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As filed with the Securities and Exchange Commission on August 6, 1996
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
CASINO AMERICA, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1659606
(State of incorporation) (I.R.S. Employer
Identification Number)
711 Washington Loop
Biloxi, Mississippi 39530
(601) 436-7000
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
Allan B. Solomon
Executive Vice President and General Counsel
2200 Corporate Boulevard, N.W.
Boca Raton, Florida 33431
(407) 995-6660
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
____________________________
Copies to:
Paul W. Theiss
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE (1) OFFERING PRICE (1) FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock par value $0.01 per share 3,583,334 shares $21,500,004 $21,500,004 $7,413.79
==================================================================================================================
(1) Estimated solely for purposes of determining the registration fee.
</TABLE>
____________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED August 6, 1996
3,583,334 Shares
Casino America, Inc.
Common Stock
(par value $0.01 per share)
_______________________
The 3,583,334 shares (the "Shares") of common stock, par value $0.01
(the "Common Stock"), of Casino America, Inc. (the "Company") offered
hereby consist of (i) 1,850,000 shares of Common Stock issued to Crown
Casino Corporation ("Crown Casino") on May 3, 1996 in connection with the
SCGC Acquisition (as herein defined) (the "Crown Casino Shares"), (ii)
833,334 shares of Common Stock issuable to Crown Casino in the event of the
exercise by Crown Casino of two Warrants to Purchase Common Stock held by
Crown Casino (the "Crown Casino Warrant Shares"), and (iii) 900,000 shares
of Common Stock issuable to various individuals either presently or
formerly affiliated with the Edward J. DeBartolo Corporation (the
"DeBartolo Warrantholders," and collectively with Crown Casino, the
"Selling Stockholders") in the event of the exercise by the DeBartolo
Warrantholders of six Warrants to purchase Common Stock held by them (the
"DeBartolo Warrant Shares"). The Shares are being sold for the account of
the Selling Stockholders, and the Company will not receive any proceeds
from the sale of the Shares.
The Selling Stockholders have advised the Company that they may from
time to time offer and sell the Shares on the Nasdaq National Stock Market
or otherwise at market prices then prevailing or at prices and upon terms
then obtainable. Sales may be made in ordinary brokerage transactions, in
block transactions, in privately negotiated transactions, pursuant to Rule
144 ("Rule 144") under the Securities Act of 1933, as amended (the
"Securities Act") or otherwise. Expenses of registering the Shares for
sale will be paid as set forth in "Plan of Distribution" on page 13.
On August 2, 1996, the last reported sale price of the Common Stock on
the Nasdaq National Stock Market was $7.375 per share.
See "Risk Factors" beginning on page 6 for certain information that
should be considered relating to an investment in the Common Stock.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
______________________
The date of this Prospectus is _____, 1996
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offering
covered by this Prospectus. If given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell, or a solicitation
of an offer to buy, any of the securities covered by this Prospectus in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
been any change in the facts set forth in this Prospectus or in the affairs of
the Company since the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy material and other information
concerning the Company can be inspected and copied at the office of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or at its regional
offices, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661 and
Seven World Trade Center, New York, New York 10048 and at the Commission's World
Wide Web site at http://www.sec.gov. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a registration statement on Form
S-3 (together with all amendments and exhibits, the "Registration Statement")
under the Securities Act, with respect to the Common Stock offered hereby. This
prospectus ("Prospectus"), which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain items of which are
contained in exhibits to the Registration Statement as permitted by the rules
and regulations of the Commission. Statements made in this Prospectus as to the
content of any contract, agreement or other document referred to are not
necessarily complete. With respect to each such contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the Registration Statement, which may be inspected and copied in the manner and
at the sources described above.
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INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated herein by reference (File No. 0-20030):
(1) The Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1996.
(2) The Company's Current Report on Form 8-K, dated May 17, 1996 (as
amended by amendments thereto dated June 4, 1996 and June 28, 1996) (Date of
earliest event reported: May 3, 1996).
(3) The Company's Current Report on Form 8-K, dated July 3, 1996 (Date of
earliest event reported: July 3, 1996).
(4) The Company's Current Report on Form 8-K, dated July 24, 1996 (Date of
earliest event reported: July 12, 1996).
Also incorporated by reference are the financial statements of St. Charles
Gaming Corporation, Inc., included in the Company's prospectus dated August 1,
1996 filed pursuant to Rule 424(b)(1).
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
made hereby shall be deemed to be incorporated by reference into this Prospectus
and to be a part hereof. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is, or
is deemed to be, incorporated by reference herein modifies or supersedes any
such statement. Any such statement so modified or superseded will not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of Common Stock, to whom this Prospectus is delivered, on the
request of such person, a copy of any of the foregoing documents incorporated
herein by reference (other than the exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents).
Written or telephone requests should be directed to Casino America, Inc. at its
principal executive offices, 711 Washington Loop, Biloxi, Mississippi 39530,
Attention: Chief Financial Officer (telephone number (601) 436-7000).
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THE COMPANY
Casino America, Inc. is a leading developer, owner and operator of dockside
and riverboat casinos and related facilities in the United States. All of the
Company's properties are based on a tropical island theme and operate under the
"Isle of Capri Casino" name. The Company currently owns and operates dockside
casinos in Biloxi and Vicksburg, Mississippi (the "Isle-Biloxi" and the "Isle-
Vicksburg"), a dockside riverboat casino in Bossier City, Louisiana (the "Isle-
Bossier City") and two riverboat casinos and related facilities and amenities on
a site one mile from Lake Charles, Louisiana (the "Isle-Lake Charles"). The
Company's 50% partner in Louisiana Riverboat Gaming Partnership ("LRGP")
beneficially owns 50% of the Isle-Bossier City and 25% of one of the two
riverboats at the Isle-Lake Charles. On July 2, 1996, the Company entered into
an agreement to purchase its partner's interest in LRGP. See "Recent
Developments-- LRGP Acquisition." The other riverboat at the Isle-Lake Charles
(the "Grand Palais Riverboat") began operations on July 12, 1996 as part of a
two-riverboat operation at the site of the Isle-Lake Charles in July 1996.
Shreveport/Bossier City is currently the closest casino gaming market to the
Dallas/Ft. Worth, Texas metropolitan area. Lake Charles is currently the closest
casino gaming market to the Houston, Texas metropolitan area. The Company also
owns and operates Pompano Park, a harness racing track in Pompano Beach,
Florida, midway between Miami and West Palm Beach off of Interstate 95.
The address of the principal executive office of the Company is 711
Washington Loop, Biloxi, Mississippi 39530, and the telephone number of the
Company is (601) 436-7000.
Recent Developments
LRGP Acquisition
On July 2, 1996, the Company agreed to acquire the remaining 50% interest
in LRGP held by Louisiana River Site Development, Inc. ("LRSD"). The
consideration for the LRGP Acquisition will be (i) $85 million in cash payable
at closing, (ii) five-year warrants to purchase 500,000 shares of the Company's
Common Stock at an exercise price of $10.50 per share delivered at closing and
(iii) $1.5 million per year for seven years, payable monthly beginning on
October 1, 1998. The Company escrowed 625,000 shares of Common Stock
(for which the Company has the right to substitute $5 million in cash), some or
all of which will be forfeited if the Company does not fulfill its obligation to
close the transaction by October 1, 1996, as such date may be extended. The
Company has the right to extend the deadline to December 1, 1996, provided that
it pays to LRSD its 50% share of LRGP's net income for the period from and after
October 1, 1996 until closing or termination, plus $166,667 per month. The
Company expects that the LRGP Acquisition will be consummated concurrently with
the Debt Offering (as defined) on or about August 6, 1996.
Hotel Joint Venture
On June 18, 1996, the Company entered into a letter of intent to form a
joint venture (the "Hotel Joint Venture") with H.I. Development Corporation, an
experienced developer of hotel properties, and certain of its affiliates ("H.I.
Development"). The purpose of the Hotel Joint Venture will be to develop, own
and operate hotel properties adjacent to the Isle-Bossier City and the Isle-Lake
Charles and, in the event the Company elects to develop a casino there, in
Cripple Creek, Colorado. The letter of intent provides that the Company and H.I.
Development will each contribute approximately $10 million
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in assets to the Hotel Joint Venture. The Company's contribution is expected to
consist of cash, certain land or other property. There can be no assurance that
the Company will consumate the transactions contemplated by the letter of intent
with H.I. Development.
Grand Palais Acquisition
On May 3, 1996, the Company purchased all of the outstanding common stock of
Grand Palais Riverboat, Inc. ("GPRI") in a bankruptcy proceeding under Chapter
11 of the United States Bankruptcy Code (the "GPRI Acquisition"). GPRI owns the
Grand Palais Riverboats, gaming equipment, certain other furniture, fixtures and
equipment, all necessary gaming licenses issued by the State of Louisiana and
other permits and authorizations. The aggregate consideration paid by the
Company in connection with the Grand Palais Acquisition was approximately $62.4
million, consisting of approximately $8.4 million in cash, approximately $37.9
million in promissory notes and assumed indebtedness and 2,250,000 shares of
Common Stock and five-year warrants to purchase an additional 500,000 shares of
Common Stock at an exercise price of $10.00 per share.
The Company operates the Grand Palais Riverboat as part of a two-riverboat
operation sharing a single land-based facility, managed by the Company's
management subsidiary. Because the Company owns 100% of the Grand Palais
Riverboat and owns 75% of the other riverboat at the Isle-Lake Charles (of which
a 25% interest is owned through the Company's interest in LRGP) pending the
consummation of the LRGP Acquisition, the Company and its partner in LRGP have
agreed to a joint operating arrangement for the two riverboats that effectively
pools revenues and expenses for the two riverboats. The Company has agreed with
the State of Louisiana to hold the excess cash flow (as defined in such
agreement) generated by GPRI during its first six months of operation in a
special escrow account.
SCGC Acquisition
On May 3, 1996, the Company purchased from Crown Casino the remaining 50%
interest in SCGC (the other 50% of which is owned by LRGP), in exchange for
1,850,000 shares of Common Stock, a five-year warrant to purchase an additional
416,667 shares of Common Stock at an exercise price of $12.00 per share ("the
New Crown Warrant") and the restructuring of certain indebtedness owed to Crown
Casino (the "SCGC Acquisition").
Goldstein Family Equity Purchase and Rights Offering
On March 11, 1996, the Company sold an aggregate of 1,020,940 shares of its
Common Stock, at a price of $5.875 per share, to Bernard Goldstein, the Chairman
and Chief Executive Officer of the Company, and three members of his family (the
"Goldstein Family Equity Purchase"). Proceeds from the sale totaled
approximately $6.0 million. A portion of the proceeds was used to retire
approximately $1.6 million in loans payable to Mr. Goldstein and a related
party, which amount includes accrued interest.
In connection with the Goldstein Family Equity Purchase, the Company issued to
its shareholders (other than those shareholders participating in the Goldstein
Family Equity Purchase), and certain other of its security-holders, rights
("Rights") to purchase up to 4,296,085 shares of Common Stock (pursuant to a
registration statement declared effective by the Commission on July 2, 1996) at
the same price, and in the same pro rata amount, as shares purchased in the
Goldstein Family Equity Purchase (the "Rights Offering"). The Rights expired on
July 26, 1996 (except with respect to certain Rights exercisable by Crown
Casino, as to which the Company has agreed to an extended exercise period). As
of the close of business on August 5, 1996, 3,079,980 shares of Common Stock
were expected to be issued in connection with the Rights Offering (including
684,786 Rights exercisable by Crown Casino, as to which Crown Casino has
informed the Company of its intent to exercise such Rights Concurrently with
the consummation of the Debt Offering (as defined below)), resulting in net
proceeds of approximately $18.1 million.
Proposed Refinancing
On July 3, 1996, the Company filed a registration statement with the
Commission relating to the proposed issuance by the Company of $300 million of
Senior Secured Notes due 2003 (the "Debt Offering"). On August 1, 1996, the
Company announced the pricing of the Debt Offering with the Notes to bear
interest at 12 1/2%, and increased the size of the offering to $315 million; the
Debt Offering is expected to close on or about August 6, 1996. The proceeds of
the Debt Offering, if it is consummated, are expected to be used for the
purposes set forth in such registration statement, including to refinance the
Company's outstanding 11 1/2% First Mortgage Notes due 2001 (the "First Mortgage
Notes") and to finance the LRGP Acquisition. There can be no assurance that the
Debt Offering (and therefore the LRGP Acquisition) will be completed, or that
the Debt Offering will be consummated on terms favorable to the Company.
First Mortgage Notes Retirement
The defeasance provisions of the indenture governing the First Mortgage
Notes (the "First Mortgage Notes Indenture") were amended (the "Amendment") on
July 26, 1996 to allow the Company to effect a defeasance or covenant defeasance
of the First Mortgage Notes concurrently with the closing of the Debt Offering
by depositing in trust (with the First Mortgage Notes trustee) proceeds
therefrom sufficient to repay the First Mortgage Notes outstanding, which
deposit would result in a release of the security interest in collateral
securing the First Mortgage Notes. The Amendment became effective on July 26,
1996, but will become null if the Company has not consummated the First Mortgage
Notes Retirement prior to 5:00 p.m., New York City time, on August 23, 1996. The
Company has entered into agreements for the purchase of the First Mortgage Notes
held by certain holders and may contact other holders of First Mortgage Notes
for the purpose of entering into similar agreements. Concurrently with the
closing of the Debt Offering, the Company intends to consummate each agreement
to purchase First Mortgage Notes and to effect a covenant defeasance of any of
the First Mortgage Notes not so purchased (the "First Mortgage Notes
Retirement"). Completion of the First Mortgage Notes Retirement is subject to
certain conditions, including, but not limited to, consummation of the Debt
Offering. The consummation of the Debt Offering is subject to the consummation
of the First Mortgage Notes Retirement. The total cost to effect the First
Mortgage Notes Retirement is expected to be approximately $116.5 million.
5
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RISK FACTORS
Prospective purchasers should consider carefully the following factors,
together with other information contained in this Prospectus, in evaluating an
investment in the Common Stock.
LOCAL OPTION REFERENDUM REGARDING CONTINUATION OF LEGALIZED GAMING IN LOUISIANA
On April 19, 1996, the Louisiana legislature approved legislation mandating
local option elections on a parish-by-parish basis to determine whether to
prohibit or continue to permit three individual forms of gaming in Louisiana.
The referendum is scheduled to be brought before the Louisiana voters on a
parish-by-parish basis at the time of the 1996 presidential election and will
determine whether each of the following forms of gaming will be prohibited or
permitted: (i) the operation of video draw poker devices in each parish; (ii)
the conduct of riverboat gaming in each parish that is contiguous to a
statutorily designated river or waterway; or (iii) the conduct of land-based
casino gaming operations in Orleans Parish. Accordingly, on November 5, 1996, it
is expected that voters in Bossier Parish (the site of the Isle-Bossier City)
and Calcasieu Parish (the site of the Isle-Lake Charles) will be voting "yes"
or "no" on the following proposition (and in appropriate parishes as to
similar propositions regarding land-based casino gaming and video draw poker
devices): "Within [name of parish], shall riverboat gaming activities be
permitted?"
The legislation requires a majority of the votes cast on such proposition to
be cast in favor of a particular form of gaming in order to continue that form
of gaming in the affected parish. Accordingly, the continuation of gaming
activities at the Isle-Bossier City requires such approval from a majority of
voters in Bossier Parish voting on such proposition and the continuation of
gaming activities at the Isle-Lake Charles requires such approval from a
majority of voters in Calcasieu Parish voting on such proposition. In the event
that the riverboat gaming proposition is defeated in a parish, the legislation
permits a licensee operating therein to continue operations in that parish
through the expiration of its current license. The current license of the Isle-
Bossier City expires in December 1998, and the two licenses of the Isle-Lake
Charles expire in March 1999 and May 2001, respectively. Alternatively, a
licensee operating in a parish where riverboat gaming is defeated may seek
permission to relocate its vessel and license to a parish where the continuation
of riverboat gaming has been approved, if any (excluding certain portions of
Lake Ponchartrain).
The discontinuation of riverboat gaming in Bossier Parish or Calcasieu Parish
would have a material adverse effect on the Company and may affect the ability
of the Company to make interest payments on its indebtedness when due or repay
the principal thereof on its maturity date and may have a material adverse
effect on the price of the Common Stock. In the event that the continuation of
riverboat gaming is not approved in the November 5, 1996 election in either
Bossier Parish or Calcasieu Parish, there can be no assurance that the Company
will be able to obtain the necessary approvals to relocate its riverboat gaming
facilities at the Isle-Bossier City or the Isle-Lake Charles, as the case may
be, to parishes where the continuation of riverboat gaming was approved, or that
any such relocation will be cost-effective for the Company. In addition, in the
event that the continuation of riverboat gaming is approved in Bossier Parish or
Calcasieu Parish, but not in another parish where riverboat gaming is presently
conducted, licensees presently conducting riverboat gaming in such parishes may
seek to relocate their operations to Bossier Parish or Calcasieu Parish, leading
to increased competition for the Company. See "--Competition."
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VOLATILITY OF STOCK PRICE
The trading price of the Common Stock has been and could continue to be
subject to wide fluctuations, based upon, among other things, quarter-to-quarter
variations in the Company's operating results, the success or failure of the
Company's efforts to expand into additional venues and investor opinions with
respect to the gaming industry. The market prices of securities of companies
whose future operating results are highly dependent on specific developments
such as the passage or defeat of particular legislation are often particularly
volatile, such as that described above under ''Local Option Referendum Regarding
Continuation of Legalized Gaming in Louisiana.'' In addition, the stock market
generally, and the gaming industry in particular, have experienced extreme price
and volume fluctuations, in a manner which has often been unrelated to the
operating performances of individual companies. A shift in investor interest
away from gaming industry stocks could adversely affect the trading price of the
Common Stock in a manner unrelated to the Company's operating performance. See
''Description of Capital Stock--Common Stock Market Price Information.''
COMPETITION
General. Competition in the gaming industry is intense in the markets where
the Company operates gaming facilities. As new gaming opportunities arise in
existing gaming jurisdictions, in new gaming jurisdictions and on Indian-owned
lands, new or expanded operations by others can be expected to increase
competition for the Company's existing and future operations and could limit new
opportunities for the Company or result in the saturation of certain gaming
markets. Casino gaming does not have a long operating history in the
jurisdictions where the Company operates gaming facilities and, therefore, the
effects of competition in these jurisdictions cannot be predicted with any
degree of certainty. Many of the Company's competitors have more gaming industry
experience, are larger and have greater financial resources than the Company. As
a result, increased competition could have a material adverse effect on the
Company.
Bossier City Operations. The Isle-Bossier City is one of three comparably
sized gaming facilities currently licensed and operating in the
Shreveport/Bossier City market, all of which opened between April and July 1994
and each of which has comparable amenities. The Isle-Bossier City will face
increased competition from existing competitors to the extent that they add to
or enhance existing amenities. In that regard, Binion's Horseshoe Casino
recently broke ground on a 606-room all suites hotel at its dockside riverboat
casino location in Bossier City. In addition to existing competition, the
granting of additional gaming licenses in the Shreveport/Bossier City market or
the relocation of existing licenses to that market from elsewhere in the State
of Louisiana would increase competition for the Isle-Bossier City. In that
regard, Casino Magic Corp. was recently granted a license to operate a gaming
facility in the Shreveport/Bossier City market, which facility is to be located
less than 1/2 mile from the site of the Isle-Bossier City. In addition, the
Company believes that Binion's Horseshoe Casino will seek approval to obtain a
license to operate an additional dockside riverboat casino at its existing site,
making it likely in management's opinion that at least a fifth dockside
riverboat casino (operated by Binion's Horseshoe Casino or another operator)
eventually will be operating in the Shreveport/Bossier City market, where only
three currently operate. Moreover, the legalization of casino gaming in Texas
would have a material adverse effect on the Isle-Bossier City.
Lake Charles Operations. The Isle-Lake Charles is one of two riverboat gaming
facilities operating in the Lake Charles, Louisiana market. The Isle-Lake
Charles' riverboat competitor, Players International, operates two riverboats
and a 134-room hotel facility from a single location in the City of Lake Charles
approximately two miles from the site of the Isle-Lake Charles. In addition, a
land-based, Indian-owned casino with approximately 68,500 square feet of gaming
space is operating in Kinder, Louisiana, approximately 35 miles to the
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northeast of the Isle-Lake Charles. Riverboats in the Lake Charles market are
subject to cruising requirements, which makes a land-based casino more desirable
to many gaming customers. Players International and the Company each hold two
gaming licenses and operate two riverboats from a single facility. (Louisiana,
unlike certain other jurisdictions, does not permit license holders to operate a
second boat out of the same location without a gaming license for each boat.)
However, because of a limited operating history at the Isle-Lake Charles with a
temporary land-based pavilion and because, prior to July 12, 1996, only one
riverboat operated at the site of the Isle-Lake Charles, the Company's
expectations regarding such operation are not based on historical operating
results. In addition to existing competition, the granting of additional gaming
licenses in the Lake Charles market or the relocation of existing licenses from
elsewhere in the State of Louisiana to that market would increase competition
for the Isle-Lake Charles. Moreover, the legalization of casino gaming in Texas
would have a material adverse effect on the Isle-Lake Charles.
See "--Legislative and Regulatory Considerations."
Biloxi Operations. Twelve gaming facilities (including the Isle-Biloxi),
with an aggregate of approximately 560,000 square feet of casino floor space,
are located along the Mississippi Gulf Coast. Eight facilities are located in
Biloxi and collectively account for approximately 360,000 square feet of casino
floor space. Two of the other four facilities are located in Gulfport,
approximately 10 miles from Biloxi, and the other two are located in Bay St.
Louis and Lakeshore (the gaming operations of such casino have been temporarily
suspended as of July 16, 1996), each approximately 30 miles from Biloxi. Because
Mississippi law does not limit the number of gaming licenses that may be
granted, there may be increases in the number of gaming facilities along the
Mississippi Gulf Coast and the surrounding areas, which could have a material
adverse effect on the Isle-Biloxi. In addition, the Company believes that many
of its competitors will add to or enhance their existing amenities and new
competitors will enter the Mississippi Gulf Coast market. Mirage Resorts, Inc.
has announced plans and received a gaming license to open a ''Golden Nugget''
casino and resort complex in Biloxi, at a site approximately two miles from the
Isle-Biloxi, in late 1997. In addition, an ''Imperial Palace'' casino is
currently being built and will be located on the Back Bay in Biloxi,
approximately three miles from the Isle-Biloxi. Both such developments are
expected to include substantial hotel facilities. Certain existing and future
competitors have more extensive financial resources than does the Company.
Intense competition on the Mississippi Gulf Coast has contributed to the closure
of two gaming facilities (and the temporary closure of a third) in that area and
two others are operating under bankruptcy protection. In addition, the
legalization of casino gaming in Alabama would increase competition for, and
could have a material adverse effect on, the Isle-Biloxi.
Vicksburg Operations. The Isle-Vicksburg is one of four gaming facilities
currently operating an aggregate of approximately 105,000 square feet of casino
floor space in the Vicksburg area. The Isle-Vicksburg is the second largest
casino in the Vicksburg area. Two competitors have hotels at their site and the
competitor closest to the Isle-Vicksburg has a hotel within 1/2 mile of its
casino. (The Isle-Vicksburg does not contain a hotel, but operates a 67-space
recreational vehicle park located 1/2 mile from its facilities.) Other local
casino competition includes one gaming facility in Natchez, Mississippi
(approximately 60 miles south of Vicksburg and 80 miles southwest of Jackson);
two gaming facilities in Greenville, Mississippi, with another under
construction (approximately 80 miles north of Vicksburg and 90 miles northwest
of Jackson); and a land-based, Indian-owned casino near Philadelphia,
Mississippi (approximately 115 miles northeast of Vicksburg and 70 miles
northeast of Jackson). Because Mississippi does not limit the number of gaming
licenses that may be granted, there may be increases in the number of gaming
facilities in Vicksburg and elsewhere in counties bordering the Mississippi
River, which could have a material adverse effect on the Isle-Vicksburg. While
the Mississippi statutes specify that gaming may only be held on the Mississippi
River and on navigable waters within counties bordering the Mississippi River,
several controversies have arisen concerning the exact permissible locations of
casinos within this statutory language. Specifically, there have been several
attempts to expand gaming as far east of the Mississippi River as possible,
including a recent request for the Mississippi Gaming Commission to consider
approving the location of a casino on the eastern border of Warren County. It is
likely that these controversies and efforts to expand gaming east of the
Mississippi River will continue. In the event sites are approved in the eastern
part of Warren County, in which the Isle-Vicksburg is located, the Isle-
Vicksburg could be adversely affected.
8
<PAGE>
LEVERAGE AND DEBT SERVICE
The ability of the Company to meet its debt service requirements and engage in
various significant corporate transactions that may be important to its business
will be dependent upon its future operating performance, which is subject to
financial, economic, competitive, regulatory and other factors affecting the
Company, many of which are beyond the Company's control. While the Company
expects that its cash flow from operations will be sufficient to cover its
expenses, including interest expense, there can be no assurance with respect
thereto. If the Company is unable to generate sufficient cash flow, it could be
required to adopt one or more alternatives, such as reducing or delaying planned
capital expenditures, selling assets, restructuring debt or obtaining additional
capital. There can be no assurance that any of such alternatives will be
feasible on satisfactory terms, and resorting to such alternatives could impair
the Company's competitive position and reduce its future cash flow. In this
regard, the Company anticipates that it will need to make significant capital
expenditures with respect to its current operations in order for those
facilities to remain competitive with existing and expected new competitors in
those markets. The Indenture relating to the Company's outstanding First
Mortgage Notes contains certain restrictions which may limit the Company's
ability to incur indebtedness to make such capital expenditures. In addition,
the highly leveraged position of the Company may adversely affect its ability to
obtain additional financing to make investments in its current operations or to
pursue future gaming opportunities. See "--Potential Need for Additional
Financing."
LEGISLATIVE AND REGULATORY CONSIDERATIONS
Texas and Alabama Legalization Risks. Casino gaming is currently prohibited
in several jurisdictions adjacent to Louisiana and Mississippi. As a result,
residents of these jurisdictions, principally Texas and Alabama, comprise a
significant portion of the customers of the Isle-Bossier City and the Isle-Lake
Charles (in the case of Texas) and the Isle-Biloxi (in the case of Alabama).
Although casino gaming is not currently permitted in Texas and the Texas
Attorney General has issued an opinion that gaming in Texas would require an
amendment to the Texas Constitution, the Texas legislature has considered
various proposals to authorize casino gaming. No gaming legislation was enacted
in the most recent legislative session ended May 29, 1995. A constitutional
amendment would require a two-thirds vote of those present and voting in each
house of the Texas legislature and approval by the electorate in a referendum.
The legalization of casino gaming in Texas at or near the primary market areas
of the Isle-Bossier City or the Isle-Lake Charles, including the Dallas/Ft.
Worth and Houston areas, would have a material adverse effect on the Company.
Casino gaming is currently illegal in Alabama due to a constitutional
prohibition against lotteries. Several attempts have been made to pass a
resolution of the Alabama legislature providing for a statewide referendum on
the repeal of the pertinent section of the Alabama Constitution prohibiting
lotteries (and thereby gaming). This action would require a three-fifths vote of
each house of the legislature, followed by a statewide referendum. Both the
Governor and the Attorney General of Alabama have stated their opposition to
legalized casino gaming, even though pari-mutuel wagering and limited charitable
bingo exist within the state. The legalization of casino gaming in Alabama would
have a material adverse effect on the Isle-Biloxi, both because the Mobile
metropolitan area is a major market for the Isle-Biloxi and because a
substantial portion of the Isle-Biloxi's customers are residents of areas east
of Mobile, including Florida and Georgia, and pass through the Mobile area when
traveling to Biloxi.
Expansion of Louisiana Gaming Activities and Possible Relocation of Existing
Licenses. Current Louisiana law limits to 15 the number of riverboat casino
licenses that may be granted. Four licenses have been allocated to the
Shreveport/Bossier City market (including the license allocated to the Isle-
Bossier City) and four licenses have been allocated to the Lake Charles market
(including the two licenses allocated to the Isle-Lake Charles); the
Shreveport/Bossier City market is comprised of two parishes. Under current
Louisiana law, up to six licenses may be granted to riverboats operating from
any one parish. There can be no assurance that future Louisiana legislation (or
any judicial determination) will not increase the total number of authorized
riverboat casino licenses or the
9
<PAGE>
number of licenses permitted in any parish. In addition, even without a change
in Louisiana law increasing the number of authorized riverboat casino licenses,
existing licenses may be relocated to other markets within Louisiana. Management
believes that the relative success of gaming operations in the
Shreveport/Bossier City and Lake Charles markets, as compared to other Louisiana
markets, may increase the possibility that existing licenses may be awarded in
or relocated to these markets, especially in the event other local parishes do
not permit riverboat gaming to continue in such parishes. See "--Option
Referendum Regarding Continuation of Legalized Gaming in Louisiana." However,
the relocation of existing licenses to another parish or of riverboats within
the same parish may be restricted by a constitutional amendment to be submitted
to a vote in Louisiana on September 21, 1996, which seeks to require, among
other things, a local parish-wide election to approve, by a majority of those
voting on the matter, the licensing of any additional riverboats in a parish
with existing licensed riverboats or relocating any operating riverboat to a
different berth in the same parish.
Limitation on New Gaming Venues. The Company intends to continue to pursue
potential gaming opportunities in states and other jurisdictions that have not
yet legalized gaming. The availability of new gaming opportunities is largely
dependent on the legalization of gaming in new jurisdictions; however, gaming is
prohibited throughout most of the United States and the recent trend toward
legalization has slowed and may continue to do so. There can be no assurance
that legislation to legalize gaming will be enacted or that gaming will be
permitted in any other states. No assurance can be given that attractive
opportunities to develop new operations will be available to the Company.
Nevertheless, due to the severe competition for potential new gaming
opportunities it is often necessary to commit resources before there can be any
assurance that gaming will be legalized at all or on terms that will enable the
Company to benefit from its activities and investments. Accordingly, the Company
may need to make investments which do not ultimately yield a gaming opportunity.
Need to Renew Licenses and Adverse Changes in Laws and Regulations. The
Company must obtain a gaming license for each location at which it operates a
casino facility. Generally, such licenses are for a fixed term and are subject
to renewal periodically. Licenses in Mississippi are issued for a two-year terms
and new licenses must be obtained at the end of such terms. Licenses in
Louisiana are issued for an initial five-year term with annual renewals
thereafter. The Company and each of its officers, directors, managers and
principal stockholders are subject to strict scrutiny and approval by the gaming
regulatory bodies of each jurisdiction in which the Company conducts or seeks to
conduct gaming operations. The issuance of a gaming license is considered a
privilege, not a right, and gaming licenses are subject to suspension,
limitation or revocation if regulatory requirements are not met. In addition to
licenses from state gaming regulatory agencies, casino operations also typically
require various local governmental approvals and riverboats require Federal and
state environmental approvals and approvals relating to operations in navigable
waters. The Company's license to operate the Isle-Bossier City will expire in
December 1998; the Company's license to operate the Isle-Biloxi will expire in
April 1998; the Company's license to operate the Isle-Vicksburg will expire in
February 1997; and the Company's licenses to operate the two riverboats
constituting the Isle-Lake Charles will expire in March 1999 and May 2001. The
loss or suspension of any present or future gaming license held by the Company,
the failure to obtain a gaming license from any state in which the Company plans
to open a gaming facility in the future, or the failure to obtain a new license
or the renewal of any license would have a material adverse effect on the
Company's business. In some circumstances, the loss of a license in one
jurisdiction may trigger the loss of a license or affect eligibility for a
license in another jurisdiction.
Recent Changes in Louisiana Regulatory Structure. In May 1996, the regulatory
oversight of riverboat gaming was transferred to the Louisiana Gaming Control
Board (the "Gaming Board"). The Gaming Board oversees all licensing matters
for riverboat casinos, the land-based casino in New Orleans, video poker, and
certain aspects of Indian gaming. The Gaming Board will be composed of nine
voting members appointed by the governor, five of whom have been appointed. The
Gaming Board held its first meeting on July 10, 1996, at which it adopted a set
of emergency rules conferring certain authority to the Chairman. On July 12,
1996, the Gaming Board (acting through the Chairman) issued all necessary
approvals to operate the Grand Palais and formally authorized the commencement
of gaming on the Grand Palais. Pursuant to that approval, the Grand Palais
opened on July 12, 1996.
10
<PAGE>
Effect on Holders of Common Stock. State gaming authorities, including those
in Mississippi and Louisiana, typically have discretionary authority to require
a holder of common stock to file an application, to be investigated and to be
found suitable as an owner or landlord of a gaming establishment. The gaming
laws and regulations of other jurisdictions in which the Company may seek or
obtain licenses may also contain restrictions on the ability of a person or
group to acquire or hold such securities or may require regulatory approval. In
addition, the federal Merchant Marine Act of 1936 and the federal Shipping Act
of 1916 and applicable regulations thereunder contain provisions designed to
prevent persons who are not citizens of the United States, as defined therein,
from holding in the aggregate more than 25% of the outstanding shares of Common
Stock. While individual holders of Common Stock beneficially owning an interest
of less than 5% in a licensee will generally not be required to be investigated
and found suitable, these gaming authorities retain the discretion to require an
investigation and a finding of suitability for any reason. Each holder of Common
Stock will be deemed to have agreed (to the extent permitted by law) that if the
relevant gaming authorities determine that the holder or beneficial owner of
such securities must be found suitable under applicable law, and if such holder
or beneficial owner is not found suitable, such holder will, upon the request of
the Company, dispose of such holder's securities within 30 days after receipt of
such request or within the time prescribed by the applicable gaming authorities,
whichever is earlier. Any holder of Common Stock required to apply for a finding
of suitability would be required to pay all investigative fees and costs of the
gaming authorities in connection with the investigation.
CONSTRUCTION AND DEVELOPMENT RISKS
Construction and development projects, such as any future hotel developments
or other land-based capital improvement projects that may be undertaken by the
Company, either alone or pursuant to a joint venture, entail significant risks,
including shortages of materials or skilled labor, unforeseen engineering,
environmental and geological problems, work stoppages, weather interference and
unanticipated cost increases. There can be no assurance that the Company will be
able to enter into contracts for the construction of future projects or that
such contracts will be on terms favorable to the Company. Moreover, the Company
believes that the development of hotel facilities and other capital improvement
projects are important to the economic success of its properties. Unexpected
development concessions required by local, state or federal regulatory
authorities could involve significant additional costs and delay the scheduled
opening of the planned facilities and any other facilities that the Company may
seek to develop in the future.
HOTEL BUSINESS AND JOINT VENTURE RISKS
The Company opened a 367-room hotel facility at the Isle-Biloxi on August 1,
1995. The Company anticipates that additional hotels will need to be developed
at its existing gaming facilities in order to remain competitive in those
markets. The Company intends to develop additional hotels either alone or with a
business partner or partners, such as in the Hotel Joint Venture. The Company
has limited experience in hotel development or operations and undertaking such
development, if any, will be subject to all of the risks inherent in the
establishment of a new enterprise. In addition, numerous permits and approvals
are required for the development of hotel projects, and no assurance can be
given that such permits and approvals can or will be obtained. Although the
Company may enter into management contracts with experienced hotel management
companies with respect to any future hotels, there can be no assurance that such
contracts will be entered into or entered into on terms favorable to the
Company. Moreover, to the extent the Company undertakes to develop hotel
facilities at its properties with a business partner or partners, the Company
will be exposed to certain risks inherent in joint ventures. The Company has
expanded its operations in the past into new venues by entering into joint
venture
11
<PAGE>
relationships, such as the LRGP and SCGC joint ventures. In any future joint
venture arrangement, the Company may not have authority to control or make
unilateral decisions with respect to the activities of such joint venture. As a
result, any management dispute between the Company and any joint venture
partner, or any financial problems of the joint venture partner, may have a
material adverse effect on any such joint venture project and, accordingly, on
the Company's business.
LOSS OF FACILITIES FROM SERVICE
The Company's profitability is dependent upon the operations of its riverboat
casino and pavilion facilities. A gaming vessel could be lost from service due
to casualty, mechanical failure or extended or extraordinary maintenance or
inspection. Business activity at any location would also be adversely affected
by a flood, hurricane, tornado or other severe weather conditions. Areas along
the Gulf of Mexico (the site of the Isle-Biloxi), the Mississippi River (the
site of the Isle-Vicksburg), the Red River (the site of the Isle-Bossier City)
and the Calcasieu River (the site of the Isle-Lake Charles) are subject to
storms and hurricanes and the Company's facilities have been closed from time to
time as a result. In addition, each riverboat operated by the Company in
Louisiana must hold a Certificate of Documentation and Inspection issued by the
U.S. Coast Guard, the loss of which could preclude its use as a riverboat
casino. A prolonged or total loss of any gaming vessel would have a material
adverse effect on the Company. The Company maintains limited business
interruption insurance, but the proceeds therefrom may be insufficient to
compensate the Company in the event that one or more of its casinos is lost from
service.
EFFECT OF LOCAL ECONOMIC AND WEATHER-RELATED FACTORS
The Company's results of operations may be adversely affected by local
economic and weather-related factors. If the local economy in a market in which
the Company operates one or more casinos suffered a downturn, the casino or
casinos located within that market could be adversely affected as the disposable
income of consumers in that market declined, resulting in a decrease in the
number of patrons at the Company's casino or casinos or a decrease in the amount
that patrons are willing to wager. In addition, storms or hurricanes that
destroy a large amount of personal and real property may result in patrons
spending time and money cleaning up and restoring property and less time and
money in the Company's casinos.
DEPENDENCE ON KEY PERSONNEL
The success of the Company is largely dependent upon the efforts and skills of
a few key executive officers and the experience of its property managers. The
loss of the services of any of such key executive officers or senior-level
property managers could have a material adverse effect on the Company. There can
be no assurance that the Company would be able to attract and hire suitable
replacements in the event of any such loss of services. In this regard, the
Company's Chief Operating Officer and Vice President of Marketing and the
general manager of the Isle-Vicksburg recently resigned from the Company and
have indicated that they intend to seek positions with one of the Company's
competitors. The Company does not maintain "key man" life insurance on any of
its employees.
DIFFICULTY IN ATTRACTING AND RETAINING QUALIFIED EMPLOYEES
The operation of the Company's business requires qualified executives,
managers and skilled employees with gaming industry experience. The Company
believes that a shortage of skilled labor exists in the gaming industry which
will make it increasingly difficult and expensive to attract and retain
qualified employees. Increasing competition in the Company's markets is expected
to lead to higher costs in order to retain and attract qualified employees. In
addition, to the extent the Company enters new markets, the Company may incur
higher labor costs to attract qualified employees from gaming facilities
existing in those markets. While the Company believes that it will be able to
attract and retain qualified employees, there can be no assurance that the
Company will be able to do so.
12
<PAGE>
POTENTIAL NEED FOR ADDITIONAL FINANCING
The Company believes that it will have sufficient funds to finance its
anticipated capital expenditure requirements. However, the Company is exploring,
and will continue to explore, multiple projects or larger-scale development
activities, either at its existing locations or in new markets, that may require
additional debt or equity financing. The lack of sufficient financing on
acceptable terms to further renovate or expand existing projects may put such
properties or projects at a substantial competitive disadvantage with their
competitors. There can be no assurance that such financing will be available
given the highly leveraged position of the Company or, if available, that it
would be available on terms satisfactory to the Company.
TAXATION
The Company believes that the prospect of significant additional revenue is
one of the primary reasons that jurisdictions have legalized gaming. As a
result, gaming companies are typically subject to significant taxes and fees in
addition to normal federal and state corporate income taxes; such taxes and fees
are subject to increase at any time and are not within the control of the
Company. Any material increase in these taxes or fees could have a material
adverse effect on the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the Shares
offered hereby.
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that they may from time to
time offer and sell the Shares on the Nasdaq National Stock Market or otherwise
at market prices then prevailing or at prices and upon terms then obtainable.
Sales may be made in ordinary brokerage transactions, in block transactions, in
privately negotiated transactions, pursuant to Rule 144 or otherwise.
The Company will pay all expenses incurred in connection with the registration
of the Crown Casino Shares (including fees and expenses of the Company's legal
counsel). Crown Casino shall pay all expenses incurred in connection with the
registration of the Crown Casino Warrant Shares (including fees and expenses of
Crown Casino's legal counsel). The DeBartolo Warrantholders shall pay all
expenses incurred in connection with the registration of the DeBartolo Warrant
Shares (including fees and expenses of the DeBartolo Warrantholders' legal
counsel). All expenses for the sale of the Shares, including brokerage
commissions and transfer taxes as well as fees and disbursements of legal
counsel for Selling Stockholders shall be borne by the Selling Stockholders.
13
<PAGE>
SELLING STOCKHOLDERS
The table below sets forth the name of the Selling Stockholders, the number and
percentage of shares of Common Stock beneficially owned by the Selling
Stockholders prior to the Offering, the maximum number of shares of Common Stock
offered hereby by the Selling Stockholders and the number and percentage of
shares of Common Stock to be held by the Selling Stockholders after the
Offering, assuming that the Selling Stockholders exercise their warrants in
full and elect to sell all shares owned by them that are being offered in the
Offering.
<TABLE>
<CAPTION>
Prior to the Offering Maximum After the Offering
--------------------- Number of ------------------
Shares to be
Number of Percentage Sold in the Number of Percentage
Name Shares Owned(1) of Class(2) Offering Shares Owned of Class(1)
---- ------------ -------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
Crown Casino 2,683,334 11.24% 2,683,334 0 0%
Corporation(1)
Lisa Marie 149,998 .63% 149,998 0 0%
DeBartolo(1)
Tiffanie Lynne 150,001 .63% 150,001 0 0%
DeBartolo(1)
Nicole Ann 150,001 .63% 150,001 0 0%
DeBartolo(1)
Marie Denise
DeBartolo York(1) 202,500 .85% 202,500 0 0%
Estate of
William D. Moses(1) 225,000 .94% 225,000 0 0%
Jack Lambert(1) 22,500 .09% 22,500 0 0%
</TABLE>
- ---------------
(1) Calculation of number of shares of Common Stock owned includes unissued
warrant shares.
(2) Includes 3,079,980 shares of Common Stock issued pursuant the Rights
Offering.
14
<PAGE>
DESCRIPTION OF CAPITAL STOCK
The following summarizes certain provisions of the Company's Certificate of
Incorporation, as amended (the "Certificate of Incorporation"), and the
Company's By-Laws (the "By-Laws"). Such summaries do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all of
the provisions of the Certificate of Incorporation and the By-Laws, including
the definitions therein of certain terms. Copies of the Certificate of
Incorporation and the By-Laws are incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part.
GENERAL
The Certificate of Incorporation authorizes the issuance of 45,000,000 shares
of Common Stock, 3,000,000 shares of Class B Common Stock, $.01 par value (the
"Class B Common Stock"), and 2,000,000 shares of preferred stock, $.01 par value
(the "Preferred Stock"). As of July 11, 1996, 20,800,157 shares of Common Stock
were issued and outstanding and no shares of Class B Common Stock or Preferred
Stock were issued or outstanding. As of June 28, 1996, all issued and
outstanding shares of Common Stock are, and upon consummation of the Offering
the shares of Common Stock offered hereby will be, fully paid and non-
assessable.
COMMON STOCK
The rights and privileges of the holders of the Common Stock are subject to
the preferential rights and privileges of the holders of any Class B Common
Stock or Preferred Stock outstanding.
Dividend Rights. Holders of shares of Common Stock are entitled to a pro rata
share of any dividends declared on the Common Stock by the Board of Directors
from funds legally available therefor. The Company has never paid a dividend and
does not anticipate paying one in the near future. See "--Common Stock Market
Price Information."
Liquidation Rights. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, holders of shares of Common Stock are
entitled to share ratably in all assets remaining after payment in full of
liabilities, including the liquidation rights of any outstanding Preferred
Stock.
Voting Rights. Holders of Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of the stockholders. Holders are not
entitled to cumulate votes for the election of directors. Accordingly, the
holders of more than 50% of all of the shares outstanding can elect all of the
directors. Significant corporate transactions such as amendments to the
Certificate of Incorporation, mergers, sale of assets and dissolution or
liquidation require approval by the affirmative vote of a majority of the
outstanding shares of Common Stock. Other matters to be voted upon by the
holders of the Common Stock require the affirmative vote of a majority of the
shares present at the particular stockholders meeting.
Redemption, Conversion and Sinking Fund Privileges. There are no redemption,
conversion or sinking fund provisions with respect to the Common Stock.
Preemptive and Other Subscription Rights. There are no preemptive or other
subscription rights with respect to the Common Stock.
15
<PAGE>
CLASS B COMMON STOCK AND PREFERRED STOCK
The Board of Directors is authorized by the Certificate of Incorporation to
establish one or more series of Class B Common Stock or one or more series of
Preferred Stock and to fix such powers, rights, preferences and limitations of
such class or series, which rights and preferences could be superior to those of
the existing Common Stock. The Company currently has no plans to issue Class B
Common Stock or Preferred Stock.
LIMITATION ON SHARE OWNERSHIP
The Certificate of Incorporation prohibits any person from becoming the
beneficial owner of 5% or more of any class or series of the Company's issued
and outstanding capital stock unless such person agrees in writing to (i)
provide to the Gaming Authorities (as defined in the Certificate of
Incorporation) information regarding such person, (ii) respond to written or
oral questions that may be propounded by any Gaming Authority and (iii) consent
to the performance of any background investigation that may be required by any
Gaming Authority, including without limitation, an investigation of any criminal
record of such person. Subject to the rights of the holders of any Class B
Common Stock or Preferred Stock then outstanding, the Board of Directors may
redeem any shares of capital stock of the Company held by a Disqualified Holder
at a price equal to the Fair Market Value of such shares or such other
redemption price as required by pertinent state or federal law pursuant to which
the redemption is required. A "Disqualified Holder" means any beneficial owner
of shares of capital stock of the Company or any of its subsidiaries, whose
holding of shares of capital stock or the Company, when taken together with the
holder of shares of capital stock by any other beneficial owner may in the
judgment of the Board of Directors, result in (i) the disapproval, modification,
or non-renewal of any contract under which the Company or any of its
subsidiaries has sole or shared authority to manage any gaming operations, or
(ii) the loss or non-reinstatement of any license or franchise from any
governmental agency held by the Company or any of its subsidiaries to conduct
any portion of its business, which license or franchise is conditioned upon some
or all of the holders of capital stock of the Company meeting certain criteria.
ANTI-TAKEOVER EFFECTS OF DELAWARE LAW AND CERTIFICATE OF INCORPORATION AND
BY-LAWS
The Certificate of Incorporation and By-Laws and Section 203 of the Delaware
General Corporation Law ("Delaware GCL") contain certain provisions that may
make more difficult the acquisition of control of the Company by means of a
tender offer, open market purchase, a proxy fight or otherwise. These provisions
could have the effect of discouraging a prospective acquirer from making a
tender offer or otherwise attempting to obtain control of the Company. To the
extent that these provisions discourage takeover attempts, they could deprive
stockholders of opportunities to realize takeover premiums for their shares or
could depress the market price of the shares.
Set forth below is a description of the relevant provisions of Section 203 of
the Delaware GCL, the Certificate of Incorporation and the By-Laws. The
descriptions are intended as a summary only and are qualified in their entirety
by reference to the Certificate of Incorporation and By-Laws, which are filed as
exhibits to the Registration Statement of which this Prospectus is a part, and
to Section 203 of the Delaware GCL.
Delaware General Corporation Law and Business Combination Provision. Section
203 of the Delaware GCL prohibits certain "business combination" transactions
between a publicly held Delaware corporation and any "interested stockholder"
for a period of three years after the date on which the latter became an
interested stockholder, unless (i) prior to that date either the proposed
business combination or the proposed acquisition of stock resulting in its
becoming an interested stockholder is approved by the Board of Directors, (ii)
in the same transaction in which it becomes an interested stockholder, the
interested stockholder acquires at least 85% of those shares of the voting stock
of the corporation which are not held by the directors, officers or certain
employee stock plans or (iii) the business combination with the interested
stockholder is approved by the Board of Directors and
16
<PAGE>
also approved at a stockholders' meeting by the affirmative vote of the holders
of at least two-thirds of the outstanding shares of the corporation's voting
stock other than shares held by the interested stockholder.
Availability of Shares of Capital Stock for Future Issuance. The
availability for issue of shares of Class B Common Stock, Preferred Stock and
Common Stock by the Company without further action by stockholders (except as
may be required by applicable stock exchange or Nasdaq regulations) could be
viewed as enabling the Board of Directors to make more difficult a change in
control of the Company, including by issuing warrants or rights to acquire
shares of Class B Common Stock, Preferred Stock or Common Stock to discourage or
defeat unsolicited stock accumulation programs and acquisition proposals and by
issuing shares in a private placement or public offering to dilute or deter
stock ownership of persons seeking to obtain control of the Company. The Company
has no present plans to issue any shares of Class B Common Stock, Preferred
Stock or Common Stock other than as offered hereby or as contemplated under the
Company's employee benefit plans.
Vote Required for Certain Matters. Significant corporate transactions such
as amendments to the Certificate of Incorporation, mergers, sale of assets and
dissolution or liquidation require approval by the affirmative vote of majority
of the outstanding shares of Common Stock. Other matters to be voted upon by the
holders of the Common Stock require the affirmative vote of a majority of the
shares present at the particular stockholders meeting.
COMMON STOCK MARKET PRICE INFORMATION
The following table sets forth, for the periods indicated, (a) the high and
low bid quotations for the Company's Common Stock as reported on the Nasdaq
Small-Cap Market until May 10, 1993 and (b) the high and low sale prices on the
Nasdaq National Market thereafter. The quotations reflect interdealer prices,
without retail mark-up or commissions, and may not necessarily represent actual
transactions. All prices listed have been adjusted to reflect the Company's
three-for-two stock dividend distributed in June 1993 and the Company's three-
for-two stock dividend distributed in April 1994.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
Fiscal Year Ending April 30, 1994
First Quarter $20.00 $11.00
Second Quarter 16.67 11.00
Third Quarter 18.33 12.67
Fourth Quarter 24.50 17.75
Fiscal Year Ending April 30, 1995
First Quarter $23.25 $ 9.50
Second Quarter 14.25 10.00
Third Quarter 11.50 7.25
Fourth Quarter 15.38 13.50
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fiscal Year Ending April 30, 1996
First Quarter $17.50 $13.50
Second Quarter 16.00 6.50
Third Quarter 8.00 5.13
Fourth Quarter 7.88 5.63
Fiscal Year Ending April 30, 1997
First Quarter (through August 2, 1996) $ 9.75 $ 5.75
</TABLE>
For a recent last reported sale price of the Common Stock on the Nasdaq
National Market, see the cover page of this Prospectus.
The Company has never paid any cash dividends with respect to its Common Stock
and the current policy of the Board of Directors is to retain earnings to
provide for the growth of the Company. In addition, the First Mortgage Note
Indenture limits the Company's ability to pay dividends. Consequently, no cash
dividends are expected to be paid on the Common Stock in the foreseeable future.
Further, there can be no assurance that the current and proposed operations of
the Company will generate the funds needed to declare a cash dividend or that
the Company will have legally available funds to pay dividends. In addition, the
Company may fund part of its operations in the future from indebtedness, the
terms of which may prohibit or restrict the payment of cash dividends. If a
holder of Common Stock is disqualified by applicable regulatory authorities from
owning such shares, such holder will not be permitted to receive any dividends
with respect to such stock.
LEGAL MATTERS
The validity of the shares of Common Stock being offered hereby will be passed
upon for the Company by Mayer, Brown & Platt, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company and the financial
statements of LRGP at April 30, 1996 and 1995 and for each of the three years in
the period ended April 30, 1996 appearing in the Company's Annual Report on
Form 10-K for the year ended April 30, 1996 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The balance sheets of St. Charles Gaming Company, Inc. as of April 30, 1995
and 1996, the statements of operations, stockholder's equity, and cash flows for
the period from June 25, 1993 (acquisition date) to April 30, 1994 and for the
years ended April 30, 1995 and 1996 appearing in the registration statement on
Form S-3 (File No. 333-7517) and related prospectus of Casino America, Inc.
filed with the Securities and Exchange Commission on July 3, 1996 as amended on
July 18, 1996 and July 31, 1996, the balance sheets of St. Charles Gaming
Company, Inc. as of December 31, 1995, and April 30, 1995, the statements of
operations, stockholder's equity, and cash flows for the eight months ended
December 31, 1995 and the year ended April 30, 1995, the balance sheet of St.
Charles Gaming Company, Inc. as of April 30, 1995 and 1994, and the statements
of operations, stockholders' equity, and cash flows for the year ended April 30,
1995 and the period from June 25, 1993 (acquisition date) to April 30, 1994,
appearing in Amendment No. 1 to the Company's Current Report on Form 8-K/A dated
June 28, 1996, incorporated by reference in this prospectus, have been
incorporated herein in reliance on the reports of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
The financial statements of St. Charles Gaming Company, Inc. as of June 24,
1993 and for the period from January 18, 1993 (date of inception) through June
24, 1993, appearing in Amendment No. 1 to the Company's Current Report on Form
8-K/A dated June 28, 1996, have been audited by Fred J. Bastie & Associates,
P.C., independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
18
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the estimated expenses in connection with the distribution
of the securities being registered:
<TABLE>
<CAPTION>
<S> <C>
Securities And Exchange Commission Registration Fee..... 7,413.79
Printing and Engraving Expenses......................... 5,000.00
Accounting Fees and Expenses............................ 5,000.00
Attorneys' Fees and Expenses............................ 10,000.00
Transfer Agent's and Registrar's Fees................... 2,000.00
Nasdaq Listing Fees..................................... 17,500.00
Miscellaneous........................................... 3,086.21
----------
Total................................................... $50,000.00
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) The Delaware GCL (Section 145) gives Delaware corporations broad powers to
indemnify their present and former directors and officers and those of
affiliated corporations against expenses incurred in the defense of any lawsuit
to which they are made parties by reason of being or having been such directors
or officers, subject to specified conditions and exclusions, gives a director or
officer who successfully defends an action the right to be so indemnified, and
authorizes the Registrant to buy directors' and officers' liability insurance.
Such indemnification is not exclusive of any other rights to which those
indemnified may be entitled under any by-laws, agreement, vote of stockholders
or otherwise.
(b) Article 8 of the Certificate of Incorporation of the Registrant provides
for indemnification of directors and officers to the fullest extent permitted by
law.
(c) In accordance with Section 102(b)(7) of the Delaware GCL, the Registrant's
Certificate of Incorporation provides that directors shall not be personally
liable for monetary damages for breaches of their fiduciary duty as directors
except for (1) breaches of their duty of loyalty to the Registrant or its
stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law, (3) under Section 174 of
the Delaware GCL (unlawful payment of dividends) or (4) transactions from which
a director derives an improper personal benefit.
1
<PAGE>
ITEM 16. EXHIBITS
A list of the exhibits included as part of this Registration Statement is set
forth in the Exhibit Index which immediately precedes such exhibits.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions referred to in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For purposes of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and this Offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies that
it has reasonable grounds to believe that it meets all the requirements for
filing on Form S-3 and has duly caused this amended Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Biloxi and State of Mississippi on the 6th day of August, 1996.
CASINO AMERICA, INC.
By /s/ Allan B. Solomon
---------------------------------------
Allan B. Solomon
Executive Vice President, Secretary and
General Counsel
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
John Gallaway, Rexford Yeisley and Allan B. Solomon and each of them, the true
and lawful attorneys-in-fact and agents of the undersigned, with full power of
substitution and resubstitution, for and in the name, place and stead of the
undersigned, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on the 6th day of August, 1996.
NAME TITLE
---- -----
/s/ BERNARD GOLDSTEIN Chairman of the Board, Chief Executive Officer
---------------------- and Director
Bernard Goldstein
/s/ JOHN A. GALLAWAY President and Director
----------------------
John A. Gallaway
/s/ REXFORD YEISLEY Chief Financial Officer (Principal Financial
---------------------- and Accounting Officer)
Rexford Yeisley
/s/ ALLAN B. SOLOMON Executive Vice President, Secretary, General
--------------------- Counsel and Director
Allan B. Solomon
/s/ ROBERT S. GOLDSTEIN Director
------------------------
Robert S. Goldstein
/s/ MARTIN GREENBERG Director
---------------------
Martin Greenberg
/s/ EMANUEL CRYSTAL Director
-------------------
Emanuel Crystal
3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ------------------------------------------------------------------------- ----------
<C> <S> <C>
4.1 Certificate of Incorporation of Casino America, Inc., as amended
(Incorporated by reference to the Company's Registration Statement on
Form S-1 filed September 3, 1993, as amended (File No. 33-68434))
4.2 Bylaws of Casino America, Inc., as amended (Incorporated by reference to
the Company's Registration Statement on Form S-1 filed September 3, 1993,
as amended (File No. 33-68434))
4.3 Indenture dated November 1, 1993 between the Company and Shawmut Bank
Connecticut, National Association, as Trustee (Incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1994 (File No. 0-20538))
4.4 First Supplemental Indenture dated as of April 29, 1994 between the
Company and Shawmut Bank Connecticut, National Association, as Trustee
(Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended April 30, 1994 (File No. 0-20538))
4.5 Second Supplemental Indenture dated as of March 8, 1995 between the
Company and Shawmut Bank Connecticut, National Association, as Trustee
(Incorporated by reference to the Company's Annual Report on Form 10-K
for the fiscal year ended April 30, 1995 (File No. 0-20538))
4.6 Third Supplemental Indenture dated as of May 8, 1996 between the Company
and Fleet National Bank (successor to Shawmut Bank Connecticut, National
Association) as Trustee (Incorporated by reference to Amendment No. 2 to
the Company's Registration Statement on Form S-3 filed June 28, 1996
(File No. 333-2610))
4.7 Promissory Note, dated June 9, 1995, made by LRGP in favor of Crown
Casino Corporation (Incorporated by reference to the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1995 (File No. 0-
20538))
4.8 Casino America, Inc. hereby agrees to furnish to the Securities and
Exchange Commission, upon its request, the instruments defining the
rights of holders of long-term debt where the total amount of securities
authorized thereunder does not exceed 10% of Casino America, Inc.'s total
consolidated assets
5.1 Opinion of Mayer, Brown & Platt.......................................... *
23.1 Consent of Ernst & Young LLP.............................................
23.2 Consent of Coopers & Lybrand L.L.P.......................................
23.3 Consent of Fred J. Bastie & Associates, P.C..............................
23.4 Consent of Mayer, Brown & Platt (contained in Exhibit 5.1)............... *
24.1 Power of Attorney (contained on the signature page to the initial
registration statement)
</TABLE>
- --------
*To be filed by amendment.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Casino America, Inc.
for the registration of 3,583,334 shares of its common stock and to the
incorporation by reference therein of our report dated June 3, 1996, with
respect to the consolidated financial statements of Casino America, Inc., and
our report dated May 22, 1996, with respect to the financial statements of
Louisiana Riverboat Gaming Partnership, both of which were included in Casino
America, Inc.'s Annual Report on Form 10-K for the year ended April 30, 1996,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
July 29, 1996
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement on
Form S-3 of our report, dated August 7, 1995, except as to the third paragraph
of Note D for which the date is September 21, 1995 on our audits of the
financial statements of St. Charles Gaming Company, Inc., as of April 30, 1995
and 1994 and for the year ended April 30, 1995 and the period from June 25, 1993
(acquisition date) to April 30, 1994, and of our report, which includes an
explanatory paragraph relating to the substantial doubt about the Company's
ability to continue as a going concern as a result of significant current debt
obligations, dated March 8, 1996, except for Note 11 as to which the date is
March 26, 1996 on our audits of the financial statements of St. Charles Gaming
Company, Inc., as of December 31, 1995 and April 30, 1995 and for the eight
month period ended December 31, 1995, and the year ended April 30, 1995, both
appearing in Amendment No. 1 to the Form 8K/A of Casino America, Inc. filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1934.
We also consent to the incorporation by reference of our report, dated June 14,
1996, on our audits of the financial statements of St. Charles Gaming Company,
Inc., as of April 30, 1995 and 1996 and for the period from June 25, 1993
(acquisition date) to April 30, 1994 and for the years ended April 30, 1995 and
1996 appearing in the registration statement on Form S-3 (File No. 333-7517) and
related Prospectus of Casino America, Inc. filed with the Securities and
Exchange Commission on July 3, 1996, as amended on July 18, 1996 and July 31,
1996. Our report dated June 14, 1996, updates the aforementioned reports. We
also consent to the reference to our firm under the caption "Experts".
Coopers & Lybrand L.L.P.
Dallas, Texas
August 5, 1996
<PAGE>
EXHIBIT 23.3
CONSENT TO INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
on Form S-3 and related Prospectus of Casino America, Inc. for the registration
of 3,583,334 Shares of Common Stock of our report dated October 22, 1993, with
respect to the financial statements of St. Charles Gaming Company, Inc. included
in Casino America, Inc.'s Current Report on Form 8-K/A dated May 3, 1996, filed
with the Securities and Exchange Commission on or about June 4, 1996 and amended
on June 28, 1996.
FRED J. BASTIE & ASSOCIATES, P.C.
Dallas, Texas
July 31, 1996
