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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Ameristar Announces Plans for UK Casino

15 December 2004

Las Vegas-based Ameristar Casinos, best known for its Midwestern riverboat gaming houses, announced Tuesday it was joining other American casino operators in a rush across the Atlantic to develop a resort in England once the United Kingdom deregulates its gaming industry in 2005.

Ameristar, which does not have a Las Vegas casino but is headquartered at offices in the Howard Hughes Center, has entered into agreement with the city of Southampton, England, and a British arena developer to build a casino-hotel project as part of a regional complex that will include an 8,000-seat ice arena and leisure skating facilities.

Ameristar will build a 65,000-square-foot casino along with a luxury hotel, restaurant attractions and meeting facilities as part of the project in the West Quay area of Southampton, a city located in England's south coast, about an hour-and-a-half from London by train.

Steve Eisner, vice president of development for Ameristar, said Southampton and the region has a population of 2 million. The cost of the project is estimated at $445 million, with Ameristar's contribution estimated at $360 million.

"We have been exploring possibilities in England for about a year and a half," Eisner said. "The project has the support of the city and will be a very important element in the redevelopment of the area."

Legislation was introduced in late October to deregulate the British gaming industry, and many of the major American casino operators have lined up to compete for the eight regional casino licenses, which many believe could be available by the spring.

According to the Web site, Gamingfloor.com, almost a dozen developers have contemplated some $7 billion in casino projects in Britain. MGM Mirage has proposed more than $2 billion in projects for Liverpool, Manchester, Salford, Glasgow and London. Harrah's Entertainment has plans to build eight casinos. Other firms eyeing the United Kingdom include Isle of Capri Casinos and Las Vegas Sands.

"We pretty much have to wait to see what the new legislation says and when it will be approved," Eisner said. "What's important is to have the backing of the city of Southampton."

Deutsche Bank gaming analyst Marc Falcone said in a note to investors that a casino in England could have tremendous upside for Ameristar, however, it's too early to tell which projects will win out in the licensing process.

Ameristar closed in trading on Tuesday at $42.86, down 46 cents, or 1.06 percent.

The British casino would fall into the mid-range when compared to the size of Ameristar's six casinos, Eisner said. The company's two casinos in Missouri -- Ameristar Kansas City and Ameristar St. Charles (near St. Louis) -- each have more than 130,000 square feet of casino space. In Council Bluffs, Iowa, and Vicksburg, Miss., each Ameristar casino has 45,000 square feet of gaming.

Ameristar operates two casinos in the northern Nevada community of Jackpot near the Idaho border. The company built and operated the Reserve Casino in Henderson until the property was sold to Station Casinos in early 2001 and was re-branded as the Fiesta Henderson.