The summer is ending; gas prices are predicted to come down as Americans take
to the road for the last of the summer’s trips. Consumer confidence fell
in August to the lowest since November, rattled, the pundits say, by expensive
gasoline and a slowing housing market. Interest rates and housing sales are certainly
going to make the headlines for the next couple of months.
Americans' faith in the economy tumbled in August to a nine-month low, which
could translate to tightened purse strings if job growth stumbles or fuel
costs rebound. Job-related worries were the big reason consumer confidence
fell more than expected this month to its lowest level since November. In
July, unemployment rose to a five-month high of 4.8 percent. But analysts
expect job creation and personal spending for August to come in higher in
reports…pump prices have fallen more than 5 percent over the past month
- providing some relief in people's travel budgets. Furthermore, consumers
surveyed reported small increases in their plans to buy homes and major appliances,
despite their dwindling confidence. Madlen Read, Associated Press, 8-29-06
How the interest rates and housing sales, or the declining cost of oil, will
impact the economy or the gaming industry remains to be seen. The results of
the industry in July were good, New Jersey was down – you may remember
that the governor closed the casinos for a few days, an act guaranteed to hurt
revenues. Mississippi is still suffering from comparison to pre-Katrina times,
but another three casinos opened in August and beginning in September the comparison
will be to a storm-torn industry, not the thriving and healthy industry of the
pre-Katrina times. Missouri was down, one percent, but I haven’t heard
any good explanations.
Nevada was down (June results), but the state has been on a roll for a while
so I suppose one might expect an occasional slowdown – especially given
Las Vegas’ distance from Los Angeles and the record gas prices in June.
Medick's telephone survey of Vegas travelers told a different story, that
rising gas prices were significantly cutting into travel plans over other
activities such as going to the movies or the mall. In fact, close to half
of the respondents said they had cut back on trips to Las Vegas as a result
of higher gas prices. Drivers also were asked at what point they would stop
driving to Las Vegas, a question based on the assumption that most folks have
a limit. About half of drivers said they would stop driving to Vegas if prices
hit $3.50 per gallon and about 80 percent would stop if gas reaches $4.33
per gallon. With the LVCVA reporting a 2 percent decline in visitor traffic
in June and the state noting a 7 percent drop in Strip casino revenue for
the month - the biggest dip in three years - even Gov. Kenny Guinn admitted
that "an economy based so much on tourism is always at the mercy of higher
gas prices and a slowing of the economy." Liz Benston, Las Vegas Sun,
8-28-06
The customers in Las Vegas have to get there, and some additional cost –
the question is at what point – is certain to have an impact on Nevada’s
gaming revenues. Everything that impacts travel has more of a potential to impact
Nevada than it does most of the other states. All of the inflationary indicators
are bound to be part of the story of gaming for the next few months at least,
if for no other reason than we always need reasons to explain downturns.
Atlantic City: July gaming revenues fall 4.8% to $480.5 million. Reuters,
8-10-06
Colorado: July casino revenue increased to $74.3 million, up 6 percent from
2005. Denver Post, 8-18-06
Delaware: July gaming revenue rose 10.4% with Delaware Park up 15.9%, Dover
Downs up 7.5% and Midway Slots at Harrington Raceway up 1.9%. Alan R. Woinski,
Gaming Industry Weekly Report, 8-22-06
Detroit: July casino revenues rose 2.7%. Alan R. Woinski, Gaming Industry
Weekly Report, 8-22-06
Connecticut: July slot win rose 1% to $ 160.3 million. New London Day, 8-15-06
Illinois: July gaming revenues rose 6.1% to $171.2 million. Alan R. Woinski,
Gaming Industry Weekly Report, 8-14-06
Indiana: July gaming revenue rose 0.8% to $221.2 million. Alan R. Woinski,
Gaming Industry Weekly Report, 8-14-06
Iowa casino revenues rose 10.9% in July to $111.9 million. Racetrack revenues
rose 22.8%. Alan R. Woinski, Gaming Industry Weekly Report, 8-22-06
Louisiana's casinos won $226.6 million compared with $217.7 million in July
2005, a 4% increase. Associated Press, 8-15-06
Mississippi: July gaming revenues decreased 6% to $222.7 compared to $237.6
million in 2005. Associated Press, 8-16-06
Missouri’s gaming revenues dropped 1% to $136.1 million in July. Rick
Alm, Kansas City Star, 8-15-06
Nevada's June gaming revenue fell 3.5% to $921.1 million. Reuters, 8-10-06
The expansion of gaming across the country has been continual since the first
state authorized a lottery in the 20th century – nothing in the 19th century
fits into a 20th or 21st century narrative. The latest group of new states to
authorize additional gaming fit into the same basic pattern. First, after some
debate in and out of the legislature, a ballot initiative is permitted. Next,
the voters approve some specific form and location for gaming, such as in Pennsylvania
where the voters approved a general location and the type of gaming. And finally,
regulators begin to develop the regulations, grant licenses, and allow operations
to begin. Well, that is what is supposed to happen; we are still waiting for
the final step in Pennsylvania and Florida. And while we wait the opposite is
working to reverse the process. There have been numerous amendments to the law
proposed in Pennsylvania, and lawsuits have been filed in both states.
In Pennsylvania the lawsuit failed, but it did add months to the process, and
in Florida we don’t know the outcome yet, but the first ruling does not
bode well for those who want slot machines.
Concerned with the possibility of widespread petition fraud, a three-judge
appeals panel has just ordered a trial court to invalidate Broward County's
successful slot-machine ballot vote if it determines the law had been broken.
The 2-1 decision by the First District Court of Appeals could deal a crippling
blow to the four parimutuel facilities that were banking on the slot machines….'Today's
ruling gives us hope that the concerns about fraudulent signature gathering
-- including dead people signing petitions -- during the petitioning process
for the slots measure will be examined by the courts,' Wayne Pacelle, president
and CEO of The Humane Society of the United States, one of the plaintiffs
in the case, said in a press statement. Marc Caputo, Miami Herald, 8-006
While a court investigates the slot petition process, another case has entered
the court system. An adult arcade owner is being tried for operating illegal
games, slot machines. The defendant says they are legal and just amusement games
for old folks. Depending on the outcome in the two cases, Florida could end
up without slot machines at racetracks or any place else, or with slot machines
every place but racetracks, or with slot machines everywhere, but only the ones
at the track would be officially called slot machines.
Adult arcades like the Tropicana Rec Room in Pompano Beach offer senior citizens
amusement, a chance to earn prizes, a free hot lunch and companionship --
all for eight cents a game. But the Broward State Attorney's Office says the
Tropicana's arcade games are programmed to cheat players, and have charged
owner Gale Fontaine, 56, with operating an illegal gambling house, violating
lottery laws and possessing a slot machine. Nikki Waller, Miami Herald, 8-8-06
It is not easy to figure out what is legal and what is not. It gets worse.
In Missouri officials have estimated that there are as many as 5,000 illegal
slot machines operating. Missouri does have legal slot machines, but only on
licensed riverboat casinos. The gaming regulators say they can’t do anything
because they only regulate legal casinos, not illegal ones. The police say it
isn’t their job and isn’t worth the effort. However, there are some
politicians who would solve the problem by authorizing charity casinos.
A donnybrook is brewing in Jefferson City over illegal gambling. A proposed
statewide investigation would focus on ubiquitous “gray market”
slot machines that are played openly around the state at truck stops, fraternal
clubs and convenience stores. Other questionable activity, including sweepstakes
and barroom poker, also could get a close look. One expert estimates that
at least 5,000 bootleg slots are in action daily around Missouri — and
maybe three or four times that number. Many are said to be salvaged arcade
video games given new life with gambling software… A small but influential
contingent of state lawmakers is adamant about legalizing slots for nonprofit
civic organizations. Rick Alm, Kansas City Star, 8-9-06
One of my favorite topics is the risk in operating a casino; the risks are
not from the customers or criminals, but from the government and regulators.
Unstable tax rates, the high cost of regulation to operators and changing legislation
all add to the risk, such as the regulation that came into effect this month
in Illinois that requires identifying all customers who appear to be 30 years
old or younger. The stated intent of the Illinois regulation is to eliminate
underage gambling and help screen for gamblers who had asked to be banned from
the casinos. A seemingly innocuous regulation, it is the precursor to investigation
checks on every customer – and possibly using a national data base for
criminal, child support, self-banned customers, and any other cause the government
wants the casinos to enforce. Besides the issue of making – as in the
banking act – a governmental enforcement agency out of each casino, there
is a huge additional cost to such procedures.
The risk internationally is even greater and more complicated. Russia appears
to be a great market, but it is impossible to guess what regulation and taxes
might be coming next.
If the rest of the mainstream population begin to join the few casino high
rollers, Moscow could eventually be the next hotbed for casino gambling investments,
just as Asia was a few years ago…the Russian parliament said that the
country’s gambling industry has reached a size of over $6 billion in
total wagers…most of the money is wagered in Moscow gambling casinos
and slot machine halls. Moscow News, 8-22-06
In Korea there is a shakeup that may lead to removing 60,000 machines, not
a good situation if you were selling slot machines or operating one of the slot
arcades.
The prosecution is considering seizing from gambling parlors illegally reprogrammed
video slot machines, which provide larger jackpot winnings than legally permitted,
officials said Monday. About 60,000 such game machines are in operation at
arcades around the country, according to police. Kim Tong-hyung, Korea Times,
8-22-06
But the crowning story of the month is from Macau. We are being prompted almost
daily with the size of the market, the profitability of the LV Sands and the
coming of Wynn Macau.
Macau…collected 1.35 billion U.S. dollars in direct gaming
taxes in the first seven months of the year, a year-on-year rise of 13.7 percent….
Chinese People’s Daily, 8-22-06
Macau's expected gross gaming revenue in 2007 would rise an
estimated 18 percent to $8 billion. Associated Press, 8-24-06
This month, however, Stanley Ho – the long time godfather of gambling
– said many of his places would be declaring bankruptcy. He blamed the
cutthroat competition from the LV Sands.
Stanley Ho, Macau's gaming magnate, said one-third of his casino unit's VIP
gaming halls face bankruptcy and thousands of jobs are at risk due to cutthroat
competition…blamed the Sands Macau… Shanghai Daily, 8-14-06
And then some demonstrated real cutthroat competition by killing two casino
managers. The local press warns that the old gangs that control the casinos
won’t tolerate a loss of their cash cow. Now that is risk.
Macau authorities are worried about a resurgence of casino-related crime…Ms
Chao Yuek-hong, the executive director of the Golden Palace VIP room in Casino
Lisboa, was found slumped in the front seat of her car with her throat slit…husband,
Mr Lam Pou-sang, a manager at the casino, was also found blindfolded with
multiple stab wounds, reported the South China Morning Post… News Paper,
Asia, 8-22-06
The Sands and Wynn do not seem to be intimidated. The Sands just opened an
expansion and now has 735 table games – the largest pit in the world –
and is building another billion dollar plus casino. Wynn is set to open in September.
Analysts are now predicting that in the future LV Sands will get 80 percent
of its revenue from Asia – Macau and Singapore. Obviously where I see
risk, some people see opportunity.
Years ago a controversial defense entered the American lexicon: Twinkie defense.
It became a popular joke – like the old Daniel Webster one – the
Twinkies made me do it. The defense was a variation of one of the most famous
defenses of the twentieth century, the insanity defense. The punch line is basically
the same; “I am not responsible, Mr. Judge, I cannot control myself.”
The twenty-first century is adding a new chapter and a new phrase to the legacy
[lexicon?] of uncontrollable impulse defenses. The addictive gambler who embezzles,
commits armed robbery, or steals from his family, friends, or church is becoming
more and more common. I am not an attorney or a psychiatrist and cannot say
for certain that the gambling addiction and subsequent crimes are uncontrollable
and therefore should receive special treatment in law, but I can say for certain
that it is becoming a very common defense. No person to my knowledge has been
sentenced to treatment instead of prison yet, but some have had their sentences
reduced and ordered into treatment.
An internet gambling addict has been jailed for milking his employers of
£1m to fund his habit…Benjafield had a salary of about £16,000,
but regularly spent more than this annual income a day on online betting using
company money. BBC News, 8-1-06
Richard Davenport, the former lawyer for John Ascuaga's Nugget who pleaded
guilty to embezzling $3 million over 15 years, suffered from a gambling addiction
that took him to the brink of suicide and left him with no wife, no assets,
but in deep remorse, his lawyer said… Martha Bellisle, Reno Gazette-Journal,
8-24-06
A former bookkeeper for a doctor's office pleaded guilty Wednesday to stealing
more than $2.3 million from her employer, money she poured - as much as $6,000
a day - into buying lottery tickets…with nearly $1.4 million stolen
in 2005. 1010 Wins, 8-24-06
The son of former Mobile County Sheriff Tom Purvis, has been sentenced to
a year and a day in prison after gambling with $150,000 worth of stolen money
at Mississippi casinos…James Purvis must also participate in gambling
addiction and alcohol treatment as well as participate in a drug testing program.
Associated Press, Sun Herald, 8-24-06
A borough tax collector in Bedford County misappropriated more than $127,000
to feed her gambling addiction…Carol Ann Shaffer, 42, told police she
used cash advances from her credit card to buy lottery tickets, then raided
the Manns Choice Borough tax account to pay her credit-card bills… Associated
Press, Pittsburgh Post Gazette, 8-24-06
It is a problem that is not going away and one that the industry is going
to have to help solve. The Illinois identity check, as unpleasant as it may
be, may be one of the steps. The states that have self-ban lists are having
mixed success, but Missouri appears to feel it is working. According to their
records an average of 145 people a day sign up to be banned from the casinos.
It may not be a perfect answer and it does address lotteries or online gambling,
but it is a place to start. And a national database – enforced in every
jurisdiction – that might include self-banned gamblers as well as those
such as the son of the deputy sheriff in Alabama could be an effective method
also.
Thousands of gambling addicts who have permanently banned themselves from
Missouri's casinos won't get a chance to reconsider – at least not yet.
On Wednesday, the Missouri Gaming Commission rejected a plan that would have
let problem gamblers remove their names from the banned list after two years.
Though the vote was 2-1 in favor of the change, it failed because three votes
were needed. The commission has two vacancies. Chairman Noel Shull, who cast
the negative vote, said more study was needed on whether two years is long
enough….Under the proposal that the commission rejected, gamblers could
have petitioned for removal from the list after two years. To be eligible,
they could have accumulated no trespassing convictions for entering casinos
during the banned time. Virginia Young, St. Louis Post-Dispatch, 8-24-06
Massachusetts is expanding its outreach program to a specific community, with
a program geared to match a casino marketing campaign aimed at the reputation
of Asians as being “big” gamblers. The answers may vary, but the
question is constant and becoming a louder and louder issue – how to deal
with the existence of a significant number of people who are addicted to gambling
and may commit the same anti-social acts as other addicts?
…hire a Mandarin-speaking coordinator and train social workers to treat
Asian gambling addicts. The Massachusetts Council on Compulsive Gambling is
taking aim at a new group — Asian gamblers. The council is dedicating
$100,000 from the state Lottery to the new effort, the largest amount they've
ever used to address a single demographic group…Casinos have been aggressively
marketing to Asians in recent years. Lottery Post, 8-23-06
Poker players in some states are becoming political activists and though their
cause may not be as noble as that of the colonists who fought the British or
the civil rights workers who went to jail in the South, these modern day activists
are going to jail for their cause: poker. Unlike the CEO of BetOnSports who
went to jail for his business activities, they are players, playing the game,
though of course they hope to profit from their activities. These two, one in
Alaska and one in Texas, have become known for their poker playing and poker
advocating; now they are also known for their poker suffering.
City and federal authorities conducted a raid last week on a Midtown house
where local gamblers have gathered for years for illegal poker games, police
said. The midnight raid on a two-story, single-family home at 4100 Arctic
Blvd. found several employees and nine players on the premises…No one
was arrested, but thousands of dollars from two Texas Hold 'em poker games
was seized, and police said they are continuing to investigate. The raid last
Tuesday night follows two others made this spring by the police, which this
year has made vice crimes, including gambling, a higher priority. Police said
they hope the raids send a message to would-be gamblers to stay away from
illegal gambling houses, which, according to police, often attract other crimes.
Megan Holland, Anchorage Daily News,
It was 10 pm on a Tuesday night in the high-end district of Shavano Park
when the news broke on WOAI News 4 in San Antonio, Texas. An illegal gambling
warrant had just been executed at the home of 2006 World Series of Poker sixth
place finisher, Richard Lee. It seems the final table of the WSOP has been
plagued with controversy, and just when the Gold vs. Leyser $6 million lawsuit
began to lose momentum, another shocking headline became fodder for the press.
According to news station WOAI, vice officers executed a warrant to break
up an alleged illegal gambling operation at a home owned by a recent WSOP
poker champion…Confirming that information was a man identifying himself
as Lee's lawyer who stated that the home's owner is the same Richard Lee who
placed 6th at the World Series of Poker and won nearly $3 million a few weeks
ago. Card Player, 8-30-06
The election season is upon us; for the next two months we will experience
with increasing intensity the rhetoric of the campaigns. This election, like
most in the last few years, will feature gaming in two categories; first, there
will be campaigns particularly for governor where gaming will be a major issue.
In Illinois and in Texas, for example, one candidate in the race is advocating
expanding gaming to help meet the state’s financial obligations.
Republican governor candidate Judy Baar Topinka called today for the creation
of a Chicago casino as the centerpiece of her four-year revenue plan for the
state, contending it would generate billions of dollars to help fund schools
and provide property-tax relief. Rick Pearson, Chicago Tribune, 8-23-06
Texas Comptroller Carole Keeton Strayhorn took her gubernatorial campaign
on…tour…outlining her proposals to give teachers a $4,000 pay
raise and to offer free community college for every high school graduate…Funding
for her proposals would come from legalizing video slot machines where gambling
is already allowed. Lynn Brezosky, Associated Press, Dallas News, 8-30-06
The other case is where gaming itself will appear on the ballot for expansion.
As it sits today, Nebraska, Ohio, and Rhode Island will be voting on some form
of gaming expansion, that is, if the current legal challenges fail. And, at
least in Rhode Island, there will be millions of dollars spent on the campaign,
and both Ohio and Rhode Island have some very well known politicians and former
governors leading the opposition.
Lincoln Park and Newport Grand stepped forward yesterday as major backers
of the opposition effort. The two established gambling venues have made an
"initial investment of $1 million" in the campaign by the coalition
-- known as Save Our State -- that is leading the fight against the proposed
constitutional amendment on the Nov. 7 state ballot.. Harrah's spent close
to $2.7 million last month alone on TV, radio and newspaper advertising and
the hiring of 50-plus staffers to promote the proposed Harrah's-Narragansett
casino in a privately owned West Warwick industrial park. Katherine Gregg,
Providence Journal, 8-30-06
U.S. Sen. George Voinovich has launched a battle against a November ballot
initiative to substantially expand gambling in Ohio…is lobbying newspaper
editorial boards across the state, as well as social service and religious
organizations, to join an effort to defeat the proposed constitutional amendment.
He and other opponents are trying to raise $1 million to $1.5 million to run
ads urging voters to reject the proposal. Stephenie Steitzer, Cincinnati Enquirer,
8-16-06
Attorney General Jon Bruning continues the push to keep a vote to legalize
up to three casinos off the November ballot. Omaha News 6, 8-30-06
Gaming has some ups and downs to look forward to in the waning months of 2006.
The economy is always a tricky component and promises to continue to offer challenges
for gaming operators. The federal government and some state governments are
“cracking down” on what they judge to be illegal activities –
activities, namely poker and sports betting, that are so ingrained into our
society that prohibiting them is much like prohibiting the consumption of alcohol
80 years ago. They are so much a part of our society that making them the subject
of mass law enforcement would have a major impact on our entire society. I hope
all agencies and legislators tread softly, for this is a very slippery slope.
Mississippi is rebuilding; Pennsylvania and Florida may indeed get some operations
open before the end of the year. Voters in Ohio, Kansas, and Nebraska will most
likely vote on expanded gaming; and in a number of states, most notably Illinois
and Texas, gaming will be an important factor in determining the outcome of
local elections. The importance of gaming at the polls is just one more illustration
of how much a part of the American culture gambling is, but then that is true
in most of the world, isn’t it?