Ameristar Casinos posts second-quarter loss

Ameristar Casinos tumbled to a second-quarter loss due largely to the cutoff of access to the company's Indiana riverboat casino that draws customers from nearby Chicago.

The Las Vegas-based casino operator said Wednesday the net loss in the quarter that ended June 30 totaled $24.9 million, or 43 cents per share. A year ago, Ameristar reported net income of $14.3 million, or 25 cents per share.

Analysts polled by Thomson Reuters predicted Ameristar would earn 20 cents per share.

"All of our properties performed quite well during the second quarter with the exception of Ameristar East Chicago," Ameristar Chief Executive Officer Gordon Kanofsky said. "Our East Chicago property's financial results were adversely affected by a nearby bridge closure to a degree much greater than originally anticipated."

The Indiana Department of Transportation permanently closed the Cline Avenue Bridge that helps connect the casino with Chicago on Dec. 28 due to safety concerns.

The closure resulted in decreases of 25.6 percent to the net revenues from Ameristar East Chicago and 62.6 percent in the property's adjusted cash flows, compared to the prior-year second quarter. Ameristar recorded a noncash impairment charge of $56 million because of the business disruption.

Without East Chicago, Ameristar said the company would have earned 13 cents per share.

Companywide, Ameristar revenues fell 5 percent to $293 million from $308.9 million last year.

Kanofsky said regulatory changes in Colorado, allowing higher wagers and longer hours, helped the company's Black Hawk Casino. The casino, which also opened a luxury hotel last fall, grew revenues 81.7 percent and cash flows were up 121.5 percent.

"We expect Ameristar Black Hawk to continue to take market share and grow cash flows," Morgan Joseph gaming analyst Justin Sebastiano told investors. "East Chicago will likely remain under pressure and, thus, we expect it to curtail spending, specifically on unprofitable promotions."

The company said its casino in St. Charles, Mo., was hurt by competition from Pinnacle Entertainment's new casino in suburban St. Louis, which opened in March. However, Kanofsky said the impact was less than the company originally expected.

Ameristar owns eight casinos in Indiana, Colorado, Missouri, Iowa, Mississippi and the Northern Nevada community of Jackpot.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.