Hot action in the gambling industry
In a combination of mid-size casino companies, Pinnacle Entertainment has announced a deal to purchase Aztar Corp. for $2.1 billion. Aztar owns Tropicana-branded casinos in Las Vegas and Atlantic City as well as casinos in Indiana, Nevada, and Missouri. Pinnacle says it would upgrade the company's hotels in Las Vegas to resort status with a multi-billion dollar investment. The deal would move Pinnacle from being the #11 casino company in the US to #6.
Pinnacle Entertainment, formerly Hollywood Park, is mostly an operator of riverboat casinos in the Midwest. It also has casinos in Louisiana, Indiana, Reno, and Argentina. It uses the brand Boomtown for some of its casinos.
As soon as the deal was announced, a higher bid ($1.4 billion) was made by privately-held real estate investment firm Colony Capital; LLC. Colony owns Hilton-branded hotel casinos in Las Vegas and Atlantic City. The bidding is open.
Colony, fueled by lots of investment money, has a remarkable recent history of major moves in the lodging and gaming industries.
- In 2006, it bought Canada's (non-casino) Fairmount luxury hotel chain, in cooperation with Saudi billionaire Prince Alwaleed bin Talal (Kingdom Hotels).
- In 2006, it announced a billion dollar investments in a new Morocco seaside resort.
- In 2005, it bought out the Raffles luxury hotel chain.
- In 2005, it bought four hotels from the Harrah's chain, which needed to dispose of some properties before the Caesars merger.
- In 2005, it made a billion dollar investment in European economy hotel chain Accor.
- In 2004, it bought the Las Vegas Hilton from Park Place (now part of Caesars),
Top ten US casino companies
The US gambling industry is dominated by two big flagship companies, themselves the results of recent mergers. Others are now jockeying for position behind the big two. As more and more sattes open gambling operations, size becoems more critial. The biggest factor now is "loyalty programs" that feeds steady gamblers from local casinos to chain flagship resorts in Las Vegas.
- Harrah's Entertainment, which owns brands Caesars Palace, Flamingo, Harrah's, Horseshoe, Showboat, and The Rio, with an estimated yearly revenue of $9 billion.
- MGM Mirage, with brands Bellagio, Mandalay Bay, and MGM Grand, with an estimated revenue of $7.4 billion.
- Boyd Gaming, with brands Stardust, Sam's Town, Orleans, South Coast and Barbary Coast, with an estimated revenue of $2.2 billion.
- Penn National has casinos in a half dozen states and Canada with an estimated revenue of $2.2 billion.
- Las Vegas Sands operates the Venetian Hotel and some in china, with an estimated revenue of $1.7 billion.
- Pinnacle/Aztar would have an estimated revenue of $1.6 billion.
- Isle of Capri Casinos has operations in the Midwest and Louisiana, with estimated revenues of $1.1 billion.
- Station Casinos is owns a number of small Las Vegas casino with an estimated revenue of $1.1 billion.
- Ameristar Casinos has operations in Iowa, Midwest Louisiana, and Missouri with an estimated revenue of $1 billion.
- Wynn Resorts, a newcomer, with one major Las Vegas hotel/casino, with an estimated revenue of $700 million.
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