New #3 in US casinos
Penn National Gaming announced this week that it will acquire Argosy Gaming Company in a $2.2 billion deal. That move will make the New company the number three casino company in the US.
The gambling industry has already seen two major mergers this year, pending deals between MGM Grand and Mandalay Bay as well as Harrah's and Caesars. Smaller buyouts have included Boyd Gaming Corp.'s acquisition of Coast Casinos and Harrah's purchase of Horseshoe casinos The new Penn National company will be far smaller than the big two companies. Its operations are and its operations will be outside Nevada. It will have over $2 billion in annual revenues.
Argosy owns six casinos, including five riverboat operations. These located in Louisiana, Missouri, Coloradu, and Illinois. The race tracks are located in Pennsylvania, Maine, New Jersey, and West Virginia.
Penn National owns 13 casinos and racetracks. The casinos are located in Mississippi, Louisiana, Illinois, and Canada. It also manages several other casinos. Penn National has been aggressive about setting up racetrack slot machine operations in the past years, and purchased Hollywood Casinos in 2003.
A Wall Street Journal article ("Penn Gaming Buy of Argosy May Signal More Deals", 11/4/2004) sees more mergers in the near future, with smaller players like Aztar, Station Casinos, and Pinnacle Entertainment looking like possible targets.
And the gaming oligopoly will also be an oligopsony. As the WSJ article states:
With so many casinos in the hands of so few, these mergers aren't a positive thing for gaming suppliers....The likes of International Game Technology (IGT), Alliance Gaming Corp. (AGI), WMS Industries Inc. (WMS) and Shuffle Master Inc. (SHFL), which provide slot machines, cards and tables to casinos, could lose some pricing power in negotiations.
10:33:40 PM 
|
|
