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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-8570
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Nevada 88-0121916
(State or other jurisdiction of (I.R.S. Employer incorporation
incorporation or organization) Identification No.)
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109-1120
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (702) 734-0410
Securities registered pursuant to Section 12(b) of the Act:
Title of Class Name of Exchanges on which Registered
Common Stock, $.01-2/3 Par Value New York Stock Exchange and Pacific
Stock Exchange
Common Stock Purchase Rights New York Stock Exchange and Pacific Stock
Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock of the Registrant held
by persons other than the registrant's directors and executive officers as
of April 22, 1996 (based upon the last reported sale price on the New York
Stock Exchange on such date) was $3,216,018,338.
The number of shares of Common Stock, $.01-2/3 par value, outstanding
at April 22, 1996: 103,346,423.
DOCUMENTS INCORPORATED BY REFERENCE
PART II - Portions of the Registrant's Annual Report to Stockholders
for the year ended January 31, 1996 are incorporated by reference into
Items 7 and 8, inclusive.
PART III - Portions of the Registrant's definitive proxy statement in
connection with the annual meeting of stockholders to be held on June 21,
1996, are incorporated by reference into Items 10 through 13, inclusive.
PART I
ITEM 1. BUSINESS.
General
Circus Circus Enterprises, Inc. (the "Company"), which was
incorporated in 1974, currently owns and operates, through wholly
owned subsidiaries, ten hotel-casino properties in the State of
Nevada with approximately 16,000 guest rooms, including four
properties with approximately 2,400 rooms which were acquired in
fiscal 1996. The Nevada properties currently owned and operated
by the Company include (i) four properties in Las Vegas (Circus
Circus-Las Vegas, Luxor, Excalibur and the Hacienda (acquired in
September 1995)), (ii) the Circus Circus Hotel and Casino in
Reno, (iii) the Colorado Belle Hotel and Casino and the Edgewater
Hotel and Casino which are located on the Colorado River in
Laughlin, (iv) Gold Strike Hotel and Gambling Hall, Nevada
Landing Hotel & Casino in Jean (both acquired in June 1995), and
(v) Railroad Pass Hotel and Casino in Henderson (acquired in June
1995). The Company also owns and operates a dockside casino
situated on a 24-acre site in Tunica County, Mississippi and
operates two smaller casinos on the Las Vegas Strip, Slots-A-Fun
(which the Company also owns) and the Silver City Casino (which
the Company operates under a long-term lease).
The Company, through wholly owned subsidiaries, is a 50%
participant in (i) a joint venture (the "Reno Joint Venture")
which owns and operates Silver Legacy, a hotel-casino located in
downtown Reno that opened in July 1995 and is situated between
Circus Circus-Reno and another hotel-casino owned and operated by
an affiliate of the other participant in the Reno Joint Venture,
(ii) a joint venture (the "Elgin Joint Venture") which owns and
operates The Grand Victoria, a riverboat casino, and a related
land-based entertainment complex located in Elgin, Illinois, and
(iii) a joint venture (the Las Vegas Joint Venture ) which is
developing Monte Carlo, a 3,000-room hotel-casino project on the
Las Vegas Strip scheduled to open in June 1996. The Company
also owns a one-third interest in a company which is operating an
interim casino in Windsor, Ontario, Canada that opened in May
1994. In December 1995, the interim facility was expanded to
include a dockside casino. Negotiations are in progress on an
agreement for a permanent facility. For additional information
concerning the projects with which the Company is involved
through the aforementioned joint ventures, see "Joint Venture
Participations" in this Item 1.
For a discussion of the Company s acquisition of Gold
Strike, Nevada Landing, Railroad Pass and its 50% interests in
the Elgin Joint Venture and the Las Vegas Joint Venture on
June 1, 1995, reference is made to Exhibit 13 of this Report
which is incorporated herein by this reference.
Unless the context otherwise indicates, all references to
the Company are to Circus Circus Enterprises, Inc. and its
subsidiaries.
Description of the Company's Operating Hotels and Casinos
Las Vegas, Nevada
Circus Circus-Las Vegas. Circus Circus-Las Vegas, the
Company's original property, is a circus-themed hotel and casino
complex situated on approximately 69 acres on the north end of
the Las Vegas Strip. The property, which has a total of 2,764
hotel rooms, includes approximately 110,000 square feet of casino
space where, as of January 31, 1996, 2,446 slot machines and
other coin-operated devices, 56 blackjack ("21") tables, four
craps tables, seven roulette tables, eight other table games and
a wheel of fortune as well as poker, keno and a race and sports
book were available to the casino's patrons. From a "Big Top"
above the casino, Circus Circus-Las Vegas offers its guests a
variety of circus acts performed free of charge to the public
from 11 a.m. to midnight daily. A mezzanine area overlooking the
casino has a circus midway with carnival-style games and an
arcade that offers a variety of amusements and electronic games.
Two specialty restaurants, a buffet with a seating capacity of
approximately 1,200, two coffee shops, several fast food snack
bars, four cocktail bars and two cocktail service bars and a
variety of gift shops and specialty shops are also available to
the guests at Circus Circus-Las Vegas. Grand Slam Canyon, an
"adventuredome" covering approximately five acres, opened in
August 1993 and offers theme park entertainment that includes a
high-speed, double-loop, double-corkscrew roller coaster, a
coursing river flume ride on white-water rapids, several rides
and attractions designed for pre-school age children, themed
carnival-style midway games, a state-of-the art arcade, a 65-foot
waterfall, fully animated life-size dinosaurs in their primeval
habitat, food kiosks and souvenir shops, all in a climate-
controlled setting under a giant pink space-frame dome. On-site
parking is available for approximately 5,100 vehicles, including
three garages that will accommodate approximately 3,200 vehicles
and covered parking for approximately 320 vehicles beneath Grand
Slam Canyon. Circus Circus-Las Vegas also offers accommodations
for approximately 384 recreational vehicles at the property's
Circusland RV Park.
For information concerning the 1,000-room hotel tower
currently under construction at Circus Circus-Las Vegas, see
"Current Expansion Activities" in this Item 1.
Luxor. Luxor is an Egyptian-themed hotel and casino complex
which features a 30-story pyramid sheathed in reflective glass.
Situated at the south end of the Las Vegas Strip on a 64-acre
site adjacent to Excalibur, Luxor was opened to the public in
October 1993 and offers its guests more than 400,000 square feet
of public entertainment area on three different levels beneath a
soaring hotel atrium enclosed by 2,526 hotel rooms, including 287
suites. The rooms can be reached from the four corners of the
pyramid by state-of-the-art "inclinators" which travel at a
39-degree angle. Luxor includes approximately 100,000 square
feet of casino space where, as of January 31, 1996, 2,082 slot
machines and other coin-operated devices, 57 blackjack ("21")
tables, six craps tables, nine roulette tables, 15 other table
games and a wheel of fortune as well as poker, keno and a race
and sports book were available to the casino's patrons. Above
the casino, a series of high-tech "participatory" adventures
arrayed in striking scenery are designed to seemingly transport
visitors to extraordinary places of times past, present and
future. Below the casino is a museum of the Tomb of King
Tutankhamen featuring replicas of Egyptian artifacts as they were
found in the tomb. Luxor's other public areas contain a buffet
with a seating capacity of approximately 900, six themed
restaurants including two gourmet restaurants, as well as a snack
bar, seven cocktail lounges and a variety of specialty shops. In
addition, the property's spa offers guests a relaxing escape from
the excitement of the casino. Parking is available for nearly
4,200 vehicles, including a garage which contains approximately
1,000 spaces.
For information concerning two hotel towers currently under
construction which will increase the number of rooms at Luxor by
approximately 2,000, see "Current Expansion Activities" in this
Item 1.
Excalibur. Excalibur is a castle-themed hotel and casino
complex situated on the south end of the Las Vegas Strip on a
53-acre site adjacent to Luxor. Excalibur, which has a total of
4,032 hotel rooms, offers its guests more than 400,000 square
feet of public entertainment area, including approximately
110,000 square feet of casino space where, as of January 31,
1996, 2,559 slot machines and other coin-operated devices, 58
blackjack ("21") tables, five craps tables, six roulette tables,
10 other table games and two wheels of fortune as well as poker,
keno and a race and sports book were available to the casino's
patrons. Excalibur's other public areas include a Renaissance
faire, a medieval village, an amphitheater with seating capacity
of nearly 1,000 where nightly mock jousting tournaments are held
and costume drama are presented, two dynamic motion theaters,
various artisans' booths and medieval games of skill. In
addition, the property has a buffet with seating capacity of
approximately 1,300, six themed restaurants, as well as four
snack bars, several cocktail lounges and a variety of specialty
shops. Parking is available for approximately 3,400 vehicles,
including a garage which contains approximately 1,400 spaces.
Hacienda. The Hacienda Hotel and Casino, acquired by the
Company in September 1995, is situated on a 47-acre site at the
south end of the Las Vegas Strip immediately to the south of
Luxor. The Hacienda has 1,169 hotel rooms and approximately
35,000 square feet of casino space. As of January 31, 1996, the
property included 868 slot machines and other coin operated
devices, 15 blackjack ("21") tables, two craps tables, two
roulette tables, five other table games, a wheel of fortune as
well as poker, keno and a sports book. The Hacienda site is
contiguous to an unimproved 73-acre site acquired by the Company
in March 1995. The Company is operating the Hacienda while it
finalizes plans to develop the Hacienda site and the
aforementioned 73 acres as part of an integrated development with
the Company s Luxor and Excalibur properties. See "Current
Expansion Activities".
Other Las Vegas Properties. The Silver City Casino and
Slots-A-Fun have 18,200 and 16,700 square feet of casino space,
respectively. Both casinos depend on foot traffic along the Las
Vegas Strip for their business. As of January 31, 1996, the
Silver City Casino had 563 slot machines and other coin-operated
devices and 21 table games, while Slots-A-Fun had 623 such
machines and devices and 23 table games.
Reno, Nevada
Circus Circus-Reno. Circus Circus-Reno is a circus-themed
hotel and casino complex situated in downtown Reno, Nevada. The
property, which has a total of 1,625 hotel rooms, includes
approximately 60,000 square feet of casino space where, as of
January 31, 1996, 1,633 slot machines and other coin-operated
devices, 60 blackjack ("21") tables, three craps tables, six
roulette tables, fourteen other table games and a wheel of
fortune, as well as poker, keno and a race and sports book were
available to the casino's patrons. From a "Big Top" above the
casino, Circus Circus-Reno also offers its guests a variety of
circus acts performed free of charge to the public from 11 a.m.
to midnight daily. A mezzanine area overlooking the casino has a
circus midway with carnival-style games and an arcade that offers
a variety of amusement and electronic games. The facilities at
Circus Circus-Reno also include a specialty restaurant, a buffet
with a seating capacity of approximately 700, a coffee shop,
three fast food snack bars, five cocktail lounges, a gift shop
and specialty shops. Covered parking is available for over 1,800
vehicles. For information concerning the Company's participation
in a joint venture which owns and operates Silver Legacy, a
casino, hotel and entertainment complex which opened in July 1995
and is connected to Circus Circus-Reno by a skywalk, see "Joint
Venture Participations -- Reno Joint Venture", below.
Laughlin, Nevada
Colorado Belle. The Colorado Belle Hotel and Casino is
situated on a 22-acre site on the bank of the Colorado River
(with 1,080 feet of river frontage) in Laughlin, Nevada,
approximately 90 miles south of Las Vegas. The Colorado Belle
features a 600-foot replica of a Mississippi riverboat with 200
hotel rooms, two towers containing an additional 1,034 hotel
rooms and a casino with approximately 64,000 square feet of space
where, as of January 31, 1996, 1,474 slot machines and other
coin-operated devices, 31 blackjack ("21") tables, two craps
tables, three roulette tables and four other table games as well
as poker, keno and a sports book were available to the casino's
patrons. The Colorado Belle's facilities also include a 350-seat
buffet, a coffee shop, three specialty restaurants, two fast food
snack bars, four cocktail lounges and a cocktail service bar as
well as a gift shop and other specialty shops. There is surface
parking available for approximately 1,700 vehicles.
Edgewater. The Edgewater Hotel and Casino is situated on a
16-acre site adjacent to the Colorado Belle in Laughlin, Nevada
with approximately 1,640 feet of frontage on the Colorado River.
The property, which has 1,450 hotel rooms, includes approximately
44,000 square feet of casino space where, as of January 31, 1996,
1,347 slot machines and other coin-operated devices, 32 blackjack
("21") tables, two craps tables, four roulette tables, four other
table games and a wheel of fortune as well as poker, keno and a
race and sports book were available to the casino's patrons. The
Edgewater's facilities also include a specialty restaurant, a
coffee shop, a buffet with a seating capacity of approximately
735, a snack bar and three cocktail lounges. There is surface
parking available for approximately 1,350 vehicles and a parking
garage which can accommodate approximately 930 additional
vehicles.
Jean, Nevada
Gold Strike. Gold Strike Hotel & Gambling Hall, which
opened in December 1987 and was acquired by the Company in June
1995, is an "old west" themed casino-hotel located on
approximately 51 acres of land on the east side of I-15, the
primary thoroughfare between Las Vegas and southern California.
The property includes, among other amenities, approximately
37,000 square feet of casino space, 813 hotel rooms, several
restaurants, a gift shop, a swimming pool and spa, a banquet
center equipped to serve 260 people and parking spaces for
approximately 2,100 cars. As of January 31, 1996, 1,115 slot
machines and other coin-operated devices and 22 table games,
including 17 blackjack ("21") tables, two craps tables and two
roulette wheels, as well as poker and keno were available to the
casino's patrons. The casino has a stage bar with regularly
scheduled live entertainment and a casino bar. Gold Strike also
offers a children's arcade in order to accommodate the numerous
families that visit the property.
Nevada Landing. Built in 1989 and acquired by the Company
in June 1995, Nevada Landing Hotel & Casino is a turn-of-the-
century riverboat themed casino-hotel located on approximately 55
acres of land across I-15 from Gold Strike. The property
includes approximately 36,000 square feet of casino space, 303
hotel rooms, a 72-seat Chinese restaurant, a full-service coffee
shop, an all-you-can-eat buffet, a snack bar, a gift shop, a
swimming pool and spa, a 300-guest banquet facility and parking
spaces for approximately 1,400 cars. As of January 31, 1996,
1,050 slot machines and other coin-operated devices and 20 table
games, including 15 blackjack ("21") tables, two craps tables and
two roulette tables, as well as keno and a sports book were
available to the casino's patrons.
Henderson, Nevada
Railroad Pass. Railroad Pass Hotel & Casino, which was
acquired by the Company in June 1995, is situated on
approximately 56 acres along US-93, the direct route between Las
Vegas and Phoenix, Arizona. The property includes, among other
amenities, approximately 21,000 square feet of casino space, 120
hotel rooms, two bars, two full-service restaurants, an all-you-
can-eat buffet, gift shop, swimming pool, a 194-guest banquet
facility and parking spaces for approximately 580 cars. As of
January 31, 1996, Railroad Pass' casino offered 438 slot machines
and nine gaming tables, including six blackjack ( 21 ) tables,
one craps table and one roulette wheel, as well as a keno lounge,
sports book and free bingo three days per week. In contrast with
the Company's other Nevada properties, Railroad Pass caters to
local residents, particularly from Henderson, who often prefer
the informal, friendly atmosphere and easy access of Railroad
Pass over the casinos on the Las Vegas Strip.
Tunica County, Mississippi
Circus Circus-Tunica. Circus Circus-Tunica, which was
built by the Company and opened in August 1994, is a dockside
casino situated on a 24-acre site along the Mississippi River in
Tunica County, Mississippi, approximately three miles west of
Mississippi State Highway 61 (a major north/south highway
connecting Memphis, Tennessee with Tunica County) and
approximately 20 miles south of Memphis. The facility, which has
a total of approximately 127,000 square feet of space, is
operated 24 hours a day and includes approximately 48,000 square
feet of casino space in addition to restaurants and entertainment
areas. As of January 31, 1996, 1,480 slot machines and other
coin-operated devices and 50 table games, including 38 blackjack
("21") tables, five craps tables, four roulette tables, and three
other table games, as well as poker were available to the
casino's patrons. The facility also includes a specialty
restaurant, a 500-seat buffet, a snack bar, three cocktail
lounges and two service bars.
The Company's Tunica site is a part of a three-casino
development covering approximately 72-acres. The other two
casinos are owned and operated by unaffiliated third parties.
The Company also has an undivided one-half interest in an
additional 388 acres of land contiguous to or near each of the
three casino sites which may be used for future development.
Marketing
Generally, the Company follows a marketing and operating
philosophy which emphasizes high-volume business by providing
moderately priced hotel rooms, food and beverage and alternative
entertainment in combination with the gaming activity. The
Company also maintains stringent cost controls which are
exemplified by a general policy of offering minimal credit for
gaming customers at the Company's properties. Management
believes that this philosophy sets the Company apart from its
principal competitors.
The Company's current operations are conducted 24 hours a
day, every day of the year. The Company does not consider its
business to be highly seasonal, although its operating income is
typically somewhat lower in the fourth quarter. Management
emphasizes courtesy and prompt service to its customers and
aspires to a high standard of excellence in all of its
operations.
The Company believes it has been able to maintain high
occupancy rates at its hotels, in part, due to the modest prices
charged for its rooms and its advertised policy of assisting any
customer who cannot be accommodated at its properties in finding
similarly priced rooms in nearby hotels and motels. For the
years ended January 31, 1996, 1995 and 1994, the combined
occupancy rate of the Company s hotels (excluding complimentaries
but including nonrefunded prepaid cancellations, and including
each hotel acquired by the Company during such three-year period
only for the portion of such period commencing with such
acquisition) was approximately 93.5%, 95.7% and 97.8%,
respectively.
Circus Circus-Las Vegas and Circus Circus-Reno, which
together contributed 27% of the Company's revenues in the year
ended January 31, 1996 (and 29% and 36%, respectively, in the
years ended January 31, 1995 and 1994), have popular buffets,
attractive because of their variety, quality and low price. From
a "Big Top" above the casino, both properties offer a variety of
circus acts performed free of charge to the public from 11 a.m.
to midnight daily. A mezzanine area overlooking each casino has
a circus midway with carnival-style games and an arcade that
offers a variety of amusement and electronic games. Grand Slam
Canyon, an adventuredome opened in 1993 at Circus Circus-
Las Vegas, offers additional theme park attractions at that
property.
Excalibur, which contributed 23% of the Company's revenues
in the year ended January 31, 1996 (and 25% and 30%,
respectively, in the years ended January 31, 1995 and 1994),
attracts customers in the same manner as the Company's two
circus-themed Nevada properties by offering quality rooms, food
and entertainment at moderate prices. By way of entertainment,
the medieval castle-themed Excalibur offers a medieval village,
an amphitheater where mock tournaments and costume drama are
presented, dynamic motion theaters, various artisans' booths and
medieval games of skill.
Luxor opened in October 1993 and contributed 20% of the
Company's revenues in the year ended January 31, 1996 (and 24%
and 9%, respectively, in the years ended January 31, 1995 and
1994), is designed to attract the higher income segment of the
middle-income strata of gaming customers by offering a new level
of entertainment and hotel accommodations. Designed with an
Egyptian theme, the pyramid-shaped Luxor offers its guests a
tri-level entertainment area which includes a series of high-tech
"participatory" adventures arrayed in striking scenery designed
to seemingly transport visitors to extraordinary places of times
past, present and future. Other entertainment features include a
museum replicating King Tut's Tomb and its contents.
The Colorado Belle and Edgewater together contributed 13% of
the Company's revenues in the year ended January 31, 1996 (and
16% and 21%, respectively, in the years ended January 31, 1995
and 1994). Forming the heart of the Laughlin "Strip", the
Colorado Belle and the Edgewater combine to offer approximately
2,700 rooms and over 108,000 square feet of casino space. The
Colorado Belle offers a classic Mississippi riverboat theme,
complete with a 60-foot paddle wheel. The Edgewater's
southwestern motif provides a relaxing atmosphere to enjoy the
property's casino and other facilities. Connected by a scenic
walkway, the two resorts form an inviting shoreline along the
Colorado River.
Gold Strike and Nevada Landing, which were acquired June 1,
1995, together contributed 4% of the Company's revenues in the
year ended January 31, 1996. The two properties are located on
opposite sides of I-15, the primary thoroughfare between Las
Vegas and southern California, approximately 25 miles south of
Las Vegas and 12 miles north of the California/Nevada border.
The properties are conveniently located at the only highway
interchange within 12 miles in either direction and are
strategically positioned to attract the large number of people
traveling to and from Las Vegas.
Circus Circus-Tunica, which opened in August 1994,
represents the Company's first wholly owned casino outside of
Nevada as well as its first dockside casino and contributed 5% of
the Company's revenues in the year ended January 31, 1996. The
facility is part of an integrated three casino development that
provides patrons with the opportunity to visit any of the three
casinos without driving, a unique experience in the Tunica
market. The three casinos are currently the closest and provide
the easiest access from Tunica's primary feeder market, Memphis,
Tennessee.
The Company maintains an active media advertising program
through radio, television, billboards and printed publications
primarily in Nevada, California and Arizona for its Nevada
properties and in the Memphis area for Circus Circus-Tunica.
During the year ended January 31, 1996, the Company incurred
total expenses relating to advertising (including the media
advertising described above) of $54.4 million compared with $49.8
million and $40.4 million during the years ended January 31, 1995
and 1994, respectively. While the Company offers complimentary
hotel accommodations, meals and drinks to its customers on an
individual basis, no group complimentary arrangements are
offered.
Operations
The primary source of revenues and income to the Company is
its casinos, although the hotels, restaurants, bars, shops,
midway games and other entertainment attractions and other
services are an important adjunct to the casinos.
The following table sets forth the contribution to net
revenues on a dollar and percentage basis of the Company's major
activities for each of the three most recent fiscal years.
Year Ended January 31,
1996 1995 1994
(Dollars in thousands)
Revenues:(1)
Casino(2) . . . . . $ 664,772 51.2% $612,115 52.3% $538,813 55.9%
Rooms(3). . . . . . 278,807 21.4% 232,346 19.9% 176,001 18.3%
Food and
beverage(3). . . . 201,385 15.5% 189,664 16.2% 152,469 15.8%
Other(3). . . . . . 158,534 12.2% 166,295 14.2% 126,048 13.1%
Earnings of unconsoli-
dated affiliates 45,485 3.5% 5,459 .5% - -
$1,348,983 103.8% 1,205,879 103.1% 993,331 103.1%
Less:
Complimentary
allowances(3) . . 49,387 3.8% 35,697 3.1% 29,861 3.1%
Net revenues. . . . . $1,299,596 100.0% $1,170,182 100.0% $963,470 100.0%
(1) Includes operations of Gold Strike, Nevada Landing and Railroad Pass from
June 1, 1995 and Hacienda from September 1, 1995.
(2) Casino revenues are the net difference between the sums received as
winnings and the sums paid as losses.
(3) Food and beverage, Rooms and Other include the retail value of revenues
from services which are provided to casino customers and others on a
complimentary basis. Such amounts are then deducted as complimentary
allowances to arrive at net revenue.
In connection with its gaming activities, the Company
follows a policy of stringent controls and cross checks on the
recording of all receipts and disbursements. The audit and cash
controls developed and utilized by the Company include the
following: locked cash boxes, independent counters, checkers and
observers to perform the daily cash and coin counts, floor
observation of the gaming areas, closed-circuit television
observation of certain areas, computer tabulation of receipts and
disbursements for each of the Company's slot machines, tables and
other games, and the rapid analysis and resolution of
discrepancies or deviations from normal performance.
The Company's credit policies are stringent and credit play
historically has accounted for an insignificant portion of its
gaming activities. Because of the Company's policies, its casino
receivables have been significantly less than 1% of its total
assets and its annual bad debt expense has been less than 1/10 of
1% of casino revenues.
Joint Venture Participations
The Company is currently a 50% participant in the Reno Joint
Venture, which owns and operates a hotel-casino in Reno, Nevada;
and the Elgin Joint Venture, which owns and operates a riverboat
casino and land-based entertainment complex in Elgin, Illinois;
and a one-third owner of a company which is operating interim
casinos in Windsor, Ontario, Canada. The Company is also a 50%
participant in the Las Vegas Joint Venture, which is constructing
Monte Carlo, a 3,000-room hotel-casino complex on the Las Vegas
Strip which is scheduled to open in June 1996.
The following is a description of the casino projects with
which the Company is currently involved as a joint venture
participant:
Reno Joint Venture (50% Participation)
The Company, through a wholly owned subsidiary, is a 50%
participant with Eldorado Limited Liability Company ("Eldorado
Limited") in the Reno Joint Venture, a general partnership which
owns and operates Silver Legacy, a themed hotel-casino and
entertainment complex situated on two city blocks in downtown
Reno, Nevada. The casino and entertainment complex, which opened
in July 1995, is located between Circus Circus-Reno and Eldorado
Hotel & Casino (the "Eldorado"), which is owned and operated by
an affiliate of Eldorado Limited. Silver Legacy's casino and
entertainment complex is connected at the mezzanine level with
Circus Circus-Reno and the Eldorado by enclosed climate-
controlled skyways above the streets between the respective
properties. The property's exterior is heavily themed to evoke
images of Reno during the period from the 1880's through the
1930's. At the main pedestrian entrances to the casino (located
on all four sides of the complex), patrons enter by passing
through active retail establishments and store fronts reminiscent
of turn-of-the-century Reno.
Silver Legacy, which has 1,711 hotel rooms, includes
approximately 85,000 square feet of gaming space on two levels,
of which approximately 75,000 square feet is on the ground level
and approximately 10,000 square feet is on the mezzanine level.
As of January 31, 1996, Silver Legacy s casino had 2,256 slot
machines and other coin operated devices and 88 table games which
include blackjack ("21") tables, craps, roulette and baccarat.
Extending up into a 180-foot diameter dome structure from the
center of the casino floor is a 120-foot tall mining rig situated
over a replica of a silver mine. The rig depicts a functioning
mining rig with running ore wagons, water flumes, steam and beam-
traction engines, cradles and working buckets, and appears to
mine and smelt ore and pour liquid gold and silver into coins and
bullion.
A 240-seat delicatessen, bar and "sidewalk" cafe are located
on the ground floor, and a seafood grill, a buffet and a 24-hour
coffee shop are located on the casino s mezzanine level. The
property also includes a 25,000-square foot special events
center, a health spa and an outdoor pool and sun deck. The hotel
complex also includes a ten-level parking structure with space
for approximately 1,800 vehicles.
Silver Legacy was completed at a total cost of approximately
$350 million (excluding preopening expenses). Pursuant to the
joint venture agreement relating to Silver Legacy (the "Reno
Venture Agreement"), each of the participants contributed to the
Reno Joint Venture cash or property with an agreed-to value of
$51.9 million. In May 1995, the Reno Joint Venture entered into
a $230 million Credit Agreement with a group of major banks. The
indebtedness under the Credit Agreement is secured by a Deed of
Trust on Silver Legacy and security interests in other assets of
the Reno Joint Venture. The indebtedness incurred pursuant to
the Credit Agreement is subject to scheduled quarterly reductions
ranging from $5 million to $7 million per quarter, and a
scheduled reduction of $125 million on September 30, 2000. In
addition to the scheduled quarterly payments, mandatory
prepayments are required after the end of each of the first eight
full fiscal quarters following the opening of Silver Legacy in
the amount of 50% of the Reno Joint Venture's Consolidated
Available Cash Flow (as defined). Each venturer's ability to
participate in cash flows generated by Silver Legacy is limited
by the terms of the Reno Venture Agreement and the Credit
Agreement, and the Company's right to receive repayments of its
below-mentioned loan to the Reno Joint Venture is subject to
limitations under the Credit Agreement. The foregoing discussion
of the Reno Venture Agreement is qualified in its entirety by
reference to the full text of such agreement which is included as
Exhibit 10(w) to this Report.
As a condition to the Credit Agreement, the Company entered
into an agreement pursuant to which it guaranteed completion of
Silver Legacy. As of January 31, 1996, the Reno Joint Venture
was indebted to the Company for advances in the aggregate amount
of $27.5 million, the repayment of which is subject to certain
limitations under the terms of the Credit Agreement. The
advances to Silver Legacy are secured by a second Deed of Trust
on Silver Legacy. In addition, the Company entered into a
make-well agreement with the Reno Joint Venture for the benefit
of the lenders under the Credit Agreement pursuant to which the
Company is obligated to make such additional contributions to the
Reno Joint Venture as may be necessary to maintain the Reno Joint
Venture's coverage ratio at a minimum permitted level of 1.05 to
1.00. As of January 31, 1996, the Company had not been required
to make any contribution pursuant to the make-well agreement.
As of January 31, 1996, the assets of the Reno Joint
Venture, including Silver Legacy, were subject to encumbrances
securing the repayment of indebtedness in the principal amount of
$247.5 million.
Elgin Joint Venture (50% Participation)
In June 1995, the Company acquired an entity which is a 50%
participant with an affiliate of Hyatt Development Corporation in the
Elgin Joint Venture, an Illinois general partnership which owns and
operates The Grand Victoria. The Grand Victoria, a Victorian themed
riverboat casino and land-based entertainment complex, opened in
October 1994 in Elgin, Illinois, a suburb approximately 40 miles
northwest of downtown Chicago. Over eight million people live within
a 50-mile radius of Elgin. The Grand Victoria, the largest cruising
gaming vessel in the United States, offers a Las Vegas-style gaming
experience. The two-story vessel is 420 feet in length and 110 feet
in width, and provides a maximum 80,000 square feet of gaming space,
approximately 36,000 square feet of which was being used at
January 31, 1996. As of such date, the casino had 977 licensed slot
machines and other coin operated devices and 56 table games. The
vessel has a capacity of 1,500 persons and operates on a fixed
cruising schedule consisting of eight cruises each Monday through
Thursday and nine cruises each Friday, Saturday, Sunday and holiday.
The dimensions of the specially designed riverboat allow The Grand
Victoria to maximize the gaming positions permitted under existing
Illinois gaming regulations. This feature also allows The Grand
Victoria to significantly increase the number of on-board gaming
positions and to adapt the vessel to provide for dockside gaming in
the event of liberalized gaming regulations in the State of Illinois.
An adjacent dockside complex on approximately 12 acres of land
overlooking the Fox River contains an approximately 83,000-square-foot
pavilion with two movie theaters, a 240-seat buffet, an 80-seat fine
dining restaurant, a VIP lounge and a gift shop, in addition to
ticketing and registration services for the riverboat. There is
surface parking available for approximately 600 vehicles and a parking
structure which accommodates approximately 1,400 vehicles. The Grand
Victoria is strategically located in Elgin among the residential
suburbs of Chicago, with nearby freeway access and direct train
service from downtown Chicago. The Grand Victoria is located
approximately 20 miles and 40 miles, respectively, from its nearest
competitors in Aurora, Illinois and Joliet, Illinois, and holds one of
only ten riverboat gaming licenses currently granted state-wide.
After the Elgin Joint Venture has recovered its $112 million
initial investment in The Grand Victoria, the Elgin Joint Venture is
obligated to contribute 20% of its after-tax adjusted net operating
income to various local educational, environmental and economic
projects benefitting the City of Elgin and Kane County, Illinois. The
Company anticipates that the Elgin Joint Venture will be required to
begin making this contribution in the second quarter of fiscal 1997.
In addition, the pavilion and parking lot are located on land leased
by the Elgin Joint Venture from the City of Elgin for an initial
period of ten years, subject to certain renewal and purchase options
granted to the Elgin Joint Venture. Under the lease, the Elgin Joint
Venture is obligated to pay base rent of approximately $110,000 per
year until the date at which the Elgin Joint Venture's cumulative
after tax cash flow equals $75 million. Thereafter, the Elgin Joint
Venture's rent will be equal to the greater of the base rent or 3% of
its net operating income. The Elgin Joint Venture may offset certain
capital expenditures against this rental obligation. Further, rent is
deductible from after-tax adjusted net operating income for purposes
of calculating the 20% contribution obligation described above. For
the first five years of the lease, the Elgin Joint Venture is also
obligated to make certain payments to the City of Elgin to help defray
law enforcement costs.
Under its agreements with the City of Elgin, the Elgin Joint
Venture also was granted an option to purchase an additional nine
acres of land contiguous to the existing site. For information
concerning certain regulatory requirements applicable to the ownership
and operation of the Elgin Joint Venture's gaming facilities, see
"Regulation and Licensing--Illinois" in this Item 1.
As of January 31, 1996, the assets of the Elgin Joint Venture
were not subject to any encumbrances securing the repayment of
indebtedness.
Las Vegas Joint Venture (50% Participation)
In June 1995, the Company acquired an entity which is a 50%
participant with an affiliate of Mirage Resorts, Incorporated
( Mirage ) in the Las Vegas Joint Venture, a Nevada general
partnership, which is constructing Monte Carlo, a 3,000-room gaming
resort that will have frontage of nearly 600 feet on the Las Vegas
Strip. Monte Carlo, which will be located on 44 acres of the former
"Dunes" golf course between two of the busiest intersections in
Las Vegas, will be part of a cluster of new megaresorts including the
MGM Grand, Excalibur and Luxor, and will be situated between Bellagio,
a luxury resort currently under construction by Mirage and New York-
New York, a casino resort being jointly developed by MGM Grand, Inc.
and Primadonna Resorts, Inc. Monte Carlo, which is expected to open
in June 1996, will contain approximately 90,000 square feet of casino
space with a palatial style reminiscent of the Belle Epoque, the
French Victorian architecture of the late 19th century. The property
will include a recreated Victorian town square featuring ornate
facades and an old-time "carnival" with circus acts, musicians,
interactive games, high-tech arcade rides and other nongaming
recreational activities. A 1,200-seat replica of a plush vaudeville
theater, including a balcony and proscenium arch, will feature an
elaborately staged show of illusions. It is currently contemplated
that a themed walking path and tram will link Monte Carlo to Bellagio.
The entity acquired by the Company, Gold Strike L.V., a Nevada
general partnership (the Circus Participant ), is the managing
partner of the Las Vegas Joint Venture and, subject to certain
exceptions, has sole authority for the design, development,
construction and operation of Monte Carlo. The cost of construction
(including preopening expenses, capitalized interest and land
acquisition costs) is estimated to be approximately $350 million. The
Las Vegas Joint Venture has obtained a $200 million nonrecourse
construction debt facility from a consortium of major banks, which,
subject to certain conditions, will convert to a permanent reducing
revolving loan once Monte Carlo opens. Pursuant to the Las Vegas
Joint Venture's joint venture agreement (the "Las Vegas Joint Venture
Agreement"), the aggregate principal amount of construction financing
and all other joint venture indebtedness outstanding shall not exceed
$210 million. The Company estimates that the Circus Participant s
equity contribution to the Monte Carlo project will be approximately
$70 million. The Circus Participant will be responsible for any
construction cost overruns beyond the $210 million debt limit, cash
equity contributions by both partners and the cost of the land.
Construction of Monte Carlo commenced in April 1995. If
construction of Monte Carlo is not completed and the facility is not
open to the public by December 31, 1996, unless such delay is not
within the Circus Participant s control, Mirage may either (i) elect
to become the managing partner of the Las Vegas Joint Venture, (ii)
dissolve the joint venture and receive from the Circus Participant a
$2 million termination fee, or (iii) purchase the Circus Participant's
entire interest in the Las Vegas Joint Venture for cash in an amount
equal to the Circus Participant's capital account balance in the joint
venture. In connection with the development of Monte Carlo, the
Company has unconditionally guaranteed completion of the construction
of Monte Carlo. The foregoing discussion of the Las Vegas Joint
Venture Agreement is qualified in its entirely by reference to the
full text of such agreement and amendments thereto which are included
as Exhibits 10(ccc), 10(ddd), 10(eee) and 10(fff) to this Report.
As of January 31, 1996, the assets of the Las Vegas Joint Venture
were subject to encumbrances securing the repayment of indebtedness in
the aggregate principal amount of $112 million.
Windsor Joint Venture (33 1/3% Participation)
The Company is a participant in a casino in Windsor,
Ontario, Canada with Hilton Hotels Corporation and Caesars World,
Inc., through its ownership of a one-third interest in Windsor
Casino Limited, an Ontario corporation ("WCL"), which has been
awarded the exclusive right to negotiate an agreement to develop
and operate a casino in Windsor, Ontario, Canada, approximately
1.5 miles from Detroit, Michigan across the Detroit River. WCL
plans, subject to reaching such agreement, to develop and operate
a hotel-casino which will include slot machines and table games
as well as a 400-room hotel, meeting facilities, entertainment
and other public areas. WCL opened an interim land-based casino
in May 1994 and a dockside casino in December 1995. WCL is
currently negotiating an agreement for a permanent facility. For
information concerning certain regulatory requirements applicable
to the ownership and operation of casino gaming facilities in
Windsor, see "Regulation and Licensing -- Windsor, Ontario,
Canada" in this Item 1.
Other
For information concerning the Company s termination of its
participation in the development of a riverboat casino project in
Chalmette, Louisiana by its purchase in June 1995 of the
remaining 50% interest in the venture entity and the sale of the
unfinished project, see Note 14 of the Notes to Consolidated
Financial Statements incorporated by reference in Item 8 of this
Report.
Current Expansion Activities
In January 1996, the Company commenced construction on a
major expansion at Luxor that will include approximately 2,000
additional rooms, situated in two identical 22-story towers
designed in a stepped-pyramid style, located between Luxor and
Excalibur. The expansion will also include additional casino
space, retail area, restaurants, and a multi-purpose showroom, as
well as a signature dark ride with a working title of "Tutmania",
an adventure through the fabled and enchanted tombs of ancient
Egypt. The rooms should open by the end of calendar 1996. The
estimated cost for this expansion is expected to be approximately
$250 million.
Also in January 1996, the Company commenced construction of
a 1,000-room tower addition at Circus Circus-Las Vegas, which is
scheduled for completion by the end of 1996. This addition will
bring the total number of rooms at Circus Circus-Las Vegas to
approximately 3,800. In concert with this expansion, the Company
is also refurbishing all of the existing rooms at Circus Circus-
Las Vegas. The estimated cost of the 1,000-room tower is
approximately $60 million.
Construction is expected to commence by the end of the
fiscal year on the site where the Hacienda currently sits. This
hotel/casino project is anticipated to include as many as 4,000
hotel rooms as well as many nongaming attractions. Although
plans are preliminary, the cost of the project is estimated to be
approximately $700-$800 million, exclusive of land and is
expected to open in mid-1998.
During fiscal 1997, the Company expects to refurbish all of
the existing rooms and begin construction of an additional
parking garage at Circus Circus-Reno. The room refurbishment
will be completed during the current year, while the parking
garage will be completed the following year. The estimated cost
of these projects is approximately $35 million.
The Company anticipates that the expansion projects
discussed above (particularly those at Luxor) will partially
disrupt business and negatively impact operating results during
the expansion phase, although the Company is not able to predict
the extent or magnitude of this impact.
The Company has been negotiating with Mirage to participate
in the development of a 150-acre site located in the Marina
District of Atlantic City. Mirage recently entered into an
agreement with the city of Atlantic City to acquire the site.
Mirage's development of the site is subject to the satisfaction
of a number of conditions, including its receipt of all requisite
licenses, permits, allocations and authorizations, resolution of
real estate title issues, its determination that the costs of
environmental remediation are not unreasonable and the approval
by the State of New Jersey of funding for certain significant
improvements affecting the site. Accordingly, there can be no
assurances as to whether or when Mirage will proceed with its
development of the site. The Company's participation is subject
to Mirage's determination to proceed with development of the site
and the Company's successful negotiation of an agreement with
Mirage, which would provide for the development of a hotel-
casino, adjacent and linked to Mirage's. The Company's ability
to proceed is also subject to its obtaining the requisite gaming
and other approvals and licenses in New Jersey, as well as the
approval of the gaming authorities of various other
jurisdictions. Assuming the Company's consummation of an
agreement with Mirage and receipt of the requisite licenses and
approvals, the Company could begin construction sometime next
year, with an anticipated 24-month construction period. While
the exact extent of a potential development cannot be determined
at this time, the Company is currently contemplating an
investment of $500-$600 million to construct a hotel/casino
megaresort with at least 2,000 rooms.
Consistent with past practice and the longstanding policy of
making substantial investments in its gaming business at regular
intervals, the Company continues to actively pursue new projects,
either by development or acquisition. New projects may be
undertaken in Nevada, where all but one of the Company's wholly
owned operating properties are currently located, or in other
jurisdictions within the United States or abroad where gaming has
been legalized. Such projects may be wholly owned and operated
by the Company, or may be developed, owned and/or operated
through joint ventures involving the Company and one or more
other parties.
The Company believes that its financial resources are
adequate to permit it to successfully meet its commitments with
respect to its current expansion projects and joint venture
participations. However, depending on the timing, size and
nature of the Company's commitments with respect thereto, future
expansion projects or joint venture participations may require
the Company to seek additional debt or equity funding.
Competition
Recognizing that middle class vacationers enjoy gaming, but
also vacation with their families, the Company seeks to appeal to
this value-oriented market and satisfy the group's diverse
entertainment demands by offering exciting entertainment
opportunities at reasonable prices. The Company seeks to achieve
this objective through its entertainment "megastores", such as
the Circus properties in Las Vegas and Reno, Luxor, Excalibur,
Colorado Belle and Edgewater, by offering gaming combined with
dramatic entertainment concepts and reasonably priced rooms,
reasonably priced food and beverage and prompt, courteous
service. As of January 31, 1996, the Company was the largest
hotel-casino operator in the Las Vegas and Laughlin markets in
terms of total square footage of casino space and number of hotel
rooms.
The Company's Las Vegas casino and hotel operations, which
are conducted from facilities located primarily along the Las
Vegas Strip, currently compete with approximately 27 major hotel-
casinos and a number of smaller casinos located on or near the
Las Vegas Strip Such operations also compete with casinos
located in downtown Las Vegas, approximately 12 of which offer
hotel, food and beverage and entertainment facilities, and
several major hotel-casinos located elsewhere in the Las Vegas
area. The Company's Las Vegas properties also compete, to a
lesser extent, with casino and hotel facilities in other parts of
Nevada, including Laughlin, Reno and along I-15 (the principal
means of access to Las Vegas from southern California by car)
near the California-Nevada state line.
The casino and hotel capacity continues to increase in the
Las Vegas market. During the fourth calendar quarter of 1993,
two major new hotel-casinos, including Luxor, opened at the south
end of the Las Vegas Strip, and a third such property opened near
the center of the Las Vegas Strip. These three properties added
significant casino capacity and over 10,500 hotel rooms to the
existing Las Vegas market. These openings have shifted the focus
of the Las Vegas Strip toward its south end, although at Circus
Circus-Las Vegas (which is located at the Strip's northern end)
results were not significantly different compared to the prior
year. The Company also believes such openings had a negative
impact on Laughlin area properties, including the Colorado Belle
and the Edgewater, by drawing visitors from the Laughlin market,
which has resulted in increased competition among Laughlin
properties for a reduced number of visitors thus contributing to
generally lower revenues and profit margins at Laughlin
properties, including the Colorado Belle and the Edgewater. In
April 1996, an additional competitor opened on the northern end
of the Strip (north of Circus Circus-Las Vegas). This property
opened with 1,500 hotel rooms (expanding to 2,500 by year-end),
97,000 square feet of casino space and various entertainment
attractions.
In the current year, 3,000 additional rooms and
approximately 90,000 square feet of casino space will be added
with the scheduled June opening of Monte Carlo (in which the
Company has a 50% interest), and approximately 3,000 additional
rooms will be added with the completion of an approximate 2,000-
room expansion at Luxor and a 1,000-room expansion at Circus
Circus-Las Vegas, each scheduled for completion by December 1996.
Two other major Las Vegas Strip projects are currently under
construction on sites contiguous to the Monte Carlo site.
According to public statements of the developers, New York, New
York is scheduled to open in December 1996 and will add an
additional 2,000 rooms and approximately 90,000 square feet of
casino space, and Bellagio is expected to open in the spring of
1998 with 3,000 rooms and a large casino. The Company cannot
determine at this time what impact the opening of the projects
currently under construction will have on the Company's
operations.
Excalibur (which has a total of 4,032 rooms) and Luxor
(which currently has 2,526 rooms and will add approximately 2,000
additional rooms with the completion of two additional hotel
towers currently under construction) each has benefited from
walk-in business attributable to the registered guests and casino
customers at the other property. While the impact on the Company
of the current expansion of its facilities in Las Vegas cannot be
determined at this time, management believes that the Company's
Las Vegas operations, on a consolidated basis, have benefited
significantly as a result of the addition of Luxor, which
represents the Company s most recent introduction to the
Las Vegas market of new hotel or casino capacity.
Circus Circus-Reno competes with approximately 13 major
casinos (the majority of which offer hotel rooms), including
Silver Legacy, a 1,700-room hotel-casino complex which opened in
July 1995 and is 50% owned by a wholly owned subsidiary of the
Company, and Eldorado Limited. Circus Circus-Reno and Silver
Legacy also compete with numerous other smaller casinos in the
greater Reno area and, to a lesser extent, with casino and hotel
facilities in other parts of Nevada. Silver Legacy, situated
between Circus Circus-Reno and the Eldorado Hotel & Casino, is
connected to each of such properties at the mezzanine level by
enclosed climate-controlled skyways above the streets between the
respective properties, thus facilitating the flow of customers
within the three properties. Since the opening of Silver Legacy,
results at Circus Circus-Reno have been affected as guests
staying at Circus Circus-Reno have chosen to visit Silver Legacy
during their stay.
In Laughlin, the Colorado Belle and the Edgewater, which
together accounted for approximately 24% of the rooms in Laughlin
as of January 31, 1996, compete with eight other Laughlin
casinos. They also compete with the hotel-casinos in Las Vegas
and those situated on I-15 (the principal highway between Las
Vegas and Los Angeles) near the Nevada-California state line, as
well as a growing number of casinos on Indian reservations in
Laughlin's regional market. While the Colorado Belle and the
Edgewater also compete with each other, both properties have
maintained occupancy levels of above 85% at their hotels and,
because the two properties are situated on adjoining sites, the
Company believes that each property benefits from walk-in
business attributable to the registered guests and casino
customers at the other property.
The Company believes that it receives the major portion of
its Las Vegas business from southern California and to a lesser
degree from the remainder of the southwestern United States. The
major portion of its Reno business is derived from northern
California and to a lesser degree from the northwestern United
States. Laughlin's business is derived principally from Arizona
and southern California.
The Company s Jean, Nevada properties, Gold Strike and
Nevada Landing, are located on I-15, the primary thoroughfare
between Las Vegas and southern California, approximately 25 miles
south of Las Vegas and 12 miles north of the California/Nevada
border, and are dependent for their customers almost entirely on
the large number of people traveling between Las Vegas and
southern California. As such, these properties compete with the
large concentration of hotel, casino and other entertainment
options available in Las Vegas as well as three hotel-casinos
clustered at the California/Nevada border which, according to
published reports, offer over 2,000 rooms and over 100,000 square
feet of casino space as well as restaurants and entertainment
facilities.
The State of Mississippi legalized casino gaming on the
water along the Mississippi River and the Mississippi Gulf Coast
in June 1990. Circus Circus-Tunica competes with eight other
casinos in Tunica County. New competition will enter the Tunica
market at Buck Lake, directly north of Tunica by the summer of
1996. This proposed property, which is being developed by Grand
Casinos, will be larger in capacity and situated closer to
Memphis than all of the existing facilities in Tunica County.
There is no limit on the number of licenses that may be granted
within Mississippi or within any county in Mississippi. The
Company believes that Circus Circus-Tunica's principal market is
the area within 100 miles of Tunica County. This area includes
Memphis, Tennessee (with a population of approximately
1,000,000), Little Rock, Arkansas (with a population of
approximately 500,000) and northern Mississippi (with a
population base of over 250,000). Tunica County is currently the
closest legalized gaming jurisdiction to Memphis. Because Circus
Circus-Tunica is heavily dependent upon the patronage of Memphis
residents and upon tourists and other out-of-state gaming
customers coming to Tunica from Memphis, the opening of gaming
casinos at locations closer to Memphis could have a material
adverse effect on Circus Circus-Tunica's operations. In this
regard, De Soto County, the northwestern most Mississippi county
and the nearest to Memphis, by local referendum in November 1992
voted against authorizing gaming activities in the county, but
could at any time after October 1996 vote to allow gaming
activities. In addition, the authorization of gaming activities
in Arkansas, or Tennessee, which currently has a constitutional
restriction on gaming activities, could have a material adverse
effect on the Company's Tunica County operations.
Gaming has expanded dramatically in the United States in
recent years. This growth has been reflected in various forms
including riverboats, dockside gaming facilities, Native American
gaming ventures, land-based casinos, state-sponsored lotteries,
off-track wagering and card parlors. Since 1990, when there were
casinos in only three states (excluding casinos on Native
American lands), gaming has spread to a number of additional
states and still other states are currently considering the
legalization of casino gaming in specific geographic areas within
their jurisdictions. Casino gaming is currently conducted by
numerous Native American tribes throughout the United States and
other Native American tribes are either in the process of
establishing or are considering the establishment of gaming at
additional locations, including sites in California and Arizona.
The Company does not believe that gaming, as presently conducted
in other states, has had a material adverse impact on its
operations. The competitive impact on Nevada gaming
establishments, in general, and the Company's operations, in
particular, from the continued growth of gaming in jurisdictions
outside of Nevada cannot be determined at this time. The Company
believes that the introduction of casino gaming in areas close to
Nevada, such as California and Arizona, could have an adverse
impact on the Company's operations and, depending on the nature,
location and extent of such operations, such impact could be
material.
Regulation and Licensing
Nevada
The ownership and operation of casino gaming facilities in
Nevada are subject to: (i) the Nevada Gaming Control Act and the
regulations promulgated thereunder (collectively, the "Nevada
Act"); and (ii) various local ordinances and regulations. The
Company's gaming operations are subject to the licensing and
regulatory control of the Nevada Gaming Commission (the "Nevada
Commission"), the Nevada State Gaming Control Board (the "Nevada
Board"), and various local licensing and regulatory authorities,
including the Clark County Liquor and Gaming Licensing Board, the
City of Reno and the City of Henderson (collectively, the "Local
Authorities"). The Nevada Commission, the Nevada Board and the
Local Authorities are collectively referred to as the "Nevada
Gaming Authorities".
The laws, regulations and supervisory procedures of the
Nevada Gaming Authorities are based upon declarations of public
policy which are concerned with, among other things: (i) the
prevention of unsavory or unsuitable persons from having a direct
or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible
accounting practices and procedures; (iii) the maintenance of
effective controls over the financial practices of licensees,
including the establishment of minimum procedures for internal
fiscal affairs and the safeguarding of assets and revenues,
providing reliable record keeping and requiring the filing of
periodic reports with the Nevada Gaming Authorities; (iv) the
prevention of cheating and fraudulent practices; and (v)
providing a source of state and local revenues through taxation
and licensing fees. Changes in such laws, regulations and
procedures could have an adverse effect on the Company's gaming
operations.
The Company's direct and indirect subsidiaries that conduct
gaming operations or have an ownership interest in an entity that
conducts gaming operations are required to be licensed by the
Nevada Gaming Authorities. The Company is registered by the
Nevada Commission as a publicly traded corporation (a "Registered
Corporation") and has been found suitable to own the stock of
Circus Circus Casinos, Inc., Slots-A-Fun, Inc., Edgewater Hotel
Corporation, Colorado Belle Corp., New Castle Corp., Ramparts,
Inc. and Pinkless, Inc., each of which is a corporate gaming
licensee under the terms of the Nevada Act ( individually, a
"Corporate Licensee" and collectively with the additional
corporate subsidiaries referenced hereinbelow, the "Corporate
Licensees") that has been licensed to conduct nonrestricted
gaming operations at its respective gaming establishment. The
Company has also been found suitable to own the stock of M.S.E.
Investments, Incorporated ("M.S.E."), Last Chance Investments,
Inc. ("LCI"), Goldstrike Investments, Inc. ("GII"), Diamond Gold,
Inc. ("DGI"), Oasis Development Company, Inc. ("Oasis") and
Galleon, Inc. ("Galleon"), each of which is a Corporate Licensee
that has been licensed as a general partner of one or more Nevada
general partnerships that have been licensed to conduct
nonrestricted or restricted gaming operations at their respective
gaming establishments. M.S.E., LCI and GII are each licensed as
general partners of Railroad Pass Investment Group, a Nevada
general partnership ("Railroad Pass"), Jean Development Company,
a Nevada general partnership ("Jean Development"), Jean
Development West, a Nevada general partnership ("Jean West"),
Gold Strike Fuel Company, a Nevada general partnership ("GSFC")
and Jean Fuel Company West, a Nevada general partnership ("Jean
Fuel"); DGI is licensed as a general partner of Jean West; Oasis
is licensed as a general partner of GSFC and Jean Fuel; and
Galleon is licensed as a 50% general partner of Circus and
Eldorado Joint Venture, a Nevada general partnership ("CEJV")
(all such general partnerships individually, a "Partnership
Licensee" and collectively, the "Partnership Licensees").
Railroad Pass, Jean Development, Jean West, and CEJV have each
been licensed to conduct nonrestricted gaming operations at their
respective gaming establishments and Jean Fuel and GSFC have each
been licensed to conduct restricted gaming operations consisting
of 15 or fewer slot machines at their respective gaming
establishments.
The gaming licenses held by the Corporate Licensees and the
Partnership Licensees (each individually, a "Gaming Subsidiary"
and collectively, the "Gaming Subsidiaries") to conduct
nonrestricted gaming operations require the payment of periodic
fees and taxes and are not transferable. As a Registered
Corporation, the Company is required periodically to submit
detailed financial and operating reports to the Nevada Commission
and furnish any other information which the Nevada Commission may
require. No person may become a stockholder or partner of, or
receive any percentage of profits from the Gaming Subsidiaries
without first obtaining licenses and approvals from the Nevada
Gaming Authorities. The Company and the Gaming Subsidiaries have
obtained from the Nevada Gaming Authorities the various
registrations, approvals, findings of suitability permits and
licenses required in order to engage in gaming activities in
Nevada.
The Nevada Gaming Authorities may investigate any individual
who has a material relationship to, or material involvement with,
the Company or the Gaming Subsidiaries in order to determine
whether such individual is suitable or should be licensed as a
business associate of a gaming licensee. Officers, directors and
certain key employees of the Gaming Subsidiaries must file
applications with the Nevada Gaming Authorities and may be
required to be licensed or found suitable by the Nevada Gaming
Authorities. Officers, directors and key employees of the
Company who are actively and directly involved in gaming
activities of the Gaming Subsidiaries may be required to be
licensed or found suitable by the Nevada Gaming Authorities. The
Nevada Gaming Authorities may deny an application for licensing
for any cause which they deem reasonable. A finding of
suitability is comparable to licensing, and both require
submission of detailed personal and financial information
followed by a thorough investigation. The applicant for
licensing or a finding of suitability must pay all the costs of
the investigation. Changes in licensed positions must be
reported to the Nevada Gaming Authorities and in addition to
their authority to deny an application for a finding of
suitability or licensure, the Nevada Gaming Authorities have
jurisdiction to disapprove a change in a corporate position.
If the Nevada Gaming Authorities were to find an officer,
director or key employee unsuitable for licensing or unsuitable
to continue having a relationship with the Company or a Gaming
Subsidiary, the companies involved would have to sever all
relationships with such person. In addition, the Nevada
Commission may require the Company and the Gaming Subsidiaries to
terminate the employment of any person who refuses to file
appropriate applications. Determinations of suitability or of
questions pertaining to licensing are not subject to judicial
review in Nevada.
The Company and the Gaming Subsidiaries are required to
submit detailed financial and operating reports to the Nevada
Commission. Substantially all material loans, leases, sales of
securities and similar financing transactions by the Gaming
Subsidiaries must be reported to or approved by the Nevada
Commission.
If it were determined that the Nevada Act was violated by a
Gaming Subsidiary, the gaming licenses it holds could be limited,
conditioned, suspended or revoked, subject to compliance with
certain statutory and regulatory procedures. In addition, the
Gaming Subsidiaries, the Company and the persons involved could
be subject to substantial fines for each separate violation of
the Nevada Act at the discretion of the Nevada Commission.
Further, a supervisor could be appointed by the Nevada Commission
to operate the Company's gaming properties and, under certain
circumstances, earnings generated during the supervisor's
appointment (except for reasonable rental value of the casino)
could be forfeited to the State of Nevada. Limitation,
conditioning or suspension of any gaming license or the
appointment of a supervisor could (and revocation of any gaming
license would) materially adversely affect the Company's gaming
operations.
Any beneficial holder of the Company's voting securities,
regardless of the number of shares owned, may be required to file
an application, be investigated, and have his suitability as a
beneficial holder of the Company's voting securities determined
if the Nevada Commission has reason to believe that such
ownership would otherwise be inconsistent with the declared
policies of the state of Nevada. The applicant must pay all
costs of investigation incurred by the Nevada Gaming Authorities
in conducting any such investigation.
The Nevada Act requires any person who acquires more than
five percent of a Registered Corporation's voting securities to
report the acquisition to the Nevada Commission. The Nevada Act
requires that beneficial owners of more than 10% of a Registered
Corporation's voting securities apply to the Nevada Commission
for a finding of suitability within thirty days after the
Chairman of the Nevada Board mails the written notice requiring
such filing. Under certain circumstances, an "institutional
investor", as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of the Registered Corporation's
voting securities may apply to the Nevada Commission for a waiver
of such finding of suitability if such institutional investor
holds the voting securities for investment purposes only. An
institutional investor shall not be deemed to hold voting
securities for investment purposes unless the voting securities
were acquired and are held in the ordinary course of business as
an institutional investor and not for the purpose of causing,
directly or indirectly, the election of a majority of the members
of the board of directors of the Company, any change in the
Company's corporate charter, bylaws, management, policies or
operations of the Registered Corporation, or any of its gaming
affiliates, or any other action which the Nevada Commission finds
to be inconsistent with holding the Registered Corporation's
voting securities for investment purposes only. Activities which
are not deemed to be inconsistent with holding voting securities
for investment purposes only include: (i) voting on all matters
voted on by stockholders; (ii) making financial and other
inquiries of management of the type normally made by securities
analysts for informational purposes and not to cause a change in
its management, policies or operations; and (iii) such other
activities as the Nevada Commission may determine to be
consistent with such investment intent. If the beneficial holder
of voting securities who must be found suitable is a corporation,
partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners. The
applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of
suitability or a license within 30 days after being ordered to do
so by the Nevada Commission or the Chairman of the Nevada Board,
may be found unsuitable. The same restrictions apply to a record
owner if the record owner, after request, fails to identify the
beneficial owner. Any stockholder found unsuitable and who
holds, directly or indirectly, any beneficial ownership of the
Company's voting securities beyond such period of time as may be
prescribed by the Nevada Commission may be guilty of a criminal
offense. The Company is subject to disciplinary action if, after
it receives notice that a person is unsuitable to be a
stockholder or to have any other relationship with the Company or
the Gaming Subsidiaries, the Company: (i) pays that person any
dividend or interest upon voting securities of the Company;
(ii) allows that person to exercise, directly or indirectly, any
voting right conferred through securities held by that person;
(iii) pays remuneration in any form to that person for services
rendered or otherwise; or (iv) fails to pursue all lawful efforts
to require such unsuitable person to relinquish his voting
securities including, if necessary, the immediate purchase of
said voting securities for cash at fair market value.
Additionally, the Clark County Liquor and Gaming Licensing Board
has the authority to approve all persons owning or controlling
the stock of any corporation controlling a gaming licensee.
The Nevada Commission may, in its discretion, require the
holder of any debt security of a Registered Corporation to file
applications, be investigated and be found suitable to own the
debt security of a Registered Corporation if the Nevada
Commission has reason to believe that such holder's acquisition
of such debt security would otherwise be inconsistent with the
declared policy of the State of Nevada. If the Nevada Commission
determines that a person is unsuitable to own such security, then
pursuant to the Nevada Act, the Registered Corporation can be
sanctioned, including the loss of its approvals, if without the
prior approval of the Nevada Commission, it: (i) pays to the
unsuitable person any dividend, interest, or any distribution
whatsoever; (ii) recognizes any voting right by such unsuitable
person in connection with such securities; (iii) pays the
unsuitable person remuneration in any form; or (iv) makes any
payment to the unsuitable person by way of principal, redemption,
conversion, exchange, liquidation or similar transaction.
The Company is required to maintain a current stock ledger
in Nevada which may be examined by the Nevada Gaming Authorities
at any time. If any securities are held in trust by an agent or
by a nominee, the record holder may be required to disclose the
identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds
for finding the record holder unsuitable. The Company is also
required to render maximum assistance in determining the identity
of the beneficial owner. The Nevada Commission has the power to
require the Company's stock certificates to bear a legend
indicating that the securities are subject to the Nevada Act.
However, to date, the Nevada Commission has not imposed such a
requirement on the Company.
The Company may not make a public offering of its securities
without the prior approval of the Nevada Commission if the
securities or proceeds therefrom are intended to be used to
construct, acquire or finance gaming facilities in Nevada, or to
retire or extend obligations incurred for such purposes. On
August 24, 1995, the Nevada Commission granted the Company prior
approval to make public offerings for a period of one year,
subject to certain conditions (the "Shelf Approval"). The Shelf
Approval also applies to any affiliated company wholly owned by
the Company (an "Affiliate") which is a publicly traded
corporation or would thereby become a publicly traded corporation
pursuant to a public offering. The Shelf Approval also includes
approval for the Corporate Licensees to guarantee any security
issued by, or to hypothecate their assets to secure the payment
or performance of any obligations issued by, the Company or an
Affiliate in a public offering under the Shelf Registration.
However, the Shelf Approval may be rescinded for good cause
without prior notice upon the issuance of an interlocutory stop
order by the Chairman of the Nevada Board and must be renewed
annually. The Shelf Approval does not constitute a finding,
recommendation or approval by the Nevada Commission or the Nevada
Board as to the accuracy or adequacy of the prospectus or the
investment merits of the securities offered. Any representation
to the contrary is unlawful.
Changes in control of the Company through merger,
consolidation, stock or asset acquisitions, management or
consulting agreements, or any act or conduct by a person whereby
he obtains control, may not occur without the prior approval of
the Nevada Commission. Entities seeking to acquire control of a
Registered Corporation must satisfy the Nevada Board and Nevada
Commission in a variety of stringent standards prior to assuming
control of such Registered Corporation. The Nevada Commission
may also require controlling stockholders, officers, directors
and other persons having a material relationship or involvement
with the entity proposing to acquire control, to be investigated
and licensed as part of the approval process relating to the
transaction.
The Nevada legislature has declared that some corporate
acquisitions opposed by management, repurchases of voting
securities and corporate defense tactics affecting Nevada gaming
corporate licensees, and Registered Corporations that are
affiliated with those operations, may be injurious to stable and
productive corporate gaming. The Nevada Commission has
established a regulatory scheme to ameliorate the potentially
adverse effects of these business practices upon Nevada's gaming
industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming operators and their
affiliates; (ii) preserve the beneficial aspects of conducting
business in the corporate form; and (iii) promote a neutral
environment for the orderly governance of corporate affairs.
Approvals are, in certain circumstances, required from the Nevada
Commission before the Company can make exceptional repurchases of
voting securities above the current market price thereof and
before a corporate acquisition opposed by management can be
consummated. The Nevada Act also requires prior approval of a
plan of recapitalization proposed by the Company's Board of
Directors in response to a tender offer made directly to the
Registered Corporation's stockholders for the purposes of
acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending
on the type of gaming or activity involved, are payable to the
State of Nevada and to the counties and cities in which the
Gaming Subsidiaries' respective operations are conducted.
Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are
based upon either: (i) a percentage of the gross revenues
received; (ii) the number of gaming devices operated; or
(iii) the number of table games operated. A casino entertainment
tax is also paid by nonrestricted casino operations where
entertainment is furnished in connection with the selling of food
or refreshments. Nevada licensees that hold a license as an
operator of a slot route, or a manufacturer's or distributor's
license, also pay certain fees and taxes to the State of Nevada.
Any person who is licensed, required to be licensed,
registered, required to be registered, or is under common control
with such persons (collectively, the "Licensees"), and who
proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and
thereafter maintain, a revolving fund in the amount of $10,000 to
pay the expenses of investigation by the Nevada Board of their
participation in such foreign gaming. The revolving fund is
subject to increase or decrease in the discretion of the Nevada
Commission. Thereafter, Licensees are required to comply with
certain reporting requirements imposed by the Nevada Act.
Licensees are also subject to disciplinary action by the Nevada
Commission if they knowingly violate any laws of the foreign
jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the
standards of honesty and integrity required of Nevada gaming
operations, engage in activities that are harmful to the state of
Nevada or its ability to collect gaming taxes and fees, or employ
a person in the foreign operation who has been denied a license
or finding of suitability in Nevada on the ground of personal
unsuitability.
The sale of alcoholic beverages at the gaming establishments
operated by the Gaming Subsidiaries is subject to licensing,
control and regulation by the applicable Local Authorities. All
licenses are revocable and are not transferable. The Local
Authorities involved have full power to limit, condition, suspend
or revoke any such license, and any such disciplinary action
could (and revocation would) have a material adverse affect upon
the operations of the licensed gaming establishments.
Mississippi
The Company conducts its Mississippi gaming operations
through a Mississippi subsidiary, Circus Circus Mississippi, Inc.
("CCMI"). The ownership and operation of casino gaming
facilities in Mississippi are subject to extensive state and
local regulation. In order to open and operate Circus Circus-
Tunica, the Company was required to register under the
Mississippi Gaming Control Act (the "Mississippi Act") and its
Mississippi gaming operations are subject to the licensing and
regulatory control of the Mississippi Gaming Commission (the
"Mississippi Commission") and various local and county regulatory
agencies. Effective October 29, 1991, the Mississippi Commission
adopted regulations in furtherance of the Mississippi Act (the
"regulations"). Changes in the Mississippi Act, the regulations
and/or interpretations of the Mississippi Act and the regulations
by the Mississippi Commission could have a material adverse
effect on gaming operations conducted by the Company in
Mississippi.
The Company is required to submit detailed financial,
operating and other reports to the Mississippi Commission.
Substantially all loans, leases, sales of securities and similar
financing transactions entered into by CCMI must be reported to
or approved by the Mississippi Commission. CCMI also is required
to periodically submit detailed financial and operating reports
to the Mississippi Commission and the Mississippi State Tax
Commission and to furnish any other information required thereby.
Each of the directors, officers and key employees of the
Company who are actively and directly engaged in the
administration or supervision of gaming in Mississippi, or who
have any other significant direct or indirect involvement with
the gaming activities of the Company in Mississippi, must be
found suitable therefor, and may be required to be licensed, by
the Mississippi Commission. The finding of suitability is
comparable to licensing, and both require submission of detailed
personal financial information followed by a thorough
investigation. In addition, any individual who is found to have
a material relationship to, or material involvement with, the
Company may be required to be investigated in order to be found
suitable or to be licensed as a business associate of the
Company. Key employees, controlling persons or others who
exercise significant influence upon the management or affairs of
the Company may also be deemed to have such a relationship or
involvement. There can be no assurance that a person who is
subject to a finding of suitability will be found suitable by the
Mississippi Commission. An application for licensing may be
denied for any cause deemed reasonable by the Mississippi
Commission. Changes in licensed positions must be reported to
the Mississippi Commission. In addition to its authority to deny
an application for a license, the Mississippi Commission has
jurisdiction to disapprove a change in corporate position. If
the Mississippi Commission were to find a director, officer or
key employee unsuitable for licensing or unsuitable to continue
having a relationship with the Company, the Company would have to
suspend, dismiss and sever all relationships with such person in
order to continue to have any involvement in gaming in
Mississippi. The Company would have similar obligations with
regard to any person who should refuse to file appropriate
applications. Each gaming employee at a Mississippi gaming
facility must obtain from the Mississippi Commission a work
permit which may be revoked upon the occurrence of certain
specified events.
Mississippi statutes and regulations give the Mississippi
Commission the discretion to require a suitability finding with
respect to anyone who acquires any security of the Company,
regardless of the percentage of ownership. The current policy of
the Mississippi Commission is to require anyone acquiring five
percent or more of any voting securities of a public or private
company to be found suitable. If the owner of voting securities
who is required to be found suitable is a corporation,
partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners. The
applicant is required to pay all costs of investigation which the
Company may reimburse. The Mississippi Commission has selected
those persons it feels were required to be investigated and found
suitable and has made the findings of suitability. However,
other persons, for the reasons set forth above, may be required
to be found suitable.
Any owner of voting securities found unsuitable and who
holds, directly or indirectly, any beneficial ownership of equity
interests in the Company beyond such period of time as may be
prescribed by the Mississippi Commission may be guilty of a
misdemeanor. Any person who fails or refuses to apply for a
finding of suitability or a license within 30 days after being
ordered to do so by the Mississippi Commission may be found
unsuitable. The Company will be subject to disciplinary action
if, after it receives notice that a person is unsuitable to be an
owner of or to have any other relationship with it, the Company:
(i) pays the unsuitable person any dividends or interest upon any
securities of the gaming subsidiary or any payments or
distribution of any kind whatsoever; (ii) recognizes the
exercise, directly or indirectly, of any voting rights in its
securities by the unsuitable person; or (iii) pays the unsuitable
person any remuneration in any form for services rendered or
otherwise, except in certain limited and specific circumstances.
In addition, if the Mississippi Commission finds any owner of
voting securities unsuitable, such owner must immediately
surrender all securities to the Company, and the Company must
refund any money or other thing of value that may have been
invested in the Company or made use of by the Company.
The Company is required to maintain current equity ownership
ledgers in the State of Mississippi which may be examined by the
Mississippi Commission at any time. The Company obtained a
waiver of this ledger requirement from the Mississippi Commission
at its licensing hearing, however, the waiver may be revoked,
modified or suspended at any time by the Mississippi Commission
in its discretion. If any securities are held in trust by an
agent or by a nominee, the record holder may be required to
disclose the identity of the beneficial owner to the Mississippi
Commission. A failure to make such disclosure may be grounds for
finding the record holder unsuitable. The Company also is
required to render maximum assistance in determining the identity
of such a beneficial owner.
The Mississippi Act requires that certificates representing
equity securities of the Company bear a legend to the general
effect that the securities are subject to the Mississippi Act and
regulations of the Mississippi Commission. The Company obtained
a waiver of this legend requirement from the Mississippi
Commission at its licensing hearing, however, this waiver may be
revoked, modified or suspended by the Mississippi Commission in
its discretion at any time. The Mississippi Commission, through
the power to regulate licenses, has the power to impose
additional restrictions on the Company and on the holders of the
Company's securities at any time.
The Company may not make a public offering of its securities
without the prior approval of the Mississippi Commission if the
securities or proceeds therefrom are intended to be used to
construct, acquire or finance gaming facilities in Mississippi,
or to retire or extend obligations incurred for such purposes.
On January 31, 1995, the Mississippi Commission granted the
Company prior approval to make public offerings for a period of
one year, subject to certain conditions (the "Shelf Approval").
The Shelf Approval also applies to any affiliated company wholly
owned by the Company (an "Affiliate") which is a publicly traded
corporation or would thereby become a publicly traded corporation
pursuant to a public offering. The Shelf Approval also included
approval for CCMI to guarantee any security issued by, or to
hypothecate their assets to secure the payment or performance of
any obligations issued by the Company or an affiliate in a public
offering under the Shelf Registration. However, the Shelf
Approval may be rescinded for good cause without prior notice
upon the issuance of an interlocutory stop order by the Executive
Director of the Mississippi Commission and must be renewed
annually. The Shelf Approval does not constitute a finding,
recommendation or approval by the Mississippi Commission as to
the accuracy or adequacy of the prospectus or the investment
merits of the securities offered. Any representation to the
contrary is unlawful.
The regulations provide that a change in control of the
Company may not occur without the prior approval of the
Mississippi Commission. Mississippi law prohibits the Company
from making a public offering of its securities without the
approval of the Mississippi Commission if any part of the
proceeds of the offering is to be used to finance the
construction, acquisition or operation of gaming facilities in
Mississippi, or to retire or extend obligations incurred for one
or more of such purposes.
As long as the Company is licensed to conduct gaming in
Mississippi, the Company may not engage in gaming activities in
Mississippi while also conducting gaming operations outside of
Mississippi without approval of the Mississippi Commission. The
Company has been approved in the following jurisdictions; Nevada,
Indiana, Louisiana, Illinois and Ontario, Canada.
The Company received its Mississippi gaming license on
August 18, 1994. The gaming license is not transferable and must
be renewed every two years. The Mississippi Commission in 1994
enacted an infrastructure development regulation which requires
that a Mississippi casino invest 25% of its casino costs in
infrastructure facilities. Infrastructure facilities are defined
in the regulation to include a hotel with at least 250 rooms,
theme park, golf course and other similar facilities. The
regulation provides that the infrastructure requirement is not
satisfied by construction of parking, roads, drainage or other
items which a municipality or county would normally construct.
The Mississippi Commission in recent relicensure hearings has
applied the infrastructure regulation to existing licensed
casinos seeking relicensure. The Company anticipates that
infrastructure development will be an issue considered by the
Mississippi Commission in the Company's relicensure hearing in
1996. There can be no assurance that any renewal application
will be approved. Each issuing agency may at any time dissolve,
suspend, condition, limit or restrict a license or approval to
own equity interests in the Company for any cause deemed
reasonable by such agency.
Substantial fines for each violation of gaming laws or
regulations may be levied against the Company in Mississippi. A
violation under any gaming license held by the Company may be
deemed a violation of its Mississippi license. Suspension or
revocation of any of the Company's gaming licenses or of the
approval of the Company would have a material adverse effect upon
any business conducted by the Company in Mississippi.
License fees and taxes, computed in various ways depending
on the type of gaming involved, are payable to the State of
Mississippi and to the county and cities in which the Company
conducts operations in Mississippi. Depending upon the
particular fee or tax involved, these fees and taxes are payable
either weekly or annually and are based upon: (i) the gross
gaming revenues received by the casino operation; (ii) the number
of slot machines operated by the casino; and (iii) the number of
table games operated by the casino. The legal age for gaming in
Mississippi is 21.
Windsor, Ontario, Canada
The Company holds one-third of the outstanding shares of
WCL, a corporation incorporated under the laws of the Province of
Ontario, Canada. WCL has two other shareholders, each holding
one-third of the outstanding shares of WCL. Pursuant to a
contract with the Ontario Casino Corporation (the "OCC"), a
governmental authority of the province of Ontario established
under the Ontario Casino Corporation Act, WCL intends to develop
and operate a hotel-casino in Windsor, Ontario on behalf of the
OCC and, pending the development and opening of such property,
has been operating an interim land-based casino that opened in
May 1994 and a dockside casino that opened in December 1995.
The operation of casino gaming facilities by WCL in Windsor,
Ontario, is subject to extensive regulation. The gaming
operations of WCL in Ontario are subject to the registration and
regulatory control of the Ontario Gaming Control Commission (the
"Ontario Commission"), the Registrar of Gaming Control (the
"Ontario Registrar") and the Director of Gaming Control (the
"Ontario Director") established or appointed under the Ontario
Gaming Control Act (the "Ontario Act"). So long as WCL operates
a casino in Windsor, it must be registered as a casino operator
under the Ontario Act.
An application for registration or renewal of registration
will be denied if there are reasonable grounds to believe that
the applicant will not be financially responsible in the conduct
of its business or if there are reasonable grounds to believe
that it will not act in accordance with the law or with
integrity, honesty, or in the public interest or the applicant is
carrying on activities in contravention of the Ontario Act or its
registration. In determining whether registration should be
granted or renewed, the Ontario Registrar may have regard to the
financial history and past conduct of the applicant, its officers
and directors and "interested persons" who have a beneficial
interest in, control of, or who have financed the applicant's
business or any of its officers' or directors' businesses. The
Ontario Registrar is empowered to investigate the character,
financial history and competence of WCL or any person who has a
beneficial interest in, control of, or who has financed WCL's
business, including WCL's shareholders. The Ontario Registrar
may also investigate officers or directors of WCL. The applicant
for registration or renewal must pay the reasonable costs of such
investigations.
Each gaming employee at an Ontario gaming facility must be
registered as a gaming assistant which registration may be
revoked upon the occurrence of certain events.
The Ontario Registrar may, subject to a registrant's right
to a hearing under the Ontario Act, suspend or revoke a
registration for any reason that would disentitle such registrant
to registration or renewal.
A change in control of WCL could result in revocation of
registration if the new person or entity in control is determined
to be unsuitable by the Ontario Registrar. Any change in the
officers and directors of WCL requires the approval of the
Ontario Registrar.
All suppliers of goods and services to WCL must be
registered as a supplier under the Ontario Act and regulations or
have been issued a certificate of exemption from the Ontario
Registrar.
All games of chance must be played in accordance with the
rules of play prescribed by the regulations and approved in
writing by the Ontario Commission.
Investigators appointed by the Ontario Commission are
empowered, subject to certain limitations, to conduct warrantless
searches for the purpose of determining compliance with the
Ontario Act, the regulations or the terms of a registration. The
Ontario Director may issue an order freezing the assets of a
person if it is alleged that a person has contravened the Ontario
Act or the regulations thereunder, is subject to criminal
proceeding, or is the subject of an investigation under the
Ontario Act and the Ontario Director finds reasonable grounds to
believe that the interests of the person on whose behalf the
assets are held require protection.
Substantial fines for each violation of the gaming laws or
regulations may be levied against WCL. Suspension or revocation
of registration could lead to a termination of any contract with
OCC and could have a material adverse effect upon any business
conducted by WCL in Ontario. The legal age for gaming in Ontario
is 19.
WCL is required to submit audited financial statements to
the Ontario Commission and to keep records prescribed by
regulation. WCL must also make available to the OCC all reports,
accounts, records and other documents related to the operation of
the casino.
The government can make further regulations under the
Ontario Act. Any additions to or changes in the Ontario Act or
the regulations thereunder could have a material adverse effect
on WCL's gaming operations, and thus the Company's interest
therein.
The sale of alcoholic beverages by WCL at its Ontario
establishment is subject to the supervision, control and
regulation of the Liquor License Board of Ontario, an Ontario
provincial government agency. The failure to obtain or the
revocation of a license to sell alcoholic beverages for the
casino gaming facilities operated by WCL in Windsor could have a
material adverse effect on the operation of such facilities.
Illinois
The Company is subject to the jurisdiction of the Illinois
gaming authorities as a result of its acquisition of The Grand
Victoria riverboat casino and gaming complex based in Elgin,
Illinois.
In 1990, the Riverboat Gambling Act (the "Illinois Act") was
enacted by the State of Illinois. The Illinois Act authorizes
the five-member Illinois Gaming Board (the "Illinois Board") to
issue up to ten owners licenses on navigable streams within or
forming a boundary of the State of Illinois except for Lake
Michigan and any waterway in Cook County, which includes Chicago.
The Illinois Act strictly regulates the facilities, persons,
associations and practices related to gaming operations pursuant
to the police powers of the State of Illinois, including
comprehensive law enforcement supervision. The Illinois Act
grants the Illinois Board specific powers and duties, and all
other powers necessary and proper to fully and effectively
execute the Illinois Act for the purpose of administering,
regulating and enforcing the system of riverboat gaming. The
Illinois Board's jurisdiction extends to every person,
association, corporation, partnership and trust involved in
riverboat gaming operations in the State of Illinois.
The Illinois Act requires the owner of a riverboat gaming
operation to hold an owner's license issued by the Illinois
Board. Each owner's license permits the holder to own up to two
riverboats, however, gaming participants are limited to 1,200 for
any owner's license. A licensed owner may hold up to 10% of a
second riverboat gaming operation in Illinois.
The Illinois Act restricts the granting of certain of the
ten owners' licenses by location. Four are for operators docking
at sites on the Mississippi River, one is for an operator docking
at a site on the Illinois River south of Marshall County and one
is for an operator docking at a site on the Des Plaines River in
Will County. The remaining four owner's licenses are not
restricted as to location. In addition to the ten owner's
licenses which may be authorized under the Illinois Act, the
Illinois Board may issue special event licenses allowing persons
who are not otherwise licensed to conduct riverboat gaming to
conduct such gaming on a specified date or series of dates.
Riverboat gaming under such a license may take place on a
riverboat not normally used for riverboat gaming.
The gaming license issued to The Grand Victoria riverboat
casino in October 1994, will be valid for an initial period of
three years and must be renewed annually thereafter. An owner's
license is eligible for renewal upon payment of the applicable
fee and a determination by the Illinois Board that the licensee
continues to meet all of the requirements of the Illinois Act and
Illinois Board rules. An ownership interest in an owner's
license, or in a business entity other than a publicly held
business entity which holds an owner's license, may not be (i)
transferred or (ii) pledged as collateral without the approval of
the Illinois Board. The Illinois Board also requires that
employees of a gaming operator and vendors of gaming supplies and
equipment be licensed.
The Illinois Act does not limit the maximum bet or per
patron loss. Licensees, however, may set any maximum or minimum
limits on wagering under the Illinois Act. No person under the
age of 21 is permitted to wager.
An admission tax is imposed on the owner of a riverboat
operation at a rate of $2 per person admitted. Additionally, a
wagering tax is imposed on the adjusted gross receipts, as
defined in the Illinois Act, of a riverboat operation at the rate
of 20%. The licensee is required to wire the wagering tax
payment to the Illinois Board daily.
Under the Illinois Act, there is a four-hour maximum period
during which gaming may be conducted during a gaming excursion.
Gaming is deemed to commence when the first passenger boards a
riverboat for an excursion and may continue while other
passengers are boarding for a period not to exceed 30 minutes. A
gaming excursion is deemed to have started upon the commencement
of gaming. Gaming may continue for a period not to exceed 30
minutes after the gangplank or its equivalent is lowered. During
this 30-minute period of egress, new passengers may not board a
riverboat. Special event extended cruises may be authorized by
the Illinois Board.
If a riverboat captain reasonably determines that either it
is unsafe to transport passengers on the waterway due to
inclement weather or the riverboat has been rendered temporarily
inoperable by mechanical or structural difficulties or river
icing, the riverboat shall either not leave the dock or
immediately return to it. If a riverboat captain reasonably
determines for reasons of safety that although seaworthy, the
riverboat should not leave the dock or should return immediately
thereto, due to either of the above conditions, a gaming
excursion may commence or continue while the gangplank or its
equivalent is raised and remains raised, in which event the
riverboat is not considered docked. If, due to either of the
above conditions, a gaming excursion must commence or continue
with the gangplank or its equivalent raised, and the riverboat
does not leave the dock, ingress is prohibited until the
completion of the excursion.
After consultation with the U.S. Army Corps of Engineers,
the Illinois Board may establish binding emergency orders upon
the concurrence of a majority regarding the navigability of
rivers in the event of extreme weather conditions, acts of God or
their extreme circumstances.
The Illinois Board is authorized to conduct investigations
into the conduct of gaming as it may deem necessary and proper
and into alleged violations of the Illinois Act and the Illinois
Board rules. Employees and agents of the Illinois Gaming Board
have access to and may inspect any facilities relating to the
riverboat gaming operations at all times.
A holder of any license is subject to imposition of fines,
suspension or revocation of such license, or other action for any
act or failure to act by himself or his agents or employees, that
is injurious to the public health, safety, morals, good order and
general welfare of the people of the State of Illinois, or that
would discredit or tend to discredit the Illinois gaming industry
or the State of Illinois. Any riverboat operations not conducted
in compliance with the Illinois Act may constitute an illegal
gaming place and consequently may be subject to criminal
penalties, which penalties include possible seizure, confiscation
and destruction of illegal gaming devices and seizure and sale of
riverboats and dock facilities to pay any unsatisfied judgment
that may be recovered and any unsatisfied fine that may be
levied. The Illinois Act also provides for civil penalties,
equal to the amount of gross receipts derived from wagering on
the gaming, whether unauthorized or authorized, conducted on the
day of any violation. The Illinois Board may revoke or suspend
licenses, as the Illinois Board may see fit and in compliance
with applicable laws of the State of Illinois regarding
administrative procedures and may suspend an owner's license,
without notice or hearing, upon a determination that the safety
or health of patrons or employees is jeopardized by continuing a
riverboat's operation. The suspension may remain in effect until
the Illinois Board determines that the cause for suspension has
been abated and it may revoke the owner's license upon a
determination that the owner has not made satisfactory progress
toward abating the hazard.
The Illinois Board requires that a "Key Person" of an owner
licensee submit a Personal Disclosure Form and be investigated
and approved by the Illinois Board. Any person directly or
indirectly holding a legal or beneficial interest of 5% or more
of an applicant is deemed to be a "Key Person," as are officers,
directors, trustees, partners, proprietors and managing agents of
a gaming enterprise. Furthermore, each applicant for an owner's
license or owner license must disclose the identity of every
person, association, trust or corporation having a greater than
1% direct or indirect pecuniary interest in an owner licensee or
in the riverboat gaming operation with respect to which the
license is sought. The Illinois Board may also require an
applicant to disclose any other principal or investor and require
the investigation and approval of such individuals.
The Illinois Board (unless the investor qualifies as an
institutional investor) requires a Personal Disclosure Form from
any person or entity who or which, individually or in association
with others, acquires directly or indirectly, beneficial
ownership of more than 5% of any class of voting securities or
nonvoting securities convertible into voting securities of a
publicly traded corporation which holds an ownership interest in
the holder of an owner's license. If the Illinois Board denies
an application for such a transfer and if no hearing is
requested, the applicant for the transfer of ownership must
promptly divest those shares in the publicly traded parent
corporation. The holder of an owner's license would not be able
to distribute profits to a publicly traded parent corporation
until such shares have been divested. If a hearing is requested,
the shares need not be divested and profits may be distributed to
a publicly-held parent corporation pending the issuance of a
final order from the Illinois Gaming Board.
The Illinois Board may waive any licensing requirement or
procedure provided by rule if it determines that such waiver is
in the best interests of the public and the gaming industry.
Also, the Illinois Board may, from time to time, amend or change
Board rules.
Uncertainty exists regarding the Illinois gambling
regulatory environment due to limited experience in interpreting
the Illinois Act.
From time to time, various proposals have been introduced in
the Illinois legislature that, if enacted, would affect the
taxation, regulation, operation or other aspects of the gaming
industry or the Company. Some of this legislation, if enacted,
could adversely affect the gaming industry or the Company. No
assurance can be given whether such or similar legislation will
be enacted.
Applicants for and holders of an owner's license are
required to obtain formal approval from the Illinois Board for
changes in the following areas: (i) Key Persons; (ii) type of
entity; (iii) equity and debt capitalization of the entity; (iv)
investors and/or debt holders; (v) source of funds; (vi)
applicant's economic development plan; (vii) riverboat capacity
or significant design change; (viii) gaming positions, (ix)
anticipated economic impact; or (x) pro forma budgets and
financial statements.
A holder of an owner's license is allowed to make
distributions to its stockholders only to the extent that such
distribution would not impair the financial viability of the
gaming operation. Factors to be considered by the licensee will
include but not be limited to the following: (i) working capital
requirements; (ii) debt service requirements; (iii) requirements
for repairs and maintenance; and (iv) capital expenditure
requirements.
Other Jurisdictions
As a result of the Company's efforts to expand its
operations into new jurisdictions, the Company is likely to
become subject to comprehensive gaming and other regulations in
each such jurisdiction into which its operations are expanded.
Such regulations may be similar to, and could be more restrictive
than, those currently applicable to the Company, its officers,
directors or employees or persons associated with the Company.
Employees and Labor Relations
At January 31, 1996, the Company employed approximately
20,200 persons. Approximately 39% of the Company's employees at
January 31, 1996 were employed pursuant to the terms of
collective bargaining agreements. Management considers its labor
relations to be satisfactory. A work stoppage has not been
experienced at a Company-owned property since an industry-wide
strike in 1975. In Windsor, Ontario, the interim casino being
operated by a joint venture in which the Company owns a 33-1/3%
interest was closed by a three-week strike in March 1995.
Certain states in which gaming recently has been legalized
have established community commitment and similar laws which
require that a specified percentage of employees of gaming
ventures be residents of the state in which the gaming venture is
located. These laws could affect the ability of the Company to
attract and retain qualified employees for gaming operations
conducted by the Company or joint ventures in which it
participates outside Nevada.
Forward Looking Information
The Private Securities Litigation Reform Act of 1995
provides a "safe harbor" for forward-looking statements. Certain
information included in this Annual Report and other materials
filed or to be filed by the Company with the Securities and
Exchange Commission (as well as information included on oral
statements or other written statements made or to be made by the
Company) contains statements that are forward-looking, such as
statements relating to plans for future expansion and other
business development activities as well as other capital
spending, financing sources and the effects of regulation
(including gaming and tax regulation) and competition. Such
forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results
in the future and, accordingly, such results may differ from
those expressed in any forward-looking statements made by or on
behalf of the Company. These risks and uncertainties include,
but are not limited to, those relating to development and
construction activities, dependence on existing management,
leverage and debt service (including sensitivity to fluctuation
in interest rates), domestic or global economic conditions,
changes in federal or state tax laws or the administration of
such laws, changes in gaming laws or regulations (including the
legalization of gaming in certain jurisdictions) and applications
for licenses and approvals under applicable laws and regulations
(including gaming laws and regulations).
ITEM 2. PROPERTIES.
Circus Circus-Las Vegas. The Company owns approximately 69
acres of land with 375 feet of frontage on the Las Vegas Strip
(the "Circus Circus-Las Vegas Site") and the related
improvements. As of January 31, 1996, neither the Circus Circus-
Las Vegas Site nor any of the improvements situated thereon was
subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning Circus
Circus-Las Vegas, see "Description of the Company's Operating
Hotels and Casinos -- Las Vegas, Nevada -- Circus Circus-Las
Vegas" in Item 1 of this Report.
Luxor and Excalibur. The Company owns a 117-acre parcel on
the southwest corner of the intersection of the Las Vegas Strip
and Tropicana Avenue, with approximately 2,400 feet of frontage
on the Las Vegas Strip (the "Excalibur-Luxor Site") and the
related improvements. Excalibur is situated on the northern
portion of the Excalibur-Luxor Site at the intersection of the
Las Vegas Strip and Tropicana Avenue and Luxor is situated on
such site to the south of Excalibur. As of January 31, 1996,
neither the Excalibur-Luxor Site nor any of the improvements
situated thereon was subject to any encumbrance securing the
repayment of indebtedness. For additional information concerning
Luxor and Excalibur, see "Description of the Company's Operating
Hotels and Casinos -- Las Vegas, Nevada -- Luxor" and
"-- Excalibur" in Item 1 of this Report.
Hacienda. The Company owns approximately 47 acres adjacent
to Luxor, which is the site of the Hacienda (the "Hacienda
Site"), and the related improvements. As of January 31, 1996,
neither the Hacienda Site, which has approximately 1,000 feet of
frontage on the Las Vegas Strip, nor any of the improvements
situated thereon was subject to any encumbrance securing the
repayment of indebtedness. For additional information concerning
the Hacienda, see Description of the Company s Operating Hotels
and Casinos -- Las Vegas, Nevada -- Hacienda in Item 1 of this
Report.
Circus Circus-Reno. Circus Circus-Reno is situated on a
two-block area in downtown Reno (the "Circus Circus-Reno Site"),
of which approximately 80% is owned by the Company and the
remainder is held under three separate leases, two of which
expire in 2032 and 2033, respectively. The Company owns the
remainder interest in the parcel subject to the third lease
pursuant to which the Company is obligated to pay rent for the
lifetime of the landlord. As of January 31, 1996, neither the
portion of the Circus Circus-Reno Site owned by the Company nor
any of the improvements situated thereon was subject to any
encumbrance securing the repayment of indebtedness. For
additional information concerning Circus Circus-Reno, see
"Description of the Company's Operating Hotels and Casinos --
Reno, Nevada -- Circus Circus-Reno" in Item 1 of this Report.
Colorado Belle. The Company owns approximately 22 acres on
the bank of the Colorado River in Laughlin, Nevada, which is the
site of the Colorado Belle (the "Colorado Belle Site"), and the
related improvements. As of January 31, 1996, neither the
Colorado Belle Site nor any of the improvements situated thereon
was subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning the Colorado
Belle Hotel and Casino, see "Description of the Company's
Operating Hotels and Casinos -- Laughlin, Nevada -- Colorado
Belle" in Item 1 of this Report.
Edgewater Hotel and Casino. Adjacent to the Colorado Belle
Site, the Company owns approximately 16 acres on the bank of the
Colorado River in Laughlin, Nevada, which is the site of the
Edgewater (the "Edgewater Site"), and the related improvements.
As of January 31, 1996, neither the Edgewater Site nor any of the
improvements situated thereon was subject to any encumbrance
securing the repayment of indebtedness. For additional
information concerning the Edgewater Hotel and Casino, see
"Description of the Company's Operating Hotels and Casinos --
Laughlin, Nevada -- Edgewater" in Item 1 of this Report.
Gold Strike. The Company owns approximately 51 acres, which
is the site of Gold Strike (the "Gold Strike Site"), and related
improvements, on the east side of I-15 in Jean, Nevada,
approximately 12 miles from the California/Nevada border and 25
miles from Las Vegas. As of January 31, 1996, neither the Gold
Strike Site nor any of the improvements situated thereon was
subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning Gold Strike,
see "Description of the Company's Operating Hotels and Casinos -
Jean, Nevada -- Gold Strike" in Item 1 of this Report.
Nevada Landing. The Company owns approximately 55 acres,
which is the site of Nevada Landing (the "Nevada Landing Site"),
and related improvements, on the west side of I-15 in Jean,
Nevada. As of January 31, 1996, neither the Nevada Landing Site
nor any of the improvements situated thereon was subject to any
encumbrance securing the repayment of indebtedness. For
additional information concerning Nevada Landing, see
"Description of the Company's Operating Hotels and Casinos -
Jean, Nevada -- Nevada Landing" in Item 1 of this Report.
Railroad Pass. The Company owns approximately 56 acres,
which is the site of the Railroad Pass (the "Railroad Pass
Site"), and related improvements, on US-93 in Henderson, Nevada.
As of January 31, 1996, neither the Railroad Pass Site nor any of
the improvements situated thereon was subject to any encumbrance
securing the repayment of indebtedness. For additional
information concerning Railroad Pass, see "Description of the
Company's Operating Hotels and Casino - Henderson, Nevada --
Railroad Pass" in Item 1 of this Report.
Circus Circus-Tunica. The Company owns approximately 24
acres in Tunica County, Mississippi, which is the site of Circus
Circus-Tunica (the "Circus Circus-Tunica Site"), and the related
improvements. The Company also owns an undivided 50% interest in
an additional 388-acre site adjacent to the Tunica Site which is
owned jointly with another unaffiliated gaming company (the
"Tunica Jointly Owned Site"). As of January 31, 1996, neither
the Circus Circus-Tunica Site nor the Company's interest in the
Tunica Jointly Owned Site was subject to any encumbrance securing
the repayment of indebtedness. For additional information
concerning Circus Circus-Tunica, see "Description of the
Company's Operating Hotels and Casinos -- Tunica County,
Mississippi -- Circus Circus-Tunica" in Item 1 of this Report.
Other Real Property
Slots-A-Fun is situated on a 30,000-square-foot parcel owned
by the Company and has approximately 100 feet of frontage on the
Las Vegas Strip. The land, building and other improvements were
not subject to any encumbrance securing indebtedness at January
31, 1996.
The Company operates the Silver City Casino in Las Vegas
under a lease which expires in October 1999. The Company
currently pays a base rent of $129,982 per month. The base rent
is subject to annual increases, calculated by using a specified
index with a cap based on a specified percentage of annual
revenues. Under the terms of the lease, the landlord or the
landlord's assignee is entitled to participate in the profits to
the extent of 50% of defined income from the operation of the
Silver City Casino. There was no profit participation rent due
for the years ended January 31, 1994, 1995 or 1996.
The Company owns approximately 73 acres of unimproved land
located immediately south of the Hacienda Site. As of
January 31, 1996, the 73-acre site, which was acquired in March
1995 for $73 million, was not subject to any encumbrance securing
indebtedness.
The Company owns approximately 15 acres of land across the
Las Vegas Strip from Luxor. The land, which was not subject to
any encumbrance securing indebtedness as of January 31, 1996, is
utilized as a parking lot for employees at Luxor and Excalibur.
The Company owns approximately five acres of land just to
the north of the Circus Circus-Reno Site, which will be used for
the construction of a parking garage and other expansion of the
property. This land is not subject to any encumbrances.
The Company owns 60 acres of land in Jean, Nevada to the
north of the Gold Strike and approximately 89 acres of land in
Sloan, Nevada off of I-15. Sloan is located between Jean and Las
Vegas. Both of these parcels are held for future development and
are not subject to any encumbrances.
The Company also owns or leases, or has options and/or
agreements to purchase or lease, certain other improved and
unimproved properties which are not deemed to be material to the
Company.
Joint Venture Interests. The Company, either directly or
through a wholly owned subsidiary: owns (i) a 50% interest in the
Reno Joint Venture, which owns and operates Silver Legacy, a
1,700-room hotel-casino in Reno, Nevada; (ii) a 50% interest in
the Elgin Joint Venture, which owns and operates The Grand
Victoria, a riverboat casino and land-based entertainment complex
in Elgin, Illinois; and (iii) a one-third interest in an entity
that operates an interim land-based casino and a dockside casino
in Windsor, Ontario, Canada. The Company, through a wholly owned
subsidiary, also owns a 50% interest in the Las Vegas Joint
Venture, which is developing and will own and operate Monte
Carlo, a 3,000-room hotel-casino complex which is scheduled to
open in June 1996. Reference is made to the information
appearing under the caption Joint Venture Participations in
Item 1 of this Report concerning the properties owned and
operated, or being developed, by the aforementioned joint venture
entities, which information is hereby incorporated in this Item 2
by this reference.
ITEM 3. LEGAL PROCEEDINGS.
On April 26, 1994, a lawsuit requesting class certification,
was filed in the United States District Court for the Middle
District of Florida against 41 manufacturers, distributors and
casino operators of video poker and electronic slot machines,
including the Company and most of the other major hotel-casino
companies. On May 10, 1994, a lawsuit requesting class
certification alleging substantially identical claims was filed
by another plaintiff in the same court against 48 defendants,
including the Company. The two lawsuits have been consolidated
into a single action and transferred to the United States
District Court for the District of Nevada. On September 26,
1995, a lawsuit requesting class certification alleging
substantially identical claims was filed by a third plaintiff in
the United States District Court for the District of Nevada
against 45 defendants, including the Company. The complaints
allege that the defendants have engaged in a course of fraudulent
and misleading conduct intended to induce persons to play video
poker and electronic slot machines by collectively
misrepresenting how the gaming machines operate, as well as the
extent to which there is an opportunity to win. The case alleges
violations of the Racketeer Influenced and Corrupt Organizations
Act, as well as claims of common law fraud, unjust enrichment and
negligent misrepresentation, and seeks unspecified compensatory
and punitive damages. The Company and other defendants have
moved to dismiss the complaints for failure to state a claim. No
hearing has been set on this motion. Management believes that
the claims are without merit and intends to defend the case
vigorously.
On July 26, 1994, 7547 Partners, a Florida partnership and
alleged stockholder of the Company, filed a self-described class
action complaint in the District Court, Clark County, Nevada (the
"Court") purportedly on behalf of the Company's stockholders
against the Company and each of its directors. On August 10,
1994, Harry Dines, also claiming to be a stockholder, filed a
substantively identical complaint with the Court. The two
actions were subsequently consolidated by the plaintiffs in a
self-described consolidated amended class action and derivative
complaint (the "amended complaint") which was filed in the Court
on October 19, 1994. The amended complaint alleges substantively
identical class action claims as those pleaded in the earlier
complaints and also purports to bring a derivative action on
behalf of the Company against the directors. The amended
complaint alleges that the individual defendants breached their
fiduciary and other common law duties and wasted corporate assets
in connection with supposed "indications of interest for the
Company" by, among other things, adopting the Rights Agreement
(the "Rights Agreement") described in the Company's Form 8-K
report filed with the Securities and Exchange Commission on July
14, 1994, and failing to initiate an auction for the sale of the
Company. The amended complaint requests declaratory and
injunctive relief enjoining the implementation of the Rights
Agreement and ordering the directors "to create an active auction
of the Company." The amended complaint also requests damages in
unspecified amounts.
On November 9, 1994, the Company and the directors filed two
motions to dismiss the amended complaint and, as to the purported
derivative claims, a request in the alternative for an order
requiring the plaintiffs to furnish a bond as security for the
expenses incurred by the Company. On January 23, 1995, the Court
issued an order dismissing plaintiffs' claims that the directors
breached their fiduciary duties by failing to auction or sell the
Company. The Court denied the motion to dismiss the plaintiffs'
claims challenging the adoption of the Rights Agreement, but
ruled that the Company and the directors could file a motion for
summary judgment on this issue, including a request for
attorney's fees, at their convenience. The Court deferred ruling
on the Company and the directors' request for a bond until it had
ruled on their motion for summary judgment.
On April 16, 1996, plaintiffs executed a stipulation of
settlement with the Company and the directors. The stipulation,
on file with the Court, provides for, among other things,
dismissal with prejudice of the lawsuit and the release of
certain claims. The Company has agreed to adopt corporate
resolutions and measures relating to review of acquisition
proposals and "related party" transactions, the standstill
agreement executed by former principals of Gold Strike Resorts
now on the Company's board, and the Rights Agreement. The
Company has agreed to pay $285,000 in attorneys' fees (of which
$250,000 is being paid by applicable insurance) as well as
certain legal costs. On April 19, 1996, the Court entered an
order providing for notice to class members and a schedule for
the hearing on approval of the settlement. The Court has set a
hearing on approval of the settlement for June 18, 1996.
An amended complaint in a purported class action lawsuit was
filed on August 23, 1995 in the United States District Court for
the District of New Jersey, Camden Division, against 79 named
defendants, including the Company and other casino operators. The
complaint, filed on behalf of Thomas Hyland and other persons
similarly situated, alleges that the defendants have engaged in a
course of conduct involving conspiracy among casinos in the
United States to refuse to deal to skilled blackjack players who
are capable of winning money at the casinos blackjack tables in
violation of various statutory provisions including the Sherman
Act, the Fair Credit Reporting Act and various state antitrust
and consumer fraud laws. The complaint also asserts pendant
causes of action under the tort and contract laws of states where
it is alleged that refusal to deal to skilled players is illegal.
The complaint seeks recovery of any compensatory damages
determined to have been sustained as a result of the alleged
violations as well as exemplary damages, including treble damages
for alleged violations of the Sherman Act. Management believes
that the claims against the Company are wholly without merit and
does not expect that the lawsuit will have a material adverse
effect on the Company s financial position or results of
operations.
The Company is a defendant in various pending litigation.
In management's opinion, the ultimate outcome of such litigation
will not have a material adverse effect on the results of
operations or the financial position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of the Company's security
holders during the fourth quarter of the fiscal year ended
January 31, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Price Range of Common Stock. The Company's Common Stock is
listed on the New York Stock Exchange and on the Pacific Stock
Exchange and traded under the symbol CIR. The following table
sets forth for the fiscal quarter periods shown the low and high
sale prices for the Common Stock on the New York Stock Exchange
Composite Tape.
Fiscal 1996 Low High
First Quarter......................$24.38 $33.50
Second Quarter.....................$29.25 $36.13
Third Quarter......................$24.75 $33.63
Fourth Quarter.....................$25.25 $31.88
Fiscal 1995 Low High
First Quarter......................$26.13 $39.38
Second Quarter.....................$20.50 $31.75
Third Quarter......................$20.50 $26.63
Fourth Quarter.....................$19.75 $27.13
On April 16, 1996 there were 4,543 holders of record of the
Common Stock of the Company.
Dividend Policy. The Company does not currently pay a cash
dividend, nor is one contemplated in the foreseeable future. The
Company believes that currently its stockholders are best served
by a policy of reinvestment in new high-return projects. The
Company has a policy of periodic share repurchase, as cash flows,
borrowing capacity and market conditions warrant.
ITEM 6. SELECTED FINANCIAL DATA.
(amounts in thousands, Year ended January 31,
except share data) 1996 1995 1994 1993 1992
Operating Results(1):
Revenues(2) $1,299,596 $1,170,182 $963,470 $850,941 $813,564
Operating profit before
corporate expense(3) 328,422 280,792 234,311 220,435 213,097
Pretax income 205,759 214,490 182,608 183,313 157,004
Net income before
nonrecurring items(3) 161,645 138,244 126,918 120,983 103,348
Net income 128,898 136,286 116,189 117,322 103,348
Earnings per share before
nonrecurring items (3)(4) $1.66 $1.61 $1.46 $1.41 $1.23
Earnings per share(4) $1.33 $1.59 $1.34 $1.37 $1.23
Balance Sheet Data:
Total assets $2,211,893 $1,512,548 $1,297,924 $950,458 $783,071
Long-term debt 715,214 632,652 567,345 308,092 337,680
Stockholders' equity 1,226,812 686,124 559,950 490,009 326,196
(1) Gold Strike, Nevada Landing and Railroad Pass were acquired on June 1,
1995 and the Hacienda was acquired on September 1, 1995. Circus
Circus-Tunica opened in August 1994 and Luxor opened in October 1993.
(2) Revenues are net of complimentary allowances.
(3) These amounts are before extraordinary items and one-time charges in
fiscal year 1996 for the write-off of certain assets of $45,148 and
Silver Legacy preopening expenses of $5,232; in fiscal 1995 for Circus
Circus-Tunica preopening expenses of $3,012; and in fiscal 1994 for
Luxor and Grand Slam Canyon preopening expenses of $16,506. In fiscal
1993, the Company experienced an extraordinary loss of $3,661, net of
income tax benefit of $1,885, on the early retirement of $100,000
principal amount of the Company's 10-1/8% Senior Subordinated Notes due
April 1997.
(4) Earnings per share are based on shares outstanding adjusted for a two-
for-one stock split effective July 12, 1991 and a three-for-two stock
split effective July 9, 1993.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Incorporated herein by reference are pages 19 through 25 of
the Company's Annual Report to Stockholders for the fiscal year
ended January 31, 1996 (the "1996 Annual Report"), which pages
are included as part of Exhibit 13 to this Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Incorporated herein by reference are pages 26 through 42 of
the 1996 Annual Report which pages are included as part of
Exhibit 13 to this Report.
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Year Ended January 31, 1996
(In thousands, except per share amounts)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Revenue $295,033 $326,766 $354,206 $323,591 $1,299,596
Income from operations 71,046 24,365 88,399 67,563 251,373
Income before income tax 61,367 12,885 76,187 55,320 205,759
Net income 39,400 7,281 46,584 35,633 128,898
Earnings per share $ 0.46 $ 0.08 $ 0.45 $ 0.35 $ 1.33
Year Ended January 31, 1995
(In thousands, except per share amounts)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Revenue $284,901 $299,895 $306,613 $278,773 $1,170,182
Income from operations 61,080 68,225 68,214 58,488 256,007
Income before income tax 50,455 57,535 57,714 48,786 214,490
Net income 32,291 36,548 36,596 30,851 136,286
Earnings per share $ 0.38 $ 0.43 $ 0.43 $ 0.36 $ 1.59
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information beginning immediately following the caption
"Election of Directors" to, but not including, the caption
"Management Remuneration" in the Company's Proxy Statement, to be
filed with the Securities and Exchange Commission within 120 days
after the close of the Company's fiscal year ended January 31,
1996 and forwarded to stockholders prior to the Company's 1996
Annual Meeting of stockholders (the "1996 Proxy Statement"), is
incorporated herein by reference.
Based solely on (i) a review of certain reports furnished to
the Company pursuant to the Securities Exchange Act of 1934 and
(ii) the written representations of the Company's executive
officers and directors, the Company believes that all reports
required to be filed pursuant to such Act with respect to
transactions in the Company's Common Stock during the fiscal year
ended January 31, 1996 were filed on a timely basis, except for
one transaction by Carl F. Dodge which was reported on a Form 4
that was not timely filed.
ITEM 11. EXECUTIVE COMPENSATION.
The information in the 1996 Proxy Statement beginning
immediately following the caption "Management Remuneration" to,
but not including, the caption "Report of the Board of Directors
and the Compensation Committee on Executive Compensation", is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information in the 1996 Proxy Statement beginning
immediately following the caption "Security Ownership of Certain
Beneficial Owners and Management" to, but not including, the
caption "Election of Directors", is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information in the 1996 Proxy Statement beginning
immediately following the caption "Certain Transactions" to, but
not including, the caption "Ratification of Selection of
Independent Auditors" and the additional information in the 1996
Proxy Statement beginning immediately following the caption
"Compensation Committee Interlocks and Insider Participation" to,
but not including, the caption "Comparative Stock Price
Performance Graph", is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) Consolidated Financial Statements:
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES Page
Consolidated Balance Sheets as of January 31, 1996 and 1995............. *
Consolidated Statements of Income for the three years ended January 31,
1996.................................................................... *
Consolidated Statements of Cash Flows for the three years ended January
31, 1996................................................................ *
Consolidated Statements of Stockholders' Equity for the three years ended
January 31, 1996........................................................ *
Notes to Consolidated Financial Statements.............................. *
Report of Independent Public
Accountants............................................................. *
(a)(2) Supplemental Financial Statement Schedules:
None.
* Refers to page of the Annual Report to Shareholders for the year ended
January 31, 1996, a copy of the incorporated portions of which are
included
as Exhibit 13 to this Report.
(a)(3) Exhibits:
The following exhibits are filed as a part of this Report or
incorporated herein by reference:
3(i)(a). Restated Articles of Incorporation of the Company as of
July 15, 1988 and Certificate of Amendment thereto, dated
June 29, 1989. (Incorporated by reference to Exhibit
3(a) to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1991.)
3(i)(b). Certificate of Division of Shares into Smaller
Denominations, dated June 20, 1991. (Incorporated by
reference to Exhibit 3(b) to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1992.)
3(i)(c). Certificate of Division of Shares into Smaller
Denominations, dated June 22, 1993. (Incorporated by
reference to Exhibit 3(i) to the Company's Current Report
on Form 8-K dated July 21, 1993.)
3(ii). Restated Bylaws of the Company dated February 29, 1996.
4(a). Rights Agreement dated as of July 14, 1994, between the
Company and First Chicago Trust Company of New York.
(Incorporated by reference to Exhibit 4 to the Company's
Current Report on Form 8-K dated August 15, 1994.)
4(b). $1.5 Billion Loan Agreement, dated as of January 29,
1996, by and among the Company, the Banks named therein
and Bank of America National Trust and Savings
Association, as administrative agent for the Banks, and
related Subsidiary Guaranty dated as of January 29, 1996,
of the Company's subsidiaries named therein.
(Incorporated by reference to Exhibit 4(a) to the
Company's Current Report on Form 8-K dated January 29,
1996.)
4(c). Amendment No. 1 to the $1.5 Billion Loan Agreement, by
and among the Company, the Banks named therein and Bank
of America National Trust and Savings Association, as
administrative agent for the Banks.
4(d). Rate Swap Master Agreement, dated as of October 24, 1986,
and Rate Swap Supplements One through Four.
(Incorporated by reference to Exhibit 4(j) to the
Company's Current Report on Form 8-K dated December 29,
1986.)
4(e). Interest Rate Swap Agreement, dated as of October 20,
1989, by and between the Company and Salomon Brothers
Holding Company Inc. (Incorporated by reference to
Exhibit 4(q) to the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1990.)
4(f). Interest Rate Swap Agreement, dated as of June 20, 1989,
by and between the Company and First Interstate Bank of
California. (Incorporated by reference to Exhibit 4(r)
to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1990.)
4(g). Interest Rate Swap Agreement, dated as of April 6, 1992,
by and between the Company and Canadian Imperial Bank of
Commerce. (Incorporated by reference to Exhibit 4(y) to
the Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1992.)
4(h). Indenture by and between the Company and First Interstate
Bank of Nevada, N.A., as Trustee with respect to the
Company's 10-5/8% Senior Subordinated Notes due 1997.
(Incorporated by reference to Exhibit 4(a) to the
Company's Registration Statement (No. 33-34439) on Form
S-3.)
4(i). Indenture by and between the Company and First Interstate
Bank of Nevada, N.A., as Trustee with respect to the
Company's 6-3/4% Senior Subordinated Notes due 2003 and
its 7-5/8% Senior Subordinated Debentures due 2013.
(Incorporated by reference to Exhibit 4(a) to the
Company's Current Report on Form 8-K dated July 21,
1993.)
4(j). Indenture, dated February 1, 1996, by and between the
Company and First Interstate Bank of Nevada, N.A., as
Trustee. (Incorporated by reference to Exhibit 4(b) to
the Company's Current Report on Form 8-K dated January
29, 1996.)
4(k). Supplemental Indenture, dated February 1, 1996, by and
between the Company and First Interstate Bank of Nevada,
N.A., as Trustee, with respect to the Company's 6.45%
Senior Notes due February 1, 2006. (Incorporated by
reference to Exhibit 4(c) to the Company's Current Report
on Form 8-K dated January 29, 1996.)
4(l). 6.45% Senior Notes due February 1, 2006 in the principal
amount of $200,000,000. (Incorporated by reference to
Exhibit 4(d) to the Company's Current Report on Form 8-K
dated January 29, 1996.)
10(a).* 1983 Nonqualified Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10(d) to the
Company's Registration Statement (No. 2-85794) on
Form S-1.)
10(b).* 1983 Incentive Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10(e) to the
Company's Registration Statement (No. 2-85794) on
Form S-1.)
10(c).* Amendment to Circus Circus Enterprises, Inc. 1983
Incentive Stock Option Plan. (Incorporated by reference
to Exhibit 4(a) to the Company's Registration Statement
(No. 2-91950) on Form S-8.)
10(d).* 1989 Stock Option Plan of the Company. (Incorporated by
reference to Exhibit 4 to the Company's Registration
Statement (No. 33-39215) on Form S-8.)
10(e).* Stock Purchase Warrant Plan. (Incorporated by reference
to Exhibit 4(a) to the Company's Registration Statement
(No. 33-29014) on Form S-8.)
10(f).* Amended and Restated 1991 Stock Incentive Plan of the
Company. (Incorporated by reference to Exhibit 4 to the
Company's Registration Statement (No. 33-56420) on Form
S-8.)
10(g).* 1993 Stock Option Plan of the Company. (Incorporated by
reference to Exhibit 10(a) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended July
31, 1993.)
10(h).* 1995 Special Stock Option Plan and Forms of Nonqualified
Stock Option Certificate and Agreement. (Incorporated by
reference to Exhibit 10(gg) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1995.)
10(i).* Circus Circus Enterprises, Inc. Executive Compensation
Insurance Plan. (Incorporated by reference to Exhibit
10(i) to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1992.)
10(j). Lease, dated November 1, 1957, by and between Bethel
Palma and others, as lessor, and the Company's
predecessor in interest, as lessee; Amendment of Lease,
dated May 6, 1983. (Incorporated by reference to Exhibit
10(g) to the Company's Registration Statement (No.
2-85794) on Form S-1.)
10(k). Grant, Bargain and Sale Deed to the Company pursuant to
the Lease dated November 1, 1957. (Incorporated by
reference to Exhibit 10(h) to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1984.)
10(l). Lease, dated August 3, 1977, by and between B&D
Properties, Inc., as lessor, and the Company, as lessee;
Amendment of Lease, dated May 6, 1983. (Incorporated by
reference to Exhibit 10(h) to the Company's Registration
Statement (No. 2-85794) on Form S-1.)
10(m). Tenth Amendment and Restatement of the Circus Circus
Employees' Profit Sharing and Investment Plan.
(Incorporated by reference to Exhibit 4(e) to Post
Effective Amendment No. 7 to the Company's Registration
Statement (No. 33-18278) on Form S-8.)
10(n). Fifth Amendment and Restatement to Circus Circus
Employees' Profit Sharing and Investment Trust.
(Incorporated by reference to Exhibit 4(h) to Post
Effective Amendment No. 7 to the Company's Registration
Statement (No. 33-18278) on Form S-8.)
10(o).* Retirement Plan for Outside Directors (Incorporated by
reference to Exhibit 10(ii) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1995).
10(p). Group Annuity Contract No. GA70867 between Philadelphia
Life (formerly Bankers Life Company) and Trustees of
Circus Circus Employees' Profit Sharing and Investment
Plan. (Incorporated by reference to Exhibit 4(c) to the
Company's Registration Statement (No. 33-1459) on
Form S-8.)
10(q). Lease, dated as of November 1, 1981, between Novus
Property Company, as landlord, and the Company, as
tenant. (Incorporated by reference to Exhibit 4(h) to
the Company's Registration Statement (No. 2-85794) on
Form S-1.)
10(r). First Addendum and First Amendment, each dated as of June
15, 1983, to Lease dated as of November 1, 1981.
(Incorporated by reference to Exhibit 4(i) to the
Company's Annual Report on Form 10-K for the year ended
January 31, 1984.)
10(s). Second Amendment, dated as of April 1, 1984, to Lease
dated as of November l, 1981. (Incorporated by reference
to Exhibit 10(o) to the Company's Registration Statement
(No. 33-4475) on Form S-1.)
10(t). Lease by and between Robert Lewis Uccelli, guardian, as
lessor, and Nevada Greens, a limited partnership, William
N. Pennington, as trustee, and William G. Bennett, as
trustee, and related Assignment of Lease. (Incorporated
by reference to Exhibit 10(p) to the Company's
Registration Statement (No. 33-4475) on Form S-1.)
10(u). Agreement of Purchase, dated March 15, 1985, by and
between Denio Brothers Trucking Company, as seller, and
the Company, as buyer, and related lease by and between
Denio Brothers Trucking Co., as lessor, and Nevada
Greens, a limited partnership, William N. Pennington, as
trustee, and William G. Bennett, as trustee, and related
Assignment of Lease. (Incorporated by reference to
Exhibit 10(q) to the Company's Registration Statement
(No. 33-4475) on Form S-1.)
10(v). Agreement of Joint Venture, dated as of March 1, 1994, by
and among Eldorado Limited Liability Company, Galleon,
Inc., and the Company. (Incorporated by reference to
Exhibit 10(y) to the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1994.)
10(w). $230 million Credit Agreement, dated May 30, 1995, by and
among Circus and Eldorado Joint Venture, the Banks named
therein and First Interstate Bank of Nevada, N.A., as
Arranger and Administrative Agent. (Incorporated by
reference to Exhibit 4(a) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended April
30, 1995.)
10(x). Agreement Between Owner and Contractor, dated February 7,
1994, by and between Circus and Eldorado Joint Venture,
and Perini Building Company. (Incorporated by reference
to Exhibit 10(cc) to the Company's Annual Report of Form
10-K for the year ended January 31, 1994.)
10(y). Interim Casino Operating Agreement, dated as of May 14,
1994, by and among Ontario Casino Corporation as agent of
Her Majesty the Queen in Right of Ontario and Windsor
Casino Limited and Caesars World, Inc., Circus Circus
Enterprises, Inc. and Hilton Hotels Corporation.
(Incorporated by reference to Exhibit 10(l) to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended April 30, 1994.)
10(z).* Agreement, dated December 16, 1994, between the Company
and Terry L. Caudill. (Incorporated by reference to
Exhibit 10(cc) to the Company's Annual Report on Form 10-
K for the fiscal year ended January 31, 1995.)
10(aa). Purchase and Sale Agreement, dated January 10, 1995, by
and between Hacienda Hotel, Inc. and William G. Bennett
of the Hacienda Hotel and Casino, and the related
Assignment and Consent to Assignment to the Company,
dated March 5, 1995. (Incorporated by reference to
Exhibit 10(dd) to the Company's Annual Report on Form 10-
K for the fiscal year ended January 31, 1995.)
10(bb). Agreement and Plan of Merger, dated March 19, 1995, by
and among the Company and M.S.E. Investments,
Incorporated, Last Chance Investments, Incorporated, Gold
Strike Investments, Incorporated, Diamond Gold, Inc.,
Gold Strike Aviation, Incorporated, Gold Strike Finance
Company, Inc., Oasis Development Company, Inc., Michael
S. Ensign, William A. Richardson, David R. Belding, Peter
A. Simon II and Robert J. Verchota. (Incorporated by
reference to Exhibit 10(ee) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1995.)
10(cc). First Amendment to Agreement and Plan of Merger, dated
May 30, 1995, by and among the Company and M.S.E.
Investments, Incorporated, Last Chance Investments,
Incorporated, Goldstrike Investments, Incorporated,
Diamond Gold, Inc., Gold Strike Aviation, Incorporated,
Goldstrike Finance Company, Inc., Oasis Development
Company, Inc., Michael S. Ensign, William A. Richardson,
David R. Belding, Peter A. Simon II and Robert J.
Verchota. (Incorporated by reference to Exhibit 99.2 of
the Schedule 13D of Michael S. Ensign relating to the
Company's Common Stock, filed on June 12, 1995.)
10(dd). Exchange Agreement, dated March 19, 1995, by and among
the Company and New Way, Inc., a wholly owned subsidiary
of the Company, Glenn W. Schaeffer, Gregg H. Solomon,
Antonio C. Alamo, Anthony Korfman and William Ensign.
(Incorporated by reference to Exhibit 10(ff) to the
Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1995.)
10(ee). First Amendment to Exchange Agreement, dated May 30,
1995, by and among the Company and New Way, Inc., a
wholly owned subsidiary of the Registrant, Glenn W.
Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony
Korfman and William Ensign. (Incorporated by reference
to Exhibit 10(d) to the Company's Current Report on Form
8-K dated June 1, 1995.)
10(ff). Registration Rights Agreement, dated as of June 1, 1995,
by and among the Company and Michael S. Ensign, William
A. Richardson, David R. Belding, Peter A. Simon II, Glenn
W. Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony
Korfman, William Ensign and Robert J. Verchota.
(Incorporated by reference to Exhibit 99.5 of the
Schedule 13D of Michael S. Ensign, relating to the
Company's Common Stock, filed on June 12, 1995.)
10(gg). Standstill Agreement, dated as of June 1, 1995, by and
among the Company and Michael S. Ensign, William A.
Richardson, David R. Belding, Peter A. Simon II and Glenn
W. Schaeffer. (Incorporated by reference to Exhibit 99.4
of the Schedule 13D of Michael S. Ensign, relating to the
Company's Common Stock, filed on June 12, 1995.)
10(hh).* Executive Officer Annual Bonus Plan. (Incorporated by
reference to Exhibit 10(hh) to the Company's Annual
Report on Form 10-K for the fiscal year ended January 31,
1995.)
10(ii).* Employment Agreement dated June 1, 1995, by and between
the Company and Clyde Turner. (Incorporated by reference
to Exhibit 10(i) to the Company's Current Report on Form
8-K dated June 1, 1995.)
10(jj).* Employment Agreement dated June 1, 1995, by and between
the Company and Michael S. Ensign. (Incorporated by
reference to Exhibit 99.3 of the Schedule 13D of Michael
S. Ensign, relating to the Company's Common Stock, filed
on June 12, 1995.)
10(kk).* Employment Agreement dated June 1, 1995, by and between
the Company and Glenn W. Schaeffer. (Incorporated by
reference to Exhibit 10(k) to the Company's Current
Report on Form 8-K dated June 1, 1995.)
10(ll).* Employment Agreement dated June 1, 1995, by and between
the Company and William A. Richardson. (Incorporated by
reference to Exhibit 99.3 of the Schedule 13D of William
R. Richardson, relating to the Company's Common Stock,
filed on June 12, 1995.)
10(mm).* Employment Agreement dated June 1, 1995, by and between
the Company and Mike H. Sloan. (Incorporated by
reference to Exhibit 10(m) to the Company's Current
Report on Form 8-K dated June 1, 1995.)
10(nn).* Employment Agreement dated June 1, 1995, by and between
the Company and Kurt D. Sullivan. (Incorporated by
reference to Exhibit 10(n) to the Company's Current
Report on Form 8-K dated June 1, 1995.)
10(oo).* Employment Agreement dated June 1, 1995, by and between
the Company and Antonio C. Alamo.
10(pp).* Employment Agreement dated June 1, 1995, by and between
the Company and Gregg H. Solomon.
10(qq).* Employment Agreement dated June 1, 1995, by and between
the Company and Daniel N. Copp.
10(rr).* Agreement dated April 15, 1996, by and between the
Company and Daniel N. Copp.
10(ss). Joint Venture Agreement, dated as of December 18, 1992,
between Nevada Landing Partnership and RBG, L.P.
(Incorporated by reference to Exhibit 10(g) to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended July 31, 1995.)
10(tt). Amendment dated July 15, 1993 to the Joint Venture
Agreement between Nevada Landing Partnership and RBG,
L.P. (Incorporated by reference to Exhibit 10(h) to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended July 31, 1995.)
10(uu). Amendment dated October 6, 1994 to the Joint Venture
Agreement between Nevada Landing Partnership and RBG,
L.P. (Incorporated by reference to Exhibit 10(i) to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended July 31, 1995.)
10(vv). Amendment dated June 1, 1995 to the Joint Venture
Agreement between Nevada Landing Partnership and RBG,
L.P. (Incorporated by reference to Exhibit 10(j) to the
Company's Quarterly Report on Form 10-Q for the quarterly
period ended July 31, 1995.)
10(ww). Amendment dated February 28, 1996 to the Joint Venture
Agreement between Nevada Landing Partnership and RBG,
L.P.
10(xx). Reducing Revolving Loan Agreement, dated as of December
21, 1994, among Victoria Partners, each bank party
thereto, The Long-Term Credit Bank of Japan, Ltd., Los
Angeles Agency, and Societe Generale, as Co-agents, and
Bank of America National Trust and Savings Association,
as Administrative Agent (without Schedules or Exhibits)
(the "Victoria Partners Loan Agreement"). (Incorporated
by reference to Exhibit 99.2 to Amendment No. 1 on Form
8-K/A to the Current Report on Form 8-K dated December 9,
1994 of Mirage Resorts, Incorporated. Commission File
No. 1-6697.)
10(yy). Amendment No. 1 to the Victoria Partners Loan Agreement,
dated as of January 31, 1995. (Incorporated by reference
to Exhibit 10(uu) to the Annual Report on Form 10-K for
the year ended December 31, 1994 of Mirage Resorts
Incorporated. Commission File No. 1-6697.)
10(zz). Amendment No. 2 to the Victoria Partners Loan Agreement,
dated as of June 30, 1995. (Incorporated by reference to
Exhibit 10.1 to the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1995 of Mirage Resorts,
Incorporated. Commission File No. 1-6697.)
10(aaa). Amendment No. 3 to the Victoria Partners Loan Agreement,
dated as of July 28, 1995. (Incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1995 of Mirage Resorts,
Incorporated. Commission File No. 1-6697.)
10(bbb). Amendment No. 4 to the Victoria Partners Loan Agreement,
dated as of October 16, 1995. (Incorporated by reference
to Exhibit 10(a) to the Company's Quarterly Report on
Form 10-Q for the quarterly period ended October 31,
1995.)
10(ccc). Joint Venture Agreement, dated as of December 9, 1994,
between MRGS Corp. and Gold Strike L.V. (without Exhibit)
(the "Victoria Partners Venture Agreement").
(Incorporated by reference to Exhibit 99.1 to the Current
Report on Form 8-K dated December 9, 1994 of Mirage
Resorts, Incorporated. Commission File No. 1-6697.)
10(ddd). Amendment No. 1 to the Victoria Partners Venture
Agreement dated as of April 17, 1995. (Incorporated by
reference to Exhibit 10(c) to the Quarterly Report on
Form 10-Q for the quarterly period ended March 31, 1995
of Mirage Resorts, Incorporated. Commission File No. 1-
6697.)
10(eee). Amendment No. 2 to the Victoria Partners Venture
Agreement dated as of September 25, 1995. (Incorporated
by reference to Exhibit 10.4 to the Quarterly Report on
Form 10-Q for the quarterly period ended September 30,
1995 of Mirage Resorts Incorporated. Commission File No.
1-6697.)
10(fff). Amendment No. 3 to the Victoria Partners Venture
Agreement dated as of February 28, 1996.
10(ggg). Consulting Agreement, dated June 1, 1995, between Circus
Circus Casinos, Inc. (a subsidiary of the Company) and
Lakeview Company.
13. Portions of the Annual Report to Stockholders for the
Year Ended January 31, 1996 specifically incorporated by
reference as part of this Report.
21. Subsidiaries of the Company.
23. Consent of Arthur Andersen LLP. (See page 64.)
27. Financial Data Schedule for the year ended January 31,
1996 as required under EDGAR.
_____________
* This exhibit is a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Report.
Certain instruments with respect to long-term debt have not
been filed hereunder or incorporated by reference herein where the
total amount of such debt thereunder does not exceed 10% of the
consolidated total assets of the Company. Copies of such
instruments will be furnished to the Securities and Exchange
Commission upon request.
(b) During the fourth quarter of the fiscal year ended
January 31, 1996, the Company filed no Current Report on Form 8-K.
(c) The exhibits required by Item 601 of Regulation S-K filed
as part of this Report or incorporated herein by reference are
listed in Item 14(a)(3) above, and the exhibits filed herewith are
listed on the Index to Exhibits which accompanies this Report.
(d) See Item 14(a)(2) of this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CIRCUS CIRCUS ENTERPRISES, INC.
Dated: April 29, 1996 By: Clyde T. Turner
Clyde T. Turner, Chairman
of the Board
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
Clyde T. Turner Chairman of the Board April 29, 1996
Clyde T. Turner and Chief Executive
Officer (Principal
Executive Officer)
Michael S. Ensign Vice Chairman and April 29, 1996
Michael S. Ensign Chief Operating Officer
William A. Richardson Executive Vice President April 29, 1996
William A. Richardson
Glenn W, Schaeffer President and Chief April 29, 1996
Glenn W. Schaeffer Financial Officer
(Principal Financial
Officer)
Kurt Sullivan Director April 29, 1996
Kurt Sullivan
Les Martin Controller (Principal April 29, 1996
Les Martin Accounting Officer)
Tony Coehlo Director April 29, 1996
Tony Coehlo
Carl F. Dodge Director April 29, 1996
Carl F. Dodge
SIGNATURES (cont.)
Signature Title Date
William N. Pennington Director April 29, 1996
William N. Pennington
Arthur M. Smith, Jr. Director April 29, 1996
Arthur M. Smith, Jr.
Fred W. Smith Director April 29, 1996
Fred W. Smith
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated February 28, 1996 included (or
incorporated by reference) in Circus Circus Enterprises, Inc.'s
Annual Report on Form 10-K for the year ended January 31, 1996,
into the Company's previously filed Form S-8 Registration
Statements File Nos. 2-91950, 2-93578, 33-18278, 33-29014, 33-
39215, 33-56420 and 33-53303 and to the Company's previously
filed Form S-3 Registration Statement File No. 33-65359.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
April 25, 1996
INDEX TO EXHIBITS
FORM 10-K
Fiscal Year Ended
January 31, 1996
Exhibit
Number
3(ii). Restated Bylaws of the Company dated February 29, 1996.
4(c). Amendment No. 1 to the $1.5 Billion Loan Agreement, by
and among the Company, the Banks named therein and Bank
of America National Trust and Savings Association, as
administrative agent for the Banks.
10(oo).* Employment Agreement dated June 1, 1995, by and between
the Company and Antonio C. Alamo.
10(pp).* Employment Agreement dated June 1, 1995, by and between
the Company and Gregg H. Solomon.
10(qq).* Employment Agreement dated June 1, 1995, by and between
the Company and Daniel N. Copp.
10(rr).* Employment Agreement dated April 15, 1996, by and
between the Company and Daniel N. Copp.
10(ww). Amendment dated February 28, 1996 to the Joint Venture
Agreement between Nevada Landing Partnership and RBG,
L.P.
10(fff). Amendment No. 3 to the Victoria Partners Venture
Agreement dated February 28, 1996.
10(ggg). Consulting Agreement, dated June 1, 1995, between
Circus Circus Casinos, Inc. (a subsidiary of the
Company) and Lakeview Company.
13. Portions of the Annual Report to Stockholders for
the Year Ended January 31, 1996 specifically
incorporated by reference as part of this Report.
21. Subsidiaries of the Company.
23. Consent of Arthur Andersen LLP.
27. Financial Data Schedule for the year ended January 31,
1996 as required under EDGAR.