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Quick-takes: The month's trends in a glance - December 2005

11 February 2006

Except for Louisiana and Mississippi, gaming is showing growth, even if it is relatively slow. For the stock market the year is winding down by winding up; and gaming stocks are gaining back some of what they have been losing for the last couple of months. Unemployment is down, job creation is up; the holiday buying season, which kicked off the day after Thanksgiving, appears to be set for great results. Even the two economic monsters of the year, crude oil prices and interest rates, are taking a break; with reserves larger than predicted, oil is selling at less than $60 a barrel and the feds promise they have raised interest rates enough for the time being and are going to take a break. All of that is good news for the gaming industry and should lead to a strong close of the year and strong beginning to 2006.

Iowa October gaming revenues were up 0.3% to $92.2 million. Riverboat revenues fell 1% while racinos were up 3%. Alan R. Woinski, Gaming Industry Weekly Report, 11-14-05

Illinois October casino win rose 2.2% to $149 million. Alan R. Woinski, Gaming Industry Weekly Report, 11-14-05

Nevada casino gambling revenue increased 9.63 percent in September from a year earlier to $1.01 billion. Reuters, 11-10-05

Atlantic City October gaming revenues grew 10.3% year-over-year to $427.9 million from $388.1 million. Hotel Interactive, 11-11-05

Missouri's 11 casinos took in gross revenues of $128.7 million, up a modest 2.2 percent from October 2004. Rick Alm, Kansas City Star, 11-16-05

Connecticut casino revenue…grew slightly, to $141.6 million for October. Rick Green, Hartford Courant, 11-16-05

Louisiana October gaming revenue fell 4% to $154 million. Alan R. Woinski, Gaming Industry Weekly Report, 11-21-05

Mississippi October gaming revenue fell 34.8% to $140 million. Alan R. Woinski, Gaming Industry Weekly Report, 11-28-05

Indiana October gaming revenue rose 0.5% to $201.3 million. Alan R. Woinski, Gaming Industry Weekly Report, 11-28-05

When momentum switches, it switches. Immediately after Hurricane Katrina, it looked like all of the opponents of gaming had suddenly come alive and were going to attack gaming everywhere. In November, however, gaming got some different news in the form of some research and polls. First, a professor at Purdue released a study that draws a simple conclusion; people who gamble spend more in general on entertainment. Why is that good news? In my opinion because it just says that people who like to go out, like to go out, and a casino is just one of the places that they like to go. Nothing moral in the conclusion, and the people who gamble are not flawed, weak or in need of protection, they are just "out-going." The second bit of news supports the conclusion that regular people are the people who like to gamble. The survey targeted attitudes toward Indian gaming, but included some other more general attitudes; 70 percent of the population is in favor of legalized gaming, a number that continues to grow year over year according to the survey.

Families that spend significant money on gambling are likely to also spend more at restaurants or on alcohol and less inclined to save, a Purdue University economist said. Larry DeBoer, a professor who often studies state tax policy, told state lawmakers and others that it is unclear whether gambling causes some families to save less or whether it is simply one part of their propensity to spend more. DeBoer spoke Monday to state officials and organizations gathered in the Indiana House of Representatives chamber for a family impact seminar sponsored by Purdue. He used data from the federal Consumer Expenditure Survey, conducted by the U.S. Census, to try to answer questions that typically emerge during debates about gambling including: What would families be buying if they weren't spending money on gambling? Can the taxes generated by gambling be considered new revenue, or would they have been collected from other purchases if not spent on gambling? DeBoer said neither question could be answered definitively using the federal data. But he said gambling tax revenue probably can be considered largely new money. Associated Press, Indianapolis Star, 11-23-05

There's a growing belief that Native American tribes, along with America at large, are winning with Indian gaming, according to newly released survey data. About 67 percent of the 1,000 U.S. residents responding in this year's survey for the National Indian Gaming Association supported Native American casinos, up from 64 percent in a 2002 survey…And 72 percent, 14 percentage points more than three years ago, believed tribal gaming benefits states and local communities. …Among the other results of the survey: 29 percent of respondents opposed legalized gambling, down from 36 percent in 2002. In both years' surveys, 7 percent more people supported Indian casinos than Las Vegas-style, corporate-run casinos. About 79 percent felt tribal gaming enables Native Americans to be self-reliant, up from 73 percent in 2002. Andy Behrendt, Green Bay Press Gazette, 11-22-05

Although there are still opponents, in light of the growing acceptance of gaming in general, they seem more like lone crusaders than leaders with a large constituency behind them. Take Reverend Tom Grey, for example; he travels to every battle, but he doesn't seem to have many peers and at this point looks more like Don Quijote than King Richard leading the faithful to liberate the holy land.

National anti-gambling proponent, the Rev. Tom Grey, is returning to help a local group oppose a proposed Turtle Mountain Indian casino in Grand Forks. Grey has visited Grand Forks several times during the past decade to warn North Dakotans against allowing video gaming machines that act like miniature "casinos" and to compare the lottery to an "entry-level drug." Grey, a Methodist minister from Illinois, travels across the country to speak on behalf of the National Coalition Against Legalized Gambling, and he is executive director of the National Coalition Against Expansion of Gambling. Grand Forks Herald, 11-22-05

Pennsylvania is still in "the process" of developing its gaming industry and welcoming the long heralded 60,000 slot machines. Wall Street is eager as the sale of that many slot machines will drive the price of IGT, Alliance, Aristocrat (okay they are traded on the Australian Exchange and not an American one), Williams and a host of smaller companies' stock. When the slot parlors, as they are called in the local press, open, they will also have an impact on some of the larger operating companies. Harrah's, Las Vegas Sands, Aztar (but not Ameristar, they decided the process was too risky) and others are vying for cities and locations. And that is the Pennsylvania story for this month, as it was last month and will be next and probably until the middle of next year. The infighting over regulations that will control the sale of slot machines, the struggles over locations and operators, and the individual municipalities trying to add another level of regulation and control continue to slow the process.

...Senate also is expected to vote today on some amendments to the state's slot machine law, but most of the attention will be focused on the pay raises. Tom Barnes, Pittsburgh Post-Gazette, 11-2-05

The gaming board had hoped to issue licenses for the seven tracks by March or April. It now looks as if licenses won't be issued until late June or possibly later, because of an ongoing dispute over procedures to create slots equipment distribution companies. Mark Belko, Pittsburgh Post-Gazette, 11-7-05

The state Gaming Control Board opened the door yesterday to competitors interested in securing licenses for five slot machine casinos and two resort parlors up for grabs in Pennsylvania…deadline for applications is Dec. 28. Mark Belko, Pittsburgh Post-Gazette, 11-7-05

Winner of city casino license not yet decided - Mayor Tom Murphy yesterday said he regretted saying the "fix is in" on who would be awarded a casino license for Pittsburgh. "I should have chosen my words more carefully," he said. At the same time he affirmed his right as mayor "to demand an open, honest and transparent selection process" for the city's casino. Pennsylvania Gaming Control Board Chairman Tad Decker, who has strongly denied that a decision on the license has been made, said earlier yesterday that Mr. Murphy should produce evidence of such a fix or retract his statement… Mr. Decker said applicants for licenses to be issued by the board -- casino operators, slots manufacturers, slots distributors, and non-gaming vendors -- will be judged impartially and fairly and political influence won't play a part. Tom Barnes, Pittsburgh Post-Gazette, 11-3-05

Shick and Centaur are competing against each other for the single remaining harness track/slots casino license in Pennsylvania, and the charges are flying…The winner of the last remaining harness racing license will become one of only four harness tracks in the state …have the opportunity to build slot machine casinos. Bill Toland, Pittsburgh Post-Gazette, 11-7-05

Hoping to ensure that slots gambling in the city is a success, Mayor Street is to meet with gambling companies with an eye toward making a recommendation on where to build the two mandated city casinos. John Sullivan, Philadelphia Inquirer, 11-7-05

The owner of the Planet Hollywood chain of theme restaurants presented city officials with plans for a $380 million casino along the Penn's Landing waterfront yesterday. Suzette Parmley, Philadelphia Inquirer, 11-4-05

Donald J. Trump's casino company has partnered with Philadelphia-area investors, including former 76ers president Pat Croce, to apply for a slots license in the city…"I'm psyched to work with the Donald and his new executive team," Croce said today. "It will be great to have the Donald in our town." Under the partnership, Croce said he and a handful of local investors will be minority shareholders, with Trump being the operator, developer and majority shareholder. Suzette Parmley, Philadelphia Inquirer, 11-30-05

Magna Entertainment Corp., the track's owner, has begun engineering work and bidding to relocate the paddock, now next to the grandstand, to the other side of the track to clear the way for the casino. The move is expected to free up land for a larger building that will include the slots parlor and a new grandstand… Mark Belko, Pittsburgh Post-Gazette, 11-7-05

Ameristar Casinos Inc. said Thursday that it will drop its plan to seek a slot-machine gambling license on Philadelphia's riverfront because the state's high taxes will prevent it from making enough money to warrant the expense. The Las Vegas-based company, citing Pennsylvania's 54 percent tax rate on slots revenues, said it will not apply during the license application period that opened Tuesday and closes at the end of the year. "We concluded we can't earn an adequate return on our investment to justify the kind of investment we're talking about," Steve Eisner, Ameristar's vice president for development, said in a telephone interview. Marc Levy, Associated Press, 11-4-05

Pennsylvania isn't the only state with slots on the mind. Racetrack owners everywhere have slots on their minds. There are only two kinds of racetracks in the country, those with slot machines and those without. The without-ers are either closing or threatening to close - if they don't get slots; some just close and some convert into housing and commercial development, like Bay Meadows in California.

Geneva Lakes dog track has held its last race…Sunday drew about 550 customers …The dog track is one of five that opened in Wisconsin during the 1990s. The Fox Valley Greyhound Park in Kaukauna, the Wisconsin Dells Greyhound Park in Lake Delton and the St. Croix Meadows Greyhound Racing Park in Hudson closed earlier, leaving only the Dairyland Greyhound Park in Kenosha. Roth blamed competition from casinos and, more recently, restrictions against expansion into other gaming for declining attendance and the closing of Geneva Lakes. Associated Press, Duluth News Tribune, 11-05

The San Mateo City Council approved plans Monday night for a housing and commercial development that would lead to the demolition of Bay Meadows racetrack…Bay Meadows Land Co. has argued that horse racing will not be economically viable in the future in California because, unlike many other states, slot machines are not permitted…
Dave Murphy, San Francisco Chronicle, 11-8-05

The racetracks with slot machines or the ones that can add slot machines experience a completely different destiny. Tracks in Oklahoma, Arkansas and Maine are adding slots for the first time after recently passing legislation that allows for slots or in Arkansas, slot-like games. In Rhode Island a racetrack with slots is worth another $125 million investment, not much compared to the $400 or $500 million the track owners are putting into their facilities in Pennsylvania.

The Birmingham Race Course is being revamped to make way for an electronic "sweepstakes" operation that will look like a casino, run on casino hours and operate as much like a casino as the fine print of the law will allow. No doubt, track owner Milton McGregor is hoping to hit the jackpot with his new gambling enterprise. …planning to open his new casino-like operation Dec. 15, using every possible loophole and maneuver to adhere to a law that permits "promotional sweepstakes." Birmingham News, 11-23-05

A new 650-machine casino will open next week at Remington Park, and owners hope the $35 million renovation project will rescue the 17-year-old racetrack. Remington Park's opening caused quite a stir in Oklahoma in the late 1980s, but attendance dropped off dramatically in the 1990s and continued to suffer with the rise of Oklahoma's tribal casino industry. State Treasurer Scott Meacham predicts the casino will make $65 million a year. As mandated by the law that legalized racinos in Oklahoma, the state will receive between 10 and 25 percent of the cut of the profit. Associated Press, 11-14-05

Hollywood Slots at Bangor open…with 475 machines. A red carpet and James Dean and Marilyn Monroe impersonators will welcome the first customers…opportunity for Mainers to play the slots follows more than two decades of debate… Mark Peters, Portland Press Herald, 11-4-05

Bitter winds and rain couldn't dampen the glitz and glamour Tuesday as three prominent business partners pledged $125 million to transform the tired Lincoln Park dog track into the Ocean State's premier entertainment destination featuring thousands of video slots, top entertainment acts and upscale dining…Lincoln Park, which first opened in the early 1940s as a thoroughbred racing track moved into greyhound racing during the 1970s, and in 1992 was allowed to revive its sagging fortunes by installing video lottery terminals, or VLTs as they're called in Rhode Island…now offers pari-mutuel betting at its year-round dog track and gaming at its 3,600 video terminals. Anthony Cronin, New London Day, 11-23-05

For those racetracks that don't have slot machines but still have hope, there are two possibilities: legislation or initiative, both options are in play. Arkansas, Oklahoma, Florida and Pennsylvania are example of successful initiatives. Alaska, Arkansas with a casino proposal, Indiana, Kansas, Kentucky, Massachusetts, Maine and Ohio are states where there is some momentum to bring slots, sometimes for racetracks, sometimes for casinos. Makes one think that slot manufacturers' stock should be a good long-term play, doesn't it? Appearing on a ballot, or having supporters in the legislature is no guarantee that gaming will pass; it is, however, guaranteed that without appearing on the ballot or without supporters in the legislature, there will not be new gaming jurisdictions.

Who Alaska's next governor will be may top the ballot in next November's general election, but a handful of citizen initiatives are currently competing for signatures in the hope of finding a place on the ballot. If proponents for seven ballot measures get their way, voters will decide whether the state should legalize gambling, ban aerial predator hunting, restrict the use of pesticides around children, tax leaseholders for not developing the state's natural gas reserves, do away with the current system for taxing oil production and reduce the amount of time lawmakers spend in Juneau each year. An initiative to establish a state video lottery is still under review by the state attorney general's office and the lieutenant governor. Sponsors of most of the initiatives, however, are already collecting signatures from registered voters around the state. R.A. Dillon, Fairbanks Daily News-Miner. 11-23-05

A Texas businessman has registered his tourism company with the Arkansas secretary of state's office in an effort to bring casino gambling, bingo and a lottery to the state. Michael Wasserman, who owns Arkansas Resorts and Hotels, had announced previously his plans to put a gambling initiative on the November 2006 ballot. Associated Press, Little Rock KATV-7, 11-28-05

Indiana bar owners are trying to mobilize a grassroots campaign to lobby the Indiana legislature to legalize video gambling machines. The Indiana Licensed Beverage Association is holding 10 meetings around the state, building a database of bar owners and social-club patrons willing to contact legislators. Eric Berman and Cheryl Miller, WIBC 1070, 11-29-05

Sumner County Commissioners [Kansas] have finalized plans to hold a public vote on the question of whether there is support for a destination casino in Sumner County. Sumner County Clerk Shane Shields says on about Dec. 7, 2005, a special non-binding advisory question election ballot will be delivered by mail to every voter who was registered in Sumner County on Nov. 19, 2005 …Do you support a destination resort casino in Sumner County, in the event such is legally permitted by the state and is otherwise deemed in the best interest of the county by the board of County Commissioners? Wellington Daily News, 11-10-05

[Kentucky] Pre-filed pro-gambling bills include BR 18 which calls for a constitutional amendment authorizing the state to operate casinos, BR 19 which would allow nine casinos across the commonwealth and BR 29 which would permit video lottery terminals across the state. Trennis Henderson, Western Recorder, 11-29-05

House Speaker Salvatore F. DiMasi signaled yesterday that the House might ignore legislation, passed last month by the Senate, that would allow the state's four struggling racetracks to install slot machines. The speaker's remarks were a blow to an industry that has pinned its hopes on the bill and spent lavishly to lobby lawmakers for its swift passage. If passed, the measure would allow the racetracks to install 2,000 slot machines each, to buoy the 4,000 jobs they support, backers say… Michael Levenson, Boston Globe, 11-7-05

Supporters of a tribal racetrack casino in eastern Maine collected more than 20,000 signatures last week in their effort to force a referendum on the issue on the 2006 ballot. Associated Press, Portland Press Herald, 11-14-05

Next November, Ohio voters will select a new governor, choose an attorney general, auditor, treasurer, secretary of state, representatives in Washington and Columbus and local officials. Then, they won't be done. They also will be asked to decide - twice, possibly - if they want to limit state government spending and taxes, and also may vote on a statewide indoor public smoking ban, an increase in Ohio's minimum wage, to allow casino gambling and require that 65 percent of schools' budgets be spent in classrooms. All of this would be a year after voters trounced four of five statewide ballot issues Nov. 8. John McCarthy, Associated Press, Chillicothe Gazette, 11-23-05

Periodically it is useful to pose the question: What is the world's largest gaming corporation up to today? As the year winds down, Harrah's is answering that question. In the last month Harrah's has announced joint ventures in the Bahamas, Slovenia, Singapore and Spain. Each of the projects is forecast to cost over $500 million and give Harrah's access to new markets and new money with the joint venture partners. The rumors are getting stronger about a major project on the Strip. Up to this point Harrah's has been adding to the Strip property it owns, and like the Boyd and Stardust sites, being coy about the plans. And, finally as one would expect, Harrah's is selling off the locations or properties that don't fit in the long-range plans of the company.

Harrah's, the world's largest casino operator, on Monday unveiled plans with US hotelier Starwood and developer Baha Mar Resorts to build a $1.6bn (£910m, €1.35bn) casino-resort in the Bahamas in what will be the largest resort in the Caribbean. Amy Yee, MSNBC, 11-8-05

Harrah's…announced today that it signed a memorandum of understanding with Hit Group, a premier Slovenian company that operates nine casinos, to form a joint venture to develop a large-scale casino resort in Nova Gorica, Slovenia, a city on the border with Italy. …The preliminary proposal is for an investment of approximately US$700 million through a proposed 50/50 partnership of Harrah's and Hit. Business Wire, Yahoo! Finance, 11-29-05

Harrah's said it signed an agreement with El Reino de Don Quijote de La Mancha to develop a Caesars casino resort in the master-planned El Reino community of Ciudad Real, 118 miles south of Madrid…expect to invest $670 million in the project, which also includes hotels, golf courses, spas and entertainment, retail and residential development. Yahoo! Finance, 11-30-05

Word out of the Harrah's corporate offices seems to indicate the company is considering a massive redevelopment of several of its flagship Las Vegas properties that could wind up being the biggest project in the city's history. This is all just rumor and conjecture so far, based on rather opaque comments from the company's executives, but what they are apparently considering is taking a wrecking ball to everything between Harrah's and Flamingo Road. This would include Harrah's, the Imperial Palace, the Flamingo, O'Shea's, the now-closed Bourbon Street hotel and Barbary Coast if it is bought from competitor Boyd Gaming. All of this is in addition to consideration being given to revamping or perhaps starting over on the Bally's property. Rick Garman, Vegas4Visitors, 11-29-05

The appointment of John Payne as regional president of Harrah's Atlantic City …"Our recently announced $550 million expansion of Harrah's is just the first step in an ambitious plan to create an unsurpassed entertainment experience in Atlantic City…John is uniquely qualified to direct this effort," Harrah's Eastern Division President Carlos Tolosa said… Donald Wittkowski, Press of Atlantic City, 11-30-05

Casino giant Harrah's Entertainment Inc. said Tuesday it agreed to sell its Flamingo Laughlin hotel and casino outside of Las Vegas, and an undeveloped land parcel in Atlantic City, N.J., for $170 million in cash to affiliates of American Real Estate Partners LP, an investment arm of billionaire Carl Icahn. Associated Press, Yahoo! Finance, 11-29-05

The gaming industry looks pretty healthy as the year 2005 winds down. Revenues in most jurisdictions are up, the economy is looking healthier with lower oil prices, strong, early holiday shopping numbers, and consumer confidence up. Pennsylvania is getting closer to the starting line, slower than one might hope, but progressing. Oklahoma and Arkansas are adding games to racetracks. Florida is not moving, but the governor (you remember him, the other Bush) has called a special session of the legislature in December to draft the regulations, so we can expect some movement.

Eight other states appear to be moving toward at least a vote on the expansion of gaming. All of this is good news for slot machine companies. The real opportunity for the major operating companies does not seem to be in the domestic market. As the Harrah's story illustrates, there is opportunity in Europe and Asia. Asia has gotten the most attention this year; next year we could well see new opportunity in Japan, Taiwan, Thailand and elsewhere. Next year the UK will heat up, but at this point it is difficult to tell if any American companies will profit from the opportunity. However, someone will profit in the Untied Kingdom, and a couple of American companies still have options in England. We may see more international joint ventures; certainly whoever gets the license in Singapore will be part of a joint venture combining gaming companies with hotel and entertainment companies. Australia, America, Asia, South Africa and the United Kingdom each have large gaming companies that will seek to be players in each other's market and work together to enter new markets. Gaming is really global and the major players will over time, lose their national identities and become simply international gaming corporations.

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.