2002 - Harness Tracks of America, Inc.

HARNESS TRACKS OF AMERICA
Executive Newsletter
A daily fax and e-mail report on racing and gaming developments in North America and beyond
Stanley F. Bergstein, Editor
MORE FROM INDIANA
It didn’t take long for investors to boost the stocks
of companies with Indiana riverboat casinos after
the Hoosier legislature gave them the gift of
dockside gambling, converting them into full blown
free-standing casinos. Despite an increase in taxes
that accompanied the measure, Boyd Gambling
was up $1.25 to $13.85, Harrah’s shares rose 27
cents to $46.54, Park Place was up 1 cent at
$10.25, Argosy rose $1.45 to $27.75, and Trump
Hotels and Casino Resorts shares rose by 4 cents
to $2.25. Indiana’s riverboat casinos currently pay
a flat 20% tax on all revenue. Under the new bill
those with annual revenues of $50 million to $75
million will pay 25%, those with revenues from $75
million to $100 million will pay 30%, and on all
revenue over $150 million the tax rate will be 35%.
In those counties that do not allow dockside gaming,
the tax will still go up, from 20% to 22.5%.
The $3 a head admission tax remains, and Hoosier
Park still will receive 65 cents from each admission,
capped at 2002 numbers despite casino
dockside gains.
SLEEPLESS IN SARATOGA
Skip Carlson, general manager of HTA’s Saratoga
Equine Sports Center member, is staying up late
at night these days, working with seven other New
York tracks to try to get the hours for forthcoming
slots broadened. The law that was passed, and is
now being challenged in court, provides for operating
hours from 10 a.m. to 10 p.m. Sunday through
Thursday, and noon to midnight Friday and Saturday.
The consortium of tracks want the hours extended
from 10 p.m. to 2 a.m., or preferably even
3 a.m. Carlson says the hours from 10 until 2 a.m.
“are very important hours. That would be great if
it happens.” Barry Schwartz, chairman and
CEO of the New York Racing Association,
says “the most productive hours are after
midnight.”
June 25, 2002
AND IN THIS CORNER......
If you like heavyweight championship fights, forget
about Lennox Lewis and the 6-foot-7 and 6-
foot-8 Russian brothers who want to challenge him,
or any of the other pugs waiting in line. A real
world class championship is shaping up in Macau,
where Steve Wynn signed a deal yesterday to build
a hotel casino next door to one operated by the
longtime ruler of Macau gambling, Stanley Ho.
Wynn, in Macau, was modest and humble, saying
all he could think of were “the challenges ahead”
competing with Ho, who has had a stranglehold on
gambling there for the last 40 years. Wynn called
Ho “a very intelligent, canny businessman,” which
is understatement on a grand scale. Ho’s flagship
casino, the Lisboa, is modest by Las Vegas standards.
We’re not sure what Wynn plans to build
on the six lots that the government has granted
him next door to the Lisboa, but we’re certain it
won’t be modest or unpretentious. Wynn has been
given a 20-year contract and must invest $497.8
million within seven years and finish the first phase
of construction by 2006. Winnings in his casino
will be taxed at 35%, but an additional 4% for
Macau charities and infrastructure, with a $3.7 million
annual fee to government starting in June,
2005, and unspecified taxes on each table game
and slot machine. The Associated Press, interviewing
Hong Kong gamblers enroute on the ferry from
Hong Kong to Macau to gamble, quoted them as
saying “the competition should make it more fun
and at least things will be cheaper,” and “Stanley
Ho won’t be able to have his own way all the time
any more.” The annual Macau win is estimated
at $2 billion, and a JP Morgan analyst said the
enormous market “is a wonderful opportunity for
a developer with Wynn’s experience, particularly
with the Asian high-end market.” A third Macau
license has been awarded to Galaxy Casino company,
controlled by Venetian hotel owner
Sheldon Adelson.