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Best of Ken Adams

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

31 October 2006

The stock market is up to record highs and the price of oil is down; consumers are confident and except for home sales it feels just like the go-go days of yesteryear. And all of the good news applies to gaming revenue across the country as well, except of course Mississippi; however, beginning in September, even Mississippi is guaranteed increases over the previous hurricane devastated year. Louisiana is already worrying about its future with a renewed Mississippi, and Atlantic City may suffer next year as Pennsylvania comes on line, but for the moment the picture is rosy indeed.

August Atlantic City casino revenue was up 4.5% to $494.4 million. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Colorado August casino revenue increased to $68.8 million, up 8 percent from 2005. Denver Business Journal, 9-22-06

Delaware August gaming revenue rose 8.8% with Delaware Park up 15.6%, Dover Downs up 4% and Harrington up 2.6%. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Detroit August gaming revenue rose 5.1% in August to $108.7 million. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Connecticut August slot win rose 5% to $153.4 million. New London Day, 9-15-06

Illinois August gaming revenue rose 5.1% to $108.6 million. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Indiana August gaming revenue rose 5.6% to $209.5 million. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Iowa August gaming revenue rose 15% to $105.7 million. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Louisiana casino revenues rose 18.2% in August to $209.5 million. . Alan R. Woinski, Gaming Industry Weekly Report, 9-24-06

Mississippi casino revenue in August was down nearly 13% to $205 million. Associated Press, 9-19-06

Missouri's 11 casinos logged $130.6 million in gaming revenue in August, an increase of 6 percent from a year ago. Deborah Gertz Husar, Quincy Herald-Whig, 9-14-06

Nevada July casino revenue rose 8.4% to $1.04 billion. Alan R. Woinski, Gaming Industry Weekly Report, 9-17-06

Casino gaming has often been pitched as the solution to economic challenges. In Colorado, New Jersey, Louisiana, Mississippi, Missouri and other states gaming has been described as the golden egg that would save everyone and everything. Jobs, taxes, financing for education and investment have all been promised at one time or another as the outcome of casino gaming. And gaming has sometimes indeed lived up to its billing; Mississippi officials, particularly in Biloxi County, proudly recount the economic benefits of their casinos. However, time has a way of diminishing the impact of even the best of innovative new developments.

Take Reno, Nevada for example. When Nevada legalized gaming Reno started on a path that led to it the center of the nation's attention as the sin and gambling capital of the United States. That was before Las Vegas and the famous Strip gained the top spot in the casino world. Las Vegas has continued to grow and prosper as the nation's gaming capital, while Reno on the other hand has struggled for 30 years to maintain its gaming economy.

Competition was Reno's undoing; casinos appeared in all of the neighboring states and ate into Reno's gaming revenues. Reno has been forced to evolve in something other than a casino town and it has. Downtown Reno has 20 less casinos than it did it 1980 and many of the former casinos are being converted into condominiums.

But Reno has not turned away from its tourist business; it has simply expanded its offerings beyond gaming. Reno started 25 years ago to concentrate on special events. In 2006 it is clear just how successful those efforts have been. In just August and September there are classic car parades, balloon races, rib cook-offs and air races.
Hundreds of thousands of people visit these events each year.

Sunday morning for a parade of 2,000 of the hottest classic cars on the West Coast…Hot August Nights spokesman Bruce Walter estimated the weeklong event that ended with the parade drew slightly more people than last year's crowd of 800,000…Five hundred more cars were registered this year for a total of 5,500, and he said that might have had some impact on parking. Susan Voyles, Reno Gazette-Journal, 8-8-06

The lines began forming 20 people deep at Famous Dave's BBQ of Minnesota minutes after the crew of 13 took honors as the best rib winners at the 18th Best in the West Nugget Rib Cook-off on Monday…This year's Best in the West Nugget Rib Cook-off was extended from five to six days and estimated to have attracted more than 500,000. Maggie O'Neill, Reno Gazette-Journal, 9-5-06

The 25th Anniversary Great Reno Balloon Race drew an estimated 175,000 spectators, organizers announced Sunday when the three-day event ended. Saturday's crowd of 75,000 was the largest in event history, officials said. Reno Gazette Journal, 9-11-06

But, over the desert outside Reno-Sparks, it's just fine to fly airplanes low and fast. In fact, the faster the better. They've been doing it for a long time. This week, the Reno National Championship Air Races take place for the 43rd time…Event organizers are hoping for total attendance of more than 200,000 by the time the last race is finished Sunday. Last year, 208,000 watched. Don Cox, Reno Gazette-Journal, 9-11-06

Other events may not bring the same size crowds to Reno, but still help keep Reno in the national news media. The Virginia City Camel races and the Burning Man are covered in newspapers all around the country; and even when Reno isn't the center of the event it is at the edge. The story of the couple that came for Burning Man, went to the camel races and is staying for the air races may not be typical, but it illustrates the attraction of the events.

The Virginia City International Camel Races continue through Sunday. Nelson, of Ladd, Ill., was one of the amateur jockeys who took a spin around the track on a camel. She had met veteran camel jockeys who invited her to the races. "We just spent a week at Burning Man, and we're staying over until the air races," Nelson said. Steve Timko, Reno Gazette-Journal, 9-9-06

Thousands of celebrants danced, hugged and cheered as the annual Burning Man counterculture festival climaxed over the Labor Day weekend and ended in the Black Rock Desert. Accompanied by a spectacular fireworks show, the 40-foot-tall wooden figure known as "The Man" went up in flames Saturday night and tumbled to the playa, 110 miles north of Reno...The crowd peaked at 39,100. Martin Griffith, Associated Press, Reno Gazette-Journal, 9-5-06

And now, just one more event to make the point, a pool tournament which is just one of dozens of special events that show a community reinventing itself as a special events place. The tournament has a three million dollar prize fund, enough to get players and media attention.

International Pool Tour's World Open 8-Ball Championship in Reno this week is moving pool sharks out of smoky halls and home billiard rooms and into the limelight. The $3 million in prize money, a record for a pool tournament, could elevate the game to a gentleman's sport, say pool players. Just like professional golfers, pool players may be able to make a living by competing on the tour. Kristin Larsen, 9-11-06

Long before California and Indian gaming Reno was faced with competition from southern Nevada. Not just Las Vegas, but Laughlin also, was cutting into Reno's business. Vegas started targeting Reno's customers with advertising campaigns in Northern California, Oregon and Washington. Reno was not slow to respond. Building on the traditional air races and rodeo, the city added more events each year. Now the summer in Reno is a summer of events that draw people from all over the world. I doubt there is a city in the country that has as many events or enjoys so many tourists because of the events. Just the major events alone bring nearly a million people to town each summer.

There were a couple of nightclub stories this month that really got my attention and show just how much of a trendsetter Las Vegas can be. First there was a story in the Las Vegas Sun about a club called "Pure," located in Caesars. The story was about the security, but it also suggests that in some way the major clubs produce really significant cash flows for the host casinos. The trend isn't new; for at least ten years Vegas casinos have been building expensive and trendy nightclubs – as in $10-30 million, more than the first Las Vegas Strip casinos themselves cost – and fighting each other for the top echelon – the A-list – tourists and locals. The story from Caesars implies that besides being expensive to build, they must be really expensive to operate. Pure employs 30 more security personal than the entire casino – that is, Caesars Palace on the Las Vegas Strip with over 2000 rooms, over 2000 slot machines and more than a hundred table games, plus all of the bars, restaurants and shops. Makes one wonder just what the daily expenses and revenue for Pure are, doesn't it?

The club has a security staff of about 85 people per shift - about 30 more than the entire Caesars casino on any given shift and more than any club in the country. It's one of the most heavily secured sites per square foot in the nation. And it's not a prison, museum or military base. The Pure nightclub at Caesars Palace - a mob scene with deluxe seating and Strip views - is a case study in understated- yet-ever-watchful security…Roughly 30 of these "men in black" are in front of the club, making sure troublemakers are kept out before they can stir up problems…receive training in several areas such as defusing tense situations with "verbal judo," case law on the use of force and training from Metro officers in identifying drugs and checking IDs. Security staff also receive regular, random drug tests. Low lighting, nooks and crannies and the alcohol-induced, hedonistic atmosphere of nightclubs create a potential minefield of liability for casinos. Their landlords are responsible for the actions of leaseholders like clubs and ultralounges that have become hot profit centers for gaming companies. Liz Benston, Las Vegas Sun, 9-13-06

The next story, also from Las Vegas, is a little more convoluted. It deals with corruption, bribery and the loss of a liquor license. But for our purposes, the liquor license and the pending sale of the club is the story. The Crazy Horse Too owner is under siege and trying to sell his business and get out of some of his problems. Now, what would you think a freestanding nightclub in Las Vegas might be worth? Well, if you guessed close to $50 million you are right - 50 million dollars for a nightclub? Yep! Wonder how much they take in each day to justify that price? That would be a lot of beer, whiskey and cover charges, although expenses can be high: witness the $10 million settlement in this case. Even with the expenses, it is beginning to sound as if a casino is becoming the lost leader in Vegas and the nightclub is the real cash cow.

A judge refused to stop Las Vegas' revocation of the Crazy Horse Too's liquor license but did rule that, for now at least, the city can collect only up to $1 million of the $2.2 million fine levied against the topless club. District Judge Mark Denton's ruling on the fine was little consolation to club owner Rick Rizzolo, however, because Denton's rejection of the request for a preliminary injunction against the license revocation jeopardizes a negotiated $45 million sale of the club, according to testimony…In June, with a federal indictment rumored to be on the horizon, Rizzolo pleaded guilty to a felony tax charge. In addition, his corporation, The Power Co., pleaded guilty to conspiracy to participate in an enterprise engaged in racketeering activity. As part of the plea deal, Rizzolo was ordered to pay $10 million to Kirk Henry, a Kansas City tourist who was paralyzed from the chest down in September 2001 after he was attacked outside the club during an argument over an $80 bill at the Crazy Horse. Glenn Puit, Las Vegas Review-Journal, 9-13-06

Four hundred miles to the north, a couple of former casino employees are trying to cash in on the obviously lucrative business trend and build a "Vegas" nightclub in Reno; in a typically Reno twist on the trend, the building is a former casino. Somehow, even with all of the tourists in town for the latest special event, it doesn't seem quite the same thing as the Vegas version, does it?

The 210 North building was once also home to the Money Tree casino, owned by the Mapes family. When the Mapes businesses went under in 1982, the building eventually became the Eddie's Fabulous 50s casino before being shuttered. It's refreshing to see somebody step up to the challenge and to use the building downtown. A few of the larger Reno casinos have tried to do large nightclubs, and they attracted crowds for a short time, but didn't last. Reno Live and its successors had gotten to the point where mention of the name would often be accompanied by snickers. Surprisingly, Reno doesn't have any large nightclubs that can compete with the ones on Tahoe's South Shore, but it looks like 210 will fill that niche. J Kellner, Reno Gazette-Journal, 9-15-06

Harrah's is the biggest casino operator in the industry and as such is often first to introduce new concepts and trends into everyday casino operations. Harrah's was the first major casino company to make its slot club uniform in each of its casinos. A player can play in any Harrah's casino using the same card and accumulating and spending the same points. Now, Harrah's has introduced a system for tracking your favorite slot machine as you move from casino to casino. It may not be earth shattering, but it is certainly a benefit for the player to be able to walk into a strange casino and know where his favorite kind of machine is hiding.

Trying to find that elusive "I Love Lucy" or "Men in Black" slot machine? Harrah's recently launched what is probably the industry's first online slot machine locator. The tool, called Slot Finder, allows customers to search by casino, slot machine name, denomination and type of machine, including mechanical and video reels…"Folks like being able to find their machines," said Katrina Lane, vice president of channel marketing for Harrah's. The company implemented the tool after customer surveys showed that people wanted to know how to track down their favorite slots more easily, she said. Liz Benston, Las Vegas Sun, 9-13-06

What is happening with Internet gambling? Americans are arresting Englishmen. Frenchmen are arresting Germans. The European Union is considering suing the French, Antigua is suing the United States and Harrah's is suing the former IT director of Binion's over the WSOP website. The American Congress is struggling with bills banning Internet gambling, and on the last day of September Senate Majority leader Bill Frist successfully attached his anti-Internet gambling bill to a "must pass" defense bill, thus undercutting gaming industry lobbying for a postponement of legislation while Internet gaming is studied under a congressional mandate.

In 2004, Harrah's acquired the venerable Binion's Horseshoe casino downtown in large part…so the company could cash in on Binion's increasingly popular World Series of Poker, or WSOP…Harrah's claims in a lawsuit against Binion's former information technology director, Federico Schiavio one year before the sale of Binion's….Schiavio registered the domain name for an Internet site called WSOP.com. Sam Skolnik, Las Vegas Sun, 9-20-06

…add an Internet gambling ban to a defense authorization bill…But after…rejected the idea because an online wagering ban would not be relevant to defense legislation. Tony Batt, Stephens Washington Bureau, Las Vegas Review-Journal, 9-19-06

BetOnSports…is negotiating a settlement of civil and criminal charges against the company, lawyers on both sides said in court this morning…Demerath told Jackson that discussions were aimed at resolving both the civil and criminal charges…CEO David Carruthers…his July 16 arrest in a Texas airport, the company fired him while he was still behind bars. Robert Patrick, St. Louis Post-Dispatch, 9-20-06

Sportingbet PLC said non-executive chairman Peter Dicks was detained by US authorities in the early hours of this morning while visiting the US on non-Sportingbet business…Sportingbet generates around half of its revenues from US sports betting. AFX, 9-7-06

Senate Democratic Leader Harry Reid of Nevada on Tuesday said he would oppose efforts by Senate Majority Leader Bill Frist…to attach an Internet gambling ban to another bill in the closing days of Congress…Although Reid has said he would vote to ban Internet gambling because he thinks it cannot be effectively regulated, he has also said he could support a study of online wagering by a federal commission. Sen. John Ensign said he would support a ban and a study…Ensign said the proposed ban is not a permanent solution but would curtail Internet gambling and "protect children" while a study is conducted. Tony Batt, Stephens Washington Bureau, Las Vegas Review-Journal, 9-20-06

France is trying to protect its lottery's monopoly on Internet gaming by arresting operators in much the same way the United States has arrested the heads of BetonSports and Sportingbet as they passed through the country. The Internet is becoming a three-ring circus of legal maneuvering, while the players keep playing. And somewhere on the Internet you can bet on the outcome of each of these events separately – but I am thinking no one has posted a parlay, yet.

The co-chief executives of Austrian online company BWIN Interactive Entertainment AG will go before a judge Monday for allegedly violating gambling laws in France, a spokeswoman for the company told Dow Jones Newswires Sunday. Manfred Bodner and Norbert Teufelberger were arrested in Monaco Friday for allegedly violating French laws preventing online gambling and advertising by online gambling companies. Mimosa Spencer, Dow Jones, 9-18-06

The Responsible Gambling Council's 2005 gambling prevalence study…shows that the number…gambling on the internet has risen, with a significant increase among young adults. Among 18-24-year-olds, the number of people gambling online has increased from 1.4 per cent in 2001 to 5.5 per cent in 2005 …the percentage of people gambling online has almost tripled from 0.7 per cent in 2001 to 1.7 per cent in 2005. CNW, 9-19-06

The pressure from the United States is starting to make itself felt in some very tangible ways. Two executives from another Internet company resigned because they did not want to risk going to jail in the U.S. Another company moved its headquarters from Canada to Ireland, one of the America's 400 richest men has decided to avoid coming to the States, and in Vegas there is a billboard war for recognition. But as someone from Sportingbet said, "IIt's the U.S. - or what's the point?" Two out of every three players online are American.

The crackdown on internet gambling in the US has begun to frighten off senior directors. World Gaming chairman James Grossman and non-executive director Clare Roberts have both resigned from the online gaming group on fears they will be arrested in the US…Mr Grossman and Mr Roberts practice as attorneys in the US, outside their work for World Gaming, while Mr Grossman is also an adviser to the US Government, a spokesman said. Caroline Muspratt, Telegraph, 9-25-06

He said yesterday CryptoLogic's top leadership will move in January to Dublin -- closer to London, epicentre of on-line gambling, and to major customers in Europe. He said an on-line gambling crackdown in the United States and arrests of foreign-based industry executives there is purely co-incidental. While the move makes sense for the company, he said he has declined the board's offer to move to Dublin for family reasons. Simon Avery, Globe and Mail, 9-26-06

"We're not targeting Nevada residents per se, rather, we're talking to the millions of tourists from around the world who pass through America's greatest entertainment city." …some online gambling companies are still using dot-com sites, which are considered illegal under federal and Nevada law. Among the boldest is Sportsbook.com, which put up a billboard on the Strip attached to a case of 100,000 $1 bills, hired an armed guard and posted odds on whether the money would be stolen. The tease generated nationwide publicity after thieves made off with some of the cash. Most was recovered…Not far behind is Bodog.com, the well-advertised online casino, poker room and sports book with a flashy new billboard near McCarran International Airport offering the friendly reminder that the online casino simply whets gamblers' appetites for Las Vegas. Enter PokerStars.com, the popular poker site that will be co-sponsoring the upcoming featherweight rematch between Manny Pacquiao and Erik Morales at the Thomas & Mack Center with Wynn Las Vegas. Liz Benston, Las Vegas Sun, 9-26-06

Sportingbet CEO determined to expand in U.S. "You can't ignore the U.S. We're going to focus on acquisitions ... we're going to be in it for the long term." ..."It's the U.S. — or what's the point? I still hold that view," the newspaper quoted McIver as saying…U.S. bets account for about two-thirds of the profits at Sportingbet, which reported profit of $20.7 million. Associated Press, 9-21-06

Sources on Capitol Hill say that new anti-internet gambling language has snuck back into the Defense Authorization Bill over the weekend. Although many gambling related news sources would like to believe that the internet gambling bill is dead, sources on Capitol Hill say that new anti-internet gambling language has snuck back into the Defense Authorization Bill. Casino Gambling Web, 9-26-06

But in the end, literally at 2 a.m. on the last day of September, before adjourning for an election season break, Republican congressional leaders attached an amendment to a port security bill that makes using credit cards, checks or electronic fund transfers illegal. I wonder if that means next month or next year the big stories will be about arrested gamblers and not arrested CEOs?

Congressional Republicans attached a measure cracking down on Internet gambling to a bill aimed at enhancing port security that passed Saturday. Senate Majority Leader Bill Frist, R-Tenn., and Sen. Jon Kyl, R-Ariz., pushed for the gambling provision to be added to the larger bill. Online gambling is generally illegal in most circumstances, but it is something that is difficult to enforce. The new measure tackles that by prohibiting gamblers from using credit cards, checks and electronic fund transfers to settle their online wagers. Associated Press, New York Times, 9-30-06

Congress may have made it nearly impossible for Internet gambling sites to do business with Americans – or they may not have; we will have to wait and see. But what they have done for certain is to go against the cultural mainstream. Gambling is part of the national culture, indeed the world culture, as the expansion in the last few years has proven. Equally certain is the fact that this is not the end of Internet gambling in the United States or the debate in Congress. But for the time being the members of Congress who voted in favor of the measure can get to campaigning claiming the moral high ground and distancing themselves from the Abramoff scandal and the implied corruption of gambling.

It is too easy to compare an Internet prohibition to the alcohol prohibition of the Depression era – but. Gambling is here. Gambling is legal in almost every state except Hawaii, where it is illegal but exists, and Utah, where it is put into the same category as pornography.

Gambling spending in the United States increases every year. The number of gamblers increases every year, and poker has taken the country by storm. Poker is on television virtually nightly. Local tournaments – and there are poker tournaments in more communities than not – are covered by local press and the major tournament, WSOP, is covered by national media. Gambling is a major source of tax revenue in many states. The third-richest American is a casino operator. Gambling drives all of our major sports in some very tangible ways. No? Then what makes fantasy leagues work? And why are the odds on games published in most major newspapers?

Gambling may create some problem behaviors, it may need to be regulated, and it may require careful oversight, but it is very much embedded into our culture and is not going away regardless of the political posturing in Washington.

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.