Business: A Run of Bad Luck in Gambling Stocks

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> International Leisure Corp., which is controlled by Millionaire Kirk Kerkorian, bought the Flamingo and built the 1,519-bedroom International Hotel. Earnings more than doubled last year to $6.5 million, but the company's stock plummeted from a 1969 high of 64 to last week's 13¾.* Dragged down in part by the dismal image shared by many casino-owning companies, it also had troubles with the SEC. Last year International Leisure needed audited financial statements going back to 1964 for a proposed stock offering. Company officers said that they could not supply the figures because the Flamingo's previous owners had refused to hand them over.

> Levin-Townsend Computer Corp., which owns the Bonanza, has suffered the sharpest decline of all the casino companies—an 87% fall from last year's high of 57½ to last week's 7⅛ a share. In the last nine months of 1969, the company had a $15.9 million loss. Too small and poorly managed to compete with the giants, the Bonanza has been closed and may be sold. Unless they find a buyer, officials of Levin-Townsend say that they may be unable to pay off some notes held by Kerkorian, the previous Bonanza owner. In that case, they will have to give the casino back to him. Not all of Levin-Townsend's woes result from the gambling business. Its former chief, Howard Levin, was ousted by the board on charges of having made acquisitions without consulting directors (TIME, Feb. 2), and he is waging a proxy fight to return.

> Lum's Inc., a restaurant franchise company, paid $60 million last fall for Caesars Palace; the price of the company's stock tumbled from 26⅜ last November to last week's 8⅛. The casino has been doing well, but Lum's other business has not been able to keep up. The company has changed its accounting method. Lum's recorded an 18% fall-off in net income for the six months ended Jan. 31; under the old accounting system, the drop would have been 77%.

> Del E. Webb Corp., the Phoenix-based construction company, owns the Sahara and the Thunderbird among others; its casinos are thriving, though its stock has dropped from 23⅝ in 1969 to 10¼ last week. Contributing to the decline was a scandal that surfaced last month, when a Webb subsidiary sued the estate of a deceased Sahara official for $500,000 that he was alleged to have siphoned out of the casino. Investigations have uncovered evidence of blackmail and possibly murder.

Overlapping Eavesdroppers. Everywhere they look, the public companies see trouble. They face higher labor costs: a 94-hour strike of kitchen workers and bartenders was settled last month for a 31½% rise in wages and fringe benefits over three years. There are also political problems ahead. George Franklin, Clark County district attorney who may run for Governor this year, wants to ban public companies from holding gaming licenses. For one thing, he says, criminals can too easily violate Nevada law by buying into casinos through their local stockbroker. To ensure state control over the casinos, Franklin prefers that public companies rent them out to private operators.