By Staff   Fri, Jan 15, 2010

Las Vegas edges up, while Atlantic City and Illinois continue their declines

Everyone knows that 2009 was a brutal year for gaming revenues. The news wasn't good from Atlantic City to the Las Vegas Strip and beyond. International venues saw similar declines and more taxes. The first half of the year for Macau was bad, but a relaxation of visa restrictions in July sent revenues soaring once again.

So what was the over assessment of a year that most executives in the gaming industry would like to forget? We're beginning to get the picture.

Cautious optimism reigns supreme as Nevada's gaming win numbers indicated a small-but meaningful-increase in November. The 4.4 percent jump over November 2008 is reason to smile after almost two years of decreases. Because Nevada reports revenue nearly a month behind other jurisdictions, no conclusions can be reached on one month with a modest increase.

The state's casinos reported a total win of $873.2 million in November from $836.8 million in November 2008. Gaming win on the Las Vegas Strip rose 8 percent over the previous year. North Las Vegas and the Boulder Strip also saw increases. Meanwhile, South Lake Tahoe's gaming win dropped almost 27 percent, and Downtown Las Vegas saw a slight decrease of 1.7 percent.

"For the first time since December 2007, statewide and Strip gaming revenues were positive," J.P. Morgan analyst Joe Greff wrote, according to MarketWatch. "We think November's relative strength has been well understood by investors, but is encouraging nonetheless. After all, we note that the November calendar was unfavorable with eight weekend days in 2009 compared with nine in 2008, though the comparison was a relatively easy negative 14.8 percent."

The MGM Grand benefitted from the November 14 boxing match between Manny Pacquiao and Miguel Cotto, and after the gaming win numbers were released, Goldman Sachs upgraded MGM to buy from neutral, indicating that Las Vegas casinos may become more favorable investment options in the new year.

Gaming win this fiscal year is down by 7.9 percent overall, but December numbers are expected to spike due to the opening of CityCenter at the end of the year. Early January saw the Consumer Electronics Show, which could lead to strong January numbers as well.

"On the heels of a strong New Year's in Las Vegas, the Consumer Electronics Show in Las Vegas looks to have drawn about 6 percent more attendees than in 2009," Union Gaming Group analyst Bill Lerner told MarketWatch. "Multiple restaurateurs that we have spoken with are experiencing growth in key metrics such as covers and average checks. We are more confident that 2010 will represent the positive inflection in Las Vegas."

Casinos in other states did not fare as well in November. Several gaming jurisdictions, including Atlantic City, Illinois and Mississippi, reported decreases in November.

In Atlantic City, casino revenues were down for the third year in a row, with a 13.2 percent year-over-year decline-the first time the city has posted double-digit losses on an annual basis.

That said, the numbers for December could be viewed as encouraging-or at least, less discouraging. In the dead of winter, typically a sluggish time for the seashore resort, the city's 11 casinos were down just 9.8 percent over 2008. It was one of the few months in 2009 that had only a single-digit decline, according to the state Casino Control Commission. Slot revenue for the month fell 12.5 percent, but table game winnings were off just 4.3 percent.

In all, the city's 11 casinos won $3.9 billion in 2009, a 13.2 percent decline compared with 2008. Slot winnings were down 13.1 percent to $2.7 billion, and the table game win dropped 13.5 percent to $1.2 billion. The yearly decline-the worst since 1997-continued a trend that began in late 2006, when Pennsylvania opened its first slot parlor, Mohegan Sun at Pocono Downs.

All 11 casino hotels reported lower revenue in 2009. Borgata Hotel Casino & Spa and Trump Taj Mahal had the best numbers: single-digit losses in both cases. Bringing up the rear were the Atlantic City Hilton and Trump Plaza, which both posted a 22.9 percent revenue drop. The Harrah's properties-including Harrah's Resort, Showboat, Bally's and Caesars-accounted for 52 percent of the total revenue, according to the Philadelphia Inquirer.

Don Marrandino, newly appointed president of Harrah's Entertainment's Eastern Division, acknowledged that 2009 was "a tough year, a hell of a tough year" for the city. But, he added, "I'm encouraged. We had an encouraging December"-despite a record snowstorm that effectively shut down the city during one weekend.

Gaming analysts forecast no rebound for 2010 due to the ongoing recession and increased competition from Pennsylvania and Delaware slot parlors. Both states will be adding Atlantic City-style table games this year in a major expansion of their gaming industries.

"Anybody who thinks that 2010 will not be at least as challenging as 2009 is out of their mind," said Israel Posner, executive director of the Institute for Gaming Management at Richard Stockton College.

Full-fledged casinos in Pennsylvania "will definitely add another thorn in the side of a shrinking Atlantic City market," wrote gaming analyst Joel H. Simkins of Macquarie Securities in a note to investors. "With regards to Atlantic City, we continue to believe that not all of the 11 properties will be able to survive following the passing of table games in Pennsylvania."

Posner told the Atlantic City Press that the $2 billion Revel casino, slated to open on the city's Boardwalk in 2011, is "the sunshine peeking through the clouds."

Atlantic City gaming revenue has been in freefall since peaking at $5.22 billion in 2006. Revenue dropped 5.7 percent to $4.92 billion in 2007 and was down 7.6 percent to $4.55 billion in 2008.

And with some casinos-Trump Marina and the Atlantic City Hilton in particular-hitting historic lows for gaming revenues, there are serious predictions of complete collapse for some properties. Isle of Capri Chairman James Perry, a former Atlantic City casino executive, has predicted that in five years only six casinos will be operating in the Boardwalk town.

Illinois is not in much better shape, even tough overall, the regional casinos have fared better during this recession. State casino revenues declined for a third straight year in 2009.  Statewide casinos revenues went from $1.6 billion to $1.4 billion.

For example, the Empress Casino's revenue for the year was $120 million, compared to $184 million the year before. Harrah's Joliet Casino & Hotel saw its revenues go from $298 million to $279 million in the same period.  The Empress in Joliet, a Penn National property, which has maintained a fourth place in ranking of casinos in the state, also saw its ranking fall to fifth place. Jon Johnson, general manager of the Empress blamed unusually lucky players and big winners for the steep decline. But he also blamed the generally bad economy.

Johnson said he believes that next year will be a repeat of 2009, especially if the general economy doesn't improve, especially unemployment and housing.

When the decline began three years ago the casinos initially blamed the smoking ban that was adopted for all public places, and which included the casinos.

Sat, Jan 16, 2010

The American Gaming Association's board of directors recently elected Boyd Gaming President and CEO Keith Smith chairman of the trade organization at the AGA's annual meeting in December. Smith has served on the AGA's board since 2007 and has served as the association's vice chairman since 2008.

Smith is replacing Thomas J. Matthews, the former chairman of International Game Technology.

"T.J.'s outstanding leadership during these difficult economic times was invaluable, and we are extremely grateful for all of his hard work on behalf of our industry," said AGA President and CEO Frank Fahrenkopf.

Richard Haddrill, Bally Technologies' president, CEO and director, will fill Smith's former position of vice chairman.

"The coming year promises to bring both challenges and opportunities, and I am confident that Keith and Dick will steer us in the right direction," Fahrenkopf said. "Together, they boast more than 35 years of gaming industry experience. They will maintain the board's important balance between the operating and manufacturing sides of our industry and work tirelessly to protect the interests of our organization's diverse membership."

Sat, Jan 16, 2010

Steffani A. Cochran has joined the National Indian Gaming Commission as the panel's third commissioner. Cochran was nominated by Secretary of the Interior Ken Salazar in October 2009 to fill the position, which has been vacant since December 2007.

Cochran joins Acting Chairman George Skibine and Vice-Chairman Norm DesRosiers on the commission.

Cochran, who is a member of the Chickasaw Nation of Oklahoma, has served as Special Counsel for Indian Affairs for the New Mexico Attorney General's Office, as well as General Counsel for the Pueblo of Pojoaque, proving that she has a wealth of experience in the field of Indian law.

"My career as a public servant has included work for tribal and state governments, so this will be my first opportunity to serve the federal government," Cochran said. "Gaming is unquestionably a vital component of tribal economies, which is one reason that I am so excited about this opportunity."

Fri, Jan 15, 2010

Cornell University is one of the nation's leading institutions for hospitality degrees. Many of the top executives at hotels and hotel companies carry Cornell diplomas. And today, that is also true of the gaming industry. Michael D. Johnson, the dean of the School of Hotel Administration, has taken the lead to incorporate gaming courses into the degree program at Cornell. Last spring, the school's Statler Hotel-the last Statler on the world-hosted a group of gaming executives for a look at Las Vegas and the lessons it teaches the hotel industry. Johnson explains how higher education can only elevate the level of leadership in the gaming industry and why it is important to the future of not only the gaming industry but also the hotel industry. He spoke with Global Gaming Business Publisher Roger Gros at Global Gaming Expo, where Johnson delivered a keynote speech, in Las Vegas in November.

Sat, Jan 16, 2010

U.K. gaming concern Ladbrokes is looking for a new CEO to replace Christopher Bell, who recently announced he will leave the company by the summer.

Bell has been with Ladbrokes for 20 years, the last nine of which he held the position of CEO.

According to the Wall Street Journal, Ladbrokes shares are down 5.4 percent in the past year while those of William Hill, a comparable mixed-sector company, are up 18 percent.

Bell has been under pressure for the past year as the company struggled with the online market in particular. James Hollins, an analyst at Daniel Stewart, said that the main issue with Bell was the lack of growth internationally in the online sector.

Bell said that he made the decision to leave the company last year, that after 20 years it was time.

"It's the most fabulous job anybody could have, but it is a huge job and I'm very pleased to be passing the baton on to somebody else because it's time for a change, and-to be quite frank-time for a little rest too," Bell told the Journal.

Sat, Jan 16, 2010

Leading slot manufacturer International Game Technology announced that its board of directors has elected Paget L. Alves to serve as a director for the company, pending applicable regulatory approval.  

Alves, 55, is the president of the business markets group for Sprint Nextel, and is responsible for Sprint's sales and marketing to all enterprise and public sector customers. He also oversees the development of strategic alliances for Sprint.

Prior to his current position, Alves was the president of sales and distribution for Sprint Nextel. During his tenure with Sprint, he has served in a number of senior executive roles for the company. He also served as president & CEO of PointOne Telecommunications, Inc., president & COO of Centennial Communications and executive vice president and COO of Murata Business Systems. He began his career as an attorney with IBM.

"Paget Alves brings more than 20 years of technology company experience to IGT, said IGT President and CEO Patti Hart. "His direct experience in driving industry-level change through evolutionary technology and market strategy is a welcome addition to the IGT board."

Sat, Jan 16, 2010

Isle of Capri Casinos recently announced its selection of Robert C. Wyre as the company's new vice president. Wyre will oversee Isle of Capri's marketing and operational consulting services to Detroit's Greektown Casino-Hotel. Isle of Capri was recently hired by Greektown to provide services to the property throughout its Chapter 11 bankruptcy process.

"We are optimistic about the possibilities ahead for Greektown Casino-Hotel, and I am confident that Rob Wyre is exactly the right professional to lead the charge," said Isle of Capri President and COO Virginia McDowell. "He is a seasoned veteran with an outstanding variety of experiences and successes across our business and will bring outstanding value to our clients and our company."

Prior to joining Isle of Capri's executive team, Wyre served as director of operations for Foxwoods Development Company, where he was responsible for overseeing the operational development of proposed projects. Throughout Wyre's 28 years in the gaming industry, he has also worked for Minnesota's Lakes Entertainment and for properties in Las Vegas and Atlantic City.

Sat, Jan 16, 2010

American Racing and Entertainment CEO Jeff Gural recently announced that Thomas Osiecki has been appointed president and general manager of the company's two racinos, Tioga Downs and Vernon Downs.

"We are pleased to announce a continuation of the successful management program for Tioga and Vernon Downs with the appointment of Tom Osiecki as president," Gural said. "Tom Osiecki has been a key part of the operation of our two properties over the past two years as assistant general manager for Tioga Downs and vice president of marketing for Tioga Downs and Vernon Downs. During that time, Tioga Downs has experienced positive growth."

American Racing and Entertainment has seen big changes at its two properties in recent years. The New York Lottery selected Tioga Downs to participate in a pilot program that tested the effects of subsidized free play in August 2009, which boosted the property's popularity in the region. Vernon Downs has faced competition from nearby Turning Stone, but Gural said the racino has held its own.

Before joining the team at American Racing and Entertainment, Osiecki served as senior director of property marketing for Isle of Capri's corporate office in Biloxi, Mississippi, then became vice president of marketing for Mississippi's Island View Casino Resort. Osiecki has more than 35 years of experience in marketing and entertainment positions across the country.

Sat, Jan 16, 2010

JCM Global has appointed Kip Haverman to the position of North America sales director. Haverman has been with the company for nine years, most recently serving as the company's Western regional sales manager.

"We are thrilled to promote Kip to this new position," said Mark Henderson, JCM Global's vice president of sales. "In his time with JCM, Kip has proven himself to be an invaluable part of the JCM team, and has served as a mentor for other sales representatives. Now in his new position, Kip can extend his expertise and knowledge to the entire North American team, and that will be very good for JCM and our customers."

Haverman is a gaming industry veteran of almost 20 years, having worked for AC Coin and Slot and Sigma Gaming prior to his time with JCM Global.

Sat, Jan 16, 2010

On a single day last week, outgoing New Jersey Governor Jon Corzine named 82 people to state boards and authorities. The appointments were announced at 4:59 p.m. on January 12, the final day of the lame-duck session.

Among the appointees is Michelline Davis, whom Corzine named to fill a vacant seat on the 17-member board of the Casino Reinvestment Development Authority. The CRDA is responsible for the disbursement of casino revenues for public projects.

Davis served for a year as chief policy counsel for the Democratic governor, who will leave office this Tuesday. Her appointment coincided with new legislation signed by Corzine that relaxes previous rules about the ability of former government staff to do casino-related work, according to the Atlantic City Press.

Davis will assume the seat formerly held by board member Diane C. Lusk of Atlantic City. However, Lusk will also retain her place on the board thanks to what the Press called "some political maneuvering" last December." Lusk resigned a position that is appointed by the state assembly speaker, but was reappointed to a different seat on the same board by Corzine.

Republican Assemblymen John Amodeo and Vince Polistina have introduced legislation to eliminate salaries for CRDA members (public members are paid $18,000 per year, and the board chairman earns $23,000). The CRDA is one of the few state authorities that pays part-time board members.

Sat, Jan 16, 2010

Pinnacle Entertainment CEO Kim Townsend, once based in Atlantic City, will not become general manager of the company's Lumiere Place casino in St. Louis, as previously reported. As of last week, no further information was available about her status within the gaming company.

In 2007, Townsend was named CEO of Pinnacle's Atlantic City operations. In October of that year, the company imploded the old Sands Casino Hotel to make way for a new $1.5 billion megaresort. But the recession and plummeting casino revenues in Atlantic City have put an end to that project, at least for now.

In October 2009, Pinnacle announced that Townsend would relocate to St. Louis to run Lumiere Place, adding that she would continue to oversee the Atlantic City project from her new office.

According to the Atlantic City Press, Townsend was a close ally of former Pinnacle chairman Dan Lee, chief architect of the Atlantic City casino project. Lee resigned in November after allegedly threatening a St. Louis official over a zoning dispute.

A Pinnacle spokeswoman confirmed that Townsend won't be taking the St. Louis job, but refused to comment further. "We're in the process of evaluating all of our Atlantic City assets. We'll discuss any further updates once we've completed that process," Pauline Yoshihashi said in a statement.

Sat, Jan 16, 2010

Leading slot manufacturer International Game Technology recently completed an order of 650 games and implementation of the EZ Pay coin-free system for the 1,000-machine Club Hotel Casino Loutraki near Athens, Greece.

The order included a variety of video, reel-spinning and video poker games, including favorite IGT titles like Double Diamond, Red, White & Blue, Wolf Run and Coyote Moon, and new formats such as Multi-Level Progressive.

"During these times of crisis we decided to focus on driving revenues and optimizing the operation," said Loutraki Group General Manager Roni Aloni, "instead of taking the short-term approach of purely reducing costs. We have to plan the future according to the needs of our clientele."

"And to complement the well-balanced mix of the latest approved video, poker and reel slots that will be on the casino's floor," added IGT Europe Sales Director Ali Civile, "Loutraki also ordered 30 Classics MLP games. Classics MLP games are already successful among Greek multi-level progressive players, and will be an excellent addition at Loutraki."

Sat, Jan 16, 2010

Class II slot manufacturer Video Gaming Technologies signed an agreement with U.K.- based Innocore Gaming under which new VGT games will incorporate an exclusive Innocore DPX hardware platform.

Under the agreement, Innocore will develop a custom DPX-S420 hardware platform based on the specific requirements of VGT in current and future markets.

"We have looked at various suppliers in the market," SAID Jon Yarbrough, CEO and founder of VGT. "There are only a few good ones for this mission. We found Innocore's offering to be the most attractive to us at this time. They have proven product capability, and a good price/performance ratio.

"We have been dealing with Innocore for a longer period and they have developed a good understanding of our specific needs, working closely with our engineering team. The communication has always taken place well within our comfort zone and we are looking forward to the next steps in this exciting project."

Edward Price, managing director of Innocore, added, "The agreement with VGT is a significant one for Innocore and a great reference for some of our key selling points-reliability, know-how of the gaming industry and a proactive approach to customer service. Our global footprint provides support for VGT in North America, on both technical and operational matters. We are very pleased to be working with such a key player as VGT and we look forward to a successful partnership over the coming year."

Sat, Jan 16, 2010

California-based printer manufacturer FutureLogic, Inc., announced the launch of "Eclipse," a universal ticket and receipt printer designed to handle outdoor applications.

According to the company, Eclipse was developed in response to continued industry demand for robust outdoor printing solutions. The new printer excels in the most extreme operating conditions and in a broad range of applications.

The Eclipse heavy-duty thermal printer delivers an industry-best throughput of 250mm per second even in the harshest environments (-20 degrees C to +60 degrees C and 10% to 85% RH, non-condensing), making it what FutureLogic calls the most reliable roll printer in its class.

The Eclipse printer is equipped with USB 2.0 and RS-232 interfaces. It also offers multiple printer and paper roll mounting positions that can accommodate paper widths of 80 or 82.5mm and paper rolls of 100, 150, 200 and 250mm in diameter. This equates to over 770m of paper, enabling the Eclipse printer to provide 5,000 6-inch receipts on a single roll.
To optimize security, the high-speed printer features a rugged presenter and advanced "eject and retract" technology that allows for storage of unclaimed receipts in an auxiliary tray. 

Sat, Jan 16, 2010

City Casino Group of Bulgaria has selected the Cashflow SC83 bill validator from payment mechanism specialist MEI to be installed as standard equipment on all new slot machines.

City Casino operates over 1,200 slots and other electronic gaming tables at 17 venues around the country, with plans to expand further in 2010.

Said Georgi Stefanov, project manager at City Casino, "Our strategy is to be acquainted with the premium product manufacturers in the casino industry. We had heard so much positive feedback from casinos specifying the MEI Cashflow SC83 that we were very keen to take part in a VAT."

"VAT" is MEI shorthand for "value-added trial," which allows an operator to test the quality of MEI products under live-action conditions.

"The ease of entering the banknotes is paramount-the experience with note rejection and note jams, leading to machine downtime, had a negative impact on our business in the past," said Stefanov. "The MEI Cashflow SC83 has solved this problem for us. It has been reliable since the first day in operation."

Mark Greenawalt, vice president for retail and gaming EMEA at MEI, said that he is pleased to add Bulgaria to the list of countries where the MEI Cashflow SC is in use.

"MEI will always be committed to providing products to the industry that make our customers more profitable," said Greenawalt. "It is great to hear that our current customers have seen so much success with our products that they recommend them to operators who may not be familiar with Cashflow SC."

Greenawalt said, "We were pleased to invite City Casino Group to perform a VAT and are delighted that they are now specifying Cashflow SC. I would like to thank Stefanov and his team for the time they invested in the VAT and for their kind hospitality."

Sat, Jan 16, 2010

Slot manufacturer Atronic International announced the installation of its first games in Mexico. The company installed a group of its "Stargate SG-1" and "King Kong Cash" games at Casino Life Del Valle in Mexico City, which opened recently as the 19th operation of the Pringsa group.

The Stargate game, based on the popular science fiction series, a new type of linked gaming to Mexico, its five bonus events and four progressive levels contrasting the traditional Class II offering in the country.

"We are of course delighted that Pringsa has chosen Atronic as machine supplier for their new Casino Life Del Valle operation," said Oscar Londono, Atronic general manager for Latin America. "With the combination of our latest linked gaming concepts, licensed titles and e² machines, the casino has a unique combination of games which is sure to excite their players. We wish Pringsa and Casino Life all the best and great success with their new casino."

Sat, Jan 16, 2010

Slot supplier Elixir Gaming Technologies announced an agreement with NagaWorld, a subsidiary of Hong Kong-listed NagaCorp, under which it will place an additional 200 electronic gaming machines on a participation basis at NagaCorp's NagaWorld casino resort in Cambodia.

The deal also amends an earlier agreement to increase the overall average revenue share to Elixir Gaming to 25 percent and extend the duration of the contract.

Elixir currently operates 440 gaming machine seats at NagaWorld, which achieved average win-per-unit per day of over US$200 for in November and December.

Clarence Chung, chairman and CEO of Elixir, said the company is pleased to expand its slot floor operations with NagaWorld. "With these additional units, Elixir Gaming will have gaming machines installed covering most of the currently available prime ground floor space at NagaWorld," he said. "Given NagaWorld's position as the exclusive casino license holder in the Phnom Penh area and our demonstrated success with our current slot operations at NagaWorld, we feel confident that we can continue to drive strong growth in participation revenue and cash flow with these additional placements."

Sat, Jan 16, 2010

California system supplier DEQ Systems Corp. announced that it has installed its award-winning G3 Progressive Jackpot and Bonusing System on nine specialty poker table games at the Barona Resort and Casino in San Diego, California. Barona has installed the G3 on three Three Card Poker tables, one Caribbean Stud table, one Let it Rid table, one Mississippi Stud( table, one Four Card Poker table and two Pai Gow Poker tables.

The system adds a side-bet feature to offer progressive jackpots and bonus payouts on the table games.

"We are excited to see the entertainment value that the G3 can bring to Barona players," said Mike Patterson, vice president of table games at Barona. "The G3 is getting rave reviews and we are very impressed with the quantitative metrics we have seen from other major casinos, notably in Las Vegas."

"It is a well-known fact in our industry that Barona is a trend-setter that other casinos look to for innovative new technology ideas and products," added DEQ President and CEO Earle G. Hall. "It goes without saying that having this showcase in Southern California will be a key element to the introduction of the G3 in this and other regions. We are very proud to be installed at this prestigious, world-class venue."

Sat, Jan 16, 2010

Former Hilton Hotels CFO Robert M. La Forgia recently announced the creation of Apertor Hospitality, LLC, a hospitality asset management and advisory firm that will tailor services for new hospitality businesses as well as struggling hotels and casinos.

Apertor is comprised of several hospitality professionals, including Carlos Garcia, Bill Sherlock, John Mazzoni, Greg Cross, K. Allen Anderson and Tony Santo.

"Uniting such a knowledgeable and battle-proven team of industry professionals from hotel and gaming operations, revenue management and distribution systems, marketing, finance, mergers and acquisitions, real estate, construction, legal and government affairs is very timely and represents a unique marriage of experts suited to help clients maximize the potential of their investments," La Forgia said.

Apertor will offer services such as rapid assessment, asset management, creditor advisory, transaction due diligence, turnaround and restructuring, litigation support and expert witness testimony, operational auditing, design, architecture and construction and opinion of value.

"With the current magnitude of economic challenge, a hotel or casino asset stands a much stronger chance of success if it engages a highly specialized asset management or advisory team with the depth of experience to uncover opportunities to maximize cash flow and deliver actionable solutions promptly," La Forgia said.