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Best of Howard Stutz

Gaming Guru

Howard Stutz

Gaming expansion to be major story in 2012

28 December 2011

LAS VEGAS, Nevada -- What could become the gaming industry's biggest story of 2012 is already taking shape.

Nevada-based casino operators and slot machine manufacturers are evaluating the political and economic landscape of what some hope will evolve into the industry's largest expansion year on record.

Four casino projects are under way in Ohio, with the first to open in downtown Cleveland by March. A casino near Wichita, Kan., will have a soft unveiling this week in preparation for a January opening.

Massachusetts is weighing locations for three full-scale casinos and a slot machine parlor. Maryland is expected to award a casino site in downtown Baltimore to Caesars Entertainment Corp. next year.

Meanwhile, New York's governor is considering a plan for legalized private casinos as a way to create jobs. In Kentucky, a state lawmaker has filed a bill that would allow five racetracks to add casinos pending local voter approval. A Texas businessman wants to build seven casinos in Arkansas.

Illinois and Kansas are considering measures to expand their current casino environments.

The big jackpot is Florida. Casino companies are exploring the state, especially Miami. Lawmakers will debate gaming ideas this spring.

If Texas had a legislative session in 2012 -- state lawmakers meet every other year -- a casino bill would surely be considered.

Nevertheless, 2012 is a full-scale employment opportunity for casino industry lobbyists.

How widespread is gaming expansion fever?

In an op-ed piece for a Honolulu legal website last week, a Hawaii lobbyist proposed that the state -- one of two along with Utah without any form of legalized gambling -- should bring casinos to the islands.

Fitch Ratings gaming analyst Michael Paladino said there are many factors against casino growth. In comments for a research report on the casino industry outlook in 2012, Paladino warned that legalization of Internet poker by Congress -- supported by most casino operators -- is in trouble.

"The political environment will make it difficult for large-scale gaming expansion in Florida and Illinois to be approved in the near term, and federal-level gaming legislation may be less likely due to the 2012 presidential race," Paladino said.

The two biggest battles are in Florida, over legalizing casinos altogether, and Massachusetts, where regulators have to approve a location for one Boston-area casino.

Florida has a myriad of issues.

Most of the major casino operators want a place in Miami. Malaysia-based Genting Group has laid claim to a waterfront site in downtown Miami along Biscayne Bay where the company plans to construct a colossal $3.8 billion casino complex. One economic study said the project would rival the entire Strip in terms of gaming revenues.

Even Miami's mayor thought the development was too overwhelming.

The trouble for Florida gaming prospects are opponents to casino expansion; the Seminole Indian tribe, which operates the Seminole Hard Rock Hotel & Casino Tampa, and theme park owner Walt Disney Co.

"The Mouse House in Orlando is not going to support gaming," said one Wall Street analyst.

In October, former Florida Gov. Jeb Bush, during a meeting with the Las Vegas Review-Journal editorial board, said northern Florida lawmakers oppose gaming, but the lure of tax dollars may drive the decision.

"The north will let the heathens in the south have the casinos and they'll take the benefits," Bush said.

A Boston gaming license is turning into a conflict between Wynn Resorts Ltd. and Caesars Entertainment. Last week, Boston-area media reported that Las Vegas Sands Corp. might jump into the fray.

A company owned by New England Patriots owner Robert Kraft will partner with Wynn on a site across from Gillette Stadium in the town of Foxborough. Wynn would build a $1 billion hotel-casino on the land.

Caesars has a strategic alliance with Suffolk Downs racetrack in East Boston to jointly acquire the Boston-area gaming license. The Caesars-Suffolk Downs partnership has the backing of key state lawmakers who pushed the casino bill through the legislature.

Wynn Resorts founder Steve Wynn watched a Patriots game from Kraft's private box in December and will address Foxborough residents publicly on Jan. 10. His persona is gaining attention, but it may not win the license.

"Foxborough is a suburb," said one knowledgeable insider. "(Lawmakers) want the casino in Boston," where analysts believe gaming could produce $1.5 billion in annual revenues.

The Battle for Boston is just one story to follow in 2012.
Gaming expansion to be major story in 2012 is republished from