CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Author Books Send to a Friend Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Recent Articles
Best of Ken Adams

Gaming Guru

author's picture
 

Quick-takes: The month's trends at a glance - January 2005

25 April 2005

The economy ended the year on a very high note. The Dow Jones Industrial Average closed the year at 10,783, the NASDAQ at 2,175 and Standard and Poor's at 1,211. All closed down at the end of January, not much, but down. Gaming stocks in general, too, were down; however, earnings' forecasts are generally good, leading one to expect gaming stocks to regain the momentum of 2004.

Stocks moved higher Tuesday [February 1, 2005] as strong earnings and a drop in oil prices offset the impact of lower-than-expected manufacturing activity and apprehension about the Federal Reserve's impending decision on rates. …January was an uncharacteristically poor month for stocks, with the S&P 500 dropping 2.53 percent. This has raised some concern on Wall Street, because January's performance often foreshadows how trading will go for the rest of the year. Associated Press, New York Times, 2-1-05

The price of oil has been creeping back toward $50, but consumer spending is still good, and in Iraq, the election took place successfully, reducing international tension and investor anxiety. And Billy Gates stepped up to the plate, returning nearly as much to the economy as the federal tax rebate of 2001.

While it is highly unusual for a dividend payment from a single company to have such a major impact on incomes, Microsoft is one of the most widely held stocks in America. The size of the payment--$32 billion--rivaled the $38 billion the government paid out in federal income tax rebates in the summer of 2001. Associated Press, Information Week, 1-31-05

Those that follow gaming revenue reports have seen one person's play have an impact on the win for the entire state of Nevada. One 'whale' playing baccarat on the Las Vegas Strip winning or losing $20 to $30 million can impact the budget of Nevada. But Bill Gates and the Microsoft dividend payment is in a category of its own.

Boosted by a large dividend payment from computer giant Microsoft Corp., Americans' personal income rose by a record 3.7% in December, the Commerce Department reported Monday. That helped boost consumer spending by a solid 0.8 percent during the all-important holiday season. The government said the increase in incomes would have been a much smaller 0.6 percent without the one-time $3-a-share dividend payment Microsoft made last month. Associated Press, Information Week, 1-31-05

Gaming revenue was generally up in December, up nearly 13 percent in some jurisdictions. Illinois, Missouri, New Jersey and Nevada were all up significantly. A good end to 2004 and a good omen for 2005.

Gambling revenue at casinos in Atlantic City, New Jersey, rose 12.6 percent in December…rose to $360.7 million from $320.3 million. Reuters, 1-10-05

Nevada's 347 casinos enjoyed their best November ever, winning $862.1 million from gamblers, up 12.9 percent compared with November 2003. Cy Ryan, Las Vegas Sun, 1-11-05

The 11 casinos in Missouri had combined winnings of $125.1 million last month, up 12 percent from a year earlier. Christopher Carey, St. Louis Post-Dispatch, 1-11-05

The nine casinos in Illinois won $146.8 million, an increase of 12.7 percent. Christopher Carey, St. Louis Post-Dispatch, 1-11-05

Connecticut…Mohegan Sun…slot revenues of $71.9 million…Foxwoods Resort Casino…slot revenues of $62 million. Associated Press, Hartford Courant, 1-14-05

…14 riverboats, the downtown New Orleans casino and three slot-machine casinos at race tracks took 175.8 million dollars from gamblers last month, compared with 166 million dollars in December 2003. KLFY channel 10, 1-18-05

Rhode Island gamblers put $2.5 billion into the machines July-December 2004, $2.3 billion of which was paid out to winners. The state's share was $119,158,988, a 15 percent increase over the same period last year. …Average net terminal income generated for the state for those six months was $33,443, compared to $15,747 at Connecticut casinos during the same period. Jim Baron, Journal Register News Service, 1-20-05

Revenues for Colorado's gaming industry rose to $59.7 million in December from $54 million a year earlier. Black Hawk's 22 casinos logged $42.9 million…Cripple Creek's 19 casinos posted $11.6 million and Central City's five casinos reported $5.2 million. Rocky Mountain News, 1-20-05

The [Northwest Indiana] Lake Michigan area casinos rang up a total of $102.2 million in December…five riverboats…outpaced December 2003 by $9 million. Susan Erler, Northwest Indiana Times, 1-21-05

Detroit's three casinos December revenues rose 1.8% to $95.8 million. MGM Grand Detroit was up 4.6%, Greektown was up 0.5% and MBG's MotorCity was down 0.2%. The Gaming Industry Weekly Report, 1-24-05

The gaming industry appears to be doing nicely; the revenue growth may not equal the go-go days, but it is still growing. The total gaming available in the United States in 2005 is significant and diverse. Even though gaming has been called "industry" for a long time, prior to 1992 or so, the term may have been a stretch. It is not a stretch today.

Now gamblers can try their luck in more than 440 high-stakes casinos that stretch from the bayous of Louisiana to the evergreens of the Pacific Northwest…Forty riverboat and dockside casinos lure gamblers to gangplanks in Illinois, Iowa, Indiana and Missouri. More than 400 Native American-run casinos operate in 23 states, from Connecticut to California. And lotteries…41 states, with Oklahoma the latest to catch Lotto fever….States made $14 billion in profits on the $45 billion in lottery tickets they sold in fiscal 2003, according to the North American Association of State & Provincial Lotteries, a trade group that represents state lotteries. Non-Indian casinos pulled in $26.5 billion in revenues and paid more than $4.3 billion in taxes in 2003 to the 11 states and localities that allow them to operate. Indian-owned casinos in 29 states brought in $16.7 billion in revenues in 2003 and made $759 million in payments to state and local governments…The country's 23 "racinos" already draw crowds in seven states and more are on the drawing board for Maine and Pennsylvania. Racinos forked over $776 million in taxes in a half-dozen states. Pamela M. Prah, Kansas City Info Zine, 1-8-05

There is more to come. Each year when legislatures in each state convene, gaming is certain to be a topic in many of them. Whether driven by the need to raise more revenue or the pressures of grass roots initiatives, gaming is on the agenda. It never seems to be over, even when it is over. Maryland, Texas and Kentucky, for example, have seen very similar legislation to expand gaming every year for years; regardless of the vote, it comes back again the following year. Last year California had three competing gaming initiatives on the ballot; one would have enabled non-Indians to operate casinos, and though it lost, there is another waiting in the wings to be placed on the ballot in 2005.

Lawmakers are gathering at their state capitols this week…43 legislatures will be in session by the end of January; 15 start work by week's end. …Economies are on the upswing after several down years, but most say the gains aren't enough to erase the pain of borrowing, cuts and tax increases from previous years. …And gambling remains an issue that draws adamant supporters and harsh critics. Supporters are pushing expanded gambling in Delaware, Indiana, Kentucky, Maryland, Nebraska and Texas. Associated Press, San Francisco Chronicle, 1-6-05

…By mid-March Kentucky legislators are expected to deal with." Passing a state budget that is already nearly a year late; a landmark tax reform package; medical malpractice reform, and possibly casino gambling. Patrick Crowley, Cincinnati Enquirer, 1-6-03

Ohio voters could be asked to decide as many as eight statewide issues in the fall -- on topics that include limits on government spending and expanded gambling. If all eight issues being discussed make it to the Nov. 1 ballot, it would be the most since voters decided eight in the June 1976 primary. Cleveland/Akron News Channel 5, 1-31-05

Should part of San Bernardino County be designated as a gambling zone? That's what California voters will be asked if an unusual initiative makes it to the ballot. A man citing a Beverly Hills post-office box as his group's address wants to create a gambling utopia of sorts in San Bernardino County, where "facial-recognition software" would track a gambler's every move and casino proceeds would be earmarked for everything from teachers' salaries to helping slaves' descendents. Even fish and fresh water are part of the plan, which calls for canals dedicated to the transport of icebergs and salmon spawning. The proposal was filed last week as a ballot-initiative bid with the state Attorney General's office. Jim Miller and Michelle DeArmond, Inland Southern California Press-Enterprise, 1-31-05

Nevada is virtually the only state that simply permits gaming without specifying where it is permitted. New Jersey limited casinos to Atlantic City; in the Midwest most states insisted that casinos float; Colorado put its casinos in three remote mountain mining towns; Michigan thought only Detroit appropriate; Pennsylvania has a couple of different options, and in Indian country the location is determined by the location of the tribal trust land. One of the trends of 2004 and 2005 is expansion of gaming into more urban areas; even states that already have gaming are exploring bringing casinos into the cities. The reason is simple, the cities need to generate more revenue, fund special projects and bring more visitors to town. So the mayor of Chicago would like a casino, the mayor of New York mentioned it, as did the mayors of Indianapolis, Oakland, Cleveland, Minneapolis, Milwaukee, Buffalo and others.

Wichita is one of three locations where voters could approve a destination casino under a bill to be introduced next week by a coalition of gambling promoters. The proposal would guarantee the state more than $100 million in up-front payments next year.. Steve Painter, Wichita Eagle, 1-31-05

…The bills to be considered would authorize 2,500 slot machines each at parimutuel tracks in Anderson and near Shelbyville. Both would steer millions of dollars in wagering tax proceeds to Indianapolis, in part to help fund construction of a new stadium for the NFL's Colts. Mike Smith, Associated Press, Indianapolis Star, 1-26-05

A proposal to build the state's first non-tribal casino in the Portland area would have to clear huge political hurdles that cast doubt on the project's future, gambling industry observers say. Two Lake Oswego entrepreneurs revealed last week that they plan to seek voter approval of a massive casino and entertainment complex that ultimately would include as many as 3,500 electronic gambling terminals. Jeff Mapes, Oregonian, 1-18-05

Unlike Michigan, Louisiana and New Jersey, many of these cities think the best way to accomplish their goal is to bring an Indian tribe in to run the casino. Not all mayors want an Indian casino; the mayor of Chicago wants the city to own the casino, and in Cleveland and New York, Indian tribes haven't been mentioned. But in the ones that want an Indian casino, the concept is to find poorer, rural tribes and offer them "the prize," the big city. It has not been proven yet, but there is enough interest this year to make one think we should see something happen in 2005.

Representatives of the Bradley Center are talking with the Forest County Potawatomi about the possibility of developing a casino near the downtown Milwaukee sports and entertainment venue…The tribe could lease the 3-acre lot on the northeast corner of North Sixth Street and West Highland Boulevard or consider combining the parking lot with other parcels that are also owned by the Bradley Center to assemble a site…The tribe has proposed a $240 million expansion of the Menomonee Valley location, but the project is on hold until the Potawatomi can reached a new gaming compact with the state of Wisconsin. Mark Kass, Milwaukee Business Journal, 1-19-05

Gov. Tim Pawlenty met with the mayor of Bloomington last month to discuss opening a partially state-run casino at the Mall of America…Lawyers for the mall's owners also met recently with the Bloomington City Council to discuss the same possibility. …the governor has met with several local officials around the Twin Cities in recent weeks to discuss his casino proposal. It would be a partnership between the state and several northern Minnesota Indian tribes that don't currently own casinos. Patrick Condon, Associated Press, Minneapolis Star-Tribune, 1-19-05

A Rochester businessman is quietly pitching a plan to state officials that would see the Seneca Nation agree to build a casino in downtown Buffalo in return for the Senecas being awarded a casino in the lucrative Catskills resort area. …The head of the Seneca Nation confirmed it would be interested in such a deal. Seneca President Barry Snyder said he would lead a push to change the nation's current position that its Erie County casino be…the airport - a plan opposed by many local and state officials - if the Senecas were given access to the Catskills. Tom Precious, Buffalo News, 1-20-05

And when the mayors don't come knocking, the tribes often go to city hall, as the Turtle Mountain tribe did with the city of Grand Forks.

Turtle Mountain tribal leaders plan a community meeting next week to pitch their concept of a casino in Grand Forks. "We're just trying to determine if this is a project that can be done," tribal Chairman Ken Davis said. "In doing some public meetings, we hope to address any questions or concerns the people have. It's important, with a project of this kind, to hold community meetings, to get out as much information as we can." Associated Press, Duluth News Tribune, 1-1-20-05

Detroit has casinos, and it has an Indian owned casino, but that doesn't mean the mayor isn't trying to figure out a way to get more out of the situation. Detroit is an extreme example of the decline of inner cities and therefore an important example in the ways cities are trying to solve declining fortunes. In 1950 Detroit had 2 million people and seemingly a very bright future as America moved out onto the brand new interstate highways in brand new American cars, cars built in Detroit. Today Detroit has about 750, 000 people and some serious challenges. So the mayor and other cities leaders are shopping for saviors with deep pockets. The Las Vegas Sands fresh from its successful IPO and debut in Macau is looking for new opportunities, but Detroit is not without challenges for the suitors; there is more than one agenda in action in Detroit. And there is a still unsettled lawsuit by an Indian tribe claiming the licensing processes were unfair.

The Las Vegas Sands Corp. is likely to face stiff competition in any attempt to purchase the MGM Grand Detroit Casino and build a new casino, hotel and convention center in Detroit. Howard Hughey, spokesman for Detroit Mayor Kwame Kilpatrick, said the city is looking into "another proposal" to expand Cobo Center, which is considered undersized to host the annual North American International Auto Show. Hughey declined to name the other party. "We are looking at all options right now" to either expand Cobo Center or build a new convention complex, Hughey said. Joel J. Smith/ R.J. King, Detroit News, 1-20-05

What will states do when gaming is in every state and there is no new gaming to introduce? Nevada and Mississippi are reaching the edge of possibilities, both are faced with significant competition for their customers, and each has most of the gaming options available, except lotteries. The legislatures in both Nevada and Mississippi will debate a state lottery. In Nevada the gaming industry is opposed, while in Mississippi the industry is indifferent. But in Nevada there is no threat of increased gaming taxes, while in Mississippi there is. Regardless of whether Nevada or Mississippi authorize a state lottery, the debate proves a point; if a state relies too heavily on one industry or one form of taxing, there will come a time when it is not enough. Nevada and Mississippi are close, but not as close as Illinois and Indiana. Illinois and Indiana have much higher tax rates on gaming and rival Mississippi and Nevada in the total gaming options available within the state.

A state lottery is low on the list of concerns in the casino industry, where people are more worried about legislation dealing with tax issues and hurricane protection. Tom Wilemon, Biloxi Sun Herald, 1-30-05

Top state Democratic lawmakers said Friday they're betting the time is right for the nation's No. 1 gambling state to create a lottery to solve what they called a "crisis" in education funding. …The state's powerful gambling interests have discouraged previous proposals for a state lottery, maintaining the state should not compete with its No. 1 industry. "The government doesn't go into the car business or compete with supermarkets," said Bill Bible, president of the Nevada Resort Association… Ken Ritter, Associated Press, Reno Gazette-Journal, 1-21-05

Not all gaming is subject to state regulation and state taxation. Poker, while often regulated, is growing so fast in so many places that it is outrunning efforts to control and regulate it. Spread by television and the Internet, poker may give sports a run for its money. Not that it is full speed ahead everywhere, many states are trying to stop the spread by attacking local tournaments, even when they are helpless against television and the Internet. Even Utah is not immune to the power of poker.

Unless you have been living in a cave, without cable, and with your hands over your ears, poker has taken over the world. Honest to God, Poker could have won the Iraqi elections if it made the ballot in time. The fine folks at ESPN, who have brought us 24-hour sports coverage…jump-started the craze with their coverage of the World Series of Poker…Now, any TV station with a strong enough signal wants to throw its hat into the ring. The Travel Channel and Bravo, which air weekly shows, have never seen their ratings higher. …Online poker has turned anyone with a major credit card and the Internet into the next World Series of Poker champion. Jeff Hoodzow, Arizona State Press, 2-1-05

Parents and church leaders may not always approve, but poker, popularized in recent years with televised tournaments, seems to be sweeping the country, reaching all the way into the nooks and conservative crannies of Utah County. A week and a half ago, Utah Valley State College held a No Limit Texas Hold 'Em poker tournament in connection with the school's all-night party, and on Friday, The Flophouse, a Texas Hold 'Em tournament club, reopened in Orem, providing action from 6 to 10 p.m. Wednesday through Saturday. David Randall, Daily Herald, 1-31-05

Agents from the Texas Alcoholic Beverage Commission (TABC) are warning bar owners that neither the bar nor the customer can gain anything of value from gambling. Lieutenant Harry Schreffler, Lubbock District TABC Supervisor, says, "It appears it's very difficult for a bar to legally hold a tournament. If there is anything of value that is being exchanged, or if there is the possibility of winning, then the tournament would be considered gambling." Lubbock News Channel 11, 2-1-05

February of 2005 is Super Bowl month; Las Vegas casinos can't have parties called "Super Bowl" parties; Las Vegas can't advertise at the Super Bowl. The NFL may not like Nevada, casinos or gambling on games, but the NFL cannot stop the action, except in Las Vegas. The Internet is not regulated, taxed or seemingly within the sphere of influence of the NFL.

…National Football League's recent crackdown on Super Bowl parties as well as the use of its trademarked "Super Bowl" brand. …Strip casinos have been strangely quiet about one of the city's biggest gambling events of the year. Gone are print ads and radio spots advertising Super Bowl events. …The lack of marketing is an echo of cease-and-desist letters the NFL sent to several Las Vegas casinos last year, warning them that upcoming parties charging admission or airing the game on big screens would violate the league's copyright on the Super Bowl…the league said it would enforce its longstanding broadcast rights to the game as well as federal copyright law entitling copyright holders to prevent public broadcasts on television screens wider than 55 inches. Liz Benston, Las Vegas Sun, 1-31-05

The Super Bowl is one of the most watched sporting events in the world, while also being the biggest betting day annually. Over 140 million people tuned into last year's game and, predictably, a majority had some type of betting action on the Super Bowl, whether through an office pool, in Las Vegas or over the Internet. With online gambling now the preferred method to bet on the Super Bowl, leading offshore gaming company BetWWTS.com today announced that it expects to receive more bets on Super Bowl XXXIX than on any game in the company's twelve-year history. Last year, the 152 land-based sports books in Nevada accepted $81.2 million in Super Bowl bets -- for an average of slightly over $500,000 per property. Demonstrating the rising popularity and acceptance of online gambling, industry estimates put the total number of Super Bowl bets placed at online sports books in the $400 million range, with BetWWTS.com accepted over $1.5 million in bets on Super Bowl Sunday alone. Yahoo! Finance, PRNewswire, 1-24-05

A gambling firm based in the West Indies is starting a service that allows wireless phone users to gamble using their mobile phones. BetWWTS.com, also known as World Wide Tele-Sports, launched the service today, boasting that it's available just in time to place bets on the Super Bowl. The mobile gambling service works with more than 600 phones, including Internet-enabled phones from Cingular Wireless, Nextel, Sprint Corp., T-Mobile and Verizon Wireless. David Hayes, Kansas City Star, 2-1-05

So that is the way we start 2005. Wall Street, always a gambling institution, has plenty of casino action available. Gaming stocks, if 2004 is any indication, should have another great year. Legislatures across the country will be debating expanded gaming. Urban locations with or without Indian tribes as partners are likely to be the "hot spots" for expansion in 2005. Regardless of the opinion of the NFL or any professional sports league, sports betting is only going to continue to grow at double-digit rates; and poker will be played everywhere, bet on it. Pandora's box has been opened, and America in 2005 is clearly a gambling country, and it will take more than an act of Congress to put the game back into the box.

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.