Snake Eyes, Again

Another quarter, another series of lousy reports from the casino sector:

Shares of casinos and gaming companies dropped Tuesday as various companies reported disappointing quarterly earnings, showing gaming continues to be pressured by a weak environment. The sector saw quarterly results from casino operators Wynn Resorts Ltd. (WYNN) and Boyd Gaming Corp. (BYD), lottery systems provider Scientific Games Corp. (SGMS) and gaming device maker WMS Industries Inc. (WMS) ... 

... In recent trading, Wynn dropped 8.6% to $57.67, and Boyd fell 12% to $9.35. Scientific Games lost 26% to $13.11, and WMS declined 8.1% to $43.58. Other casinos trading lower included MGM Mirage (MGM), down 8.6% to $10.05, and Las Vegas Sands Corp. (LVS), down 6.9% to $14.96. Pinnacle Entertainment Inc. (PNK) dropped 3.7% to $10.32, while Penn National Gaming Inc. (PENN) declined 3.2% to $26.43. Gaylord Entertainment Co. (GET), which operates the Grand Ole Opry, fell 4.7% to $16.48. Gambling device and technology maker Bally Technologies Inc. (BYI) lost 5.1% to $40.90, and slot-machine maker International Game Technology (IGT) slid 5.6% to $19.39.

... Seems like a bad time to be getting into the casino business -- see Rivers Casino and its lackluster handle -- but Ohio seems bent on it. And much like Pennsylvania's casinos had to promise jobs to local residents, Ohio's casino backers are making the same pitch:

"Backers of the proposed constitutional amendment to allow casinos in Cleveland, Columbus, Cincinnati and Toledo on Tuesday, Oct. 27, pledged that 90 percent of all jobs in the casinos would go to residents of the four host cities and the surrounding metropolitan areas. That would amount to about 6,750 jobs, according to Bob Tenenbaum, spokesman for the pro-casino Ohio Jobs and Growth Committee."

Ohio gets to vote on the casino issue in just a few days, which means foes will be taking out all the stops:

"A new television ad tries to persuade Ohio voters to defeat a Nov. 3 ballot issue legalizing casinos by saying one of its operators was arrested for illegal bookmaking 28 years ago. TruthPAC, a group financed in part by Mountaineer Casino in West Virginia and horse tracks, discredits Cleveland Cavaliers' owner Dan Gilbert by publicizing a felony charge. Gilbert is the leading partner of casinos proposed at Cincinnati's Broadway Commons and in Cleveland. He was a freshman at Michigan State University at the time; the charge was removed from his record after he paid an unspecified fine and completed 100 hours of community service, according to newspaper accounts. At a Cleveland City Club Forum on Monday, Gilbert downplayed the arrest, saying the case was dropped 'a few months later and no money was ever exchanged.' USA TODAY identified it as a $114,000 ring."

Ooooh ... Michigan State. I wonder how Buckeye Nation feels about that?:

"Former Ohio State quarterback Art Schlichter says a November ballot proposal to build casinos is bad for the state. Schlichter, who played for the Buckeyes between 1978 and 1981 and whose career in the NFL was derailed by a gambling addiction, said Tuesday he wants Ohioans to consider how the state will handle an increase in crime and addictions if the casinos are built. ... Schlichter, who spent 10 years in prison for gambling-related crimes, said it's probably inevitable that Ohio will someday have gambling."

... After three weeks of ticking upward, revenues at Rivers Casino dipped down again last week. See Chris Briem's chart for all the visuals.

... Does it matter that the Flying Zappalas hold posts at a casino association?:

"During the final days of state budget negotiations, a flurry of press releases was sent to media, letters were sent to lawmakers and radio ads were sent over airwaves, all advocating low tax rates and license fees for casino table games. One statement threatened that four large casinos would sue the state if smaller ones were allowed to increase the number of slot machines at their locations. The communications all emanated from The Pennsylvania Casino Association, which has been run for the last two years by former state Supreme Court Chief Justice Stephen A. Zappala Sr. and his daughter Michele Zappala Peck, who is running for Allegheny Common Pleas Court."

Odds and ends

An ATM malfunction sends gamblers at The Meadows home unhappy, and without any bus fare ... And speaking of buses, seniors aboard a bus bound for The Meadows in Washington County had a surprise in store for them ... More smoke signals from the Bay State on a proposed casino ... Ditto from Kansas City ... The Morning Call's ace gambling reporter is subpoenaed in the ongoing Louis DeNaples saga (partly because of stories like this: "Reputed mobster William D'Elia gave prosecutors documents and photos that showed 'conclusive evidence of a long-standing relationship' with Scranton businessman Louis DeNaples, according to federal authorities.")

The Las Vegas Review calls table games in Pennsylvania "the golden goose":

"Pennsylvania's Legislature is considering adding table games to the state's slots-only casinos. This growing, expedient interest in expanding American gaming is a mixed bag for Nevada. If millions more Midwestern and Eastern residents have convenient, increasingly local options to gamble, they're less likely to hop on a plane to Las Vegas. That affects the profitability of airlines and Strip hotels, the income of tens of thousands of tip earners and the state's room, gaming and sales tax collections. However, these states present Nevada-based gaming companies with new opportunities. The chance to expand into new areas with limited competition can help them remain profitable even when their Nevada numbers are falling through the floor."

Blackjack, baby!

A colleague and I were discussing this the other day -- it took literally two decades for any type of casino gambling to be legalized in Pennsylvania. From the early 1980s' discussions about slots, to the mid-1990s' flirtations with riverboat gambling, through the 2000s, when casinos were finally approved -- you might not have agreed with the final decision, but you can't deny that the subject was debated, off and on, fairly thoroughly, for years and years. There's methodical, and then there's plodding.

We all knew that the slots legalization was the camel's nose in the tent -- the rest of the camel, table games, was going to get in eventually. But that it happened (tentatively -- there is no budget yet) so quickly, and with such little debate or dissent or fanfare, is remarkable. In Pennsylvania, where we have a Prohibition relic selling booze and 500 school districts and hundreds of sewer authorities, this is some accomplishment. 

Philly.com has some details:

"Typically, a casino will have 50 to 100 table games. Tables would mean about a 10 percent to 15 percent increase in customers, because table-game players spend more than slot players, according to industry experts. For operators, table games are less profitable than slot machines because they require, on average, six to eight card dealers, croupiers, and other employees to run. In contrast, slots require little overhead. But to the state, that's a selling point for table games: They generate jobs. That helps explain why the tax rates would be different. In Pennsylvania, the tax on slots revenue is 55 percent. On table games, lawmakers are haggling over whether it should be 12 percent or 21 percent. Table operations, too, are important for bringing more traffic and customers to casinos. The table-game crowd tends to be younger and more predominantly male than the slot-machine market."

... Table games will be a Band-Aid for this year's budget problems, but little more than that, says YDR:

"If other states are any indication, the novelty factor will fade. At some point, neighboring states Maryland and Ohio will likely up the ante by passing their own table-game laws. Just like gamblers in eastern Pennsylvania might have traded a night in Atlantic City for Bethlehem last year, some people would stop making the trip here."

... Yes, it might be a short-term novelty, but that doesn't mean Atlantic City is thrilled about it:

While table games are a potential boon for Pennsylvania, the prospect of the state's slot parlors becoming full-fledged casinos is more bad news for Atlantic City in what has been a dismal year for the resort's gambling industry.

Competitors already are smelling blood.

"This makes us full gaming houses," George Toth, chief executive officer of the Mount Airy Casino Resort, said. "We can compete with Atlantic City on equal footing. This is what we've been waiting for."

... Table games will come (if they come) not a moment too soon for Rivers casino, which is already missing revenue expectations:

Less than two months after it opened, the Rivers Casino has become a riskier bet for one prominent New York credit rating agency. Standard & Poor's downgraded the credit rating for casino affiliate Holdings Gaming Borrower one notch yesterday, from B to B-minus, citing concerns about the Rivers' "weak operating performance" and its ability to meet debt service payments if there's no change in fortunes.

At the same time, the agency put Holdings Gaming on its CreditWatch, with negative implications, meaning there's about a 50 percent chance the rating could be dropped again. The moves come as the North Shore casino, which opened with great fanfare Aug. 9, fails to produce revenues anywhere close to its own estimates or even those of the rating agency.

For the week of Sept. 14-20, the casino suffered its worst seven-day stretch since its opening, generating $3.6 million in gross terminal revenue on $45.1 million in wagers, ranking it seventh among the nine slots venues in the state. It continued a slide that began after a big opening week.

So is it the recession, which has bitten casinos from Vegas to Atlantic City? Or is it something worse? It's not just that the casino is below expectations -- it's also performing well below its in-state peers. Maybe Station Square was a better location all along. If the numbers stay this bad, "the casino may not produce enough revenue to meet its debt service obligations once it has exhausted interest reserve accounts set up to provide a cushion." How could the projections have been so far off?

... Chris Briem ponders the meaning of it all:

"People get up in arms over a pay raise for some legislators, yet this all goes without the least bit of consternation. I don't get it. The No Dice folks must be having a conniption. ... Speaking of funny numbers: I heard the casino's community guy George Matta on TV say the casino has 90 full time police officers and that it was more than some local municipalities. Well, looking at the list I compiled last month of local police officers by municipality it turns out that the casino has more police officers than ALL police departments in the county other than the City of Pittsburgh and Allegheny County itself. Go figure."

Dispatches from the border

Rivers casino employs 1,000 people, so in one sense, it clearly is a creator of jobs. But are those net jobs? Or is just pulling a cocktail waitress away from Applebees and into the North Side?:

"An economic study commissioned by Ohio's bar owners says a casino proposal is a zero-sum game that will simply replace established jobs. The Hiram College Public Policy Research Group released a study Tuesday questioning the jobs promised by the casino plan, and proposed tax rates and license fees. The Ohio Jobs and Growth Committee is promoting the ballot proposal to put casinos in Cleveland, Columbus, Cincinnati and Toledo. It has said the plan will create 34,000 jobs. But the Hiram College study says the casinos would largely be frequented by locals and take business from surrounding interests such as bars. The study also says the number of jobs promised per casino is significantly more than the number employed at casinos in surrounding states."

... Ohioans, start your engines.

Odd and ends

Can Atlantic City survive? ... Atlantic City, Redux: the casinos will again take up the smoking ban ... Atlantic City, Redux Redux:15,000 AC casino workers have agreed to a new labor deal, averting a casino shut-down ... Don't expect a gambling bill to be produced by the Bay State this calendar year ... Again with the casino protests in Philadelphia ... This time, Ohioans might actually approve casino gambling, if this poll is any indication ... Don Barden might move (and shutter) his Gary, Ind., gambling "empire"  ... Probably because the tax rate is killing him.

Money money money

For a recsssion, y'all have a lot of disposable income:

"The casino's first eight days of operations produced one big haul, generating $6.5 million in gross terminal revenue on $73.7 million in wagering. Of the $6.5 million, 55 percent, or $3.6 million, went to the state in taxes. About $2.2 million of that will go for property tax relief. The casino kept $2.9 million."

... Rivers bends on its steep game-day parking fee:

"Gamblers no longer will have to wager at least $80 to get free parking in the Rivers Casino garage during Steeler game days. Now customers who gamble any amount of money will receive free parking at the garage during football games. During Thursday's preseason game, players had to wager at least $80 at slot machines in order to get free parking and avoid a $50 fee. The casino also has decided to drop the garage fee on Steeler game days from $50 to $20 for those fans who don't gamble."

... Day One:

Three hours until the ribbon cutting. Mr. Fasulo is meeting with his senior staff, about 20 men and women, in a second-floor conference room. On the agenda: logistics, scheduling, and nagging computer troubles.

"Is it us, or is it Konami?" he asks. At last week's test run, the casino's tech and finance teams discovered that some of the slot machines weren't properly recording the wagers. Thousands of dollars "disappear," meaning the money isn't showing up on slots machine audits.

Dispatches from the border

Like a broken record, this item:

"Atlantic City casino profits took a dive in the second quarter of 2009, as the resort's gaming halls earned 19.8 percent less than the prior year, according to figures released today by the state Casino Control Commission. Gross operating profits totaled $198.4 million for April to June, down from $247.3 million collected in the same three-month period in 2008."

... High stakes in Delaware: "While officials of Delaware's three horse-track-based casinos say they have spent a combined $12 million upgrading their facilities, the cash-strapped state government has racked up tens of thousands on outside lawyers to fight a fierce legal challenge by the major sports leagues and the NCAA."

... In Ohio, they've settled on wording for the casino referendum, to be placed on the ballot this November.The "proposed constitutional amendment that would allow full-scale casinos in Columbus, Cleveland, Cincinnati and Toledo."

The Big Day

Five years, one month and two days after Gov. Ed Rendell signed Act 71 of 2004, otherwise known as the Gaming Act, Pittsburgh's casino, The Rivers, is about to become a reality.

It's been a long road. Act 71 was preceded by a decade of riverboat gambling talk. (Never happened.) Then came the passage of the law. (Took forever.) Then came the three-way race for a casino in Pittsburgh. (Also took forever). Then the "fix was in" for Harrah's and Forrest City. (Said Mayor Murphy.) Then came all those noisome Penguins fans in support of Isle of Capri. (Like Mark Madden). Then Don Barden and the Majestic Star somehow won the casino license. (Whoa!) Then there were a bunch of appeals and lawsuits from The Riverlife Task Force, the Steelers and Pirates, and the losing casino bidders. (Bummer.) Then there was concern Don Barden couldn't build his casino on time, and then there was concern -- well founded, it turned out -- that he couldn't build it at all. (Whoops.) Then Neil Bluhm saved the day. (Yay!)

... Guide to coverage: The P-G's Mark belko will have a story in Sunday's paper, telling us everything we need to know about slot machines. On Monday, expect a story about opening day, as well as a behind-the-scenes profile of the casino's general manager, Ed Fasulo.

... If you go: Expect lots of traffic on day one. Doors open at noon. Free concert at 8:30 p.m. Fireworks to follow.

And be sure to visit post-gazette.com on Sunday and Monday for updates, photos and videos.

... this week was "crushing" for Don Barden. He got to see his casino open -- but it was no longer his:

"As Mr. Barden stood outside the casino's main entrance yesterday, he said the day was "crushing in a sense emotionally." But he added he took pride in seeing the casino completed largely in accordance with his vision. 'I promised first class and that's what people got,' he said."

... the casino's 93-person security force will be watching you if you show up this Sunday.

... The Rivers thinks it can take in $400 million in year one.

... The casino foes from No Dice Pa (who plan to stage a protest / press conference outside the casino on Sunday at 11:30 a.m.) say "we told you so":

"We said the promises of property tax "relief" were unrealistic. Five years later, my tax bill hasn't gone down. Gov. Ed Rendell boasts of reducing tax bills by an average of $200 while seeking to raise the income tax by an average of $250 per household. A shell game, perhaps, but not relief ... Enjoy your favorite Downtown or North Shore eatery or watering hole now. Many of them will close in the next few years, unable to compete with the Rivers Casino's glitz and discounted food and drinks."

Odd and ends

A computer hacker (and a former Mt. Airy Casino employee) tries to break into a casino computer ... The Donald squares off against his bondholders ... Pennsylvania's daily slots revenue exceeded $3 million in July ... It's getting heated in Ohio again ... Same is true in Baltimore, where they want to build a casino ... Same is true in New England.

Ohio approves slots referendum ...

... yet again:

"The idea for building four, full-service casinos in Ohio will be decided by voters in November. The Ohio Secretary of State's Office today said a group backing the constitutional amendment calling for full-service gambling facilities in Cleveland, Columbus, Cincinnati and Toledo have gathered enough signatures to place the issue on the Nov. 3 ballot."

Some of the signatures, naturally, seem to have come from dead people, the Plain Dealer reports:

"There were nearly as many signatures deemed invalid for not being verifiable for whatever reason. In some cases, names of dead people appeared on petitions. ... The amendment would rewrite Ohio's constitution to allow the four casinos to be built and controlled by Cleveland Cavaliers majority owner Dan Gilbert and Penn National Gaming of Pennsylvania."

That seems odd. All the casinos belong to one ownership group?

More:

"The gambling facilities could include slot machines and table games and could have attached restaurants and entertainment venues."

That's different than the "slots-lite" machines that had been proposed for Ohio's racetracks -- these sound like full-fledged casinos, and as such would be more of a threat to Pennsylvania's border casinos in Pittsburgh, Erie, Washington County and (someday, maybe) Lawrence County. But Ohio casinos will be a threat only if they actually open, and the referendum is approved by voters -- but several times in the past two decades, Ohio voters have had a chance to approve casinos, and they've shot it down each time. 

... more from around the state of Pennsylvania:

"Many of the country's largest casino companies have cut pay for their executives and managers," reports the AP. "Harrah's Entertainment cut its managers' pay by 5 percent. Wynn Resorts cut pay 15 percent for managers making $150,000 or more, and 10 percent for the rest. And the Mohegan Tribal Authority cut bosses' pay by up to 10 percent in Connecticut and Pennsylvania. In Atlantic City, the three Trump casinos, the Tropicana Casino and Resort, and Resorts Atlantic City all cut or froze pay for managers."

So the casino executive definitely feel your pain.

... Careful using your ATM card at the casino:

"A 55-year-old woman with a gambling problem tried 23 times to take money from casino-goers' bank accounts, Pennsylvania State Police report. Shoumin Chai of New York City, took $1,110 on three successful tries on June 19 and 20 at Sands Casino Resort Bethlehem ... Chai stood nearby when patrons used an ATM on the casino floor, police said. When the patrons left, police said, Chai was able to enter their personal identification numbers and access their accounts without a bank card."

I'm no ATM security whiz, but it seems like you should need a bank card in order to do that.

... Speaking of the Sands, its in a fierce competition with Mt. Airy casino, just up the road:

"George Toth, Mount Airy Casino Resort's president and chief executive officer, knew Sands Casino Resort Bethlehem's opening would hurt his bottom line. And it has: Sands opened May 22, and Mount Airy's June revenue was down 14.5 percent from June 2008."

In case you missed it ...

... The Meadows just opened its bowling alleys.

Odds and ends

The Meadows Racetrack & Casino will host the finals of 1250 ESPN Radio's "Top Fan 2" at 2 p.m. Thursday, July 23 in Silks Lounge ... MTR Gaming (which ownes Presque Isle in Erie) is refinancing its debt ... Atlantic City's casinos are still taking a beating from Pennsylvania's casinos ... You will be stunned to learn that legislatures across the country are looking to expanded gambling to fill the holes in their 2009 and 2010 budgets ... Mark your (2010) calendars: The New England Gaming Summit will be held September 13 and 14, 2010, at Foxwoods Resort Casino in Ledyard, Conn.

A harbinger?

Surley the executives at the new Sands casino in Bethlehem, Pa., were hoping that the novelty of the casino would have lasted a bit longer than a month-and-a-half:

"After opening to packed houses, the Sands Bethlehem Casino has seen business drop quickly, as the casino has fallen to fourth in revenue among the state’s eight operating casinos. Las Vegas Sands officials say the decline is normal and expected, as the newness wears off. According to figures released by the Pennsylvania State Gaming Control Board, slot income at the Bethlehem gambling venue show a 30 percent decline since opening week. A decline is normal, say gaming analysts, but the drop for Sands is occurring extremely early in the operation’s existence. The casino only opened its doors in May."

These numbers have gotta be making the folks at The Rivers casino a wee bit nervous. Pennsylvania had been the one industry anomally -- casino revenues were crashing in Vegas, Atlantic City and just about everywhere else because of the recession, but we had been somewhat insulated from the effects of the recession because the casinos here are all shiny and new. Maybe that insulation is wearing thin?

... Harbinger: c.1471, herbengar "one sent ahead to arrange lodgings" (for a monarch, an army, etc.), alt. of M.E. herberger "provider of shelter, innkeeper" (c.1175), from O.Fr. herbergeor, from herbergier "provide lodging," from herber "lodging, shelter," from Frank. *heriberga "lodging, inn" (cf. O.S., O.H.G. heriberga "army shelter," from heri "army" + berga "shelter"). 

The "berga" that makes up the second half of the word is similar, but seemingly unrelated, to the sense of shelter that we find at the end of Pittsburgh --  that burgh is a "castle, manor house, fortified place" (related to beorg "hill"), from P.Gmc. *burgs "fortress" (cf. O.N. borg "wall, castle," Ger. Burg "castle," Goth. baurgs "city"), from PIE *bhrgh "high," with derivatives referring to hills, hill forts, fortified elevations.

OK, enough of that book learnin'.

From the pages of the P-G

Two items for the price of one. A story from Mark Belko:

"State Gaming Control Board members may be forced to intervene to resolve a dispute between the Rivers Casino and a local authority over when the North Shore slots venue is to start paying its share of funding for the new arena. The city-Allegheny County Sports & Exhibition Authority wants the casino to begin making the payments -- $7.5 million a year for 30 years -- starting Sept. 15, little more than a month after the gambling venue's grand opening Aug. 9. But that's not what the casino's ownership group was told last year, when it was in discussions to rescue the project from near bankruptcy after Detroit businessman Don Barden failed to secure permanent financing."

... and an editorial, about casino execs and their ability to make campaign contributions:

"Our objection regards the marquee provision -- a ban on contributions by gambling industry officials to political candidates. While casino proponents have given plenty, excessive contributions go to politicians from individuals or political action committees representing a host of special interests -- trial lawyers, labor unions, business groups and advocates for social causes. The Legislature should impose strict caps, as the federal government does, on all political contributions -- not just those from a targeted industry. If lawmakers are subject to influence by big checks from pro-gambling forces, then what about all that dough from polluters, doctors and the insurance industry?"

... bonus story, in case you missed it the first time around -- the company that operates the racetrack side of The Meadows Racetrack & Casino in Washington County (called MEC Pennsylvania Racing Services) has filed for bankruptcy.

Speaking of The Meadows ...

... when it opened a few months ago, a few elements were unfinished, including its bowling alley -- the bowling alley is now scheduled to open next Tuesday, July 14.

Notes from the A.C.

The Donald is getting aggressive in trying to remind Pennsylvania gamblers of all Atlantic City has to offer:

"Some new casino billboards have been popping up in the Lehigh Valley, home turf of the $743 million Sands Casino Resort, Pennsylvania's newest and most expensive slots parlor. But instead of beckoning customers to the Sands, the billboards invite gamblers to the Trump casinos in Atlantic City, about 120 miles away," reports The Press of Atlantic City. "They feature a side-by-side comparison of the amenities the resort-style casinos in Atlantic City have and the more modest slot parlors in Pennsylvania do not. The billboards are part of a marketing effort by casinos to entice Pennsylvania gamblers to Atlantic City this summer, the peak time for tourism."

Odds and ends

The founder and chairman of Isle Of Capri Casinos (which had wanted to build a casino in Uptown / Lower Hill) has died ... Sands may be down from its opening week, but its July 4 revenues were up ... Philadelphia's casino plans are moving along slowly ... Two Connecticut rivals (Foxwoods and Mohegan Sun) are teaming up to take on Atlantic City ...An Ohio study suggests that the legalization of gambling in Ohio could add 34,000 jobs to the economy ... Moscow has imposed a gambling ban in parts of Russia.

Last item:

"The woman in charge of promotions at the casino at Yonkers Raceway was indicted Tuesday on charges she arranged for friends and relatives to win contests. Donna Cronin, 44, and two co-defendants at Empire City Casino helped their acquaintances win money, flat-screen televisions, laptop computers and Broadway tickets, Westchester District Attorney Janet DiFiore said. Sometimes they demanded kickbacks, she said."

That just so happens to be the New York casino owned by the Rooney family.

A small delay

If you asked for a vacation day on Aug. 5 so you could be the first in line at the new casino, you may want to reschedule:

"The Rivers Casino is seeking to delay its opening by four days because of water damage to slot machines caused by last week's storms. In a statement this morning, casino officials said they had asked the state Gaming Control Board to push back the opening from Aug. 5 to Aug. 9. They said the request was a result of minor water damage to a small number of slot machines during the bad weather as well as damage to some slot machines during their transport to the North Shore venue."

... also from the pages of the P-G:

"As a Senate panel moved to resurrect a law banning casino officials from donating politically to legislators and other elected officials, a citizens watchdog group said such high-powered gaming interests gave $4.4 million to state politicians from 2001-08. Lawyers and lobbyists for the 14 casinos authorized by a 2004 state law contributed an additional $12.3 million, according to a report by Common Cause/Pennsylvania released yesterday."

And:

"Pennsylvania could get an additional $165 million in annual gaming revenue if table games were in operation at all 12 of the state's larger casinos, an analyst hired by three casinos said today. The revenue would consist of $104 million generated by the table games themselves -- poker, blackjack, roulette and dice -- plus another $61 million in additional revenue from slots."

Around the state

Those slot machines at The Rivers were saturated because of the storm. Have Pennsylvania's casino revenues likewise reached their saturation point?

"State slots revenue continues to grow, but are the latest figures showing saturation? Or just the realities of heavier discounting in a weaker economy - a way to compete for scarcer discretionary spending? Overall gaming revenues were up 19 percent last week compared to a year ago, but only 5 percent when factoring out the newly opened, 3,000-machine Sands Bethlehem. And revenues per machine declined substantially over last year's figures. Wagers, which grew faster than revenues, jumped by 26 percent to $506 billion last week."

... "A Senate committee gave unanimous approval [Tuesday] to a major overhaul of Pennsylvania's 5-year-old slots casino law, and the full Senate might act as early as next week. The bill would reimpose a ban on casino officials contributing to the political campaigns of legislators and other state officials, a ban that was contained in the 2004 slots law but was recently struck down by the state Supreme Court."

... The new Sands casino is performing well.

... $41 million wagered at Presque Isle last week.

Dispatches from the border

Ohio's governor has a full-blown case of slots fever:

"Gov. Ted Strickland's plan to balance the budget with gambling money includes legalizing up to 15,250 slot machines at Ohio's seven horse racetracks, with most of the games plugged in by next May. The governor's office estimates the machines will rake in nearly $1 billion in 14 months -- from May 2010 to the end of the 2011 fiscal year. The plan would allow the state to collect 48 percent of that revenue for education spending while the other 52 percent would be split among the seven track owners and pay administrative and operational expenses, including payouts to lucky winners."

So close you can taste it

We're just two months away from the opening of the Rivers Casino on the North Shore. Today, the casino released a list of charites that will benefit from the pre-grand opening test run (the test nights are scheduled for Saturday Aug. 1, 2009 and Monday August 3, 2009).

The beneficiaries will be the Allegheny County World War II Memorial, the Urban League of Greater Pittsburgh, The Greater Pittsburgh Food Bank, and Allegheny General Hospital.

Moving on ...

... If you haven't been to The Rivers' Web site lately, they've been busy updating it with the names of all the bars and restaurants, plus promotional information.

... Pennsylvania slots revenues are up almost a fifth, year over year: "Slot machines in Pennsylvania generated $178.4 million in gross revenue last month, an 18 percent gain compared to May 2008, regulators said Tuesday. Numbers were helped by the new Sands Casino Resort Bethlehem, which generated $10 million in revenue in May. Comparing the seven casinos that existed a year ago, revenue was up 10.8 percent."

... Follow the money:

"It doesn't happen exactly as it does in 'Ocean's Eleven,' but every dollar of the more than $1 million netted by the Sands each day is tracked. From the time a bill leaves a person's wallet until it is loaded into an armored car, it goes through a gantlet of check points that includes surveillance by employees watching 42 high-definition monitors above the casino floor, and counting in massive machines in a bunker-like room beneath the Sands. It's all part of an almost obsessive effort by casino operators and state regulators charged with seeing that Pennsylvania gets every penny of its 55 percent cut."

Dispatches from the border

"Backers of a proposed four-casino ballot measure already have spent thousands of dollars to gather signatures to get on the November ballot. But could they be having second thoughts? Penn National Gaming Inc., the Pennsylvania gambling conglomerate that's supplying much of the money and strategic mettle for the proposed Ohio ballot measure, might yet back out in order to shoot for the 2010 ballot, analysts concluded after meeting with the company's senior management." (Via the Columbus Dispatch.)

... Allowing table games in Delaware would mean more jobs.

Until next time ...

Like Sands through the hourglass ...

Ready? Set? Gamble!:

"Some were there to help a charity. Others wanted to see what all the fuss was about. But most people at Sands Casino Resort Bethlehem on Monday were there to be the first people to gamble in Bethlehem. Invited guests from across the region flocked to south Bethlehem for the first of two test runs designed to get the $743 million casino ready for its official opening at 9 a.m. Friday. People who arrived about 1 p.m. Monday and expected to wait for the doors to open at 2 instead found themselves ushered directly to the casino floor. There they wasted no time in making Bethlehem the state's newest gambling town."

... And here's the scene from this A.M.: "Pennsylvania's newest casino is open for business. The $743 million Sands Casino Resort opened about 20 minutes earlier than its scheduled 9 a.m. opening Friday. Several hundred people poured onto the gaming floor. Some had been waiting in line since before dawn. [Sands] debuts with 3,000 slot machines and four restaurants. It is the eighth casino to open in Pennsylvania since the state legalized slots gambling in 2004."

... the Sands company really needs this property to perform:

"Casino magnate Sheldon Adelson doesn't look back - even after a year when he lost $22 billion of his net worth, one of the biggest falloffs of 2008, according to Forbes magazine. Instead, Adelson is looking ahead to his latest venture: a $743 million casino that will open next Friday in Bethlehem, Pa., about an hour's drive from Philadelphia. 'The project is important for us,' Adelson said in a rare interview. 'We don't want to fail in any project. We do our best to succeed.' His company, Las Vegas Sands Corp., can only go up. Shares fell more than 95 percent last year."

... across Pennsylvania, the video poker "industry" (such as it is) fears a state takeover.

... can the Rivers Casino on the NorSide / North Shore draw young people? Or will it be the retiree crowd feeding the slots?

The CEO of Pittsburgh's casino is probably one of the youngest in the country and he wants 20, 30, and 40-somethings to make the Rivers Casino their destination, too. [Greg Carlin] is a 42-year-old Chicago millionaire, a 1988 graduate of the University of Pennsylvania, and the quiet, unassuming CEO of the new Rivers Casino. [He] wants Pittsburgh's casino to be more than just a slots casino -- he's encouraging non-gamblers to visit, especially younger people.

"A lot of our food and beverage venues and bars are located along the river," Carlin adds. "We've got outdoor patio areas at our buffet, at our steakhouse. We've got great views from our drum bar - three-story atrium looking out at the river and the city of Pittsburgh." And Carlin says the sports bar will boast something nobody else has.

"We're probably going to have the biggest TV screen in the city. We're looking at about 150 inches of -- it's multi-screen -- a really neat piece of equipment. Our audio visual budget just for that venue is about $600,000."

Via KDKA.

Dispatches from the border

Sports betting is now legal in Delaware:

"Delaware became the first state east of the Mississippi River to legalize sports betting in a move designed to cut the state’s budget deficit. Gov. Jack Markell signed the bill approving the change today in a ceremony at the oldest of Delaware’s three horse tracks. By September those so-called racinos will add sports wagering to their 8,200 slot machines and horse-betting operations that have been legal in Delaware since 1995. 'There is tremendous interest in the sports lottery throughout our region and nationally,' Markell, a Democrat, said."

So does that mean we'll be getting Dover odds in addition to Vegas odds?

... The opening of the Sands casino in Bethlehem is good news for Pennsylvania, but (more) bad news for New Jersey:

"As Pennsylvania's gambling market expands, analysts say Atlantic City's casinos haven't hit bottom yet. Figures released yesterday underscored their point: Last month's revenue at Atlantic City's 11 casinos plunged 14.2 percent from April last year. Meanwhile, April revenue at Pennsylvania's seven slots parlors rose 13.8 percent - to $150.7 million - from the year before. The April decrease in Atlantic City - to $313.6 million - was an improvement from the revenue declines of 19.4 percent in March and 19.2 percent in February. But it's what's in store later this month that has casino operators here anxious."

... which means construction is slowing it Atlantic City as well: "Some big projects have stalled. Just a couple of years ago, city officials were boasting about plans for three major casinos, totaling $10 billion in investment, by MGM Mirage, Pinnacle Entertainment and Revel. Only Revel continues to go forward," reports the New York Times.

... A dispatch from the border (Kentucky) of one of our border states (Ohio):

"The heads of Kentucky's six leading tracks and the largest thoroughbred horsemen's association painted a dire picture Wednesday afternoon of what will happen if the Kentucky legislature does not soon act to bring slot machines to the commonwealth's racetracks. The press conference was held in the Churchill Downs paddock on the first canceled Wednesday of the spring meet - a point made by several speakers. Churchill Downs earlier this month received permission from the Kentucky Horse Racing Commission to drop from a five- to four-day race week because of a shortage of horses, which tracks are blaming in large part to competition for tracks in the region with slots-enriched purses. The tracks and horsemen are supporting House Speaker Greg Stumbo's bill to bring slots to the racetracks."

Odds and ends

Americans are gambling less, but Pennsylvanians are gambling more ... U.S. casino stocks are having a boring week ... More on Atlantic City's brutal first quarter '09 ... Kansas is still trying to build two casinos ... A Nebraska investor says Harrah's plied him with too many drinks, which was part of the reason he lost tens of millions of dollars while gambling ... Arizona is again contemplating racetrack casinos as a solution to the state's money problems: "The state could reap nearly $1 billion next year if it allowed casino-style gambling at Arizona's racetracks. Rep. Andy Tobin, R-Paulden, is shopping the idea as a way to win enough votes in the Legislature to balance the state budget without a tax hike. The idea of creating so-called racinos has long been sought by Arizona's racing industry. Voters rejected it in a 2002 ballot measure."

Slots on the North Shore

Just a few more months:

"The Rivers Casino took delivery of its first 278 slot machines today, marking another milestone in the North Shore venue's development. During a ceremony this morning, casino officials and Sanford Rivers, a state gaming control board member, placed the first slot machine, a Mr. Cashman festooned with blue and white balloons, in its bank on the gambling floor. It was the first of 3,000 to be installed at the riverfront casino by the time it opens on Aug. 5, including the first machine in the state with a $500 wager."

Whoa. You could burn through your entire pension check in seconds at one of those $500 machines (see video of the event here).

But at least you'll save money on parking:

"It might not be on par with free drinks. But the Rivers Casino will offer customers at least one perk during its first month of operation -- free parking. But their luck could run out after that. At this point, the North Shore slots venue, scheduled to open Aug. 5, will provide free parking in its massive 3,872-space parking garage for the first month as a 'gesture of goodwill,' General Manager Ed Fasulo said yesterday. Officials also are hoping the freebie will help to mitigate traffic backups and minimize frustration during a period in which the casino expects to attract large crowds eager to check out the venue."

After that, it's anybody's guess. But the garage will be outfitted with gates and pay stations, so that may be a clue.

... More feedback on the Supreme Court ruling from two weeks ago:

"One of the leading experts in gambling law found the Pennsylvania Supreme Court's rulingoverturning the prohibition on campaign donations by casino owners and executives shocking. I. Nelson Rose, a law professor at Whittier college in California, told the Pittsburgh Tribune-Review that gambling usually falls under a state's police powers and trump constitutional concerns. 'Everywhere else, the restrictions even on advertising have been upheld by the courts. When lawyers who worked for New Jersey casinos wanted to get involved in political campaigns, the courts basically said, 'No, gambling comes under the state's police power and if you don't like it, you don't have to be in this,''  Rose told the newspaper."

... Pennsylvania's governor gets lucky:

"He considers himself a 'pretty good' blackjack player and likes the ponies, though he has never really been all that lucky a gambler. But Gov. Ed Rendell -- Pennsylvania's biggest cheerleader for slot machines -- had an encounter with Lady Luck last spring at Harrah's Chester Casino & Racetrack that is only now coming to light. He left $2,000 richer, according to Mr. Rendell's federal tax return released to The Inquirer last week."

Dispatches from the border

Ohioans still aren't sold on casino gambling:

"A new poll shows that Ohioans favor legalizing casino gambling in the state, but those results don't mean voters will pass a possible November ballot issue allowing casinos in Ohio's four largest cities. The poll, conducted by the Institute for Policy Research at the University of Cincinnati, shows that 60 percent of respondents favor making casino gambling legal in Ohio. However, the poll analysis notes that Ohioans' purported 58 percent support of gambling 'in the large Ohio city where you live or near to where you live' has grown only slightly since the same question was asked in 1998. Yet Ohioans continue to overwhelmingly defeat gambling issues at the ballot."

Most recently, last November.

... Is Delaware getting sports gambling and table games?

"Delaware moved one step closer to sports betting on Friday as House lawmakers resurrected and revised a bill that failed to win approval earlier this week amid opposition from the casino industry. [Because] of a brief and unsuccessful experiment with a sports lottery in the late 1970s, Delaware is one of only four states, along with Nevada, Montana and Oregon, grandfathered under a 1992 federal law that bans sports gambling. Delaware's status as the only state east of the Mississippi River that can offer sports betting could provide an economic buffer against slot machine competition in neighboring Pennsylvania and Maryland."

The bill also calls for state officials and the casino industry to submit an initial proposal on table games within 75 days of enactment of the sports betting legislation, reports the Inquirer.

Odds and ends

The Mohegan Tribal Gaming Authority decided not to pursue a casino in New York ... The Greektown Casino buyout in Detroit isn't going so well, with two "low-ball" offers ... The SugarHouse casino in Philadelphia gets a preliminary thumbs-up ... The Flying Elvi show at The Meadows in Washington County keeps getting postponed becasue of weather and wind ... The Sands casino in Bethlehem, Pa., is hiring.