ADAMS REPORT
A Review of Current Gaming Literature
Volume VI, Issue 11
December 2002
Quick-takes: The month’s trends in a glance.
There was a time when one could expect double digit revenue growth from most if not all gaming
jurisdictions. Today’s trend is toward growth less than 5%. Atlantic City, Colorado, Detroit,
Mississippi and Las Vegas numbers have not been impressive, not the kind of growth investors
had become accustomed to in the past with gaming. Detroit was down 1%, Casino Windsor
across the boarder was down 10%, Atlantic City, Colorado and Mississippi grew by less than 5%
and Nevada grew 6%, and that is in comparison to the disaster of 2001 and the totals are still not
up to 2000 totals. There is no apparent reason to predict much change in that pattern; growth will
take place, but it will be in the expanding or emerging markets. Except for the slot
manufacturers, not many of the established gaming companies will benefit from the expansion.
The growth on the horizon, all of it, will be fueled by the November elections. In at least 12
states, gaming was either part of the political dialogue, on the ballot, or part of the post election
budget discussions. The majority of the expansion that will result from the election of 2002 will
entail slot machines, and most of that will include Indian gaming.
Maine, Rhode Island, Massachusetts, Maryland, Arizona, Idaho, California and Kansas are all
enabling tribes to develop or expand their operations, or the state is, in some way, investigating
allowing Indian gaming. Ohio, Florida, Alabama, Nebraska, Pennsylvania and Kentucky are
looking at ways to expand or initiate some form of gaming, generally slots with racetracks or
lotteries. Who will be the major beneficiary of this expansion? The common wisdom and the
election rhetoric say that taxpayers and state budgets will reap the rewards. Michael Pollock of
the Gaming Observer has another take: “No matter what happens anywhere – in gaming, in
politics or in whatever – somehow, someway, it will benefit International Game Technology.”
Legalized Gaming Wins Big At Polls. Legalized gambling won big at the polls Tuesday. Voters
chose to expand, retain or establish various forms of gambling in the five states with binding
measures and candidates favoring slot machines at racetracks won gubernatorial races in Maryland
and Pennsylvania. In non-binding local votes, citizens defeated casino referendums in three states
and approved a casino referendum in another state. …In Tennessee, one of only three states
without any form of legalized gambling, citizens voted 53 percent to 47 percent to allow a state
lottery. …In Arizona, voters were narrowly approving the measure that would expand Indian
casino gambling the most, allowing each tribe as much as four casinos, 1,400 slot machines and
100 gaming tables. …In Idaho, voters were approving a measure to legalize the slot machines
already in use at the state's five Indian casinos. In non-binding referendums, voters in ...Holyoke,
Mass., voted 59 percent to 41 percent to support development of a casino in the city; Cabell
County, W.Va., voted 62 percent to 38 percent against development of a casino hotel in downtown
Huntington; Wausau, Wis., voted 65 percent to 35 percent against a casino in the city; all nine
Maine towns with casino referendums voted against the idea of building casinos in their
communities. Joe Weinert, The Press of Atlantic City, 11-6-02
Another Spin At Gambling. Get ready for folks in Frankfort to take another spin at bringing some
kind of casino-style gambling to Kentucky. Kentucky Post, 11-13-02
Gambling Panel Meets For The First Time. Boston - A commission charged with studying the
impact of expanding gambling in Massachusetts met for the first time yesterday, just six weeks
before it must report its findings to the Legislature. Michael Kunzelman, Daily News Tribune, 11-14-02
As Costs Rise, Bush Open To Gambling. Gov. Jeb Bush adamantly opposed any expansion of
gambling during his first term. …it may be the least of three evils. "I am opposed to the expansion
of gambling, but I'm also opposed to raising taxes. And I'm opposed to cutting important socialservice programs," Bush said. David Royse, Associated Press, The Ledger, 11-14-02
Senate To Consider Slots For Racetracks. Faced with budget woes, leaders of the Florida state
Senate will consider expanded gambling at racetracks in order to boost tax dollars. Senate
President Jim King, R-Jacksonville, said the upper chamber will examine a bill that would allow
video lottery games, similar to slot machines, at Gulfstream Park, Calder Race Course, and Tampa
Bay Downs as well as greyhound and standardbred tracks and jai alai frontons. Thoroughbred Times,
11-20-02
Application For New Philadelphia Track Filed By Horsemen. A group of Pennsylvania owners
has filed an application with the Pennsylvania State Horse Racing Commission and hopes to build
a new racetrack in Philadelphia. Thoroughbred Times, 11-19-02
Bill For 14,000 Racetrack Slot Machines. A bill introducing up to 14,000 video slot machines at
Ohio’s seven racetracks has been placed on a fast track with hopes for approval by the end of the
year. …"We’re exporting money that we could keep in Ohio," Blessing said in the Cleveland
Plain-Dealer. Thoroughbred Times, 11-21-02
Casino King Makes Pitch For Slots. Las Vegas casino king Steve Wynn recently journeyed to
Annapolis to meet with top legislative leaders and express his interest in expanding his gambling
empire to Maryland. Matthew Mosk and Craig Whitlock, Washington Post, 11-27-02
Government regulation is the constant companion of casino gaming. In every jurisdiction, the
exact nature of regulation differs. Long ago, in 1980, for example, there were two simple models,
the Nevada and New Jersey models. Nevada was noted for the minimum standard approach and
New Jersey for the exact standards model. In 2002, there are dozens of variations on those
themes. There is a natural trend that leads to one common approach to all gaming regulation: As
the industry matures and competition develops, the gaming industry and the gaming regulators
develop a symbiotic relationship. This is not to say that regulators lose their integrity, rather that
each exists because of the other and the ability to compete against other jurisdictions is in the
interest of both parties. As competition develops on all sides of New Jersey, there is a changing
of attitude by regulators, articulated this month, as there was a changing of the guard.
New CCC Chair Vows To Lead With Integrity. The new Casino Control Commission chair
promised Wednesday to champion causes for the $4.6 billion gaming industry, but not at the
expense of weakening the state's regulatory structure. "I look forward to a productive relationship
with each and every one of you," Kassekert told casino executives who watched Gov. James E.
McGreevey administer her oath of office. Kassekert said the commission stands ready to help
casinos respond to likely competition in nearby states. "The commission will do everything it
can to ensure that this casino industry can grow and prosper," she said. "This commission
also will not waiver from ensuring honest, good character and integrity in the industry." Joe
Weinert, Press of Atlantic City, 11-21-02
Australia is an interesting case study for the American gaming industry. There are two very
separate types of venues in Australia, the private clubs and casinos. Casinos in Australia are like
casinos in the United States, but the clubs are unlike anything in the U. S. The clubs feature
mostly slots, with the revenue from the machines going back into the club for improvements and
member benefits. By the very nature of the club, the players are regular, very regular. That
environment has proven to be a successful laboratory environment for new slots. Aristocrat
discovered years ago that any slot that was successful in the Australian clubs would be successful
in the United States. That is how the multi-line, multi-coin video slots came to be. The multiline, multi-coin video slot grew to maturity in the marsupial pouch of the Australian club.
Australia, and to some extent New Zealand, is incubating some new ideas that just may sneak
across the seas like an airborne virus. The government has promulgated a series of regulations
intended to reduce the impact of gaming on compulsive gamblers. The regulations govern
smoking, length of play, speed of play and other limiting restrictions.
In the United States, Montana has “no smoking” regulations in its casino-bars. It is a trend that
bears watching, even if at the moment it is happening thousands of miles and a hemisphere away.
More Bans For Pokies. Pokies advertising would be banned under new gaming regulations
announced yesterday. A re-elected Bracks Government would prohibit venues from spruiking
(Ken, help on the previous) pokies through the media and would outlaw unsolicited mail-outs.
The bans would affect Crown casino and the state's 534 pokies parlors. …The bans are part of a
series of proposed gaming reforms unveiled by Labor yesterday, including an extension on the
number of regions with poker machines caps. Mr. Pandazopoulos also promised a school
intervention program designed to educate children about the risks of gambling. Michael Warner, The
Herald Sun, 11-21-02
Gambling Code Aimed At Curbing 'Excessive' Gambling. Gambling facilities will be required to
install clocks and skylights under a new mandatory code of practice which comes into force in the
ACT next month. The new regulations are aimed at reducing the social and financial impact
associated with excessive gambling. Racing and Gaming Commission spokesman Tony Curtis
says the new code will require gambling venues to cut back on marketing schemes that offer
customers cash and other incentives. ABC.Net, Australia News, 11-27-02
But in case you think the Australians have become anti-gaming prudes, read the following.
Maybe this trend will come to the U. S. instead.
New Pokie Thrill. Patrons at a Melbourne brothel could soon be on a roll in more ways than one.
Pickwood Lodge, in Brunswick, wants to install poker machines to keep nervous customers
occupied while waiting to hit the real jackpot. …"Top-end brothels like ours are becoming
entertainment centers rather than just providing a specific service," he said. Brothels are
unable to obtain a gaming or alcohol license by law, but Mr. Hewinson is confident of winning
approval from the Victorian Casino and Gaming Authority. Michael Warmer, The Australian, 11-13-02
The Isle of Capri has not been a trendsetter in the sense that Harrah’s, Park Place or MGM has
been, but they have proven to be excellent operators. Using a simple, but effective casino design,
Isle has concentrated on the slot floor and slot club. In November, Isle signed an agreement with
Gamecraft to develop proprietary slot machines. If Isle pursues unique games the way it has
pursued database marketing, Isle may well become as much a trendsetter as the big guys.
Isle Of Capri Casinos, Inc. Announces Strategic Development Agreement With Gamecraft Inc.
Isle of Capri Casinos, Inc. officials announced today that the company has signed an agreement
with Gamecraft, Inc. …This unique agreement will allow for Isle of Capri Casinos to spearhead
the game development process from inception to installation. Gamecraft's GC2000 gaming
platform, the industry's first interactive slot machine fully based on a Microsoft® Windows® and
Intel® hardware architecture, will enable the company to easily develop customized games. Any
game jointly created under this agreement is exclusive to Isle in the markets in which the company
operates. PRNewswire-FirstCall, Yahoo Business, 11-7-02
The New York horserace betting scam has become more interesting. The ringleader, one Chris
Harn, pleaded guilty and apparently told the investigators about more that just one incident. Now
the investigation covers a twelve-month period, not good news for the racing industry. But help
is on the way, Rudolph Giuliani, New York’s former mayor, the country’s leader during the
September 11th crisis and the next savior for WorldCom, has been called in to protect the
innocence. Seems like WorldCom alone would be enough to keep him busy, but maybe checking
all of the wagers at racetracks around the country for a year is really a simple and easy task, at
least for super Rudi.
Accused Trio Allegedly Cashed Fraudulent Bets For 12 Months. The Breeders’ Cup Ultra Pick
Six scandal widened considerably on Wednesday when former Autotote Corp. programmer Chris
Harn pleaded guilty to wire fraud conspiracy and money laundering conspiracy. Documents filed
in United States District Court, Southern District of New York, reveal allegations that Harn and his
co-defendants and college fraternity brothers, Derrick Davis and Glen DaSilva, have been
producing fraudulent winning tickets for races run at New York, New Jersey, and Pennsylvania
racetracks for the last 12 months. Thoroughbred Times, 11-21-02
NTRA Hires Giuliani Partners LLC to Lead Review Process. The National Thoroughbred Racing
Association and a new coalition organized by the NTRA, the Wagering Integrity Alliance,
announced today that they have retained Giuliani Partners LLC to manage and oversee the
horseracing industry's review of its electronic wagering systems. Additionally, the NTRA
announced that it is launching a "systematic examination" of certain wagers over the past year
with the goal of identifying whether there are areas requiring additional security measures.
…Mayor Giuliani said, "Thousands of fans wager everyday on horseracing across the country and
should be confident with the knowledge that their wagers are being handled in a secure fashion in
an honest system... I look forward to working with the leaders of the racing industry to develop
new safeguards for one of America's most popular sports." Business Wire, Yahoo Business, 11-20-02
Internet gaming may become legal in the United States. Internet gaming may be banned in the
United States. From week to week, either proposition seems equally likely. Every month there
are new announcements. The feds think Internet gaming within Nevada may be illegal, Senator
Reid wants to ban Internet gaming outright, while another Senator wants to regulate it. In the
book on my block, it is still a ‘pick’em.’ Whatever the odds, the reality is that daily it becomes
more complicated to finance an Internet wager.
Akamai Drops Ads For Online Gambling. Akamai Technologies Inc. is calling a halt to carrying
Internet gambling advertising. ``We had three legacy clients that, as a part of their business, ran
online gaming sites,'' Jeff Young, an Akamai spokesman, confirmed. ``We've taken steps to
terminate these relationships.'' Akamai, a Cambridge Web content delivery contractor, has trimmed
its sales efforts to focus on three big markets and gaming is not among them, Young said.
…Yahoo Inc. stopped carrying Internet casino ads on its Web sites last month. In addition, eBay
Inc. stopped PayPal Inc.'s financial-transaction service to let gamblers pay bets online. Donna
Goodison, Business Today, 11-27-02
And here is what may also be a really significant Internet trend, suits against message board
participants. Message boards are an interesting phenomenon. Every public company has a group
of regular stockholders that seem to have inside information, an understanding of the company’s
operations and management and plenty of time to talk about it. They debate the company’s
future, the competence of management and exchange some very interesting gossip. It is not
unknown for the message board debate to bring about a change in management, affect the stock
prices and finally generate a lawsuit. If you haven’t already plugged into the world of message
boards, I recommend it, at the very least, as a form of light entertainment, and as its best as an
excellent source for due diligence investigations on a public company.
Casino operator sues to stop Yahoo! Subscriber. Harrah's Entertainment Inc. of Las Vegas sued to
stop a Yahoo! subscriber from making defamatory statements about the casino giant, allegedly to
manipulate its stock price. The subscriber, whom Harrah's did not name in its Clark County
District Court lawsuit, is said to regularly contribute to Harrah's message board on the Yahoo!
Finance webpage under the name "hanslee99." The subscriber allegedly published false and
defamatory information on Harrah's message board including messages accusing Harrah's of
"financial impropriety, intentionally misstating its revenues and engaging in fraud." Las Vegas Sun,
11-27-02
Bit and Pieces from Indian Country
The long, complicated and contentious debate over the management of Indian trust funds has a
new causality, the Director of the Bureau of Indian Affairs. Both he and the Secretary of Interior
have been found guilty of contempt. McCaleb thinks there is just too much pressure and the job
has become too personal. He wants to go home and rest. The news has been met by mixed
reviews. In the recognition process he has been seen as a friend of the tribes, regardless of the
judge’s view of his willingness to cooperate in the trust case.
Indian Affairs Director Resigns Amid Trust. Bureau of Indian Affairs director Neal A. McCaleb,
who faces contempt-of-court sanctions along with Interior Secretary Gale Norton, resigned
Thursday, saying he was wary of the "contentious and litigious environment" ahead of him. …As
assistant interior secretary for Indian affairs, McCaleb had a key role in defending the Bush
administration against a massive lawsuit over the Indian bureau's handling of more than 350,000
Indian trust accounts. … in September U.S. District Judge Royce C. Lamberth found Norton and
McCaleb guilty of four counts of civil contempt, ruling they committed "a fraud on the court" by
withholding evidence in the case. … Dennis Gingold, the Indians' lawyer in the case, said
McCaleb still must answer for his actions. "He can run, but he can't hide," Gingold said. "We are
going to pursue him, whatever it takes." Bill McAllister, Denver Post Washington Bureau, 11-22-02
Connecticut had revenue growth, but like the rest of country nothing like the double-digit growth
of the past. Foxwoods grew at an anemic 2.5%. California, on the other hand, is still in the
expansion mode and growing rapidly, if the fees paid to the state are any indication.
Slots Revenue Rises 5.4 %. Money continued to pour into slot machines at the state's
(Connecticut) two Indian casinos in October, rising 5.4 percent from the same period a year ago.
The total "win" from slot machines at Mohegan Sun and Foxwoods Resort Casino for October was
$124.8 million. ….Mohegan Sun's win was up 6.7 percent from a year ago; Foxwoods' was up 2.5
percent. ...Since Foxwoods opened in 1992 and Mohegan Sun followed in 1996, the slots have
contributed about $2.3 billion to the state treasury. Rick Green, Hartford Courant, 11-18-02
Gaming Taxes Are Beating Projections. The first round of Indian gambling taxes paid to the state
has come in substantially higher than expected, setting a pace that should generate nearly $100
million during the first year. … Under California's Indian gambling agreements, or compacts,
tribes finance two funds. One is a revenue-sharing account that provides a large new source of
income for poorer, mostly non-gaming tribes. The other was set up largely to offset impacts of the
rapidly expanding $5 billion industry. Known as the Special Distribution Fund, the latter collects
from 7 percent to 13 percent of the net win from slot machines that 28 tribes already were
operating when the first compacts were signed three years ago. James P. Sweeney, Copley News Service,
San Diego Union Tribune, 11-15-02
In November a couple of tribes decided to force the envelope and put in a casino regardless of the
opposition and without all of the normal approvals.
Tecumseh, Tribe To Discuss Casino Project. The city council may have to decide whether to sell
electricity to a casino if its construction cannot be prevented. …He said the casino will be inside a
modular building, to accommodate about 120 chance machines, four blackjack tables and a snack
bar and require 54 full- time workers. Burke said the casino will be built regardless of protests.
Ann Kelley, The Oklahoman, 11-12-02
Webbers Falls Casino Boat Planned. Webbers Falls - A leader of the Southern Cherokee Nation said
his tribe is putting a casino boat on the Arkansas River at Webbers Falls, and there's nothing
anyone can do about it. The Southern Cherokee Nation is not recognized by the federal
government, so any gambling enterprise would raise questions of legality. "That's neither here nor
there," Vice Principal Chief Dave Quentin said of the tribe's lack of recognition from the federal
government. "We're going to do what we want, regardless of what the government wants."
Principal Chief Gary Ridge could not be reached for comment. A woman in his office at Webbers
Falls said he and others were working at the river site, had lights turned on and "were going 90 to
nothing" into the night. Mac Bentley, The Oklahoman, 11-13-02
In contrast with the tribes forcing the envelope, there are cities and tribes that are pushing the
envelope together. In California and in Kansas, cities and tribes are working together to solve a
two-sided problem: the tribes need a ‘good’ location, i. e. in a metropolitan area, to maximize
their opportunity; the cities need development, employment and tax revenues. It sounds like a
marriage made in heaven, if neighboring tribes, state governments and the federal government
can be convinced to go along with the plan. Expect opposition from competing tribes, state
governments, and the gaming industry lobby.
Casino Deal Gets City OK. Calling it "the best deal we could get," West Sacramento Mayor Bill
Kristoff signed an agreement Friday that will guarantee the city millions of dollars a year if a Lake
County Indian tribe opens a casino complex within city limits. "There is really a lot in here for the
city," he said. "What the city is really doing here is protecting itself, and its interests." Steve
Wiegand, Sacramento Bee, 11-11-02
LV Company Completes Proposal For Tribal Casino. Las Vegas-based Kean Cos. recently
completed a proposal for a band of Pomo Indians to develop a Las Vegas-style casino and hotel in
Richmond (California). The city of Richmond is considering a pitch from the Pomo Indians to
buy shipping port Terminal 3 to make way for the development, with the promise of millions of
dollars and thousands of jobs for the local economy. A hastily appointed City Council committee
heard Kean's bid Tuesday following a closed session. Gaming Wire, Las Vegas Review-Journal, 11-8-02
City Ready To Make Deal With Tribe For Casino. The unified government of Kansas City, Kan.,
this week authorized city staffers to work out an agreement with the Wyandotte Nation tribe, in
which the tribe would drop a longstanding lawsuit over a large chunk of land in the city in
exchange for the right to build a casino, KMBC's Bob Werly reported. The arrangement would,
for the first time, bring gambling to the Kansas side of the metropolitan area.
TheKansasCityChannel.com, 11-8-02
In keeping with the trend of not settling for what you are dealt and looking for a better
opportunity, tribes and investors are eager to get a piece of New York’s coming gaming pie.
Wisconsin Indian Tribe Buys Farmland. A Wisconsin Indian tribe has acquired 125 acres of
upstate New York farmland, taking another significant step in re-establishing its presence in
New York after an absence of nearly 170 years. "We have long sought to re-establish our
presence in New York State, our ancestral homeland," Robert Chicks, president of the
Stockbridge-Munsee Band of Mohican Indians, said Wednesday. …Trading Cove, which helped
the Mohegan Tribe develop the Mohegan Sun casino in Connecticut, signed an agreement
with the Stockbridge-Munsee 19 months ago to develop a major casino in New York.
Associated Press, Buffalo News, 11-14-02
Oklahoma Indians Buying Land in NY. The Oklahoma-based Seneca-Cayuga Indians, a group
interested in developing casinos in New York, are acquiring 240 acres near the Finger Lakes,
according to a published report. Associated Press, Las Vegas Sun, 11-21-02
Billionaire Loans Senecas Money For Casino. A Malaysian billionaire is loaning the Seneca
Nation of Indians $80 million to build their casino, a newspaper reported Tuesday. … The fiveyear, adjustable-rate loan is so risky that it carries a 29 percent interest rate, the paper reported.
High-stakes deals are not new to Lim. His father created an exotic mountaintop casino resort in
Malaysia, and his family financed the Foxwoods Indian casino in Connecticut. Associated Press,
Boston Daily News, 11-12-02
As tribes become more successful, more aggressive and more visible, opposition to tribal gaming
also becomes more pronounced. The nature of the opposition varies from location to location. In
Connecticut, the opposition is political and wants to limit the number of tribal casinos and the
number of recognized tribes in the state; legislation has been introduced on two fronts. In
California, the opposition is opposed to tribes moving into more urban areas. In Arizona, the
opposition is arguing for a more level playing field; they want the right to operate slot machines
and limit the number the tribes can operate. Montana tried to avoid negotiating with a tribe but
submitted to an arbitration process and lost, and in New York, a county is trying to stop one of
tribes buying into New York for the purpose of operating a casino.
County And State Seek Roles In Indian Casino Case. The state and Yolo County asked a federal
court Tuesday to let them take active roles in the legal fight over a proposed Indian casino in West
Sacramento. In petitions to the court, Yolo supervisors and the attorney general's office, on behalf
of Gov. Gray Davis, said they want to be recognized as interveners opposed to plans by a Lake
County tribe to build a $200 million casino and hotel complex near Interstate 80. …The West
Sacramento City Council approved a settlement deal with the tribe two weeks ago that provides
for the city to receive millions of dollars annually from the casino, if it is approved, in return for
the city dropping its opposition. But the Yolo County Board of Supervisors voted unanimously
Tuesday to oppose the plan, arguing the tribe has no geographical or historical ties to the area. The
Washington Unified School District joined the board's action. Steve Wiegand, Sacramento Bee, 11-27-02
High Court Denies Racetracks' Attempt. The Arizona Supreme Court denied an injunction request
Tuesday by dog and horse race track owners, opening the way for Gov. Jane Hull to immediately
sign casino agreements with American Indian tribes. It was the third time in three business days
that the tracks petitioned a state court for a stay preventing the implementation of Proposition 202,
a measure to expand gambling on tribal lands approved by voters Nov. 5. Beth DeFalco, Associated
Press, Arizona Republic, 11-27-02
Mediator Sides With Arapaho On Gambling. A federal mediator on Tuesday ordered Wyoming to
allow slot machines and other high-stakes casino gambling on the Wind River Indian Reservation.
The decision, handed down by retired federal judge James Carrigan in Denver, at least temporarily
clears the way for the reservation to begin building a new casino. Northern Arapaho Tribe officials
called it a "major setback" for Gov. Jim Geringer, who has opposed high-stakes gambling in
Wyoming. Associated Press, Billings Gazette, 11-15-02
Cayuga County Moves To Block Casino. Cayuga County will try to legally block the CayugaSenecas from opening a casino or other tax-exempt businesses on land the Oklahoma tribe is
buying in Aurelius and Montezuma, County Attorney Thomas Stopyra said Tuesday. Scott Rapp, The
Syracuse Post Standard, 11-27-02
And again in Connecticut, the new chairman of the Pequots is going to fight the anti-casino
movement with a new attitude and higher visibility.
New Tribal Leadership, New Agenda. Pequots Organizing To Counter Anti-Casino Sentiment.
Michael J. Thomas stepped out as the next chairman of the Mashantucket Pequots Monday,
offering a vision of a friendlier tribe that will aggressively develop new hotels and casinos as well
as homes for Indians returning to the reservation. The 600-member tribe, a dominant force in
southeastern Connecticut, also will take a more active role in state politics through an "Indian
caucus" it is organizing to counter a growing anti-casino movement. Rick Green, Hartford Courant, 11-502
And finally, one last way for Indians to have a casino in a city: Buy it.
Indigenous Global to Take Over Ownership of Sundowner Casino in Reno. Indigenous Global
Development Corporation (IGDC), formerly Focal Corporation announced today that it has
entered into a letter of intent to take over ownership of the Sundowner Hotel Casino in downtown
Reno. …IGDC is planning to spend over $10 million revitalizing the Sundowner to reflect its new
ownership as well as pump new life into the downtown area of Reno. This will also signify the
first time a Native American owned and controlled entity will own a casino/off reservation
within Nevada. Business Wire, Yahoo Business, 11-5-02
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.
Casino Crime
Louisiana Governor Reports to Prison After Failed Delay Attempt. After Supreme Court Justice
Antonin Scalia refused to delay the dates that former Louisiana Gov. Edwin Edwards was to
report to prison, Edwards, 75, surrendered himself at the gates of a federal prison in Fort Worth,
Texas on Oct. 21. Edwards was convicted more than two years ago on racketeering, extortion
and fraud charges stemming from the lcasing of riverboat casinos during and after his last term in
office, which ran from 1992 to 1996. He was sentenced to 10 years. Vol. 8, No. 11, November 2002
Man Charged in Casino Scandal Gets House Arrest. Dimitrios Pilarinos, a casino owner
convicted of trying to corrupt former British Columbia Premier Glen Clark, was sentenced to two
years minus a day under house arrest and ordered to perform 240 hours of community service.
…Prosecutors alleged that Clark helped Pilarinos and his business partner obtain a conditional
casino license in exchange for renovations to his home and family cottage, but Clark was
acquitted of breach of trust and accepting a benefit charge after a 10-month trial. Pilarinos was
convicted of offering a benefit, fraud and influence peddling. Vol. 8, No. 11, December 2002
Casino Player
Put Your Money Where Your Mouse Is. Here in Las Vegas, the month of November comes with a
different set of challenges than elsewhere throughout the United States. While Americans from
Maine to California finish their Halloween candy and toss out rotted pumpkins, pull sweaters
from storage, begin their holiday shopping and plan for the inevitable food-and-family frenzy of
Thanksgiving, those of us in Las Vegas greet November with a certain sense of anxiety and
resignation. Not that we aren’t doing the same things as the rest of our domestic cousins… but
here in Las Vegas, November brings with it a larger event. It is an event that makes us shudder
with apprehension, whether we work in the casinos or simply have to drive across the Strip to get
to work. It can be wrapped up in one simple acronym: COMDEX. Just speaking the word sends
a shudder through the spine of any resident. Perhaps you’ve never been to Las Vegas in
November or have never heard of COMDEX. So let me tell you about it. COMDEX is the
largest convention of the year. It might be the largest convention in the world. I have yet to
witness a larger one. Most casino executives refer to it as a giant elephant that sits on the Strip
for a week. …Every hotel room is filled, from on end of the Vegas Valley to the other. Every
restaurant, from Binion’s to Bellagio, is packed solid. The streets are doubly congested with
taxis, limos and rental cars. …Now, most folks would think this is a good thing – and the
infusion of cash into Las Vegas is certainly welcomed by anyone concerned with the fortunes of
this city. The hotels raise their rates, book additional entertainment, and sell out their restaurants,
night after night. That’s great. But there’s a deeper problem here: COMDEX attendees don’t
gamble. A couple of twenties in a slot machine, maybe, but not gambling on the level of most
Vegas visitors. And therein lies the problem: Loyal, regular customers of Las Vegas’ casinos are
literally shut out for the week. Adam Fine, Vol. 15, No. 3, November 2002
Detroit Free Press
Engler Names Director For Gaming Control. Gov. John Engler appointed a new executive
director Tuesday for the Michigan Gaming Control Board, the agency that regulates Detroit's
three casinos. Nelson Westrin, who had headed the agency since it was formed in 1996, resigned
Tuesday to take a post on the National Indian Gaming Commission in Washington, D.C. Westrin,
56, will be replaced by Dan Gustafson, who has been chairman of the state Liquor Control
Commission since December 2000. Before that, Gustafson was chief of staff to Lt. Gov. Dick
Posthumus and once was state representative from Haslett. Tina Lam, 11-13-02
Detroit News
Casinos Have Rare Drop In Revenues. Combined monthly revenues for Detroit's three casinos
fell 1 percent in October compared with the same month last year -- the first time the local casino
industry has experienced a drop in monthly business. The three gambling houses still raised a
combined $92.2 million in October and operators say it's too early to say that business is leveling
off. … Here are each casino property's October results: MGM Grand Detroit Casino, October's
market share leader, saw revenues dip 2 percent to $32.4 million; Greektown was the only casino
to see business levels rise, by 2 percent to $27.9 million. Through September, however, its
monthly growth rates had ranged from 5 percent to 43 percent… MotorCity's revenues slid 2
percent to $31.8 million. It was its first monthly revenue drop ever. Historically, it has posted
monthly growth rates ranging from 6 percent to 20 percent. Becky Yerak, The Detroit News, 11-15-02
Casino Windsor Revenue Drops 10%. A year after the Sept. 11 terrorist attacks raised border
tensions, revenue at Casino Windsor is down 10 percent from the same period last year. Although
more recent monthly figures are a vast improvement from the months following the attacks, they
remain shy of the levels needed to stay atop the Metro Detroit gambling market. Casino Windsor
last summer had re-emerged, albeit by a hair, as the busiest of the region's four betting halls but
its reign was short-lived as $97.3 million in sales for the quarter ended Sept. 30 placed it second
in the market. Becky Yerak, 11-21-02
Greektown Bans 30 Winners. Skilled video poker players proved unprofitable for casino.
Greektown Casino's slogan is "Let the Party Begin at Greektown." But for some Greektown
gamblers, the party's over. In recent weeks, Greektown has ejected about 30 video poker players
because their winnings, along with mounting cash-back incentives and freebies, made them
unprofitable customers for the market's lowest-grossing gambling house. A few regulars caught
in the dragnet are ticked off, embarrassed about having been escorted out by a coterie of redjacketed Greektown security guards and told to stay away lest they be deemed trespassers -- even
two blocks away in the Greektown parking garage. …But Dancer, the author, said just because a
gambler is behind doesn't mean he or she is immune. "Some casinos back off due to recent wins,
and some back off due to perceiving you as a potential threat," he said. …"Blackjack is less
popular today than it was 15 years ago because players do get barred," Dancer said. "It takes a
long time to become a good blackjack player. For a long time, wannabe card counters are hugely
profitable for casinos." But as casinos began cracking down on card counters, players figured it
wasn't worth going through an expensive learning curve. Similarly, "wannabe good video poker
players are profitable to casinos. They're losing several thousand a year while practicing," Dancer
said. "If a large number start getting barred, these players will decide video poker is not such a
great deal." Becky Yerak, 11-25-02
Gaming Industry Weekly Report
We Want To Stress That, Unlike Others, We Do Not See Any Near Term Losers In The Election
Results. Investors may have been a bit surprised that there really was no reaction from gaming
stocks after such pro-gaming Election Day results, but it did not surprise us. First of all, the
primary beneficiaries of Tuesday's results had already risen dramatically going into Election Day.
The suppliers and Penn National Gaming are the biggest beneficiaries, and the fact that they did
not succumb to profit taking on Wednesday impressed us more than anything else. Also
benefiting is Magna Entertainment, as it looks like they finally made a few acquisitions that may
make them some money. We are talking about their tracks in Pennsylvania and Maryland. Also
benefiting is MTR Gaming as they should have no problem finding the funds to build their new
racetrack in Pennsylvania and, quite frankly, this has stepped them right up as a takeover target.
Lottery companies like Scientific Games, GTECH and IGT should also benefit from new lottery
states in the future. 11-8-02
The Election Day honeymoon between investors and certain gaming stocks ended as suppliers
and some beneficiaries of Election Day results were hit with profit taking. This should not have
been surprising at all as most of these stocks set new all-time highs in the weeks leading up to
Election Day, acting as if slots at tracks would appear in states such as Pennsylvania and
Maryland the day after so-called pro-gaming Governors were elected. … Also of note was the
profit taking in suppliers despite some new evidence that the expansion of gaming could be more
widespread than anyone thought. This past week, Ohio, Massachusetts and even Florida saw their
odds of expanded gaming increase. 11-18-02
Mikohn Gaming Corp. (MIKN) disclosed that three insiders defaulted on loans totaling $450,000.
The loans matured October 30th and were given to the insiders so they could purchase stock in
October of 1997. MIKN said that a third loan was paid in full at maturity. MIKN said that the
loans were secured by a pledge of the purchased shares.
MIKN also said that they are currently negotiating with Foothill Capital Corp. to cure a covenant
breach under their $17.5 million working capital revolving line of credit. MIKN said that as of
9/30, they were in violation of a covenant to maintain EBITDA of about $15 million for the prior
12 months. MIKN is currently negotiating with Foothill to amend the terms of the facility so that
certain noncash expenses recorded in the nine months ended 9/30 would be excluded from the
calculations of EBITDA. MIKN said they had not drawn on the facility as of 9/30. 11-22-02
Mexico Is Supposed To Vote. As we have been telling you, while investors have been focusing
lately on the tough comparisons for riverboat casinos for the next few months and the effects of a
drop in consumer confidence, we believe next year’s winners and losers in gaming stocks will be
determined more by the rumors and facts surrounding expanded gaming in various jurisdictions
and tax situations. …Not surprisingly, this past shortened week contained a lot of debate and
some action on expansion of gaming. This is probably what you should expect for the next few
months although we will tell you to keep December 15th circled on your calendar. On December
15th, Mexico is supposed to hold a vote to possibly legalize casinos. There have been some
reports that put the approval rate as high as 90% yet nobody will place a bet that it is going to
happen this time. As we told you months ago, we believe that this has the greatest chance of
passage than all those other years before. … While we never endorse buying stocks at their
highs, we do suggest you take the chance and go into December 15th owning some IGT, Alliance
Gaming, Shuffle Master, WMS, Ten Stix, Cash Systems, Mikohn Gaming or any combination of
these supplier stocks. You see, if Mexico does legalize casinos, it will kick off what we expect to
be a gaming stock bull market, led mostly by suppliers, that could make 1992 look modest. 12-2-02
Gaming Revenue News
Nevada: Clark County gaming revenues were up 2.3% in August. Slots fell 7.6%, while games
grew 20.7%, primarily due to strong results, up 77.1%. (Ken previous percentages?) …The Strip
grew 9.0% for the month; Downtown Las Vegas was off 7.4%; Laughlin was up 1.3%; and
Boulder Strip fell 16.0%. Washoe County stemmed its decline and grew 2.2% in August, with
Reno up 2.8%, Sparks down 0.4% and North Lake Tahoe down 12.2%. South Lake Tahoe fell
5.6% in August, which compares to an 18.2% decline in August 2001 over August 2000.
Atlantic City: Atlantic City gaming revenues grew 5.3% in September, compared to a 6.5%
decline the year before.
Colorado: Colorado revenues grew 4.75% in September. Black Hawk gained 6.1%, Central City
fell 2.2% and Cripple Creek was up 2.8%.
Mississippi: Mississippi revenues gained 1.0% in September. Last year’s revenues were 8.3%
ahead of 2000’s results. For September, the Coastal region grew 2.5%, the North River area was
up 1.4% and South River fell 5.4%. Vol. 16, No.11, November 2002
Gaming Update: Colorado Division of Gaming
Sunset Review. Like many state agencies, the Division of Gaming is periodically subject to a
Sunset review to determine if the Division is essential for the protection of the public and to
evaluate the functions of regulation, licensing and oversight of the conduct of limited gaming in
Colorado. The review was conducted by analysts at the Department of Regulatory Agencies
(DORA) and was completed in early October. The report found the Division is meeting its
statutory duties and should be continued. In fact, the report recommends continuing the Division
for another 10 years, a longer period than the five-year extension granted after the last Sunset
review. Ultimately the general Assembly will consider all the recommendations in the report and
draft legislation to incorporate any changes to the statute. Tom Kitts, Vol. XI, Issue 11, November 2002
Indian Country Today
The American Indian Vote Comes Of Age. There was a lot of good news in the Nov. 5 election
results for American Indians. Indian gaming referenda were passed in Arizona and Idaho. Seven
Indians were elected to the Montana state legislature. A governor very friendly to tribal interests
was elected in New Mexico (former Congressman and Energy Secretary Bill Richardson), and it
appears another respecter of tribal sovereignty was elected governor in Arizona (former United
States Attorney Janet Napolitano). And long-time friend of the tribes Tim Johnson was re-elected
to the Senate from South Dakota. Beneath these results, though, lies the greatest news of all:
Indian votes count. And in a close election in the right state, Indian votes can be the difference
between the election of a friend and the election of an adversary. …But a remarkable thing
happened. Indian Democrats, with strong support from the state Democratic Party and the
campaign of Sen. Tim Johnson, set out to prove that the Indian vote could be decisive in South
Dakota. And did they ever! Although Indian voters have long been part of the winning coalition
of Sen. Tom Daschle and Sen. Johnson, never before have Indian voters been so visible in South
Dakota, and never before so decisive a factor in the outcome. Turnout on the reservations hit
record levels everywhere in South Dakota, and those votes clearly carried Sen. Johnson to victory
over John Thune, the man recruited by President Bush to run against Johnson. While Democrats
elsewhere were losing tight elections in states where President Bush campaigned hard for
Republicans, the record Indian vote stemmed the tide in South Dakota. … In the political system
today, tribes have two ways to make their mark. One is money, and the other is votes. Kevin Gover,
11-18-02
Indian Gaming
New Casino Management Program Underway at Haskell Indian Nations University. In the fall of
2002, Haskell Indian Nations University in Lawrence, Kansas, started a casino management class.
This single class is the beginning of a bright future for Indian leaders in the gaming industry.
With the national percentage of Indian to non-Indian employees at tribally owned casino at 75%
non-Indian to 25% Indian, Peggy Houston, human resources director for Harrah’s Prairie Band
Casino, saw the need for Native Americans to be trained as managers in the gaming industry. In
1999 she began talking to Haskell Indian Nations University about starting a casino management
curriculum. … Recognizing that gaming has become a major economic development effort for
tribal governments, Haskell Indian Nations University, in partnership with various tribal
governments and organizations, will establish a tribal tourism and hotel management program.
The primary goal of the tribal tourism and hotel management program will be to develop a
program that addresses economic development of tribal governments and the Indian people they
serve through the timely use of ‘windows of economic opportunity.’ P. J. McKinney, Vol. 12, No. 11,
November 2002, p. 32-33
International Gaming & Wagering Business
Some Venues Face Gaming ‘Super Tax.’ The newly elected South Australian government shows
no signs of backing away from its decision to impose a “super tax” of 65 percent on the profits of
some gaming venues. Indeed, the government has gone further and imposed a levy on the sale or
transfer of hotels with gaming machines…
South Australia has more than 14,000 machines in 593 venues, although the government
estimates that only 42 venues have net gaming revenue of more than $3.5 million. Tom Skotnicki, Vol.
23, No. 11, November 2002
Sweet Charity. Ontario’s charity casinos grow into destination resorts, guaranteeing revenue for
worthy causes. The charity casinos of Ontario, Canada, despite their name, are definitely not the
poor cousins of the upscale Casino Windsor or Casino Niagara. Rather, they are sophisticated,
creatively designed properties with enough entertainment sparkle to draw discerning American
visitors from nearby border communities. The five casinos – in Ganonoque, Sault Ste. Marie,
Point Edward, Thunder Bay and Brantford – produce C$100 million (US$63 million) annually for
hundreds of worthy causes across the province, and the money is guaranteed by the Ontario
Lottery and Gaming Corp., which built, owns and operates the casinos. …Each has up to 450
slots and 60 table games. …Ontario’s five charity casinos replaced three-day roving Monte Carlo
gaming events conducted in rented premises all over the province. …There were also consolation
prizes. In late 1998, OLGC granted licensees to some of the consortiums to operate slot machines
at racetracks around the province. By late March 2000, nine of them were in operation. Between
the charity casinos and racetracks, “nobody [in Ontario] is too far away from a slot machine,”
Ron Barbaro, OLGC’s chairman and CEO said. Albert Warson, Vol. 23, No. 11, November 2002
Las Vegas Review-Journal
Fashion Show On Catwalk. It has been called all things to all shoppers and it's almost ready for
business. Ending more than a decade of planning and anticipation, the first phase of the Fashion
Show Mall's $1 billion expansion is scheduled to open at 10 a.m. today. The project adds nearly
900,000 square feet of retail space to the 22-year-old mall and also should kick off a new era in
retailing that further enhances the city's status as one of the world's top shopping destinations….
Even the city's most prominent casino developer is excited about the mall's new look. "This is
going to be the most unique shopping center in the world," said Steve Wynn, whose $1.85 billion
Le Reve resort will be built across the street from the mall. "The Rouse Company has taken that
corner to another level." Chris Jones, Gaming Wire, 11-1-02
National Airlines Ends Run. Financial problems permanently grounded National Airlines on
Wednesday, ending a brief and turbulent run for the Las Vegas-based carrier. Only 41 months
after its inaugural flight left McCarran International Airport on May 27, 1999, National Airlines
Chairman and Chief Executive Officer Michael Conway announced late Wednesday afternoon the
bankrupt airline would shut down. "This is a very sad day for the 1,500 employees of National
Airlines, the city of Las Vegas and Southern Nevada, as well as the traveling public who now
have one less choice to meet their travel needs" Conway said in a statement. Chris Jones, Gaming Wire,
11-7-02
Jury Awards $8 Million On Fraud. A California high roller was awarded more than $8 million by
a Las Vegas federal court jury that agreed he was defrauded by Park Place Entertainment and its
Paris Las Vegas resort. Lawyers for multimillionaire gambler Steven Mattes argued that Paris
executives lured the big bettor to the megaresort's September 1999 grand opening by promising
him a $2 million credit line and then reneged on the marker offer after he lost millions of his own
money at the resort. On Friday, Park Place spokesman Robert Stewart said the company was
disappointed by the jury's Thursday decision. … Gaming Control Board Chairman Dennis
Neilander said Friday the board has already launched a preliminary investigation of the case to
determine if it warrants a full-fledged inquiry. Jeff Simpson, Gaming Wire, 11-18-02
Tech Stocks Sink, Comdex Shrinks. Each fall for more than two decades, the high-tech world has
descended upon Las Vegas to hype the industry's hottest wares and ideas at the Comdex trade
show. Whether focused on the first PCs of the '80s, the Internet in the '90s or the wireless
gadgetry of recent years, exhibitors were assured hordes of executives, buyers and reporters. But
at the 23rd annual show, which starts today, the crowds will be smaller, the exhibit area more
compact and the mood subdued. Comdex, like the rest of the high-tech industry, is sputtering.
"Comdex is not bigger than the industry it serves," said Fredric Rosen, chief executive of
Key3Media Group, Comdex's organizer. "We didn't make the economy. We only reflect it."
Rosen expects visitors this year to stay steady with the 125,000 who attended in 2001 -- an
abysmal year because of the terrorist attacks, anthrax scare and sinking economy. Mathew Fordahl,
Associated Press, 11-18-02
Las Vegas Sun
Multi-Property Cards Planned. Las Vegas casino chains Boyd Gaming Corp. and Coast Casinos
Inc. say they expect to develop slot club loyalty cards that would allow gamblers to earn perks at
multiple casinos in Las Vegas. The two companies are the last major gaming empires in Las
Vegas that don't yet have so-called "linked" cards that can rack up rewards across multiple
casinos. 11-8-02
Gaming Win Up From 9/01. For the second straight month, Nevada casinos posted increased
winnings, this time reporting September revenues that were up 6 percent from the very weak
numbers in September 2001. The state Gaming Control Board reported today the casinos won
$810.1 million, which is $46.4 million more than the same month a year ago when the terrorist
attacks hit the United States and hurt the tourism industry. Gov. Kenny Guinn said, "Despite the
encouraging 6 percent increase in gaming win over last September, we are still nearly $17 million
short of gaming tax revenue as projected by the Economic Forum for the fiscal year 2003. This
follows a $31 million shortfall in fiscal year 2002." …Frank Streshley, senior research analyst for
the Control Board, said slot win statewide rose 8.6 percent; 21 or blackjack win fell 13.7 percent;
craps was up 28.4 percent; roulette rose 1.7 percent and baccarat slipped by 31.7 percent. Sports
pool betting jumped 35.5 percent. Cy Ryan, Sun Capital Bureau, 11-12-02
Tourism Indicators Still Below 2000 Levels. Visitor volume in Las Vegas surged by 8.6 percent
in September compared with the same month last year, but tourism is still off from 2000 levels.
…Volume was still down by 6.7 percent from September 2000, a sign that the economy has not
yet recovered from the terrorism and economic decline that has affected the city's tourism
industry, according to data released Thursday by the Las Vegas Convention and Visitors
Authority. …About 2.75 million people visited Las Vegas during September, up from 2.53
million visitors in September 2001 but down from 2.95 visitors in September 2000. Liz Benston, 1115-02
Regulators OK 24-Hour Kiosks For Sports Betting. American Wagering Inc., the parent company
of Leroy's and also the state's largest provider of computerized sports betting systems to casinos,
has developed a kiosk that allows gamblers to bet on horse races, auto racing and other sporting
events 24 hours a day, seven days a week. …Nevada regulators Thursday approved a sports and
race betting kiosk concept that works somewhat like an ATM. …Smaller casinos also could
benefit by relying less on manned sports book operations, which are more expensive to operate
than kiosks, the company says. American Wagering still needs regulatory approvals to conduct a
field trial for the device, which could be launched in casinos across Nevada by mid-April. Liz
Benston, 11-22-02
Imperial Palace Owner Engelstad Dies. Imperial Palace casino owner and Las Vegas Motor
Speedway co-developer Ralph Engelstad, 72, died of cancer Tuesday night at his Las Vegas
home. …His death throws into question the long-term future of the 2,700-room Las Vegas
Imperial Palace, a centrally located property near Caesars Palace, The Venetian and Harrah's,
among other flagship casinos. Also unclear is what will happen to his approximately 1,100-room
Imperial Palace in Biloxi, Miss. Liz Benston, 11-27-02
Wynn Considers Resort For Maryland. New details surfaced Thursday about talks between Las
Vegas and Chinese casino resort developer Steve Wynn and top Maryland lawmakers to explore
proposals for legalizing slots in Maryland. Wynn, the chairman of Wynn Resorts of Las Vegas
and former head of Mirage Resorts Inc., talked about possibly getting involved through one of
four horse tracks or at a "tourist destination resort," such as National Harbor in southern Prince
George's County, said state lawmaker Howard P. Rawlings. "His focus is to build a major
entertainment complex with racing, slots and entertainment," said Rawlings, a Baltimore
Democrat who serves as chairman of the House Appropriations Committee. 11-29-02
Press of Atlantic City
October Casino Win Up 4% at $350M. A.C. casinos report 12th straight month of revenue
increases. Atlantic City casinos racked up their second straight month of strong revenue gains in
October, again helped by an easy comparison to the same month after the terrorist attacks last
year. The dozen casinos won $350.5 million from gamblers last month, up 4 percent compared to
last year's October, according to preliminary figures obtained by The Press of Atlantic City. The
industry has now reported 12 straight months of revenue gains… Joe Weinert, 11-5-02
Spirit Flights Link Las Vegas, Atlantic City. If gamblers grow tired of the Atlantic City scene,
now they can hop on a plane and be in Las Vegas in a few hours. Beefing up its presence at
Atlantic City International Airport, Spirit Airlines launched connecting service to Las Vegas on
Thursday along with other new flights that will make it easier for local travelers to get to the West
Coast. The Las Vegas flight, which includes a stop in Detroit, represents the first time that the
country's two gaming capitals have been linked by scheduled air service. "It should develop into
a strong market because of the symbiotic relationship between Las Vegas and Atlantic City," said
Gary P. Israel, a spokesman for the South Jersey Transportation Authority, the airport operator.
Donald Wittkowski, 11-15-02
A.C. Casinos Squeeze More Earnings From Modest Revenue Rise. The casino industry reported
a 6 percent gain in third-quarter gross operating profit, helped by an easy comparison to poor
results a year earlier. Gross operating profit at the dozen casinos improved to $383.6 million on
net revenue of $1.2 billion, up 3.3 percent, according to figures released Tuesday by the Casino
Control Commission. …When this year's third-quarter results are compared to the third-quarter
2000 results, gross operating profit increased only 2.1 percent and net revenue declined 9.5
percent. …Harrah's led the cash-flow list at $59.7 million and broke its own citywide record for
cash-flow margin, retaining 46.2 cents in cash flow for every dollar of revenue generated.
…Bally's Park Place led the city in revenue at $146.9 million, up 0.5 percent, and was second in
gross operating profit at $55.2 million, up 1.4 percent. Joe Weinert, 11-20-02
Observer: Michael Pollock’s Gaming Industry Observer
IGT Gets Boost from Myriad Trends. Gaming Industry Observer has a new theory that is
tentatively titled the “Rule of Opposing Thumbs.” The first rule is that, in Atlantic City, the
prospect of next summer’s opening of the Borgata is changing everyone’s thinking. The second
rule of thumb is that, no matter what happens anywhere – in gaming, in politics or in whatever –
somehow, someway, it will benefit International Game Technology. Here’s how these two rules
work together. The prospect of the Borgata’s opening is forcing managers throughout Atlantic
City to throw out old notions and scribble new ones. One of the new mantras is: cashless. …The
change is being largely driven by something rather prosaic: Cashless saves money. …Jason Ader
of Bear Stearns underscores these savings, noting “one operator has quantified that its labor costs
associated with the slots has fallen by approximately 40 percent (and) the cashless system can
improve the financial efficiency of the slot floor by reducing the amount of coin in the cage.”
Now, who is the primary beneficiary of this change? You guessed it. IGT. The world’s largest
slot manufacturer will surely benefit from the recent national elections, in which pro-gaming
candidates came out ahead in key states such as Pennsylvania and Maryland. …And don’t forget
cashless. Ader writes: “In recent years, on average operators have replaced between 15 percent to
20 percent of its slot machines annually. In a transition to cashless, this figure grows to as much
as 75 percent. Further, cashless-enabled slots sell at a higher cost than do non-cashless slots,
boosting the average product price. These trends combined should serve to boost top-line
revenues in this segment handsomely in the coming two years.” …And this growth [IGT’s
growth in market share] is coming at the expense of such competitors as Sigma. Bally Gaming is
holding its own. If these various trend lines continue unabated, the equipment side of the
business will soon resemble a duopoly, making it increasingly difficult for others to make inroads.
Vol. 7, No. 18, 12-2-02, p. 8 & 7
Ray Koon’s Gaming/Gram
Gaming Control Board Terms. The terms of Board [Nevada Gaming Control Board] chairman
Dennis Neilander and Board member Bobby Siller expire on December 31, 2002, with each
subject to reappointment by Governor Kenny Guinn. Neilander was initially appointed as a
member on September 19, 1998, and became chairman on January 1, 2001. Siller began his tour
as a member on January 1, 1999. Vol. 17, No. 10, 10-31-02
Reno Gazette-Journal
Man Wins $1 Million Slot Tourney. Kenneth Wilson of Waynesville, N.C., outlasted 242 other
finalists to win the title of National Champion of Slots at Harrah's Lake Tahoe late Monday. The
65-year-old is scheduled to collect the cash in $50,000 installments over 20 years. Associated Press,
11-6-02
ACLU May Sue To Block Work Card Law. The American Civil Liberties Union said it might sue
to block implementation of a statewide casino work card law that it says gives the Nevada
Gaming Commission unconstitutional powers to investigate an applicant’s background. Gary
Peck, executive director of the Nevada ACLU, told the commission at a public hearing Thursday
that the work card plan under study needs to be changed to protect workers’ privacy. He said there
was no reason the commission should have sweeping rights to dig up the personal history of the
casino industry’s rank-and-file employees. “There are some limits that need to be imposed,” Peck
said. “That’s why we have the Bill of Rights.” Associated Press, 11-22-02
Strictly Slots
Standard Play. Every “industry standard” starts as a brilliant idea. And in the case of the gaming
industry most of them started in the mind of Ed Fishman. You probably don’t know his name.
And chances are good, you wouldn’t recognize his face. But you know Ed Fishman’s work. If
you’ve ever played in a slot tournament… If you’ve ever withdrawn money in a casino off of
your credit card… If you’ve used a slot club card to get a comp… Or if you’ve ever repeated the
old catch phrase, “Who loves you, Baby?” you know Ed Fishman. He’s responsible for all of it.
…He’s been in the gaming industry for the better part of three decades, and his contributions are
worthy of a book. They are contributions he is, rightfully so, proud of. In our interview, where
he was joined via speaker phone with partner and entertainment marketing technology president
Steven Meistrich, I soon discovered he would need little prompting to discuss his long career.
…So, below, you’ll find the words directly from Ed Fishman’s mouth. And you’ll discover why
we as gamers have him to thank for so much of what we have come to expect from every casino
experience. Melissa Raimondi, Vol. 14, No. 11, November 2002, p.42-51
Ken Adams
210 Marsh Avenue, Suite 103
Reno, NV 89509
(775) 322-7722 Fax (775) 322-7806
kenadams@softcom.net