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Gaming Guru

Joe Weinert
 

Atlantic City Round-Up

11 February 2003

ATLANTIC CITY -- There is growing speculation in New Jersey that Gov.Jim McGreevey proposed new and higher casino taxes as a bargaining chip to get slot machines at racetracks in the northern part of the state.

Not that that makes Atlantic City casino bosses breathe any easier.

"I think they floated this tax thing because they wanted slot machines at racetracks. And we're not compromising on either one of these," said Dennis Gomes, president of the Casino Association of New Jersey, which represents the 11 Atlantic City casinos.

"What they (McGreevey administration) don't understand is that it's equally as much of a problem to us.There's huge damage to us. We have a huge market base up there. That's a disaster," Gomes said.

The issue heated up Friday, when McGreevey officials phoned some Atlantic City casino bosses. The purpose of the call, according to a governor's spokesman, was to "affirm his commitment to the economic vitality of Atlantic city and its importance to the state's economy and discuss how to insure the long-term success of Atlantic City."

But Harrah's Entertainment said that McGreevey personally called Harrahís Chairman Phil Satre and asked his company to manage proposed slots at Meadowlands Racetrack.

"Whether it was to be part of the management contract or the full contract, I don't know," Harrah's spokesman Gary Thompson said. "I don't know what Phil said to the governor or whether he was noncommittal or just listened to what he said or even gave a reaction."

McGreevey spokesman Micah Rasmussen angrily denied Harrah's claim.

"I don't know where this guy's from, but in New Jersey when you have a conversation with the governor and then you flat out lie about that conversation it's unacceptable," Rasmussen said. "He completely misrepresented the conversation. It's disrespectful to the office. In the future, the governor will deal with more responsible members of the casino industry."

McGreevey stunned gaming executives four days earlier with four proposals that they said would damage the casino industry. He wants to increase the revenue tax to 10 percent from 8 percent; impose the 6 percent sales tax on casino complimentaries; impose a 7 percent hotel tax; and form a commission to study legalizing slots at racetracks. Itís unclear whether the hotel tax would apply to Atlantic City hotels, which already pay a unique lodging tax.

The revenue and comp taxes would cost the industry at least $135 million this year.

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A New Jersey legislative panel unanimously passed a bill that would ban smoking inside public places, including casinos.

Casino executives say that between 40 and 50 percent of their customers smoke while gambling.

Racetrack executives in neighboring Delaware blame a similar smoking ban for causing an unprecedented 10 percent decline in slot-machine revenue since it was enacted Nov. 27.

"I can tell you it took all of our growth away," said William Fasy, general manager of Delaware Park in Wilmington, Del. "I think they (customers) are going elsewhere. Some of the Maryland customers say they're going to West Virginia, and some of our Delaware, Pennsylvania and New Jersey customers say they're going to Atlantic City."

On the flip side are casino-floor employees who say they're fed up with working in smoky rooms where losing customers sometime blow smoke in their faces.

"For the many employees who suffer from asthma, the casino environment creates a living hell,î said Joseph Yaniak, a 22-year casino-floor employee who said he suffers from a number of respiratory ailments. "This does not mean to pick and choose which occupations should be protected under the law and which should not."

Local 54 of the Hotel Employees and Restaurant Employees International Union, which represents about 14,000 casino workers, said it supports the smoking ban.

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Atlantic City casino operators credit a widespread case of cabin fever for driving a 4.8 percent gain in January gambling revenue.

The city's 11 casinos won $337.8 million from gamblers during the month, up $15.3 million over the same period a year earlier.

January was unusually cold in the Northeast, prompting many people to curtail activities that involved going outside -- but only for so long. The roads were mostly clear and dry, which executives said encouraged gamblers to spring for a day trip to Atlantic City.

Better luck at the gaming tables and having the bulk of the New Year's Day holiday effect fall in January also helped the comparison to the previous year.

Bally's, which now includes the old Claridge Casino Hotel, led the revenue list at $53 million, up 6 percent over the two casinos' combined results a year earlier.

Harrah's led the city in revenue growth at 25 percent, to $35.9 million. The casino is getting big returns on its hotel and casino expansions that opened last year.

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One-time Caesars Atlantic City president Mark Juliano will become president of Caesars Palace in Las Vegas next week.

"I've been there before and know the potential it has.It has the greatest location in Las Vegas and with all the investment the company has made there the potential is huge," Juliano said.

Juliano had turned down the Caesars Palace job seven years ago because he didnít want to live in Las Vegas.

"We feel very comfortable about the move," said Juliano, whose family will be moving to Las Vegas in June. "The city is the fastest-growing in the United States, with plenty of opportunities for my family and myself."

Juliano has been out of gaming since he left an executive position with MGM Mirage 16 months ago. He will resign his position as chairman of the Atlantic City Convention & Visitors Authority once Gov. McGreevey names a replacement.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com.)