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  • John McCain has a long, complicated relationship with gambling interests

    In a lengthy piece today, The New York Times details John McCain’s extensive connections to the casino industry and Indian gaming.

    As a member and former chairman of the Senate Indian Affairs Committee, it’s not surprising that McCain would have many supporters in industry.

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    Yet in 2008, both Barack Obama and Hillary Rodham Clinton rank higher in campaign donations from Indian gaming organizations. According to an analysis by the Center for Responsive Politics, Clinton ranks second among congressional recipients (after Bill Richardson), with contributions totaling $82,375. Obama ranks 12th, with $56,100.

    McCain isn’t on the list of top 20 recipients, having received $5,000.

    The center’s analysis found that Indian tribes and the National Indian Gaming Association, the tribes’ chief lobbying group, have given $7.3 million this year to federal candidates and their parties.

    The gambling industry as a whole has contributed $12.7 million. Giving in the larger sector has been led by MGM Mirage, whose chairman, J. Terrence Lanni, is a close friend of McCain and a bundler for his campaign. Lanni has raised more than $500,000 for McCain’s presidential bid this year.

    After co-authoring the Indian gambling act and helping to fashion much of the legislation governing the gaming industry, McCain appears to distanced himself from the tribal casinos. In 2000, he was the top congressional recipient of their donations, taking in $39,400. This year, he has accepted $5,000.

    As the Times reports, McCain stopped taking tribal donations after the scandal surrounding Jack Abramoff and his lobbying activities for Indian tribes.

    However, less overt connections continue. The Times notes: “In his current campaign, more than 40 fund-raisers and top advisers have lobbied or worked for an array of gambling interests – including tribal and Las Vegas casinos, lottery companies and online poker purveyors.”

    Campaign staffers told the Times that McCain was “justifiably proud” of his record on Indian gaming.

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  • After failed buyout, Penn National Gaming focuses on growth

    Its $6 billion buyout may have collapsed, but business life goes on – quite aggressively – for Penn National Gaming.

    Last week, the grand opening of its new slot machine palace in Maine set revenue and attendance records. This quarter it plans to open a new hotel at its casino and race track in Charles Town, WV, near the lucrative Washington, DC, market. It also is planning a new 270,000 square foot gambling barge in Indiana and positioning itself to move into Maryland if voters there approve slots in November.

    Penn National, one of the nation’s biggest gambling companies outside of Nevada, also has nearly $1.5 billion in new cash to spend because of its termination agreement with the firms that had agreed to take it over and the banks that were going to fund the deal.

    “We believe the substantial capital infusion will enable Penn National to be aggressively opportunistic at a time when gaming industry valuations appear very attractive,” CEO Peter Carlino said in a statement.

    The gambling industry, once thought recession proof, is being hurt by the national economic slowdown.

    Carlino said he was disappointed that the $67 a share buyout didn’t go through, but given current economic conditions and the gaming industry outlook, he believes this is a good outcome for Penn National. The company’s stock closed at about $30 a share last week.

    “We may be in the gaming business, but we would never gamble the Company’s future,” Carlino said.

    Founded in 1972, Penn National operates casinos, horse race tracks (and one dog track) in 14 states and Canada. It employs 16,000 and generates about $2.5 billion in annual revenue. Last year, the Pennsylvania-based company made Fortune’s list of the 100 fastest growing companies for the sixth time.

    The buyout deal with Fortress Investment Group and Centerbridge Partners was announced a year ago, but was undermined by turmoil in the credit markets and a slowing economy. The Wall Street Journal reports that one-fifth of all the leveraged buyout deals for American companies that were announced in 2007 have been terminated.

    Penn National, with about $3 billion in long-term debt, said it plans to use the money from the termination agreement to repay existing debt, acquire and develop gaming facilities and repurchase company stock.

    As part of the deal, Fortress chairman and CEO Wesley Edens will join Penn National’s board of directors.

    In February, Tim Wilmott joined Penn National as COO. Previously, he held the same position at Harrah’s Entertainment, one of the largest gambling companies in the world.