Las Vegas companies win, lose from gaming ballot initiatives

By Liz Benston

Wednesday, Nov. 5, 2008 | 12:20 p.m.

Two Las Vegas gaming companies that don't operate any casinos here were winners Tuesday as voters in Missouri and Colorado approved ballot measures that will increase gambling revenue in those states.

A third Las Vegas company, formed by the developer of Southern Highlands and owner of the Casino Fandango in Carson City, was handed a defeat in Maine, where voters rejected Olympia Gaming's plans to build a casino there.

While voters in Maine and Ohio once again rejected casino gambling in their states, Maryland voters approved plans for some 15,000 slot machines at several locations across that state after similar attempts failed in years past.

It's a net gain for slot makers like International Game Technology because the Ohio and Maine proposals were for single casinos.

Also, voters in West Virginia approved plans for a casino that will be available to registered guests at the Greenbrier Resort in that state.

Four out of six is a big step forward for an industry that is happy if one gambling ballot initiative or bill each year is approved.

The economic downturn has bolstered the age-old argument that gambling will help pay for education and other government services during lean times, analysts say.

"Gaming initiatives do better when times are tough," said casino consultant Joe Weinert with Spectrum Gaming Group in Atlantic City. "Voters are going to say, 'What's in it for me.'"

Gaming proponents in states such as Maryland, Missouri and Colorado were able to make a case that residents statewide would benefit from increased tax revenue, whereas those arguments fell flat in Ohio and Maine, where developers were proposing only one casino, Weinert said.

"When voters in Maine and Ohio asked, 'What's in it for me,' the answer was, 'Not much, if anything,'" he said.

In Missouri, voters repealed a state-imposed loss limit of $500 and approved a cap on the number of casino licenses at 13 as well as an increase in the gaming tax by one percentage point, to 21 percent.

An estimated 44 percent of Ameristar Casinos' 2008 earnings come from Missouri and about 7 percent from Colorado, where the company will open a hotel next year, Banc of America Securities stock analyst Shaun Kelley said in a research note to investors today. Ameristar opened a luxury hotel at its St. Charles casino in Missouri this year.

In Colorado, voters approved an increase in the bet limit to $100 from $5, as well as authorizing 24-7 casino operations and the addition of roulette and craps.

About 25 percent of Pinnacle Entertainment's estimated 2010 earnings, including the company's River City casino, which opens next year or in 2010 near St. Louis, will come from Missouri, Kelley said.