Delta Owner Says Employees to Stay on Payroll
Updated: Thursday, December 13, 2001 2:18 PM
By Hector San Miguel
Posted: Thursday, December 13, 2001 2:18 PM
Boyd Gaming will keep all 700 new Delta Downs employees on its payroll even though it doesn't know when it will open its slot-machine casino.
That's according to Rob Stillwell, a Boyd spokesman, who made the comments Tuesday in response to a recent filings with the U.S. Securities and Exchange Commission that inidicated Boyd may have to sell the Vinton, La., racetrack if it can't beat a lawsuit opposing its slots parlor.
In a telephone interview from his Las Vegas office, Stillwell said the track is not for sale and that the company is doing everything it can to get its slots parlor opened.
"That is something (a sale of the track) that would be categorized as a last resort," Stillwell said. "We took a great deal of time through the negotiation of this process when we initially agreed to purchase the property. We looked at every possible situation that might impede us from opening. We certainly didn't anticipate it playing out quite the way it has."
Boyd has spent $35 million on improvements at the track, which the Las Vegas-based company bought for $125 million. It's located just east of the Texas border.
Estimates from the Louisiana Gaming Control Board show that Boyd will lose more than $9 million in gross revenues a month as long as its slot parlor remains closed. That comes out to about $301,370 a day in lost gross revenues that would be generated by an estimated 1,700 slot machines.
"The state is losing money as well," Stillwell said in reference to gaming taxes.
As for company employees, Stillwell said: "We have every intention of doing our best to make sure that we are able to open, and open with the employees that we have. We have trained a lot of these employees. That's adding an expense. It cost money to recruit, train, and bring them in."
Boyd had hoped to operate 1,700 slot machines at Delta Downs in December, but a lawsuit filed by Isle of Capri in Novemeber put the project on hold. A 19th Judicial District judge in Baton Rouge, La., issued a preliminary injunction Nov. 20 that prevented a gaming license issued to Boyd from going into effect. The order is in effect pending a trial on the lawsuit.
"Currently we are waiting to hear from the court with respect to the issues related to our appeal," Stillwell said. "In terms of when this will be resolved, we don't know. I can't even put a timeline on it."
Boyd mentioned in recent filings to the Securities and Exchange Commission that if it can't solve its legal woes, it may have to sell the track. When asked about those statements, Stillwell said: "It's our responsibility as a publicly traded company to make sure that we have explained all the possibilities related to any given issue. The sale of the track is certainly in the realm of possibility. However, at this particular time, that is not where our focus is."
Stillwell said Boyd is working to resolve the lawsuit filed by Isle of Capri. "We are looking at all possibilities with regard to this because at the end of the day, we want to be operating the Delta Downs Racetrack and Casino."
It isn't the first time a Boyd casino has run into problems and been shut down as a result, Stillwell said. "We had a similar incident with a riverboat where we were preparing to open and there was a delay," he said. "We kept (employees) on the payroll until we worked it out."
The injunction issued in November centers on whether former Delta Downs owner Shawn Scott had to undergo a suitability check before the track's slot operation commences. The Isle of Capri petition raised an issue over whether Scott still had an economic interest in the track since part of the sales agreement requires Boyd to pay him $27 million on top of the purchase price if certain criteria are met.
State District Judge Duke Welch ruled that Scott must undergo financial and criminal background checks because he stands to gain from the project.
FREE! E-Newsletters from The Blood-Horse!...
Follow the top stories of major racing events, racing previews and results with FREE e-newsletters from bloodhorse.com. As news develops, we'll deliver updates to your inbox. Follow important events moment by moment, step by step!