Can a new managing partner help turn things around at the much-maligned Valley View Downs, the proposed -- but not yet built -- racetrack and casino in Lawrence County? And will a racetrack in Youngstown, Ohio (to be built by Penn National, just 20 miles away from New Castle) damage Valley View Downs' prospects? Read on:
"... Those 'new people' from New York are reportedly Och-Ziff Capital Management Group, a proposed managing partner, which has been trying to round up limited partners and captive investors for the project. At one point, the project had been touted as a $450 million property, a value estimate that has likely declined as the project's financial woes have continued." (PG)
As for the developments in Ohio:
"Berks County-based Penn National was given permission last week to move two of its existing Ohio horse-racing operations -- one in Toledo, the other near Columbus -- to locations in the Youngstown area and Dayton. The move to Dayton will position one of the tracks closer to the Indiana and Kentucky borders, while a track in Youngstown -- technically, Austintown, just west of Youngstown -- positions Penn National to compete for gamblers in Pennsylvania." (PG)
A consultant from New Orleans says a racetrack in Youngstown would damage Valley View Downs' prospective revenue by $40 million a year.
Stay tuned -- Valley View's owners say they are committed to applying for a casino license. Meanwhile, both the Pennsylvania Gaming Control Board and the state harness racing commission are set to meet this week.
... This has nothing to do with Pennsylvania, but Forbes, via the New York Times Magazine, has a cautionary tale for casino investors (such as, perhaps, those who might be tempted to invest in Valley View Downs) -- casinos are not always a license to print money. If you misjudge the market and borrow too much money, all the grandmothers playing all the slot machines in the world can't save you. Says the Times of Connecticut's Foxwoods Resort Casino, the largest tribal casino in the U.S.: "The casino is underwater, like a five-bedroom Spanish colonial in a Nevada subdivision. The Pequots misjudged the market, borrowed too much and expanded unwisely. Foxwoods's debt is on a scale befitting the size of the property — $2.3 billion."
Dispatches from the border
From the Buckeye State: Scotio Downs in Columbus is ready to hire (NBC4i.com) ... and the pace of construction quickens at Cincinnati's casino, thanks to the mild winter weather:
"When a floor at the casino under construction in Cincinnati collapsed in January, it raised questions about whether the project would finish on time. But the pace of construction at the work site has erased many concerns." (WLWT.com)
... in Atlantic City, New Jersey Gov. Chris Christie has been unable to convince bond buyers that a new casino is a good investment. As a result, "the bonds of [Atlantic City's most profitable venue lose out on a record rally for gaming debt. Borgata Hotel Casino & Spa bonds that were issued in May and traded as high as 105.5 cents on the dollar in July have since lost 3.4 percent -- while casino bonds gained an average 4.9 percent, Bank of America Merrill Lynch index data show. 'There's too much capacity in Atlantic City now,' said John Kempf, a credit analyst at Royal Bank of Canada in New York. 'Borgata could take a significant hit here.'" (story, Bloomberg; photo, Amanda Brown, The Star-Ledger)
... And in Maryland: "As state and county officials debate proposals for a casino at Rosecroft Raceway or a billion-dollar, Las Vegas-style venue at National Harbor, gambling and games of chance — both legal and illegal — already pervade Prince George's, whether it's secret games of dice and poker at nightclubs, church bingo or the scratch-off lottery tickets sold to patrons as they do their wash at a Riverdale laundromat." (Washington Post)
Prince George's County is southwest of Baltimore -- the National Harbor is not to be confused with Baltimore's Inner Harbor.
Odds and ends
Erie's casino take from the sunny St. Patrick's Day week ... What if, instead of steering Pennsylvania's tax revenue take toward reducing property taxes, we had instead steered it toward our ailing pensions? Kansas may try that route ... No racetrack casinos in Minnesota, for now ... A group fron Youngstown, Ohio, wants to build a free-standing casino, rather than a racetrack casino, but Penn National says these folks aren't to be taken seriously.