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Mandalay Sees $40 Million Hit From Illinois 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. "Also on Friday, smaller casino operator Hollywood Casino Corp. (AMEX:HWD) said the increase will absorb virtually all of the returns it expected from a newly completed $78 million face-lift and expansion to its casino in Aurora, Illinois. "…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. "…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. "…Shares for all casino operators have been hurt recently, following the Illinois move two weeks ago and a similar development in the Indiana legislature earlier this week…" |