Of course $17,000 is really chump change compared to what PNK can earn in a night running a new casino in Atlantic City, but it’s still a surprising amount of change to be lost over 26 years. Now that the Sands has been cleaned though, there is a bigger issue of how to deal with all of the casino chips that were issued throughout that 26 year period.

Because the chips themselves are like gift certificates, they have no expiration date even though the Sands is out of business. When PNK bought the Sands, they also bought the risk that people who have been hoarding these chips could later come out of the woodwork and demand payment.

To help mitigate some of the risks that they are taking, PNK had a pulverizing party and destroyed more than $61.2 million worth of casino currency. They hired a company, Secure Mobile Destruction to do the dirty deed and brought in a 51-foot semi truck “with a machine like a giant hammer inside to pound the chips into pellets.”

Once they reduce the nearly 10,000 pounds of chips to clay pellets, they will dispose of them at the local dump with no fear of anyone coming back and demanding payment later.

I’m still working on getting the pool set up. I’ve talked with a few vendors about providing better portfolio tracking software, because I’d like to move the Minus Index outside of Marketocracy, so that all readers can see it. In the meantime, if you are interested in tracking the day to day movements of the index, you can still follow the performance by logging into Marketocracy and then checking out this link.

I’ve also been in contact with a couple of software companies and have been evaluating the best solution to use for the pool. I had originally hoped to move the site into beta by May 1st, but it’s been taking longer than expected to build it out. Since these early decisions will affect the site for years to come, I am being extra careful in trying to think through issues early on. I’m hoping to get the pool built in time for memorial day and if all goes well, we’ll be moving to beta before Independence day.

No Stopping Until You Cross The Finish Line Hosted on Zooomr

I posted an entire set of photos from opening weekend on Zooomr. I also uploaded a higher res copy of the race to Stage6. Right now, it looks like Bay Meadows is going to close down in San Mateo, so Golden Gate Fields may end up being San Francisco’s only horse racing option. That would be Ok if they raced for a longer season, but I think it means less racing. It said to see Bay Meadows close down, especially when they have the nicer track.

This year though, Yum brands is going to reward the athletes themselves and have agreed to a bizzare sponsorship of the Kentucky Derby, through a partnership with Churchill Downs. (CHDN) Financial details of the arrangement were not disclosed, but if any horse is able to beat Barbaro’s record of 6 and 1/2 lengths, then Yum brands has agreed to give a million dollars to the winner. Compared to what Churchill Downs will be taking in during the race, the $1 million is really just chump change, but it’d be a nice bonus, for an owner, on top of the winnings from the race.

At the very least, this partnership will help to raise awareness for the sport of kings. Barbaro’s fantastic run brought a lot of attention to the sport and it’s nice to see corporate sponsors lining up to help carry on the tradition. As more and and more sponsors start launching their marketing campaigns for the Kentucky Derby, it will be interesting to see if it lifts the Minus Index from the extra attention. I could see the publicity from the event bringing in new investors, but you’d also think that the smart money would have identified this sort of trend already (if it even exists).

Update - It looks like it only took about 3 hours for Yum brand’s prize offer to hit the mainstream press. The AP has a write up on the prize and mentions that this could become an ongoing event if no one wins. I bet that if you wanted to wager on anyone breaking Barbaro’s record, you could get 50 - 1 odds. If this is the case, then between the AP article, plus the blogger buzz, plus whatever coverage shows up on the social network sites, Yum just got a ton of press coverage for something that probably only would cost them $20,000 to hedge.

I think it’s crazy that people are allowed to invest capital in the stock markets, but they can’t make a bet online. If I go to a poker house I can gamble, but if I’m there and I’m using an internet connection then I’m breaking the law if I play online. These rules make no sense and need to be rethought.

I don’t give Frank’s bill much of a chance of passing, but if it did pass, I’m not sure if it would really be good for the Minus Index or not. On one hand it would open up potential markets to many of the companies in the pool, but on another level it would also open up their industry to a new breed of competition. The internet has done a good job of commoditizing the pricing for many industries and if it weren’t for many of these laws, I’m not sure that the casinos could earn the commissions that they charge.

Regardless of it’s impact though, I’d like to see online gaming legitimatized. I don’t think that whether or not someone is allowed to bet, should be based on their geography.

I went out to Golden Gate fields this weekend to watch the San Francisco Mile. Overall I ended up paying the house it’s commission, but I also had a lot of fun. Here is one of the races from the event. Scientific Games (SGMS) handles all the betting, so they will be the one to win from my wagering, but I still ended up winning this race.

Out of the gates, the stock traded down, but once the analysts got involved, it was a shark feeding frenzy! Ryan L. Worst with Brean Murray, Carret & Co told investors that “TrackNet’s content would shave a penny or two from Youbet’s second-quarter profit. That represents 20 percent to 40 percent of the profit analysts polled by Thomson Financial forecast for the quarter.” Todd Eilers with Roth Capital also downgraded the stock and warned of soft profits. To make matters even worse, AllofHorseRacing.com jumped all over the PR blunder, in order to promote their own support for the Kentucky Derby.

After seeing the market’s response, YouBet issued a rushed press release announcing that they had extended their agreement with Churchill Downs (CHDN) to 2010. This is important because CHDN represents half of the TrackNet equation, but it did little to soothe investor’s nerves (although the stock did recover a bit over the remainder of the day.) They company also denied that the issue would impact their earnings because it would be offset by savings in marketing costs.

Whether or not it will impact earnings remains to be seen, but the public outburst does tell us something about YouBet’s negotiating position right now and things do smell a little desperate. I’m still familiarizing with the history of each stock in the Minus index, but luckily for me, there are others, who know more about this. Marshall Graham at Equinometrics offer an excellent hypothesis on what really might be going on.

“For the past few years America TAB and Youbet have operated offering both TVG and MEC tracks. Why the sudden change? My guess is that TrackNet intends to squeeze all ADWs out. If Empire Racing (which includes Magna and Churchill Downs) get the New York tracks, it is all over for Youbet.”

All in all, it was an ugly day that really didn’t need to happen. YouBet could have continued their negotiations with TrackNet privately instead of airing the dirty laundry. As a result, investors have lost some measure of confidence and they’ve damaged a key relationship with the blunder.

To TrackNet’s credit, they responded to this public airing of their dirty laundry by saying that they don’t want to lock YouBet out, as much as they want to make a content agreement with Television Games Network first. TGN has had a history of insisting on these exclusivity agreements and apparently TrackNet is doing their best to open up the industry.

On one level, I can understand TrackNet Media’s desire to protect their races from being dilluted by other competitors and to negotiate their own concerns before addressing their partner, but on another level, this seems like a very low handed tactic to use, in order to apply pressure to a competitor. Somehow YouBet got caught up in all of this drama and regardless of TrackNet’s motivation, their business could be impacted. I’ll leave my readers to decide whether it’s a shrewd move on TrackNet’s part or a dangerous precident to set. If exclusivity does survive, then it will be a blow to consumers, but once again the odds will be stacked in the favor of the house.

With a market cap of about $30 million today’s news was definetely material for the company and a welcome relief for shareholders, who have seen their market value drop from $10 to $2.50 over the last 12 months. With a very healthy balance sheet and access to more cash, it will be interesting to see what the company has planned for the cash. They have already indicated that they’ve earmarked the funds for growth, so I doubt we’d see a dividend or share buyback, but after a difficult year, it’s good to see the company begining to claw it’s way back. Whether this is the bottom of a difficult road or just a dead cat bounce remains to be seen, but at a fraction of what the company used to be worth, there may be a value opportunity for investors who aren’t afraid of risk or dabbling on the bulletin boards.

Nevada Gold develops and operates several casinos and helps to provides financing to tribal casinos. They also own mining rights to 9,000 acreas in Nevada. As of today’s close the company traded at just 1.8 times book and less then .50 times their trailing 12 month sales. Overall, their earnings look OK, but the company had a terrible 2nd quarter and on their Oct 2006 was forced to absorb steep losses after they spent $2.1 million to open up racing facilities for the subsidiary they just sold. At the same time, they also were forced to absorb losses related to $3.1 million in loans.