Colonial Downs

Colonial Downs

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Colonial Downs Owner Hurt by MTR Gaming

The owner of Colonial Downs reported it lost $4.1 million during 2008.

The owner of Colonial Downs said it lost $4.1 million during 2008, due in part to its investment in MTR Gaming Group, it was reported March 18.

Jacobs Entertainment, which owns five casinos and 18 truck plaza gaming operations in addition to Colonial Downs, recorded a $6.6-million impairment charge on its equity investment in MTR Gaming, according to an annual report filed with the Securities and Exchange Commission. Both Jacobs Entertainment and MTR Gaming are chaired by Jeffrey P. Jacobs.

Annual net revenues for Jacobs Entertainment in 2008 were $362.5 million, a 3.6% increase over 2007, when the company produced a profit of $5 million.

Jacobs Entertainment directly owns 3% of MTR Gaming stock, and affiliates related to the founding Jacobs family own another 15%. The company said it recorded the $6.6-million impairment on the shares because it determined "We and our affiliates had reached a level of significant influence on the operations of MTR," and was required to account for its investment.

The company said its total investment of $7,943,000 in MTR Gaming stock carried a value of $1,367,000 at the end of the 2008.

Steve Roark, president of Jacobs Entertainment, said in a March 19 conference call with financial analysts that there wasn’t much he could comment on in regard to the company’s stake in MTR Gaming. “We continue to watch our investment in MTR,” he said.

In 2006, Jacobs Entertainment and affiliates began investing in MTR Gaming, whose shares traded as high as $16.72 in 2007, but in 2008 tumbled like those of many other companies. MTR Gaming shares closed 2008 trading at $1.68, and closed March 18 trading at 80 cents. MTR Gaming, which recently reported an annual loss of $17.7 million for 2008, includes in its portfolio Mountaineer Casino, Racetrack & Resort in Chester, W. Va; and Presque Isle Downs & Casino in Erie, Pa.

Jacobs Entertainment, a privately-held company headquartered in Golden, Colo., reported a 6% decrease in pari-mutuel revenues to $38.7 million for Colonial Downs, its eight satellite off-track wagering locations, and related advance deposit wagering. The company attributed the overall drop in pari-mutuel revenues to a $3.6 million decrease at its OTBs, and a $200,000 decline at Colonial Downs, which is located in New Kent, Va. Revenues from account wagering increased $1.1 million.

In addition to Colonial Downs, holdings of Jacobs Entertainment include two casinos in Colorado; three casinos in Nevada; and 18 truck plaza video gaming facilities in Louisiana, which are collectively referred to by the company as “Jalou.”