For eight years the Fishman brothers struggled selling memberships in Players Club, a sort of discount travel service for medium-stakes gamblers. Even with actor Telly Savalas pitching the club on late-night television commercials, their company, Players International Inc., mostly swallowed losses.
But now their luck seems to have changed. Last February, the Calabasas-based company stopped marketing its club and teamed up with celebrity Merv Griffin in launching a riverboat casino in Metropolis, a town of 6,700 at the southern tip of Illinois. Since then, Players has been on a hot streak, although analysts warn that in the long run the company faces a potentially saturated market.
On Monday, Players reported a profit of $6.3 million on revenue of $18.3 million in its fiscal first quarter ended June 30. That included a $3.5 million tax credit for a change in its accounting method. Still, it's not bad for a company that lost $11 million in its fiscal year ended March 30, when Players was restructuring.
Its stock, which had languished at a couple bucks per share during most of the 1990s, shot up to $20 this summer. It closed Monday at $18.38 a share, up 25. And last month Players raised $87.5 million by selling new shares of stock to the public. Even the great Midwestern deluge missed Players' riverboat in Metropolis, which docks on the Ohio River, about 45 miles from the flood zone.
"We haven't even had any rain recently" in Metropolis, said Ed Fishman, 50, Players' chairman and chief executive. His brother, David, 45, who is vice chairman, added: "Last couple of years it was very difficult with the recession. But we saw the riverboat casino industry coming alive. I'd say our luck's changed."
Riverboat gambling has indeed come alive--and quickly. It was only in April, 1991, that the first riverboat casino in decades emerged on the Mississippi River in Iowa. Since then five more states have approved riverboat gambling. Now about 20 riverboat casinos are operating, and that number is likely to double in a year.
Players plans to open its second riverboat casino, in Lake Charles in southwestern Louisiana, by year's end. The company is spending $27 million to build a 24,000-square-foot riverboat, which will be filled with 800 slot machines and 45 table games. Players is also in the hunt for a casino license from Indiana, the latest state to approve riverboat gaming.
