This week’s announcement of a $1.4 billion takeover of Shufflemaster, er, SHFL Entertainment is another reminder of the casino industry’s monkey-see/monkey-do tendencies. Scientific Games gobbled up WMS Industries, so Bally had to do something, right? At least this buyout was somewhat better received on Wall Street. The resulting greater diversity of products and global presence (particularly in Australia and Asia) was a positive for J.P. Morgan analyst Joseph Greff. It also considerably strengthens Bally’s position vis-a-vis offering table games and ancillary products. “Social issues (like SHFL’s CEO staying beyond closing) are unclear,” he added. Former Bally COO Gavin Isaacs, now the CEO of SHFL, could return to Bally as an underling. Awwwwkward.
But Wall Street‘s reaction was generally favorable. At a purchase price that was 24% above the previous close, it remains to be seen if Bally’s offer is rich enough to scare off rival buyers. International Game Technology, under free-spending CEO Patti Hart, might want to enter the fray. (SHFL carries a paltry $8 million in debt.) Sensing a recession around the corner, Seeking Alpha panned the deal, opining that it left Bally overexposed to economic turmoil. However, it also removes a (smallish) slot competitor from the board, so how bad could the downside be? Both companies hope to close the deal in a year.
The big float. In order to close its purchase of Ameristar Casinos, purchaser Pinnacle Entertainment — which got the nod from Louisiana regulators earlier today — will be floating $800 million in new debt. That’s in addition to $2.6 billion in other debt and credit lines. That’s a lot of new indebtedness, too. If 
Ameristar’s casinos weren’t such strong performers (as are most of Pinnacle’s), S&G would find this borrowing spree worrisome. ($450 million in old debt is to be retired right away.) Also, Pinnacle has three hotels and two casinos on the market right now, so any sale proceeds will greatly reduce the leverage … at least that’s what one hopes, in a buyer’s market.
Nothing says “casino” like … some laser tag. But that’s just one of the amenities Choctaw Casino Resort is going to add to keep customers crossing the Texas border into Oklahoma. Someday Texans will wake up and smell the coffee about the revenue drain that decades of anti-gambling policy have created. But probably not anytime soon.
Would it be great if Dan Lee gets the scratch together to buy back Lake Charles? Just saying.
Maybe with Rick Perry leaving, things will look up in Texas. Its a shame all those dollars leaving the state. Let’s hope for a change.
Hey James, I would hope you are right but I doubt it. The religious right who controls Austin will never want us to think for ourselves. They were put on this earth so they could tell us how to live. Just look at the abortion bill. Only the faces will change.
Someday Texans will wake up and smell the coffee about the revenue drain that decades of anti-gambling policy have created. But probably not anytime soon.
You give Texans WAY too much credit.