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Indiana bridge closing could hurt Ameristar Casinos30 December 2009
By Howard Stutz
LAS VEGAS, Nevada -- A bridge closing in Indiana has implications for investors in Las Vegas-based Ameristar Casinos.
The shut down of the Cline Avenue Bridge (Indiana State Route 912) will force customers of Ameristar East Chicago to find a new access to the riverboat casino.
Macquarie Securities gaming analyst Joel Simkins said the disruption could impact cash flow at the property, which was expected to account for 21 percent of Ameristar's revenues and 18 percent of its cash flow next year.
"While we believe that Ameristar will work with state and local officials on alternate traffic routes and signage to redirect gamblers to the casino, primarily coming eastbound from Chicago, we believe the property could experience reduced ingress-egress for a number of years," Simkins warned investors.
The Indiana Department of Transportation said it was closing the bridge permanently. The bridge is in a diminished state and any combination of repair or reconstruction required to meet minimum safety requirements would not justify the investment, Indiana officials said.
Simkins said there are a handful of ways to reach Ameristar East Chicago, but they involve local streets and the Indiana Toll Road. He said the routes were "highly inconvenient."
The biggest beneficiaries of Ameristar East Chicago's woes will be other Indiana riverboat casinos servicing the Chicago market, including the Harrah's Entertainment-owned Horseshoe Hammond and Boyd Gaming's Blue Chip Casino.
"It does not appear that there will be any quick fixes to this dilemma," Simkins said.
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