Wednesday, April 16, 2008

Casino cometh

Just catching up on casino news.......

The Trib has this piece titled: Credit crisis adds $180 million to Pittsburgh casino cost. Which says the cost to build the casino has gone up from around $400mil to over $600mil. Reuters says they are actually negotiating a $720 million dollar loan. If that represented a bigger construction project I would ponder the larger economic impact here, but if this is just sheer financing costs then its not an impact on the ground here. What really makes me wonder is that if you look at an economic analysis done before Don Barden was awarded the license, the whole project could have made some sense from an IRR standpoint in the $400mil range. It raises the question of how profitable the venture is if it costs $600+million to get off the ground and what that means.

MTR Gaming (remember them) lost $$11.4 million in 2007 and chairman and chief executive officer Ted Arneault has announced he is resigning.

Waiting for all those free drinks down at the casino when it opens? The AP reports that comps may be on the exit ramp because Atlantic City casino revenue went down for the first time ever last year. Those extra credit costs may be to blame if the North Shore is not a free drink zone here.


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