Share This Page

Analyst: Isle of Capri is favorite for casino

With the clock winding down toward a decision on who will win Pittsburgh's lone slots license, Isle of Capri Casinos has made a comeback.

Isle of Capri is the frontrunner for the license, according to Robert Shore, an analyst for Philadelphia-based Susquehanna Financial Group. Shore's report, released Monday, said IOC has a 55 percent chance to win.

In March, Shore's group listed Harrah's Station Square Casino as the leader for the slots license, with Isle of Capri running second. However, Harrah's odds dipped to 3 to 2 (40 percent) after news last week that its parent company might be bought out by two private equity firms.

"Usually, when private equity comes in, it reduces capital spending," Shore said. "So, that's a negative factor because it creates uncertainty. When the (state) gaming board looks at that, it might (wonder), 'Where is Harrah's going to be in 10, 20 or 30 years?' "

If the deal for Harrah's goes through, it would be one of the largest leveraged buyouts in history. Harrah's, which operates about 40 casinos across the country, has equity of more than $12 billion and about $10 billion in debt.

In Pittsburgh, Cleveland-based Forest City Enterprises would own the casino and Harrah's would operate it.

The IOC slots license bid, which includes an offer of $290 million for a new hockey arena, also got a boost last week when Canadian billionaire Jim Balsillie signed a purchase agreement for the Penguins.

Balsillie has been linked to a group that is trying to bring an NHL franchise to Hamilton, Ontario. The Penguins' lease at Mellon Arena expires June 30.

"With him being from outside the area, it generates more steam for the possibility that he could move the Penguins," Shore said. "He also has been strongly supportive of the IOC plan."

The Penguins have a partnership with IOC to construct an arena in the Hill District, near the slots casino site.

Detroit businessman Don Barden's group, which wants to open a Majestic Star Casino on the North Shore, is rated a 19-to-1 long shot.

"He doesn't have Harrah's strong brand name or the arena offer that IOC has," Shore said.

Susquehanna Financial Group compiled its odds for investors trying to decide where to put their money. Company analysts will attend the licensing hearings Nov. 20 for IOC and Harrah's and Nov. 21 for Majestic Star.

Shore said his firm could revise its ratings after those hearings.

The State Gaming Commission is expected to award the license Dec. 20 in Harrisburg.

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.