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Boyd and Aztar may Benefit from Borgata

LAS VEGAS, Nevada – Jan. 12, 2001 -- Atlantic City may hold the key to turnarounds for two companies that made corporate presentations Thursday at the American Gaming Summit.

Las Vegas-based Boyd Gaming Corp., which has seven Southern Nevada properties in its portfolio, including the Stardust hotel-casino on the Strip, is reeling from a bad quarter blamed on construction delays and poor weather.

Boyd this week reported that it expects to report a loss of 4 cents to 8 cents per share for the fourth quarter of 2000.

But the company already is anticipating the opening in 2003 of the 2,010-room Borgata, a project Boyd is partnering with MGM-MIRAGE in Atlantic City's Marina District.

Boyd isn't the only company expecting a lift from The Borgata. Phoenix-based Aztar Corp., which operates the Tropicana hotel-casino in Las Vegas and the Tropicana in Atlantic City, expects Atlantic City to forge a company rebound.

"The Borgata will be good for Atlantic City," said Robert Haddock, executive vice president and chief financial officer of Aztar. "Its opening will help all of us."

Analysts concur.

A gaming industry report by Bear, Stearns & Co., co-sponsor of the two-day gaming summit concluding today at the Bellagio hotel-casino, says Atlantic City is ready to make a step forward.

"If there were a slogan for Atlantic City, it might be the words of comedian Rodney Dangerfield: 'I don't get no respect,"' the Bear Stearns report says. "In our opinion, Atlantic City doesn't get the respect it deserves as a major gaming market and a substantial contributor to the cash flow of major gaming companies."

Bear Stearns cites Aztar and Boyd as beneficiaries of an upturn anticipated for the No. 2 gaming market in the country. It also says Harrah's Entertainment, Park Place Entertainment and MGM MIRAGE will ride the wave.

"This will be the first new hotel in Atlantic City in 13 years, since the (Trump) Taj (Mahal) opened in 1990," said Ellis Landau, executive vice president, treasurer and chief financial officer of Boyd in his presentation.

Landau said Boyd's Sam's Town property on the Boulder Strip suffered revenue shortfalls as a result of construction at the property. The $86 million expansion and renovation added casino space, an events arena and a movie theater complex for the locals property.

The Sam's Town in Tunica, Miss., also had construction-related shortfalls with the addition of new restaurants and a recreational vehicle park.

Bad weather, meanwhile, hurt Boyd properties in other jurisdictions -- the Blue Chip Casino in Michigan City, Ind., and the Par-A-Dice hotel-casino in East Peoria, Ill.

Landau said the company's Treasure Chest Casino, a riverboat property in Kenner, La., could have some increased revenue possibilities depending on whether the Harrah's casino in New Orleans closes in March.

Landau also said the company has yet to achieve the $20 million annual cash flow goal set for the Stardust. But he said Boyd's downtown Las Vegas properties -- the California, Main Street Station and Fremont hotel-casinos -- continue to prosper from daily charter flights arranged by the company to Las Vegas from Hawaii.

Aztar, meanwhile, reported it has no specific plans for the 34-acre Tropicana property on the Strip. The company will continue to reduce debt and repurchase equity and listen to any proposals that would increase shareholder value for the 43-year-old property that has 1,800 rooms.

The Tropicana in Atlantic City, with 1,624 rooms, is the largest hotel on the market there. The company also operates the Ramada Express hotel-casino in Laughlin and has riverboats in the Midwest.

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