Tuesday, April 08, 2008

MotorCity Casino revenues ailing


MGM Grand's March revenues up; other 2 down


Revenue for all 3 Detroit casinos for the month of March was up .02% compared with the same month last year.

MGM Grand Detroit reported $50.2 million in revenues in March, compared with $47.4 million last March, up by 5.94%.

MotorCity Casino reported revenues of $41.3 million, compared with $42.8 million last March, down by 3.7%.

Greektown reported revenues of $32.2 million, compared with $33.4 million last year, down 3.58%.

For the month of March 2008, gaming taxes for the three Detroit casinos were $11.81 million, compared with $14.97 million for the same period last year.

The decrease in state gaming tax revenue is due to a tax roll-back for MGM Grand Detroit Casino and MotorCity Casino, whose taxes were lowered with the completion of its permanent facilities.

Contact MARGARITA BAUZA at mbauza@freepress.com.

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Moody’s sees bleak outlook for Gaming Industry; MotorCity Casino affiliate on downslide

Economic Slowdown Hits U.S. Gaming Sector

  • The U.S. gaming sector is experiencing weaker visitation and spending trends as a result of the slowing U.S. economy. Moody's recently revised its outlook for the U.S. gaming sector to negative from stable to reflect these trends.

  • The economic slowdown and possibility of a longer-term, consumer-based recession come at the same time that fierce competition within and among gaming jurisdictions is requiring gaming companies to spend heavily on promotion and capital investment.

  • Reduced access to capital markets is increasing overall risks to the sector’s credit profile. Decreased access to capital is also likely to result in the cancellation or delay of some planned development projects, potentially hurting longer-term revenue and cash flow growth rates.

  • Many U.S. gaming markets are in their relative infancy and do not have enough of a documented history to indicate how they will perform during a period of prolonged economic weakness.

  • Unfavorable legislative initiatives designed to address possible state budget deficits could result in higher gaming taxes and/or increased competition.

  • Long-term fundamentals of the sector, including increased acceptance and popularity of gaming and a demographic shift towards age groups that exhibit a high propensity to gamble, remain favorable, but they may not offset near-term economic and competitive challenges.

  • Negative rating actions are expected to significantly exceed positive rating actions in 2008. Eleven U.S. gaming issuers are currently on review for possible downgrade and six have a negative outlook -- those include CCM Merger, Inc. the parent of Marian Ilitch's MotorCity Casino. Combined, these issuers account for almost 25% of the total number of rated U.S. gaming issuers.

source: Moody's Corporate Finance, March 2008

Moody's drops MotorCity Casino's credit rating, again!

New York, March 31, 2008 -- Moody's Investors Service lowered the ratings of CCM Merger, Inc. ("CCM") due to the much slower-than-anticipated leverage reductions and fiercely competitive Detroit gaming market. A stable ratings outlook was assigned.

CCM Merger's debt/EBITDA for the fiscal year-ended December 31, 2007 was about 7.6 times. CCM Merger, Inc. is a holding company whose primary operating subsidiary is Detroit Entertainment, LLC doing business as MotorCity Casino.

CCM Merger's corporate family rating reflects the company's high leverage, highly concentrated operations in the fiercely competitive Detroit gaming market, average development profile, and adequate liquidity.

CCM Merger's profitability metrics are weak and largely reflect the company's ongoing construction and expansion.

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Ilitch has backed loosing sports teams and pizza, but casinos in Detroit? Forbes.com 10.09.06 ● Marian Ilitch #1 on "25 Most Powerful People" to Watch 2006” global gaming business o1.oo.o5 ● My Kingdom for a Casino Forbes 05.08.06 ● Big Lagoon’s casino dream awakens north coast journal 07.28.05 ● Shinnecocks launch legal claim to Hamptons land newsday.com 06.16.05 ● Ilitch Plans to Expand Casino Empire RGTonline.com 07.05.05 ● Ilitch outbids partners MichiganDaily.com 04.14.05 ● Ilitch enmeshed in NY casino dispute detnews.com 03.20.05 ● Marian Ilitch, high roller freep.com 03.20.05 ● MGM Mirage to Decide on Offer for Casino in Detroit rgtonline.com 04.16.05 ● Secret deal for MotorCity alleged freep.com 02.15.05 ● Los Coyotes get new developer desertdispatch.com 02.08.05 Detroit casino figure to finance Barstow project LasVegasSun.com 07.07.03 ● Indian Band trying to put casino in Barstow signonSanDiego.com 06.04.03 Pizza matriarch takes on casino roles detnews.com 10.23.02 ● Vanderbilt gets short straw in negotiations for a casino Lansing Journal 10.06.02 ● Indians aim to drive family from tribe in vicious dispute san diego union tribune 04.09.00 ●Malik owns 2000 Michigan Quarter Horse of the Year Michigan.gov 01.01.00 ● Detroit Team to run Michigan’s newest Indian casino detnews.com 05.23.99 Tiger ties tangle Marian Ilitch detnews.com 04.29.99 ● Three investors must sell their Detroit casino interests gamblingmagazine.com 04.25.99 ● Partners’ cash revived election; They say money was crucial to Prop-E detnews.com 04.25.99 Investors have troubled histories las vegas review journal 04.27.99 ● Investor served probation for domestic assault on 12 year old boy detnews.com 04.25.99 Can a pair win a jackpot?: local men hope to... crainsdetroit.com 03.17.97

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