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Thursday, 05 August 2010 14:20

Written by Bill Toland

Next week is the one-year anniversary of the opening of Rivers Casino. Already, a lot has changed -- the guy who was tapped to open the casino, Ed Fasulo (at right), is gone, replaced by Todd Moyer. Table games were swiftly approved by the state Legislature, and installed -- they debuted last month. Table games really are the last great hope for Rivers Casino -- barring a reduction in the tax rate, there's no new cash cow on the horizon. The only thing that will bring the casino increased revenue is an actual increase in business. 

Will table games meet expectations?

The new gambling, introduced July 6 in western Pennsylvania and later in the month elsewhere in the state, generated $1.6 million for the state's general fund, according to figures released today by the state Department of Revenue. Revenue generated by individual venues last month, including the Rivers Casino in Pittsburgh and The Meadows Racetrack and Casino in Washington County, were not available today. They will be released by the state gaming control board later this month. The state has budgeted $91.4 million this year from table games, which are taxed at 16 percent compared to 55 percent for slot machines.

But the first-month totals were below what the state hopes to be collecting on a monthly basis.

... has casino gaming reached the long-discussed, long-feared saturation point, especially in the North East? The attorneys who practice gaming law certainly seem to think so: "After years of steady expansion in their legal niche, lawyers who represent casinos and other gambling interests say there are signs their specialty may be leveling off, even as casinos in Pennsylvania are booming. For now, there appears to be plenty of work for lawyers in this highly specialized, insular field, particularly in jurisdictions such as Pennsylvania, where legalized gambling still is new and revenue is on a sharp upward arc. But gambling revenues are down nationally." (Philadelphia Inquirer)

Maybe they should think about changing specialties -- I hear newspaper bankruptcy law is about to take off.

Boston: No go for launch

In Massachusetts, "the failure to pass an expanded gambling bill has left its supporters seething. There are the frustrated developers who must now shelve multimillion-dollar building plans and hope for success in the next legislative session. There are the municipal officials across the state who were counting on those developments for new jobs and tax revenue. And then there are people like Robert Young, a landscaper in Palmer who wanted a casino to enliven the local business climate and can't believe the legislation fell through again." (Boston Globe)

Raiders of the Slots Park

In Tuskegee, Ala., the governor wants to raid a bingo parlor: "The commander of Gov. Bob Riley's gambling task force told a judge Thursday that he wants to raid the state's largest electronic bingo casino even though a Supreme Court ruling allowing the raid won't be final for 12 days. But in an emotional plea rekindling civil rights-era struggles, attorneys representing Macon County officials begged Circuit Judge Tom Young to delay efforts to close the Victoryland casino as long as possible to preserve the 600 jobs it provides in the poor, mostly black county." (Montgomery Advertiser).

Odds and ends

Credit card scam at the Wheeling, W. Va., casino ... Should the state of New Jersey oversee a "gaming district" in Atlantic City? ...  And is Atlantic City primped for its spotlight?:

"The U.S. correspondent for The Observer, a large British newspaper, is in town doing a story on Atlantic City because of the upcoming debut of the 'Boardwalk Empire' miniseries on HBO. Expect more of this attention, much more. HBO is hyping the show big-time. Reporters from across the nation and around the world will likely be descending on the city."

Comments (4)

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written by DukesFan, August 06, 2010 - 11:35 AM

Table games really are the last great hope for Rivers Casino -- barring a reduction in the tax rate, there's no new cash cow on the horizon.

Is Rivers Casino in such bad shape that we are talking about last great hopes?

I am confused about your term last great hope. I know they have been underperforming, but I didn't realize it was at the stage of talking about the "last great hope."

If they are in such poor shape, why isn't this a bigger story?

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written by B_Toland, August 06, 2010 - 02:28 PM

Well, they ARE underperforming, and cash flow has been an issue there back to the Barden days. In June 2010, they had to restructure their debt -- not a bad thing in isolation, but credit rating agencies certainly viewed it that way in this case, and had downgraded Rivers' credit rating earlier in the spring as a result, and then again following the debt restructuring. They also needed a cash infusion of $108 million to help float it this summer and going forward:

In an update released hours after the Rivers announcement, Standard & Poor's downgraded the rating of casino affiliate Holdings Gaming Borrower from CCC to SD, or selective default. It marked the third downgrade since the casino opened in last August.

Standard & Poor's stated it viewed the buy back of some of the senior debt and the accompanying restructuring of other obligations as "tantamount to a default," given the "distressed financial condition" of the company.

http://www.post-gazette.com/pg/10154/1062788-53.stm#ixzz0vqcWYCy4

Neil Bluhm and Co. can keep pumping their own cash into it if they want, but at some point Rivers will have to sustain itself, either by making more money that it currently is, or cutting its costs (payroll, or selective default of debts). To date, the revenues are well below what all of the financial forecasters had predicted for the Pittsburgh casino.

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written by DukesFan, August 07, 2010 - 05:14 PM

I honestly didn't realize it had reached this level of concern. Perhaps two casinos for the Pittsburgh area was one too many.

Thanks for the info. Selective default of debts....hmmm, I wonder what biannual payment they would look to shed first.

It doesn't seem like a whole lot was done correctly by the PA Gaming Board on the awarding of licenses. Poconos mob connections, trouble with Arneault (sp?) in Erie, Philly mess for the one casino, and the potential for default here.

I like the blog!!

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written by marlena21, September 23, 2010 - 09:15 AM

Congratulations! It is one of my favorite casino in Pennsylvania. They have a great personal!
Regards,
Blackjack blog

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