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Matthew Crowley

Las Vegas Casino Companies Results Down

4 November 2005

LAS VEGAS -- Ameristar Casinos, a Las Vegas-based casino operator, on Thursday said its third-quarter net income fell from a year earlier, hurt by construction delays at a casino in Colorado. Meanwhile. Alliance Gaming, a Las Vegas slot maker, said it foresees an operating loss for 2005 and will further delay filing its annual report.

In a statement, Ameristar said it earned $16.1 million, or 28 cents per diluted share, for the three months ended Sept. 30, down from net income of $16.6 million, or 30 cents per diluted share, a year earlier.

The latest results topped the 26 cents-per-share estimate of analysts polled by Thomson First Call.

Ameristar said its Mountain High casino in Black Hawk, Colo., had a $1.5 million operating loss in the quarter. The company said an expansion-related construction disruption at Mountain High hurt the casino's operating results. The company said it expects the disruption to last through 2006's first

The temporary closure of a principal highway connecting Black Hawk and Denver also hurt Mountain High's results in the quarter, Ameristar said.

Revenue rose 10.6 percent to $238.6 million from $215.7 million.

Also on Thursday, Ameristar Casinos said that it will drop plans to seek a slot-machine license on Philadelphia's riverfront because the state's high taxes will prevent it from making enough money to warrant the expense.

The company, citing Pennsylvania's 54 percent tax rate on slots revenues, said it will not apply during the license application period.

"We concluded we can't earn an adequate return on our investment to justify the kind of investment we're talking about," Steve Eisner, Ameristar's vice president for development, said.

Alliance, meanwhile, said in a statement, that it expects to report an operating loss for the fiscal year ended June 30 of approximately $20 million to $22 million, or 40 cents to 44 cents per share, on revenue of $480 million to $490 million.

The company said it will delay filing of its annual report until December. Reuters noted that the company had earlier said it would file the report Thursday.

Alliance said it would delay its results for the quarter ended Sept. 30, to allow it to finish its annual financial statements and assess internal controls over financial reporting. Alliance also said that it found, following a review, that it would have to restate certain financial statements because of a re-evaluation of revenue recognition policies, an accounting correction and a restated tax rate.

The company said the restatement and accounting changes will yield a downward revision for previously reported earnings per share of about 10 cents to 13 cents per share in each of the fiscal years ended 2003 and 2004, and a carry-forward of approximately 15 cents to 17 cents to fiscal year 2006.

Ameristar shares fell 13 cents, or 0.59 percent, Thursday to close at $21.77 on the Nasdaq National Market. Alliance shares. Alliance shares fell 39 cents, or 3.68 percent, Thursday to close at $11 on the New York Stock Exchange.