Sunday, April 20, 2003
Copyright © Las Vegas Review-Journal

INSIDE GAMING: Rumors say egos hamper mergers

Word around town is that Frank and Lorenzo Fertitta's "egos" are holding up a potential merger deal with another gaming company. Solid sources say Station would have long since done a merger or acquisition except for the Fertittas' demands, including rich golden parachutes for bailing out of the business. Under his current contract with Station, if the company were sold and Frank Fertitta left without cause, for example, he could bail out for $11.375 million without a noncompete contract.

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In a strange twist of fate, the problems plaguing leisure travel could end up boosting business in Las Vegas. Analysts are saying that Americans previously planning vacations in exotic foreign lands are alarmed by the threats of terrorists and pandemics. As a result, they are instead booking trips to Las Vegas, home of faux overseas travel. If the trickle becomes a flood, it could prove a classic example of the law of unintended consequences.

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Celine Dion's show at Caesars Colosseum is performing ahead of expectations. Anecdotally, company outsiders say it is helping Caesars Palace sell rooms at higher prices than it otherwise could as part of a Celine Dion package. It's also adding 3,000 seatings a night at restaurants near the show on the evenings she performs. Good performance, but still not enough to lift stock prices, analysts say.

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The bigger they are, the harder they fall. Preliminary Deutsche Bank analyses show Illinois Gov. Rod Blagojevich's recently announced tax plan would penalize the most profitable casinos most harshly. The $50 million tax bite could cost Harrah's Entertainment Inc. $21.5 million after taxes, Mandalay Resort Group $13.1 million, Argosy Gaming Co. $11.4 million and Boyd Gaming Corp. $5.6 million. Chances are the companies will fight the tax increase; bets are they'll prevail.

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Nobody's willing to give a date for the opening of Atlantic City's Borgata, a $1 billion joint project of Boyd Gaming Corp. and MGM Mirage, but it'll be doing business by mid-July. At least the American Gaming Association has signed up to hold its 15th annual Gaming Hall of Fame Charity Dinner and Induction Ceremony there July 26.

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Off the launching pad. A new men's luxury magazine, JAQK (short for jack, ace, queen, king), is set to debut in four months. Capitalizing on the $64 billion Americans gambled last year, the slick magazine will try to help readers bridge the risks of high-stakes gaming and traditional business with their quest for wealth, elegance and rich rewards. A unique element of the magazine will be its JAQK card, offering complimentary benefits parallel to casino comp cards.

The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at (702) 477-3893, fax (702) 387-5243 or e-mail at rsmith@reviewjournal.com.