Louisiana Stalls Its Decision on Hollywood Park Merger Plan

Louisiana gambling regulators have thrown an unexpected monkey wrench into Hollywood Park’s proposed $245-million acquisition of Boomtown Inc., a Nevada-based casino and riverboat company.

After receiving an anonymous 500-page document containing allegations of wrongdoing against Hollywood Park Chief Executive Randall D. Hubbard and the company, the state Gaming Control Board on Monday postponed until at least June 20 a decision on whether to approve the deal.

Because the terms of the merger require all regulatory approvals to be received by the end of June, any delay past that point would jeopardize the deal, Hubbard reportedly told the regulators.

Louisiana’s approval is needed because Boomtown operates a riverboat casino in that state. Other state approvals, including those from Mississippi and Nevada, have already been secured.

Hubbard and other Hollywood Park executives declined to comment Wednesday. Executives of Boomtown did not return calls to the company’s Verdi, Nev., corporate office. Hollywood Park’s stock closed unchanged Wednesday at $14, and Boomtown’s closed down 12.5 cents at $7.625. Both companies trade on the Nasdaq Stock Market.

Hubbard and Boomtown Chief Executive Timothy Parrott were both in the audience at Monday’s hearing in Baton Rouge when the gaming board disclosed it had received the anonymous parcel making a wide range of allegations against Hubbard and Inglewood-based Hollywood Park. Under state law, the board is prevented from releasing the text of the report to anyone, including Hollywood Park itself. Board officials also said that their investigators had already questioned Hubbard under oath about many of the allegations but that a state police investigation into the document was not yet complete. The board postponed its consideration of the merger until a meeting June 20 to give police time to finish that inquiry.

“We ask a lot of hard questions,” State Secretary of Revenue and Taxation John N. Kennedy, a nonvoting member of the board, told The Times. “But that’s our job.”

Hollywood Park last year announced its planned acquisition of Boomtown for stock and the acquisition of Boomtown debt. The deal was seen as beneficial to Boomtown, which operates casinos in Reno, Las Vegas and Biloxi, Miss., because it would enable the company to finance further expansion with Hollywood Park’s relatively lower-cost credit.

Hollywood Park, meanwhile, would gain a foothold in the lucrative Nevada and Mississippi gaming markets, allowing it to expand beyond its business operating racetracks and California card clubs.