Bay St Louis and Biloxi Casino Update

Boomtown booms, Hollywood hiccups

By TOM WILEMON

BILOXI – There’s a tale of two casinos in the fourth-quarter earnings report from Penn National Gaming.

The casino operator’s Biloxi property Boomtown is prospering, but its Hollywood Casino in Bay St. Louis is struggling.

Peter Carlino, the chief executive of Penn National Gaming, told stock analysts in an earnings conference call Thursday Bay St. Louis is the only property the company has any significant questions about.

Biloxi has quickly re-emerged as a popular gambling spot since Hurricane Katrina. Bay St. Louis has not.

“We are off to a slow start there,” Carlino said. “That property as you may know is in the area probably with the largest devastation of anywhere on the Gulf Coast.”

Companywide, Penn National’s net income in the fourth quarter increased to $87.3 million, or $1 per share, from $37.6 million, or 44 cents a share, a year earlier.

Boomtown’s operating cash flow for the three-month period was just under $5.7 million, compared with $3.8 million during the fourth quarter of 2005. That’s a 50 percent increase. Boomtown has benefitted from its proximity to Interstate 110 and the IP Casino.

Hollywood Casino’s operating cash flow was $2.6 million, compared with $4 million during the fourth quarter of 2004. Hollywood Casino is in an isolated location because of the closure of the U.S. 90 bridge over the Bay of St. Louis.

“We’ve only opened a temporary facility there,” Carlino said. “We remain cautious, frankly, as we look at that market in trying to decide what we want to do with that property.”

However, Carlino said the company has no plans to sell the casino resort.

“Fundamentally, I’m not a seller,” he said. “The concept of selling anything is not one of my favorite things, and it certainly isn’t to the degree that folks are listening down at the property. That has not been discussed here at all. The focus has been what can we do to maximize value at the property.”

Bob Davidge, the Hollywood’s public relations manager, said the casino has made great progress in adding attractions since it reopened Aug. 31. It has new restaurants, a new martini bar and a lineup of entertainers scheduled ranging from K.C. and the Sunshine Band to George Jones. The pro shop and café at its golf course opened this week.

“We have more than 600 acres tucked over here on the Bay that provides a nice little getaway for the snowbirders or anyone else who comes over here,” Davidge said.

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