. Allen said gaming was the main revenue earner for the tribe, which also produces citrus, cattle and tobacco.

Harrah's Sale Final

Harrah's Entertainment Inc. on Dec. 18 agreed to a $90 per share buyout offer from private equity duo Apollo Management Group and Texas Pacific Group, said an anonymous spokesperson with knowledge of the negotiations. The spokesperson said the agreement was made late last week, but lawyers for both sides have been working out the details. An official announcement could be made as early as Tuesday, said the spokesperson. The deal values Harrah's at $16.7 billion and represents a 36 percent premium over Harrah's share price on Sept. 29, the last trading day before Apollo first proposed a buyout Oct. 2. Apollo and Texas Pacific also will assume $10.7 billion in debt.

PBL Melco Looks for More Ventures in Asia

Publishing and Broadcasting Limited (PBL) announced on Dec. 11 that it had lost its bid for a casino license in Singapore. Despite the failure, PBL executive chairman James Packer said the company, and its joint venture partner in Asia, Melco International Development Limited., would continue to seek investment opportunities in the Asian gaming market. Packer said PBL's participation in Singapore was a valuable experience and that they had always considered their bid to have an outside chance.

Russia Passes Casino Zoning Legislation

Russia's State Duma, the lower house of the country's parliament, on Dec. 20 passed in a third and final reading gambling legislation that forces casinos across the country to relocate into four designated zones. All that remains for the bill to become law is the signature of President Vladimir Putin, the bill's original sponsor. If it becomes law, casinos in Moscow, St. Petersburg and other cities not permitting gambling would be closed by June 30, 2009. The four legal gambling zones as of July 1, 2009 will be the Altai, Primorsk and Kaliningrad regions, as well as an area between the Rostov and Krasnodar regions.

Station Casinos Going Private?

Las Vegas-based casino operator Station Casinos Inc. on Dec. 4 received a $4.7 billion buyout offer from its founding family, the Fertittas, and an affiliate of Los Angeles-based real estate investment firm Colony Capital, according to the company. Station Casino Chairman and CEO Frank Fertitta III, President Lorenzo Fertitta and Colony Capital LLC have formed Fertitta Colony Partners LLC to make an $82 per share bid for the company. The offer represents a 19 percent premium to the company's closing price on December 1. Station's Board of Directors has established a Special Committee of independent directors to review the proposal, but no decisions have been made by the with respect to the proposal.

Ladbrokes for Kids

U.K. betting giant Ladbrokes is reportedly talks with U.K. attractions operator Merlin Entertainments Group to join its bid to operate a super casino at Blackpool. The Casino Advisory Panel (CAP), set up by the government to choose the location of the country's first super casino, is eight weeks away from its selection and has narrowed down the finalists to Greenwich, Glasgow, Blackpool and Sheffield. Merlin Entertainments is the company behind international children's theme park Legoland and the link between the gambling and family entertainment has raised eyebrows in the leisure industry. Gamcare, however, which tackles problem gambling, said they did not have a problem with a children's theme park being sited next to a giant casino. "If it serves to provide a distraction from the gambling, that has to be a good thing," a Gamcare spokesman said.

Moulin Rouge Revival

Atlantis Internet Group, Corp. (ATIG) announced on Dec. 19 that it has entered into a joint venture agreement with the Moulin Rouge Hotel & Casino Corporation to rebuild the Historic Moulin Rouge Hotel & Casino property in Las Vegas, Nevada. Built in 1955, the original casino boasted legendary owners like Heavy Weight Champion Joe Louis and headliners such as Frank Sinatra, Dean Martin and Sammy Davis, Jr. The casino burnt down a few years ago, but ATIG intends to offer a new state-of-the-art music themed casino, hotel, condominiums, and musical amphitheater in its place. "The theme should appeal to music lovers worldwide and much like the original Las Vegas Moulin Rouge, the new hotel, resort, casino and entertainment facility will truly be 'A Vegas Jewel,'" said Donald L. Bailey, CEO of ATIG.

Chartwell Debuts Flash Poker

Internet gaming software provider Chartwell Technology Inc. has released its popular European-style 32 card poker product in Flash technology. Players will notice features such as quick access to their accounts and game play from any Internet browser available. The Flash technology also makes the product available to Mac users. Chartwell intends to release a Flash based Texas Hold'em product in Q1 2007.