Quick-takes: The month's trends in a glance - December 2003

Households' Net Worth Drops. Slumping stocks took a heavy toll on the balance sheets of U.S. households in the third quarter, according to report on Thursday from the Federal Reserve. In its quarterly "flow of funds" report, the Fed said the net worth of U.S. households and nonprofit organizations totaled $38.315 trillion at the end of the third quarter, down by $1.811 trillion from the second-quarter total. About half of the decline was caused by a drop in stock values, which dipped by $948.8 billion. Helping offset that loss was a gain in home values. Household real estate values gained $180.8 billion to $13.414 trillion, the Fed said. Jonathan Nicholson, Yahoo Business, Rueters, 12-5-02

Consumer Confidence Unexpectedly Drops. NEW YORK - Consumer confidence unexpectedly fell in December as the outlook for employment worsened, energy prices rose and the stock market slumped during a period of heightened uncertainty around the globe. Brad Foss, AP Business, Yahoo Business, 12-31-02

Retailers Report Modest November Sales. A bigger-than-expected buying spree over Thanksgiving weekend brought some relief to the nation's major retailers, but their overall sales gains for November nonetheless were modest. Anne D'Innocenzio, Associated Press, Yahoo Business, 12-5-02

Jump in New-Home Sales Sets Record. New-home sales jumped 5.7 percent in November to the highest monthly level on record… … In November, the average interest rate on a 30-year fixed-rate mortgage was 6.07 percent, down from 6.66 percent for the same month a year ago. This week, rates on 30-year mortgages dropped to a new low of 5.93 percent, Freddie Mac, the mortgage giant reported Thursday. Low mortgage rates this year have been feeding a flurry of home mortgage refinancing activity. The extra monthly cash consumers are saving by refinancing their mortgages at lower interest rates is helping to support consumer spending, which has been the main force keeping the economy going this year. Jeannine Aversa, Associated Press, Yahoo Business, 12-27-02

The loss of individual wealth and retirement funds and a generally weak economy affects the way people spend money. The amusement park industry has been affected, the airlines industry has been affected and the casino industry has been affected. Growth in casino revenues has slowed to a trickle, except some of the relatively new Indian casino jurisdictions, as reflected by the reported results in Colorado, Illinois, Michigan, Mississippi, New Jersey, Nevada.

"For the first time in recent memory, there was a strong correlation between the state of the economy and a decline in attendance," Tim O'Brien, Amusement Business, Vol. 114, No. 51, 12-23-02

Detroit Casinos' Revenue Dips. Total revenues at the casinos edged down 1 percent in November compared with the same period a year ago. October results also were down a notch. Previously throughout 2002, growth rates at the bare-bones casinos ranged from 5 percent to 29 percent. Becky Yerak, Detroit News, 12-26-02

Illinois November gaming revenues fell 4.2% to $143.1 million. Gaming Industry Weekly Report, 12-16-02

Year-to-date, Clark County revenue is down 1.7%. …Atlantic City revenues grew (only) 3.9% in October. …The party is slowing down…Colorado revenues declined 1.5% in October. …Mississippi revenues gained 2.7% in October. Gaming Revenue News, Vol. 16, No.12, December 2002

Racetracks across the county are fighting for their lives and in every case that means lobbying for slot machines. The election has passed, and now the campaigns begin for real. The California association has made slot machines its top priority; in New York and Pennsylvania there is pressure to move forward quickly and Kentucky is seeing its first billboards. The move toward slots has attracted lots of attention from operators and investors; Racinos have suddenly become plumbs to be picked by the larger gaming corporations, as the competition to get the locations and licenses heats up.

Thoroughbred Owners Say Gambling Expansion Is Top Legislative Priority. …The legislative committee of the Thoroughbred Owners of California (TOC) has listed legalizing slot machines at California's racetracks as its top priority for 2003. The committee would also like to increase the number of satellite wagering facilities within the state. Yahoo Business, PRNewswire, 12-19-02

Racetracks Push Hard For Gambling Deal. Harness industry sees doom without video lottery terminals. Whether New York horse racing tracks will get slot-machine-like terminals is a "life or death" situation, said the president of the Western New York Harness Horseman's Association. And that life-or-death scenario is expected to play out early next year when racetracks across the state meet with state legislators to determine a better revenue-sharing formula for the potentially lucrative gambling expansion. Joseph Spector, Rochester Democrat and Chronicle, 12-27-02

Kentucky Horse Industry Group Launches Legislative Campaign. The Kentucky Thoroughbred Association has launched its initial lobbying effort for this year's General Assembly session, renting a billboard at one of Frankfort's busiest intersections to tout the horse industry's financial impact on the state. What the billboard does not say, but what KTA officials hope will come across to legislators and constituents, is that the thoroughbred industry is important enough to merit assistance, perhaps racetrack slots legislation. Associated Press, Blood Horse Magazine, 1-2-03

Experts See 'Racinos' Re-Shaping Gaming. Tucson, Arizona - Over the next five years, virtually all of the racetracks in the United States will offer banks of slot machines -- creating mini-casinos… The instantaneous growth in profits witnessed by horseracing tracks that introduce slots will prompt casino companies to look at alternatives to full-blown casinos, Ron Barbaro, chairman and chief executive officer of the Ontario Lottery & Gaming Corp., told attendees at the Racing & Gaming Summit last week in Tucson. "For one-tenth the cost of Bellagio, we outfitted all of our tracks (with slots) and generate $20 million a week of gross profit," he said… Liz Benston, Las Vegas Sun, 12-18-02

Even in England, the home of the sport of kings, machines make more money than more traditional wagers.

Gaming Law Invoked Over Machines. The gaming board is set to take Britain's bookmakers to court to challenge their right to offer customers access to lucrative electronic betting machines. The board believes that the fixed odds betting terminals, which offer a number of games including roulette and bingo, should be reclassified as gaming machines and therefore subject to significant restrictions. … The machines have proved to be a highly popular and profitable innovation for high-street bookies. Hilton, owners of Ladbroke, said last month that over 1,000 have been installed in its shops with a further 1,000 planned by the first quarter of 2003. Weekly turnover from them at Ladbroke is in excess of £11m, which equates to annual profits of around £14m and so far only 20% of its shops have them installed. - Ian Griffiths, The Manchester Guardian, 12-9-02

The move to slots to shore up a declining industry, horse racing and horse race wagering, comes at a time when the integrity of racing is being questioned as never before. Fixing a race used to mean tampering with the horse or the jockey, today it means tampering with the technology that takes the wagers and reports the results. The big scam of the year is still under investigation, but today it has a new wrinkle. A player straight out of Guys and Dolls, Jimmy the Hat, has filed a class action lawsuit, claiming millions in lost winnings, (or is it Winnings Lost? Did Milton write that?) due to the tampering with the technology.

Autotote To Face Class Action Lawsuit. Autotote Systems Inc., which handles roughly 65% of all pari-mutuel wagering in North America, will be served on Wednesday with a class action lawsuit for negligence. …on behalf of gambler Jimmy "Jimmy the Hat" Allard. …The lawsuit will charge Autotote with negligence and allege that "the betting public may have been cheated out of countless of millions of dollars the past eight years, with the Breeders' Cup fraud being the first time it has been discovered." Thoroughbred Times, 12-3-02

Speaking of lawsuits, December produced two more tobacco like suits, where players blame the casinos for their gambling. Neither case is a class action, but the stage is being set.

Gamblers Sue Over Addiction. Ontario case among rising number faced by gaming industry. In his first gambling experience, Constantin Digalakis amassed more than $10,900 in winnings over two days at Casino Windsor, a Canadian gambling parlor only minutes from downtown Detroit. …Five years later and after being diagnosed as a pathological gambler, Digalakis has turned to the legal system to recoup nearly $192,200 in losses at government-owned Casino Windsor. Becky Yerak, The Detroit News, 12-10-02

Gambler Sues Casino Over Losses. Evansville, Indiana - David N. Williams, an Evansville accountant, lost his life savings at Casino Aztar's slot machines. He blames the casino -- and now argues that it should compensate him. In an unusual suit filed in U.S. District Court in Evansville last year, Williams, 53, accuses Aztar of targeting him as a compulsive gambler after it received information that he was depressed and suicidal. The case raises a pivotal legal question: What responsibility -- if any -- does a casino have to stop a compulsive gambler from gambling? Grace Schneider, Courier-Journal, 12-24-02

Just say No! The discussions over compulsive gambling are leading to new regulations. Up to this point, regulations to control gamblers are in jurisdictions outside the United States. Australia has taken the lead, limiting hours, smoking, wagers and slots machines. Nova Scotia has taken one step further, slot machines that tell you how long you have played, and then tell you no.

Slot Machines In Nova Scotia Tell Gamblers When They've Had Enough. Your mother, your brother or your best friend might be the one who tells you when it's time to quit gambling and go home. But in the Canadian province of Nova Scotia, the slot machines tell gamblers when they've had enough. During the past 18 months, all 3,234 government-owned video lottery terminals scattered in 550 bars and restaurants throughout the Atlantic coastal province have been refitted or replaced by games with responsible gaming software that decidedly does not soft-pedal its message. Pop-up screens that halt play for up to a minute advise players how long they've been at it after 60, 90 and 120 minutes. After 150 minutes, the machine shuts down and automatically cashes them out. Rick Alm, Kansas City Star, 12-11-02

Other industries are suffering from the recession and are looking for other revenue to boost declining sales. In England, one of the world's largest and most famous retailers, has decided to roll the dice online to strengthen its revenues. And now that Internet technology allows for live dealers, we can look forward to chatting with a clerk in London while she wraps a purchase and spins the roulette wheel. If Harrods succeeds, can McDonalds, Pennys and Starbucks be far behind?

Harrods To Reopen Its Online Gaming Casino. Harrods is poised to reopen its online casino. Top people will be able to play blackjack, roulette, baccarat and take their chances on the slot machines over the internet in the new year. … Harrods will not provide data on the financial success of its online casino but it is understood to have become an important revenue stream. The luxury store is convinced that it has found a balance which encourages gamblers to visit the online casino in numbers without undermining the integrity of the underlying retailing brand. - Ian Griffiths, The Manchester Guardian, 12-9-02

Online Casino Introduces Live Dealers. In the race to develop an ever more realistic Internet gaming environment, GoldenPalace.com has taken the lead with the recent launch of their new live casino, Golden Palace LIVE. Cyber gamers can now play Roulette and Blackjack with a real person spinning the wheel and dealing the cards, rather than a faceless, computerized dealer. The Golden Palace LIVE software is included with the original GoldenPalace.com download, and the live video feed can be viewed by dial-up and broadband users alike. Players can even chat with the dealers in real time while playing. Yahoo Business, PRNewswire, 12-16-02

Racetracks want slot machines. Indian tribes have casinos. Department stores have online casinos. The competition for the 'gambling dollar' has never been so fierce. In fact gambling has pretty much become a commodity. Under the pressure of competition, hundreds of strategies have been developed. Reno, Nevada has tried to become an action adventure destination, tribes in Arizona and California have lobbied for more slot machines, and Atlantic City is building more rooms and adding more shopping and attractions.

Las Vegas has always led the way in creating a unique attraction, but even Las Vegas has been forced to do more. Here are few of the ways that Las Vegas and Las Vegas casinos raise the bar.

Public Transit Becoming Part Of Vegas Experience. …the city of neon, flash and fun is applying its rebellious spirit to the usually unglamorous world of public transportation. While many gamblers, conventioneers and sightseers still cruise the Strip past behemoth hotels and casinos in rented convertibles or limousines, public transit has quietly become a big part of the Vegas experience. And it's about to get bigger -- and flashier. …If that's not unusual enough, Las Vegas plans to become the first U.S. city to operate European buses that steer themselves. They're expected to hit the road next summer. …Soon, the Strip will offer a flashier transit option -- a sleek monorail dressed in neon. "It will make you think of Disneyland," said Cam Walker, president of the firm managing the monorail. The $650 million monorail system….is due to open in early 2004. Michael Cabanatuan, San Francisco Chronicle, 12-27-02

Las Vegas No. 1 Destination for Tradeshows in 2003. Las Vegas ranks No. 1 among cities in the U.S. and Canada for number of tradeshows planned for 2003, according to the Dec. 2 issue of Tradeshow Week magazine. …Las Vegas is slated to host 163 major tradeshows in 2003. Its closest competitor is New York City (141), followed by Toronto (140), Chicago (127)… Hotel Online, 12-24-02

The Maloofs' Vegas Venture Is NBA-Friendly. When owners of a luxury hotel also own a professional basketball team, they quickly figure out how to make a 7-footer feel right at home. …For its special niche, the Palms created 24 special "NBA rooms," 600-square-foot junior suites complete with 32-inch televisions, XXXL plush terry bathrobes and a view of the Strip. The ceilings are 10 feet high. The rooms' "NBA King" beds -- not to be confused with the NBA Kings of Sacramento -- are 18 inches longer than standard king-size mattresses. The shower heads are 7 feet up. "We're the only hotel in Las Vegas with NBA beds," said Maloof. "We designed this property to appeal not only to the local crowd, but to celebrities and athletes. We're a little smaller than others, and people like the intimacy. "The hotel's relatively small overall size helps it cater to its well-known clientele." Debbie Arrington, Sacramento Bee, 12-26-02

Blame It On The Rio -- the one in Las Vegas, that is -- for jump-starting an entertainment trend of dress-to-thrill nightspots that have become as ubiquitous as belly-buster buffets in Sin City. The all-suites casino-hotel on Flamingo Avenue just west of the Strip opened Club Rio and the VooDoo Lounge in the early 1990s, targeting a young-adult clientele that Vegas had simply been ignoring. But there was no ignoring the long line of twenty-somethings that snaked through the casino waiting to get in to the Rio's dance club, and other hotels quickly followed suit. …Now, the Rio, where it all started, is trying to take the lead again with a club that represents a stark departure from the slinky pretentiousness of the chichi hot spots to something both more casual and, quite frankly, risque. BiKiNiS at the Rio, the latest entry in the highly competitive scramble for the Vegas club crowd, has a South Beach theme. In keeping with that theme, waitresses wear, what else, bikinis and a filmy sarong. Bill Ordine, The Philadelphia Inquirer, Knight Ridder/Tribune Business News, 12-30-02

And for a little touch of irony. Dennis Gomes first became famous in Nevada for leading the Nevada regulators' charge against organized crime. Gomes, through his relentlessness, diligence and attention to detail broke the back of the infamous Stardust scam and ushered in the era of internal controls. Today, Dennis is an operator in Atlantic City and for the next year, leading the gaming industry in its lobbying efforts to reduce the burdensome level of regulation in New Jersey.

Aztar Exec Ready To Lead N.J. Casino Association. Property-tax hikes, streamlined regulations and more political clout - and the unexpected. Dennis Gomes said he's prepared to tackle it all as incoming president of the Casino Association of New Jersey, trade group for the city's $4.6 billion gaming industry. …Gomes said a chief goal is to avoid another hike in the city property tax. …Gomes wants to push gaming regulators for faster approvals of slot machines and gaming equipment. The pace of technology advances is causing rapid changes, further burdening the Division of Gaming Enforcement's famously slow approvals process. … Gomes said he'd like to see the industry put its financial and human clout to work in politics. Casinos are barred from contributing to local and state campaigns, a rule he said should be changed. Joe Weinert, The Press of Atlantic City, 12-5-02