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NEWS BRIEFS
Table games help soften Q3 loss for MTR Gaming
MORGANTOWN — Despite a double-digit gain in revenues, casino and racetrack operator MTR Gaming Group Inc. reported a third-quarter loss of $8.2 million Friday.
The loss, which translates to 30 cents per share, includes $11.2 million in pretax, non-cash charges, the company said. It’s more than triple the $2.8 million or 10-cent loss that MTR reported in the same period last year, when the figures reflected a charge of $3.6 million from discontinued operations.
Net revenue grew 13 percent for the period ended Sept. 30 to $131.4 million. That’s up from $116 million in the third-quarter of 2007.
Revenues at Mountaineer Casino, Racetrack & Resort in Chester surged 15 percent to $77.3 million, up from $67 million over last year, with table games generating $13.2 million, the company said. Slot play, however, fell by $4.2 million.
MTR blamed that drop on slot parlor competition from Pennsylvania.
Revenues were also up 10 percent at Presque Isle Downs & Casino in Erie, Pa., from $46.7 million in the third quarter of 2007 to $51.5 million. The daily win on slot machines was up from $237 to $256 per machine.
MTR also owns or has interests in tracks in Ohio, Michigan and Minnesota.
Friday’s conference call with investors was the last for Chief Executive Ted Arneault, who has run the company for 13 years and who will continue to earn $512,000 a year for consulting services. When he took over, he said, MTR had just 300 employees. Today, it has 4,000.
“It’s a great regional asset,” with an assortment of properties that will enhance the parent company’s value, he said. “Our core assets will do nothing but improve.”
Industry veteran Robert F. Griffin replaces Arneault on Monday. The men took turns fielding questions from analysts, but both said MTR will look for ways to reduce overhead at Mountaineer by $2 million.
Mountaineer has always carried the corporate costs. With the company now in operational rather than expansion mode, Arneault said, non-operating costs must be examined.
While front-line personnel and services may be strengthened, “a lot of non-operating expenses, we’ll be taking a very hard look at,” he said.
Table games are starting to take hold, and MTR can find ways to develop new players and grow its profit margin, Griffin said. But labor and other expenses must be reviewed.
“We want to do this with a scalpel. We don’t want to do this with a machete,” he said. “... We want to do this right.”
Griffin also announced MTR is reviewing a $3.4 million offer for real estate but did not disclose details.
“If we don’t need it to run our facilities,” he said, “then basically it’s up for sale to reduce our debt.”
For years, MTR has lobbied for more gambling in Ohio, and now it’s awaiting the outcome of another referendum. Supporters of a ballot measure want to build a $600 million casino in Clinton County, about 45 miles north of Cincinnati.
But campaigns to expand gambling in Ohio failed in 1996 and 2006, despite arguments about job creation and college scholarship funding.
A narrow failure this time would be a positive, Arneault said. It would suggest that Ohio voters may be softening and may be more inclined to look at a bill that would include more parts of the state.
