“We believe the opportunity will eventually present itself,” McDowell said. “We know the Nevada market.”

The state’s gaming regulators have recommended that Isle of Capri Casinos be approved for licensing that will allow them to finalize a deal to purchase less than 1% of Fernley Pioneers LLC who owns a small casino operation outside of Reno.

The deal was designed to position the company for a quick takeover of a gaming property when the “cycle turns” McDowell said. While she did not elaborate on which property they had their eye on, McDowell did tell regulators that they were a local casino operator and felt strongly that when the time was right they would return either through a purchase or management contracts.

The Gaming Control Board has given their recommendation to license Isle of Capri Casino and the Nevada Gaming Commission will vote on September 16.

The first fiscal quarter for the regional casino operator proved to be a bad one, with a loss of $2.66 million or $0.08 a share.

Wall Street analysts’ on average were anticipating earnings of $0.12 per share on revenue of $262.50 million.

Net revenue for Isle’s first quarter reached only $251.92 down from $257.91 million in the previous year.

Despite the steep loss chairman and chief executive officer, James B. Perry said, “I believe we achieved solid performance by taking steps to maintain profitability in the midst of poor economic conditions that impacted regional gaming markets across the country during the quarter.”

Perry reiterated the company’s commitment to improving margins, “We are currently engaged in competitive bid processes for projects in Cape Girardeau, Missouri, and at the Nemacolin Woodlands Resort in Fayette County, Pennsylvania. Both of these licenses should be awarded by the end of the year, and we are actively exploring opportunities in other jurisdictions to increase and diversify cash flows.”

Shares of ISLE had fallen to $7.59 in the morning hours, down 14.43% from the previous closing price of $8.87.

According to regulatory filing on Friday, Brackenbury will be resigning from his posts on the casino operators Board of Directors and stock option and compensation committee effective October 5 following the annual 2010 meeting.

Brackenbury has held his potions with Isle of Capri Casinos and its U.K. subsidiaries since January 2004 but informed Isle last week that he would not stand for re-election at the stockholders meeting on October 5. At age 72, Brackenbury will be retiring.

Over the past six years with Isle, Brackenbury has had an active role in Isle of Capri UK Holdings, Inc which sold its casino operation in the Ricoh Arena of Coventry last April.

Isle of Capri Casinos has expressed their appreciation for Brackenbury’s service.

Council members convened to decide whether to back a proposal from Isle of Capri Casinos or St. Louis Capital Partners.

Both groups gave their presentations to city officials and residents in July.

City Manager Scott Meyer told council members that he believed that Isle’s proposal was the best suited to produce positive results for the city.

Isle is proposing developing a 125,000 to 135,000 square foot gaming complex that would include 1,200 gaming positions surrounded by restaurants and a 750 seat event center at a former shoe factory downtown.

Voters will go to the polls on November 2 and decide if the casino should be allowed within the city, however the Missouri Gaming Commission will only accept applications until September 1.

The earliest Cape Girardeau could see the casino opened would be 2012.

Although voters will still need to decide at the polls comes November, if gambling in Cape Girardeau should be allowed to continue; Isle of Capri says that they will continue to pursue Missouri’s final gaming license in the hopes that a town with legalized gambling and no casinos will welcome them.

Isle’s casino proposal is not the only one being considered by the council at tonight’s special meeting. St. Louis Capital Partners LLC are also courting Cape Girardeau for support, however last month Mayor Harry Rediger said that he was “enthusiastic with what Isle of Capri proposes”.

That proposal includes up to 1,200 gaming positions and a 750 seat events center.

Final applications are due before the Missouri Gaming Commission by September 1.

Over the next few years, Forst says that earnings should begin showing trends of a “significant ramp up” and that changes in the regional market is the reason they have upgraded shares of Isle.

KeyBanc raised its rating on the stock from “hold” to “Buy” and initiated a price target of $13.

Forst expects Isle to be able to improve earnings and reduce debt in the coming years.

The purchase of the Rainbow Casino from Bally Technologies in the previous quarter will begin improving quarterly revenue and should be reflected in tomorrow’s earnings report.

Forst says that Isle’s casino and track in South Florida should also show improvements with the recent reduction in tax rate from 50% to 35%, leaving more cash available for marketing promotions that would boost business; also noting that Isle backed by local investors may be selected as the winning bid to develop a casino in Cape Girardeau Missouri later this year.

City Administrator, Craig Malin, stated that they were in negotiations with two companies, one of which could be chosen as early as next month to build a land based casino to replace the Rhythm City Casino.

“If there is a company that is willing to invest and purchase the asset at a commercially reasonable multiple, we are willing to listen.” responded Isle of Capri spokeswoman Jill Haynes.

In 2008 Isle of Capri opted to develop a land based gaming facility in neighboring Bettendorf, which has continually produced higher revenues than the Rhythm City riverboat casino; prompting city officials to seek out a new developer that was willing to invest and could possibly generate an additional $8 million more in revenue for the city.

While Isle of Capri reserves the right to refuse to be bought out, the Iowa Racing and Gaming Commission and the Riverboat Development Authority, who currently holds the license on Rhythm City, will have the final say in whether or not the gaming license would be transferred to another operator.

According to reports from the Iowa Racing and Gaming Commission, fiscal 2010 revenue ending June 30 at the Isle of Capri casino declined by 12% from the previous year to $78.3 million, which is the lowest for the casino in the past 10 years.

The revenue drop for the riverboat operation was also the biggest percentage decrease experienced by all of Iowa’s 17 state regulated casinos.

Even with the addition of two new hotels adjacent to the property and an events center opening within the period, yearly admissions were also down 43% to 1.15 million.

Iowa’s casinos, as a whole brought in gross gambling revenue of $1.36 billion for the fiscal year, down by 3.5% from $1.41 billion in the previous year.

Isle of Capri officials discussed their plans to build a casino along North Main Street that could include up to 1,200 gaming positions and a 750 seat event center.

Representatives from the casino company said that Cape Girardeau was chosen because it was the best positioned area to produce revenue without affecting other casinos in the state.

Earlier in the process, Isle had also expressed interest in St. Louis but following a study initiated by Ameristar Casino, chose Cape Girardeau.

Isle will be competing with St. Louis Capital Partners LLC to gain the endorsement of city council members, however following this week’s meeting, the city’s highest ranking lawmakers already seem to be favoring Isle.

“My initial reaction is that I am very enthusiastic with what Isle of Capri proposes,” Mayor Harry Rediger said. “It is a solid plan, and they have been open with us.”

The firm indicated that the move to postpone the sale would jeopardize Isle’s ability to reduce and maintain leverage at a level required to hold the current B2 rating.

Keith Foley, the agency’s senior vice president said that even with the reduced tax rate in Florida and the recent acquisition of the Rainbow Casino, Isle is still facing a tough operating environment that will continue to pressure credit metrics.

Earlier this month Isle released its fiscal fourth quarter results that were down to a third of what it was the previous year. Even with the drop, Isle managed to beat analysts’ expectations that predicted a loss for the quarter.

Isle’s stock has not yet been able to recover from the sudden drop experienced when Investors learned of the proposed sale. Isle dropped by $1.73 on Tuesday to close the session at $10.68 and has continued to fall below the $10 price range. Although the high has teetered around the $10 price since Thursday, the market price closed at $9.90 on July 1 and $9.20 on July 2.

On Monday, the casino operator announced that Deutsche Bank Securities, Credit Suisse and Wells Fargo Securities were hired to assist with the offering however on Thursday Isle says that those plans have been put on hold.

Isle stock had dropped approximately 25% since Monday’s announcement which analysts say led to the delayed sale.

“The company was expecting to raise $120 million. If the deal was priced at current levels, the offering would have generated only $80 million.” Stifel Nicolaus analyst Steven Wieczynski wrote in a note to clients.

Isle planned to use the funds to pay back borrowings under its revolving line of credit, including $80 million that was used to acquire the Rainbow Casino. The remaining funds would have been used for general corporate purposes.

Isle has not indicated a new date for the offering.

The St. Louis based casino operator has hired Deutsche Bank Securities and Credit Suisse to work as joint book-running managers and Wells Fargo Securities as joint lead manager.

Underwriters will be given an option for 30 days to purchase up to an extra 1.35 million shares to cover any excess demand that may occur.

Isle of Capri Casinos will use the funds to pay back borrowings under its revolving line of credit, including $80 million that was used to acquire the Rainbow Casino in Vicksburg, Mississippi from Bally Technologies in a deal that was closed earlier this month. The remaining funds will be used for general corporate purposes.

Shares of Isle have fallen 12.85% or $1.60 to $10.82 during the afternoon trading session.

The November ballot will ask Colorado voters whether or not they want to continue to allow gambling operations, under state law requiring a referendum every eight years.

Isle of Capri casinos owns casino operations in Davenport and Bettendorf and operates casinos in Waterloo and Marquette.

Although supporters of the casinos are confident that the referendum will pass, as it did in 2002, they plan to strategically campaign in counties that host the casinos.

“We believe this is going to be an education campaign,” said Jill Haynes, a spokeswoman for the St. Louis-based gaming company.

Mary Ellen Chamberlin, president of the Riverboat Development Authority, which holds the license to the Davenport operation said that the city has expressed dissatisfaction with Isle’s rebranding of its Davenport operation and is concerned that will lead to “some grumbling” over the referendum.

The gaming company has finalized the purchase of the Rainbow Casino from Bally Technologies Inc in an all cash transaction of $80 million.

The intended sale was announced in April and approved by gaming regulators last month.

Bally Technologies has been looking to sell the riverboat operation in order to exit the casino industry and focus primarily on game manufacturing.

Isle plans to eventually rebrand and rename the 25,000 square foot casino with 831 slot machines and 10 table games as well as an 89 room hotel into the Lady Luck Casino.

“Once the deal closes we will start a fairly slow transition.” said a company spokesperson during an earlier interview regarding the pending transaction.

Isle of Capri operates 15 casino properties in Mississippi, Louisiana, Iowa, Missouri, Colorado and Florida, but sold their Vicksburg property in 2006.

This morning the casino operator reported its fiscal fourth quarter 2010 results with a net income of $0.15 per share compared to $0.46 per share reported in 2009. Analysts’ predicted Isle to take a loss of $0.08 per share.

For the quarter ending April 25, profits were down 66% to $4.9 million compared to $14.6 million in the same period last year.

“While we believe the economic condition of our customers improved as the fiscal year progressed, we believe the effect of an economic recovery on the gaming business will be slow and steady,” President and Chief Operating Officer Virginia McDowell said in a statement Wednesday. “As a result, we continue to trim costs where possible, improve our marketing efforts and elevate the guest experience to improve the competitive positioning of each of our properties. Over the past two years we have made prudent changes to our cost structure, including the elimination of over $30 million in property-level operating costs relating to our gaming floors, guest amenities and hotels, other facilities and marketing and administrative costs.”

Mississippi gaming regulators have granted approval for Isle to purchase the Rainbow Casino in Vicksburg from Bally. The $80 million sale is expected to be finalized and officially change hands on June 9.

Isle originally announced the deal last month and said that there was no immediate plans to rename or rebrand the property until later next year. Eventually Isle does plan to rebrand the casino to bring it under their Lady Luck casino brand.

The purchase marks Isle’s return to Vicksburg. In 1993 Isle opened Vicksburg’s first casino which it later sold to Legends Gaming in 2006.

Isle closed the regular trading session on Monday up 0.76% from its previous close to $10.65.

Isle has been trading in the range of a 52 week low of $7.05 and a 52 week high of 14.40.

With calculated support of $8.39 and resistance of $11.15, shares of Isle hit its lowest trading point this month of $8.39 on May 6 and a high of $11.75 on May 3.

According to SmartTrend’s analysis of the stock, Isle has a price/sales ratio of 0.33x based on a current price of $10.65 and trailing 12-month sales per share of $31.87.

Isle of Capri Casinos, the owner and operator of branded casino resorts throughout the U.S., the U.K. and the Bahamas, entered into an agreement with Bally Technologies last month to purchase the Rainbow Casino in Vicksburg, Mississippi and hopes the sale will be complete by June.

Isle has also been granted approval on preliminary plans to expand its Pompano Beach racetrack and casino following an expanded gambling allowance signed in the state of Florida.

Both of these ventures, as well as many pending management opportunities are expected to help Isle grow their bottom line, increase recurring revenue and increase shareholder value.

The approval paves the way for the track to build a 500 room hotel and increase its casino space by an additional 67,000 square feet.

Other plans include the addition of a 65,000 square foot conference center, 45,000 square feet of entertainment space, more than 400,000 square feet of retail space and 850 condos and residential units.

“We think we’re going to bring something, eventually, better than the Hard Rock Hotel & Casino,” said Alan Koslow, an attorney representing the Isle. “We’re going to do it smarter.”

However, General Manager Rob Wyre says it’s too early to set a construction time line “We’re still trying to gauge if the worst is behind us in the economy, and having been under the 50 percent [slot] tax for three years has prevented the shareholders from a fair return on their investment. We’re looking to improve that.”

City officials had asked interested developers to submit basic information to the St. Louis Development Corp. Interest parties would then be asked to submit a full proposal prior to May 27. The city will review applications and select one to back before the Missouri Gaming Commission.

The Commission has begun speaking with developers who wish to obtain the states final gaming license, that will become available this summer, when Pinnacle Entertainment closes the President Riverboat Casino.

St. Louis is hoping that they will be able to find a winning proposal that would increase their odds of keeping the license in the city.

Among those that came forward was Isle of Capri, who says that they are looking at possible new casino sites in the city as well as other areas in the state.

“We’ve expressed interest in the feasibility of constructing a casino in the city,” said Jill Haynes, a spokeswoman for Isle of Capri “The company is also evaluating other opportunities, in addition to the city of St. Louis. We have had preliminary conversations regarding several locations but have not yet committed to a specific project.”

Analysts, Ryan Worst upgraded Isle from “Hold” to “Buy” this week with a target price of $12.

Worst, wrote in a client note that the tax rate on slot machines at Florida’s racinos may drop from the current 50% to 35% when the state’s gaming compact is signed with the Seminole Indian tribe.

Isle would benefit from this rate change, as they own the highest grossing horse racing facility in the state.

Worst also said that he was pleased with the gaming company’s strong free cash flow, the recently amended credit agreement and the pending $80 million purchase of Bally Technologies Rainbow casino.

Isle stock closed the market yesterday at $9.93 up $0.33 from the opening price of $9.60.

Isle reached its highest price since October 2009 yesterday hitting $9.98 in the afternoon hours.