Riverboat boosts profit for Fitzgeralds owner

By Liz Benston (contact)

Friday, Nov. 8, 2002 | 11:10 a.m.

Majestic Star Casino LLC, which owns Fitzgeralds Casino & Hotel in downtown Las Vegas, reported a third quarter increase in earnings driven by a move to permanently dock its flagship Indiana riverboat casino and the launch of a new parking garage there.

The company reported lower returns at its Las Vegas property -- but is upgrading the property and boosting its marketing to improve results, executives said.

Fitzgeralds is renovating its lobby area, its coffeeshop and buffet. It received an exterior paint job and upgrade over the summer, and has completed renovations of a steakhouse and its showroom.

Majestic Star Casino owns and operates a single riverboat casino in Gary, Ind. The company also owns three separate Fitzgeralds casinos in Mississippi, Colorado and Las Vegas through its subsidiary, Majestic Investor Holdings LLC.

Fitzgeralds in Las Vegas was the only casino among the three to report a loss. The casino posted a loss of about $930,000 for the third quarter. The company didn't state the casino's 2001 net income.

The casino reported revenues of $11.8 million, down from $12.7 million in the prior year's quarter. Cash flow minus certain non-recurring items was about $16,000 compared to a loss of $148,000 last year.

"(W)e have made significant changes to the property's management and marketing functions and the results speak for themselves," Don Barden, Majestic Star's chairman and chief executive, said.

Other indicators still showed declines. The average slot "win" per day was $84, down from $93 a year ago. The number of slot machines in operation dropped by about 50, to about 900, during the period. Hotel occupancy was 88.6 percent compared to 92.4 percent last year. The average daily rate was essentially flat from last year at $33.

Earnings at its Majestic Star Casino in Indiana were $1.2 million compared to a loss of about $119,000 for the third quarter of 2001. Revenues at the property rose to $33.5 million compared to $30 million for the same period last year. Cash flow, excluding certain non-recurring items, was $7.4 million, up from $6.4 million for the prior year's quarter.

The company in August initiated a new provision enacted by Indiana gambling regulators that allows riverboat operators to permanently dock their casinos. The provision should increase revenues that will offset the recent gambling tax increase in Indiana, the company said.