| Tough times for governing boards and slots. The promise of dozens of new jurisdictions is very slow in materializing. The politics of adding slot machines has not turned out to be a simple and slam dunk-ish as originally predicted by the advocates and observers. IGT is still counting the dollars in advance in California and other states. Any expansion means big bucks for IGT. The competitors do not have quite as easy a road. Three companies are having a most difficult time. Sigma is struggling with licensing, but far more serious are the problems facing Aristocrat and Mikohn. Both companies have gained much less market share than each predicted over the last few years. Profits and shareholder satisfaction reflect those unmet expectations. Both companies have had major change in management and have been forced to restructure and reduce expenses. And still the stock market and stockholders clamber for more. Heads Roll In Aristocrat Shake-Up. Poker machine maker Aristocrat has sacked three United States executives, including president Mark Newburg, in the wake of last month's huge profit downgrade. While analysts and major shareholders welcomed the changes, they said more heads at board and executive level had to roll before they would be satisfied. …Des Randall, in the US to lead a review of the group's operations, will manage the North American operations until a new president is found. Allison Jackson, The Age, 3-3-03 Aristocrat's US Posting Displeases Market. …Aristocrat was accused of "arrogance" and doling out "jobs for the boys" after the group announced the appointment on Monday. Mr Isaacs, believed to be close to chief executive Des Randall, has been managing director of Aristocrat's European business for 12 months and will replace Mark Newburg, who was sacked nine days ago. …Shares in Aristocrat fell 3 cents to $1.65, a fresh four-year low, in response to the announcement. Allison Jackson, Sidney Morning Herald, 3-12-03 News that it would be dropped from the Standard & Poors/ASX 50 stock index in Australia last week was the most recent setback for Aussie slot giant Aristocrat Leisure Ltd. S&P announced Friday that Sydney-based Aristocrat would be cut from the Aussie exchange at the end of trading March 31 because of declines in its share price following poor profit reports from its U.S. operations. Jeff Burbank, Reno Gazette-Journal, 3-17-03 Aristocrat Leisure Ltd…is cutting costs at its Australian operations by forcing workers to take leave, the Australian Financial Review reported, citing unidentified people close to the situation. Las Vegas Sun, 3-26-03 Mikohn's problems, while not identical to Aristocrat's, have some common elements to Aristocrat's problems. Results at Aristocrat failed to meet management forecasts, at Mikohn revenues might have come closer to meeting expectations and were up slightly, but Mikohn's losses hardly met investor expectations. Since last August, the entire management team of Mikohn has changed, and this month saw a mass exodus from the board. The changes were all immediate and sudden, at least to those who listened to the teleconference and believed the official answers. And finally, not all separations appear to have been friendly and to "pursue other interests." …For the year ended December 31, 2002, the Company reported a net loss of $37.9 million, or $2.95 per share, compared with a net loss of $9.7 million, or $0.83 per share, for the year ended December 31, 2001. Included in the 2001 net loss was a charge of $3.1 million for the early retirement of debt and $9.7 million of charges for asset write-offs, discontinued operations, and other valuation and impairment charges. Included in the 2002 net loss were $28.0 million in charges ($27.8 million related to the Company's restructuring initiatives in August 2002). Business Wire, Yahoo Finance, 3-13-03 Harrah's is the most diverse of all the casino companies. Harrah's is also the most diverse in its approach to the gaming industry. Gaming companies are looking for expansion opportunities; Harrah's is often one step ahead. Leading the way with its tribal contracts, now as a 'racino' operator and in the negotiations with communities in states studying gaming, Harrah's is everywhere. Participating in negotiations in California, Connecticut and Massachusetts, the biggest is trying to get bigger. The Town Council moved last week to bring gambling to the town's business park, where the Narragansett Indian tribe and Las Vegas-based Harrah's Entertainment Inc. propose to build a resort-style casino. Under the terms of an agreement approved last week, Harrah's is to pay the town for studies of the local effects of gambling… Providence Journal Bulletin, LV Sun, 3-3-03 Harrah's Entertainment Inc. manages the Harrah's Rincon Casino and Resort near San Diego for the Rincon San Luiseno Band of Mission Indians. …recently joined a coalition of 21 California tribes that became the first in the state to formally announce their desire to discuss sharing casino revenue with the state in exchange for expanding the number of slot machines at their casinos, among other issues. Liz Benston, Las Vegas Sun, 3-6-03 The chief executive of Harrah's Entertainment Inc…said yesterday he thought there was a ''50-50'' chance casinos would be allowed in Massachusetts in the near future. Thomas C. Palmer Jr., Boston Globe, 3-26-03 Harrah's set the tone for the rest of industry in several other areas this month, too. With the Wheel of Fortune agreement, Harrah's not only gains prime time exposure to a huge viewing audience, but also gains access to a data base of people who register for the sweepstakes. Wheel of Fortune, America's #1 rated syndicated television series, and Harrah's Entertainment, Inc. have signed a cross-promotion deal bringing together these two industry leaders for the first time. …Harrah's will sponsor the in-show Wheel of Fortune $100,000 Bonus Round. In addition, daily 10-second promotional spots aired during the show will encourage all viewers 21 and older to log onto www.wheeloffortune.com to register for a $100,000 online sweepstakes. …Finalists from the May drawing will participate in a grand prize …when Wheel of Fortune co-host Vanna White will present the check to one lucky winner. PRNewswire-FirstCall, Yahoo Business, 3-3-03 Size helps. Because of its size, Harrah's was able to negotiate a separate tax deal in Iowa. The deal only makes sense because Harrah's has casinos and a racetrack, additional costs at one are offset by gains at the other.Sovereignty makes headlines again this month; actually it would be more accurate to say it is the headlining story every month in Indian country. The U. S. Supreme Court is going to be hearing an important case that will either limit the ability of states to enforce laws on tribal land or limit the ability of tribes to resist the legal action of the states. In either case, it will be an important decision in the ongoing debate over sovereignty. The U.S. Supreme Court soon will take up a California case that could affect every American Indian tribe in the United States. At issue is how far the reach of county and state law enforcement can extend onto reservations. …The 9th Circuit Court of Appeals ruled that a 1953 act of Congress giving California and other states criminal jurisdiction on Indian lands applies to tribal members but not tribal governments. Chet Barfield, San Diego Union-Tribune, 3-5-03 |
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