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Casinos' Q3 Aided By Las Vegas, Atlantic City Operations16 October 2002NEW YORK – As reported by the Dow Jones: "Casino hotel operators saw rather steady business in Las Vegas and Atlantic City, but casinos in riverboat markets had to contend with tax increases and stormy weather. "Cost cutting helped margins for some casino operators, said Lehman Brothers Inc. analyst Joyce Minor. That was important, given the higher costs stemming from a new union contract in Las Vegas and higher gaming taxes in Illinois and Indiana "Also, Tropical Storm Isidore hit the Gulf Coast and Louisiana, disrupting business at Gulf Coast casinos owned by Park Place Entertainment Inc. and Mandalay Resort Group (NYSE:MBG) and at Louisiana casinos owned by Harrah's Entertainment Inc. , Park Place and Boyd Gaming Corp. (NYSE:BYD) . "The Las Vegas market was better, as discounted air fares and hotel rooms drew gamblers, according to Bear Stearns & Co. analyst Jason Ader. "Las Vegas Strip gaming revenue rose 9% in August to $448.3 million, while statewide gaming revenue rose 1.8% to $839.5 million in the month, according to the Nevada Gaming Control Board. "…The upswing in revenue was due to an unusually high baccarat-hold percentage - or bets retained by the house against amounts wagered. "…Meanwhile, further cost savings and lower interest expenses resulting from debt reduction should also boost MGM Mirage's earnings, said Goldman Sachs & Co. analyst Steven Kent. "…Park Place, which operates the Bally's and Caesars Palace hotels and casinos, lowered its third-quarter earnings projection earlier this month to a range of 14 cents to 16 cents a share from 17 cents to 19 cents. The company, scheduled to report on Oct. 24, cited the damage that Isidore did to its Gulf Coast properties, disappointing results at Caesars Palace in Las Vegas and termination of an energy contract with Enron Corp. . "Park Place, however, should benefit from a strong Atlantic City market. The company, which has four casinos in Atlantic City, is expected to report earnings of 15 cents a share for the third quarter, according to First Call, compared with earnings of 6 cents a share a year ago. "Gaming revenue in Atlantic City in July rose 0.8% to $418 million and rose 0.9% to $427 million in August. "…Harrah's Las Vegas casinos should also add to earnings in the quarter, said CIBC World Markets Corp. analyst William Stemmata. But Harrah's Lake Charles, La., casino was hurt by the tropical storm, and Harrah's Missouri and Iowa sites faced increased competition from upgraded properties in those markets. "…Station Casinos Inc. (NYSE:STN) , whose casinos are off the Las Vegas strip and cater to local residents, is expected to post strong quarterly results. Its 50%- owned Green Valley Ranch property has been tracking ahead of expectations and its Palace Station casino began regaining market share once road construction near the entrance ended, Prudential Securities Inc. analyst William Lerner said…" |