The stock market continued its uncertain up and down ride throughout June - taking
gaming stocks with it for the most part. The feds are still fighting inflation
and raising rates, making investors nervous - or so the pundits say. If it makes
anyone feel better the world markets are suffering the same trends. While the
market may be uncertain, the real world as measured by operating results does
not seem at all uncertain. Except for Mississippi, which is still operating shorthanded,
and Colorado all other jurisdictions reported higher revenues than last year.
Atlantic City: May gaming revenues rose 2.9% to $432.5 million. Alan R. Woinski,
Gaming Industry Weekly Report, 6-19-06
Colorado: May casino revenue decreased to $65.6 million, down .87 percent
from 2005. Rocky Mountain News, 6-19-06
Detroit: May casino revenues rose 1.1% to $107.3 million. Alan R. Woinski,
Gaming Industry Weekly Report, 6-19-06
Connecticut: May slot win rose .9% to $ 150.6 million. Alan R. Woinski, Gaming
Industry Weekly Report, 6-26-06
Illinois: May gaming revenues rose 5% to $161.6 million. Alan R. Woinski,
Gaming Industry Weekly Report, 6-12-06
Indiana: May gaming revenue rose 1.4% to $208.6 million. Alan R. Woinski,
Gaming Industry Weekly Report, 6-19-06
Iowa: Casino revenues rose 7.5% in May to $103.5 million. Racetrack revenues
rose 24.4%. Alan R. Woinski, Gaming Industry Weekly Report, 6-19-06
Louisiana's casinos won $220.2 million compared with $199.5 million in May
2005, 10.3% increase. Associated Press, 6-19-06
Mississippi: May gaming revenues decreased 18.3% to $199.3 million. Alan
R. Woinski, Gaming Industry Weekly Report, 6-26-06
Missouri: Gaming revenues rose 1% to $129.3 million. Alan R. Woinski, Gaming
Industry Weekly Report, 6-19-06
Nevada's April casino win rose 12.7% to $989.8 million. Ryan Randazzo, Reno
Gazette-Journal, 6-9-06
Gaming stocks may be unstable, and while the operating results are good, but
not great, the industry has a bright future. At least that is the conclusion
of a couple of reports released in June, which should make gaming investors
and operators more comfortable with their choice of industries. Gaming is growing
nationally and internationally, more people are going to casinos, more money
is being spent on gambling, and the predictions are for continued growth.
Global revenue from gambling is expected to climb 8.8 percent annually from
$82.2 billion last year to $125 billion by 2010, according to a new estimate
by consultant PricewaterhouseCoopers LLP. Fueled by new casinos in the Chinese
gambling enclave of Macau, the Asia-Pacific region will grow the fastest at
14 percent annually, surpassing revenue from the region encompassing Europe,
the Middle East and Africa when it hits $23 billion by 2010, the firm said.
The United States, which is predicted to remain the world's largest gambling
market, is expected to see gambling revenue grow 6.9 percent per year, from
$53.4 billion in 2005 to $74.5 billion in 2010, it said
Tribal casino
operators are seen increasing their share of the U.S. market from 42 percent
to 43 percent, growing from $22.7 billion to $32.5 billion by 2010
.
Billions of dollars of investment in new casinos in Nevada are expected to
give the state's gambling revenue an annual 8.2 percent increase from $11.7
billion to $17.3 billion, boosting the state's share from 21 percent to 23
percent of the U.S. gambling market. Associated Press, Washington Post, 6-21-06
More Than Quarter of U.S. Adults Visited a Casino At Least Once Last Year
A new national survey demonstrates Americans' enthusiasm for casino gambling
and their desire to experience a broad array of entertainment choices offered
by gambling venues in states throughout the country. "Profile of the
American Casino Gambler: Harrah's Survey 2006" reports that Americans
made more than 322 million casino trips in 2005 and that 52.8 million Americans
age 21 and older (25 percent of the U.S. adult population) visited casinos
to gamble at least once during the same year
Gamblers averaged just
over six casino visits a year
Casino visitation was highest among adults
with household incomes in excess of $95,000, who represented approximately
31 percent of all casino players in 2005. Residents in the West census region
were most likely to include casino gambling in their leisure activities (33
percent of total gamblers), although participation rates among citizens in
the North Central (27 percent) and North East (28 percent) regions were not
far behind. Business Wire, Yahoo! Finance, 6-22-06
And if you need a little bit more to make you feel good about the gaming industry
- the Harrah's survey says gamblers are trendsetters, the first in their neighborhood
to take a chance on new things. That should mean there are more players just
warming up in the bullpen of life getting ready to come into the game.
"Harrah's Survey 2006" reports on casino player demographics and
characteristics and shows that gamblers are trendsetters in many aspects of
their lives. Gamblers are more often the first to buy new products and tell
others about their experiences. Business Wire, Yahoo! Finance, 6-22-06
Atlantic City became frightening in June, not in the way the Gulf Coast was
frightening when the hurricanes screamed through, but in a more fundamental
manner. As one of the most, if not the most regulated industry in the United
States, gaming is seemingly always subject to the whims of politicians and regulators.
Usually that means individual operators may face the wrath of the regulators
at any time, and the industry holds its breath whenever legislators meet. But
in New Jersey Governor Jon S. Corzine, in an "intraparty standoff"
with the legislature over the state's budget and taxes, promised to close down
the government - including the casinos, which cannot operate without the state-employed
regulators.
Gov. Jon S. Corzine signed an executive order on Saturday shutting down the
state's government, for the first time in its history
The order, a result
of an impasse between the governor and the State Legislature over the budget
for the new fiscal year, began a process in which the state, over the next
few days, may close state parks, two state-run beaches and
the 12 Atlantic
City casinos. Richard G. Jones, New York Times, 7-1-06
The budget stalemate dispute boils down to an intraparty standoff between
Corzine and Roberts, who opposes Corzine's proposal to raise the sales tax
from 6 percent to 7 percent. Roberts claims more palatable alternatives are
available. Corzine maintains the alternative offered by Assembly Democrats
- a combination of tax increases and spending cuts - continues a history of
budgetary gimmicks that left New Jersey in debt at a time when it should be
thriving. Pete McAleer, Atlantic City Press, 7-3-06
Race tracks are ordered to close by the end of tomorrow
Yesterday was
the first full day since Gov. Jon S. Corzine closed state government amid
a budget impasse with fellow Democrats in the Assembly
Racing at the
Meadowlands was canceled Saturday night before an appeals court judge stepped
in. The horse-racing industry won a reprieve late Saturday, when the judge
issued an order allowing them to temporarily continue operating. Angela Delli
Santi, Associated Press, Philadelphia Inquirer, 7-3-06
The lottery - which provided the state $812 million in revenue last year
- is expected to continue its drawings of games for which tickets have already
been sold. It may face penalties for failing to sell tickets for the multistate
Mega Millions game
though if you were hoping to test your luck Saturday,
you may have been out of it. The New Jersey Lottery stopped selling tickets
at 8 p.m. Saturday. Lottery Post, 7-3-06
Would any governor really shut down an entire industry just to prove a point?
Tell me it didn't happen - the governor of the second largest gaming state in
the country didn't close all of the casinos in a political battle within his
own party. Okay, it did happen, but I still can't believe it; I am waiting for
Toto to pull open the curtain and expose it all as a hoax and a bad joke.
Biloxi is on its way back. Another casino opened and one more started construction
in June. The only people not cheering are the casino operators in Louisiana.
Without Biloxi casinos, they have been reaping the benefits of a drastically
reduced Biloxi casino market. While Louisiana is thinking about Biloxi and Biloxi
is thinking about rebuilding, the Indian tribes in Oklahoma are expanding as
quickly as they can, cutting further into the Louisiana market and taking advantage
of Biloxi's current status. Biloxi will rebuild and be a much stronger competitor.
Louisiana is another story. While making hay as Biloxi gets back on its feet,
Louisiana seems to be missing the real threat to its long-term growth - Oklahoma.
Minus stout competition from the Mississippi Gulf Coast and with thousands
of recovery workers with time and money on their hands, Louisiana's casino
industry is enjoying its biggest boom ever - thanks to the double punch of
hurricanes Katrina and Rita
Flocks of gamblers have provided a revenue
boost for Louisiana, which faced dire predictions of deep cuts in spending
after the storms. Through the first 11 months of the current fiscal year,
the state's take was $473.8 million, up sharply from $413.9 million a year
ago. Alan Sayre, Associated Press, 7-2-06
The Mississippi Gaming Commission approved the locations for two proposed
multi-million-dollar casino resorts
commission also declared the locations
for a Foxwoods Casino in Biloxi and an Isle of Capri Casino in DeLisle as
legal gambling sites. Foxwoods Development Co.
plans to spend $400 million
on the Biloxi casino, which will be part of a $1 billion to $1.3 billion planned
development on the more than 260-acre Biloxi Broadwater property
Tim
Hinkley, president of Isle of Capri Casinos Inc., said his company plans to
invest $250 million to $300 million to build what will be the first casino
resort for rural Harrison County
Gulfside Casino Partnership, which
is owned by Terry Green and Rick Carter, received its license to operate the
Gulfport Oasis. The company closed on financing of more than $200 million
to fund the build-out of the resort. Tom Wilemon, Biloxi Sun-Herald, 6-16-06
Boomtown on Thursday became the fifth casino to reopen in Biloxi since Hurricane
Katrina and put 750 people back to work
Boomtown, which has no hotel,
refurbished its gambling barge and installed all-new slot machines. The casino
has 1,000 slots and 22 table games. Tom Wilemon, Biloxi Sun-Herald, 6-30-06
Premier Entertainment has signed a contract with Roy Anderson Corp. for the
company to rebuild its Hard Rock Biloxi Casino at a cost of no more than $78.3
million, according to a recent filing with the Securities and Exchange Commission.
The rebuilding should be complete by July 4, 2007
Tom Wilemon, Biloxi
Sun-Herald, 6-30-06
Oklahoma's tribal casinos made more than $1.4 billion from gamblers last
year, making it the second fastest growing market in the country, a new study
found. Revenue grew by 39 percent as the number of electronic gambling machines
rose by more than 5,100. At the end of 2005, 90 Oklahoma gaming centers held
32,961 machines and 623 table games. Anthony Thornton, Oklahoman, 6-26-06
The Louisiana, Mississippi, Oklahoma story is pretty much the story of gaming.
The industry in general is healthy and growing; every year more people find
casinos (online and on land) an acceptable, interesting and entertaining way
to spend their disposable income. However, the number of jurisdictions and the
number of licenses in most jurisdictions are limited, which means that competition
is going to become more and more expensive. In gaming there is no way to reduce
the price as a competitive measure; gaming operators compete by spending more
on their properties, offering more amenities and giving more in promotions.
This makes gaming an increasingly expensive industry into which to enter and
to operate, which in turn will lead to more mergers, larger companies and the
weeding out of smaller, weaker companies. But - and with gaming there is always
a but - the action by the governor of New Jersey demonstrates that regardless
of how healthy the industry appears, it is always an at-risk industry.