Slots to the rescue!!!

Slots have helped Delaware's horse industry, according to many. From the Wilmington News Journal:

The business of raising horses has boomed in Delaware since proceeds from slot machine gambling started flowing in December 1995 as life's blood for a dying industry.

Delaware-bred racehorses are selling at higher prices, many former hobbyists have joined the industry full time, and out-of-state owners and breeders have set up shop in Delaware since the Horse Racing Development Act of 1994 was enacted, according to Sal DiMario, director of the Delaware Standardbred Owners Association.

The legislation authorized gambling at Delaware's three racetracks and requires a portion of slot machine revenue to be set aside for horse-racing purses.

The law has spurred growth in the number of new horse farms in Delaware and in businesses that support farms, Delaware Agriculture Secretary Michael Scuse said.

Although he can't offer specific numbers, Scuse is sure that the growth in horse activity has spawned new businesses, new jobs and a substantial flow of tax proceeds into the state's coffers. The state will attempt to quantify that with a study.

FULL STORY

While they don't have the hard data yet, pro-slots people are going to be able to argue that gambling at racetracks has a multiplier effect throughout agriculture in a state with racinos.
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Takeover target?

According to stock analyst Jason Ader, the low price-earnings ratio at Boyd Gaming makes it a prime target for takeover by another company. There's a story to that effect in the LV SUN.

Assuming that another casino company did want to acquire Boyd, they would be assuming an extremely diversified portfolio of casinos, from the downtown Las Vegas properties to the 50% stake in Atlantic City's Borgata. You've got Sam's Town and the Stardust and other properties in Southern Nevada, Delta Downs in Louisiana, and properties in Indiana, Illinois, and Mississippi.

One scenario that I see is a Harrah's/Showboat type acquisiton, where one company acquires a rival corporation to get a strategic asset--in that case the AC Showboat--and the discards the others. So it is possible that an operator could snap up Boyd for some of the larger properties--particularly the Stardust and Borgata--and sell off the downtown Vegas casinos.

Or, this could all be idle speculation.
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Two tiger tales

Roy Horn's mishap with Montecore is becoming a national news item, even one week later. Fox News interviewed Steve Wynn about the incident, and then found their own expert to dispute Wynn's version of events:

"There wasn't a speck of violence in anything that Montecore did," said Steve Wynn who was not present during the performance but said he has seen a tape of the attack.

Animal experts on Thursday said the 600-pound animal was going for the jugular when it took Horn by the neck.

"The cat wasn't trying to protect him," said Jonathan Kraft, who runs the Arizona-based nonprofit group Keepers of the Wild. "That was a typical killing bite."

"I admire the guys, I just think they are sending a wrong message," Kraft said. "The message needs to be: These are wild animals."

Horn's partner, Siegfried Fischbacher, said Wednesday in interviews that the animal had been trying to help Horn after the illusionist slipped during Friday's performance.

FULL STORY

Siegfried's version of events seemed a bit improbable, but as I'm not an animal behaviorist I won't speculate on Montecore's motivations. I have personally learned a great deal from this whole story: Siegfried and Roy's last names (I didn't even know they had them before), what wild cats do when they are stressed, and that 600-pound wild animals can cause a lot of damage.
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Hastert blasts casinos

In the 1950s, congressmen could get some mileage out of denouncing illegal gambling operators as leeches that drained money from working Americans and corrupted police and politicians. In 2003, the Speaker of the House has harsh words for legal casino operators--because they don't contribute enough to the GOP. From the LVRJ:

"The speaker is dismayed and disappointed that the gaming industry continues to place their bets on the wrong team," said Pete Jeffries, Hastert's communications director.

Hastert's criticism followed reports showing Democrats have received $1.17 million, or 54 percent of the gambling industry's contributions for the 2004 election cycle, compared with $1.01 million, or 46 percent for Republicans. The numbers came from The Center for Responsive Politics, a nonprofit and nonpartisan Washington, D.C., research group.

Frank Fahrenkopf, president of the American Gaming Association and a former chairman of the Republican National Committee, said it's too early to draw conclusions from the casinos' contributions.

"Historically, the contributions from commercial casinos are fairly balanced," Fahrenkopf said.

Fahrenkopf cited two factors that may be holding down contributions by casinos to Republicans. One is a new campaign finance law that prohibits contributions of soft money, or unlimited sums to the national parties. A ruling from the U.S. Supreme Court on the law's constitutionality is pending.

Fahrenkopf also noted that Reid and Rep. Shelley Berkley, another strong Democratic ally of casinos, announced plan to seek re-election early in the cycle.

Like Gibbons, Berkley and Rep. Jon Porter, R-Nev., are members of the House Gaming Caucus. But neither Berkley nor Porter expressed concern about casinos' contributions to Democrats.

"My experience is that the gaming industry is a very generous supporter of members on both sides of the aisle who support their issues," Berkley said.
FULL STORY

THIS SHOULD BE AN EXPLOSIVE ISSUE!!! My take is that the most powerful politician in Congress is essentially blackmailing the commercial casino industry by demanding that they give more money to his party...or else. What else could that "wrong team" blast imply, other than that the gaming industry will somehow suffer if it does not ante up.

Perhaps I am naive, but I would like to beleive that Congress treats important issues with a semblance of fairness and is not completely in the pocket of whoever gives the most soft-money contributions. Obviously, campaign contributions buy some influence, but this is tantamount to Hastert admitting that it is money and lobbyists, rather than constituents, that determine voting patterns.

This just seems so blatantly cynical that I don't understand why the mainstream press hasn't run with it. Some in the media made Cruz Bustamonte out to be the puppet of California Indians for accepting contributions from them. But one of the most powerful politicians in DC essentially shakes down an industry, and we hear nothing.

If you have a take on this, email me; otherwise I'll think I just dreamed it or something.
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That's all for today. I am sincerely puzzled by the Hastert story. I tend to follow national politics with an avid layperson's interest, and I can't recall ever having heard of anything like this. Maybe it's the norm today.

In that case, you are on the "wrong team" if you haven't bought Suburban Xanadu yet.

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posted by Dave at 2:49 PM

Celebs=heat

That's the good kind of heat, too. A timely article from ABCnews about the Palms:

Maloof has built a smallish off-Strip hotel and taken it to the top of hip heights with a heavy dose of slot machines and a relentless marketing campaign featuring the likes of Britney Spears and Leonardo DiCaprio.

Maloof's business model for the 430-room Palms covets jawdroppers like Playboy models and Jessica Simpson, instead of expensive showstoppers like Celine Dion.

"If you have the girls, you are going to get the guys," Maloof said about attracting customers to his $265 million resort.....

Maloof knew what he didn't want: families and foreign tourists visiting Las Vegas for the first time. How to accomplish the opposite? Let MTV take over a suite and fill it with seven attractive people who weren't sheepish in front of the camera. Give them the hottest bar in town, a rooftop lounge called Ghostbar. Install strippers' poles in some rooms for bachelor and bachelorette parties. Build 24, 8-foot-long beds for some very tall and rich athletes (the Palms sponsors the Kings). Then throw in concerts by Nelly, Jay-Z, Pink and let them perform in a club that only holds 1,800 people — not an inexpensive proposition.

End result: lots of buzz, plenty of hype and an endless stream of 20-something and 30-something customers willing to leave their money in Las Vegas.

Maloof says that it's easier to throw around money when you don't have to answer to Wall Street corporate analysts. "I guarantee I overspend," Maloof said. "I don't have to watch every dollar. I'm a private company. If I want to go out and spend whatever I want to spend to work … a great event, I'm going to do it."

FULL STORY

Part adoring portrait of Maloof, part gape-jawed description of the celebrities that fill the Palms, it's a good look into the casino that has only a few historical inaccuracies--such as giving kudos to Bugsy Siegel for filling the Flamingo with Hollywood celebs when he drew a meager line-up of B-listers for the casino's actual premeire. The Bugsy Myth will simply not die.

But it's funny, I only rarely see celebrities there; usually it looks like its filled with kids from Irvine waiting to get into Rain. I guess I've got to start spending more time there.
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Roy update: Show will go on

Siegried spoke to Diane Sawyer, and I ripped this from ABCnews; I was there for the Palms story and got this bonus:

Asked how he would feel being on stage with a big cat again, Siegfried Fischenbacher, the other half of the pair known as Siegfried and Roy, said, "I will be. I will be because this is my family, and Roy will be."

Fischenbacher, a German native, continued in broken English: "This is our life. If I wouldn't do this, life would be — meant nothing. But the life what we lived would meant nothing."

Roy remains in critical condition, but is stable. Fischenbacher said he is confident his partner will pull through.

"I know Roy all of these years. He always surprises us. Roy always comes through because I think Roy, he is the strongest man ever lived anyway. He has the strength like a tiger, you know."

Fischenbacher said he communicates with Horn by holding hands and squeezing. "One time is yes and two times is no. I can see his eyes, and he is following me, and he smiles and he's positive."

FULL STORY

To be light-hearted for a moment, I hope he isn't fighting "like a Bengal tiger." We know how that went for Gray Davis.

And what about the tiger? Bernie Yuman, the duo's manager, had this to say to the LVRJ: "His future is bright," Yuman said. "A tiger is a tiger. We understand."

He mauls someone into critical condition, and gets that kind of vote of confidence? That tiger must have a real personality. Whether the show will go on or not is contingent on Roy's recovery, and if the thoughts and prayers of his well-wishers mean anything, it will be a speedy one.
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Russian regulation?

I came across a very interesting article in the English website for Pravda about gaming and regulation. I want to repost much of it here. I get the feeling that the AGA does not have a branch office in Moscow, and that the industry does not have many effective third-party advocates. From Pravda:

People learnt about gambling long ago, in the early days of mankind. At first people threw the dice, then they learnt to play cards, roulette and lotteries; the number of other games of chance is increasing every day. All people, men and women of any ages and social positions, are prone to the sin of gambling. People like to feel their adrenalin increase and watch a ball jumping on the red and black sectors of the roulette. People lose entire fortunes, commit murders, and violate the human and divine laws while gambling. Others, on the contrary, sometimes win.

Gambling has become a precious enticement for swindlers of all kinds, a legal one by the way. The number of people addicted to gambling in Moscow makes thousands; more and more casinos and gambling houses is increasing in the city. Experts from the Russian Association of Gambling Business Development say that about half a million people regularly indulge in gambling in Moscow. Psychiatrists at the same time provide quite different information. The head of the extra-hospital aid in the National Narcological Scientific Center Taras Dudko says that the number of people regularly going to Moscow casinos, bookmaking offices and gambling houses is over 1.5 million people.

Gambling business is some kind of an intellectual drug that yields incredible profits. The necessity to establish government control over gambling has been spoken about for a long period already. Otherwise huge sums of money will be involved in gambling and handled without any assignment to the state budget. Besides, the government will not be able to control money inflow into gambling business. This will allow to legally launder money by Russians as well as foreigners. Chairman of the Duma Budgetary Committee Mikhail Zadornov says that lotteries are that sphere of activity where the government has not had control within the past 12 years. Every year, the government receives fewer revenues because of gambling which is $5-15 million; about $300-340 million fall out of the government control.

Until recently, no effective legal basis has been introduced into the gambling business. The law in force "On the gambling tax" was adopted in July 1998; but this is rather a project of the law as it regulates relationship between entrepreneurs in gambling.

Early this week, the Duma Budgetary Committee have once again touched upon the issue and recommended the chamber to approve the second reading of the bill "On lotteries". This will be the first serious legislative act to regulate activity of the operators on the gambling market.

This bill is expected to fix the rules of play on the lottery market once and for all; the document will also determine the responsibility for any violations in lottery organization. Mikhail Zadornov says that the document provides for administrative responsibility of lottery organizers. "Besides, some amendments to the Criminal Code are to be done to provide for criminal responsibility during organization of lotteries." The bill also stipulates the prize bounties amount which is to make up not less than 50 per cent of the total sum of the lottery and assignment for special social programs, not less than 10 per cent. Companies or individual persons wishing to organize lotteries must first obtain certificates. According to the new bill, target assignments are to be used now to finance important social infrastructure and events, including those meant for sport and culture development. A member of the Duma Budgetary Committee told RBC daily that "lotteries all over the world are the means to distribute earnings between different layers of the population and to finance different social programs."

We should wait and see to what extent this redistribution will prove to be effective in this country. The government will be extremely lucky if it manages to establish control over all big players on the gambling market. Petty swindlers must be the responsibility of law enforcement authorities; the government must prevent creation of more financial pyramids in this country.

This is also very important to protect the younger population from the obtrusive advertising of gambling houses. The problem is that the number of game-playing machines and gambling houses is speedily increasing all over the country. Teenagers miss school or immediately after lessons run to gambling houses to crowd around game-playing machines with the hope of winning some money. And when they lose their money they still find ways to accumulate another sum and feed it to the machines.

Addiction to gambling is the same as drug or alcohol addiction: it cannot be cured; the only way for people to get rid of it is to give it absolutely up and never start it again. There are special clinics for drug and alcohol addicts; unfortunately we have no medical institutions of this kind meant for people addicted to gambling. The state must somehow control the addiction of people to gambling. If the state cannot cultivate some different moral in the people and youth first of all, this state will easily turn into a country of people crazy about easy money.

"Violate the human and divine laws while gambling?" Maybe, maybe not--church bingo directors would have a different take on that.

"Petty swindlers" is also a pretty big catch-all for casino operators. I know that the English makes it a funny read, but this is like seeing a parallel universe where US casinos never got state regulation and continued to run as semi-outlaw operations without any PR machine. It makes you realize how far the industry has come in the US.
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posted by Dave at 4:11 PM

Family fun has NOT failed

If there's anything I've had my fill of, it's glib media assessments of Las Vegas. This is probably symptomatic of glib media assessments of everything, in which case it is amazing that we ever learn anything about anything. If it can't be expressed in a soundbite, it isn't said. Well, the new soundbite is that family-friendly Vegas is out and "Sin City" is back. Well, both the Washington Post and the New York Times ran stories along these lines this weekend, and the Post's had some glaring inaccuracies. For another commentary, check out Love and Casino War. Here's some of the offending material, and then my take:

With dozens of white lions and tigers, a massive Thai elephant disappearing into thin air, and scores of dancers in glittering costumes, the Siegfried & Roy show was the hallmark of the new, family-oriented entertainment center Las Vegas sought to become in the 1990s. When local magnate Stephen A. Wynn lured the magicians in 1989 to his new Mirage Resort -- a 3,000-room project with a volcano erupting 60 feet into the sky beside the front door and a Taj Mahal-style zoo and dolphin tank inside -- he said the hotel was specifically designed to be "a property which would help set a new direction for Las Vegas, one which would appeal to the entire family audience."

It was a visionary idea for a city built on blackjack and bare breasts. The only problem was, it didn't work.

This is so ridiculous that it almost doesn't warrant a response. If Steve Wynn failed with the Mirage, then I wonder what he would have to do to be successful. That resort entirely changed the direction of the gaming industry, and has been tremendously profitable. The only hotel that has been more successful than the Mirage is the Bellagio, which Wynn himself built, using many of the lessons learned with the Mirage.

Let's compare the Mirage not to the "old Vegas" of the Copa Lounge, which was gone by the 1980s anyway, but to Excalibur, which was under development when the Mirage opened. In a parallel universe where Steve Wynn decides to leave Nevada and build the Mirage project in Atlantic City, or just doesn't build the casino, the Excalibur opens the 1990s as the newest, biggest, casino hotel and the new paradigm. Like Mirage, it is big, but unlike Mirage, it is decidedly down-scale, with a food court and midway rather than four star restaurants. It definitely caters to families, something that seemed like a logical move at the time, and is still valid.

But the sense that the Post gives is that Mr. Wynn had an idea to cater only to families, and that he failed. Nothing could be further from the truth. The Mirage was notable for enshrining the principle that high overhead=high profits.

But there's more nonsense. Take this nugget of wisdom:

The 1990s effort to build a "family-oriented" Las Vegas was always a challenge to the town's flamboyant history. Ever since mobster Benjamin "Bugsy" Siegel opened the Flamingo hotel and casino in 1946, Las Vegas has been a place for adult pursuits -- and it remains so today.

Beneath its flaming rainbow of neon, the Strip of massive hotels along Las Vegas Boulevard is perhaps the last place in America where people are allowed to smoke and drink anywhere, any time.

Visitors can gamble until the break of dawn, ogle the exposed body parts of statuesque dancers of both genders, jump up on the bar and dance wildly in their skimpiest miniskirts -- and nobody will bat an eyelash.

First of all, anyone who read Suburban Xanadu knows that the Flamingo was the third Strip casino to open, and the Siegel wasn't even...ah, forget it.

But where else can Americans smoke, drink, and see nudity? Ummm, maybe Strip clubs. Going back to the 1950s, casinos were not deviant places, but actually bastions of cultural conservatism. Don't believe me? Later this month, the Casino Legends Hall of Fame at the Trop will be inducting a new class, including Frankie Valli, Connie Francis, and Jack Carter--not exactly the deviant edge of American popular culture. Part of the problem might be that writers who aren't familiar with casinos get so wigged out by the lights and the sounds that they can't consider any of this rationally.

Anyway, the Post story is here.

The New York Times story is about a proposed theme park near Foxwoods and Mohegan Sun, and also alleges that the family-friendly approach has "unraveled" on the Strip. Who is the arbiter of all this, anyway?
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The OTHER big Vegas story

As you may have read elsewhere, during Friday's Siegfried and Roy show at the Mirage, magician Roy Horn was mauled by a performing white tiger. The LVRJ put up a special section on the attack and it's aftermath. It shows the cycle of reporting on the unfortunate, from the initial shock to expressions of hope to retrospectives on the past to assessments of the economic impact. There are even reports that cast members are offended by the show's quick closure and their terminations.

One of the first things that I thought of, after Roy's health, was that a score of Strip performers would have to come up with something to replace their Siegfried and Roy material. Norm's Sunday column mentioned at least 5 acts that use white tiger humor. These comedians and magicians will now have to think of something creative to fill the time.

At least there's a political carny show next door to riff on.
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Fighting the good fight (but not booking action on it)

The National Coalition Against Legalized Gambling kicked off their annual conference recently, vowing to fight against the expansion of gambling. From the LV Sun:

"Our best days are ahead of us," Grey told the gathering of about 100 anti-gambling organizers from more than 30 states. "In the early '90s it (gambling) was inevitable. Now it doesn't even look desirable."

But casino industry observers are wondering why Grey is so optimistic.

While Grey's spirited network of volunteers has won a few victories here and there, Grey and his coalition are badly losing the war against the expansion of gambling on a national level.

Despite Grey's best efforts, gambling is growing dramatically in the United States, winning over a nation that depends on lottery money to fund basic services and views slot machines and casinos as reliable tax and job generators.

Some form of gambling has now been approved in all but two states, with consumers spending more on wagers each year than they do at the movies.

Gambling revenue ballooned 570 percent from a decade ago -- and 7 percent from 2001 -- to a record $69.7 billion in 2002, according to casino analysis firm Christiansen Capital Advisors.

FULL STORY

There's already a lot of gambling going on legally, and even more illegally, which morally complicates any attempt to limit gaming. Why not legalize casinos in Maryland if the money is going to go to Delaware or New Jersey anyway? For that matter, why not just put a slot machine in everyone's house? Oh, the Internet has already done that.
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Dancing waters dance on

As you may know, there's a drought here in Southern Nevada. This has affected thousands of local residents who must deal with restrictions on when and how they water their lawns. I know that my apartment complex has drained its fountains and slips weekly reminders on my door chastising me against excess water use. But the casinos of the Strip have been given free reign to keep their fountains running, chiefly because money talks. From the LVRJ:

Strip hotels and other resorts will be allowed to operate man-made water features while office parks, housing developments and other private businesses will be prohibited from operating a fountain or water feature during the day, according to a proposal to be considered today.

The resorts will not be subject to the same restriction because they are essential to Las Vegas' tourist-driven economy, said Chuck Pulsipher, zoning administrator for the county. Combined, he said, their water use supplies the equivalent of about 130 homes.

"The actual amount of water that these features use is pretty insignificant," Pulsipher said. "From a cost-benefit standpoint, we're getting the economic benefit of worldwide publicity for a world-class tourist destination in exchange for enough water for 100 to 130 homes."

Commission Chairwoman Mary Kincaid-Chauncey and Commissioner Myrna Williams, who serves as president of the Las Vegas Valley Water District Board of Directors, said the success of Strip resorts is essential to maintaining jobs and keeping taxes low for residents in Southern Nevada.

Water features and fountains outside other local businesses do not contribute like the resorts do to the local economy, Williams said.

"Gaming is the major source of revenue for those of us that live in Nevada, so we need to do everything we can to protect it," Williams said. "They're (fountains) an important enticement for tourists. If you go down the Strip, you see people hovering and watching those things."

Kincaid-Chauncey acknowledged many residents do not appreciate why water restrictions are not applied uniformly.

But most do not realize that some of the larger casinos receive water from their own aquifers rather than the public's water supply and that they recycle the water, she said.

"It's really hard for people to understand when we are asking them to not put in lawns and to cut down on water features," Kincaid Chauncey said. "But, there is more at stake here than just water."

FULL STORY

From the days of the Mormon Trail, water has been the lifeblood of Las Vegas's economy. It is only appropriate that it be recognized now, when we face a severe water shortage.
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That's all for today

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posted by Dave at 5:02 PM