Tax Assessments Soar for Gaming Companies - Saturday 15th of April 2006

Las Vegas Gaming Wire

Clark County casino companies' taxable property values are rising at a record clip. However, the companies' tax assessments are rising faster than the taxes they owe, thanks to a year-old law designed to cap commercial and residential real estate taxes.

Experts and insiders say the law capping the taxes could cause long-term problems for the gaming industry. The taxable value of Las Vegas-based casino companies rose 28.2 percent in the past year, data from the Clark County tax assessor's office show. County officials and local tax experts said the assessment increases are unprecedented.

"There's been no period in history when assessments have gone up so rapidly for gaming or residential," said Jeremy Aguero, a partner in Las Vegas financial consulting company Applied Analysis.

Riviera finally draws sales deal

The Riviera's parent company on Thursday said it agreed to sell the 2,070-room hotel-casino after several months of on-again, off-again negotiations.

The buyer, an upper-end private investment group known as Riv Acquisition Holdings, will pay $426.5 million for the Riviera and its 26-acre site on the north Strip. The price includes the assumption of $215 million in Riviera Holdings Corp. debt. Las Vegas-based Riviera Holdings included in the sale its Riviera Black Hawk, a 1,000-slot machine casino approximately 40 miles west of Denver in Black Hawk, Colo. The deal is expected to close in the first half of 2007.

Riv Acquisition Holdings President Scott Butera said Thursday the company will not raze the Riviera but keep it open while improvements occur.

Gaming stocks keep climbing

Gaming stocks continued their upward trend in March, with some companies surpassing or nearing all-time high price levels.

Las Vegas-based Applied Analysis, a financial consulting firm that tracks nine major gaming companies for an industry index, said healthy fundamentals within the gaming sector have contributed to the upward swing. The company's gaming index finished the month at its highest level ever.

Applied Analysis has been recording the index since January 2002.

Sneak preview boosts Station

Rave reviews from Wall Street analysts for Red Rock Resort sent Station Casinos shares soaring last week. Station Casinos held a well-attended sneak preview for analysts Tuesday at its newest property, which opens April 18.

Deutsche Bank analyst Marc Falcone said Red Rock Resort surpassed even the loftiest expectations of analysts and investors. "We also believe investors' conviction on the ability of Red Rock to generate solid returns on a $925 million project is clearly evident after previous concerns."

CRT Capital Group gaming analyst Steve Ruggerio said the opening of Red Rock Resort will reinforce Station Casinos' dominant position in the Las Vegas locals gaming market. Furthermore, he said, the opening will help Station Casinos reach out to the Southern California market it is also luring with Green Valley Ranch Resort in Henderson.

Poker players fight Internet ban

Three poker champions on Tuesday came to Capitol Hill to lobby against legislation that would outlaw Internet poker and other forms of online gambling.

If Congress prohibits Internet gambling, poker should be exempted from the ban, said Howard Lederer of Las Vegas. Michael Bolcerek, president of Poker Players Alliance, described the anti-Internet gambling legislation as a "burgeoning threat."

In previous years, the American Gaming Association has remained neutral on legislation to prohibit Internet gambling. But association President Frank Fahrenkopf said the group's position on Internet gambling may be modified at a board meeting later this month in Las Vegas. Fahrenkopf has said some board members believe technology now exists to effectively regulate Internet gambling.

"Visitor volumes continue to press forward, while consumer spending is holding its ground," Applied Analysis partner Brian Gordon said.

"We estimate spending on gaming, lodging, dining and retail items posted healthy gains ranging from high single-digits to low double-digits during the first quarter of 2006."

The portfolio, or composite value, of the casino companies, which climbed to a record $26.4 billion this year from $20.6 billion in 2005-06, are based on the market value of the property and the value of improvements, said Rocky Steele, assistant director of the assessor's office.

Entertainment and conventions should remain key elements of the resort.

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