The Luck of the Irish
The gambling industry in Ireland has grown significantly in recent years. In the past, efforts were made to establish a large casino in the Phoenix Park area of Dublin, but these were not successful. Since then the Irish economy has grown and is set to double its size in the next 15 years. Standards of living have increased and the gaming and gambling sector has been boosted by the fact that the average person now has more disposable income. The growth of private casinos and the influence of the internet are rapidly changing the picture of gambling in Ireland. However, the laws governing the sector are widely accepted to be outdated and in need of reform. The government has signaled its intention to bring in the necessary reforms, which are encapsulated below. Size of the Market
Irish people gamble approximately €70 million per week. That figure is set to rise to €100 million within the next two years. The National Lottery enjoys annual gaming revenue of €578 million and on-course race betting through Tote Ireland stands at about €47 million. Online gambling is now estimated to be growing at a rate of 70 percent per year. On a per-capita basis these figures indicate that the Irish market is similar to that of the U.K. Also, a significant number of non-nationals are active punters.
All of this indicates that by 2009 the annual spend on gambling within the Irish economy could stand at around €5.2 billion, nearly 5 percent of GNP. As many online gambling outlets currently channel much of their business through offshore companies, which do not have to levy Irish betting tax and thus for which no official numbers are available, the real numbers quoted could be even higher.
Considering the growth of internet gambling and the popularity of games like roulette and poker in recent years, the public perception of casino-type gambling is changing. However, there is no contemporary research that reveals the views of the general public on the matter. Likewise, to date there has been no concerted effort to convince the public that a casino can have a positive rather than a negative effect. What is clear is that proper regulation of the market could lead to significant benefits for the industry, the exchequer and the general public.
The Experience of Other Countries
Many countries and regions, including Russia, South America, North Africa, the Caribbean and others, experienced great difficulties when casinos were originally introduced. In most cases this was due to a lack of understanding of how to promote the business and how to protect the business. These two basic factors stemmed from the lack of interest each respective government had in the casino industry.
When the 1968 Gaming Act was passed in the U.K., a gaming board was also formed within the government to oversee and administrate the industry. It was decided by this board that any member of staff who worked for the casino on the gaming floor must be licensed by the government—dealers, inspectors, pit bosses, managers and others. It did not include reception staff, waitresses, cleaners and other non-gaming support personnel. This single act of issuing gaming staff with a government license did a lot for the integrity and protection of the business, because it prohibited licenses to those with previous criminal convictions.
So far, the Irish government seems to be taking rational and logical steps to decide how gaming will be implemented in the nation.
Key Recommendations
An interdepartmental group was formed in the late 1990s to undertake a review of the Gaming and Lotteries Acts as it existed between 1956 and 1986. This group made its report to the government in 2000. The key recommendations which they made included the following:
• Existing acts are no longer appropriate to current needs and have been overtaken both by technology and society. There is a need for a modern regulatory structure which will also provide the public with the required safeguards.
• Irish society has conflicting images of gambling. For instance, while horse racing and the National Lottery and radio bingo are seen as acceptable, gambling in the form of casinos suffers from a more negative perception.
• Internationally, gambling has grown over the last 20 years. Internet gambling has significantly increased in Ireland in recent years.
• There is a need for a more balanced approach than the original 1956 act, which is very restrictive.
• While amendments to the current legislation may be a helpful interim measure, there is a clear need for completely new legislation in this area.
• A gaming and lotteries authority should be set up.
• There is a need for much greater consultation with all affected parties.
• Local authorities should still retain their control in relation to gaming and gambling venues, albeit with some changes.
• Premises permitting gaming should continue to require a licence for their activities.
• The definitions of gaming machines should be updated to remove the scope for circumvention of the law.
• An increase in the stake and prize limits for machines to 50 cents and €20 respectively.
• The ban on casino-type gambling should be retained based upon a government decision in 1996.
When the report was published, the government undertook to bring forward the necessary regulatory framework. The group received a number of submissions both for and against casino development in Ireland. However, as no specific reference was made to casinos in the group’s terms of reference, they took a largely neutral view, saying that arguments could be made on both sides but that in light of the government’s decision in 1996 not to allow casinos, they were not in a position to make any recommendation in this area other than to reaffirm the prohibition contained in the 1956 act.
There are still some points, even with the above notations, that need to be clarified.
If we accept that the current gaming laws are in need of a revamp, we need to clarify and distinguish between an arcade and a casino. An arcade is usually defined as a beachfront holiday amusement center where all the family can be entertained. The reality is quite the reverse in Ireland, where high stakes are played on slot machines and often family holidays are destroyed. These premises are usually very inviting—no membership is required—and hard gambling is available. In effect, such premises are providing casino-style gambling under the guise of family entertainment.
For a business like a slot arcade to conform to proper legislation, the arcade would have to define itself simply as a family business, adult business, arcade or casino.
A family business arcade would have very small-stake slot machines deemed to be available for fun and amusement. This would need to be strictly enforced.
A casino requires a minimum entry age—unlike an arcade—and that age is 21. You cannot easily access a casino in Ireland as they have a membership procedure in force.
There should be high-stake slot machines inside a casino. The question of how many slot machines a casino is allowed should be dependent on the number of table games present. For example, for every roulette or blackjack table, three slot machines would be allowed. This regulation has been used successfully in other jurisdictions and keeps the business defined as a casino for taxation purposes. It does not allow a crossover to a 24-hour slot parlor. It also protects the young and the vulnerable as access is restricted.
Growth of Private Casinos
Ireland has seen significant growth in recent years in the area of private casinos. These small casinos are able to operate in a grey area under the current legislation. Members are presumed to be betting between each other and not against the house. Although there is nothing in the law to say this is legal, there is nothing to say that it is illegal either. It should be noted that the number of these clubs doubled in the period from 2006 to the present, following the announcement by the then-minister of justice that casino legislation was on the way. There were 20-25 clubs in 2006. That figure has grown to around 50.
It is relatively easy to obtain access to these clubs. The public are often admitted as guests or signed up as members “on-the-spot” when they arrive at the club. It is clear that in the long term Ireland cannot afford to allow this type of casino to continue to grow. Without any form of regulation, eventually this will present opportunities for criminal involvement and money laundering. It will be harder to attract the international corporate casino companies to the nation if we have a casino in every town in Ireland. The majority of those involved in the industry do not want this and would therefore welcome sensible regulation of the market.
Content of New Legislation
New legislation should focus on a number of key priorities to ensure that Ireland develops a safe and progressive gaming industry.
• Ownership of casinos: Directors, shareholders and all operatives should be free from any previous criminal convictions and meet a series of minimum standards.
• Gaming staff: Everyone who works in the gaming area should be required to obtain a license from the government, or in conjunction with the Gardai or police.
• Taxation: It can be quite complex to accurately tax a casino’s revenue, but over the last 15-20 years significant progress has been made and there are various options that need to be discussed. Taxation could be affected in a major way depending on whether or not an Irish gaming board is formed. For example, a government official is present at the close of business every day to determine the casino’s result in countries like Spain. In any case, efforts should be made to demonstrate to government officials that a lower tax rate means more investment, jobs, infrastructure improvements and so on.
• Integrity: A competent regulatory system should be set up so that the operations and the games are conducted in accordance with reliability and honest fair play.
• Money laundering: This issue can be addressed in exactly the same fashion as with banks and building societies (credit unions). Any license that is issued, whether it be to operator, executive or employee, can also be revoked if the establishment fails to carry out its duties with due care and responsibility. The final responsibility lies with the management of the casino, so policing itself should be the policy of any responsible casino club.
• Games permitted: There is a wide selection of games separate from slot machines available in the market today. These games should be studied carefully, as some of these games do not give the customer fair play. In some countries a casino operator can put virtually any type of game he wants onto the casino floor. This should not be the case in Ireland. Of course, the basic games like blackjack and roulette, which are played all over the world, all have edges in favor of the house. But these edges are considered fair internationally and are 0.47 percent on blackjack and 2.25 percent on single-zero roulette. If these edges did not exist, a casino would not be a viable commercial proposition. In addition, the size of the stakes allowed to be played needs to be discussed.
• Where should the casinos be located: This is a complex question which needs to be thoroughly discussed and vetted. Items to be considered include the population of the town or city, location within a given jurisdiction and distance from another casino, the size of the proposed casino, and specific negotiations between the issuer of the license, bidders and town planners.
• Availability of alcohol: The serving of alcohol should be based on local laws and should not be an incentive to visit a casino. For example, if restaurants and pubs cease serving alcohol at 2 a.m., the casino should be required to do the same. The issue of providing free drinks to punters should be evaluated as well.
• Protect the vulnerable: There should be a strict age policy that specifies a minimum age of 21 to enter a casino, to prevent minors from gambling. Efforts should be made to implement responsible gaming programs that prevent problem gamblers from being harmed. Ultimately, however, it is the professionalism of the management which will ensure that customers are protected, which refers once again to the issuing of individual gaming licenses.
Making the Case
More Irish people are gambling today than was the case in the early 1990s when casinos were not favored. The Irish punters’ views have changed dramatically over this period, with many people actively participating in gambling either online or in casinos.
Ireland needs to make sure that bidders understand that a license is a privilege, not a right. Any license that is issued must come with a set of rules, and if it is deemed that the rules have not been adhered to, then that license must be revoked.
If we are to have legislation, we must get fully behind it to establish a confidence and integrity within the industry. Casino staff must feel pride in their work and not be frowned upon by family and friends. Like any other international business, Ireland will be competing on the world stage for tourism. All over the world, casinos have strong links with golf and horse racing through sponsorship, partnerships and other arrangements. We must encourage these relationships in Ireland as well.
With the correct regulation and oversight, the Irish casino market can grow in a socially responsible fashion—for the benefit of the companies involved, the government, the community and the employees.
JJ Woods is director of operations for Atlantic Casino Consultants, which he founded in 2005. Woods was born in Ireland but left in the 1970s to live in London, where he started a career in banking. He later trained in the casino industry, and over the last 25 years, Woods has dedicated his career to the design, opening and management of casinos around the world.
The New Age of Bonusing
Bonusing systems—extra prizes that have nothing to do with slot machine results—have in just a few years become integral to slot player tracking systems. Now they are moving to table games. Next year, as server-based gaming is introduced at CityCenter in Las Vegas and begins its march across the gaming landscape, bonusing systems will help casinos to target their most valuable players with rewards that they will truly prize—and increase profits.
Bonusing is an expanding frontier whose potential hasn’t been defined, much less reached.
As major slot manufacturers have realized those potentials, they assimilated smaller companies that developed proprietary bonusing systems.
Derik Moobery, Bally’s vice president of system sales for Western North America, recalls, “In the ’80s and ’90s people bought systems for slot accounting, to track the money and track theft. In the ’90s player tracking arrived. As we moved out of the ’90s it became not just important to track players but to incentivize them, to drive additional revenue toward the slot.”
Brian Macsymic, director of product management for Casinolink Enterprise at Progressive Gaming International Corporation, credits this development to the Australian market.
“It became an integral part based on mystery progressives, which were born from the Australian market,” he says. “It evolved outside of the base game with interesting and compelling ways of bonusing players. It was natural to tie it to a loyalty program.”
PGIC played a part with its Mystery Progressives, which were part of its Casinolink Jackpot System, or CJS.
Vince Manfredi, director of strategic marketing services for International Game Technology, adds, “It was a technical evolution. Some industry leaders had the vision to see that a network could be more than just a data collector for accounting; it could provide two-way communication and player incentives at the point of sale.”
In the 1990s Bally introduced Coupon Cashless (today’s Power Coupon), which addressed a business problem posed by bus groups and giveaways—how to give back more to the player.
Back then, notes Moobery, “you actually got a roll of quarters as you got off the bus. Question was, how do we know they even play those? Or do they buy a cup of coffee and breakfast and then take the next bus out?”
One gaming tribe, says Moobery, knew the answer because they had a convenience store across the street. They could track how many rolls went into food instead of the slots.
Coupon Cashless converted giveaways into credits that could only be spent in the slot machine. A company Bally acquired in 2002, ACSC, developed the technology for downloading credits into the slot.
“Today that is a standard tool, but that was actually developed some time ago,” says Moobery. “People think that tools like bar coding, marketing coupons and downloading credits are new, but some have been around for 13 or 14 years.”
Aristocrat also led in developing bonusing systems. Product Manager Lael Berelowitz notes that Aristocrat’s Oasis 360 evolved over the last 15 years as both the technology and the savvy of casino patrons progressed in tandem—driven by casino expansion outside of Nevada and New Jersey. Competition increased, giving players a reason to pick one casino over another.
“Oasis 360 was originally developed to provide a robust accounting solution,” says Berelowitz. “Aristocrat recognized the shift toward the need for patron-centric applications and developed feature-rich bonusing modules like SpeedMedia Splashdown Countdown and Ricochet Rewards.”
Today, says Moobery, “when someone buys a system, the first question is, what bonusing system does it have? First it was slot accounting, then tracking, then bonusing. Where it became integrated, they would say, ‘We now have the ability to bonus players; how much more money am I making?’ Now, we can run reports and tell how, if we give a player $10 in bonuses, we get X amount of play.”
Power Bonusing
Today’s casino operators have several bonusing options.
Bally offers the Power Bonusing Suite, where each product meets different needs. Customers buy the bonusing tools that work in their markets.
Power Winners lets casinos offer a mystery jackpot that starts with a certain value and can have a must-hit-by value or must-hit-by time. Players watch a plasma screen or Bally’s iVIEW tracking device to see where the mystery jackpot is at any time.
Power Coupon, a bar-coded marketing coupon, is inserted into the bill validator to put cashable or non-cashable credit on the game.
With Power Promotions, players can convert slot points or a promotional offer into free credits on the machine.
Power Bank lets players deposit money, and when they are done playing, load the money directly to their account. The next day they can download directly to the machine.
Power Sweepstakes lets players earn raffle tickets or chances to win a prize. For instance, if you play a video 21 game and you hit “21” you get a chance on a drawing. Or if you play X amount, you get X amount on a sweepstakes.
Power Rewards allows different types of multiplying to incentivize players. Play X and get Y. Bally got the idea from a casino operator who was very close to competitors and realized that the Blazing 7s slot machine looks the same at every casino.
As Moobery recalls it, the casino operator said, “‘I know players split their time. How do I get them to sit longer at my casino? I want to give them an incentive to play longer at my casino.’”
The final two products, Live Rewards and Tournaments, both run on the iVIEW. Live Rewards provides individualized bonus games configurable by the casino. Pay tables are dynamic. The pay table on the bonus game is really dynamic in that it links to players’ play habits on the base game. With two players side by side on the same game, one plays a penny, the other plays max bets. It will give better rewards to the player making higher bets. This difference is obvious to the players.
Tournaments allows players to enter a tournament at any slot, instead of the casino roping off a bank or area. Most slot tournaments are not played with real money. Here, players use real money—on any game.
Advantage System
IGT’s Advantage System features a network that gives the casino the ability for rudimentary communication from system to player. There are hardware options that are part of the player tracking kit in each machine, depending on the option. The most advanced is NexGen, a touch-screen display that provides the ability to reward and surprise specific players while they play.
NexGen greets the guest with sound and the guest’s name, describing pending awards, current balances and how much free play credit they have.
According to Manfredi, “It creates switching costs in the mind of the player, because it builds loyalty, giving benefits for playing at a particular casino.”
Any kind of player tracking hardware is a separate component at the option of the operator. If a casino purchased such a system it could buy NexGen. If it bought 100 slots and it had the Advantage system they would be installed before the machines are delivered.
“It’s one-stop shopping,” says Manfredi. “The interactive and marketing side takes these concepts and makes them more powerful exponentially. NexGen is important not just in today’s casinos, but down the road when we see that become a bridge to the server-based world.”
Such a system generates more slot machine play.
“Number one: we know slot players like to play slots, so if we give extra games and extra credits and extend time on device we have components for building loyalty,” says Manfredi.
“Ten years ago the idea was to deliver a fixed level of credits or a mixed jackpot. Our first bonusing customers in Australia had $1 million giveaways. They delivered a life-changing award linked to the venue—not because you were playing a particular game, but because you were playing in a Crown Casino. They give the opportunity to build loyalty.”
In more primitive scenarios, he notes, everyone was eligible for the bonus. NexGen can use animation to create a game within a game, or another bonus game. “Instead of just delivering $500 we can have everyone who is eligible participate in an animated horse race, where one player wins the $500,” he says. “This lets us create a fully branded bonusing experience. It’s a segue to much greater depth as we move into server-based.”
Casinolink
Progressive Gaming’s Casinolink Jackpot is an enterprise-wide management system with layers providing centralized control of progressive and mystery jackpots for slots and table games. It delivers a real-time global view.
Promotions are built around loyalty points. Properties can, based on demographic data, offer promotional credits. There is also a random player bonus solution where a winner is chosen from predetermined criteria, e.g., “You might offer a promotional credit for anyone over 50 who plays on Tuesday, who would be eligible for random giveaways throughout the day. When the prize is awarded, media signs throughout the casino would celebrate,” says Macsymic.
The Jackpot module enables expanded jackpots and bonusing across multiple sites.
These tools are available for both slots and table games.
Casinolink Jackpot enables table game progressives in local and multi-site links on games such as World Series of Poker, Progressive Texas Hold ’Em, Caribbean Stud, Progressive Baccarat and Progressive Blackjack from the same server as slot progressives and mystery jackpots.
PGIC’s player tracking interface was developed in partnership with IGT, and it is integrating the server-based NexGen into the system. That will be available this month.
Bonusing Futures
What’s the future of bonusing?
“What you are seeing is that it is becoming more targeted,” says Moobery. “If not every player has an equal opportunity for a bonus, casinos can focus more on specific programs that make it more profitable. That’s where server-based and high-speed floors come in. The biggest advantage you get is the ability to communicate with the player, to push product or media or marketing to that player based on who they are.”
Readers who buy books on Amazon.com know exactly what Moobery is getting at. You can use bonusing to, say, fill a showroom by getting tickets to people who might like a particular show or type of show.
That will arrive with the high-speed floor.
Manfredi agrees: “It really gets into server-based gaming where we have more horsepower. Soon, a player will insert a card and we’ll know his past preferences. If we can use the system to understand who has a preference for show tickets and who deserves them we can ‘paper the house’ with intelligence, not randomness.”
Macsymic believes that bonusing technology will transcend the slots boundary. “It will lend itself to hospitality, going beyond the four walls,” he says. “Server-based deployment brings a new level of sophistication. Today bonusing solutions are implemented with 10-year-old technology. SB will bring faster, more efficient ways that go beyond giving people free play.
“Starting in 2009, you will see really interesting technology enhancements. Some are starting to be deployed in S2S (the GSA system-to-system standard), so you will be able to connect separate systems, like tables and slots. Our random player rewards and point multiplier promotions can already bridge slots and tables. As technology gets more integrated it will transcend those barriers.”
Earle G. Hall, president and CEO of DEQ Systems Corp., which manufactures a table bonusing system (see sidebar) provides this perspective:
“Remember how faxes, printers and scanners were once three products? Now you can pick up three in one. You see a convergence where all table games have the possibility to be connected. Players will demand the same bonuses from slots and tables, because there is discrimination. Wife and husband, who often play different games, are not treated alike. Bonusing is another name for customer relationship management.”
Mohegan Sun Opens Casino of the Wind
Connecticut’s Mohegan Sun last month opened the first phase of the mega-resort’s $925 million expansion. A tribal blessing, followed by a ribbon cutting, marked the occasion.The project, the casino’s third expansion since it opened the Casino of the Earth 13 years ago, has been dubbed Project Horizon. That will be completed by 2010 when the 925-room hotel is opened.
The casino that opened last month, called Casino of the Wind, includes 650 more slot machines, a 42-table poker room called “Aces Up” and 28 table games.
New restaurants include Jimmy Buffett’s flamboyant Margaritaville, slated to open later this month, which will have a small plane hanging from the ceiling, and a quick-service deli, called the Chief’s Deli.
The project opened a little more than a year after breaking ground.
Inside of the casino are features designed to instill a sense of awe, such as a 35-foot wall of granite brought in from South America with vivid changing hues projected onto it and images of birds, leaves and clouds moving across the ceiling. In another room are twisted shapes of trees.
The opening is something of a gamble, since the tribe is betting that the sluggish economy, which has hit the Sun’s profits significantly, will turn around.
Mohegan Chairman Bruce “Two Dogs” Bozsum comments, “We didn’t see a reason to stop what we’re doing here on the casino side.”
Jeffrey Hartmann, the Mohegan Tribal Gaming Authority’s CEO, added, “The tribe always looks to the long term. We’re prepared to weather through.”
The expansion opening comes four months after the Sun’s main competition, Foxwoods, opened its $700 million MGM Grand at Foxwoods addition. Both casinos are engaged in something of an “arms race” to attempt to top each other, but that is the casino business.
“We watch them carefully and they watch us carefully,” says Foxwoods interim president Barry Cregan.
Some industry analysts see the expansion plans by both casinos as a well-thought-out strategy to define their market in national terms, rather than merely regional.
“There’s no question that’s a very conscious strategy that they initiated years ago on the full anticipation that other states would authorize slot machines or casinos,” says Clyde Barrow, a market analyst based in Massachusetts.
Rolling Thunder
The Buffalo Thunder Resort Casino in New Mexico is billed as bringing Las Vegas to Santa Fe. For the grand opening ceremony on August 3, this meant an appearance by the Flying Elvi and a couple of show girls. But in a more real sense, the collaborative project between the Pueblo of Pojoaque and Hilton Hotels brings the aesthetics and amenities usually seen in Las Vegas resorts to what is now the largest resort in New Mexico.The $300 million property, designed by Thalden Boyd Emery Architects and constructed by Balfour Beatty, is a pueblo-styled building popular in northern New Mexico. It features artwork from all of the tribes of New Mexico, a point of pride for Pueblo of Pojoaque Governor George Rivera.
“It’s a matter of paying respect to the arts and the culture that is really what makes the Indian people who they are,” Rivera says. “We want to ensure that is recognized and continues.”
The resort features 60,000 square feet of gaming space, including a 10-table poker room, 66,000 square feet of meeting space, a spa and a 36-hole golf course. The property also has 395 hotel rooms, which are being operated by Hilton in its first partnership with a gaming tribe.
Ian Carter, president of global operations for Hilton Hotels Corporation, says the company was immediately impressed by the tribe’s plans for the resort when first approached seven years ago under then-Governor Jacob Villareal.
“Once we saw the plans and the vision that both governors had to make a resort of this quality, it was a pretty easy decision,” Carter says.
The resort is the culmination of more than 15 years of economic development for a tribe that was instrumental in bringing tribal gaming to New Mexico. (Villareal threatened to shut down traffic on the highway that runs through the tribal land if the state would not ratify gaming compacts.) While other tribes, most notably the Mescalero, were initially more successful with their gaming ventures, Rivera says with Buffalo Thunder, the Pueblo of Pojoaque are now the leaders of New Mexico gaming.
“Governor Villareal learned his economic lessons from our friend, the late president of the Mescalero Tribe Wendell Chino,” Rivera says. “President Chino liked to say that the Pueblos make pottery, the Navajos make jewelry and the Mescaleros make money. Today, the Pueblo makes pottery, Pojoaque makes jewelry and Pojoaque makes money.
“Just like we learned from other tribes and their businesses and developments, now, they’ll be learning from us.”
Buffalo Thunder is ultimately more than just a destination resort, a fact touched on by Barry Thalden of Thalden Boyd Emery.
“Our mission at Thalden Boyd Architects is to improve the lives of Native Americans through the development of spectacular, creative and successful resorts and casinos,” Thalden says. “This represents more than just a building. To us, and to the Pueblo of Pojoaque, this represents the future of their children and their children’s children.”
Through the various businesses it owns, the tribe has been able to develop scholarship programs for private primary schooling as well as secondary institutions. It has put together early child care programs and programs to benefit senior citizens. It also funds a 50,000-square-foot recreation center that is open to the public.
“When we got into developing the businesses, we had done a needs analysis of the community,” Rivera says. “As the businesses grew and started producing revenue, we had the needs analysis and started addressing the social issues line-by-line.”
With the new resort, the tribe will be in an even stronger position to provide education, health care and employment opportunities to tribal members.
“It’s the direction we want our future to go,” Rivera says. “It’s not just about the money, it’s about the survival of the people and the education of the people. Those are the reasons why we move forward in this direction and that’s why I’m committed to the project.”
New Attitude
For more than a decade, the skyline along the Boulder Highway stood unchanged. A few smaller casinos opened, and the major casinos underwent expansion and renovation projects, but nothing new has been added to the inventory of casino space and hotel rooms in the area known as the Boulder Strip since Sunset Station opened in 1997. The last property built on Boulder Highway itself was Boulder Station in 1994.
That changed last month when the Eastside Cannery opened to thousands of guests who waited for hours to get a glimpse of the new casino. The $250 million resort is at the site of the former Nevada Palace, which was operated by Cannery Casino Resorts. With the new project, company co-owners and co-founders Bill Paulos and Bill Wortman are hoping they can replicate the success they have enjoyed with the Rampart casino at the Resort at Summerlin and the Cannery in North Las Vegas.
The property is built with an industrial theme similar to the company’s North Las Vegas casino. However, Eastside Cannery is more modern, drawing on art and pop culture items from the early 1960s, as opposed to its sister property, which is designed to resemble a late ’40s or early ’50s canning factory.
Like the North Las Vegas property, Paulos and Wortman both say they wanted the Eastside to be a place that the locals would call comfortable.
“We want to make people feel at home, like this is their place,” Paulos says. “We want people to feel like we built this for them, because we did.”
The timing of the opening isn’t perfect. The economy is not what it was when the project was announced. Company officials, however, are not concerned.
“We’ve done most of our projects in hard times and opened them in just kind of the tail end, and we have grown very well,” Paulos explains. “You never know when the bottom is and you never know when the top is.”
Additionally, the company is happy with the numbers it has been posting at its other Las Vegas properties. It has not had to lay off any workers, and even found a way to keep the 300 workers displaced when Nevada Palace shut its doors earlier this year, by moving them to other casinos.
Sal Semola, vice president and general manager of the Eastside Cannery, admits there are challenges to operating right now, but notes that “at the end of the day, there’s always room for good product and good experience and that’s what we strive to provide.”
Ultimately charged with the task of delivering the experience Semola promises are the 1,100 team members who will bring the property to life. The company received close to 25,000 applications for the 800 positions it needed to fill, allowing the company to choose the best candidates to be part of the new team.
“The most important thing is hiring the right people,” Semola explains. “We all buy our slot machines from the same manufacturers, we buy our food from a lot of the same vendors and so forth, but the people are truly the point of differentiation that sets you apart from everybody else.”
Opening a new casino can be a time-consuming challenge. It takes a lot of work and dedication to guide a project through years of design and construction before bringing it to life. But, it is something Paulos, Wortman and Semola are all familiar with.
For Semola, Eastside Cannery is the fourth casino opening with which he has been involved, about which he jokes he is a glutton for punishment.
“Really, it is a lot of fun to take a project from nothing and put it together,” he says. “And it’s not just the physical plan, but the human resource element, bringing on folks and watching them grow and develop. It really is something that does require a lot of work, but yet is very rewarding at the same time.”
Even with a proven track record of delivering new properties, Wortman says he still deals with thoughts like whether anyone will show up.
“It’s just the nature of the business,” he says. “We’ve opened several of these, and certainly my partner has opened many more than I have, and at the end of the day, you always think about what happens if you open and not one person shows up.
“Those are the kinds of crazy thoughts you have.”
A New View For Food
Eastside Cannery will have a few other things that set it apart from the other casinos on Boulder Highway and in Las Vegas. While the gaming options are similar to what you will find in the area, there will be some different dining options, as well as a top-floor lounge offering amazing views of the valley.
Perhaps the most talked-about innovation is the new approach of adding tableside service to the ubiquitous casino buffet. Sweet Lucy’s will feature a number of dishes from a menu that is created daily. Food will vary from American comfort foods to Tex-Mex, Italian, Asian, barbecue, seafood and more. And with the addition of a server, the only time people will have to get up is to take advantage of the 20-foot, self-service dessert bar.
The other big news is the 16th floor lounge and restaurant, ONE SIX.
“Something unique on the east side of town will be the restaurant club we have on the 16th floor that will oversee the Las Vegas Strip,” says Wortman. “It will face west and actually have a spectacular view of the entire valley.”
Eastside Cannery will also bring Casa Cocina to the Boulder Highway. The popular Mexican restaurant from the North Las Vegas property was a natural fit, Semola explains, because it is well known and it has been so successful at the other property, earning a Best of Las Vegas nomination from the staff of the Las Vegas Review-Journal.
“We felt we needed a Mexican restaurant in this location, and what was better than Casa Cocina?” says Semola. “It’s a great brand, people like it and they know what it is.”
Other restaurants include the fine-dining option of Carve, which is similar to Waverly’s at the North Las Vegas property. The 112-seat restaurant centers around the prime rib carving station, the signature dish. Also available are steaks, chicken and seafood.
The Eastside Deli offers a quick bite to eat, though Semola notes that it is much more than just a simple deli. “It’s a 60-seat outlet and the (cooking) line is pretty substantial; there is more than just turkey sandwiches and chicken salad,” he says.
The deli is located just behind the race and sports book, and across from a floor bar. The idea is to create a location where people can come and hang out, watch games or races and have something to eat and drink. Because it is located across from the poker room, the deli will see additional activity. “There’s a lot of synergy in this area,” Semola says.
The Other Draws
In addition to the restaurants, Eastside Cannery has all the other trappings of a locals casino as well. The property features 307 hotel rooms, which like ONE SIX, are designed to take advantage of the views from the east side of town, whether they overlook the Strip or the mountains in any direction.
“All of the hotel rooms have a terrific view of the valley,” Wortman says. “They all have great views of the Strip or the mountains. It’s really, I think, a totally new paradigm on that side of town.”
The property also features 65,000 square feet of casino space, room for 2,100 slot machines and a 26-table pit. While the floor will feature many familiar machines, it will also be the first Las Vegas home for IGT’s new bar-top machines, upright cabinets and slant-top cabinets. Eastside is also the first property to feature Aristocrat’s Viridian cabinet and Gen7 platform.
There is also a state-of-the-art race and sports book, located immediately inside the south entrance, directly across from the 10-table poker room.
Nightlife at Eastside Cannery isn’t just limited to the top floor. In addition to the Pin-Ups center bar, the property features the 200-seat Marilyn’s (as in Monroe) Lounge. The venue works for concerts and smaller performances, and can also be used for showing televised sporting events like football games and boxing.
“It’s not necessarily a showroom, but it’s more than just a lounge,” Semola says.
For larger events, the 20,000-square-foot ballroom comes into play. The facility can be used as a 1,400-seat headliner venue or a 2,000-seat boxing/wrestling/MMA arena. The space also is available for meetings and conventions, with a 17,000-square-foot main ballroom that can be divided into five rooms, as well as two additional meeting rooms and two boardrooms immediately outside the main room.
The Difference-Makers
For Cannery Casino Resorts, the most important assets are the team members who bring a property to life.
“I tell everybody that the bricks and mortar are fine, but nothing comes to life, none of these places come to life without those 1,100 people who are in it creating personality and creating the life of the building,” Paulos says.
The importance of the team members is what prompted the company to keep on the employees of Nevada Palace during the transition period. It was a decision that cost money, but that wasn’t a big concern for company officials.
Instead, they were focused on how they could keep people employed between the time Nevada Palace closed and the day Eastside Cannery opened. It involved moving people into positions at Rampart and Cannery during the interim. Some have decided to stay at their new properties, but a majority are returning to the Boulder Highway.
“We knew we were going to need employees at our new property and we thought it was the right thing to do to make room elsewhere for those who had worked with us and had been loyal to us all that period of time,” Wortman explains.
Many of the workers at Nevada Palace had been there for the better part of 20 years, and while Cannery Casino Resorts has only existed since 1996, Wortman’s association with Nevada Palace dates back to the 1980s. In those two decades, the workers took on as much importance as family, and when it was announced that a new property would be built, Paulos says there was no question of what the company was going to do.
“There was no way that if we’re going to have a new property and we have two properties already, that we wouldn’t assimilate these folks into our properties so they could continue to make a living, and so that they can come back to the all new and improved ‘Nevada Palace,’” he says. “They’re part of our family, and you’ve got to take care of your family.
“We’re very fortunate in the fact that we’re not a public company and can make a lot of our own decisions. If some of those decisions happen to cost us money, but are for the benefit of the folks who work with us, then more likely than not, we’re going to take that route.”
There are added benefits to the decision. It creates a more stable corporate culture, and it allows the existing team members to inculcate the new hires in the family. It also sends a message to the community about how Cannery Casino Resorts treats its team members, and creates comfort for old guests of Nevada Palace, who will be able to come back and see their favorite dealers in a new environment.
“We didn’t do it for that purpose,” Wortman notes. “We did it because it was absolutely the right thing to do.”
Time for Change
A short time after construction started on Eastside Cannery, an announcement was made that Crown Ltd. was acquiring Cannery Casino Resorts. The Australian gaming company headed by James Packer is working on regulatory issues before it can complete the purchase, which is expected to happen between the end of this year and the coming summer. Crown needs licensing to operate in both Nevada and Pennsylvania, where CCR is also building a casino, and there is little doubt that the transaction will clear. It’s just a matter of time.
For Paulos and Wortman, the deal was about more than making money by selling a successful company. It was another way to benefit Cannery Casino Resorts’ 3,000 employees.
“When we had people looking at our company, one of the criteria Bill and I had was we wanted to make sure that the company that took over provided a like atmosphere for our employees and provided a greater opportunity for our employees,” says Paulos, who worked for Crown as COO/deputy chairman in 1994. “Crown is making its entry into this market. They don’t have an overabundance of U.S. management, and they have every intention of expanding, so it gives our employees upward mobility.”
Paulos and Wortman expect to stay with the company in an advisory role for a while after the transaction is completed. Once they leave, both say the thing they will miss the most are not the properties they built, but the people they’ve worked with.
“I think whenever you have this kind of situation, you form an emotional attachment to the company, but more importantly, you form an emotional attachment to the people you work with,” says Wortman.
“I’m very proud that we’ve been able to create a business that was able to support the lives of 3,000 or 4,000 people and to have them be our associates and, for the most part, our friends,” Paulos says. “That’s huge for us.”
Interview with Terry Caudill, President, TLC Casino Enterprises
Interview with Lee Amaitis, President & CEO, Cantor Gaming
Interview with Jerry St. Pe, Chairman, Mississippi Gaming Commission
Casino Marketing,
A Great Business Opportunity
These days, the demographic of the Asian population is changing rapidly. In the past, the only places with large Asian populations were in big cities like New York, Los Angeles and San Francisco. But now the Asian population is more spread out throughout the country. In addition, you see smaller groups of different Asian nationalities like Hmong, Laotian, Thai and Cambodian, at the side of high-gaming-profile Chinese, Vietnamese and Korean depending on your casino’s location. Therefore, wherever your casino is located, Asian casino business is here to stay.
I have many opportunities to visit casinos in the U.S. due to my consulting business. And I was particularly surprised to witness that many casinos are taking a very reactive Asian marketing development approach, even where they have very healthy or potential Asian business.
Developing Asian marketing is no different than domestic casino marketing. You have to develop and maintain Asian business with proactive marketing effort regardless of the volume of your current Asian business. That is the right marketing policy, and rewards will support your bottom-line performance.
The first step toward developing Asian marketing is total understanding of the nature of Asian business in your marketing territories, locally, regionally and nationally. Since the Asian population is everywhere and there are many Asian ethnic groups that exist in your marketing territory, understanding, recognizing and identifying demographics of Asian population is a must.
Based on these analyses, you should establish your Asian marketing plans, strategies and goals as well as your Asian host language mix, and the number of hosts/player development staff you need. Then, establish effective Asian marketing programs by ramping up your Asian marketing to the next performance level.
Secondly, it is important that you choose the games that appeal to Asian players. Any casino seeking to develop the Asian market must offer Asian table games that appeal to Asian clientele: baccarat, pai gow poker and pai gow tiles (a traditional Chinese game that is found at major casinos where there is a large Chinese clientele).
Another essential step is that your casino must have Asian hosts who speak the Asian languages. Having someone who speaks the Asian languages is a very basic marketing tool for developing Asian marketing as well. There are some serious language barriers and cultural diversity issues with Asian players, so it is critical to recognize these issues.
Your casino needs to send a message to the Asian communities: “We speak your language.” Asian players do not expect Asian-style decorated hotel rooms from the casino, but Asian players definitely expect an Asian host who can service them with their own languages. It demonstrates your proactive desire to service Asian players.
Another important basic is providing Asian menus in your property. It is also one of the very basic marketing tools for developing Asian business. Recognizing the Asian patron’s dining needs is one way of saying “We welcome your business” and “We know how to serve you.” It creates a huge welcome to Asian customers. Your property must create the high-standard authenticity of Asian menus, environment and ambience that is necessary to effectively market to and continuously capture the Asian players.
Finally, the core gaming business is providing a variety of casino games on the floor, and at the same time we provide a high standard of customer services to Asian players. As we all know, Asian patrons want to enjoy themselves and not be mistreated by anyone, just like any other customer. And understanding gaming-related cultural diversity issues and managing language barrier problems will definitely help us to service the Asian patron better.
Therefore, some form of Asian customer-service training programs will assist all employees. These include VIP service, player’s club, host department, marketing, table and slot operations, security department, hotel and all supplementary customer service departments.
Certainly implementing some form of diversity training program should not be ignored if you want a successful Asian business segment. Without this customer service support from all departments, the best-laid marketing plan will fail. Training and educating your employees will definitely set your property apart from your competitors. Having different cultural backgrounds or not being able to speak English well does not make the high-gaming-profile Asian patron any less a customer for our casino business. You must acknowledge the value of Asian customer services if you want to develop loyal Asian customers.
If you are not getting enough activity or you want to enhance your current Asian performance from these high-gaming-profile Asian players, take proactive marketing approaches on
developing your Asian market. Remember, your competitors are enjoying the Asian revenue right now.
Thomas Lim is an Asian marketing specialist working with CDC Consulting. He has worked with Sun International, Harrah’s Entertainment, Mohegan Sun and the Trump Organization in international marketing positions. He can be reached at 1-702-277-2780 or at Thomaslim@earthlink.net.
I have many opportunities to visit casinos in the U.S. due to my consulting business. And I was particularly surprised to witness that many casinos are taking a very reactive Asian marketing development approach, even where they have very healthy or potential Asian business.
Developing Asian marketing is no different than domestic casino marketing. You have to develop and maintain Asian business with proactive marketing effort regardless of the volume of your current Asian business. That is the right marketing policy, and rewards will support your bottom-line performance.
The first step toward developing Asian marketing is total understanding of the nature of Asian business in your marketing territories, locally, regionally and nationally. Since the Asian population is everywhere and there are many Asian ethnic groups that exist in your marketing territory, understanding, recognizing and identifying demographics of Asian population is a must.
Based on these analyses, you should establish your Asian marketing plans, strategies and goals as well as your Asian host language mix, and the number of hosts/player development staff you need. Then, establish effective Asian marketing programs by ramping up your Asian marketing to the next performance level.
Secondly, it is important that you choose the games that appeal to Asian players. Any casino seeking to develop the Asian market must offer Asian table games that appeal to Asian clientele: baccarat, pai gow poker and pai gow tiles (a traditional Chinese game that is found at major casinos where there is a large Chinese clientele).
Another essential step is that your casino must have Asian hosts who speak the Asian languages. Having someone who speaks the Asian languages is a very basic marketing tool for developing Asian marketing as well. There are some serious language barriers and cultural diversity issues with Asian players, so it is critical to recognize these issues.
Your casino needs to send a message to the Asian communities: “We speak your language.” Asian players do not expect Asian-style decorated hotel rooms from the casino, but Asian players definitely expect an Asian host who can service them with their own languages. It demonstrates your proactive desire to service Asian players.
Another important basic is providing Asian menus in your property. It is also one of the very basic marketing tools for developing Asian business. Recognizing the Asian patron’s dining needs is one way of saying “We welcome your business” and “We know how to serve you.” It creates a huge welcome to Asian customers. Your property must create the high-standard authenticity of Asian menus, environment and ambience that is necessary to effectively market to and continuously capture the Asian players.
Finally, the core gaming business is providing a variety of casino games on the floor, and at the same time we provide a high standard of customer services to Asian players. As we all know, Asian patrons want to enjoy themselves and not be mistreated by anyone, just like any other customer. And understanding gaming-related cultural diversity issues and managing language barrier problems will definitely help us to service the Asian patron better.
Therefore, some form of Asian customer-service training programs will assist all employees. These include VIP service, player’s club, host department, marketing, table and slot operations, security department, hotel and all supplementary customer service departments.
Certainly implementing some form of diversity training program should not be ignored if you want a successful Asian business segment. Without this customer service support from all departments, the best-laid marketing plan will fail. Training and educating your employees will definitely set your property apart from your competitors. Having different cultural backgrounds or not being able to speak English well does not make the high-gaming-profile Asian patron any less a customer for our casino business. You must acknowledge the value of Asian customer services if you want to develop loyal Asian customers.
If you are not getting enough activity or you want to enhance your current Asian performance from these high-gaming-profile Asian players, take proactive marketing approaches on
developing your Asian market. Remember, your competitors are enjoying the Asian revenue right now.
Thomas Lim is an Asian marketing specialist working with CDC Consulting. He has worked with Sun International, Harrah’s Entertainment, Mohegan Sun and the Trump Organization in international marketing positions. He can be reached at 1-702-277-2780 or at Thomaslim@earthlink.net.
Casino Communications,
Scott Butera
One of the big stories of 2007 was the yanking of the New Jersey casino license for Tropicana Entertainment, the casino division of Columbia Sussex. The state Casino Control Commission found that Chairman Bill Yung disregarded several regulations and failed to maintain a “first-class resort” as stipulated in the Casino Control Act. The Atlantic City Tropicana was put up for sale (yet to be consummated) and the company scrambled to survive as Indiana also forced a yet-to-be-consummated sale of the company’s Evansville property. The board brought in turnaround artist Scott Butera, who helped the Trump Organization emerge from bankruptcy in 2005. Butera immediately went to work purging the company of the offenders, and the Yung family was ousted. He spoke with Global Gaming Business Publisher Roger Gros at the Tropicana in Las Vegas about what he has done and what to expect from Tropicana Entertainment in the near and long-term future. To hear the full version of this interview in a podcast, go to www.ggbmagazine.com and click on the GGB Podcast button. GGB: When you first came on board, things were disorganized and chaotic in the company. What was your first priority?
Butera: You’re right; this was very much a troubled company when I got here, both operationally and financially. The biggest challenge we had was deciding what was the right step in turning this around. How do we break ourselves free from some of the things that have gotten ourselves into trouble so we can start improving the operations?
For us, that was establishing ourselves in good standing primarily with the regulatory authorities we work with. Clearly, being in the gaming business and being a gaming operator is a privilege, not a right. We wanted to establish that we’re a company that could operate in good standing, that we could operate in compliance with regulatory authorities and with laws, we could produce accurate financial statements on a timely basis, and we could get our constituents comfortable so that they’d be a little bit patient. We knew we could improve the company, so that we could finally start improving the operations.
And that’s what we’ve been doing over the last three to four months and I think we’ve been fairly successful.
Did you realize right away that Bill Yung had to be removed from the company, and how did you accomplish that?
I think Bill Yung got in the situation because he obviously bought an asset at the height of the market. He paid a big price for Aztar, and to effect that transaction he leveraged the company significantly. Shortly thereafter, there was a fair amount of downturn in the operations. In order to save cash to be able to make debt service on the high leverage, he had to do a fair amount of cutting. A lot of that came through labor. That created issues with the unions in New Jersey, and I don’t think that the communication of why the company was doing what it was doing was as effective as it could have been.
We realized that we needed new oversight. In order to be in good standing, our regulators and our investors wanted to know that there were new people at the helm. We put in a new board with three quality individuals (Brad Smith, Tom Benninger and Mike Corrigan) and myself. We’re all highly experienced, credible people that have a much different perspective on the business. So do I necessarily think that from an operational and financial standpoint Mr. Yung leaving was critical? Only in the sense that we wouldn’t have the opportunity to be here unless that was the case.
Does Bill Yung or his son Joe, who always played a part in the company, have any role at this point?
No, they do not.
Let’s talk about the Las Vegas property. What are your short-term goals for this property?
We have an outstanding location. We have 34 acres, we’re two miles away from McCarran Airport, and as Las Vegas Boulevard continues to get more crowded, we think that’s going to be important. We obviously have a lot of development that’s going on just south of us, as you get past Russell Road and south of that. So we’re very excited about the location. What we’re going to be doing is making investments in this property with a five- to seven-year horizon.
How about Atlantic City? You’ve recently indicated that you’d like to be reconsidered to get back into the bidding process there. What’s your impression of how that process has been run up until this point?
I think the prospect of trying to sell a large asset in Atlantic City right now in this market is very difficult. The capital markets are probably the worst I’ve ever seen, having spent 16 years on Wall Street and having been an operator thereafter.
What we’ve tried to do is we’ve had preliminary discussions with the Casino Control Commission and said, “Look, we’re a new company, we’re not Columbia Sussex; we’ve tried to address all the things that you’ve highlighted when we weren’t able to get a license, and of all the people out there that can come in right away and help that asset both with managerial skills and with financial resources, we’re the ones that could do it the most quickly. We’re supportive of the sale process, but if that process doesn’t bear fruit…”
We’d like to be considered a potential alternative to selling the asset, because really it was the question of do they really want to sell the asset, or do they really want all the negative elements of Columbia Sussex removed? We’ve removed those negative elements, so we feel like we would be as good as any other bidder, particularly a bidder who might have to scratch to put together a deal.
People,
Hammond Named MGM HR Chief
MGM Mirage, Inc. announced that Miriam Hammond has been named senior vice president and chief human resources officer. Hammond is a longtime executive with the company, serving most recently as senior VP of human resources for MGM Grand Las Vegas.In her new capacity, Hammond will provide company-wide leadership in the development of HR strategies and organizational capabilities to support overall business objectives.
People,
Aliante Names Executives
Station Casinos has named gaming veterans Joe Hasson and Carol Thompson as vice president/general manager and assistant general manager, respectively, for the company’s new Aliante Station property slated to open November 11 in North Las Vegas.Both Hasson and Thompson will be responsible for the overall leadership and operations at Aliante Station, including overseeing a staff of 1,200 employees plus tenants.
Hasson has nearly 30 years of casino experience, most recently serving as vice president/general manager for Station Casinos’ Green Valley Ranch resort—where he gained national exposure on the popular Discovery Channel reality show American Casino. Prior to joining Station Casinos, Hasson was with Harrah’s Entertainment in various management capacities for more than 20 years.
Thompson has been with Station since 2000, having risen through the ranks in human resources, marketing and management, most recently serving as general manager of Barley’s and The Greens. Prior to joining the company, she worked for Mirage Resorts and MGM Grand.
People,
Sycuan Names Marketing Director
Michael Tabor has been promoted to director of marketing for California’s Sycuan Casino. He has been the assistant marketing director for the past two years.Tabor has more than 12 years experience in casino marketing, including eight years as director of marketing with Hollywood Park Casino. In his new role with Sycuan Casino, he will guide all aspects of marketing, including advertising, promotions, player development, entertainment and publicity.
People,
Ameristar Names Kansas City GM
Ameristar Casinos, Inc. announced that Chet W. Koch has been promoted to senior vice president and general manager of Ameristar Kansas City.
Koch had been serving as the property’s vice president and acting GM. He was VP of finance before stepping into the GM role in 2007 upon the departure of Dave Albrecht. He also served as VP of finance at Grand Casino Tunica in Mississippi, at Caesars Entertainment and at Windsor Casino in Ontario.
Koch had been serving as the property’s vice president and acting GM. He was VP of finance before stepping into the GM role in 2007 upon the departure of Dave Albrecht. He also served as VP of finance at Grand Casino Tunica in Mississippi, at Caesars Entertainment and at Windsor Casino in Ontario.
People,
Downstream Announces New GM
Oklahoma’s Downstream Casino Resort announced that General Manager John Cirrincione is resigning, and Chief Financial Officer Steven Drewes will become the resort’s new GM.
Cirrincione was part of the team that opened the resort in July, but has decided to move on to new opportunities, he said. Meanwhile, Drewes, who a day earlier announced he would resign and move back to his native Minnesota, changed his mind after being offered the top executive position.
Drewes has more than 10 years experience as a financial officer in the gaming industry. He joined Downstream in late 2007 as part of the pre-opening team. He has served as Downstream’s CFO since July 11, when he replaced a financial officer who specialized in the pre-opening and opening phases of casinos. Prior to that, Drewes held the position of senior director of finance at Lumiere Place Casino & Hotel in St. Louis, Missouri.
Cirrincione was part of the team that opened the resort in July, but has decided to move on to new opportunities, he said. Meanwhile, Drewes, who a day earlier announced he would resign and move back to his native Minnesota, changed his mind after being offered the top executive position.
Drewes has more than 10 years experience as a financial officer in the gaming industry. He joined Downstream in late 2007 as part of the pre-opening team. He has served as Downstream’s CFO since July 11, when he replaced a financial officer who specialized in the pre-opening and opening phases of casinos. Prior to that, Drewes held the position of senior director of finance at Lumiere Place Casino & Hotel in St. Louis, Missouri.
People,
Language to Head Bally S. Africa
Slot manufacturer Bally Technologies announced that Allwin Language has been named director of South Africa operations, responsible for all administrative, sales and service operations in the company’s Johannesburg office.The appointment of Language comes on the heels of the opening of Bally’s new office in Johannesburg and Bally’s re-entrance into the South Africa market. He brings more than 12 years of sales and marketing experience in Africa to his new position, including nearly two years as a technical and sales manager for Bally Technologies in the late ’90s. Prior to rejoining Bally, Language held a sales and marketing director role with IGT Africa.
People,
Multimedia Names New COO
Multimedia Games Inc. announced it has named Patrick Ramsey to the newly created position of chief operating officer.
For the last six years, Ramsey has served in various executive and operational positions with Harrah’s Entertainment Inc., most recently as vice president and executive associate to the company’s vice chairman.
Multimedia Games, based in Austin, makes electronic games, player terminals and other gaming systems for the casino, Native American gaming, lottery and sweepstakes markets.
For the last six years, Ramsey has served in various executive and operational positions with Harrah’s Entertainment Inc., most recently as vice president and executive associate to the company’s vice chairman.
Multimedia Games, based in Austin, makes electronic games, player terminals and other gaming systems for the casino, Native American gaming, lottery and sweepstakes markets.
Goods & Services,
Battle of the Wheel
A federal judge found in favor of slot leader International Game Technology in a patent infringement lawsuit brought by rival slot manufacturer Bally Technologies, but Bally last week was joining IGT in praising the ruling.The reason is the wording of the decision, which involves bonus wheels on slot machines. Bally sued IGT over its wheel bonus games, including the popular Wheel Of Fortune, claiming the wheel bonus infringed on prior Bally patents for games involving bonuses conducted on a wheel.
IGT has other patent infringement cases pending against Bally, claiming Bally’s wheel games infringe on Wheel Of Fortune patents.
U.S. District Judge Edward Reed held for IGT last month, writing that Bally’s patent infringement claims were invalid due to prior art (i.e., wheel bonuses existed previously) and obviousness—a finding that could hurt IGT’s patent infringement claims against Bally wheel games.
“We feel this decision strengthens our position in the other litigation brought by IGT,” said Bally CEO Richard Haddrill in a statement. A statement from TJ Matthews, IGT’s chief executive, said the judge’s decision validated his company’s position, and that IGT “respects the valid intellectual property rights of others.”
The first of several infringement lawsuits IGT filed against Bally is slated to be heard this month. Analysts say there is a good chance the two companies will reach a settlement in that case prior to trial, to avoid having a judge use last week’s decision to hold that all wheel patents are invalid.
Since a settlement of these issues will benefit both companies, last month’s decision sent the stock of both companies up.
Goods & Services,
PureDepth Extends IGT License Agreement
PureDepth, Inc. announced that it has extended its licensing agreement with leading slot manufacturer International Game Technology. The new 10-year deal will permit IGT to continue to develop its “REELDepth” series of video slots using PureDepth’s multi-layer display, or MLD technology.
MLD technology involves overlaying two LCD video screens to enhance 3D video and simulate spinning reels on a video screen with remarkable clarity.
“This agreement represents a very significant achievement for PureDepth, which sets the stage for ongoing development of our MLD technology in addition to cementing our relationship with IGT,” said Jonathan McCaman, CFO of PureDepth. “IGT’s long-term commitment to MLD technology, subsequent to their successful launch of REELdepth games this summer, demonstrates the clear commercial viability of PureDepth’s technology and further validates our company’s ability to support product development efforts.”
IGT paid PureDepth an up-front royalty payment of $10 million under the agreement.
MLD technology involves overlaying two LCD video screens to enhance 3D video and simulate spinning reels on a video screen with remarkable clarity.
“This agreement represents a very significant achievement for PureDepth, which sets the stage for ongoing development of our MLD technology in addition to cementing our relationship with IGT,” said Jonathan McCaman, CFO of PureDepth. “IGT’s long-term commitment to MLD technology, subsequent to their successful launch of REELdepth games this summer, demonstrates the clear commercial viability of PureDepth’s technology and further validates our company’s ability to support product development efforts.”
IGT paid PureDepth an up-front royalty payment of $10 million under the agreement.
Goods & Services,
Bally Appoints New Sales and Operations Executives for Mexico
Slot and system manufacturer Bally Technologies has announced two key sales and operations appointments.
Carlos Engel was named director of Mexico sales and operations, and Timothy G. Spatharos was named director of international operations.
Engel will be based in the company’s Mexico City office and manage Bally’s expanding sales activities and market-development strategies throughout the country. Before joining Bally, he worked for Acuity Brands Lighting in Atlanta, Georgia as international market development manager, responsible for managing an $18 million sales portfolio encompassing seven Latin American countries.
Engel was previously a professional tennis player on the Association of Tennis Professionals Tour, appearing at both the French Open and Wimbledon.
Spatharos, who will be based at Bally’s Las Vegas corporate headquarters, will be responsible for managing global gaming operations, including supervising game install, managing service-related issues, and supporting the company’s international sales activities and gaming operations. He previously served as Bally’s director of outbound logistics.
Prior to joining Bally, Spatharos was president of TEFTEC Corporation, a national manufacturer of customized, high-end powered wheelchairs.
Carlos Engel was named director of Mexico sales and operations, and Timothy G. Spatharos was named director of international operations.
Engel will be based in the company’s Mexico City office and manage Bally’s expanding sales activities and market-development strategies throughout the country. Before joining Bally, he worked for Acuity Brands Lighting in Atlanta, Georgia as international market development manager, responsible for managing an $18 million sales portfolio encompassing seven Latin American countries.
Engel was previously a professional tennis player on the Association of Tennis Professionals Tour, appearing at both the French Open and Wimbledon.
Spatharos, who will be based at Bally’s Las Vegas corporate headquarters, will be responsible for managing global gaming operations, including supervising game install, managing service-related issues, and supporting the company’s international sales activities and gaming operations. He previously served as Bally’s director of outbound logistics.
Prior to joining Bally, Spatharos was president of TEFTEC Corporation, a national manufacturer of customized, high-end powered wheelchairs.
Goods & Services,
GSA Announces New Members
The Gaming Standards Association announced nine new members.
Joining as GSA’s newest Platinum member is U.S.-based AMX, a system supplier that specializes in hardware and software solutions to simplify the way people interact with technology. Joining as a Gold member is New Wave Automation (U.S.). Joining as Silver members are Codere S.A. (Spain), F2 Systems (Korea), International Currency Technologies Corp. (Taiwan), Oregon Lottery (U.S.), and Nanoptix Inc. (Canada). Additionally, SIQ (Slovenia) and Technical Systems Testing (Australia) have joined as Advisory members.
“We are excited to have such a diverse range of companies join GSA, and we welcome them with open arms,” said GSA President Peter DeRaedt. “The international reach of our new members clearly underscores the global relevance of our standards, across jurisdictions and across disciplines within the gaming industry.”
Joining as GSA’s newest Platinum member is U.S.-based AMX, a system supplier that specializes in hardware and software solutions to simplify the way people interact with technology. Joining as a Gold member is New Wave Automation (U.S.). Joining as Silver members are Codere S.A. (Spain), F2 Systems (Korea), International Currency Technologies Corp. (Taiwan), Oregon Lottery (U.S.), and Nanoptix Inc. (Canada). Additionally, SIQ (Slovenia) and Technical Systems Testing (Australia) have joined as Advisory members.
“We are excited to have such a diverse range of companies join GSA, and we welcome them with open arms,” said GSA President Peter DeRaedt. “The international reach of our new members clearly underscores the global relevance of our standards, across jurisdictions and across disciplines within the gaming industry.”
Goods & Services,
Atronic Launches ‘Cash Fever’
Slot manufacturer Atronic International announced additions to its executive sales team in Europe. Matthew Collman will take over as head of sales for Eastern Europe. He will be headquartered in St Albans, U.K., and will be responsible for sales of Atronic slots and systems in Belgium, Belarus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.
“We are all very pleased to introduce and welcome Matthew to the team,” said Stuart German, sales director for Atronic International. “With the upcoming G2E Las Vegas show it is a great opportunity for him to meet customers and key industry personalities. Matthew joins the sales team at an exciting time for Atronic with our new ‘Era in Gaming Solutions’ kicking off to a good start for the company.”
“Cash Fever,” the groundbreaking multiple-progressive slot that has been extremely popular for Atronic around the world, recently was launched in Albania, debuting at the Regency Casino Tirana.
The casino introduced the game, which uses a free-spin bonus to increase a progressive jackpot through various levels on an animated thermometer, with free champagne for guests lined up to play. “Dr. Cash,” the professorial mascot depicted in the game, was on hand as a host and guide for players.
The Albania launch of the game represents the first launch in Albania of Atronic’s “e2” format, the new generation of the manufacturer’s “e-motion” platform.
“We are all very pleased to introduce and welcome Matthew to the team,” said Stuart German, sales director for Atronic International. “With the upcoming G2E Las Vegas show it is a great opportunity for him to meet customers and key industry personalities. Matthew joins the sales team at an exciting time for Atronic with our new ‘Era in Gaming Solutions’ kicking off to a good start for the company.”
“Cash Fever,” the groundbreaking multiple-progressive slot that has been extremely popular for Atronic around the world, recently was launched in Albania, debuting at the Regency Casino Tirana.
The casino introduced the game, which uses a free-spin bonus to increase a progressive jackpot through various levels on an animated thermometer, with free champagne for guests lined up to play. “Dr. Cash,” the professorial mascot depicted in the game, was on hand as a host and guide for players.
The Albania launch of the game represents the first launch in Albania of Atronic’s “e2” format, the new generation of the manufacturer’s “e-motion” platform.
Goods & Services,
GPI Completes Macau Order
Leading table game equipment supplier Gaming Partners International has completed an order for the latest casino to open in Macau, in the Hotel Taipa Square, opposite the Macau Jockey Club.
All 125,000 chips and 28,000 plaques from GPI’s Bourgogne et Grasset brand were manufactured at the GPI plant in Beaune, France. All of them but the lowest denomination were produced with low 125KHz RFID frequency microchips. In addition, a full range of electronic reading devices was supplied with the installation of eight cage and two chip bank readers, complete with the live and cashier’s desk CIDs operating software.
“The casino was able to source directly from GPI at a cost-effective price all the necessary RFID equipment to perform chip tracking and accounting and guarantee the security of its chip bank,” said Christophe Leparoux, manager of international sales and marketing for GPI.
All 125,000 chips and 28,000 plaques from GPI’s Bourgogne et Grasset brand were manufactured at the GPI plant in Beaune, France. All of them but the lowest denomination were produced with low 125KHz RFID frequency microchips. In addition, a full range of electronic reading devices was supplied with the installation of eight cage and two chip bank readers, complete with the live and cashier’s desk CIDs operating software.
“The casino was able to source directly from GPI at a cost-effective price all the necessary RFID equipment to perform chip tracking and accounting and guarantee the security of its chip bank,” said Christophe Leparoux, manager of international sales and marketing for GPI.
Goods & Services,
Seminole Gaming Selects FutureLogic
Printer supplier FutureLogic announced that Florida’s Seminole Gaming has chosen the company as a preferred technology partner. According to Seminole Gaming, their selection was based on the superior performance of FutureLogic’s GEN2 Universal thermal printer in an extensive product-comparison analysis.
Seminole Gaming operates seven casinos on behalf of the Seminole Tribe of Florida, with more than 8,000 games installed across its properties. Seminole Gaming has directed its slot machine vendors to make FutureLogic the preferred printer for all new purchases by the Seminole casinos.
The GEN2 Universal printer is currently being used for ticket-in/ticket-out applications on all of the casinos’ Class III slot machines and will remain the standard printer as Seminole Gaming adds more Class III games under its new compact with the state.
“In addition to demonstrating their reliability over time, FutureLogic printers offer designed-in software and hardware that give us the flexibility we need now and for future gaming platforms,” said Paul Tjoumakaris, senior vice president of gaming operations for Seminole casinos. “We are also pleased with the service FutureLogic has provided throughout our casinos.”
Seminole Gaming operates seven casinos on behalf of the Seminole Tribe of Florida, with more than 8,000 games installed across its properties. Seminole Gaming has directed its slot machine vendors to make FutureLogic the preferred printer for all new purchases by the Seminole casinos.
The GEN2 Universal printer is currently being used for ticket-in/ticket-out applications on all of the casinos’ Class III slot machines and will remain the standard printer as Seminole Gaming adds more Class III games under its new compact with the state.
“In addition to demonstrating their reliability over time, FutureLogic printers offer designed-in software and hardware that give us the flexibility we need now and for future gaming platforms,” said Paul Tjoumakaris, senior vice president of gaming operations for Seminole casinos. “We are also pleased with the service FutureLogic has provided throughout our casinos.”
Goods & Services,
Swiss Gaming to Offer Blackjack eXtreme
BJX Entertainment announced that the company has selected Swiss Gaming Corporation to help bring its new game, BlackJack eXtreme, into the global gaming industry.Invented for television, BJX is a new method of playing blackjack at the poker table. It is a player vs. player game and the casino takes no risk. Several key features of the new game include allowing the player/dealer to choose which card the table sees, allowing players to raise their original bets up to all-in and then receive as many cards as needed to improve the hand. The player/dealer is allowed to surrender to the table.
“We are delighted to work with BJX to bring this innovative product into the gaming industry,” said René Lindsen, CEO of Swiss Gaming Corporation. “Like hold’em, this totally new game seems deceptively simple until you actually play the game—then you see that each hand is a unique situation. The explosive growth of poker indicates that social or community gaming attracts new players and offers a fresh attraction which brings regular visitors back more frequently.”
(Lindsen also is European sales director for Global Gaming Business.)
Goods & Services,
Betfair Australia Appoints New CEO
Betfair Australia has appointed Andrew Twaits as its new chief executive officer, effective mid-October.
Twaits will replace Anthony Klok, who is joining Crown Limited as international business development director.
Crown is one of Australia’s largest entertainment groups and has a 50 percent interest in Betfair Australasia. The other 50 percent is owned by Betfair UK.
Klok will continue to serve as a member of the Betfair Australia board.
Twaits has been Betfair’s director of corporate and business affairs in Australia since April 2005. He is a former lawyer and has previously served as general manager of legal and business affairs for Cricket Australia.
Twaits will replace Anthony Klok, who is joining Crown Limited as international business development director.
Crown is one of Australia’s largest entertainment groups and has a 50 percent interest in Betfair Australasia. The other 50 percent is owned by Betfair UK.
Klok will continue to serve as a member of the Betfair Australia board.
Twaits has been Betfair’s director of corporate and business affairs in Australia since April 2005. He is a former lawyer and has previously served as general manager of legal and business affairs for Cricket Australia.
Goods & Services,
Shakeups at Leading Slot Companies
Two of the world’s top slot companies experienced changes at the top last month as the slot market gets more competitive. Leading slot manufacturer International Game Technology announced that Chief Operating Officer Steve Morro has resigned, with president and CEO TJ Matthews taking on additional duties.
Morro will remain with the company as a non-executive employee, according to a filing with the Securities and Exchange Commission.
Morro’s resignation comes as a surprise, Goldman Sachs analyst Steven Kent said in a client note, as he was favorably received by investors.
Morro, who was named COO in June 2007, had been president of IGT’s gaming division since 2005. The manufacturer has been reshuffling its management structure to achieve more efficiency in the current economic slump.
Morro’s departure also comes as the company continues an executive search for a new chief financial officer. Maureen Mullarkey resigned as CFO in June 2007, and Daniel Siciliano has served as interim principal financial officer since then.
Analysts stressed that while Morro is a well-respected executive, the resignation could be a positive for the company if it is part of a restructuring to bring costs down.
In that spirit, Matthews announced that the company would reduce its 5,400-employee workforce through a combination of early-retirement buyouts and layoffs.
IGT will offer buyouts to roughly 500 employees who are age 55 or older, Sales VP Ed Rogich told the Associated Press. Matthews is expected to make a decision on job eliminations and layoffs in January.
Matthews said in an e-mail to employees that the number of layoffs will depend on how many accept voluntary separation.
“As we continue efforts to reduce expenses and restructure the company to maximize efficiencies in light of a strained economic environment, it has become evident that we must conduct an involuntary reduction in our work force in addition to our other efforts,” Matthews said in the message.
“My hope is that through these efforts, we can stabilize our spending to be aligned with our revenue forecasts and be in a position to weather the near-term uncertainty that is prevalent in our industry and our economy in general.”
IGT currently employs 3,000 at its Reno headquarters, and 1,000 in a new facility in Las Vegas. The remainder of the manufacturer’s work force is spread across the world.
Meanwhile, Australia’s Aristocrat Leisure Ltd. has replaced Tim Parrott as president of Aristocrat Technologies, the slot manufacturer’s U.S.-based subsidiary. Parrott, who took the helm at Aristocrat only two years ago when Gavin Isaacs left to take over as COO of Bally Technologies, has overseen a period of declining U.S. sales and plunging stock prices for Aristocrat.
The new president of Aristocrat Technologies
is Nick Khin, who has been head of the company’s operations in Europe, the Middle East and
Africa for the past two years. Under Khin, that region has reported record revenue (up more than 50 percent) and profitability (up 140 percent) over the past two years, with the company significantly increasing its overall market share and presence in the region.
Khin has also had global executive responsibility for development and commercialization of the company’s ACE Class III and VLT TruServ server-based gaming initiative through its Stockholm-based subsidiary, ACE Interactive. In addition, he has played a key supervisory role over Elektroncek BV, the company’s 50 percent-owned multi-terminal business, which sells the Interblock brand of electronic table games.
“I am confident that Khin’s leadership style coupled with his intimate understanding of global gaming markets and customers will establish Aristocrat as the pre-eminent supplier of gaming solutions in the Americas region,” said Aristocrat CEO Paul Oneile in a statement.
Oneile himself announced earlier this year that he is stepping down as head of the Australian slot-maker, effective at the end of the year.
Parrott had been in casino operations prior to joining Aristocrat, holding executive positions with Primadonna Resorts and a position on the board of Pinnacle Entertainment.
Frankly Speaking,
Feed Lots, Ice Lounges and Goofiness
You know, we here at Global Gaming Business (motto: “All The News That Warrants A Press Conference Where Lunch Is Served”) span the globe month after month, in an undying quest to bring you, our devoted readers, the most relevant, vital and forward-looking topics to support your continued success.(Second GGB motto: “No Sentence Too Long.”)
In this solemn search for relevant topics, we do, from time to time, run across some pretty goofy news items as well.
That’s where I come in.
I’ve got a couple of fer-instances this month. For instance, over in Topeka, Kansas, investors were waiting at press time for a decision from the Kansas Lottery on which applicants would win the right to operate a casino in Dodge City. That, in itself, is not goofy. (Well, to most people.) However, I just ran across a gaming website that includes a blog on the day-to-day negotiations concerning the Dodge City casino. At press time, one of the, er, pressing issues was whether or not the casino will stink.
“The Dodge City casino is currently examining wind patterns in the area and how the odors from the nearby feed lots might affect the appeal of the project,” the blogger said.
Apparently, there are lots of feed lots in Kansas, where cows and pigs gather at the old trough to shoot the breeze. And sometimes, the breeze shoots in a lot of different directions. Lottery officials are afraid the casino may end up with a distinctive aromatic identity.
I say, use it. I envision a marquee… The Swine-‘n-Bovine Casino Hotel, Spa and Feed Lot. Alternate flashes of neon pigs and cows on the colorful signage out front. First-month sweepstakes promotion: the “Test Your Sniffer Cash Giveaway.” Fragrances are channeled through the ventilation system while you are engaged in carded slot play or rated table play. Is it pig? Or is it cow? Guess right for HUGE JACKPOT WINNINGS!
Yeah, I know. I should have been in marketing.
Next news item:
A whole bunch of ATMs at casinos across the United States apparently worked quite efficiently in hundreds of transactions for a short period last month, accurately deducting the cash withdrawal amounts and accompanying fees from patrons’ bank accounts.
One thing, though—the machines forgot to dispense the cash.
To me, it makes perfect sense. Those players just saved a lot of time they would have spent losing that money to the casino. Heck, they could have just stayed home and deducted the money from their bank accounts themselves. Think of all the gasoline they would have saved.
Seriously, though, I must say that the fact there were no riots, torch-lit marches through casinos towns, or tarring and feathering of casino operators last month means that there just may be hope for this country yet. Providing we all vote for… Oh, noyadon’t. No politics in my column. It’s goofy enough already.
Here’s an item that was in our weekly e-newsletter: A New Zealand-based company is building a 2,000-square-foot “ice lounge” at Mandalay Bay. It will be called the “Minus 5 Lodge,” and the whole place will be built of ice. There will be ice tables, furniture made of ice, ice floor, ice ceiling. Parkas and boots will be issued at the door, and you can go in and enjoy what the article says will be a lounge “built in the style of a northern lodge or ski hut.”
Does anyone else besides me think this is the most ridiculous thing they ever heard of? Now, I don’t frequent many “northern lodges” or “ski huts,” but I’m pretty sure they probably have some kind of heating, or at least a fireplace, and that the furniture is not made of friggin’ ice. I’m probably just being “old-fashioned,” but I really don’t think I’m going to be a fan of putting on a parka and sitting down on a frozen block of ice for a couple of hours. What if you stick?
And, what happens in the case of a power failure? Does the lounge just disappear? Do they have to sculpt the whole thing again? Or does it just become a water-themed lounge?
They’re going to have to keep it damn cold in there to prevent the lounge from disappearing. I guess the entertainment will have to be a skating act, like Peggy Fleming. Better yet, Tonya Harding.
Maybe they should put an ice lounge at the Kansas Feed Lot Casino. If it’s frozen, that should take care of the smell.
Hey, I’m always thinking.
Cutting Edge,
Locking In Style
TimeLox, the world’s leading supplier of ZigBee online electronic locking systems for hotels and resorts, recently introduced Optima, a new line of design-centric electronic door locks.Optima pairs elegant, dual-card bezel readers with hoteliers’ choice of handle and finish to provide design flexibility, what the company calls “the pinnacle of elegant security.”
TimeLox developed Optima to offer hoteliers an ideal combination of the design elements they want with the security they need. The TimeLox DC-One Dual-Card technology has been recognized for its high level of security.
The DC-One system is compatible with magnetic-stripe and smart cards, allowing hotels to enjoy the advantages that each technology offers while maximizing security for both the property and guests.
On the design side, the locking system brings together high quality, solid brass bezel readers and the choice of three handle styles in eight
finishes.
For more information, contact TimeLox representatives at
972-692-3167, or visit the company’s website at www.timelox.com.
Cutting Edge,
Teaching Card Counting
Swiss Gaming Corporation will soon launch the European version of a player-vs.-player blackjack game that allows players to employ card-counting skills to estimate opponent hands, and bet and bluff as in poker. SGC also plans to introduce the game online and on TV.Some see SGC’s BlackJack eXtreme, or BJX, as having a huge potential online, in land-based casinos and on TV.
SGC maintains that the skills associated with card counting—mathematical proficiency, the ability to concentrate and multi-task—are valuable in any event, and that “reinvented blackjack” should be offered by casinos in a way players can utilize the skill without hurting the house. Players and player/dealers may interpret the wagering moves of their opponents to deduce the most likely value of the hole cards.
BlackJack eXtreme adds social interaction, card-counting skills and excitement to the most popular casino game. Like poker, it’s a rake game. It plays on any standard poker table with no felt change. BJX is designed to generate more hands per hour than most poker games.
Swiss Gaming Corporation is the first European company to represent the game in all forms. BlackJack eXtreme was first conceived as a TV game, but the online, electronic casino and table game may possibly entice players back to online and real-world casinos. SGC’s testing shows that women love playing BlackJack eXtreme, making it appealing for couples or singles.
For more information, contact Mark Koetting at +1 866 752 9259 or visit www.playBJX.com. In Europe, contact René Lindsen at +41 91 792 3619 or visit www.swissgamingcorporation.com.
New Game Review,
Slingo Bonus Deluxe
This latest “community-style” game from AC Coin features three base slots linked to a common bonus round based on the popular internet game “Slingo.”The base games are the five-reel mechanical version of Double Diamond, which is a popular game in itself. The bonus round occurs every 46 spins on average, which means there will be several occasions when two or all three players on the bank will enter the bonus round at the same time. The bonus game is played out on the 42-inch LCD video screen atop the bank.
When the bonus is triggered, an award card on the player’s machine will flash between numbers indicating how many spins he will get on the big Slingo board—from eight to 16 spins. The LCD display contains a game card with 25 squares. Each of the squares contains a unique number between 1 and 75. Below the card on the display are five video reels, one for each column of numbers. At the conclusion of each spin, the computer evaluates the numbers on the player’s reels against the numbers on the big board. A “spot hit,” in Slingo parlance, occurs when the numbers match to light up one of the spots on the big board.
In addition to numbers, there are jokers on the player’s reels. A joker is used to complete a winning combination on the big board to rack up a bonus award.
The object is to complete a “Slingo”—all the numbers in a column, row or diagonal on the big Slingo board. Every time a player accomplishes that with a spin, he gets 20 credits. If the full card—all the numbers on the grid—is completed, the award is 100 credits. Also, if spins remain when the player completes the card, he is paid the 100-credit full-card bonus again for each remaining spin.
Manufacturer: AC Coin & Slot
Platform: IGT S2000
Format: Five-reel, 20-line stepper slot
Denomination: Player-selectable
Max Bet: 20—400
Top Award: 100,000
Hit Frequency: Approximately 40%
Theoretical Hold: 8.08%—14.08%
New Game Review,
Night Sky / Witches Riches
This video slot game program is being released with two different themes. The first, pictured, titled Night Sky, carries a mystical theme related to astronomy and heavenly bodies. The other, called Witches Riches, carries the appropriate Halloween-style theme. It is a clone program with different art and reel symbols.The new themes actually are enhanced versions of what has been one of IGT’s most popular games over the years, the venerable Cleopatra. IGT has modified the proven player favorite with a 40-line pay window and “stacked” wild symbols. They also employ graphics that are much more advanced than the original Cleopatra, thanks to AVP, or IGT’s “Advanced Video Platform.” The poker symbols and other reel icons carry a modern, stylish appearance. The artwork is superior on both games.
Stacked wild symbols typically fill up an entire reel or more, resulting in dozens of paying combinations from only a few jackpot symbols.
Add to this the signature Cleopatra-style free-spin feature. Three or more triggering symbols launch 15 free games—with all wins paid at triple the pay-schedule jackpot. This feature can be re-triggered if the bonus symbols land again during a free spin.
This creates a very volatile program perfect for placement in the lowest denominations.
It is the type of volatility players flock to these days, and the clones allow operators to take advantage of the proven Cleopatra game math in a variety of themes.
Manufacturer: International Game Technology
Platform: Game King AVP
Format: Five-reel, 40-line video slot
Denomination: .01, .02
Max Bet: 400
Top Award: 10,000 credits times
line bet
Hit Frequency: Approximately 36%
Theoretical Hold: 2%—13.1%
New Game Review,
Chinese Kitchen
This new video slot in Bally’s Alpha formats (Alpha Elite V20 or the wide-screen CineVision) features a collection of innovative and fun bonus features, with multiple possible outcomes.The base game has 50 paylines, which enables a decent hit frequency in the primary game. The more innovative feature, though, is a collection of bonus rounds that encourage high average bets.
The reason is a good frequency of wins that are multipliers of the total bet, in the multi-faceted Chinese Kitchen Bonus Feature.
Three or more scattered bonus symbols trigger the feature. The more symbols, the higher the multiplier for a preliminary bonus award—which is awarded to the player before the event even starts. Three bonus symbols trigger an initial award of double the total bet. Four bonus symbols win 15 times the total bet; five pay 30 times the total bet.
After the initial award, a spinner appears on the screen. The player touches a bonus button, and the dial spins to one of eight spots. The slices on the dial display either bonus amounts, free games or a mystery bonus. If it’s a straight bonus, the player is paid and the bonus ends. If it lands on the Mystery Bonus Feature, the player is awarded a random bonus amount ranging from five times to a hefty 1,000 times his total bet. The player also gets to spin the dial a second time after a mystery bonus.
If the dial lands on free games, there is a multitude of possible outcomes. The random number generator will award one of six free-game options: five free spins at 5X, 10 spins at 2X, 10 spins at 3X, 15 spins at even money, 50 free spins at 2X, or 100 free spins at even money. There also is a special paying combination that applies only on free spins: the coin symbol. Three of them on a free spin pay twice the total bet; four pay 15 times the bet; five pay 30 times the bet.
This is a well-designed game that provides the player easy-to-understand reasons to bet the maximum. For the operator, that means more coin-in.
Manufacturer: Bally Technologies
Platform: Alpha Elite
Format: Five-reel, 50-line video slot
Denomination: .01 through 1,000
Max Bet: Configurable; 250 recommended
Top Award: 2,500 credits times line bet
Theoretical Hold: 3.97%—12%
New Game Review,
Arctic Dreaming
This game, in the new Gen7 platform and sleek Viridian cabinet, is a clone of a slot that has been very popular for Aristocrat in New South Wales, Australia. It is a strong new game in Aristocrat’s Reel Power series. Reel Power games contain no paylines; the player pays to activate reels, and all wins are paid as scatters.In this case, it costs from one credit to 30 credits to activate each reel. With five reels activated for a maximum 150-credit wager, the Reel Power format with a standard five-by-three pay window offers the player 243 possible winning combinations on each spin. However, this is one of Aristocrat’s games featuring the “Power Pay” wager. This is an extra “ante” wager that activates additional features on any given game.
In this case, a wager of five credits per reel plus an extra five-credit ante wager (at least 30 credits per spin) causes extra reel spots to appear on the second and fourth reels—they become four-symbol reels. What this does to the scatter-pay setup is nearly double the possible paying combinations. Instead of 243 ways, the Power Pay screen offers 432 possible winning combinations on each spin.
The polar-themed symbols of the primary game include a wild dancing polar bear, which substitutes for all but the scatter-pay igloo symbol. Three or more scattered igloo symbols trigger a unique free-spin round. There are 10 free spins, and beginning with the second free game, a dancing-bear wild symbol is added to each of the second and fourth reels. Thus, in the Power Pay mode, from the sixth free game on, the second and fourth reels are completely filled with wild symbols.
The Power Pay feature will encourage high average wagers, and the volatility of this game will appeal to the frequent-play gambler.
Manufacturer: Aristocrat Technologies
Platform: Gen7
Format: Scatter-pay video slot
Denomination: .01
Max Bet: 150, 300, 750
Top Award: 40,000 credits times line bet
Hit Frequency: 31.74%
Theoretical Hold: 7.01%—14.22%
Online Gaming,
Absolute and Ultimate Band Together
Absolute Poker and Ultimate Bet have joined to form the Cereus Poker Network. In doing so, the two companies are poised to become the third largest poker network, competing with sites like PokerStars and Full Tilt.
Both sites have had issues with so-called “super-players” who manipulate the software to cheat.
Paul Leggett, chief operations officer of Absolute Poker and UltimateBet, said the Cereus Poker Network was the culmination of more than 12 months of innovation and development.
The two sites will pool their customers in the new network, but there are no plans at present to merge and they will continue to operate under their individual brands.
“Cereus not only delivers the best online poker experience; it enables our company to improve our operations and deliver significantly better value and service to our customers,”
said Leggett.
Both sites have had issues with so-called “super-players” who manipulate the software to cheat.
Paul Leggett, chief operations officer of Absolute Poker and UltimateBet, said the Cereus Poker Network was the culmination of more than 12 months of innovation and development.
The two sites will pool their customers in the new network, but there are no plans at present to merge and they will continue to operate under their individual brands.
“Cereus not only delivers the best online poker experience; it enables our company to improve our operations and deliver significantly better value and service to our customers,”
said Leggett.
Online Gaming,
A Bank of Their Own
Customers of online casinos, poker rooms, lotteries and bingo sites have a new option for deposits and withdrawals to and from their gaming providers. Ivobank is a new online banking service that is looking to attract customers from Europe’s expanding online gaming market.
The new bank is a venture of the Sampoerna family, which owns Mansion online poker and sports book and Les Ambassadeurs casino in London. Ivobank is headed by two former execs of U.K.-based online bank Cahoot. Timothy Sawyer is a former CEO of Cahoot and Martin Peterlechner was Cahoot’s head of sales and marketing.
Sawyer said that the bank is open to anyone, but that it had been specifically designed with online gamers in mind.
“The online gaming industry has developed rapidly in recent years, but the financial services supporting it have not kept pace,” Sawyer said.
“Ivobank aims to plug the gap by offering instant and highly secure online payment services, combined with competitive interest rates.”
Ivobank account holders can transfer money across borders instantly. Taking advantage of the Single European Payments Area, Ivobank allows customers to make cross-border money transfers without incurring the fees charged by regular banks, which can add up.
“Many online businesses and customers have been ill-served to date, resulting in relatively high costs and relatively low levels of service,” said Sawyer.
Account holders also receive an Ivobank Virtual Card that can be used for online purchases in place of a MasterCard.
The bank is authorized and regulated by the Financial Services Authority of the U.K. Currently the bank has been launched in the U.K., Ireland, Spain and Canada, with plans to expand to Germany and the Netherlands and eventually the Asia-Pacific region.
The new bank is a venture of the Sampoerna family, which owns Mansion online poker and sports book and Les Ambassadeurs casino in London. Ivobank is headed by two former execs of U.K.-based online bank Cahoot. Timothy Sawyer is a former CEO of Cahoot and Martin Peterlechner was Cahoot’s head of sales and marketing.
Sawyer said that the bank is open to anyone, but that it had been specifically designed with online gamers in mind.
“The online gaming industry has developed rapidly in recent years, but the financial services supporting it have not kept pace,” Sawyer said.
“Ivobank aims to plug the gap by offering instant and highly secure online payment services, combined with competitive interest rates.”
Ivobank account holders can transfer money across borders instantly. Taking advantage of the Single European Payments Area, Ivobank allows customers to make cross-border money transfers without incurring the fees charged by regular banks, which can add up.
“Many online businesses and customers have been ill-served to date, resulting in relatively high costs and relatively low levels of service,” said Sawyer.
Account holders also receive an Ivobank Virtual Card that can be used for online purchases in place of a MasterCard.
The bank is authorized and regulated by the Financial Services Authority of the U.K. Currently the bank has been launched in the U.K., Ireland, Spain and Canada, with plans to expand to Germany and the Netherlands and eventually the Asia-Pacific region.
Online Gaming,
Poker Fans Try Hand at Lobbying
Poker players in the United States who want access to online card rooms are taking their mission to nominating conventions where they are trying to lobby lawmakers to get the law overturned.The Poker Players Alliance, which represents about 1 million people, held a charity poker tournament during the Republican convention in St. Paul, Minnesota, and brought a number of legislators to the event.
“Up until this point, the minority of the public that is anti-gambling has yelled louder,” professional poker player Andy Bloch told Reuters. “We’re trying to change that.”
During the Democratic convention, a charity tournament was staged benefiting the Paralyzed Veterans of America.
Lobbying Democrats is not as difficult as it is with the Republicans. Many Democrats oppose the Unlawful Internet Gambling Enforcement Act, and a number have introduced legislation to overturn it. House Financial Services Committee Chairman Barney Frank has introduced legislation that would regulate online gambling. He said he expects the legislation will pass next year in a Congress controlled by Democrats.
But the Republican side still opposes online gaming—it is even part of the official presidential platform. The opposition largely stems from one of the strongest constituent groups for the Republicans: Christian conservatives.
Chad Hills, an analyst for Focus on the Family, said the internet is akin to a public library. Because gambling is not allowed in a public library, it should not be allowed on the internet, either, he said.
“You can’t make public policy out of a group of individuals’ desires,” Hills said. “You have to say, ‘How is this impacting our culture? How is this impacting our children?’”
Some lawmakers are supporting legislation to study online gaming, including what the
benefits and costs would be of regulating it in the U.S. Such legislation is largely opposed by
Republicans.
Online Gaming,
RGA Pushing U.S. On Prohibition
The Remote Gambling Association filed a complaint with the European Commission alleging the Unlawful Internet Gambling Enforcement Act restrains trade and allows U.S. companies to engage in activities foreign companies are prohibited from engaging in.
The RGA represents European online casino operators. In the complaint filed with the European Commission, it specifically cites wagering online on horse racing as an activity that is allowed to continue in the U.S., but only if U.S. companies are operating the betting sites.
Of particular concern for the U.S. is that the European companies are greater in number and revenue than those operating out of Antigua. The U.S. continues to discuss a resolution with Antigua for prohibiting its operators access to U.S. citizens, but negotiations with the European nations would likely center around considerably larger sums of cash.
Antigua was successful in bringing a complaint before the World Trade Organization, and it cited the same complaint as did the RGA: specifically, that the UIGEA allows U.S. companies to engage in business that is prohibited for foreign companies. This practice is contrary to free trade obligations that U.S. has agreed to under the General Agreement on Trade and Tariffs.
The RGA represents European online casino operators. In the complaint filed with the European Commission, it specifically cites wagering online on horse racing as an activity that is allowed to continue in the U.S., but only if U.S. companies are operating the betting sites.
Of particular concern for the U.S. is that the European companies are greater in number and revenue than those operating out of Antigua. The U.S. continues to discuss a resolution with Antigua for prohibiting its operators access to U.S. citizens, but negotiations with the European nations would likely center around considerably larger sums of cash.
Antigua was successful in bringing a complaint before the World Trade Organization, and it cited the same complaint as did the RGA: specifically, that the UIGEA allows U.S. companies to engage in business that is prohibited for foreign companies. This practice is contrary to free trade obligations that U.S. has agreed to under the General Agreement on Trade and Tariffs.
Podcast Q & A,
David Norton
Harrah’s Total Rewards program has become the gold standard for player rating systems in the industry. With its complete data-sifting characteristics and Harrah’s network of properties, Total Rewards has created a unique brand of loyalty among customers. Now, a new program that incorporates non-gaming spend into traditional gaming ratings has raised the bar. Chief Marketing Officer David Norton explains how the system will be implemented and what it might mean for his company and his customers. He spoke with Global Gaming Business Publisher Roger Gros and Editor Frank Legato at Harrah’s corporate offices in Las Vegas in September. To hear a full version of this podcast, go to www.ggbmagazine.com and click on the GGB Podcast button.
GGB: Total Rewards has allowed Harrah’s to market to its
customers and really create relationships between them and all the company’s properties. Tell us how this new initiative will expand the reach of Total Rewards.
Norton: We recently launched a non-gaming version of Total Rewards. It
recognizes the non-gaming spend from all our Total Reward members. Obviously it should work well in Las Vegas and Atlantic City, but it can also be used at Horseshoe Hammond and other properties that have big non- gaming amenities.
We’re trying to attract a broader audience, people who might like to game a little bit but are coming for other reasons: a good meal, a great room, spa treatment or whatever. Now, our program is relevant to them. We’ll track all their activities and they’ll be able to earn great rewards. This will allow us to be able to market to them more effectively beyond gaming because we’ll know intuitively what they like.
Why bother with non-gaming purchases? Has the ratio of gaming spend to non-gaming spend become that important?
We’ve done a lot of research and analysis on this, and we’re confident it will pay off. In Vegas, of course, the ratio of non-gaming to gaming revenue is much greater. Across the company, 20 percent to 25 percent of our revenue is non-gaming. It’s been growing at a good clip and has become a big part of our strategy in all our markets to attract this audience.
For the customer, it’s one account. If they decide to throw some money down on the games or spend it in other parts of the hotel, they get credit for everything on one account. It’s a lot of value for the customer and for us too.
Does this apply to all non-gaming buys: hotel rooms, show tickets, spa treatments, hotel retail outlets, restaurants, etc.?
Yes, with one caveat. The leased outlets are not included in the program at this time, such as the Forum Shops or the Pier at Caesars. But anything on property, we’re going to credit your Total Rewards account for purchases.
How about your smaller casinos in the heartland? Is there as much of a non-gaming element there?
It certainly depends on the property. But each property has something. For example, the Horseshoe Council Bluffs with its Whiskey Bar where they have concerts. Their buffet is something special and most properties have things like that. But clearly the gaming revenues outweigh non-gaming pretty dramatically in this region. But it’s still a reasonable share of the business and it will grow.
This program has a pretty simple formula: customers will get one point for every dollar spent in non-gaming outlets. How do you reconcile that with the widely differing profit margins in restaurants, retail, and so forth?
There was a lot of discussion internally about this before we reached our final decision. You are right. The profit margins vary quite dramatically depending upon the outlet. We felt like getting customers to understand the concept of tying rewards to profitability was not worth the effort. We felt that one point for every dollar was much easier to communicate for both customers and employees, and was parallel to our membership awards where you get a point for every dollar spent. It’s not perfect on the profitability side, but we feel the upside outweighed it.
Might this program encourage the development of non-gaming amenities in other properties to capture that revenue and marketing ability?
It could spur it on, especially in the Midwest. But the network effect of building loyalty, not only in the home market, but when they come to Las Vegas or Atlantic City for their once-a-year excursion will be enhanced.
Are these non-gaming and gaming ratings going to be merged together so you have a better idea of the customer’s value?
At the deepest level, yes. We will know the customer’s profitability to a much greater extent. For example, you could have two $50 average-bet gamblers.
One would spend $1,000 on the hotel, spa, shopping etc., while the other would spend $100. In the past, we would have treated them both the same. Inherently we will now know the true value of the customer and reward them appropriately. Exactly how we execute our marketing plans will be refined and evolve as we go along.
There’s a whole range of possibilities and we have to determine what is the biggest motivator for specific customers or groups of customers. The idea is to be relevant to them so we can target very closely what motivates them.
Is this an internally developed program for Harrah’s? Did you use any outside vendors?
From a strategic marketing perspective, no, it was all done internally. We worked with Leo Burnett on the creative that really will bring this campaign to life.
I was very passionate about this program, as was Gary Loveman. We had a lot of debate and discussion internally. We did some tests in Las Vegas late last year and launched it in Tahoe in July, which was more of a technical test than anything. We’re convinced this is the right thing to do.
How does it work on the technology side? Do you need separate card swipes at each point of sale?
Yes, we capture the data at each POS terminal. They must present their Total Rewards card in addition to a credit card or cash, so it is one more step. Then the information feeds into the data warehouse. And when it’s fed into the data warehouse, we do the calculations about profitability, but still reward the one point for each dollar spent.
The biggest challenge is the amount of data coming into the system. It took a lot of time to get the data to flow accurately and to figure out how to handle it effectively.
Can you see this program someday being introduced into the leased properties at the Pier or the Forum Shops?
With Total Rewards, we’re capturing so much data, we have to be respectful of the customer’s information, so I’m not sure if that would work.
We’re cognizant that there may be some confusion at the Forum Shops, for instance, so we’ve developed some signage that we can put in front of company-owned shops saying “Earn and Redeem Here.”
Several years ago at the Pier, we offered up the Total Rewards Gift Card through Discover, which allows members to redeem points at Pier shops. That amounts to several hundred thousand dollars a month. Guests who redeem these gift cards can go to any of the shops or restaurants and get quick rewards. We’re doing this now at the Forum Shops, as well. There’s a lot of value for the customer and for the entities in these shopping areas.
Down the road, we’ll definitely tackle ways to earn points at these stores, but we want to get this up and running before we do that. It will be a much more complex process, but not insurmountable.
Are you going to rate people who don’t gamble at all?
Yes, that’s part of the incentive for this program. It comes down to execution at each property, but hopefully when you check in, we encourage membership in Total Rewards. Even if you don’t gamble, this program is relevant for that person too. When we start with the big promotions to support this new program, it will become even more obvious why you have to become a member.
We saw a demonstration from Microsoft at last year’s G2E, which focused on a very extensive and complicated relationship program. Is this part of that plan?
We launched Microsoft Surface at the I-Bar at the Rio recently, which is part of this relationship-building program. At this time, these two things are totally separate, but there could certainly be some linkage in the future. There could be a system where you could put your card on the table and it magically gets swiped when you order a drink. There are ways to integrate this, for sure. We want to test as many things as possible so that eventually we can offer the customer a complete, seamless and easy-to-understand package.
Is this advanced technology—the kinds of things that younger people are very comfortable with, texting, sharing videos, etc.—the element you think will shape Total Rewards in years to come?
We envision people being able to interact through Total Rewards whether they are at our 300-plus acres in Las Vegas or a smaller riverboat property in the Midwest. There are many more compelling and innovative ways we can utilize Total Rewards than simply sliding it into a slot machine or swiping in at one of our retail outlets. We can make it more mobile and part of the experience. I think this will happen. When it happens and how it happens is still to be determined.
GGB: Total Rewards has allowed Harrah’s to market to its
customers and really create relationships between them and all the company’s properties. Tell us how this new initiative will expand the reach of Total Rewards.
Norton: We recently launched a non-gaming version of Total Rewards. It
recognizes the non-gaming spend from all our Total Reward members. Obviously it should work well in Las Vegas and Atlantic City, but it can also be used at Horseshoe Hammond and other properties that have big non- gaming amenities.
We’re trying to attract a broader audience, people who might like to game a little bit but are coming for other reasons: a good meal, a great room, spa treatment or whatever. Now, our program is relevant to them. We’ll track all their activities and they’ll be able to earn great rewards. This will allow us to be able to market to them more effectively beyond gaming because we’ll know intuitively what they like.
Why bother with non-gaming purchases? Has the ratio of gaming spend to non-gaming spend become that important?
We’ve done a lot of research and analysis on this, and we’re confident it will pay off. In Vegas, of course, the ratio of non-gaming to gaming revenue is much greater. Across the company, 20 percent to 25 percent of our revenue is non-gaming. It’s been growing at a good clip and has become a big part of our strategy in all our markets to attract this audience.
For the customer, it’s one account. If they decide to throw some money down on the games or spend it in other parts of the hotel, they get credit for everything on one account. It’s a lot of value for the customer and for us too.
Does this apply to all non-gaming buys: hotel rooms, show tickets, spa treatments, hotel retail outlets, restaurants, etc.?
Yes, with one caveat. The leased outlets are not included in the program at this time, such as the Forum Shops or the Pier at Caesars. But anything on property, we’re going to credit your Total Rewards account for purchases.
How about your smaller casinos in the heartland? Is there as much of a non-gaming element there?
It certainly depends on the property. But each property has something. For example, the Horseshoe Council Bluffs with its Whiskey Bar where they have concerts. Their buffet is something special and most properties have things like that. But clearly the gaming revenues outweigh non-gaming pretty dramatically in this region. But it’s still a reasonable share of the business and it will grow.
This program has a pretty simple formula: customers will get one point for every dollar spent in non-gaming outlets. How do you reconcile that with the widely differing profit margins in restaurants, retail, and so forth?
There was a lot of discussion internally about this before we reached our final decision. You are right. The profit margins vary quite dramatically depending upon the outlet. We felt like getting customers to understand the concept of tying rewards to profitability was not worth the effort. We felt that one point for every dollar was much easier to communicate for both customers and employees, and was parallel to our membership awards where you get a point for every dollar spent. It’s not perfect on the profitability side, but we feel the upside outweighed it.
Might this program encourage the development of non-gaming amenities in other properties to capture that revenue and marketing ability?
It could spur it on, especially in the Midwest. But the network effect of building loyalty, not only in the home market, but when they come to Las Vegas or Atlantic City for their once-a-year excursion will be enhanced.
Are these non-gaming and gaming ratings going to be merged together so you have a better idea of the customer’s value?
At the deepest level, yes. We will know the customer’s profitability to a much greater extent. For example, you could have two $50 average-bet gamblers.
One would spend $1,000 on the hotel, spa, shopping etc., while the other would spend $100. In the past, we would have treated them both the same. Inherently we will now know the true value of the customer and reward them appropriately. Exactly how we execute our marketing plans will be refined and evolve as we go along.
There’s a whole range of possibilities and we have to determine what is the biggest motivator for specific customers or groups of customers. The idea is to be relevant to them so we can target very closely what motivates them.
Is this an internally developed program for Harrah’s? Did you use any outside vendors?
From a strategic marketing perspective, no, it was all done internally. We worked with Leo Burnett on the creative that really will bring this campaign to life.
I was very passionate about this program, as was Gary Loveman. We had a lot of debate and discussion internally. We did some tests in Las Vegas late last year and launched it in Tahoe in July, which was more of a technical test than anything. We’re convinced this is the right thing to do.
How does it work on the technology side? Do you need separate card swipes at each point of sale?
Yes, we capture the data at each POS terminal. They must present their Total Rewards card in addition to a credit card or cash, so it is one more step. Then the information feeds into the data warehouse. And when it’s fed into the data warehouse, we do the calculations about profitability, but still reward the one point for each dollar spent.
The biggest challenge is the amount of data coming into the system. It took a lot of time to get the data to flow accurately and to figure out how to handle it effectively.
Can you see this program someday being introduced into the leased properties at the Pier or the Forum Shops?
With Total Rewards, we’re capturing so much data, we have to be respectful of the customer’s information, so I’m not sure if that would work.
We’re cognizant that there may be some confusion at the Forum Shops, for instance, so we’ve developed some signage that we can put in front of company-owned shops saying “Earn and Redeem Here.”
Several years ago at the Pier, we offered up the Total Rewards Gift Card through Discover, which allows members to redeem points at Pier shops. That amounts to several hundred thousand dollars a month. Guests who redeem these gift cards can go to any of the shops or restaurants and get quick rewards. We’re doing this now at the Forum Shops, as well. There’s a lot of value for the customer and for the entities in these shopping areas.
Down the road, we’ll definitely tackle ways to earn points at these stores, but we want to get this up and running before we do that. It will be a much more complex process, but not insurmountable.
Are you going to rate people who don’t gamble at all?
Yes, that’s part of the incentive for this program. It comes down to execution at each property, but hopefully when you check in, we encourage membership in Total Rewards. Even if you don’t gamble, this program is relevant for that person too. When we start with the big promotions to support this new program, it will become even more obvious why you have to become a member.
We saw a demonstration from Microsoft at last year’s G2E, which focused on a very extensive and complicated relationship program. Is this part of that plan?
We launched Microsoft Surface at the I-Bar at the Rio recently, which is part of this relationship-building program. At this time, these two things are totally separate, but there could certainly be some linkage in the future. There could be a system where you could put your card on the table and it magically gets swiped when you order a drink. There are ways to integrate this, for sure. We want to test as many things as possible so that eventually we can offer the customer a complete, seamless and easy-to-understand package.
Is this advanced technology—the kinds of things that younger people are very comfortable with, texting, sharing videos, etc.—the element you think will shape Total Rewards in years to come?
We envision people being able to interact through Total Rewards whether they are at our 300-plus acres in Las Vegas or a smaller riverboat property in the Midwest. There are many more compelling and innovative ways we can utilize Total Rewards than simply sliding it into a slot machine or swiping in at one of our retail outlets. We can make it more mobile and part of the experience. I think this will happen. When it happens and how it happens is still to be determined.
Dateline,
Penn Pulls Out
The business of gaming is always a
gamble, but nowhere is that more apparent than in Kansas, where four
regional casinos and three racinos that have been in the works for
months all seem to be in a state of flux.
Case in point: Penn National Gaming, Inc. If it can’t have both, it doesn’t want any.
The Pennsylvania-based gaming company last month said it’s withdrawing from building and running a casino in Cherokee County, Kansas, after it lost its bid to Harrah’s Entertainment Inc. to also operate a casino in Sumner County.
Penn National was the only bidder for the Cherokee County regional casino and had already been awarded that contract on August 22. State officials reluctantly agreed to allow the company to space its minimum $250 million investment over a dozen years instead of up front. But it was competing against two other bidders in Sumner County.
Penn National had earlier told the Lottery Gaming Facility Review Board that it couldn’t successfully compete against the $300 million Downstream Casino Resort that the Oklahoma-based Quapaw Tribe opened in July on the Oklahoma/Kansas border, unless it employed a “southern Kansas” strategy of two casinos.
After it lost to Harrah’s a Penn National spokesman responded, “We’re clearly disappointed… A Cherokee County casino on a stand-alone basis would be very difficult to justify, given the market conditions there and the competition across the street.”
Cherokee County immediately filed suit against Penn asking for millions of dollars in damages.
Case in point: Penn National Gaming, Inc. If it can’t have both, it doesn’t want any.
The Pennsylvania-based gaming company last month said it’s withdrawing from building and running a casino in Cherokee County, Kansas, after it lost its bid to Harrah’s Entertainment Inc. to also operate a casino in Sumner County.
Penn National was the only bidder for the Cherokee County regional casino and had already been awarded that contract on August 22. State officials reluctantly agreed to allow the company to space its minimum $250 million investment over a dozen years instead of up front. But it was competing against two other bidders in Sumner County.
Penn National had earlier told the Lottery Gaming Facility Review Board that it couldn’t successfully compete against the $300 million Downstream Casino Resort that the Oklahoma-based Quapaw Tribe opened in July on the Oklahoma/Kansas border, unless it employed a “southern Kansas” strategy of two casinos.
After it lost to Harrah’s a Penn National spokesman responded, “We’re clearly disappointed… A Cherokee County casino on a stand-alone basis would be very difficult to justify, given the market conditions there and the competition across the street.”
Cherokee County immediately filed suit against Penn asking for millions of dollars in damages.
AGA,
The Biggest Small Act
There is an ancient proverb that has been quoted in many forms (including by Benjamin Franklin) over the years to illustrate the importance of a single, apparently small, act in determining the outcome of important events. My favorite version of the proverb is: “For want of a nail, the shoe was lost; for want of a shoe, the horse was lost; for want of a horse, the leader was lost; for want of a leader, the army was lost; and for want of an army, the kingdom was lost.”
As this column is being written, the nation is heading into the final stages of one of the most interesting, historic elections of our lifetime, and it may well be that for want of a single vote—yours—a presidential, gubernatorial, mayoral or city council election may be lost.
If you don’t believe your vote is that important, then consider these historical tidbits:
• In 1850, California was admitted to the union by a margin of one vote.
• In 1916, if presidential hopeful Charles E. Hughes had received one additional vote in each of California’s precincts, he would have defeated President Woodrow Wilson’s re-election bid.
• On November 8, 1923, members of the recently formed Germany Beer Hall, by a majority of one vote, chose an ex-soldier named Adolph Hitler to become the Nazi Party leader.
• In the 1960 presidential election, an additional one vote per precinct in Illinois, Missouri, New Jersey and Texas may have altered the course of America’s modern history by denying John F. Kennedy the presidency and placing Richard Nixon in the White House eight years earlier.
• In 1962, the governors of Maine, Rhode Island and North Dakota all were elected by a margin of one vote per precinct.
One of the great frustrations of my years as a political professional, both in Nevada and later on the national stage, was witnessing firsthand how often people take their vote for granted. It is difficult to imagine how the United States could rank 139th out of 172 countries in the percentage of eligible men and women who vote. In fact, most of the 33 countries with lower percentages of voter turnout are third-world countries.
It is one thing to see the difference in attitude toward voting through turnout numbers such as those above, but it really comes into focus when you witness firsthand how excited and energized over voting men and women can become in places like Russia and the Czech Republic.
I had that opportunity when I visited with voters in those countries not long after the fall of the Soviet Union, and the opportunity to vote in an open election was one of their most cherished new freedoms. And who can forget the pictures of the Iraqi men and women in 2005 holding up ink-stained fingers to show their pride in braving terrorist threats and attacks to vote in open elections for the first time in their lives?
The people of the former Soviet Union and Iraq were moved to vote because they considered voting a wonderful privilege after living under tyranny for so long, but the people also clearly recognized what was at stake and accepted that they had not just the right but a responsibility to vote.
Clearly, we in the United States view most things, including voting, differently than people who had been without freedom for so long, but we should share their sense of responsibility—not simply because voting is the responsibility of every citizen in some patriotic way, but because elections have a very real impact on each of our lives and the lives of our families, loved ones and communities.
The people who win elections make decisions that touch every part of our lives. If you don’t think so, consider the impact on you personally of the different ways the two presidential candidates and their parties will handle critical issues should they control the Washington agenda. There is no doubt their actions on health care, taxes, Social Security, immigration, energy prices, food prices and the financial markets will directly affect you or your family.
These “pocketbook” issues (a clever moniker used by political pundits) will determine to one degree or another how much cash each of us has in our pocket at the end of the work week. And, beyond the pocketbook issues, there are issues that impact the quality of life we live.
I hope I have made my point: Elections are important to you, and every vote counts.
My purpose in raising this subject is not to advocate for any candidate. The issues we face today are serious, and I appeal to you to treat your vote just as seriously. Accept the responsibility to take a hard look at the issues that concern you personally. And, also think seriously about the impact the people we elect locally, statewide and nationally will have on the gaming industry and, as a consequence, on your job. Voting is the biggest small act any of us can perform. As the list of single-vote victories above demonstrates, for want of a single vote, history has been changed time and time again. Your vote could make a major difference to you, your family and your country. Please vote November 4, and make your voice heard.
Frank Fahrenkopf, Jr. served six years during the administration of Ronald Reagan as chairman of the Republican National Committee, making him that committee’s longest-serving chairman in the 20th century. He remains involved in presidential politics as co-chairman of the Commission on Presidential Debates, which is responsible for sponsoring and producing presidential and vice presidential debates. Fahrenkopf and former Democratic National Committee Chairman Paul Kirk have served as the commission’s co-chairs since they helped create it in 1987.
As this column is being written, the nation is heading into the final stages of one of the most interesting, historic elections of our lifetime, and it may well be that for want of a single vote—yours—a presidential, gubernatorial, mayoral or city council election may be lost.
If you don’t believe your vote is that important, then consider these historical tidbits:
• In 1850, California was admitted to the union by a margin of one vote.
• In 1916, if presidential hopeful Charles E. Hughes had received one additional vote in each of California’s precincts, he would have defeated President Woodrow Wilson’s re-election bid.
• On November 8, 1923, members of the recently formed Germany Beer Hall, by a majority of one vote, chose an ex-soldier named Adolph Hitler to become the Nazi Party leader.
• In the 1960 presidential election, an additional one vote per precinct in Illinois, Missouri, New Jersey and Texas may have altered the course of America’s modern history by denying John F. Kennedy the presidency and placing Richard Nixon in the White House eight years earlier.
• In 1962, the governors of Maine, Rhode Island and North Dakota all were elected by a margin of one vote per precinct.
One of the great frustrations of my years as a political professional, both in Nevada and later on the national stage, was witnessing firsthand how often people take their vote for granted. It is difficult to imagine how the United States could rank 139th out of 172 countries in the percentage of eligible men and women who vote. In fact, most of the 33 countries with lower percentages of voter turnout are third-world countries.
It is one thing to see the difference in attitude toward voting through turnout numbers such as those above, but it really comes into focus when you witness firsthand how excited and energized over voting men and women can become in places like Russia and the Czech Republic.
I had that opportunity when I visited with voters in those countries not long after the fall of the Soviet Union, and the opportunity to vote in an open election was one of their most cherished new freedoms. And who can forget the pictures of the Iraqi men and women in 2005 holding up ink-stained fingers to show their pride in braving terrorist threats and attacks to vote in open elections for the first time in their lives?
The people of the former Soviet Union and Iraq were moved to vote because they considered voting a wonderful privilege after living under tyranny for so long, but the people also clearly recognized what was at stake and accepted that they had not just the right but a responsibility to vote.
Clearly, we in the United States view most things, including voting, differently than people who had been without freedom for so long, but we should share their sense of responsibility—not simply because voting is the responsibility of every citizen in some patriotic way, but because elections have a very real impact on each of our lives and the lives of our families, loved ones and communities.
The people who win elections make decisions that touch every part of our lives. If you don’t think so, consider the impact on you personally of the different ways the two presidential candidates and their parties will handle critical issues should they control the Washington agenda. There is no doubt their actions on health care, taxes, Social Security, immigration, energy prices, food prices and the financial markets will directly affect you or your family.
These “pocketbook” issues (a clever moniker used by political pundits) will determine to one degree or another how much cash each of us has in our pocket at the end of the work week. And, beyond the pocketbook issues, there are issues that impact the quality of life we live.
I hope I have made my point: Elections are important to you, and every vote counts.
My purpose in raising this subject is not to advocate for any candidate. The issues we face today are serious, and I appeal to you to treat your vote just as seriously. Accept the responsibility to take a hard look at the issues that concern you personally. And, also think seriously about the impact the people we elect locally, statewide and nationally will have on the gaming industry and, as a consequence, on your job. Voting is the biggest small act any of us can perform. As the list of single-vote victories above demonstrates, for want of a single vote, history has been changed time and time again. Your vote could make a major difference to you, your family and your country. Please vote November 4, and make your voice heard.
Frank Fahrenkopf, Jr. served six years during the administration of Ronald Reagan as chairman of the Republican National Committee, making him that committee’s longest-serving chairman in the 20th century. He remains involved in presidential politics as co-chairman of the Commission on Presidential Debates, which is responsible for sponsoring and producing presidential and vice presidential debates. Fahrenkopf and former Democratic National Committee Chairman Paul Kirk have served as the commission’s co-chairs since they helped create it in 1987.
Fantini's Finance,
The Power of Patience
Casino companies are both labor-intensive and capital-intensive, a bad combination today when we have what might be called a consumer recession and a financial crisis.
Casinos are labor-intensive for two reasons: it takes a lot of workers to clean thousands of hotel rooms daily and staff casino floors 24/7; and casinos compete on providing excellent experiences for their customers.
Thus, cutting labor costs is difficult. Some little-used areas of the gaming floor can be closed during slow hours, restaurants and showrooms can be dark on slow nights, unused hotel rooms can be idled.
But no casino operator wants to cut staff to the point that his operation becomes less attractive than a competitor, or that dissatisfied customers decide not to return. Thus, the temptation is to maintain staffing levels.
Simply put, a casino is not a factory. An operator can’t shut down an entire shift or facility to slash costs.
Complicating cost-cutting is the need to bring customers in the door. As gamblers in almost every market know, casinos are spending fiercely to entice their business. Room rates are falling. Gamblers are being lured with free play or liberal tournaments. Comps are flowing, despite efforts by
casinos to rein them in, or target them to proven gamblers.
The credit freeze and financial crisis are less visible, but very considerable problems.
One school of thought is to welcome the lull it has created in new development as casino developers can’t get financing for new projects.
Certainly, a lull can be welcome to Las Vegas operators who face considerably increased competition in a weak environment as Encore, CityCenter, Fontainebleau, Cosmopolitan and an expanded Hard Rock come on line over the next two years.
And when credit markets do return, a number of prospective casino developers may be long gone, leaving incumbents in strong positions.
But tighter credit has a downside as well. Pinnacle Entertainment, for example, can boast a great growth pipeline, but an awfully slow one until the markets turn around.
And Boyd investors can’t be happy about the continuing costs to carry an Echelon project on which construction has been suspended.
The impact on Atlantic City is not as difficult as in Las Vegas because, except for Revel, projects in AC either have been completed or are yet to start. In other words, the city can continue on as before, and even enjoy the benefits of new hotel towers and added amenities at Borgata, Harrah’s and Trump.
In past economic downturns, governments have turned to gaming to raise revenues without raising taxes, creating a source of industry growth.
But those days are mostly history.
Today, most gaming expansion is coming as slot parlors that are taxed at 60 percent and more of gaming win, meaning not much opportunity for investors in publicly owned companies.
Certainly, that lesson is clear in Florida, where Gulfstream has been a drag on Magna Entertainment, Pompano Park has not been the transforming property Isle of Capri had hoped, and Boyd Gaming shelved plans for slots under the circumstances.
New York is another example, with taxes so high that most slot parlors limp along and a couple nearly shut down until taxes were liberalized earlier this year. Their main contribution, it seems, has been to draw convenience gamblers away from the destination resorts of Atlantic City and Connecticut.
And even if good opportunities do come along, companies may find it difficult to get financing, or to afford to build resorts as attractive as has become standard.
Finally, there is another aspect of the credit crisis that isn’t much discussed, but is important—carrying existing debt.
Casinos have lived in a favorable environment where they have been able to refinance debt to lower levels.
Today, as debt matures, there’s some need to refinance. The cost of debt is coming in higher, meaning their future expense base is higher, or they need to use cash to pay down debt.
In some cases, companies might have to raise fresh capital. And that is difficult to do when stock prices are low and lending tight.
It also may mean that debt for future projects or to complete current projects becomes more expensive.
The good news for the casino industry is that its fundamentals remain healthy, despite the current economic slowdown. People will always gamble and will always seek out entertainment.
In that regard, the casino industry is less sensitive to the economy than some others, though it obviously is affected by the availability of discretionary income, as has been evidenced this year.
The key word for everyone—governments as well as casino operators—is patience. The casino industry is fundamentally sound, and while it may face a development lull, it will come out the other side.
Casinos are labor-intensive for two reasons: it takes a lot of workers to clean thousands of hotel rooms daily and staff casino floors 24/7; and casinos compete on providing excellent experiences for their customers.
Thus, cutting labor costs is difficult. Some little-used areas of the gaming floor can be closed during slow hours, restaurants and showrooms can be dark on slow nights, unused hotel rooms can be idled.
But no casino operator wants to cut staff to the point that his operation becomes less attractive than a competitor, or that dissatisfied customers decide not to return. Thus, the temptation is to maintain staffing levels.
Simply put, a casino is not a factory. An operator can’t shut down an entire shift or facility to slash costs.
Complicating cost-cutting is the need to bring customers in the door. As gamblers in almost every market know, casinos are spending fiercely to entice their business. Room rates are falling. Gamblers are being lured with free play or liberal tournaments. Comps are flowing, despite efforts by
casinos to rein them in, or target them to proven gamblers.
The credit freeze and financial crisis are less visible, but very considerable problems.
One school of thought is to welcome the lull it has created in new development as casino developers can’t get financing for new projects.
Certainly, a lull can be welcome to Las Vegas operators who face considerably increased competition in a weak environment as Encore, CityCenter, Fontainebleau, Cosmopolitan and an expanded Hard Rock come on line over the next two years.
And when credit markets do return, a number of prospective casino developers may be long gone, leaving incumbents in strong positions.
But tighter credit has a downside as well. Pinnacle Entertainment, for example, can boast a great growth pipeline, but an awfully slow one until the markets turn around.
And Boyd investors can’t be happy about the continuing costs to carry an Echelon project on which construction has been suspended.
The impact on Atlantic City is not as difficult as in Las Vegas because, except for Revel, projects in AC either have been completed or are yet to start. In other words, the city can continue on as before, and even enjoy the benefits of new hotel towers and added amenities at Borgata, Harrah’s and Trump.
In past economic downturns, governments have turned to gaming to raise revenues without raising taxes, creating a source of industry growth.
But those days are mostly history.
Today, most gaming expansion is coming as slot parlors that are taxed at 60 percent and more of gaming win, meaning not much opportunity for investors in publicly owned companies.
Certainly, that lesson is clear in Florida, where Gulfstream has been a drag on Magna Entertainment, Pompano Park has not been the transforming property Isle of Capri had hoped, and Boyd Gaming shelved plans for slots under the circumstances.
New York is another example, with taxes so high that most slot parlors limp along and a couple nearly shut down until taxes were liberalized earlier this year. Their main contribution, it seems, has been to draw convenience gamblers away from the destination resorts of Atlantic City and Connecticut.
And even if good opportunities do come along, companies may find it difficult to get financing, or to afford to build resorts as attractive as has become standard.
Finally, there is another aspect of the credit crisis that isn’t much discussed, but is important—carrying existing debt.
Casinos have lived in a favorable environment where they have been able to refinance debt to lower levels.
Today, as debt matures, there’s some need to refinance. The cost of debt is coming in higher, meaning their future expense base is higher, or they need to use cash to pay down debt.
In some cases, companies might have to raise fresh capital. And that is difficult to do when stock prices are low and lending tight.
It also may mean that debt for future projects or to complete current projects becomes more expensive.
The good news for the casino industry is that its fundamentals remain healthy, despite the current economic slowdown. People will always gamble and will always seek out entertainment.
In that regard, the casino industry is less sensitive to the economy than some others, though it obviously is affected by the availability of discretionary income, as has been evidenced this year.
The key word for everyone—governments as well as casino operators—is patience. The casino industry is fundamentally sound, and while it may face a development lull, it will come out the other side.
Nutshell,
New Jersey Casinos and the State’s Racetrack Industry Finalized an Agreement
On August 13, New Jersey casinos and the state’s racetrack industry finalized an agreement requiring the casinos to pay $90 million over the next three years in exchange for a moratorium on racinos. It follows a previous four-year, $86 million agreement that helps keep the tracks afloat while staving off more competition for Atlantic City.
Nutshell,
Buenos Aires May Go Smoke-Free
The province of Buenos Aires in Argentina may go smoke-free before the end of the year. A bill being debated by the Commission of Production and Commerce would see a smoking ban in all public spaces, including bingo halls and casinos. • Empire Resorts Inc. and a joint-venture partner completed the last piece of investor financing needed for a $1.1 billion gambling resort in the Catskills. The partner, Concord Associates LP, closed a $225 million equity loan with Kansas City-based Entertainment Properties Trust. The investors propose a resort with a 300,000-square-foot casino, a 750-room hotel and a convention center near Monticello, New York.
Nutshell,
40/40 Club to Close for Race and Sports Book
Eight months after the 40/40 Club opened, Las Vegas Sands announced it will buy back the lease and close the club so the company can build a 24,000-square-foot race and sports book. The Palazzo does not have a book. There is only a small window for sports wagers adjacent to the 40/40 Club and the book at the connected Venetian. “By adding a complete gaming component, we will be able to create a very unique environment for our guests,” said Palazzo President Rob Goldstein. The club, owned by hip-hop mogul and businessman Jay-Z, will close at the end of September, and the new book should be operational as soon as October or November.
Nutshell,
Star Trek: The Experience is Calling it Quits
After 10 years at the Las Vegas Hilton, Star Trek: The Experience is calling it quits. The exhibit, which was originally considered for Downtown Las Vegas before the Fremont Street Experience canopy-mall concept was instituted, has been a huge draw for sci-fi fans visiting Las Vegas. But, with exhibit owner Cedar Fair Entertainment and the Las Vegas Hilton unable to agree on a new lease, the attraction closed. Rumors that the area is being decommissioned to make room for a stage for Michael Jackson were dismissed by property spokesman David Ira Sternberg.
Nutshell,
CityCenter in Las Vegas
MGM Mirage has all but $700 million in funding necessary to build the $9.2 billion CityCenter in Las Vegas. The company recently announced that it secured $2.3 billion of the $3 billion outstanding on the project, but MGM Mirage President Jim Murren said financing would be completed by the end of September. Murren said the company has commitments for the outstanding funds, and is negotiating with banks in what he described as “a spirited debate over pricing.”
Nutshell,
Draft Regulations in Guyana
Draft regulations are being created that will establish a gaming authority in Guyana. President Bharat Jagdeo said the regulations that could open the way to casino gambling should be on the cabinet agenda very soon.
Nutshell,
Harrah’s Cherokee Casino
A referendum as to whether to allow alcohol to be served at Harrah’s Cherokee Casino in North Carolina was vetoed last month by Eastern Band of the Cherokee Indians Principal Chief Mitchell Hicks. The tribal council voted August 7 to hold the election. Harrah’s has asked to be allowed to sell alcohol to make the casino more competitive and increase revenues. In vetoing the election, Hicks pointed to the tribe’s longstanding tradition against alcohol on the reservation. The tribal council is now considering whether to override Hicks’ veto.
Nutshell,
Pinnacle Entertainment, Has Changed Its Name
The group backing repeal of Missouri’s $500 gambling loss limit, funded by Ameristar Casinos and Pinnacle Entertainment, has changed its name to the “YES on A Coalition.” It was the “Yes for Schools First Coalition,” but decided to match its moniker to the now-named Proposition A on November’s state ballot.
Nutshell,
South Beach Casino in Manitoba has Added a $20 Million, Six-Story Hotel
South Beach Casino in Manitoba has added a $20 million, six-story hotel. The art deco-style building, which opened last month, features a ballroom, 4,000-square-foot pool and 170-seat restaurant.
Nutshell,
Towcester Racecourse for Sale
Lord Hesketh has put up for sale Towcester Racecourse in South Northamptonshire in the U.K. The property is being touted by the estate agents as a potential candidate for conversion to a racino with hotel and spa, similar to what is happening at Wolverhampton. The asking price is £10 million.
Nutshell,
Tourism Company of Puerto Rico
The 21 licensed casinos of the Tourism Company of Puerto Rico have earned $314 million in the 2007-2008 fiscal year, up 2 percent over the previous year. The company plans to open seven more casinos and offer courses in casino administration at the University of Puerto Rico.
Nutshell,
EELEX Trade Show in Moscow was a Fake
Last month’s EELEX trade show in Moscow was a fake, says the owner of the real show, Unicum Group. The annual event had been canceled earlier this year, but a company called SMILE EXPO apparently decided to stage the show, reportedly without approval from Unicum.
Nutshell,
Sweden is Looking at Licensing Foreign Companies
A government commission in Sweden is looking at licensing foreign companies to offer betting on sports and horse racing in shops. The current monopoly system would for the time being remain in place for casinos and online gaming. A decision is expected by December.
Dateline,
Labor Strife in U.K.
The multiple factors that have contributed to lower gaming revenue in the U.K. are now putting pressure on relations between management and labor.
Casino operator Genting Stanley is asking employees to take a “pay deferral” that would see their usual pay increase, which should have been paid in May, postponed until at least the start of 2009.
Affected workers are those at the company’s Stanley, Circus, Maxims and Mint casinos.
According to the Daily Echo, Genting Stanley COO Bobby McGhee said, “We’ve already made a number of difficult operating decisions in the interest of the long-term health of the business, and as part of our review of operating costs we have reluctantly concluded that we must defer our annual pay review to January 2009. We would like to thank all our staff for their support and contribution during these challenging times.”
Blamed for the difficult times are an increased gaming tax, the smoking ban, the change in slot machine regulations that removed certain machines from casinos, and the credit crunch.
Casino operator Genting Stanley is asking employees to take a “pay deferral” that would see their usual pay increase, which should have been paid in May, postponed until at least the start of 2009.
Affected workers are those at the company’s Stanley, Circus, Maxims and Mint casinos.
According to the Daily Echo, Genting Stanley COO Bobby McGhee said, “We’ve already made a number of difficult operating decisions in the interest of the long-term health of the business, and as part of our review of operating costs we have reluctantly concluded that we must defer our annual pay review to January 2009. We would like to thank all our staff for their support and contribution during these challenging times.”
Blamed for the difficult times are an increased gaming tax, the smoking ban, the change in slot machine regulations that removed certain machines from casinos, and the credit crunch.
Dateline,
Quixote Still Coming in Spain
The Harrah’s Entertainment project known as the Kingdom of Don Quixote—Reino de Don Quijote in Spanish—will happen, according to Andrew Tottenham, Harrah’s director of development for Europe. However, it might have to wait until the economic climate improves.
Dateline,
Belgian Breakthrough
The nine casinos spread around Belgium have tripled their collective gaming revenue in the past four years, and a once-decrepit industry is now blossoming.
That is according to new numbers released by the nation’s Gaming Commission and the opinions of commission member Marc Callu, as reported in the Belgian newspaper De Tijd.
The country’s nine casinos grossed €115 million in 2007. In 2004, with only eight casinos operating, total revenue was only €43.3 million.
The improvement is primarily the result of a combination of continually evolving legislation and professional management by international and local operators.
“The introduction of gaming legislation in 1999 introduced a new era for Belgian casinos,” said Callu. “After decades of a policy of simply tolerating unlegislated gaming, suddenly very strict rules came into force. That kicked off a period of difficult times and various takeovers. Now, the casinos at Oostende, Knokke, Dinant and Chaudfontaine are all part of the French Partouche Group. Middelkerke and Blankenberge belong to the U.K.-based Rank, and Spa and Namur are owned by Circus Leisure, from the French-speaking part of Belgium.”
The big addition to the mix since 2004 is the Grand Casino Brussels, which opened in 2005. Owned by Casinos Austria International, the Brussels property contributed €37.6 million in 2007—one-third of the total casino revenue generated last year.
Callu believes that the Grand Brussels Casino has not yet reached its full potential.
“The casino crowd has not yet found its way to the capital of Europe,” said Callu. “Continuity is still missing, certainly now that the casino is moving to (its new, permanent structure in) the Anspach Center.”
The other eight casinos, which produced €43.3 million in 2004, combined for €77.6 million last year.
“The success is mainly due to the poker explosion and the reintroduction of gaming machines,” said Callu. “There is a lot of investment again in new bingo halls, poker tables, slot machines and personnel.”
That is according to new numbers released by the nation’s Gaming Commission and the opinions of commission member Marc Callu, as reported in the Belgian newspaper De Tijd.
The country’s nine casinos grossed €115 million in 2007. In 2004, with only eight casinos operating, total revenue was only €43.3 million.
The improvement is primarily the result of a combination of continually evolving legislation and professional management by international and local operators.
“The introduction of gaming legislation in 1999 introduced a new era for Belgian casinos,” said Callu. “After decades of a policy of simply tolerating unlegislated gaming, suddenly very strict rules came into force. That kicked off a period of difficult times and various takeovers. Now, the casinos at Oostende, Knokke, Dinant and Chaudfontaine are all part of the French Partouche Group. Middelkerke and Blankenberge belong to the U.K.-based Rank, and Spa and Namur are owned by Circus Leisure, from the French-speaking part of Belgium.”
The big addition to the mix since 2004 is the Grand Casino Brussels, which opened in 2005. Owned by Casinos Austria International, the Brussels property contributed €37.6 million in 2007—one-third of the total casino revenue generated last year.
Callu believes that the Grand Brussels Casino has not yet reached its full potential.
“The casino crowd has not yet found its way to the capital of Europe,” said Callu. “Continuity is still missing, certainly now that the casino is moving to (its new, permanent structure in) the Anspach Center.”
The other eight casinos, which produced €43.3 million in 2004, combined for €77.6 million last year.
“The success is mainly due to the poker explosion and the reintroduction of gaming machines,” said Callu. “There is a lot of investment again in new bingo halls, poker tables, slot machines and personnel.”
Dateline,
French Casinos in Trouble
The secretary general of Casinos de France is reporting that its member groups saw a collective 18 percent decline in gross gaming revenue in June followed by a 19 percent drop in July.Casinos de France is an operators’ association that represents the casino groups Barrière, Emeraude, Joa and Tranchant.
Jean-François Cot, secretary general of Casinos de France, told Le Figaro that the crisis the sector is experiencing could be fatal for some individual properties. Since the beginning of 2008, gaming revenue has fallen about 14 percent.
“It is clear that the drop in GGR won’t recover anytime soon,” said Cot. “We fear that some casinos will be unable to overcome this difficulty. There are probably more than a dozen casinos in jeopardy today.”
Half to three-quarters of the blame for the poor numbers is falling on the all-too-familiar smoking ban. An estimated 60 percent of players smoke, according to casino managers.
The rest of the blame goes to players spending less time and money per session
Dateline,
Singapore Court Upholds U.S. Decision
In a landmark case, Singapore’s high court ruled that a businessman who lost $4.4 million in Las Vegas and left the country without paying his debt must abide by a 1999 U.S. court ruling and repay the money he owes.
Traditionally, gambling debts incurred in non-commonwealth countries could not be recovered in Singapore.
Poh Soon Kit lost the money at Caesars Palace over a six-year period beginning in 1992. He has appealed the ruling.
The ruling also has implications for two casinos that will open in Singapore soon. If the country is willing to help casinos in other jurisdictions recover their debts, reciprocity is expected to benefit Singapore casinos.
Traditionally, gambling debts incurred in non-commonwealth countries could not be recovered in Singapore.
Poh Soon Kit lost the money at Caesars Palace over a six-year period beginning in 1992. He has appealed the ruling.
The ruling also has implications for two casinos that will open in Singapore soon. If the country is willing to help casinos in other jurisdictions recover their debts, reciprocity is expected to benefit Singapore casinos.
Dateline,
New Brand of Luxury in Macau
Just as reports appear that the occupancy rates at Macau’s luxury hotels are rising, the bar is being raised by a noted hotel company.
The French luxury hotel Sofitel Macau At Ponte16 debuted last month to rave reviews. The hotel is part of a joint venture with Pier 16 Resort Hotel Management Ltd. as part of an estimated HK$3.2 billion (US$400 million) total investment that involves the development of a combined hotel, casino, retail, restaurant and entertainment complex.
The 20-story Sofitel Macau has 408 rooms, a Mistral restaurant, a swimming pool, a business center and a 460-square-meter multi-function banquet room, plus additional meeting rooms. The hotel will also have Club Sofitel floors as well as the Mansion at Sofitel, designed for the casino’s high rollers.
The Ponte 16 casino is located in Macau’s Inner Harbour area, adjacent to such iconic landmarks as the Old Clock Tower, which is the focal point of the project.
Sofitel Macau General Manager Robert Rippon said Sofitel Macau is unique among Macau’s luxury hotels in that it combines modern style and design with a stunning heritage location.
“The vast interest in historic cities bodes well for Macau,” he said, “and with Ponte 16’s commitment to maintaining the historic integrity of the waterfront district, we believe Sofitel Macau will attract strong interest from visitors around the world, including discerning leisure travelers and high-end conference and incentive groups.”
The French luxury hotel Sofitel Macau At Ponte16 debuted last month to rave reviews. The hotel is part of a joint venture with Pier 16 Resort Hotel Management Ltd. as part of an estimated HK$3.2 billion (US$400 million) total investment that involves the development of a combined hotel, casino, retail, restaurant and entertainment complex.
The 20-story Sofitel Macau has 408 rooms, a Mistral restaurant, a swimming pool, a business center and a 460-square-meter multi-function banquet room, plus additional meeting rooms. The hotel will also have Club Sofitel floors as well as the Mansion at Sofitel, designed for the casino’s high rollers.
The Ponte 16 casino is located in Macau’s Inner Harbour area, adjacent to such iconic landmarks as the Old Clock Tower, which is the focal point of the project.
Sofitel Macau General Manager Robert Rippon said Sofitel Macau is unique among Macau’s luxury hotels in that it combines modern style and design with a stunning heritage location.
“The vast interest in historic cities bodes well for Macau,” he said, “and with Ponte 16’s commitment to maintaining the historic integrity of the waterfront district, we believe Sofitel Macau will attract strong interest from visitors around the world, including discerning leisure travelers and high-end conference and incentive groups.”
Dateline,
Art Runs Into Reality in Tinian Project
The proposed Matua Bay Resort on Tinian Island has been designed by world-renowned architect Shin Takamatsu of Japan. All that stands in the way of it now is garbage. The real kind.
The multimillion-dollar resort with 405-room hotel, casino and 18-hole golf course is planned for a site that is currently the only depository of solid waste on the island. Plans to build a new dump are proceeding, according to the Saipan Tribune, but a consulting engineer with the project said that a pending military buildup in the region could complicate things, and that without a new dump the hotel could not be built.
Meanwhile, the developers, Marianas Resort Development Co., have submitted the environmental impact assessment for the project. One important consideration is the presence of the Tinian monarch, a bird threatened with loss of habitat. Also, a number of archeological sites have been identified.
The multimillion-dollar resort with 405-room hotel, casino and 18-hole golf course is planned for a site that is currently the only depository of solid waste on the island. Plans to build a new dump are proceeding, according to the Saipan Tribune, but a consulting engineer with the project said that a pending military buildup in the region could complicate things, and that without a new dump the hotel could not be built.
Meanwhile, the developers, Marianas Resort Development Co., have submitted the environmental impact assessment for the project. One important consideration is the presence of the Tinian monarch, a bird threatened with loss of habitat. Also, a number of archeological sites have been identified.
Dateline,
Ferries Limited to Daylight Hours in Macau
Ferry boats operated by Las Vegas Sands traveling between Hong Kong and Macau will now be limited to hourly crossings during the nighttime hours, because the Macau government cannot provide 24-hour immigration services at the city’s newest terminal. The ferries leave every 30 minutes during the day from a temporary ferry terminal at Pac On.In August the 10 LV Sands ferries carried more than 500,000 passengers, with a capacity to carry 21,000 people a day. A Sands executive said the company would run ferries every 15 minutes if the government could efficiently staff the immigration centers.
A second company with permission to use the temporary terminal, Macau Dragon, is currently testing a huge boat, capable of carrying up to 1,200 passengers. Most other ferries can only carry approximately 400 people. A second boat will be added soon after the first begins operations.
Dateline,
Dreams of Empire
Macau and Singapore are not the final destinations for Las Vegas Sands in Asia, says Sheldon Adelson.
“We would like to build a Cotai Strip in India,” he says.
The billionaire casino magnate reportedly met with Indian trade and tourism ministers on his way to Macau for the opening of the Four Seasons Hotel.
While in Macau, Adelson told an Indian reporter, “You could have the equivalent of Las Vegas. If your government wants to invite us there, we would be happy to commit $12 billion to $14 billion.”
But India isn’t the only Asian market being eyed by LVS. According to a report from China Economic News Service, the hyperactive developer is also looking at the possibility of a casino on Taiwan.
William Weidner, president of LVS, told the Chinese-language Economic Daily News that his company is exploring the opportunity to establish a casino in the city of Taipei or Kaohsiung—if and when the government allows casinos in the island nation.
The Taiwan legislature has rejected several attempts to create a casino industry, but is scheduled to again address the subject by the end of the year. However, the front-runner among possible locations for initial casino development is the offshore islands of Penghu, not major cities like Taipei.
Weidner said LVS is not interested in developing a casino resort on the islands. The company once had plans to build there, but things went awry in 2000 when promised political support vanished. Instead, LVS took its money to Macau and built the Venetian.
Weidner believes that the best site for a casino in Taiwan is someplace with a large population and good transportation, meaning a major city like Taipei or Kaohsiung.
In typical Vegas style, Adelson is not worried about over-development.
“We would like to build a Cotai Strip in India that would not affect Macau whatsoever. As a matter of fact, the market in India with 1.1 billion people would justify more than one Cotai Strip,” he told reporters.
“We would like to build a Cotai Strip in India,” he says.
The billionaire casino magnate reportedly met with Indian trade and tourism ministers on his way to Macau for the opening of the Four Seasons Hotel.
While in Macau, Adelson told an Indian reporter, “You could have the equivalent of Las Vegas. If your government wants to invite us there, we would be happy to commit $12 billion to $14 billion.”
But India isn’t the only Asian market being eyed by LVS. According to a report from China Economic News Service, the hyperactive developer is also looking at the possibility of a casino on Taiwan.
William Weidner, president of LVS, told the Chinese-language Economic Daily News that his company is exploring the opportunity to establish a casino in the city of Taipei or Kaohsiung—if and when the government allows casinos in the island nation.
The Taiwan legislature has rejected several attempts to create a casino industry, but is scheduled to again address the subject by the end of the year. However, the front-runner among possible locations for initial casino development is the offshore islands of Penghu, not major cities like Taipei.
Weidner said LVS is not interested in developing a casino resort on the islands. The company once had plans to build there, but things went awry in 2000 when promised political support vanished. Instead, LVS took its money to Macau and built the Venetian.
Weidner believes that the best site for a casino in Taiwan is someplace with a large population and good transportation, meaning a major city like Taipei or Kaohsiung.
In typical Vegas style, Adelson is not worried about over-development.
“We would like to build a Cotai Strip in India that would not affect Macau whatsoever. As a matter of fact, the market in India with 1.1 billion people would justify more than one Cotai Strip,” he told reporters.
Dateline,
South Korea Moves Disturb Gaming Industry
The South Korean government revealed
several changes last month that are likely to strangle the growth of its young gaming
industry.
South Korea’s Ministry of Strategy and Finance has announced plans to double the tax on casino gaming revenue to 20 percent as of January 1, 2009.
The planned tax increase, reported by Bloomberg, follows a recent statement from the National Gaming Control Commission that it wants to limit the gaming industry’s revenue to about $12.5 billion annually.
Paradise Group, which operates six casinos around the nation, said in a statement: “Imposing a 20 percent tax on companies suffering from stiffer competition and falling profit is just like they are telling us to shut down shops. If they take away 20 percent of net sales, most of the companies will go out of business.”
The new plan does include tax reductions on income and elimination of certain property taxes.
The government also wants to introduce an e-card system that would place a limit on the amount a player could lose and impose stricter control over new players looking to participate in gaming of all forms.
The National Gaming Control Commission said its intent is to limit the amount gambled in casinos, on horse racing and on lotteries, according to an article from Bloomberg. The commission wants to limit the amount spent industry-wide to 14 trillion won annually, about $13.4 billion.
South Korea currently has only one legal casino that allows Korean citizens to play.
Bloomberg quoted Jeong Woo Cheol, an analyst at Mirage Asset Securities, who said, “I am not sure the government’s plan will be realized as gambling operators will firmly resist it.”
The commission is expected to complete its plan in September.
several changes last month that are likely to strangle the growth of its young gaming
industry.
South Korea’s Ministry of Strategy and Finance has announced plans to double the tax on casino gaming revenue to 20 percent as of January 1, 2009.
The planned tax increase, reported by Bloomberg, follows a recent statement from the National Gaming Control Commission that it wants to limit the gaming industry’s revenue to about $12.5 billion annually.
Paradise Group, which operates six casinos around the nation, said in a statement: “Imposing a 20 percent tax on companies suffering from stiffer competition and falling profit is just like they are telling us to shut down shops. If they take away 20 percent of net sales, most of the companies will go out of business.”
The new plan does include tax reductions on income and elimination of certain property taxes.
The government also wants to introduce an e-card system that would place a limit on the amount a player could lose and impose stricter control over new players looking to participate in gaming of all forms.
The National Gaming Control Commission said its intent is to limit the amount gambled in casinos, on horse racing and on lotteries, according to an article from Bloomberg. The commission wants to limit the amount spent industry-wide to 14 trillion won annually, about $13.4 billion.
South Korea currently has only one legal casino that allows Korean citizens to play.
Bloomberg quoted Jeong Woo Cheol, an analyst at Mirage Asset Securities, who said, “I am not sure the government’s plan will be realized as gambling operators will firmly resist it.”
The commission is expected to complete its plan in September.
Dateline,
Taiwan Inches Toward Casinos
In a move that could signal serious intent to establish casino gambling, Taiwan’s Premier Liu Chao-shiuan said that a first step would be to decriminalize gambling in the nation’s offshore islands.Premier Liu made the statement about decriminalization at a regular cabinet meeting two weeks ago, adding that the cabinet would need to back decriminalization before a casino gaming plan could be drawn up by the Council for Economic Planning and Development.
It would fall to the legislature to actually pass legalization of gaming in the islands, which include the favored Penghu region. Once the legislature passed such a law, the cabinet would create a draft of gaming regulations.
The casino plan is seen by some as an important element in the further development of the leisure industry of Penghu. The region lives on fishing and tourism.
According to Taiwan’s President Ma Ying-jeou, who favors the introduction of gaming in the nation, the outlying islands will be the only areas where gaming will be permitted for at least 10 years.
Dateline,
Seasons Greetings in Macau
One year after debuting the massive Venetian Macao Hotel Casino on the Cotai Strip, Las Vegas Sands executives gathered to launch the
Four Seasons Macao, adjacent to the Venetian.
The second property on the Cotai Strip (of almost a dozen hotels), the Four Seasons brings another level of luxury and will reportedly help the Venetian compete in the brutal VIP market, although LV Sands expects it to increase tourist traffic.
“The key to building a successful tourist destination is being able to assemble the critical mass of attractions needed to make the location more unique and compelling than its rival destinations,” said Sheldon G. Adelson, chairman and chief
executive officer of Las Vegas Sands Corp. “That is why we continue to add more and more important components, like luxury retail and world-class entertainment, to our Cotai Strip development.”
The new Four Seasons Hotel Macao, which is owned by LV Sands but operated and managed by Four Seasons Hotels and Resorts, features 360 upscale guestrooms and suites. It also includes several food-and-beverage offerings, an exquisite pool and garden area, and a variety of conference, banquet and business services and facilities.
An upscale retail area, the Shoppes at Four Seasons, is a 211,000-square-foot mall connected to the Grand Canal Shoppes at the Venetian Macao and the Four Seasons Hotel Macao. It features approximately 180 luxury brands, including more than 60 brands not previously offered in Macau.
Next year, LV Sands plans to introduce the St. Regis and Shangri-La hotel brands on the Cotai Strip.
Meanwhile, the Venetian also debuted a new Cirque du Soleil show, ZAIA, the company’s first permanent production to open in Asia.
Adelson also said the Cotai Strip will avoid the effect of an economic downturn because it will appeal to more than just the VIP market. He says his properties are not as dependent upon Chinese visitors—who now face stiff visa restrictions from the Chinese government—as other properties.
“The Cotai Strip is not just a series of integrated resorts for Chinese people only,” he said. “It’s for all Asians.”
Four Seasons Macao, adjacent to the Venetian.
The second property on the Cotai Strip (of almost a dozen hotels), the Four Seasons brings another level of luxury and will reportedly help the Venetian compete in the brutal VIP market, although LV Sands expects it to increase tourist traffic.
“The key to building a successful tourist destination is being able to assemble the critical mass of attractions needed to make the location more unique and compelling than its rival destinations,” said Sheldon G. Adelson, chairman and chief
executive officer of Las Vegas Sands Corp. “That is why we continue to add more and more important components, like luxury retail and world-class entertainment, to our Cotai Strip development.”
The new Four Seasons Hotel Macao, which is owned by LV Sands but operated and managed by Four Seasons Hotels and Resorts, features 360 upscale guestrooms and suites. It also includes several food-and-beverage offerings, an exquisite pool and garden area, and a variety of conference, banquet and business services and facilities.
An upscale retail area, the Shoppes at Four Seasons, is a 211,000-square-foot mall connected to the Grand Canal Shoppes at the Venetian Macao and the Four Seasons Hotel Macao. It features approximately 180 luxury brands, including more than 60 brands not previously offered in Macau.
Next year, LV Sands plans to introduce the St. Regis and Shangri-La hotel brands on the Cotai Strip.
Meanwhile, the Venetian also debuted a new Cirque du Soleil show, ZAIA, the company’s first permanent production to open in Asia.
Adelson also said the Cotai Strip will avoid the effect of an economic downturn because it will appeal to more than just the VIP market. He says his properties are not as dependent upon Chinese visitors—who now face stiff visa restrictions from the Chinese government—as other properties.
“The Cotai Strip is not just a series of integrated resorts for Chinese people only,” he said. “It’s for all Asians.”
Dateline,
Morgans Announces Delano Dubai
Morgans Hotel Group Co., owner of the Hard Rock Hotel Casino in Las Vegas, announced development of Delano Dubai, scheduled to open by 2012.
Delano Dubai will consist of a three-building complex overlooking the iconic Palm Jebel Ali, with panoramic views of the Persian Gulf, the open spaces of the waterfront and beachfront parks.
The hotel is expected to have approximately 200 guest rooms and 100 branded residences, and will include a restaurant, bar and spa.
Adjacent to the property will be another 360 residences with hotel services, rising 44 stories over the waterfront.
Visitors and residents of the complex will have access to a retail promenade lined with luxury boutiques, stretching to the beachfront. Plans also call for a vast cabana bar built into the pier that will offer a dock for boats and gondolas.
Morgans also plans to build a Delano hotel at Boyd Gaming’s now-delayed Echelon development in Las Vegas.
Delano Dubai will consist of a three-building complex overlooking the iconic Palm Jebel Ali, with panoramic views of the Persian Gulf, the open spaces of the waterfront and beachfront parks.
The hotel is expected to have approximately 200 guest rooms and 100 branded residences, and will include a restaurant, bar and spa.
Adjacent to the property will be another 360 residences with hotel services, rising 44 stories over the waterfront.
Visitors and residents of the complex will have access to a retail promenade lined with luxury boutiques, stretching to the beachfront. Plans also call for a vast cabana bar built into the pier that will offer a dock for boats and gondolas.
Morgans also plans to build a Delano hotel at Boyd Gaming’s now-delayed Echelon development in Las Vegas.
Dateline,
Sale of the Century
Century Casinos, based in Colorado with a subsidiary in Austria, has announced that it is open to selling all or part of its casino resort operations in South Africa.
The willingness to sell follows on the heels of “verbal indications of interest,” according to a press release from the company.
The properties in question are the Caledon Hotel, Spa and Casino in the Western Cape province and the Century Casino and Hotel in Newcastle, KwaZulu-Natal provin
Century owns 100 percent of the Caledon complex, which had net operating revenue of 127.8 million rand, about $16.1 million, and adjusted EBITDA of 53.1 million rand.
The Newcastle property is 60 percent owned by Century and produced net operating revenue of 84.4 million rand and EBITDA of 30.5 million rand.
Century Casinos has operations in the U.S., Canada, Czech Republic and South Africa, plus on cruise ships.
Century Casinos Europe GmbH owns 33 percent of Casinos Poland.
The willingness to sell follows on the heels of “verbal indications of interest,” according to a press release from the company.
The properties in question are the Caledon Hotel, Spa and Casino in the Western Cape province and the Century Casino and Hotel in Newcastle, KwaZulu-Natal provin
Century owns 100 percent of the Caledon complex, which had net operating revenue of 127.8 million rand, about $16.1 million, and adjusted EBITDA of 53.1 million rand.
The Newcastle property is 60 percent owned by Century and produced net operating revenue of 84.4 million rand and EBITDA of 30.5 million rand.
Century Casinos has operations in the U.S., Canada, Czech Republic and South Africa, plus on cruise ships.
Century Casinos Europe GmbH owns 33 percent of Casinos Poland.
Dateline,
Mexico to Modernize
The Subcommittee of Games and Draws in the Mexican House of Representatives has begun its exploration into over 700 licenses issued during the previous administration. When the work is through, Mexico could be on its way to a legal casino gaming industry.
A member of the subcommission, Gilberto Ojeda Camacho, told El Sol de Mexico, “We must have new rules according to the needs of the country… to make the tourist sector more productive.”
Current gaming legislation in Mexico dates back to 1947.
The coordinator of the legislative study group, Armando García Méndez, expects the subcommittee will look at revising 763 gaming licenses issued by the Department of the Interior during the administration of Vicente Fox.
“Seven hundred and sixty-three licenses were granted, but we don’t know if they were legal or illegal,” said García Méndez, according to América Multimedios.
The subcommittee is composed of 12 representatives from five political parties.
The Tourism Commission of the House of Representatives also will expand a new law dealing with games and draws to include the operation of casinos in various parts of the country, said Camacho. The subcommittee will look at the pros and cons of the industry to decide in which areas casinos would be better placed with an eye to economic development but also local synergy.
García Méndez said the subcommission will initiate meetings with officers from the government secretary, the health and economy secretary and specialists in the field. The goal is to have as much expert information as possible about games and draws, to design new legislation. He did not rule out a meeting with the former government secretary and current senator, Santiago Creel Miranda. An invitation will be issued and it will be up to the senator “if he wants to come or not,” he said.
García Méndez says now that the games and draws are part of the society they need to be regulated to avoid social problems.
“It is clear that some things will be permitted and others forbidden, such as slots in stores,
because they may create an addiction in children and youngsters.”
A member of the subcommission, Gilberto Ojeda Camacho, told El Sol de Mexico, “We must have new rules according to the needs of the country… to make the tourist sector more productive.”
Current gaming legislation in Mexico dates back to 1947.
The coordinator of the legislative study group, Armando García Méndez, expects the subcommittee will look at revising 763 gaming licenses issued by the Department of the Interior during the administration of Vicente Fox.
“Seven hundred and sixty-three licenses were granted, but we don’t know if they were legal or illegal,” said García Méndez, according to América Multimedios.
The subcommittee is composed of 12 representatives from five political parties.
The Tourism Commission of the House of Representatives also will expand a new law dealing with games and draws to include the operation of casinos in various parts of the country, said Camacho. The subcommittee will look at the pros and cons of the industry to decide in which areas casinos would be better placed with an eye to economic development but also local synergy.
García Méndez said the subcommission will initiate meetings with officers from the government secretary, the health and economy secretary and specialists in the field. The goal is to have as much expert information as possible about games and draws, to design new legislation. He did not rule out a meeting with the former government secretary and current senator, Santiago Creel Miranda. An invitation will be issued and it will be up to the senator “if he wants to come or not,” he said.
García Méndez says now that the games and draws are part of the society they need to be regulated to avoid social problems.
“It is clear that some things will be permitted and others forbidden, such as slots in stores,
because they may create an addiction in children and youngsters.”
Dateline,
One Step Closer
A commission in Brazil’s House of Representatives has approved a measure that would see the introduction of six casinos nationwide.
The decision by the Commission of Economic Development, Industry and Commerce also would allow permanent bingo halls with a minimum of 500 player positions. Temporary bingos are also permitted by the commission’s approval.
Pending further review and decisions by other commissions, both casinos and bingo halls will be permitted to operate slot machines connected to a centrally controlled server, such as a video lottery terminal or SBG network.
According to a report from BNL Magocom, the measure limits gaming options to roulette, card games and linked, centrally controlled slot machines.
Bingo halls will be connected by a real-time data processing system under the control of the state. Prizes would be paid in cash, with a return to players of at least 70 percent of the amount of gross sales.
The proposal to which the representatives agreed limits casinos to the North, Northeast and Central West regions of Brazil. Those communities with the lowest “Human Development Rate”—IDH for short in Brazilian government parlance—will have priority for casino development.
For the first five years, only two casinos per region would be permitted. After that initial period the government would be free to look at allowing further casino development.
Gaming revenue generated by the operations will be allocated to the national health sector. In that light, there will be extra care taken to ensure that those with compulsive gambling problems are not visiting casinos. Operators found to be in violation of established measures would face severe penalties.
The original measure was drawn up and introduced by Representative Vicentinho Alves. It now moves on to be studied by other commissions.
Dateline,
NIGC One-Touch Appeal, Class II Rules Dropped
Class II tribal bingo operators may rest easier nationwide over developments in the National Indian Gaming Commission’s effort to distinguish advanced bingo devices from Class III slot machines. Some controversy has been quelled at least temporarily, but more may be in the wind.
Responding to Oklahoma tribes’ concerns, Alaska’s Metlakatla Indian Community has dropped its planned appeal of NIGC Chairman Phil Hogen’s refusal to allow the tribe’s fast-playing one-touch bingo machines as Class II. That means any decision the full commission might have made about the appeal won’t reach federal courts as some observers expected—and Hogen hoped.
“It appears a judicial test of this important dividing line will be put off at this time. If there was concern that the view stated in my disapproval of this measure would be sustained in a federal court review, I think such concern was well placed,” Hogen said in an NIGC news release.
The next day, the Tulsa World reported that in an interview with the paper, “Hogen also said the parts of proposed gambling regulations that had been set aside after triggering strong opposition from tribes and members of Congress now would be formally withdrawn.”
That line, buried near the end of a story about the Alaska decision, referred to new rules for Class II machines that Hogen has worked on for five years. The same day he made the Alaska decision, he announced the rules would be “set aside” for a new cost-benefit analysis.
An earlier study showed that Class II gamers as a group would lose billions of dollars if they had to junk bingo machines redefined as Class III or consequently had to negotiate state gaming compacts—and share revenue—to run the games legally. That substantiated tribes’ prior howls over losing entertainment value, relatively rapid play and customer appeal for their electronic bingo. Similar concerns arose over the one-touch machines.
Oklahoma gaming tribes, which run many one-touches among their 25,000 bingo machines—half the estimated total used in the United States—were particularly alarmed about prospects of a court decision resulting from Metlakatla’s appeal. “While respecting their sovereignty, we approached Metlakatla about the wider impact this could have,” said Oklahoma Indian Gaming Association Chairman David Qualls. “I’m very grateful to the Metlakatla for reconsidering and withdrawing their
petition.”
Since the Alaska one-touch decision was not made by the full commission, it applies only to Metlakatla, said Joseph Webster, the tribe’s Washington, D.C., attorney. The Oklahoma group’s Washington attorney told Indian Country Today that withdrawal of the appeal means the full NIGC can take no action on the one-touch decision, “mooting out” its possible effects.
Still, reports have Hogen insisting that “as other or similar matters confront us, we will be guided by the Metlakatla decision unless or until the commission changes that or a court or Congress changes it.”
Responding to Oklahoma tribes’ concerns, Alaska’s Metlakatla Indian Community has dropped its planned appeal of NIGC Chairman Phil Hogen’s refusal to allow the tribe’s fast-playing one-touch bingo machines as Class II. That means any decision the full commission might have made about the appeal won’t reach federal courts as some observers expected—and Hogen hoped.
“It appears a judicial test of this important dividing line will be put off at this time. If there was concern that the view stated in my disapproval of this measure would be sustained in a federal court review, I think such concern was well placed,” Hogen said in an NIGC news release.
The next day, the Tulsa World reported that in an interview with the paper, “Hogen also said the parts of proposed gambling regulations that had been set aside after triggering strong opposition from tribes and members of Congress now would be formally withdrawn.”
That line, buried near the end of a story about the Alaska decision, referred to new rules for Class II machines that Hogen has worked on for five years. The same day he made the Alaska decision, he announced the rules would be “set aside” for a new cost-benefit analysis.
An earlier study showed that Class II gamers as a group would lose billions of dollars if they had to junk bingo machines redefined as Class III or consequently had to negotiate state gaming compacts—and share revenue—to run the games legally. That substantiated tribes’ prior howls over losing entertainment value, relatively rapid play and customer appeal for their electronic bingo. Similar concerns arose over the one-touch machines.
Oklahoma gaming tribes, which run many one-touches among their 25,000 bingo machines—half the estimated total used in the United States—were particularly alarmed about prospects of a court decision resulting from Metlakatla’s appeal. “While respecting their sovereignty, we approached Metlakatla about the wider impact this could have,” said Oklahoma Indian Gaming Association Chairman David Qualls. “I’m very grateful to the Metlakatla for reconsidering and withdrawing their
petition.”
Since the Alaska one-touch decision was not made by the full commission, it applies only to Metlakatla, said Joseph Webster, the tribe’s Washington, D.C., attorney. The Oklahoma group’s Washington attorney told Indian Country Today that withdrawal of the appeal means the full NIGC can take no action on the one-touch decision, “mooting out” its possible effects.
Still, reports have Hogen insisting that “as other or similar matters confront us, we will be guided by the Metlakatla decision unless or until the commission changes that or a court or Congress changes it.”
Dateline,
Buffalo Battle
New York’s Seneca Nation kept its temporary Buffalo casino open last week despite a “notice of violation” and a closure deadline from the National Indian Gaming Commission. Seneca is appealing the notice.The five-day notice gave the tribe until September 8 to correct the violation by closing the casino to comply with federal law. U.S. District Judge William M. Skretny ruled July 8 that NIGC erred in finding the downtown casino’s site legal for tribal gaming. He ordered NIGC to act on the ruling August 26.
The appeal starts an NIGC review that could last a month or more. Seneca expects to explore all legal avenues to keep the casino open.
The federal Interior and Justice departments are working with NIGC to decide whether appeal Skretny’s decision, which vacated NIGC’s approval of Seneca’s site-specific Class III gaming ordinance for the Buffalo Creek Casino.
The site is sovereign land, but cannot be used for gaming because it was obtained after passage of the federal Indian Gaming Regulatory Act in 1988, the judge ruled. It does not meet IGRA’s land-claim settlement exception as Seneca
contends, Skretny said.
Seneca is hoping those appeals succeed to moot the notice, says Seneca Nation President Maurice John.
“If the U.S. government were to appeal and be upheld on the merits, or if the commission were to approve the new gaming ordinance, the premise on which the notice of violation is based would be obviated and the Seneca Nation would be proved correct in its interpretation of the applicable law in this case,” John wrote to NIGC Chairman Phil Hogen.
Seneca opened the temporary Buffalo Creek in July 2007 with 135 slots. It drew so many players that the tribe soon added 109 slots, expanding the windowless metal building to 10,000 square feet.
The temp stands on nine acres where Seneca started building the permanent hotel-casino complex last year. It was due to open in 2010 with 2,000 slot machines and 206 hotel suites, but last month the tribe said it was suspending construction on the $333 million project until “the appropriate time” because of economic conditions.
The tribe faces an NIGC fine of $25,000 each day Buffalo Creek has operated past September 8.
“I can assure you of one thing,” said Cornelius D. Murray, a lawyer for the anti-casino Citizens for a Better Buffalo. “We won’t accept some form of wrist-slapping here. As a practical matter, there is no way to continue the gambling and still comply with the law unless there is a stay of Judge Skretny’s ruling, which we shall vigorously oppose.”
Dateline,
Foxwoods Moves in Philly
After years of fighting with the city of Philadelphia to preserve its original site along the Delaware River, Foxwoods has agreed to move its casino location to the downtown area of the city, in the Gallery at Market East, a 1-million-square-foot retail complex. While the highest court in Pennsylvania had confirmed that Foxwoods was entitled to build at the original location, Philadelphia officials were still battling construction. The deal was reached after extensive negotiations involved Pennsylvania Governor Ed Rendell, Philadelphia Mayor Michael Nutter and Foxwoods officials.
“I commend Foxwoods’ leaders for being open and responsive to the concerns of the communities in which they operate,” Rendell said.
The Gaming Control Board must still OK the deal, as well as several approvals by Philadelphia government agencies before construction can begin.
Dateline,
Deutsche Bank Finds Buyer
Interest in the struggling Cosmopolitan in Las Vegas has been lackluster after Deutsche Bank started foreclosure proceedings earlier this year. So it’s not a surprise that an affiliate of Deutsche Bank, Nevada Property 1 LLC, bought the property out of foreclosure for $1 billion last month.
Additionally, it was announced Perini Building Company has signed a “guaranteed maximum price contract” to complete construction of the
property. Perini had continued working on Cosmopolitan even when the
property’s future was uncertain.
Friedmutter Group and architecture company Arquitectonica Corp. of Miami, both of whom were part of the original design team, will remain under the new ownership. Two new companies have been added to the design team, however. Related Cos. of New York and W.A. Richardson Builders of Las Vegas will oversee the project.
Deutsche Bank has not announced who will operate the hotel or run the casino, but contracts are expected soon.
Some people also expect some announcements concerning design changes at the property. The side-facing casino entrance—reserving the limited Strip frontage of the property for retail boutiques—might be scrapped under the new team. Design changes could push back the opening of the property from the original late 2009 or early 2010 projection.
Additionally, it was announced Perini Building Company has signed a “guaranteed maximum price contract” to complete construction of the
property. Perini had continued working on Cosmopolitan even when the
property’s future was uncertain.
Friedmutter Group and architecture company Arquitectonica Corp. of Miami, both of whom were part of the original design team, will remain under the new ownership. Two new companies have been added to the design team, however. Related Cos. of New York and W.A. Richardson Builders of Las Vegas will oversee the project.
Deutsche Bank has not announced who will operate the hotel or run the casino, but contracts are expected soon.
Some people also expect some announcements concerning design changes at the property. The side-facing casino entrance—reserving the limited Strip frontage of the property for retail boutiques—might be scrapped under the new team. Design changes could push back the opening of the property from the original late 2009 or early 2010 projection.
Dateline,
It’s Official: MGM Pushed Back in Atlantic City
Another gaming giant has put the brakes on an Atlantic City casino project. Like Pinnacle Entertainment, which postponed plans for a $1.5 billion Boardwalk resort earlier this year, and the Atlantic City Hilton, which just tabled major expansion plans, MGM Mirage will delay construction on a mammoth $5 billion casino and hotel development in the Marina District.
Groundbreaking has been pushed back to 2009 or later, but MGM hopes to stick with the original opening date sometime in 2012.
“We’re still enthusiastic and confident about the Atlantic City market,” company spokesman Gordon Absher said last month. “The project has not changed or been downscaled.”
MGM announced the East Coast project last October, before the credit markets foundered. When complete, the complex will feature Atlantic City’s largest casino and tallest building, plus three hotel towers, a luxury spa, a convention center and 500,000 square feet of retail, restaurants and entertainment. At 280,000 square feet, its casino floor will dwarf others in Atlantic City.
The location is a 72-acre site next to Borgata Hotel Casino
& Spa, which MGM co-owns with Boyd Gaming Corp. About 60 acres will be earmarked for the casino, with the rest set aside for future development.
Though MGM pulled the plug on construction, it will go ahead with the planning and regulatory approvals. A sticking point for New Jersey commissioners could be the company’s partnership in Macau with Pansy Ho, the daughter of Asian gaming icon Stanley Ho, who has reputed ties to Asian organized crime.
The Casino Control Commission did approve Dubai World’s request to increase its stake in MGM Mirage to 20 percent. Dubai World is the second-biggest shareholder and currently owns 9.4 percent of MGM Mirage, while Los Angeles billionaire Kirk Kerkorian holds the majority stake of almost 54 percent. It will also take a 50 percent stake in CityCenter, MGM’s $9 billion project in Las Vegas.
Groundbreaking has been pushed back to 2009 or later, but MGM hopes to stick with the original opening date sometime in 2012.
“We’re still enthusiastic and confident about the Atlantic City market,” company spokesman Gordon Absher said last month. “The project has not changed or been downscaled.”
MGM announced the East Coast project last October, before the credit markets foundered. When complete, the complex will feature Atlantic City’s largest casino and tallest building, plus three hotel towers, a luxury spa, a convention center and 500,000 square feet of retail, restaurants and entertainment. At 280,000 square feet, its casino floor will dwarf others in Atlantic City.
The location is a 72-acre site next to Borgata Hotel Casino
& Spa, which MGM co-owns with Boyd Gaming Corp. About 60 acres will be earmarked for the casino, with the rest set aside for future development.
Though MGM pulled the plug on construction, it will go ahead with the planning and regulatory approvals. A sticking point for New Jersey commissioners could be the company’s partnership in Macau with Pansy Ho, the daughter of Asian gaming icon Stanley Ho, who has reputed ties to Asian organized crime.
The Casino Control Commission did approve Dubai World’s request to increase its stake in MGM Mirage to 20 percent. Dubai World is the second-biggest shareholder and currently owns 9.4 percent of MGM Mirage, while Los Angeles billionaire Kirk Kerkorian holds the majority stake of almost 54 percent. It will also take a 50 percent stake in CityCenter, MGM’s $9 billion project in Las Vegas.
The Agenda,
Server Selection
As I was perusing the schedule for next month’s Global Gaming Expo, I noticed that there are at least five sessions dedicated to networked, downloadable or server-based gaming. Now, it’s been at least five years since this kind of system has become the fashionable subject at G2E, so I began to wonder. What’s taking so long? When exactly are these systems going to be launched, if ever? And will they even work?
Now I’ve read all the data, material and praise for how these systems are going to dramatically change the gaming industry. But I don’t think I’m quite ready to drink the Kool-Aid.
Now, I’m not an operator or affiliated with any, but I’ve heard all the questions:
• Why should I make the change?
• How much is it going to cost?
• What exactly are the advantages over the games I offer now?
• Why should I do it now, instead of waiting until it’s a proven success?
• Does it really work?
• How will my customers accept the change, if they even will?
• What do the regulators think of these systems?
And of course the biggie:
• Will I make more money from server-based gaming than I do now from my “regular” machines?
So no matter what you call it— networked, downloadable or server-based gaming; and they’re all different, by the way—SBG is still a mystery, at least five years after we first heard about it.
We’ve heard that the first widespread installation of SBG will occur at MGM Mirage’s CityCenter (now known as ARIA casino resort), which IGT will install and operate. That’s going to be a great test, but it raises many other questions. What is the pricing structure, for one? And will players have access to games from other manufacturers on the IGT system?
It will be a new casino with an entirely new casino floor. Therefore, it will have new players. Will those players take to the new system, or will they be confused and move on to the nearest “traditional” casino floor?
Now, I love new technology in the gaming industry. There’s no doubt that TITO has revolutionized the slot floor. But do we remember some of the first attempts to introduce this technology? MGM Grand put in a bank of machines in the mid-1990s, and for the first year, those machines were avoided like the plague.
It wasn’t until the technology was tweaked with the sounds of winning, dependable tickets and printers, and a concentrated information
campaign that showed players why tickets made much more sense than coins, that TITO became
a winner.
Or how about multi-player games? At first, people were shy about getting involved electronically with other players. But that reticence has now dissolved and “community gaming” has become another hot industry buzzword.
I suspect the same will be true of server-based gaming. It’s not going to be an immediate hit. It’s going to take hard work and innovative efforts to demonstrate to players why SBG works for them. Once they understand they can change the game they are playing without getting up, that might help. But some players are going to want to move. Others will be superstitious when it comes to new technology.
The theoretical advantages of SBG were demonstrated very clearly in a two-part series we published late last year by Dean Macomber and Roy Student, two of the most savvy experts in the gaming industry. They showed how operators would save money on SBG, be more flexible when it came to the casino floor, and appeal to different groups by using the various elements of SBG.
So why has it taken so long to catch on, even among operators? Because most of the questions I outlined above have not yet been answered to the satisfaction of the operators. We need one manufacturer to step forward with the “silver bullet,” the one example that will cause us to snap our fingers and say, “Why didn’t we think of that?”
Yes, I’ll go to the SBG sessions at this year’s G2E. I’m very interested to hear if there are any answers to these questions and others that I’m sure the operators have. Because until the manufacturers can supply those answers, I’m sure the SBG sessions at G2E 2009 will be just as ever-present—but even more unfulfilling.