Casino Watch - September

17 August 2006
Harrah's Eyes UK Casino Groups

The Birmingham Post reports that Internet gaming goliath Harrah’s Entertainment has expressed interest in purchasing British casino operations Stanley Leisure and London Clubs International (LCI). Stanley and LCI are still discussing a merger of their own, worth a reported £634 million. Some in the gaming community speculate Harrah's CEO Gary Loveman will purchase Stanley and LCI after they merge. Allegedly, concern over rising construction costs in Las Vegas has impelled Harrah's to strengthen its presence abroad. While stricter gaming regulations in the United Kingdom have adversely affected the companies' profits--LCI lost £6.3 million last year--more recent numbers offer some cause for optimism. Stanley reports a 17 percent increase in provincial casino attendance, as well as a 2 percent increase in turnover. LCI, meanwhile, saw its shares rise sharply from 418p in January 2005 to 875p in early 2006, though the stock has since dipped to 600p. Stanley and LCI are expected to conclude their merger this month, with the sale to Harrah's still pending.

Shutdown Prevents AC Casinos from Breaking Revenue Records

The Philadelphia Inquirer reports that last month's three-day, state-imposed shutdown of all 12 Atlantic City casinos resulted in significant loss in gambling revenue, roughly $51 million. When juxtaposed with July 2005 numbers, last month's revenue dropped 4.8 percent. The casinos bounced back, earning $480.53 million in revenue, second only to the record-setting $504.77 million earned in July 2005. In 28 days last month, gambling halls earned $17.16 million a day. Had they operated 31 days, assuming the month's average for daily earnings, $17.16 million, would have held up, $532.02 million in revenue would have been generated, a difference of $51.49 million.

Losses were unevenly distributed among Atlantic City properties. The Tropicana lost $5 million over the three-day blackout, and took an 11 percent loss in revenue over the month. The Borgata, however, grossed $73 million, up 9.7 percent from July 2005. Other operations experienced revenue loss; all three Trump casinos suffered: Trump Taj Mahal was down 1.4 percent; Trump Marina, 8 percent; and Trump Plaza, 12 percent. Trump Entertainment Resorts Chief Operating Officer Mark Juliano remarked "(the shutdown) had a bigger impact than anticipated."

The three-day closure meant casinos in neighboring states absorbed some of the business. A spokesperson for Foxwoods Resort Casino in Mashantucket, Conn., claimed the casino serviced 33 percent more customers arriving by bus from the New York metropolitan area. Smaller casinos were also eager to cash in. Terry Nyquist, marketing and sales manager at Midway Slots in Delaware, reported a similar influx of bus traffic.

Atlantic City operators expressed uncertainty about the shut-down's long-term effects. "We won't know whether customers who took advantage of going to other places will stay there or not," Juliano said.

Snag in Blackpool

The Land-based casino development in the seaside resort of Blackpool, U.K., has hit a snag. The Noble Organization (TNO) has applied to convert the now-defunct Palace Nightclub into a new, three-storey gambling establishment. Blackpool's Development Control Committee (BDCC), however, has been advised to deny TNO's application for fear that it "could encourage the proliferation of smaller casinos."

A report submitted to the committee claims that approving TNO's application would have consequences twofold. On the one hand, "(The new development) would question the robustness of the council's policy stance." On the other, "(The new development) could undermine the longer-term, wider regeneration benefits that a new format casino development could bring to Blackpool as part of much needed wider mixed leisure and tourism redevelopment and investment." By contrast, casino operator Grosvenor is expected to win approval from BDCC to expand the size of its gaming floor, since the plan conforms to BDCC's casino policy, which permits small-scale expansion and improvement of existent casinos.

Mansion's Mission: Land-Based Poker

In an effort to increase brand conspicuity, online gaming operator Mansion recently announced its intention to open a land-based poker center in the U.K., and is seeking licensure in London. The latest venture comes amid a flurry of activity, as Mansion continues negotiations with an as-yet unnamed broadcaster to present its Poker Dome television series to U.K. audiences.

Maltese Party Gets out of Hand

Following a series of indecorous events that occurred at the Casinò di Venezia in Vittoroisa on July 9 and 14, the venue has reopened its doors after being stripped of its license by Malta's Gaming Authority. reports that the events were "shameful, disgusting and unacceptable." quoted sources as saying a party, organized on the night of the World Cup final, became "too wild to be acceptable." The list of offenses ranged from broken glasses to "indecent acts" that were performed in the presence of clients. The Maltese casino complied with Gaming Authority conditions, reducing its staff to such numbers as to lose its license temporarily. Yogonet reports the casino as making the adequate redresses, appointing a new Venetian/Maltese management duo as well as filling staff vacancies.