Stardancer Casinos gambling boat business seems stuck in a run of bad luck - and it's all related to money: money owed and not available.
By AMY WIMMER, Times Staff Writer
© St. Petersburg Times, published December 22, 2002
MADEIRA BEACH -- He owes his employees two weeks' pay. Just days ago he used credit cards to make a $30,000 engine repair to the company's casino boat. Last week he bounced a check to pay for his monthly dock lease.
Sam Gray, president and chief executive officer of Stardancer Casinos, is confident the company will be afloat again soon.
In the meantime, he's a little nervous.
"Would you want to be running a business where your business is handling money and your employees think you're an S.O.B.?" Gray said during an interview in his Madeira Beach office Friday afternoon. "It's a very dangerous thing."
Gray promises the 50 or 60 employees and his dock landlords they'll be paid Monday, when a new investor steps forward with loans to help with operating expenses. But some employees, unsure whether that promise is genuine, are looking for new jobs or showing up for work with hopes of making some tips from gamblers.
Said Bob Eldridge, a relief casino manager: "The few of us that are still here are hanging around, hoping that some new money comes in."
Added Tim Baker, who works on the slot machines: "And that we'll all still have jobs."
This year has gotten progressively worse for Stardancer, based in Little River, S.C. In February, a Stardancer financier was accused of embezzling $40-million from the Ohio bank where he was chief executive officer, and lending much of that money to Stardancer. The Federal Deposit Insurance Corporation froze Stardancer's bank accounts. Then the El Dorado, Stardancer casino boat that was docked in Tarpon Springs, was repossessed.
The repossession was especially tough. With the boat went the gambling equipment inside, the money inside the slot machines, and the money in the cashier's cage, where casinos pay their lucky patrons.
That money totaled about $250,000 in money and assets. "You tell me what kind of business can handle those kind of losses," Gray said. He added that he hasn't paid himself since October.
Documents filed in the federal criminal case against Mark Steven Miller, the Ohio banker accused of embezzlement, reveal Stardancer has been trying to recover its casino equipment ever since.
The FDIC cannot comment on whether it is investigating Stardancer, said David Barr, a spokesman for FDIC in Washington, D.C. But Gray blames his problems exclusively on the federal agency, which was created in 1933 to insure deposits and promote safe banking.
At the time, the company docked boats in Madeira Beach, Tarpon Springs, Port Richey, Fernandina Beach and Myrtle Beach. Now the Madeira boat is the only one still operating.
And according to employees, sometimes the boat doesn't attract enough customers to make its twice-daily runs to the Gulf of Mexico from John's Pass, where it is docked at Hubbard's Marina. The trips are canceled when fewer than 20 people board.
The company also reduced the amount of money it keeps in the cage, thus lowering significantly the amount customers are allowed to gamble at each table.
Gray wants to restart the Tarpon Springs gambling day trips the day after Christmas, and Port Richey soon afterward.
Right now, the Port Richey offices are closed, and the grounds are no longer being maintained. Stardancer would face plenty of competition in Port Richey -- as many as three gambling boats might operate on the waterfront there, and a new developer is talking about building a $40-million hotel and casino boat project.
Gray says his investor needs some assurance from FDIC that it won't seize the money he hopes to put into Stardancer.
He says his employees could get paid in time for Christmas.
"I feel very badly that they don't have their checks. It really hurts me a great deal," Gray said of his employees, who should have been paid Monday. "I'm not proud of it. It's embarrassing."
-- Times staff writer Matthew Waite and researcher Cathy Wos contributed to this report.