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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

16 June 2003

ATLANTIC CITY -- Atlantic City casinos will not have to pay a permanently higher tax on their gambling revenue but they will, one way or another, have to contribute $90 million to the State of New Jersey to help solve its budget gap, a key lawmaker said.

Louis Greenwald, who chairs the Assembly's budget committee, said he's siding with Gov. James McGreevey in demanding that casinos pay up.

The industry has offered to contribute an estimated $32 million through increased parking fees and a tax on slot-machine lease payments. Greenwald, however, said the industry needs to do better.

"If they don't come back with something, we're ready to go," Greenwald said. A budget bill must be passed by June 30.

McGreevey indicated he's looking only for a temporary funding assistance from the casinos.

"The governor is not saying this has to be forever. We need $90 million for the budget," spokeswoman Kathleen Ellis said.

Meanwhile, the once lovey-dovey relationship between McGreevey and the casinos has turned downright nasty. In a counterattack to an industry radio campaign, the governor and state Democrats accused "millionaire casino CEOs" of being greedy and uncaring.

"When the casinos pick a fight with New Jersey's working families, they've chosen the wrong target. That's why I'm fighting to put the odds on our side," McGreevey said in the new 60-second radio spots.

The Casino Association of New Jersey hit back in full-page newspaper ads Sunday, urging New Jerseyans to "stop the anti-job tax." The group claims McGreeveyâs gaming tax would cause 5,000 job losses inside and outside the casinos.

"New Jersey's state budget must be balanced. But Governor McGreevey needs to understand itâs neither right nor fair to balance the budget on the backs of South Jersey's working people," the industry said in the ads.

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Atlantic City casino bosses are breathing easier, though many of their employers and customers literally will not, after being exempted from the "Clean Indoor Air Act" passed by a state Senate committee.

"I think the overwhelming demand for the customers is they want a facility where they can enjoy a smoke. Clearly, that's what they tell us," said Robert Stewart, Park Place Entertainment spokesman. "Like any smart operator, we respond to the demands of our marketplace."

The casino industry lobbied against the bill, arguing that its business would suffer if gamblers couldn't smoke. In neighboring Delaware, slot-machine revenue has declined between 8 and 28 percent every month since a similar indoor-smoking ban in public place was enacted in late November.

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Borgata Hotel Casino & Spa, the $1.1 billion, 2,002-room joint venture between Boyd Gaming and MGM Mirage, was awarded a casino license from the Casino Control Commission.

"Its enthusiasm is apparent and I welcome it to the markeplace," commission Chair Linda Kassekert said.

Borgata CEO Bob Boughner said he has not yet chosen an opening date within the July 1-11 window.

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Shareholders frustrated by a $2 stock thatâs shown little movement for 2.5 years unloaded on the board and management at the annual stockholders meeting of Trump Hotels & Casino Resorts.

"Thank God I sold some when I lost my shirt. Now I'm losing my panties," said Anne Furman, a 72-year Trump Hotels shareholder.

Alfred Rappaport challenged Chairman and CEO Donald Trump to work for $1 a year and to cash out Rappaport's 10,000 shares at $7 each. Trump swatted away both questions like a bothersome fly.

Frank Balsamo told the board that it should change management next year if it cannot create shareholder value.

Chief Operating Officer Mark Brown, meanwhile, touted the company's record cash flow last year and record cash flow at three of its four casinos. He explained to shareholders that most of the cash flow goes to service debt, leaving little left over for capital projects and nothing for net income.

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Trump Plaza Hotel and Casino, looking for a "signature" tenant since the Warner Bros. Studio Store closed 18 months ago, is preparing to welcome a Rainforest Cafe.

Houston-based Landry's Restaurants has agreed to build one of its Rainforest concepts on a prime Boardwalk site, Plaza Chief Operating Officer Matt Harkness said. The exterior will feature a two-story facade accented with lush vegetation and the colorful Rainforest signs.

There are only 25 Rainforest Cafes in the country, including one at the MGM Grand in Las Vegas. They're typically located in destination resorts and major shopping malls.

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Harrah's Entertainment Chairman Phil Satre and singer Tom Jones will be inducted into the Gaming Hall of Fame during ceremonies next month, the American Gaming Association announced.

The event takes place July 26 at Borgata Hotel Casino & Spa in Atlantic City, the first time in the event's 15 years its being held outside of Las Vegas.

Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com