Boyd buying Louisiana track, will add casino & slots

David Strow

Thursday, April 26, 2001 | 3:20 a.m.

Boyd Gaming Corp. of Las Vegas said Thursday it will buy a Louisiana race track for $115 million to $125 million and will spend another $30 million to refurbish the property and install a casino with slots there.

Boyd said it will acquire Delta Downs near Vinton, La., in the southwestern portion of the state. The horse racetrack is about 100 miles east of Houston near Interstate 10.

Delta Downs, owned by Las Vegas businessman Shawn Scott and Jimho Cho of Hawaii, was authorized by local voters to operate slot machines in late 1999. The 25-year-old racetrack applied for a license to operate 1,200 slot machines, but this application has yet to be approved.

The owners' licensing efforts have been made difficult by a failed bond deal earlier this year. Proceeds from the bond offering would have been used to purchase slots, pay down debt and provide capital for the casino. Following the failed bond deal, the owners immediately began shopping the property, sources indicated -- one said the short list of potential buyers included Boyd, Harrah's Entertainment Inc., Isle of Capri Casinos and Lakes Gaming.

The current owners' plans for the casino, according to their bond offering prospectus, included a 30,000-square-foot casino and a 300-room hotel. Scott's holdings in Las Vegas have included the Cheyenne hotel-casino in North Las Vegas, sold to MTR Gaming in 1998. MTR has since renamed that property the Speedway Casino.

What makes the Delta Downs attractive is its location. The track is located just four miles east of the Texas border, which would make it the closest Louisiana gaming property to the Houston market. It is about 22 miles closer to Houston than is Lake Charles, a key Louisiana casino destination.

That fact hasn't been lost on the Lake Charles operators. During the 1999 vote to authorize slot machines there, Isle of Capri and Players International launched an intense political campaign designed to defeat the effort. During this campaign, the Lake Charles operators estimated Delta Downs could swipe as much as 25 percent of their business if slots were approved there.

Delta Downs would become Boyd's second Louisiana property. The company currently owns and operates the Treasure Chest, a riverboat casino located in the New Orleans metro area. This casino has suffered from intensifying competition in New Orleans, particularly from Harrah's -- in 2000, the property reported $16 million in cash flow, down 48 percent from 1999. The Treasure Chest operates 989 slot machines and 47 table games, but has no hotel rooms.