NEW ON THE BUSINESS SCENE: GAMING CONSIDERED A GROWTH INDUSTRY OF '90s

Until recently, the gaming industry, referred to by many as a "sin industry," has been limited to a handful of major places in the United States Las Vegas, Reno and Lake Tahoe, all in Nevada, and Atlantic-City, N.J. Now the industry is on the threshold of unprecedented growth.

Areas in many Midwest and Southern states have embraced the idea of floating casinos, with most of the new ~gaming opportunities in riverside and dockside casinos in Illinois, Iowa and Mississippi. Facilities are on planning boards in Louisiana. One is a land-based casino in downtown New Orleans.

The Indiana legislature recently approved the riverboat gaming concept, Tennessee is discussing the issue, and Kentucky officials have discussed the possibility of permitting land casinos at each of its eight race tracks.

One gaming industry analyst, Clint Arnoldus, an executive vice president for First Interstate Bank in Las Vegas, predicts there will be as many as 95 dockside and riverboat casinos by 1995.

"This (gaming) may, in fact, be the growth industry of the 1990s," said Arnoldus.

More than 25 casinos are already in operation in Iowa, Illinois, and Mississippi, and 15 riverboat casinos have been approved for Louisiana, along with the huge land-based casino at New Orleans.

Iowa was the first state to permit riverboat gambling. It was followed by Illinois and Mississippi. Boats must cruise in Illinois unless remaining dockside because of safety factors.

Mississippi regulations are far more liberal. Riverboats, or structures resembling them, are permitted along rivers and the coast. No fewer than five boats operate along the Gulf strip of Southern Mississippi. All Mississippi facilities, including those at Natchez, Vicksburg and Tunica, are open 24 hours a day. None cruise.

Jazzville in the Big Easy

There was dancing in the streets in New Orleans recently.

This is nothing new for revelers in the Crescent City. But on Aug. 11, the celebration was a special one for a small group of people.

When the Louisiana Casino Board selected Hurrah's Jazzville to develop the state's first, and only, land-based gaming casino, exuberant investors crossed Canal Street from the casino board's offices to The Rivergate, the site of the new casino, where some of the investors provided a pickup truck loaded with Dixie Beer and champagne to celebrate.

Harrah's Jazzville, a partnership headed by the Harrah Co., the entertainment division of Promus, headquartered in Memphis, Tenn., and 10 Louisiana investors cashed in on some big odds to emerge a 5-4 winner for the casino development from Caesars World Inc. and developer Christopher Hammeter, odds-on favorites to obtain the lease.

This writer was in New Orleans when the board announced its decision Aug. 11. On that day, the price of the Promus Companies stock jumped on Wall Street, from $58 a share to $70.

Promus, which employs a total of 23,000 people, 1,000 of them in its Memphis headquarters, operates four hotel chains Harrah's Casino Hotels; Embassy Suites (100 properties in 30 states and Canada); Hampton Inns (300 in 42 states), and Homewood Suites (24 in 16 states).

New Orleans street talk throughout the French Quarter centered on the new gambling casino. A "Now What?" headline claimed almost half of the local newspaper's front page.

The group has $40 million in cash available to get a temporary casino opened by January, but is looking to an overall $400-$544 million investment in the project in a three-phase operation, with the completed casino set to open in October 1994.

Harrah's an industry giant

Promus (Harrah's) is leading the charge in the nationwide spread of legalized gambling. Be it a cruise boat on the Des Plaines River in Joliet, Ill., a gambling hall on an Indian reservation near Phoenix, a dockside casino in Tunica County 35 miles south of Memphis, or Vicksburg, Miss., Harrah's logo is cropping up in more places than the other major gaming companies combined, and at a lightning-fast pace.

The company recently delivered a check for $1,428,333 to the city of Vicksburg, Miss., for property the gaming firm had negotiated to buy.

Harrah's is already moving forward with its project to build a $48 million hotel-casino complex in downtown Vicksburg, a city known for years as a mecca for Civil War buffs. The complex includes a 117-room hotel, riverboat casino, and shoreline food and beverage facilities.

Harrah's target date for opening the Vicksburg facility is Nov. 1.

Harrah's is also proposing a floating casino at the Southeast Missouri Regional Port near Scott City.

A vote of Scott County residents on riverboat gaming is expected to be on the ballot Nov. 2. Promus is hinting at a $30 million development at the port, with employment for about 700 people.

The casino would be on the Scott County side of the harbor. The regional port encompasses land in both Scott and Cape Girardeau counties.

Harrah's opened its first riverboat operation in Joliet, and is planning a second casino there. The company also has casinos under construction at Shreveport, La., and Tunica in Northern Mississippi. Also on the planning boards are operations at North Kansas City, and Maryland Heights in the St. Louis metro area.

Meanwhile, Harrah's has announced that the company is abandoning plans for a casino along the Mississippi coast because of the number of existing or potential casinos in that area. In addition to the five along the coast, at last two other casino operations have plans to open. They too are open 24 hours a day, 365 days a year.

Cape sparks interest

The Scott County riverboat gaming vote would be the second on area ballots Nov. 2. The gaming issue will be voted on a second time in Cape Girardeau that day; voters here rejected the issue in June.

The potential of yet another place for legalized gaming has sparked interest in Cape Girardeau by several casino companies, including Promus.

Boyd Group Enterprises, a gaming and resort company which has four casino operations in Las Vegas, was the most visible casino firm during the June election. Boyd proposed a $38 million facility that would have included a land-based parking garage, offices and retail lease space along with a riverboat casino north of Broadway, along the Mississippi River floodwall. The Boyd Group has purchased some property and has taken options on others north of Broadway.

Players International, which operates Merv's (Griffin) Bar & Grill and a riverboat casino at nearby Metropolis, Ill., has also expressed an interest. And, although Players has elected to wait until after the election before announcing any intentions, we understand that the gaming firm has been looking at property south of the Mississippi River bridge.

If riverboat gambling passes in November, the next step would be for interested operators to submit proposals to the city and state. The selection process would likely be lengthy and would surely be interesting.

Players cashes in

Players, a public company, has announced record earnings for the company's first fiscal quarter ended June 30.

Revenues for the quarter were $18,310,200 and net income was $6,397,200, or 42 cents per share.

Included in net income were charges of $389,100, or $233,500 after taxes, relating to pre-opening and gaming development costs for Lake Charles, La., and other sites. Also included in net income were a one-time, non-cash charge of $1,065,000, or $639,000 after taxes, for common stock incentives to two new senior executives and $3.5 million after-tax credit for a change in accounting principle for income taxes.

"We're pleased to see that our first-quarter results reflect the strength of Players' new strategy, which is to develop riverboat casino and entertainment complexes in locations where Players can achieve a dominant position in the market," said Ed Fishman, Players' chairman.

From April to June, more than 320,000 people took a three-hour ride on the riverboat casino, paying an average of $20 admission and wagering a total of more than $100,000 million.

Players stock was about $2 a share before the company opened its first riverboat operation at Metropolis this year. The company's stock shot up to $20 when its first riverboat casino opened at Metropolis, and has been hovering in the $16-to-$19 range since.

Players' riverboat complex in Metropolis and its new location in Lake Charles, La., are in gaming jurisdictions that limit the number of licenses issued. Players' Lake Charles facility is the only holder of a certificate of preliminary approval in Southwest Louisiana, and will open in late December or early January.

The Lake Charles operation, just a 30-mile hop form the Texas border, will serve a market of about six million people in Louisiana and Texas, including Houston, Beaumont and Galveston. Casino gaming is not presently permitted in Texas. The firm is also interested in a gaming development at Evansville, Ind., depending upon the outcome of an election there on Nov. 2.