Casino

The owner of the Twin River slot parlor failed to reach a new financing deal with its lenders before the current one expired last night, according to a slot parlor representative.

“I don’t believe we will have an announcement today,” Patti Doyle, Twin River’s spokeswoman, said late yesterday afternoon. “We will be working through the weekend to get an agreement.”

UTGR Inc., which owns the slot parlor in Lincoln, has been negotiating for months with its lenders to rework the $577 million in financing it has tied to Twin River’s operations. The company, a subsidiary of BLB Investors LLC, is under pressure from its chief lender, the Merrill Lynch Capital Corp., to generate enough money to meet the loan payments.

BLB itself is a consortium of Kerzner International, a Bahamas-based casino and resort operator that helped develop the Mohegan Sun casino; the Waterford Group, which owns or manages 22 hotels and the Connecticut Convention Center, in Hartford; and Starwood Capital Group.

The lenders have granted Twin River’s owners one extension after another during the talks. The company missed a loan payment in March, prompting negotiations with its lenders and collection efforts by contractors who worked on the $225-million reconstruction project that transformed the aging Lincoln Park race track into Twin River.

The two sides entered into a pact, known as a forbearance agreement, that allows the company time to work out payment plans with its lenders and creditors.

Company representatives have used that time to improve profits at the slot parlor and negotiate with state officials over the terms of Twin River’s revenue deal with the state.

Gambling is the third-largest source of state revenue.

Out of every dollar lost into one of the video-lottery terminals (VLTs) at Twin River, the state gets slightly more than 60 cents. If expectations play out, that would translate into $254.4 million from Twin River alone for the state this year.

In March, the General Assembly approved round-the-clock gambling at Twin River on Friday, Saturday and Sunday nights and until 3 a.m. on the Tuesday morning after a Monday holiday. Newport Grand, Rhode Island’s other slot parlor, does not have 24-hour gambling.

Last month, the state also allowed Twin River to test-market a player-rewards program, similar to those offered in most full-scale casinos, over a 92-day period.

Also that month, Twin River closed its buffet and leased space to other food vendors. The 581-seat Carmine’s Family Style Restaurant also closed.

At one point this year, the slot parlor’s owners offered the state upward of $500 million up-front in return for slicing by more than half the percentage of money the state gets from the slot parlor, from 61.45 percent to 25 percent.

So far, state officials have demurred.

Meanwhile, slot income at Twin River leaped from $34.2 million in May 2007 to $38.9 million this May. In the traditionally slower month of June, it inched from $32.4 million last year to $33.9 million.

Slot income increased again last month, according to results posted on the Rhode Island Lottery Commission’s Web site. Twin River’s slot income for the month was $35.7 million, up 5.3 percent from the $33.9 million earned in July 2007.

Conversely, revenue at Newport Grand was down 9.3 percent last month, falling from $6.4 million to $5.8 million.

Combined, net income from the two slot parlors was $41.5 million for the month, up 3 percent for this July over July 2007.

Gary Sasse, director of the state Department of Revenue, said yesterday afternoon that he wouldn’t comment on the Twin River financing issue until slot parlor representatives formally notify him of the status of their talks with the lenders.

pgrimald@projo.com