Florida site may pay off for Boyd Gaming

Three years after spending $152.5 million to acquire a South Florida jai-alai fronton and its adjacent land, the transaction might finally pay dividends for Boyd Gaming Corp.

Both the Florida House and Senate Friday approved a revision to the state’s gambling compact with the Seminole Indians, which operates casinos in the Tampa area. If the tribe and Gov. Charlie Crist agree, gaming taxes could be reduced from 50 percent of all gambling revenues down to 35 percent.

If that happens, Boyd Gaming might explore adding slot machines to the Fort Lauderdale-area Dania Jai-Alai facility the company has operated since 2006. Boyd Gaming bought the facility and the surrounding 46 acres when gambling expansion in Florida was on the front burner. At the time, analysts thought Boyd would spend $100 million to $150 million to build a 1,500-slot machine casino.

But politics and other matters shelved gaming expansion.

Boyd Gaming Chief Executive Officer Keith Smith said this week the company could have added slot machines to the site, but was content to operate the jai-alai matches out of the existing facility. The company decided to just sit on the location until opening a casino became a little more profitable.

“A 50 percent gaming tax didn’t really interest us,” Smith said. “We’ll just wait until something changes.”

Change could be quicker than he thought.

“We think the situation remains fluid and difficult to call, although we believe the aspects related to the compact and lower taxes appear likely,” Oppenheimer gaming analyst David Katz told investors this week.

Boyd Gaming has taken non-cash write downs against the land over the past few quarters. On Wednesday, the company told investors a pre-tax impairment charge of $28.4 million was the main reason Boyd Gaming reported a net loss per share in the first quarter.

“The property has been written down, but could now potentially become a viable gaming operation,” Katz said.