October 1, 2010
Philadelphia City Hall
Gambling on Philly’s first casino
Sugarhouse Casino, located on the Delaware River waterfront about five miles north of downtown, was scheduled to open its doors to the public on September 23 with 1,600 slot machines, 40 table games and free parking (a must in the densely urbanized area where the casino is located).
The $390 million, 45,000-square-foot venue, which occupies about 26 acres, is owned by a limited partnership that includes Chicago billionaire Neil Bluhm and a couple of local investors. The same partnership owns Rivers Casino in downtown Pittsburgh.
Management intends to lure gamblers throughout southeastern Pennsylvania, southern New Jersey and northern Delaware with the slogan: “Philly Loves a Winner”. Two million visitors a year are expected, with $16 million in annual taxes and fees accruing to the city, according to local news reports. Pennsylvania casinos pay to the state a 55 percent tax on gross revenues.
Meryl Levitz, president of the Greater Philadelphia Tourism Marketing Corp., said the concentration of three casinos within a 30-mile radius — counting Parx Casino to the northeast and Harrah’s Chester to the south — has prompted her staff to add a new gambling category to its Web site.
“We don’t think it will cause an avalanche of new tourists, though it will attract people in the beginning because it’s on the water and because it is a novelty,” she told the Courier-Post, a daily newspaper based in nearby Cherry Hill, N.J. “It will be interesting to see if the three casinos engage in group marketing, or will they continue to work on their own identity?”
Philadelphia is licensed for one more casino. That project has stalled as a result of funding and other problems. West of the city, Valley Forge Convention Center has been awarded one of the state’s two “resort hotel” licenses. (The other is slated for the Nemacolin Woodlands resort in Fayette County in the western part of the state.)
The state has one more racetrack casino license that currently belongs to a Lawrence County project that also has run into financial problems.
GTECH, SCIGAMES WIN CONTRACT TO RUN ILLINOIS LOTTERY
Illinois Gov. Pat Quinn has awarded a groundbreaking contract to manage the Illinois Lottery to a partnership between lottery giants GTECH, which holds the state contract for lottery machines, and Scientific Games, which provides the lottery’s instant tickets.
The joint venture, known as Northstar Lottery Group, says it will generate $4.8 billion in net income over the first five years of the 10-year contract, which could earn Northstar $331 million over five years through a combination of management fees and incentives.
State officials said Northstar would increase net income to $851 million in fiscal year 2012, the first year of the contract. Of that, $650 million would go to schools and the rest to public construction projects around the state. The lottery generated $662 million in income in fiscal year 2010, according to unaudited figures cited by the Chicago Tribune.
Illinois will be the first state to entirely privatize the management and marketing of its lottery, a move lawmakers hope will help boost revenue and attract new players. The state will retain ownership and regulatory oversight.
Northstar has said it will attract younger and more affluent players through aggressive marketing, expanding the number of retail outlets selling tickets, introducing new games and possibly by selling tickets online.
Northstar beat out Camelot Group, which runs Great Britain’s National Lottery. A third bidder, Greece-based Intralot, which was eliminated from the competition in the first round, said it might challenge the bidding, as it recently did over the Illinois Gaming Board’s contract for a central communications system for video gaming terminals. Intralot protested that a scoring error by the state added millions to the cost of its bid. The contract for the system originally was awarded to Scientific Games.
GAMBLING IN CANADA TOPS $13.7B. IN 2009
Net revenue from Canada’s government-run lotteries, video lottery terminals, casinos and non-casino slot machines totaled C$13.75 billion in 2009, essentially unchanged from $13.67 billion the year before.
Statistics Canada says revenue from gambling leveled off at roughly $13.7 billion in 2007 after increasing steadily from $2.73 billion in 1992.
Casinos accounted for 34 percent of net revenue last year. Lotteries accounted for 26 percent, slot machines outside casinos, mainly at racetracks, accounted for 21 percent, and VLTs accounted for 19 percent.
Gambling profits totaled slightly more than $6.7 billion in 2008, or 4.7 percent of all provincial revenue.
In terms of participation, 51 percent of households with incomes of less than $20,000 gambled in 2008, spending an average of $395. Among households with incomes of $80,000 or more, 78 percent gambled, spending an average of $555.
Average household spend in 2008 was highest in Saskatchewan at $720, followed by Alberta at $645. It was lowest in Quebec at $390
TRIBE SUES RIVAL TO STOP PLANS FOR COMPETING CASINO
The Gila River Indian Community has filed suit with the U.S. Interior Department to stop another Phoenix-area tribe, the Tohono O’odham Nation, from building a competing casino in the metropolitan suburb of Glendale, Ariz.
The Gila, who own three casinos on reservation land in the southern Phoenix suburbs of Chandler and Laveen, are challenging the procedures under which the department earlier this year designated 54 acres of Glendale real estate purchased by the Tohono O’odham as reservation by taking it into trust on behalf of the tribe. The Tohono O’odham announced plans last year to build a casino and hotel near a popular entertainment district in Glendale that is home to the University of Phoenix Stadium where the Arizona Cardinals of the National Football League play.
The city of Glendale, which also opposes the casino, was planning last month to join the Gila River lawsuit.
VEGAS CASINOS TWEET, JUST NOT VERY OFTEN
Las Vegas casinos are tweeting, but not a lot.
That’s the finding of a recent University of Nevada, Las Vegas study which said 40 percent of the city’s casinos have Twitter accounts but post to them fewer than once a day, according to an Associated Press report.
The most prolific tweeter among the casinos is also one of the newest, Casino Royale on the Las Vegas Strip, which tweets nearly 16 times a day, the report said.
David Schwartz, who heads the university’s Center for Gaming Research, said some casinos post less than once per week.
“If you don’t have a conversation going, it’s really not as effective,” he suggested.
The study didn’t look at the kinds of tweets casinos sent, just when the casinos opened the accounts and how often they posted.
A pilot study by the university analyzed 11 casino Twitter accounts for one week from June 1-7, finding that nearly 36 percent of the posts were friendly responses to positive tweets from others who mentioned the casino. Nearly 19 percent of the posts were “re-tweets” of positive messages with minimal additional comment. The 11 casinos posted 6.5 times per day during that study. The newer study, released last month, said only nine casinos posted to the site more than five times per day.
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