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Quicktakes: The month's trends at a glance - October 2005

4 January 2006

The entire economy in some ways reflects the hurricanes on the Gulf Coast. Gas prices in particular continue to climb; consumer confidence and new home sales are down, though previously owned home sales continue to increase. And Wall Street, dear old Wall Street, has been hit daily with bad news. The indices have not dropped radically, but have had trouble maintaining the pre-hurricane levels. In the month before Katrina, an 11,000 DOW seemed possible; since then it has struggled around 10,400. Daily the stock markets have gone up and down with oil prices, damage reports and Greenspan comments on housing prices, financing and inflation.

U.S. consumer confidence fell by the most in 15 years after Hurricane Katrina devastated the Gulf Coast and pushed gasoline prices to a record this month. The consumer confidence index dropped to 86.6, the lowest in two years, from 105.5 in August, the New York-based Conference Board research group said today. New home sales sold in August at the slowest pace since November, falling 9.9 percent to a 1.237 million annual rate, the Commerce Department said in Washington. Bloomberg, 9-27-05

There were mixed results for the gaming industry in August. Missouri and Indiana reported lower revenues and the rest of the States, an increase, with no report from Mississippi. September, whenever the reports are in, will reflect hurricanes in both Mississippi and Louisiana. The casinos in Biloxi and New Orleans will have been closed the entire month.

Illinois gaming revenue grew 6.8% to $153.2 million - the 14th consecutive month of statewide revenue growth. Joseph Greff, Bear Stearns, 9-8-05

Nevada casinos won $958.4 million from gamblers in July, 17.9 percent better than the $812.7 million won in July 2004. Cy Ryan, Las Vegas Sun, 9-9-05

Louisiana's state-licensed casinos won $173 million…lower than the $173.8 million…in August 2004. Alan Sayre, Associated Press, Biloxi Sun Herald, 9-14-05

Atlantic City August revenues rose 4.6% to $473 million. Woinski 's Gaming Industry Weekly Report, 9-19-05

Iowa August gaming revenues rose 2.9% to $91.9 million. Woinski 's Gaming Industry Weekly Report, 9-19-05

Detroit August gaming revenues rose 5.2% in August. Woinski 's Gaming Industry Weekly Report, 9-19-05

Missouri August gaming revenue fell 1% to $123.3 million. Woinski 's Gaming Industry Weekly Report, 9-19-05

Colorado's casinos reported revenues of almost $63.9 million in August, a gain of 2.1 percent from a year earlier. Rocky Mountain News, 9-20-05

Indiana August gaming revenue fell 1% to $198.3 million. Woinski 's Gaming Industry Weekly Report, 9-26-05
Baltimore Sun, 9-7-05

In anticipation of the Global Gaming Expo, lovingly called G2E, the major manufacturers announced the new products to be put on display at the show. Not surprising each is presenting a version of server-based games, some new reel games (this year's hot game, 5-reelers) and the usual array of trademarked names. And in a change of direction from previous years, Elvis seems to have left the building. Games tied to famous names, if not missing, are not occupying the center stage they have in previous years.

Unlike past gaming industry trade shows, when slot machines themed after pop culture icons, 1960s and 1970s television shows, and blockbuster movies were the convention's rage, the star of this week's Global Gaming Expo 2005 is what's inside the machine...more than 27,000 people are expected…will feature 700 exhibitors… Goldman Sachs gaming analyst Steven Kent said this year's gaming expo will highlight technology on the slot machine floor. The show is providing manufacturers a ready-made audience for a time when the equipment vendors need to find a way to boost sagging sales…"Specifically, the slot space faces rising competition, a slowdown in the replacement cycle, and limited new market openings," Kent said. "We don't expect these trends to improve in 2006, and while many of the technologies will be on display for downloadable gaming and table management systems, we still think it will be a while before they are fully commercially available." Howard Stutz, Gaming Wire, Las Vegas Review-Journal, 9-12-05

IGT: A wealth of new penny slot themes spanning all IGT product lines and a new Trimline machine that applies AVP® technology to for-sale machines will be among the "must- sees" at the IGT booth during the Global Gaming Expo…"Based on the phenomenal popularity of low-denomination games, we'll showcase the strength of our penny products by unveiling new game titles across all of our product lines," said Steve Morro, President of IGT's Gaming Group. "We'll have close to 400 gaming machines in the IGT booth with a dazzling array of configurations: our highly successful 5-reel slots and video slots with up to 100 paylines, and penny themes on our Fort Knox® and Party Time!® Multi Level Progressives, Wheelionaire(TM) Mega-Mystery Progressive, MultiWay(TM), Reel Touch® games and video slot products. PRNewswire, Yahoo! Finance, 9-7-05

Bally Gaming and Systems…plans to showcase the broadest array of gaming products and technology of any supplier at the upcoming Global Gaming Expo (G2E) …The Global Gaming Expo…an opportunity to display unique products and technology covering video slots; reel-spinning slots; Class II, lottery and central-determination games; wide-area progressives; specialty games; licensed titles; multiple systems platforms for both domestic and international markets; group-play games; table technology solutions for blackjack and baccarat; advanced bonusing technology; international games; proprietary poker games; system-based games; downloadable technology and other future concept machines and games. PRNewswire, Yahoo! Finance, 9-8-05

Aristocrat Technologies, Inc. today announced that it will display a standout array of gaming machines and technology at the 2005 Global Gaming Expo..."Our G2E exhibit is going to look like the casino floor of the future, featuring our new five-reel stepper series, a range of double standalone progressive games, downloadable technology, and a new, 100 percent cashless slant-top cabinet among over 150 game titles," said Aristocrat Technologies, Inc. President Gavin Isaacs. "The new games and game concepts on display demonstrate our commitment to continuing to provide casino operators with high-performing games that entertain players." In addition to an impressive array of new games, Aristocrat will exhibit its downloadable games technology. PRNewswire, Yahoo! Finance, 9-7-05

WMS…announced today that it will preview its server-based gaming technologies…next generation gaming technology that focuses on the enhancement of slot machine content, downloadable software for game assets, central determination of game outcomes and centralized game configuration through a trusted, server-based environment. Business Wire, Yahoo! Finance, 9-7-05

WMS Gaming Inc… announced today that a new series of wide-area progressive games based on the nation's premier lottery brand, POWERBALL(TM), will debut at the fifth annual Global Gaming Expo (G2E)… Business Wire, Yahoo! Finance, 9-7-05

Multimedia Games, Inc. announced today that the downloadable and configurable module of its Casino Commander(TM) game management system has received approval by Gaming Laboratories International Inc. ("GLI"), which has certified that the system meets the current GLI-21 national standard for server-based, downloadable gaming systems, the one now used by many of the tribes and racetracks in the Oklahoma jurisdiction. Multimedia Games will demonstrate the GLI-approved Casino Commander technology, including Tournament Service capabilities and other Intelligent Casino(TM) features, at the fifth annual Global Gaming Expo. Business Wire, Yahoo! Finance, 9-7-05

Even though there wasn't much new product, the panels and discussions still focused on the industry and a very wide array of topics. There was, of course, discussion and debate on current issues as there always is at the annual trade show. This year, probably nothing was more important or timely than the damage of Katrina to the casinos of Mississippi and Louisiana. The impact was very new and the discussions were only the first of many, but they still were important. A perfect opportunity for industry leaders to get together and talk about the future of riverboats in those areas.

In another sign of the gaming industry's anxiety about its future in the hurricane-ravaged Gulf Coast, CEOs of the top casino companies are expected to discuss the matter next week during the industry's annual G2E trade show in Las Vegas. At least one state official -- Larry Gregory, head of Mississippi Gaming Commission -- fears that the casinos may not return to the state unless the current gaming laws are changed to allow companies to operate land-based casinos instead of the "floating casinos" decimated by Katrina. If companies don't rebuild their businesses, Gregory fears the state could risk losing thousands of jobs and billions of dollars in gaming revenue and taxes. The American Gaming Association's (AGA) board of directors, which includes MGM Mirage CEO Terry Lanni, Harrah's Entertainment CEO Gary Loveman, Pinnacle Entertainment chief Daniel Lee and Wynn Resorts CEO Stephen Wynn, will meet Monday, according to AGA's Parija Bhatnagar, CNN/Money, 9-7-05

Just when we thought Hurricane Katrina was the worse that could happen to the casino industry another hurricane, Rita, came along hitting the casinos in Louisiana. The damage wasn't as severe and the casinos probably will not take as long to rebuild, with the exception of the New Orleans area where they suffered from both hurricanes. What is to be done, and how can the casinos and the taxes they generate be protected? The debate is just getting started, but it seems clear that there will be a complete discussion of the issues with all sides making their position known. Barbour, Baptists, Biloxi, bosses and even Bush have contributed the discussion.

The first post-Katrina special session of the Mississippi Legislature that starts [Tuesday, September 27, 2005] will likely be dominated by a proposal to allow Coast casinos to rebuild on dry land. Gov. Haley Barbour, who has sole authority to call and control the agenda for special sessions, confirmed late Monday that he's including a proposal to allow casinos onshore, a move he said is based on "public safety and fiscal sanity." Geoff Pender, Biloxi Sun Herald, 9-27-05

The state's largest religious group - the Mississippi Baptist Convention - is trying to thwart any move by officials to let casinos build on land, saying hurricane damage shouldn't be used as a reason to expand the gambling industry… Jimmy Porter, executive director of the Mississippi Baptist Convention's Christian Action Commission, said in a news release Thursday that the convention opposes any form of gambling and the "terrible human tragedy" of Hurricane Katrina shouldn't be used to expand casino interests…Porter said any proposed changes in gambling laws should be put on statewide ballots to let voters decide. Emily Wagster Pettus, Associated Press, 9-22-05

The City Council unanimously passed a resolution Monday in support of legislation that would allow casinos to build on land near the waterfront. The resolution would favor allowing casinos to build in the areas along U.S. 90, and the Back Bay on the shore…a map with proposed gaming zones was attached to the document. Michael Newsom, Biloxi Sun Herald, 9-27-05

Coast leaders reached a compromise Monday on how state law should be changed to help 17,000 casino employees get back to work, but they've still got a lot of convincing to do. The leaders assembled by Mississippians for Jobs agreed, in essence, not to disagree about allowing shoreline-based casinos within 800 feet of where gambling barges are currently permitted. A unified front is crucial for convincing legislators from other areas of the state to amend existing legislation. Tom Wilemon, Biloxi Sun Herald, 9-27-05

National gambling companies - already rushing to rebuild casinos on the Coast - would be granted access to millions of dollars in tax breaks under President Bush's plan to entice businesses into the Katrina disaster zone. In a break from previous Gulf Coast economic development practices, White House officials said they do not plan to exclude the gambling industry from huge tax write-offs for investment in equipment and structures in the president's proposed Gulf Opportunity Zone. Jonathan Weisman, Washington Post, 9-23-05

Free bus rides are available for frontline casino workers who would like to go to the Capitol in Jackson to push for a state law change to allow shoreline-based gambling on the Coast. Tom Wilemon, Biloxi Sun Herald, 9-27-05

Bring in the slots! This is not a new trend, nor one that has advanced a long way lately. Still a few separate stories from separate states point out that it is a story that is not going away until all of the tracks have either closed or added slots.

Saratoga Race Course…Using estimates for Sept. 5 attendance and wagering, the season finished up with attendance at approximately 933,372 for a daily average of 25,927, which is down 3.1% from last year's average of 26,762. Blood Horse News, 9-6-05

Ellis Park concluded its 41-day 2005 meet on Sept. 5. The track used 2003 figures for comparison purposes, as both years had 41 racing days…On-track wagering for this year's 41-day session totaled $8,012,806, a decrease of 18.1% from 2003 $9,780,749). An average of $195,434 was wagered on-track each day compared to the daily average of $238,555 Blood Horse News, 9-6-05

Financial woes will force the Geneva Lakes Greyhound Track to close in November after more than 15 years of operation...will leave Wisconsin with one greyhound track…"The operation is simply not financially sustainable any longer," according to …general manager Milt Roth…Roth said the track lost customers and revenue to casinos… Associated Press, Duluth News Tribune, 9-6-05

The president of the Shakopee track had weathered one disappointment earlier in the 68-day season, when Canterbury's bid for a racino failed, and another near the end when Sunday's races were canceled…declines in on- and off-track wagering caused the total handle to fall 7.6 percent from last season… Rachel Blount, Minneapolis Star Tribune, 9-6-05

Magna Entertainment Corp., owner of Maryland's two major horse-racing tracks, plans to cut racing days in the state almost in half, Gov. Robert L. Ehrlich Jr. said…"I've been told they don't want to leave," Ehrlich said. "I've been told they most likely will be here next year. I have no guarantee they will be here in two years, three years." Associated Press, 9-05

If you have had enough of the dismal news for the moment and would like a note from the bright side, how about roping goats? A Seattle investment company is building a goat ropers' paradise; goat roper is a popular term of cowboys and rural residents of Nevada. Usually it conveys at best an unsophisticated, boot wearing, country bumpkin. Who would have thought of building a casino just for them and their favorite entertainment, (you guessed it roping goats at the rodeo)? Some one did. Not just one goat-ropers' casino, but three casinos to cater to the rodeo crowd. I can hardly wait; just image 150 rodeos and slot machines, too.

A Seattle investment company believes it will hit the jackpot with three rodeo and casino resorts in rural Nevada. Triad Resorts LLC, whose managing member is a principal with the investment banking firm Capital Access LLC, is moving ahead with a plan to build three four-star resorts in the border towns of Jackpot and Wendover and in Elko. Patrick …Each resort would be centered around a rodeo arena and Triad plans to play host to 150 rodeos a year between the three facilities. Richard N. Velotta, Las Vegas Sun, 9-6-05

In September 2005, there are trends that still deserve our attention. Both Pennsylvania and Florida continue to work their way toward slot machines. New York and Maryland are working their way in the opposite direction, while California, Massachusetts and Kentucky are some place in the middle. The G2E convention, usually a showcase of trends, was different. The manufacturers seemed to be stumped about the next trend, except server-based gaming that does not easily fit into a business model. Five reel nickels do not seem to be enough to drive an entire year's sales, nor a trend except as the tail end of multi-coin, multi-line games. Any of those hundreds of slot machines scattered around the convention center floor in Las Vegas, however, would be just fine for the race tracks still trying to convince legislators to allow them. But there really is only one story this month, hurricanes. The aftermath of Katrina and Rita is not yet a trend, and it will be months before we understand the scope of the damage or before we see all of the implications in regulation, legislation and investment that will in themselves be part of a trend resulting from a very strong wind.

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.