Gaming briefs for July 19, 2004

Monday, July 19, 2004 | 11:10 a.m.

City Council sues over casino development delays

NEW ORLEANS -- The New Orleans City Council on Friday sued Harrah's New Orleans Casino over planned development of the casino's second-floor restaurants, bars and nightclubs.

Under terms of Harrah's lease, the city and the casino are to split the net operating income made on the 130,000-square-foot second floor. Because the second floor hasn't been developed yet, the city hasn't made any money from it.

"Harrah's has spun this lease like a roulette wheel," Russ Herman, a City Council lawyer, said. "They just delay and delay and delay."

"Our citizens are demanding better streets, increased police protection, and there are other needs of the city that are critical, and there's not an income stream from the second floor," he said.

Harrah's said it would review the matter but declined to comment on the lawsuit.

Company increases dividend

Boyd Gaming Corp. of Las Vegas today said its board of directors voted to increase the company's quarterly cash dividend to 8.5 cents a share from 7.5 cents per share. The dividend is payable on Sept. 1 to shareholders of record on Aug. 13.

Boyd Gaming, which closed its acquisition of Coast Casinos Inc. this month, may be more confident about the company's ability to generate future cash flow, Goldman, Sachs & Co. gaming analyst Steven Kent wrote in a research note today.

"The Coast acquisition increases (Boyd's) exposure to the Las Vegas locals market and should diversify its earnings from the regional riverboat markets, where growth has been limited," Kent said.

The move follows Harrah's Entertainment Inc.'s decision last week to raise the company's quarterly dividend to 33 cents, a 10 percent increase. The announcement was made the same day as the disclosure of board approvals for Harrah's $9.4 billion bid to buy Caesars Entertainment Inc.

Anti-casino ads launched

JEFFERSON CITY, Mo. -- Opponents of an amendment to allow a casino in southwest Missouri are rolling out television and radio ads beginning today that play on fears of expanding gambling.

The ads will counter the ads from casino supporters that have run statewide for a few weeks.

Missourians will vote Aug. 3 on a constitutional amendment that would allow a casino in Rockaway Beach along the White River, a few miles from Branson. The Missouri Constitution now limits casinos to towns along the Mississippi and Missouri rivers.

Supporters of the casino project say it will revitalize the town's economy, but critics fear it will hurt the Branson area's family-friendly image.

The opponents' television ad opens with a child spinning on a merry-go-round, and text flashes across the screen as the merry-go-round spins faster and faster. Against the sounds of a roulette wheel, the ad states that if more gambling is allowed in the state, it will open the door to slot machines in grocery and convenience stores around Missouri.