By Roger Gros   Thu, Apr 29, 2010

Few things were quite so surprising five years ago when Singapore legalized casino gaming. The normally straitlaced city-state/island nation in southern Asia declared that it wanted to increase tourism and that two integrated resorts would do the trick.

After a relatively quick and painless RFP process was followed by a rational selection procedure, two winners were announced: Genting Bhd, from neighboring Malaysia, was chosen to build a family style resort on Sentosa Island, Singapore's holiday destination; and Las Vegas Sands, the gaming industry expert in the MICE business (meetings, incentives, conventions and exhibitions) for a project in the downtown area of Singapore.

Even though Marina Bay Sands, the LV Sands property located across the bay from the downtown area, did not win the race to open first, it clearly is the more dramatic property of the two. Three 55-story towers are capped by the signature "SkyPark," a 3.5-acre platform that spans the three buildings and includes pools, restaurants, spas, nightclubs and other amenities that give guests a commanding view of the city and surrounding countries.

An extensive shopping area with 800,000 square feet of retail space featuring multi-level stores, dramatic views of the surrounding waterfront and the ever-present (for an LV Sands retail development) canals and gondolas (and let's not forget Singapore's first ice rink-complete with plastic ice).

The 1.25 million square feet of meeting space is designed to make Singapore the Asian capital for meetings, conventions and special events.

The two executives in charge of opening the Singapore property weren't there at the start, although LVS COO Michael Leven was on the company's board of directors at the time, before being brought into management by Chairman Sheldon Adelson to replace the departed William Weidner.

Tom Arasi, the president of Marina Bay Sands, was brought in from the hotel industry less than two years ago, and helped put together a team of seasoned gaming executives led by gaming veteran Andrew MacDonald, the senior vice president of gaming for the property.

Even though the opening date for Marina Bay Sands has been pushed back several times (it held a soft opening on April 27), Arasi says it's still remarkable that such a complicated project was completed in the time it was. 

"This has been completed astoundingly fast for a project of this nature," he says. "When you look at the conception of an idea, design, financing, bidding out the construction, and building something like this, it's amazingly fast."

Leven waxes poetic when he envisions the completed facility.

"From the Eiffel Tower, the pyramids, the Taj Mahal, Sydney Opera House... this building is going to be equally iconic," he says. "The SkyPark alone you can't find anywhere on the planet. The design that (principal architect) Safdie did on the three towers is breathtaking. And when you add in all the public space, when it's finally opened and running, when you see it really 'alive,' it will be spectacular."

It hasn't always been easy, however. Las Vegas Sands had to defeat some formidable opponents during the RFP phase: Harrah's Entertainment, MGM Mirage Wynn Resorts, Kerzner International and others. Some of the stipulations insisted upon by the Singapore government have been somewhat onerous. And an undiscovered underwater seawall complicated the foundation process so much that it threw construction behind in some cases by as much as a year. And finally, the global economic meltdown threatened to put the company out of business just a year ago.

Leven says that economic strain had nothing to do with Singapore, however.

"The financial problems of this company were not caused by Singapore," he insists. "We have good debt there. I think they were more created by what we did in Macau in '05 and '06 where we spent $2.6 billion with no financing. If we didn't do that, no one would have said anything about our financial shape."

Although a little disappointed in losing the race to open first, Leven says he believes that will not be too advantageous for Genting's Resorts World Sentosa, which opened on February 14.

"The first mover advantage, if there is one, is focused on the local resident who paid the S$2,000 (annual entry fee of US$70 for Singapore citizens and permanent residents). They're going to continue to go there because they paid for it."

Arasi downplays any advantage that might come to Resorts World as a result of opening first.

"We are very comfortable with our position," he says. "We think it's going to be a big market and our experience is that you're only ready when you're ready. And when we're ready, we'll open.

"Resorts World will undoubtedly do a fine job, but we feel that there is plenty of business for everyone. We feel very good about the product offering we have and our ability to differentiate ourselves and get great acceptance both in the VIP and mass market segments. The reality is if we had opened up a couple of months before them it wouldn't have been a big advantage, but long term, no one will remember who opened first."

Unlike Macau, where the VIP market dominates by producing more than 70 percent of the gaming revenue, Singapore seems to be attracting more of the mass market. The first two months of operations at Resorts World have anecdotally demonstrated the strength of the mass market.

"Let's talk about the mass market and the slot play," says Leven, "which everyone agrees has been spectacular so far. If we do what Genting is allegedly doing, we could make our numbers on slot machines alone."

Arasi believes that the "locals" market-which includes Singapore, Malaysia and Indonesia-will be strong.

"We think there are different geographies that allow us to draw a locals market," he says. "There's great play in this part of the world and we think we're going to be in a great position, with a great city, to be able to attract players from around the region.

"We've done this in other areas and we're confident we'll do it here."

But slot play is only the icing on the cake when compared to the dominance of tables in Asia. Questions about how the VIP market would be handled were cleared up late last year when Singapore issued regulations that require the VIP operators that are active in Macau to be licensed-a situation not very likely.

Marina Bay Sands was prepared for this outcome, and has built a solid in-house international marketing department under the leadership of casino marketing veteran Steve Karoul.

"We are not targeting the VIP operators at all," Arasi says. "We are making a direct appeal to the VIPs and we don't plan to use any outside operators in our business model."

Leven says the VIP operators are not crucial to the success of the property.

"We don't expect the individuals we work with in Macau, and Genting works with in Malaysia, will choose to go through the licensing process," he says. "Some may, and we'll do business with them when they get licensed. We have no plans, however, to urge the government in Singapore to change that process. We're already working with VIPs individually."

When asked to speculate on how big the VIP market will be versus the mass market, Leven claims to be as much in the dark as anyone.

"What will the mix be between the VIPs and mass market?" he asks. "We don't know. Will it be 50-50? No way of telling at this point. I think there will be a very strong mass market component with Malaysia and Indonesia, and we'll have VIPs from China and Hong Kong, but the extent that happens, the amount they play and what falls down to the bottom line, we're still guessing."

While both Arasi and Leven claim that the market will be big enough to make both Marina Bay Sands and Resorts World successful, Leven says he believes Marina Bay Sands has an edge in the VIP market.

"I think we have a better chance of capturing the VIP market considering the aura of our property versus theirs," he says. "But it's going to be a while before we know."
    

Building Excitement
It is the facility that will set Marina Bay Sands apart from Resorts World. While Resorts World has more of a leisure feel-four different hotel styles, a Universal Theme Park and a world-class aquarium-Marina Bay Sands is set adjacent to Singapore's business district, which will be linked with the hotel by a two-kilometer pedestrian walk rimming Marina Bay. The dynamics of the property combine business, entertainment, shopping and bringing the outdoors inside.

Arasi says the building is incorporated into a city accustomed to spectacular buildings.

"Singapore already has an identity and some spectacular architecture," he says. "It's got iconic projects. It's got the new and the old. But everyone acknowledges this is very special and will be unique to Singapore and every other place in the world. It really stands out in what we believe will be the new postcard for Singapore."

As impressive as the exterior is, however, Arasi believes the property ramps up the promise upon entering.

"It is even more impactful when you see the inside of it," he says. "It's extraordinary in architecture, design and appointment inside as well as outside. Everything is articulated and detailed. Everything has an atmosphere that will be very memorable and special. 

"When you look up it's like a fabulous movie. You can see that movie 10 or 20 times and each time be amazed at how many new details you pick up and how fresh it stays. This facility is like a brand new great old movie. You'll see it in the casino, the restaurant, the MICE facility, the theaters and the museum. Right now there is a lot of construction going on, but when it's done, if you imagine a stage and a stage set, Marina Bay Sands is front and center. The financial district of Singapore is the audience, and you look out across the bay and we have the spotlight on us. We think it becomes the new anchor of Singapore. We are going to be the pedestrian epicenter of Singapore. Festival, street art, people watching... We are the center destination point for the pedestrian walk around Marina Bay."

Like all LV Sands properties, the food-and-beverage offerings at Marina Bay Sands (see sidebar, left) are truly special, accented by offerings from some of the finest chefs in the world. In a city already revered by people who appreciate fine cuisine, the Marina Bay Sands offerings simply widen the choices.

"We think we link in well with what is already here in Singapore. We also think that these names really put us on the radar screen of the 'foodies' and the 'winies' from all over the globe. We'll be recognized by people who scour cities for unique dining experiences," he says.

For the shopper, Marina Bay Sands also extends the retail choices offered in Singapore. The world-renowned Orchard Road shopping district is nearby, but Leven and Arasi are confident that the Marina Bay Sands retail offerings will do well.

"I have seen studies that if you look at Singapore's retail inventory compared to its population, as well as some metric of retail spend, Singapore is not one of the more developed retail markets," Arasi explains. "It might seem that way because it is largely concentrated on Orchard Road and it seems like a lot more than it is. I think there is still substantial opportunity if you have a different and unique offering. We do. We have the only critical mass of retail that is connected to a wide range of other experiential components. It's attached to our hotel, casino and meeting facilities with tens of thousands of trade show delegates. It's attached to our 55 restaurants, bars and related food-and-beverage outlets. It's attached to the theater and that traffic. It's attached to the new pedestrian walkway around Marina Bay. Furthermore, our space, without question, is going to be most dramatic and interesting retail space in Singapore. The soaring atriums, the glass walls, world-class architecture with views of the Singapore skyline and Marina Bay. And the best part, unlike Orchard Road, you get to walk around in air-conditioned space."

The LV Sands model for retail is strong, and Leven says it should work in Singapore to the benefit of the company.

"We expect that Singapore tourism is going to go up by 30 percent," he says. "It's inconceivable to me that tourists will not visit Marina Bay Sands, and then they'll be visiting the retail as well. As the economy gets better in that part of the world, it's bound to do well. But at the end of the day, if it does great, that's great but if it does OK, that's OK. It's not critical to the success of the property."

At the same time, the sale of the mall to a third party is a distinct possibility, since that occurred in Las Vegas and has been floated in Macau.

"Sheldon's model of the attraction of the mall I think will work," says Leven. "After a three-year period, we have the right to sell that mall, but our expectation is that we'll pay off all of our debt with that."

Meeting Priorities
One business that Las Vegas Sands knows intimately is the convention business. The company was born in Las Vegas on the premise that meetings and conventions will fill hotel rooms and the casino on the less-busy midweek days. The company is counting on Singapore to do the same, but it has been slow to ramp up, according to Leven.

"Honestly, I would have liked to see more business on the books than we have right now," he says. "I think the nature of the facility being built over three to four years has caused meeting planners to delay making any commitments. But over the past few months, bookings have really picked up. Eventually, we'll own the MICE business in this town. Once the publicity starts and people begin to realize what we have here, I think we'll have plenty of business. I told my sales staff that they're going to have an easy job, so let's make sure we have the right people in place. The phones will be ringing off the hook."

Singapore has long been a MICE destination in Asia with the Suntec Convention and Exhibition Center, and Arasi says Marina Bay Sands makes it the premier city to host meetings.

"While I believe we are very complementary to the public meeting space, we are truly the ideal space in Singapore," he says. "We have 2,000 rooms and suites connected to the meeting space. When your meetings are done, you don't need to travel to the entertainment district. It's self-contained at the Marina Bay Sands. We've got the exhibit space, ballrooms and meeting facility all under one roof. We can house citywide-size events under one roof. We will give an excitement, a buzz and an experience that you can't find anywhere else in Singapore."

Market Forces
Since the aspiration of the Singapore government was to increase tourism to the city via more family entertainment and MICE business, it's clear that the two casinos must work together to achieve that goal.

Leven says the market is strong and vibrant, so that neither casino has to fear competitive pressures from the other.

"The market is so big and vibrant. There's plenty of business for both casinos," he says. "It's a duopoly for 10 years, so I don't think we'll have any problems with the market during the period. There's plenty of room in the market for both of us."

Arasi says there have already been discussions on cooperation between the
casinos.

"We will work with not only Resorts World, but the other hotels and attractions and the Singapore tourism authorities," he says. "This is to a very large degree about selling Singapore and how we can participate in things that are good for Singapore. If we're effective, we'll all get our fair share. Within that context, we think we can do very well."

Another Singapore stipulation is an aggressive problem gambling effort. Arasi says this was an easy piece for LV Sands to comply with because the corporation had an in-house program that is a success in its other properties.

"We have an industry-leading model," he says. "We've done everything from the original research to the treatment. We've extended responsible gaming training to everyone at Marina Bay Sands, and that training will be ongoing as we continue to evolve and understand the problem more completely."

And the minimization of social problems is also an area where LV Sands will work hard to shine.

"We have a very specific set of targets to shoot for, because the way Singapore has laid out the model," he says, "you'll have all the social safeguards which are strictly controlled. It's quite a transparent process that we'll be able to build our program around."

Corporate Impact
While the Las Vegas and Macau developments of Las Vegas Sands are impressive and successful, Leven says it is Singapore that will tell the tale. He's confident that the property will live up to expectations and truly become a transformative moment for the company.

The goal of increasing non-gaming spend may take a while to move into place, but even so, Leven believes the gaming revenues will be enough to achieve success.

"Based on the numbers we're seeing at Resorts World and what we expect to see at Marina Bay Sands, I think it's going to take a couple of years to reach the 65-45 mix that we have anticipated," Leven explains. "The casino business in the early going is going to dramatically exceed the MICE business and the room business. First of all, they're all not going to be ready immediately, and then there's a booking cycle that takes a while to kick in. So I think it's going to be well into 2012 before that starts to level off. You can't sustain these kinds of buildings without the gaming revenue. I've been in the hotel business long enough to know something about that income. The casino business is likely to be 75 percent to 80 percent of the EBIDTA revenues, certainly for the first seven months, and likely for the first full year as well."

The monetary return on the project is just one benefit it will bring Las Vegas Sands, according to Leven.

"You can't underestimate what this project does for the company," he says. "This project will lead us to opportunities that may have never come to this company before-Japan and other countries that are considering gaming. They look at this and they are going to say, 'This is what I want. I don't want a casino just for locals. I want to drive tourism.' Countries that restrict local players like Korea will see a place like this and understand that you can include local players and that the rest of the business that is driven in will create jobs, taxes and other benefits. That will give us the opportunity to go forward.

"Sheldon and I have already visited Japan twice. We've talked to various potential partners over there. One of those meetings came from someone who had actually visited the property in Singapore. We've had calls from Vietnam, which has a bit of a drawback because they don't want their citizens to gamble. We've talked to Korea, and then there's also some European talk. There will be more once Singapore is open. India is a possibility. We've had discussions about the Mumbai area."

While Adelson has described Las Vegas Sands now as an "Asian company," that doesn't mean that he's given up hopes of developing integrated resorts in the United States.

"A facility like this in Florida-in the Dade/Broward County area-would be a lot better for the state than that deal they just made with the Seminoles," says Leven. "That will put some money in the state budget coffers for a few years, but it won't have a long-range significance. And an integrated resort in Florida
wouldn't cost us as much as the Singapore project did or one in Japan would."

And even though Adelson and Leven are Boston natives, Leven doesn't believe there is opportunity for the company in the Bay State.

"Massachusetts has some problems," he says. "You need to be in a location that is favorable and there are weather problems nine months of the year. We've had those conversations. If you're not contiguous to Boston and that infrastructure, you can't expect to drive enormous midweek convention business."

For the immediate future, however, the attention of LV Sands will be devoted to Singapore (and to Macau; see sidebar on page 28). Leven believes that the phased openings will allow the company to develop a feel for the different elements of the property.

"By the winter of '11, all aspects of the property will be up and running," he says, "with the possible exception of a few MICE elements still to open. But by a year from the opening-by June of '11-we should have a full building operating at peak efficiency."

By Roger Gros   Fri, Apr 30, 2010

As with all Las Vegas Sands properties, Marina Bay Sands has a stellar collection of celebrity chefs who will anchor an extensive collection of more than 50 food and beverage outlets at the property.

In Singapore, the integrated resort enters a city that already has a reputation as a foodie destination. Like its culture, Singapore is a melting pot of all cuisines, with some unique creations available across the city.

Marina Bay Sands brings together an international roster of chefs who will craft restaurants as spectacular as their building. The flavors and creations of the restaurants will create an experience that matches the stunning edifice. The lineup includes (clockwise from top) Tetsuya Wakuda (Waku Ghin),  Wolfgang Puck (CUT), Daniel Bouland (DB Bistro Moderne), Santi Santamaria (Santi), Guy Savoy (Guy Savoy), and Singapore native Justin Quek (The Sky on 57).

By Roger Gros   Fri, Apr 30, 2010

Marina Bay Sands offers something for everyone in the Singapore market. Even though competitor Resorts World Sentosa will attract families with its Universal Theme Park Singapore, Marina Bay Sands won't take second place in offering something for children of all ages to do. Just some of the features of Marina Bay Sands are:

• Three hotel towers, 55 stories high, with 2,500 hotel rooms and suites, making it the largest hotel in Singapore.
• The rooftop SkyPark, longer than the Eiffel Tower is high, with the world's largest public cantilever, lush gardens, restaurants and an
• infinity-edged swimming pool larger than a football field.
• 1.3 million space of exhibit and meeting space that will host over 45,000 delegates at one time, complemented by Southeast Asia's largest ballroom.
• The Shoppes at Marina Bay Sands, 800,000 square feet of spectacular retail and dining space, featuring luxury brands such as Bally, Cartier, Gucci, Louis Vuitton, Prada, Tiffany and much more.
• 55 food-and-beverage outlets including gourmet restaurants, fast food, nightclubs and lounges.
• A lotus-shaped museum that will host traveling exhibitions of the world's greatest art.
• Two theaters with more than 4,000 seats, one of which will host the first Asian production of Disney's The Lion King.
• An outdoor events center on the water that will seat up to 10,000 with hydraulic seating sections so the area can be configured to any kind of attraction.

By Roger Gros   Fri, Apr 30, 2010

It was a clearly a gamble, the move into Macau made by Las Vegas Sands. The company made an initial wager with the Sands Macao and then double- and tripled-down on the Cotai Strip. The future of the entire company was at stake.

It quickly paid off, however, when Sands Macao opened next to the ferry terminal and was inundated by business. The construction costs were paid off in less than a year, and planning was under way for the Venetian, the first development of the company's extensive Cotai Strip footprint.

When completed, the Venetian took time to ramp up. The property was built for the mass market, and even though it controlled a sizable portion of the all-important VIP groups, the mass market was growing too slowly to immediately call the Venetian an unqualified success.

And the global economic downturn hit and the Chinese government imposed regulations to slow the growth of the casino industry in Macau. While recent relaxations of those restrictions have helped to revive the Macau market, the future is uncertain.

Betting the Farm
Las Vegas Sands COO Michael Leven says that the initial wager was bold, so it's not surprising that there have been bumps in the road.

"The bet we made in Macau, to use gambling terms, was that we could change Macau from a strictly gambling town to a place where you could go for leisure tourism and MICE business, as well as gaming," said Leven. "And Macau has made some progress and made some of the commitments to change, as has Beijing. 

"Our investments in Macau in Parcels 5 and 6 and beyond, are all designed to maximize that. But we need cooperation from the government. Now we're dealing with restricted tables and things like that which may change the nature of our growth patterns. It's not as predictable as other places. We are very profitable, but it's not easy. You're not in control of the long-term growth the same way you are in control of it somewhere else."

Steve Jacobs, the president of Sands China, was brought in last year to restructure the business in Macau so it runs more efficiently and effectively. He says the growth of the mass market has been encouraging. 

"It's paying off," he says. "Each year we do slightly better. To us, the tipping point comes when you can actually get the mass market that's coming in on day trips and give them a place to stay. Right now the marketplace runs almost at capacity during the weekdays, and absolutely at capacity at the weekends. So there isn't the ability right now to have that mass market player come in and actually take a one-time trip and make it a four-day stay as opposed to an in-and-out, same-day. I think it does a couple of things: It enables the mass market that comes to game for the entertainment. It also allows you to pull more families and a larger, diversified segment in to enjoy what Macau has to offer."    

Maybe the most significant-but little known-initiative instituted by Jacobs is a leveling of the VIP commission rate with Melco Crown, which owns City of Dreams, across the street from the Venetian. The move allows the two integrated resorts to compete on a level playing field.

"The market when I came aboard was about 1.35 percent," says Jacobs. "We lowered it to 1.25 and agreed that on Cotai, that would be the rate. We lost a couple of junkets, but in about 60 to 90 days, they came back. What we found and what we proved through this experiment is if the brand is strong enough-if there's enough adhesion between the products and the services-the guests and the high-rolling VIPs like to play where they feel lucky and where they call home. It certainly benefitted us and City of Dreams. We continue to hold at that rate, even though the rates downtown now are at 1.4, 1.45, 1.5-which makes no sense to me at all. None. That being said, I think as long as we continue to develop product and experience ahead of just pure commission, we'll be fine."

VIP Version
The VIP operators have been under greater scrutiny in the past few months for a variety of reasons. Allegations of connections with organized crime have increased and some U.S. jurisdictions are taking a closer look at the arrangements. Leven says the company has always been careful about their business partners.

"When it comes to the junket business around the world, Macau is a different kind of place," Leven admits. "Even when you investigate, it's difficult to discover everything that is there. But we've never had any problems that we can identify with any of the operators we are currently working with."

Leven says that the company takes its lead from Chairman Sheldon Adelson in this regard.

"This is a company that values integrity first and foremost," he says. "Sheldon is the best. This is my 50th year of work. I have never worked for an individual that has his ethical standards. He will not cross the line. He will not even come close to the line. If he makes a mistake-like any of us can-it's certainly not by intent. We want to run a compliant operation and will do everything in our control to do that."

The launch of Sands China as a publicly traded company featuring a minority percentage of the Macau operations of Las Vegas Sands was a milestone for the company, and Jacobs explains how it impacted his operations.

"It's changed everything and it's changed nothing," he says. "Clearly as a stand-alone public entity we have certain rules of governance and certain ways that we have to run the business per the Hong Kong stock exchange. In terms of day in and day out: No. We locked the strategy in place back in the June/July timeframe, and now we're executing. In terms of the board, we were very fortunate to get three very qualified independent directors that have been very helpful and helping us expand our understanding of markets in which we play and how we might want to go about some different strategies. But it's not a material change."

Shopping Macau
The retail operations for the Sands China Cotai operations have struggled. Jacobs says he sees improvement over the past six months.

"Last year was a bad year globally for retail," he says. "We're not an exception. If you look at our numbers from September, month over month, the gains we've had have been quite significant. If you look in the Hong Kong market, you can see that the retail now in 2010 is largely back. They're now back in the range of 4.5, 5 cap rates, which, if you'd asked me a year ago, I would've said would have been a 2012 event, not a 2010 event."

But even with recovering retail, the new hotels scheduled to open in 2011 will add around 800,000 additional square feet to the more than 1 million square feet in the Venetian and Four Seasons. Jacobs says he expects that shoppers will migrate back and forth and that Macau has an advantage at least equal to Hong Kong when it comes to shoppers.

"One: We don't have a luxury tax, which is one of the huge benefits that Hong Kong has," he says. "Two: It is quite likely this year that we will surpass Hong Kong in total visitors. Three: If you look at the socioeconomic demographics of the people going into Hong Kong versus Macau, there are much larger wallets and a much higher caliber of potential shopper coming in. To get the shopping to really take off in the luxury retail even more so than it is today-and it is quite strong in 2010; the first quarter has been quite good-you've got to get them to stay and you've got to get more families to come in. Every time we get a family to stay, we actually get a much higher share of wallet and retail than when just the gamer comes in alone."

Last year, LV Sands sought to sell the shopping areas on Cotai and went as far as soliciting bids. None were acceptable, says Jacobs.

"We got qualified offers-all cash offers," he points out. "The cap rates weren't what we wanted. They were in the 7.5-8 range. Realistically, for that quality of an asset, you should be in the 4.5, 5, 6 range. The asset's only going to go one direction, and that's up. Our sales per square foot continue to improve, as we continue to grow month over month. I wouldn't expect anything on that in 2010, but I would expect management to be aware of the impact, because it's multibillion-dollar monetization of that when you sell it."
    

Entertaining Options
Another differentiator for the properties of the Cotai Strip has been entertainment. Jacobs says it's a key element of the company's strategy.

"The Cotai Arena (at the Venetian) is firing on all cylinders," he says. "We now have three to four shows a month. The last time I looked, we were about No. 70 in the world in terms of entertainment venues. We're the only ones listed in the top 100 in all of Asia. That will only continue to grow as we get more rooms for people who come from afar."

Leven says he's happy with the turnaround in Macau, despite the difficult market.

"I'm very pleased with the direction Macau is going in," he says. "Our stock price reflects a lot of Macau's strength. Macau is always going to be a challenge-working in the local marketplace, working with the government, trying to figure out what the future's like, trying to deal with things that aren't in writing yet. But overall, there is more good news than bad these days coming out of Macau."

By Rich Geller   Thu, Apr 29, 2010

In January 2009, the Taiwan legislature passed a bill that contained a measure to allow casino development on the nation's offshore islands, should a majority of the local population agree.

The measure was included as an amendment to the Remote Island Development Act, which sought to encourage investment on several of Taiwan's smaller, economically challenged islands.

The law came with stipulations. Any casino would have to be a part of an international tourist resort, and non-gaming amenities would need to be included in any project. The list of eligible amenities included an international tourist hotel, conference center and exhibition facility, retail shopping mall and other offerings capable of attracting visitors.

One month earlier, Taiwan's Committee for Economic Planning and Development had presented a list of recommendations which could influence the eventual casino legislation. Suggestions from CEPD included a proposal to require a minimum investment of $1 billion, to plan for a minimum land area of 10 hectares and to require the project be an integrated resort in the style of the two Singapore projects then under construction, Marina Bay Sands and Resorts World Sentosa.

CEPD also suggested a gaming license be valid for 20-30 years, with a gaming tax of 10 percent and a special allowable operation tax of 5 percent.

The outlying islands referred to in the law include the archipelagos of Penghu, Kinmen and Matsu. The suitability of these three island groups for casino resort development varies due to such factors as distance to Taiwan, distance to China, local economic conditions and military role.

The three main islands of Penghu were seen as the most likely candidates for casino resorts. The resort and commercial fishing center is only a 30-50-minute flight from Taiwan's main population centers, and the seasonal character of the local economy suggested Penghu as a candidate for additional economic development.

Expressing its support for gaming, shortly before the bill was passed, Penghu county government announced it was seeking private investment of NTD30 billion-over $900 million-to aid in the development of casino resorts.

The initial project would involve the development of a 120-hectare resort featuring a hotel with more than 2,000 rooms, casinos, golf courses, a convention center and a duty-free shopping mall. Two locations named by the Penghu officials as likely sites of the project were Houliao Bay on Baisha Island and the Huhsi Port area on the main island of Makung. Design was to begin in 2009, the private investment component finalized by February 2010, and development to start in 2011.

A separate effort to construct a casino resort on Penghu had been started a decade earlier by commercial developer AMZ Holdings Plc. The London Stock Exchange-listed company had begun the process of acquiring land on the main island of Penghu as far back as 1999. The resulting 10.8-hectare AMZ property had been rezoned from agricultural to commercial use, and the company's original plans included a 600-room luxury hotel and a casino of minimum 130,000 square feet.    

The Kinmen islands were seen as being the most desirable site for a casino resort from the standpoint of physical location. However, at the same time, they presented a more complicated picture. Situated just a few miles from mainland China, the province is also one of the wealthiest of Taiwan, and the Remote Island Development Act would arguably be more intended to improve conditions in a place like Penghu, where seasonal employment is the norm.

But the real irony of Kinmen is that, while it is closest to mainland China and thus would profit more from the potential of attracting Chinese players, the very fact that it would profit from such visits suggests to some a political liability. The thought being: If China is allowing its citizens in effect to give their money to Taiwan, what might China want from Taiwan in return?

Since 2001 the main island of Kinmen has been receiving tourists from China by ferry, primarily those curious about this once-heavily fortified outpost. As this activity increased, there developed the idea of building a bridge between Kinmen and the Chinese port city of Xiamen, which would put Kinmen only a 30-minute drive from China.

An article from the Central News Agency cited a 2007 poll of Kinmen's 50,000 residents in which 84 percent of respondents listed the construction of a bridge as an important issue, to create closer ties with China. There were almost 1 million journeys between Kinmen and Xiamen in 2008.

But although the bridge proposal may be popular locally, according to the article, there is little enthusiasm for it within the Taiwan national government. A feasibility study on a bridge is under way, but there is no pressure to complete it. Political opposition cites the bridge project as another move closer to China.

However, "closer" is just what supporters of the bridge seem to want. In recent years, parents have been sending their children to school in Xiamen, and some have begun buying homes there and in other nearby communities on the mainland. Other Kinmen residents point to new water mains and electricity lines from China as welcome byproducts of any bridge project.

Another politically sensitive aspect of building casino resorts on Kinmen could be the potential for competition with Macau. The island is located about 350 miles up the coast from the current casino center. Lin Chin-liang, the local government head of Little Kinmen, has even been reported as saying he'd like to see the island become a "little Macau." A move to build casinos here rather than in Penghu, which is physically much closer to Taiwan, would be a clear sign that the targeted player is the mainland Chinese.

With the backing of the president, the passage of legislation and local government support, casino gaming for Taiwan seemed to be right around the corner. But in September 2009, the residents of Penghu voted down the measure in a local referendum. Only 42 percent of eligible voters turned out to cast a ballot, with over 56 percent voting no.

Aside from the naturally conservative nature of the local population and organized efforts by the usual anti-gaming forces, some industry experts saw the failure of the referendum as a failure of government to adequately explain the additional benefits a casino resort industry would provide.

But perhaps a more important factor was that the national government, having passed the initial legislation, had been too slow to create a structure that would give voters confidence in the coming process. Only recently did the government complete two tenders for assistance with creating the legal and regulatory framework for casino gaming. These were a tender for planning a tourism zone with gaming for the offshore islands and a tender for developing laws and regulations to govern gaming. The former was awarded in March and the latter in April, though at the time of this writing the name of neither recipient had been revealed.

The successful bidders will work with the ministries involved to create a bill for the next legislative session, which starts in August. The bill is expected to pass by the end of 2010, which is when the session ends.

Should the bill pass, Penghu is expected to push for a new referendum on casino resorts. The governor and a delegation of county officials reportedly met with the Taiwan Gaming Control Board recently to formally express their desire to try again. It is believed that a more effective pro-gaming effort by local government and business will produce a "yes" result at that time.

By David D. Waddell and Douglas L. Minke   Fri, Apr 30, 2010

The casino industry is unique when it comes to the relationship operators have with their customers. Commercial and Native American casino operations across the United States have invested billions of dollars to establish safe, comfortable and secure environments for their patrons to enjoy a dynamic entertainment experience. In addition to world-class leisure amenities that are offered in the modern casino environment, the core service provided by casinos continues to be a secure and regulated gaming experience.

As a result of the unique nature of the casino environment, numerous laws categorize casinos as financial institutions and require reporting of various financial transactions, to prevent these businesses from being used by unscrupulous people for laundering money, evading taxation or funding criminal activities.

Casinos across the country have developed sound practices to ensure compliance with the anti-money laundering provisions of the Bank Secrecy Act/Title 31 and the Patriot Act. Despite the fact that casino operators have developed systems to ensure a safe experience, new regulations continue to be adopted that, if not complied with, could expose operators to regulatory fines and/or civil/criminal liability.

Starting in 2010, certain casino operators that offer specific types of financial accounts will be required to develop policies and procedures to prevent identity theft. According to a 2010 congressional report, identify theft is the fastest-growing type of fraud in the United States. In 2008, an estimated 9.9 million Americans were victims of identify theft, an increase of 22 percent from 2007. The Federal Trade Commission estimates that identity theft costs consumers approximately $50 billion annually. As a result, the FTC is implementing a new "Red Flags Rule" to seek assistance from businesses to prevent identity theft.

There is a lot of confusion within the gaming industry over these matters. The purpose of this article is to provide some clarity with regard to the changes in federal law, and to provide a general overview of the steps casinos should take to assure ongoing compliance.

Jim Dowling, a former anti-money laundering official with the United States Office of National Drug Control Policy and currently president of Dowling Advisory Group (a company that has extensive experience in auditing and assisting companies in federal compliance matters), states that "identify theft continues to plague many different industries, and is a growing concern with companies that store customer information electronically." Dowling says current cases show where a single breach can result in thousands of individuals' personal information being compromised. Beginning June 1, after four extensions of the enforcement date, the FTC is scheduled to begin enforcing the Red Flags Rule, a set of identity theft prevention regulations issued pursuant to the Fair and Accurate Credit Transactions Act. The Red Flags Rule, which is codified at 16 C.F.R. §681.1, generally requires: the development and implementation of a written identity theft protection program that is designed to detect, prevent and mitigate identity theft; and the periodic performance of a risk assessment to determine whether the business offers or maintains any other accounts for which there is a "reasonably foreseeable risk" to customers or to the business from identity theft.

Is Your Casino Subject to the Red Flags Rule?
The Red Flags Rule is applicable to "financial institutions" and/or "creditors" that maintain "covered accounts."

For the purposes of the Red Flags Rule, a "financial institution" is defined as "a state or national bank, a state or federal savings and loan association, a mutual savings bank, a state or federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in 12 U.S.C. §461(b)) belonging to a consumer."

Many casino operators will not likely meet the definition of a "financial institution" for purposes of the Red Flags Rule. It is important to note that the analysis does not end there, as the identity theft prevention regulations also cover entities that are considered "creditors."

A "creditor" is "any person who regularly extends, renews or continues credit; any person who regularly arranges for the extension, renewal or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew or continue credit."

It is this definition of "creditor" which may bring many casino operators within these regulatory confines.

An organization that qualifies as either a "financial institution" or a "creditor" must then analyze its internal operations to determine whether it maintains "covered accounts," which are defined as:
(i) an account that a financial institution or creditor offers or maintains, primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, such as a credit card account, mortgage loan, automobile loan, margin account, cell phone account, utility account, checking account, or savings account; and (ii) any other account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.

The determination of whether your casino meets the definitions of a "financial institution" or a "creditor" and whether your organization maintains "covered accounts" requires a fact-specific analysis that should be undertaken by qualified legal counsel.

Percival Veloro, senior gaming auditor of the Agua Caliente Band of Cahuilla Indians, says the "formal adoption of a Red Flags Rule written program is key to properly protecting the casino and its customers from the risk of identity theft and assuring compliance with federal law." The Agua Caliente Band recently implemented Red Flags Rule compliance procedures.

Although the implementation of any new federal requirement can sometimes seem daunting, experience in working on such programs reveals that they are not too difficult to develop. Existing casino compliance systems help minimize the risk of identity theft in most casino operations. Proper documentation of the written program is a key first step, and the guidance of legal counsel in this uncharted territory will provide the casino with reassurance that all legally required steps are being taken.

Nuts and Bolts of Red Flags Rule Compliance
The seminal part of Red Flags Rule compliance centers on the development and implementation of a written identity theft prevention program "that is designed to detect, prevent and mitigate identity theft in connection with the opening of a covered account or any existing covered account."

"Establishing a robust Red Flags Rule program can help casinos secure their customers' information," says Dowling, "and mitigate potential federal and state regulatory sanctions, as well as civil liability."     

According to the regulations, a program must be appropriate to the size and complexity of the business operation and must include reasonable policies and procedures to:
    

• identify relevant red flags (pattern, practice or specific activity that indicates the possible existence of identity theft), and incorporate those red flags into the program;

• detect red flags that have been incorporated into the program;

• respond appropriately to any red flags that are detected to prevent and mitigate identify theft; and

• ensure the program is updated periodically to reflect changes in risks to customers.

The categories of identity theft-related "red flags" that a subject business should be cognizant of include, but are not limited to:

• alerts, notifications or other warnings received from consumer reporting agencies (such as a fraud alert, notice of credit freeze or address discrepancy included in a consumer credit report);

• presentation of suspicious documents from a patron (including documents that have been forged or altered, or if the photograph on an identification document is not consistent with the patron's appearance);

• presentation of suspicious identifying information (e.g. suspicious address change, a Social Security number that had not been issued, or is outside the corresponding date-of-birth range, fictitious phone number);

• unusual use of, or suspicious activity related to, a covered account (activity on the account not consistent with past record of use, material increase in available credit line, mail to patron returned "undeliverable" although transactions continue to be conducted from the account); and

• notice from patrons, identity theft victims, law enforcement or other persons regarding possible identity theft.

In addition to the development and implementation of the program, Red Flags Rule compliance also requires the periodic performance of a "risk assessment" to determine whether the business offers or maintains any other accounts for which there are reasonably foreseeable risks to customers or to the business from identity theft.

In conducting this periodic risk assessment, a business must take into account: (i) the methods it provides to open its accounts, (ii) the methods it provides to access its accounts, and (iii) its previous experiences with identity theft.

Veloro also emphasizes that "a written program demonstrates that the casino has given the topic thoughtful analysis, meeting the requirements of federal law."

Dowling notes that "as with all compliance programs, the first step to establishing an effective program is to prepare a risk assessment."

Integrating Red Flags Rule Compliance
A casino which is subject to the Red Flags Rule must craft a compliance program that will comfortably fit within and further complement its overall gaming regulatory compliance procedures. This process will include drafting internal controls, assembling departmental operating procedures and obtaining the necessary gaming regulatory approvals of such changes.

Also, a casino should designate an appropriate individual or committee to oversee the Red Flags Rule compliance program. For purposes of efficiency, and also to draw on existing institutional compliance knowledge, these oversight duties can be delegated to the existing compliance officer. However, a different designated employee, the board of directors, or a committee of the board can also be charged with Red Flags Rule compliance.

Those charged with administering the compliance program should report, at least annually, to the casino's board of directors, a committee of the board or a designated member of senior management on Red Flags Rule compliance.

Current employee training to ensure compliance with Title 31/Bank Secrecy Act provisions, the mandates of the Office of Financial Assets Control and other gaming regulatory requirements should be expanded to include proper implementation, administration and monitoring of the Red Flags Rule compliance program. Current internal and external audits of the compliance programs should also be expanded to include auditing of the identity theft prevention program.

Finally, the Red Flags Rule compliance program should also be periodically reviewed and revised to stay current for developments in the gaming industry, as well as to take into account identity theft instances experienced by the casino.

Notably, Veloro also states, "It is our goal that our Red Flags Rule compliance program will protect the casino against potential liability for penalties or for damages that might result from identity theft."

Penalties for Non-Compliance
Red Flags Rule compliance should be an integral part of a casino's overall compliance program. In addition to the gaming-related compliance concerns, the FTC is authorized to seek civil penalties and injunctive relief against subject businesses for regulatory violations. The current maximum civil penalty for non-compliance with the Red Flags Rule is $3,500 per violation. However, a more important reason for compliance is to provide a safe and secure wagering and entertainment environment. A sound identity theft prevention program assures your casino patrons that your property is doing its part to protect their identities.

Key Resources
For additional information concerning the FTC and its enforcement of the Red Flags Rule, visit www.ftc.gov/redflagsrule. Interested persons can also visit RMC Legal's website (www.rmclegal.com) and download a recent webinar presentation that discussed compliance issues related to the Bank Secrecy Act, the Office of Foreign Assets Control and the Red Flags Rule, as well as to register for a May 5 webinar titled, "You Think Your Casino is Compliant-Will an IRS Auditor Agree?"

By Caitlin McGarry   Fri, Apr 30, 2010

ATMs and ticket redemption kiosks dot casino floors across the country, and several companies are transforming the way cash-dispensing stands operate.

From check cashing and debit transactions to cash advances and marketing, cash access corporations are turning simple ATMs into sophisticated machines.

Focusing on the Future
There are a variety of new cash access services currently on the market, and more are being released each year.

U.S. Bank first introduced check cashing on ATMs four years ago, and has continued to expand the capabilities of the increasingly standard service due to high demand from casino operators.

"Casinos are interested in innovative ways to reduce demand on cage personnel," says Paul Nielsen, vice president and managing director of gaming services for U.S. Bank. "They're also looking for ways to increase convenience for guests. They are looking for ways to increase cash to the floor. This solution delivers all on all of those needs simultaneously. It allows a migration of services away from the cage to the ATM or to the kiosk. The kiosks are located throughout the facility, so it increases convenience. Whenever convenience is increased, there's potential for cash to the floor to be increased as well."

U.S. Bank provides check cashing in partnership with Global Payments, a company that offers check guarantee and cash advance services to gaming operators. Nielsen says U.S. Bank and Global Payments are currently developing a new check cashing-related service to introduce in the near future.

Check services company Certegy also offers check cashing on its ECAGE application, which is used by casino cage personnel. The company is currently working to develop the capability for casino patrons to access check cashing on kiosks on the gaming floor.

"We do have the application developed to be able to offer check cashing from a kiosk device on the floor that would work in conjunction with ECAGE, but we are currently in the process of certification testing," says Mandi Hart, Certegy's vice president of cash access product development. "We anticipate the product to be available to the market this summer."

Other companies have developed updated kiosks that provide ATM services and ticket redemption in one machine. Automated Currency Instruments CEO Neal Jacobs says his company's latest product, the PEK Plus, will be released June 1 with dozens of popular features.

"It's the next generation," Jacobs says. "It provides TITO redemption. It provides the cash advance functionality as well as player card enrollment, so that if somebody wants to enroll in the player club of the casino, they can do it right at that unit with a swipe of a driver's license. We can reissue their loyalty card if they've forgotten it. It adds significant functionality."

ACI is also planning to make ATMs more entertaining for patrons.

"One of the things we're doing is trying to make the customer interaction at the kiosk more interactive, more involving for the consumer so it becomes part of the entertainment experience in the casino," Jacobs says. "We hope to be able to show some of that at the G2E show in November. Some of the things we're going to be doing involve the graphical user interface that the customer sees. We'll have entertaining displays on the unit to keep the patron interested and entertained while he or she is waiting for the transaction to complete."

The move toward a cashless gaming floor is becoming more of a reality with the advent of server-based gaming and ticket-in/ticket-out technology. Cash access provider Global Cash Access characterizes itself is a pioneer of cashless gaming, and is soon introducing its latest cashless product, QuikTicket.

"When you play a slot machine, when you cash out, you get a ticket," says GCA CEO Scott Betts. "When you get the ticket, you take the ticket to the next slot machine, and when you're done playing, you take it to a redemption device, which we also run, and redeem it. What QuikTicket allows you to do is go straight from an ATM transaction to a ticket. It really eliminates the cost and the potential for fraud and theft of having to cash out at the gaming machines."

Preventing Problems
Cash access providers ensure extra security for their financial services, but they also offer precautionary options for problem gamblers.

Certegy's Gamblers Addiction Intervention Network is an example of a program that allows casino employees to enter problem gamblers' information using the ECAGE application.
"GAIN is our self-exclusion program, and the users also have the ability to manage and input self-exclusion patrons right into the application itself," Hart says.

ACI is developing a system that connects a casino's self-exclusion list with its financial services information to prevent problem gamblers from using cash access services.

"We have been working on a module that would tie in all of the financial services of the casino-whether that is the loyalty club, the ATM or cash advance-into what is known as the 'do not play' list," Jacobs says. "Each casino has them, and we have looked at being able to integrate that into the cash advance system so that when somebody tries to get a cash advance in the casino or get cash access in the casino, if they are on that list, they'll be politely declined and referred to the cage for further discussion, just in case there's a commonality of a name-sometimes you'll have John Smith, then you have another John Smith, and you don't want to eliminate one person from being able to play."

Global Cash Access's self-exclusion program is called STEP, and casino operators can also put players on a "do not play" list via a program called Merchant STEP.

"STEP allows a player or patron of a casino to call or give us the information on their name and who they are and their account numbers and we will block them from accessing any funds in any casino that we process with," Betts says. "Because we process for such a high percentage of casinos, it's the most robust system that's out there right now for allowing someone to self-exclude."

Catering to Players
Cash access providers are able to exclude problem gamblers, and they also appeal to a casino's most valuable players by integrating marketing strategies and financial services.

GCA's Casino Marketing Services product is comprised of a database of players who have used the company's cash access services in the past.

"We will work with our casinos and we give them the names from our database to do direct mailing, based on any number of criteria," Betts says. "It could be something like: 'Anybody who's been at a casino within a 150-mile radius of this one casino and has withdrawn more than $5,000 in one year-give us all those names.' We will give those names to a third party who then puts them on mailers and then mails them out."

ACI provides options for casinos to decrease ATM fees for players with club cards who have accumulated a certain amount of points.

"We have optional modules for casinos that, depending on the choice of the casino, they could opt to reward certain levels of their loyalty card holders with either reduced ATM charges or even free ATM or free cash advance or reduced cash advance charges, depending on the level of the loyalty card holder," Jacobs says.

"That depends on the casino. That's a straight tie-in between a relationship that a casino has with the patron and giving them the advantage for using that cash advance functionality at the casino and rewarding them for their loyalty."

By GGB Staff   Mon, May 03, 2010

One of the nation's most prominent and respected American Indian advocates has been appointed to the Gaming Law Advisory Council of the William S. Boyd School of Law at the University of Nevada, Las Vegas, law school Dean John Valery White announced last week.

Jacob L. Coin, a citizen of the Hopi Tribe of Arizona with more than 17 years experience in Native American public policy at the federal and state levels, will devote his efforts to expanding the law school curriculum to include more American Indian policy issues, including tribal governance, tribal government gaming law and economic development.

Coin will work with White to create a course on Native American gaming law. Material on tribal casinos and the laws that govern their creation and operation currently is included in the Introduction to Gaming Law and Federal Gaming Law courses.

Coin is executive director of public affairs for the San Manuel Band of Serrano Mission Indians of San Bernardino County, California.  

By GGB Staff   Mon, May 03, 2010

Thermal printing supplier FutureLogic, Inc. has been granted two U.S. patents and two Australian patents for printers with the capability to produce promotional coupons.

One U.S. patent, titled "Method and Apparatus for Gaming Promotional Printer," applies to FutureLogic's printer that is connected to a gaming machine via a main communication port and separately connected to a promotional coupon controller via an auxiliary communication port.

The second U.S. patent was issued for a financial transaction printer with promotional printing capabilities. Additionally, Australian patents were issued to FutureLogic for a gaming promotional printer and a gaming machine printer.

"These patents are representative of FutureLogic's innovative approach to gaming printer technology and our promotional couponing expertise," said Eric Meyerhofer, FutureLogic CEO. "We are proud of this achievement and look forward to working with casinos and our EGM customers to implement this exciting technology in our products.

By Frank Legato   Fri, Apr 30, 2010

Manufacturer: Bally Technologies
Platform: Alpha Elite
Format: Five-reel stepper slot; 30, 40 or 50 lines
Denomination: .01, .02, .05, .10, .25
Max Bet: 150, 200, 250, 400, 500
Top Award: Progressive; $1,200 reset
Hit Frequency: 32.41%
Theoretical Hold: 4.05%-14.94%

This video slot on Bally's new Pro Series Slant platform presents an Asian theme packed with special bonus features. The recommended base game is a five-reel, 500-line video slot, but the game is available in 30-line or 40-line configurations as well.

Prominent on the top screen of the dual-screen setup are three progressive meters, displaying three levels of jackpot to be won through the primary game. Recommended resets for the progressives are $15, $100 and $1,200, won by lining up three, four or five treasure chest symbols, respectively, on an active payline.

There are two separate bonus events, one a second-screen pick-a-tile game and the other a free-spin event. When bonus symbols appear on the first, third and fifth reels, the screen displays three boxes for a credit award. The jackpots are pre-multiplied to return a range of three times to 100 times the total bet.

"Free Games" symbols on the first, third and fifth reels trigger 15 free spins, with jackpots for all winning combinations tripled. All winning combinations are multiplied by three. Additionally, if a 2X multiplier symbol appears within the free games, the player will receive double the amount of the accumulated credits in the bonus.

Additional free games can be won within the free spins, up to a potential total of 90 free spins. (The progressives are unavailable on the free spins.)

By GGB Staff   Fri, Apr 30, 2010

Since the Obama administration clearly defers to Harry Reid on any issue that impacts the gaming industry, it was unlikely that any of the various bills that would legalize or decriminalize online gaming would pass the Senate without his support-which was, until recently, lacking. But recent rumors and reports of Reid's new dalliance with a comprehensive online poker bill may mean there is a window of opportunity in the United States.

H2 Gambling Capital, a U.K. group, issued a report in April that suggested Reid is negotiating a bill that would legalize, regulate and tax online poker. The activity is currently illegal, and the Unlawful Internet Gambling Enforce-ment Act, which prohibits banks and credit card companies from processing any payments to or from online gaming sites, is set to go into effect in June.

Rep. Barney Frank (D-Massachusetts), the chairman of the House Financial Services Committee, has sponsored a bill that would legalize online gambling and set up a regulatory system. Rep. Jim McDermott (D-Washington), a member of the House Ways and Means Committee, has authored legislation that would tax online gambling. And Senator Robert Menendez (D-New Jersey) has proposed a bill that would permit online poker. Senators Ron Wyden (D-Oregon) and Judd Gregg (R-New Hampshire) have proposed an internet gaming taxation bill as part of the federal stimulus package.

Reid's views on internet gambling may have been influenced by a change in policy at the American Gaming Association. At the organization's last board meeting, the policy was shifted from neutral to positive after many of the major members-MGM Mirage, Harrah's Entertainment, Wynn Las Vegas and others-spoke in favor of internet gambling legalization.

Reid's bill is reportedly limited to online poker, and would not include any of the other casino games at this point because there is less opposition and more support for poker.

According to H2, "A Reid-sponsored bill with wide approval should also have limited opposition, without the need for last-minute political intervention."

The report also says the bill would allow individual states to opt out of online gaming.

But the bill is upsetting some Native American tribes, since there seems to be no provision in Reid's rumored bill for them. Many tribes had been coalescing behind the Frank bill, which includes clear carve-outs for tribes that the Reid bill reportedly lacks.

The California Tribal Business Alliance, which represents nine tribes in the Golden State, recently sent a letter to Frank, chairman of the House's banking committee, saying the group no longer opposes such a bill as long as gaming tribes don't suffer by it. This is similar to a position taken recently by United South and Eastern Tribes, which represents 20 tribes, and which has called for a study of the effects of internet gaming on tribal operations.

"The legalization of internet gambling in the United States could be a disaster for tribal government gaming, or it could be a wonderful new avenue for tribal economic development," said the letter written by Chairman Leslie Lohse of CTBA.

Lohse worries that Frank's legislation might conflict with rights established by the Indian Gaming Regulatory Act, which grants tribes exclusive rights to operate casinos when they have compacts with the state.

She said her group would happily work with Frank to write a law that would protect Indian rights, and yet open the way for another source of gaming revenue. Frank has previously offered assurances that he doesn't want his legislation to affect Indian gaming or compacts.

By Caitlin McGarry   Fri, Apr 30, 2010

Product/Manufacturer: Kaleidoscope Network

Scottsdale, Arizona-based Kaleidoscope Network is unveiling its network of websites that are customizable to each casino and each casino player. Kaleidoscope Network is a marketing innovation that allows a casino to communicate personally relevant information to its players and provides a platform for players to communicate with the casino.

The innovation tracks psychographic player data to maximize media placement strategies, to understand what players want both on property and off, and enhance promotion planning and hosting efforts.

Product and service satisfaction is tracked by game and by amenity, to the time of use. It includes a system of email alerts for notifying staff of dissatisfaction for immediate service recovery, and a system for notifying patrons of upcoming events of their stated interest and expiring offers.

All player data is tied to player value taken directly from the property's player tracking system. Kaleidoscope integrates with all major player tracking systems and supports clients with customer service and technological staff.

Easy-to-read reports are provided in real time, in graph and chart form, on all psychographic data. Each report is prepared to be analyzed by segment, and includes metrics such as value strata, age, gender, club status, distance from property, etc.

Player satisfaction data is reported in real time and is compared to prior periods and summarized with a market ranking report showing where the property ranks against its immediate competition.

Kaleidoscope has been in development for several years and has been running live at Sycuan Casino in El Cajon, California for more than six months. It was introduced to the gaming industry at the recent NIGA 2010 trade show, and both tribal leaders and casino operators have expressed interest in implementing Kaleidoscope at their properties.

According to Kaleidoscope Network executives, the company's pricing philosophy is to make Kaleidoscope available to all casinos by pricing it at an affordable monthly licensing fee. 

For more information about the Kaleidoscope Network, visit www.focusonyourplayers.com.

By GGB Staff   Thu, Apr 29, 2010

MGM Mirage has hired five banks to help it raise money for a Hong Kong initial public offering of part of the company's Macau operations. The company named BNP Paribas, Bank of America-Merrill Lynch, HSBC, JP Morgan and Morgan Stanley as the preferred partners in the plan. The IPO is expected to be completed in the second quarter of 2010 and raise more than $500 million. It follows similar successful public offerings in 2009 by SJM, Las Vegas Sands and Wynn Resorts.  • Estonia-based casino and online gaming operator Olympic Entertainment Group has agreed with lender Swedbank to a change in terms for its existing €17.6 million loan. The current floating interest rate will change to a fixed interest rate 5.45 percent. OEG will make a premature repayment of €6 million. Final term of the loan, December 25, 2013, does not change.  •  Harrah's Entertainment is increasing its sale of new debt by 50 percent to $750 million, and also is offering a 13 percent yield on the notes, which will come due in 2018. The terms of the sale are not yet in place, though the company said the funds from the sale will go toward paying down debt due in 2011 and repaying loans to the company's banks.  •  Clark County, Nevada's largest taxpayers lost $12.5 billion in combined appraised property value in 2010. Only MGM Mirage's appraised value increased, due to the addition of CityCenter to the rolls.  • Planet Hollywood on the Las Vegas Strip has gained a new owner but is losing two of its nightclubs. The Privé and Living Room clubs have lost their leases in the resort. Privé owes Planet Hollywood more than $300,000 in back rent and other expenses, and decided to reject its lease in the terms of its bankruptcy.  • The Nova Scotia Gaming Corp. predicts that Casino Nova Scotia in Halifax will see a decline in 2010-11 due to a gaming complex slated to open in Moncton in May. Moncton is expected to attract potential visitors from Nova Scotia, Prince Edward Island and New Brunswick.  Site work, including demolition, has begun at the location of the old Delphi auto parts plant in Columbus, Ohio, where Penn National Gaming Inc. hopes to build its Hollywood Casino Columbus if voters in May approve moving the location from the city's Arena District to the defunct factory. Columbus and Franklin Township, where the land is actually located, are moving closer to an agreement on allowing the land to change jurisdictions, so it will be inside of Columbus when the casino opens in 2012.  • Bally Technologies has sold its Rainbow Casino in Vicksburg, Mississippi to Isle of Capri Casinos Inc. for $80 million. Bally, which once the purchases closes on June 30 will own no casinos, says it will concentrate on developing gaming technology.  The casino has 831 slots, 10 gaming tables and a hotel. Isle of Capri opened the first casino in Vicksburg in 1993. •  The Maryland legislature has passed a bill lowering the proposed tax rate for a slot casino at Rocky Gap Lodge and state park. The bill reduces the total effective gaming tax from 67 percent to 64.5 percent, and allows the purchase price of the lodge to be covered as part of the license fee. The estimated cost of the run-down lodge is $25 million. The measure is designed to entice bidders to seek the license, which has seen no suitors since Empire Resorts, whose application was rejected when it failed to deliver the up-front license fee. There are currently no bidders for the Baltimore city license either. Critics cite the suffocating tax rate as the main culprit. •  A permit was issued last month for new construction at the Palace Casino in Biloxi, Mississippi. The $36 million expansion is intended to restore the casino to its former condition before Hurricane Katrina struck the region. Construction will be done in phases over the next 20 months. The Palace will remain open. •  The Pennsylvania Gaming Control Board approved table-game petitions of three casinos last month, approving tables for Sands Casino Resort Bethlehem, Mount Airy Casino Resort and Hollywood Casino at Penn National Race Course. The approvals bring the total to five casinos that have cleared the first hurdle of table game approval. Tables were approved in March for Mohegan Sun at Pocono Downs and the Parx Casino at Philadelphia Park Racetrack, and the baord will consider Harrah's Chester at its meeting in May.  •  Officials of Las Vegas-based Riviera Holdings Corporation, while acknowledging that the company is in talks with creditors about restructuring its debt, refused to respond to press inquiries last month concerning reports that the operator is about to be acquired by Starwood Capital Group LLC through a prepackaged bankruptcy. Starwood chief Barry Sternlicht was reported to be interested in taking over Riviera, whose assets include the Riviera hotel-casino on the Las Vegas Strip and the Riviera Blackhawk in Colorado. However, a statement from Riviera said only that the company will consider Chapter 11 bankruptcy if it is unable to restructure its debt. The statement did not mention the reported talks with Starwood.

By GGB Staff   Thu, Apr 29, 2010

Critics of a new casino planned for downtown Vancouver are questioning the propriety of the deal, and the choice of a major political donor to develop and manage the $450 million gaming hall.

T. Richard Turner is chairman of the Insurance Corporation of British Columbia and former chairman of the province's lotteries and gambling corporation. His company contributed $50,000 to Liberal candidates before the 2009 election, and Turner personally donated about $17,000.

He told the National Post that he sees nothing wrong in taking control of the project. "I sleep nicely at night," he said.

In 2006, Turner joined the board of ParagonCanadaHoldingsULC, a division of Las Vegas-based Paragon Development Ltd., which had just bought a failing casino in Vancouver. His job, he said, was explaining to Paragon local perspectives and matters of community interest.

In May, after the election, Paragon bid for and won the right to build the new casino and hotel, and Turner was named to run the show. He told the Post he had little input in the bidding process. He had not even "read the bid book" that lay on his desk. He "only looked at the pictures," he said.

"I purposely stayed out of the process. My only input was about using as much wood as possible and not to use neon" in the proposed casino, he told the Post.

By GGB Staff   Thu, Apr 29, 2010

In one of the most dramatic legislative reversals in recent history, the Massachusetts House of Representatives gave a veto-proof vote of 120-37 to Speaker Robert DeLeo for his bill that would authorize two regional casino resorts and four racinos. The bill survived over 200 amendment attempts.

Now it heads to the Senate, which approved a racino bill in 2005. The Senate, however, plans to pen its own gaming legalization bill, with a vote not expected until June.

The bill will, says DeLeo, create 18,000 jobs, generate up to $500 million annually in economic activity, and inject $100 million into local government from a 40 percent tax of gaming revenue. It would also collect $260 million in one-time licensing fees and require a $500 million minimum investment by a casino developer.

It would, if passed by the Senate and allowed to stand by the governor, make the state the 14th in the nation to have commercial casinos.

Much of that money will, it is expected, come from Massachusetts players who now play in neighboring states, such as Connecticut, where they spend over $1 billion annually.

Two years ago the House, under a different speaker, Salvatore F. DiMasi, shot down a three-casino resort bill by Governor Deval Patrick by more than two thirds. The main difference between then and now is the recession.

Most of those representatives reversed themselves in the new vote. That includes the speaker himself. But they aren't the only ones who changed their minds. Patrick is now on record as opposing this bill, which he said would have unacceptable social costs.

Several representatives who fought hard for a guarantee that Western Massachusetts would be guaranteed one of the casinos were unsuccessful. That region includes the town of Palmer, where the development arm of the Mohegan tribe of Connecticut is pushing to build a mega-casino resort.

One ancillary effect of the bill was that online poker-playing in the Bay State was not criminalized, as it had been in the original bill pushed by Patrick two years ago. Removing that provision from the bill was supported by the Poker Players Alliance, a nationwide organization that has 25,000 members in the state.

By GGB Staff   Thu, Apr 29, 2010

The latest iteration of Steve Wynn's vision was on display in Macau last month when Encore Macau opened on time and on budget.

Highlighted by a spectacular Grucci fireworks show, the sister property of Wynn Macau steps up the gaming experience enjoyed by Wynn guests in Macau. With 414 suites and villas, Encore Macau adds two restaurants, three retail offerings and the "Spa at Encore," a top-of-the-line experience with private therapy suites.

The $605 million Encore gives Wynn more room to host the VIPs and "premium mass market" that is the company's target market.

Wynn also took time in Macau to criticize the policies of the Obama administration to explain why he's focusing on the Macau market and not U.S. gaming venues.

"The governmental policies in the United States of America are a damper, a wet blanket," Wynn said in an interview with Bloomberg Television. "They retard investment, they retard job formation, they retard the creation of a better life for the citizens in spite of the rhetoric of the president."

Wynn even threatened to move his corporate offices from Las Vegas to Macau, but most experts thought that an idle threat used to skewer U.S.
policy.

Wynn has also backed away from other U.S. investments, withdrawing from the bidding for the gaming operation at Aqueduct racetrack in New York City and recently canceling a project that was envisioned in Philadelphia. He also visited Atlantic City before declaring himself uninterested in the opportunities there. 

His opinion of China is very different, however.

"I'm thrilled and I love it here," Wynn said at the Encore opening. "I feel a very steady, stable, consistent direction."

Plans for the next Wynn Resorts Macau development are already under way, he said. It will include around 2,000 rooms, 400 tables, restaurants, shopping and gardens-and will contrast with the edifices of neighbors the Venetian, City of Dreams and Galaxy Macau.

"What makes people happy, and what don't they get in China? What you don't get in China is space, and the heart of a resort is space-gardens, places to gambol, not gamble," Wynn said in an AP interview in Macau.

“I know what I want to do on the 51 acres, not build four hotels or six hotels or any of that foolishness,” he said. “I am going to build one hotel of modest size with gardens and extended space wherever you are.”

Wynn believes his Cotai casino would expand the appeal of Macau.

"You create a product that didn't exist before and all of a sudden it broadens the appeal of the city-that makes people who aren't necessarily baccarat players decide to come here," he said.

By GGB Staff   Thu, Apr 29, 2010

The state of Florida and the Seminole Indians have finally agreed on a gaming compact. Governor Charlie Crist signed the bill into law in late April.

The new deal will allow the tribe exclusive rights to casino-style card games like blackjack at five of its seven casinos, including the Hard Rock in Tampa and three casinos in Broward County. In return, the Seminoles will pay more than $1 billion over the next five years. At the end of the term, the state has the option of extending the five-year agreement. A second, 20-year agreement enables the tribe to operate Las Vegas-style slot machines at all seven of its facilities.

"I think everyone will benefit as well as the Seminole tribe," said Seminole Chairman Mitchell Cypress, of the deal that's been three years in the making. "It's been a long journey."

The compact will pump more than $400 million into the state budget. The Seminoles have already paid $270 million they had held in escrow pending a final deal; they will pay a minimum of $150 million to $200 million per year through 2015. That money will help to cover part of the state's gaping budget deficit. While Crist has long touted the use of gaming revenues for public education, the latest version of the deal sends the money to the general fund.

The state's 27 dog tracks, horse tracks and jai-alai frontons also won some concessions. Tracks and frontons in Broward and Miami-Dade counties, which have voter-approved slot machines, will see their tax rate slashed from 50 percent to 35 percent.

Other tracks and frontons will get a chance to expand their existing poker games, set higher limits and open for longer hours. They also will be allowed to install 350 electronic bingo or instant racing machines at each of their facilities.

The new compact could lead to the expansion of the Seminole casino empire, said Jim Allen, CEO of Seminole Gaming.

"It creates a real incentive for us to expand, hire more people and create more destinations," Allen told the Tribune.

The new compact gives the state "an opportunity to catch our breath," said House negotiator Bill Galvano. "At that point we know what the deal is and we have the ability to decide if banked card games are something we want in our borders."

State lawmakers and outside investors like Sheldon Adelson of the Las Vegas Sands Corp. have spoken publicly about creating destination casinos in places like Miami. That could make Florida the Las Vegas of the Southeast, according to the Palm Beach Post.

"That's a very real probability, yes," Galvano told the Post.

By GGB Staff   Thu, Apr 29, 2010

The Republic of Armenia is in the process of tightening up its casino and slot hall industry.

The legislature passed the Republic of Armenia Concept on Regulation and Control of the Gambling Business Sector on April 1. The law will eventually result in more reporting obligations by operators as well as in higher fees, and is expected to favor larger companies.

Local news source Tert reports that the nation's 11 casinos and 103 slot halls are being moved out of the major cities and into three large resort towns. These are: Sevan, a lake resort 75 kilometers northeast of the capital, Yerevan; Tsaghkadzor, a ski and mountain recreation area 60 kilometers northeast of Yerevan; and Jermuk, a renowned spa center 170 miles southeast of Yerevan.

Armenia, with a total population around 3 million, is bordered by Turkey and Iran, with populations of 76 million and 66 million respectively. It is thought the gaming businesses will benefit from tourism from these countries.

Along with the location changes, the finance ministry plans to implement new regulations to counter potential money laundering, criminal activities and financing of terrorism. The regulations are being developed based on work by the international Financial Action Task Force.

Deputy Finance Minister Vardan Aramyan announced the measures at a press conference last month.

"Larger companies in this sector are more disciplined and have control systems, separate subdivisions to fight against money laundering and financing of terrorism," said Aramyan. "Smaller companies are less disciplined, more negligent, and that is conditioned by their abilities."

Gaming currently provides the Armenian treasury with some AMD4 billion a year-about $10 million.

By GGB Staff   Mon, May 03, 2010

SCA Promotions announced that Autumn Gregg has been named director of the company's gaming division.

SCA Gaming is the world's leader in risk-free mega-jackpots, serving 365 gaming clients with over 3,000 promotions worldwide.

Gregg has been an account executive with SCA Promotions since 2002. She joined the company in 2000. According to the company, as director of SCA Gaming, she will "bring the one-to-one marketing and promotion expertise she has provided her clients to the entire division."

"Autumn will be a great asset in her new role as director," said Bob Hamman, CEO of SCA Promotions. "We are delighted to have Autumn at the helm of SCA Gaming as we continue to expand our presence in the gaming space."

"SCA is pleased to report that it had one of the best quarters in its 26-year history," added COO Hemant Lall. "Sales and profitability numbers for the first quarter of 2010 are up significantly across the board, including the gaming division. We expect that trend to continue in spite of a weak economy."

By GGB Staff   Mon, May 03, 2010

Bergman, Walls Associates, Ltd. Architects announced that George Bergman AIA has been elected president for both domestic and Asian operations, replacing company principal Scott Walls, who retired April 2.

Walls will remain a director and will continue to market BWA as Bergman, the son of company Chairman Joel Bergman, leads the firm. BWA has done extensive work in the gaming industry.

Bergman, who holds a master's degree in economics from Soka University in Tokyo, Japan, has expanded the firm's work in Asia. Often saying that the U.S. economic future is tied to Asia, he has established BWA offices in Vietnam and the Philippines, and is scouting an office location in China.

Bergman, 45, also was the architect for prominent gaming  projects including the mega-suites at Caesars Augustus Tower, the Pure and LAX nightclubs and the Resorts Atlantic City high-rise addition.

By GGB Staff   Mon, May 03, 2010

Leading slot manufacturer International Game Technology is launching a new upgrade kit that will allow customers to retrofit legacy IGT machines with the advanced Service Window for interactive networked communication.

The Service Window solution for legacy IGT 80960 video machines,  scheduled to be deployed in the fall, is the only GSA-compliant player interface available for the legacy IGT machines. It is compliant with the G2S, or game-to-system interface.

The Service Window provides player interaction with the casino, right at the slot machine. When the player inserts his players club card, a special window slides the game screen over, providing a menu of information and services the player and operator can customize, all designed to improve the player experience. It is featured on all of IGT's newest game formats, which are designed to work in networked systems such as IGT's sbX system.

"This new solution helps preserve operator investments," said Rich Schneider, IGT's executive vice president of gaming products. "Now, operators will have access to future technologies on the gaming machines they have today. And, because this solution is GSA-compliant, it gives operators more control and flexibility for the types of content distributed across the network-creating a better player experience."

By Caitlin McGarry   Fri, Apr 30, 2010

Product: Roulette wheels, reader displays
Manufacturer: Gaming Partners International

Gaming Partners International offers a full-service, turn-key approach to providing gaming furniture and equipment for casinos worldwide. For years, its B&G line of precision roulette wheels has been sold all over the world. GPI is now adding roulette and baccarat reader displays to its extensive line of products.

GPI's European roulette wheels have 37 number slots, including one through 36 and the single zero, and feature a low-maintenance, secure construction for a highly reliable and consistent game. American roulette wheels are made with extremely precise and secure production requirements and feature 38 number slots, including one through 36 and single- and double-zero slots.  

Utilizing precision mechanics, all GPI roulette wheels are equipped with high-security separators, machined from a solid piece of metal with tolerances of plus/minus 0.02 millimeters. Designed and built for easy maintenance, each wheel is individually checked on 12 different points before leaving the factory.  

To complement its line of precision roulette wheels, GPI also offers roulette reader displays. Roulette reader displays are available for both single- and double-zero wheels, come in a variety of sizes and feature real-time instant reading of the action on the roulette wheel. With an integrated camera, a slim design and easy installation, GPI roulette reader displays offer features like a display of statistics, such as the 16 last winning numbers, simple bets, hot and cool numbers, display of minimum and maximum table bets and an area for commercial messages.

GPI roulette readers are designed for integration with roulette wheels that have colored separator cells.

GPI also offers baccarat displays, which are fully customizable and display all the relevant statistics of the game.

GPI's plug-and-play baccarat display features a 19-inch horizontal screen and an easy-to-use, table-mounted, 19-key keypad with calculator option, all of which can be networked to enable the display of real-time statistics. Graphics can be customized to accommodate the casino's display preferences, including custom logo and background, table and game information, game statistics, results statistics, etc.

For more information about GPI's roulette wheels and reader displays, visit www.gpigaming.com.

By Frank Legato   Fri, Apr 30, 2010

Manufacturer: Konami Gaming
Platform: K2V; Podium
Format: Five-reel, five-line video slot
Denomination: .25, .50, 1.00, 2.00, 5.00
Max Bet: 250
Top Award: 50,000 credits
Hit Frequency: Approximately 35%
Theoretical Hold: 14.8%

This latest title in Konami Gaming's K2V video slot series and Podium cabinet is a five-reel, five-line game designed for high denominations. It is available to casinos in quarter, 50-cent, $1, $2 and $5 denominations.

There is a free-spin bonus event, with an extra twist. Three, four or five scattered coin symbols trigger seven, 10 or 20 free games, respectively. The normal reels are replaced by a special set of symbols for the free games.

During the free spins, each time a "nugget" symbol appears, it is recorded on a meter. When the dragon symbol lands, if five or more nuggets have been accumulated, the player is paid a bonus, beginning with five times the per-line wager for five nuggets, and rising by five-credit increments with every additional nugget-10 times the per-line bet for six nuggets, 15 times the bet for seven nuggets, etc.-until reaching 11 nuggets.

If the player has accumulated 11 or more nuggets, the bonus amounts accumulate more rapidly: 50 times the line bet for 11 nuggets; 100 times the bet for 12; 150 times the bet for 13; 500 times the bet for 14; and a top bonus of 1,000 times the line bet for a dragon symbol with 15 accumulated nuggets. The free-spin round can be re-triggered within the free spins.

By GGB Staff   Fri, Apr 30, 2010

Full Tilt Poker is under the gun as a federal grand jury in Manhattan investigates the site for catering to American gamblers. Online gambling is currently illegal in the United States, though many U.S. residents gamble online anyway. Celebrity poker players Chris Ferguson and Howard Lederer, who reportedly control Full Tilt Poker, also are under investigation.

"They are waging this war of intimidation," gambling legal expert Nelson Rose told the Financial Times. "There are not a lot of good statutes, so they go after high-profile targets and try to intimidate everybody."

Eric Jackson, a  Los Angeles-based attorney representing Lederer, Ferguson and a Full Tilt-related software company, told the newspaper his clients "are not going to comment about a speculative grand jury investigation that we are not aware of."

Full Tilt Poker is currently involved in a civil case in Los Angeles related to its U.S. activities, but Lederer and Ferguson filed a motion to have the case dismissed.

Significantly, the investigation charges Full Tilt with violations of the money laundering laws rather than relying on the Wire Act, under which previous online gaming operators were charged, or the Unlawful Internet Gambling Enforcement Act, whose penalties and jurisdiction have been questioned. 

By GGB Staff   Fri, Apr 30, 2010

The legislature in Peru has voted overwhelmingly in favor of a law that bans tobacco use in all public, enclosed spaces, including casinos.

The 120-member unicameral congress approved the law with a vote of 60 to 4, with 13 abstentions, according to Europa Press. The move brings Peru into compliance with a World Health Organization agreement on smoking policy.

Luis Alva Castro, president of the congress, said of the law, "We must respect the health of the non-smokers, who are the majority."

The World Health Organization Framework Convention on Tobacco Control is the first international treaty negotiated under the WHO umbrella, with 168 nations and regional economic integration organizations. Adopted in 2005 after three years of negotiation, the Tobacco Free Initiative is one of the most widely and rapidly ratified treaties in the history of the United Nations.

By GGB Staff   Thu, Apr 29, 2010

Chisholm Creek Casino Resort reacted to being denied a 60-day extension for the state to decide on its bid to build a state-owned $225 million casino resort in Sumner County by abruptly pulling out of the process.

The lead developer, Lakes Entertainment, sent a brief note to the state announcing it was pulling out and asking for its $25 million privilege fee to be returned.

Kansas Governor Mark Parkinson rejected the request for a fourth delay in voting by the seven-member Kansas Lottery Gaming Facility Review Board that is tasked with making that decision. The developer had asked for the extension from the board, which passed it on to the governor, who rejected it with this statement: "I believe it is not in the best interest of Kansas, or the project stakeholders, to put this decision off any longer."

Without the governor's permission, the board was required to make a decision by April 19.

Also complicating the process is the fact that Chisholm Creek was the only applicant for Summer County and the south-central gaming zone. So now, apparently, the whole process will go back to square one.

By GGB Staff   Thu, Apr 29, 2010

The effort by Goa Chief Minister Digambar Kamat to provide financial relief for land-based casino operators has been answered with an almost symbolic counter-measure by the municipal corporation of the city of Panaji.

Kamat, who is also minister of finance for the state, recently lowered the entrance fee to casinos from INR2,000-about $45-to INR500, reports news agency IANS. Several months ago the entrance fee was raised from INR200 over alleged concerns about young people gambling.

Soon after the announced reduction, the Panaji city leaders revealed their new budget, which includes an increase in the annual trade tax for Goa's casino ships, from the current INR7,150 to INR50,000.

"They should be able to pay up at least so much," said Panaji Mayor Carolina Po, referring to the additional $960 casino ships will owe the city each year. "They are parked off Panaji and their offices are located on the banks of the city."

There are over a dozen electronic, land-based casinos operating in five-star hotels in the state of Goa and six licensed casino ships, with table games as well as slots, based in Panaji and operating on the Mandovi River. There has been a strong push against gambling from the opposition political party since before state elections a year ago.

Kamat has said that his government is working on creating a process that will result in an official casino gaming act and regulations.

By GGB Staff   Thu, Apr 29, 2010

France-based casino resort operator Lucien Barriere is now expected to hold off on its anticipated IPO until at least the autumn of 2010.

On the last day of March, Reuters initially cited French news website Wansquare as saying that the 51 percent-family-owned casino group could go public as early as the end of June.

However, on April 2, Reuters reported that another French website, Les Echos, had since quoted Barriere Chairman Dominique Desseigne as saying that the group would list "in September-October or at the end of the year, depending on market conditions."

Desseigne told Les Echos that business is "not good" at the present time and that this year "will be tough," Reuters reported. Barriere sales were down 3 percent in the first four months of the current fiscal year, which started at the beginning of November 2009.

French hotel and payment services group Accor announced in February it is looking to sell its 49 percent stake in Barriere.

The Desseigne-Barriere family owns 51 percent of Groupe Lucien Barriere and 70 percent of SFCMC, which operates two luxury hotels and two casinos in Cannes.

By GGB Staff   Mon, May 03, 2010

Slot manufacturer WMS Gaming announced that its "Adaptive Gaming" system of video slot games linked through a wide-area network has passed 1 million unique player log-ins.

Adaptive Gaming slots such as the Star Trek series allow players to advance through various levels and "episodes"-completely different games-by achieving certain bonus events. In the Star Trek series, they are called earning "medals" from "Star Fleet."

The unique aspect of the games is that they are all linked to a wide-area server that permits a player to pick up a game where he left off, at any other machine on the network, regardless of the location. A ticket prints out with a log-in code, and the player can resume his game and not lose anything earned so far.

In another Adaptive Gaming slot, Reel 'Em In Compete To Win, player scores in a competitive fishing contest are logged and can be accessed with the log-in code.

According to WMS, each of the two games has generated an average of approximately 2,000 new, unique player log-ins per day.

This summer, the manufacturer will introduce a new Adaptive Gaming title, The Lord of the Rings.

By Frank Legato   Fri, Apr 30, 2010

Manufacturer: Aruze Gaming
Platform: G-Enex
Format: Five-reel, multi-line video slot
Denomination: .01
Max Bet: Various
Top Award: Various
Hit Frequency: Approximately 50%
Theoretical Hold: 14.31%-20.63%

Aruze is famous for this game in many parts of the world. Using a variety of base games, a bank of networked slots is offered with a random, automatic tournament function.

Players have been drawn to this game because of the presentation, featuring giant, three-dimensional gloved hands jutting from an overhead display, moving around to indicate that a tournament is beginning.

The base games are all multi-line video slots in various payline configurations, each game available in penny denomination with either a one-credit-per-line or half-credit-per-line wagering setup. The networked banks are available in groups of six or 10 machines. Players have to cover the paylines and wager an ante to qualify for the community tournament.

When the random tournament feature is triggered, the regular screens disappear and are replaced by a special set of reels with a single payline. During the tournament, players receive points for symbols landing on the payline, and points are deducted for symbols bearing a "minus" sign. The top three scores at the end of the tournament receive cash prizes.

Base games include popular Aruze titles such as Shen Long, Legend of the Qin Dynasty II, Magical Cat and Kyoto.

Graphics and sound-and those big hands-are designed to capture player attention. When a tournament is triggered, a countdown commences as an announcer encourages qualified players to get ready for the contest.

By GGB Staff   Fri, Apr 30, 2010

The parliament of France has passed the bill that will end the national online gaming monopoly. The bill is expected to become law in time for the 2010 World Cup soccer matches, which start in June.

Operators will need a license from the state and be taxed at a rate of 7.5 percent on sports betting and horse racing and 2 percent on poker. The government will have the power to block illegal sites, and financial transactions between those sites and French banks.

In the run-up to the opening of the French market, the existing monopolies have closed deals with media platforms and private companies with products that will enhance their ability to compete in the new environment.

French national lottery and sports betting operator Francaise des Jeux has been especially aggressive. The company recently signed an agreement with telecommunications provider Orange to add betting to Orange’s French portals. In March, the French operator acquired its supplier of fixed-odds betting products, London-based Laverock von Schoultz. In February, FDJ inked a sponsorship deal with the nation’s largest commercial TV channel, TF1. And in January, FDJ and French casino group Lucien Barriere formed a joint venture to launch an online poker site, with Online Gaming 3D holding a 12.4 percent share and CyberArts providing the platform.

In March, French horse-race wagering monopoly PMU signed an agreement with PartyGaming to provide its online poker product. In November, PMU contracted with Ireland's Paddy Power to provide sports betting.

On the private competition side, Ladbrokes announced last month that it has signed a conditional 50-50 joint venture agreement with television Group Canal+ to launch a French-licensed online betting and gaming service. Canal+ is the leading premium pay TV provider in France and operator of such channels as Canal+ and Canal+ Sport.

Ladbrokes Managing Director of Remote Betting and Gaming John O'Reilly said, "Canal+ is a brand that is synonymous with sport in France. We believe that there is an opportunity to build a good business in France over time as the market and regulation develop."

By GGB Staff   Thu, Apr 29, 2010

City officials and just about everyone else in Philadelphia were shocked last month by the announcement from Wynn Resorts Chairman Stephen Wynn that he is abandoning his bid to take over the troubled Foxwoods Philadelphia project on the city's riverfront.

The news came in a two-paragraph business-wire press release from Wynn Resorts that its newly formed subsidiary Development Associates, LLC had "terminated all agreements and negotiations with respect to a potential investment in the Foxwoods Casino project in Philadelphia, Pennsylvania."

Wynn's statement in the release shed little light on the reason he is abandoning the project. "We are fascinated by the legalization of full gaming in Pennsylvania and stimulated by the opportunity that it presents for Wynn Resorts, but this particular project did not, in the end, present an opportunity that was appropriate for our company," he said.

Only three days earlier, Wynn and his main architect had met-at Wynn's request-with Philadelphia Mayor Michael Nutter to discuss the project. Nutter later said it was a productive meeting, and after the announcement, said he was "stunned" at Wynn's departure.

Just a week before the cancellation, Wynn's Philadelphia venture had seemed full-speed ahead. He had delivered complete plans for the project, including color renderings, to the state Gaming Control Board three weeks early for a casino he said would be "Wynn top to bottom."

Some experts said his cancellation of the project had something to do with Atlantic City.

Soon after leaving Philadelphia, Wynn visited the Atlantic City Hilton, the casino-hotel he built in the 1980s as the Golden Nugget. According to one Hilton employee, there was an idea being floated of Wynn re-acquiring the property and transforming the hotel into an all-suite facility.

Another report had Wynn looking over the Revel project at the other end of the Boardwalk, which had days earlier been announced as for sale by Morgan Stanley. The Wall Street giant, which was reportedly close to securing the final piece of financing to complete the mega-resort's interiors, indicated it was willing to take a loss in selling the property. It is possible that Wynn could pick up a new property for a bargain.

But all that speculation was put to rest when Wynn Resorts announced it had no interest in acquiring any property in Atlantic City.

By GGB Staff   Thu, Apr 29, 2010

One of the favorite locations for the annual Indian Gaming trade show produced by the National Indian Gaming Association is San Diego. When this year's version of the show arrived in San Diego, it brought with it 5,000 attendees.

Held on the occasion of NIGA's 25th anniversary, the event was dedicated to Native Americans who played significant roles in the development of Indian gaming, who died in the last year: Chief Philip Martin of the Mississippi Choctaw tribe, Tim Wapato, NIGA's first chairman, a member of the Colville Confederated Tribe, and others.

NIGA also honored many living legends. At the Chairman's Leadership Awards Luncheon, Oneida Nation of Wisconsin Chairman Rick Hill, 45-year Tulalip Tribes board member Stan Jones, and Kurt BlueDog, general counsel of the Shakopee Mdewakanton Sioux Community, were recognized for their contributions to the industry. At the 12th Annual Wendell Chino Humanitarian Award Banquet Wednesday night, Chickasaw Nation Governor Bill Anouatubby was honored, followed by a performance of the legendary rock band Guess Who. NIGA leadership was also re-elected, with Vice Chairman Kevin Leecy and Treasurer J.R. Matthews returned to office.

NIGA Chairman Ernie Stevens said he's proud of the business that is done each year at his organization's annual trade show and conference.

"I like to keep things in house," he told Indian Country Today. "That's why we've got something happening every night, because we want people to see what we do, we want people to interact with one another, and do the business of Indian country. It's an understatement to say business goes on at NIGA. I think that's where the business is built, where the business is protected, where people are educated about the business and where it's advanced."

By GGB Staff   Thu, Apr 29, 2010

The Cratos Premium resort on the Turkish side of Cyprus is scheduled to open officially in the beginning of June. With a price tag of $220 million, to date it is the largest tourism-sector investment within either the Turkish or Greek side of the Mediterranean island nation.

The resort is the first hotel project from construction firm BozGroup of Turkey. The developer self-financed the building of the Cratos Premium.

The hotel features 10 king suites and 410 premium rooms, half of which are suites. Thirty-five different décor schemes have been employed in the rooms.

The casino will have 250 slot machines and 35 table games.

Resort amenities include 14 fine dining and gourmet restaurants, a spa, a beach club that is open 24 hours a day and a private beach that is one kilometer long. A large ballroom and 14 meeting rooms are available to host seminars and events.

A soft opening of the resort is expected in mid May.

By GGB Staff   Mon, May 03, 2010

The gaming industry's top executives will come together to "chip in" to support research on gambling and responsible gaming education at the 12th annual AGEM/AGA Golf Classic presented by JCM Global. Sponsored by the Association of Gaming Equipment Manufacturers and the American Gaming Association, the AGEM/AGA Golf Classic is a fund-raiser for the National Center for Responsible Gaming, the only national nonprofit organization dedicated to funding research on gambling disorders and increasing awareness about responsible gaming.

The tournament takes place May 10 on the stunning fairways and impeccable greens of the award-winning Cascata in Boulder City, Nevada. Since its inception, the event has raised nearly $800,000 for the NCRG, including $80,000 last year.

Player reservations and sponsorship options are now available. Sponsorships range from $75 to $50,000; raffle prize donations are also being accepted. For registration or sponsorship information, contact JCM Global at 702-651-3472 or visit www.golf.jcmglobal.com.

"With the support of the gaming industry, the NCRG continues to fund critical research breakthroughs in the field of gambling disorders and advance awareness about the importance of responsible gaming," said Glenn Christenson, chairman of the NCRG. "Events such as the AGEM/AGA Golf Classic presented by JCM Global enable us to continue delivering on our mission of research and education while providing industry professionals with a unique and enjoyable opportunity to support this important cause."

"The gaming industry looks forward to this event every year and the Association of Gaming Equipment Manufacturers is proud to once again serve as a title sponsor," said AGEM Executive Director Marcus Prater. "There's nothing like a round of golf at Cascata, and the fact that it provides such a strong financial boost in support of responsible gaming makes the day even more satisfying."

By Frank Legato   Fri, Apr 30, 2010

Manufacturer: International Game Technology
Platform: AVP
Format: Five-reel, 60-line video slot
Denomination: .01
Max Bet: 300
Top Award: 25,000 credits times line bet
Hit Frequency: Approximately 50%
Theoretical Hold: 2%-15%

With this video slot, IGT mines the rich vein of imagery offered by Little Shop of Horrors, the low-budget 1960 black comedy that gained new life in the 1980s as a Broadway musical and movie starring Rick Moranis, in the title role of a nerdy florist shop worker who raises a plant that feeds on human blood.

The slot employs 3D animation and a novel reel configuration to make the story come to life. The reel set is hexagonal, with five symbols in the middle reel, four symbols on the second and fourth reels, and three symbols on the outer reels. It is also has a "Tumbling Reels" feature, which adds to winning combinations as the winning symbols disappear and new reel spots tumble into place.

The 3-D animation is employed both in the primary game and in a unique bonus event. In the base game, mini Venus Flytrap plants grow from the reels' outer edges in 3-D, and eat symbols to grow bigger. Loud crunching sounds intensify the plants' presence.

The "Pick a Bud" bonus feature lets players choose one of three prizes-more credits, a multiplier of the win, or a free games feature. In the free-spin round, extra symbols turn wild, and the Venus plants crunch away. Each time the plant grows to full size, the player gets more free games and an additional symbols turn wild.

The Tumbling Reels game play occurs whenever the plant symbol appears. Symbols disappear and new ones fall into place, and the plant continues to grow larger each time it feeds on more symbols.

Operators can configure the game to play all 60 paylines for 50-cent, quarter and 10-cent bets to allow for high-denomination play. The game is available as a 3-D game for IGT DynamiX configurations, and can also run without 3-D in the wide-screen G20 and G22 multi-game units.

By GGB Staff   Fri, Apr 30, 2010

Determining the public's opinions about online gaming is very complicated, if you consider two polls released within a week of each other.

A survey by market research firm Ipsos Reid surveyed about 1,000 Americans and an equal number of Canadians with the respondents balanced to reflect the demographics of each country, and returned some surprising numbers. According to the poll, a wide majority of citizens in each country believe that internet gaming is legal: 63 percent of Americans and 77 percent of Canadians. This compares favorably with 59 percent and 72 percent respectively in a survey conducted two years ago.

In addition, with appropriate regulations and controls, 49 percent of Americans and 55 percent of Canadians are in favor of online gaming. This finding directly contradicts a study released two weeks earlier by New Jersey's Fairleigh Dickinson University that showed 67 percent of Americans opposed the legalization of online gaming.

"The idea of internet gambling appears to be gaining acceptance in North America, with more people expressing an interest to see it legalized with proper regulation," says Paul Lauzon, senior vice president and managing director of Ipsos Reid's Lottery & Gaming Group. "The regulation issue has the biggest impact on American gambling behaviors. Across the board on a number of gambling, betting and gaming options, we see that Americans are more concerned with regulation than Canadians.             

"Comparing a number of legally permitted gambling options, Canadian interest in playing remains almost unchanged based on regulation or no regulation. But Americans feel more comfortable in playing betting games and gambling when there is a system of government regulation in place."

By GGB Staff   Thu, Apr 29, 2010

Gaming in the Bahamas took a turn for the better last month when financing was announced for a huge new project and the possible lifting of the ban that keeps Bahamians from gambling was discussed.

The ill-fated Baha Mar casino resort development in the Bahamas announced that the Beijing-based China State Construction and the Export-Import Bank of China (the same bank Revel in Atlantic City named as a possible financier) inked a deal that will provide $2.5 billion to finance the 3,000-room, 1,000-acre beach resort and casino in the Bahamas. The project was originally slated to include a Caesars Palace hotel and casino, but the withdrawal of Harrah's Entertainment two years ago effectively stalled the project.

The funding from the Chinese companies means that the project, which also includes a 100,000-square-foot casino and a Jack Nicklaus signature golf course, can proceed with the planning and permitting process.

Meanwhile, a committee formed to examine gaming laws in the Bahamas is said to be looking at allowing some residents to enter casinos and gamble.

Officials at Bahamian casinos have urged the government to make this change in order to create more business for their properties in a bad economic time. Even the head of the Atlantis on Paradise Island in Nassau has requested the change because of massive expansion of gaming on the East Coast of the United States, the property's main market.

By GGB Staff   Thu, Apr 29, 2010

The impact of New Jersey's rejection of the partnership between MGM Mirage and Pansy Ho for gaming operations in Macau is growing. Three states are reviewing their approval of the deal and Nevada is looking into overall gaming operations in Macau as a result of the New Jersey decision and other recent reports of organized crime activity in the VIP sector in the Chinese Special Administrative Region.

Regulators in Illinois, Mississippi and Michigan, where MGM Mirage operates casinos, say they are looking again at their investigation of the Hos in connection to the MGM deal. Michael Fries, the general counsel of the Illinois Gaming Board, and Allen Godfrey of the Mississippi Gaming Commission both confirmed that their organizations are reopening their probe, and Michigan also confirmed that they want more information.

Alan Feldman, MGM Mirage senior vice president of public affairs, says the company is cooperating.

"We're ready to provide whatever additional information they may request," he said.

Nevada, however, is standing by its approval of the partnership.

For MGM, the Pansy Ho situation may have some legal repercussions as well. Last month, a law firm announced it is filing a suit over the alleged criminal associations of Pansy Ho. The New York-based firm Wolf Haldenstein says it has opened an investigation of whether the company has violated its fiduciary responsibility by associating with Ho; that would cause it to lose the ability to do business in certain areas of the United States.

By GGB Staff   Thu, Apr 29, 2010

The Flandreau Santee Sioux Tribe is working with a group of Sioux Falls business leaders to prepare a proposal for a new casino that would combat the effects of a planned casino in nearby Lyon County, Iowa.

The Sioux Falls casino may be able to stem the tide of losses that are expected to occur when the Lyon County casino opens. The Sioux Tribe also plans to share profits from the casino with the city and state.

The Sioux Falls casino proposal would require both federal and state approval, which is uncertain. But the perfect storm created by political unrest and competition from Iowa may lead to a casino after all.

"I think if Lyon County didn't exist, it would be a harder thing for the public to accept," David Sweet, CEO of Hotel & Resort Management, told the Argus Leader. "But right now, it does exist, and it is going forward."

By GGB Staff   Mon, May 03, 2010

U.K. gaming operator Ladbrokes has named Richard Glynn as its new chief executive officer.
    

Glynn, 45, is currently chairman of spread betting firm Sporting Index, where he was named CEO in 2001. He will receive a base salary of £580,000 plus bonuses. If the stock of Ladbrokes were to double from its current price, Glynn could profit by an additional £12 million.
  

 Starting on April 22, Glynn will replace Chris Bell, said in January that he would end his 20-year career at Ladbrokes. Bell will stay on for a transitional period.

By GGB Staff   Mon, May 03, 2010

Table game supplier TCS John Huxley announced that the state of Delaware has granted the company a gaming vendor license. The company will supply tables for the state's newly legalized table games, expected to be up and running before fall.

According to the company, the approval has already lead to "substantial orders" to supply table games and accessories for blackjack, craps, roulette, baccarat, Texas hold 'em poker and various specialty poker games. Additionally, the company has received a number of orders for its Saturn roulette wheels, "Chipper Champ 2" chip-sorting machines and "e-FX Insignia" number displays for roulette.

"The Delaware Lottery has responded swiftly in issuing our license, guaranteeing no time is wasted with table games being installed on the casino gaming floor," said Roger Hawkins, TCS John Huxley's CEO for the Americas. "We are very excited to have the opportunity to work with the Delaware casinos, and our extensive knowledge and experience as well as excellent infrastructure ensure we are well-placed to deliver products and services that are key."

By   Thu, Apr 29, 2010

Uruguay's national director of casinos wants to bring 15,000 non-casino gaming machines into a regulatory framework.

"These slots are in a legal limbo," said Javier Cha, the new director of casinos for Uruguay. "Our goal is to regulate this activity."

According to reports from El Pais and Yogonet, this year the ministry of economy and the gaming board will jointly present a bill that will tax the heretofore "grey-area" slots. The bill also will set the tax rate for the devices.

Cha wants the slot machines to be taxed or connected to a central network, which would provide a means to monitor them.

Among the changes the bill introduces are location, size and hours of operation of non-casino slot venues. At present, many slot halls are situated near schools and in the outlying neighborhoods of Montevideo.

Said Cha, "Slots cannot be installed anywhere and in any situation. Neither will they be of any size nor will they operate at any time."

Walpirio Cardozo, president of the slots owners association, Aufoje, said that five years ago his association began to look into a system for paying taxes.

"We think we would pay $4 million a year to the state if we operate according to the rules," said Cardozo.

According to Cardozo, each machine takes in about $100 a month, which is split between the owner of the machine and the owner of the location. Aufoje data says that total slot take for all 15,000 machines is $18 million per year.

By GGB Staff   Thu, Apr 29, 2010

Casinos Austria International has launched its branded online casino and gaming product.

Based and licensed on Malta, caigames.com, the operation from CAI's Intergame Ltd. subsidiary, is currently available for cash play to clients only in the U.K., where clear legislation and regulations allow such activity. Elsewhere, players must be content with participating strictly for fun-until their governments specifically OK otherwise.

Paul Herzfeld, CEO of CAI, said of the self-imposed restriction, "We would not even consider offering online gambling services in a market that is not fully regulated or where we do not hold a license to do so."

The experienced land-based casino operator does expect positive changes in other jurisdictions and plans to extend its online gaming activities when appropriate legislative frameworks have been put in place.

By GGB Staff   Mon, May 03, 2010

The Pascua Yaqui Tribe's Casino Del Sol in Tucson, Arizona plans to expand its 213,000-square-foot casino, and has selected architecture firm Leo A Daly to design the property's new additions.

Leo A Daly also designed the existing casino, and will add a 10-story hotel, conference center, parking garage, laundry facility and warehouse to the property. The design is distinctly Mediterranean, with desert influences taken from the casino's surrounding environment.

"The Pascua Yaqui Tribe and Sol Casinos are very excited about this new phase of our facility, and we are thrilled to have the Leo A Daly design team and McCarthy Construction working with us on the project," said Sol Casinos CEO Wendell Long. "They were involved in the original design and construction of Casino del Sol, and are helping us take our ideas and concepts forward to transform our vision into reality."

By GGB Staff   Mon, May 03, 2010

Spectrum Gaming has promoted Harvey Perkins to executive vice president and Allison McCoy to senior vice president of marketing.

Perkins has worked for Spectrum since 2005, and held executive posts at casinos in Atlantic City and New Orleans prior to joining the Spectrum team. As executive vice president, Perkins will be responsible for developing projects for North American and Asian clients.

McCoy has worked for Spectrum since 2007. Prior to that, she was director of industry development for the Global Gaming Expo at Reed Exhibitions.

By GGB Staff   Mon, May 03, 2010

Slot and system manufacturer Bally Technologies was busy last month.

The company announced it has amended its existing credit facility and entered into a new, four-year $75 million revolving credit facility led by Bank of America Securities LLC and Wells Fargo Securities LLC.

"We are extremely pleased with the amendment of our existing credit facility and the new $75 million revolver, which brings our total undrawn revolver capacity to $150 million," said Bally Chief Financial Officer Robert C. Caller. "As a result of our strong and continually improving credit profile, we obtained a 50 basis point reduction in the LIBOR spread on our term loan and the revolving credit facilities, as well as increased flexibility in terms of our allowable leverage ratio, and increases in our restricted payments and acquisition baskets. With these revolving credit facilities, cash on hand, expected net proceeds from the sale of the Rainbow Casino, and cash flows generated from our ongoing operations, we have the liquidity to grow our business, consider appropriate acquisitions, and fund anticipated share repurchases."

In other Bally news, the company has named Suzo-Happ Group North America as its exclusive distributor for the new Illinois video lottery market. Under the terms of the agreement, Suzo-Happ will promote, sell, service and maintain Bally's gaming devices for the state's new video lottery program, enacted last July.

The new program permits up to five video lottery terminals in licensed bars, taverns, restaurants, truck stops and certain other venues that offer on-premise alcohol consumption, and requires that the devices be sold through a distributor. More than 21,000 Illinois restaurants and bars serve liquor.

And finally, Turning Stone Resort & Casino in Central New York's Mohawk Valley has added 200 new machines to its gaming floor, with 27 different options from Bally Technologies of Las Vegas, boosting the number of games to more than 160.

The new games include Forest Wild, Glacier Wild, Grizzly Wild and River Wild. Installation of the machines should be completed by the first week in May, casino officials announced last month.

Turning Stone, operated by the Oneida Indian Nation, has 2,315 gaming machines, 89 table games, a 32-table poker room and a 1,400-seat high stakes bingo hall.

By GGB Staff   Mon, May 03, 2010

Casino Marbella has selected Novomatic's Novo Touchbet Live-Roulette installation.

The casino, situated on the Costa del Sol in the autonomous region of Andalusia, is the flagship property of the Cirsa group's four casinos in Spain. This is the first placement of the Novomatic product in one of these venues.

The installation features a dealer-operated, live roulette wheel linked to 12 individual slant top terminals. Novo Touchbet Live-Roulette runs on Novomatic's server-based Novo Unity multi-player platform, which supports a variety of downloadable electronic table games. The roulette product has been licensed for Andalucia, Madrid, Catalunya and Aragon.

Casino Marbella recently renovated and extended its gaming floor.

"We wanted to introduce a new roulette concept to our gaming floor and thus offer the maximum gaming excitement at the highest possible technical level in our casino," said Casino Marbella Director Javier Burgues. "The Cirsa Group very much embraces the stable and excellent performance of the Novomatic products over many years of daily operation."

By GGB Staff   Mon, May 03, 2010

Elixir Gaming Technologies says it has a new machine participation agreement with Grand Golden to place approximately 60 electronic gaming machine stations at its new casino in Kampong Cham Province, Cambodia, near the Vietnam border.

The company anticipates full deployment of the stations in November 2010 following completion of renovations to the floor space by the venue owner.

Under the terms of the agreement, Elixir Gaming will have joint control over the operation of all the company's electronic gaming machine stations, including full audit rights. Elixir Gaming and Grand Golden will share the revenue and marketing costs, at a 30 percent/70 percent split, respectively, and Elixir Gaming will receive on a monthly basis its relevant portion of the daily win in cash. The contract duration is five years commencing once the 60 gaming machine stations become operational.

Clarence Chung, chairman and CEO of Elixir Gaming, said, "We are pleased to announce the expansion of our operations in one of our key markets with our new contract with Grand Golden, the owners of which are established gaming operators in the Indo-China region. Given the contracted 60 machines are expected to be sourced primarily from our current inventory, capital expenditures for this project should be minimal. In addition, we continue to actively pursue additional machine placement opportunities in Cambodia and other new markets."

By GGB Staff   Mon, May 03, 2010

Slot manufacturer Atronic International announced that its latest video slot in the "Deal Or No Deal" series, called "Join'N Play," has been placed in a total of casino locations across the Netherlands.

During April, a total of 14 properties of Holland Casino installed one bank each of the game, the latest in the series of games based on the popular TV game show of the same name. This version is part of Atronic's new "Community Bonus Series," which allows players to work together during the bonus round.

The "Briefcase Bonus," the central feature of the slot series, mimics the show by having player pick a briefcase and reveal hidden amounts of remaining briefcases on a screen, taking or refusing the option to "deal" his hidden briefcase amount for a guaranteed payoff. In the Community Bonus version of the game, players can select and swap briefcases with fellow players.

"The rollout of Deal Or No Deal Join'N Play in our casinos follows research that many of our guests prefer playing together," said Jan Paul van Heemskerck, vice president of marketing for Holland Casino. "We are confident the game fits well into our new direction of offering more social gaming and enhancing the casino experience of our guests."

By GGB Staff   Mon, May 03, 2010

Former Desert Inn Hotel & Country Club CEO Burton Cohen has been elected to the MGM Mirage board of directors. Cohen, a member of the American Gaming Association Hall of Fame, is currently the chairman of the board of trustees of Sunrise Hospital and has long been a philanthropist in the Las Vegas community.
    

Cohen is a gaming veteran-before serving at the Desert Inn, he was co-owner and general manager of the New Frontier, and worked as an executive at the Flamingo, Caesars Palace and the Dunes.

By GGB Staff   Mon, May 03, 2010

Slot manufacturer Konami Gaming announced that effective April 1, Ross O'Hanley, senior director of marketing since October 2008, has been named to the new position of senior director, North American game sales and marketing.    

In addition to his current marketing management role, O'Hanley will take on the operational and strategic responsibilities for North American game sales. According to the company, the new role has been established to provide additional focus on increasing Konami's market share in North America, which is in alignment with the company's objective of being a top-tier supplier of gaming and systems products on a global basis.    

As senior marketing director, O'Hanley has worked closely with the slot sales division on product release strategy, branding, communications, and sales.

By GGB Staff   Mon, May 03, 2010

Slovenia's Elektroncek, manufacturer of the Interblock brand of auto-roulette and other automated table games, announced that it has successfully installed three of its Player Information Displays, or PIDs, at the Kongo Hotel & Casino in Grosuplje, Slovenia.

PIDs provide detailed statistics of game results on electro-mechanical automated roulette machines, providing players statistics of the previous 200 games. The displays are also configurable to add the table name, and the minimum and maximum bets.

"In Kongo, we decided to install PIDs mainly to increase the visibility of the electro-mechanical roulettes on the floor of the casino, and to provide detailed statistics of the games in progress, thereby allowing increased transparency for players," said Žiga Kvas, casino manager at Kongo Hotel & Casino. "Important emphasis is to attract players to the electro-mechanical roulettes, both existing roulette players and those who normally play slot machines. At the same time, PIDs improve the player's knowledge of the game and provide statistical data to hold the player's interest.

"Since installing the PIDs we have already seen increased player traffic on the electro-mechanical roulettes through higher coin-in and occupancy and, of course, improved profit."

By GGB Staff   Mon, May 03, 2010

Cash-handling and acceptance equipment supplier JCM Global has expanded its sales and service teams. In sales, the company has named David Wafle as territory sales manager and Tobin Scott as sales executive. In service, Jerry Pittmon has joined JCM as customer service manager.

As territory sales manager, Wafle will serve JCM Global clients in Connecticut, Maine, New Jersey, New York and Canada. He has extensive experience in the gaming industry, most recently as senior regional manager for game sales for Aristocrat Technologies, where he guided Aristocrat's initial entrance into the Quebec marketplace. Prior to Aristocrat, he was director of slot project strategy for Harrah's Entertainment in Atlantic City, where he created and managed the Caesars Atlantic City low-denomination slot strategy.

As sales executive, Scott will assist JCM customers in Idaho, Oregon, Montana and Washington. He was most recently an account executive for slot manufacturer International Game Technology, representing the company's products from throughout northern California and Oregon.

Pittmon, the new customer service manager, including work as senior technical trainer, casino services supervisor and technical training supervisor for IGT.

"It's about having the best," said JCM Global Sales VP Mark Henderson. "The best customers deserve the best products, the best sales and the best service, and adding David, Tobin and Jerry to the JCM Global team builds on JCM's tradition of accepting nothing less than the best."

By Roger Gros   Mon, May 03, 2010

Five years ago, when Dick Haddrill was named president and CEO of Bally Technologies, he inherited a tough financial situation, but a company with superior product in the pipeline. Ultimately, Haddrill limited the financial difficulties and maximized development. During the intervening years, Bally has dramatically increased its market share, settled its financial uncertainty and become one of the major slot companies poised to take advantage of an industry turnaround. Haddrill spoke with Global Gaming Business Publisher Roger Gros at the Bally offices in Las Vegas in April. A full version of the podcast of this interview can be heard at
www.ggbnews/podcast.

GGB: Describe the general business climate when you arrived and how things are different today.

Haddrill: When I came on board-I'd been on the board for a little over a year before I became the CEO-what excited me was the technology acquisitions we had made and all the opportunity to capitalize on those, to really bring games and systems together for the future of gaming. I felt Bally was very well positioned to do that. I also felt it was a space where technology was probably five, six, seven years behind some other industries, so there was a real opportunity to create some value for customers and players by advancing technology at a more rapid rate in the industry as we brought more games and systems together. Those were the two big opportunities I saw, and I liked what I saw at Bally as a chance to have a platform to do that. The last five years have gone well.

You quickly demonstrated a knack for assembling the right gaming people to move the company
forward. Was this team the result of a grand master plan, or just a succession of very good luck for Bally?
When I came here, I wanted to get to know the existing executives and management team better and see whether they were the right team for the challenges ahead. As the company evolved, it became clear that we could benefit from some additional executives. Somebody like Ramesh Srinivasan brings outstanding enterprise software capability that gaming really hasn't had. Gavin Isaacs brings international experience and strong gaming background. Bruce Rowe, of course, brings a strong operator perspective and how to really get ROI out of the games and the systems. Those team members really helped round out our vision and execution capability.

Bally was in a bit of a financial mess back when you took the reins, but at the same time, the
company had just completed the acquisition of Sierra Design Group. Did you see that acquisition as a key to the company's renaissance?

It certainly was a catalyst, because we were using seven different game platforms when I arrived, and we were able to consolidate it down to one, which made our R&D more effective and allowed us to get competent in video, where before we were just a stepper company. SDG also brought us a leadership position in Class II, which again is systems and games coming together, which is complementary to our systems business. I would say SDG was a catalyst. A lot of other things-our leadership in systems is somewhat independent from SDG, which contributed to it-but certainly on the game development side, not only the people from SDG but having that platform, that Alpha platform, really was important.

You've fared better than most slot manufacturers during the recession of the past two years. To what do you attribute that?

I would say it's a combination of both the systems business increasing our leadership position as we've integrated and updated those technologies, and just producing much better and faster game content on the Alpha platform with the two main drivers.

That said, we have expanded into some markets we were not in before-international markets like South Africa and South America.

Analysts are now saying the long-awaited replacement cycle for new slot sales probably won't start until next year at the earliest. Do you agree with that assessment?

Last fall from September through G2E, we had lots of customer meetings, and they were very positive, most of them indicating that they were going to spend more capital this calendar year. It was a great G2E; we were very positive. But it feels like so far this year-and here we are in April-that customers have been very deliberate. Even though they may have increased their budgets, they're still holding onto it. That said, we're pretty sure it's just deferred spend. It's not that it's gone away. We do believe that some of the operators are going to start spending, and that's going to put pressure on the others to start to spend.

Competition has been heating up lately, with renewed companies like Aruze entering the market and Class II companies like Multimedia beginning to crack the Class III market. How are you meeting that competition?
The first good-news point is the technology is just advancing at a much faster rate than the casinos are deploying. Because the players are going to demand some of the better products, they're going to want to invest, and they're going to get a good ROI on that from all of the suppliers now who are doing a better job of innovating. The good news is that the innovation is at the most rapid rate. The bad news is casinos just aren't buying much of it. The one thing I tell our sales force is as much as we've got a more balanced competitive landscape than we've had in years, we don't have the 80 percent of the market owned by IGT, which was the case six or seven years ago. It's still a better competitive environment with still not that many competitors. Other industries might have 15 or 20 competitors. We've got three to five. I like our position. I like our odds.

By Frank Legato   Fri, Apr 30, 2010

But it's not to become a dental floss tycoon. I'm going there to show my support for Big Sky Country, since I read that fewer people are going there because they're a little nervous.

(OK, for some of you around the world who may not understand, that "dental floss" thing was a line from a Frank Zappa song. You could look it up.)

The problems in Montana started when two teenage knuckleheads tried to rob a guy with box-cutters (the knuckleheads had the box-cutters, not the guy) as he came out of a restroom at the Pirates Treasure Casino in Butte. I saw a picture of them-imagine Jack Black and Carrot-Top as 18-year-olds. Alternatively, think of the two guys in "Wayne's World."

They were, of course, caught and arrested, because... and if the perpetrators are reading this, listen closely, kids... THERE ARE CAMERAS IN CASINOS. All over the place. There's probably enough surveillance video to make their crime into a documentary. Real mental giants here.

The sad sacks didn't even get any money. The guy they tried to rob was an employee of the casino, and when he saw the box-cutters, he went back into the restroom and locked the door. After a while, he went back out of the restroom to find the thieves gone and no one missing any money. Evidently, when the bathroom door closed, the kids looked at each other with cartoon expressions and then scrammed.

They weren't hard to track down because, you know, the police had video. But that's not the point of my bringing it up here. The point is, it's OK to go back to Montana. It was just a couple of teenage dim-wits.

I also bring it up here because it gives me a chance to write about Montana. I like to write about Montana because I like the names of the places up there. The Charging Horse Casino in Lame Deer. The Silver Wolf in Wolf Point. The Little Big Horn in Crow Agency. It sounds like you have to hike between the casinos on former deer trails, camping under the stars along the way.

Nothing like Atlantic City, where we can camp under the stars on the beach, but we have to share our campsite with the feral cats under the Boardwalk.

But there are other things to talk about in Atlantic City this month. (OK, it was a lame segue, but I can't hit it out of the park every time, you know?) First, Donald Trump won the first round of his bout with Carl Icahn, when a bankruptcy judge approved the plan of Trump and his bondholders to retain ownership of the three Trump casinos. Icahn will appeal.

They didn't decide it by a cage match between Donald and Carl like I had suggested, but I understand that U.S. Bankruptcy Judge Judith Wizmur did take their hairstyles into consideration before making her decision.

The other big news last month in Atlantic City were the Steve Wynn sightings. Ever since Steve left town in 1988, he's been like Elvis around here, periodically popping up and generating rumors that he's going to stage a comeback tour. In this instance, he was seen at the Atlantic City Hilton, where he stayed a night in the hotel that was once his Golden Nugget; and visiting at Revel with CEO and former Wynn executive Kevin DeSanctis, which he described as a social call.

Whatever the purpose, the visit generated rampant speculation that Wynn, having ditched his plan to take over the Foxwoods Philadelphia project-on that one, my theory is that the mayor told him he'd have to build the casino in a way that it would be invisible-was looking to go back to Atlantic City.

People tell me I'm dreaming, but I still think Steve should take over that big vacant lot in the middle of town, the Pinnacle site. I'm told that would never happen, but I only suggest it because Steve himself did so a few years ago. When former Pinnacle chief Dan Lee was griping that he'd leave town if Wynn got a casino at Bader Field (another vast wasteland in AC), here's what Wynn said:

"If Pinnacle Entertainment is afraid of competition, we would be willing to buy their Boardwalk site at their cost and they can then leave and try to control competition somewhere else."

Now, he could get it for a lot less than Pinnacle's cost. Think of it: Wynn Park Place. (Well, Park Place is a block away, but still...)

I know. He'll probably go to Montana before that happens.

"Wynn Lame Deer." I like the sound of that.

By Randall A. Fine   Fri, Apr 30, 2010

Have you noticed that ugly is the new hot? Take a look at some of the latest comedic hits-all the Judd Apatow movies that feature goofy, somewhat overweight, unshaven guys who somehow get the girl and save the day. Perhaps in this era of recession, we have shifted our interests from the skin-deep and vapid to the soul-searching and meaningful.

But what does this have to do with gaming? As I have written before, over the past decade, most major casino properties entered some kind of nuclear arms race over whose property could be bigger, nicer and fancier than the competition. Much as in the larger world—where the solution to everything was a nicer outfit, pair of shoes, or even luggage—in our world, we responded to everything by opening a new restaurant, remodeling hotel rooms or expanding an ultra-lounge. He with the best bricks and mortar won; it was simply taken for granted.

No market exemplifies this better than Atlantic City. Seven years ago, the first new property in more than a decade opened-the Borgata. And a spectacular property it is, living up to post-Mirage Las Vegas standards in every way-luxury rooms, name-brand restaurants, spectacular gaming spaces, and entertainment options galore. Virtually overnight, it took over the top market-share spot, leaving everyone else in its dust. Even today, in the midst of a recession and competitive pressures from every state surrounding it-and some two states away-it is shrinking the least of its competitive set.

In seven years, a lot has happened with its initial 11 competitors. One was imploded. Three are bankrupt. One had its license revoked, and two more have management seemingly determined to close. Why? Well, one can make up lots of excuses, but in my mind it comes down to one simple fact-they stopped playing on their own playing field and started playing on someone else's.

Take the drive from Philadelphia to Atlantic City and you can summarize the billboards into two categories-Borgata's and a bunch that say "We're Nice Too!"

For the past seven years, each of these properties has been distracted by trying to glom something onto their old and fading properties. To use the phrase Sarah Palin made famous, they are putting "lipstick on a pig." Whether it was adding the beautiful Quarter to the otherwise "carnival/bazaar" Tropicana or slapping a House of Blues alongside what otherwise is a House of Blue Hair, none of these projects made these facilities as nice as the Borgata, but what they did was distract management away from playing to their own strengths.

You see, you don't have to have the nicest bricks and mortar in a market to win. Sure, there is some level of quality that is necessary to be open-but once you reach it, there are many, many ways to differentiate yourself.

Our firm faced this challenge in Detroit. That market, while only having four casinos, has its own Borgata, the MGM Grand Detroit. It is, in my view, one of the nicest casino properties in any market, anywhere. A billion-dollar, master-planned masterpiece. We, on the other hand, managed the Greektown Casino-Hotel, a casino housed within buildings serving (at least) their fourth purpose. Originally, the area was where fur trappers traded their wares-that tells you something about how old the buildings are. Ten years ago, the buildings were retrofitted to become the temporary Greektown Casino, and last year, after much renegotiation with the state, became the permanent facility.

But when you compare a brand-new, shiny MGM Grand to the former fur market Greektown, the comparison is tough. So when, on our first drive from the airport, we saw signs advertising restaurants and clubs at both properties we knew that, as is the case in Atlantic City, we were inheriting a property that was trying to compete on the "Hey, look at me! I'm nice too!" plan.

Not surprisingly, it didn't work. Month after month, MGM had gained traction as Greektown slid further and further behind.

So what did we do? Did we rush out to build more rooms or fancier restaurants, or add more slot machines? No, no, and no. We stated the obvious-"If you want to go to the nicest casino in Detroit, it is a couple miles to the east"-and figured out the playing field we should get on. In effect, we embraced our ugliness. We decided to target the middle-American, blue-collar Midwesterner, something those of us from Kentucky (me) and Missouri (my partner) could get our arms around. We decided to poke fun at the $15 hamburger model that our Vegas-style competitor had used, and instead sold our entire buffet for $9.99. We brought a chicken into the property to play tic-tac-toe. We sold every hotel room-and the rooms are nice-for $99 per night.

In effect, rather than going for a glamorous position-a.k.a. Borgata or the MGM Grand-we went for the "we are one of you" approach, and it worked. MGM stopped doubling our business, and in 2009, we set all-time revenue and profitability records.

We embraced our ugliness. We stopped worrying about what we didn't have and how nice our competitor was, and focused on what we did have and where we could compete.

I just wish this was an idea that someone could run with in Atlantic City. Perhaps the time has passed, perhaps Pennsylvania and New York have come too far already, but who knows? Perhaps with a little luck, one of those resorts will get a new lease on life by embracing its inner ugliness too.

By Frank Fantini   Fri, Apr 30, 2010

Investors tend to break down to those who take a long-term view of the market-maybe even take on an owner's attitude and want to grow with a company-and those just itching to trade.

And, while there is frequent-and dare we say endless?-debate over which view is superior, the fact is that both approaches offer opportunity to make money.

We recently were struck by such opportunity when the stock market reacted strongly in different directions to news affecting two very different kinds of companies.

In one instance, Bally Technologies announced that its earnings this fiscal year would be lower than expected because of a variety of reasons, but CEO Dick Haddrill also gave reasons why the long-term prospects for the company remain strong.

By the next morning, the sell-side analysts had taken down their earnings estimates, not just for this year but next, as well. They cut their target prices, and at least one, Joel Simkins of Macquarie, downgraded his rating to neutral.

The result: Bally sold off 5 percent.

But within three days, Bally shares had recovered.

The next episode of violent market reaction came around 11 a.m. one recent Thursday.

The Nevada Gaming Commission had just released gambling revenues for February. The Las Vegas Strip was nearly off the charts with revenue leaping 32.9 percent over last year. What's more, the improvement was concentrated in baccarat play, a way of saying that casinos appealing to high rollers did killer business.

Put yet another way, Wynn Resorts, MGM Mirage and Las Vegas Sands are the likely beneficiaries, though until they report their first-quarter results, we won't know which, or what combination of them, benefitted and by how much.

Still, it didn't take long for traders to react. The stocks shot up, especially MGM. Within an hour, it was up 11 percent. Normal trading volume had doubled by lunchtime.

Whoever was first on the news made quick bucks.

But, like with Bally, the overall fundamentals really hadn't changed. Take out baccarat and Strip revenue actually declined 2 percent. Slot revenue, a better gauge of business volumes, fell 9 percent.

And part of the big bacc win came from unusually high hold. A lot of big players lost big. Luck can turn. And, over time, hold will fall to normal levels.

In the reaction to Bally's earnings, only Macquarie's Simkins among the prominent analysts seemed to pick out a fresh reason to be wary of the stock. The field of suppliers is getting crowded with competitors, and it will become harder to grow market share, he said.

Other analysis focused on slow gaming operations revenue (a result of recession) and softer-than-expected orders from casino companies (another recession effect).

But recessions end. And Haddrill, in his comments, noted the growing pipeline of systems orders (even if some have been delayed), coming gaming expansions in the U.S. and overseas, and the inevitability of the replacement sales cycle turning up.

So, an investor who sold into Bally's mini-bear missed out on the recovery later in the week, while a trader had the chance to buy on the dip and sell into the rally.

Still, the 5 percent and 10 percent moves are small compared to long-term potential.

Warren Buffett once said his biggest mistake as an investor was trying to save a dime here or a quarter there on a stock price, not buying, and missing out on much greater appreciation as the business grew.

We feel much the same way about reacting to news, though many traders who profited over the volatility would surely disagree.
 

High-End Coupon
A sign of the discounting times in Las Vegas is evident at Four Seasons, of all places.

When handed keys to our car upon leaving recently, the valet also handed a little thank-you envelope. Inside: a $50 coupon for the hotel's spa and a 25 percent-off dinner coupon for the Verandah restaurant on a weekend.

When Four Seasons starts couponing, you know hotels are scrambling for customers.

Dividends Pay Off
On the supplier side, Shuffle Master has always been a growth company, reinvesting the considerable free cash it generated.

Under new CEO Tim Parrott, the emphasis has been on paying down debt, a pursuit that will free up even more cash in the future. Meanwhile, Shuffle Master is improving margins and expects to grow sales in the upper-single digits, making for even more free cash.

So what's Shuffle Master to do?

Asked that question at the annual meeting, Parrott talked about the lack of attractive acquisitions right now, then said: "We like the idea of a dividend."

Given its more mature business lines and more manufacturing-like business model, a dividend may make sense.

It also might make sense for other gaming companies, especially the regional casino operators who, for the most part, are winding down growth projects and might find dividends attractive as debt declines and cash flow grows.

Ameristar is the lone one to pay a dividend today, but Boyd did so not long ago.

By Frank Fahrenkopf   Thu, Apr 29, 2010

There's no way around it-this past year was tough. The down economy dealt most Americans challenges we haven't faced in some time, if ever. For those of us in the commercial casino industry, that meant people had less money to spend on our products. Our revenues in 2009 fell 5.5 percent from 2008 to $30.74 billion. This is the story told in the 2010 edition of AGA's State of the States report. But as challenging as the year was for most of us, that's not the entire story.

State of the States reports that in the midst of the challenges, commercial casinos continued to be major employers, providing jobs for 330,000 people this past year and paying $13.1 billion in wages, benefits and tips. As always, casinos generated a healthy amount of tax revenues where they operate, returning nearly $5.59 billion to states and local communities through direct gaming taxes. This was a 1.6 percent decrease from 2008 contributions, but those taxes helped states and localities pay for important programs and services when deep budget deficits plagued most local and state governments.

And while a majority of states followed the national trend and experienced gaming revenue declines-New Jersey, Nevada and Mississippi were hardest hit-the State of the States report found that others did well. Colorado, Indiana, Missouri and Pennsylvania all witnessed gains. Pennsylvania saw the most significant increase, as revenues jumped more than 21 percent thanks to new properties opening there. In December, the first casino in Kansas welcomed visitors, becoming the 13th commercial casino state in the U.S.

As this year's survey reports, a particular bright spot for the industry came in the racetrack casino sector, which continued to grow. Gross gaming revenues rose in 2009 to $6.40 billion, a 5 percent increase over 2008 figures. Gaming tax contributions from racinos also increased. Racinos in Indiana, Pennsylvania and Oklahoma saw significant employment increases in 2009.

For the second year, the AGA teamed up with the Association of Gaming Equipment Manufacturers to highlight the significant contributions the gaming equipment manufacturing sector is making to the economy. The results show that despite the recession, this sector of our industry generated substantial revenue, supported tens of thousands of employees and paid billions of dollars in wages. Survey results also show that gaming equipment manufacturers, like all segments of the commercial casino industry, provide important benefits to their employees nationwide and to their host communities. Most noteworthy, perhaps, 75 percent of those in the business are optimistic about growth prospects in the near future.

As these results indicate-and as we all know from our own interactions within the communities where we do business-commercial casinos have always been good and valuable neighbors. The tax revenues, jobs, charitable contributions and other social and economic benefits our industry brings with it have created a great deal of goodwill. To provide a fuller picture of the impact of casinos in host communities-and to better understand the attitudes and gambling habits of casino county residents-the AGA commissioned VP Communications, Inc., and national pollster Peter D. Hart, to ask people living and working in gaming communities what they think of their commercial casino "neighbors."

The results showed that our neighbors like us and like what we do. Nearly two-thirds (64 percent) think casinos have had a positive impact on the community, and an even higher percentage (69 percent) say casinos have had a positive impact on their area's tourism industry. A solid majority (62 percent) says casinos are beneficial during recessionary times because of the tax revenues, tourism and jobs we generate. In perhaps the most telling result of the survey, more than two-thirds (68 percent) of those surveyed would vote "yes" if a referendum were held to decide whether or not to keep casino gaming in their communities.

This result tells us not only that we're doing a good job as contributors to the economic fortunes of host communities, but that we're succeeding as responsible corporate citizens. It tells those who are considering the prospects for casino gaming within their own communities that average citizens who have experienced our business embrace us. And it puts the lie to opponents' claims that casinos bring nothing to communities but predation and degradation. The people have spoken, and they clearly say otherwise.

At the national level, the State of the States report reveals that more than one-quarter of the U.S. adult population visited a casino during 2009, totaling approximately 61.7 million people. Only the lottery was a more popular form of gambling than visiting a casino.

Slot machines are the favorite game for most casino-goers and have been for a number of years-no surprise there. So we decided to take a more in-depth look at why these games draw such interest and provide the level of entertainment that is reported by those who play. Among the results, nearly half of slot players say the games are their favorite because they are less intimidating than some other
gambling options.

Despite various predications made by some of our opponents, commercial gaming has not fallen out of favor because of the difficulties presented by the down economy. In keeping with previous results of the survey on the acceptability of casino gaming, 81 percent say it is acceptable for themselves or
others.

This and many other findings in the 2010 edition of the State of the States should provide confidence that with a turnaround in the national economy will come a positive change in the economics of the commercial casino industry. As this year's survey shows, our base is solid-both in the numbers who continue to enjoy the entertainment we offer and those who support our industry-and it will

By Roger Gros   Thu, Apr 29, 2010

Someone who has been around gaming as long or longer than I have will always get my respect. I learned a lot from I. Nelson Rose over the years, but I always remember a piece that he wrote about how cyclical gaming is, called the "Third Wave of Gambling."

Rose, a scholar and legal expert, looked at the history of gambling over the past 200 years or so and discovered that its acceptance rose and fell in direct relation to scandals that have blemished the activity over the years. His implication, because the cycle has thus far remained unbroken (and we are still in the third "expansion" phase), is that a time will come when gambling will once again be reviled because a major scandal has tainted the activity.

Since Rose's postulation is now more than 20 years old, I was beginning to doubt that it would ever happen again. After all, gaming in the U.S. and most other developed countries has become almost universally accepted. Strict regulations in most jurisdictions have kept criminal elements out of the industry. So maybe this theory was just that.

But then New Jersey started sniffing around the MGM Mirage-Pansy Ho deal in Macau as it considered whether it was acceptable under state gaming regulations. Without recapping the entire episode, MGM surrendered its New Jersey license rather than giving up its Macau partnership with Pansy Ho. A report from the Division of Gaming Enforcement indicated that they objected to Pansy's close business ties with her father, Stanley Ho, who, said the report, was and is intricately linked to Chinese organized crime.

That event was later followed by a "special report" issued by the Reuters news agency linking a Macau VIP operator with a murder-for-hire trial in Hong Kong that involved some criminal activity in a Macau casino. The report suggested that this kind of activity was just the tip of the iceberg on Macau and organized crime.

Now, both the New Jersey report and the Reuters story have weaknesses, procedural errors and holes as big as Mack trucks, but they bring up concerns about the Macau regulations that could blow up in the face of everyone involved in Macau and the industry as a whole. There is clearly an organized crime element involved in the VIP operations in Macau (or "colorful" characters, as one poster described them on the GGB online blog). Companies knew that going in, but expected that over time, like in Nevada, there would be procedures put in place that would eventually eliminate any criminal elements.

And that still may happen. Macau regulators say they license VIP operators for just one year to make sure there is an ongoing review of the companies involved in this area. But clearly, there is some issue here. When Singapore announced that it would require all VIP operators to submit to complete licensing investigations, few if any of the Macau operators said they would participate in this huge new market. What do they have to hide? And what is it that Macau regulators are willing to overlook in their licensing efforts?

We know that there is not always fire where there is smoke, but in this case, the smoke keeps getting thicker and it begins to obscure the truth. Nevada gaming regulators say they can't impose Nevada standards on Macau regulators, which is true. But they can impose Nevada standards on companies with licenses in Nevada to behave in the manner those companies are expected to behave in Nevada. New Jersey has clearly held MGM Mirage to those standards and the company came up short, at least according to the state's somewhat questionable report.

At any rate, this seems to be "the way things are done" in Macau, and there is so much money being made under these procedures that it is unlikely anything will change anytime soon. U.S. companies need to realize, however, that there are more than just gaming regulations at issue here. I'm sure this issue is keeping the compliance departments of the major companies involved in Macau busy, but it's hurting some U.S. jurisdictions. New Jersey has lost the participation of MGM Mirage, the second-largest gaming company in the U.S. Other states are now re-examining their approval of the Ho deal with MGM and may also be forced to drop the company.

So while I was once confident that a scandal could never occur that would be big enough to cause re-criminalization of gambling and ending the "third wave" of legalized gambling, I am no longer quite so sure. All I can say is, let's be careful out there!