Penn National Settles Lawsuit
Updated: Thursday, April 4, 2002 2:00 PM
Posted: Tuesday, April 2, 2002 9:26 AM
Penn National Gaming will pay a $1 million settlement to a Las Vegas casino company that was suing over the casino rights to Charles Town Races.
Showboat Development agreed to drop all pending litigation in return for the one-time payment. The casino company, a subsidiary of Harrah's Entertainment, had filed a lawsuit in Pennsylvania claiming that the video lottery and slot machine operation at Charles Town constituted a casino, which triggered an option Showboat has to manage a casino at the West Virginia racetrack. The suit also claimed Penn National's acquisition of an 11% minority interest in Charles Town from the BDC Group, a former partner, violated a first right of refusal agreement that Showboat has with BDC Group regarding the sale of any interest in a casino at the track.
As required by general accounting principles, Penn National will report the payment in the fourth quarter of 2001. Earnings for the quarter and for the year as reported Feb. 4 will be adjusted by $650,000 after taxes, or 4 cents per share.
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