Casino Firms Say They Can Weather Jersey Shutdown

4 July 2006

TLANTIC CITY, New Jersey -- As reported by the Reno Gazette-Journal: "Atlantic City casinos could close Wednesday if a state budget crisis isn't averted today, but gambling companies with ties to Northern Nevada are not expected to take a big hit.

"International Game Technology, the Reno-based largest slot manufacturer in the world, gets a portion of revenue from MegaJackpots machines it operates in the city's casinos, Vice President of Marketing Ed Rogich said. But only about 10 percent of the machine revenue in the market is from MegaJackpots, and IGT gets only a fraction of that revenue.

"...Deutsche Bank analyst Bill Lerner estimates the 12 Atlantic City casinos would have to be closed 60 to 65 days to ding IGT's quarterly profit one penny per share. Last quarter, IGT's profits were 35 cents per share.

"...Lerner said a closure would clearly be negative for casinos. He also estimated the casinos would have to shut down just two days to hit Harrah's Entertainment Inc.'s earnings per share a penny.

"...Harrah's asked casino employees -- hotels and restaurants will remain open regardless -- to take vacation or other leave, as they won't be paid if the casinos shut, Lopez said. Harrah's continued to pay displaced workers last year following devastating hurricanes that shut down Southern casinos.

"...For MGM Mirage to lose a penny per share of quarterly profit, the Atlantic City casinos would have to be closed 13 to 15 days, Lerner estimates.

"A long-term government shutdown seems unlikely..."


Related Links
Caesars Entertainment Ownership Details
IGT Ownership Details
IGT Software Details
MGM Resorts International Ownership Details
New Jersey Gambling

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