The
ADAMS REPORT
A Review of Current Gaming Literature
Volume V, Issue 3
March 2001
Editorial
Rumors of Recession. The story in March was not the historic low unemployment. Although,
casinos around the United States may have had trouble getting enough employees, that was not
the big story in March. The Dow dropped dramatically, California is having power problems and
just as the Nasdaq and e-business stopped being the center of attention, it seems the Internet
gaming is creeping on the “legitimate” stage.
Since October and the pre-presidential election hype there have been rumors of a worsening
economy. But our attention has been diverted. First by Florida and the comic stress of deciding
who was really on first, or at least who was first to the White House. And then we were watching
the e-business dance; as a never-ending stream of “dot.com-ers” died.
…chief executive…who rode a meteoric rise to the top…has resigned. …has yet to turn a profit
since going public in October 19999. Its stock, which hit a high of $22.25 a share on Nov. 26,
19999, has floundered below $1 for the past three weeks. It closed on Monday at 68 cents in
Nasdaq trading. Bill O’Driscoll, Reno Gazette-Journal, 3-27-01
While we fiddled, the stock market went into serious decline. The decade-long orgy of growth
and optimism ended over night. The three major indexes all entered “bear territory,” defined as a
20 percent drop from its peak. Some time around March 10th and March 15th we all realized that
this was serious and affected everyone. It took value out of our retirement funds; it took
disposable income from the retired and created stress in every boardroom in the United States. .
– The major indexes suffered staggering losses Monday in a broad-based sell-off
that handed the Dow Industrials its worst percentage loss in 11 months and took the Nasdaq below
the 2,000 mark for the first time since December 1998. Friday’s horrible price action apparently
wasn’t enough to exhaust the selling pressure. Tech stocks led on the downside as mounting profit
warnings, including the latest from Ericsson, set buyers into hibernation. Cisco Systems was
among the hardest hit, with Nasdaq bellwether plunging to a 27-month low following news of
layoffs due to economic downturn Friday. The Dow saw its lowest close since Oct. 19, 2000 and
experienced its fifth-largest point loss ever. Julie Rannazzisi, CBS.MarketWatch.com, 3-12-01
New York (CBS.NW)
U. S. Stocks fall; Dow at 2-year low, near bear territory. New York, March 21 (Reuters) – Stocks sank on
Wednesday, pushing the blue-chip Dow to its lowest since March 1999, after a surprise uptick in
inflation damped hopes fro a near-term interest-rate cut to kick-start the economy. …The Dow
Jones Industrial Average tumbled 233.76 points…to 9,487…only 112 points away from bear
territory…from its peak of 11,722.98 on Jan. 14, 2000. Yahoo! Finance, Reuters, 3-21-01
Something was happening to economy. There were differences of opinion about what was
happening, how long it would last and what the impact would be; but everyone agreed that
something is happening.
Economic Alert. The volatile economic conditions demand close attend and creative scrutiny. The
“how and whys” behind the crash of the Nasdaq and destabilized financial markets were visible to
those who penetrated the double talk and misinformation that passed as financial wisdom. Now,
the financial wizards who promised perpetual growth are peddling simplistic remedies to restore
economic health. But the problems will continue, since the classic tools for economic adjustment
don’t address the full range of economic disorder. The Trends Journal, Vol. X, No. 2, Spring Issue 2001
For the casino industry it means there will be an impact. Money will be harder to borrow and our
customers will have less confidence in the economy and less money to spend on entertainment.
Industry Keeps Wary Eye on Cooling Market. The reality of slower economic growth came
crashing down on investors’ heads the week of March 12, when the Dow Jones Industrial Average
fell 7.9%. …Mark Falcone, a leisure analyst at Bear Stearns in New York, explains that any time
the economy slows, companies in industries reliant on disposable-income spending – such as
gaming, them parks, and golf – will feel the crunch. Matt Benz, Amusement Business, Vol. 113, No. 12, 3-26-01, p. 1, 3
And, as if we needed more, California is having an energy crisis that threatens to spill over into
Nevada and maybe the rest of the country. In point of fact, it already has spilled over into
Nevada in at least two ways. People in California are not traveling to Nevada as much, probably
because of the cost increases; and in Las Vegas (see Quicktakes) the price of energy is going up
as well. And, if Nevada operators needed a couple more issues to chew on, California tribes are
ramping up rapidly before the May 15th deadline; and John McCain (see Gaming Industry Weekly
Report) and the NCAA are on the attack against sports betting.
Millions in California Face 50 Percent Hike in Electricity Costs. San Francisco – California’s top
power regulator proposed a nearly 50 percent increase in electricity rates Monday for some 10
million homes and business. …The increases are the product of California’s disastrously failed
deregulation plan, which allowed the expenses of utilities to fluctuate, while keeping revenues
relatively fixed. Karen Guadette, Associated Press, Reno Gazette-Journal, 3-27-01
The casino industry has seen better months, months that foretold a brighter future than March did.
The one growth issue on the horizon is the bill introduced (see Quicktakes) in Nevada to regulate.
It is ironic, that just when e-businesses are in serious trouble that e-gambling may be become
viable for licensed casino companies. Terri Lanni may get his wish. The MGM Mirage can lead
the charge into the unknown of cyberspace.
But that is just my opinion!
Update:
Lawmaker Proposes Slots at O’Hare. Illinois Senator Walter Dudycz (R-Chicago) has
introduced legislation that would put slot machines in ticketed areas of Chicago’s busy O’Hare
International airport. “We have people traveling from all over the world stopping at O’Hare
Airport,” explains Dudycz. “With all the holdovers and delays, I go through the airport and
watch these people just sitting, bored or at bars or newsstands. I’d like to see them actively
involved in gaming opportunities.” The slots initiative is one of two controversial gambling
initiatives that Dudycz has introduced in the past week. (The other proposal would legalize video
gambling machines in bars.) CasinoWire, 2-28-01
Western Village is First Northern Nevada Casino to Install IGT’s EZ Play ™ Ticket
System Machines. Reno, Nev., PR/Newswire – The Western Village Hotel and Casino in Sparks, Nev., this
week became the first casino in Northern Nevada to feature IGT’s new EZ Pay ™ ticket system
with the latest EZ Play ticket-in-ticket-out gaming machines. Western Villages’ 50 EZ Play ™
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machines are the latest additions to an installed base of more than 6,000 EZ Play ™ machines
nationwide. Press Release, IGT, 3-2-01
London (AP) – The Treasury is not giving odds, but the betting
is heavy that a change in Britain’s taxation of online gambling will give it a global lead in a
market worth tens of billions of dollars. Burnett of Merrill Lynch estimated that online gambling
could grow to $177 billion by 2015. Bryan Brumley, Yahoo! News, 3-13-01
Brits Shift Taxes on Web Gambling.
Revenue Climbs in City Casinos. Gamblers love to try their luck at Detroit’s casinos. Three
gaming houses – MGM Grand Detroit, MotorCity and Greektown – took in $75.7 million in
February, up $1.7 million form January. Lorene Yue, Free Press, 3-15-01
Quicktakes:
The Internet: The Nevada Resort Association, the chairman of the Nevada gaming Commission
and casino giant MGM Mirage all say they will support Berman’s bill [To legalize Internet
gambling in Nevada. “Gambling is certainly one of the mainstays of our economy, and if
licensees in other jurisdictions can do it, them it certainly makes sense that Nevada Licensees
should be involved in it.” David Strow, Las Vegas Sun, 3-9-01
Energy: Energy Costs Jolt Casinos in Nevada. MGM Mirage, the largest owner of hotelcasinos in Las Vegas, has budgeted $39 million for power costs this year compared with last
year’s $33 million – an 18 percent increase, said Bobby Baldwin, president of the company’s
Mirage division. Reno Gazette-Journal, 3-10-01
California’s top power regulator proposed a nearly 50 percent increase in electricity rates Monday
for some 10 million homes and business. Karen Guadette, Associated Press, Reno Gazette-Journal, 3-27-01
Mergers and Acquisitions: IGT Completes Acquisition. Reno-based slot maker and game
designer International Game Technology announced late Tuesday that it had completed its $34miilion acquisition of Palo Alto, Calif.-based slot maker and game designer Silicon Gaming Inc.
John Stearns, Reno Gazette-Journal, 3-29-01
Wall Street: Industry Keeps Wary Eye on Cooling Market. The reality of slower economic
growth came crashing down on investors’ heads the week of March 12, when the Dow Jones
Industrial Average fell 7.9%. Matt Benz, Amusement Business, Vol. 113, No. 12, 3-26-01, p. 1, 3
Betting on Amateur Sports: Lawmakers Push Bill to Counter Illegal Bets. Trying to
counter efforts to ban all gambling on amateur athletics, Nevada’ congressional delegation is
again pushing a measure that lawmakers say will have a more direct impact on the problem of
illegal gambling on sports. Nevada’s Washington Watch, Vol. 7, Issue 58, March 2001, p. 6
Harrah’s Watch
Baton Rouge, La. – Harrah’s New Orleans Casino has
reached an agreement with restaurant and hotel trade groups in the gambling hall’s bid to expand
its food and lodging services, representatives of each group say. JCC Holding wants more table
dinning and authority to offer discounted and free meals to gamblers. The company also wants to
have its own hotel with discounted rooms. Both measures would have to be approved by
legislators. Associated Press, Las Vegas Review-Journal, 3-3-01
Casino Strikes Deal to Expand Services.
New Eateries on the Menu for Harrah’s.
Atlantic City – The way to a gambler’s wallet is through
his or her stomach, according to a multimillion-dollar belief espoused by Harrah’s Entertainment
Inc. The gaming giant is sparing no expense replacing restaurants at its two casino
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here…Harrah’s Atlantic City, which 4 1/3 years ago developed the $7 million Fantasea Reef
Buffet, is now building the $5.9 million Steakhouse. Six months ago, it opened the $4.2 million
Florentino’s Italian restaurant and five before that a $4.5 million coffee shop. …A mile away on
the Boardwalk, Harrah’s sister Showboat Casino-Hotel is spending $17 million to replace its 60lane bowling center with two restaurants…Last year, Showboat spent $4.1 million the
Champagne Charlie’s French restaurant and remodeling the Casa di Napoli Italian restaurants.
…“The food experience goes beyond the food and service. It becomes part of the entertainment
experience for our customers,” Showboat GM Tom O’Donnell said. …“One of the things
Harrah’s believes, that other casino do not believe, is that a great experience in a restaurant leads
to loyalty, which leads to increased profits,” GM Dave Jonas said. Joe Weinert, The Press of Atlantic City Online, 3-10-01
Harrah’s Expands AK-Chin Casino to 142-Room Resort. Today is the grand opening
celebration for Harrah’s AK-Chin Casino Resort.
The Business Journal of Phoenix, 3-12-01
Casinos Feel Borgata’s Pressure.
Atlantic City – Without even one steel beam in place, the Borgata
casino hotel is already reshaping the local gaming industry. Top casino executives said
Wednesday that they’re investing heavily in their properties, rethinking marketing plans and
working harder to create loyal employees and customers – all due to the specter of competing
against the $1 billion Borgata in summer 2003. “We’re spending $250 million before they even
open their doors. It’s because of these guys we’re spending it,” David Jonas, GM of Harrah’s
Atlantic City, said during a panel discussion at Business Expo 2001, sponsored by the Greater
Atlantic City Chamber of Commerce. “I would imagine that fright after we open this project
we’ll be announcing another expansion,” Jonas said. Joe Weinert, The Press of Atlantic City Online, 3-15-01
Harrah’s New Orleans: Casino, city reach deal.
– Harrah’s New Orleans Casino
agreed to increase the city’s percentage of its take, and the City Council voted to cut $5 million
off it rent. The percentage concession and a promise that the casino would make its “best efforts”
to keep all 2,550 workers on the payroll took all day Thursday to work out, making legislators
nervous. …The deal also includes zoning changes to let Harrah’s’ build a hotel and expand its
restaurants. Associated Press, Las Vegas Review-Journal, 3-17-01
New Orleans
JCC Holding Company Emerges from Bankruptcy: Casino Remains Open.
New Orleans, March
– JCC Holding Company and its subsidiaries including Jazz Casino Company, LLC,
owner of Harrah’s New Orleans Casino, emerged from bankruptcy yesterday, March 29. With
this action, the casino has now obtained all governmental and regulatory approvals, the amended
casino operating contract with the State of Louisiana and the amended lease with the City of New
Orleans are now in effect. The revised contract guarantees the state a $50 million annual
minimum payment from April 1, 2001 through March 31, 2002, and $60 million per year
thereafter. Press Release, JCC Holding Company, Yahoo! Finance, 3-30-01
30/PRNewswire
No Comment:
Sherman’s March to the Sea. “This is a scourge every bit as devastating as Sherman’s March
to the Sea,” said Sen. Mike Beatty (R-Jefferson, Georgia). [on video poker machines moving in
from South Carolina] National Gaming Summary, 3-19-01
The Harlotry of Casino Gambling. “You’re really getting snookered on this,” says Senate
Majority Leader Jim Risch (R-Boise, Idaho), who asked committee members to think twice
before selling out to “the harlotry of casino gambling.” [on the approval of tribal-state gaming
compacts in Idaho]National Gaming Summary, 3-19-01
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Literature
Each of the following articles is a direct quote from the publication as cited. The articles in the original publications
vary in length and detail, but are always more detailed than as presented in this report. The original article should be
consulted any time the issue is of importance to you.
Amusement Business
Pros Identify Food Trends to Look for in ’01. Everyone wants to know what consumers will
be opening their wallets for this year, especially in the food and beverage arena. Amusement
Business talked to several food and beverage experts both in and outside of the industries to find
out what they believe we’ll all be talking about at the end of the year. …Tortilla-wrapped
sandwiches. These have been a staple over the past five years and likely to continue to grab
market share with newer combinations. …Regionalizing of food service cuisine. There appears
to be more of an effort to make menu items less homogenous and different from the
competition,… "a great example is stir-fry, which I think people will be talking a lot about this
year.” …Are customers ordering fewer microbrews? And if so, what are they drinking instead?
“While the microbrew concept is still rolling along, I think we’ll see more frozen drinks on
menus.” …Large portion. These have been a “growing trend during the last few years, and most
see a continuation of big plates. …Souvenir cups. A tried-and-true concept that is likely to sell
well in 2001. …Bundling. The concept of “bundling” or packaging products together has been
around for several years and is likely to continue. …Down-sized portions for kids. …Plastic
bottled beer. John Morell, Vol. 113, No. 10, 3-12-01, p. 1, 11, 32
Industry Keeps Wary Eye on Cooling Market. The reality of slower economic growth came
crashing down on investors’ heads the week of March 12, when the Dow Jones Industrial
Average fell 7.9%. With the specter of a recession now looming, analysts and participants in the
amusement business say some sectors will fare better than others in the race for a share of
consumers’ dwindling deposable income. …Mark Falcone, a leisure analyst at Bear Stearns in
New York, explains that any time the economy slows, companies in industries reliant on
disposable-income spending – such as gaming, them parks, and golf – will feel the crunch.
Among the unlucky industries is motor sports, says Falcone. Television ratings have soared over
the first four events of the NASCAR Winston Cup Series this year – driven perhaps in large part
by the story of the death of Dale Earnhardt – but Falcone says attendance has not improved. Matt
Benz, Vol. 113, No. 12, 3-26-01, p. 1, 3
Atlantic City Insider
‘New’ A.C. Shaping UP. MGM Mirage, Boyd, and Harrah’s advance Marina district plans and
Park Place Entertainment wins Claridge duel. The plans for the long-awaited “second wave” of
casino construction in Atlantic City seem to be back on track. …Last month, MGM Mirage
announced that it was officially beginning development of its won new megaresort on the Marina
district “H-tract,” on the site of former Mirage Chairman Steve Wynn’s planned French-themed
property. …Marina district neighbor Harrah’s, meanwhile, is busy with a construction project of
it own. … Access to the district will improve by leaps and bounds this summer, when the longawaited Atlantic City-Brigantine Connector highway and tunnel are expected to open. …Across
town along the Boardwalk, the Tropicana is following suit, with plans just announced fro a $225
million casino and hotel expansion. ….It is likely that Park Place with somehow connect the
Calridge to its flagship Bally’s Park Place property to create an indoor path through nearly half of
the Boardwalk casinos during winter. Vol. 5, NO. 7, March 2001, p. 1-2
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Cabazon Circle
Zuni Pueblo, Ariz. – At the invitation of the
Zuni tribe and the New Mexico Commission on Indian Affairs, the Spanish embassy’s minister of
language and culture visited Zuni schools in January. Gonzalo Gomez Dacal acknowledged the
“troubling history” of Spanish colonization. It was the first visit by a Spanish official. “We can
start the healing process,” said Zuni Councilman Eldred Bowekaty. “We can’t go back in history
and change it. Vol. X, Issue III, March 2001, p. 8
Zuni Pueblo Reaches Out to Heal Wounds of the Past.
Casino Executive
If You Built It, They Will Come… But Will They Come Back? Gaming companies need to
focus on strengthening the customer relationship to develop a sustainable competitive advantage.
Throughout the 1990’s, large gaming companies increased marked share through acquisition and
construction. This wave of growth created a few large players in the industry. Today, Harrah’s
Entertainment, Mandalay Resort Group, Park Place Entertainment and MGM mirage now
represent 61% of total gaming industry revenue. Since all of the “Big Four” currently hold
elaborate over-the-top casino-hotels, even the most phenomenal property no longer provides a
sustainable competitive advantage. If similar companies in the hospitality-and-leisure industry (e.
g., Ritz-Carlton Hotels, Disney) are any indication, the next wave of growth for the gaming
industry will be competition for the biggest share of the customers’ wallet. …There are a few
signs indicating that rapid property growth is not the best strategy for the future. First, new
construction doesn’t generate the returns it once did. …Second, despite elaborate facilities at
every property, competition to keep the customer spending at the same hotel is intensifying.
…Third, by most accounts, room-supply growth – especially in Las Vegas – should be minimal
over the next few years. Outside Las Vegas, since 1996 casino regulations in potential new
locations have increased substantially, limiting opportunities for growth. …It’s clear that the
giants will have to begin to learn to squeeze more from their fixed assets, as they figure out how
to gain a bigger slice of a pie that may not be expanding as was once hoped. Ian H. Cohen, Vol. 7, No. 3, March
2001, p.13-16, 17-18
Other Articles of Interest
Here To Stay: Tribal Gaming Is A $10 Billion Industry and Some Lobbyists and
Legislators Chafe at Its Autonomy. Anyone who doubts Indian gamin is a growing financial
and political phenomenon should realize that, as recently as 1988, the industry consisted
primarily of pull tabs and makeshift bingo parlors hauling in about $500 million a year. Now
tribes own and operate the largest casino in the world – the ornate Foxwoods of Ledyard, Conn. –
and last year recorded gross receipts approaching $10 billion. That does not even include the
lucrative California market, where tribal casinos are expected to double the industry’s income.
Out of 561 federally recognized tribes, only 195 run gambling operations. Of those, 28 tribal
casinos account for 61% of the industry’s revenue, according to the National Indian Gaming
Association (NIGA). The debate on the merits of Indian gaming, such as whether enough tribes
benefit from it and its impact on surrounding communities and Native American culture, will
continue indefinitely. But there can be no argument that Indian gaming has transformed the way
tribes are perceived and how they perceive themselves. As Indians become emboldened in
asserting their rights as sovereign nations, Congress struggles to assuage state concerns that
reservation gambling is an unregulated business destined for corruption and scandal. It is a
delicate balancing act played out on Capitol Hill year after year. With the election of a new
president, the biggest question facing Indian gaming is whether the industry will continue to
flourish under George W. Bush as it did during the eight-year reign of Bill Clinton. …The Bush
administration already is looking ahead to 2004 and the possibility that California Gov. Gray
Davis will be the Democratic presidential nominee, according to a source who served on the new
president’s transition team. “The ‘Bushies” don’t want to do anything that will make the
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California tribes open their checkbooks for Gray Davis in 2004,” adds the source, who requested
anonymity. Tony Batt, Vol. 7, No. 3, March 2001, p.20-21, 24, 29
Casino Journal
The New Revenue Generators. Amenities are becoming stand-alone operations just as import
to a casino’s bottom line as slots or table games. It wasn’t look ago that the word “casino” would
conjure up images of nothing more than row after row of slot machines and table games amid a
few bright neon signs. If a casino was big enough, maybe it had a showroom, coffee shop and a
few bars – side dishes to cater to the throngs of gamblers, whose main goal was to hit the big
jackpot. But that’s all changed. Thanks to the addition of lavish amenities like restaurants, retail
malls, animal attractions, thrill rides, elaborate stage shows and well-appointed hotel rooms,
casinos have transformed themselves into destination resorts that have become the equivalent of
small-scale cities, offering guest a plethora of entertainment options. “Amenities have really
become one of the key drivers of traffic,” says Bear Stearns gaming analysts Jason Ader. “More
and more people are choosing which hotel-casinos they want to go to based on the amenity
package they offer.” Andy Holtmann, Vol. 14, No. 3, March 2001, p.26-31
Other Articles of Interest
Loyalty’s Total Rewards. Gaming companies are exploring one-card loyalty programs to bond
customers to favorite brands even away from the Las Vegas Strip. …“Harrah’s has had a great
deal of success in a comprehensive rewards program, but each of its facilities provide a similar
environment and are based around similar themes.” Steven Kent, a gaming and lodging analyst
with Goldman Sachs. William Quinn, Vol. 14, No. 3, March 2001, p.32-34
Spark on the Seaside. Atlantic city gaming industry may be on its way to destination resort
status with the fire lighted by Boyd Gaming’s Borgata. …“Over the past five years Atlantic City
moved in the direction of an overnight destination. As new operators enter the marketplace,
Atlantic City will continue to move forward in that direction.” Audrey Oswell, president, Resorts
Atlantic City. Vol. 14, No. 3, March 2001, p. 36-39
Casino Player
The Best of the Web. Casino Player readers choose their online gambling favorites. Pressed to
choose a catchphrase that best sums up the final years of the Twentieth Century, we’d have to
choose “Visit our website.” …The World Wide Web has affected industry in monumental ways.
Anyone with even an elementary understanding of the Internet has the ability to attract or
communicate with millions of people, and faster that you can say “Blair Witch Project,” a handful
of nobodys can accomplish what was previously limited to large corporations with millions of
dollars at their disposal. The same holds true for the gaming industry. Five years ago, if you
wanted to won your own casino, you needed financing for several hundred million dollars, a few
thousand qualified employees, a location that licensed the activity, and if you were really lucky, a
vice president of marketing to draw gamblers to your front door. …Today, almost anyone can be
a casino operator – and with over a thousand sites offering a chance to gamble, people are clearly
jumping on the bandwagon. …Well, it’s high time we examined at least the latter group of sites
(gambling), and to do so, we decided to follow the successful format of our annual “Best of
Gaming” feature. …That said, we believe our survey results produced a list of sites that truly are
the best, which means the magazine you now hold in your hands contains the most
comprehensive online gambling overview ever printed: Casino Player’s Best of the Web. [The
article contains 59 pages of reviews of sites and full-page ads from winning sites; I fully agree with the
magazines assessment, this is the most complete overview of Internet gambling available. Ed.] John Hansen, Vol.
13, No. 7, March 2001, p. 3A-62A
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Gaming Newsletter: Atlantic City-Colorado-Mississippi
January 2001 was a 3% Month.
Atlantic City gaming revenues grew 3.3% in January. Last year revenues were 1.3% ahead of
1999’s results. AC slots were up 6.1% with nickels gaining 91.0% over last year’s results.
Colorado revenues grew 3.1% in January, indicating a slowdown of the phenomenal growth in
this state. In January 2000, January revenues were 16.9% ahead of 1999’s results. Slots were up
3.5% for the month. Nickels grew 24.8% and quarters fell 8.1%
Mississippi revenues grew 3.7% in January. Last year’s growth was 12.0% over 1999’s results.
Vol. 3, No. 1, March 2001
Gaming Industry Weekly Report
Buying the Cash Flow. When Jeffrey Jacobs entered the gaming industry through investments
in a few companies, we predicted that eventually he would roll them all up into one company.
Jacobs, a member of the family which at one time controlled Cleveland through the Cleveland
Indians and just about everything else, is the controlling shareholder in Black Hawk Gaming &
Development and Colonial Holdings. …This past week, our prediction came true as Jacobs made
offers on BHWK and CHLD to acquire all the shares that he did not own in these companies.
…What Jacobs has done could occur at other companies where there is a controlling shareholder
who has money. While we have no idea why he is doing this with CHLD, the cash flow which
BHWK throws off and the low valuation they were trading at makes Jacobs’ move a wise one.
He could very well recoup his investment in a few years if things do not fall off a cliff in Reno
and Black Hawk. You have to think that if the valuations of certain small cap casino companies
do not improve, you could see this exact same thing happen at other companies. Isle of Capri
Casinos, Hollywood Casinos, Ameristar Casinos and even Station Casinos are just a few
companies which should be put on the watch list for this sort of event. Vol. 9, Issue, 3-5-01
Supplier Stocks Soar to New Highs. As you know by now, one of the only ways to have made
money in the stock market in the last 6 months has been to be heavily invested in the stock of
companies who are suppliers to the casino industry. …In case it has not become apparent, we
are starting to wonder just how every slot maker in the industry is going to be successful. …We
are wrestling with the dilemma that if Aristocrat is as successful in Nevada and California as
gaming analysts in Australia are saying and ALLY continues the success in the orders they are
receiving and WMS continues to gain market share, how is IGT going to remain the dominant
slot maker that their valuation is suggesting? If IGT remains in their dominant position, how are
other slot makers going to continue their success? What is going to happen if we do have that lag
between the May deadline for new installed slots in California and the opening of the Borgata and
expected expansions in Atlantic City? At the same time, upstarts like Konami Gaming, the entry
of new slot titles from Shuffle Master and the continuous licensing of well known themes shows
that more supply is coming on line and with9out a strong replacement market or new casinos
opening, the market could become very crowded. Vol. 9, Issue 11, 5-12-01
What a Difference a Year Makes. One final catalyst for the casino industry is Internet
gaming. This is also a long shot but it does look a lot better than last year. At this time last year,
the American Gaming Association, the Nevada Resort Association and politicians form Nevada
were backing Senator Kyl and Rep. Goodlatte in their Internet Gambling Prohibition Act. What a
difference a year makes. As we reported last week, Nevada Assemblywoman Merle Bernman
introduced a bill that would give Nevada gaming regulators the ability to legalize and regulate on
line gaming for their licensees. A similar bill was introduced in NJ for Atlantic City casinos but
for some reason, operators in AC seem to have no interest in this while some Nevada casino
8
companies are giving full support of the proposal in LV. Considering the companies that are
supporting this in LV are also in AC, this does not make a lot of sense… Bill Bible, the head of
the Nevada Resort Association and former top gaming regulator in Nevada, has publicly stated
that he supports the proposal in Nevada. Vol. 9, Issue 12, 3-19-01
McCain, Nader, Bradley and Bauer are Poor and Vengeful Losers. . The day March
Madness began, a report was released on political donations from the gaming industry. The
report showed that the American Gaming Association, the member casinos and manufacturers
and their executives donated $2.3 million in slot money to Republican committees and $1.6
million to Democratic committees during the 1999-2000 election cycle. The $3.9 million donated
was up 70% from the previous election. Two politicians, Gary Bauer and Bill Bradley, began
screaming to anyone who would listen that these donations were specifically to encourage
politicians to block the NCAA college sports betting ban and they demanded an investigation. If
you recall, right after John McCain gave up his bid to become President, the first thing he did
when he went back to his Senate job was make a lot of noise about this bill. The report on the
soft money donations was prepared by an organization headed by Ralph Nader. What do Ralph
Nader, John McCain, Bill Bradley and Gary Bauer all have in common? All 4 of them
unsuccessfully ran for the Presidential nomination in their respective parties. All 4 of them were
not on the list of who received parts of the $3.9 million. Call us paranoid but it cert6ainly does
look like these 4 are a little perturbed that they did not even come close to winning their parties’
nomination for President and are taking it out on the gaming industry. Perhaps they are not happy
that they did no receive any campaign donations. Vol. 9, Issue 13, March 2001
Gaming Update Colorado Division of Gaming
Commission Rules on Petition. The Colorado Limited Gaming Control Commission has
determined Central City alderman-elect Bruce Schmalz’s “liability for loans secured against
gaming property constitutes an interest in a limited gaming license for the purposes of section 1247.1-804(1), C. R. S.” That state prohibits elected municipal officials in Black Hawk, Central
City and Cripple Creek, among others, from having “any interest, direct or indirect, in any license
involved in or with limited gaming.” Schmalz, co-owner of Dostal Alley Casino, was elected
alderman in November 2000. In January, he petitioned the Commission to determine what steps
he would need to take to comply with the statue. He amended that petition in February to ask the
Commission whether a contingent liability on a mortgage constituted an “interest” in a gaming
license under the statue. Vol. X, Issue 3, March 2001
Indian Country Today
Washington – Gale Norton, newly
appointed secretary of Interior, has spent part of her first weeks on the job learning about and
talking about tribal issues. Secretary Norton addressed tribal leaders during a meeting of the
National Congress of American Indians one week and testified before members of the Senate
Committee on Indian Affairs the next. …In both appearance, Norton reiterated support for tribal
sovereignty and focused on Indian education and reform of tribal trust funds management. “I
take very seriously my responsibility as trustee for Indian lands, trust moneys and federal
obligations to the tribes under treaties and laws,” Norton said. …Norton was warmly received by
tribal leaders at NCAI. Many remarked how they appreciated her willingness to talk with them
so early after taking office. Others noted her promise to employ “consultation, cooperation, and
communication” in working with tribal governments. Brian Stockes, 3-7-01
Norton Speaks to Tribes and Indian Affairs Committee.
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International Casino Surveillance Network
Player’s Club Accounts Scam Arrest. Subject, a slot marketing representative, was arrested
for cashing out and deleting slot club accounts of patrons who had not been to the casino for a
long period of time. It was found that over a period of approximately eight and a half (81/2)
months a total of sixteen (16) accounts totaling $4013 had been cashed out deleted. Subject
generated a cash redemption slip and then took it to the cashier’s cage and cashed it as if for the
patron. This was considered a normal part of her job and the cashier’s cage did not question these
cash outs. After checking with the past patrons and casino records, it was found that none of
them hand been to the casino during that time period. The player cash back monies that had been
apparently abandoned by the patrons should have been returned to the corporate account. The
subject admitted to the thefts, provided a written statement to that effect, was arrested and
charged with grand larceny. 3-16-01
International Gaming & Wagering Business
The Devil Really Does Care. Pundit Mark Shields told a funny story at last month’s
Washington Press Club dinner, a black-tie affair that draws politicians of every imaginable strip.
As part of his introduction of a speaker from Texas, Shields cited a piece of political history from
the Lone Star State’s colorful past. It involved a legislator know as Ma Ferguson, who backed a
measure that would have banned the instruction of foreign languages from Texas’ public schools.
“There we no more learnin’ of dirty French and Spanish,” Ma said. “If English was good enough
for Jesus Christ, it’s good enough for our children.” One could say the spirit of Ma is still alive
and well, even if it comes in a more polished form these days. The election a conservative,
religiously devout Republican president, and his appointment of archconservative John “No
Dancin’” Ashcroft to head the U. S. Justice Department as attorney general, have emboldened the
religious right. Look for this group, whose unyielding support represents Bush’s political base, to
demand its pound of flesh somewhere along the line in the next four years. And don’t be
surprised if the American gaming industry winds up in its crosshairs.
…On the flip side, the federal government is drunk on 10-year surplus projects of $5.6 trillion,
which may or may not materialize. No matter; all the political momentum favors nothing less
than the $1.6 trillion cut advocated by the Bush administration. After defense, Social Security
and Medicare, there really won’t be that much left over for all the other programs so dear to
voters (education, prescription drugs, law enforcement, etc.). The pressure on states only figures
to mount as Uncle Sam kicks in less and less. Alternative forms of revenue raising will again be
in vogue as long as they are politically palatable. If the gaming industry builds up its political
capital, it could only benefit. Charles Anderer, Vol. 22, No. 3, March 2001, p.4
Other Articles of Interest
Challenging Look at Casino Design. The foreword by Bill Eadington to Bill Friedman’s new
book Designing Casinos to Dominate the Competition is provocative to say the least:
“Suppose someone were to tell you that most of the megacasinos that were built in the 1990s
considerably missed their mark. …Or that the billion of dollars that are presently infested in
major new casino projects form Connecticut to California, from South Africa to Sweden, are for
the most part going to deliver – if not, disappointing results – results well below their potential.
…You might think the person suggesting such heresies should have his head examined. Or
should he?” writes Eadington, director of the Institute for the Study of Gambling and Commercial
Gaming at the University of Nevada, Reno, the book’s publisher. Would you want to read on?
Of course you would.
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…Whether or not you agree with Friedman’s findings, this is a book that
must be read. There is simply too much intriguing information to dismiss Friedman’s
principles outright and too much potential to learn from them. Marian Green, Vol. 22, No. 3, March 2001, p. 23
Las Vegas Review-Journal
Dealers Election: Excalibur dealers reject union. Casino dealers at Mandalay Bay’s
Excalibur voted by nearly 3-to-1 margin against union representation by the Transportation
Workers Union of America on Saturday. Sharon Gerrie, 3-5-01
Board May Deny License to Silver City Owner, Source Says. The Nevada Gaming control
Board is expect today to recommend denial of a state gaming license to the San Francisco
businessman who owns the Silver City casino, a knowledgeable source. …“His application was
filled with inaccuracies and omissions,” the source said. He applied for a state gaming license
after he was forced to close the casino at the Strip and Convention Center Drive because he was
unable to find a licensed operator to run thee property. Jeff Simpson, lasvegas.com Gaming Wire, 3-7-01
Dealers Elections: Union Turns to Negotiations. After suffering a final election defeat at the
Treasure Island Saturday, the Transportation Workers Union of America now plans to
concentrate on contract negotiations for dealers at the three casinos where unions were approved.
In addition to negotiating contracts for dealers at Carl Icahn’s Stratosphere, Aztar Corp.’s
Tropicana and Phil Ruffin’s New Frontier, Tim Grandfield, international director of organization
with the Transportation Workers Union, Saturday said the TWU plans to keep working with
dealers in Las Vegas. Sharon Gerrie, 3-12-01
– On the eve of debate on a bill to increase gaming taxes, the
Nevada Resort Association Monday released a report that shows gaming profits have fallen
dramatically. The report states gaming profits fell from about $1.4 billion in 1997 to $500
million in 2000. Profits last year were about $280 million below 1999 figures. Ed Vogel, 3-13-01
Casino Profits Falling.
Carson City
Rio Lays Off Staff. Harrah’s Entertainment’s Rio has laid off 99 employees, the property’s
second layoff since August. The layoffs, which came on Friday, were Rio custodians,
housekeepers, front desk workers, casino hosts, surveillance personnel and others. Jeff Simpson,
lasvegas.com Gaming Wire, 3-20-01
Las Vegas Sun
Pact Signed with Slot Maker. Shuffle Master Inc. of Las Vegas announced Wednesday it
signed an agreement to distribute slot products owned by Recreativos Franco, an international slot
manufacturer and distributor based in Spain. Under the agreement, Shuffle Master said it will
adapt games from the Madrid company’s library to run on its slot machine system, then distribute
these games in certain North American markets, including Nevada. 3-1-01
Regulator, Industry Group Support State Internet Bill. …The Nevada Resort Association,
the chairman of the Nevada gaming Commission and casino giant MGM Mirage all say they will
support Berman’s bill. “If it (Internet gambling) is clearly a legal act, I think it’s appropriate that
Nevada licensees engage in it,” said NRA President Bill Bible. “Gambling is certainly one of the
mainstays of our economy, and if licensees in other jurisdictions can do it, them it certainly
makes sense that Nevada Licensees should be involved in it.” David Strow, 3-9-01
Raleigh, N. C. – Lottery opponents rolled
out their heavy hitters Tuesday, unveiling a coalition of groups and citizens unified against the
strongest push to date to approve state-sponsored gambling. The people behind the bipartisan
North Carolina Gambling Foes Roll out Heavy Hitters.
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Citizens United Against the Lottery include three ex-governors, banking chief executives, former
university president and religious leaders. The group also has the support of the Rev. Billy
Graham, said organizer Chick Neely, a former state House member and gubernatorial candidate.
3-14-01
Video Poker Bar Business Booming in Las Vegas. The latest addition to the Roadrunners
chain of taverns isn’t your typical Las Vegas bar and casino. The 10,000-square-foot complex,
opened in Green Valley in February, features such items as a full-size restaurant, a huge TV
lounge, a small video game arcade, a three-quarter scale bowing alley – and, of course, the
requisite 15 video poker machines lining the bar. …Michael Corrigan, who co-owns the sixlocation Roadrunners chain with brother Sean and Adam, said it’s one of the few taverns in Las
Vegas where food revenues outstrip bar revenues, as it averages 1,200 meals a day. David Strow, 3-21-01
Mecca to Head GV Resort. Mike Mecca is returning to Las Vegas as head of Station Casinos
Inc.’s newest casino, now under construction in Green Valley.
3-23-01
Constitutionality of Gaming Regulations to be Challenged by Denied Applicant. A San
Francisco developer is vowing to mount a legal challenge to the constitutionality of Nevada’s
gaming regulations, following the Nevada Gaming Commission’s unanimous decision to deny
him a gaming license Thursday. The state Gaming Control Board had recommended earlier this
month that Luke Brugnara’s application to reopen the Silver City Casino on the Las Vegas Strip
be denied. Only a unanimous vote of the commission in Brugnara’s favor could have overturned
that recommendation. Brugnara had hoped to build a San Francisco-themed megaresort at the
Silver City site. …Brugnara portrayed himself during the hearing as the personification of “the
American dream,” a young real estate star who would turn his energies toward revitalizing the
north end of the Strip. But it became clear the commission was more concerned with a long list
of issues uncovered during the board’s investigation of Brugnara. “When an applicant comes
forward before us (the commission), he has two or three or maybe zero items of concern, and
those are resolved or documented so the control board is satisfied,” said commissioner Augie
Gurrola. “I have a list here of at least 24 areas of concern. This is mind-boggling. I’ve never
seen anything like this.” David Strow, 3-23-01
Lottery, Pari-Mutuel & Casino regulation
House Committee Shelves Measure to Ban Cockfighting. The last attempt by lawmakers this
year to ban cockfighting in New Mexico failed in a House committee after proponents of the
sport argued that outlawing it would hurt the economies of rural communities and was an assault
on Hispanic tradition. Vol. 12, No. 9, 3-5-01, p. 3
Minnesota Representative to Introduce Airport Gambling Bill. A state representative plans
to introduce a bill to build a state-run casino at the Minneapolis-St. Paul International Airport.
Rep. Phyllis Kahn, who earlier this year proposed legislation that would legalize betting on
professional sports in Minnesota, plans to introduce the bill Monday, which would only allow
travelers to gamble. They would have to produce airplane tickets that are valid within 12 hours
on either end of the flight to gain admission to a casino. Vol. 12, No. 10, 3-12-01
Minnesota Legislators Would Legalize – and Tax – NCAA Betting Pools. Those NCAA
betting pools would be legal – and taxable – under a plan a Minnesota House subcommittee kept
alive Tuesday. A trio of skeptical lawmakers passed along a bill by Rep. Phyllis Kahn that would
allow bars or convenience stores to take bets on sporting events. The state would use an
estimated $120 million in tax revenue to pay for amateur sports programs or recreation trails.
“We’re not getting our cut,” Kahn said of the state/s estimated $2 billion illegal sports betting
industry. Vol. 12, No. 11, 3-19-01
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Indians bet on Texas Casino Bills. Legislation pending in the Texas Legislature would
legalize gambling on Texas’ three federally recognized Indian reservations, opening the door to a
casino and the Alabama-Coushattas are ready to “get in the game.” “We want to provide
for the welfare of our people. All the social services are severely under funded on our
reservation.” Vol. 12, No. 12, 3-26-01
Michigan Gaming Law Newsletter
Sal Semola is New COO at Greektown Casino. Mike Mecca Accepts Position with Station
Casinos. Salvatore P. Semola has been named Chief Operation Officer at Greentown Casino,
replacing Michael V. Mecca who has accepted a position with Station Casinos in Nevada.
Semola, of Grosse Pointe Park, has served as Greektown’s Vice President of Table Game
Operations since March 1999. He has more than two decades of gaming management experience.
“This is a tremendous opportunity in an excellent property in one of the nation’s truly great
cities,” Semola said. “There is no limit to how successful we can be for our owners, our team
members, our guests and the City of Detroit.” Vol. 7, Issue 8, 3-23-01
Michigan Tribe Signs Term Sheet to License Internet Bingo Software. Las week, dot.com
Entertainment Group, Inc. through its wholly owned Antigua subsidiary, dot.com (Antigua), Ltd.
Announced that it had entered into a preliminary term sheet with the a Lac Vieux Desert Band of
Lake Superior Chippewa Indians to deliver and install a complete Internet Bingo system at the
tribe’s casino, located in Watersmeet, Michigan. Although the preliminary term sheet is
nonbonding, it contemplates the completion of a binding licensing agreement at the earliest
possible date. Vol. 7, Issue 8, 3-23-01
National Gaming Summary
Bidding Narrows for Empress Casino. Mandalay Resort Group, Park Place Entertainment
and Argosy Gaming Co. have emerged as the three top contenders to buy the Empress casino in
Joliet. As part of a settlement with the Illinois Gaming Board, Empress owner Horseshoe
Gaming Inc. agreed to sell the boat by the end of May, which prompted the inters of numerous
well-known casino companies. 3-12-01
Ainsworth Game Technology on the Australian Stock Market. Australian slot pioneer Len
Ainsworth is set to launch his new company, Ainsworth Game Technology, on the Australian
stock market in May or June. Ainsworth founded Aristocrat Leisure, which has since gown into
the world’s second largest producer of slot machines. 3-12-01
Nevada Internet Bill Could Change Online Betting Picture. Nevada casino operators are
already lining up behind a bill in the state Legislature that would allow licensed casino to conduct
Internet wagering. If it passes within the next few weeks, the dam blocking virtual casino in the
United States could be broken as the state moves into the lead of U. S. governments entities
favoring online betting. 3-19-01
State Ratifies New Revenue Sharing. The New Mexico legislature has recently passed and
Gov. Larry Johnson has signed several new bills regarding gambling, the most important being a
new pact between the state and 11 of its gaming tribes. …Under the new compact, tribes would
pay at most 8 percent of their revenues to the state. Smaller gaming tribes would pay 3 percent.
…Most of the state’s 13 tribes are satisfied that it’s better that the 1997 pact, which took 16
percent of revenues. …A separate bill, also approved by the legislature, although not yet signed
by the governor, boosts the number of slot machines allowed at racetracks from 300 to 750. 3-26-01
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Nevada Gaming Newsletter
Sports Books Carry the Day for Nevada in December. The Strip grew 8.8% in December,
compared to last year’s 13.6% in December 1999 over 1998. …Sports books jumped up
2109.4% or nearly $18 million for the month. …Downtown Las Vegas was up 0.1% in
December. …Laughlin grew 4.9% in December. …Boulder Strip declined 8.8% in December
with slots off 11.0% and games falling 8.1%. …Reno gaming revenues were up 10.0% in
December. …Race books grew 8.9% and sports books grew 111.2%. South Lake Tahoe grew
6.2% in December, which compares to a 15.3% increase in December 19999 over December
1998. Vol. 15, No. 2, February 2001
Nevada’s Washington Watch
Lawmakers Push Bill to Counter Illegal Bets. Trying to counter efforts to ban all gambling
on amateur athletics, Nevada’ congressional delegation is again pushing a measure that
lawmakers say will have a more direct impact on the problem of illegal gambling on sports.
Senator John Ensign (R), along with his Senate colleague, Democrat Harry Reid, introduced their
bill, the National Collegiate and Amateur Athletic Protection Act of 2001, in mid-February. The
bill would require the U. S. Attorney General’s office to form a task force on illegal sports
gambling. Without enact ion any new laws, the task force would be in charge of enforcing
existing laws that prohibit illegal sports gambling… The Ensign-Reid bill, which has a
companion piece of legislation in the House co-authored by Nevada Reps. Shelley Berkley (D)
and James Gibbons (R) would also authorize $4 million is start-up money for the task force in
2002 and another $6 million for the next four years. Vol. 7, Issue 58, March 2001, p. 6
Observer: Michael Pollock’s Gaming Industry Observer
R & D Growth Means Regulators Can Forget About Their R & R Plans. Attention, all you
regulators toiling away in slot labs, and those of you sitting at desks, reviewing internal-control
submissions. It’s time to notify your spouse and significant others that you will be putting in
some long hours in 2001 and beyond. Regulatory workloads are like slow-moving storms. You
can track them from hundreds of mils away, giving you plenty of time tock up on essentials.
Regulators, though, don’t deed milk or rod salt. Pepcid AC will do. One of the most reliable
predictors of new technology that will soon be sluicing through the gaming pipeline is the amount
of money earmarked for research and development by slot manufacturers and slot-systems
providers. R & D in gaming has relatively short gestation period. Within two years of such
dollars being spent, new products are dropped off on the doorsteps of regulatory agencies,
demanding instant approval. For example, William R. Schmitt of CIBC World Markets projects
that Anchor Gaming’s spending on research and development will rise from $16.5 million last
year to $18 million in 2002… Consider that IGT’s spending on R & D rose from $38.1 million in
1998 to $45.5 million in 1999 and to $55.2 million in 2000, and you get the idea. …WMS, which
is getting more attention from Wall Street these days, is doing its best to close that gap. It
increased its fourth quarter R & D spending by 63.9 percent, from $2.5 million to $4.1 million.
…Casino Data Systems…increased its investment in research and development from 8 percent of
revenues to 10 percent. …Shuffle Master…research and development costs grew from $2.4
million in 1998 to $4.96 million last year. …When it comes to R & D spending as a percentage
of revenues, the top prize has to go to Silicon Gaming…in a recent quarter, Silicon spent $1.75
million on R & D, which equates to 88 percent of revenue. …Mikohn Gaming has also been
quietly raising its R & D spending in recent years. In 1998, for example, spending rose 44
percent to $5.5 million, followed by a 9 percent jump in 1999. Vol. 6, No. 6, March 2001, p. 1, 6-7
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Press of Atlantic City
Atlantic City – Showboat casino-Hotel fired its
10 full-time pit bosses Thursday in a reorganization of its table games department. …Showboat
told the fired pit bosses that it will use “dual-rates” to supervise the pits, according one of the
fired workers. …Showboat spokeswoman Susan Tulino said the reorganization will help the
casino operate more efficiently. The firings were not due to cost-cutting, she said. “This is not
new in the industry. Maybe in Atlantic City, but not the industry as a whole. We made the
realignment to give us more functionality,” Tulino said. Harrah’s Entertainment Inc. bout
Showboat Inc. in 1998 but did not fully integrate the local Showboat into its management style
until last fall. Harrah’s Atlantic City continues to use full-time bosses at its tables, a casino
spokeswoman said. Joe Weinert, 3-23-01
10 Showboat Pit Bosses Dismissed in Reshuffling.
Mohawks, Park Place Plan Casino. Park Place “Entertainment Corp. and the St. Regis
Mohawk Tribe disclosed plans Monday to build the country’s fifth-largest casino floor, just 30
miles from the New Jersey border. The $500 million Indian casino hotel near Monticello, N. Y.,
would have 165,000 square feet of gaming space, slightly larger than the Bally’s Park Place-Wild
Wild West casino floor in Atlantic City. The casino, to be located at Kutsher’s Resort Hotel and
Country Club in the Catskills, would also have 750 hotel rooms, 154,000 square feet of meeting
space, a 2,000-seat theater, eight restaurants and a spa. Park Place CEO Thomas Gallagher
promised “a world-class gaming facility.” Joe Weinert, 3-27-01
Atlantic City – Organized labor won its first election among
local gaming-floor employees in seven years, when Tropicana Casino and Resort slot-machine
attendants voted for representation by Teamsters Local 331. Joe Weinert, 3-27-01
Trop. Slot Attendants Vote for Union.
Ray Koon’s Gaming/Gram
The Big Keno Ticket. “The Big Ticket,” submitted by Las Vegas Gaming, Inc., Las Vegas, was
determined to be a variation or modification of the existing game of keno, and is not considered
to be a lottery (illegal in Nevada). …Like keno, this game will be allowed only in nonrestricted
locations. Siller remarked, “This is a drastic variation of keno. There will be only five balls
pulled once daily. That looks pretty much like a lottery to me.” Approval was granted on a 3-0
vote of the Board, and 5-0 Commission vote.
…Las Vegas Gaming, Inc., Las Vegas, was granted licenses as a manufacturer and distributor,
and as the operator of an inter-casino liked system (OILS). The company’s attorney told the
Board, “The basic reason for this company is to bring new concepts to the game of ancient keno,
with life altering jackpots, through the linking of a progressive game with multiple casinos. The
company has raised over $6 million, with $4 million dedicated to bankroll jackpots.” A company
executive followed, “We will be able to go 36 months without revenues. Only five balls will be
drawn. Game tickets will be $2.00, with 50 cents going to the progressive fund. The beginning
jackpot of $5 million, will be paid over 20-25 years, and we expect to pay the progressive jackpot
2 to 3 times annually.” Vol. 16, No. 3, March 30, 2001, p. 3
Reno Gazette-Journal
Millions in California Face 50 Percent Hike in Electricity Costs. San Francisco –
California’s top power regulator proposed a nearly 50 percent increase in electricity rates Monday
for some 10 million homes and business. …The increases are the product of California’s
disastrously failed deregulation plan, which allowed the expenses of utilities to fluctuate, while
keeping revenues relatively fixed. Karen Guadette, Associated Press, 3-27-01
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Study: Indian Casinos May Affect Local Jobs, Taxes. California Indian casino could drain
up to $43 million in tax revenue from Nevada and cost residents more than 16,000 jobs, a new
report says. Applied Economics, an Arizona economic analysis firm, estimated lost revenue to
the state at between $24 and $43 million a year. The company – hired by the Reno
Redevelopment Agency to evaluate the effect of planned casinos along Interstate 80 and U. S. 50
in California – estimated Nevada’s Indian gaming-related job losses at between 7,708 and 16,020.
The City Council is scheduled to receive the report at noon today. The analysis comes as Reno
embarks on an ambitious campaign to promote the region’s skiing and other recreational
attractions, renovate its downtown core along the Truckee River and bolster the city’s convention
facilities. Susan Voyles, 4-3-01
Strictly Slots
Barona Casino Receives First Konami Slot Machines. San Diego’s Barona Casino became
the first casino in the United States to receive slot machines manufactured by Konami Gaming, a
Las Vegas-based subsidiary of Japanese video gaming giant Konami Co. Ltd., creators of the
popular arcade amusements “Fisherman’s Bait” and “Dark Silhouette” as well as several
Playstation/PC games. Although the company has no current Nevada casino locations, they were
approved this year by the Nevada Gaming Commission for a manufacturing, distribution and slot
route operators’ license. Vol. 3, No. 4, March 2001, p.12
The Sands: “A Work in Progress.” New owner Carl Icahn is busily fixing up the property
after years of neglect. Construction is in full swing and visitors report changes, including newly
remodeled rooms, on an almost daily basis. Icahn’s philosophy is to give a better deal to the
players. The Sands has been the highest-paying casino fro quarter players in Atlantic city for two
months in a row now. If the changes we’ve seen so far are just a taste of what is to come, the
Sands will be worth the short walk from the Boardwalk to visit. …In the years B. C. (before
Carl, that is), the Sands had nothing but tired, old machines. Most of those games are gone now,
replaced with today’s hottest slots, including a wide selection of video slots on the upper level.
Select machines have signs indicating that they pay back 97.5% or more/. The Sands also has its
won exclusive progressive slot, Play The Market, which is a lot fun, especially since it’s one of
the machines that pays back at least 97.5%. John Robinson, Vol. 3, No. 4, March 2001, p. 16
The Trends Journal
Economic Alert. The volatile economic conditions demand close attend and creative scrutiny.
The “how and whys” behind the crash of the Nasdaq and destabilized financial markets were
visible to those who penetrated the double talk and misinformation that passed as financial
wisdom. Now, the financial wizards who promised perpetual growth are peddling simplistic
remedies to restore economic health. But the problems will continue, since the classic tools for
economic adjustment don’t address the full range of economic disorder. In this issue we point out
how unrealistic it is to expect a Hollywood ending, in which the economy lives happily ever after.
Our take on the future is more sobering. We advise investors to maintain a state
of high alert and realistic expectations, and for businesses to develop
strategies in anticipation of sharp competition and soft margins. Vol. X, No. 2,
Spring Issue 2001
Bits and Bits from Indian Country
Boise – North Idaho’s Indian tribes would get the legal
certainty they’ve long sought for their reservation gaming operations under a proposed new
Tribes, Governor Agree on Compact.
16
agreement with the state outlined Friday by Gov. Dirk Kempthorne. At the same time, the state
would get strict limits on the number and type of gambling machines tribes could operate, 5
percent of profits for a state-tribal foundation, the ability to take disputes to court, a ban on
gaming expansion off reservations and other restrictions. Betsy Z. Russell, The Spokesman-Review.com, 3-3-01
High Court Says Tribes Must Give Farmers Records: Document Dispute over Irrigation
Plan Originated in 1996. Washington – A unanimous U. S. Supreme Court on Monday handed
Sacramento attorneys and Northern California farmers a victory in a long-running freedom of
information case. The court’s 9-0 ruling grants framers around Tule Lake, near the Oregon
border, a peek at previously confidential tribal documents. More broadly, the ruling could boost
other people’s efforts to obtain tribal information now held by the federal government. Michael Doyle,
Bee Washington Bureau, Sacramento Bee, 3-6-01
Indian Gaming Pioneer Dies at 76. John Philip Nichols, the man credited with bringing
prosperity and infamy to the Cabazon Band of Mission Indians, died Saturday at John F. Kennedy
Hospital in Indio. …Nichols guided the tribe as it made history by opening of the country’s first
American Indian casinos in 1980. Benjamin Spillman, The Desert Sun, 3-20-01
Senate Rejects Gaming Deal. Compacts would have averted fight with tribes in federal court.
Boise – Senators handed a stunning defeat to Gov. Dirk Kempthorne and North Idaho Indian
tribes on Monday, killing legislation for new gaming compacts that the governor billed as the best
hope for containing gambling on Indian reservations. “Now they have no limits, and no
conditions,” a disheartened Kempthorne said after the state Senate vote. Betsy Z. Russell, The SpokesmanReviw.com, 3-27-01
The Adams Report is an executive summary for busy casino industry executives and
observers. Each month, I review the current gaming literature. Articles selected are of
special importance or interest. My focus is on identifying significant trends. I do not
report the news; there are many excellent
news sources available.
The Adams Report is designed to serve a broad general interest. If
your focus is more specific, research or customized reports can be
created on a project specific basis.
Ken Adams
210 Marsh Avenue, Suite 103
Reno, NV 89509
(775) 322-7722 Fax (775) 322-7806
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