A Roll of the Dice : Gaming: The TV tycoon is making a $2.25-million bet with a stake in Players International’s riverboat casino.

The last time Merv Griffin bet on the casino business, the dice rolled the wrong way.

In 1988, Griffin outbid Donald Trump for Resorts International, and ended up splitting the company with the New York developer. Trump kept Resorts’ then-unfinished Taj Mahal casino in Atlantic City, N.J.; for $365 million, Griffin got the rest of the company, which owns other casinos in Atlantic City and the Bahamas.

Less than two years later, Resorts--struggling under heavy debt--filed for bankruptcy court protection.

But now, the talk show host-turned-businessman is gambling on another, albeit much smaller, gaming venture. Last week, Players International Inc. in Calabasas said that Griffin invested $2.25 million in its planned Illinois riverboat casino, part of $5.8 million the company raised in a private placement of debt to finish building the boat and get it running by next spring.

Griffin also has the option of buying up to 20% of Players by converting his debentures into common stock. The company said that if Griffin and other investors converted their debentures and exercised warrants to purchase additional stock that are attached to the debentures, Players would get another $14 million in cash and increase its net worth by about $20 million.

Why is Griffin gambling on another casino venture?

“I’m betting on live entertainment making a big comeback,” Griffin said. “People have been locked in their chairs long enough.”

Players is currently building its 210-foot, 1,200-passenger boat in Louisiana. A replica of a 19th-Century riverboat, the vessel will feature more than 650 video poker and slot machines, 38 table games and live poker.

Part of what intrigued Griffin about Players’ riverboat venture, he said, is that the project also includes plans for riverfront restaurants, shops, a theater, meeting facilities and land that could be used to develop a hotel.

The Ohio River location in the southern Illinois town of Metropolis is another plus, he said. Six million people live within a 200-mile radius of the town, and Griffin said it could become a popular entertainment destination.

Griffin said the investment is also a chance for him to work with Players Chairman Edward Fishman, whom Griffin calls “a marketing genius.”

Now 66, Griffin developed the hit game shows “Jeopardy!” and “Wheel of Fortune,” then sold his production company to the Coca-Cola Co. in 1986 for $250 million. He also owns the Beverly Hills Hilton, which he bought in 1987 for $100 million, and has interests in radio and film.

As for Resorts, Griffin said, “the final chapter isn’t written yet.”

Resorts emerged from bankruptcy protection in September, 1990, but continues to struggle, reporting a $41.6-million loss for 1991. Griffin has conceded that he paid too much for the company, and in a concession to Resorts’ bondholders, he reduced his majority stake in the company to 22%. After appearing on the Forbes magazine ranking of the 400 richest Americans in 1989 with an estimated $300-million fortune, Griffin has since dropped off the list.

But, Griffin said, Resorts’ financial problems were largely due to its enormous debt, and operationally the company has rebounded. The Atlantic City casino “is a huge success and is mobbed” with customers, he said.

For Players, Griffin’s investment is the final piece of the $18-million cost of the riverboat project. “The money certainly was important to us,” said David Fishman, Edward Fishman’s brother, who is Players’ vice chairman and president of its Players Riverboat Casino subsidiary.

He added: “Having someone of the stature of Merv Griffin related to our company is certainly a benefit.”

Players’ casino boat venture comes at a time of sinking fortunes for the company, whose main business is providing promotions and discounts for gambling resorts. In the fiscal year ended March 31, Players’ revenue rose 20%, to $23.6 million, but it lost $4.26 million, in contrast with a profit of $805,100 the previous year.

Part of the loss was due to a $3.8-million after-tax charge for changing the way it accounts for its membership acquisition costs. The company also blamed the loss on the recession and the Gulf War’s effect on travel.

Players Club, which charges members $144 a year, has about 75,000 members, down from about 100,000 a year ago. The club is best known for its television commercials featuring actor Telly Savalas.

Players said its 1991 results were also hurt by write-offs it took for cutting back its 900-number telephone business “due to unacceptable performance levels.” The operation includes call-in versions of “Jeopardy!” and other TV game shows.

The company’s stock closed Monday at $3.125 a share, roughly where it has traded for the past year.

Despite the losses, Fishman said Players isn’t counting on the riverboat casino for the company to stay afloat. But the project “opens a huge opportunity for the company in a different direction,” he said.

David Leibowitz, an analyst at American Securities Corp. in New York, said, “The potential rewards from riverboat gaming appear to significantly exceed the opportunities . . . in their existing businesses.”

Analyst Ian T. Gilson at L. H. Friend, Weinress & Frankson in Irvine predicted that the casino boat, once up and running, would generate between $5 million and $8 million in annual profits for Players. The riverboat would also help generate new business for the company’s other operations, he said.

Players hopes to finish the boat in late February and to begin operations in April. It has received preliminary approval to operate the casino by the Illinois Gaming Board. Once the boat is ready to begin accepting customers and receives its final inspection, the company expects to get its license.

Like Illinois, many Midwestern states have taken steps to legalize riverboat gambling as a means to raise revenues. Players will pay the state a 20% tax on its riverboat gaming revenues. Unlike some states, however, Illinois has no limit on the size of individual bets or losses.

Illinois has so far licensed nine other riverboat casinos--the closest to Players’ site is about 250 miles away. Harvey Goldberg, Players’ chief financial officer, said other riverboats in operation, which are much smaller than the one Players plans, are averaging from 60,000 to 110,000 passengers a month, with revenues of about $60 per passenger.

Goldberg said Players is also hoping to cash in on the growth in gaming venues throughout the country. In addition to riverboat casinos, many local governments have approved land-based gambling operations, and Players’ expertise in providing services to the industry “puts us in a position to participate in these new areas,” he said.