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Rod Smith

Inside Gaming Column: Land, Not Casino, May Draw Bids for Riviera

18 September 2006

Sharks are circling the Rivera. With the rejection of a $426.5 million bid from Riv Acquisition Holdings, East Coast investors are starting new due-diligence checks. After all, the bid died because many shareholders had bought in for more per share than the proposed sales price and the company's land was considered vastly undervalued. There was nothing wrong with the concept, just the price. The new focus seems to be mainly on the market value of the Strip land, not the company value based on cash flow or a reasonable price per share. With Strip land going for as much as $30 million an acre, but with a small property and likely demolition costs, look for new bids as high as $800 million, early expressions of interest suggest.

The Stardust's last month will probably be its best month. For one thing, the joint's completely booked, at least on Internet sites, for its last month of operation. Old-time customers reading last week's column about the Stardust's Nov. 1 closing say they'll miss the landmark, but not too much. Several said Boyd Gaming Corp. deserves as much credit for helping loyal customers find new digs as for finding workers new jobs. One couple told us the South Coast may even be better, given the drive in from California. All said they want to attend at least one of the many closing celebrations, which probably explains all the reservations.

Nude dealers, online. Now there's an invitation to regulation of online gambling if you've ever heard -- or seen -- one. Sophos, an Australian computer security firm, has turned up a plot that online casinos are spamming the Internet with offers of live naked dealers. Sophos warns it stems from simple competition -- and greed. The Strip's casinos offer free booze to dent the mental processes of gamblers. "Online casinos don't have that luxury, so they're trying to distract gamblers in more titillating ways," said Graham Cluley, senior technology consultant for Sophos.

Illinois seems to be getting serious about problem gambling. Its gaming board has started demanding identification from all players who "seem to be" younger than 30. If their names appear on the state list of problem gamblers, they're turned over to local police for trespassing. If the procedures keep problem gamblers younger than 30 out of casinos, the board may expand them to all age groups. The program is meant to help people such as Linda Ruder, who sold her house, cashed out her pension and lost all the money playing slot machines at Illinois casinos, press reports in Chicago said. Then, after she signed up for the state program last year and banned herself from entering the state's casinos, they let her in anyhow and Ruder relapsed and lost an additional $35,000.