Santa Claus smiles upon Borgata; No reprieve for Suffolk

Christmas came early for Boyd Gaming and Kris Kringle wore the judicial robes of the Tax Court of New Jersey. “A silver lining to Atlantic City‘s fall from grace for casino operators: the tax bills are lighter when the going gets tough,” Seeking Alpha wrote. Borgata had been seeking a writedown in its assessed value to $870 million, but was taxed at $2.26 billion. Yesterday’s ruling means that Boyd is due nearly $49 million in refunds for 2009-10, although whether Atlantic City can pay is an open question. “Devastating” was a well-chosen characterization of the effect on Atlantic City’s finances, especially with Boyd and MGM Resorts International gearing up to revisit their 2011-12 valuations, too. As Deutsche Bank‘s Carlo Santarelli wrote, “Where the money will come from however is anyone’s guess.” He did think the revaluation could retroactively add another $14 million a year to Borgata’s cash flow.

Suffolk Downs didn’t get its wish for a mulligan on the Nov. 5 ballot question that polls East Boston on its preference for a casino (or not). Unsurprisingly, Secretary of State William F. Galvin said that Caesars Entertainment‘s forcible exit from the project wasn’t sufficient reason for putting a municipal election on hold. Galvin offered an alternative remedy: post-electoral litigation to overturn the result on the grounds that the ballot language was deceptive. Speculation on who will replace Caesars continues to center upon state-approved Rush Street Gaming and on Hard Rock International. Suffolk Downs principal owner Richard Fields and the Seminole Tribe have done business in the past, although the tribe’s background check is several weeks from completion.

It an act of utter, brazen desperation, Penn National Gaming is offering Prince George’s County 100% of all profits from Rosecroft Raceway. That’s right: 100%. Of course, the track would have to pay rent to Penn’s REIT arm and ownership would rake management fees off the top. And, somehow it all has to add up to $319 million for county coffers. (What happens, for instance, if Year Two operating revenues don’t match or exceed $100 million?) When asked why he was being Lady Bountiful, Penn COO Tim Wilmott said the company could make a sufficient return for itself off fees and rent.

A more honest answer might have been to say that Penn needs to throw a Hail Mary pass to win the casino license. However, with Penn’s offer being praised as having “a significant impact on the school system’s ability to recruit and retain teachers,” Penn may have just flung a touchdown. All the money is going to good causes but it’s also an index of how badly Penn needs to keep that new, fifth license out of other companies’ hands.

Mohegan Sun Massachusetts got a clean bill of health in terms of its impact on the area … according to a report prepared by the Mohegan Tribal Gaming Authority, that is. File this one with the Department of Foregone Conclusions. Based on long experience, I’d say the “no additional housing prediction” is unduly optimistic, even if nothing else turns out to be.