Calabasas Firm Bets on Riverboat Casino : Gaming: Midwestern states hungry for revenue have taken steps to legalize such gambling. Players International hopes to cash in.

Players International, a Calabasas company that offers discounts at casinos in Las Vegas and Atlantic City, is rolling the dice on what it hopes will be a profitable new venture: riverboat gambling.

Many Midwestern states hungry for revenue have taken steps to legalize riverboat gambling. Three gambling ships have begun operating in Iowa. In Illinois last year the state passed a law providing for as many as 20 casino boats, and the state has so far granted four preliminary licenses to companies planning to operate riverboat casinos.

Players applied in January for a license to operate a riverboat casino on the Ohio River near the town of Metropolis in southern Illinois. That area was a haven for riverboat gambling in the 1800s. The Illinois Gaming Board, which regulates gambling in the state, hopes to announce a decision on Players’ application in August, said Donna Moore, chief legal counsel for the board.

If the license is granted, Players expects to have its boat running by the summer of 1992.

“If it happens and it’s successful, it’s going to be a major contributor to the company,” said David Fishman, Players’ vice chairman. “It’s a very profit-oriented business.”

For Players, a relatively small company in the high-stakes gaming business, the riverboat casino will be a big gamble, requiring an initial investment of about $13 million. Several million dollars will come from Players’ own cash and the rest will be financed, Fishman said.

Players would have to pay a 20% tax on its riverboat gaming revenues to Illinois. However, unlike Iowa, Illinois has no limits on the size of bets or losses by any one gambler.

Saul Leonard, a Los Angeles gaming industry consultant, said the payoff potential for riverboat casinos is uncertain and that it would depend on factors such as how competitive the market becomes and how much business can be generated when the weather turns bad.

“I think the potential on any riverboat is relatively limited,” Leonard said. “That’s why you don’t see any major companies going into it.”

But Gregory H. Kieselmann, an analyst at the L. H. Friend, Weinress & Frankson brokerage firm in Irvine, said he expects the casino to be a “spectacular success” for Players. Kieselmann predicted that by fiscal 1993, the riverboat would be generating about $30 million of the company’s $50-million revenue and would push Players’ earnings to about $5 million. That contrasts with Kieselmann’s projections for fiscal 1991 of about $20.5 million in revenue with $1 million in profit.

Kieselmann added that the riverboat casinos that recently began operating in Iowa are fully booked through September and have been receiving about seven times more phone calls on their reservation lines than initial projections had foreseen.

To date, Players’ main business has involved selling memberships that offer discounts of 25% or more on vacation packages at gambling spots. The Players Club--best known for its TV ads featuring actor Telly Savalas--has about 100,000 members who pay annual dues of $125. Players also operates casinos on two cruise ships and markets a line of cash-advance machines used in casinos.

Players’ riverboat venture comes at a time when the company’s earnings have taken a downturn. For the fiscal third quarter ended Dec. 31, earnings fell 43% to $179,000 from $313,000 the year before, despite a 47% gain in revenue to $6 million.

The company blamed the lower profit largely on the costs of starting a new business that markets telephone call-in versions of the TV game shows “Jeopardy!” and “Wheel of Fortune.”

Players has not yet reported financial results for the fourth quarter ended March 31.