February 1, 2010
FLORIDA SEMINOLES KILL SEMINOLE DEAL
A committee of the Florida House of Representatives has driven the last nail into the coffin of Gov. Charlie Crist’s abortive gambling compact with the Seminole Indian Tribe.
The Seminole Indian Compact Review Committee voted unanimously last month to reject both Crist’s agreement and the $225 million the tribe had set aside for the state’s schools. Under the terms of the deal the compact could have raised more than $800 million for education by 2013.
In a further rebuke to the governor the lawmakers also voted to lower the tax rate on slot machines at South Florida pari-mutuel racetracks and loosen some gambling limits.
The Seminoles are running slots, blackjack, baccarat and other table games at its seven casinos based on a 2007 compact that was invalidated by the Florida Supreme Court because it allowed the tribe to operate games that were illegal in Florida. Federal law allows for tribes to operate only gambling that is legal elsewhere in the state. Crist, a Republican, signed a new compact with the tribe last August, but it is not valid unless the Legislature ratifies it.
“This does not mean there is a line in the sand with regard to further negotiations,” said Rep. Bill Galvano, the Bradenton Republican who chairs the compact committee. He told the Tampa Tribune he still thinks it would be in everybody’s best interests to come to an agreement. He warned, however, that negotiations will be difficult as long as the tribe offers games prohibited by state law.
House leaders say they want the federal government to shut down the illegal games until a compact is signed. House Speaker Larry Cretul (R-Ocala) sent a letter to the National Indian Gaming Commission late last year urging it to do just that because the tribe’s “ability to profit from these illegal games creates a disincentive to enter into a compact, and places the state at a significant disadvantage in negotiating games to which it never gave its consent.”
An NIGC spokesman said the agency is monitoring the issue but there would be no immediate action.
QUEBEC LOTTERY WILL COMPENSATE PROBLEM GAMBLERS
In a case that could have implications throughout Canada, Quebec’s Lottery Commission has reached a tentative multimillion-dollar agreement to compensate thousands of addicted gamblers.
The out-of-court settlement stems from a class-action lawsuit filed against Loto-Quebec in 2001 by gamblers addicted to video lottery terminals.
A group concerned with ethics at Loto-Quebec said it wasn’t surprised by the settlement, suggesting that the Lottery Commission doesn’t want a court judgment that might set a legal precedent.
Similar lawsuits are under way in Ontario, Nova Scotia and Newfoundland-Labrador, and other jurisdictions have had their eyes on the Quebec case.
The plaintiffs say around 119,000 Quebec gamblers can trace their addiction to VLTs. They were hoping for more than C$500 million, but the settlement reportedly amounts to C$50 million.
In order to get compensation, Loto-Quebec says compulsive gamblers will need to provide proof that they underwent therapy.
GPS IN THE CASINO: PLAYER TRACKING, AND THEN SOME
Harrah’s Entertainment is deploying an iPhone application with a GPS locator that will follow customers as they walk through the company’s Las Vegas casinos, sending text messages to their phones with offers for nearby restaurants, showrooms and other attractions.
“If you’re at Paris, we could send you two free admissions to the Eiffel Tower ride, or if you’re at Caesars Palace after 6 p.m. we could send you an offer for the Bette Midler show,” said a company spokesman, Neal Narayani, speaking in an interview with the Las Vegas Sun. “We might have some additional show tickets left over, so knowing where the customer is is a great way to get those tickets pushed.”
Harrah’s also has launched an automatic hotel check-in application that incorporates text messaging. Texpress, debuting at Caesars Palace, allows customers to bypass the front desk, similar to what hotels have already done with the check-out process. When booking a room through the Caesars Palace Web site, customers may choose a check-in feature prompting them to confirm their arrival a day in advance by texting the property.
The GPS technology is part of a campaign launching this month at Caesars Palace with a map of the resort, contact numbers for various attractions and access to the hotel’s Twitter feed, among other features.
Harrah’s joins a handful of major hotel chains with iPhone applications allowing visitors to find nearby hotels based on their location and learn more about properties and amenities.
CENTURY EXPANDS IN CANADA WITH CALGARY CASINO
Century Casinos has acquired the Silver Dollar casino in Calgary for US$10.5 million with plans to refurbish the property and relaunch it under the Century Casino brand.
The 93,000-square-foot casino is located on approximately seven acres of land in the Canadian province of Alberta’s largest city. The casino contains 504 slot machines, 16 table games, 15 video lottery terminals, two restaurants, a lounge, a 5,000-square-foot showroom, an 18,000-square-foot sports and entertainment center and a bowling alley.
Publicly traded Century Casinos, based in Colorado, already owns and operates a casino and hotel in Alberta’s capital of Edmonton.
“Once we have made certain improvements at the property and refined its market position, we believe the Silver Dollar has the potential to substantially contribute to our overall performance,” said the Century’s co-CEOs Erwin Haitzmann and Peter Hoetzinger.
Evergreen Gaming Corp., the company that acquired the Silver Dollar in 2007, filed for protection from creditors and last June a receiver was appointed by the Canadian courts to oversee its assets.
HARRAH’S CLOSER TO TAKEOVER OF PLANET HOLLYWOOD
Harrah’s Entertainment has taken over management of the hotel operations of Las Vegas Strip competitor Planet Hollywood.
Harrah’s will operate the 2,496-room hotel and manage some of the property’s food and beverage operations but is not involved in the resort’s newly opened 1,201-room PH Tower, which is owned by Westgate.
Planet Hollywood will continue to operate the casino.
The takeover gives Harrah’s 22,866 rooms on the Strip across nine hotels, including Caesars Palace, the Rio, Harrah’s Las Vegas and the Flamingo Las Vegas. Harrah’s has been trying since last year to acquire Planet Hollywood through a debt purchase. In September, Harrah’s controlled nearly $140 million of the debt. In November, the company filed applications with the Nevada Gaming Control Board seeking approval to acquire the resort.
Planet Hollywood, which is in default on its debt, is owned by a partnership between Planet Hollywood restaurant founder Robert Earl, private equity firm Bay Harbour Management and Starwood Hotel & Resorts Worldwide.
PA. SCRAPS LIMIT ON SLOT-MAKERS
Pennsylvania has scrapped a regulation that limited individual slot machine manufacturers to no more than 50 percent of casino floors.
Language to eliminate the cap was included in the bill legalizing table games in the state, which was signed by Gov. Ed Rendell last month, allowing casinos to offer craps, blackjack, roulette and other table games in exchange for licensing fees and a 16 percent tax on gaming revenues.
Pennsylvania had been one of only three states that capped manufacturers’ market share. Now all three of those states — they included New Jersey at one time and Delaware — have rescinded their limits.
The cap was seen initially as an attempt to limit IGT’s dominance of the U.S. slot market, and it was supported by rival slot-makers. IGT has since seen its market share reduced. Chuck Brooke, senior vice president of government relations for Reno, Nev.-based IGT, said he was pleased the limit was eliminated. “Let’s just say good things happen to those who wait,” he said. “When it comes to politics, timing is everything.”
Slot machines have been allowed in Pennsylvania since 2004. Five standalone casinos and seven racetrack casinos are allowed up to 5,000 slot machines each and pay a 53 percent tax on the revenues generated by the games.
PENN HAS NEW SITE FOR OHIO CASINO
Penn National has secured an option on a second parcel of land in Columbus, Ohio, to build one of four casinos authorized last November by the state’s voters.
The site is about six miles from the Arena District location Penn had initially contemplated and is considerably larger — 123 acres versus 24.
“It opens new possibilities,” a company spokesman said.
But there are hurdles to overcome. Ohio voters must approve a new constitutional amendment in May to allow the move, and the area, located in Franklin Township, still must be annexed into Columbus.
But city officials and community leaders say they support the move.
Penn President Tim Wilmott said the company will return to the original location if the amendment to move the location is rejected.
PRISON STRIPES FOR CARRUTHERS
David Carruthers, the former BetonSports CEO who pleaded guilty in a U.S. government investigation that shut down the online gambling company, has been sentenced to 33 months in prison.
U.S. District Judge Carol E. Jackson sentenced the British national at a hearing last month in St. Louis, where Carruthers had been living under federal house arrest for more than three years. He previously pleaded guilty to one count of racketeering conspiracy.
Carruthers and 10 others, including BetonSports founder Gary S. Kaplan, a U.S. citizen, were indicted by a grand jury in 2006 for violating federal laws banning the placement of wagers by wire. Carruthers was arrested in July 2006 as he changed planes at a Dallas-area airport.
“I understand now that the business was operating outside the laws of the United States,” Carruthers said in a statement he read in court. “I realize I made the biggest mistake of my life.” He apologized to employees, customers, investors and his family. “I am sorry for the actions of BetonSports and the trouble it caused,” he said.
Carruthers’ attorney, Scott Rosenblum, had asked the judge for a shorter sentence since Carruthers was incarcerated for 32 days and was under house confinement for more than three years.
“I believe your apology and remorse, but I know at some point you learned that this endeavor was illegal,” Jackson told Carruthers in court. “I don’t think you thought it was a grey area. I think you knew there would be ramifications for your conduct.”
BetonSports took in $1.25 billion in 2004, with 98 percent of that revenue coming from bets made through its Web site by U.S.-based clients, according to court papers.
The company suspended trading of its shares on the London Stock Exchange on July 18, 2006, a day after the indictment was unsealed. The company filed for liquidation and in May 2007 through its attorney also pleaded guilty to a racketeering-related charge.
Kaplan received more than four years in prison.
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