The stock market raced toward record highs, but then got dizzy at the heights
and fell back - way back. Gaming stocks did very much the same thing - and, as
they say on the Street, the investors took their profits and sold their holdings.
Most of the major gaming companies tracked by Applied Analysis saw their
average daily stock prices decrease during May, victims of profit-taking by
investors worried that rising fuel costs might impact the spending habits
of some casino patrons. The index closed up almost seven points, but without
Las Vegas Sands, the index would have posted a 10-point decline…According
to the index, the only other casino operator to post a gain in its average
daily stock price during May was Harrah's Entertainment, at $79.60, up 0.7
percent. The other operators had percent decreases ranging from 1.3 percent
(MGM Mirage) to 6.7 percent (Boyd Gaming Corp.). Local gaming giant Station
Casinos saw its average daily stock price fall 3.7 percent from April. Howard
Stutz, Gaming Wire, Las Vegas Review-Journal, 6-1-06
Meanwhile, gaming revenues continued to grow for the most part, even if at
a somewhat slower pace; surprisingly, Foxwoods and Mohegan Sun are even beginning
to show signs of maturing as the win dropped slightly. Other than that, Indiana
decreased very slightly and Mississippi is still showing the effects of Katrina,
with only three casinos operating in Biloxi. Atlantic City is doing well and
probably has a year before it begins to show the effects of slot machines in
Pennsylvania as that process drags along, mired in politics and bureaucracy.
Atlantic City: April gaming revenue rose 4% to $440.2 million. Alan R. Woinski,
Gaming Industry Weekly Report, 5-15-06
Colorado: April casino revenue increased to $65.8 million, up 5.8 percent
from 2005. Andy Voung, Denver Post, 5-18-06
Detroit: April revenues rose 2.1% to $106 million. Alan R. Woinski, Gaming
Industry Weekly Report, 5-22-06
Connecticut: April slot win fell 2.2% to $144 million. Alan R. Woinski, Gaming
Industry Weekly Report, 5-22-06
Illinois: April Gaming revenues rose 5.7% to $160.6 million in March. Alan
R. Woinski, Gaming Industry Weekly Report, 5-15-06
Indiana: April gaming revenues were down 0.6% to $210.9 million. Alan R.
Woinski, Gaming Industry Weekly Report, 5-15-06
Iowa: April gaming revenues were up 9.3% to $102.6 million. Racetrack revenues
were up 21.9%. Alan R. Woinski, Gaming Industry Weekly Report, 5-15-06
Louisiana's casinos won $213.9 million compared with $189.3 million in April
2005. Associated Press, New Orleans Times-Picayune, 5-16-06
Mississippi: April gaming revenues decreased 11.6% to $196 million. Alan
R. Woinski, Gaming Industry Weekly Report, 5-29-06
Missouri's April revenues were up 0.3% to $130.7 million. Alan R. Woinski,
Gaming Industry Weekly Report, 5-15-06
Nevada's March casino win rose 3.3% to $1.03 billion. Howard Stutz, Gaming
Wire, Las Vegas Review-Journal, 5-11-06
If the rest of the industry's stocks were taking a hit, the Las Vegas Sands
was not. The company got some very good news during May; it was chosen for the
first of only two licenses for Singapore. Within two days, nine different lenders
expressed interest in financing the deal. The Sands was pleased. COO Bill Weidner
said they had the cash, but the equity was simply too valuable. And then a day
later, the Sands announced financing for Macau - said to be the largest non-governmental
financial backing in China. And finally, as further illustration of my penetrating
analytical ability, a personal announcement: I sold my Sands stock two weeks
earlier at $53 dollars, just $20 less than what it hit after the announcement.
Las Vegas Sands Corp., owner of The Venetian in Nevada, won a hotly contested
license Friday to build Singapore's first casino, which could be the world's
costliest casino resort project by the time it opens in 2009. Shares of Las
Vegas Sands climbed $5.96, or 9.4 percent, to close at $69.63 on the New York
Stock Exchange, near its 52-week high of $73.14. Gillian Wong, Associated
Press, 5-26-06
Las Vegas Sands Corp. received proposals from at least nine banks to provide
a US$1bil, one-year loan as the company plans financing to fund the development
of Singapore's first casino-resort. "We will pick one of those banks
to provide the loan in order to bridge ourselves and give ourselves time to
figure out exactly which market is the most efficient to tap for the funding,'
Bill Weidner, chief operating officer at Las Vegas Sands, said here yesterday.
"We could use our own cash. We don't necessarily want to sell shares
because we think our equity is too valuable.' Asian Star, 6-1-06
Las Vegas Sands Corp. has secured a $2.5 billion financing package to fund
its gaming projects in Macau. Analysts consider the loan, which comes from
six different banks, to be the largest single credit facility ever given to
a non-government entity in China. The loaned money will be used to fund an
expansion of the casino at the existing Sands Macau and for construction of
the $3 billion Venetian Macau, now under construction on Cotai, which is just
minutes south of Macau by car. The Sands expansion is expected to finish this
year; the Venetian Macau is scheduled to open in 2007. Howard Stutz, Gaming
Wire, Las Vegas Review-Journal, 6-2-06
The success of the Sands in Asia has excited the envy of more than one gaming
operator. Harrah's is doing whatever it can to get into the game, but this has
proven more difficult than in American jurisdictions. Steve Wynn is supposed
to open in September and that too will excite the industry. A small, if there
is such a thing in regulation, side effect surfaced this month. Regulators from
New Jersey want to spend lots of time traveling around the MGM empire and traveling
to China to assure themselves that MGM is not being infected by the father of
their Macau partner, Pansy Ho. It is possible, not probable, but possible, that
MGM would have to choose between Macau and Atlantic City. And then if the choice
were Macau, Nevada might force the same choice, as might other jurisdictions.
As good as Macau appears, it isn't likely that it is worth more than all of
the American jurisdictions combined. This investigation probably won't turn
out to be that important, but it certainly has the potential.
New Jersey investigators are preparing to take sworn statements from MGM
Mirage executives about their $1 billion casino project in Macau, following
two trips there to meet with American, Chinese and local gaming regulators
about the deal…New Jersey regulators launched a probe into the partnership
last year because MGM Mirage is part owner of Borgata casino in Atlantic City.
Depending on the outcome, the New Jersey Casino Control Commission could force
the company to sever ties with Pansy Ho. As part of the probe, New Jersey
Gaming Enforcement Director Thomas Auriemma and two others traveled to Macau
in March, when they met with U.S., Chinese and local regulators to smooth
the way for a team of investigators that followed a month later. New Jersey
investigators have also traveled to Nevada several times since last year to
meet with MGM executives and gather documents related to the deal, according
to two officials with knowledge of the probe. They also seized a computer
from the company's Nevada office so forensic specialists could search its
hard drive and retrieve any e-mails related to Macau. Rick Hepp And Joe Donohue,
Star-Ledger, 5-26-06
Two states have provided more entertainment in the last two years than all
of the rest of the gaming states combined; Illinois and Pennsylvania have been
good enough to merit a Broadway musical. Illinois' songs are very different
from Pennsylvania's. In Illinois the story is sometimes the highest taxes in
the nation and sometimes the first casino owned by a city as the mayor of Chicago
argued for keeping all of the revenue - far exceeding the governor's greed in
wanting over 70 percent of the revenue in taxes. There has also been the license
farce (okay, that qualifies as a mixed metaphor, a farce may be theatre, but
it wasn't musical), the license that never was; though issued, it was withdrawn,
bid out, but never awarded, all the while mired in litigation and criminal investigation.
The latest song as introduced by the Illinois governor is privatizing the lottery
by selling it to the highest bidder or maybe selling shares on Wall Street just
like one of the gaming companies. I wonder if the Governor was drooling over
the Las Vegas Sands stock the way I was? When pressed for the details of his
plan, he said sharing his plan with his political opposition would be like a
football coach sharing his game plan with the opposing team. Anyway, casting
for the production may begin soon; I can't wait to see if Al Capone comes back
from the dead to play one of the leading characters.
Illinois aims to raise around $10bn from a lease or initial public offering
of its state-run lottery in what would be the first complete privatization
of a public gaming license in the US. The plan outlined on Tuesday by Governor
Rod Blagojevich would see the funds ring-fenced to boost education spending,
and underpin the Democratic incumbent's pledge not to raise taxes as he faces
a tough re-election battle in November. The IPO is one of three options proposed
for the lottery, which was set up in 1975 to fund education programmes, and
is expected to yield $650m for schools in the current state budget. The plan
could also see a long-term lease of the licence, or a hybrid lease and share-sale
to retail and institutional investors. Financial Times, 5-23-06
The next time you read that a new idea is the way of the future think of this
story, as today's enthusiasm often becomes tomorrow's boredom. Atlantic City
has never been known for much creativity; regulation is so restrictive that
all of the casinos are pretty much the same, at least until Borgota. Bally's
tried to break out of the mode and created a "themed" casino. It wasn't
exactly a Mirage or New York New York, or Paris, but for Atlantic City it was
adventurous: the Wild Wild West. The theme has run its course, and it didn't
change Atlantic City; it didn't change anything. A shame they didn't ask some
Nevada operators who tried the theme and knew its limitations and its life cycle.
The Wild Wild West represented the future of the gaming scene when it debuted
as the town's first Las Vegas-style themed casino. Its whimsical surroundings
were a welcome diversion from the drab casino floors prevalent in those days.
Now, nine years later, the cowboy concept has grown a bit stale - a fatal
flaw in the fast-changing casino industry. Gamblers flocked to the Wild Wild
West Casino like prospectors rushing to the gold hills of California in 1849.
They sought riches at them thar slot machines and poker tables, but were also
attracted by an extravagant re-creation of the Old West in what was billed
as Atlantic City's first "themed" casino. That was 1997, when the
$110 million Bonanza-like expansion of Bally's Atlantic City opened to rave
reviews. But now, the Wild Wild West theme seems as tired as the mechanical
old pack mule that greets visitors arriving at the casino's Boardwalk entrance.
Like the real-life Old West before it, the Wild Wild West Casino could fade
into history. Harrah's Entertainment Inc., which inherited the sprawling Bally's
casino complex when it acquired Caesars Entertainment Inc. last year, may
redevelop the Wild Wild West for a new hotel tower or other attractions. Donald
Wittkowski, Atlantic City Press, 5-30-06
Most things are dependent on perspective, and that is as true in gaming as
in any other business or activity. In Las Vegas an announcement of a new casino
is hardly worth noticing unless it costs at least a billion dollars, covers
hundreds of acres and employs thousands of workers. In Mississippi they expect
you to spend at least $200 or $300 million to build a casino, onew which should
employ hundreds of people and have nearly 2000 slot machines.
To be important in Iowa, however, you don't have to do quite as much to be
worthy of note; spend a few million, hire a couple of hundred people, and if
a new gas station, McDonald's and a Super 8 motel come to town, everyone is
both happy and excited about the economic boom. The Wild Rose blooms in Iowa,
and the casino officials proudly proclaim a premier gaming facility. It doesn't
matter what it would be called in Nevada, Atlantic City or Mississippi; in Emmetsburg
the Wild Rose is a big deal.
Along with the 340 employees that the casino brought in, there is a Super
8 being built, a new gas station and a McDonald's coming to Emmetsburg in
response to the new gaming facility. Wild Rose Casino and Resort opened its
doors for the first time Sunday to friends and family of the owners and their
employees…Friends and family anxiously waited to enter the casino to
be among the first to try out the slot machines and game tables. Casino supporters
anticipated seeing growth in their community. "We hope it to be a good
economic boost to Emmetsburg and Palo Alto County," said Kathy Fahy,
marketing manager. "We also would like to bring more employment and to
be a good community partner."… Wild Rose Casino and Resort is one
of the premier gaming facilities in the Midwest, according to casino officials.
The casino features 28,000 square feet of gambling luxuries that include 550
slot machines, 16 game tables, an Irish Pub, a full buffet, a 71-room hotel,
a 68-spot RV park and a convention center. Ashley Van Alstine, Fort Dodge
Messenger, 5-30-06
Do you ever play "what if"? A fun little game - not often productive
if you look back at your life and imagine a more glorious one if you had just
had John Kennedy's parents or Michael Jordan's genes - but a lot of fun when
looking at history. For example, if it were not for a governor of Wyoming in
1935 who vetoed legislation to legalize casino gambling, Casper might be Las
Vegas; and if Nevada had had a vetoing governor instead, Las Vegas might be
Casper. Summers gambling in the world's capital of gambling would be more pleasant,
but I can't imagine strolling along the strip in December. It didn't happen,
but after 71 years Wyoming does have a black jack game, and the first night
there were five players.
Gambling has had a checkered past in Wyoming dating back to the earliest
parts of the 20th century. In 1935, the Legislature voted to legalize casino
gambling, only to be rebuffed by Gov. Leslie Miller, who vetoed the measure.
At about 10:30 Saturday morning, Wind River Casino table games manager Peggy
Black and several security guards unhooked the chain encircling four tables
that have become the center of attention here. With them were two fellow employees,
wearing glistening tuxedo vests and carrying two white boxes -- each holding
eight fresh decks of Gemaco playing cards. The tuxedoed dealers counted, shuffled
and sorted the decks, and when the clock struck 11, five people filled all
but one seat at Wyoming's only legal, blackjack table…Not since 1901,
when gambling was prohibited in Wyoming were people allowed to double down
on a game of blackjack. The Northern Arapaho tribe were granted the right
to do so in part by a 1988 law that governs gaming on Indian lands. Cory Matteson,
Casper Star-Tribune, 5-30-06
The stock market correction is most likely just a natural part of the dynamics
of the market. The casino industry stock will have strong growth times again
and even though continual revenue growth is not possible in every jurisdiction
- in fact, some jurisdictions will experience the kind of decline that Reno
has seen as new competition comes online (pun intended) - still the industry
is healthy and growing. Two trends are unsettling. The first is the continued
instability as represented this month by Illinois and the second is the New
Jersey investigation into MGM Mirage. Gaming seems to be the only industry in
which one state believes it can and should control the activities in another
state through its regulatory control.
