| Steve Wynn thinks Wall Street has yet to figure out just how powerful his Macau casino opportunity is. The Strip developer expects to break ground on his planned $500 million Macau casino by April, but said recently that investors haven't caught onto the property's prospects. Wynn plans to open the gambling operation about 16 months after the Macau groundbreaking, meaning the casino would open in mid-summer 2004. … Deutsche Banc casino bond analyst Andrew Zarnett said it's difficult for investors who haven't seen a Macau casino to understand what the pending opening means. "These casinos have wall-to-wall gamblers," Zarnett said. "You can think about it, but until you see it for yourself, you don't truly understand it." Jeff Simpson, Gaming Wire, Las Vegas Review-Journal, 1-21-03 Higher Expectations Challenge Casino Developer. Casino developer Steve Wynn admitted to attendees at the 2003 International Builders' Show on Tuesday that it is growing harder to beat people's high expectations for his new projects. "Now whether we're building homes or hotels, the challenge to create a better mousetrap is ever more daunting than it was before," Wynn said to a capacity crowd inside the 7,000-seat Aladdin Theater. …Unlike his previous Strip developments…Wynn said Le Reve has been designed from the inside out. As a result, its signature theme won't be visible from outside the property. "It's beautiful, but you can't look in. The audience in this hotel is in the hotel," Wynn said of Le Reve's faux 150-foot-tall mountain that will hide a 100-foot-wide waterfall, lake and choreographed musical water show. Once Le Reve's proposed outdoor water and light show has finished, Wynn said he hopes his guests will feel as though they have recently experienced a dream. Chris Jones, Gaming Wire, Las Vegas Review-Journal, 1-22-03 One Connecticut tribe got some bad news, no recognition, and no casino. Paugussetts' Rejection Ends Plan For Casino. For the second time in two months the Bureau of Indian Affairs has denied a Connecticut tribe federal recognition, turning back the Golden Hill Paugussetts Tuesday and effectively squashing its proposal for a Bridgeport casino. … The BIA's "proposed finding" by acting Assistant Secretary of Indian Affairs Aurene M. Martin ruled that the Trumbull-based Paugussetts failed in three of seven mandatory criteria. BIA researchers determined the tribe "ceased to exist as a distinct community" 180 years ago and that there is "insufficient evidence" that the group's current members are descended from historic Indians. They also found no evidence of a tribe with an internal government or political process between 1802 and 1973. Since 1973, the BIA said, the tribe's political process has consisted of only "a few individuals." Rick Green, Hartford Courant, 1-22-03 California and Connecticut will continue to be the story in Indian gaming. Whether Governor Grey Davis can get $1.5 billion from the tribes remains to be seen. And whether Foxwood and Mohegan Sun can maintain their dominate position without any serious competition also remains to be seen. Massachusetts might want to sell monopoly, but there are other forces out there working to develop other Indian casinos in New York, Rhode Island, and Massachusetts. In Pennsylvania, Rhode Island, Maryland and other states, there are forces at work to put slots in racetracks and to develop other casinos. Nothing is certain at this point, except that big changes are underway. Gambler Sues Casino Over Losses. Evansville, Indiana - David N. Williams, an Evansville accountant, lost his life savings at Casino Aztar's slot machines. He blames the casino -- and now argues that it should compensate him. In an unusual suit filed in U.S. District Court in Evansville last year, Williams, 53, accuses Aztar of targeting him as a compulsive gambler after it received information that he was depressed and suicidal. The case raises a pivotal legal question: What responsibility -- if any -- does a casino have to stop a compulsive gambler from gambling? Grace Schneider, Courier-Journal, 12-24-02 A much broader issue that is ultimately in the hands of the Supreme Court is that of franchise, or the right to participate in the democratic process. Many legislators have thought that gaming money makes good taxes, but is too corrupt to be used to finance campaigns. The extreme of this position is found in Colorado, where licensed casino employees are not allowed to hold public office. The Supreme Court of the United States is set to rule on the constitutionality of prohibiting casinos from participating in the political process. Especially in light of the spread of gaming driven by the need for individual states to raise revenues, it is bizarre if nothing else to deny gaming interests the right to participate in the democratic process. High Court Eyes Casino Donor Ban. A Louisiana law banning campaign contributions from the casino gambling industry is getting a good look from the U.S. Supreme Court. The Casino Association of Louisiana wants the nation's top court to take up its challenge of the state law. Now, the U.S. Supreme Court has mandated that the state Board of Ethics, operating as the state's Supervisory Committee on Campaign Finance Disclosure, file opposition arguments. …The Louisiana Supreme Court last year upheld the constitutionality of a state law banning riverboat and land-based casino interests from making contributions to political campaigns. Casino Opening Hurts First- Quarter Earnings For Choctaws. The Choctaw Resort Development Enterprise has reported a $10.5 million loss in first-quarter earnings from the previous year due to the expense of opening a new casino. Net income for the first quarter ended Dec. 31, 2002, was $9.4 million compared with $19.9 million in the previous first-quarter. Revenue was $68.5 million – up $11.3 million, or 19.8 percent – compared with $57.2 million for the first quarter ended Dec. 31, 2001. Associated Press, Neshoba Democrat, 2-19-03 Expansion, as exciting as it is, is an economic bubble. The current gaming expansion bubble is driven by the economy, state budgets and the "leveling of the playing field" effect. Leveling the playing field is the term used to describe the pressure from conventional gaming operators for the opportunity to operate under the same conditions as Indian casinos. Regardless of its causes, the bubble will burst; just as the tulip, Florida land development and dot.com bubble burst. The dynamics of competition as outlined by Michael Porter in his famous work, Competitive Strategy, apply to the gaming industry just as surely as they do to the automobile industry or any other. The end result of the expansion, competition and bursting bubble will be simple. Not all casinos, suppliers or manufacturers will succeed; not all states, cities or Indian tribes will be successful with gaming. There is a high cost in gaming, a high cost to enter, a high cost to operate (due to regulation) and a high cost to compete. And there is a price for failing, the exit price. Every state (individual and company) rushing to get on the bandwagon would be well served to weigh the costs as they consider the benefits. Political Rivals Fight Governor's Proposal. Imploring preachers to pray for Gov. James E. McGreevey, political foes came together Wednesday to crusade against the new casino taxes in his proposed state budget. Republican state Sen. Bill Gormley joined hands with warring Democrats Mayor Lorenzo Langford and City Council President Craig Callaway in front of the Second Baptist Church's altar. …A coalition of local black ministers registered approval from seats near the speaker's podium, as elected leaders called the proposed taxes an assault on an industry that produces income for the state and an attack on a city that is on the verge of realizing the payoff of casino gaming 25 years after its start. Bridget Murphy, The Press of Atlantic City, 2-20-03 And now for a man who made a living explaining gaming to Wall Street and the gaming industry itself, a new gamble. Bear Stearns Analyst Resigns. Jason Ader, Bear Stearns Cos. casino and hotels analyst, left the No. 6 U.S. securities firm last week to explore other options, he said. Ader, ranked No. 1 by Institutional Investor magazine from 1999 to 2001 and No. 2 in 2002, will hand coverage of companies such as MGM MIRAGE and Hilton Hotels Corp. to Mark Abramson. Abramson has covered lodging in Europe and Asia and been with Bear Stearns for nine years, said Russell Sherman, a spokesman. Ader, who turned 35 on Thursday, celebrated by asking his girlfriend to marry him. He proposed in his Manhattan apartment before going to Lespinasse, the French restaurant at the St. Regis Hotel. She said yes and he quit the next day. Las Vegas Sun, 2-11-03 California is the biggest story in Indian gaming, with a potential to be even bigger. Tribes in California lead the state in job growth and have for three years. Tribal employment has doubled since January 2000. The Agua Caliente Band, a significant employer, now has decided to continue to pay employees who have gone into the military in the Iraq conflict. Tribal government economies have for three years led the state in job growth, with employment doubling since January 2000… The explosion of employment on Indian lands has largely been generated by the expansion of tribal government gaming… Tribal governments employ 36,300 workers, according to state figures, more than twice the 17,200 workers on tribal payrolls in January 2000, three months after 58 tribes agreed to compacts with Gov. Gray Davis… PRNewswire, Yahoo Finance, 3-31-02 The Agua Caliente Band of Cahuilla Indians affirmed today the Tribe will supplement the salaries of its team members who are called to active military duty. …"As the war in Iraq enters its second week, we felt it was important for our team members and this community to know that we stand by our team members who are called to serve in the United States military." PRNewswire, Yahoo Finance, 3-31-03 The impact of the war on Indian gaming, the gaming industry, the general economy, indeed on our daily lives, is still uncertain. It is certain, however, that there will be an impact. It is also certain that the longer the war lasts the greater the impact will be on the gaming industry, the economy and on our daily lives. Just as war dominates television, radio and the print media, war will dominate the economy and make itself felt in the gaming industry and our lives. The biggest and strongest of private and public companies, Indian casinos and public jurisdictions will be the least impacted; the smaller and weaker ones will be severely challenged. HET agreed with the state of Iowa on a 30% tax rate for their Bluffs Run Racetrack and Casino. Currently, they are paying 20%, the same as riverboats but if the U.S. Supreme Court reverses the decision, they will be paying 32% to 36% and probably will be liable for the differences during the 20% months. … HET has the second highest grossing riverboat in the state. So if they pay 30% at Bluffs Run, down from what was paid at this time last year, and in return there is no increase at their riverboat, they are ahead of the game. Gaming Industry Weekly Report, 3-28-03 In the first week of war, with casinos in most every jurisdiction and a very diverse customer base, Harrah's hasn't felt the impact of war, yet. Harrah's Entertainment Inc. has not modified its forecast for 2003 earnings growth despite the war in Iraq, the chief executive of the No. 3 casino operator said on Tuesday. …"Our business has held up very well," Loveman told reporters after discussing the potential for gambling in Massachusetts at a meeting of the state chapter of the National Association of Industrial and Office Properties. Reuters, Yahoo Finance, 3-25-03 It is too soon for Harrah's or any of us to know what to expect, except that Harrah's will continue to work to find unique solutions to industry problems and to expand its revenue base as much as possible. Mikohn Gaming Corporation today announced the retirement of Dennis Garcia and Bruce Peterson from its Board of Directors. Mr. Garcia will continue with the Company in his current role as a member of Mikohn's Sales Management Team. Both retirements are effective immediately. Business Wire, Yahoo Finance, 3-14-03 Mikohn…announced the retirement of David J. Thompson from its Board of Directors. Peter G. Boynton, Chairman of the Audit Committee will assume the role of Chairman of the Board subject to confirmation at the company's Annual Meeting to be held on May 13, 2003. Business Wire, Yahoo Finance, 3-21-03 Mikohn…sued its former general counsel, Charles McCrea Jr….alleging he defaulted on a $113,740 loan plus interest for 20,000 shares of Mikohn stock. McCrea, who allegedly participated in a Mikohn board-approved stock purchase plan that allowed its eligible directors and executives to buy up to 20,000 shares of restricted Mikohn stock, was accused of defaulting on payments of a $113,740 promissory note that became due on Oct. 29, 2002. Las Vegas Sun, 3-27-03 Whatever the root causes of these kinds of problems, one thing is certain: the gaming industry is highly competitive and not every company is going to survive, much less be successful. |
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