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."