Gambling news from http://www.9news.com/
So far Central City's $38M dollar gamble on a new road to lure customers from its competition hasn't paid off, and it will be unable to make its next scheduled bond payment.
The eight-mile-long road was built so that gamblers could go directly to Central City without passing through Black Hawk.
Instead, "it sends people speedily on their way to Black Hawk," said Beverly Miller, manager of a gift shop, Bevie Sue's Emporium, in downtown Central City.
"People here are scared," said local miner and city gadfly Brad Shinners. "They are very scared."
Gambling revenue has increased in Central City since the Central City Parkway opened in 2004, but it has jumped even more in Black Hawk.
Only one new casino has been built in Central City, a $50 million hotel-casino with a 488-parking garage, while two have closed. The road district won't be able to make its next scheduled bond payment by Dec. 31.
"One thing we know for sure is the way the district projections were set up, we needed two to three additional brick-and-mortar projects within the city ... to cover the debt service on the bonds," said Joe Behm, president of the business improvement district. "We got one of them with Century. The piece that's missing is the two other ones."
Philadelphia-based HWC Investors, which bought the bonds, has revised the deal so the payment can be made later, Behm told The Denver Post. HWC couldn't be reached for comment.
"The road was good at getting people to go through Central," said Ryan Worst, a gaming analyst with Brean Murray, Carret & Co. "Additional capital will help get those people who go through to stay there instead of going through to Black Hawk."
Limited stakes gambling was legalized in Colorado to help Central City, and its famous opera, struggling to survive on tourism. But the main road went through Black Hawk.
Black Hawk officials cooperated with the industry, while Central City insisted on sticking to historic-preservation guidelines. It wouldn't permit developers to raze old buildings to build new casinos.
Black Hawk's casinos rose from $527.7 million in fiscal 2005 to $543.5 million in fiscal 2006. Central City's revenue also rose, from $49.7 million in fiscal 2004 to $65.6 million in fiscal 2005. However, the next year it rose only $4 million.
Black Hawk has 21 casinos, Central City has 6.
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