Players Club Hits Jackpot With Riverboat Casino : Gaming: The once-struggling Fishman brothers have been on a hot streak ever since they teamed up with Merv Griffin to launch a floating gambling hall on the Ohio River.

For eight years, the Fishman brothers of Calabasas struggled to sell memberships in Players Club, a sort of discount travel service for medium-stakes gamblers.

Even with actor Telly Savalas pitching the club on late-night television commercials, the Fishmans and their company, Players International Inc., mostly swallowed losses.

But now their luck seems to have changed.

In February, Players teamed up with Merv Griffin to launch a riverboat casino in Metropolis, a town of 6,700 at the southern tip of Illinois. Since then, the Fishmans have been on a hot streak.

Players early this month reported a financial turnaround, recording a profit of $6.3 million on revenue of $18.3 million in the quarter ended June 30. While that included a $3.5-million tax credit for a change in its accounting method, it wasn’t bad for a company that lost $11 million in the year ended March 30.

The firm’s stock, which had languished near $2 a share over the last couple of years, shot up to $20 this summer. (It closed Friday at $15.75 in over-the-counter trading.) And last month, Players raised $87.5 million by selling new shares to the public.

Even the great Midwestern floods this summer missed Players’ riverboat, which docks on the Ohio River about 45 miles from the flood zone--though analysts warn that the company, in the long run, faces a saturated gambling market.

“The last couple of years it was very difficult with the recession,” said David Fishman, 45, the company’s vice chairman. “But we saw the riverboat casino industry coming alive. I’d say our luck’s changed.”

Riverboat gambling indeed has come alive--and quickly. It was only in April, 1991, that the first riverboat gambling in decades commenced on the Mississippi River in Iowa. Since then, five more states hungry for tax revenues have approved riverboat casinos. About 20 are operating, a number likely to double in a year.

Players plans to open its second riverboat casino, in Lake Charles, La., by year’s end. The company is spending $27 million to build the 24,000-square-foot riverboat, which will be filled with 800 slot machines and 45 gaming tables. Players is also in the hunt for a casino license from Indiana, the latest state to approve riverboat gaming.

Players’ riverboat in Metropolis is evidence of Middle America’s appetite for gaming.

From April to June, about 320,000 people took the three-hour ride on the paddle wheeler, paying an average $10 admission and wagering a total of more than $100 million. The company’s win--or gross revenue--totaled about $16 million. The pretax profit margin was about 33%, analysts figure.

“Players has put some pretty impressive numbers on the board so far,” said David Leibowitz, a gaming industry analyst at Republic New York Securities Corp.

But Leibowitz added this caveat: “It’s difficult in the gaming industry to look too far out into the future.”

For Players, the biggest threat comes from other nearby casinos.

In Metropolis, its nearest rival riverboat is about three hours away, at East St. Louis, Ill. In Louisiana, its closest competitor will be a two-hour drive away--about the maximum distance experts say gamblers will travel to visit a riverboat casino.

But casino gambling is burgeoning nationwide, both on riverboats and on land.

For example, Kentucky--feeling pressure from nearby riverboat gambling in Indiana--may allow casino gambling at race tracks. And the track in Paducah, Ky., is only about 10 miles from Metropolis.

To bolster its fortunes, Players signed an option late last month that will allow it to build a casino in Paducah, if Kentucky legalizes casino gambling.

Players’ potential business rivals are formidable. Harrah’s, Hilton Hotels Corp., Circus Circus Enterprises and ITT Sheraton Corp. are among the giant companies developing riverboat casinos.

“Five years from now, the whole industry will be dominated by four or five companies,” said Marvin Roffman, a money manager in Philadelphia who tracks casino stocks.

Other risks include the uncertainties of operating in a tightly regulated environment.

“There’s (always) the threat that the next license is going to be harder to get,” said Ian Gilson, an analyst who follows Players for L.H. Friend, Weinress & Frankson, an Irvine investment banking firm.

Players can hardly ignore, for example, what happened to one small competitor, Iowa-based President Riverboat Casinos. The company’s stock plunged to $28 a share in late June after flirting with the $50 range earlier in the month--partly on the news that it had failed to win a riverboat casino license from Louisiana.

Players’ chairman and chief executive, 50-year-old Ed Fishman, agrees that riverboat gambling in the long run is a bit of a crap shoot. Still, he said, “as long as we pick our sites well, I can only foresee our company having a great decade.”

Ed Fishman already has hit the jackpot from the sudden surge in riverboat casino stocks--many of which, like Players, have surged in the last year.

Last month, Fishman sold 297,000 of his Players shares at $18.75 each, for a total of $5.6 million. He and his brother still own 11.5% of the company’s common stock. Merv Griffin’s company, the Griffin Group Inc., is Players’ single biggest shareholder, with 12.4%.

Griffin, the former singer and talk-show host, said he met the Fishmans in 1988, when they were organizing a blackjack tournament at his Resorts International casino in Atlantic City.

“It was immediate chemistry,” said Griffin, who visits the Metropolis riverboat frequently and is the company’s spokesman.

Like Griffin--who created Wheel of Fortune and Jeopardy--the Fishmans started out in television game shows.

In the mid-1970s, they produced a game show called Dealer’s Choice in Las Vegas and started organizing blackjack tournaments. They formed Players Club in 1985, selling memberships for $125 a year that offered gamblers discounts on air fare, lodging, food and entertainment.

Players turned its first profit in 1989, when club membership reached 100,000. But with the recession and increased competition in gambling, hotels began marketing discounts directly. After losing $11 million in fiscal 1993--including $2 million to terminate its contract with tough-guy spokesman Savalas and $5 million for restructuring--the company is trying to sell Players Club.

Even so, the Fishmans say the club taught them what gamblers want. In Metropolis, Players is building a hotel and 400-seat theater next to Merv Griffin’s Landing, where the riverboat docks.

Experts, however, don’t think such amenities will make much difference in the long run.

“At the moment, Players is in pretty good shape,” said I. Nelson Rose, a law professor at Whittier Law School who has written books and lectured on the gambling industry. “But in the long term, there’s going to be more land-based casinos. And the speed of change is picking up.”