Riverboat Gaming On The Mississippi

Life on the Mississippi is changing for the bettor. Since Iowa first launched riverboat gaming on April 1,1991, four other states along the Mississippi have enacted similar legislation. Missouri became the latest state to legalize riverboat gaming on the Mississippi River, when voters overwhelmingly approved a statewide proposition on election day. In accordance with the new law, local municipalities or counties also have to approve gambling in separate proactive local referendums. St.

Louis, St. Charles, Ste. Genevieve, Jefferson City, Parkville, Jefferson county and Buchanan county did so on the same day.

Ironically, Hannibal, Mo., the hometown of Mark Twain, whose name is synonymous with the Mississippi riverboat era, was the only community to reject riverboat gaming in the recent Missouri vote.

Exhibit 1 shows highlights of the current riverboat gaming legislation in Illinois, Iowa, Louisiana, Mississippi and Missouri.

There are a number of groups actively lobbying for legalization of riverboat gaming in Connecticut, Texas, Virginia, West Virginia and Wisconsin.

With five states already on-line and others seriously considering legalization, shipbuilders, naval architects, outfitters and suppliers are gearing up for a lucrative, multimillion-dollar market which should be sustained for at least the next five years.

Depending on their size and outfitting, the average construction cost of a new riverboat casino could be $6 million to $12 million, with proposed gaming boats in Louisiana more than $35 million.

Perhaps the only exceptions to this gage are the casino vessels that will operate in Mississippi, a market that will be predominately composed of refitted, existing barges.

There are currently 14 riverboat casinos operating, five each in Illinois and Mississippi and four in Iowa. Exhibit 2 provides details on riverboat casinos in operation, while Exhibit 3 shows new construction.

"It's going to be a very good market over the next few years," said Charles Burrell, whose company, Jennings, La.-based Leevac Shipyards, Inc., is a major player in the construction of casino boats. "And with the recent passage of Missouri gaming, a good market just got a little bit brighter." Leevac is currently in discussions with several parties interested in riverboat casinos.

The yard's most recent delivery was the DeJong & Lebet-designed President Riverboat Casino Mississippi, which is one of the few selfpropelled vessels currently in operation in Mississippi.

Fully outfitted with sophisticated surveillance and gaming equipment, the President Riverboat Casino Mississippi had a reported price tag of $17 million.

Admiral To See Action As A Casino Boat The approval of riverboat gaming in Missouri will have a dramatic impact on the St. Louis riverfront. Under special provisions written into the Missouri law, permanently moored vessels within a certain distance of the Eads Bridge will be allowed to offer gaming. This provision, especially written in for the idled Admiral, owned by John Connelly's Gateway Riverboat Cruises of St. Louis, would give the former steamer a new life. The old riverboat, which measures 374- by 92-feet and was at one time licensed to carry 4,400 passengers, has been shut down since late 1988. Mr. Connelly also owns the excursion vessel Belle of St. Louis, built by Leevac Shipyards.

When she was constructed, the vessel, an integrated power unit and barge, was prewired for slot gaming operations. Mr. Connelly has already indicated that he plans to utilize both these vessels in casino operations. According to preliminary plans recently outlined by Gary C. Frommelt, director of marine operations for Gateway Riverboat Cruises, the refurbishment of the Admiral would involve the removal of bulkheads and gift shop areas on the first deck.

The first deck would then probably be closed off. The main ballroom on the second deck would be widened to the full beam of the boat by removing the outer bulkheads.

This area would then be utilized as the main casino. The renovation of the Admiral is expected to be completed this spring.

In addition, according to one industry source, another gaming vessel is in the design phase for the Connelly Group.

Its intended area of operation is unknown at this time.

There are approximately 10 slots available near the Eads Bridge for permanently moored casino boats, six of which are reportedly controlled by the Connelly Group.

At the recent Riverboat Gaming Congress & Expo held in New Orleans, Mr. Connelly also announced that his firm, President Riverboat Casinos, Inc., had applied for registration for public trading on the NASDAQ exchange.

A stock offering would supply the firm with an infusion of capital to further expand operations.

The firm includes excursion vessel operator Gateway Riverboat Cruises, President Casinos gaming operations in Iowa and Mississippi, and gaming equipment manufacturer International Gaming Technology. Proposals For The St. Louis Riverfront In the space of one week of the approval of riverboat gaming in Missouri, there were no less than a half dozen projects proposed for the St. Louis riverfront by would-be casino operators.

One of the most ambitious projects came from Jumer Hotels & Casinos, the operator of the successful Illinois gaming vessel Casino Rock Island.

Jumer's proposal calls for the construction of two new casino boats and a 250-room hotel at Laclede's Landing, an historic district north of the Eads Bridge currently under renovation.

As laid out by Jumer, the two casino boats would be near replicas of the steamers J.S. Deluxe and Capital, which served St. Louis in the early 1900s.

The J.S. Deluxe II would be permanently moored at the site, while the Capitol II would make regular gaming excursion trips. The 320- foot J.S. Deluxe II, with a restaurant on its upper deck and casinos on its second and main decks, and a 195-foot pavilion barge, featuring gift shops, recreation area and offices, would be built first and open in the spring of 1994.

The 293-foot Capital II would be completed in the fall of 1995. The hotel would be open by late 1994. Jumer expects to draw over 3.1 million people to the complex upon its completion.

The total cost of the project would be more than $90 million.

According to figures released by the company, this unique attraction would create jobs for 2,250 employees with a payroll of $67 million and produce a projected $163.9 million in city and state revenues over its initial five years.

Other proposals for Laclede's Landing came from: Ashfari Enterprises, Casino Magic Corporation, Kuhlmann Design Group, St. Louis Riverport Resort, and Skyline Casinos, Inc.

City officials are expected to decide late this month which of the firms would receive the mooring lease for Laclede's Landing. Queen of New Orleans: A $35 Million Riverboat "Hilton has long been at the forefront of the gaming industry and as gaming proliferated across the country, we plan on taking advantage of appropriate opportunities," said Barron Hilton, chairman and president of Hilton Hotels Corporation. Sticking to its philosophy, Hilton Hotels Corporation and its partner New Orleans Paddle wheels, Inc., are soon expected to announce the award of the contract to construct a 3,500-passenger, 400- by 90-foot casino paddlewheeler for Louisiana.

According to Duncan McKenzi, president, Hilton's Queen of New Orleans Riverboat Casino, the short list of yards in the running for the contract has been narrowed to Halter Marine, Inc., a part of the Trinity Marine Group; Avondale Industries, Inc.; Bender Shipbuilding & Repair Co., Inc.; and McDermott, Inc.

Many insiders believe that Halter Marine, which provided the design work for the vessel, will be awarded the construction contract. The $35 million project, which will involve 200 jobs for ship workers, is expected to be completed approximately 12 months from the start of construction.

Some industry sources suggest that the cost of the vessel might exceed $35 million, once specialized surveillance, coin counting and gaming equipment is installed. Upon completion, the Queen of New Orleans would feature a 30,000-squarefoot casino containing nearly 1,500 slot machines and 60 table games. "We are going to award the contract to a Louisiana-based yard to stay within the spirit of the law, which was to create jobs locally," said Mr. McKenzie. "Three of the yards are based right here in New Orleans, while Bender just recently purchased the Bergeron Shipyard in Braithwaite." Conservative estimates by Mr. McKenzie project that the vessel will carry over one million passengers per year, generating revenues of about $40-45 per person per trip. If a lease can be obtained, the Queen of New Orleans would operate out of a new open air pavilion located at the Canal Street Wharf.

New Orleans Paddlewheels, Inc., will own 50 percent of the project and manage the operation of the vessel. Hilton Gaming Division will manage the operation of the casino. According to joint venture partner Warren Reuther, president of New Orleans Paddlewheels, Inc., the two firms are also considering operating vessels out of the cities of Lake Charles and Shreveport.

These vessels would be smaller than the Queen of New Orleans, with a length of250 feet and beam of 60 feet, carrying 1,500 passengers. The paddlewheelers, of Rodney E. Lay design, would be similar in style to the Players Riverboat Casino under construction at Leevac Shipyards, Inc., in Jennings, La.

"Riverboat gaming will have a major impact on tourism to Louisiana," said Mr. Reuther. "The project [Queen of New Orleans] will work to enhance the existing charm and excitement New Orleans is renowned for . . ." As many as 15 licenses are expected to be issued in Louisiana, with a maximum of six vessels operating out of any one Parish.

By law, gaming operations have been limited to: the Mississippi, Red, Calcasieu, Mermentau, Ouachita and Atchafalaya Rivers, Bayou Bienvenue, Lake Pontchartrain, Lake Maurepas and the Gulf Intracoastal Waterway.

All the vessels must be paddlewheelers and of at least 150 feet in length. Up to 60 percent of the passenger square footage can be devoted to gaming.

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