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CR87-p79-business4:SJC-Casino Review 23/12/09 17:46 Page 1
AC decline speeds up again
November revenues in Atlantic City dropped by 13.4
per cent year on year, resuming the trend of a double-
digit decline after slowing slightly in September and
October. The 11 casinos generated GGR of $299.3m
(E209.3) with slots accounting for $206.8m
(E144.8m). As competition increases from
NEWS Pennsylvania and even Delaware, the prospects for
future months are poor.
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Boyd offers to
Station’s Red Rock Resort
is one of the prime targets
for Boyd Gaming
buy Station
Casinos… again
Boyd really wants to buy and for as little as possible. Station really
doesn’t want to sell, unless it’s for an amount they can’t refuse. As
the economic situation continues in the doldrums, the two positions
are perhaps becoming closer than either party thought.
onthetable Station’s current major ceeds in its ambition to take adding its four locals venues in the city but also some flag-
BOYD GAMING shareholders, the Fertitta all or part of Station off the and downtown-Las Vegas ship properties including Red
family and Colony Capital Fertittas and Colony Capital, casinos to Station’s broad Rock and half of Green Valley
Station Casinos, which has have said they want to keep it would become one of the portfolio that includes not Ranch in Henderson as well
been in Chapter 11 since the the company together with biggest operators in Las Vegas only the biggest locals venues as across the United States.
end of July, has received the same identity: they
another offer from Boyd rejected the last offer made
Gaming to buy the company by Boyd. Station recently
for $2.45bn (E1.71bn) cash Gaming’s position as a managed to extend its exclu-
and assumed debt. licensed operator with sive period in which to reor-
The proposal, an improve- strong financial capabilities, ganise the company to 25
ment on Boyd’s last offer of we continue to believe that March 2010 and is resolutely
$950m (E665m) for parts of the acquisition of the Station not committing to any course
the business, is still a long assets by Boyd Gaming is the of action that includes sale of
way short of the $6.8bn optimal way for Station and its assets.
(E4.76bn) debt and liabilities will create the most value for Private equity company
carried by Station. However, Station’s creditors.” Colony Capital was forced to
Boyd believes the deal It continued: “Importantly, cede another casino in its
reflects the current eco- Boyd Gaming is in the best portfolio in December, the
nomic reality. position to execute a smooth Resorts Casino Hotel in
In its letter to Station, Boyd transition of ownership and Atlantic City. Resorts had
said:“Combining Station with operate the Station properties failed to make a mortgage
our current portfolio is con- efficiently from day one. We payment since October 2008
sistent with our strategy of believe our proposal…will and in November 2009, the
growing our presence in the help to strengthen the local lenders and owners agreed
Las Vegas locals market. The economy and preserve thou- to exchange more than
transaction contemplated by sands of jobs. We believe our $380m (E266m) of debt for
this proposal will allow us to offer price represents fair equity. Colony Capital has
leverage our 35 years of oper- value to Station’s stakeholders now handed over the keys to
ating experience in the Las and takes into account current the new co-owner Nick Ribis.
Vegas market to maximise market conditions, our deep If Boyd Gaming - which is
the full potential of Station’s knowledge of the industry and now also a creditor of Station
assets. Given this compelling Station’s publicly disclosed Casinos having bought $2m
strategic fit, and Boyd financial performance.” (E1.4m) worth of debt - suc-
Pinnacle’s cuts back on Sugarcane
sweetspot tions with the existing 1,000-
PINNACLE ENTERTAINMENT room hotel, such as the recep-
tion area, and also sees less
The Louisiana Gaming Control restaurant and retail space
Board has approved a reduc- than formerly planned.
tion in the investment made by Pinnacle has also
Pinnacle Entertainment in a announced that it intends to
new riverboat casino, the Sug- bring forward the opening date
arcane Bay of $50m (E35m), The company said it would of its River City casino in Mis-
after a redesign. finish the hotel by the end of souri to early March, subject to
That represents a 14 per June 2011 but that gambling the necessary approvals. Pre-
cent cutback on the original may begin earlier. viously the opening had been
$350m (E245m) investment The modified design con- planned for ‘spring’ 2010. The
planned in the venue adjacent sists mostly of configuring the venue will house more than
to Pinnacle’s successful new 400-room hotel so that it 2,000 slot machines and 55
L’Auberge du Lac casino-hotel. can share some of the func- table games.
January 2010 • businessnews 79
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