Casino News Today

ATLANTIC CITY — Gov. Jon S. Corzine was addressing a tough crowd when he spoke to an annual conference of casino owners and casino suppliers last week.The speaking engagement came a day after the state Casino Control Commission released figures showing that the city’s 11 gambling halls suffered a 17.7 percent drop in first-quarter gross operating profits to $243.8 million, compared with the year-ago quarter. Revenues were down 4.8 percent to $1.1 billion.

“I see the numbers and I don’t like the numbers any more than you do,” Corzine told the 12th annual East Coast Gaming Conference in the Atlantic City Convention Center. “We have hit some rough spots. Competition is growing and surrounding us. The economy is challenging. Disposable income is declining and high food and gas prices are affecting the market today.”

But despite the downturn, executives from Atlantic City-based Revel Entertainment Group LLC and Las Vegas-based MGM Mirage told the conference that they still plan to build lavish new casino-hotels in Atlantic City. Their expressions of support contrasted with the previously expressed view of Las Vegas-based Pinnacle Entertainment, which earlier this year said the distressed credit market had caused it to delay plans for a new casino-hotel in Atlantic City.

Corzine said the casino industry is vital to New Jersey because it pays more than $1 billion in taxes and employs 40,000 people. The economy “will turn around, and, at the end of the day, we’d love to see your money and investment,” the governor told the executives.

He said the market attracts casino operators because densely populated New Jersey helps to bring 35 million visitors to the city per year, and the state’s 9.5 percent tax rate on casino revenue is the second-lowest in the nation—compared with rates of 54 percent in Pennsylvania and more than 60 percent in New York.

In the long run, Corzine added, Atlantic City’s gaming industry—with its collection of casinos and offerings of dining, retail and entertainment—will out-compete the isolated slot machine parlors and casinos now popping up in Delaware, Pennsylvania and New York.

Kevin DeSanctis, CEO of Revel Entertainment, which is in the early stages of building a $2 billion boardwalk casino-hotel scheduled to open in 2010, conceded that “the outlook is pretty bleak in Atlantic City right now, and people ask me, ‘Does it make sense to invest in Atlantic City?’

“Gas prices continue to rise,” said DeSanctis, who is partnering in the new property with a unit of Morgan Stanley. “Market revenue is horrible. The economy is weak. Capital markets are just starting to get back.” However, he added, “I think that ultimately this too shall pass.

“Atlantic City is the second largest gaming market in the U.S., with revenue of $5 billion per year,” said DeSanctis. And while the city is losing day-trippers to new slot parlors in eastern Pennsylvania, a redefined Atlantic City “is starting to bring a different person into the marketplace” who stays longer and spends more money.

Atlantic City now gets 86 percent of its revenue from gaming, he noted, and “we need to increase non-gaming revenue. We need to build a place that can get that, and that is what we plan to do.”

Dan D’Arrigo, chief financial officer for MGM Mirage, said his company still plans to build a $5 billion project called “Center City East” on 72 acres it already owns in the Marina District next to the Borgata Hotel Casino & Spa. The project, which has not come before casino regulators, calls for three hotel towers totaling at least 3,000 rooms and suites. It would boast the city’s biggest casino, with 5,000 slot machines, 200 table games and large rooms for poker. Plans call for Las Vegas-like bars and restaurants directly off the casino’s floor, said D’Arrigo, noting that “we want to create an environment where you just don’t feel like you are in a casino at all.”

Pinnacle Entertainment, which last year unveiled plans for a $1.5 billion casino-hotel to open in 2011 or 2012 where the Atlantic City Sands once stood, is pulling back—despite four billboards along The Atlantic City Expressway touting the company’s imminent arrival. In a conference call with gaming analysts in March, Pinnacle Chairman Dan Lee said, “I’ve been asked by a number of people, ‘How the hell are you going to build in Atlantic City?’ The answer is, if the credit markets don’t improve, we won’t build,” Lee said.

The gaming center’s weak results for the first quarter disappointed experts who hoped the casinos had bottomed out last year when they reported the first annual revenue decline in their 28-year history. Widely blamed for the drop were the new Pennsylvania slot parlors and a new smoking ban in casinos.

But Linda M. Kassekert, chairwoman of the state Casino Control Commission, attributed this year’s decline to “rising gasoline prices and people concerned about their disposable income. It’s hard to distinguish and actually pull out how much is the smoking ban, how much is the gas issue and how much is the economy,” she said.

Gary Loveman, CEO of , called the latest revenue decline disappointing even with the Pennsylvania competition factored in. He had hoped that gamblers would migrate back to Atlantic City a year after the first eastern Pennsylvania slot parlors opened. “We were hoping to see greater vitality in business, particularly since the anniversary of the Pennsylvania facilities,” said Loveman, whose company’s four Atlantic City casinos account for a quarter of its earnings.

When asked what he expects for the rest of the year, Loveman replied, “Slow improvement. That’s what we’re all hoping for, isn’t it?”

No Comments Yet »

A group of developers has pulled out of the competition for a contract for a state-owned casino in Sumner County, Kan.

The developers had proposed the Chisholm Creek project, in Mulvane.

Their attorney said negotiations with the Kansas Lottery didn’t result in acceptable terms.

Chisholm Creek was a partnership of MGM Mirage Inc., of Las Vegas, and Foxwoods Development Co., of St. Louis. It was one of four seeking a contract for Sumner County.

The Kansas Lottery Commission met Tuesday to consider 10 applications for a single contract each in Ford, Sumner and Wyandotte counties.

The commission can forward as many of the 10 as it wants to a special review board that will pick the winning applicant in each county.

No Comments Yet »

DALLAS, Texas (AFP) — Dallas Cowboys cornerback Adam “Pacman” Jones sent a 20,000 check to a Las Vegas casino on Friday to pay off a gambling debt, his agent said Friday.

Manny Arora said Jones sent the money to Caesar’s Palace one day after Las Vegas authorities had requested felony theft and fraud charges be filed against Jones, who is under a suspension from the National Football League.

Police in Las Vegas said Friday the debt and penalties connected to it have been paid in full.

Jones has served as a witness in a Las Vegas nightclub shooting trial and entered a no contest plea to a conspiracy for disorderly conduct charge.

NFL commissioner Roger Goodell has said he will review Jones’ case before the start of training camp to consider reinstatement, but it was not certain if the flap would have an impact upon Jones’ bid to return to the playing field.

No Comments Yet »

OMAHA, Neb. - Nebraska’s governor is voicing concerns about a proposed casino in Iowa on land near the Nebraska-Iowa border.

Gov. Dave Heineman has sent a letter to the Secretary of the Interior opposing the plan.

Nebraska doesn’t allow casino gambling, but Iowa does. The rub is that an American Indian tribe has received permission from the National Indian Gaming Commission to run a casino at Carter Lake, Iowa.

Carter Lake is on the Nebraska side of the Missouri River, just northeast of downtown Omaha.

Heineman said in his letter that the city of Omaha would be charged with providing the necessary infrastructure for the project. He also said a casino will exacerbate the social ills associated with problem gambling.

No Comments Yet »