November 1, 2009
CLASS II REGS ON HOLD FOR AT LEAST A YEAR
The National Indian Gaming Commission is delaying for a year a set of controversial regulations designed to establish clear distinctions between Class II and Class III machine games
The commission’s announcement said work required on the new regulations had not been completed.
“Therefore, to avoid confusion as well as gaps in regulation, the commission decided to extend the effective date,” the NIGC stated.
“With a leadership change at NIGC currently under way, and the fact that several constituent groups across the nation have asked for more consideration of the impacts these regulations would have, now is not the time to be instituting sweeping changes to Class II gaming,” said U.S. Rep. Dan Boren of Oklahoma, a state whose Indian tribes stood to loose millions has they been required to fundamentally alter their Class II games, making them less appealing, to comply with the change in regulations.
Word of the delay came only days after the announcement that National Indian Gaming Commission Chairman Phil Hogen would resign.
Hogen was closely associated with efforts to draw a “bright line” between Class II, bingo-type games, which are pari-mutuel in nature, and Class III games such as slot machines, which are house-banked. The commission had decided that advancements in technology had blurred the distinctions between the two.
President Obama has named George Skibine of the Department of the Interior as the commission’s acting chairman.
NEW CASINO AVOIDS FINES, PAYS UP FOR PITTSBURGH
Faced with potential fines from the Pennsylvania Gaming Control Board, the new Rivers Casino has paid part of its $7.5 million commitment to help fund the city of Pittsburgh’s new arena.
The $2.35 million payment came a day after the gaming board’s Bureau of Investigations and Enforcement recommended action against the casino for violating a condition of its license by not turning over the $7.5 million.
State Sens. Sean Logan of Monroeville and Wayne Fontana of Brookline inserted language into a proposed bill legalizing table games to suspend the Rivers’ license and appoint a trustee to run the casino if no payment was made by October 25. The amendments also would ban the casino from receiving a table games license until it makes the payment.
According to a Pittsburgh Post-Gazette story, an attorney for the Rivers’ owners described the $2.35 million payment as a “gesture of good will” while negotiations continue toward a final agreement with the city and the Allegheny County Sports & Exhibition Authority, which will own the new arena, the Consol Energy Center. The payments are part of the financing for the facility, which is scheduled to open next year.
The casino’s owners, Holdings Acquisition, committed to the $7.5 million payments for the next 30 years when it took control of the casino from Detroit businessman Don Barden, who withdrew from the project last year when he was unable to secure permanent financing for it.
The next installment of $5.14 million is due April 25.
Critics question huge losses at Ontario’s casinos
A decline in U.S. visitation has hurt Canadian border casinos like Niagara Fallsview.
Finance Minister Dwight Duncan, who is responsible for the province’s scandal-plagued Ontario Lottery and Gaming Corporation, which owns the casinos, blamed the losses on an industry-wide slowdown stemming from the economic slump.
“If you look at the publicly traded companies in the U.S., you’ll find that casino gaming business is down around the world,” he told the Ottawa Citizen
Duncan said U.S. border restrictions implemented after the 9/11 terrorist attacks have hurt attendance at the casinos, three of which are in the border towns of Niagara Falls and Windsor. A fourth casino is on a native reserve near Orillia.
The four casinos lost $76 million in 2007-08, the previous fiscal year.
Duncan couldn’t say when the casinos last turned a profit, according to the Citizen.
The data are prompting questions about the province’s decision to sink hundreds of millions into a casino expansion project in Windsor, where a new 5,000-seat concert facility and hotel expansion opened in 2008.
Premier Dalton McGuinty justified the government-financed project, which came as he campaigned for billions more in federal transfers, as a way to generate more revenue.
Despite the additions, however, the casino, which is operated by Harrah’s Entertainment and Hilton Hotels, continues to lose money, Duncan said.
Conservative MPP Peter Shurman called the Windsor expansion a “billion-dollar boondoggle”.
TRIBE FACES OPPOSITION TO TWIN RIVER TAKEOVER
Rhode Island’s U.S. senators and one of its two congressmen say they will oppose any change in the law that would bypass the state’s voters and authorize the federal government to take Twin River racetrack and racino into trust for an Indian tribe to own as a casino.
The Narragansett Tribe is seeking financial backing to buy the deeply indebted greyhound course and slots parlor, which has been operating under protection of Chapter 11 of the U.S. Bankruptcy Code since June. The facility, located in the Town of Lincoln, close to Providence, is owned by BLB Investors, a holding company consisting of Kerzner International, Waterford Group and Starwood Capital Group.
If the tribe is successful and the facility is taken as federal trust land on behalf of the tribe the state would lose hundreds of millions of dollars. The 4,700-plus VLTs and electronic blackjack and roulette tables operating there under the auspices of the state lottery generated $396.7 million in win this year and paid the state $242.3 million.
U.S. Sens. Jack Reed and Sheldon Whitehouse and U.S. Rep. James R. Langevin all said they would oppose a takeover unless it is approved in a statewide referendum.
The state’s other congressman, Patrick J. Kennedy, also expressed doubts. “There’s no way I see a land deal like this getting done until the entire congressional delegation and the people of Rhode Island agree,” he said.
Gov. Donald Carcieri, once an avowed opponent of casino gambling, said he would not oppose a 2010 ballot question to turn Twin River into a casino.
A.C. ‘RIGHT-SIZES,’ 1,000 LOSE JOBS
Annual end-of-summer belt-tightening saw more than 1,000 people lose their jobs at Atlantic City’s 11 casinos in September, with the possibility of more layoffs heading into the slow winter months.
Figures released by the New Jersey Casino Control Commission and cited by The Press of Atlantic City showed a loss of 1,067 jobs, which reduced the total workforce at the casinos to 37,337.
“I think this is related to the continuing softness in the Atlantic City market,” Cory H. Morowitz, chairman of Morowitz Gaming Advisors, told The Press. “As the revenue declines the operators are responding by right-sizing their businesses.”
Gaming revenue this year is headed for another double-digit decline as the recession and competition from Pennsylvania continue to take a toll on the seaside resort.
More than 3,700 jobs have been lost industry-wide in the last 12 months, according to official figures show. Employment is down to a level not seen since the late 1980s and well below the peak of 51,560 jobs in July 1997.
In the Rockies, a new hotel, and then some
Ameristar Black Hawk — targeting ‘a brand new demographic of guests’.
The expansion also makes Ameristar one of the local economy’s largest employers, with more than 720 new workers representing a 45 percent increase in payroll over 2008.
“Ameristar remains very enthusiastic about Black Hawk,” CEO Gordon Kanofsky said in a prepared statement. “Our $235 million investment in this expansion will generate more local economic development by attracting guests who would be spending their leisure dollars elsewhere.”
Indeed, with the hotel’s amenities and the increased betting limits that took effect in the state on July 2, Las Vegas-based Ameristar believes it can compete to attract gamblers who frequent more established markets outside Colorado.
“We are seeing a brand new demographic of guests,” said Reggie Fullwood, general manager of the Black Hawk property. “These are people who are new to our casino and new to our market, and they are bringing a lot of energy and enthusiasm with them.”
Every one of the new hotel rooms contains wireless high-speed Internet access and a plasma-screen television. The 64 suites feature hot tubs, and some offer double-sided fireplaces and Rocky Mountain views. There is a rooftop swimming pool, which can be enclosed in winter, and indoor and outdoor whirlpools, a full-service spa and 15,000 square feet of flexible meeting space.
Down below, the casino offers an array of restaurants and bars. The 55,000-square-foot gaming floor has a 14-table poker room, 18 blackjack, craps and roulette tables and more than 1,600 slot machines.
ALBERTA MAY REQUIRE PHOTO IDS FOR ENTRY
The Canadian province of Alberta is considering requiring all casino patrons to show photo identification in an effort to prevent banned problem gamblers from returning.
The Alberta Gaming and Liquor Commission is researching the feasibility and public acceptance of all gamblers having to provide photo identification before entry. Under such a system, names would be cross-checked with those who have signed voluntary self-exclusion agreements to ensure they don’t get in.
How to enforce such agreements has been a vexing problem in Canada. Most provinces have relied on a memory-based system - binders filled with gamblers’ photos - that has largely been seen as a failure, with gamblers often returning to casinos, sparking lawsuits in Ontario, Manitoba and Quebec.
“It’s a big change culturally for the province, for our industry,” said Kent Verlik, executive director of the commission’s social responsibility division, speaking in an interview with The Globe and Mail of Toronto. “We have to be very careful in how we approach these things.”
Alberta plans to institute a system whereby those who have signed the voluntary bans and want to return to casinos must take a three-hour course first. And starting November 1, those who breach their self-exclusion agreements could face a $250 fine, Verlik said.
FIRST LOTTERY TICKETS ON SALE IN ARKANSAS
Arkansas has become the 42nd U.S. state to operate a government lottery, and the 43rd U.S. jurisdiction to do so, counting the District of Columbia.
Tickets for four Arkansas Lottery scratch-off games went on sale this week at nearly 1,500 retailers, with the proceeds earmarked for college scholarships for state residents.
An estimated $600,000 dollars worth of tickets were sold the first day and more than $450,000 in prizes paid out.
More games will be added in the coming months, officials said.
CHICKASAW TRIBE BUYS A SECOND RACETRACK
The Chickasaw Nation of Oklahoma has added to its portfolio of racetracks with a purchase at auction last month of a Texas thoroughbred and quarter-horse racetrack, Lone Star Park at Grand Prairie.
The buy, made through Global Gaming Services, a wholly owned business of the tribe’s, was awaiting approval by a U.S. Bankruptcy Court judge. Magna Entertainment, which owned the track, filed for Chapter 11 protection in March.
Global Gaming Services recently bought another of Magna’s holdings, Remington Park in Oklahoma City
“We look forward to having a great relationship with the horsemen and with the city of Grand Prairie,” said GGS Chief Executive John Elliott.
The transfer of the Lone Star license requires approval of the Texas Racing Commission. State law also requires that a majority of the ownership be Texan. Elliott said the company will be able to satisfy that requirement.
‘AGGRESSIVE’ PLAN FOR ILLINOIS’ 10TH CASINO
Construction will begin on Illinois’ long-awaited 10th casino in March, the new licensee told state regulators last month.
Neil Bluhm, chairman of Midwest Gaming and Entertainment, told the Illinois Gaming Board that the company is on track to secure investors and funding to start construction despite the poor economy.
The state’s newest casino will be located on 21 acres in the town of Des Plaines, near Chicago’s O’Hare International Airport.
Bluhm said that if all goes according to plan the casino will be completed by the end of 2011.
“It’s an aggressive, optimistic plan, but we think achievable if everything rolls into place,” he said.
Midwest beat out competitors last year for the license despite submitting the lowest bid. The license, which once was viewed as worth half a billion dollars, went for $125 million up front and $300 million over 30 years.
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