Updated and bumped:
Mike W. (one of my readers) spotted an interesting change on the Lakes Entertainment web site. Here's what it says now:Casino HighlightsThey dropped the completion date! I'm not entirely sure what this change means, but it sure is hard to see it as anything other than good news!Project Status
- 1,000 gaming devices, 20 table games and 5 poker tables
- Enclosed parking garage
- 20 minutes to downtown San Diego
- Proven gaming market
- Population - 11 million/100 mile radius
- Signed development and financing agreement
- Currently planning to build on existing reservation
Original Post:
The Lakes Entertainment web site is now showing the revised casino plans:
Casino Highlights
- 1,000 gaming devices, 20 table games and 5 poker tables
- Enclosed parking garage
- 20 minutes to downtown San Diego
- Proven gaming market
- Population - 11 million/100 mile radius
Project Status
- Signed development and financing agreement
- Currently planning to build on existing reservation
- Opening estimated January 2009
Assuming those are Class 2 gaming devices (not requiring any agreement with the State), this is a plan for a tiny and far less profitable casino than the proposal we heard last fall. It appears to be either 3 or 4 stories high, versus the 27 or 30 or whatever was really being planned (I’ve heard so many variations that I’m not sure what the reality was).
While I’m sure that the tribe and Lakes Entertainment are completely correct to say there are fewer obstacles in the way of getting this plan implemented, I believe it’s also true that the (much) smaller profit incentive means it’s much less likely that Lakes Entertainment will be willing to fund a prolonged, difficult legal battle. In other words, I think this development means the casino project is now more vulnerable to challenge…
If you look at Lake's website (LakesEntertainment.com) today (beginning of Aug), you will see that they have removed the estimated completion date.
ReplyDeleteInteresting notation on Lakes Q3 2007 Financial report.
ReplyDeleteNet unrealized gains and (losses) on notes receivable were ($0.6) million and $5.8 million for the third quarters of 2007 and 2006, respectively. The net unrealized losses in the third quarter of 2007 related to unrealized gains on Lakes’ notes receivable from the Shingle Springs Band of Miwok Indians (Shingle Springs Tribe) in the amount of $1.2 million and unrealized losses of $1.8 million on the Lakes’ notes receivable from the Jamul Indian Village (Jamul Tribe). These notes receivable are adjusted to estimated fair value based upon the current status of the related tribal casino projects. The increase in fair value of the notes receivable from the Shingle Springs Tribe relates primarily to continued progress on the construction of this project, which is currently within budget and on schedule. The decrease in fair value of the notes receivable from the Jamul Tribe relates primarily to an increase in the discount rate which resulted from a decrease in current estimated win per unit for this project.
--- Layman's terms: Lakes has a 5.2M loss for Q3 and a 8+M loss for YTD 07. Part of that loss was adjusting expectations on the Jamul project - the "win per unit" (read: Profit per slot) had to be decreased. Lakes is continuing to set expectations downward for this project.
Very interesting comment Tim Cope tossed out there on March 5th, 2009:
ReplyDelete"Lakes has concluded that it is not currently in its best interest to terminate its involvement with the Jamul casino project altogether. Lakes will continue to monitor the status of this project. "
Mike Weber
If you parse this carefully - "it is not currently" can be seen to mean "in the future we may terminate" and what does the modifier "altogether" mean in the sentence? Does this mean that they have partially terminated their interest in the project? Add to the fact that they reduced the fair market value of the project to $7.6 (including 500K? for the extra 100 acres that appear will never go into trust thanks to the recent Supreme court ruling on the Rhode Island tribe) after writing off 18.8M seems to me that they shed most of the value under the cover of darkness (or the losses based on My Ohio Now) so that the hit when they do part ways will not be as severe.