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Quick-takes: The month's trends in a glance - April 2003

30 April 2003

Wars and SARS are still with us, but there is some light in the tunnel.  The stock market is the highest it has been at the end of any month this year, proving that we would rather dream than face the realities of war, disease and recession.  Steven Wynn's stock, without a casino or any revenue, has out paced the market.  The Dow closed at 8053 in January, dropped to 7800 in February, climbed a little to 7900 in March and jumped to 8400 in April.  Wynn's stock progressed steadily form $13.75 a share in January to $14.22, $15.40 and finally $17.37 and that without a shovel in the ground.  I wonder if Bush has considered Wynn for a cabinet position?  The war in Iraq was quick, gas prices are recovering, consumer confidence is on the rise and Greenspan is going to stay on to keep mortgage rates driving the economy.  The economy looks brighter than any time this year.

Stocks in Asia opened weaker and the dollar was steady on Wednesday, as markets began shifting focus to what might happen to the U.S. economy now that the war in Iraq appeared to be entering its final stages.  …Oil prices made some gains as the possibility of an output cut from OPEC curbed the impact over expectations of a swift end to the war.  Bill Tarrant, Reuters, Yahoo Business, 4-9-03

SARS Disrupts Sporting Calendar.  Sporting events worldwide are being disrupted by concerns over the deadly SARS virus, which has killed over 300 people and infected more than 5,000. Utusan Malaysia Online, 4-29-03

Consumer confidence, which had declined for four consecutive months, improved sharply in April, helped by a swift outcome in the U.S.-led war in Iraq The Consumer Confidence Index rose to 81.0 from a revised 61.4 in March….the largest increase since March 1991…."The swift outcome in the Middle East has helped quell consumers' short-term concerns," said Lynn Franco, director of The Conference Board's Consumer Research Center. Anne D'innocenzio, Associated Press, Yahoo Business, 4-29-03

A person who understands the stock market and can predict its ups and downs is a rare bird indeed.  Any one with stock in a retirement fund has felt the pressure and looked for a sure thing.  The anxiety of the retiree with a diminishing retirement fund is almost palpable.  Apparently it isn't just the average investor that finds the market that stressful.  A rash of bright young and not so young analysts have thrown in the towel and gone to look for greener pastures.  Jason Ader said he was tired; he left the Street to marry and live happily ever after; but it is rumored he has joined Steve Wynn, he must really believe in the dream.

Many high-profile stock analysts are quitting their jobs amid dwindling compensation, declining morale and tough new rules designed to prevent more scandals.  Some are taking research jobs with institutional investors such as mutual funds and hedge funds. Others have decided to give it all up, often after decades in the business.  …Bear Stearns Co. gaming analyst Jason Ader gave notice last month, saying he was fatigued and heading for the beach.  Meg Richards, Associated Press, Yahoo Business, 4-13-03

The economy may be on the mend, but the states' budget problems have not been solved: California is still negotiating with the tribes; Wisconsin has signed 9 compacts; governors are still thinking about raising gaming taxes; but no state has yet to approve additional gaming.  As if it is impossible to learn from the past, the governor of Illinois has suggested higher gaming taxes and even entertained conversations about state operated casinos or a state casino in Chicago.  The results are predictable, the stock of the casinos operating in the state went down:  "Welcome to Inhospitable Illinois" the sign at the Stateline says.

As Illinois Gov. Rod Blagojevich attempts to close a gaping hole in the budget, local officials are outraged over his proposal to increase taxes on casinos.    In his budget address Wednesday, Blagojevich proposed charging an extra $2 for every person who enters a casino and an additional 20 percent tax on the most profitable riverboats in the state — Aurora, Elgin and Joliet.    His proposal would mean a total 70 percent tax on casino revenues above $250 million, up from the current maximum of 50 percent.  Chicago Sun, 4-10-03

Riverboat casino operators Argosy and Harrah's took on water Thursday after the governor of Illinois proposed a hefty hike in taxes and fees on the gambling business.  …In a note to investors Thursday, UBS Warburg's Robin Farley said that "given what an inhospitable business environment Illinois proved to be last year, we believe that gaming stocks that could be impacted by this proposal will not be able to rest easy until" the legislative session ends on May 23.  William Spain, CBS.MarketWatch.com, 4-11-03

The most interesting trend in April comes from Nevada.  In the past Nevada was the center of new casino ideas, the dream of Steve Wynn, Elvis Presley on stage, billion dollar mega casinos; whatever the mind could imagine Las Vegas could and would build.  That was before Indian casinos in California, racinos, riverboats, Internet and all of the other manifestations of gambling in the last few years in the United States and around the world.

This month's new ideas from Nevada are slightly different, some times given the history of the state, bizarre.  The mayor of Las Vegas suggested a city lottery, there was a proposal to allow unsuccessful casinos to move to a better location, one to allow time-share resorts to have casino licenses, another to allow "super clubs" to have slot machines.  In Reno a small war is developing over relocating old licenses; as with the Las Vegas proposal, it allows for a casino without hotel requirements and in residential districts that do not have competing casinos.

And then for those that cannot move, Treasure Island is going to hang the pirates and invite the young and hip into a new and hip casino.

Sen. Mike Schneider, D-Las Vegas, has a deal for small and unprofitable casino operators who want a fresh start at a better location.  …Bill 271, which would allow casino operators in Clark County to relocate outside of established gaming districts to locations where business would improveLas Vegas Review-Journal, 3-14-03

State Sen. Mike Schneider is bucking big hotels with his proposal to allow wide-open gambling in time-share developments on the Strip.  …Schneider, D-Las Vegas, told the Senate Judiciary Committee Tuesday the gaming market is changing across the country and large companies are coming to Las Vegas to build time-shares to bring in thousands of people.  Cy Ryan, Las Vegas Sun, 4-9-03

Supper clubs could gain permission to operate a limited number of slot machines, but the Las Vegas City Council wants the authority to consider each case individually.  .  Michael Squires, 4-17-03

…Nevada Casinos as the operator and holding company that will take over the unrestricted gaming license from the Old Reno Casino, one of the smallest casinos in the region.  Thomas J. Walsh, 4-3-03

The owners of the Reno Turf Club downtown are trying to relocate the club's unrestricted gaming license to an upscale neighborhood in Reno, on McCarran Boulevard just north of Fourth Street. …The Turf Club's gaming license is grandfathered, exempting the Cal Neva from building a hotel with the new casinoThomas J. Walsh, 4-

…transformation of Treasure Island's exterior, changing the megaresort's look to match its evolution from a pirate-themed property to a hip spot with allure to value-conscious adults.  …"We've evolved from a yo-ho-ho feel to a more sophisticated feel," Treasure Island President Scott Sibella said.  Jeff Simpson, Gaming Wire, 4-22-03

Nevada is very pregnant with gaming.  When the revenue base of the state or its major cities is threatened by competition from other states and the Internet, one can expect a competitive response.  This is only the first round of ideas, and it bears remembering that we are really in the first year of realization that the go-go years are gone and the future promises nothing to resemble that growth.  I wonder what will be proposed next?

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.