Detroit Casino News: Remembering African American Billionaire ‘Media Mogul’ Don Barden & More

DETROIT – In a deal that would mark the exit from the last of the casino businesses that African American Billionaire ‘media mogul’ Don Barden held, Holdings Acquisition Co. LP seeks to buy the 20 percent interest that Don Barden and associated investors held in the complex through their PITG Entertainment LLC, according to a report in the Pittsburgh Post-Gazette.

With a career spanning more than 40 years in casinos, real estate development and the entertainment industry, Barden was regarded as one of the top African-American entrepreneurs in the nation.

“Don Barden served history well as a humanitarian, employer and trainer of people,” the Rev. Jesse Jackson said in a statement. “He set the pace for entrepreneurship as a television cable operator and the first African-American casino owner.

Barden was the owner, chairman and chief executive officer of Barden Companies Inc., the Majestic Star and Fitzgerald’s casinos and hotels, and Waycor Development Co.

He led the companies from earnings of $600,000 to annual revenue of more than $519 million, making it one of the largest African-American-owned conglomerates in the country.

In December, The Detroit-based Barden Cos. transferred the Majestic Star LLC riverboat casinos and hotels in Gary, Ind., and casinos in Tunica, Miss., and Black Hawk, Colo., to its largest creditors as part of a bankruptcy reorganization.

That transfer followed the company’s sale in October of the Fitzgeralds Casino and Hotel in Las Vegas to Derek and Gregory Stevens, owners of several nut-and-bolt manufacturing companies in metro Detroit and majority owners of the Golden Gate Hotel & Casino in Las Vegas.

With a casino scheduled to open in Toledo at the end of the month, the gross revenue pulled away from the three Detroit casinos could total $35.5 million to $71 million of the total $1.4 billion in 2011 revenue. Detroit’s three casinos will be bracing for an impact that may take up to 5 percent of revenue.

But not much can be done at this point to prevent the leak of their customer base to Hollywood Casino, said Gregg Solomon, CEO of MotorCity Casino and Hotel.

The Hollywood casino, about 60 miles south of Detroit, opens its doors May 29. Wyomissing, Pa.-based Penn National Gaming will own the Toledo casino.

Detroit has about 11,500 “gaming positions” and about 15,240 including Caesars Windsor Hotel & Casino across the Detroit River. The industry defines a gaming position as a blackjack seat, slot machine, or any other spot a person can gamble.

Toledo’s casino will add 2,360 gaming positions to the market, or about 13 percent.

“The impact is going to be noticeable, without question,” Solomon said

He expects casinos in Ohio to take between 50 percent and 75 percent of the Ohio residents who currently come to the Detroit casinos, along with some customers from southern Michigan.

“Even if Ohio takes 10 percent of the customers from Detroit casinos, it’s an impact,” Miklojcik said.

Because Detroit taxes 10.9 percent of casino revenue, the city stands to lose about $7.7 million in annual tax revenue to Ohio.

It is tough to prevent customers from leaving or decreasing the time they spend at the Detroit casinos, Solomon said. When it comes to gambling, he said. location trumps marketing.

“The reality is, is that general advertising is not going to sway that Toledo customer to come to Detroit if they aren’t already,” he said.

Once the Hollywood casino opens, MotorCity will measure any changes in their customers’ behavior and plan their marketing campaign accordingly.

“We will continue to react to business levels, changes in customer behavior, average trip frequency and average theoretical wins,” Solomon said.

Greektown Casino Hotel executives declined to comment.

Mark the London 2012 Games with your own piece of history

Source: crainsdetroit.com

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Posted by WoodlawnPost on May 14 2012. Filed under Business, CEO's, Hotel & Casino's. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.