Dec 02 2008
The boys in accounting won't be happy about this:
"An offer of $500 in free slot-machine playing credits was accidentally mailed to 55,000 gambling customers, leaving a Pennsylvania casino scrambling to placate customers and figure out how the mistake happened. Hollywood Casino at Penn National Race Course decided to partially honor the offer on Monday after frantically calling tens of thousands of customers over the weekend," reports the AP.
The problem? The free-play ticket -- which also included two free trips to the casino's buffet -- was supposed to be sent to only 1,000 of the casino's top customers. But because of a mixup at the casino's direct-mail contractor, the promotion was sent to 55,000 customers. Of each of them had redeemed the full value of the ticket, it would have cost Hollywood Casino more than $29 million.
Dispatches from the east
The casinos in Atlantic City are mired in a year-long losing streak, but that's not the case for one of the country's biggest casino suppliers:
"Somehow, Pleasantville-based AC Coin has avoided the economic woes befalling the rest of the gaming business, including the slot machine suppliers. While most of the industry has been shrinking, AC Coin plans to boost production by 30 percent next year as it continues to develop new slot games in a highly competitive market."
AC Coin & Slot builds and services slot machines in New Jersey, Pennsylvania and elsewhere.
... Don Barden isn't the only one missing debt payments:
"Facing tough competition and sliding revenue amid the economic meltdown, Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday [in] order to maintain sufficient liquidity. The Atlantic City, N.J., casino operator, with about $1.25 billion worth of the notes outstanding, said late Friday that it has a 30-day grace period to pay up and will meanwhile seek talks with its lenders to revamp its capital structure and improve its liquidity."
... You'll be happy to know that the contractors building Philadelphia's Sugarhouse casino are not digging on the site of Ben Franklin's favorite brothel, or anything else that might have survived from the colonial period:
"It's not Batchelor's Hall, probably just a house from 1873. That is the conclusion of archaeologists hired by SugarHouse Casino to investigate a foundation unearthed two weeks ago on the 22-acre property where the slots parlor is to be built. But the 15-page report filed yesterday with the Army Corps of Engineers did not change the mind of local historian Torben Jenk. He has insisted for months that an important building from 1729 - a club for educated men called Batchelor's Hall - stood on the site."
Dispatches from the south
Ever since Pennsylvania legalized slot machines, its racing purses have increased, drawing better jockeys and better thoroughbreds and standardbreds. Will all that change once Maryland, with its deep horse racing roots, opens its casinos?
The Patriot-News of Harrisburg tries to answer the question:
"Maryland is home to the Preakness Stakes, the second jewel in horse racing's Triple Crown. But for the last few years, Maryland's two racetracks -- Pimlico and Laurel -- have watched helplessly as horse owners left the state for larger purses in neighboring states, such as Pennsylvania, that have legalized slots gambling. Pennsylvania, particularly the suburbs near Bensalem's Philadelphia Park, has probably benefited the most from Maryland's inability to offer competitive purses. Wayne Wright, executive secretary of the Maryland Thoroughbred Horsemen's Association Inc., recalled Maryland owners pulling up stakes and moving near Philadelphia on the promise that the Keystone State would get slots. ... 'You saw horses leaving here.'"
Odds and ends
Lebanon County wants a piece of the gambling pie, even though no casino is techincally located within the county limits ... Illinois gets a new casino ... Isle of Capri releases its quarterlies (losses of $13.5 million and a suspension of some capital projects) ... Atlantic City should steel itself for a rough December ... Mountaineer Casino Racetrack & Resort announced is laying off 93 workers, 4 percent of its work force. "The cuts affect 'nonessential personnel' like maintenance workers and carpenters," says the AP.
Finally, Vegas casino workers aren't happy with new IRS regulations on tipping and tax reporting requirements:
"The Culinary Union, representing roughly 60,000 service workers, says tips are down 50 percent as visitors spend less time and money in Las Vegas, making workers unhappy with IRS withholding requirements. The IRS has agreed with casinos to reduce the amount casino workers must declare as tip income by 20 percent. Union officials say many workers intend to drop out of the voluntary program to withhold taxes from tips, choosing to risk the possibility of an audit."
Nov 18 2008
First things first: We have a new name for the Majestic Star casino. It shall forthwith be called Rivers casino.
Will this guy get free play? Or this guy? Or maybe this guy?
Onto our regularly scheduled program.
... The gambling industry is getting killed just about everywhere else, but in Pennsylvania, we're just getting revved up:
Pennsylvania is bucking the downward revenue trend in the casino business. The state reported gains of as much as thirty percent over revenues in the same month last year. Even after adjusting the figure to exclude new venues, Pennsylvania still shows that four of the five casinos in existence a year ago have increased business, and revenues among the five locations are up almost four percent.
In contrast, neighboring Atlantic City casinos are down close to twenty percent, and Las Vegas is off by twelve percent.
Part of the Pennsylvania boon is the convenience of location. While traveling destinations have suffered from the effects of rising fuel prices and the general economy, patrons have found gambling closer to home attractive. Pennsylvania police have also conducted a major intimidation campaign, raiding and closing local bars and social clubs for even the most minute of gambling operations. Gov. Ed Rendell has largely succeeded in forcing gamblers to seek state-licensed locations to satisfy their gaming needs.
But it's more than just geography and the novelty of the industry at play here:
"A closer look shows that even among the five casinos that have been open more than a year, four are doing better than last year at this time, and all of them are outpacing Gaming Control Board projections. For the month of October, those five have taken in $103.3 million of gross terminal revenue -- the amount of money kept after paying all winners -- compared with $98.8 million in October 2007. That's a modest 3.4 percent increase over last year, but compared to the double-digit slot machine revenue declines in most other states, it's encouraging to state officials. Only Harrah's Chester casino took in less than last year." (Via the Morning Call of Allentown.)
... But what will happen to those border gamblers once the Maryland slots come on line? And what will happen in West Virginia?
"The West Virginia Lottery Commission figures show about 70 percent of the [Charles Town Races and Slots] customers come from Maryland and Virginia while another 14 percent come from Pennsylvania. Britton can't yet estimate how much business Charles Town will lose. He doesn't expect the machines in Maryland to begin operating for another two or three years. Eventually there will be 15,000 machines in five Maryland locations: Allegheny, Worcester, Cecil and Anne Arundel Counties as well as Baltimore City."
... One way to fight the competition to the south is to fortify the borders with your own casinos:
"The recent passing of a voter referendum that legalizes slots gambling in Maryland could further boost the chances a casino and racetrack resort will come to Adams County, said the Gettysburg businessman behind the idea. The project envisioned by David LeVan can't move forward if the Pennsylvania Gaming Control Board awards the last remaining gaming license to a Pittsburgh casino project. But there's been some speculation a license won't be awarded, and LeVan said his plan for an Adams County casino has become an even more attractive venture since slots will be coming to Maryland."
Of course, the state Harness Racing Commission might have something to say about that, as will Centaur, the Indiana gaming company that says it is still trying to complete a financing deal to build a casino in Lawrence County.
... On Neil Bluhm's excellent timing:
"Nearly a year after Don Barden broke ground on the Pittsburgh casino, a group headed by Neil Bluhm, a Chicago billionaire, formally took control of the project, receiving the slots license from state Gaming Control Board members during a ceremony at the North Shore construction site. Mr. Barden was forced to relinquish the license last summer, when he was unable to secure permanent financing for the project. Enter Mr. Bluhm's group, which gained majority ownership when it put $205 million in cash into the casino, rescuing it from a near-bankruptcy. [Friday], gaming board members and local politicians said Mr. Bluhm's involvement came just in the nick of time. He was able to secure $555 million in financing for the $800 million project before the nation's financial meltdown virtually dried up lending."
Dispatches from the east
The latest out of Philadelphia:
"Working on a Sunday, Mayor Nutter signed zoning legislation yesterday that helps clear the way for Foxwoods Casino to put a 3,000-machine slots parlor in the Gallery at Market East. On Thursday, City Council approved bills that establish a commercial entertainment zone in the block bordered by Market, Filbert, 10th and 11th Streets. Signing the legislation allows Foxwoods to apply to the Pennsylvania Gaming Control Board for permission to move its proposed casino from the South Philadelphia waterfront to Center City. ... The zoning change has been met with opposition from residents of Chinatown and complaints that they have been shut out of the process."
Glad that's finally out of the way. Only took, what, four years?
... The Inky editorializes on the decision:
"The city needs to assure that the process for picking a Foxwoods site is thoughtful and deliberate and takes neighbors' concerns into consideration. While the city may be anxious to get hold of the tax revenue from the slots parlors, it is more important to get the location right. ... Then it will be up to Foxwoods: It needs to submit a detailed plan for the Gallery site to both the City Planning Commission and Council. Their review should involve plenty of public input, and should address the many concerns about the location."
Odds and ends
The annual Global Gaming Expo begins this week in Las Vegas ... There are three finalists for the up-for-grabs Illinois gaming license ... The Greektown casino in Detroit is running short on cash, "hampering its ability to continue operating or to finish building its new hotel, which is slated to open in February, according to documents filed by the Michigan Gaming Control Board" ... More layoffs in Atlantic City, this time courtesy of Harrah's ... Harrah's has also pulled out of the Kansas casino project that it signed up for not long ago ... Even the go-go Asian gambling markets are getting killed by the worldwide recession ... The Meadows in Washington County is feeling generous:
"The Meadows is organizing a canned food drive for the holiday. People who donate canned food get as much as $25 in free play. Nearly 15,000 cans have been donated so far, according to The Meadows."
The Meadows is donating turkeys, too.
Nov 07 2008
Poor Ohio. Always a bridesmaid, never a bride:
Proponents of a failed casino issue on the Nov. 4 ballot are not taking "no" for answer. MyOhioNow.com cofounders Rick Lertzman and Brad Pressman said Wednesday they plan to return to the ballot next year with another casino proposal. It possibly would call for sites in Columbus, Cleveland, Cincinnati, Youngstown, Toledo and other areas rather than just a single location.
"We remain optimistic," Pressman said in a release. "We know there is a large base that supports the idea of a casino in Ohio. With that in mind, MyOhioNow has decided to move forward."
Voters rejected MyOhioNow's casino proposal by nearly a 2-1 margin Tuesday, with 3.28 million voting against State Issue 6 and 1.95 million in favor. The proposed constitutional amendment would have allowed MyOhioNow and its lead investor, Lakes Entertainment Inc., a gaming company based in Minneapolis, to build a casino resort in southwest Ohio near Wilmington.
What happened? A savvy anti-casino PR campaign:
"Early polls showed Issue 6 leading, but support withered in the face of a $27 million advertising campaign against the measure. The anti-Issue 6 campaign hammered away at a 'loophole' in the measure that might have allowed the casino to escape taxation if an Indian casino came to Ohio. Lakes Entertainment insisted that it would pay a 30 percent tax on gambling revenue to be divided among Ohio counties."
... Maryland, on the other hand, approved its slots measure on Election Day, and while it will be a boon (they hope) for Maryland horseracing, the casinos there shouldn't put much pressure on the casinos in Pittsburgh or Washington County:
Maryland voters approved the addition of slot machines to that state Tuesday, but any impact on Pennsylvania's growing slots industry could be minimal. ... Maryland voters agreed to allow five slots operations in their state that could have a total of 15,000 machines. It could be two or more years before any open, as exact locations will have to be determined by a new commission. The only certain location now is Rocky Gap State Park, which is near Cumberland, Md. It will be the closest Maryland facility to Western Pennsylvania and the smallest in that state, with no more than 1,500 machines. Joe Weinert, an analyst for Spectrum Gaming Group, expects the impact on Pennsylvania's slots patronage and revenue to be minimal from new gambling operations in the Baltimore and Annapolis areas and elsewhere in Maryland.
"But this is a real blow to Delaware," he said. Casinos there "will be challenged to retain their substantial basis of Maryland customers."
Dispatches from the east
The stumbling, bumbling, crumbling economy has put a lot of big developments on hold, including this one:
"Pinnacle Entertainment's plan to build a mega-casino worth as much as $2 billion on the Atlantic City Boardwalk is on "indefinite hold" due to worsening competition and the poor economy. The company also said Thursday it would consider selling its land here 'if someone made us a decent offer.'"
OBO? I though you only saw that sort of sign on a used junker, not beachfront real estate.
... They're still trying to figure out where the Philadelphia casinos will be built. But it's starting to look like Center City, near Chinatown:
In the first stage of a lengthy approval process, the Philadelphia City Planning Commission supported a zoning change yesterday so Foxwoods Casino could build a slots parlor at the Gallery shopping mall. At the meeting in the Academy of Natural Sciences auditorium, several residents expressed anger that a decision had been made before anyone knew what the project would look like or what impact it could have on the surrounding area.
"Slow down!" implored John Chin, executive director of the Philadelphia Chinatown Development Corp., a nonprofit neighborhood group. "There's no reason to rush this. Foxwoods has presented no information, no studies." A month ago, Foxwoods Casino said it wanted to move its proposed slot-machine casino from a riverfront location in South Philadelphia to Center City. The company made the switch after repeated delays and challenges from the city.
Meanwhile, the second of the city's two casinos -- SugarHouse -- has been fighting with folks who want the casino to inspect its site for important architectural and historical remnants:
[For a year], SugarHouse insisted that its archaeologists found no evidence of a British fort from 1777 or of Batchelor's Hall, a social club built in 1729 for Philadelphia's renaissance men, including botanist John Bartram.
Local historians and archaeologists countered with maps, deeds, titles, journals and surveys to contend otherwise.
On Wednesday, in a surprise move at the end of a six-hour, closed-door meeting at the Army Corps' Center City offices, the project manager for SugarHouse developer Keating Consulting, Terry McKenna, shocked his opponents by telling them the company would take another, closer look.
According to several participants, McKenna told a local historian, Torben Jenk, that if the location of certain key 18th-century buildings could be pinpointed, "we'll dig for it."
Odds and ends
You may have missed this retirement: "The first, and so far only, director of a key department for the state Gaming Control Board plans to retire Dec. 5. David Kwait, director of the Bureau of Investigations and Enforcement, said he will end a career that has included a 30-year stint with the FBI" ... The state gaming board will be hiring -- eventually ... The last beam has been placed atop the former Majestic Star casino on Pittsburgh's North Shore ... "Don Barden's Majestic Star Casino company, once the developer of Pittsburgh's casino, is saddled with debt and could sell all its assets, according to a report the company filed Tuesday with federal regulators." .. No more $500 loss limits at Missouri casinos ... Detroit's casinos, like most others, suffered greatly in October.
More bad news from the gaming sector as a whole:
"Casino operators Trump Entertainment Resorts Inc and Harrah's Entertainment Inc reported quarterly losses on Friday as the economic slowdown continued to savage the gambling industry. The recently booming sector is now facing a wave of restructuring or even bankruptcies, as it struggles to finance new projects and casinos see customers slash spending. 'Our average spend per patron has fallen significantly during the fluctuations of the financial market and gas prices,' Trump Chief Executive Mark Juliano said in a statement. The Dow Jones U.S. Gambling index has tumbled 77 percent from its lifetime high in October last year, when several years of sharp growth in Las Vegas and Macau, Asia's gambling enclave, started to show signs of faltering."
Oct 13 2008
The Dow is up! Use your newfound stock winnings to gamble at Pittsburgh's casino, which is right on schedule (or at least, its most recent schedule, which is more than a year behind the original schedule):
"Rough as it is, the $800 million North Shore casino slowly is taking form, from the 90-foot-high drum atrium, the building's centerpiece, to the curve of the sleek two-story facade designed to follow the river, to the gigantic 3,872-space parking garage being built behind it. During a tour yesterday, [general manager Ed Fasulo] said the casino, after weathering a work stoppage and financing crisis that cost Don Barden his majority ownership last summer, is on track to open in August."
... check out this cool 360-degree shot of the casino atrium.
... "Nearly two years after Pennsylvania's casinos began opening, compulsive gamblers seeking treatment are able to begin receiving services paid for by the state. The state Department of Health posted a listing on its Web site last week of 13 different individual or agency providers, including several in southwestern Pennsylvania, authorized to be reimbursed for treating gamblers. Officials say at least two dozen more providers are likely to be approved soon, making them eligible to be reimbursed for up to 20 therapy sessions for gambling addicts or their family members."
... Nice problem to have: Canonsburg is trying to figure out how to spend its casino revenue.
Dispatches from the east
You don't have to be Paul Krugman to figure this out, but September is going to go down as a bad month for casinos:
"More bad news for the gaming industry is expected when the New Jersey Casino Control Commission releases revenue figures for September. Larry Mullin, president and chief operating officer of Borgata Hotel Casino & Spa, estimates revenue fell about 15 percent in September. If true, it will be the biggest monthly decline so far this year. Overall, the casino 'win' has dropped 5.2 percent in the first eight months of the year due to the weak economy, high gas prices and competition from slot parlors in Pennsylvania."
Gonna go on a limb here and say we can expect more of the same for October.
... That's ugly, but a delay in implementing Atlantic City's smoking ban could help at least a little bit:
"Atlantic City's City Council voted narrowly last night to delay a complete ban on smoking in the casinos. They did so because powerful casino operators and even some casino employees eager for a smoke-free and healthier workplace joined politicians in ice-cold terror that the ban would drop revenues even more, perhaps as much as 30 percent in total. Those numbers would almost assuredly result in major layoffs."
... Man, you can't give these things away:
"Split Rock Lodge, citing the strained economy, has asked the Pennsylvania Gaming Control Board to drop its application for a slot machines license. When Split Rock, at the western end of the Poconos in Kidder Township, applied in June 2007, the stock market was robust, the real estate market strong and 'credit was readily available' from lenders with whom owner Vacation Charters Limited 'had longstanding relationships,' the [Poconos-area] resort said in a release."
If you recall, both Seven Springs and Nemacolin had applied for the same "resort" slots license, which limits the mini-casino tp 500 slot machines instead of the 5,000 maximum at racetrack and stand-alone casinos.
But both of those Western Pennsylvania resorts pulled their applications, as well.
Dispatches from the south
Maryland ministers are lining up against the state's proposal to legalize slots at racetracks: "Pastors at the 23 churches affiliated with the Laurel Clergy Association are all sermonizing against the referendum throughout the month leading up to the Nov. 4 election," reports the The Gazette of Gaithersburg, Md.
Odds and ends
Maine's casino proponents outspend opponents 18-1 when it comes to political lobbying ... Only Indians need apply at this job fair, for a Native American casino ... This editorial urges a "no" vote on the Ohio casino proposition ... Greektown Casino in Detroit is looking for a buyer ... Thanks to the lousy economy, it's a tough negotiating atmosphere for the labor unions that last year won the right to represent several thousand workers at casinos across the country ... Neil Bluhm, part owner of the Pittsburgh casino now that Don Barden has given up his majority stake, has big plans for Illinois.
Oct 06 2008
John McCain's a gambler; Sarah Palin proved that. But just how much does he like to gamble? And how closely is he tied to the casino industry?
Senator John McCain was on a roll. In a room reserved for high-stakes gamblers at the Foxwoods Resort Casino in Connecticut, he tossed $100 chips around a hot craps table. When the marathon session ended around 2:30 a.m., the Arizona senator and his entourage emerged with thousands of dollars in winnings.
A lifelong gambler, Mr. McCain takes risks, both on and off the craps table. He was throwing dice that night not long after his failed 2000 presidential bid, in which he was skewered by the GOP's evangelical base, opponents of gambling. Mr. McCain was betting at a casino he oversaw as a member of the Senate Indian Affairs Committee, and he was doing so with the lobbyist who represents that casino, according to three associates of Mr. McCain.
The visit had been arranged by the lobbyist, Scott Reed, who works for the Mashantucket Pequot, a tribe that has contributed heavily to Mr. McCain's campaigns and built Foxwoods into the world's second-largest casino. Joining them was Rick Davis, Mr. McCain's current campaign manager. Their night of good fortune epitomized not just Mr. McCain's affection for gambling, but also the close relationship he has built with the gambling industry and its lobbyists during his 25-year career in Congress.
He is one of the "founding fathers of Indian gaming," says Steven Light, a University of North Dakota professor and Indian gambling expert.
... On Monday, the bad news spread quickly from Wall Street to the Las Vegas Strip:
"Shares of casino operators tumbled Monday - several to new multiyear lows - as jittery investors watched Wall Street and global markets slide on fears the financial crisis is spreading. The markets have realized that the $700 billion rescue plan won't work quickly to unfreeze the credit markets and that many banks are still having difficulty gaining access to cash. That's caused investors to exit stocks and move money into the relative safety of government debt ... MGM Mirage's stock fell $3.50, or 16.6 percent, to $17.50 in afternoon trading. It hit a nearly five-year low of $17.28 earlier the session ... Other stocks hitting fresh lows included Las Vegas Sands Corp., which slipped to an all-time low of $19.10, and Wynn Resorts Ltd., which sagged to a more than two-year low of $62, before making back some losses."
... More bad news:
"The MGM Grand Detroit says it's laying off some restaurant and bar employees at its casino, hotel and entertainment complex. The Detroit News and the Detroit Free Press report Saturday that the casino is laying off less than 100 workers. Another round of less than 100 layoffs by the casino had been made earlier this year."
Dispatches from the east
Phialdelphia's would-be Foxwoods casino has agreed to move away from the waterfront, perhaps closer to Chinatown. Predicatbly, Chinatown isn't thrilled about this development: "The casino now planned for the Gallery will poison Chinese minds and rob their souls."
... Should casino workers be eligible for elected office? In Atlantic City, being a dealer, a bouncer, a waitress or middle management means you can't run for city council:
"To safeguard against corruption in local government, one of the regulations that state lawmakers adopted in 1977 barred casino workers from holding local elected office. But in the 30 years since casino gambling was legalized here, three mayors have left office under clouds of suspicion and dozens of city councilmen have been indicted in corruption scandals. Not one worked for a casino. Now some state legislators say they are ready to allow casino workers to run for mayor and City Council in Atlantic City. The state Assembly voted 66-11 last week to approve a bill to allow casino workers who live in Atlantic City to hold municipal office there."
The casino workers would still be barred from running for state office, however.
Dispatches from the south
Maryland hopes that legalizing slots would prevent Maryland gambling dollars from crossing the border to Pennsylvania, West Virginia, Delaware and New Jersey. But will it?
"Three of the locations proposed in the slot machine gambling proposal on the November ballot -- in Allegany, Cecil and Worcester counties -- were chosen in part to attract Marylanders who now go to West Virginia, Pennsylvania, Delaware and New Jersey to take their chances. But the plush new Inn at Charles Town, where from their rooms guests can watch thoroughbreds race and can hop a free shuttle to the slots floor, shows that the competition is prepared to fight back," reports The Washington Post.
Odds and ends
More evidence that casinos aren't recession-proof (or is that Depression proof?) ... Atlantic City's smoking ban may be delayed ... Penn National Gaming warns of a rough third quarter ... An update on the push for (and against) casinos in Ohio ... Polls show that the voting public supports the Ohio casino initiative ... Homestead (Pa.) police receive a grant to shut down those back-room poker machines, which are illegal.
Sep 29 2008
The unnamed Pittsburgh casino is back on track; casino revenues are down slightly across the state; and in Washington County everybody is trying to figure out how to split $12 million or so in local slots tax revenues, courtesy of The Meadows; but thie big news is over to the west, in Ohio, where the voters will (again) have a chance to approve casino gambling through a November referendum:
"Backers of a $600 million casino resort initiative collected enough certified signatures to bring the controversial issue before Ohio voters in November, Secretary of State Jennifer Brunner said Friday. Brunner's office said the proposal contained 480,003 valid signatures, above the required 402,275 needed to qualify for the ballot. Beachwood-based MyOhioNow.com on Aug. 5 submitted about 800,000 signatures for Issue 6, which calls for Ohio's first casino to be developed in Clinton County, between Columbus and Cincinnati."
Ohio voters have shot down this sort of proposal before. Will this year be any different? Not if these guys have anything to say about it:
"The sponsors of a low-key ballot measure to build a casino in southwestern Ohio suddenly have a battle on their hands -- both hands. On the right is Vote No Casinos, a group that includes many of Ohio's traditional gambling opponents such as leaders of the conservative public-policy group Ohio Roundtable. On the left comes the No On 6 committee, with the financial heft of a Pennsylvania-based gambling conglomerate that owns a riverboat casino near Cincinnati and a horse track in Toledo."
That "Pennsylvania-based gambling conglomerate" would be Penn National.
Dispatches from the east
We move from Ohio to Philly, where city officials and SugarHouse Gaming continue to dicker over where the casino should be built:
"A proposal to build the Foxwoods Casino within the Gallery at Market East rather than on the South Philadelphia waterfront would allow the city to reinvent one of its dreariest downtown thoroughfares and improve nearby neighborhoods, Gov. Rendell and Mayor Nutter said [this month]. Rendell, Nutter and Foxwoods officials formally introduced their plan, which calls for building a 3,000-machine slots parlor in part of the Gallery, a 1970s-era attempt at urban retail redevelopment that never quite took."
Kinda like Allegheny Center.
Up in smoke, part II
Is this a glimpse of Pennsylvania's future?
Via Cigar Aficionado: "The Illinois smoking ban is partially to blame for eight straight months of lost revenue in state casinos, says Tom Swoik, executive director of the Illinois Casino Gaming Association. From January, when the smoking ban started, to August, casinos' gross receipts dropped 18 percent compared to the same period in 2007, according to the association's monthly report. Also, 926,000 fewer people have visited the casinos."
You're right, it could be the smoking ban. Or maybe the crippled economy? Anybody watching CNN over at Cigar Aficionado?
This is a trend, it seems:
"Smoke ‘em if you got ‘em in the public concourses at Ameristar Kansas City Casino and Hotel -- but only for another 10 days at most." The smoking ban kicks in imminently.
Odds and ends
MTR Gaming plucks a CEO from Isle of Capri ... A horse trainer was killed at a racetrack in Erie ... The Donald is trying to rescue his Atlantic City operation with a giant skyscraper ... Kansas is go for launch, casino-wise.
Sep 09 2008
In a slow week for casino news, we're left to talk about Thursday's statewide smoking ban, and whether it will hurt business at Pennsylvania's casinos, where the cigarette haze is as much a part of the decor as the drapes or the tight-shirted waitresses. Will the chain smokers take their business elsewhere? Will they walk the 25 feet to the nearest smoking section?
Or will they drive to Atlantic City?
Thing is, Atlantic City's smoking ban is set to take effect, too -- next month, in fact, and whatever Pennsylvania gamblers might be lost for the month of September might be regained in October:
"The state of Pennsylvania could be the beneficiary of the smoking laws in New Jersey. They, too, have a smoking ban law that is going into effect in less then two weeks. They have excluded certain areas of a casino floor from the ban, however ... Pennsylvania casinos could see a large jump in business in October. That is when the smoking laws go into effect in Atlantic City."
The smoking ban at Pennsylvania's casinos is fairly lax -- up to 25 percent of the casino floor can be used as the "smoking section," and if casinos can prove a hardship caused by the smoking ban, that percentage could increase to 50 percent. Atlantic City, meanwhile, has an all-out ban.
... Remember the resort casinos, the mini-casinos with up to 500 slot machines each? Western Pennsylvania was in line to get two of them -- Seven Springs and Nemacolin. But both of those outfits pulled out of the running in 2006, opening the competition to new applicants. Those three applicants (for only two licenses) will be vetted at hearings next month, at the Pennsylvania State Museum in Harrisburg.:
-3 p.m., Oct. 22, for Valley Forge Convention Center Partners, L.P., near Philadelphia.
-1:30 p.m., Oct. 23, Vacation Charters, Ltd., (The Resort at Split Rock) in Carbon County.
-3:30 p.m., Oct. 23, Bushkill Group, Inc. (Fernwood Hotel & Resort) in Monroe County.
... oh, and the photo is somewhat relevant:
"Fallsview Casino Resort announced today that Cheech and Chong - one of the most popular comedy duos of the 1970s and 1980s - will bring their Light Up Canada tour to Fallsview as part of the resort's autumn line-up. The reunited Richard 'Cheech' Marin and Tommy Chong will perform one show only in Fallsview's Avalon Theatre on Thursday, Nov. 6, beginning at 8:30 p.m."
So mark your calendars I guess.
Dispatches from the east
Atlantic City is still reeling from what has been a lousy year, and the local newspaper says the bad economy has spun into a bad customer service experience for casino visitors, which exacerbates things:
"The casinos have cut back on pit bosses, floor persons and full-time employees. Pit bosses are overworked, supervising too many gaming pits. Floor persons have to watch up to six table games. The effect is worse customer service. The slot departments have also been reduced. Customers have to search for attendants for service and often ask dealers that are going on break to help them. Maybe customers are frustrated and are going to places that provide better customer service. As the casinos reduce the number of front-line workers, customer service suffers."
That, and you won't be able to smoke there come October.
... Not drawing enough gamblers? Build more casinos!
"In an effort to survive withering competition from Pennsylvania and New York slots parlors, Atlantic City is considering expanding casino gambling into areas that were never envisioned when gambling was approved here in the 1970s. The City Council last week approved changes to its master plan that will rezone parts of Route 30 to allow construction of a casino on the site of a former oil depot. About a mile from the Boardwalk and only slightly closer than that to the three marina district casinos, the proposed gambling hall would be built by Penn National Gaming in an area currently known best for traffic jams and sewage odors."
You won't smell like cigarette smoke anymore ... but you may smell like raw sewage.
... In Philadelphia, they're still discussing where the casinos will be built:
"The potential relocation of at least one proposed riverfront casino has set off serious real-estate speculation and more than a little community concern about where the project might go next. Foxwoods, which received a license from the state in December 2006 to build a casino on Columbus Boulevard at Reed Street, agreed last month to consider moving after 20 months of delays brought on by a resistant city government and community opposition. So where could Foxwoods go? Could the former Budd Co. site in Nicetown, where Donald Trump was rejected for a casino license by the state Gaming Control Board, be back in play? What about the Wachovia Spectrum in South Philly, which will be torn down for a massive, multi-use entertainment complex? Or Center City?"
The Budd Co. site tops the rumor list, says the Philadelphia Daily News.
Dispatches from the west
Could Ohio get an Indian casino?
"Monroe City officials plan to resume negotiations with the Eastern Shawnee tribe on a new revenue sharing agreement before the end of year for a proposed $300 million to $350 million casino complex ... The tribe previously was considering a site for a casino at Monroe's Corridor 75 Park, a site southeast of Interstate 75 and Ohio 63, but the Eastern Shawnee and the property owners of the park did not renew the option for the purchase of the land at the site."
Monroe is 30 miles north of Cincinnati.
Odds and ends
Detroit's Motor City Casino gets a facelift ... Harra's begins planning its casino in Kansas ... Tropicana Entertainment wants to regain control of its former Atlantic City casino ... An Indian tribe strikes out in the Bay State.
Sep 03 2008
... also known as a "notes" column. Also known as Lazy Writer Syndrome (LWS), characterized by drowsiness, bouts of procrastination, shin splints and multiple trips to the snack bar. The only known cure is a tropical vacation.
... Here's the state's rationale for approving the Pittsburgh casino license switcharoo.
... Nothing to do on Friday? Here's something:
"Friday marks the one-year anniversary of Centaur Inc. getting one of two things it needs to create a new $425 million harness racetrack and slot machine casino west of New Castle in Lawrence County. On Sept. 5, 2007, the state Harness Racing Commission granted Indianapolis-based Centaur a harness racing license. ... To spur the gaming board to act on the slots license, county tourism officials and Carmen Shick, the head of Lawrence County-based Ambrosia Enterprises, will hold a rally Friday near the proposed racetrack/casino site, along Route 422 near the Ohio line."
Dispatches from the east
"Gambling regulators have cited Harrah's Chester Casino for allowing a child on the casino floor. The Pennsylvania Gaming Control Board last week fined the casino $20,000 for allowing a 14-year-old girl on the casino floor in March of this year. Board spokesman Richard McGarvey said the girl was able to get onto the floor, gamble, and cash in the winnings before being caught by a security guard. The casino was also fined $10,000 for several incidents involving security personnel not being present in security zones within the facility."
What, you seriously expect them to check the IDs of every single person who walks through the casino doors? Think of the manpower that would require! Like, two bouncers at least.
... It's simple math -- fewer gamblers means fewer people paying for parking in Atlantic City:
"Gambling floors aren't the only places where Atlantic City casinos are on a losing streak. Revenue at casino parking garages fell nearly 6 percent in fiscal 2008, which ended June 30, state Treasury Department figures show. The $35 million total was down from more than $37 million in fiscal 2007. Gambling winnings for the casinos were down by a similar percentage as more players seemed to choose slots parlors in Pennsylvania and New York."
Odds and ends
Should the state pay down old debts or buy new stuff with its casino revenues? ... A Maryland thoroughbred dealer wants slots to be legalized in his state ... Both Maine and Massachusetts consider new casinos ... The Gulf Coast casinos reopen after Hurricane Gustav (and hope another hurricane doesn't hit next week) ... Isle of Capri releases its quarterlies.
Aug 28 2008
Barden's former spokesman, Bob Oltmanns, makes the case:
From my front-row seat to the Pittsburgh casino saga, I can say without reservation that Don Barden is a good and decent man. He's the kind of guy Pittsburgh used to embrace, yet from Day One he was maligned, criticized and disparaged by rumor and innuendo and never got the benefit of the doubt that he deserved. He may have made some missteps, but his ultimate shortcoming was that he did not have the financial wherewithal to overcome an historic decline in the credit market ... I know he wanted to go on fighting. It's in his DNA. But in the end, he did what he knew he had to do to keep hard-working construction families from getting hurt, and he put Pittsburgh ahead of a dream to which he had devoted five years of his life.
And for that, Pittsburgh ran him out of town.
Literally from the very hour that Mr. Barden was awarded Pittsburgh's gaming license, he was castigated as the guy who would cost Pittsburgh its National Hockey League franchise because his proposal did not include full funding for a new Penguins arena. [Later], the competitors for the Pittsburgh gaming license, Isle of Capri and Station Square Gaming/Harrah's, appealed the gaming board's decision in favor of Mr. Barden to the state Supreme Court, delaying the project by six months and pushing it into the worst credit crisis since the Great Depression. This ultimately doomed Mr. Barden's attempt to secure permanent financing.
[Month after month], new obstacles were thrown in Mr. Barden's way and new demands placed on him. He was criticized for resisting the public process, when precisely the opposite was true. Mr. Barden depended on the public process to ensure that the license applications were reviewed fairly and honestly, and he followed the rules of law and procedure to the letter. In return, he became the defendant of a public process run amok. If any private development project in the history of this city has ever been subjected to such ever-changing standards and demands, I've not seen it.
[It] was hypocrisy that drove Don Barden from this community and, as a Pittsburgher, I'm ashamed at the treatment he received. The economy and credit crisis merely offered cover to those committed to seeing him fail. He's a good man who will be missed, and Pittsburgh is the lesser for his departure.
Many fair points from Mr. Oltmanns, but here's a question -- why would anyone have expected smooth sailing? Did Mr. Barden really think that the construction of a casino in an urban area -- the very first casino in Pittsburgh -- would not be met with political resistanace? With interference from community groups? Lawsuits from neighbors and business foes? Maybe it's that simple in Las Vegas, but from Buffalo to New Orleans, from Philadelphia to San Francisco, experience tell us that casinos are nearly always controversial projects, and construction timelines are often delayed by years. Mr. Barden may have been unfairly villified to some extent, but he was also uncommonly naive if he truly believed that he'd have his casino up and running by March 2008 (his original projection, just 15 months after winning the casino license)
Agree? Disagree? Comment below, or sign up here.
... See what I mean? It's rarely easy:
"The Seneca Nation of Indians has suspended construction activity for two of its high-profile construction projects, including the controversial Seneca Buffalo Creek Casino in downtown Buffalo. While the Seneca Nation pinpoints the decision on a weakened economy, others suggest the decision concerning the Seneca Buffalo Creek Casino may be related to on-going litigation from anti-casino forces. The suspension of the construction projects comes one day after U.S. Federal Judge William Skretny enforced an earlier ruling that gaming operations in Buffalo were being run from a previous 'arbitrary and capricious' decision by the National Indian Gaming Commission. Skretny ordered the NIGC to make its final determination about the fate of Seneca Buffalo Creek Casino soon."
Dispatches from the border
Big news from Atlantic City -- if you were hoping for slot machines at racetracks:
"Slot parlors in Pennsylvania, New York and Delaware have been chipping away at Atlantic City's business, but at least the casinos no longer have to worry about losing their customers to New Jersey racetracks. After more than a year of negotiations, the casinos have finally wrapped up an agreement with the horseracing industry to block slot machine-like video lottery terminals at the tracks, a casino representative said Wednesday. The agreement, signed Aug. 13 without fanfare and with no public announcement, requires the casinos to pay the tracks $90 million over the next three years in exchange for a moratorium on VLTs."
... Atlantic City's losing hand: "For years, casino executives have acknowledged that Atlantic City needed to become a destination resort. Its future prosperity depended on making the town more than just home to a slew of gambling halls. But to date that hasn't happened. And now that there's competition, Atlantic City executives don't have a reasonable answer to the guy who wonders why he should drive all the way to Atlantic City to play the slots when he can do that closer to home. Skimping on the comps only provides another disincentive."
Odds and ends
Maybe some of that casino revenue should go toward improving health care ... Harrah's will run a new casino in Kansas ... The Philly Inquirer editorializes on the recent Supreme Court decision ... Las Vegas Sands, which will operate the Bethlehem, Pa., casino, is looking to build in India ... Greektown casino in Detroit adds 600 slot machines ... Isle of Capri set to release its quarterly results ...
Gamblers aren't losing quite enough money in Kansas City:
"Lawmakers' failure to lift casino loss limits has prompted Kansas City's Ameristar Casino to put the question on the ballot in November. In return for the removal of the $500 loss limits, casinos are willing to up their tax rate a percentage point and prohibit the building of any more casinos in the state to pit fears of gambling expansion."
Aug 26 2008
Remember last week when we said that Neil Bluhm, head of the Majestic Star's new ownership group, might be forced to consider moving his Philadelphia casino away from the city's riverfront, if only to speed up the construction process (since neither of the two proposed Philly casinos, Bluhm's SugarHouse or Foxwoods, has broken ground yet)? No? Well, I did. You can look it up. Just scroll down a bit. Or click here.
Point is, last Friday the state Supreme Court rescued the SugarHouse project, or at least it seems that way on first blush:
A group of state Senate and House members who represent neighborhoods near the proposed SugarHouse casino pledged today to go to federal court to overturn a decision that lets the casino build on submerged riverfront land. [The] legislators sharply criticized a Pennsylvania Supreme Court decision issued Friday that gave riparian rights to the casino developer. They also argued that submerged land along the waterfront should be under state control.
The strategies are the latest effort by those opposed to casinos being built along the Delaware River waterfront. The casinos have received the approval to build there by the state Gaming Control Board, an approval that was affirmed by the state Supreme Court.
"We believe the court overstepped its boundaries," said Rep. Michael O'Brien, as he boarded a plane from Chicago to Denver for the Democratic National Convention today. O'Brien was joined in the statement by State Rep. William Keller and Sens. Vincent J. Fumo and Michael Stack, all Democrats from Philadelphia.
"Our legislative counsel is reviewing the decision," O'Brien said, "and we assume to take it up to the federal court and review our options there and also seek legislative remedies."
Meanwhile, SugarHouse's chief executive officer, Greg Carlin, said today that his company was moving forward on obtaining remaining permits and removing debris at the site for the $700 million casino planned for North Delaware Avenue at Shackamaxon Street.
Full speed ahead. Until this thing ends up in federal court.
... Read the full Supeme Court opinion here (and the dissenting opinions here and here).
... Editorial: "The Delaware riverfront is the wrong location for the proposed SugarHouse and Foxwoods casinos. That's the conclusion of PennPraxis design experts who prepared a site plan review for Mayor Nutter. It said the proposed big-box slots parlors and their mammoth parking garages wouldn't be compatible with the kind of waterfront most Philadelphians want - walkable, relatively green, connected to the rest of the city. Among the few people who don't seem to recognize this planning dilemma are the casino developers, the state gaming board and Gov. Rendell, who will convene a meeting today of interested parties."
Slots law overhaul
"A member of the state's casino oversight board fired back at senators who want to eliminate outside income of board members, saying lawmakers should play by the same rules. 'I'm an old believer in what's good for one is good for all,' said Jeffrey Coy, a former House member from Shippensburg earning $145,000 a year on the Gaming Control Board. 'Jeff knows better than that,' said Stephen MacNett, general counsel for Senate Republicans. 'He was a legislator and he knows that the role of a legislator is very different than that of a gaming board member.' Legislation sponsored by Sen. Vincent Fumo, a pro-gambling Democrat from Philadelphia, and Sen. Jane Orie, an anti-slots Republican from McCandless, would prevent future board members from receiving outside income."
Dispatches from Atlantic City
Comps are becoming harder to find in Atlantic City:
"With a slow economy and competition from neighboring states hurting their revenues, comps are growing scarce at Atlantic City's 11 casinos. And its mostly high-end players who are now getting the benefits that used to be common for many patrons, especially seniors and daytrippers who mostly played the slots. Overall, Atlantic City casinos spent $375 million on premium hotel rooms and other perks in the three months ending June 30."
A year ago, they spent about $422 million during the same period, according to the Associated Press.
... AC is at a crossroads:
"High gas prices, fierce competition and an ailing economy have taken a heavy toll on Atlantic City's casinos, and industry analysts predict even more pain ahead, including layoffs, bankruptcy filings and lower tax revenue for senior citizen programs. 'Atlantic City is truly at a crossroads,' said Harvey Perkins, senior vice president of the casino consulting firm Spectrum Gaming Group. 'Layoffs are a given.' [Other] analysts take a similarly dim view of the state of the A.C. market. 'We may be passing through the darkest point in the tunnel right now, but it would be foolish to believe the tough times are behind us,' Deutsche Bank analyst Andrew Zarnett wrote in a recent report."
... But the tree of gambling must be refreshed from time to time with the blood of casino magnates and their employees:
"'The best thing that happened to Atlantic City is competition,' Perkins said. 'This market has had lazy exclusivity for 28 years, because very few of the operators chose to reinvest vibrantly. Those that did invest are faring better than those that didn't.'"
Odds and ends
The Meadows' success means good things for Washington County's Tanger outlet stores, and vice versa ... From the Hindsight is 20/20 Dept: "The Democratic candidate for state attorney general said he would have sought a court injunction to block the awarding of a slots license to Dunmore businessman Louis A. DeNaples had he been in office at the time." ... The same company that is to operate The Meadows' new casino has a grand opening scheduled for Nevada ... Penn National's Hollywood casino near Harrisburg is performing admirably in light of high gas prices and less discretionary spending ... This guy is unimpressed with how casinos expanded into Pennsylvania ... MTR's credit rating may drop.
Bad news for the Buffalo, N.Y., casino:
"Opponents of casino gambling in Buffalo say they have won another legal round. The Seneca Nation of Indians, meanwhile, say they will appeal the lastest decision while gambling continues at their temporary casino near downtown. Federal Judge William Skretny has reaffirmed his decision earlier this summer, namely, that casino gambling on the Senecas' Buffalo Creek site near H-S-B-C Arena is illegal. But Tuesday's ruling leaves the question of how to enforce his July decision up to the National Indian Gaming Commission. In a written statement, Senecas say construction of a permanent casino on the Buffalo Creek site will continue."
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