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Gaming Guru

Joe Weinert
 

Atlantic City Round-Up

25 February 2003

The chairman of Harrah's Entertainment wrote New Jersey Gov. James McGreevey to calm the waters churned up by their respective spokesmen.

Phil Satre acknowledged in his Feb. 12 letter that McGreevey did not ask Harrah's to manage possible video lottery terminal operations at Meadowlands Racetrack when the two talked by telephone five days earlier. A Harrah's spokesman had said that McGreevey "made a proposal" for Harrah's to be involved with the VLTs, which prompted the governor's spokesman to deny that VLTs were even discussed.

The truth, Satre indicated in his letter, was somewhere in the middle.

"I recall that you and I talked about proposals for gaming-tax increases and, as an alternative, video lottery terminals at racetracks and their revenue-generating potential. Neither of us made any offers too each other on either issue. There was no negotiation," Satre said in his letter.

Satre told McGreevey that he recalled the governor wanted to set up a meeting between casino officials and the state treasurer to discuss McGreevey's proposed gaming-tax hikes.

That meeting has yet to take place.

Meanwhile, Atlantic City casino operators seem to be targeting legislators who support installing VLTs at racetracks in northern New Jersey. When Democratic Senate leader Richard Codey and state Sen. Garry Furnari said that casinos should accept that VLTs are coming, the Casino Association of New Jersey pointed out that casinos last year did $76 million in business with firms in Codey's home county and $20 million in business in Furnari's county.

"Presumably, the two senators are willing to risk almost $100 million in combined business in their counties in the interest of putting VLTs at racetracks, a constitutionally questionable act at best," association spokesman Carl Golden said.

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Three political enemies literally joined hands to oppose Gov. McGreevey's proposed casino taxes and possible video lottery terminals at racetracks in northern New Jersey.

State Sen. Bill Gormley, Atlantic City Mayor Lorenzo Langford and Atlantic City Council President Craig Callaway headlined a protest organized by the Second Baptist Church. About 150 supporters, including casino employees bused in by Tropicana and the Park Place Entertainment casinos, attended the event.

"Gov. McGreevey is my friend, but on this issue, Gov. McGreevey is dead wrong," Langford told the audience.

McGreevey wants to raise the casino-revenue tax to 10 percent from 8 percent, impose the 6 percent sales tax on casino complimentaries, create a 7 percent hotel-revenue tax and possibly install VLTs at racetracks.

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The East Coast blizzard wiped out up to half the volumes casinos expected on the last half of Presidents Day weekend, typically one of their highest-grossing periods of the year.

Luckily, the storm did not hit the New Jersey-New York area until Sunday morning, enabling casinos to profit from the first half of the holiday period. And even after that, they got some play from snowbound hotel guests.

"While it was not a typical Presidents Day weekend, it wasn't as disastrous as it could have been," said Audrey Oswell, president of Resorts Atlantic City.

Showboat General Manager Tom O'Donnell said his business was off 50 percent from Sunday through Tuesday and was only slowly bouncing back as the week progressed. Heavy rains last weekend were expected to further hurt business.

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Tropicana's bird-brained stunt of letting gamblers play tic-tac-toe against real barnyard chickens is coming to an end -- after giving the casino some $1 million in free publicity.

"Every promotion runs its course. It was fun while it lasted," Tropicana spokesman Maureen Siman said.

The $10,000 Chicken Challenge, as it's called, will end on March 31, 18 months after it began. Tropicana had wanted to close the promotion two or three times earlier but kept extending it by popular demand.

Media coverage of the chickens gave Tropicana an estimated $1 million worth of free advertising, Siman said.

Gamblers win $10,000 if they can beat the chickens at tic-tac-toe. It appears that a computer is doing the chickens' work, although nine players have won the big prize. Other casinos, including the Tropicana in Las Vegas, have since contracted the same promotion from Bunky Boger's farm in rural Arkansas.

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Foxwoods reclaimed its title as the country's casino revenue king, winning $59.6 million, up 0.7 percent, from gamblers in January. Nearby Mohegan Sun had supplanted Foxwoods atop the revenue last in December, but Foxwoods came back thanks to tighter slot machines.

Gamblers wagered far more at Mohegan Sun's slots last month, but its slots were looser -- paying out 92.5 percent compared to 91.6 percent at Foxwoods. Mohegan reported slot revenue of $56.9 million, up 18 percent over the same month last year.

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