The economy in March produced the same set of mixed reports and results that have
characterized at least the last year, if not the entire period since September
11, 2001. The stock market indexes, Dow, NASDAQ and S & P, were all down,
but only about 2 percent. However, for the first time this year job growth was
significant, just in time to join the presidential debate; within a week of the
news, Bush was promising more of the same, Kerry 10 million new jobs.
Unexpected good news on the jobs front: Non-farm payrolls
climbed 308,000 in March, the strongest month since April 2000. Job growth
increased across all sectors, with construction and retail sales seeing the
largest gains, according to the government report. Stephen Taub, CFO Magazine,
4-5-04
There is some not so good news that, if the trend continues, is bound to impact
the gaming industry as well as the rest of economy. Gas prices continue at record
levels; OPEC recently voted to reduce supplies further and therefore we can
look forward to a summer driving season of record prices; in some areas, such
as California, probably approaching three dollars a gallon. Increased prices
will reduce travel, but of equal importance, the higher prices are predicted
to hit every segment of the economy with increased prices and reduced disposable
income. The first sign of the impact was the price increases and then price
decreases announced by national airlines.
U.S. retail gasoline prices rose to their highest level on
record Tuesday, spelling pain at the pumps for the nation's 200 million motorists,
the American Automobile Association said on Tuesday. The average price for
regular gasoline struck $1.738 per gallon, up a tenth of a cent from the previous
record hit in late summer 2003, according to the motorist group's survey of
more than 60,000 stations. …The U.S. government on Monday predicted prices
would average a record $1.83 per gallon in April and May during the run-up
to the summer driving season when Americans typically take to the roads. Richard
Valdmanis, Reuters, Yahoo Finance!, 3-23-04
US airlines said they would reverse course on a days-old decision
to raise ticket prices amid rocketing energy costs because they want to remain
"competitive." "We reversed out decision the night before last
night (Monday March 29)," a spokeswoman for Continental Airlines told
AFP, adding the reversal had come about "because of competitive reasons."
Low-cost airlines have not raised their fares in response to the spike in
fuel costs. American Airlines has also reportedly scrapped plans for ticket
hikes. The two carriers join rivals who ditched the planned price hikes, which
were agreed to prior to the weekend. AFP, Yahoo! Business, 3-31-04
There was very good news for the gaming industry with the February results;
gaming across the country had a great month, probably the best overall growth
the industry has seen this century. The trend has certainly been toward very
low, if any, growth in most markets. Depending on the month, the weather, special
events, the general economy and the competition, every market has experienced
months of growth and months of declining revenues. It was nice to see a month
reminiscent of the go-go times of the early 1990s.
February looks like a blowout for the gaming industry. February
casino revenues have all been released, with the exception of Nevada. February
saw an aggregate 17 percent year-over-year increase in revenue across the
regional markets (Connecticut, Illinois, Indiana, Iowa, Louisiana, Michigan,
Missouri and New Jersey). Las Vegas Review-Journal, 3-28-04
Nevada's 347 casinos won $876 million from gamblers in February,
the third best monthly haul in history and up 15.9 percent compared with the
$756.1 million won in February 2003, the state Gaming Control Board reported
this morning. Jeff Simpson, Las Vegas Sun
The Internet is still a challenging place for gaming operators. Just when it
seems the future of gaming has finally arrived, something happens to indicate
it will take a couple of more weeks at least. In the United States the pressure
from the federal government continues to shape the landscape and influence how
Internet gambling is conducted.
Federal prosecutors have begun a wide-ranging effort to curb
the growing popularity of online gambling in the United States by quietly
threatening legal action against American companies that do business with
Internet casinos and sports betting operations based outside the country,
lawyers and industry executives say. The investigation into the activities
of media, public relations and technology companies relies on a controversial
legal concept that holds that the American businesses, by providing advertising
and other services that support Internet gambling, are "aiding and abetting"
online casinos. That gives prosecutors an indirect way to attack the overseas
enterprises, whose operations are illegal here but fall outside their jurisdiction.
Matt Richtel, New York News, 3-15-04
Web search engines Yahoo and Google will stop running online
gambling ads on their U.S. Web sites, the New York Times reported Monday.
Google also will pull the ads from its Web sites in other countries. The change
is scheduled to take place by the end of April and could hurt the Internet
gambling industry. Search engine Lycos also said it had decided in recent
months to stop running the ads but did not specify when or why it had pulled
the advertisements. UPI, Washington Times, 4-5-04
The federal government is not the only government that thinks it has jurisdiction
over Internet gambling. Antigua, for example believes it has the power to license
Internet casinos and wagering, and due to the American pressure, Antigua took
its case to the World Trade Organization and won. Undoubtedly that will not
be the last word on the subject, but it does serve to cloud the issue even more.
The World Trade Organization has ruled that the hard line
taken by the US on Internet gambling is in breach of world trade rules. The
tiny Caribbean state of Antigua had complained that the moralistic stance
of the US was seriously damaging its economy. The decision, which is only
a preliminary ruling, came after Antigua and Barbuda complained to the WTO
last year that US prohibitions against Internet gambling are discriminatory
and in breach of international trade agreements that require the US to allow
foreign Internet companies to offer their services to US citizens. Antigua
and Barbuda, with a population of less than 70,000, has an economy largely
dependent on tourism, but with a growing market in Internet gambling. According
to a report on Caribbean Net News.com, the country has lost around US$30 million
since the US began its attempts to restrict Americans' access to on-line gambling
services. Out-Law, 3.26-04
In the war over the Internet, governments are not the only ones that that have
the power to shape the future. In an ironic twist reminiscent of the Mafia in
the United States, extortionists, probably Russian, have found a way to make
a buck from gambling on the Internet and intimidate a few people along the way.
Online gambling sites are betting on tighter security after
a recent wave of computer attacks from cyber extortionists plunged several
into darkness. Shadowy hackers demand $20,000 to $50,000 for protection from
distributed denial-of-service attacks, which flood a Web site with data so
that it is overloaded. BetWWTS.com in Antigua was forced to pay $30,000 when
hackers shuttered its site and thousands of its customers couldn't place wagers
worth an estimated $5 million, CEO Simon Noble says. It's one of the lucky
ones. Since the attacks started a few months ago, a handful of smaller operations
have gone out of business or abandoned Web sites in favor of phones to avoid
the problem. …Gangs of computer crooks allegedly operating out of Eastern
Europe have collected protection money from 10% to 15% of the companies they
have threatened, says DK Matai, executive chairman of security company MI2G.
Most issue ultimatums in e-mail messages in the days leading to major sporting
events, such as the Super Bowl. Often, threats are issued after an attack,
demanding that American currency be sent to a Western Union office. Jon Swartz,
USA Today, 3-10-04
Meanwhile, American gaming companies continue to explore ways to make a profit
using the Internet and in the process establish a presence that might at some
time in the future be leveraged into a gambling site.
Caesars Entertainment will up the ante in its competition
with major Internet providers today when it launches its new "Best Rate
Plus Guarantee" program. If a customer finds a lower Internet rate for
a room at one of the company's resorts, Caesars will match that price, then
beat it by offering an extra 25 percent discount on its own rooms. The program
was designed to offer guests more incentives to book rooms at the company's
18 domestic casino resorts directly through the company's Web sites. Vegas.com
Senior Marketing Director Bryan Allison said such programs are becoming common
in the lodging industry although the gambling industry in Las Vegas is just
now discovering them. Rod Smith, Gaming Wire, Las Vegas Review-Journal, 3-15-04
The National College Athletic Association is having its annual championship
tournament. Nevada, as the only state with legalized sports betting, has a horse
in the race. This year for two rounds it had a couple other entries in the race
also -- UNLV women and UNR men both gave local betters a sentimental place to
put their money. The NCAA has never been a friend of Nevada gambling and often
not of Nevada sports, just ask ex-UNLV coach Jerry Tarkanian. The NCAA has tried
numerous times to find a way to stop Nevada sports books from taking wagering
on NCAA sports. This year they sent a spy to Nevada to gather more information
on Nevada sports betting, thinking, I am thinking, that they would overhear
conversations between bookies and players about throwing games.
An executive with the NCAA who was a spectator in several
Las Vegas sports books during the opening rounds of the NIT and NCAA basketball
tournaments last week says his colleagues probably will be surprised to learn
how many different ways there are to bet on a basketball game. But Bill Saum,
the NCAA's director of agent, gambling and amateurism activities, said what
struck him most during his 2 1/2 days of observations of the sports books
was how little people actually cared about who won the games -- as long as
they were on the right side of the point spread or chose the "over"
or "under" correctly. …Asked if he also was looking for any
copyright or game telecast matters similar to those complained about by the
National Football League prior to last month's Super Bowl game, Saum said
he observed three things that he plans to take back to the NCAA's legal staff
for review. "My primary reason for being there was to be observant of
the issues related to the sports book and to become better educated,"
he said. "But if I see infringement issues, I noted them. I'm not a lawyer,
so I can't really tell anything for sure about whether there were any problems."
Richard N. Velotta, Las Vegas Sun, 3-22-04
As he sat watching nothing happened, surprise, except of course people wagered
money on the outcomes of games. Much as they do in every office in the United
States, or can you believe, on the Internet. Still basketball is good business
for Nevada.
Nothing brings out the gambler more than March Madness. This
month, $80 million in college basketball wagers will be made in Nevada, where
sports betting is legal. Online casinos will take in $1.6 billion. But the
bulk of the total $3.5 billion in bets the FBI estimates will be gambled is
in the millions of office pools across the country. Those office pool bets
translate into $1.5 billion in lost productivity, business outplacement firm
Challenger, Gray & Christmas estimates. This includes time on the Internet,
time to discuss bets and time to recollect everybody's upsets. Las Vegas Review-Journal,
3-28-04
The NCAA has other states on its "bad boy" list. Oregon, where the
lottery once offered sports betting, is still paying the price. The NCAA much
like any playground bully got mad and took its ball and went home, leaving poor
Oregon standing on the sidelines. However, regardless of how angry the rest
of us may get, it is their ball.
The governing body refuses to allow the state to host the
top college basketball event because it sanctions sports gambling. In 1983,
coach Jim Valvano led his underdog North Carolina State team on a tightrope
walk through the NCAA men's basketball tournament. The Wolfpack's unlikely
title culminated in Valvano's famous, frenzied search around the court for
someone to hug. That championship run began with two games at Gill Coliseum
in Corvallis, where N.C. State beat Pepperdine in double overtime and rallied
from 12 points down to upset UNLV. The Division I men's basketball tournament
has not visited Oregon since. And as baskets swished in Denver, Seattle and
six other cities last weekend, Portland remained hopelessly hoopless, as far
as ever from playing host to the grandest tournament in sports. "It has
everything in place to do it in a top-notch manner," said Bill Moos,
athletic director at the University of Oregon. "And it's a crying shame
that we're not being considered." Rachel Bachman, Oregonian, 3-22-04
Illinois is bent on providing the gaming industry with a considerable amount
of entertainment and an equal amount of anxiety. Last year the governor of Illinois,
Rod Blagojevich, decided to take a major step towards nationalizing casinos
with a tax rate that makes the state the majority owner of all the state's casinos.
The tax rate has changed the way the casinos operate and the way Wall Street
views those casinos. Still there are those companies that look at the Chicago
market, drool and believe that regardless of the tax rate, there is money to
be made in the environs of Chicago.
The enabling casino legislation limited the number of licenses in the state
to ten; nine have been granted and are operating. One license originally awarded
for the Chicago suburb of Rosemont has been in limbo for years. The state gaming
authorities refused to license the original operators and that forced the company
and the license into the hands of the bankruptcy courts. In March after years
of ups and downs the state regulators held an auction for the license. They
awarded the license to Isle of Capri for Rosemont; each bidder was coupled with
a community and they supported each other in the process.
Isle of Capri Casinos, Inc. officials announced today that
the company has been selected by the Illinois Gaming Board as the successful
bidder for the 10th Illinois gaming license. …The company's project includes
constructing a single level 40,000 square foot casino, with 1,200 gaming positions,
four of its signature restaurants, a 12,000 square foot entertainment venue,
and 7,500 square feet of retail space. Isle of Capri will own 80 percent of
its Rosemont subsidiary, with the remaining 20 percent to be owned by qualified
minority investors, as required by statute. PRNewswire-FirstCall, Yahoo Business,
3-16-04
Shares of Isle of Capri Casinos Inc. rose 11 percent on Tuesday,
the day after it won the right to build a casino on the outskirts of Chicago
in an auction by the state gaming board. Reuters, Yahoo Business, 3-16-04
There are more for hoops for Isle to successfully jump through before the doors
of any casino open. The bankruptcy court has to approve and then the gaming
board has to license the company and key individuals to operate a casino. The
auction awarded the remaining license, but not a license to operate. Confused
yet?
A U.S. Bankruptcy Court on Thursday set a May 17 confirmation
hearing date for a plan that would allow Isle of Capri Casinos Inc. to build
a Chicago-area gambling hall and take over the license from bankrupt Emerald
Casino, Inc., an attorney for Emerald said. If the court agrees to the plan,
Isle of Capri still must pass a suitability investigation by the Illinois
Gaming Board before obtaining the license, according to Joe Schorer, the attorney.
The gaming board had anticipated the court would hold the hearing around April
1, more than month earlier than the date set by the court. Reuters, Yahoo
Business, 3-18-04
So far the process appears to be idiosyncratic, convoluted, slow and maybe
a little political, but nothing more. Here is where anxiety over taxes and refused
licenses turns to entertainment for almost everyone except Isle of Capri stockholders
and the citizens of Rosemont. Immediately after the license was awarded to Isle
the governor and attorney general decided the process was flawed, if not corrupt,
and called for reviews, legal action, resignations and everything short of an
execution.
Illinois Attorney General Lisa Madigan on Tuesday called on
the state gaming board to explain what she called the "surprising"
decision to choose Isle of Capri Casinos…said she wanted more information
since the regulator's staff had recommended another bidder, there were concerns
about the site, and a top Isle executive had been disciplined by the Illinois
Gaming Board in the past. Reuters, Yahoo Business, 3-16-04
Illinois Attorney General Lisa Madigan laid out her case Thursday
that the taint of organized crime has sullied Rosemont, putting pressure on
the state's Gaming Board to reject the northwest suburb as a casino site.
Chris Fusco/ Art Golab/ Dave Mckinney, Chicago Sun Times, 3-26-04
Illinois Gov. Rod Blagojevich on Wednesday called on the state's
gaming board to conduct a full, open and public review of their choice of
Isle of Capri Casinos, Inc. to operate a casino in the Chicago suburb of Rosemont.
Reuters, Yahoo Business, 3-17-04
Gov. Rod Blagojevich on Wednesday will name a former deputy
U.S. attorney general as special investigator to look into the Illinois Gaming
Board's decision to give a casino license to Rosemont and Isle of Capri Casinos,
according to a source close to the administration. Eric Holder, Jr., who was
a top Justice Department official in the Clinton administration with extensive
experience in prosecuting public corruption, will review the "suitability"
of the board's choice of Isle of Capri, based in Biloxi, Miss., the source
said. Chicago Tribune, 3-24-04
Irate over the Illinois Gaming Board's selection of Rosemont
for the state's last casino license, Senate President Emil Jones kept his
promise Wednesday to go after the board itself. A Jones amendment approved
by the Senate Executive Committee dismisses current gaming board members and
allows Gov. Rod Blagojevich to fill the five seats with new members. The amendment
now heads to the full Senate, followed by the House. Blagojevich could appoint
new members to the gaming board within seven days of signing the bill. His
selections would come back to the Senate for confirmation. Kristen McQueary,
Chicago Daily Southtown, 3-25-04
As one might imagine, the gaming board members are not terribly excited by
the developments, nor are the executives of Isle of Capri.
The only member of the Illinois Gaming Board who was opposed
to putting a casino in Rosemont is criticizing Gov. Rod Blagojevich's call
for an investigation into the board's 4-to-1 vote. …But board member
Gary Peterlin says the investigation sends the wrong message. "The Gaming
Board staff, which is independent, competent and very well respected, must
be allowed to adequately do their job without interference," Peterlin
said in a written statement Friday. "It is very important that they have,
in addition to being able to remain independent, the appearance of remaining
independent." Associated Press, Suburban Chicago News, 3-22-04
Isle of Capri Casinos, the company that plans to build a casino
in Rosemont, denied comments by a former gaming board administrator that the
casino's owner left Illinois in 1993 with the understanding that he would
not return. …Mort Friedman, the gaming board administrator at the time,
told The Chicago Tribune he believed the settlement precluded Goldstein from
returning to Illinois gaming. …In an interview with the Chicago Sun-Times
on Saturday, Isle of Capri President Timothy Hinkley vehemently denied any
such deal. "Bernie never agreed to forgo any opportunity to again hold
a license in Illinois. There's nothing in writing or orally," Hinkley
said. "I'm surprised that a gaming board or any government entity would
make that kind of decision verbally. It would certainly be in writing, and
there is nothing in writing that the gaming board approved." Art Golab,
Chicago Sun Times, 3-22-04
Makes one wonder if the license is worth all of the effort. In fact, some observers
say Isle bid too much and developing a profitable casino under the circumstances
may not be possible and that is without all of the hassle from the governor,
legislators and attorney general.
Argosy Gaming chairman Bill Cellini claims the sought-after
10th riverboat casino license is no "slam dunk" for the winner because
the final bids were overpriced. "The bids were extraordinarily high,
and I think that investors will find that the return is not going to be a
great return," Cellini said. "This is not the great deal that others
think that it is. It still is going to be very risky for the investors."
…Cellini, 69, said the license auction, which went late into the night,
led to "substantial overbidding by everybody." …"I believe
the people went into those biddings, and as sometimes happens in auctions,
you become too emotional and sometimes you overbid," said Cellini. "I
don't think anybody expected it to go to that extent." Mary Massingale,
Copley News Service, Suburban Chicago News, 3-22-04
Making a profit with unreasonably high taxes and an overpriced license are
not the state's problem. The state succeeds if the check clears the bank and
the taxes are paid, even if only for a relatively short time. After the late
night poker game between the bidders, Harrah's, Midwest Gaming and Isle of Capri,
the Illinois license is worth a half billion dollars. Before the ink was dry
on the decision, lawmakers in other states began to think about the auction
and the "real" value of a casino license in their state. And of course
in Illinois there are lawmakers suggesting expanding gaming to allow for two
more licenses.
But this week some state [Pennsylvania] lawmakers were again
raising the issue of auctions. Senate Republicans discussed the idea in caucus
this week. House Republicans have been considering it since they got a Feb.
27 memo from the conservative Commonwealth Foundation promoting auctioning.
"Look at the stock of the company that bought the license," said
Sen. Gibson Armstrong, a Republican from Lancaster. Armstrong is a gambling
opponent, who raised the issue in the caucus after the Illinois sale. "Apparently
their stockholders think it's a good value." Associated Press, Washington
(PA) Observer-Reporter, 3-22-04
State lawmakers are not the only people who have trouble finding the right
value to place on a casino license or a casino operation for that matter. Even
longtime operators can get confused, after all neither Harrah's and Isle of
Capri are casino novices, and yet by some estimates they got excited and bid
the price up a little too much. The poster child for bidding up a casino's value
is the Donald; not that he spends more than anyone else, rather he has more
with debt that others. Donald Trump is still struggling with some 1990's debt
and even if he is not wondering if he overdid it, there are others that are
wondering just that.
Shares of Trump Hotels & Casino Resorts fell 11 percent
Tuesday on news of auditors' concerns that, barring a bailout, the company
might not be able to continue as a ``going concern.'' In a letter to the company's
board of directors, auditors for Ernst & Young LLP said that the debt-laden
company, which runs three Atlantic City casinos, is struggling under stiff
competition, recurring operating losses and had a working capital deficit
as of Dec. 31, 2003, the auditors said. John Curran, Associated Press, Atlanta
Journal Constitution, 3-31-04
Scott Butera, executive vice president of Trump Hotels, said
the company would be able to make a $73 million interest payment on the notes
due May 1, although the company may use a 30-day grace period to do so. …"What
we've been saying to the market is we have high leverage and we have fairly
high interest rates relative to our competitors in Atlantic City. Most of
our cash flow goes to pay debt service. As a result, we haven't had the opportunity
to invest in our properties as our competitors have.'' John Curran, Associated
Press, Atlanta Journal Constitution, 3-31-04
The Donald does not appear to be worried; after all, he is a television star.
He is considering copyrighting "you're fired" and marketing his own
line of "you're fired" merchandise. And while he is fascinated with
his imagine on television, the gaming regulators in New Jersey are not as fascinated.
They want to make certain he is not violating any gaming regulations.
Now, the Division of Gaming Enforcement is looking into whether
the Trump Taj Mahal, the crown jewel of Trump's casino empire, got all the
approvals it needed before the taping of a recent "Apprentice" episode
there. Trump officials confirmed yesterday the division asked for a tape of
the show to review. But they denied the show, which aired last Thursday on
NBC, violated any state gambling regulations. Judy Dehaven, New Jersey Star-Ledger,
3-30-04
Too much debt, regulators sniffing around, not to worry, Trump is going to
have his own Visa card, a trump card; I wonder if he can transfer his outstanding
balance to his new card. On a final Trump note, seems he didn't mean it when
he said there wasn't room for another casino near his Trump 29 casino. "Just
kidding, guys; there is always room for one more casino run by the friends of
my friends."
Today, consumers can have a new "trump" card in
their wallets. Trump and Bank One launched the Trump Rewards Visa* card enabling
cardmembers to earn rewards that can be used at select Trump entertainment
locations. PRNewswire-FirstCall, Yahoo! Finance, 3-31-04
Casino developer Donald Trump backed off his earlier claim
that the gaming market around Trump 29 Casino in Coachella was already saturated.
Trump said he changed his mind because he didn't know the tribal owners of
Trump 29 Casino were "friendly" with a tribe that wants to build
another casino nearby. "I think it could work very nicely. I think it
could be a very positive thing for the area," said Trump of the proposed
second casino. Brian Joseph, Palm Springs Desert Sun
Trump, Harrah's and the Isle are not the only ones who can be a bit too anxious
to get into the casino business, or in this case into a casino. This poor man
was willing to risk everything for a roll of the dice.
A man was impaled on a fence outside Brisbane's casino today
after falling during a bid to get inside. Police said the man fell from the
first floor as he scaled the outside of…Treasury Casino…He had earlier
been refused entry. The 29-year-old was taken from the scene with part of
the fence still piercing his buttocks and groin after being cut free of the
rest of the fence by emergency workers. Australian, 4-3-04
Be patient. If you can't get to or into a casino, just wait. The Internet will
get here some day and while you wait television may be willing to fill in. Poker
and lately blackjack have become television spectator favorites. BingoTV would
like to be your interactive viewing choice.
Since February, millions of television viewers nationwide
have had a chance to play bingo from their living room sofas rather than heading
to a casino. BingoTV is a live bingo game that broadcasts every Wednesday
evening on the Dish Network satellite service. Viewers participate in the
game by using free game cards and can win prizes ranging from television sets
to golf clubs. Dish Network's Denver-based parent EchoStar Communications
Corp. announced the program Thursday after calling the experiment a success.
"Today you can sit at home and get every question on 'Jeopardy' right
and only win the admiration of your spouse, " BingoTV President Ira Bahr
said. "This is the first time anyone can sit home and win something from
a TV show." Liz Benston, Las Vegas Sun, 3-19-04
New job growth, higher gas prices, lower stock prices made the headlines, while
great revenue growth in February set the tone for the gaming industry. The Donald's
casinos are struggling, but he is a star. The Isle of Capri won the lottery
in Illinois and won the wrath of the governor, attorney general and some legislators
in the process. However, winter is over and we are all ready for the summer
season, aren't we?
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