The main financial backer for Majestic Star Casino's Pittsburgh slots parlor has changed, analysts said Wednesday.
Wall Street investment firm Jefferies & Co. told state gambling regulators last year it would put up $455 million in financing for the North Shore casino. But Credit Suisse now is putting up money for the casino and seeking investors.
"They will have minimal difficulty getting the deal done because it's such a good project," said Gregg Klein, senior gambling industry analyst at BNP Paribas bank in New York City. "The prospects are quite strong."
State Gaming Control Board Chairman Mary DiGiacomo Colins identified Credit Suisse as Majestic Star's lender in a recent interview. Spokesman Doug Harbach said the board has not been formally notified of the change.
In general, Harbach said, "these types of financial deals change all the time simply because they can get a better deal."
The terms of the loan and reason for changing companies haven't been disclosed. Credit Suisse does not have to make public the details of its private investment offering, and it did not respond to a request for comment.
Majestic Star owner Don Barden could not be reached, and his spokesman, Bob Oltmanns, declined to comment.
A spokeswoman for Jefferies said the company does not discuss information about its clients.
Separately, Majestic Star officials are expected to meet today with city Planning Director Noor Ismail to discuss the casino design. City officials have raised concerns about the height of a proposed parking garage that would go behind the casino building.
Majestic Star officials expect construction to take 16 months. They have not broken ground while waiting for some city permits and the resolution of appeals filed by the Steelers and Pirates over traffic concerns.
State gambling regulators expect Majestic Star eventually to bring in more than $480 million a year.
Dennis Gomes, a former state gambling investigator in New Jersey and Las Vegas, said it's common for gambling companies to switch financing. It's not unlike a homeowner getting a better deal on interest rates and switching lenders.
Gomes, who is building and operating a casino in the Indianapolis area, said both Jefferies and Credit Suisse are top-of-the-line lenders. Gomes was an unsuccessful bidder for a casino in the Poconos.
"Those financial arrangements (for building casinos) are generally pretty fluid," Gomes said. "I've seen a lot of situations where someone starts out with one and winds up with another."
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