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Mandalay Predicts $40 Million Annual Hit from Tax Hike17 June 2002LOS ANGELES, California – As reported by Reuters: "Casino operator Mandalay Resort Group (NYSE:MBG) said on Friday a pending hike in the Illinois gaming tax rate will cost it about $40 million in annual operating income, making it the latest company to quantify the impact from the unexpected tax increase. "…Illinois Gov. George Ryan has not yet signed the tax hike, which was passed by the state legislature nearly two weeks ago, a spokesman said. But Ryan has indicated in the past he supports increased gaming taxes as a way to generate more revenue for the state. "Mandalay said the tax hike -- which would raise the maximum rate on gaming profits to 50 percent from the current 35 percent -- will have `a significant impact on operations at Grand Victoria,' its joint venture casino in Illinois. "Had the new legislation been in effect during the prior year, the impact would have been a reduction in operating income at this property of approximately $40 million,' the company wrote in its quarterly report filed on Friday with the Securities and Exchange Commission. "Mandalay, whose properties include Luxor, Circus Circus and Mandalay Bay in Las Vegas, reported operating income of $351.1 million for its fiscal year ended Jan. 31, and $431.5 million for the year before that. . "…Since May 31, the last trading day before the Illinois legislature's action, Mandalay shares have fallen nearly 13 percent to $28.40 from $32.60…" |