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 in a glance - September 2003

18 November 2003

The Dow Jones may have closed down from its high of 9659 during September to 9275, down 248 from August, but most of the economic news was better. The gross domestic product grew significantly during the quarter, consumer spending (though confidence fell), housing and job markets improved, while summer gasoline prices pushed the Consumer Price Index up. The high fuel prices are likely to continue with OPEC cutting production.

Major stock market indexes fell in September, ending a string of monthly increases, but managed to end the third quarter higher. Elizabeth Lazarowitz, Reuters, 9-30-03

Healthy consumer spending nudged U.S. economic growth ahead….Gross domestic product, or GDP, grew at a revised 3.3 percent annual rate in the three months from April to June, up from a 3.1 percent rate reported a month ago. Reuters, Yahoo Business, 9-26-03

US consumer spending rose 0.8 percent in August while personal income increased 0.2 percent… Real consumer spending (adjusted for inflation) increased 0.5 percent in August, the fourth straight robust month of spending….real disposable incomes increased 0.6 percent Yahoo Business, 9-29-03

The Consumer Confidence Index fell to 76.8, down nearly five points from the revised 81.7 registered in August, the Conference Board reported Tuesday. Anne D'Innocenzio, Associated Press, 9-30-03

The U.S. housing sector continued to sizzle and the jobs market appeared to improve, but a drop in demand for costly factory goods left a reminder the economy is not yet back to full health, reports showed on Thursday. Tim Ahmann, Reuters, Yahoo Business, 9-25-03

Rising gasoline costs put a dent in motorists' wallets in August and contributed to the biggest increase in consumer prices in five months, the Labor Department reported Tuesday. The Consumer Price Index rose by 0.3 percent, matching the increase of last March. …Most of the increase was due to skyrocketing prices for gasoline, which soared by 6.2 percent. Jeannine Aversa, Associated Press, Yahoo Business, 9-16-03

Defying most expectations, OPEC will cut its oil production target by 3.5 percent beginning in November, the cartel announced Wednesday. …The group said it would meet again Dec. 4 to reassess market conditions. – Bruce Stanley, Associated Press, Yahoo Business, 9-24-03

The big news in the gaming industry for September was clearly the purchase of Horseshoe Gaming by Harrah's. The purchase sent a clear statement to the industry; Harrah's intends to be the dominate player in the industry. After releasing the annual gaming survey, Gary Loveman pointed out to any state that failed to get the more subtle message: if you don't open your state to expanded gaming, your citizens will cross the border to gamble. Ubiquitous, not quite like Starbucks with a store at every busy intersection, but certainly in every busy gaming jurisdiction. Build them, buy them or lobby for them, casinos, Indian casinos, racetracks, riverboats and more. Harrah's intends to be a major player wherever gaming is permitted to any person, for any purpose: my apologies to the judge in the Cabazon case.

Harrah's Entertainment Inc. said on Thursday it will pay $917 million in cash to buy Horseshoe Gaming Holding Corp…will also assume about $533 million in debt, taking the price to $1.45 billion in a deal that Harrah's said will boost profits immediately. …Harrah's, which operates 26 gambling halls, said it intends to sell its Harrah's casino in Shreveport, Louisiana, to avoid overexposure in that market. Peter Henderson, Reuters, Yahoo Business, 9-11-03

…The Roper ASW survey of 2,000 Americans finds that despite a penchant for taking risks, wagerers are relatively conservative with money at home: 61 percent say they always or almost always pay off their credit cards every month, compared with 52 percent of the general population. …'It's counterintuitive, especially when you realize the income of these people is 20 percent higher than the general population,'' he says. The survey pegged median household income for casino gamblers at $50,716 vs. $42,228 for the population as a whole. …About 51 million Americans, 26 percent of the adult population, have gambled in a casino at least once in the past year, down slightly from 53 million the year before. Gene Sloan, Chicago Sun Times, 9-27-03

Harrah's Entertainment unleashed a blitz of state-specific press releases, using data from company-funded studies to note how many times residents from each of 11 states gamble at casinos. Gamblers in casino-less Pennsylvania, for instance, made 8.9 million trips to casinos last year, Harrah's found. "Pennsylvania residents are voting with their feet and pocketbooks for casino entertainment," Harrah's CEO Gary Loveman said. "Unfortunately for them, Pennsylvania public policy insists they cross state lines to do so." Loveman had a similar message in press releases customized for Arkansas, Florida, Kentucky, Maryland, Massachusetts, New York, Ohio, Oklahoma, Rhode Island and Virginia. Loveman believes casino-style gambling is benign entertainment that should be widely available to adults. Joe Weinert, Press of Atlantic City, 9-27-03

Stockholders and executives in Harrah's are pleased with the growth and geographic diversity of Harrah's, but the person most pleased is Jack Binion. A true son of his father, Jack understands not only the industry, but more importantly the mind of the player. He left Las Vegas to his sister and moved east, and in the process proved that some are better operators than others; he also proved that his father's mantra of giving the player a real bet works. Cashing out for nearly a billion dollars certainly is a validation of the operating philosophy of two Binions, Jack and Benny.

Lucky and proud. That's how Jack Binion said he felt Thursday after he and Harrah's Entertainment executives signed a $1.45 billion deal for Harrah's to buy his Horseshoe Gaming Holding Corp. and its three riverboat casinos. Binion started the company in July 1994, and in less than a decade built a company Harrah's was willing to pay almost one-and-a-half billion dollars for. The deal carries the biggest price for the sale of a privately held casino company and also would mark the third-biggest casino company sale ever. Horseshoe's riverboats in Hammond, Ind.; Tunica, Miss.; and Bossier City, La., are the top-performing casinos in their markets. Jeff Simpson, Gaming Wire, Las Vegas Review-Journal, 9-12-03

Harrah's is not the only gaming company that thinks size and geographic diversity are keys to success in the gaming industry. A new company to gaming, Columbia Sussex, is wasting no time expanding across the country. With a quiet beginning at Lake Tahoe, followed by an interesting purchase of the closed and bankrupt Maxim in Las Vegas, and then a chin scratcher, the River Palms (formerly Gold River) in Laughlin, now the company has suddenly reached out for some much larger and more expensive properties.

Columbia Sussex Corp. seems to have set its sights on becoming a key player in the gaming industry. The Fort Mitchell, Ky.-based hotel, resort and casino holding company has bids in for the Reno Hilton and possibly the Las Vegas Hilton, sources close to the deal say. It may also bid on other Park Place Entertainment Corp. properties, including the Bally's Belle of New Orleans and the Flamingo Hilton Laughlin. Columbia Sussex bought the River Palms in Laughlin in September and has a deal pending to buy Harrah's Vicksburg Hotel & Casino in Mississippi, which is expected to close before year's end. Columbia Sussex last year bought the Maxim in Las Vegas for $38 million and owns the Lake Tahoe Horizon Casino Resort. Las Vegas Review-Journal, 9-29-03

Isle of Capri and Park Place Entertainment (soon to be Caesars Entertainment) were active in September, looking for opportunities to extend operations into untapped areas. Each is eying major urban markets; the Isle casting a longing glance at St. Louis and Park Place hoping to share in the lucrative Southern California market and Minneapolis-St. Paul.

The Waterloo City Council voted 5-2 today to approve an agreement with the Black Hawk County Gaming Association, one hurdle to clear the way to allow Isle of Capri Casinos Inc. to locate a riverboat on a man-made lake near Lost Island Adventurepark. Pat Kinney, Waterloo/Cedar Falls Courier, 9-25-03

Isle of Capri Casinos Inc. is offering $50 million to buy a struggling downtown gaming site, a move that could help its case to build a St. Louis County casino. Associated Press, Kansas City Star, 9-26-03

Isle of Capri Casinos, Inc. officials announced today that the company has completed the agreements to lease and operate a casino at Our Lucaya Beach and Golf Resort at Freeport, Grand Bahama…..serves as the company's introduction to international operations. PRNewswire-FirstCall, Yahoo Business, 10-1-03

Park Place Entertainment Corp. will develop a Caesars-branded casino on tribal lands near Pauma Valley in Southern California, the company announced Wednesday. Rod Smith, Gaming Wire, Las Vegas Review-Journal, 9-18-03

Park Place Entertainment, one of the largest casino companies in the world, has hired an improbable ally in its efforts to overcome opposition by Minnesota's Indian tribes to its plans for a Las Vegas-style casino at the Mall of America. … Park Place, which has not sealed a deal with the owners of the megamall in Bloomington, could be among many competitors seeking legislative approval next year. Associated Press, Minneapolis-St. Paul, Star Tribune, 9-29-03

Five companies submitted applications by Friday to operate a proposed casino in Orange County (Indiana), including Park Place Entertainment Corp. of Las Vegas, an investor group involving Indiana Pacers President Larry Bird and a group led by casino magnate Donald Trump. Shannon Dininny, Associated Press, Las Vegas Sun, 9-22-03

The "big boys" are not the only ones growing their portfolios of gaming properties. The Holder Hospitably Group in Nevada is quietly developing a diversified group of Nevada properties. Hal Holder, the principle in the company, looks for rural Nevada properties that may be underperforming and ones that would benefit from the economies of scale that a group of properties would have. Hal is not the only person looking for opportunity in rural Nevada, but he is the fastest moving of the lot.

Sparks-based Holder Hospitality Group said Thursday that it plans to buy Pipers Casino in Silver Springs. …Holder Hospitality owns the Silver Club Hotel/Casino in Sparks, along with six other small casinos in Fernley, Gardnerville, Hawthorne, Winnemucca and Henderson. The company also owns a recently expanded statewide slot route… Stephen Reich, 9-26-03

This latest round of consolidation is in part driven by the lack of success in state legislatures to expand gaming and the growing desire of those same legislatures to impose the largest taxes possible on gaming. The unstable tax environment has prompted many operators to up efforts to find opportunity outside the borders of the United States. That environment has also lead to an increase in efforts of many operators to find opportunities in Indian country, particularly California. Although as unstable as California's political climate is at the moment, it hardly seems like a safe haven.

A big boost in state taxes will slow casino construction in the United States and encourage casino companies to seek new opportunities abroad, top executives said on the first day of the industry's biggest trade show. Terry Lanni, chairman and chief executive of MGM Mirage, owner of MGM Grand Detroit casino, said Britain was a good candidate for expansion because lawmakers are considering an overhaul of strict gambling regulations. Thailand was another possibility, Lanni told the Global Gaming Expo at the Las Vegas Convention Center. Part of that think-global strategy is the result of a sudden increase in casino taxes in the United States. As more states look to the casino industry to help cure their budget woes and increase casino taxes, gambling executives say they feel the pinch. "I think there'll be a little bit of a pause in this country until you see a prudent view on the tax rates get worked out," Lanni said in response to a question on the health of gambling and market growth. "We have a strong belief, however, that there is great opportunity over in the UK. We are spending a lot of time over there, and I think you'll see a lot more on this very soon." Ryan Slattery, Detroit Free Press, 9-17-03

Mandalay Resort Group President and CFO Glenn Schaeffer said Wednesday the Global Gaming Expo that his company is unlikely to consider building in Atlantic City any time soon. …Schaeffer took a playful swipe at Harrah's Entertainment and MGM Mirage, two companies that have announced deals to develop casinos in the United Kingdom. "I think they're making a bid on the British Empire," Schaeffer deadpanned. Harrah's CEO Gary Loveman said the company likes the Las Vegas locals market, but can't figure out a practical way to break into it. Jeff Simpson, Gaming Wire, Las Vegas Review-Journal, 9-18-03

Kerzner International Limited announced today that it has agreed to form a joint venture with Nakheel LLC, an entity owned by the Government of Dubai, to develop Atlantis, The Palm, the first phase of which is expected to be an approximately $650 million development to include a 1,000-room resort and an extensive water theme park situated on 1.5 miles of beachfront. Atlantis, The Palm will be located at the center of The Palm, Jumeirah, a $1.5 billion land reclamation project in Dubai, United Arab Emirates. The agreement provides for additional land available for future development and that would ultimately enable Atlantis, The Palm to grow its room capacity to at least 2,000 rooms. Business Wire, Yahoo Business, 9-22-03

However, lest you draw the conclusion that the individual states are unstable, unpredictable gaming jurisdiction, but other countries and venues are stable and predictable note the changes taking place in Australia and New Zealand. Both countries, as are some provinces in Canada, are progressively tightening regulation and limiting the scope and nature of gaming.

Sweeping changes to gambling industry regulation were passed by Parliament yesterday despite opposition claims it will open up internet gaming. …It introduces a raft of changes including banning new casinos and restricting the number of poker machines on a site to nine - half the present limit - if operators were licensed on or after October 18, 2001. …There are now more than 25,000 compared with about 20,000 in October 2001. Under the new law some will have to be removed. …The changes included allowing the Lotteries Commission to offer internet gambling, restricting banknote acceptors on pokies to $20 notes (until now there has been no restriction) and requiring consultation with the gaming industry when setting a problem gambling levy. …The act's four main objectives were to control the growth of gambling, reduce harm, ensure gambling raised funds for the community, and ensure community involvement in decisions about access to gambling. Kevin Taylor, New Zealand Herald, 9-11-03

Sometimes there is no one to blame for our problems, not regulators, governors or even competitors. There are times when we simply shoot ourselves in the foot. Take the case of Tropicana in Atlantic City. The Trop is doing a $250 million expansion. New, exciting and truly revolutionary; well just how revolutionary you might ask? Just like Fidel in Cuba, a true revolutionary. No, you could not possibly make the comparison the communist dictator of the century as a metaphor for new and truly different. Oh, but they did.

The Tropicana is using Castro's image to tout The Quarter, the casino's $245 million entertainment, dining, retail and spa development project. The ads, along two major highways leading into the city, show Castro with his trademark cigar and carry the slogan ``The next revolution.'' Tropicana spokeswoman Maureen Siman told The Press of Atlantic City that the dictator's likeness was used to show that the project was revolutionary. She said the casino was not trying to make a political statement. Miami Herald, 9-12-03

Tropicana officials said the billboards weren't meant as a political statement. But after talks with Cuban-American leaders on Thursday, Tropicana will now place the international symbol for "no" - a circle with a bar through the middle - across Castro's face. The slogan will also be changed to read "The Real Revolution." Thomas Barlas, Press of Atlantic City, 9-13-03

Revolutionary was hardly the theme in Las Vegas at the Global Gaming Expo. Rather the show was a trip down memory lane and a stylized version of American pop culture of the last 30 or 40 years. It is far too soon to pass judgment on the success of any of the new games, but not too soon to say there are hundreds of them; and at least one has to have player appeal, "legs" and profitability for casino operators, doesn't it? If you are casino operator, you are putting a lot on the line, hoping that you can recognize a winner when you see it. If you manufacture games, you hope that you have learned what makes a winner, but you really hope that casinos buy lots of those games to test your theories.

A random list of themes from various slot machine manufacturers at the Global Gaming Expo: Star Wars, Big Mouth Billy Bass, Professional Bull Riders, Men Are From Mars, Women Are From Venus", Chicago, M*A*S*H, Austin Powers, Goldmember, The Twilight Zone, Used Cars, Laverne & Shirley, Gilligan's Island, I Dream of Jeannie, Dilbert, New Year's Rockin' Eve, Rodney Dangerfield ("Reel Respect"), Magic 8 Ball, Uno, Othello, Marilyn Monroe, Family Feud, Young Frankenstein, The Terminator, Regis (Philbin) Money Mixer, Animal House, American Graffiti, The Dating Game, The Price is Right, Elizabeth Taylor — Dazzling Diamonds, Jeopardy!, That Girl, Drew Carey, Mickey Mantle, The Phantom of the Opera, I Spy, Bewitched, Jack & the Beanstalk, The Honeymooners. — Themed slot machines are nothing new in the expanding world of gambling. But the abundance of new slots on display at the Global Gaming Expo this week from companies around the world set new levels of ambition, theme licensing and technological savvy, exhibitors said. Reno-based International Game Technology's floor display was easily the largest and most prominent, displaying 150 newly designed machines that are either in development, being readied for distribution or recently made available. IGT's display alone would make a decent primer for anyone wishing to brush up on American pop culture. Most of the machines are based on television shows — sitcoms and game shows like M*A*S*H and The Dating Game — but many others depict popular movies like Animal House and American Graffiti. Others simply pay homage to pop icons and sex symbols from the past, like Frank Sinatra, Elizabeth Taylor and Marilyn Monroe. Thomas J. Walsh, Reno Gazette-Journal, 9-19-03

The world of casino gambling has become commonplace. So commonplace that is often the backdrop for movies, novels and increasingly television. Las Vegas is, of course, the prime venue, but even Reno has a program named after it this season.

The producers of NBC's "The Restaurant" might be betting on "The Casino" for their next reality hit. Sources said producers Mark Burnett and Ben Silverman are working on a spinoff of "The Restaurant," which chronicled the behind-the-scenes action surrounding the opening and the running of a Manhattan restaurant headed by chef Rocco DiSpirito. Nellie Andreeva, Reuters Hollywood Reporter, 9-9-03

Midway through tonight's "Las Vegas" premiere, a high-powered casino hostess is offered a hotel suite with either a Strip or a mountain view. "Strip," she says without missing a beat. "Of course." The characters in this new NBC drama are in love with Sin City…Of the 36 new network shows premiering this fall, "Las Vegas" is among the more promising. Matthew Gilbert, Boston Globe, 9-22-03

Hugh Hefner must have been watching the movies and television programs because he chose the Palms in Vegas for the 50th anniversary party for Playboy. And maybe the mayor of New York has been watching, too or maybe he and Mayor Daily of Chicago are friends; it seems he is thinking New York could compete with Vegas for the "Sin City" title.

Lounging poolside at the Palms hotel-casino with his six beautiful blondes, Hugh Hefner knows life wouldn't be the same if Playboy magazine ended up being a bunny flop 50 years ago. "We've certainly come a long way," says the 77-year-old patriarch of the Playboy empire. "We live in a much different, a much better world than we did in the 1950s." Hefner and his Playmate entourage spent the weekend in Las Vegas hosting "Playboy's 50th Anniversary Celebration," where wild parties, Playmate casting calls and Playboy fashion shows drew thousands. Christina Almeida, Associated Press, San Francisco Chronicle, 9-22-03

New York City Mayor Michael on Friday said he was "honestly annoyed" that the state only allows gambling on Indian reservations, adding that the city might as well have a casino too. The Republican mayor made it clear he disliked gambling because it draws the people who can least afford to lose money. But he added: "If everybody from New York City is going across a (nearby) border, why not keep the money here?" Comments on his weekly radio show were the most positive he has made about gambling. His remarks contrasted sharply with the cold reception he gave the governor's mid-May proposal to help the city solve its fiscal crisis by installing 4,500 video poker machines in Times Square. Poker Magazine, New York Times, 9-29-03

Oh, and did I mention that Michigan has moved further into the world of gaming; no need to build more casinos, but how about we put gaming in restaurants and bars around the state.

Michigan residents will be able to play new lottery games next month - for the first time at restaurants and bars. The keno and pull-tab games may help the Michigan Lottery compete with the state's 20 casinos. Allowing the games at bars - instead of solely at gas stations and stores - makes gambling somewhat of a social event, officials say. "It's an important new market,'' Lottery Commissioner Gary Peters said. "Especially in these tough economic times, we've got to do what we can to generate revenue for the state.'' Tim Martin, Lansing State Journal, 9-15-03

The industry has entered another major consolidation phase and expansion phase. At the beginning of the year, it appeared that industry as well as corporate growth would be driven by new legislation. Significant new legislation has yet to develop and growth thus far has been corporate and driven by acquisitions and not new properties. The only significant new property this year, the Borgata in Atlantic City has not proven it can expand the market, only that it has raised the cost of competing and reduced the size of everyone's slice of the pie. Growth, therefore, for slot manufacturers has to come from increased sales to existing operations (and more participation games); that has produced hundreds of new games this year. The operators and the manufacturers both need lots of winners from the lot if revenues are to grow. It is very much a symbiotic relationship; they need each.

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.