<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 3, 1996
REGISTRATION NO. 333-9653
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
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: [X]
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: [_]
---------------
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 OCTOBER 3, 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 21.
On October 2, 1996, the last reported sale price of the Common Stock on the
Nasdaq National Stock Market was $7.00 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 October , 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.
2
<PAGE>
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 (as amended by amendments thereto dated August 27, 1996 and
September 5, 1996).
(2) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 31, 1996 (as amended by amendment thereto dated October 1,
1996).
(3) 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).
(4) The Company's Current Report on Form 8-K, dated July 3, 1996 (Date of
earliest event reported: July 3, 1996).
(5) 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 Company, 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).
3
<PAGE>
THE COMPANY
Casino America is a leading developer, owner and operator of dockside and
riverboat casinos and related facilities in the United States. The Company
owns 100% of, and operates, four dockside or riverboat casino facilities. All
of the Company's properties are based on a tropical island theme and operate
under the "Isle of Capri Casino" name. The Company owns and operates a
dockside riverboat casino and hotel in Bossier City, Louisiana (the "Isle-
Bossier City"), two riverboat casinos at a single facility on a site one mile
from Lake Charles, Louisiana (the "Isle-Lake Charles"), a dockside casino and
hotel in Biloxi, Mississippi (the "Isle-Biloxi") and a dockside casino and
recreational vehicle park in Vicksburg, Mississippi (the "Isle-Vicksburg").
Shreveport/Bossier City is currently the closest casino gaming market to the
Dallas/Ft. Worth, Texas metropolitan area and 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
Issuance of Senior Secured Notes and Debt Refinancing
On August 6, 1996, the Company issued $315 million in aggregate principal
amount of its 12 1/2% Senior Secured Notes due 2003 (the "Notes"). The
proceeds of the issuance of the Notes were used, in part, to retire or defease
all of the Company's 11 1/2% First Mortgage Notes due 2001 in the aggregate
principal amount of $105 million, refinance other indebtedness, and finance
the purchase by the Company of the 50% interest not owned by it in Louisiana
Riverboat Gaming Partnership ("LRGP"), which at the time of purchase owned 50%
of the common stock of St. Charles Gaming Company, Inc. ("SCGC").
LRGP Acquisition
On August 6, 1996, the Company acquired (the "LRGP Acquisition") the
remaining 50% interest in LRGP not owned by it from Louisiana River Site
Development, Inc. The consideration for the LRGP Acquisition included (i) $85
million in cash, (ii) five-year warrants to purchase 500,000 shares of the
Company's Common Stock at an exercise price of $10.50 per share and (iii) $1.5
million in cash per year for seven years, payable monthly beginning on October
1, 1998.
Hotel Development Activities
The Company presently intends to pursue the construction and development,
either alone or with one or more business partners, of hotel facilities
adjacent to the Isle-Bossier City and the Isle-Lake Charles. In June 1996, the
Company entered into a letter of intent, which has since expired according to
its terms, to form a joint venture with a developer of hotel properties for
the purpose of developing, owning and operating hotel properties. The Company
may seek other business partners to assist in developing and operating hotels
at one or more of its gaming facilities or, in the event the Company does not
enter an arrangement to develop, own and operate hotels with a business
partner, the Company intends to develop, own and operate such facilities
alone. See "Risk Factors--Construction and Development Risks" and "Risk
Factors--Hotel Business and Joint Venture Risks."
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 Riverboat, 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 $60.8 million, consisting of approximately $7.5 million in cash,
approximately $37.1 million in
4
<PAGE>
promissory notes and assumed indebtedness, 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. On July 12, 1996, the Gaming
Board (as defined below) authorized the commencement of gaming on the Grand
Palais and, pursuant to such approval, the Grand Palais opened on such date.
See "Risk Factors--Legislative and Regulatory Considerations--Recent Changes
in Louisiana Regulatory Structure." 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 a direct 50%
interest in St. Charles Gaming Company, Inc. ("SCGC") (the other 50% of which,
at that time, was owned by LRGP, which the Company now owns in its entirety),
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 which can be exercised only by exchanging up to $5 million of
indebtedness under a note, 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"). A total of
3,079,980 shares of Common Stock were issued in connection with the Rights
Offering, resulting in net proceeds to the Company of approximately $18.1
million.
5
<PAGE>
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). See "--Legislative and
Regulatory Considerations--Expansion of Louisiana Gaming Activities and
Possible Relocation of Existing Licenses."
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. An adverse vote on the
continuation of gaming in Bossier Parish or Calcasieu Parish would result in
the Company being required, pursuant to the Indenture governing the Notes, to
deposit the cash flow from the affected property in a collateral account, and
from time to time to make offers to repurchase a portion of the Notes. 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 "--Legislative and
Regulatory Considerations--Expansion of Louisiana Gaming Activities and
Possible Relocation of Existing Licenses" and "--Competition."
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
6
<PAGE>
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, and
possibly a sixth, dockside riverboat casino (operated by Binion's Horseshoe
Casino or another operator or operators) 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 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."
7
<PAGE>
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.
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
8
<PAGE>
its current operations, including the development of hotel facilities, in
order for those facilities to remain competitive with existing and expected
new competitors in those markets. The Indenture relating to the 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 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 "--Local 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, approved in Louisiana on
September 21, 1996, which requires, 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.
9
<PAGE>
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 legalization of
gaming in new jurisdictions 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.
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
10
<PAGE>
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 the Company's planned 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. 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
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.
11
<PAGE>
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 resigned from the Company in
July 1996 and have accepted 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.
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.
FORWARD-LOOKING STATEMENTS
This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements other than statements of historical facts
included in this
12
<PAGE>
Prospectus, or incorporated therein, including without limitation, statements
under "--Leverage and Debt Service," "--Competition" and "The Company--Recent
Developments," regarding the Company's financial position, business strategy,
capital resources, and plans and objectives of management of the Company for
future operations are forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
have been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus, including,
without limitation, in conjunction with the forward-looking statements
included in this Prospectus. All subsequent written and oral forward-looking
statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by the Cautionary Statements.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the Shares
offered hereby.
UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma condensed consolidated financial
statements are based on the historical financial statements of the Company
adjusted to give effect to LRGP's purchase of a 50% interest in SCGC on June
9, 1995 (the "Initial Acquisition"), the SCGC Acquisition, the LRGP
Acquisition, the GPRI Acquisition, the Rights Offering and the offering and
sale of the Notes (the "Note Offering") and the application of the net
proceeds therefrom. The unaudited pro forma condensed consolidated balance
sheet as of July 31, 1996 gives effect to the LRGP Acquisition, that portion
of the proceeds from the Rights Offering received subsequent to July 31, 1996
and the Note Offering and the application of the net proceeds therefrom as if
such transactions had occurred on July 31, 1996. The unaudited pro forma
condensed consolidated statement of income for the year ended April 30, 1996
gives effect to the Initial Acquisition, the SCGC Acquisition, the LRGP
Acquisition, the GPRI Acquisition (to the extent of interest on debt assumed
or issued in connection with the acquisition), the Rights Offering and the
Note Offering and the application of the net proceeds therefrom, as if such
transactions had occurred on May 1, 1995. The unaudited pro forma condensed
consolidated statement of income for the three months ended July 31, 1996
gives effect to the SCGC Acquisition, the LRGP Acquisition, the GPRI
Acquisition, the Rights Offering and the Note Offering and the application of
the net proceeds therefrom, as if such transactions had occurred on May 1,
1996.
The Initial Acquisition, the SCGC Acquisition, the LRGP Acquisition and the
GPRI Acquisition have been accounted for by the Company using the purchase
method of accounting. The pro forma adjustments are based upon currently
available information and certain assumptions that management believes are
reasonable. The actual purchase price adjustments will be finalized based on
the fair market value of the assets and liabilities acquired and may differ
significantly from the amounts reflected in the pro forma adjustments.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of the financial position or results of operations
which would have been achieved had the above mentioned transactions occurred
on the indicated dates, nor are they necessarily indicative of the results of
future operations. The unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the financial statements and
related notes of the Company, LRGP and SCGC incorporated by reference in this
Prospectus.
The pre-bankruptcy business of GPRI consisted entirely of developing and
operating the Grand Palais riverboat casino in New Orleans, Louisiana. The
Grand Palais began gaming operations in New Orleans on March 29, 1995 and, due
to poor operating results, ceased operations on June 6, 1995. GPRI was forced
into involuntary bankruptcy on July 26, 1995 and was completely non-
operational between the date of the closing of the Grand Palais on June 6,
1995 and its subsequent reopening at the Isle-Lake Charles on July 11, 1996.
Other than interest on debt incurred to effect the GPRI Acquisition,
adjustments related to the pre-bankruptcy operations of the Grand Palais have
not been included in the following unaudited pro forma condensed consolidated
statement of income for the three months ended July 31, 1996 because GPRI was
not operating between June 6, 1995 and July 11, 1996, and because the pre-
bankruptcy operations of GPRI were very limited and substantially different
than the post-acquisition operations.
13
<PAGE>
CASINO AMERICA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JULY 31, 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
AS REPORTED
--------------------------------
CASINO LRGP AND TOTAL PRO FORMA
ASSETS AMERICA, INC. LRG HOTELS SCGC HISTORICAL ADJUSTMENTS PRO FORMA
------ ------------- ---------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents........... $ 22,279 $ 8,738 $ 2,879 $ 33,896(1) $ 28,403(1) $ 62,299
Accounts receivable.... 4,389 407 272 5,068 (1,004)(2) 4,064
Other current assets... 3,592 629 419 4,640 -- 4,640
-------- -------- ------- -------- --------- --------
Total current assets. 30,260 9,774 3,570 43,604 27,399 71,003
Property and equipment--
net.................... 172,319 51,984 70,952 295,255 -- 295,255
Other assets:
Investment in and ad-
vances to joint
ventures.............. 51,647 63,158 -- 114,805 (114,805)(3) --
Notes
receivable/advances
due from affiliates... 4,700 2,194 177 7,071 (7,071)(4) --
Goodwill............... 16,652 -- -- 16,652 95,727(5) 112,379
Other investments...... 2,250 -- -- 2,250 -- 2,250
Property held for de-
velopment or sale..... 15,840 -- -- 15,840 -- 15,840
Other non current
assets................ 12,541 1,113 8,097 21,751 5,658(6) 27,409
-------- -------- ------- -------- --------- --------
103,630 66,465 8,274 178,369 (20,491) 157,878
-------- -------- ------- -------- --------- --------
Total assets......... $306,209 $128,223 $82,796 $517,228 $ 6,908 $524,136
======== ======== ======= ======== ========= ========
<CAPTION>
LIABILITIES AND
STOCKHOLDERS'
EQUITY/PARTNERS' CAPITAL
- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Current liabilities:
Notes payable and cur-
rent maturities of
long-term debt........ $ 16,923 $ 21,885 $79,585 $118,393 $(103,810)(7) $ 14,583
Accounts payable....... 10,523 3,110 2,928 16,561 -- 16,561
Accrued liabilities.... 19,493 7,447 4,903 31,843 (8,526)(8) 23,317
-------- -------- ------- -------- --------- --------
Total current
liabilities......... 46,939 32,442 87,416 166,797 (112,336) 54,461
Long-term debt.......... 155,812 20,180 2,874 178,866 195,810(9) 374,676
Deferred income taxes... 6,999 -- (1,242) 5,757 -- 5,757
Stockholders'
equity/partners' capi-
tal: --
Common stock........... 226 -- 5,600 5,826 (5,594)(10) 232
Additional paid-in
capital............... 57,063 -- 13,857 70,920 (8,840)(10) 62,080
Retained
earnings/partners'
capital............... 39,170 75,601 (25,709) 89,062 (62,132)(11) 26,930
-------- -------- ------- -------- --------- --------
Total stockholders'
equity/partners'
capital............. 96,459 75,601 (6,252) 165,808 (76,566) 89,242
-------- -------- ------- -------- --------- --------
Total liabilities and
stockholders'
equity/partners'
capital............. $306,209 $128,223 $82,796 $517,228 $ 6,908 $524,136
======== ======== ======= ======== ========= ========
</TABLE>
See accompanying notes.
14
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JULY 31, 1996
(1) Represents $24,380,000 of the net proceeds of the Note Offering to be
used for general corporate purposes and $4,023,000 of net proceeds from the
Rights Offering received subsequent to July 31, 1996.
(2) Represents the elimination of miscellaneous intercompany balances.
(3) Represents the elimination of the Company's investment in and advances
to LRGP, LRG Hotels, L.L.C., and SCGC and the elimination of LRGP's investment
in and advances to SCGC.
(4) Represents the elimination of notes receivable/advances due to the
Company and LRGP from SCGC and LRG Hotels, L.L.C.
(5) Represents the excess of cost over the estimated fair value of the net
assets acquired in the Initial Acquisition, the SCGC Acquisition and the LRGP
Acquisition.
(6) Represents $11,105,000 of issuance costs related to the Notes, less the
write-off of $4,865,000 of unamortized debt issuance costs related to the
First Mortgage Notes and $582,000 of unamortized debt issuance costs related
to other debt which was retired with proceeds from the Note Offering.
(7) Represents the retirement of the current portion of certain indebtedness
of the Company, LRGP and SCGC using a portion of the net proceeds from the
Note Offering and the elimination of certain intercompany indebtedness as
follows:
<TABLE>
<S> <C>
Retirement of certain indebtedness of the Company--current
portion.................................................. $ (3,625,000)
Retirement of certain indebtedness of LRGP--current
portion.................................................. (20,600,000)
Retirement of certain indebtedness of SCGC--current
portion.................................................. (30,000,000)
Elimination of advances from LRGP to SCGC................. (44,885,000)
Elimination of the note issued by the Company to SCGC..... (4,700,000)
-------------
Total adjustment to current portion of long-term debt... $(103,810,000)
=============
</TABLE>
(8) Adjusted to reflect:
<TABLE>
<S> <C>
Payment of accrued interest on debt assumed to be retired
using the proceeds from the Note Offering.................. $(3,585,000)
Tax benefit related to the premium on the First Mortgage
Notes Retirement and retirement of certain other
indebtedness and the write-off of unamortized debt issuance
costs and original issue discount ......................... (6,591,000)
Accrued issuance costs related to the Notes................. 1,650,000
-----------
$(8,526,000)
===========
</TABLE>
(9) Adjusted to reflect:
<TABLE>
<S> <C>
Total principal amount of the Notes........................ $315,000,000
Present value of the deferred payments to be made in
connection with the LRGP Acquisition...................... 5,300,000
Retirement of the First Mortgage Notes (net of unamortized
discount of $1,660,000)................................... (103,340,000)
Retirement of certain indebtedness of LRGP................. (10,900,000)
Retirement of certain indebtedness of GPRI................. (10,250,000)
------------
Total adjustment to long-term debt..................... $195,810,000
============
</TABLE>
15
<PAGE>
(10) Adjusted to reflect (i) the elimination of SCGC's common stock and
additional paid in capital, (ii) the issuance of warrants to purchase 500,000
shares of Common Stock at an exercise price of $10.50 per share, valued at
$1,000,000, in connection with the LRGP Acquisition and (iii) the issuance of
684,786 shares of Common Stock, resulting in net proceeds of $4,023,000, in
connection with the Rights Offering, issued and received after July 31, 1996.
(11) Adjusted to reflect:
<TABLE>
<S> <C>
Write-off of unamortized debt issuance costs related
primarily to redemption of the First Mortgage Notes..... $ (5,447,000)
Write-off of the unamortized discount related to the
First Mortgage Notes.................................... (1,660,000)
Premium on the retirement of the First Mortgage Notes and
certain other indebtedness.............................. (11,724,000)
Tax benefit related to the above items................... 6,591,000
Elimination of LRGP's, LRG Hotels', L.L.C.'s and SCGC's
retained earnings/partners' capital..................... (49,892,000)
------------
$(62,132,000)
============
</TABLE>
16
<PAGE>
CASINO AMERICA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED JULY 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED
--------------------------------
CASINO LRGP AND TOTAL PRO FORMA
AMERICA, INC. LRG HOTELS SCGC HISTORICAL ADJUSTMENTS PRO FORMA
------------- ---------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Casino................. $37,474 $37,366 $23,177 $98,017 $ -- $98,017
Rooms, food, beverage
and other............. 8,631 2,991 1,093 12,715 -- 12,715
Management fees--joint
ventures.............. 2,012 -- -- 2,012 (2,012)(1) --
------- ------- ------- ------- ------- -------
Total revenue........ 48,117 40,357 24,270 112,744 (2,012) 110,732
Operating expenses:
Casino and gaming
taxes................. 19,414 17,408 11,422 48,244 -- 48,244
Marketing and
administrative........ 9,870 8,798 4,658 23,326 -- 23,326
Depreciation and
amortization.......... 3,373 1,429 1,489 6,291 1,124 (2) 7,415
One-time charge........ -- -- -- -- -- --
Preopening expenses.... 1,984 -- -- 1,984 -- 1,984
Loss on disposal of
equipment............. -- -- -- -- -- --
Other.................. 8,853 4,675 3,310 16,838 (2,012)(1) 14,826
------- ------- ------- ------- ------- -------
Total operating
expenses............ 43,494 32,310 20,879 96,683 (888) 95,795
------- ------- ------- ------- ------- -------
Operating income (loss). 4,623 8,047 3,391 16,601 (1,124) 14,937
Interest expense, net... (4,362) (110) (3,123) (7,595) (3,751)(3) (11,346)
Equity in income (loss)
of joint ventures...... 4,279 399 -- 4,678 (4,678)(4) --
Other................... -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Income (loss) before
income taxes........... 4,540 8,336 268 13,144 (9,553) 3,591
Income taxes............ (1,623) -- -- (1,623) 187 (5) (1,436)
------- ------- ------- ------- ------- -------
Income (loss) before
extraordinary loss..... $ 2,917 $ 8,336 $ 268 $11,521 $(9,366) $ 2,155
======= ======= ======= ======= ======= =======
Income (loss) before
extraordinary loss per
common and common
equivalent share....... $ 0.14 $ 0.09
Weighted average common
and common equivalent
shares................. 20,666 3,080 (6) 23,746
</TABLE>
See accompanying notes.
17
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JULY 31, 1996
(1) Represents elimination of the management fee charged by the Company to
LRGP and SCGC.
(2) Reflects the amortization of the excess of the cost over the fair value
of the net assets acquired in the Initial Acquisition, the SCGC Acquisition,
the LRGP Acquisition and the GPRI Acquisition. Amortization has been
calculated using the straight-line method over an estimated useful life of 25
years.
(3) Adjusted to reflect:
<TABLE>
<S> <C>
Interest expense on the Notes................................ $9,844,000
Amortization of issuance costs related to the Note Offering.. 397,000
Imputed interest on the deferred payments to be made in
connection with the LRGP Acquisition........................ 171,000
Less interest on debt retired with the proceeds from the Note
Offering.................................................... (6,249,000)
Less amortization of debt issuance costs and original issue
discount related to debt retired with the proceeds from the
Note Offering............................................... (412,000)
----------
$3,751,000
==========
</TABLE>
(4) Represents elimination of the Company's equity in the earnings of LRGP,
LRG Hotels, L.L.C. and SCGC, and elimination of LRGP's equity in the earnings
of SCGC.
(5) Reflects the income tax effects of the pro forma adjustments.
(6) Represents the issuance of 3,079,980 shares of Common Stock in
connection with the Rights Offering.
18
<PAGE>
CASINO AMERICA, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED APRIL 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AS REPORTED
--------------------------------
CASINO LRGP AND TOTAL PRO FORMA
AMERICA, INC. LRG HOTELS SCGC HISTORICAL ADJUSTMENTS PRO FORMA
------------- ---------- ------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
Casino................. $123,936 $145,604 $56,589 $326,129 $ -- $326,129
Rooms, food, beverage
and other............. 27,719 8,951 674 37,344 -- 37,344
Management fees--joint
ventures.............. 6,308 -- -- 6,308 (6,308)(1) --
-------- -------- ------- -------- -------- --------
Total revenue........ 157,963 154,555 57,263 369,781 (6,308) 363,473
Operating expenses:
Casino and gaming
taxes................. 65,026 66,088 23,895 155,009 -- 155,009
Marketing and
administrative........ 33,167 25,872 19,813 78,852 -- 78,852
Depreciation and
amortization.......... 12,111 5,728 3,289 21,128 4,569 (2) 25,697
One-time charge........ 11,798 -- -- 11,798 -- 11,798
Preopening expenses.... 1,311 -- 4,196 5,507 -- 5,507
Loss on disposal of
equipment............. 1,217 -- -- 1,217 -- 1,217
Other.................. 30,140 18,709 7,249 56,098 (6,308)(1) 49,790
-------- -------- ------- -------- -------- --------
Total operating
expenses............ 154,770 116,397 58,442 329,609 (1,739) 327,870
-------- -------- ------- -------- -------- --------
Operating income (loss). 3,193 38,158 (1,179) 40,172 (4,569) 35,603
Interest expense, net... (13,924) (1,948) (6,210) (22,082) (23,168)(3) (45,250)
Equity in income (loss)
of joint ventures...... 16,434 (2,658) -- 13,776 (13,776)(4) --
Other................... -- -- -- -- -- --
-------- -------- ------- -------- -------- --------
Income (loss) before
income taxes........... 5,703 33,552 (7,389) 31,866 (41,513) (9,647)
Income taxes............ (4,148) -- 1,056 (3,092) 3,092 (5) --
-------- -------- ------- -------- -------- --------
Income (loss) before
extraordinary loss..... $ 1,555 $ 33,552 $(6,333) $ 28,774 $(38,421) $ (9,647)
======== ======== ======= ======== ======== ========
Income (loss) before
extraordinary loss per
common and common
equivalent share....... $ 0.10 $ (0.42)
Weighted average common
and common equivalent
shares................. 15,721 7,180 (6) 22,901
</TABLE>
See accompanying notes.
19
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF INCOME FOR THE YEAR ENDED APRIL 30, 1996
(1) Represents elimination of the management fee charged by the Company to
LRGP and SCGC.
(2) Reflects the amortization of the excess of the cost over the fair value
of the net assets acquired in the Initial Acquisition, the SCGC Acquisition,
the LRGP Acquisition and the GPRI Acquisition. Amortization has been
calculated using the straight-line method over an estimated useful life of 25
years.
(3) Adjusted to reflect:
<TABLE>
<S> <C>
Interest expense on the Notes............................... $39,375,000
Amortization of issuance costs related to the Notes......... 1,586,000
Incremental interest expense on the 11 1/2% $20 million note
issued by LRGP in connection with the Initial Acquisition.. 249,000
Interest expense on GPRI debt incurred to effect the GPRI
Acquisition (net of $13,300,000 of GPRI debt redeemed using
the proceeds from the Note Offering)....................... 2,035,000
Imputed interest on the deferred payments to be made in
connection with the LRGP Acquisition....................... 685,000
Less interest on debt retired with the proceeds from the
Note Offering.............................................. (19,438,000)
Less amortization of debt issuance costs and original issue
discount related to debt retired with the proceeds from the
Note Offering.............................................. (1,324,000)
-----------
$23,168,000
===========
</TABLE>
(4) Represents elimination of the Company's equity in the earnings and
losses of LRGP and LRG Hotels, L.L.C., respectively, and elimination of LRGP's
equity in the losses of SCGC.
(5) Reflects the income tax effects of the pro forma adjustments.
(6) Represents the issuance of 1,850,000 shares of Common Stock in
connection with the SCGC Acquisition, the issuance of 2,250,000 shares of
Common Stock in connection with the GPRI Acquisition and the issuance of
3,079,980 shares of Common Stock in connection with the Rights Offering.
20
<PAGE>
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.
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 -----------------------
PERCENTAGE SHARES TO BE PERCENTAGE
NUMBER OF OF SOLD IN THE NUMBER OF OF
NAME SHARES OWNED(1) CLASS(2) OFFERING SHARES OWNED CLASS(2)
- ---- --------------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
Crown Casino
Corporation............ 3,368,120 13.98% 2,683,334 684,786 2.94%
Lisa Marie DeBartolo.... 188,277 .80% 149,998 38,279 .16%
Tiffanie Lynne
DeBartolo.............. 188,281 .80% 150,001 38,280 .16%
Nicole Ann DeBartolo.... 188,281 .80% 150,001 38,280 .16%
Marie Denise DeBartolo
York................... 254,178 1.08% 202,500 51,678 .22%
William D. Moses Family
Trust No. 1............ 225,000 .96% 225,000 0 0%
Jack Lambert............ 32,242 .14% 22,500 9,742 .04%
</TABLE>
- --------
(1) Calculation of number of shares of Common Stock owned includes unissued
warrant shares.
(2)Based on 23,257,537 shares of Common Stock outstanding as of September 9,
1996. Unissued warrant shares are deemed outstanding for the purpose of
calculating the percentage owned by such person, but are not deemed
outstanding for the purpose of calculating the percentage owned by each other
person listed.
21
<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 August 19, 1996, 23,257,537
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 August 19,
1996, all issued and outstanding shares of Common Stock are 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.
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.
22
<PAGE>
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 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
23
<PAGE>
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
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............................................ $ 9.75 $ 5.75
Second Quarter (through October 2, 1996)................. $ 7.38 $ 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 Indenture governing
the Notes 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.
24
<PAGE>
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, stockholders' 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, stockholders' 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.
25
<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>
<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.
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
II-1
<PAGE>
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.
II-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 3RD DAY OF OCTOBER, 1996.
Casino America, Inc.
/s/ Allan B. Solomon
By___________________________________
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 3RD DAY OF OCTOBER, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Bernard Goldstein Chairman of the Board, Chief Executive
___________________________________________ Officer and Director
Bernard Goldstein
/s/ John A. Gallaway President, Chief Operating Officer 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
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DOCUMENT 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 (Incorpo-
rated by reference to the Company's Registration State-
ment 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 An-
nual 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, Na-
tional Association, as Trustee (Incorporated by refer-
ence 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, Na-
tional Association, as Trustee (Incorporated by refer-
ence 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 Fourth Supplemental Indenture dated July 26, 1996 be-
tween 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
(Registration No. 333-7517))
4.8 Promissory Note, dated June 9, 1995, made by LRGP in
favor of Crown Casino Corporation (Incorporated by ref-
erence to the Company's Annual Report on Form 10-K for
the fiscal year ended April 30, 1995 (File No. 0-
20538))
4.9 Indenture dated August 1, 1996 between the Company and
Fleet National Bank, as Trustee (Incorporated by refer-
ence to Amendment No. 2 to the Company's registration
statement on Form S-3 (Registration No. 333-7517))
4.10 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 autho-
rized 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>
- --------
*Filed herewith.
<PAGE>
Exhibit 5.1
October 2, 1996
Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, D.C. 20549
Re: Casino America, Inc.
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Casino America, Inc., a Delaware corporation
(the "Company"), and are familiar with the corporate proceedings taken and to be
taken in connection with the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of the 3,583,334 shares (the "Shares") of
Common Stock, $.01 par value per share ("Common Stock"), of the Company.
We have participated in the preparation and filing with the Securities and
Exchange Commission under the Securities Act of a Registration Statement on Form
S-3 ("Registration Statement"). In this connection, we have examined and are
familiar with the Certificate of Incorporation and the By-laws of the Company.
We have also examined such other documents, records and certificates of the
Company as we consider necessary for the purpose of this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware.
2. The Shares are duly authorized, validly issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement being filed in connection with the above-mentioned
registration and to the reference to us under the caption "Legal Matters"
therein.
<PAGE>
Securities and Exchange Commission
October 2, 1996
Page 2
We are admitted to practice law in the State of Illinois and we express no
opinions as to matters under or involving any laws other than the laws of the
State of Illinois, the federal laws of the United States of America and the
General Corporation Law of the State of Delaware.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
<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
October 2, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
registration statement on Form S-3 (File No. 333-9653) 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
October 2, 1996
<PAGE>
EXHIBIT 23.3
CONSENT OF 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
October 2, 1996
