The struggle for control of the yet to be completed Orange County Casino in French Lick could give us some insight to the value of the Grand Victoria when it goes on the market next month.
The Indianpolis Star reports that the casino-resort project in French Lick is projected to generate $120.6 million in gambling revenue and send $30 million or more in tax revenue to state and local governments. By 2011, gambling revenue is estimated to grow grow to $136 million, according to figures released by the Indiana Gaming Commission. The numbers come from a forecast made for the companies by The Innovation Group, a national casino consulting firm, in November 2005.
The real fight is over anticipated cash flow which could be anywhere between $40 million and $70 million a year. Cash flow is a business' profits before it pays debt interest, taxes, depreciation and amortization, is a key figure to determine the overall value of a business. Casinos recently have sold at prices that are 8.5 to 9.1 times higher than annual cash flow. So the Orange County casino-resort may be worth about $340 million to $620 million. That's quite a range.
The Grand Victoria has shown a growth in gaming revenue from $138 million in FY 2003 to $148.8 million in FY 2005, or a total of 8% over two years. In comparison, Belterra grew its revenues 24% to $156.2 million over the same period, while Argosy improved 13.4% to a whopping $444.5 million. Still Grand Vic's gaming revenues last year exceeded those anticipated for the Orange County casino.
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