Suckers Needed : Fast!!

Via Null Space comes the news that the Rivers Casino Debt is now rated by S&P at CCC, a drop of two notches, from B-. For folks who don't know this---there is no F given.

A D rating means currently in Default, which gives one some idea how precarious things are.

From the Post Gazette.

Unless there's a "significant improvement in operating performance from that observed to date" the casino might not be able to generate enough cash to meet fixed charges, which include the arena payment, in excess of $55 million next year, S & P stated.

It said it expected a $56 million interest reserve account set up as part of the casino's financing to be depleted in the first quarter of 2010, putting more pressure on the facility to boost revenue.

No doubt they are watching the same sharp declines in weekly revenues, that Chris at Null Space has charted at the end of his post.

If they fail to make the arena payment, we may get to really see the naked scum on the bottom of this pool.

Barden's Majestic Star Files For Bankruptcy

Chart From Wall Street Journal

Desperate Gary, Indiana now a major creditor.

"Gary and Majestic Star, the owner of both local casino licenses, have been in negotiations for years now over its local development agreement. Former Mayor Scott King signed an amendment to that agreement in 2005 which required Majestic Star to pay the city 6 percent of its adjusted gross revenue.

Previous agreements set that amount at 7 percent. It also capped the maximum amount of money Majestic Star would pay to Gary at $6 million annually.

However, attorneys for Mayor Rudy Clay have disputed the validity of that agreement because it wasn't approved by Gary's Board of Public Works and Safety. In February 2008, Majestic Star filed a lawsuit against the city, asking a judge to sort out the matter."

How far off we are from this situation is open to debate but so far revenues from the new Rivers Casino are far below the company's projections even as the city's need for cash grows.


"I believe this stopgap funding measure is crucial," said state Rep. Chelsa Wagner. She added that a long-term solution may come if the General Assembly dedicates 1 percent of Rivers Casino table games revenue to libraries."

Cinncinati Stadium Debt Problems And Buyers Remorse

Our current financial problems are making most of us regret a lot of the purchases and debts we took on, as well as those politicians roped us into.

Null Space, points out The Bond Buyer's story on troubles brewing in Cincinnati.

Hamilton County has a $13.2 million dollar deficit in the fund for it's NFL and MLB stadiums. The problem is the low growth in sales tax revenue. This deficit could rise to 92 million in 2014.

Of course we have the casino to pay for our new Hockey arena (and everything else our hearts desire) right? Well, Null Space also pointed out a PG article about the very underwhelming casino receipts.

I really don't know much about the Casino's financing and debt obligations but the shortfall is very ominous.

"For the week of August 17-23, the casino generated $4.6 million in gross terminal revenue, placing it fifth among the nine casinos in Pennsylvania. Multiplied over the year, the $4.6 million would produce $242 million in gross terminal revenue, far less the $427.8 million the casino itself estimated for its first year. It's also lower than the $362.4 million projected by the gaming board." Geee that's not much more than half of stated projections and you have to guess that the opening weeks would be stronger than average.

Then there's that minor little BILLION DOLLAR BLACK HOLE IN THE CITY'S PENSION FUND!

I know, it's impolite to shout but people better wake up soon.