Influence charges fly in Pittsburgh casino rescue

July 18, 2008 at 8:39 am · Filed under Online Gambling

A flurry of calls involving state leaders, investors in Pittsburgh's casino and two state gambling regulators -- calls that resulted in a deal to shore up the casino's finances -- have prompted charges by opponents that undue influence was brought to bear.

The deal's supporters -- including Gov. Ed Rendell and House Appropriations Chairman Dwight Evans -- say their involvement was necessary to save the sputtering $780 million North Shore project.

The leaders of an investment team that soon could have a 75 percent stake in the casino donated more than $200,000 to Rendell from 2000 to 2006, state records show. Include their donations to the Democratic National Committee when Rendell was the national party chairman, and the total rises to more than $300,000.

Some lawmakers are angry that Evans, D-Philadelphia, called gambling board Chairwoman Mary DiGiacomo Colins and board member Jeffrey Coy to tell them he supported the project. Critics say it's illegal for board members to discuss matters on which they'll have to vote. Evans said his calls were no different from the letters lawmakers routinely send the board.
"I can only use the word 'incredulous' for the whole thing," said state Sen. Jim Ferlo, D-Highland Park. Ferlo urged the board to revoke Don Barden's license and start from scratch to find a slots licensee for Pittsburgh. "This thing really stinks to high heaven."

Colins and Coy didn't express any opinions in Evans' conversations with them, which he said lasted about two minutes.

"They didn't say anything except 'Thank you,' " said Evans. "It's unfortunate that other people would try to characterize this as anything other than me ... trying to make sure this thing benefits the city and the county."

That the board members took Evans' call is "clearly a violation" of the gambling law, said state Sen. Jane Orie, R-McCandless.

Orie knew only about the phone call involving Coy, who was appointed to the board by the Legislature. If Coy, a former state representative, talked to Evans about the investment team, "there's a possibility of him being forced to resign from the board," Orie said.

The calls to Colins and Coy came shortly before the first of two Monday evening conference calls involving Rendell, Evans, casino owner Barden and Chicago billionaire and investment team leader Neil Bluhm.

Negotiations between Barden and Bluhm over control of the casino had hit "some sticking points," said Rendell spokesman Chuck Ardo. Participants declined to specify what was bogging down the talks, which they had hoped to complete the previous Friday.

Evans heard about the problems from state Rep. Jake Wheatley, D-Hill District, and told Rendell he should get involved. Rendell's office set up the calls, Evans said.

Bluhm and another investor, Ira Lubert, long have been prominent figures in Philadelphia, where Rendell was mayor from 1992 to 2000. Lubert's Philadelphia-based firm, Lubert-Adler Real Estate Funds, has invested $15 billion in real estate since its founding in 1997 and controls $2.5 billion. He has donated about $141,000 to Rendell since 2000. He plans to contribute about $10 million to the casino project.

Bluhm's connection to Philadelphia dates to the 1980s, when his former real estate firm built the landmark Four Seasons Philadelphia. He has donated about $60,000 to Rendell. Bluhm donated $320,000 to the Democratic National Committee in the past 11 years, including $110,000 in 2000, when Rendell was the party chairman.

It is Bluhm's prodigious real estate success -- which includes casinos in Canada, Mississippi and the planned SugarHouse Casino in Philadelphia -- that qualifies him for the deal, and not his relationship with Rendell, said Bluhm spokesman Dan Fee. Fee was Rendell's campaign spokesman.

"The governor did not bring us into the deal," Fee said. "I think the most important thing is that Neil is a recognized developer who has built successful projects across the country."

Rendell's long-time relationship with Bluhm was "critical" to getting the deal done, Ardo said.

"His role was simply as an intermediary," Ardo said. "He attempted to smooth out whatever rough spots remained toward the end of their negotiations, and clearly he was successful."

Bluhm plans to invest $120 million in the stalled project and to use that money to attract $660 million or so in loans. Barden began construction in December with a $200 million short-term loan, on which he defaulted last month. Without Bluhm's involvement, lender Credit Suisse could foreclose on the casino property, with its steel skeleton and half-completed concrete garage.

The gambling board must approve the ownership change.

Orie and Ferlo questioned whether it was a governor's job to put together financing for a private project. Evans pointed out that the governor intervened to keep the Penguins in Pittsburgh.

What's needed to restore confidence in the gambling board's process, the senators said, is to revoke Barden's license and take applications in a public process.

"If Mr. Bluhm is Mr. Rendell's ringer, that's fine, if he is indeed found to have the best" chance at completing the project, Ferlo said. "But it should go back to the beginning of the process, which starts with the revocation of the license."

Evans said that would take too long.

"That's at least two years," Evans said. "It's silly season. It's electoral season. That's what I see going on here, and it's unfortunate this is occurring."

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Online flash casinos on the rise

July 15, 2008 at 11:41 am · Filed under Online Gambling

The new type of virtual gambling experience offered by the top online casinos in the last few years is a real breakthrough. Flash online casinos use a revolutionary type of software - flash software. Unlike the well-known traditional online casino software platforms, the flash platform revolutionized the idea of online gambling.

Flash software requires no downloading. All you need is to just log in on the site of an online casino of your choice and start playing. Easy, quick and convenient - what else could you want when you are in need of effective entertainment?

Playing online flash casinos has many advantages. You can play anytime and any place you want. What is more, you don't spend time on downloading the games. That is why virtual flash casinos are steadily increasing their popularity.

If you visit online chats where gamblers communicate in real time, you will see what I mean - online flash casinos craze is on the go. If you happen to ask gamers for their personal preferences they will confirm the fact. Obviously, online flash casinos are the option of the future in online gambling.

The reason is simple - by playing online flash casino games you are saving; saving a valuable resource - your time. Time is money. Respectively, by playing flash casino online chances to multiply deposit money look bigger. What is more, this can be done with ease and in a much comfortable way.

Flash games and online flash casinos have improved substantially during the last several years. Graphic design with superior quality and stunning sound effects provide a top quality entertainment. The immediate access to the play is the icing on the cake.

Flash online casinos offer a rich array of games - all types of slot machines, casino arcade games, online roulette, keno etc - whatever casino game you can think of. All of the best online casino sites have introduced flash casino sections.

Virtual flash games have magic attraction to players. Enticed by the realistic sounds and high-tech graphics, online gamblers are absorbed by a new imaginary world. Most of these games are multi-player ones. This adds the allure of the competitiveness and zest for triumph.

Psychologists claim that online flash games are beneficial for individuals because they give stimuli for perseverance, ability for hard work and patience. The taste of virtual competition enhances the spirit for rivalry and sportsmanship.

Designing a betting strategy is believed to develop thinking. Certain online flash casino games improve player's reflexes and speed of thinking.

The trend is that flash online casino sites will soon outnumber classical online casinos on the web. In fact, online gamblers claim that flash games technically outperform the traditional download virtual casinos in many ways.

Seems like new dimension of advanced online gaming is being offered to regular online casino players. And inevitably, online gamblers hail and jump into this new world of entertainment experience.

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Capital Availability is Vital to Global Gaming Sector Growth in 2008

July 10, 2008 at 3:08 am · Filed under Online Gambling

A repeat of last year's growth in the global gaming sector hinges on affordable sources of capital resurfacing soon for the industry's mega-projects, according to Ernst & Young's report Reviewing the market: The 2008 Global Gaming Bulletin.

The report shows that the opening of new jurisdictions to gaming as well as growing consumer demand for destination gaming and plentiful development capital for new projects led to a second year of stellar growth for the global gaming sector in 2007. However, with global capital markets still reeling from the effects of credit crisis, the availability of capital is vital to the gaming sector's growth in 2008.

Now in its 26th year, Ernst & Young's annual Gaming Bulletin reports that Macau cemented its position last year as the world's premier gaming destination by posting US$10.2 billion in revenue, an increase of 47 percent on 2006. Las Vegas casino revenues were US$6.8 billion for 2007, only 1.5% up on 2006 revenues.

The report points to other challenges faced by the global gaming sector. In 2007, for example, several countries including the UK and Australia imposed smoking bans in casinos. Also, partial smoking bans have been imposed in gaming properties in Nevada and Atlantic City, New Jersey, USA. These bans have resulted in lower gaming revenues, but overall Ernst & Young sees more positives than negatives for the sector.

"With new destination gaming centers opening around the globe and technological advances such as electronic table games and wireless betting units enhancing consumers' casino experiences, we see potential for future revenue growth in the sector," said Tom Roche, Global Gaming Services Leader, Ernst & Young. "However, the sector's long-term outlook very much depends upon the industry's continued access to affordable capital to finance the building of the mega casino/entertainment/retail projects that consumers seem to crave," he added.
The 2008 Global Gaming Bulletin is a 132-page report, which includes a review of the global gaming sector's major highlights in 2007, as well as detailed analysis of gaming in Australia, France, Germany, Latin America, Macau, Russia, Spain, UK, US and the US Native American (tribal) gaming sector.
About Ernst & Young's Global Real Estate Center

Today's real estate industry must adopt new approaches to address regulatory requirements and financial risks, whilst meeting the challenges of expanding globally and achieving sustainable growth. Ernst & Young's Global Real Estate Center brings together a worldwide team of professionals to help our clients achieve their potential -- a team with deep technical experience in providing assurance, tax, transaction and advisory services. The Center works to anticipate market trends, identify the implications and develop points of view on relevant industry issues. Ultimately it enables us to help our clients meet their goals and compete more effectively. It's how Ernst & Young makes a difference.

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 130,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.
Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

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S-Network Global Gaming IndexSM Returned -30.64 Percent Through June

July 7, 2008 at 11:49 am · Filed under Online Gambling

The S-Network Global Gaming IndexSM (Bloomberg ticker: WAGR) returned -16.07 percent in June and returned -30.64 percent in the six months ending June 30, 2008.* †

The Index is comprised of a basket of the securities of 59 companies from around the world that are engaged in the gaming industry including casinos and resorts, equipment and technologies, sports and race wagering, online gaming and horse racing. The Index, launched on December 10, 2007 includes many companies of global prominence including International Game Technology, MGM Mirage and Las Vegas Sands Corp. (representing 7.8%, 3.6% and 5.7% of the Index as of June 30, 2008).

Market Vectors–Gaming ETF (Amex: BJK) is an exchange-traded fund that seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Index. BJK generally holds all of the securities that comprise the Index in proportion to their weighting in the Index.

*Past performance does not guarantee future results. The Index’s return does not represent the performance of any fund. The Index charges no fees, including management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Investors cannot invest directly in the Index.

Performance information presented for the Index covering the period prior to December 10, 2007 is based on hypothetical, back-tested data. Prior to that date, the Index was not calculated in real time by an independent calculation agent. Hypothetical, back-tested performance has inherent limitations and is not indicative of future results. No representation is being made that any investment will achieve performance similar to that shown.
†About the S-Network Global Gaming IndexSM

The Index is intended to give investors an efficient way to track the performance of equity securities of selected companies engaged in the gaming industry. It is calculated using a modified market capitalization weighting methodology. The Index is weighted based on the market capitalization of each of the component stocks, modified to conform to various asset diversification requirements, which are applied in conjunction with the scheduled quarterly adjustments to the Index. The value of the Index is disseminated every 15 seconds between the hours of approximately 9:30 a.m. and 4:15 p.m. Eastern Time. The Index is a total return index.

The S-Network Global Gaming IndexSM, a trademark of Stowe Global Indexes LLC, is licensed for use by Van Eck Associates Corporation in connection with BJK. Stowe Global Indexes LLC does not sponsor or endorse BJK and makes no warranty or representation as to the accuracy and/or completeness of the Index or results to be obtained by any person from use of the Index in connection with trading BJK.
About Van Eck Global

Founded in 1955, Van Eck Associates Corporation was among the first U.S. money managers helping investors achieve greater diversification through global investing. Today, the firm continues the 50+ year tradition by offering global investment choices in hard assets, emerging markets, precious metals including gold, and other specialized asset classes.

Including BJK, Van Eck offers ten equity ETFs under the Market Vectors brand name: Agribusiness, Coal, Environmental Services, Gaming, Global Alternative Energy, Gold Miners, Nuclear Energy, Russia, Solar and Steel.

Van Eck also offers a number of mutual funds. Van Eck’s mutual funds are sold nationwide through retail brokers, financial planners and investment advisors. Designed for investors seeking innovative choices for portfolio diversification, they are often categorized in asset classes having returns with low correlations to those of more traditional U.S. equity and fixed income investments.

Van Eck also offers separate accounts, alternative investments and the Worldwide Insurance Trust Funds, a series of investment choices within the variable annuity contracts and variable life policies of widely known and highly regarded insurers.

Fund shares are not individually redeemable and will be issued and redeemed at their NAV only through certain authorized broker-dealers in large, specified blocks of shares called “creation units” and otherwise can be bought and sold only through exchange trading. Creation units are issued and redeemed principally in kind. Shares may trade at a premium or discount to NAV in the secondary market.

Market Vectors Gaming ETF is subject to various risks including those associated with making investments in companies engaged in the gaming business such as competitive pressures, changes in government regulation, world events and economic conditions. Additional risks include legislative changes, high correlation within the industry and changes in consumer taste. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.

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Spring flooding reduces casino profits

July 6, 2008 at 11:59 am · Filed under Online Gambling

When the Isle of Capri casino was forced to close its doors due to floodwaters in April, it was inevitable the business would lose money.

The casino was closed for 15 days in the fourth quarter, which ended April 27. It was also closed for a portion of the next quarter.

The fourth quarter reports show the casino’s profit at $8.5 million, down from the 2007 fourth quarter, which showed a net revenue of $10.6 million.

“You can safely say that revenues declined in the quarter,” said Jill Haynes director of Corporate Communications for the Isle of Capri. “Natchez was closed for 15 days during the (fourth) quarter which represents approximately half the time the property was closed.”

Haynes said comparing the net revenue of the 2008 quarter to 2007’s quarter is like comparing apples to oranges, however.

Because the rest of the time the casino was closed falls into the first quarter, it’s still unknown just how much money was lost.

Haynes said the company is preparing a business interruption claim, which is insurance for these types of incidents.

“The Isle insurance carrier will cover a portion of the loss,” Haynes said.

Of course the Isle will have to pay a deductible.

The casino boat had to be moved to higher ground when the Mississippi River hit between 52 and 52.5 feet, but still maintained operations.

By the time floodwaters hit 55.5 feet, the ramp to the boat was obstructed and the base of Silver Street was flooded.

At that time, April 13, the Isle was forced to close.

On May 12, the boat reopened after having being repositioned when the river hit between 52 and 52.5 feet.

Employees of the casino were paid throughout the closure.

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First day a record-breaker for new Maine casino

July 4, 2008 at 2:21 pm · Filed under Online Gambling

Penn National Gaming had a record-breaking day for the grand opening of its new Hollywood Slots at Bangor casino.

An estimated 9,000 people tried their luck at Tuesday's opening of the new $132 million gambling and entertainment complex, officials said.

The new facility replaces Penn National's temporary slot machine hall, which opened in November 2005 just down the street in the former Miller's Restaurant.

The company's two top days in its temporary facility came in February 2006 during the annual high school basketball tournament week, said Robert Welch, executive director for the Maine Gambling Control Board.

While exact dollar figures weren't immediately available for opening day at the new site, the amount wagered "roughly doubled" the previous top amounts, Welch said.

Jon Johnson, general manager of the casino, said some 9,000 people came through the doors in the first day. Business in the first few days, he said, has been "going great -- smooth opening, continuing smooth operation."

The new casino has 1,000 slot machines, more than double the 475 machines at the old facility. It also has a 1,500-spot parking garage, two restaurants, a lounge, a gift shop and a 152-room hotel that is slated to open later this summer.

Penn National has the option of adding another 500 slot machines at its new site.

While Hollywood Slots had a record numbers on opening day at its new facility, revenues for the first five months of the year were down compared to the same period in 2007, according to the Gambling Control Board.

The casino had gross revenues of $231.7 million from January through May, a 9 percent decline from the $254.6 million in the first five months of last year.

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Study: California customers prefer smoke-free casinos

July 2, 2008 at 12:31 pm · Filed under Online Gambling

A large majority -- 85 percent -- of gaming customers at Indian casinos in Southern California report that they would prefer a smoke-free environment in these casinos, according to the J.D. Power and Associates 2008 Southern California Indian Gaming Casino Satisfaction Study(SM) released today.

The inaugural study measures overall customer satisfaction based on performance in five key measures (listed in order of importance): gaming (33%); facility (27%); cage cashier/ticket redemption machine (17%); arriving/parking (15%); and beverage service (9%).

"Most casino customers have grown accustomed to dealing with large volumes of cigarette smoke in the air, but an overwhelming percentage indicate they would prefer to play in a smoke-free environment, which presents a major opportunity for improvement for casinos," said Sam Thanawalla, director of the global hospitality and travel practice at J.D. Power and Associates. "While some establishments have already begun implementing smoke-free gaming areas in their facilities, customers may not be aware that this is an option. Those casinos that provide smoke-free gaming areas and also do a good job of educating consumers about them could benefit from increased attendance and higher satisfaction."

Barona Valley Ranch Resort and Casino ranks highest in satisfying customers with a score of 737 on a 1,000-point scale and performs particularly well in four of five factors: arriving/parking; facility; gaming; and cage cashier/ticket redemption. Following in the rankings are Viejas Casino (724) and Pala Casino Spa and Resort (717), respectively. Viejas Casino performs particularly well in the beverage service measure.

The study also finds that a very low percentage -- approximately 6 percent -- of Indian casino customers in Southern California are "highly committed" to any one casino. On average, players make seven visits to Indian gaming casinos within a six-month period. Casino customers tend to visit more than one Indian gaming establishment during this time period, rather than return to the same casino each time.

"Those customers who are highly committed to a particular casino report that they experienced particularly high levels of enjoyment and excitement during their casino experience," said Thanawalla. "These highly committed customers are nearly three and a half times more likely to recommend the casino to others, and nearly three times more likely to return to the same casino, compared with customers with low or medium commitment. Some of the ways casinos can maximize customer levels of enjoyment and excitement are to offer a wide variety of slot machines and table games, and to ensure that staff-including dealers, cashiers and beverage servers-are friendly and engaging. In addition, customers indicate that ease of locating the casino entrance upon arrival and being able to locate the cashier and ticket redemption machines are particularly important to overall satisfaction."

The study also finds the following key patterns:

-- On average, Indian gaming casino players in Southern California travel approximately 64 miles, each way, to visit a casino.

-- Only 1 in 20 casino players (5%) report experiencing a significant problem during their casino visit. Of those customers who reported their problem to a casino employee, approximately one-third said their problem was resolved.

-- Approximately 89 percent of casino customers play slot machines, while 48 percent play table games.

The 2008 Southern California Indian Gaming Casino Satisfaction Study measures customer satisfaction of gaming players of Indian casinos in Southern California. Casinos included in the study have a minimum of 2,000 slot machines. The study is based on 1,766 responses from gaming players who visited an Indian casino in Southern California between December 2007 and June 2008. The study was fielded in May and June 2008.

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