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Best of Ken Adams

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Quick-takes: The month's trends in a glance – April 2006 by Ken Adams

11 June 2006

The feds have a new chairman, but not a new plan; on March 29th the Federal Reserve raided interest rates again - the 15th time in the last two years. The Dow Jones Industrial Average is still over 11000 - gaming stocks are generally enjoying the ride with the rest of the market. Oil prices are not much higher - even if prices at the pump are - housing is slowing a little, but consumer confidence is not. In general we have lived through the first three months of 2006 and things seem pretty good for business in general and for the casino industry. The results from the individual states are not up as much as they were last month, but in they are for the most part good. Colorado was down in February and so was Mississippi, but even Louisiana improved over 2005 with fewer casinos. 2006 has certainly started well for gaming.

Atlantic City February gaming revenue rose 12.3% to $397 million. Alan R. Woinski, Gaming Industry Weekly Report, 3-20-06

Colorado February casino revenue fell to $61.5 million, down 1.0 percent from 2005. Andy Voung, Denver Post, 3-17-06

Detroit January revenues rose 6.7% to $109.1 million. Alan R. Woinski, Gaming Industry Weekly Report, 3-20-06

Connecticut February slot win rose 1.7% to $ 136.3 million. Associated Press, Hartford Courant, 3-15-06

Illinois Gaming revenue rose 6.5% to $153.9 million in February. Alan R. Woinski, Gaming Industry Weekly Report, 2-13-06

Indiana January gaming win rose 3.3% to $220.7 million. Alan R. Woinski, Gaming Industry Weekly Report, 3-13-06

Iowa revenue was up 0.1% to $92.2 million. Racetrack revenues were up 3.3% and riverboats were down 1.3%. . Alan R. Woinski, Gaming Industry Weekly Report, 3-13-06

Louisiana's casinos won $214.8 million compared with $190.1 million in February 2005. Associated Press, New Orleans Times-Picayune, 3-21-06

Mississippi February gaming revenues fell 19.2% to $198.1 million. Alan R. Woinski, Gaming Industry Weekly Report, 3-27-06

Missouri's February revenues were up 9% to $1337.7 million. Alan R. Woinski, Gaming Industry Weekly Report, 3-20-06

Nevada's January casino win was $1.14 billion, up 24.4 percent from 2005. Brendan Riley, Associated Press, Las Vegas Sun, 3-9-06

The industry observers and analysis have decided the opportunity for expansion is over in the United States and they might be right - there certainly are very few states where expansion is possible. There are some, however that are debating the possibilities; Alabama, Arkansas, Kentucky, Kansas Massachusetts, Ohio, Oregon and West Virginia are among the states where some expansion is possible; and of course though the analyst say Pennsylvania and Florida are done deals, the slots are not on the floor of the casinos and racinos, yet. Whatever happens in any of those states, it is clear that expanding gaming is going to be on the horizon every year for the next couple of years - somewhere.

After years of heady campaigns to spread legal, commercial gambling to new jurisdictions in the United States, proliferation has ground to a halt in 2006. Deutsche Bank analyst Andrew Zarnett called current chances for proliferation in the near term "nominal to nonexistent." "Within the U.S., there's very little proliferation except for Pennsylvania, where slots at tracks are planned, and Florida, where any impact would be nominal since the market is not destination-based and would not compete for visitors," he said. Gaming foe Tom Grey, executive director of the National Coalition Against Legalized Gambling, said no statewide referendums to expand gambling are likely in 2006 or in the next two years, although there is limited discussion of a referendum in Kentucky. "It won't happen in an election year or with all the campaign financing scandals," Grey said. "It would be like Pickett's Charge," referring to the ill-fated Confederate attack on the final day of the Battle of Gettysburg…"Basically, the country is covered," said University of Nevada, Las Vegas professor Bill Thompson, who specializes in gaming studies. "The issues of legalizing (gambling) have been resolved. The political disputes instead are over taxes and regulations." Just three years ago, a dozen states were moving to legalize new forms of gambling or liberalize existing regulations and three states were also considering raising gaming taxes. Rod Smith, Gaming Wire, Las Vegas Review-Journal, 3-3-06

Differences of opinion regarding the continuously changing bill for Kentucky casino gaming caused its consideration to be postponed Wednesday by the House Committee on Licensing and Occupations until the week of March 13. Esther Marr, Blood Horse News, 3-9-06

A bill authorizing two destination casinos in eastern Kansas and slot machines at the Wichita Greyhound Park and other pari-mutuel tracks is headed to the full Senate. A Senate panel narrowly approved the bill today after reducing the total number of slots permitted at betting tracks from 7,000 to 5,000. Senate debate could come as early as Thursday, said Sen. Pete Brungardt, chairman of the Federal and State Affairs Committee. Kansas City Star, 3-15-06

The Washington wars are heating up; Jack Abramoff just won't go away and he touches more people than one might imagine. Even if he has pleaded guilty to a variety of charges and has been sentenced to 6 years in the first of his trials. The forces of conservatism and anti-gambling appear to have found a way to use him for their purposes; of course everyone in that position is trying to distance thems4elvs as quickly as possible. The right side of the isle was not the only tainted side, more than one democrat took his money and his advice.

A liberal activist group bought newspaper and television ads to accuse three conservative leaders of hypocrisy for promoting Christian values while amassing money and political power. The targets of the spots said the accusations were lies. The ads are aimed at Ralph Reed, a Christian conservative running for lieutenant governor in Georgia; James Dobson, head of Focus on the Family; and Louis Sheldon, head of the Traditional Values Coalition. The liberal group, Campaign to Defend the Constitution, is spending $200,000 for a full-page ad that ran Wednesday in The New York Times; an online campaign; and a television ad starting Wednesday on cable news in Washington, D.C., New York and Colorado Springs, Colo., where Focus on the Family is based. The ads accused all three conservative leaders of involvement with disgraced lobbyist Jack Abramoff, who has admitted to conspiring to defraud Indian tribes, often in relation to gambling and casino interests. Associated Press, Washington Post, 3-9-06

Jack isn't the only force moving congress toward anti-indian gaming legislation, but his name comes up very often in the process. McCain hearings have not helped the cause of Indian gaming; Abramoff himself says that McCain has a vendetta against him and used the hearing to humiliate him as McCain made his case for stronger federal oversight of Indian gaming. I would warn the industry that it is only a matter of time before some congressman tries the same tactics against the industry in general.

Retail groups and campaign-finance advocates have escalated their push to use lobbying-reform legislation as a vehicle for new limits on Indian tribes' political contributions, enlisting a crucial ally in freshman Sen. David Vitter (R-La.). The National Association of Convenience Stores (NACS), which clashed with tribes in 2004 over lawmakers' attempts to curb untaxed online cigarette sales, has assembled a coalition of more than 25 state and federal groups to corral Senate support for Vitter's amendment to this week's lobbying-reform bill. Vitter wants tribes to be treated as corporations under federal election laws, forcing them to form PACs and register with the Federal Election Commission (FEC). often using profits from gambling operations. Elana Schor, The Hill, 3-9-06

Dismissing complaints from Indian gaming advocates, Sen. John McCain, R-Ariz., said Wednesday the Senate Indian Affairs Committee will vote March 29 on his bill to broaden federal authority over tribal casinos. McCain bristled at a statement by Ron His Horse Is Thunder, chairman of the Standing Rock Sioux Tribe of North Dakota and South Dakota, that the bill resulted from anti-Indian press reports and the scandal surrounding disgraced lobbyist Jack Abramoff. "We don't understand why the legislation is necessary," His Horse Is Thunder said. "I have no questions (for you)," McCain pointedly told the Sioux chairman at a hearing. "We're too far apart in our views." McCain, who is the Indian Affairs chairman, opened the session by saying he "steadfastly" rejects the view that the Indian Gaming Regulatory Act of 1988 should not be reviewed or changed…McCain said his bill would reform the following three aspects of Indian gaming: The National Indian Gaming Commission, the federal agency that oversees tribal gambling, would be given authority to establish minimum internal control standards for casinos as well as less sophisticated operations such as bingo; Federal regulations would be beefed up to crack down on off-reservation gambling, the establishment of casinos by tribes beyond their native lands; The chairman of the National Indian Gaming Commission would be given broader authority to review tribal casino contracts with consultants as well as managers. Tony Batt, Stephens Washington Bureau, Las Vegas Review-Journal, 3-9-06

In the meantime, Goodlatte and Kyl have introduced their bills to outlaw Internet gaming. They too site Abramoff as a cause for the failure of their previous efforts against Internet wagering. The industry doesn't have Abramoff to act as their lobbyist, but they did hire his former firm and there certainly will be a strong lobby against the bill. One would hope they might have hearing on the state of Internet gambling and take a pragmatic and not a moral stance - doesn't sound very likely does it?

The gambling portal webmasters association has started to gather support against a bill that was reintroduced in Congress. If implemented, the bill would prohibit some internet gambling activities. Following the suggestion of a bill that prohibits certain types of online gambling, the Gambling Portal Webmasters Association) is starting a campaign that centers in fighting the proposed act and preventing it from being passed…This anti-gambling bill will never pass, says Ken Blechdom, president of online casinos, a gambling entertainment and information web site…The GPWA is trying to organize support for their lobby against this act, which they say is making the government exceed it's jurisdiction. I-Newswire, 3-9-06

The spread of gaming has alerted the acceptance of gaming in a dramatic manner. The first survey that I remember seeing on public gaming attitudes was about fifteen years ago; then less than 30 percent of the people surveyed admitted to placing a wager, including buying a lottery ticket and even less to visiting a casino within a year. Today, 58 percent have gambled in a casino

Americans are gambling more than ever and generally say they support state licensing of lotteries, casinos, horse and dog tracks and charitable bingo parlors, according a new Scripps Howard/Ohio University poll. For the first time, a majority of adults say they've placed at least one wager in a casino; a third said they've gone to casinos three times or more…The biggest change has been in attitudes over Las Vegas-style casino gambling. Only 43 percent said they favored casino operations in their state in 1996; 53 percent favor them this year. People who say they've placed bets in a casino rose from 47 to 58 percent. Thomas Hargrove/ Guido H. Stempel, Scripps Howard News Service, Biloxi Sun Herald, 3-16-06

It should come as no surprise that the changes in attitude translate into tangible and measurable wagers. The Super Bowl this year was thought to generate the highest handle of any event in history: an estimate $.5 billion world wide, including Nevada sports books, informal office pools and the Internet - a huge number considering less than $100 million was bet legally on the game in Nevada. However, by the current estimates, the National Collegiate Athletic Association's basketball tournament will dwarf those numbers.

According to PinnacleSports.com, there are 182 sports booking outlets in Nevada, where gambling is legal, and $90 million in bets are expected to be made on the NCAA tournament. But online book makers are expected to record $1.3 billion in bets during the month long basketball contest. About $600 million was wagered during the Super Bowl. "As more consumers realize the safety and convenience online sports books provide, the Internet will continue to be the destination of choice for betting on major sporting events like the NCAA tournament," said Noble. United Press International, Physorg, 3-16-06

The Internet is huge, but dwarfing even the Internet is the office pool; the Super Bowl and the NCAA tournament are the two major events in office pool wagering. Illegal in most states, the office pool is still the most common way Americans will make a wager in March - and more than 58 percent of the adult population will be making a wager in March. The FBI estimated $3.8 billion will be wager in office pools on the tournament. Logic, if you are not an official of the NCAA, would indicate the reasons the tournament is so successful and creates so much revenue for the NCAA, the individual schools and the television networks is the wagering. People watch the game because they have a wager on it and without the wagering the interest in the games would drop dramatically.

The FBI estimates that about $3.8 billion will be wagered on the NCAA tournament, more than half of it in office pools…Montana is one of just four states that allowed some form of sports betting before Congress passed, in 1992, a law that banned all sports gambling in the United States. Vince Devlin, Missoulian, 3-16-06

"Whether you're a student, housewife, senior citizen or doctor I think the whole country calls it March Madness for a reason. Whether it is brackets or taking the next step and making a wager, I think everybody's doing it."…Twenty bucks in the office pool is the accepted wager across most of America. But guys will stand in lines 20 deep in Vegas casinos Thursday to bet such things as whether Southern will ever have a lead in its game against Duke. That's enough to horrify the NCAA by itself…The NCAA frets about that, partly because it rightfully wants to protect the integrity of its games and partly because it always seems to like to take the high moral ground. But it also indirectly profits from it, making millions without ever having to make a bet itself. Those running the tournament would never admit it, but the NCAA's annual get together of 64 teams owes much of its success to the fact that much of America has a small financial interest in the outcome. Tim Dahlberg, MSNBC, 3-16-06

And while we are on the subject; if gambling is so much a part of our culture that a basketball tournament dominates television, the newspapers, the workplace, personal computers and therefore the home fires, is it any shock that the tenancy to gamble even to excess runs in families? If it runs in cultures, it seems reasonable that it runs in families and that some families gamble more than others. There may be a genetic link, but it isn't essential - people in the Islamic Middle East could easily draw the conclusion that there is a gambling gene running amok in the west, especially in March.
Study Finds Pathological Gambling Runs In Families

Problem gambling runs in families according to a University of Iowa study published online Feb. 24 in the journal Psychiatry Research. The study also found an excess of alcoholism, drug disorders and antisocial personality disorder in families with pathological gamblers. This is the first study of its kind to include detailed family interviews of relatives of persons with pathological gambling, said Donald W. Black, M.D., professor of psychiatry in the University of Iowa Roy J. and Lucille A. Carver College of Medicine. "Something is being passed along in these families that increases the persons' likelihood of engaging in impulsive and ultimately self-destructive behavior. In some persons, it manifests as substance abuse, in others as antisocial behavior, and in others gambling, and often the three are combined." Newswise, 3-16-06

Baseball has become a three-ring circus; the national game is now the national joke. Barry Bonds and all of the great hitters of the last few years are being tarnished with the steroid scandal. The record books are being rewritten, not just because of the records that have been broken, but to accommodate the asterisk attached to those records. Pete Rose is banned from the game and can't get into the Hall of Fame; Pete is left to selling autographs and calling for Barry and the other big batters to be drawn and quartered. And the game to pure for Pete has made a deal with Scientific Games for a major league lottery ticket. Confused? I wonder if the commissioner condones betting on the outcome of his investigation and Barry's quest for the all time homerun record? It doesn't matter - they will book your bet somewhere on the net.

Scientific Games Corp., a seller of instant and online lottery tickets, said Tuesday it reached a licensing agreement with Major League Baseball in which Scientific has the exclusive rights through 2010 to produce and distribute state lottery tickets featuring major league trademarks…Scientific Games said it expects several lotteries to introduce MLB games this year, with many more launching next year. The first MLB game will launch in Massachusetts on April 11 and will feature the Boston Red Sox. "Obtaining Major League Baseball licensing rights will help lotteries boost their revenue by creating new opportunities for fans to show their affinity for their favorite Clubs." Associated Press, Huston Chronicle, 3-28-06

Casinos didn't invent players clubs - green stamps did. Then airlines moved the process along with frequent flier clubs - bonus miles and all. The process is so ingrained in our culture that frequent flier miles are often part of divorce settlements: you get the house and I get the frequent flier miles. Casinos took the idea up from there; Harrah's made the most of it by creating the first national players club. Points earned in one Harrah's casino are redeemable in any other Harrah's casino. New York racing has just added to frequent spender, flier, player program with the NYRA's own version. And guess what you get extra points for bets with the worse odds for the player - what a surprise. Oh, I get it, wise guys who are too stupid to understand they are making a bad bet, yeah, right.

The New York State Racing and Wagering Board ushered in a new era in pari-mutuel wagering in the state Tuesday when it authorized both the New York Racing Association and Capital District Regional Off-Track Betting to begin separate cash rebate programs for bettors on a one-year trial basis…NYRA Rewards Program players will receive one point for every dollar wagered on a race at one of the three NYRA tracks - Aqueduct, Belmont, and Saratoga Race Course - and a half-point for every dollar wagered on a simulcast race within one calendar month…A bettor earning 500,000 points would get a 3% cash reward for win, place, and show wagers, 4% for two-horse multiple wagers, and 7% for exotic wagers…In concert with the NYRA Rewards Program, and as stipulated in the recent $25-million loan from the state to NYRA, the percentage of takeout on win/place/show bets will be increased from 14% to 15% beginning April 1. Bill Heller, Thoroughbred Times, 3-28-06

Pennsylvania and Florida are trying very hard to provide entertainment for all of us; when the legislation passed allowing slot machines in each state, it sounded so simple. There is a law enabling slot machines, now a regulatory agency is necessary to develop regulations and grant licenses. It has not proven so simple. Each state is doing whatever it can to complicate the process - and to find new ways to divide the spoils. Which state is closer to opening the doors? Your guess is probably better than mine. Pennsylvania wants every citizen to participate in the process, while Florida wants to keep it all in the hands of the legislature. Pennsylvania wants to gouge everyone upfront; Florida wants its cut through taxation and control. The process in each of those states makes Nevada, New Jersey, Colorado, Mississippi, Missouri, Louisiana and all of the other states with gaming look efficient, trustworthy and stable. Or it that just my opinion?

Atlantic City has gotten hot, suddenly. In the last week of March, Colony Capital trumped Pinnacle's offer for Atzar, followed quickly by a higher offer from Ameristar and Harrah's announced hotel expansion plans. Gary Loveman says the market needs 8000 more rooms and Morgan Stanley purchased 20 acres that is rumored to be for a development by Hard Rock. Whatever the rest of the world thinks about the impact of Pennsylvania on Atlantic City there are those that think the market will not only survive the threat, but also grow and prosper. By some estimates as many as 60 percent of the customers for Atlantic City come from Pennsylvania - that certainly would indicate Atlantic City will face some challenges; Reno is a case study in what happens when your customers get 60,000 slot machines at home. I wonder if any of the Atlantic City execs have a trip to Reno scheduled yet? It doesn't look like it; they seem to be too busy adding to their properties at home.

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.