By Roger Gros   Wed, Apr 29, 2009

In a way, it’s a new beginning and the end of an era. When the City of Dreams debuts in June, the second casino resort developed by Melco Crown, the only remaining unopened development from Macau’s first big wave of casinos will be Wynn Macau’s Encore, scheduled to debut some time in 2010.

A partnership between Lawrence Ho, son of the original Macau gambling magnate Stanley Ho, and James Packer, son of the late Australian tycoon Kerry Packer, Melco Crown is betting its future on the success of City of Dreams. The company’s original development, Crown Macau, has had an up-and-down history since it opened in May 2007. For a time, it dominated the market, paying a higher commission to the all-important VIP operators, but when the government made a correction by capping commission payments, Crown Macau lost some market share, and now competes fiercely with Wynn, the Venetian and the SJM properties controlled by Stanley Ho.

“We know the pressure is on us,” Ho told Bloomberg Television in April. “The success of it will have major implications.”

Because the economy has slowed construction of other new casinos—Las Vegas Sands’ Cotai Strip development is on hold; Galaxy slowed to a crawl on its mega-resort; and Studio City Macau stopped dead—City of Dreams is likely the last of the full-blown mega-resorts to open before reality sets in.

For Greg Hawkins, the president of City of Dreams, the economy isn’t really an issue since the property was completely financed before the economic problems began. So he doesn’t expect the results to be altered too much.

“In terms of investor management, we’re being realistic,” he says. “We were fully financed before the downturn, so we were fortunate to be able to go with our original plans. We haven’t materially changed the direction of what we were building, so the basic elements of what will make us successful are still included.”

Hawkins is realistic, however, about the property’s potential visitors from China, given the visa restrictions that have been put in place since the start of City of Dreams construction.

“Operationally, we’re very conscious of the competitive conditions in China and Hong Kong, as well,” says Hawkins. “We’re looking at our strategic execution to ensure it’s aligned with the current market conditions. So from the operations perspective, we need to know that our cost basis will allow us to adapt to market conditions, and then hone the execution pieces to be really sharp so we can maximize the earnings potential.”

Ho believes that the economy has begun to bounce back in Macau, which took a hit last year when the visa restrictions severely reduced visitors from mainland China. He says the worst is over.

“In terms of China’s political matters, these are definitely out of our hands,” Ho said. “The bleakest days of the industry are past us, which was the fourth quarter.”

COD Delivers

If the Venetian Macao is its immediate competition (and being directly across the street, it’s certainly in the neighborhood), City of Dreams matches it and more—starting with three hotels: a Crown tower, a Hard Rock Hotel and a Grand Hyatt.

“We’re trying to hit every demographic and price point with our room offerings,” says Hawkins.

“At the Crown Tower, we’re offering 300 absolutely spectacular rooms and suites. These will primarily be offered to the VIP market that we’ve developed, and we hope to continue to develop.

“At the Hard Rock, we’re looking to bring in a younger audience, with the rock ‘n’ roll lifestyle. In the casino, we’re making it a truly exciting atmosphere with the memorabilia for which Hard Rock is so well known, including items from Asian star Jacky Cheung. He’s probably best described as the Bruce Springsteen of Asia, and he’s very popular.

“And our third hotel, which should open in the third quarter of this year, is the Hyatt brand, which gives our customers that luxury they have become so accustomed to in the Asian market.”

The City of Dreams retail area, the “Boulevard,” will be unlike anything currently offered in Macau, says Hawkins.

“When you access the property, it doesn’t matter which way you come in, you’re immediately placed on the Boulevard, which runs around the outside of the property,” he explains. “That’s where all the retail is located. We’ve got a great selection of stores, a wide variety. We really want to look at the aggregation of the brands throughout the retail space so we can truly drive the casino experience. While this is undoubtedly a challenging market, we’re pleased with the take-up rate for our tenants.”

Phase One of the Boulevard comprises approximately 85,000 square feet of retail space developed in collaboration with retail operator DFS. The Boulevard will present “precincts,” which will group fashion ready-to-wear, accessories, jewelry, watches and beauty in distinct zones.

In the middle of the Boulevard will be the first “must-see” attraction in Macau, the “Bubble,” which will provide a totally immersive multimedia experience, unlike anything else that has been seen in Asia.

“It’s like an Imax on steroids,” says Hawkins.

Designed and produced by U.S. entertainment group Falcon’s Treehouse, the production will combine high-definition video content, a sweeping musical score, over 29,000 theatrical LED lights and a variety of sensory effects to create a stirring multimedia extravaganza.

In addition to the Bubble, City of Dreams will offer a production show designed by Cirque de Soleil’s founder, Franco Dragone, and his new company, Dragone. The theater will be designed by world-renowned architects, the Pei Partnership of New York. Hawkins says the show will open before the end of 2009, and will be the final piece for phase one of City of Dreams.

VIP Development

At Crown Macau, the high-powered VIP company A-MAX has an exclusive arrangement to provide players to that property.

At City of Dreams, Hawkins says A-MAX will not be exclusive, but definitely part of the mix of VIP operators that will work with the property.

“The VIP market is a work in progress,” he says. “We’re talking with many operators about coming into City of Dreams. We’ve received a lot of inquiries about working with that, but we’re still sorting that out. We have a great executive handling that for us, Kelvin Tan. He’s very experienced and knowledgeable in this area.”

But the main thrust of City of Dreams is the rapidly growing mass market, which is seen as the future of Macau. Hawkins says City of Dreams will target the mass market, but not at the expense of the VIP segment.

“While we expect to serve the VIP market as aggressively as we have at Crown Macau, we want to appeal to the mass market in a way no other property in Macau has,” he says. “The layout of the property, the marketing efforts, the entertainment offerings and the gaming will create a truly unique experience that they can only get at City of Dreams.

“We would like to expand the mass market, but we’d never ignore or de-emphasize the VIP market. We can do both very well.”

Formerly the CEO at Crown Macau, Hawkins says the company will be very careful not to cannibalize the market at that property to provide for City of Dreams. Crown Macau will be re-branded as “Altira Macau” with the Crown Macau brand re-emerging at the City of Dreams.

“The relationship will be very synergistic,” he says. “Obviously the approach, with two operating casino properties, would be to work together. Crown Macau focuses on that VIP market. At City of Dreams, we’ll focus on new junket partners trying to get an aggregate for the two properties with the goal of adding incremental rather than competing with each other.”

Even though City of Dreams offers amenities and the “wow” factor, Hawkins is very cognizant that service will make the difference between his property and the rest of Macau.

“One of the real challenges and objectives is to have a service experience that is distinct and at the top end of the market,” he says. “One of our programs, called ‘Dream Service,’ captures the core elements of what we want our team members to provide to create a consistent service experience. It’s a very strong focus and at the center of our attention.”

To provide that service, City of Dreams has had access to an expanding pool of employees. It was expected to be very thin, but the economy, in this case, worked in his favor, according to Hawkins.

    “Phase one of the project, we’ll need about 7,000 team members on board,” he says. “The labor situation has changed quite a bit from even 12 or 18 months ago. Since we’ve been recruiting at a time when there isn’t a lot of other capacity coming on stream, we’ve been able to offer a lot of career promotional opportunities to our applicants. We’re certainly happy with the quality. So I’m fairly confident we’ll have a great operational team, even later on when we are fully staffed.”

Countdown to Opening

For Hawkins, the opening of City of Dreams in June will be welcome after spending two years in preparation. He gives credit to Lawrence Ho for his leadership and direction.

“Lawrence really has been the visionary for the project,” he says. “From the start, he really has had a superb understanding of the market, and that has been the guiding principle that has gotten us to where we are today. He’s very hands-on, and has great input to every area of decision-making. I think this property really has the capacity to balance the Eastern and Western cultures in such a way that everyone is comfortable.”

Hawkins says he and his team have been vital contributors, but it’s Ho who has been the one to make the final decisions.

“Lawrence has been a great boss,” says Hawkins. “He’s very approachable and understanding. Like every good leader, he’s got the ability to listen but also to address as required.”

But Hawkins is anxious to see the reactions of his guests.

“It has been a very rewarding process,” he says. “Our relationship with our design team has been outstanding, and now that we’re less than two months out, we’re really looking forward to getting the reaction of the public and our customers.”

By Frank Legato  

Twenty-five years ago, a casino floor was every man—or manufacturer—for himself.

Back in the 1980s, of course, it didn’t matter that the slot floor, still newly popular, consisted of a mish-mash of machines produced by different manufacturers, each protecting its patents and intellectual property as a spy protects a secret document. That was, until systems entered the mix.

By the late ’80s, online slot accounting and player tracking systems were spreading rapidly across the industry. Suddenly, slot managers were able to record drop, track per-machine winnings and turn in daily results without sending a fleet of attendants out to read meters. They also were able to market the games with promotions and reward loyal players to a degree that never was possible before. In other words, computer technology had created the modern slot floor.

That same technology, though, required something that never was needed in the past—communication between devices. A line of electronic communication had to be established from systems to all devices on the floor for accounting, and among all the various slot machines and the back of the house for player tracking and marketing.

Sounds simple, right?

Not even close.

Sharing a Common Cause

Two decades ago, fiercely competitive slot and system manufacturers each developed proprietary technology. That meant, by and large, that an IGT slot machine was designed to link to an IGT system, a Bally slot to a Bally system, and so forth. Putting together a complete tracking and accounting system with games from several manufacturers meant having a casino’s IT personnel devise makeshift protocols to link everything together.

“It was an absolutely chaotic situation,” says Peter DeRaedt, president of the organization that would eventually solve the problem, the Gaming Standards Association. “Every time you wanted to add an application, you had to be very creative on the interface, to try and make it all work. You had to get a few parties involved to ensure that information was correctly transferred. That created a significant amount of errors.

“Therefore, it took a long time to bring any concept to market, because of all the trial and error, and all the tribulations involved in communicating information correctly.”

DeRaedt says increased costs added to the difficulty of the situation. “Every time you have to install something on a machine, there is a hardware cost related to that, there is a software cost and there is a maintenance cost.”

By the mid 1990s, IT professionals in the industry knew there was a  better way to do things—courtesy of the internet more than anything, according to DeRaedt. He says it was, after all, the existence of open standards and common protocols among computers that fueled the growth of the internet.

The open internet standards provided a starting point when GSA was formed in 1998, with an industry agreement by which various companies would work together to make common protocols a reality. The idea was to have any system communicate with a game from any manufacturer with a standard game-to-system, or G2S, protocol; and for various systems to link through a system-to-system, or S2S, protocol.

The first order of business was to educate the industry on the language of open standards. “Most of these large operators had been painfully aware of the challenges they had to go through to get their floors up and running,” DeRaedt says. “They didn’t fully understand why that was. They did not understand the term ‘protocol,’ but unfortunately, some of them had to dig down and learn about that term and what it meant—and what its impact on the business was.”

The real trick, though, would be getting the manufacturers on board. “A standard-setting organization in any industry has its biggest challenge when you bring competing entities together,” DeRaedt says. “It always boils down to intellectual property, and keeping a competitive edge. In the early days of GSA, people did not quite understand why they had to collaborate, because they thought proprietary solutions were the way to go, and the way for them to control the market. And that was not an unreasonable assumption to make.”

Eventually, he says, the applications proliferating on the internet caused it to dawn on competing manufacturers that there are a wealth of similar possibilities in applications on slot systems. “As internet applications were developed, they saw a broader market with the ability to do more applications, and saw that it was in their interest to ensure that everybody can speak the same language,” says DeRaedt. “Because then, they’re able to generate more money—not by themselves but with others as well.”

One of GSA’s early moves was to implement an intellectual property policy that would allow partnership between manufacturers in developing an open standard while protecting proprietary technology. Over time, the industry came around. “We came up with a very fair and equitable policy that everyone could agree to,” DeRaedt explains. “That was the milestone, by which suddenly, we had the whole industry behind GSA. From then on, we accelerated. We were able not only to get more funding, which we needed, but were able to get up to nine people who work for GSA full-time.”

Moving Ahead Together

Eleven years later, manufacturers and operators around the industry adhere to GSA standards, and the standards themselves have been refined. “The standards get refined because the manufacturers implementing them find small details—mostly clarifications that need to be made to the standards to ensure correct implementation by all the vendors to employ an open standard,” says DeRaedt.

The next big push will be to implement server-based and server-supported gaming on a large scale. According to DeRaedt, that means a focus on spreading the GSA standards internationally, and on getting vendors and operators around the world up to speed for the move to networked gaming.

“Just about every single vendor—system and games, but specifically system providers—is now deploying Ethernet on the floor,” DeRaedt explains. “This also applies to operators. Operators around the world are beginning to employ standard Ethernet connections to the bank. How they go from the bank to the machines is obviously up to the game provider and the system providers, but more and more, you see switch network technologies being used, and there are indeed vendors now who supply games with Ethernet ports just like a computer—which you can simply plug in.”

GSA’s latest efforts have brought international operators and vendors—including many non-gaming vendors such as Cisco and Oracle—on board in the effort to achieve networked gaming. This year’s focus, he says, is on Asia, because it is still a growing market and because of the lack of legacy systems—there is no retrofit involved in setting up a server-based or server-supported floor.

“The advantage in Asia is that these operators can leap-frog what is happening in the rest of the world, where everyone inherited a history of systems and a patchwork,” says DeRaedt. “Here, once the operators understand the benefits of the technology, they will demand these latest systems. Therefore, it is a tremendous growth market, not only domestically but internationally, for all our members.”

The Future Network

The goal of GSA is to create an infrastructure on which the applications can flourish in a server-based or server-supported gaming setup.

“GSA University” was set up by the organization to travel around the world educating operators and vendors in how open standards will open up a new world of possibilities for gaming.

DeRaedt says discussions and education on server-based gaming actually began about three years ago. “The protocol standard we developed facilitates any deployment of a server-based or server-supported gaming solution,” he says. “The technology does not restrict anybody or force anybody in a certain direction. This was accomplished after a very healthy discussion with all industry partners—whether it be people who supply solutions to the British market, which is truly server-based gaming; or people supporting and selling system-supported gaming in the United States, which is very different.”

DeRaedt contends that the industry has put the cart before the horse when it comes to server-based gaming, touting its benefits before the infrastructure was in place to make it actually happen. “When everybody was first talking about server-based gaming two years ago, it was premature,” he says. “While the standards we developed were finished, implementing these technologies takes a lot of time. It’s the same as a computer, where you had a serial port, and suddenly you had to put in an Ethernet port and the software to support it. That’s a radically different technology, and it’s vastly more complex.”

With more and more companies implementing Ethernet technology and companies working together on common applications, DeRaedt says the time is finally arriving when everything is in place to implement server-based and server-supported gaming.

“Operators are beginning to realize that the technology is definitely there, and efforts are going to be accelerated,” he says.

“First of all, we needed to develop a standard, which we did. Then, the industry needed time to learn it, get the right engineers and resources to implement it, and get these systems approved and tested. That was a cycle of about three years, and now we are getting there. CityCenter is going to open with a significant portion of GSA standards in place, and they will drive some of these new functionalities. Depending on how it goes in 2010, it’s going to be very interesting to follow the player feedback on that. What will be the impact of this server-based window?”

DeRaedt presented some of the new horizons to be explored through server-based gaming enabled with GSA open standards at the recent Asia’s GEM trade show in Manila. Among the new applications he noted are the distribution of game and promotional content to multiple platforms; the integration of resorts using “loyalty points” throughout a property; inter-jurisdictional communication to enable financial tracking, on demand software checks and other functions; improved data warehousing; and highly adaptive, interactive games on networks that span multiple properties, and even multiple jurisdictions.

While capital markets may delay full implementation of server-based gaming on a widespread basis, DeRaedt looks to CityCenter as a giant test site of new applications using open standards—and an example for the rest of the industry. “The result of CityCenter is going to be pretty exciting,” he says. “Competitors around the Strip will pay close attention to that, and then you’re going to see an acceleration.”

As for GSA, DeRaedt says he hopes the organization serves as a catalyst for a complete transformation of the industry to new technological standards. “GSA won’t disappear, but GSA will go into the background,” he says. “We won’t talk about GSA protocols—you’re going to be focusing on all the applications these vendors will be producing. We will be in the background, making sure we maintain and ensure the technology that allows this and future applications to be developed.

“Even in these depressed times, this is going to be a phenomenal time for the industry over the next five years. Just watch and observe the applications.”

By Frank Legato  

In a time when legendary names of the gaming industry are struggling to survive mountainous debt, scrambling to reach agreements with bondholders and creditors, and trying to cut costs wherever possible, what’s an operator to do?

For Cannery Casino Resorts, the answer is simple: Open a new casino.

Cannery last month opened a new jewel in the crown recently passed over by, well, Crown. Fresh off the collapse of the company’s proposed buyout by Australia’s Crown Ltd.—a deal that ended up rosy for Cannery, which got a substantial equity investment from the Australian operator—Cannery opened the 350,000-square-foot permanent casino facility at its Meadows Racetrack & Casino in Washington County, Pennsylvania, about 25 miles south of Pittsburgh.

Despite the economy, this one was a good bet. The temporary slot facility opened in June 2007 at the Meadows had been packed for the entire time it was open. Its 1,800 slots averaged $20 million a month, and for its last complete month, slot win was 20 percent over the same month a year ago.

The recession, in fact, has not affected Pennsylvania’s nascent slot industry anything like it has the industry overall. Pennsylvania casinos have logged double-digit growth every month of this most dismal of years for the rest of the industry, and have recorded nearly $300 a day in per-machine win.

Western Pennsylvania, though, has proven particularly recession-proof when it comes to the insatiable appetite for the slots among the locals. In fact, the Meadows’ proximity to the border of West Virginia, where players flock to both slots and tables that are less than an hour’s drive away, has not been an issue for either this racetrack casino or for those West Virginia racinos.

“This is a great area for gaming,” says Michael Graninger, vice president and general manager of the Meadows. “It’s booming. A couple of months ago, we had a record day in our place, and the racino in Wheeling (West Virginia) had a record day on the same day. That means the market is gigantic here.”

Graninger says the only problem for the temporary casino was a lack of capacity. “There were two people for every machine and three cars for every parking spot,” he says.

That problem was solved April 15, when the doors opened on a beautiful new casino that has double the slot capacity of the temporary facility. By the time the last of the slots from the temporary facility joined all the new games, the Meadows offered 3,700 slots—the most in Pennsylvania.

The new casino hit the ground running. Two days before the grand opening, a crowd of 10,000 invited guests clogged the highway leading to the Meadows for a charity test day of the new casino (required by the state Gaming Control Board to give regulators a chance to view the systems in place). “We invited everybody we knew to that, to raise money for the volunteer fire departments of Washington County,” says Graninger. “Everybody we invited showed up!”

The test day turned out to be a record-setter, raising $264,000 for the local fire departments—the most money ever raised on a test day in Pennsylvania.

It was a fitting prelude to what is yet another milestone in a big year for Cannery Casino Resorts—a second grand opening within the space of seven months. It was only August 2008 that the operator opened the Eastside Cannery on the Boulder Strip in Las Vegas.

“This is a tremendous event for us,” said CCR principal Bill Wortman as hundreds of customers streamed through the doors of the Meadows on opening day, applauding as they walked. “We’re very, very proud of this product. At the end of the day, this is as big a anything we’ve done under the Cannery brand.”

Wortman, who, with partner Bill Paulos, heads Cannery Resorts through parent company Millennium Gaming, says he has absolutely no trepidations about introducing a new product in the middle of such a difficult economic period.

“The truth is, we’ve now opened two products in this economy. Eastside is doing fine, and we expect this to do extremely well in this marketplace. We’re not concerned, and we know things are going to get better from a general economic standpoint... And we have a top-flight product ready when they do.”

Vegas at the Track

That top-flight product is another Cannery gem, and another property that demonstrates the operator’s uncanny ability to produce a quality product at a minimum of cost. The new casino’s quality matches just about any existing facility, particularly in the racino market. Yet, it was completed for only $175 million, a fraction of what most new gaming halls cost.

It’s the standard M.O. for the operator, which completed Eastside Cannery last year for $250 million.

“What we try to do is get value for what we build,” says Wortman. “Everyone who comes in here shakes their heads and says, ‘How did you build this property for that price?’ We believe we get real value.”

The cost is all the more surprising when one looks at the facility, which masterfully executes a dual design theme. The main slot floor has a classic Vegas theme, with elegant, soft lighting and high ceilings over the sea of slot machines and electronic table games. (There are even large color portraits of the Las Vegas Cannery casinos at the entryway.) Go to the back of the casino floor, though, and you realize how this Vegas design melds seamlessly into the standardbred racetrack, and the racing theme that has been this property’s identity for 45 years.

David Climans, principal of project architect Climans Green Liang, says the combination of Las Vegas and the harness racing theme is what distinguishes the Meadows from other racinos.

“The integration of the racing and gaming is something you don’t see in very many tracks to this degree,” Climans says. “The track was an integral part of the design. We integrated all of the components. It was one of the main objectives, to make the racing and gaming somewhat seamless. The main bar and main restaurants have a beautiful view of the track, but also have a view back into the casino. It’s intended to maximize the synergies among all the various components.”

Climans, whose firm specializes in racino design, adds that the project has accomplished a classic casino design inside a building that does not look like a casino from the outside, where residential neighborhoods dot the surrounding southwestern Pennsylvania hills.

“From the outside, it was important to us to blend in with the overall landscape and the community,” Climans says. “We were sensitive to the fact that we’re within a residential community here, and I think we’ve achieved our objective. It’s got a good presence, but at the same time it’s very respectful of the neighborhood.”

The Meadows offers thousands of the newest slots in every different game style. Most of the major slot manufacturers are represented on the expansive floor, with rows of games separated by wide aisles. At the center of the floor in the back is an “electronic pit” made up of seven Shuffle Master “Table Master” electronic table games. (Each is a five-seat table in front of a life-size video “dealer.”) Included are blackjack and specialty poker games like Let It Ride and Three Card Poker, in a setup that appears it could be easily replaced by a live pit when the state eventually legalizes live table games, as is expected.

“There is no specific theme on the inside; it’s just tasteful, timeless design with very large forms that are proportional to the overall expanse of the space,” says Climans of the main casino floor. “All of the components are visually accessible from anywhere within the facility. Even though it’s so large, you’ve got great sight lines to all the components.”

The “e-pit” leads to an elevated central sports bar and lounge. Called “Pacers,” it offers a view of the harness track through large windows behind the bar.

Pacers is at the center of a casino section that features the racetrack. To the right is a food court offering five outlets, including Franks for specialty hot dogs, Cibos homemade pizza, the Peppers deli, a Perks gourmet coffee shop and Cookies hand-dipped ice cream. Guests eat near floor-to-ceiling windows facing the racetrack.

On the second floor, the new facility features several VIP “Super Boxes” overlooking the track for private parties, as well as a state-of-the-art simulcast area. The property’s high-end restaurant also is on the second floor. Bistecca, an Italian steakhouse, was created by renowned Pittsburgh chef Greg Alauzen. Gourmet dishes are served in an elegant setting complete with private dining rooms, a bar, and a terrace for outdoor dining overlooking the races during warm months.

Facing the track on the casino level are the Terrace Café, featuring classic American cuisine along with international fare—Italian, Southwest, Greek, and Creole join local and regional specialties—and Delvins, featuring casual track-side dining.

By the end of this month, the Meadows will unveil its last and perhaps most unique offering, a 24-lane bowling center complete with a lounge and a restaurant offering its own full-service specialty menu.

“I think this is the best racino facility in America,” says Wortman. “This is a spectacular facility. It presents our customers with something they have not seen before. The comments we got on opening day and with our test session were extraordinary. I think what we’ve done is we’ve over-delivered, and in so doing, we have positioned ourselves well into the future. This facility offers so many different entertainment options, it puts us in the dominant position in this entire marketplace.”

“Today is the culmination of nearly five years of hard work by so many people,” said Paulos, Wortman’s longtime partner in Cannery, at the ribbon-cutting ceremony. “The Meadows is among the finest gaming facilities on the East Coast. By fully integrating horse racing and gaming, while adding great restaurants, live entertainment and an all-ages bowling center, we have created a true entertainment destination that everyone can enjoy. This shows how a community and region can benefit when private enterprise, local government leaders and the Pennsylvania Gaming Control Board work as partners.”

By Robert Russell   Wed, Apr 29, 2009

In the 2008 American Gaming Association “State of the States Report” only the Las Vegas Strip, Atlantic City Boardwalk, Chicagoland area and Connecticut outperformed Detroit’s three casinos. As the Motown casinos celebrate their 10th anniversary, they are holding up in these recessionary times better than most.

Michigan voters legalized casino gaming in 1996 as an economic development tool for the city of Detroit. The enabling legislation permitted up to three licenses to be issued by the state of Michigan. Since 1999, when the first Detroit casino opened, the gaming market has emerged onto the national stage, with Detroit quickly becoming one of the top five gaming markets in the United States.

MGM Grand Detroit, MotorCity and Greektown Casino generated $1.4 billion in gross gaming revenues during calendar year 2008. The Detroit operators have generated $223.9 million collectively during the first two months of 2009, as compared with $225.9 million during the same period in 2008, which is a 1 percent decline in the Detroit market.

Eugene Christiansen of Christiansen Capital Advisors notes that “the Detroit market compares very favorably with the state of the overall industry, as most of the North American markets are down by double digits for this same period.”

The three casinos operate in permanent casino complexes, with a collective total of 300,000 square feet of gaming space, 1,200 hotel rooms and over a dozen high-quality restaurants and lounges. Detroit’s entertainment and hospitality landscape was completely transformed by the successful development of casino gaming. As a market, the three operators have spent approximately $2 billion on capital investment.

William Eadington, a professor of economics at the University of Nevada-Reno, says, “Detroit’s urban landscape makes it a very unique market, as no other major U.S. city has incorporated gaming into its core business district.”

Eadington indicates that he expects the Detroit market to “continue to hold its current levels or have incremental gains.”     

“Capital investment spent on the construction of hotel rooms and other non-gaming amenities by the three Detroit operators did not substantially grow the market, but did dramatically improve the quality of the product offerings in Detroit,” Eadington says.

When looking at the Detroit market, one must also factor in Caesars Windsor, which is a 100,000-square-foot gaming venue with 758 hotel rooms, a 5,000-seat event center and 100,000 square feet of convention and meeting space. Caesars Windsor is located a short 10-minute drive from Detroit over the Ambassador Bridge in Windsor, Ontario.

Although revenues were off by 11 percent at Caesars Windsor in 2008, it still grossed $280 million in revenues, which brings the total Detroit/Windsor market revenue up to approximately $1.6 billion per year.

The Detroit casino market has had its ups and downs, including a lawsuit that challenged the casino selection process and delayed the opening of the permanent Detroit casinos, and more recently, with a bankruptcy filing by Greektown Casino. The region, which is so deeply tied to the automobile industry, will also continue to be impacted by fate of the Big Three auto manufacturers and the various tier-one suppliers that employ thousands of Metro Detroit residents.

Despite the various obstacles that the casino operators have faced in Detroit, however, they have respectively established an extremely strong foundation. As analysts, suppliers, financial investors and industry observers monitor the Detroit market, one will be impressed by the quality of the product put forth by MGM Grand Detroit, MotorCity and Greektown, as well as Caesars Windsor.

Detroit’s casino operators have remained committed to providing a 24/7 gaming environment, and have diversified the Detroit economy from one that was centered on manufacturers and their suppliers to a first-class Midwest tourist and convention destination.

Detroit’s gaming operators have added a great deal to the urban entertainment experience. Detroit is a true success story in how investment from the gaming industry can aid in an urban redevelopment effort. The three Detroit operators all invested large sums of capital to finalize their permanent casinos, and as the Detroit landscape continues to be transformed, it is anchored by these three strategic partners.

MGM Grand Detroit Casino

Through February 2009, MGM Grand Detroit Casino has generated $4.3 billion in gross gaming revenues since opening on July 29, 1999, according to the state of Michigan. MGM Grand Detroit operated in its temporary facility until October 3, 2007, when it closed its interim facility and opened its new, state-of-the-art permanent casino complex, at a cost of $800 million. The property is owned by MGM Mirage in partnership with Partners Detroit LLC, which is composed of 10 local Detroit investors.

“We are the only Detroit casino to build from the ground up, and since opening our doors we have worked hard to distinguish ourselves from our competitors,” says Lorenzo Creighton, president and COO of MGM Grand Detroit. “What we are most proud of is that MGM Grand Detroit has helped to re-shape downtown Detroit as an entertainment destination. Moreover, the jobs created by MGM Grand Detroit average a salary of $50,000 per year, which has gone a long way to help stabilize families and this community.”

Since the debut of its permanent hotel resort in 2007, MGM Grand Detroit’s identity has changed from a local slot house which operated out of a temporary location to a luxury casino complex. Early this year, the operator launched a new branding campaign via the use of direct mail, interactive marketing, and both outdoor and radio ads in an effort to emphasize its gaming offerings and downplay its luxury amenities. This effort adds to executives’ goal to showcase the product and expose every level of player to the MGM Grand Detroit experience.

The marketing campaign “I Touched the Lion” focuses on the casino player with luxury implied. Images and creative media involved in the campaign are designed to give MGM a brand that is unique and recognizable.

MGM Grand Detroit has received the Four Star Award from Mobil Travel Guide for its hotel and spa, and it has also received the AAA Four Diamond Award for its hotel and Michael Mina’s Saltwater restaurant.

“As the market leader, we believe that we have established ourselves as the premier entertainment destination in this region,” says Creighton. “When customers visit MGM Grand Detroit, they don’t just remember a nice evening or weekend at our restaurants, spa, nightclubs or gaming floor. They remember the total experience.”

MGM Grand Detroit has changed 10 percent of its slot machine game themes since opening in 2007 and, based on market demand, adjusted its denomination mix to add more penny and 2-cent machines. The casino has also increased the number of table game units by 7 percent due to customer demand.

The state of Michigan also recently approved a “Bad Beat Jackpot” for the MGM Poker Room. The property also has introduced a patented new game called “The Golden Dice Challenge,” which allows the casino to coordinate a marketing promotion in which players who have made the most passes in a day receive $500 in “Freebet.” The “Freebet” program gives loyal patrons one free bet on the house.

MotorCity Casino

MotorCity Casino’s location transformed a once-downtrodden section of downtown Detroit into an entertainment complex that includes a luxury hotel, spa, ultra lounge, live performance theater, six bars and lounges, and 67,000 square feet of meeting and banquet space along with a wide array of dining options, including the Four Diamond restaurant Iridescence. Since opening in December 1999, MotorCity has generated $3.8 billion in gross gaming revenues (through February 2009).

MotorCity Casino was originally developed by a joint venture involving Mandalay Resort Group and several Detroit-area investors, including Marian Ilitch. In 2005 when MGM Mirage acquired Mandalay Resort Group, MotorCity Casino was purchased outright by Ilitch, who is a co-founder of Little Caesar’s Pizza and owns a variety of entertainment and hospitality enterprises, including the Detroit Red Wings hockey team.

MotorCity Casino Hotel has established a brand that celebrates Detroit’s positive attributes, including the city’s rich history surrounding cars, music and sports. MotorCity spokeswoman Jacci Woods says the property has remained very true to its branding with its expanded facility’s interior and exterior architecture and design.

Woods says MotorCity preserved and restored an iconic piece of Detroit architecture as a cornerstone of the property, the Wonder Bread factory (circa 1918), and morphed it into a modern, world-class facility. The renowned custom car designer Chip Foose collaborated with MotorCity’s design team on numerous sections of the casino’s design. The end result has been a modern facility with a definite Detroit feel that has changed the skyline of the city.

MotorCity COO Rhonda Cohen says her company’s ownership “has a demonstrated track record of commitment to the economic development of the city of Detroit. We are here for the long haul and are confident that we can leverage our new assets along with other attributes in the city, to attract new visitors from throughout the region. The level of service that we offer along with these new product offerings will produce positive results for our business as well as positively influencing how the outside world views downtown Detroit.”

MotorCity has strategically aligned with Ford Field, Comerica Park and other entertainment venues in Detroit to create value-added entertainment packages. Woods notes that MotorCity’s packages have proven successful in driving new business, and it is the goal of the company’s owners to “contribute to the overall success of Detroit and the region.” She points out that MotorCity has launched a campaign called “Getaway Without Going Away” that includes bundling varied offerings with hotel rooms at a reasonable price.

The 1,800-seat Sound Board is MotorCity’s state-of-the-art live performance theater. The space is unique and adaptable, which allows it to be used for a diverse lineup of well-known entertainers including Tony Bennett, Natalie Cole and Gary Allen, along with introducing Detroit’s first Sunday Gospel Brunches.

The completion of MotorCity’s expanded casino resulted in an increase of 500 machines, bringing its total to over 2,800, along with 71 table games. The property has taken an aggressive approach toward adding new table games such as Progressive Mini Baccarat and Ultimate Texas Hold ’Em. MotorCity was the first casino in the Detroit market to offer electronic roulette, and will be introducing Shuffle Master’s Royal Match 21 electronic blackjack game—both at $5 minimums. The electronic multi-player games have been well-received in the market without affecting the live games.

“The large majority of MotorCity’s leadership team came up through the ranks in this industry and knows exactly what it is like to be on the floor and interact with guests, particularly during peak periods,” Cohen says. “Leaders spend time on the casino floor, in all of our outlets and in the heart of house speaking and listening to associates. Our guest service training workshops are conducted by line-level associates as opposed to management. Our company culture is aligned with our branding in that we promote an inclusive environment where feedback is valued.”

MotorCity takes a lot of pride in its employee recognition program, “Simply The Best” (STB), which celebrates line associates on a monthly basis and leaders on a quarterly basis. Nominations for the STB awards are done by fellow associates based on individual impact on the guest experience, as well as with fellow team members. The monthly and quarterly awards include $500 in cash. All winners are eligible for a $20,000 grand prize and a $5,000 second prize, which are given out at an annual banquet.

Greektown Casino

Since opening on November 20, 2000, Greektown Casino has generated $2.7 billion in gross gaming revenue (through February 2009), according to the revenue figures provided by the state of Michigan.

Greektown Casino recently completed construction of its permanent hotel and casino complex, which opened on February 12. The casino is currently operating under Chapter 11 bankruptcy protection, after filing for bankruptcy in late May 2008.

Greektown is currently owned by the Sault Ste. Marie Tribe of Chippewa Indians, which also owns five Native American Class III casinos in Michigan’s Upper Peninsula.

Greektown Casino is located in Detroit’s historic Greektown district, a vibrant, pedestrian-friendly area of the city. Greektown’s close proximity to the downtown sports venues, including Ford Field, Comerica Park and Joe Louis Arena, gives it the ability to easily shuttle its guests to and from the numerous sporting events and concerts held in the city. Earlier this year, Greektown opened its 400-room hotel, and during the course of the past 12 months opened a new VIP area and buffet as well.

Greektown officials say the property team prides itself as being in a true partnership with the downtown Detroit community, and values being part of the fabric of the surrounding area. “We hear over and over again from our customers that they really respond to the fact that we are a part of the community and reflect the Greektown neighborhood,” says Greektown marketing consultant Amanda Totaro, from the Fine Point Group. “We are the ‘regular guy’ place to play, the value place to play, and that’s reflective of the neighborhood itself.”

Greektown is focusing its efforts on branding the casino as a great value to the casino customer. According to Totaro, “The economic conditions are significant, clearly, and they are impacting the entire Detroit metro area. But on the positive side, people still need to go out and have a good time, and we have positioned ourselves so that when they do go out looking for that experience, you’re going to get the best value here at Greektown.” Greektown’s focus on value carries over to its current marketing efforts, with the casino offering a $9.99 buffet and $99 hotel rooms.

Greektown has installed the Fine Point Group as management consultants to the property. The consulting firm was engaged to help improve the casino operations and profitability, with a focus on customer relationship marketing and customer loyalty. Once the necessary regulatory approvals are obtained, three members of the group will be assuming the positions of CEO, general manager and vice president of marketing, with full decision-making authority.

Totaro, who will assume the role of vice president of marketing upon regulatory approval, notes that the changes have had a positive impact. “In January and February we were able to increase market share by three quarters of a point, and that trend continued from February to March, when we were able to increase market share by one and a half points,” she says.

“The Fine Point Group is focused on leveraging our industry-leading skills at asset optimization to quickly—and profitably—improve Greektown’s performance,” says Fine Point Group President Randy Fine, who will serve as CEO of Greektown Casino following the necessary regulatory approvals. “While we usually do our work behind the scenes—ensuring our clients get the credit—due to the public nature of bankruptcy, we are enjoying being front-and-center and being held directly accountable for our performance. In less than three months, we have doubled the expectations of profitability, and picked up more than 200 market-share basis points. And we only expect it to get better.”

Robert Russell is a senior gaming analyst with Regulatory Management Counselors, PC in East Lansing, Michigan. Russell assists casino suppliers, operators and financial institutions with license, compliance and business planning issues. He can be reached at 517-507-3858 or online at www.rmclegal.com.

By GGB Staff   Fri, May 01, 2009

John Restrepo has seemingly spent his life observing the Nevada economy, when in actuality it has been less than 20 years. A former vice president with Coopers & Lybrand (now PricewaterhouseCoopers), Restrepo has become one of the most quoted and consulted economists in the region. He predicted the real estate collapse in Las Vegas and has consistently been correct about the slumping economy. A consultant who has clients in gaming, real estate and the financial industries, Restrepo Consulting produces several publications that present in-depth information available nowhere else. Restrepo met with Global Gaming Business Publisher Roger Gros and Associate Editor Greg Jones at his offices in Las Vegas in March to discuss the current state of the gaming industry.

GGB: What do you see right now in the economy?

Restrepo: What we see now is the expression about “known unknowns.” We know we are going to come out of this pretty deep recession eventually; the question is how long it will take. And, when we do, is the market going to be materially different?

Are we going through a transformational period now? Do we have to put the old business models—those developed between 1995 and 2005—on a shelf while we go back to an older business model, or do we have to find a new model? Is this recession going to have a material effect on how people view spending? If this becomes a period of time that people start saving, staying home and rebuilding their 401(k) plans, then we may have a different business model. People won’t stop coming to Las Vegas, but maybe they will come less frequently or spend less money.

We do know it is probably going to last longer than we thought it was going to last six months or a year ago.

The valuation of gaming companies changed a few years ago when real estate was considered a big part of a casino company’s value. How does the decline in real estate impact how a company is valued?

It impacts it quite a bit, not only from the asset value component, but also as the going-concern question. There is a lot of intricacy in all of this. The challenge is how you tie all of this in with a drop in asset values and how you tie it in to where the economy is going, not only nationally, but globally. The resort industry is struggling with how to deal with this new reality.

Some of the largest casino companies based in Las Vegas are in serious trouble with their debt. The debt load is too much for the corporations, so a sale of assets looks as though it will be necessary. Two questions: First, how will they value the assets? Second, who will be able to buy the assets if the current tight credit situation continues?

It’s very fluid, because the value of those assets is largely driven by the volume of visitation to the market, and that is also based on the volume of spending once the visitors get here—and their willingness to pay so much for a room, for entertainment and food. So at the end of the day, it is consumer confidence that is really driving the value of these properties, and that is a very fluid situation.

Until we get the economy stabilized and get people comfortable with knowing they are not about to get laid off, that they can spend a little bit more and that they can do things, then we have some challenges. But even then if there is a somewhat semi-permanent change in how people view the world and the psychology of spending, this may be a longer and more protracted recovery than we had thought it would be.

With companies looking to sell some assets, what will it take for buyers to become interested? Is it a matter of seeing prices drop low enough or credit markets opening up a little more?

It’s going to be a combination of both. There is always money on the sidelines, and a lot of that money is just waiting for these values to go even lower. They don’t think we’ve hit bottom yet. They’re waiting for that to happen, combined with seeing what the stimulus package does about freeing up credit to buy these assets. Because even if they wanted to buy today, they couldn’t get the financing to do it.

But even if the credit markets loosen up, we still have this issue of consumer confidence and a redefinition of how people spend and what they spend on. That is a different issue, so I think those buyers have to look at both the sides.

Why do you think the regional casinos are performing better than destination locations like Las Vegas or Atlantic City?

The most logical issue is that it is cheaper to get there. You just have to drive there. The value proposition has always been there and those are the major reasons.

One of the challenges Las Vegas faces is that it is isolated, so you have to fly in or you take a long drive to get here. Same thing going to Florida and these other resort destinations. So if you can go to your casino in Illinois or an Indian casino in California, why not if you can easily drive there, and they’ve always been offering that value proposition? In Las Vegas, we kind of lost some of that in the last 10 years. Everything became luxury.

It will be interesting to see how the resort industry in Las Vegas redefines itself to start servicing that value customer again. Not everyone wants luxury. That is the challenge.

By GGB Staff   Fri, May 01, 2009

Empire Resorts Inc. of Henderson, Nevada, plans to move its company headquarters to New York.

In making the announcement, the company also announced the immediate resignation of CEO David Hanlon and imminent resignation of Chief Financial Officer Ronald Radcliffe.

According to a company statement, the relocation of its Las Vegas headquarters, the executive resignations and other cost-cutting measures will save the company several million dollars a year.

By GGB Staff   Fri, May 01, 2009

Magna Entertainment Corporation has appointed its restructuring adviser, Greg Rayburn, as interim chief executive officer.

The operator, currently in the midst of Chapter 11 bankruptcy reorganization, is appointing Rayburn to lead restructuring activities and oversee the bankruptcy sale of Magna’s assets, including several famous racetracks and the Preakness Stakes, the Triple Crown event that already has several interested suitors—including, most recently, the state of Maryland.

Rayburn is currently senior managing director and practice leader of FTI Palladium Partners. He has more than 26 years experience in corporate restructuring efforts, serving as CEO or restructuring officer for companies including WorldCom, aaiPharma and Muzak Holdings.

By GGB Staff   Fri, May 01, 2009

Las Vegas Sands Corp. announced the addition of Hayground Cove Asset Management CEO Jason Ader to its board of directors.

Ader founded Hayground, an investment management firm, in 2003. Before that, he worked as a senior managing director at Bear Stearns and Co.

Ader also founded the India Hospitality Corp., a food-service company, as well as the acquisition-oriented investment business Global Consumer Acquisition Corp. He has been ranked on Institutional Investor’s All-America Research Team for nine straight years and as the top gaming and hospitality analyst in the magazine’s poll for three consecutive years.

By GGB Staff   Fri, May 01, 2009

The Fine Point Group, a leading casino consulting and management firm announced the promotion of two key executives.

Steve Dahle was named senior vice president of relationship marketing, and Marlene Reyes was named senior vice president of loyalty marketing and system architecture practice. Both were formerly senior associates at the firm.

Before joining the Fine Point Group, Dahle spent more than 12 years at Harrah’s Entertainment, where he served as regional vice president of direct marketing, and was responsible for over $1 billion in annual revenue.

Reyes also was formerly with Harrah’s, where she led the rollout of the Total Rewards national player’s club across new properties. Since joining the firm, she has managed a number of major loyalty strategy projects, including a property on the Las Vegas Strip, a multi-property riverboat operator, a Native American casino operator in the Pacific Northwest and one property outside the U.S.

By GGB Staff   Fri, May 01, 2009

TJ Matthews has resigned as president and chief executive of leading slot manufacturer International Game Technology. Effective April 1, four-year IGT board member Patti S. Hart will take over as CEO.

Matthews, who cited family reasons for stepping down, will remain as executive chairman of IGT’s board of directors, and will assist Hart in the transition at least until the end of the year.

Matthews joined IGT as CEO in 2003, after the slot-maker acquired Anchor Gaming, where he had previously served as chairman.

Hart has served on IGT’s board of directors since June 2006. She is former chairman and CEO of Pinnacle Systems Inc., and a director for Korn/Ferry International Inc. She also held several executive positions with the Sprint telecommunications firm.

“In Patti, the CEO search committee saw a unique combination of executive-level management experience, an intimate knowledge of IGT through her years of service on our board, and technology sector experience for a gaming industry increasingly characterized by rapidly evolving technology,” Matthews said in a written statement.

IGT also announced that former Treasure Island President Tom Mikulich has been named vice president of MegaJackpots, responsible for all the wide-area progressive systems developed by the company. Mikulich stepped down at Treasure Island when new owner Phil Ruffin bought the hotel from MGM Mirage. Additionally, the company named former Goldman Sachs VP Craig Billings as vice president of corporate finance and investor relations. He most recently served in Goldman’s London office covering the gaming and leisure industries.

By GGB Staff   Fri, May 01, 2009

Netherlands-based Gaming Support has announced it will be working with Holland Casino on the remodeling of the interior of the Dutch operator’s Rotterdam property.

Gaming Support will provide exclusively designed custom signage, as well as slot-themed signage to be featured within Holland Casino Rotterdam. The value of the signage work is said to be around €100,000.

“We’re honored to be awarded this scope of work,” said Nick Hogan, vice president of sales and business development at Gaming Support. “The package selected features a number of cutting-edge design components, including full-scale JackpotJunction XL integration, and signage to match existing slot themes. We look forward to delivering to our valued client what is sure to be a spectacular showcase.”

“As Gaming Support has demonstrated through its many signage projects with Lucien Barrière, Casinos Austria, Hyatt Regency and multiple slot manufacturers, the team possesses the creativity and material capacity to deliver top-tier work at attractive price points,” said Remko de Boer, concept innovator for Holland Casino gaming operations and previously product manager for Holland Casino Rotterdam.

By GGB Staff   Fri, May 01, 2009

There was good news and bad news last month for North Carolina-based PokerTek, Inc., producer of the popular PokerPro automated poker table.

The good news was final approval from the Nevada Gaming Commission, paving the way for the company to expand its presence in the state. Currently, there are over 1,000 PokerPro tables installed statewide.

PokerPro is a 10-player automated poker table, with embedded player interface stations surrounding a large video display of the deal and the flop.

“We are delighted to be approved by the Nevada Gaming Commission,” said PokerTek CEO Chris Halligan. “Nevada is one of the most important gaming markets in the world and its regulatory processes are stringent and challenging. To receive approval from Nevada is a huge milestone for our company and our product.”

PokerPro commenced its field trial last August at the Excalibur Hotel and Casino in Las Vegas, where there are 12 tables installed in the casino’s poker room. “Since we started field trial in Nevada, we’ve had tremendous interest from prospects around the state,” said Robert Perry, PokerTek’s vice president of sales. “Thanks to this approval, we’re now able to grow the footprint of automated poker in the Silver State.”

The company also announced that the product continued its worldwide expansion with an installation of a completely automated poker room at Hoosier Park Racing & Casino near Indianapolis, Indiana.

The new poker room opened March 20 with four PokerPro tables. “We are delighted to be able to bring poker to our guests in the form of PokerPro,” said Jason Newkirk, director of electronic gaming at Hoosier Park. “Area poker players will find that these tables combine the best attributes of online and manual poker, including mistake-free play and more hands per hour than manual tables.”

The bad news came from the first PokerPro installation in Atlantic City, where players have the option of live poker rooms at several casinos. Trump Plaza announced it is closing the automated poker room in its East Tower casino. The casino had projected $1.8 million in annual revenue from the 14 PokerPro tables, which officials hoped would draw a younger crowd into the aging casino. The best month for the poker room generated only $14,000.

“For us, that was pretty discouraging, to say the least,” Trump Plaza GM Jim Rigot told the Atlantic City Press. “Poker players like to play with chips; they like to have real cards in their hands if given the chance.”

By GGB Staff   Fri, May 01, 2009

Electronic table game supplier TableMax Gaming, Inc. has filed suit against Shuffle Master, Inc., alleging infringement on three patents under which it is an exclusive licensee.

The complaint, filed in the Las Vegas division of the District of Nevada, alleges infringement of patents which protect the proprietary electronic devices and system architecture used in the TableMax multi-player games. The suit alleges that Shuffle Master’s Table Master multi-player electronic table games infringe on these patents, and seeks preliminary and permanent injunctive relief along with unspecified damages and fees.

“We have to aggressively protect TableMax intellectual property to ensure there is no infringing competition in the marketplace,” said TableMax CEO Stephen Crystal. “We previously raised our infringement concerns with Shuffle Master and had to file this suit to have them properly addressed.” 

By GGB Staff   Fri, May 01, 2009

Slot manufacturer Cadillac Jack announced the launch of a new 50-line video slot series to select markets in the U.S. and Mexico.

The series will feature four titles in the initial launch, including “Tiger Magic,” “Coyote Country,” “Cap’n Seamore Cash” and “Wild Ninja.” Each game activates two paylines for each credit wagered, with a maximum bet of 250 credits. All include free-spin bonus events, stacked wild symbols and upgraded pay symbols during bonus rounds.

“We are pleased with the strong interest and play that our new 50-line products are receiving during the initial rollout phase,” commented Mauro Franic, VP of product management and marketing at Cadillac Jack. “The 50 Line series will target a niche that we weren’t previously addressing and allow us to better serve our customers with more depth and variety in our product portfolio.”

By GGB Staff   Fri, May 01, 2009

Slot manufacturer WMS Gaming has signed an agreement with India-based HCL Technologies, a leading information technology services provider, to partner on a new customer relationship management system for casino operators.

The new system, being built on the Microsoft Dynamics platform, is the next step in the technology WMS calls WAGE-NET—for Wide Area Game Enhanced Network. It is a server-based network that links games between different properties, permitting nationwide link-ups for game play.

The CRM module will be the fifth technology falling under the WAGE-NET umbrella, which currently includes Remote Configuration and Download, Account Based Wagering, Networked Gaming Enablement, and Patron Services modules.

The new partnership will add customer relationship management to the suite of Patron Services software in the WAGE-NET system. It will enable casinos to develop data mining programs, with business intelligence and analytics that will integrate marketing reinvestment offers with the gaming experience itself.

By GGB Staff   Fri, May 01, 2009

Leading slot manufacturer International Game Technology announced the completion of its first installation of “sbX Tier One,” a limited-scale server-based slot system, at the Ameristar Casino in St. Charles, Missouri.

The installation links 62 IGT video slots in the Advanced Video Platform, or AVP, to a central server in a pilot installation. After testing server-based solutions at the Ameristar site, company officials anticipate beginning commercial installations during the second quarter.

lGT and Ameristar first completed testing of what is the industry’s first Gaming Standards Association-approved G2S (game to system communication) game management solution.

The pilot system links 40 slots using the new G20 cabinet—IGT’s standard for server-based setups—and 12 games using the  company’s new MLD, or multi-layer display, video setup. Within these cabinets, Ameristar officials will be able to switch remotely between 50 game themes included in the Tier One package.

IGT’s sbX Floor Manager software permits remote management of game changes and downloads in real time, with no machine down-time.

By GGB Staff   Fri, May 01, 2009

Dr. Stanley Ho, a leader and pioneer in international gaming, will be honored with the G2E Asia Visionary Award during Global Gaming Expo Asia 2009. The second annual G2E Asia Visionary Award recognizes Ho’s key role in the Macau gaming market’s growth and success. He will receive the award prior to his opening keynote the first day of the show.

“Dr. Stanley Ho, whose name is synonymous with the Asian gaming entertainment industry, has a long and rich history in this thriving market,” said Frank J. Fahrenkopf, Jr., president and CEO of the American Gaming Association. “His work helped lay the foundation for gaming in Macau, and, given his entrepreneurial spirit and expertise, we are excited to hear his thoughts during his keynote address.”

As managing director of both the Sociedade de Turismo e Diversões de Macau and Sociedade de Jogos de Macau and chairman of the publicly listed SJM Holdings Limited in Hong Kong, Ho has been an instrumental figure in the development of gaming in Macau. In addition, he is involved in a variety of business sectors in Macau, Hong Kong and China and has played a vital part in the region’s economic development and growth. Ho also serves as group executive chairman of the Hong Kong-listed Shun Tak Holdings Limited and is involved with a number of business, educational and philanthropic associations.

Ho has received a number of decorations and honors from governments around the world.

“I am honored to be awarded the G2E Asia Visionary Award,” said Ho. “This award affirms what I have done over the years for Macau’s gaming business and for the overall community. Fulfilling my obligations to society is such a wonderful source of happiness and satisfaction.”

The G2E Asia Visionary Award recognizes leaders who have contributed to the success and expansion of the thriving Asian gaming-entertainment market. Last year’s inaugural award honored the late Tan Sri Lim Goh Tong, founder of Genting Group.

G2E Asia is the premier gaming exhibition and conference event dedicated to the Asian gaming markets. G2EAsia 2009 is scheduled for June 2-4 at the Cotai Strip CotaiExpo at the Venetian Macao. Visit www.G2Easia.com more information, and to register for free exhibits-only admission and early bird discounts to the conference.

By Caitlin McGarry   Fri, May 01, 2009

LED video company Daktronics has devoted years to developing new technology for its products, lending its expertise to some of the world’s best properties, like the Grand Lisboa Casino in Macau and Wynn Las Vegas.

The company is now introducing a new line of ProPixel LED products that allow casino owners to combine video and architecture using flexible, free-form video elements that can mount to a wide variety of different surfaces.

The products allow facilities to unlock new possibilities in the realm of creative entertainment by making it possible to wrap video elements around structures of any shape or size with precisely positioned effects, animation or video. Because the elements are designed on a video foundation, rather than a lighting foundation, they deliver smooth motion, accurate image reproduction and rich color depth.

The company currently offers a PXC-73 LED cluster element, a complete line of PXS LED stick elements, full-service concept design, installation and integration services to help customers bring their video concepts to life.

Daktronics recently partnered with Tulsa, Oklahoma’s newly opened River Spirit Casino to create several video displays, including the property’s marquee. River Spirit houses the first Daktronics installation to use three of the company’s lines at the same time.

“This one-of-a-kind digital marquee is an amazing feature you won’t find anywhere else in Tulsa, and we are excited to be the first to provide this cutting-edge technology,” Jenny Cross, director of marketing for River Spirit Casino, said in a statement.

The company also contributed ProPixel free-form video elements to Las Vegas’ newest Strip casino, M Resort.

For more information about the ProPixel LED products, contact Daktronics at1-800-843-5843 or www.daktronics.com.

By Caitlin McGarry   Fri, May 01, 2009

With more than 1 million ticket-in/ticket-out printers shipped to date, FutureLogic, Inc. is at the top of its game. The GEN2 Universal printer is the latest in a line of FutureLogic gaming printers that have won 10 industry awards in the past five years.

The GEN2 Universal printer is server-based-ready and supports both SPC (IGT) and GDS protocols, providing a migration path for the next generation of networked games. The device can be configured to communicate with multiple hosts at the same time, such as RS232 or Netplex, and USB 2.0. For example, the printer would be able to communicate with the game and with a USB SMIB system interface at the same time, without the need for additional connectors, adaptors or hardware.

The GEN2 Universal printer also supports promotional couponing with its “PromoNet” couponing solution. A template-based system that helps casinos design and manage a wide range of promotional campaigns from the convenience of a workstation PC, the PromoNet couponing solution turns ordinary slot tickets into colorful, eye-catching coupons.

Having helped pioneer couponing technology in grocery stores more than 20 years ago, FutureLogic may have an advantage in the promotional couponing arena. By directly linking promotional campaigns to specific player actions, activities or behavior, the GEN2 Universal printer becomes a multi-functional marketing tool.

This technology allows casinos to automatically trigger a marketing campaign based on game play metrics, player tracking information, POS systems or redemption terminals. For instance, a player who has just hit a number of predetermined triggers may be issued a bar-coded voucher that can be used for additional play or played at another machine, or a promotional coupon that can be redeemed at any of the bars or restaurants within a resort.

By using a secure system approach, the PromoNet couponing solution ensures that casino servers are in full control of all communication with the printers and cash-out vouchers. It also offers casinos of any size a flexible, cost-effective, real-time method for delivering targeted promotional campaigns.

All GEN2 Universal printers are equipped with a USB communication port and require only a firmware upgrade for GSA compliance. This approach lets casinos leverage existing GEN2 Universal hardware across the casino floor, eliminating the need for costly modifications to printers and/or communication protocols.

For more information about the GEN2 Universal printer, contact FutureLogic at 1-818-244-4700 or visit www.futurelogicinc.com.

By Frank Legato   Fri, May 01, 2009

This five-reel stepper is the latest game in AC Coin’s Mega Bonus Slots brand to use the “Slotto” style of mechanical top-box bonus, with the lotto-style ball blower. This version, a new entry in the “Slotto Advanced” series, is similar to the top box used in “Popcorn Slotto”—a square top box with the bonus apparatus inside.

It is also the latest AC Coin game to carry a Native American theme. In fact, the game has adapted the basic Popcorn Slotto theme into a design that fits nicely alongside the manufacturer’s “Wild Native Spirit” game, which has been wildly popular in Indian casinos.

The top-box bonus device displays just-harvested corn, with several corn stalks changing fall colors and the bonus balls appearing as “kernels” coming out the top.

The base game is the five-reel, 40-line version of IGT’s “Double Diamond.” With all paylines active, the top-box bonus is triggered every 41 handle-pulls—a very high frequency that is likely to keep players on the device a long time. The player receives one, two or four bonus balls out of the blower device (lights flash between three popcorn cups, stopping on one to indicate the number of bonus balls).

The bonus blower contains Slotto balls bearing nine values—eight credit values ranging from 40 to 500 credits, and one 2X multiplier ball. If one or more multiplier balls drop, all pay value amounts are first added together and then the multipliers are applied. If a single bonus ball is a 2X multiplier, it is multiplied by 500 for a 1,000-credit award. If a two-ball outcome are both multipliers, the 500 is multiplied by four.

If four multiplier balls fall into the chamber, it yields the highest possible bonus, which is also the highest possible award on the machine. The bonus award is 16 times 500, or 8,000, times the line bet. The top possible award here with maximum coins wagered is 160,000 credits. The top line jackpot, for five Double Diamond wild symbols on an active line at max-coin, is 100,000 credits.

Manufacturer: AC Coin & Slot

Platform: S2000

Format: Five-reel, 40-line stepper

Denomination: .01

Max Bet: Configurable, 40-800

Top Award: 160,000

Hit Frequency: Approximately 50%

Theoretical Hold: 7.01%—10.01%

By Frank Legato   Fri, May 01, 2009

With this game, WMS brings two of its most popular game concepts together and ties them together to the brand that started it all for the manufacturer in the video market, “Reel ‘Em In.”

“Reel ‘Em In Compete to Win” combines the “Community Gaming” series of linked video slots with the “Adaptive Gaming” series of server-assisted games begun several months ago with the release of “Star Trek.”

The presentation alone is going to make this game a winner. Banks of individual Reel ‘Em In games are linked under a giant LCD display linking two 52-inch high-definition monitors to create what looks like an aquarium from a distance. Displayed is, of course, a 3D underwater scene with fish swimming around coral reefs and sunken treasure chests.

There are two base games, called “Hog Wild” and “Pegasus II.” Each has game-specific features—Hog Wild has a pick-a-tile bonus in which players try to match pig characters in a streak of picks. Pegasus has a free-spin bonus and a double-win feature on five-of-a-kind wins—the player selects from icons at the bottom of the screen to reveal a jackpot symbol that replaces the five-of-a-kind with an equal or better five-symbol win.

Players make an ante “feature bet” to qualify for the competitive bonus round. The system randomly triggers one of three possible competitive bonus features. As in the other versions of Reel ‘Em In, each player picks or is assigned a fisherman character, and a competitive sequence begins. In “Fishing Contest,” each fisherman reels in from three to six fish, each awarding a  credit value. A final high-value fish emerges from the bottom of the display and is caught by one player. All players win the credit values of their fish, but the player with the most fish gets the value of all fish caught by all players.

In “Fishing Boat Race,” each player hooks a fish as boats race across the screens. The first fisherman to reel in a fish and cross the finish line wins the race and the largest bonus. (One player is randomly awarded a 2X multiplier.) In “Best Fish,” each player catches fish that may be eaten by other, higher-value fish. The player with the highest-value fish wins the contest.

The animation is excellent in this display, and good coin-in is assured by the requirement for the ante wager. An added player “hook,” if you will, is that it is on a wide-area network which, in addition to the multi-site progressive jackpot, displays national “leaders” in the fishing contests.

Manufacturer: WMS Gaming

Platform: CPU-NXT2

Format: Five-reel, 15-line, 25-line or 30-line video slot

Denomination: .01, .05

Max Bet: Configurable, 125, 400, 500

Top Award: Progressive; $500,000 reset

Hit Frequency: 34.76%—58.07%

Theoretical Hold: 3.85%—14.08%

By Frank Legato   Fri, May 01, 2009

I see the Detroit casinos are celebrating their 10th anniversary. Huzzah!

I remember the wisecracks I made in one of my columns when I first heard they were putting casinos in Detroit. I remember one about a “demilitarized zone” being set up to build the casinos in, complete with guard towers. Then, there was my idea to open a riverside casino restaurant, which I was going to call “The Bobbing Cadaver.”

To my friends in Detroit, you did know I was just kidding, didn’t you? Ha ha! What a card that Legato guy is, don’t you think?

Ten years later, the casinos in Detroit are all in beautiful permanent facilities, and they’re all holding their own despite this stinking heap of fuming manure into which the economy has sunk. (As you can see, I’ve cleaned up my metaphors for print suitability.)

My boss, Publisher Roger Gros, just made a trip to Detroit, and he commented how convenient Greektown is to all the great sports stuff—which, let’s face it, is some of the best sports stuff anywhere. Roger went to a Detroit Tigers game while he was there, and the last time I was in Detroit, I went to a Red Wings hockey game.

A side note: I am a diehard Pittsburgh Penguins fan, and the Pens were dispatched in last year’s Stanley Cup finals by those same Detroit Red Wings, but damn, I still love going to that hockey arena in Detroit. They sell whiskey along with the beer at the concession stands. Yep, if you want a good time, there’s nothing like 10,000 whiskey-drunk hockey fans screaming at the top of their lungs. In case you wondered, I do not wear my Penguins jersey there, because I have grown fond of my bones.

Oh, yeah. This is a gaming column. Sorry—I digress. To get back to my original point (and if you’re a regular reader of this column, you know I rarely have one), the Detroit gaming industry has come a long way in 10 years. And, my bemused wanderings from gaming into sports, though no doubt a symptom of my rapidly approaching dementia, are not far off the mark. Sports and casinos mesh nicely in Detroit. The Ilitch family, which owns the Tigers and the Red Wings, also owns the MotorCity Casino.

(Of course, they also own the Little River Casino, Little Caesars Pizza, Blue Line Foodservice, Olympic Entertainment, Uptown Entertainment, and, I believe, several third-world countries.)

The casinos also mesh in nicely with the heritage of the area. Bunches of unemployed auto workers were hired to work at the casinos. (So was their union, but that’s another story.) And what better heritage for casino entertainment could there be than Motown?

Of course, these days, we’re more likely to get faux Motown. Instead of the Temptations, you’ll get one elderly Temptation and a bunch of young guys. Instead of the Four Tops, you’ve got the One Breathing Top and Company. Smokey’s still around, but without any Miracles. Heck, I’m not even sure if Gladys Knight has a Pip to her name anymore. (OK, I’ll stop. It’s a gaming column.)

Finally, despite all my early wisecracks about casinos in so-called “dangerous Detroit,” it is really a secure environment for players. There was just a story in the Associated Press the other day about an assumed terrorist whose planned attack was apparently thwarted after he was caught on video dropping off several “suspicious items” in the parking garage at MotorCity. The devices, at first thought to be pipe bombs, were destroyed by the bomb squad, and the guy was arrested.

Of course, he was arrested in his suburban home. At 1 a.m. And it turns out he was 70 years old. And there were no explosives found.

But still, he dumped stuff in a parking garage. So maybe they were sandwich wrappers he had in his car, or adult diapers (insert your own “70-year-old bomber” joke here). They could have been pipe bombs, and the guy could have been a dangerous criminal, and he was apprehended, at home, cleverly disguised as an old man in pajamas without his dentures in.

The point is, Detroit’s security apparatus was on the ball here. It is a safe place to play, and people can feel secure that they’re not going to be harmed by 70-year-old men in pajamas.

Come to think of it, I think the guy may have been a Pip.

By Dino Guiliano   Fri, May 01, 2009

Panama, coming off of its sixth consecutive year of double-digit revenue growth, continues to defy expectations, as it seems there is no limit to the Panamanian appetite for gaming activities.

Will it continue, or are indications pointing toward a potential end to Panama’s hot streak? That probably depends on who you ask.

A History: 1997 to 2009

Panamanian casinos and slot halls are governed by Decree Law No. 2, which in 1997 privatized the then-state-run industry by setting out detailed laws and regulations for the country’s new private operators. Then as now, barriers to entry were relatively low, as complete casinos were permitted in any hotel of 300 rooms or more providing they were situated a certain distance from schools and hospitals, and that the proper approvals were gained from the national gaming authority.

By 1999, three private operators offered gaming activities at 18 venues throughout Panama City. This included six complete casinos, split evenly between Canada’s Thunderbird Resorts and Panama’s Alta Cordillera, S.A. (Alta Cordillera operated as Crown Casinos, and has since been acquired and expanded by Spain’s CODERE) and 12 Type “A” slot halls run by Spain’s CIRSA.

The years between 2000 and 2008 brought an additional 10 complete casinos and 16 new slot halls both from these operators and a few new entrants. The province of Panama (which includes Panama City) contains nearly 50 percent of the county’s total population, a somewhat larger percentage of its aggregate incomes, and over 70 percent of the country’s total available hotel capacity. However, fewer than a third of these newer venues were developed in the Panama province with the remainder opened in secondary and tertiary population centers/tourist destinations across the country.

Today, Panama’s gaming market is still very much dominated by the original players, though the largest facility in the market is currently operated by a more recent entrant. Between them, these four operators offer nearly 8,400 slot machines and nearly 250 tables. Sixty-five percent of these positions are located in Panama City.

• CIRSA operates 28 slot halls under its Magic, Money, Lucky and Fantastic brands as well as one complete casino under the Majestic moniker. While official numbers aren’t available, it is estimated that nearly 4,000 slots are distributed among these venues, 65 percent-70 percent of which are located in Panama City.

• Thunderbird Resorts operates six complete casinos under its Fiesta brand, and has recently received authorization to develop a seventh in the city of Veraguas. Thunderbird’s Fiesta facilities house 2,130 slots and 76 table games, just under half of which are in Panama City.

• Codere operates five complete casinos and a racino under its Crown Casino brand as of December 2008, and is awaiting the approval of a sixth, to be the company’s second operation in the port city of Colon. To date, Codere’s 1,606 slot machines are largely concentrated within Panama City’s limits.

With approximately 40,000 square feet of gaming space, Panama’s largest complete casino is the Veneto Casino in Panama City’s banking district—owned and operated by Silver Entertainment of New York.

Between them, venues operated by these four groups are estimated to have generated at least 85 percent of Panama’s gaming win in 2008.

Peak Performance

Total gaming win at all Panamanian casinos and slot halls grew to $246.9 million in 2008, a gain of 14 percent over the previous year. State collections of gaming tax are broken down by type of operation (complete casino or slot hall) rather than type of game as provided by the JCJ.

Payments collected from complete casinos in 2008 increased only 4 percent year-over-year, while those collected from Type “A” slot halls increased an amazing 36 percent, implying substantial growth in gross gaming win at these venues—all of which are operated by CIRSA. This is in contrast to the trend in previous years, where growth was primarily driven by tables and slots at complete casinos.

Data gleaned from reports and press statements of Thunderbird Resorts and Codere indicate both operators’ revenue performance for same-store Panamanian gaming operations increased by approximately 10 percent between 2007 and 2008. In the case of Thunderbird’s operating portfolio, nearly 78 percent of this growth was driven by venues outside of Panama City. Over the same period, the number of same-store positions offered grew 16 percent at Thunderbird’s Fiesta facilities and just under 10 percent at Codere’s Crown Casinos.

This implies that the newer market entrants (referring to anyone who is not CIRSA, Thunderbird or Codere) would have incurred a loss of approximately 7 percent-10 percent on average in 2008. The reality is that this more than likely translates into a substantial year-over-year decline for just one or two of these newer operators.

That being said, we now have two very different perspectives on the accessibility and sustainability of Panama’s thundering growth going forward.

Back to the Future

All indicators lead to the conclusion that aggregate revenue growth will likely continue at least through 2009 and likely into 2010, though some operators will prove increasingly more successful at capturing it than others.

CIRSA has really fortified itself as Panama’s 800-pound gorilla. Already well distributed from a geographic perspective and with its flexible operating model, the group can continue to patiently tweak size and positioning of each facility in each of its markets in efforts to penetrate the demand base deeper than the competition.

If payments to the state for the first quarter of 2009 are any indicator, they continue to do just that. Casinos have been fairly flat the first quarter while CIRSA’s slot halls continue to demonstrate strong growth (over 20 percent).

For their part, casino operators will challenge this reality by seeking further geographic penetration in secondary and tertiary markets and will likely be successful on this front (in fact, both Thunderbird and Codere have already initiated such efforts with the JCJ, as previously mentioned).

Panama City may offer small niche opportunities for the development of new facilities by new or existing operators, as well. Already well-positioned geographically, however, casino operators will likely choose to focus on finding incremental growth via increased marketing/promotional efforts and continued enhancements to existing facilities via additional gaming positions and/or ancillary offerings. Accordingly, we can expect that resultant top-line growth will be tempered by profit erosion caused by increased marketing/promotional expenses.

In the long term, it is likely someone will try to disrupt the Panama City market with a best-in-class type development—CIRSA (via parent Nortia) and Trump have made announcements in this regard, and certainly others have been quietly contemplating it.

However, while a sizeable investment would almost certainly grow the market in aggregate, this move will have to be perfectly timed and even more perfectly located to provide the necessary returns for the development itself to be considered successful.

Dino Guiliano is an independent gaming industry consultant working with a global network of services partners to deliver value through strategic and tactical solutions in emerging and transitioning gaming markets worldwide. Guiliano can be reached at his offices in Costa Rica +506-8862-8419 (from the U.S. dial 610-572-2030) or via email at dino.guiliano@gmail.com.

By Paul Heretakis   Fri, May 01, 2009

My bet is bigger than yours! And YES, size does matter! Just ask one of the ladies walking around the tables.

In Macau, it’s all about gaming and table energy. The integrated resorts of the United States depend on the voyeurism and excitement of the amenities and their interaction with the gaming floor as a whole to create that energy. In Macau, much of the action is localized to the table itself. The player is extremely animated, hoping to will his luck with each hand. It is not unusual for onlooking crowds at the Venetian to reach over 20 people deep.

Many foreigners look at the older casinos of Macau with their low ceilings, gaudy finishes and obvious themes and don’t understand that the tables see more action and money than almost any other tables in the world.

Casino play is influenced by the design of the gaming floor and the people; it must be alive with visual movement and sensed energy. Successful casino design can influence the gaming environment and draw people to it, while a poorly designed casino feels lifeless—and will die a quick death.

A casino and its design must deliver the promises of hope and excitement, the possibility of winning. Life can be repetitive and boring; a gaming visit must deliver fantasy, competition and fun. Inviting casino design must contain core elements of sparkle, reflectivity, color, texture, sensuality, wealth and richness.

Wynn Macau uses an imbalance, favoring the affluent and elegant elements for a very dramatic and sophisticated environment. Others like the Grand Lisboa and Star World go very heavy on the sparkle, color and reflectivity. All of these casinos are very successful, and they take very different approaches. However, if you look closely, they have many commonalties that feed their success.

These commonalties are combined to become highly stimulating to the senses—a feeling that is energetic while promoting gaming with a visual noise approach. Many foreigners don’t understand the Asian clientele well enough to realize the success of these over-the-top designs.

Many of the open, multi-story casino environments allow the stage, bar and entertainment venues, with their stadium-sized video screens, to take over the casino and become a great focal point. While bars attract people in the States, most Asians don’t drink while they gamble, and the bars are often empty. They anchor the entertainment center, but don’t directly add energy to the room. Fortunately, the live bands and scantily clad dancers often add a certain splash of flash to the gaming scene. The Grand Lisboa and Sands do this very successfully.

Macau gaming floors are often four to five times larger than the largest casinos in Australia and the U.S. This creates a problem with the ability to fill them, and deliver the promise of hope when the perception of the crowd is small and in turn not lucky. Very simply, if the casino is crowded, the gamblers feel that the house is giving money away. Obviously not true, but it creates a great draw.

The visual stimulation of a successful design can complement a crowded casino while also adding energy to a floor that is below capacity. The chamber design approach the Wynn casino utilizes has had a great effect in reducing the intimidation factor of such a large floor. You must learn to use the size of the gaming floor to your benefit to promote places of gathering and energy, places that feel lucky. Even though the Venetian’s gaming floor is very large, I always feel I can get lucky. Good energy equals good design!

While themes in many countries are out of vogue, in Macau they are used almost exclusively. Unfortunately, people tend focus too much on the story of design instead of the actual elements that influence gaming and profitability.

The Venetian is heavily themed and has the largest floor in the world, but it uses the same successful elements of design—just in a simpler, more refined balance than many of the other, less successful themed casinos. The core principles of design will attract customers and bring good fortune to the casino operators.

Traditional gourmet rooms of the States don’t attract a crowd in Macau. Noodle bars, on the other hand, are of utmost importance and are the most successful amenity on the floor. They add energy, voyeurism and a place to eat in less than 20 minutes. The individual’s personal energy level never lessens due to the quick food turnaround and the ability to see the floor from the dining seat.

The influences of Feng Shui principles complement many of the factors of casino design, to enhance the energy and good fortune of the casino.

The casino environment is one of vices, lost inhibitions and exhilarating fun. Designing a casino is often similar. The materials used in casino design are very rarely used in other building types—they are often too loud, over-scaled and in many cases too expensive. Giant crystal chandeliers, gold leaf, fused glass, rare veneers and marbles are staples of casino design. The rarest and most unique of materials often have the greatest impact on the customer. Using them in large quantities and multiple combinations is never a problem in casinos; it just adds to the visual stimulation and energy level.

Gamblers want to be in exciting places doing exciting things with other exciting people. As casino operators just stand back, you’ll be surprised how big it will grow.

Paul Heretakis, RA, vice president of Westar Architects, has over 15 years of experience overseeing hospitality design and mixed-use, master-planning projects throughout the world. Heretakis can be contacted at pheretakis@wagnarchitects.com.

By Frank Fahrenkopf   Wed, Apr 29, 2009

With its reduction in consumer spending and freezing credit markets, the recession that began in late 2007 made 2008 a challenging year for the commercial casino industry, and nowhere is that more evident than in the 2009 edition of the AGA’s State of the States survey. It should not come as a shock that most of the major economic impact figures were down this year, and while nationwide gross gaming revenues at commercial casinos were still the second-highest ever, at $32.54 billion, they were 4.7 percent below 2007’s record level.

Results from our 2009 public opinion poll conducted by VP Communications, Inc. and national pollster Peter D. Hart confirm that reduced consumer spending is one of the key reasons for the drop in gaming revenues. The data bear out the fact consumers are cutting back on their casino gaming during these recessionary times, just as they are cutting back on other activities, like going out to restaurants and taking weekend trips.

Despite these tough times, however, the gaming industry has continued to be a major contributor to communities where it operates. The industry returned nearly $5.7 billion to states and local communities through direct gaming taxes. Those tax contributions help fund vital public services, such as transportation and infrastructure, education and public safety programs. The industry also continued to be a major employer last year, as commercial casinos employed 357,314 people who earned a total of $14.1 billion in wages, benefits and tips.

It is no surprise that the recession has hit some markets and regions harder and differently than others. For example, the economic climate in Nevada coupled with a reduction in consumer spending on overnight travel spelled problems for the state’s revenues. New Jersey was forced to deal with the unfortunate trinity of lower consumer spending, a partial smoking ban and increased regional competition, and the smoking bans in Colorado and Illinois resulted in those states experiencing the largest percentage revenue declines.

Expanding markets saw growth despite the recession, as new properties in Pennsylvania, Missouri and Indiana resulted in subsequent boosts to gaming revenues in those states, with Pennsylvania experiencing the largest percentage increase.

One of the brightest spots in this year’s report is the racetrack casino sector. Even as the commercial casino industry as a whole faced declining revenues, the racetrack casino sector continued to grow, with three new properties and one new “racino state”—Indiana. Racetrack casinos experienced a 17.3 percent increase in gross gaming revenues compared to 2007, with revenues growing to $6.19 billion.

The racetrack casino sector also provided sorely needed tax revenues and jobs. Racetrack casinos’ contributions through direct gaming taxes grew to $2.74 billion, a 23.3 percent increase from 2007’s record levels. Employment at racetrack casinos also steadily increased, with 29,051 employed during 2008, a 6.6 percent increase over 2007 figures.

For this year’s report, the AGA teamed up with the Association of Gaming Equipment Manufacturers to highlight the significant contributions the gaming equipment manufacturing sector makes to the overall economy. The data show that the sector has continued to grow during these challenging economic times.

According to AGEM’s research, conducted by Applied Analysis, gaming equipment manufacturers produced a record $12.7 billion in economic output, or revenues, in 2008, a 6.7 percent increase over 2007 numbers. They also directly employed 29,600 people and paid salaries and wages of an estimated $2 billion.

AGEM’s research data also show that, like members of the commercial casino industry, gaming equipment manufacturers create spillover effects in the communities where they operate and provide substantial benefits, like employer-sponsored health care and retirement plans, to their employees.

The hard data prove that all segments of the commercial casino industry are valuable parts of the overall U.S. economy, and this year’s poll results are evidence of its importance to the U.S. travel and tourism industry.

A recent national public opinion poll and a new survey of tourism industry professionals conducted for this year’s State of the States reveals that nearly two-thirds (65 percent) of Americans and a whopping 84 percent of travel professionals—those who know the industry best—agree that gaming is a valuable part of the overall U.S. tourism industry. In fact, 82 percent of travel professionals in gaming states say casinos have helped encourage leisure travel in their regions. They also think that casinos are an important component of their state’s travel and tourism industry and create a positive, spillover effect from casino customers.

Even travel industry professionals from states without casinos see the value of partnering with the gaming industry, as nine out of 10 think their states would attract more leisure travelers from out of state if casinos were introduced.

The travel survey results also show that, despite being attacked recently by politicians and the media, business meetings and event travel are an important component of the overall U.S. travel and tourism industry, and more than three-quarters (79 percent) of surveyed travel professionals think that the recent criticisms of meetings and events have hurt business travel in the U.S. While casinos in particular have been labeled by some as inappropriate venues for business meetings, 76 percent of travel professionals disagree with that notion and three quarters (75 percent) say casinos are a vital component of the business travel market.

As it has for the last decade, gaming acceptability remained high in this year’s polling, with 81 percent of Americans deeming casino gambling acceptable for themselves or others. This, along with other positive polling results and past experience, should make observers confident that the gaming industry will weather this storm. I have no doubt that, as the country’s economic fortunes turn around, gaming’s will too.

By Frank Fantini   Wed, Apr 29, 2009

Capitalism is working its wondrous ways in the casino industry, bringing it at least partly back to its roots—the return of private, individual ownership, not to mention cheap room rates.

In addition, private capital in other forms appears ready to replace the frozen public markets.

And private casino operators are stepping into Indian Country, where issues of lender rights in a sovereign environment are making both borrowers and lenders nervous.

All of this is happening as the public capital markets and banks have become so difficult and expensive, and as covenant violations force the issues.

Entrepreneurs Are Back

Phil Ruffin, Neil Bluhm, Anthony Marnell III, David Cordish, and maybe Mike Ensign and Carl Icahn.

Those are names of individuals, some with fellow investors, who are doing what public corporations can’t—buying and building casinos.

Ruffin bought Treasure Island from MGM Mirage for $775 million, and his first day on the job told employees that the emphasis will be on customer service. Sounds like a throwback.

Bluhm rescued the downtown Pittsburgh casino, and has projects in the works in Philadelphia and suburban Chicago.

Marnell recently opened the $1 billion M Resort in Las Vegas—with the help of MGM Mirage’s investment. The M has a number of unique touches that show the personal Marnell qualities. Another throwback.

It also has a number of employees who left corporate operators because at M, they know who they work for, Marnell notes.

Cordish put both the financial and creative oomph behind Indiana Live, the new racino near Indianapolis. He is ready to try again to build in Kansas City, Kansas.

Ensign also is ready to develop in Kansas, though with a group of local investors in Sumner County.

Icahn, who once rescued the Stratosphere in Las Vegas, is ready to try his trick again at the Atlantic City Tropicana.

Entrepreneurs have advantages as casino owners—they can return to the personal touch that made the casino industry, and they can make decisions fast and decisively.

At least one other name that could join this list: Jack Binion, who still has the cash from selling Horseshoe Gaming to Harrah’s.

 Big Private Capital Lurking?

Who has the money to buy casinos if lenders break up companies?

That is the dilemma, many think.

But other observers say that big private capital is hanging around, waiting for the right prices. And when prices become compelling, some of these unidentified hedge funds and foreign deep pockets would find opportunity worth the intrusive licensing process.

You Don’t Have To Own It To Make Money

Top officers of one private company made it clear that they are aggressively looking for opportunities where they won’t have to take on big debt.

The reasoning: lenders will soon own casino companies, and they won’t want to break them up or sell them until prices improve. In the interim, they’ll want a strong management team to run the properties.

Among companies that can fill that bill: Larry Woolf at Navagante, the Marnells, former Station COO Bill Warner, Golden Gaming, Millennium Gaming and any of a number of experienced casino managers who can assemble a team.

Indian Country and the Sovereignty Dilemma

As some tribes move toward covenant violations, both they and their lenders are becoming nervous.

Lenders worry about the security of their investments. They can’t take assets, such as real estate and buildings, as collateral because those assets are held by a sovereign power.

Indian tribes worry that any bankruptcy of an enterprise under such a circumstance might scare away future lenders.

And both sides worry what courts might decide if the issues land in a judge’s lap.

One solution: A company offers to refinance the relatively small debt that most tribes have at a rate considerably lower than banks and bondholders would require. In turn, the tribe signs a management contract with the group.

We note that at least one management team, assembled by Bill Warner, is now running the Inn of the Mountain Gods, the troubled Mescalero Apache property in New Mexico.

How To Play It

Of course, by definition, private investors are closed to the public markets. But there are ways to search for plays:

• Debt. Many of these private players will be borrowing money in the public markets, or affecting existing publicly traded debt by buying out public companies, or the properties of public companies that carry debt.

In addition, the management companies that can improve the results of Indian gaming enterprises will also improve the value of their publicly traded debt. That will happen at Inn of the Mountain Gods, for example.

• The relief factor. Stocks should rise on publicly traded companies if they get a buyout offer, or sell some of their properties. Of course, the buyout price could come lower than today’s if stocks keep falling.

• Patience. Eventually, much of what is private becomes public as entrepreneurs seek required equity from someone else’s pocket, or as comes are sold off in the stock market.

Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.gaminginvestments.com.

By GGB Staff   Wed, Apr 29, 2009

The fire-damaged Empress Casino in Joliet, Illinois, could reopen sometime this June, but it may be a year or more before a charred casino pavilion is rebuilt. A March 20 blaze destroyed the Egyptian-themed structure. Fire officials estimate the Empress sustained about $340 million in damage in the fire, which may have been sparked by a welder working on a kitchen duct system. The fire was contained to the pavilion area, which was undergoing a $50 million renovation. No one was injured. Joliet City Manager Tom Thanas told the Chicago Tribune that the city expects to lose about $4.5 million in gaming revenue during the casino’s closing. Based on 2008 figures, the casino could be losing more than a half million dollars daily. Penn National Gaming Inc., owner of the Empress, agreed to extend full pay and benefits to all 850 employees for 90 days.

By GGB Staff   Wed, Apr 29, 2009

The Maryland Senate passed a bill that would allow the state to seize the Maryland racetracks owned by Magna Entertainment, the bankrupt operator that is currently trying to sell assets as part of its reorganization plan. The bill is clearly aimed at Pimlico Race Course in Baltimore, with the purpose of keeping the Preakness Stakes held there in the state should Magna be unable to sell the track with a guarantee that the new owner would keep the prestigious Triple Crown race in Maryland. The bill’s fate in the state House was less certain.

By GGB Staff   Wed, Apr 29, 2009

The Schaghticoke Tribal Nation of New York is seeking restoration of federal recognition first granted in 2004, then rescinded in 2006. The tribe has asked a New York appellate court to reverse the reversal, saying it was prompted by politicians who did not want the tribe to open a Connecticut casino. A third casino would invalidate the tribal-state contracts and stop the tribe’s basic contributions to the state.

By GGB Staff   Wed, Apr 29, 2009

Historic Greenbrier Resort in West Virginia has filed for Chapter 11 bankruptcy protection and could be sold to Marriott International. Voters narrowly approved a measure in November to allow casino gambling at the resort. Marriott has not revealed if it will move forward with gaming.

By GGB Staff   Wed, Apr 29, 2009

Wynn Resorts announced last month it had sold 1.44 million shares at $19 a share. While no plans were announced for the additional capital, some observers speculated that the company may be seeking to refinance some debt or even position itself to re-acquire the Bellagio in the wake of MGM Mirage’s financial difficulties.

By GGB Staff   Wed, Apr 29, 2009

This summer, Indiana’s Argosy Casino will be getting a makeover. First, the property is changing its name to Hollywood Casino Lawrenceburg, and to go with the L.A. theme, details are being added to the new riverboat to reflect the film industry. Workers have created a replica of the Hollywood Bowl for the property’s live performances, and new technology like flat-screen televisions will add more visual interest to the casino. “We’ll increase our revenues,” Argosy General Manager Tony Rodio told the Cincinnati Examiner. “Plus, the word of mouth—it’s going to create a buzz that you need to see this.”

By GGB Staff   Wed, Apr 29, 2009

Cantor Gaming is asking the Nevada Gaming Control Board for permission to operate a small slot route in Southern Nevada. The route includes 24 machines at five locations. Cantor acquired the slot route through its purchase of businesses belonging to Mickey Wichinsky. Cantor will manage the devices and share the revenues with the location owner.

By GGB Staff   Wed, Apr 29, 2009

A five-year-long standoff between the state of Wisconsin and the Lac du Flambeau Chippewa band ended last month when the tribe agreed to pay $3.7 million in back payments to the state as part of a new compact. Under the new compact the tribe will pay the state $738,000 each year for two years and then pay $500,000 each year for the next 10 years.

By GGB Staff   Wed, Apr 29, 2009

Commissioners in Washington state’s Clark County last month voted to terminate a revenue-sharing agreement for a casino that the Cowlitz Indian tribe hopes to build in the county. Since the agreement was first reached in 2004 the composition of the commission has changed so that a majority no longer supports the casino. Complications have also arisen because the tribe is seeking to put land off the reservation into federal trust, a process that is now much harder because of a recent U.S. Supreme Court ruling. Commissioners said they hoped that their decision would remove them from being at the end of “the casino hotline” from angry constituents.

By GGB Staff   Wed, Apr 29, 2009

Boston’s Big Night Entertainment will open a tequila bar and restaurant next month at Foxwoods Resort Casino in Connecticut. The 5,000-square-foot Scorpion Bar will accommodate up to 300 patrons and have a 50-foot-long bar. Live entertainment will be offered nightly. Said Big Night principal Ed Kane, the Scorpion Bar “has a significantly darker feeling than what you think of a Mexican cantina, with some ‘Day of the Dead’ elements, but not colorful and festive looking. Everything is a little out of place.” DJs will play remixed rock songs from bands like Aerosmith, the Rolling Stones, AC/DC and U2. Big Night investors  include Boston Red Sox Chairman Tom Werner and Vice Chairman David Ginsburg and auto magnate Herb Chambers.

By GGB Staff   Wed, Apr 29, 2009

Just weeks after the departure of Bill Weidner and Brad Stone, Mark Brown has been ousted from his post as president of the Venetian and Sands Macao. Brown was a former 20-year executive with Donald Trump in Atlantic City before joining Las Vegas Sands. Brown led the Venetian and Sands Macao since right before the opening of the Venetian and was often at odds with other high-ranking executives. With Weidner fired, followed by the resignation of global president Brad Stone, Brown was let go last month. No announcement of his replacement has yet been made.

By GGB Staff   Wed, Apr 29, 2009

The European Gaming and Betting Association—EGBA—is questioning the compatibility of proposed French online gaming legislation with existing European Union law and European Court of Justice rulings.

Specifically, the five questions being asked are:

• Can the reform and the opening of online sports betting be called consistent, when sports betting in the offline environment will remain under the monopoly of lottery operator FDJ and parimutuel operator PMU?

• Is “French tradition” an acceptable justification to limit the opening of horse betting only to pools betting, when fixed-odds betting is offered for all other types of sports and is very much appreciated by French and European consumers?

• Is a ceiling on the payout ratio, set at the same level as those currently being used by historical operators, compatible with E.U. law? Given that such a ceiling has no known impact on consumer protection, what other objectives than protection of the French market and the position of historical operators can it possibly serve?

• Will the French online gaming authority, in compliance with the jurisprudence of the European Court of Justice, take into account the warranties and controls already offered by other E.U. licensing jurisdictions, such as the U.K., Malta or Gibraltar, to avoid the application of dual licensing and purely administrative restrictions in the single market?

• Is the creation of a “sports betting right,” granted to the French sport federations in the context of commercial agreements with sports betting operators in France, a credible means to prevent match fixing? The majority of stakeholders have already developed partnerships and successful early warning systems to anticipate and prevent those risks.

The EGBA says it is “particularly concerned” about the potential creation of a “local” internet market, given the French authorities’ “clear intention to adopt payment and ISP blockings” and continued criminal enforcement even in the case of established E.U. online gaming and betting operators. The group calls such a move “completely incompatible with the European dimension and the cross-border nature of this leading internet sector.”

By GGB Staff   Wed, Apr 29, 2009

Former PartyGaming CEO Mitch Garber has joined Harrah’s Entertainment in a position where he will oversee the company’s online operations.

The announcement has some people speculating that Harrah’s is getting ready to enter the world of online poker.

“They won’t in the States yet,” a source told Gambling911.com. “But trust me, it will happen in the next two years.”

Details about Garber’s position are limited, but in addition to handling online business, he is expected to have some role with the World Series of Poker. Garber’s former company, PartyPoker, was a title sponsor of the WSOP before the passage of the Unlawful Internet Gambling Enforcement Act forced the company out of the U.S. market.

By GGB Staff   Wed, Apr 29, 2009

Ireland Minister for Sport Martin Cullen is warning online betting operators that they could find themselves shut out of the game unless more funding is forthcoming for the Horse and Greyhound Racing Fund.

“It is not sustainable to continue to support this fund from the Exchequer,” Cullen told a committee last month. “A view will need to be formed about internet and offshore betting. I will use whatever legal levers are available to me to get at that funding in terms of trying to get some tax out of it.”

Cullen said that a 0.5 percent tax on internet wagers would yield over €100 million.

By GGB Staff   Wed, Apr 29, 2009

U.S. Congressman Barney Frank is authoring a bill that would establish a regulatory and licensing framework for online casino operators.

Frank has long been an opponent of the Unlawful Internet Gambling Enforcement Act and has undertaken a number of steps to curb that legislation. He has opposed everything about the UIGEA, from the way it was introduced as an add-on to a port security bill to the effects it has on small banking institutions.

In fact, Frank is introducing his bill as a stand-alone, which some say reduces the chance it will pass. But Frank said it would be inappropriate to try to attach it to other legislation.

“It would be a mistake,” Frank told The Hill. “I want to do this with hearings, discussions and votes.”

Frank’s announcement has a number of people excited about the possibility of a legitimate discussion of online gaming in the U.S.

“We welcome a stand-alone bill, which would allow for a thorough discussion of all the issues relating to regulations and consumer protections,” Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative, told The Hill. “The excitement over Congressman Frank’s bill is that it would create an environment that would protect American consumers and include safeguards against underage gambling and compulsive gambling, which don’t exist right now.”

Despite the optimism and the perception that U.S. President Barack Obama and his administration are more friendly toward online regulations than the Bush administration, there are some who don’t think change is coming anytime soon.

By GGB Staff   Wed, Apr 29, 2009

General Growth Properties Inc. has filed for bankruptcy, putting the future of its Las Vegas shopping mall developments in doubt.

The company, which owns the Fashion Show (above), Boulevard and Meadows malls, as well as the Grand Canal Shoppes at the Venetian and the Shoppes at the Palazzo, is expected to restructure its debt in court and emerge with fewer properties.

Prior to entering into bankruptcy, General Growth was suffering under $27 billion in debt. The company said it attempted to negotiate with creditors without success, and has decided to reorganize in a Chapter 11 filing.

General Growth is expected to be the largest real estate victim of the recession so far, with more than 24,000 retail properties across the country.

By GGB Staff   Wed, Apr 29, 2009

Officials of Foxwoods Philadelphia made their formal pitch to the Pennsylvania Gaming Control Board last month to move their casino project from the Market Street Mall, which is adjacent to the Chinatown neighborhood, three blocks away to a former department store.

Officials of the majority local investment group and the Mashantucket Pequot tribe, which will manage the casino as a 30 percent equity partner, submitted their plan to the Pennsylvania Gaming Control Board for a casino at 8th and Market streets in Philadelphia, in the former Strawbridge & Clothier department store building.

The new slot casino would have 3,000 machines and employ 450 people. Officials told the board it could begin construction almost immediately.

“We’re pleased to report that the critical elements are now in place to bring this project to fruition,” Brian Ford, CEO of local investment group Washington Philadelphia Investors, told the board.

“We look forward to developing detailed plans and coming back before this board to present them as part of our Ford added that the investor group, which owns 70 percent of the casino license, has a lease in place for the building and financing in place to complete the casino.

Philadelphia Mayor Michael Nutter issued a statement praising the new casino plan.

By GGB Staff   Wed, Apr 29, 2009

The world’s two largest gaming companies last month dodged bullets as they continued to work with their debtors to avoid declaring bankruptcy—at least for now.

MGM Mirage was granted another waiver allowing it to again put up money on behalf of its CityCenter partner Dubai World, allowing construction on the project to continue.

But the $70 million payment made in April—on top of the $200 million paid earlier in the month—does not get the project out of trouble. Another payment of $200 million is due in May.

And with the relationship between Dubai World and MGM Mirage strained because of an ongoing lawsuit, the gaming giant put up the payments for Dubai World with no guarantee that the money will be returned. For its part, Dubai World said it remains committed to the project.

“We cannot comment on specifics of our discussions but we continue to be fully committed to completing CityCenter and we continue to work with our partners and the lenders to seek a solution,” said George Dalton, general counsel for Dubai World.

The two companies are reportedly negotiating a deal that would guarantee completion of the project. One of the terms of the arrangement would reportedly drop the provision that default on one loan would trigger default on other loans. This would presumably permit MGM Mirage to either declare bankruptcy or restructure other loans in order to survive. Neither partner would comment beyond the fact that talks are ongoing.

MGM Mirage faces a May 15 deadline to design a restructuring plan for its $13.5 billion in long-term corporate debt, which could result in bankruptcy protection, an option that previously would have impacted the completion of CityCenter.

Meanwhile, a new threat arose last month when Carl Icahn and Oaktree Management used their newly acquired leverage to urge MGM Mirage to file for bankruptcy. Icahn, the master Wall Street trader who has already made a profit from the gaming industry, believes that bankruptcy is the best option.

The Wall Street Journal reported that Icahn’s strategy could be to pick up some of the company’s non-strategic assets. Icahn and Oaktree recently bought hundreds of millions of MGM shares in anticipation of this move.

Harrah’s Entertainment, meanwhile, completed a debt exchange offer that reduced the company’s debt by $2.3 billion. The company traded $5.5 billion in debt for $3.5 billion of new 10 percent notes that will mature in 2018, though $514 million notes will still mature in 2010 and an additional $964.2 million will mature by 2013.

A $6.5 billion mortgage-backed securities loan leveraged against Harrah’s, Paris Las Vegas, Flamingo and the Rio properties will also come due in 2013. After the debt exchange offer was completed, analysts examined the company’s financial health and agreed that Harrah’s may still be underwater.

The company is currently operating with $23 billion worth of debt, and analysts say Harrah’s has reduced its interest payments by $70 million per year, which is a small margin.

“The improvement to Harrah’s balance sheet is palpable, as the company should now clearly get through 2010 without any liquidity problems. Beyond that, particularly in 2011, the company will face significant hurdles from its debt maturities,’’ CreditSights analysts Chris Snow and Frank Lee said in a note to investors.

By GGB Staff   Wed, Apr 29, 2009

When questions about the financial viability of Las Vegas Sands Corp. were raised last year, the company halted the development of its multibillion-dollar Cotai Strip project in Macau, tossing more than 11,000 workers off their jobs.

While the company continued building the $5.4 billion Marina Bay Sands in Singapore, the Macau development was put off indefinitely.

Now, according to Steven Weaver, the head of LV Sands Asia operations, that time may be shorter than the Macau government had feared.

“We’re certainly looking to resume in this calendar year,” Weaver told reporters in Hong Kong. “Our imperative is to get the construction workers back to work as quickly as we can.”

The company has been meeting with potential investors—who Weaver would not identify—and expects that funding will fall into place for the remaining $2 billion necessary.

Some of the hotels are nearing construction, particularly the Shangri-La and the St. Regis, but sources say that LV Sands will exchange equity in the project for increased financing. It is expected that the company will sell the retail developments at the Venetian and Four Seasons to gain additional financing.

By GGB Staff   Wed, Apr 29, 2009

The government of the Indian state of Goa has announced that it will appoint an official gaming commission. The move comes as the latest round of political maneuvering with regard to the offshore casinos operating on the Mandovi River has spurred several licensing and regulatory agencies, as well as various levels of courts, to issue confusing and often-contradictory orders and rulings.

In the past month, the casino ships—which number five or six, depending on which local news source happens to be reporting—have been ordered by the government to relocate outside of the city limits, only to have that order overturned by a court ruling.

Several of the ships have also been accused by the Goa State Pollution Control Board of operating without proper licensing from that agency. The government took a week to act to close down the ships, during which time the proper licenses were applied for and obtained. In the end the ships were able to reopen just three hours after having been shut down.

The government has said that it is open to licensing more casino ships as long as they operate further offshore.

By GGB Staff   Wed, Apr 29, 2009

The Singapore government last month began to take applications for its exclusion list that will hopefully prevent problem gamblers from entering the city-state’s two casinos, the first of which will open later this year.

The ban is part of an extensive program that will be set up to identify, protect and treat problem gamblers. Some of the other measures being implemented are an entry fee for locals and loss limits.

Families can now begin to apply to have members banned from the casino. To do so, they must document the member’s gambling activities and how it has harmed the family. They must also undergo counseling before the application is accepted.

“Often, families with problem gambling issues have more immediate financial and stress issues to manage, and if these are not tackled at the same time, the family may not be able to cope emotionally and financially,” said Lim Hock San, the chairman of Singapore’s National Council on Problem Gambling.

The only other place in the world where this sort of ban is practiced is in South Australia. In the four years the program has been in place, only eight bans have been issued out of only 18 applications.

Mildred Tan, a member of the council, says that she expects a similar kind of reaction in Singapore because it will put strains upon family units.

“But whatever the number that comes, we will offer all the help we can to start the healing process,” she says.

Within the next few months, Singapore will also implement voluntary self-exclusion and third-party exclusion orders, where people with un-discharged bankruptcies and those receiving public assistance will be barred from the casinos. The later would be the first of its kind in the world.

By GGB Staff   Wed, Apr 29, 2009

The financial turmoil surrounding MGM Mirage in the U.S. have created no problems for the company’s Macau casino, says Pansy Ho, the company’s partner in the gambling enclave.

“We’re keeping updated on the influence of the American counterpart’s financial difficulties to Macau; it should not be a big influence to us so far,” Ho said last month.

Since the company’s Macau developments is financed separately from the CityCenter project, which has been severely impacted by the world financial crisis, Ho says the 50-50 partnership has currently not been impacted.

“Despite MGM being our commercial partner, they’re dealing with the financial problem individually,” she said.

It could become an issue if MGM Mirage declares bankruptcy or otherwise alters its business model, says Ho.

“If they change their operational mode or the corporation objective, as a joint-venture partner, we then shall have to discuss it, as it would affect our daily operational mode,” she said.

By GGB Staff   Wed, Apr 29, 2009

It’s no billion-dollar project, but the 60-room Royal Plaza Hotel in Gangtok, Sikkim has become the first operator to open a land-based casino in India. And there are reportedly seven other operators with license applications pending.

The Casino Sikkim opened at the start of March, with two roulette tables, one table each of blackjack, baccarat and flush—an Indian game similar to 3 Card Brag, the basis for 3 Card Poker—and 10 slot machines.

For technical expertise, the license holder has retained Kishore Silwal, who runs three casinos in Nepal, according to a report in the Sikkim Express.

The only other Indian state to allow casino gaming, Goa, has only offshore casinos and electronic casinos in five-star hotels.

“It is a soft opening now,” said Naresh Subba, director of The Royal Plaza and Teesta Rangit, the company operating the casino, reports The Telegraph. “We will be investing INR30 crore to have a full-fledged casino in a bigger room in the next three months.”

In U.S. dollars, the future investment will be around $6 million. This will be on top of the initial investment of around $2 million.

The casino will provide the state treasury with INR15 million—about $300,000—over the next five years. The annual license fee of INR2 million will automatically increase by INR500,000 each of the next four years, according to Business Line.

Mah-jong tables are being added to appeal to locals, but the main target market for the casino is the upscale tourist.

Sikkim is a popular tourism destination situated at the northernmost part of India, between Nepal on the west side and Bhutan on the east. The state runs into the Himalayas and rises from 800 feet above sea level to altitudes of over 28,000 feet.

The state government, which wants to attract more high-end domestic and foreign tourists, has been working toward permitting casinos for several years. In November 2008 a provisional license was to granted Teesta Rangit.

By GGB Staff   Wed, Apr 29, 2009

Asia’s GEM Gaming Tourism and Investments Congress was held last month in Manila. Highlighted by a conference and trade show, Asia’s GEM is used by the Philippine Amusement and Gaming Corporation (PAGCOR) as a way to promote tourism in the country.

As with the previous two years, much attention at Asia’s GEM was paid to PAGCOR’s Entertainment City, which is a 40-hectare plot of land on the shores of Manila Harbor that will host four integrated resorts. With three of the projects already spoken for, questions about progress at the site had been raised.

PAGCOR President and COO Rafael “Butch” Francisco wanted to allay those fears. During a panel discussion on gaming in the Philippines, three representatives of the bidders appeared to commit once again to the project. Alliance Global Group, Inc. President Kingson Sian, Aruze Manila President Mikio Tanji and SM Hotel Corporation President Merrill F. Yu all agreed the project will go forward.

A quick glance at the land, however, demonstrates that Francisco’s prediction of an opening of the first phase of the project may be too ambitious. While he says a 2010 opening will occur, little has been accomplished beyond some preparation of the land.

And with a Philippine presidential election slated for May 2010, it seems unlikely that much will happen between now and then. A new president means new leadership at PAGCOR, since both Francisco and Chairman Efriam Genuino are political appointees serving at the whim of the president.

Genuino told the Philippine Star that construction will begin in the second quarter of this year and will create 200,000 jobs. Each developer is required to invest at least $1 billion in its facilities.

He said gaming would be just a small part of Entertainment City.

“Only 3 percent of the entire investments are geared toward gaming; the majority are tourist attractions,” says Genuino.

PAGCOR has pitched all the major gaming companies to take part in Entertainment City, including Wynn Resorts, Harrah’s Entertainment, MGM Mirage, Crown Casinos and others. While some are intrigued, none made a commitment.

At this year’s Asia’s GEM, Harrah’s President of Asia Michael Chen continued the discussions and said the development satisfied most of the points Harrah’s considers when weighing developments worldwide.

The conference also hosted the fourth annual meeting of the Euro-Asian Cooperation on Gaming. The group is designed to promote the gaming industry in Europe and Asia.

By GGB Staff   Wed, Apr 29, 2009

The St. Regis Mohawk Tribe of New York state has asked the Interior Department to overturn a policy blocking their effort to build a casino in the Catskills.

The tribe, hopeful that the Obama administration will be open-minded about off-reservation casinos, has also resumed discussions with its former Catskill casino development partner, Empire Resorts Inc.

“At this stage, everything is preliminary,” tribal Chief Barbara A. Lazore told the Watertown Daily Times. “But we felt it was important to tell our history of the past 14 years, which was dismissed at the stroke of a pen by the previous administration.”

In January 2008, after more than a decade of planning, the tribe’s proposed $600 million, 766,000-square-foot casino was canceled by then-Secretary of the Interior Dirk Kempthorne. President Bush’s interior secretary ruled the St. Regis could not operate a casino at Monticello because it is too far from the tribe’s northern New York reserve.

The Mohawks tabled the project more than a year ago. But now, with new Interior Secretary Ken Salazar in office, they are calling for a change in federal policy governing fee-to-trust applications, which transfer private land into federal land, often as tribal restitution.

The planned Mohawk casino and entertainment complex was to feature approximately 125 table games, 3,500 slot machines, 24 poker tables and numerous restaurant and retail venues on a 29-acre site. It was expected to create about 3,000 permanent full-time jobs and attract 6 million visitors in its first year.

“We made it clear last year that we would patiently wait for a new administration to arrive in Washington and one that would hopefully revisit the injustices that were done to our tribe,” tribal Chief James W. Ransom said in a statement. “That time has come.”

The Seneca Nation of Indians, in southwestern New York, have also partnered with a gaming company, Rotate Black, to propose a casino in the Sullivan County town of Bridgeville. The Stockbridge-Munsee Band of Mohican Indians, who once lived in upstate New York but now are based in Wisconsin, also has raised the possibility of a Catskills casino.

By GGB Staff   Wed, Apr 29, 2009

The Navajo Nation is looking at three potential sites for its first permanent casino, one in New Mexico and two in Arizona.

Last month, the Tribal Council’s Budget and Finance Committee listed three potential sites: Upper Fruitland, New Mexico; and Sanders and Flagstaff, both in Arizona.

Now that the sites have been identified they are subject to feasibility studies, including environmental and biological review, as well as being checked for potential archaeological sites.

The Navajo Nation is divided into 110 local government subdivisions, called chapters. For a casino to be built on a chapter its government must approve legislation that makes gaming legal, although it also requires the approval of the tribal nation’s government to agree to fund it.

The Upper Fruitland Chapter has passed the necessary legislation and its residents approved of a casino a year ago. They are hoping that a casino could break ground this year, but that decision, or whether any casino will be built at any of the three locations, will be made later by the Navajo Nation Gaming Enterprise.

The nation opened its first temporary casino, Fire Rock (left), at Church Rock last year.

By GGB Staff   Wed, Apr 29, 2009

The nation’s second-largest trade show, Indian Gaming ’09, the annual gathering of the National Indian Gaming Association, was held last month in Phoenix. While attendance seemed to be down a bit from last year’s show in San Diego, there was no shortage of drama.

The highlight of the conference was the annual meeting of NIGA. Ernest Stevens, Jr. was re-elected as chairman for another term after he faced no opposition for the third consecutive election.

“Either no one wants the headaches of taking over for a legend, or Stevens is doing what most NIGA members consider to be a good job,” said one board member.

Arizona is always a fine host for the show. In one of the most progressive states when it comes to tribal gaming, the Arizona Gaming Association makes sure that visitors get a great reception. The opening night reception—“Jam on the Rez”—was held at the Gila River tribe’s Wild Horse Casino, and a reception hosted by the Association of Gaming Equipment Manufacturers on the second night attracted thousands of show attendees. The Wendell Chino Award dinner on the final night featured an appearance by the Beach Boys.

Like most conferences these days, the NIGA sessions focused on the recession, which has hit Indian Country as hard as other casinos. Stevens believes the worst is over, but is cautious.

“We see a brighter future ahead, and we’re excited about that future,” he said. “But that’s not going to happen until we take care of things ourselves.”

Stevens said tribes have plenty of practice in surviving tough times.

“This is what we’ve lived through for generations, and the reason we’ve survived this is because we stand together,” he said. “We’re united, we hold hands, and we fight this fight together.”

By GGB Staff   Wed, Apr 29, 2009

With the high season fast approaching, Monte Carlo SBM, the operator of Monaco’s leisure industry, has announced the planned introduction of a new open-air slot casino in April and the scheduled reopening of the fully refurbished and redesigned Monte Carlo Beach Hotel in May.

The new open-air slots area is part of the existing Casino du Café de Paris. The operator has decided to take advantage of the annual 300 days of sunshine the region enjoys to provide a cashless slot area with 100 machines. The move will enable guests to smoke while playing, thus circumventing the smoking ban that has been instituted in Monaco.

Before creating the new slot area, architects took into consideration the location of the terrace and analyzed the airflow to mitigate the heat in summer and the cold in winter, as well as to minimize the effects of wind. The grand opening is scheduled for April 11.

The 40-room Monte Carlo Beach Hotel closed last September to allow for an extensive redo. At a press event in New York, reports Travel Trade, Danielle Garcelon-Siri, general manager of the Monte Carlo Beach Hotel, said that the rooms and suites are getting a marine-themed décor. A new fine dining restaurant, Elsa, will provide the Monte Carlo Beach with its fourth restaurant, not counting the Sea Lounge.

By GGB Staff   Wed, Apr 29, 2009

The project to refurbish London’s famous Hippodrome and turn it into a casino, theater and celebrity restaurant has been taken on completely by the father-son team that previously owned one third of the joint venture.

Simon Thomas and father Jerry Thomas bought out their two partners for anundisclosed sum, according to Property Week.

Simon Thomas said, “Having successfully developed the project to this stage as part of a consortium, and achieved all the necessary permits and licenses, my father and I decided that we would like to see through the redevelopment as the sole operator and launch what is destined to become one of Europe’s top entertainment venues.”

The 74,250-square-foot space will be fitted with tables and slots, a 160-seat cabaret theater and a Gordon Ramsay restaurant. The article said talks are under way with Royal Bank of Scotland, Barclays and Norwich Union about funding for the plans.

The two former bingo operators sold Beacon Bingo three years ago for £80 million.

An online casino bearing the Hippodrome name will launch this summer.

The Hippodrome itself is scheduled for completion in early 2011.

By GGB Staff   Wed, Apr 29, 2009

Plaza Centers N.V. has announced the acquisition of an additional 27 percent stake in Hungary’s Dream Island project. For Plaza and joint venture partner MKB Bank, the move increases ownership of the planned resort complex to 87 percent.

The stake was purchased from CP Holdings Ltd., a company controlled by Sir Bernard Schreier, for about €21.4 million. The agreement calls for €12 million in cash and the assumption of €9.4 million of debt, which the statement said represents 27 percent of the project’s net debt liability.

Dream Island is now 87 percent owned by Plaza and MKB Bank, 10 percent by a company controlled by the managing director of the consortium, and the remaining 3 percent owned by another party and minorities.

The Dream Island project represents one of the largest leisure developments currently planned for Europe. The casino will measure 40,000 square meters and incorporate over 200 tables and 4,000 slot machines. Hotels of various categories will provide 3,000 rooms, and around 1,000 leisure apartments will be built. Non-gaming amenities include a convention center capable of handling gatherings of 3,500 delegates, a 1,500-seat opera house, a 3,500-seat multi-purpose theater, a shopping and entertainment center featuring a designer’s avenue, and parking for 5,500 vehicles.

As the name suggests, Dream Island will in fact occupy the southern end of Obuda Island, in the middle of the Danube River, situated right between the two distinct sections of Budapest. Total gross built area will exceed 35 hectares, over 86 acres. A marina that can handle 300 craft is included.

The consortium has received an exclusive casino license, valid for 20 years from the date of opening of the casino and with an option for a 10-year extension. The conditions of the license state that no other major casino licenses will be granted by the Hungarian government in the area of Budapest during that time.

By Roger Gros   Wed, Apr 29, 2009

Every April, I sit back and watch the first pitch of the Major League Baseball season and believe everything is right with the world and anything is possible.

As a boy who grew up in New York City in the 1950s, you can’t help but have a soft spot in your heart for baseball. It was the era of the greatest baseball rivalries of all time: the Brooklyn Dodgers (my team), the New York Giants and the New York Yankees. So when the flowers start to bloom in April, I truly believe anyone can win the World Series in October (and early November, these days!).

So why is it not possible to imagine a sports betting industry in the United States that is taxed, regulated and completely transparent?

Let’s look at the reality these days. While I was watching one of the first games in the new Yankee Stadium, one of the banners that pop up behind the batter is an ad for Mohegan Sun. The Mohegan Sun also has large signs in Fenway Park, home of the Yankees’ hated rivals, the Boston Red Sox. Across town in New York, Harrah’s Entertainment has signed a major sponsorship contract at Citi Field, the new home of the Mets. In Milwaukee, the Potawatomi Bingo Casino is a major sponsor for the hometown Brewers. Last month, I went to a game in Phoenix during the NIGA show and was pleased to see the three casinos of the Gila River Band as major sponsors. The Sycuan tribe advertises at games played by the San Diego Padres. Almost every major league team has some sort of sponsorship from their local casinos.  

But while Major League Baseball is pleased to take sponsorship and advertising money from casinos, they throw up a stonewall when it is suggested that the same bettors that the casinos are hoping to attract at the ballpark would be able to bet on the game that they are watching.

What are they afraid of?

Major league players are paid so much money now, there is very little likelihood that any gambler or bookie would be able to offer enough money to make them risk their careers to influence a game. Even umpires make decent money, so an approach to them is not likely either. And besides, umpires are already under severe scrutiny on every call, gambling or no gambling.

Officials with baseball will be joined by the National Football League and the NCAA college sports organization later this year when Delaware considers legalizing its form of sports betting. Delaware is one of four states grandfathered in when Congress banned the wagering in the mid 1990s (Nevada, Oregon and Montana are the other three).

But baseball is hardly alone accepting casino money for advertising. The NFL has the same signs in its stadiums, and the NCAA member colleges almost uniformly accept money from casinos for sponsorships and advertising. When members of the basketball national champion North Carolina Tar Heels visited the Greektown casino in Detroit during the Final Four tournament, it was almost a scandal!

The truth is major and minor league sports would have much more integrity (and make much more money!) if they did allow legalized betting on their games. It has been proven that unusual activities during certain games at legal Las Vegas sports books have uncovered attempts to influence those games. After activity by a crooked NBA referee was revealed, unusual moves in the lines could be seen during games where he was assigned. As it exists now, criminal bookies can act under the radar. With legal sports betting, they’d be put out of business.

Internationally, sports betting is conducted in many countries with little or no trouble on sports that are even more sensitive to influence than any of the American sports. The model is already up and running. There’s no reason to reinvent the wheel.

And technology has changed the world. Today, any American citizen can place a bet on a game via the internet. Yes, it’s technically illegal but certainly not a very dangerous activity. The online sports books walk their potential customers through the steps, which make it virtually risk-free.

So now that April has come and gone again, and anything is possible, let’s reconsider legalizing sports betting in the United States.