By Roger Gros   Thu, May 01, 2008

Toward the end of every September in pre-casino Atlantic City, a bitter old joke would make the rounds: “Last one out of town, turn out the lights.”

And it wasn’t far from the truth.

Atlantic City in those days was a 10-week economy. Most businesses struggled to make their nut during those weeks. July, August and the first two weeks of September, culminating with the Miss America Pageant, was the most important time of the year. Locals said it best: “Three months of hurry; nine months of worry.”

Most workers collected unemployment in the off-season. It was a dire situation for most Atlantic City residents and businesses, with little hope of improving.

The solution was apparent. With Nevada being the only legal U.S. gaming jurisdiction, the history of quasi-legal casinos in Atlantic City provided some hope. After all, the gambling clubs that called Atlantic City home during the 1930s and ’40s helped to make the city the entertainment capital of the East Coast. Investigations by a Senate committee headed up by Senator Estes Kefauver in the 1950s led to a crackdown and effectively ended the games, not only in Atlantic City but also in other gambling towns such as Biloxi, Mississippi; North Covington, Kentucky; Steubenville, Ohio; and many others.

Simple Answers

So when it came time to decide how to revitalize Atlantic City, gaming was a logical, if not the only, choice.

After the back-room gambling halls shut down, Atlantic City’s plight got even worse following the Democratic National Convention in 1964. While the event produced some historic American political drama (Robert Kennedy’s speech following the death of his brother just nine months before), it exposed Atlantic City for exactly what it was: a second-class resort on the decline.

The first hint that gaming could be the solution came in 1968 when the New Jersey Assembly held hearings that considered the introduction of legalized gaming. All members of law enforcement who testified agreed that legalized casinos would be impossible to police—except for one: Essex County Prosecutor Brendan Byrne.

“I discovered that you couldn’t stamp out gambling, so I thought why not legalize it and make the state a partner in the gambling operation?” said the future governor of New Jersey.

But there were several problems with that scenario. First of all, the current governor would not approve gaming in any situation. And the only legal gaming jurisdiction in the United States at that time was Nevada, whose reputation was, shall we say, less than stellar. And New Jersey itself had something of a sullied background. It was widely regarded as one of the most corrupt of the United States. And Atlantic City itself wasn’t squeaky clean, either.

“The political leadership in Atlantic City was going to jail and would continue going to jail,” says Steven Perskie, now a Superior Court judge, but a freshman assemblyman at the time. “So the idea of bringing casinos to Atlantic City was to take an industry with an unsavory background that couldn’t be financed without mob-related union money and putting it into the most corrupt city of the most corrupt state in the nation. So that idea didn’t fly very well.”

Nonetheless, as a candidate for governor in 1973, Byrne supported the idea of legalized casinos for Atlantic City. His election provided a window for Perskie. But political realities soon hit home.

“We discovered,” says Perskie, “that we couldn’t get a gaming bill passed without including some of the other communities that needed help, as well.”

So the referendum that was put before the voters in November 1974 held out the option that gambling could be approved for any town in the state, if that town and the county in which is was to be located voted for it. Byrne did not support it because he wanted a bill that would benefit only Atlantic City.

The referendum failed by a large margin, mostly because New Jersey residents didn’t mind helping Atlantic City but didn’t want casinos in their backyards.

Second Chances

After the loss in ’74, the mayor of Atlantic City, Joseph Lazarow, organized the Committee to Rebuild Atlantic City, or CRAC.

“Atlantic City at that time was no different than it is today,” says Perskie. “In those days, you could not get any three people in a room to agree on anything. Yet on this issue, you had the commercial, hotel, union, racial and political leadership of both parties united on this issue and how to approach it. In 1976, we realized this was not only a second chance, it was likely our last chance. To my amazement, it worked. Around that table, from April to November, everybody behaved. After the referendum, everything went back to normal.”

For Perskie, the second referendum was successful because they learned from mistakes made the first time around.

“Since we had been asked all kinds of questions about the casino industry during the ’74 campaign—how would it be controlled, what games would be offered, who would oversee the casino and the like—questions we could not answer—we decided to write the Casino Control Act before the ’76 campaign began so we’d have all the answers,” he says.

Pressure to get the casinos opened began to mount immediately after the election.

“There was quite a bit of pressure to get these casinos open,” says former state Senator Bill Gormley, then a freshman assemblyman. “It soon became apparent that the casino would be ready long before the investigation was over so we had to amend the Casino Control Act to provide for temporary licenses.”

Joel Sterns, the attorney for Resorts International, says the pressure went beyond what the casinos would produce for Atlantic City.

“Remember, no one knew what the market was going to be,” he explains. “We had Wall Street and other developers such as Steve Wynn wondering how deep the market was. So a delay was not feasible.”

The initial investigation process was somewhat convoluted—mostly because it had never been done before, even in Nevada, where licensing was a much less complicated affair. But in April, a temporary license was approved for Resorts and on Memorial Day weekend, the dice began to roll.

Byrne made headlines that day when he warned organized crime to “keep your filthy hands off Atlantic City and stay the hell out of our state.”

Today, he believes that goal was met.

“I knew that with the State Police under Clinton Pagano, I could introduce casino gambling without the influence of organized crime,” he says. “Everybody laughed at me. But there was no reason we couldn’t do it, and we did. It was such a big business that reputable people wanted to get involved to keep organized crime out.”

The permanent license for Resorts International, which had bought and renovated the former Chalfonte/Haddon Hall, was a bit more difficult. The Division of Gaming Enforcement had recommended against a license, citing 17 deficiencies. G. Michael “Mickey” Brown conducted the state’s case against Resorts before the commission.

“There was never any pressure on me to go easy on Resorts,” he says. “There may have been pressure on members of the commission, but it was a social pressure to get this thing started. There was concern that we’d kill it before it got started.”

Later that year, Resorts was granted a license by a 5-0 vote.

The opening of Resorts was followed one year later by Caesars Boardwalk Regency (now Caesars Atlantic City) in the renovated Howard Johnson’s Hotel. Later that year, Bally’s opened, followed in 1980 by the Brighton (later the Sands), Harrah’s and the Golden Nugget.

Licensing issues complicated the opening of most of the casinos, as the state Division of Gaming Enforcement and Casino Control Commission began to sort out procedures and the balance of power in the regulatory scheme in Atlantic City.

Promises Promises

The campaign to legalize gaming in Atlantic City funded a study that made several predictions about what it would mean for the city. In 1976, a study commissioned by CRAC estimated that by 1985, casinos would generate the following:

• 33,690 new jobs would be created, including 24,600 in casino hotels (today, more than 50,000 jobs have been created in casino hotels alone)

• $844 million in new construction (today, more than $5 billion in new and renovated buildings—and growing rapidly—have been built); and

• $330 million in payroll (today, more than $1.4 billion is paid out annually)

One thing gaming did not do was to solve the unemployment problem in Atlantic City.

State Senator James Whelan, who served two terms on the City Council of Atlantic City in the 1980s before being elected mayor in 1990, says no one realized that it wasn’t enough just to offer jobs.

“Atlantic City was no different than any other urban center experiencing the decay that most cities were at that time,” he says. “Despite all our efforts, it was impossible to cut into the unemployment rate significantly enough to make a difference.”

While Atlantic City itself languished, the mainland boomed. New housing developments, shopping centers, movie theaters (which had fled Atlantic City) and other businesses sprung up to service the population that dramatically increased during those early years. Egg Harbor Township grew so rapidly, it almost outstripped the highways and school systems.

The Casino Reinvestment Development Authority was formed in 1984 to address the needs in Atlantic City that had gone unanswered. The CRDA (or “creeda” as it was dubbed) immediately set about building desperately needed housing in the city. The slums of the North Inlet were the first target, and in a remarkably short period of time, the entire neighborhood was leveled and rebuilt. Because the elevation had to be raised to avoid flooding, the cost of each home averaged more than $250,000 but they were sold for a loss at around $170,000.

“The formation of the CRDA was an important milestone in Atlantic City,” says Whelan. “It’s been a tool to help bring some of the promise of casino gaming to the city.”

Gormley says the CRDA was one of the most important pieces of legislation ever passed related to gaming. After the housing issue eased, he says bills passed in the 1990s were able to capitalize on the promise of the CRDA.

“We were able to use the CRDA to take Atlantic City to the next level,” he says. “If we didn’t pass the room credit bill and build a few towers, with about 4,000-5,000 rooms total, we wouldn’t have been ready for the next generation of hotels. And if we hadn’t done the entertainment zone bill, where would we be? We wouldn’t have the Walk. We wouldn’t have the Quarter. We wouldn’t have the Pier. We would be nowhere.”

Lean Years

The hustle and bustle of new casinos consistently opening in Atlantic City masked the indifference—and at times outright hostility—state officials showed Atlantic City.

Whelan said it wasn’t just the state.

“Even U.S. Senator Bill Bradley would have nothing to do with us,” Whelan says.

The decision to deny a license to the internationally known and respected Hilton Hotels Corporation, threw a chill on the investment prospects of the city. And by the time the last casino of the decade opened—Showboat in 1987—the chill had turned to ice.

Governor Tom Kean, who had blithely lasted nearly two terms without so much as a nod toward Atlantic City (with the possible exception of the legislation creating the CRDA), suddenly noticed the malaise enveloping the city.

Probably the most important gaming decision of the Kean administration was to appoint former state Senator Frank “Pat” Dodd as a member of the Casino Control Commission.

Dodd didn’t waste much time. He immediately began to investigate the way the commission did business and found some immediate problems.

“Something as simple as fingerprinting,” he says. “There was a huge delay in getting people licensed, which required taking fingerprints. I found out that only two retired state police officers were doing the fingerprinting so the appointments were backed up three weeks. We resolved that one quickly.”

Other things didn’t go so quickly, but when a new governor took office, Camden’s Jim Florio, he made streamlining the casino industry a priority and appointed former state Senator Steve Perskie his chief of staff. A year later, Perskie became chairman of the commission, and instituted revolutionary changes that transformed the commission from an adversary to a partner.

Perskie and his successors took the time to meet with Wall Street investment bankers to give them the facts about the New Jersey regulatory process. Today, CCC Chairwoman Linda Kassekert considers this part of her job.

“I don’t consider us cheerleaders for the gaming industry,” she says, “but I believe it is our responsibility to inform investors about how we regulate the industry and why we should be considered fair and business-friendly.”

New Dawn, New Day

After 30 years, there is still a lot to be done in Atlantic City. In retrospect, however, some believe that the promise of casino gaming has been fulfilled in a uniquely Atlantic City way.

Perskie explains why it’s a two-part answer.

“When you look at the data that we published about what would happen if you passed casino gaming in New Jersey, we far surpassed it by so much it was laughable,” he says. “So we dramatically underestimated the economic power of gaming on Atlantic City. We weren’t even close.

“In terms of what we really had in mind, which was to redevelop the infrastructure and tourism industry in Atlantic City, there’s again two different answers. Did we, over the 30 years, come as far and as fast as we could? The answer is categorically no. The industry fulfilled its obligation by coming into Atlantic City, investing money and running an honest shop. But government did not. Government in Atlantic City did not, government in Trenton did not. At least until the 1990s, when things started to change.

“But in 2008, we have to admit that we have come a long way but also recognize we have a long way to go.”

Whelan believes that a lot has been accomplished but there will always be more to do.

“I always use the analogy that in 1976, the diving horse was a great gimmick, but after 30 years, it wasn’t so fresh anymore,” he says. “If you’re in the tourist business, you have to constantly change. Las Vegas understands this, and so should we.”

Former Tropicana president Dennis Gomes believes the Las Vegas experience will help Atlantic City when it comes to regional competition. Whereas Las Vegas was not hurt by California gaming, he doesn’t believe Atlantic City will ultimately be hurt either.

“Las Vegas is the mecca of gaming and Atlantic City is the mecca of gaming on the East Coast,” says Gomes. “So the more believers there are, the more people will want to go to mecca.”

Dodd says government has to get out of the way regarding decisions that are made for Atlantic City and let the people who run the businesses make the decisions.

“Take the rail line, for example,” he explains. “If we used the money that has been invested so far, we could have bought everyone who has ever ridden the rail line a brand new Volkswagen.”

Byrne says that the non-gaming amenities recently becoming such a big part of Atlantic City is the right way to go.

“Atlantic City has to make casino gambling part of the overall entertainment package,” he says. “That’s how Atlantic City will survive and prosper. States that offer just gambling and casinos on their own are not doing as well and won’t be as successful in the long run.”

Batzer hopes that the current construction in Atlantic City will be its salvation.

“If the four or five major projects that are on the drawing board get up and open,” he says, “Atlantic City will be just fine. And we don’t have to be just a regional destination. I think Atlantic City can be much more. Given its demographics and access to European markets, Atlantic City can be much more.”

Gormley says a little thing like one-way traffic on Pacific Avenue can make a huge difference, but overall there needs to be cooperation between all interests in Atlantic City, like there was in the beginning.

“I’m excited about the future because there’s so much upside potential,” says Gormley. “It’s a matter of integrity. If we can emulate what happened in 1976 where certain personalities were set aside, a lot can be accomplished.”

By Marjorie Preston   Fri, May 02, 2008

The first casino on the Las Vegas Strip was built in 1941. As its name suggests, El Rancho Vegas effected a Western theme that carried over into all aspects of operation, including food and beverage: hence the Round-Up Room, the Buckaroo Buffet and the Wagon Wheel Tavern.

In the ensuing 60-plus years, trends in casino restaurants have undergone countless incarnations, with grab-and-go joints supplanted by gourmet bistros, heavy-handed themes giving way to cool minimalism, and flash-and-dazzle replaced by understated elegance.

But what’s chic today may soon be passé. Experts say the average casino eatery, no matter how great the food and ambience, has a shelf life of five to 10 years—maybe less. After that, repeat customers (some of whom visit the same property dozens of times a year) just want to try something new.

So what’s the remedy for a tried-and-true establishment that’s lost its appeal?

It’s a multiple-choice question. Some operators go for a cosmetic “freshening” with rudimentary changes in lighting, color palette and menu design (sort of a mini-facelift, instead of the full Joan Rivers). Others choose a total gut-and-remodel, which can range from $200 to a staggering $3,000 per square foot including furniture, fixtures and equipment.

One thing is certain: with the growing emphasis on non-gaming amenities, casinos no longer tolerate “loss leaders.”

“All food and beverage—from the snack bar to fine dining or a restaurant lounge—is what activates the perimeter of the casino,” says architect Scott Walls. “(Restaurants) make sure that life is going on out there, and you’re not just sitting in a big box of slot machines.”

Read on as the experts in their fields sound off about revitalizing casino restaurants.

Beyond ‘Paint-and-Paper’

A “paint-and-paper job” isn’t always enough to extend a venue’s lifespan, says Walls, founding partner of Bergman Walls & Associates. “People come in and think, ‘Hey, it’s the same old place.’ Typically we try to conserve the kitchen, but the rest goes back to the bare bones and we reinvent from there.”

Because mature customers tend to feel more comfortable in cozy or romantic settings and 20-somethings go for interaction and a quick pace, Walls says it’s increasingly popular to balance spaciousness and intimacy with “little niches and private seating areas,” sometimes draped for extra privacy.

Such a configuration, with small spaces tucked into a larger space, also enables a venue to switch gears—and identities—when the dinner hour is through.

“As the night gets later, some restaurants change over to an ultra-lounge type of venue with semi-secluded alcoves,” says Walls. “They drop the lights to create a different mood, and they get much more use out of the space.” Adding a late-afternoon happy hour as well as a nightlife experience can extend operations by up to seven hours a day.

Another advantage to small spaces—60-seat to 90-seat “jewel boxes” instead of 200-seat dining halls—is that they look busier with fewer patrons.

Senior interior designer Christie Pezzetta of JCJ Architecture says, “Even when we work on a 450-seat buffet, we strive to make the patrons feel as though they have their own space. We purposely sculpt it so every person feels flattered, as though they have a very comfortable front-row seat.”

Ideally, a restaurant will “feed on, add to and trade energy with the casino,” says architect Paul Heretakis of Westar Architecture and Interior Design. “Open, clubby places complement what’s going on at the gaming floor.”

To facilitate that exchange of energy, many lounges and bars are being built with fewer or no walls at the entryway so patrons can literally see and be seen. “You don’t want a closed-in environment,” says Heretakis. “Restaurants and bars are all about people-watching.”

Placement of a venue within the casino is pivotal. Says Albie Colotto, director of design with Friedmutter Group, “You want to retail your restaurant and sell (customers) from the time they walk in—while they’re gambling, when they’re walking to a show. Being located on the casino floor makes you very visible and accessible.”

Locating a restaurant on an upper floor is not the best idea, but it can add a sense of importance to high-end dining establishments.

“We did (Thomas Keller’s) Bouchon on the seventh floor at the Venetian, and it does great,” says Colotto. “But that’s one of the true destination restaurants, so the location creates that exclusivity and a little extra cachet.”

Timeless Design

When it comes to design, “most (operators) don’t want gimmicky anymore,” says Heretakis. “Instead of a themed restaurant like a rainforest, they want more sophistication and a certain timelessness.”

Suzanne Couture, senior designer with Friedmutter, agrees. “The days of theming are over. Today we talk about lifestyle and brand, about creating a resort environment that takes you out of your real life but doesn’t take you back to the Old West.”

For the restaurants at Red Rock Casino Resort Spa, a Station property at Red Rock Canyon near Las Vegas, Friedmutter’s design team took its cues from the surrounding mountains and Mojave Desert, using plenty of wood, stone and muted, earthy colors to resurrect the classic “desert-modern” look of the ’50s and ’60s. The Terra Rossa restaurant features Calcutta stone and antique terracotta floor tiles; the T-Bone Chophouse juxtaposes polished rosewood and stacked quartzite for a dramatic look that is wholly indigenous.

“Almost every restaurant at Red Rock is on an exterior wall, so there’s a lot of natural light,” says Colotto. “It’s very comfortable and appealing and blends with the environment.”

But there is still a place for the outrageous kitsch of yore: witness the Cathouse at the Luxor, “inspired,” as its website boasts, “by the rich opulence of a 19th century European bordello,” complete with blue lights and gilt-framed nudes.

Tribal casinos welcome designs that tell stories about their heritage and heroes. At Seneca Allegany in Salamanca, New York, a ubiquitous theme is the story of a brave named Three Arrows who discovered fire and brought it back to his people. That folk tale is reflected in the Lightning Bar, where a chandelier was designed to look like it’s ablaze. Another restaurant was built “like a longhouse, with an abstracted fire pit in the middle,” says JCJ’s Pezzetta. “They loved it.”

“I don’t know if the trend is completely away from brightly lit and cheerful,” says Todd Pagel, also a senior interior designer with JCJ Architecture. “There is some understatement and some very stylish, interpretive and elegant settings as opposed to something more energetic, but the patron base likes both. It’s good to have a diversity.”

“Some people are going retro, some very modern, some are after a very luxe, over-the-top look,” says restaurant consultant Elizabeth Blau, of Blau and Associates. “That keeps it exciting.”

Paying for Celebrity

As senior vice president of restaurant development at Mirage Resorts, Blau was credited with importing the first wave of celebrity chefs (Todd English, Jean-George Vongerichten, Michael Mina) and restaurateurs (Le Cirque’s Sirio Maccioni) to Las Vegas in the late 1990s. She believes media outlets like the Food Network have helped create a more educated diner who will gladly forego the steam-table assembly line to dine among the stars—even if it’s pricey, even if they have to wait in long lines.

“When I came to Las Vegas 11 years ago, people were still writing about the $1.99 buffet and all-you-can-eat prime rib,” Blau says. “Without a doubt, the public is more discerning now. There’s 24-hour Food TV, and every major celebrity chef has a national morning syndicated show. My mother-in-law, who lives in the Adirondacks, knows about Daniel Boulud’s DB burger because she saw it on Regis & Kelly.”

If diners willingly pay $275 for a prix-fixe dinner from “Chef of the Century” Joel Robuchon at the Mansion in Las Vegas, it makes sense that icons like Wolfgang Puck, Bobby Flay, Vongerichten, Emeril Lagasse and Georges Perrier will plumb the same marketplace. The presence of these superstars has raised the standard for everyone.

Operators who don’t build and run their own restaurants or contract with celebrity chefs can lease “the box”—usually four walls, structural components and utility hookups, but no finish work—to franchisees, as MGM Grand in Las Vegas did with Robuchon or Caesars Atlantic City did with Morton’s—The Steakhouse.

Mohegan Sun at Pocono Downs in Pennsylvania is doing it with Ruth’s Chris Steak House; the famous chain, with 114 locations around the country, differs from most franchises in that its locations do not adhere to a static look or layout. At Pocono Downs, local contractors, subcontractors and architects drew up the plans, and the restaurant will be owned and operated by local restaurateur John C. Metz. But the Ruth’s Chris name still provides split-second name recognition and built-in loyalty.

While the dining lineup at casinos remains fairly standard—most properties have an Italian restaurant, a steakhouse, a coffee shop, a buffet—casinos are spinning the design elements.

The traditional look of a steakhouse, for example—with dark woods and red leather chairs—is being challenged by venues like Wolfgang Puck’s CUT at the Las Vegas Palazzo. CUT goes for an almost austere modernity and neutral palette that, instead of seeming cold, comes across as modern yet relaxingly uncluttered.

Old Homestead Steakhouse, at Atlantic City’s Borgata, sounds like it should have lassos and longhorns on the walls. Instead, the restaurant—with a flagship that originated in New York more than a century ago—has a streamlined, retro-sleek look with almost no embellishments.

That kind of look exemplifies Blau’s adage that the most effective designers “are not designing for a casino.”

“Restaurants like these have been a major part of repositioning properties,” she says. “What (CEO) Bob Boughner did with Borgata repositioned Atlantic City, and now every casino hotel is working to match that bar… You don’t want to aim for your current market, but for your potential market.”

“In the casino industry, people always want new things—you can’t rest on your laurels,” says Albie Colotto. Of the latest trends, he says, “Every owner says the same thing: ‘We want a lot of people in our restaurant.’ That’s the new trend.”

By Rich Geller   Fri, May 02, 2008

In the second part of a three-part series, “Germany/Austria/Switzerland: Saturation or Malaise,” we visit the Swiss gaming industry. In Part I of the series in the April issue of GGB magazine, we saw the multiple problems facing

operators in the mature market of Germany. The initial question for Switzerland, which entered the modern casino era less than 10 years ago, was just how much had been learned from observing the best and the worst in existing jurisdictions around Europe.

Part II: Switzerland

Establishing a new casino jurisdiction is never a quick or easy task. Making the transition from a reasonably successful, local version of casino gaming to a more generic international format can be even more complex. Give final say on the change to the individual voter in a national referendum—which vote binds casino taxes directly to the national pension plan—and you have the condensed backstory of the current Swiss casino industry.

At present there are 19 casinos in Switzerland. Seven of them have an “A” license and are intended as full regional casinos to serve the general public. Twelve have a “B” license and are primarily to add to the tourism offering. The main differences between the two licenses are in the number of table games and slots allowed and the amount of the maximum stake and payout. An “A” casino may offer any table games approved by the Swiss Gaming Commission—the ESBK for short—and any number of slots, with no limits on stakes, payouts or jackpots. A “B” casino may offer three table games from the ESBK-approved list, on as many tables as it cares to have, and up to 150 slots. Maximum stake for a “B” table or slot is CHF 25—just shy of $25 these days, with the Swiss franc close to parity with the dollar—and maximum win per game round is CHF 25,000. Slot jackpots fall under a separate regulation for “B” casinos and are limited to CHF 100,000.

Ownership Issues

The casinos are individually owned and operated by a mix of commercial companies, in some cases together with local government as a partner. Familiar operators include the French groups Barriére and Partouche, with properties in the French-speaking region of Switzerland; Tranchant, also of France, but operating the casino in Basel in the German-speaking region; a Swiss subsidiary of Casinos Austria, with interests in seven casinos; and a subsidiary of the Novomatic group of Austria, which wholly owns the property with the highest gaming revenue in the country, in the Italian-speaking region.

Estimates for 2007 put GGR from the 19 casinos somewhere near CHF 1.1 billion, or about €660 million. Compare that to the 81 casinos in Germany that produced €923 million that same year. The population of Switzerland is about 7.5 million. Germany has 11 times that many inhabitants.

One explanation for the more efficient result is that Swiss casinos have more incentive to do well. Taxes on gaming revenue would make Las Vegans cringe, but in practice they are lower in most cases than in some states in the U.S.A. For “A” casinos, taxes start with 40 percent on the first CHF 20 million and increase by a half-percent for each additional million won. For “B” casinos, the rate is 40 percent for the first CHF 10 million and then the same half-percent per million increase kicks in. The logic behind the slightly higher rate for “B” casinos is that they are generally expected to operate fewer tables than “A” properties and thus be less labor-intensive.

The maximum rate for both licenses is 80 percent, the percentage at which most jurisdictions in Germany begin. In fact, the highest rate paid by any Swiss casino in 2006 averaged just over 61 percent.

The long road to modernity began with a referendum in 1993. Three-fourths of the voters were in favor of changing the existing casino system to one which would allow the development of international-style casinos.

At the time, Switzerland had a kursaal casino industry built almost exclusively around low-stake slot machines that by law had to incorporate a very simple skill element in the game’s outcome. The roulette-style table game boule completed the offering, with a maximum stake of CHF 5.

As unsophisticated as they might sound, many of the kursaal casinos did great business. Not to be confused with simple slot arcades, they functioned as popular entertainment centers, combined with restaurants and stages for live performances. Some featured elaborate, themed interiors. And they made money—some grossing more than major casinos in Germany.

Federal Fix

It took several years from the initial vote, but in April 2000 a new law governing casinos and games of chance was introduced at the federal level. The law provided for a transition phase for the kursaal industry. Kursaal operators received a provisional “B” license and were allowed to apply for one of the 14 new “B” licenses within the year. If the operator did not apply or was rejected, then business would have to cease after the one year and the license would go to one of the new bidders.

Seven of the coveted “A” licenses were also put up for bid. The idea was to provide one major property for each million inhabitants and to have the casinos located strategically around the country, rather than concentrated in one or two gaming zones.

One of the most desired locations not included in the original plan was Zurich. The financial powerhouse with over a million inhabitants in the vicinity attracted more than 50 proposals from would-be operators. For a variety of reasons it was decided to leave Zurich out of the equation and to date there are no announced plans to change that decision. Instead, the Zurich market is served by Grand Casino Baden, just 25 kilometers from central Zurich. Also, the “B” Casino Pfaffikon is about 30 minutes down the lakeshore from Zurich.

Customer Care

A crucial element to the Swiss gaming law is its emphasis on combating problem gambling. From the start, the law has required license holders to comply with a number of concrete measures that go way beyond placing a few brochures in reception. Personnel must be trained to recognize symptoms of compulsive gambling in their players and be capable of offering them information on where to get help. Casino management can ban a player it believes is getting in over his or her head, if that player is unwilling to request a self-imposed ban or visitation limit. Casinos require a show of identification to enter, which makes the banning measure feasible, although the elaborate registration process required by many European jurisdictions is something that was mercifully bypassed. The operator is also required to spend CHF 250,000 annually to maintain a relationship with a qualified scientific facility, such as a university, for advice and support of its efforts in this area.

The most recent figures available show that by the end of 2006 a total of 16,761 people were banned, self-banned or partially banned from Swiss casinos. A national database ensures that the information is available to all casinos. In 2006 there were 2,882 players who qualified for newly banned status. Of these, 1,013 had the ban imposed on them, while the rest were the result of requests by the player involved. A ban is imposed for a minimum one year, after which the player can apply for its removal.

Despite the taxes and social mandates, as mentioned earlier, business is going fairly well for the operators. In 2006, the “A” casinos at Lugano, Montreaux and Baden each grossed over CHF 100 million. Grand Casino Basel booked almost CHF 95 million, and the remaining three “A” properties at Bern, Luzern and St. Gallen had results close to CHF 60 million, 49 million and 48 million respectively. They combined for a total GGR of over CHF 563 million and contributed almost CHF 301 million directly to the national pension fund.

Surprisingly, though, the highest grossing casino in all of Switzerland is the “B” licensed Casino Admiral Mendrisio. In 2006 the operation grossed almost CHF 133 million and had the accompanying honor of paying the nation’s highest tax rate for the year, just over 61 percent. Altogether, “B” casinos contributed over CHF 392 million to total GGR in and almost CHF 195 million in tax.

The Mendrisio property is situated just a few kilometers from the border with Italy and is the first Swiss casino reached by Italians motoring up from Milan. Although only allowed to offer three types of table games—Mendrisio chose roulette, blackjack and punto banco from the menu—their popularity with Italian guests inspired management to increase the number of tables from the original 24 to 31. The casino, which is owned by Novomatic subsidiary ACE, is also the first to offer multi-game slots that incorporate a recently allowed multi-level jackpot system. Previously, only “A” casinos were allowed to offer multi-level jackpots.

Casinos Austria (Swiss) AG is involved as a partner in the “A” casinos of Bern (13.5 percent), Lugano (29 percent), Luzern (45 percent) and St. Gallen (29.4 percent) and the “B” casinos at Pfaffikon (30 percent), Schaffhausen (14.8 percent) and St. Moritz (50 percent). All told, the company claims a 35 percent market share.

The near future will bring some of the same new challenges that other jurisdictions are undergoing. Smoking, or the banning of smoking, is beginning to become an issue as more local governments institute their own individual regulations. The market is also believed to be reaching its limits, with predictions of a slight reduction in GGR for 2008, around 3 percent. If that is the case, then all the prep work done by Swiss gaming authorities just might have resulted in getting the numbers right. For the moment.

By   Fri, May 02, 2008

It’s been hotly disputed for years, yet no clear answers have emerged. The issue: social costs of gambling. Why good data remains so elusive was the subject of a recent white paper by Douglas M. Walker, Ph.D., professor of economics at the College of Charleston, which was posted on the American Gaming Association website in January: “Challenges that Confront Researchers on Estimating the Social Costs of Gambling.” The paper was also the topic of a February article in Global Gaming Business.

It’s worth another look as to why there is still “little consensus on the validity of any of the numbers,” as Walker points out. What stance do casino operators take on the issue, especially when entering new jurisdictions or during relicensing hearings? And are there any clear solutions in sight? We’ll look at these questions and more as a follow-up to Walker’s white paper.

It’s not hard to see why the debate rages on. With pressure from policy-makers and communities for hard numbers and accurate statistics, and with pro- and anti-gamers marshaling their forces on either side of the issue, researchers feel compelled to provide information. But here’s where it gets tricky.

It’s been difficult to agree on a definition of the term “social cost,” much less measure actual hard costs in dollars and cents. For years, Bill Eadington, professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno, has recognized the complexities inherent in the issue: “Estimating the social costs of gambling is no simple task; rather, such an undertaking is fraught with conceptual and empirical difficulties.”

As Walker points out in his white paper, the task hasn’t gotten any easier. In a follow-up conversation about his paper, he comments: “Many researchers seem to downplay those fundamental problems in estimating social costs. It appears that, since politicians want cost estimates (this is understandable—they need something on which to base their policy decisions), there are researchers willing to provide them, no matter how baseless they are.”

The social cost question is rendered even more volatile because the nature of the industry tends to polarize opinions: “The casino issue remains highly controversial and political, especially where it is still under consideration for legalization or liberalization,” says Eadington. “Thus, both sides have a lot of reason to exaggerate their positions.”

In addition, fuel has been added to the fire by the media, notes Eadington, in that “the media has provided a willing outlet for a controversial issue.”

Casino operators find themselves frustrated by the lack of consensus on estimates of social costs and sometimes sketchy research methodology. “There just isn’t any solid data,” says Dean Hestermann, director of public affairs at Harrah’s Entertainment. “Most of this research simply shows that when you multiply one imaginary number by another imaginary number, you get another—really large—imaginary number.”

Rob Stillwell, vice president of corporate communications at Boyd Gaming, agrees that the lack of consensus on the data is a source of concern for the industry: “In order to set public policy, lawmakers need accurate data—not figures that might be inflated in order to support a writer’s personal biases or beliefs. That has been an ongoing problem in research on this topic, and public policy has often suffered as a result.

“Obviously, there are some social costs associated with pathological gamblers. We want and need to know what those costs really are. But it doesn’t help anyone to exaggerate or inflate those costs. If many factors are at work, addressing just one of those factors doesn’t solve anything.”

Commenting on Walker’s white paper, Stillwell says, “Dr. Walker makes a very good point—how much of the ‘social costs’ attributed to problem gambling are costs incurred directly because of gambling problems, and how much are linked to other issues, including smoking, drinking or drug abuse? Saying that every nickel of estimated cost is directly related to legalized gambling is dishonest and simplistic, yet many reseachers try to do just that.”

Real-Life Evidence

Hestermann explains that Harrah’s has chosen to take a different tack on the cost/benefit debate. “We don’t argue the issue in in the languages of economics or social science, but we point out real-life examples and the actual track record of casinos in scores of communities that have welcomed and lived with casino gaming for more than a decade.

“Debates are hot where facts are scarce,” he observes. But there’s no denying the facts as they exist in communities across the country, Hestermann notes: “Jobs are real, capital investment is real, absence of crime is real, the lack of impact on social services is real.”

Hestermann turns the tables on the debate, and squarely places the burden of proof on those opposed to gaming: “The burden should be on the anti-gamers to prove if the social costs exist on this order of magnitude. If in fact they did, there would be an outcry from all over the country. If social costs were on the scale that they are alleged to be, we would have seen a huge backlash from communities with casinos. But look at states like Iowa, where the public voted an overwhelming 80 percent ‘yes’ to continue to keep casinos. That says clearly the benefits far outweigh any social costs.”

It’s also enlightening to take a look at Indian Country for their experience on the issue. Jonathan Taylor, president of the Taylor Policy Group, provides economic and public policy research to tribal governments, corporations and consortia, and has authored a number of studies on the effects of gaming on Indian tribes. Taylor puts the social cost issue in a quadrant consisting of economic costs/economic benefits and social costs/social benefits. “A lot of times the debate focuses on only part of the quadrant—on economic benefits vs. social costs—but it’s important to consider the social benefits as well,” he explains.

Taylor has witnessed some dramatic social benefits in his work in Indian gaming. The “destination effect” of casinos is discernible in the data, he says, and translates to a rising economy and rising fortunes of the tribe. In his paper “The National Evidence on the Socioeconomic Impacts of American Indian Gaming on their Non-Indian Communities,” published in 2000 and co-authored with Matthew Krepps and Patrick Wang, he found: “Indian casinos have substantial beneficial economic and social impacts on surrounding communities. … No evidence of harmful economic or social impacts due to Indian casino introduction is discernible in our 30 indicators of economic and social health.”

In Indian country, he explains, “The economic and employment benefits that come with casinos also extend to social phenomena.” So positive economic forces can help create positive social trends and bring social benefits as well.

The Debate Continues

With studies disputed by counter-studies, is there an end in sight to this debate? Not according to the research community. Eadington notes: “Regrettably, the social cost issue is inherently difficult to measure, so there is not going to be a resolution to this issue. You will instead see some very clever posturing on both sides to reinforce their positions.”

In his paper, Walker proposes some alternative methodologies to measure social costs (see table). But he’s still not entirely satisfied, describing them as only a “slightly less imperfect way” to evaluate the issue. The next step, he says, is “to try to develop some ways around the problems I’ve discussed in the AGA paper. That is very important, but also very difficult.”

The costs of illness literature for substance abuse or alcohol abuse related to cost/benefit analysis may show some promise when applied to problem gambling. Walker comments, “It may be a way we don’t have to reinvent the wheel—but researchers have been looking at those issues a lot longer than we have in gaming and still haven’t come to a resolution on the social cost problem.”

From an operator’s perspective, Walker’s paper again reiterates the challenges in measuring social costs and provides a call to action for solid methodological approaches. Hestermann notes, “As Doug Walker indicates in his article, the notion that we are going to get consensus that social costs equal X dollars is just not reasonable. Any progress we can make in the direction of better estimates is good—if we can’t arrive at a consensus, perhaps we can narrow the range of reasonable estimates.”

From Stillwell’s point of view, “Yes, there are social costs associated with pathological gambling. We are committed to helping them and minimizing the costs they incur on our communities. While we know that we’re talking about a very small percentage of the adult population—less than 1 percent, according to the National Center for Responsible Gaming—we have always embraced the idea that one pathological gambler is one too many, and anything we can do to address this issue directly, we wholeheartedly support.”

Is there a perfect methodological approach to measuring social costs? Eadington describes what it could look like, but is less than optimistic it will happen: “It would be ideal to have disinterested social scientists working toward methodologically clean analysis on this controversial question, but that is hard to achieve. I think that is what Walker is advocating, but both sides have the tendency to evaluate information based on how they support their pre-determined positions, rather than based upon its validity in an objective sense.”

With no resolution in sight, Walker can only predict: “The debate will go on for some time.”

By Andrew Smith   Fri, May 02, 2008

While gaming opponents and proponents have debated the costs and benefits associated with commercial casino gaming for generations, the vigorousness of this debate reached new levels during the late 1980s and early 1990s when a number of states, particularly in the Midwest and South, turned to casino gaming as a means for promoting economic development, creating jobs and generating additional tax revenues for state and local government.

Since that time, and through the days of the National Gambling Impact Study Commission, which issued its final report in 1999, a small but vocal cadre of gaming opponents, aided and abetted by an uncritical media establishment, has been “carrying the water” for what probably appears to casual observers and the general public to be a more broad-based movement. Let’s shed some light on the nature and makeup of the central figures in opposition of gaming in the U.S. today and illustrate how shaky the ground is upon which many of their intellectual arguments rest.

The Evolution of the Arguments Against Gaming

While anti-gaming groups have been around for more than a century in the United States, the nature and content of their opposition has clearly evolved over time. The frequent ties between religious institutions and anti-gaming forces, particularly in the early years, were unmistakable.

These connections remain in place today, but an important realization has occurred. While the central critique of opponents had for decades been focused on the failings, sins and moral weaknesses of those who chose to gamble (particularly those who did so to excess and who we might today characterize as disordered or problem gamblers), they came to realize more recently that if they fought the battle for Americans’ hearts and minds on this field, they would lose. Today, while still harboring, but publicly suppressing, this underlying moral hostility to gaming, opponents have chosen to no longer attack the individual gambler but rather gaming companies on two central grounds:

Gaming companies and the individuals who work for them are purveyors of a predatory product and are solely interested in profit-making. A large percentage of their customers are either addicted to their product or are unwittingly drawn to casinos by ultra-savvy marketing campaigns and promotions. Elected officials stand on the sidelines because they too are addicted—addicted to the tax revenues gaming generates.

The benefits derived from casino gaming in the form of jobs, capital expenditures, tax revenues and more are exceeded by the costs associated with it. The host of social ills directly attributable to the existence of commercial casinos in the U.S. literally runs the gamut—addiction, suicide, divorce, bankruptcy, prostitution, white-collar crime, unemployment, etc.

As various states and communities around the country debate whether or not casino gaming is the right choice for them, they have a right to know who is driving the arguments just described and on what grounds these arguments are being made.

Poor Scholarship Lives On

The media play a significant role in allowing “bad science” to take on a life of its own and to remain a part of the public discourse for far longer than it deserves. The following are just a few examples of this:

1—The American Insurance Institute estimates that gambling today is the root of at least 40 percent of all white-collar crime. First stated in a 1992 report published by Minnesota Planning, a public policy think-tank located in St. Paul, Minnesota, this erroneous information got new life after Robert Goodman passed it along as fact in a widely circulated work Legalized Gambling as a Strategy for Economic Development. The extent of Goodman’s poor scholarship is underscored by the fact that no organization by the name of the American Insurance Institute even existed at the time! Professor Joseph Kelly of the University of Buffalo actually published a Gaming Law Review article that detailed the extent to which elected officials and some of the most prominent U.S. newspapers had continued to cite this alleged AII study.

2—For every dollar in tax legalized gambling activities actually contribute in tax revenues, taxpayers are really losing $3 or more. John Warren Kindt, another anti-gaming academic in the mold of Earl Grinols (they in fact continually cite each other’s work so as to give off the impression of broader acceptance of their findings) made this assertion during testimony before the National Gambling Impact Study Commission in 1998, and yet it has no independent, peer-reviewed research to support it. Moreover, many of the calculations that went into creating this $3-to-$1 ratio, such as increased incidence of crime, have proven questionable due to a lack of rigorous scholarship.

Just last month, the New York Times quoted Earl Grinols once again. He asserted that, “pro-gambling interests lose referendum battles whenever they do not outspend their opponents by at least 75 to 1.” While hardly the kind of information on which one would think a trained economist would be focusing, one would have hoped for more discrimination from a top-tier news organization before going to print. Regrettably for the sake of a fact-based discourse on the merits of commercialized gaming, casino companies make inviting targets and sell papers. Opponents of gambling have long used this fact to their advantage; let’s hope for a future where facts trump sound bites.

The Cast of Characters

Those opposing gaming are predictable and ever-present in anti-gaming campaigns. The following “players” appear in front of many government panels examining gaming even though their arguments and methods have been discredited for the most part.

Robert Goodman—It is probably fair to characterize Robert Goodman as one of the godfathers of the modern anti-gaming movement. His book, The Luck Business, which was published in 1995, sparked interest from the press and certainly led to his later being asked to give “expert” testimony before government officials on the costs and benefits associated with legalized gambling. In the opening paragraph of the aforementioned book, Goodman also notes that in 1992, he had become the director of the United States Gambling Study, which he carefully points out, “didn’t take a moral position for or against gambling, but its conclusions turned out to be critical of gambling.”

The study should not be confused with the very official-sounding United States Gambling Research Institute, which Goodman also founded at the time with what has been reported as modest funding from the Ford Foundation and the Aspen Institute, and to which he had also appointed himself director. When not attending to his dual-directorships, Goodman was, and still is, a professor of environmental design at Hampshire College.

Unfortunately, for those who were interested at the time in reading a well-researched and dispassionate examination of the costs and benefits associated with gaming, The Luck Business let them down. Taking aside for a moment any question of biased reporting, Goodman’s work has a very fundamental problem of arriving at conclusions with little quantitative data to underpin his arguments. He admits to beginning his examination of “American’s Gambling Explosion” in early 1992, yet at the time, outside of Nevada and New Jersey, only Colorado, Illinois, Iowa and South Dakota had operating commercial casinos. In the case of the first three states, casinos had been open only a matter of months by the time Goodman began his “research.”

David Rados of Vanderbilt University reviewed The Luck Business in the Journal of Macromarketing in 1996. In it, he states, “Goodman chooses his facts, not with the aim of informing, but with the aim of drawing an emotional response. He rarely takes up opportunities to present information in a balanced way.”

Robert Detlefsen, in a contributing piece for Reason magazine, takes an even more in-depth look at Goodman’s past and his work. Detlefsen effectively argues, that when one looks at The Luck Business in the context of Goodman’s prior work, his bias is not against gambling as an activity per se (Goodman admits to being fond of poker) but rather against gambling as a profit-making industry and enterprise.

In After the Planners (1971), Goodman was less circumspect about his distaste for free markets and capitalism. For example, he writes, “Our problem is not simply to destroy capitalism, but to do this through the creation of a culture which will not tolerate the repressive and competitive values which capitalism has already induced us to accept.”

Thus, when Goodman suggests in his later work that government could “properly redirect” the gaming industry toward the “development of non-gambling ventures,” it does not take great imagination to see where a man with such strong socialist leaning might be heading.

Tom Grey and the National Coalition Against Legalized Gambling—If Robert Goodman is one of the intellectual godfathers of the anti-gambling movement in America today, then Reverend Tom Grey is probably best described as their most visible foot soldier.

A former Methodist minister, he became an energized opponent of gaming shortly after riverboats began operating in his home state of Illinois. As field coordinator, national spokesman and board member for the National Coalition Against Legalized Gambling, he has worked, primarily through churches and religious institutions, to bring together the state and local organizations that share in his mission. Grey and the 22 other members of the NCALG’s board of directors represent 10 anti-gaming organizations and six religious organizations from 14 states and the District of Columbia.

Despite characterizing the NCALG’s mission as “a battle for the soul of America,” Grey is a keen strategist and realized early on that “if we based our opposition on personal morality, we would lose” (Time, April 1996).

His revamped strategy recently took the form of a fiery condemnation of elected officials in a speech to the National Council of Legislators from Gambling States. Grey called the legalization of gambling “a bad means to provide government’s ordinary ends,” and thus accused the legislators of “trying to bleed their neighbors” and “preying on their most vulnerable citizens.”

What his statements of course do not address are the specifics. How, for example, is the gaming industry bleeding local residents on the Mississippi Gulf Coast where they have invested hundreds of millions of dollars and provided thousands of jobs since hurricanes Katrina and Rita hit in 2005?

What basis does he have to claim that casinos take advantage of the most vulnerable when survey research has repeatedly demonstrated that casino customers on average are more affluent and more highly educated than the average American adult?

Grey’s gift for inflammatory and provocative rhetoric (he has called gambling “nothing less than a new institution of slavery”) may add fuel to the fire when he speaks to like-minded audiences, but his words hardly match the realities on the ground in gaming communities around the country nor do they add much substance to ongoing debate concerning gaming’s true costs and benefits.

Earl Grinols—Earl Grinols is probably the most frequently cited academic in the anti-gambling community, yet despite having impressive scholarly credentials (Ph.D from MIT), his body of work on the costs and benefits associated with the gaming industry can aptly be characterized as biased, methodologically unsound and littered with unsubstantiated claims.

His book Gambling in America: Costs and Benefits, published in 2004, is a prime example of this. What serious scholar or academic would, for example, state, “Examples of crime caused by gambling are not difficult to find; a search of the Internet and America’s newspapers and magazine is all that is required?”

Grinols followed up this statement by using a full 20 pages of his book to provide his readers with short quotes from newspapers in both the U.S. and Canada allegedly proving the link between casinos and increased incidence of crime. This is hardly the rigorous scholarship a subject of this magnitude deserves.

Unfortunately, but predictably, Grinols’ work errs in other significant ways. His estimates of the social costs attributable to problem and pathological gamblers rely on the average cost estimates of previously conducted studies, but a number of these earlier studies are themselves examples of questionable science.

The Politzer, Morrow and Leavey study that Grinols makes use of was conducted in 1981 using an incredibly small sample of 28 disordered gamblers. Researchers at the Wharton School at the University of Pennsylvania in a paper published in 1998 said of the research, “The fundamental limitation of Politzer et al’s work for analysis of the social costs of problem gambling is clear.”

The fact that Politzer’s study was more than two decades old, relied on a statistically unreliable sample and had received withering fire from other academicians did not deter Earl Grinols.

The degree to which Grinols might let his zeal and own personal beliefs about gambling impact his research is a matter of debate. Grinols, for example, presented a paper in 1997 entitled “Piety and Political Economy,” in which he details the important role his Christian faith plays in how he approaches his professional life as an economist.

In it, Grinols writes, “It is axiomatic that, as a group, Christian economists should be different in what they do. That is, the choice of topics and the professional endeavors to which they devote themselves should look different in some way than for non-Christians.”

By Frank Legato   Thu, May 01, 2008

“Keep your filthy hands off Atlantic City and keep the hell out of our state!”

This was the famous line directed at organized crime by former New Jersey Governor Brendan Byrne after he signed the Casino Control Act in 1977, officially ushering in Atlantic City’s gaming era. At the time, many reporters undoubtedly licked their chops, looking forward to the times they could throw that line back in Byrne’s face.

After all, this was New Jersey, right? How, they reasoned, could a business like casinos—their only record at the time being the infamous and, at the time, still-strong mob control of gaming in Nevada—avoid mob infiltration in a state that was one of the cradles of the Cosa Nostra in America?

Thirty years after the first casino opened, reporters have had almost no occasion to bring that quote up in a story, because, by and large, organized crime has kept its “filthy hands” off Atlantic City gaming.

New Jersey succeeded in keeping the business clean by starting out with a regulatory structure that some called cumbersome, and others complained was absolutely stifling to the normal conduct of business. Those initial rules would be relaxed eventually, but not at the expense of strict integrity within the industry, and not before the gaming industry had begun its expansion beyond Nevada and New Jersey to become a nationwide business that was recognized and respected.

“We had to ensure integrity in the very beginning,” comments Linda Kassekert, chairwoman of the New Jersey Casino Control Commission. “We had to prove ourselves, being the second jurisdiction after Nevada to get gaming, that this was a business as pure as it could be, as clean as it could be… Had my forebears not been as stringent, we might be looking at a very different Atlantic City today. Just the fact that we have such a good national, and even worldwide, reputation is really a testament to those early days.”

The Other Extreme

Those early days were legendary in their definition of the term “strict regulation,” and, some would argue, “over-regulation.”

“I think ‘cumbersome’ is a mild word, because initially, the regulations were beyond cumbersome,” recalls Mac Seelig, founder and president of AC Coin & Slot, one of the first vendors to Atlantic City casinos. “They were costly to all of us as vendors—the additional costs we had just to get licensed, to have the state come and inspect our facilities, and so on. The legal fees alone on our side were just unconscionable.”

Seelig adds that when the initial regulations were relaxed in the 1990s, all realized that they had been necessary to establish the reputation for integrity that New Jersey gaming has since enjoyed. “The job was done so well by the operators and the regulators initially that it left all of us, those still here standing, doing very well,” he says.

That didn’t change how difficult it was initially to do business in Atlantic City. However, as noted by the people who created that initial regulatory structure, the difficulties arose from safeguards deemed necessary to maintain a squeaky-clean local version of an industry that traditionally was anything but squeaky-clean.

“Remember, when we built the regulatory structure, first, we were working from scratch,” says Judge Steven Perskie, who, as an attorney and a state lawmaker in the 1970s, was a main force in drafting what would become the Casino Control Act. “We had nothing to go by. Second, we were dealing with the specter of an industry that had a corrupt reputation, in a city and state that both had corrupt reputations.”

Perskie, who would go on to serve as perhaps the most influential head of the Casino Control Commission during the 1990s, says he actually drafted and published what would become the Casino Control Act before the 1976 election, so voters would get a complete picture of what the casinos would look like. Though borrowing the best from the statutes of jurisdictions where gaming was legal, he didn’t simply copy existing rules.

“We had to create a structure that met New Jersey’s needs,” he says. “We were acutely aware of New Jersey’s climate and history, so we made the strategic decision that the regulatory system was the key—because the regulatory system had to be and to be seen as being independent and strong, and free from political pressures, completely isolated from the normal New Jersey political system.

“That’s how we came up with the idea for a two-agency system—the Casino Control Commission, an independent agency; and the Division of Gaming Enforcement, which is organized within the Attorney General’s office.” It is a system that eventually would become a model for new gaming jurisdictions across the world.

“It kept the mob out,” says Pat Dodd, a state senator in the 1970s who was later a Casino Control Commission member under Walter Read and Perskie. “That was the major success of the Casino Control Act.”

Joel Sterns, the attorney representing Resorts during the licensing hearings, explains that his clients were part of the process of writing the regulations, but had no problem with integrity issues.

“We wanted to concentrate on business issues,” says Sterns. “If they wanted a cocktail waitress to fill out 100 pages to get a license, that was OK with us. Just let us run our business and make money for our company and the state.”

Tough Years, Tough Decisions

While the Casino Control Act would go on to become the model for new gaming jurisdictions, the early years of gaming in Atlantic City would see strict application of the law by regulators who were mainly from the realm of law enforcement.

The first chairman of the Casino Control Commission, the late Joseph P. Lordi, was a former Essex County prosecutor (as was Byrne), and both the commission and the DGE were replete with law enforcement experience.

“Joe Lordi ran the commission as a startup agency very well,” comments G. Michael Brown, who went on from a position as prosecutor under Lordi in Essex County to become the second director of the DGE in 1980. “He had been the Alcoholic Beverage Control director and first assistant prosecutor under Byrne—he became prosecutor when Byrne became governor, after which Byrne drafted him to head the new agency. He wanted law enforcement presence on the commission.”

Byrne also sent the word down to the early commission that the Casino Control Act was to be interpreted strictly—much to the chagrin of operators during the early 1980s.

And to make matters worse, the election of Tom Kean as governor, and appointment of Walter Read as commission chairman, ushered in a period that was very much adversarial between the regulators and operators in Atlantic City.

Dennis Gomes, former president of the Tropicana and now head of Cordish+Gomes Gaming, was an investigator for the DGE at the time. His law-enforcement reputation was stellar. He had helped to bring down Frank “Lefty” Rosenthal, one of the last mob associates to still control a Las Vegas casino, during his time as a Nevada investigator. In New Jersey, Gomes said he was given free reign with a special task force.

“We were told that we had complete autonomy in our investigatory procedures,” he says.

After he crossed international borders to prove that Resorts had been making payments to relatives of Bahamian politicians, his group was disbanded.

“We were disappointed, but there was a lot of pressure to get Resorts licensed,” he says.

The regulatory controls, designed to keep organized crime out, extended to every aspect of casino operations. At least 5 percent of slots had to be nickel games. A certain number of $2 and $5 blackjack tables needed to be in play at all times. Minor changes in operations—even the colors of the bathrooms, by some accounts—had to be approved by the commission. Any introduction of new games had to be approved by the legislature.

“Unfortunately, we placed burdens on businesses and on ourselves—we didn’t know when to stop,” says Dodd. “It wasn’t until the late 1980s that it became very clear that we were doing it wrong.”

The 1980s also were marked by several controversial licensing decisions, leading up to the most controversial of all, the denial of a gaming license to Hilton Hotels Corporation in May of 1985.

It wasn’t the first controversial decision—the DGE recommended against licensing for Resorts International, the first casino, citing a total of 17 points to which objections could be raised. Brown, who worked on the Resorts licensing hearing as an attorney for the commission, says the panel ultimately decided none of the points rose to the level required for a license denial.

Sterns agrees. “We were able to explain that all the objections were minor issues,” he says. “Even the issue of payments to Bahamian companies could be justified as normal payments for services rendered.”

After the Resorts licensing, the commission adopted a policy of conditional licensing, which had major ramifications for the companies involved. Stuart and Clifford Perlman, the founders of Caesars World, were found unsuitable because of past business dealings with alleged criminal figures. Caesars Boardwalk Regency (later Caesars Atlantic City) was given the condition of the Perlmans’ resignation before a license would be issued. The Perlmans resigned.

Bally’s Park Place (now Bally’s Atlantic City) encountered a similar problem—the board ruled that William O’Donnell, founder of Bally Manufacturing, was unsuitable for licensing. O’Donnell stepped down from the famous company he had founded, to allow it to cash in Atlantic City gaming. “It was heart-wrenching,” comments Brown. “Bill O’Donnell had founded Bally, and had relationships with some vending machine companies that were wrong 30 years ago. He had seven children; we let him give his stock to his seven children.”

Playboy was next; the commission found CEO Hugh Hefner unsuitable for licensing. Playboy chose to keep Hef, selling its half-interest in the Playboy Casino to partner Elsinore Corporation.

The granddaddy of them all, though, was the Hilton decision. No one expected Hilton to be denied a license, least of all the famous company’s executives, who oversaw construction of a Marina District casino hotel that was nearly complete at the time of the decision. When the commission denied Hilton’s license, it sent a chill through the industry that undoubtedly caused some companies to second-guess investing in Atlantic City. (The near-complete casino, along with its hired employees, were snatched up by Donald Trump for what is today Trump Marina.)

According to those involved with the decision, the Hilton was denied licensing because of an arrogant attitude toward the commission’s concerns.

The board questioned Hilton executives, and their lawyer, Bud Foley, about two separate problems—one involved the company’s 13-year employment of a Chicago attorney with alleged links to organized crime; the other involved an internal corporate investigation into alleged misconduct by Hilton executives in San Francisco. The latter investigation produced a report that company executives withheld from the commission until the day it was to render its decision.

Carl Zeitz, one of the two commissioners who voted against Hilton’s licensing in 1985, says it was the attitude of Hilton officials with respect to these concerns that ultimately led to denial of the company’s license.

“There was a lack of acknowledgement by the Hilton corporation of the severity of these issues,” says Zeitz, who is now a consultant to the industry on regulatory issues. “Measured against the standards that had been established in the earlier cases, Hilton was not measuring up as far as being forthcoming in dealing with those issues. They were not treated with the measure of gravity they deserved.”

Perskie agrees, noting that when Hilton came before the commission again in 1991 when he was chairman, they came in with a different application—and a different attitude. “Their application acknowledged that they shouldn’t have been involved with those people,” he says. “They had established a compliance structure within the corporation to monitor all associations and investments. They said, ‘We’ll give you access to it.’ Guess what? That’s all we were looking for.” Hilton was quickly approved for a license on the second try.

A New Era

The election of Jim Florio as New Jersey governor ushered in a new era of cooperation between Atlantic City regulators and operators. Florio’s appointment of Perskie as chairman of the Casino Control Commission began a partnership between the industry and its regulatory agencies that continues to this day.

The changes actually started when Dodd became a commissioner, under Read. Dodd became the lone voice for reform of the commission’s procedures, but when Perskie was appointed chairman, he says, everything changed.

“I had lists—suggestions, not just complaints—on how we could tweak the entire process,” Dodd says. “Perskie adopted virtually everything, and then, to his credit, went on to other innovations. It was a watershed change.”

“When I became chairman,” recalls Perskie, “there were two different realities. One, on a person-to-person basis, we had the finest government agency I’d ever seen. By the same token, though, by 1990, the industry had been here 12 years, and nobody had ever sat down to do a substantive and comprehensive analysis of whether the regulatory structure and its systems were still serving the appropriate public interest.

“The good news is that the system worked; the bad news is that by 1990, it was sclerotic—it was using 1978 techniques and 1978 ideas to deal with an industry and reality in 1990.”

One by one, the restrictive regulations began to give way to more business-friendly rules. Casinos no longer had to go the commission to change the colors in their restaurants, or for that matter, to reconfigure slot floors. Decisions on new casino games are now the responsibility of the commission, not lawmakers in Trenton. The rules on approval of slot machines, once a laborious process in New Jersey, were streamlined to allow slot game approval that is now among the quickest in the industry.

After hundreds of regulatory and administrative changes, Atlantic City casinos entered their golden age, and became darlings of Wall Street in the process.

However, of all the changes made, Perskie notes that the controls in place to prevent crime remained among the most strict in the industry.

Even the more restrictive early days of regulation, though, played an important part in the development of the casino industry in general. For instance, the so-called “50 percent rule,” which held in the beginning that no one slot manufacturer could occupy as much as half of a casino floor, allowed a slot sector dominated in 1978 by one company—Bally—to flourish with a variety of new manufacturers, not the least of which was International Game Technology.

“That was such an evolutionary step for the industry,” notes AC Coin’s Seelig. “It’s the reason IGT and all those other folks are in the position they are today. It was a good thing; it changed technology.”

Even the most restrictive of the early regulations and the toughest commission decisions were not necessarily a bad thing, notes Zeitz. “They were part of a body of decisions that ultimately established principles under which other states realized you can establish a casino industry. Had similar principles been established in other industries, you might not have had an Enron or similar scandals.”

Sterns says even Nevada is better off now that New Jersey regulations proved to be so successful.

“In the beginning, they laughed at us,” says Sterns. “But now, Nevada regulations are the equal to if not even tougher than New Jersey. And all other states look to New Jersey today in addition to Nevada, so the two states really are the gold standard of gaming regulations.”

“Casino gaming is legal in 38 states now, and probably 70 percent of them drafted their regulatory model around New Jersey,” says Brown. “I worked in two states in Australia, and both used the Casino Control Act of New Jersey as the basis for legalizing casinos.

“New Jersey gave legitimacy to the casino industry.”

By Roger Gros   Mon, May 26, 2008

By Roger Gros   Sun, May 18, 2008

By Roger Gros   Mon, May 12, 2008

By Frank Fantini   Mon, May 05, 2008

After suffering through accelerating declines from 2007 through early this year, gaming stocks appear to have settled into a range, albeit a low one.

Unfortunately, the prospects for a quick rebound do not appear to be in the making.

Indeed, while the worst of the financial and credit crises might be behind Wall Street, the deepening recession may be just starting to dampen Main Street. And, with their new revenue models that count on customers spending liberally outside the casino floor, this industry is no longer recession-proof.

The first place to look for an impact on consumers is in gaming revenues, which should be the most stable part of the casino business. That picture has not been pretty.

Revenues declined in almost every gaming state in America in January and March. February figures were up, but only because leap year added 3.7 percent more gaming time, and a Friday, at that.

But even with that help, revenue in Nevada fell. Interestingly, revenue dropped double digits in the Boulder Strip and North Las Vegas districts, while rising slightly in affluent areas around Las Vegas, perhaps adding to the idea that working families are financially stressed, especially in the wake of the housing bubble bursting.

Here are some factors that make an early turnaround unlikely:

Increasing competition. Atlantic City is the poster child for what happens when competition increases. Revenues have declined while the cost of enticing players has increased. Eventually, Atlantic City will work out as it replaces low-value day-trippers with bigger-spending overnight guests. But that will take time, and cost billions of dollars to build must-see properties and add enough hotel rooms.

Macau and Las Vegas also face new competition. In Macau, this may be just a matter of absorbing new capacity as the market grows. But in Las Vegas, there is concern about filling 40,000 new hotel rooms, all aimed at the same upscale market segment.

Expanding too slowly. Ironically, while gaming is expanding rapidly in meccas such as Macau and Las Vegas, growth is excruciatingly slow in the hinterlands.

It is difficult to legalize casinos even where popular support and a strongly pro-gaming governor exist, as has been seen this year in Kentucky and Massachusetts. And even where gaming is new, development and ramp-up can be slower than expected, as we see in Florida, Illinois and Kansas.

Credit markets. Casinos face two problems with credit markets: 1) There is little or no money available for new projects; 2) if it is made available, it will be at rates so high that the old standard of 20 percent returns is long gone.

In that environment, casinos have several unhappy choices: Put in more money as equity. Borrow at high rates and accept lower returns on investment. Shelve the projects.

To date, downsizing, delaying and shelving have been the choices. It is difficult, after all, to put more money into a multibillion-dollar project that may get just a 10 percent or 12 percent return, if it gets even that, or to attract investors or lenders in that environment.

Smoking bans are coming fast throughout the country, and they definitely have negatives effects. Just look at the double-digit revenue declines in Illinois. Or the devastation done to Nevada’s slot route industry.

The day will come when the impacts of the smoking bans are reversed, but that process will not start for a least a year after the bans are implemented, and then growth will resume from a lower base, and some business, especially at the high end, may be lost forever.

Tax increases are always a risk to the casino industry, as we’ve seen in state after state.

Now, we have two new phenomena. States now considering legalizing casinos are proposing 50 percent and 60 percent tax rates that simply make full-fledged casinos unattractive investments. And Nevada, of all places, might raise its tax by 44 percent from 6.75 to 9.75 percent.

The Nevada tax would be small compared to other states, but the multibillion-dollar, extravagant mega-resorts that make Las Vegas a worldwide destination are based on the economics allowed by the low rate.

And if Nevada increases its tax, as seems sure to happen if left in the voters’ hands, will New Jersey be far behind?

So what is an investor who wants to take advantage of what is still a growing industry
to do?

Gaming suppliers are one thought. All those new and expanded casinos in the world, from the Far East to Las Vegas mega-resorts to Indian Country, need slot machines and gaming tables.

That should make a bright future for IGT, Bally, WMS, Aristocrat and Shuffle Master, among others, despite what might be a slow 2008 as casinos cut back buying to save money.

Among the suppliers, investors should look at companies whose products save money for casinos or increase plays. That should be true of all the companies mentioned above, as well as Progressive Gaming International and some
others.

As for casino companies, now could be the time for truly long-term investors to buy solid big-cap names such as MGM Mirage, Wynn and Las Vegas Sands, and ride out the storm.

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

By GGB Staff   Mon, May 05, 2008

• The casino business has turned Macau into the world’s 20th richest economy, according to the South China Post. Macau has passed Singapore, Brunei and Japan to become the leading economic territory in Asia, with per capita GDP equal to $36,357 in 2007, according to Macau government figures.

• The government of Ukraine will begin a broad review of existing gaming legislation and regulations. Problems have arisen from the fast-growing gaming market and some lawmakers favor restrictions as radical as prohibition. The government, however, is said to be more concerned with looking at areas such as player protection and money laundering.

• The Ministry of Popular Power for Tourism in Venezuela has published a resolution ordering the National Commission of Casinos, Bingo Halls and Slots to abstain from issuing or renewing licenses for the next three years. The ministry also banned the casinos, bingo halls and slot machines from shopping centers, national parks and national monuments.

• The Tahoe Biltmore Lodge and Casino will see some changes in the coming months as part of a $1.5 million renovation project. General Manager John Muller said the property will feature updated slot products, a new entertainment venue and a VIP room on the casino floor.

• In the midst of a $215 million renovation project, Planet Hollywood Resort managed to show signs of improvement by trimming its net loss by more than 20 percent last year. Not only did this turnaround come during the facelift that removed any vestiges of the old Aladdin, but it also came despite a reduction in net revenue of 3.6 percent. Casino revenues were up 9 percent over 2006 and daily occupancy rates were up 4.7 percent.

• The Strip site of the proposed $5 billion Crown Las Vegas is for sale, the Wall Street Journal reports. “Unable to come up with the increased equity demanded by lenders, developers last month put the site up for sale with CB Richard Ellis Group Inc. and Goldman Sachs,” the paper reported. The proposed Crown Las Vegas is not necessarily dead, with project principals James Packer and Christopher Milam looking for another equity partner to keep it moving forward. The 5,000-room hotel tower would have been the tallest hotel tower in Las Vegas.

• Indiana’s two horse-racing tracks, Hoosier Park in Anderson and Indiana Downs near Shelbyville, received final approval for their $250 million licenses to run up to 2,000 slot machines each from the Indiana Gaming Commission last month. Hoosier Park expects to open its racino in June, including two $100 slots and a “New York” deli. Indiana Downs is building a $170 million facility with a NASCAR-themed sports bar and high-end steakhouse.

• It looks like Atlantic City gamblers will be able to light up only in non-gaming, unstaffed lounges at the city’s 11 casinos. Last month City Council unanimously approved a measure that will prohibit smoking on all casino floors. The ordinance, which has the support of Mayor Scott Evans, is expected to pass after a second reading later this month. Then casino officials will have until October 15 to construct the ventilated smoking lounges. The Casino Association of New Jersey had argued that a full smoking ban could lead to a further decline in gaming revenue and the potential loss of thousands of casino jobs. Trump Entertainment CEO Mark Juliano called the lounges “a middle ground.”

• Jasper County, Iowa voters last month rejected casino gaming in the county by 62 percent to 38 percent, according to unofficial tallies. Casino proponents had wanted to build a casino hotel complex next to the Iowa Speedway near Interstate 80 in Newton. The Iowa Racing and Gaming Commission is conducting an economic study of the state’s gaming industry and is tabling any further new casino licenses, although several other communities besides Newton have shown interest in them. They include Ottumwa, Fort Dodge, Tama and Franklin County.

• Mayor A.J. Holloway signed a zoning change that would allow the South Beach Resort and Casino in Biloxi, Mississippi, sending the project to the state gaming commission for final approval. The project has been criticized as an attempt to expand gaming along the entire beachfront of the city, a criticism Holloway dismisses. “Since there is already development on the south side of the Biloxi Strip, near where Gold Coast is proposing to be located, I do not believe this project would create pressure to open the entire beachfront to casino gaming,” Holloway said. “In fact, this land was zoned for casino development from 1993 until recently, so we’re not changing the rules for the casino resorts that are already here.”

• Connecticut Governor M. Jodi Rell has asked top state legislators to withdraw a bill that would include the Mohegan Sun and Foxwoods tribal casinos in a statewide smoking ban so she can negotiate the issue with the owners. That might avoid a likely legal battle predicted by the state attorney general, but both operators have said they won’t enter discussions while the bill is in process.

• The U.S. Bureau of Indian Affairs has issued a final environmental impact statement on a North Richmond, California, casino proposed by the Scotts Valley Band of Pomo Indians. Comment ends April 28 on the EIS for the 225,000-square-foot complex, proposed about four years ago amid a flurry of public protest. The agency continues work to decide whether the site near San Francisco Bay qualifies as restored land for the currently landless tribe’s 219 members.

By Roger Gros   Mon, May 05, 2008

By GGB Staff   Fri, May 02, 2008

Jon Porter was installed as the first representative of Nevada’s newly created Third District in January 2003. The district includes parts of metropolitan Las Vegas, all of Henderson and Boulder City. Porter is a member of, or has served on, several committees in the House of Representatives: Ways and Means, Budget, Education and the Workforce, Transportation and Infrastructure and Government Reform. Formerly an elected official in Boulder City, Porter was elected to the Nevada Senate in 1994. Despite coming from the only city in Nevada without gaming (Boulder City), Porter has a keen understanding of the importance of the state’s casino and tourism industry. His ability to represent both the industry executives and its employees are appreciated from the boardroom to the dining halls. Porter spoke with Global Gaming Business Publisher Roger Gros in his offices in Washington, D.C., in February. To hear a podcast of the interview, during which Porter discusses his efforts to increase tourism in Nevada, the housing crisis and more, go to www.ggbmagazine.com and click on the GGB Podcast button.

GGB: There used to be a gaming caucus that Senator John Ensign started when he was in the House of Representatives. Is that still active?

Porter: Yes, there still is a caucus. Congresswoman Shelley Berkley and (New Jersey Congressman) Frank LoBiondo and, of course, a few others are involved. Where we really get engaged is when there are key issues before Congress. We’ve faced serious setbacks with Katrina and what happened to the industry with some of the tax proposals. So we geared up.

We see each other most every day, but when there’s a crisis, we get together even more. And gaming now is in most every state in some shape or form, so it’s very important to many members of Congress.

Indian gaming is an issue that’s active on the federal level right now. There are a lot of discussions about revisiting this year the IGRA bill that passed 20 years ago. Are you in favor of revisiting that act?

Yes, and today is a good example. A hearing is under way about some possible Indian gaming properties in Michigan.

I think we should always be reviewing, looking at what is happening with this particular hearing that may well take away the state’s ability to make a decision. We have a few members of Congress that, in spite of the fact that Michigan voters were opposed, decided to bring it to Congress to make a decision which would change the whole process. I think it should be state-regulated and I think states should make the decision.

I am personally not very supportive of the reservation shopping. But I understand that most tribes are doing a tremendous job running their casinos. They treat their customers well, they’re professional, and I’m pleased that it has been successful. But I’m very concerned about the shopping. I don’t think that necessarily is a good thing.

A few years ago when the Democrats were in control of Congress there was a consideration of a federal excise tax on gaming, and now that the Democrats are back in control, have you heard any discussion of that at any point?

I think our industry is supported in a pretty bi-partisan manner these days. But this Congress is looking to raise, I think, the largest tax increase in the history of the country, a $200 billion to $300 billion increase. So I think that all businesses should be worried and be very cautious. I think that we have proven in the state of Nevada the success at regulating gaming and taxing it by the state, that it’s successful. It’s not a role for the federal government and we’re going to do everything we can to prevent that from happening.

Another federal issue that the industry is concerned about is online gaming. You have co-sponsored a bill to create a federal panel to study that. How would that work?

We know it’s a rough estimate, but experts say online gaming is a $12 billion to $15 billion-a-year industry and we want to make sure that it’s done properly and that there’s proper oversight. I’ve supported, sponsored and co-sponsored legislation with Congresswoman Shelley Berkley to provide a study so that we can find out the facts. It’s happening and we want to make sure there’s not an abuse happening. I think that this is a good way to do it.

Is your approach that “it’s happening and there’s not a whole lot we can do to keep it from happening, so we might as well control it and regulate it?”

I wouldn’t say that we can’t do anything but I know that, as a representative for Nevada, we’re proud of our industry and of our employees that make it what it is. I just want to make sure that there are not abuses happening. It’s very easy to take advantage of people when there’s no oversight and no regulation.

Your district in Southern Nevada has been growing so fast that it’s become something of a problem. Do you believe that there should be some sort of control over where, when and how the growth is contained here?

I think the way you properly plan growth is through planning and zoning through your local government. I think Nevada’s done a tremendous job with infrastructure.

We have something unique to the world and that’s part of what has helped develop our quality of life. People want to enjoy our community, and I don’t think it should be done from political measures, other than planning and zoning. As long as we have the proper amount of water, streets and highways, and schools… I think that’s how you handle it.

By GGB Staff   Fri, May 02, 2008

Century Casinos has appointed Paul Campbell as new managing director of its South African subsidiary, Century Casinos Africa (Pty) Ltd.

Campbell, who has been working as general manager of the Caledon Hotel, Spa and Casino for two years, will be responsible for the management of Century Casinos’ South African operations, which include the Caledon, Century Casino Newcastle and the food and beverage company, Celebrations.

Campbell has more than 16 years experience in the gaming and entertainment industry, where he mainly held management and senior management positions. He served as director of slots for Storm International in Moscow and deputy slots manager for GrandWest Casino & Entertainment World, Sun International, in Cape Town.

Rossouw Lubbe, who joined Century Casinos Africa as managing director in July last year, will shift his focus from operations to strategic compliance matters, corporate governance and Broad Based Black Economic Empowerment for the South African operations.

“This decision is a result of growing dynamic operations in South Africa and will ensure that our approach to strategic decision- making and corporate governance as well as our commitment to Broad Based Black Economic Empowerment will be augmented to an even higher level,” said Erwin Haitzmann and Peter Hoetzinger, co-CEOs of Century Casinos, Inc.

By GGB Staff   Fri, May 02, 2008

Dr. Tony Alamo Jr. is a well-connected player in Nevada politics, and he is looking forward to giving something to the community as the newest member of the Nevada Gaming Commission. The former Nevada Athletic Commission member said his position with the gaming commission may not be exciting, but it is important. “I know the enormous workload that’s involved to do the kind of job I want to do,” Alamo said. “I was born and raised in Nevada. Giving back to the community is something you’re supposed to do.

By GGB Staff   Fri, May 02, 2008

Spectrum Gaming Group last month announced the appointment of key executives in two new positions. Michael Diamond was named vice president of research, and Laura Westheimer was named vice president of the company’s expanded Las Vegas office.

Diamond has extensive investigative research experience, both in journalism and in government. He joined Spectrum after a 33-year career at the Atlantic City Press, where he served as a special projects writer, editorial page editor, statehouse correspondent and bureau chief, all of which involved frequent coverage of gaming-industry issues.

Diamond will head up Spectrum’s domestic and international research projects, including state economic-impact reports and regulatory investigations in Asia.

Westheimer will open Spectrum’s expanded Las Vegas office, from which she will manage the company’s Nevada services, including feasibility studies, market analyses, regulatory and due diligenceservices and litigation support.

Westheimer began her gaming industry career in 1989 in casino marketing at the Desert Inn. She went on to hold several management positions with the Grand Victoria Casino in Elgin, Illinois, and as corporate manager of special projects for Cannery Casino Resorts.

By GGB Staff   Fri, May 02, 2008

Wynn Resorts announced a new vice president of its design arm, Wynn Design and Development. Architectural interior designer Jerry Beale has been named senior vice president of design, joining Executive Vice President Roger Thomas in the creative leadership of Wynn Design.

Beale was previously a design principal for the Los Angeles office of Wilson & Associates, where he gained an international reputation for quality high-end hotel interior design. Among his noted projects are Hotel Bel-Air, Los Angeles, California; the Four Seasons Aviara Resort, Carlsbad, California; the Fairmont Hotel historic restoration in San Francisco, California; the Tokyo Twin Parks Towers in Japan; the Pool Villas for Caesars Palace, Las Vegas; the Mansion at the MGM Grand Hotel in Las Vegas; and the Royal Park Hotel at Landmark Tower, Yokohama, Japan.

By GGB Staff   Fri, May 02, 2008

Tropicana Entertainment appointed Scott Butera president as the company looks to improve its reputation with regulators in various jurisdictions. Butera, who is leaving the Cosmopolitan Resort in Las Vegas for the new position, has a reputation as being able to fix struggling gaming companies. Butera brought Trump Hotels and Casino Resorts out of bankruptcy as chief operating officer. He is expected to guide Tropicana and its parent company, Columbia Sussex, in evaluating the quality of the company’s holdings.

By GGB Staff   Fri, May 02, 2008

Trump Entertainment Resorts has appointed chief executive Mark Juliano to the company’s board of directors.

Juliano was named CEO last year after James Perry resigned amid rumors he had clashed with Donald Trump, chairman of the board and top shareholder. Perry had also served as a member of the board of directors.

Accompanying the appointment was a salary increase of $50,000, to $850,000, and 200,000 shares of restricted stock.

By Frank Legato   Fri, May 02, 2008

On the occasion of our big issue celebrating three decades of gaming in Atlantic City, I thought I would add my voice to the chorus of nostalgia that has shouted from these pages.

I don’t have any dealer stories like our publisher Roger Gros, or crime-fighting, mob-busting stories like Dennis Gomes, or whoops-they-denied-my-license stories like Barron Hilton.

I have no “prior life” in Atlantic City. I’m not an ex-dealer, an ex-regulator or an ex-con. I was never in the mob. They didn’t call me “Chicken Man” or anything like that. (Actually, it was “Frankie Tunes.”) I never pushed a rolling chair or served as a lifeguard. (I don’t even like to take my shirt off. In public, anyway.)

No, I came to Atlantic City as a reporter, and a reporter I remain. Well, OK, I’m an “editor,” but that’s just a fancy word for reporter. I was called “editor” in 1984, the first time I came to Atlantic City, but I was still just a 27-year-old punk reporter—it just so happened that I was reporter, editor and just about everything else for a magazine called Casino Gaming when I first took one of those puddle-jumper planes from Washington, D.C., to good old Bader Field.

Now that was traveling in style. The kind of plane where the pilot shouted “Contact!” before starting up. If it was raining, water would seep in while you were flying. As you approached your destination, instead of saying, “We’re beginning our final descent into Atlantic City,” they would say, “We’re approaching our drop zone.”

Bader Field at the time was kind of like a big bus terminal, except that the buses left the ground.

I always went first-class, of course—the Claridge! The Claridge was exactly the same in 1984 as it had been when it opened in 1930. In fact, I think it had all the same employees.

The Claridge was great for people with gambling problems, because you never got to the casino. Your entire stay was spent riding to your room in the elevator. They were absolutely the slowest elevators on the planet. There were families whose children began school on the second floor and graduated by the 20th floor.

Atlantic City back in those days was not exactly the magnet for young, hip, twenty-somethings it is today. It was the age of the “blue-hairs.” If you visited a casino in mid-morning, it was like there had been a jail break at the rest home—a traffic-jam of walkers, canes and cantankerous fuss-budgets. And all of them had rolls of quarters. The casinos would give them the first roll of quarters, to prime the pump, and so they would have something to hit you over the head with if you got in their way.

I started writing about Atlantic City casinos back in the era when state officials, including some of the regulators, considered the gaming industry an inflamed canker sore on the rear-end of the state’s business community.

No one, I mean no one, messed with the regulators. I remember having lunch in Reno with George Drews, who was president of International Game Technology, one day in 1985. He was telling me about the young company’s biggest order to date—hundreds of slots and video poker machines for the new Atlantic City Hilton.

One of his assistants came in and whispered something in his ear, and he turned a rather attractive shade of off-white. New Jersey regulators had denied Hilton a license, just as hundreds of IGT slots bearing the Hilton logo were rolling off the assembly lines.

Luckily, The Donald bailed George out, buying all of the machines the Hilton had previously purchased.

It was just another step in the birthing process for Atlantic City gaming. As we all know, the ’90s eventually came, and Steve Perskie and Pat Dodd took over the Casino Control Commission, and the casinos flourished.

And me? I went to work for one Roger Gros, over at Casino Journal and Casino Player. Adam Fine and Roger had come up with the idea for the Atlantic City Insider, a newsletter for players that would accept no advertising.

I was allowed to say whatever the heck I wanted about Atlantic City casinos.

That, of course, is when many of you AC casino execs got to know me, and my particular brand of, umm, humor.

I’m hoping that now that 30 years have passed, we can all be friends again. Happy 30th, AC gaming. May we all survive to be the blue-hairs of the future.

By GGB Staff   Fri, May 02, 2008

Technology solutions consultant Elixir Gaming Technologies, Inc. announced the appointment of several Asia-based gaming veterans to executive positions in the company. Company officials say they are making staff additions to increase the company’s level of gaming venue technical support expertise, while the addition of four high-level executives to strengthen Elixir Gaming’s finance, legal and human resources capabilities.

Joining Elixir Gaming in senior executive positions are: Rolando Sangalay as vice president, projects; Andy Crestafi as regional gaming director; Loke Beng Hwa as Cambodia country manager; Frank Magpantay as chief technician; Tony Lam as VP of general administration and human resources; Stephanie Wong as regional finance director; Athena Tse as business control director; and Edmond Choi as vice president, legal (Asia).

“Elixir Gaming continues to rapidly transform itself as we execute against our business model to place electronic gaming machines on a participation model in emerging Asian gaming markets,” said Elixir CEO Gordon Yuen, “and we expect to benefit from the addition of this exceptional group of executives who bring decades of experience to the company.

“The addition of Rolando, Andy, Loke and Frank to our gaming venue technical support team allows us to provide our operating partners with an enhanced level of industry expertise, which is expected to benefit our customers and Elixir Gaming through improvements in win per day per machine.”

Delaware to add auto-roulette

The three racetrack casinos in Delaware plan to add some form of automated roulette by the fall to their slot and electronic table-game offerings, according to the Delaware Lottery, which controls the games.

Delaware’s racinos have had solid success with the Shuffle Master electronic table games, which they added last year. Those games feature individual play stations surrounding a video dealer for blackjack and specialty poker games.

However, with Pennsylvania having added the same electronic table games—the closest Pennsylvania racino, Harrah’s Chester, is only 10 minutes from the Delaware state line—Delaware lottery officials and the racinos themselves are looking for more of an edge.

The games to be added will be fully automated roulette games that use a real roulette wheel and ball, with individual betting stations linked to the wheel. A video camera will show the spinning wheel live on the screen of the player stations. It is the type of roulette game that is popular across Europe, and is produced by a dozen or so different vendors worldwide.

Lottery officials say they will select a vendor over the summer, and begin installing the games in the fall. Ed Sutor, president and CEO of Dover Downs Casino & Slots, told the News Journal newspaper last month that the addition of the games will be one more step in producing a first-class, traditional casino experience. “We’re trying to make it as close as you would experience if you went to Vegas or Atlantic City,” he said.

By GGB Staff   Fri, May 02, 2008

North Carolina-based PokerTek, Inc. announced that several of its top executives made a loan of $2 million to the company, to finance its continued growth.

The loan, made personally by board chairman Lyle Berman, Vice Chairman Lou White, President James Crawford and board member Lee Lomax, will enable the company to continue spreading the PokerPro automated poker table across the industry.

“Quite simply, we believe in the future of the company,” said Berman. “This loan allows our team to continue executing their plan that, thus far, has delivered revenue growth while efficiently managing costs.”

By GGB Staff   Fri, May 02, 2008

TableMAX Holdings LLC, one of the world’s leading developers of electronic table games, and eBet, developer and marketer of software and systems designed to facilitate the management of slot machine networks, have signed a partnership agreement under which eBet will operate wide-area progressives on all TableMAX game content, including Progressive Blackjack, Caribbean Stud poker, Caribbean Draw poker, Texas Hold ’Em Bonus Poker and Bonus Blackjack.

“This is very noteworthy news for TableMAX,” said TableMAX CEO Stephen Crystal. “We have a unique product that is already in high demand across the continent. Now we have a partnership that will expand our exciting progressive beyond a stand-alone game situation to a full wide-area progressive. This is a major step forward in our business plan.”

“This partnership utilizes the skills and experience of both companies to our mutual benefit,” added eBet CEO and Managing Director Tony Toohey. “I am confident that this will culminate in substantial business for TableMAX and eBet across the United States. We are very excited about working together to realize the full potential of this innovative product.”

Currently, a TableMAX game’s progressive is currently tied to one five-station game. Under the partnership, the progressive could be casino-wide, multi-property, multi-city within a state and even multi-state.

The partnership is a three-year agreement encompassing North America. The new eBet-driven WAP is expected to go live in April 2008 in Oklahoma.

By GGB Staff   Fri, May 02, 2008

Gaming Laboratories International announced that its European branch, GLI Europe BV, has received full approval from the United Kingdom Gambling Commission to test all categories of gaming equipment.

“Full approval” status from the U.K. Gambling Commission is granted to test organizations that have passed the commission’s assessment of integrity and independence and have obtained full accreditation to the commission’s standard.

“At GLI, we continue to aggressively pursue certifications and accreditations that will be beneficial to our customers,” said GLI Europe Managing Director Ian Hughes. “With this approval status, now more than ever before, regulators, manufacturers and operators can be assured that GLI is themost capable testing lab, in Europe and around the globe.”

GLI also has added two customer service professionals to its development team. Robert J. Reyes and Bounthay (Boon) Saysavanh have joined GLI as supplier development representatives.

Reyes is an experienced sales and customer service professional. He most recently was VP of sales for the TekTube Group, where he led a team of 32 and oversaw the company’s procurement of ISO certifications. Reyes’ gaming experience includes a stint as western regional claims manager for Harrah’s Entertainment.

Saysavanh most recently was director of business development for Tardus Financial Services, developing its sales team during the company’s launch and directing the company’s Alliance Partner Program. He has also served as GM/regional sales manager for Marfred Industries, and has worked with Automated Data Processing, BlueSkies Investments and Transworld Systems.

“We are thrilled to add Robert and Boon to our supplier development team,” said Ian Hughes, senior director of engineering and client services for GLI. “The important role suppliers play in the industry cannot be overstated, and developing our relationships with OEMs is a critical aspect of our business plan. We are excited to have Robert and Boon on board to help us provide top customer service to these valuable clients.”

The addition of Reyes and Saysavanh bring GLI’s worldwide development team to 16. Overall, GLI employs more than 400 professionals in 10 labs on six continents.

By GGB Staff   Fri, May 02, 2008

International Game Tecnology has announced the agenda for its third annual IGT Network Systems Users Conference, scheduled for June 9-11 at the Mirage in Las Vegas.

The conference will carry the theme “The Path to Open,” focusing on the preparation needed to transition IGT customers to the open-network floor of the future.

Conference sessions will address the importance of network infrastructure, details on technologies driving the change, the importance of games readiness, and a business comparison of today’s networks with tomorrow’s casino floor.

Guy Kawasaki, recognized as the world’s first “tech evangelist,” will deliver the keynote address, “The Art of Innovation and Your Competitive Edge,” during lunch on June 10. Kawasaki is a managing director of Garage Technology Ventures, an early-stage venture capital firm, and is ranked as one of the top 100 bloggers in the world.

At Apple Computer, Inc., Kawasaki reportedly was one of those responsible for the success of the Macintosh computer. He has written eight books, including Rules for Revolutionaries and How to Drive Your Competition Crazy, and he has spoken to organizations as diverse as Nike, Audi, Wal-Mart, Sprint, Hewlett-Packard, MIT and Forbes.

Users Conference sessions have been arranged in 10 tracks geared toward new and advanced users, seven of which focus on optimizing existing IGT Advantage, EZ Pay, Table iD and IGT Mariposa products: Slot Technicians, Slot Operations & Accounting, Marketing, Information Technology, Business Intelligence, Table Operations, and Services & Support.

The remaining optional tracks focus on future technology, so attendees may pick and choose the level of detail they would like to hear: sb Impact on Operations, Transition to Open, and the new executive-level focused track, An Executive Look. The conference will also feature an “Interactive Area” with live demonstrations of all current IGT Advantage and IGT Mariposa products, as well as future sb and EZ Pay Smart Card technology.

To register for the IGT Network Systems Users Conference, visit www.IGT.com/UsersConference or e-mail UsersConference@IGT.com with questions.

By GGB Staff   Fri, May 02, 2008

Printer manufacturer TransAct Technologies, Inc. announced that Brandon Knowles, the company’s vice president of gaming sales, has been elected to serve on the Gaming Standards Association Board of Directors.

Knowles will help manage the direction of GSA, the international trade association tasked with developing open, industry-developed, communication standards across the gaming industry. He has over 20 years of international gaming experience, and has held leading positions with companies such as Mirage Resorts, Aristocrat, Shuffle Master and Progressive Gaming.

“We are delighted to welcome Brandon Knowles as a member of GSA’s board of directors,” said GSA President Peter DeRaedt. “TransAct’s participation underscores the universality of GSA protocols, from game to system to peripherals.”

“As a longstanding member of GSA, we are proud to support the association and the gaming industry,” added Tracey S. Chernay, senior vice president of sales and marketing for TransAct. “We are very pleased that Brandon was elected by GSA members to join the board of directors and we look forward to our continued involvement with this industry organization.”  

By GGB Staff   Fri, May 02, 2008

Win Systems International, a global technology supplier to the gaming and lottery industries, announced it has entered into an agreement with Konami Gaming to use Konami content in certain of Win’s pending projects in Europe and Latin America.  Konami game content will be featured in various projects driven by Win’s server-based downloadable gaming platform.

Darío Zutel, Win’s president & CEO, stated, “As part of our ongoing expansion we are proud to begin a relationship with a company as internationally respected as Konami.  The quality of Konami’s content will allow us to better serve our customers and demonstrate the benefits of our server based gaming platform.”  

Win and Konami have identified the first two in a series of international projects that will feature Win’s platform and Konami’s games.

For more information: www.winsystemsintl.com.

By GGB Staff   Fri, May 02, 2008

Atlantic City’s Tropicana Casino & Resort announced plans to create a new slot environment in partnership with slot and signage supplier AC Coin & Slot.

AC Coin will design and fabricate the new area, which will convert an elevated section of gaming floor into a mixed offering of IGT slot product in a festive, high-energy atmosphere.

The project is slated to be open in May.

“In this increasingly hypercompetitive market surrounded by new properties coming online in the near future, it is important for us create this unique, ‘one of a kind’ environment that will visually and interactively excite all our visitors,” said Mark Giannantonio, president and COO of the Trop. “I want them to immediately feel they are in an atmosphere that puts them at ease and makes them feel they are a world away. Our goal is to create a space that further encompasses the vibe of the Quarter by evoking a Cuban-infused flair and extending it to the next level on the casino floor.

“With a project like this, the Tropicana will be leading the way again in giving customers more reasons to visit their casino and make a trip to Atlantic City,” added Jason Seelig, AC Coin’s executive vice president of sales and marketing. “We have completed these types of projects for other casino partners throughout North America and are proud to be part of this one. The overall concept will complement the entire brand experience that the Tropicana has just completed throughout the rest of the property. This is similar to a store-in-store concept that has been in the retail industry for years. Mark Giannantonio’s foresight in implementing this kind of offering to evolve the gaming experience for the Atlantic City market is exceptional.”

By GGB Staff   Fri, May 02, 2008

Slot and system manufacturer Bally Technologies announced it has appointed Dan Savage as vice president of marketing, replacing Marcus Prater, who left his post in December after nine years at the company’s marketing helm.

Savage will assume responsibility for the company’s global marketing efforts as well as oversee product management operations.

Savage was formerly head of one of the business units of 3M Company, where he also served as global business manager for 3M’s touch screen manufacturing division, 3M Touch Systems, the number-one supplier of touch-screen displays to the gaming industry.

Previously, Savage was the director of marketing and sales for Dynapro Technologies, a Vancouver, British Columbia-headquartered technology company which was acquired by 3M in 2000. Savage also worked as a sales manager for Kodak and as a product manager for Xillix Technologies, a Vancouver-based medical imaging equipment manufacturer.

“I am pleased to welcome Dan to Bally,” said Gavin Isaacs, executive vice president and chief operating officer for Bally Technologies. “Dan’s extensive experience in product management, his knowledge of the gaming industry, and his background working for one of the world’s top Fortune 100 technology companies are just some of the reasons why he is the ideal person to lead Bally’s marketing and product management efforts going forward. I’m sure he will be an outstanding addition to our management team.”

By GGB Staff   Fri, May 02, 2008

Global Gaming Expo’s Casino Design conference, the only conference dedicated to casino architecture, design and décor, will move to November to be held alongside G2E 2008. By joining with the gaming industry’s premier trade show and conference event, Casino Design will now be able to offer features such as the Casino Design pavilion on the G2E show floor and expanded networking opportunities. G2E 2008 is scheduled for November 18-20, 2008, with the Casino Design conference taking place on November 17, at the Las Vegas Convention Center.

“Casino Design always has provided a unique forum for casino architecture, design and décor professionals to learn about new innovations in the field and build strong business relationships,” said Frank J. Fahrenkopf, Jr., president and CEO of the American Gaming Association. “Bringing Casino Design to G2E 2008 allows us not only to expand the conference’s offerings with a new pavilion, but to offer more opportunities for architecture, design and décor professionals to network with professionals from other sectors of the gaming industry.”

The Casino Design conference will offer a full day of educational and networking sessions for professionals in the architecture, design and décor sectors. In addition to participating in interactive, expert-led, educational sessions about the latest trends in casino design and development, attendees will be able to take advantage of the event’s Las Vegas location by experiencing how these trends have been implemented on tours of some of Las Vegas’ hottest casino resorts. Topics that will be covered in this year’s sessions include sustainable design, renovation, restaurant design, highly anticipated casino design projects, Native American casino design and more.

One of the highlights of this year’s conference will be the Casino Design Awards Luncheon, which will honor leading figures in casino design, architecture and construction with Gaming Vision awards and the recipient of this year’s Sarno Lifetime Achievement award. Entries for the awards are now being accepted; submission guidelines are available on the G2E website.

In conjunction with the Casino Design conference, G2E 2008 will offer the Casino Design Pavilion, which will feature exhibitors showcasing products and services in the fields of architecture, construction, interior design, landscape architecture, signage, land use, furniture/fixture, décor, themed environments, golf course design, hospitality lighting and more.

G2E is the leading trade event for the international gaming entertainment community, attended by more than 30,000 industry professionals from around the world. For more information on G2E, and to register for early bird discounts, visit the website at www.globalgamingexpo.com.

By Robert Russell   Fri, May 02, 2008

If you ask any president, CEO or general manager whose company sells products to the casino gaming industry, they will tell you that having a license from a jurisdiction’s regulatory body is one of the first barriers to entry.

Many industries across the globe require licenses to perform a business service or gain access to a marketplace, but the laws and regulations that govern the licensing process of vendors/suppliers of the casino gaming industry is very unique. These licensing standards include the background, financial wherewithal, licensing history and suitability of a company and its key officers. In addition, gaming control boards that enforce these licensing standards look at who a company does business with, and the processes that a licensee or applicant has in place to ensure that it transacts business in legal jurisdictions and with suitable parties.

The purpose of this article is to outline key compliance steps that every company doing business with the casino gaming industry should incorporate into its business structure. Doing so will allow a company to ensure that it knows with whom it is transacting business, to prevent it, or an affiliate, from doing business with an unsuitable party—and, consequently, heading off an adverse licensing determination.

The large majority of established businesses working in the casino gaming industry within the United States, as well as internationally, have developed and adopted a “compliance policy” and have compliance procedures in place to properly vet current and prospective business partners. However, many businesses involved with the industry need to improve their efforts in this regard, as failure to do so could result in licensing problems, and costly investigations, fines, or worse yet, license suspension or revocation.

NFC Global, LLC specializes in assisting governmental entities with their investigation efforts into potential licensees, as well as working with industry suppliers seeking to ensure the suitability of potential business partners. William Kisby, partner and executive vice president, says jurisdictions do indeed look at who prospective or renewing license applicants work with when determining whether to license a company.

Kisby notes that any company holding a privilege gaming supplier license should ensure that all affiliations that it enters are properly vetted, and if problems are identified, that there are policies in place to ensure that these business relationships are terminated or avoided. He says the company’s compliance policy and manual should, at a very minimum, require that all prospective key business partners complete a background disclosure form, and that the company have an independent background check completed by an investigative firm that specializes in gaming compliance.

According to Kisby, gaming regulators do not look favorably on companies that operate under a philosophy of “sales before compliance.”

Ben McMakin, former deputy director of the Michigan Gaming Control Board’s Licensing Division, says, “One of the most important factors to consider in evaluating a contractual relationship is who the people are behind the company you are considering an affiliation with.”

McMakin says that, other than the salesperson or customer representative you are dealing with, what you do really know about the company and its

owners is fundamental. One major “red flag” in determining whether a business affiliation is wise would be a company’s inability to obtain verifiable information about the owners of the business, to confirm the backgrounds of these individuals.

Kisby notes that businesses seeking to work in the licensed gaming industry must embrace a culture of compliance, and develop a strong track record to develop a reputation that ensures gaming regulators that, even if a problem mistakenly occurs, the company did have policies in place on the whole to prevent such events from being commonplace.

McMakin says that regulators do take into account the limits to which a supplier should be expected to probe when conducting its due diligence, or how deeply the “problem” was buried or concealed from the supplier. “If the due diligence failed to identify a problem that was a matter of public record,” he says, “or the supplier failed to follow its own due diligence protocol, the regulators will likely conclude that supplier was deficient in its due diligence efforts.”

The regulators will then, most likely, look at a sampling of other due diligence investigations by the supplier to see if similar deficiencies are present.

The gaming industry is fueled by innovation of the industry suppliers and their business affiliations, and the incorporation of the unique creations of different businesses is key to this process. However, as a result of the high standard of integrity that gaming laws and regulations require from the industry suppliers, it is important that these businesses have adopted a “compliance policy,” and that this policy is embraced by the culture of the company. Failure to do so could jeopardize the innovation that business owners and investors have fought to create.

Therefore, it is important that if your company is licensed in the gaming industry, and you do not have a current or enforced “compliance policy” that examines business affiliations, you should seek to consult with an appropriate professional to develop such a policy—and quickly so as not to jeopardize one of your most valuable assets, the gaming supplier license.

Robert Russell is a senior gaming analyst with Regulatory Management Counselors, P.C. in East Lansing, Michigan. He can be reached at

1-517-507-3858 or online at www.rmclegal.com.

By David Ross   Fri, May 02, 2008

Imagine broadcasting audio messages straight to your target audience and nowhere else—like a laser beam, except that it’s sound instead of light. That’s the SpotDAP, sound-generation technology that targets specific areas, soon to be introduced to casinos by Toulouse, France-based RSF, a manufacturer of audio, video and show control products that is branching out into the gaming market.

This technology is being used in Europe at locations such as Disneyland Paris and the British Museum of London. Other applications include digital signage, points of sale, kiosks, grocery stores, lobbies, parks and banks.

In a casino where many machines and activities compete for attention, the SpotDAPs can direct sound where the casino wants it (with a directivity of 3 degrees). This reduces noise pollution levels—in casinos, it would target sound around the clamor of the slots.

Small and lightweight, the SpotDAPs are simple to install, as all their elements are contained within the enclosure (including digital processing, amplification and emitter devices).

They are easily connected to any audio source. No power amplifier is necessary. SpotDAPs work on the same principle as an active loudspeaker.

Defying the principle of the inverse square law, the SpotDAP’s sound level decreases very slowly with distance. The manufacturer says this feature is unique to its HyperSonic Sound technology. The sound remains clearly intelligible up to 20 meters away.

At museums where the product was deployed, sculptures or paintings were made to come alive with sound. They can also be used to attract a visitor’s attention by directing it along passageways.

For marketing purposes, RSF has signed an exclusivity agreement with SGC to take advantage of their understanding of the industry.

RSF sees potential applications including positioning the speakers directly over gaming tables, giving each its own sound channel without disrupting others.

Either inside or outside casinos, the SpotDAP is great at attracting attention. The sound is produced in the air just next to the listener’s ear. This means that to the listener, the source is extremely close. The natural human instinct is to pay much more attention to close sounds than distant ones; therefore, on walking into the sound beam people can’t help but to turn around. This approach can either be used on its own, or coupled with the TV screens used in digital signage.

Another application in the gaming industry could be in sports books—different screens can show different sports events, and can each have their own independent sound channel for commentary.

For more information about SpotDAP contact RSF at

info@rsf-int.com or call

352-49-74-20-40.

By David Ross   Fri, May 02, 2008

GT’s sb Floor Manager provides casinos a program for control of all server-based slot operations. The product, which in January won first place in the sixth annual Global Gaming Business Gaming & Technology Awards for Best Productivity-Enhancement Technology, has been field-testing for two years and is now ready to be deployed at casinos nationwide.

The sb Floor Manager allows game content, graphics and denominations to be changed from a desktop computer—allowing operators to manage the casino’s entire slot mix from the desktop. Floor managers can use the system to oversee all floor activities, including downloads, configuration changes, event scheduling and monitoring, reporting and ultimately remote game ordering. They will be able to use predictive analytics to immediately act upon data in deciding game mixes.

The Floor Manager will almost eliminate machine downtime during game conversions and configurations, reducing the time to market for new titles with the ability to download games. It quickly increases the number of hot performing themes and allows the manager to efficiently replace less popular themes.

It is the first such product to use the Gaming Standards Association’s open Game-to-System (G2S) network.

For more information about the sb Floor Manager, visit IGT’s website at IGT.com or call IGT Systems Sales at 702-914-5573.

By Frank Legato   Fri, May 02, 2008

This is one of the newest games in Bally’s Alpha Elite series. It is available in either the “V20” thin cabinet, which incorporates a 20-inch screen, or in the wide-screen “CineVision” format.

The base game is a 30-line video slot with a 90-credit max bet. The theme is the New York Police Department, with all the appropriate icons. The top jackpot of 10,000 credits times the line bet is won with five scattered “N.Y. Gold” police badges.

The unique part of this game is a special feature called “Red and Blue Siren Bonus” that is designed to increase time on device. There are red and blue emergency siren light symbols, and a special pay table for each displayed on the top box. The pay tables multiply as the player spins. Every six spins, the multiplier on each pay table increments, and the pay schedule amounts rise.

Beginning at 1X, each six spins the multipliers rise through 2X, 3X, 4X, 5X and 10X, until one of the light symbol combinations hits. It then returns to 1X. For instance, the red siren symbol starts at a range of 15 credits for three on a payline, 30 for four, and 90 for five. After six spins, the range goes up to 30-180 credits and so forth, until either three or more of the symbols land or until it reaches 10X and a 900-credit top jackpot. If that happens, it stays at the 10X level until one of the combinations is hit.

The feature is a good incentive to keep players at the machine, particularly as the multiplier approaches 10X.

The game is available in denominations ranging from pennies all the way to $5, with bets ranging from one to three credits per line. It is available as a progressive as well, with the top jackpot resetting at 10,000 credits times the line bet.

Manufacturer: Bally Technologies

Platform: Alpha Elite

Format: Five-reel, 30-line video slot

Denominations: .01 through $5

Max Bet: 90

Top Award: 10,000 credits times line bet

Hit Frequency: Approximately 50%

Theoretical Hold: 3.98%—14.33%

By Frank Legato   Fri, May 02, 2008

This game uses the basic play experience of the popular IGT slot “Ancient Chinese Secret,” but with a modified version of the “community play” aspect of that game.

The base Ancient Chinese Secret game is the same familiar 25-line play experience as the original game, with sharp graphics and artwork along with Chinese-themed icons on the reels. The top line jackpot returns a progressive jackpot set by the casino.

The common bonus round occurs at random. A gong sounds over the bank to let players know a bonus round is about to begin, which serves to build interest and enthusiasm around the slot.

The computer linking the entire bank of machines then picks one player’s slot to be the main bonus player in the “Imperial Secret Bonus.” Two groups of symbols appear on that player’s screen—eight symbols on top, four on the bottom. The top panels hide either credit values, “Win All,” a “Stopper” or an “Extra Life” symbol. The main bonus player picks panels until a value is selected for each of the eight top symbols, or until a Stopper is revealed, which ends the bonus round—unless, of course, the player has nabbed an Extra Life, which he can use to continue the round after a Stopper.

If all eight credit awards are revealed without a Stopper, the player advances to another screen, depicting three golden doors. The player selects one to reveal a credit award.

The four symbols on the bottom screen panel hide multiplier amounts—once a credit award is determined, the player selects one of the bottom symbols to multiply that award.

At any time during the main player’s bonus, any other player on the bank can randomly go into a secondary “Secret Bonus” event. Eight symbols appear in a hexagon, and the player selects one to reveal a credit value; he then selects a second symbol for a multiplier.

Anywhere from one to all five additional players on a six-machine bank can get this secondary bonus. The manufacturer says the more a player wagers on the primary game, the more likely it is that one of these random events will occur.

Manufacturer: International Game Technology

Platform: Game King

Format: Five-reel; 25-line video slot

Denominations: .01, .02, .05

Max Bet: 125

Top Award: Progressive; Operator Configurable

Hit Frequency: 29.57%

Theoretical Hold: 5.01%—12%

By Frank Legato   Fri, May 02, 2008

This Asian-themed game is one of the first two slots to feature Aristocrat’s new “Gen 7” video platform and sleek “Viridian” cabinet. Gen 7 features top-quality, high-resolution graphics, and the new thin cabinet style features pay-table information in a dynamic video display in the top box. (This will be Aristocrat’s preferred terminal format for downloadable, server-based gaming applications.)

The base game is a 25-line slot in Aristocrat’s “Power Play” series. In this format, the player is given the option to go into “Power Play Mode” by wagering enough to cover the paylines, plus a five-credit ante wager.

Without the ante wager, the main feature is a normal free-spin round with a “Roaming Wild” symbol added to the normal wild symbol, which is a lion. Three, four or five scattered “Double Happiness” symbols trigger 10, 15 or 25 free games, respectively, with the extra wild symbol.

With the ante wager, the free-spin round features two roaming wild symbols, and a random multiplier number that can multiply jackpots on free spins up to 10X.

On either version, the free-spin feature can be re-triggered within the free spins.

Double Happiness is an average-volatility penny slot game with a bonus feature that hits with average frequency. The top award is 2,500 credits times the line bet in normal mode, 25,000 times the line bet in Power Pay mode.

Manufacturer: Aristocrat Technologies

Platform: Gen 7

Format: Five-reel, 25-line video slot

Denominations: .01

Max Bet: 300, 450, 600

Top Award: 25,000 credits times line bet

Hit Frequency: 22.26%

Theoretical Hold: 6.95%—14.04%

By Frank Legato   Fri, May 02, 2008

Atronic mixes and matches game styles with this one, combining the advanced “e-motion” platform with a more traditional style of game play.

The game is available to casinos in 20-line or 25-line versions for the penny markets, but also in two five-line versions—one taking a five-coin max bet and the other taking a 25-coin max—that are recommended for quarters or higher.

The math program is volatile, with a comparatively low hit frequency and comparatively frequent high credit wins, helped along by some strong features—there are two wild symbols in the base game, and there is a special “mystery symbol” that appears at random. It pops up over a reel symbol from time to time, and then fades to reveal a second symbol that results in a bonus payoff.

Finally, there is a frequent free-spin round in which all pays are doubled. It can be triggered with as few as two bonus symbols, and there are two separate symbols that can trigger the free games. Two, three, four or five white or yellow tiger symbols trigger five, 10, 20 or 50 free spins, respectively. These double-pay free spins can be retriggered if the bonus symbols appear again—up to a maximum 300 free games.

The top jackpot can be configured as a stand-alone 25,000 credits times the line bet, or as an in-house progressive. A “Rapid Hit” program returns the top prize as frequently as every 7,000 spins in some versions. If configured as a progressive, the top prize is awarded at random, in Atronic’s “Mystery Magic” system. This links a jackpot controller to a bank of the games, with coin-in triggers enacting a mystery progressive to a game on the bank.

Manufacturer: Atronic Americas

Platform: e-motion

Format: Five-reel; five-line, 20-line or 25-line video slot

Denominations: All denominations available

Max Bet: 5, 20, 25, 200, 250

Top Award: 1,000, 5,000, 10,000 or 25,000 credits times line bet; progressive versions available

Hit Frequency: 23.64% or 30.86%

Theoretical Hold: 8%—14%

By GGB Staff   Fri, May 02, 2008

Online poker operator Everest Poker signed a multi-year contract with Harrah’s Entertainment making the company the exclusive sponsor of the World Series of Poker in Las Vegas.

The deal will put the Everest logo on all table felts, and allow the operator to give away a seat to the main event through online tournaments.

“We’ve always tried to position ourselves as the European gateway to all things poker,” Everest spokesman Ed Pownall said. “Obviously, with the law the way it is, we’ve never accepted American bets, so we felt we were in quite a strong position to get this and the negotiations have been going on for some months. We are delighted.”

By GGB Staff   Fri, May 02, 2008

Mitch Garber said he will leave his position as chief executive of PartyGaming when his contract runs out in 2009.

The online gaming operator, which runs PartyPoker and PartyBets, is seeing slower-than-expected revenue growth and is currently dealing with U.S. authorities to avoid prosecution over accepting bets from U.S. residents in the past.

Those negotiations are coming to an end; PartyGaming said a conclusion could come in the “foreseeable future.”

By GGB Staff   Fri, May 02, 2008

The U.S. failed to issue a proposal to settle the dispute with Antigua and Barbuda over online gaming by deadline, but the process has been full of delays and missed deadlines.

That led to officials from the island states taking the same “wait and see” approach they have adopted throughout the negotiations.

The settlement proposal from the U.S. needs to address the country’s failure to comply with the World Trade Organization ruling of a $21 million sanction for denying access to online operators as well as additional claims for compensation from Antigua and Barbuda for allowing the U.S. to withdraw from its commitment under the WTO General Agreement on Trade and Services.

By GGB Staff   Fri, May 02, 2008

Two U.S. congressmen have introduced legislation that would ultimately render the Unlawful Internet Gambling Enforcement Act moot by prohibiting the Treasury and Federal Reserve from “proposing, prescribing or implementing” regulations under the UIGEA.

The bill, introduced by Reps. Barney Frank and Ron Paul, comes after hearings held in April that explored the burden the UIGEA is placing upon smaller banks and financial institutions. It is seen as a representation of the general consensus in Congress that the UIGEA is not sound legislation.

The hearings earlier this month focused on the overly vague and sometimes contradictory wording in the bill that made it almost impossible for banks to adhere to its restrictions.

It is expected that conservative groups and professional sports leagues will oppose the bill, but financial institutions and some interested members of Congress could counter that.

Nevada’s Rep. Shelley Berkley, who has introduced her own legislation calling for a one-year study of online gaming, supports the bill.

“I opposed this unfair law when it was passed, and I fully support Chairman Frank’s legislation to stop these burdensome regulations before they ever go into effect,” she said.

Frank has been an outspoken critic of the UIGEA since its passage, and introduced legislation in 2007 that would establish a system for regulating and taxing online gaming operations in the U.S. That bill, the Internet Gambling Regulation and Enforcement Act, currently has 48 co-sponsors, including Berkley.

Federal officials charged with enforcing the Unlawful Internet Gambling Enforcement Act said during the congressional hearings that the law is too vague to figure it out.

“I think it is very difficult without having more of a bright line about what is intended to be unlawful internet gambling,” said Louisa Roseman, head of the Federal Reserve’s bank operations division. “The challenge we have is interpreting something, particularly federal laws, that Congress itself isn’t sure what they mean.”

Roseman wants Congress to outline exactly which transactions need to be blocked and which ones are allowed.

“Clarity on this point would permit them to design policies and procedures that they could be assured would meet the rule’s requirements,” Roseman said. “Still others, including some gambling businesses and many consumers, asked that the rule clarify that certain types of gambling, such as parimutuel betting or poker, are lawful.”

When the ban was passed it charged financial institutions with blocking transactions between U.S. customers and illegal online operations. At the same time, it carved out an exemption for some online operations including wagering on horse racing and playing fantasy sports.

This has caused smaller banks to ask how they will enforce the law.

“It makes financial institutions the police, prosecutors and judges in place of real law enforcement officers,” said Wayne Abernathy of the American Bankers Association.

Supporters of the Paul and Frank bill include Rep. George Miller, chairman of the House Democratic Policy Committee and the House Education and Labor Committee, who signed on as a co-sponsor of the Internet Gambling Regulation and Enforcement Act.

“The endorsement of this key legislation by Congressman Miller, one of the most influential leaders on Capitol Hill, further demonstrates the growing support for regulated internet gambling,” said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. “We expect continuing momentum in Congress as more people realize that the current approach to prohibit internet gambling is a failure. Rather than leave consumers vulnerable in an underground, uncontrolled marketplace, regulation of internet gambling would protect consumers and generate billions in revenue.”

Republican senators Pete Dominici and John Sununu have also criticized the original legislation.

The senators said in a letter to Henry Paulson, U.S. Treasury Secretary, that the UIGEA is unfairly burdensome on banks which must determine the nature of all online transactions, and also determine the legality of various online gambling sites.

“In failing to provide more detail, the proposed rules would inordinately burden every bank, credit union, credit card company, money transmitting business and payment system in the country, leading to non-uniform compliance and confusion,” the letter stated. “This issue is particularly important, as most federal and state gambling laws predate the internet and are less than specific as to their application to particular practices or circumstances.”

By Frank Fahrenkopf   Fri, May 02, 2008

Each spring since 1999, the AGA has published its State of the States report, and over those 10 years, we have seen the industry change in so many ways, from the growth of the racetrack casino sector and expansion in states like Pennsylvania and Florida to the growth of non-gaming amenities and the poker boom. These and many other factors have all contributed to the industry’s continued growth by every measure. In the last 10 years:

U.S. consumer spending on commercial casino gaming has increased 73 percent, growing from $19.7 billion in 1998 to $34.13 billion in 2007.

The growth of gaming has allowed state and local governments to pursue projects that otherwise wouldn’t be possible, as tax revenues have more than doubled in the past decade, with gaming jurisdictions receiving $2.5 billion in revenue in 1998 and $5.87 billion in 2007.

The commercial casino industry employed more than 35,000 more people in 2007 than it did in 1998, a 10 percent increase in one decade.

To commemorate 10 years of collecting and reporting data on the commercial casino industry, this year’s State of the States report includes 10-year revenue trend data for each of the states with commercial casinos from when we started producing the report in 1999. It is not surprising, given the marked growth of the industry as whole, that all 11 states saw their gross gaming revenues rise considerably between 1998 and 2007. Percentage increases over the decade ranged from 23 percent in New Jersey to 175 percent in Iowa. Three states, Indiana, Iowa and South Dakota, saw their revenues more than double in the past 10 years.

While the U.S. commercial casino industry has grown by leaps and bounds during the decade that we have been producing the State of the States survey, the industry’s overall growth in 2007, while steady, slowed somewhat compared to the past few years. But despite a weakening national economy in the last few months of 2007, the industry has proven itself to be resilient in the face of the economic slowdown. The expansion of commercial casinos into new jurisdictions, the opening of new properties in existing jurisdictions and the continued revitalization and development of individual properties across the country spurred modest but consistent growth. In fact, gross gaming revenues for commercial casino states reached $34.13 billion in 2007, an increase of more than 5 percent over 2006. Commercial casinos also contributed more in direct gaming taxes in 2007 than ever before—$5.87 billion.

The growth of the industry is even more pronounced in the racetrack casino segment, which continues to be the primary mode of expansion for the commercial casino industry. Five new racinos opened last year, and for others, 2007 was their first full year of operations. The numbers bear out this growth.

Consumer spending on racetrack casinos jumped more than 45 percent, from $3.62 billion in 2006 to $5.28 billion in 2007.

Racetrack casino tax distributions totaled $2.32 billion, a 37 percent increase over 2006.

While the data in this year’s report point to current growth, a special section outlines what the industry is doing to ensure its future growth and success. Nowhere is the dynamic nature of the gaming industry more apparent than in the many capital investment projects taking place in gaming jurisdictions across the country. Through recent and planned expansions and renovations, commercial casino companies are investing more than $53 billion in their host communities over the next few years.

As I mentioned in this space two months ago, we are in the midst of uncertain economic times, when most segments of the nation’s economy are contracting, but the commercial casino industry’s investments are representative of its commitment to the communities where we do business. It’s a commitment to bringing in tourism dollars, spurring economic development and providing jobs both in the gaming industry and in the many industries, such as construction, that benefit from increased development. The expansion and investment are proof of the commercial casino industry’s long-term partnership with its many host communities.

The more things promise to change in the gaming entertainment industry, the more the public’s opinions of casino gambling seem to stay the same. Each year, our pollsters at Luntz, Maslansky Strategic Research and Peter D. Hart Research Associates ask Americans their personal views on casino gambling, and each year we get similar results. This year, 84 percent of those surveyed said that casino gambling is acceptable for themselves or others. This result is in line with numbers that we have seen for the 10 years we have published the survey, indicating our support among the American people is steady and consistent.

Personal choice was another important concept for survey respondents this year, as 89 percent agree that people should be able to go into a casino, have their own budget and spend their disposable income the way that they want. Additionally, 86 percent see gaming as a states’ rights issue, and that people in individual state and communities should be allowed to decide what is best for them with respect to casino gaming.

The future is always an uncertain proposition. The past 10 years have been successful and eventful, but it would have been difficult to predict the road the industry has traveled during that time. It is impossible to divine where gaming will be in another decade. It is hard enough to guess where it will be in a year, especially with the economic challenges we currently are facing. However, one thing is certain: as long as gaming continues to expand and commercial casino companies continue to invest resources to create top-of-the-line entertainment options, the future will be a bright one.

By GGB Staff   Fri, May 02, 2008

The town of Mashpee, the hometown of the Mashpee Wampanoag tribe of Massachusetts, last month approved an agreement with the tribe that lays to rest its long-term land claims.

The tribe has set aside its claims to land in the town and has instead placed all its bets on putting over 500 acres into trust in the town of Middleboro, where it hopes to build a casino.

The tribe agreed not to try to build a casino in Mashpee, which is OK with the town. In return the town agreed to help the tribe put 140 acres into federal trust for a reservation. That application is part of the same process that seeks to put the Middleboro land into trust. Also part of the deal is the transfer of ownership of a meeting house, tribal burial ground and parsonage to the tribe.

Now, the tribe must negotiate with Governor Deval Patrick, who is still smarting from the defeat of his plan to build three commercial casino resorts in the state. He’s in no mood right now to OK an Indian casino, but stranger things have happened.

By GGB Staff   Fri, May 02, 2008

Lawmakers last month upheld Governor John Baldacci’s veto of a bill that would have allowed the Penobscot Nation to deploy 100 slot machines to its Indian Island beano casino.

The House vote was 94-49, less than the two-thirds majority of both houses required to overturn the governor’s veto. Baldacci reiterated his stand that this issue should be referred to the voters.

“In my view, such expansions must gain the approval of Maine’s voters via the signature-gathering and referendum processes,” said the governor, who personally opposes gaming.

Last year voters defeated a proposal that would have allowed the Passamaquoddy Tribe to build a racino in Calais.

That was just the latest of five times that tribes have tried to obtain permission to operate casinos. There is one commercial casino in the state: Hollywood Slots, in Bangor. It is in the process of expanding into a permanent casino resort.

By GGB Staff   Fri, May 02, 2008

Louisiana’s Senator David Vitter (r.) has introduced a bill that would limit “forum shopping,” which is a euphemistic rendering of what opponents of the practice usually call “reservation shopping.”

Whatever you call it, the Republican senator wants to limit or end the ability of tribes to locate tribal casinos sometimes hundreds of miles away from their reservation or traditional homeland.

This places him squarely in the camp of the current thinking in the Bureau of Indian Affairs, but also puts him in the headlights of many tribal lobbyists, who, despite the fall of Jack Abramoff two years ago, still have largely unabated influence in Washington.

Vitter’s bill is the continuation of his fight against the Jena Band of Choctaw Indians’ proposal to put a casino on the Texas border, which is a long way from its reservation. It would give the states greater influence on the location of proposed casinos and would tighten up the law in other ways.

By GGB Staff   Fri, May 02, 2008

Alabama officials have filed a lawsuit in U.S. District Court challenging the authority of the U.S. Department of the Interior to permit video gaming machines in gaming halls operated by the Poarch Band of Creek Indians on tribal lands.

The tribe has sought video gaming under the Indian Gaming Regulatory Act, since the video machines are currently legal at racetracks and off-track betting parlors. Tribal officials appealed to the Department of the Interior after attempting to negotiate a compact with the state.

Interior Department officials said they were going to permit the tribe to install the machines under IGRA. (The agency refused to order implementation of another request from the tribe for permission to run poker and other card games.)

“The Department of the Interior’s recent actions represent a complete disregard for fundamental principles of states’ rights and an arrogant lack of respect for the people of Alabama,” Alabama Attorney General Troy King said in a statement after filing the lawsuit. “Federal bureaucrats simply lack the authority to override the will of the people of Alabama by allowing casino gambling to invade our state. I will not stand idly by and allow them to do so.”

By GGB Staff   Fri, May 02, 2008

Federal officials last month agreed to look into Lac du Flambeau tribe members’ claims of corruption among tribal leadership, peacefully ending protestors’ 14-hour occupation of the gaming tribe’s northern Wisconsin headquarters. Members complained of supposedly hidden information on the debt-ridden tribe’s finances, including unproductive gaming investments.

A prime issue is a $50 million debt-consolidation bond the tribal council issued in January, partly to help fund a proposed commercial riverboat casino complex in Natchez, Mississippi. Collateral for the bond is all revenue from the tribe’s 900-slot Lake of the Torches casino, which originated as a 1970s bingo hall in Lac du Flambeau.

“Not one council member read the 585-page bond document before voting on it,” says  council member Brooks Big John, “and no one understood it. Now it has basically leveraged all our money from our cash cow—the casino.” Big John and two others voted against the bond.

The tribe must pay 12 percent interest on the five-year bond, with monthly payments of more than $500,000, Big John says. It is considering mortgaging 1,800 acres of tribal fee lands to raise cash, disturbing many of the tribe’s 3,000 members, half of whom live on the reservation.

The tribe had also proposed a casino in Shullsburg, Wisconsin, 300 miles from the reservation. The U.S. Interior Department in January rejected it as too distant.

Lac du Flambeau leaders earlier invested $3 million for a minority interest in a gaming cruise venture that was to see the Dream Catcher vessel sailing out of Cancun, Mexico. The project collapsed and the boat is for sale in a Florida drydock, some of the tribe say.

After last week’s invasion of the headquarters while hundreds of the tribe crowded the adjacent casino parking lot, top tribal officials were not commenting on possible fraud, graft and other allegations. One said no money is missing and all spending had been authorized correctly.

Lake of the Torches remains open.

By GGB Staff   Fri, May 02, 2008

Gaming is Canada’s most important entertainment industry, contributing $15.3 billion to the economy each year and providing 267,000 full-time jobs, according to a study released last week by the Canadian Gaming Association.

Yet some gaming halls are drawing fewer patrons than anticipated, and others are reconfiguring work force and operations to compensate for sliding revenues.

The association’s first comprehensive nationwide report is based on data from 2006. It says gaming directs $8.7 billion—more than half the industry’s revenue—to government services and charities, and an additional $6.6 billion to operations, salaries, and goods and services. The report also says the industry is currently investing almost $10 billion in capital construction, with the bulk of the investment (49 percent) in Ontario.

“It is now demonstrably clear how the majority of spending in the industry goes directly back to Canadians in the form of paychecks, construction in communities and revenues for the programs and services and charities that we value,” said CGA President Bill Rutsey.

According to the CGA study, Ontario employs more people in the industry than any other province (102,000 jobs), followed by Quebec (52,000), Alberta (43,000) and British Columbia (32,000). The figures include jobs in gambling operations as well as supporting professions, including gambling-related government and charity organizations.

“The breadth and depth of the industry is significant,” said study author Robert Scarpelli of HLT Advisory. “We’ve always known that employment in gaming operations was robust, but the total impact of the industry surprised us.”

Despite efforts to frame the report as “just the facts,” it had its critics.

Judith Glynn of the Ontario Problem Gambling Research Centre said gambling has a “qualitative” impact on communities that is more difficult to measure. “What would happen,” she asked, “if the money that people in the local community spent on gambling was spent elsewhere?”

Professor Robert Williams of the University of Lethbridge in Alberta added, “We know a lot of money changes hands and there’s a fair bit of employment and economic revenue from gambling, but the real question is: ‘Does that offset the social costs?’”

Rutsey said there has been no agreement on how to measure the social costs of gaming, if any.

“We state quite clearly in our report we did not look at social costs as there has been no effective methodology to measure, with the Ontario Problem Gambling Research Center and Alberta Gaming Research having just released for the first time a methodology they intend to begin using,” Rutsey said.

By GGB Staff   Fri, May 02, 2008

The government of Victoria, Australia, has drastically restructured the future of its gaming industry. Changes will be seen in the licensing of operations involving slot machines, race and sports betting and keno.

After the year 2012, the state’s 27,500 slot machines located in clubs and hotels will no longer be centrally operated by Tabcorp or Tatts, as is the current arrangement. Instead, individual venues will obtain their licenses directly from the state.

In addition, the license for operating race and sports betting, currently in the hands of Tabcorp but expiring in 2012, will be put up for bid. Likewise, the two licenses for operating keno that Tabcorp and Tatts currently hold until 2012 will be merged into one license, which will also be open to bidding.

The new regulations will not affect the 2,500 slots at Crown Casino Melbourne.

The current cap of 27,500 slots for the entire state—not counting the casino—will be maintained. Venues located within the city of Melbourne will be limited to 80 percent of the machines, with a minimum of 20 percent of machines guaranteed for premises outside the metropolitan area. Venues will be restricted to 105 machines each. The hotel and club industries will each get 50 percent of the total number of slots.

Additional changes to the gaming laws include the banning of ATMs from all non-casino gaming venues. Inside the Melbourne Casino, ATMs will have to be at least 50 meters from any entrance to the gaming floor. Both measures will become effective at the end of 2012.

From 2010 on, all new slot machines will be required to incorporate a “pre-commitment mechanism,” giving players the ability to pre-determine a length of play or amount of loss.

From July 2008 all new machines will limit the maximum bet per game to A$5, which is half of what it is currently. All existing machines will have to comply with this limit by the start of 2010. Again, Melbourne Casino is exempt from this rule.

In the last fiscal year, Victoria recorded A$4.76 billion spent on gambling. Non-casino slot machines accounted for A$2.54 billion, horse and sports betting A$678.2 million, keno A$7.3 million and lotteries A$471.3 million. The Melbourne casino accounted for A$1.06 billion.

By GGB Staff   Fri, May 02, 2008

Two casinos went different ways last month in response to financial troubles.

In Michigan, a bidder reportedly is offering $1 billion for the Greektown casino in Detroit, and several unidentified groups are negotiating to buy at least a partial interest in the Sault Ste. Marie Chippewa tribe’s commercial casino. The Michigan Gaming Control Board said last month it might put the casino up for sale if the owners cannot raise enough to finance construction of permanent facilities by April 30.

Greektown spokesman Brian Brown told a control board meeting negotiations are under way with entities he would not name. “We are confident these negotiations will produce a positive outcome very soon,” he said following the hearing.

Greektown needs at least $79 million from an equity partner or other source to meet undisclosed income-to-debt ratios regulators set in 2007. The operators don’t expect to match those for this year by target dates, either, although the casino remains profitable.

In Indiana, repercussions of the New Jersey decision to remove the gaming license of Tropicana Resorts has filtered down to the state.

At a meeting of the Indiana Gaming Commission last month, Tropicana’s parent company, Columbia Sussex, announced it had sold its Aztar riverboat in Evansville to Reno-based Eldorado Resorts. The sale short-circuited a possible commission move to pull the company’s Indiana license, which would have resulted in a sale similar to New Jersey, where a conservator is running the Tropicana and conducting a public sale of the property. Columbia Sussex will not be allowed to make a profit on any sale of the Atlantic City property.

Still, the commission appointed a trustee to run the property until the sale to Eldorado is completed. Former Harrah’s executive Robert “Tom” Dingman will serve as trustee to handle the day-to-day operations of the Aztar property. Tropicana will retain authority to make significant decisions such as incurring debt and settling lawsuits.

Eldorado will pay $245 million for Casino Aztar. The company will pay Columbia Sussex $190 million in cash, a $30 million note and $25 million in earnings incentives. Columbia Sussex said it will use the revenue to pay off debt.

Like New Jersey, Columbia Sussex’s reign in Evansville was bumpy from the start. After finalizing the purchase of Aztar, the company announced it planned to lay off 70 casino workers in early 2007. Evansville Mayor Jonathan Weinzapfel asked the state gaming commission to investigate the company, alleging it was violating state standards. The investigation was suspended when New Jersey pulled the company’s license to operate the Tropicana in Atlantic City.

Eldorado’s Reno namesake is its flagship hotel. It also has a half-interest in the adjacent Silver Legacy (with MGM Mirage), and operates the former Hollywood Casino in Shreveport. And it recently reached a deal to take over the Legacy Casino in Bossier City.

By GGB Staff   Fri, May 02, 2008

Two states last month rejected gaming as a new revenue source and generator of jobs and infrastructure improvements. Freshman governors who won election on the pledge to approve casinos showed their lack of political acumen in the defeats.

The three-regional-casino bill proposed by Massachusetts Governor Deval Patrick went down to defeat after several days of intense arm-twisting by House Speaker Salvatore DiMasi, who said he preferred other solutions to the state’s budget crisis.

Even before the vote Patrick conceded that the bill stood little chance of passage. During his appearance before a House committee, as hundreds of supporters, including union members in hard hats, demonstrated in favor, he told the committee: “I have no illusions about the plans in the House for this legislation… What you do in this committee will determine whether that full and open debate is even possible.

Anticipating a loss in the House, state Senator Steven Panagiotakos, chairman of the Senate Ways & Means Committee, proposed a referendum in November to poll the public on the issue.

Such a measure would require being passed in both houses of the legislature, so DiMasi could still bottle it up.

Another gaming-related bill, this one authorizing slot machines at racetracks, failed to get the needed votes from the Committee on Consumer Protection and Licensure. The same bill will be examined by Committee on Economic Development, where supporters hope it will get better treatment. They are also promoting it as a less sweeping alternative to Patrick’s bill.

The racino bill could bring $200 million annually to the state.

In Kentucky, Governor Steve Beshear declared his floundering casino bill to be dead, at least for this session of the legislature.

“It is time we let the people decide this issue,” he said.

Beshear, a Democrat, says casinos could help plug a projected $900 million budget deficit and forestall severe cuts in government services. He has advanced casino gambling as a way to fund education.    

Brereton Jones, chairman of the Kentucky Equine Education Project, told Bloodhorse magazine that the effort was handled badly from the beginning.

“The governor made a big mistake in not introducing the bill immediately as House Bill 1,” said Jones, “and calling the Democratic leadership together and saying, ‘This is what I ran on, this is what I told the people I would do, this is what they said they wanted. We’ll pass this bill first, and then I’ll help you pass your bills.’ But he chose not to do that.”

Beshear vowed the fight for casinos isn’t over.

“Obviously, we will see how things develop over the next year and a half, as we approach the 2010 session, to see what might be possible at that time,” he said.

By GGB Staff   Fri, May 02, 2008

Development is about to begin in the state of Sikkim, India’s second casino jurisdiction. Sarovar Hotels & Resorts will construct one of its five-star Park Plaza brand hotels—with casino—in the city of Gangtok.

The project is the first to be announced since the state completed its casino regulatory policy in 2007. According to those rules, casino licenses are granted for five years for a fee of 5,000 rupees, about $125. The state also takes 25 percent of annual GGR.

A casino must be located in a five-star hotel and open 24 hours. Advertising in all media is allowed and casinos may provide clients with credit. Players must pay an entry fee of 1,500 rupees, about $37.50.

Other prospective casino developers include the DLF Group and Ambuja.

Sikkim is situated on India’s border with Nepal, which has casinos in operation.

By GGB Staff   Fri, May 02, 2008

Last December the question of casino gaming in Taiwan was finding few supporters. With presidential elections looming, the topic was considered too controversial.    

However, during the campaigning, now president-elect Ma Ying-jeou said that he supported the idea of a gaming district on the island of Penghu.

And we’re off to the races again.

Asia Pulse News reports that Taiwan’s Miaoli County commissioned an engineering consultancy to study local sites for a gaming district. The completed report identified an 800-hectare piece of land near a salt refinery in Tongsiao Township as a likely spot. The fact that Miaoli County is not on Penghu but on Taiwan proper did not deter local officials, who point out that they are ideally situated midway between northern and southern Taiwan, with good rail and highway networks. President-elect Ma is not known to have been in favor of casinos elsewhere.

Penghu authorities said last year that casinos there would produce the equivalent of $803.2 million in taxes annually and generate more than $1.24 billion worth of foreign and local investment.

One potential operator rooting for Penghu is Larry Woolf, head of casino management company Navegante. The Las Vegas Review-Journal reported recently that Amazing Holdings, a land-development company with which Woolf is involved, has 27 acres of beachfront property just waiting for a casino resort project. The land was acquired over the last three years.

Said Woolf, “We’re betting that our site is strategically the best-located opportunity. We own the land free and clear, it’s one of the largest commercial sites on the island and it’s the most likely place where the government would want to locate casinos.”

By GGB Staff   Fri, May 02, 2008

With bishops and other representatives of the Roman Catholic Church participating in the blessing ceremony, ground was broken last month on the long-awaited Philippines casino and entertainment center complex officially known by the slogan-busting name, “Bagong Nayong Pilipino-Manila Bay Integrated City”—which has mercifully been shortened to Pagcor City or Tourism City.

Located on 40 hectares of reclaimed land on Manila Bay, Pagcor City will feature casinos, world-class hotels, restaurants, convention space, shopping malls, racetracks, amusement parks, educational and cultural centers, a sports stadium, theaters, residences, a hospital district and other facilities.

Planning for the massive project began in 2001 under the leadership of Philippine Amusement and Gaming Corporation (Pagcor) Chairman and CEO Efraim Genuino.

Genuino led the groundbreaking ceremony at the Reclamation Area in Parañaque City. A time capsule containing the plans for the city was buried.

Pagcor announced the approval of plans submitted by four participants in the project: Aruze Corporation of Japan; Bloombury Investments Ltd. with headquarters in the British Virgin Islands; Genting Berhad Group of Malaysia; and the Philippines-based SM Investments Corporation.

The Aruze Corporation concept is the Okada Resort Manila Bay. This is a casino resort with 2,000 standard hotel rooms and 300 VIP suites, an ocean aquarium intended to be the largest in the world, theaters, a sports arena and museum, and a giant “Manila Eye” Ferris wheel, named after the enormous London Eye wheel at Greenwich.

Genting Berhad Group, which owns and operates the Genting Highlands Resort in Malaysia, will be represented by its subsidiary Star Cruises, which just announced it had entered into an agreement with Philippines property force Alliance Global Group. A subsidiary of Alliance, Travelers International Hotel Group, has filed an application for a provisional gaming license with Pagcor. Their joint contribution will be casino gaming, several hotels with at least 2,000 rooms total, a world-class theme park (operated by Universal Studios, Genting’s partner in Singapore), a museum and a tower that will be the tallest in the world.

SM Investments Corporation, one of the Philippines’ largest companies, will partner with Asia Pacific Gaming of Australia. Their plan is to build a world-class gaming facility, a luxury hotel managed by Radisson Hotels & Resorts, a museum and a sports arena. The location will be SM Investments’ Mall of Asia complex, which adjoins part of the Pagcor City area.

Bloombury Investments will build three luxury hotels with 1,500 rooms total, high-end retail shopping, restaurants, a showroom, a museum, and an entertainment and sports center.

When completed, Pagcor City is expected to raise tourism from outside the country to over three million visitors annually. Over 250,000 new jobs are expected to be created as a result. Total investment is to be between $15 billion and $20 billion.

The Philippines’ future casino center is another project richer with the announcement that the Waterfront hotels group will cooperate with an unnamed Macau-based operator to build a 2,500- room hotel with casino inside Pagcor City limits.

The estimated cost of the project is between $500 million and $1 billion. Construction is to begin in 2009 and take four years to complete.

By GGB Staff   Fri, May 02, 2008

It was just six months ago that Petter Nylander, head of online betting firm Unibet, was arrested in the Netherlands on a French warrant, accused of breaching France’s monopoly laws regarding betting. Now, in a complete about-face, the French budget minister, Eric Woerth, has told Le Parisien that the online betting market could open up for a testing period within the next two years.

The move is said to come from the Sarkozy government. President Nicolas Sarkozy has previously indicated he is open to experimentation in the online betting market.

Under the as-yet unformulated plan, online betting companies would be licensed by the French authorities and be subject to the same rules and regulations as the current, monopoly horse-race betting operator, Pari Mutuel Urbain, or PMU.

Online casinos and online poker rooms could also be licensed, but Woerth said that further study would be necessary first. At the moment, one area where online gaming is not expected to make much progress is in online slot machines. Woerth said that this form of gaming is considered too addictive.

According to a report at Online Casinos.com, the new French system for online betting could be developed in cooperation with other E.U. member states in similar legal positions regarding Brussels. A steering committee is expected to meet at the end of April for an initial look at the situation.

Meanwhile, the Copenhagen Post reports that Denmark may also be ready to explore a new future for online betting.

Denmark has already been the target of an E.U. lawsuit over the monopoly of its national games provider, Danske Spil. Faced with the prospect of losing the suit—and the fact that Danish players will continue to seek out alternative online providers anyway—the reality of the situation is beginning to set in.

Anders Samuelsen, a legislator who belongs to the political party New Alliance, which supports an open market policy, believes the important thing now is for the government to be able to count on revenue from betting in the future.

“We must be able to guarantee that the money is still available,” said Samuelsen. “And by selling licenses to international gaming companies, a new source of income will be established.”

By GGB Staff   Fri, May 02, 2008

French gaming company Partouche regained ownership of the casino in Dinant, Belgium, buying the casino after previous owner Luciene Barriere withdrew before its contract ended, which cost it €1.7 million. The casino has 50 slot machines and eight gaming tables as well as a tavern and a restaurant overlooking the River Meuse.

Partouche already owns three other Belgium casinos. It has already closed the venue for renovation and will reopen it as Grand Casino de Dinant this month under a 20-year operating license.

The deficit under the Barriere operators reached €1.8 million due to high taxation, strict regulation and slow growth.

By GGB Staff   Fri, May 02, 2008

The adverse climate in which the gaming industry must operate in the U.K. is hitting operators on all levels. Companies like Gala Coral and Rank, which have operations in several gaming categories, are feeling it in all areas.

The smoking ban and the loss of slot machines have devastated bingo club and betting shop results. New casino regulations have introduced unexpected, higher taxes on gaming revenue. Add in the consumer credit situation and the overall effect has been one of less money coming in and more going out—not a good thing.

Casino and bingo operator Rank had been the subject of takeover rumors for several months when  the U.K. media reported that the company was approached by Genting Berhad with a takeover offer valued at about £485 million, around $960 million. Genting, which has a subsidiary that owns Stanley Casinos in the U.K., had built its stake in Rank to about 11 percent in recent months. The stock price jumped over 10 percent on the news. But a day later, a Reuters report quoted an unidentified source saying that Genting had not in fact made a bid and was unlikely to do so. Rank stock then lost its recent gains.

At Gala Coral the problems were of a different nature, although they had the same source. The Telegraph reported that as numbers had worsened over the past months, management realized the company could run into danger regarding certain banking agreements. To ward off the danger, the private equity owners of Gala Coral agreed with its creditors to pump £125 million into the business. The cash will be used to pay down £83 million of senior debt, with the rest of the infusion going onto the Gala Coral balance sheet.

On top of their individual troubles, the two operators are now battling each other over rights to the letter “G.”

Rank, which owns the Grosvenor casino group, recently began branding its newer, entertainment-based casinos as “G Casinos.” But now, as the company is thought to be trying to register the “G” logo, Gala says that it had already registered the “G” for its brand. How the situation will play out is anybody’s guess. However, it would appear the two have more pressing problems.

By Roger Gros   Fri, May 02, 2008

My gaming memory is sharp. While I often can’t remember what happened during my last meeting, ask me about dealing a $2 blackjack game in Atlantic City at Caesars Boardwalk Regency on June 30, 1981. I can recall most of the hands and the more memorable players.

Yes, I started out as a dealer, slogging away behind the tables, head down, hands active, taking and paying.

And now I’m publisher of what is arguably the most respected gaming trade magazine in the world. Whew, it’s been a long strange trip, that’s for sure. But I’m far from alone on this trip.

Gathering information for our cover story, I was struck by a story told by Steve Perskie, who many call the “father” of Atlantic City gaming, after our interview (all of which can be heard on our website as podcasts; simply go to www.ggbmagazine.com and click on the GBB Podcast for all the interviews conducted in a special month-long retrospective for this issue). Now a New Jersey Superior Court judge, Perskie told me a story about recently being approached by a man following an unrelated court appearance who thanked him for helping to craft and pass the Casino Control Act. The man told Perskie that he and all his family have benefited from gaming in Atlantic City by jobs and other byproducts.

I could say the same thing. I moved to Atlantic City soon after the ’76 referendum looking for a better life. For me, it was chance to become a

professional musician playing the lounges and showrooms. Well, obviously, that never happened, but it did propel me into employment at Caesars, the Golden Nugget and for a short while at Showboat. Since that time, I’ve spent more than 20 years covering gaming as a journalist. My life has been completely changed and enriched by gaming, but I’m not the only one; not by a long shot.

Everyone reading this magazine has a life impacted by what happened in New Jersey more than 30 years ago. Everyone from the room attendants to the chairmen of the companies have lives that would not be the same if not for Atlantic City. Even if you never worked in Atlantic City, the gaming industry would not be what it is today if not for what happened on the Boardwalk 30 years ago this month.

Take Steve Wynn. He had the foresight to be one of the early entrants into Atlantic City. He made a boatload of money and his sale of the Golden Nugget to Bally’s in 1987 laid the groundwork for—and financed—the Mirage and everything he has accomplished since then.

Donald Trump may have been a successful New York developer prior to arriving in Atlantic City in 1984, but it was the visibility he achieved by running one of the city’s most successful casinos at the time and promoting some of the 20th century’s biggest boxing matches and entertainment events in Atlantic City that propelled him onto the front pages of the nation’s leading newspapers.

A slew of the world’s top gaming executives—from Terry Lanni to Bill Weidner and many more—began their professional careers in earnest at Caesars Atlantic City.

Those who criticize the gaming industry as only good for producing “entry-level” jobs need to take a walk with me and meet some of the fine people who took those entry-level jobs in the early days and made something of their lives.

I travel frequently in my role as publisher. And in every corner of the world, I find an Atlantic City veteran—Mark Brown in Macau; Keith Crosby in Mississippi; Don Marrandino and Audry Oswell in Las Vegas; Bob DeSalvio in Pennsylvania; Mitchell Etess in Connecticut; Jim Allen in Florida; Tony Celona in New York; James Maida, just about everywhere; and the list goes on and on.

The significance of the legalization of gaming in New Jersey and the subsequent squeaky-clean operation of the Atlantic City industry have had ramifications far beyond the Boardwalk. It clearly opened up gaming for the rest of the country. It showed that casinos could be regulated effectively even in a less-than-favorable environment. And it provided proof that gaming could have a positive and long-lasting impact on a community that truly needed help.

So while we celebrate the 30 years of gaming and what it has done for Atlantic City, I prefer to focus on what it has done for some great people who may or may not have gotten the chance to shine the same way they have by making the decision to enter the gaming industry in Atlantic City.