MTR Gaming reports second-quarter loss

Mountaineer will install new table games to help boost revenue.

MORGANTOWN, W.Va. (AP) — The cost of opening its own slots parlor in Pennsylvania and the loss of traditional customers to other casinos in that state led to a second-quarter loss of $502,000 for MTR Gaming Group Inc.

That translates to 2 cents per share, compared to a gain of $472,000, or 2 cents per share, in the same period last year, the Chester-based company said Thursday.

MTR shares fell 47 cents, or 4.2 percent, to $10.73 on the Nasdaq Stock Market.

“The second quarter was one of tremendous transition,” President and CEO Ted Arneault told investors on a conference call.

At MTR’s flagship property, Mountaineer Race Track & Gaming Resort in Chester, revenues fell from $74 million in the second quarter of 2006 to $68 million in the same period this year. Arneault said that reflects the impact of Pennsylvania’s new casinos, which have cut into Mountaineer’s traditional market base.

The nearest threat is The Meadows Casino and Racetrack in Houston, Pa., which Arneault said has cut a bit deeper into Mountaineer’s performance than expected.

“No doubt, they’ve had a good first month with the newness of the facility and its location,” he said, “but I think the key will be our ability to react.”

Table games

For Mountaineer, that means additional amenities and the long-awaited debut of table games late this fall.

The track spent some $400,000 promoting a referendum on table games for the track and took a hit for it in the second quarter. But the investment paid off: Hancock County voters gave MTR permission to install blackjack, poker and other types of table games in a June 30 election.

Mountaineer expects to add 37 poker tables and 13 other table games during the fourth quarter, Arneault said. Although he had been aiming for a third-quarter debut, the state needs more time to develop regulations and train enforcement staff.

The West Virginia Lottery Commission, which oversees the state’s gambling ventures, has consultants on board to help, Arneault said.

“We will be ready well in advance of when the state’s ready,” he said.

Though initial attendance at MTR’s Presque Isle Downs near Erie, Pa., dipped after the debut, Arneault said he is pleased with early operating results. The casino opened Feb. 28 and has generated revenues of nearly $44 million so far.

Arneault predicts a jump in business when the racetrack reopens in September.

MTR’s net revenues for the quarter surged 40 percent year-to-year, from $94.9 million to $132.8 million.