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Quicktakes: The month's trends in a glance - August 2006

11 October 2006

A new month, a new war, and new record highs for oil prices. Actually, none of that is really new. We have a July every year, Israel has been at war since the founding of the state, and oil prices were higher thirty years ago if you adjust the price for inflation. Gaming didn’t report anything new in revenue trends either, just a continuation of moderate growth trends, except in those rare cases where a hurricane or a governor has closed some casinos. New Jersey results next month will reflect the closure and Mississippi will continue to reflect the effects of Katrina until all of the casinos have reopened. The results are still good and should give investors and other interested parties confidence in the future of gaming.

Atlantic City: June gaming revenues rose 5.9% to $428.1 million. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06

Colorado: June casino revenue increased to $63.5 million, up 1.9 percent from 2005. Denver Post, 7-19-06

Detroit: May casino revenues rose 14.7% to $106.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 7-24-06

Connecticut: June slot win rose .9% [is .9% OK?] to $ 150.6 million. New London Day, 7-15-06

Illinois: June gaming revenues rose 4.2% to $141.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06

Indiana: June gaming revenue rose 7.2% to $203.2 million. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06

Iowa casino revenues rose 13.7% in June to $102.1 million. Racetrack revenues rose 22.8%. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06

Louisiana's casinos won $213.7 million compared with $196.1 million in June 2005, a 9% increase. Associated Press, 7-18-06

Mississippi: June gaming revenues decreased 12.7% to $203.3 million. Mississippi Gaming Commission

Missouri’s gaming revenues rose 6% to $129 million in June. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06

Nevada's May casino win rose 9% to $1.126 billion. Alan R. Woinski, Gaming Industry Weekly Report, 7-17-06
6-26-06


Public debate is often couched in logic; each side attempts to demonstrate the superiority of its argument. That is the foundation of our legal system and of our political system, at least on the surface. There is usually a private agenda at work under the surface and if you subscribe to the theory, a conspiracy in the background pulling the strings. But at least in public, we debate an issue on logic. Going into this year’s Congress, everyone knew that Internet gambling would be debated as it has been in the past. This year, however, the gaming industry was backing a study, and the exposure gaming on the Internet has gotten through poker seemed to indicate the debate would be based on reality and logic. Wrong! The Republican Party has decided to put Internet gambling into the party’s platform as a fundamental moral issue – linked with gay marriage, abortion, flag burning, and probably murder, incest, and disrespecting one’s parents. No room for logic – if you oppose them it is a moral flaw making you more like an Islamic extremist than a logical businessperson.

Any hopes Las Vegas casinos had of the federal government gently starting to loosen prohibitions on Internet gambling are likely stalled now that U.S. House Republicans have decided to target online betting as a cornerstone of their election-year American Values Agenda. The casinos have been watching on the sidelines as the online jackpot has become a lucrative $15 billion industry worldwide in just a few short years…Earlier this year, the American Gaming Association called for a congressional study to determine the feasibility of perhaps regulating online gambling, much as Nevada and other states oversee rules for brick-and-mortar casinos. Nevada Reps. Jon Porter, a Republican, and Shelley Berkley, a Democrat, joined forces this spring to introduce legislation establishing a study commission…The objective is essentially doomed now that House Republicans have made anti-gambling legislation part of their conservative agenda of 10 bills - including bans on gay marriage, flag burning and abortion - to be addressed in the run-up to the November elections. Lisa Mascaro, Las Vegas Sun, 7-8-06

The House of Representatives passed an anti-gaming bill, without a study and seemingly as much in reaction to the Abramoff scandals as anything else. What better way to prove your innocence than vote against gaming – the major subject of Abramoff’s lobbying efforts.

With bipartisan support and Jack Abramoff’s lobbying scandals haunting Republican efforts to pass antigambling legislation, the House of Representatives approved a crackdown on Internet wagering this afternoon that would ban not just sports betting but online wagering for poker and other games. The House voted 317 to 93 to pass a bill that would make it illegal for financial institutions or intermediaries to process payments to offshore casinos through bettors’ credit cards, electronic funds transfers, checks, debits and other electronic transactions. In addition, the bill updates the Wire Act of 1961 that forbids the transmission of betting over telephone lines so that it specifically prohibits online gambling through whatever communication network, making it a felony. It would increase the penalties for convictions to five years in prison from two years. Kate Phillips, New York Times, 7-11-06


That news has been creating a bit of discomfort around the world, particularly on the London stock market, the home of most of the public online gaming companies. That, however, wasn’t the worst news they received. On July 17th federal agents arrested David Carruthers, CEO of BetOnSports, while he was passing through an American airport. Carruthers is not an American; the company trades on the London stock exchange and is headquartered in Costa Rica. The charges are racketeering, tax evasion, and misleading advertising.

David Carruthers, chief executive of online gaming group BetonSports has been detained by US federal authorities while changing planes in America. He and his wife Carol were on their way from the UK to the group's operations in Costa Rica. It is understood they were approached in the transit lounge and Mr Carruthers was requested to accompany federal agents. Philip Robinson, Times, 7-17-06

Betonsports Plc Chief Executive Officer David Carruthers was indicted by a federal grand jury on charges of racketeering conspiracy in connection with a U.S. gambling probe...The indictment, issued June 1 by a federal grand jury in Missouri and unsealed today, charges nine other people and three additional companies. Bloomberg, 7-17-06

According to the indictment, BetOnSports misleadingly advertised itself as the "World’s Largest Legal and Licensed Sportsbook." The indictment also alleges that [BetonSports founder] Kaplan failed to pay federal wagering excise taxes on more than $3.3 billion in wagers taken from the United States and seeks $4.5 billion from Kaplan and his co-defendants, as well as various properties…in conjunction with the indictment, the United States has filed a civil complaint in federal court to obtain an order requiring BetonSports to stop taking sports bets from the United States, and to return money held in wagering accounts to account holders in the United States. Philip Robinson, Dominic Walsh and James Doran, Times, 7-17-06

The government is promising more prosecution and problems for online gambling operators; those promises are raising some serious international issues. Antigua has been pursuing a case against the United States with the WTO, claiming it violates international trade agreements. Antigua is not the only country that feels the United States is going a bit too far; they might even suggest American actions have much in common with the Ministry of Vice and Virtue in some Muslim countries, although no one has yet to make that comparison.

'Illegal commercial gambling across state and international borders is a crime,' Catherine Hanaway, U.S. attorney said. 'This indictment is but one step in a series of actions designed to punish and seize the profits of individuals who disregard federal and state laws.' Bloomberg, 7-17-06

"The people were scared of the Vice and Virtues Ministry under the Taliban, but this new ministry won't be like the Taliban's," Rahimi said. "It will take into consideration moral and religious activities to help improve Afghan society." The Afghan government announced plans Tuesday to re-establish a Vice and Virtues Ministry…considered the most powerful in the ousted Taliban government. It employed 32,000 people to enforce the Islamic zealots' bans on girls' schools, on television, on card-playing and other gambling, even on kite-flying and women's public baths. Amir Shah, Associated Press, 7-18-06

Going in the opposite online direction as the United States is the United Kingdom. The ongoing process of revising decades-old gaming regulations is leading to more opportunity and a more open environment for gaming – on land and online. Legalizing advertising for both forms of gaming operations goes more than just one regulatory step forward; it is a legitimizing step forward. The American government and the English government are definitely marching to different Internet drummers.

Casinos, betting shops and gambling websites will be allowed to advertise on television and radio for the first time next year under guidelines published today. Under draft rules announced by the advertising standards watchdog, advertisements will be permitted if they are "socially responsible" and do not target the young, the vulnerable or promote gambling as an alternative to employment. The guidelines are part of the liberalisation of the betting industries under the Gambling Act 2005. David Derbyshire, Telegraph, 7-17-06

It is not just in Washington, D.C. that gaming is being hotly debated. Ballot initiatives are becoming a regular part of every election, and every November four or five gaming initiatives are likely to be on the ballot. This coming November is no exception. But it is not enough to get the signatures and place an item on the ballot. The supporters have to draw voters’ attention to their cause and get their supporters to the polls. The opposition can try to stop the petitions with legal maneuvers, but once an initiative is approved for the ballot, then the opposition is faced with the same challenges – raise voter awareness. In both cases that means spending lots of money on television advertising, and then getting their constituents to the polls.

Even though the elections are still three months away, the politician positioning is already underway, and the big names, big budgets, and big guns are rolling out their arsenals, as they are in Ohio and Nebraska.

Betty Montgomery doesn’t want to see gambling expanded in Ohio, but if it will happen anyway, she wants the state to be in charge. Montgomery, Ohio’s auditor and Republican candidate for attorney general, brought her stand against gambling to Lima on Monday, campaigning against a possible November ballot issue that would allow slot machines in racetracks and casinos in Cleveland and possibly Cincinnati. Jim Sabin, Lima News, 7-18-06

U.S. Sen. George Voinovich said Monday he’s ready to battle again with gambling proponents who want to expand legalized gambling in the state but warned that this time the foe is much stronger. Voinovich, who opposes putting any proposal for slot machines in Ohio on the Nov. 7 ballot, told reporters and editors at The Chronicle-Telegram the costs of gambling far outweigh any benefit…Voinovich cautioned voters that only people running the slot machines will benefit in the long run because of the money those billions of dollars that will be lost in state revenue, and therefore programs. “They’re trying to pass this off as something good for higher education, and it’s not,” he said. “Is this really the way we want to raise money for higher education?” The amendment is flawed, too, because it does not include a provision for moving the slot machines, so the constitution would have to be amended yet again for that to happen, he said. Jason Miller, Elyria Chronicle, 7-18-06

Congressman Tom Osborne sounded the warning during a Monday news conference announcing an anti-gambling group is activating its statewide network…The keno petition is a change in state law, not a change in the constitution. And the anti-gambling group believes that the gambling industry cannot legally get video keno without changing the constitution…Two other Nebraska leaders, Ron Brown, director of Fellowship of Christian Athletes, and Dave Bydalek, director of Family First, a division of Focus on the Family, spoke at the news conference. Nancy Hicks, Lincoln Journal Star, 7-18-06

Gaming is on the campaign trail in other states also – when the issue is big enough, the candidates for governor and sometimes candidates for other state constitutional offices cannot avoid taking a position, as in the campaigns in Kansas and Maine.

Voters in next month's Republican gubernatorial primary could influence the future debate in Kansas over legalized gambling. Two of the three leading GOP contenders oppose gambling on social and economic grounds. If either wins, and later unseats incumbent Democratic Gov. Kathleen Sebelius, the debate over gaming could be all but over for the next four years. Gambling supporters in the Legislature have come close to passing casino legislation in recent years, with Sebelius' support, but each time it has failed to gain enough votes to get over the top. Steve Painter, Wichita Eagle, 7-18-06

If you're looking for an issue that separates Maine's seven gubernatorial candidates, gambling is a safe bet. Neither Gov. John Baldacci nor his Republican re-election challenger Chandler Woodcock is a fan of casino gambling, but that's about all they agree on. The issue elicited a variety of views from the other contestants in the seven-person Blaine House field. But all acknowledge that voters have spoken on the matter, and said yes… The first referendum question asks whether the Passamaquoddy tribe should be allowed to run a harness-racing track with slot machines and high-stakes beano games in Washington County. The second asks whether slot machines should be banned in Maine. Associated Press, Maine Today, 7-18-06

With November just around the corner, gaming on the ballot and candidates on gaming will continue to make the news. However, if we have learned anything from Pennsylvania and Florida, approving slot machines is not the same thing as installing slot machines. And with the elections coming up, the politicians in Washington may not have any more time for dealing with gaming; the House of Representatives has made its gesture, so now they can get out on the campaign trail. If that sounds cynical it is because I am; I don’t believe Congress is dealing honestly with gaming – Internet, Indian, or any other form. It is my opinion that they are using their Washington stage to pander to voters.


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.