Indian gaming revenue

The National Indian Gaming Commission has released its figures for 2003 casino revenues:

National Indian Gaming Commission Chairman Phil Hogen announced today that national 2003 gross gaming revenues for Indian gaming facilities topped $16.7 billion, an increase of $2 billion or 13.7 percent over 2002 gross gaming revenues.

“The Indian gaming industry has grown significantly and steadily throughout the past decade,” said Chairman Hogen. “This growth has allowed tribes to create jobs, develop economically, build infrastructure within their communities and provide services for tribal members.”

The $16.7 billion figure is based on audited financial statements received by the National Indian Gaming Commission (NIGC) for gaming operations with fiscal years ending in 2003. The figure is based on statements received by June 30, 2004.

Additionally, the NIGC has broken-down the $16.7 billion by the agency’s six regions.
Region III, which includes California, accounted for approximately 50 percent of the total increase in revenues. Region III revenues increased by almost 28 percent for the year compared to 9 percent for the other regions.

NIGC Announces Indian Gaming Revenue for 2003

If you’re interested in more Indian gaming news, check, the top online source for Indian gaming news and information.

This is a big deal for the commerical casino industry too, because even though California revenues have exploded, Nevada gaming has not suffered too much. Certain markets have been harder hit than others, but on the whole the state’s gaming revenues are growing. I imagine that destination-type markets throughout the country would find the same pattern.

Bill and Jay’s Excellent Adventure

Metaphorically, of course. Since both Bill Harrah and Jay Sarno are deceased, I’m talking about the companies that claim them as founders: Harrah’s Entertainment and Caesars Entertainment. According to the Wall Street Journal, quoted here by Reuters, Bill’s company is going to acquire Jay’s, the second major gaming merger in a month:

Harrah’s Entertainment near a deal to buy rival Caesars Entertainment Inc, in what would be the gambling industry’s second major takeover in a month, The Wall Street Journal reported on Wednesday.
The terms of the proposed transaction were not immediately clear, the newspaper said. If consummated, the deal would make Harrah’s the biggest gambling company in the world with $8.8 billion in revenue and as many as 54 casinos, according to the Journal.

Based on Caesars’ closing stock price of $13.92 on Tuesday, the company has a market value of about $4.3 billion, not counting about $4.5 billion in debt, the Journal said.

Last month, MGM Mirage agreed to buy Mandalay Resort Group for $4.8 billion plus debt.

Harrah’s and Caesars, which owns Caesars Palace, Paris Las Vegas, Bally’s and other casinos, began talking after the MGM Mirage-Mandalay deal was reached, the Journal said, citing unnamed people familiar with the situation.

Buying Caesars Entertainment would give Harrah’s a stronger foothold on the Las Vegas strip, where the Harrah’s casino is not one of the top attractions, the Journal reported.

The Harrah’s acquisition plan, like MGM Mirage’s, was likely to attract scrutiny from antitrust regulators at the U.S. Federal Trade Commission or Justice Department, as well as at several states, the Journal said.

Harrah’s Said Near Deal to Buy Caesars

Of course, this is less about Bill Harrah and Jay Sarno than it is about Gary Loveman and Wally Barr, respective leaders of HET and CZR.

Is this deal a surprise? Not really. The media reported on rumors of it a month ago, as you can see right here.

What does this deal mean? For the Las Vegas Strip (unless HET sells off some properties), the company would own:

Harrah’s Las Vegas
Caesars Palace
The Horseshoe brand, which HET has wanted to put on a new property

This is a lot of casinos; you would now have the entire Strip south of the Venetian controlled by two companies, with two exceptions: the Tropicana and Aladdin/Planet Hollywood. And, of course, the Hawaiian Marketplace.

The comapnies also overlap in most of the other major American gaming markets: Reno, Tahoe, Tunica, the Gulf Coast, New Orleans, and of course Atlantic City.

In AC, HET would own between 5 and 7 casinos, depending on how you consider Bally’s Atlantic City:

Harrah’s Atlantic City
Bally’s Atlantic City
–Wild Wild West
Caesars Atlantic City
Atlantic City Hilton

When you consider that the city has 12 or 14 casinos, this means about as big a concentration as MGM MIRAGE will have on the Strip, but with less room for growth.

Look for more on this news story. Like I said with the MGM/Mandalay merger, even if this one doesn’t go through right now, look for future consolidation to be the trend.

UPDATE: A new article from Reuters tagged the deal at close to $10 billion:

UPDATE 1-Harrah’s near $10 bln deal to buy Caesars

Breathe easy, Anaheim

Particularly if you own a pinball machine. From the LA Times:

Anaheim officials are doing a little housekeeping and whittling down the city’s bulky municipal code. Tonight, the City Council is scheduled to consider repealing or modifying several ordinances that officials call outdated, redundant or just plain silly.

The unlucky task of poring through decades of laws and thousands of ordinances fell to City Atty. Jack White, who said he had collected arcane gems that may come in handy only at cocktail parties or if he became a “Jeopardy!” contestant.

He knows, for example, that in the 1940s and ’50s, pinball was considered gambling.

The change in the law is welcome news for Terry McIntire, an owner of Orange County Game Distributors Inc., who said that if authorities cited him for all his pinball machines, “we would be old and gray by the time we got out” of jail.

In most cases, authorities realized the absurdities of these ordinances and stopped enforcing them years ago.

Pinball Desperados in Anaheim Will Be Allowed to Play at Full Tilt

During my research for Uneasy Convictions, I learned that many slot manufacturers evaded the Johnson Act, the 1950 law that halted the interstate shipment of slots, by switching to “amusement” devices whose “free games” could be redeemed for cash. In 1961, when RFK pushed for new anti-gambling laws (including the Wire Act), he also spoke out against pinball machines. So this was actually a pretty common theme of anti-gamblers in the 1950s and 1960s.

Even now, the line between “amusement” and gambling is thinner than we think. Is there that much difference between a slot machine and redemption games? Some would argue no.

Electronic scratchers

Scratch-off cards have become a huge money-maker for lotteries. It’s only natural that they will continue to evolve. From KCRG-TV9 in Cedar Rapids, Iowa:

This fall Iowa will become the first state to test an electronic version of a scratch-off lottery game.

A market trial for “Quarter Play” will start in October.

The game is a battery-powered card costing 20 dollars that will offer 80 plays of instant-type games.

Gambling critics say it’s just another expansion of the state’s one-billion-dollar a year gaming industry.
Electronic Lottery Game Planned for Iowa

Though the article was telegraphically short, I think this is a significant story. Like Cyber Slingo, New Jersey’s try at an “online” lottery that is not online, it pushes the boundaries of lottery-dom.

VLT easter eggs

Everyone likes easter eggs, hidden features in video games, DVDs, etc. Usually they are not that impressive–you can unlock hidden commentary or an alternate costume in fighting games. But an article in Canada’s National Post says that video lottery terminals also have easter eggs that can be exploited:

As the middle-aged mother from Illinois plunked away at buttons on the electronic poker machine, something unusual happened. The machine, usually so adept at parting gamblers from their money, fell under the spell of the player.

The woman had manipulated the video lottery terminal at an Edmonton casino into letting her win on command, recalls Zues Yaghi, a computer programmer and gaming machine expert who watched the scene.

“She had been doing it for four years and had put her kids through university, was driving a Mercedes 500. She was all decked out,” Mr. Yaghi recalled.

“She thought she was the queen of the underground…. It’s so easy, so easy to run 10 grand from these machines.”

Mr. Yaghi says the woman was tapping into what he and some other experts call an “easter egg”: a line of digital code allegedly embedded on to the machine’s computer chip by rogue programmers, allowing informed players to cheat the games out of their booty.

Mr. Yaghi reported the problem to gaming authorities after discovering it himself. But four years later, rather than being hailed a hero, he is living a legal nightmare over the issue, facing a $10-million libel suit filed by the American maker of the machine on which he first found an easter egg.

Meanwhile, he and other experts allege that some compromised machines are still out there today, raising questions about the fairness of a diversion on which Canadians spend billions of dollars a year.

‘Easter egg’ cheats cracking casinos?

In the old days of mechanical slots, owners had to worry about mechanics or locksmiths making a duplicate key; today, they have to consider the possibility that programmers have inserted easter eggs.
Yesterday, the Pittsburgh Post-Gazette published an opinion piece I wrote about Pennsylvania’s recent slot machine bill’s approval:

Forum: Greetings from Slotsylvania

Obviously, this bill marks a historic milestone, and I think that we’re going to be seeing much more gaming expansion in the next few years.

Casino blocking monument?

We’ve all heard that new casino construction “destroys history,” and regular readers know that a casino company tore down my high school. As Perry White might say, “Great Caesar’s ghost!”

But here’s a story where potential casino construction is preventing the erection of piece of monumental architecture. From the Desert Dispatch:

The plan to build a monument to Route 66 made of crushed cars has been postponed indefinitely due to increased land speculation that an Indian casino may be coming to Barstow.

The Carthenon would be a pillared structure that would sit alongside Interstate 15 near Outlet Center Drive.

Wayne Soppeland, a local Realtor and the driving force behind the project, said the owners of three different parcels originally optioned to house the Carthenon are waiting to see whether or not a proposed Indian casino will come to Barstow.

“The [proposed] casino has put the whole project on hold,” he said. “Owners think their property might have some use for the casino.”

Washington-based artist C. Zaxxr Llewellyn designed the Carthenon with pillars of crushed cars. Solar power would light the structure at night. It is intended to connect with historic Route 66 and the car culture of Southern California.

The primary site lay near Outlet Center Drive and I-15, the secondary site near the Tanger Outlet Mall and the third site was in between the two others, he said.

The proposed casino resort, if approved, would be east of Interstate 15 and Lenwood Road and south of the Factory Merchants Mall. Its features would include 50,000 square feet of gaming space, a 180-room hotel, an entertainment venue, a gift shop, an RV park and a restaurant.

However, Soppeland said the Carthenon could still be built if the optioned land parcels were not used in connection with the casino.

“If we get the casino, the project would have more impetus to be completed,” he said.

He also said that most of the funds raised for the project have already been spent on preliminary materials, such as two Cadillac car fenders, engineering, and artwork.

Casino speculation delays Carthenon

Courtesy of Architectural Alliance, here is a rendering of the Carthenon:
Carthenon, from
That looks absolutely…unique. I think this would be an incredible boon to any proposed casino project. In fact, I’m surprised that there isn’t a Carthenon slot machine already.

I’m most impressed that the sculpture will apparently cast no shadow, and that it will be accessed through a simple dirt path. I imagine that this monument does not meet the ADA standards.

If they’ve already got the Caddy fenders, what’s holding them up? It seems to not have too much more to it than those.

Here’s a contest: let’s see who can design the best faux monument and, using Photoshop, create a “rendering” of it. I’ll post the best responses. You can send them here.

If you haven’t noticed, I have finally enabled comments. Please use this opportunity to comment on posts or suggest something for me to post about.

Slots, urban design, and destination dreams

Philly Inquirer architecture critic Inga Saffron doesn’t think much of the recently-passed slot bill. From (reg. required):

The legalization of slot machines in Pennsylvania was sold to the public as a form of tax relief, although tax redistribution strikes me as a better term. Harrisburg will use part of the money deposited in the parlors’ one-armed bandits to reduce the Philadelphia wage tax. If current revenue projections hold, someone earning $40,000 a year would eventually save $160 annually in city taxes. As a further incentive, Philadelphia has been promised $636 million to expand the Convention Center.

But the city will have to pay dearly for this infusion of revenue. The slots bill, which was rushed through the legislature without the usual opportunities for public comment, strips Philadelphia of planning and zoning powers over its future casinos. Instead, a seven-member, state-run gambling control board will decide the big design issues, from the location of the casinos down to the location of their garage driveways.

The city’s lack of control is no small thing. With Saturday’s vote, Philadelphia became the biggest city in America to permit casinos. Unlike the gaming halls in Detroit, Milwaukee and New Orleans, ours will be wedged into a dense and still-thriving downtown. At least one slots parlor – and possibly two – appear headed for Market Street, in the high-profile stretch between City Hall and Independence Mall.

That’s barely two blocks from the residential neighborhoods of Washington Square and Chinatown. Yet slots parlors the size of those planned in Philadelphia, with 5,000 machines, can draw 40,000 gamblers in a 24-hour day.

Saffron argues her case on some interesting aesthetic grounds:

Casinos and good design go together about as well as oil and water. Because gambling operators want to keep patrons at their machines as long as possible, they aim to block out anything that hints of the outside world, such as clocks and windows. Virtually every downtown casino built in America in the last decade is a solid-walled box, surrounded by a vast supply of parking spaces.

What urban good will a big box do for an eclectic urban environment like East Market Street? For that matter, what good will a big box do for the Delaware River waterfront, where another slots parlor is expected?

Let me quote Gary Tuma, spokesman for Sen. Vince Fumo (D., Phila.), who largely wrote the slots bill: The casino applicants will be judged on “their potential for producing revenue.” Gambling was not conceived as a way of improving the urban environment….

In a perfect world, Philadelphia’s slots parlors would be planned as one component in a major revitalization of dowdy East Market Street. The area has been sadly neglected even though it is a key connector between the Convention Center and the tourist district around Independence Mall. It’s vital that the casino be attractive for gamblers and non-gamblers alike.

Changing Skyline | City’s losses outstrip its slot wins

I doubt that she read Suburban Xanadu, but I think that my book makes some of the same points. Obviously, casinos are, like any business, designed to maximize revenue. In that a casino is profitable, one can say that it is well-designed.

Does this mean that it is an asset to an urban neighborhood? Not necessarily. As I said in Suburban Xanadu, self-contained casino resorts–what you find on the Las Vegas Strip, on Indian reservations, and in Atlantic City–have not proved themselves to improve any kind of “urban” fabric. A casino designed to encourage genuine interaction with the neighborhood, though, certainly could.

Another view, from the Intelligencer, holds that slots parlors won’t make too much of an immediate impact:

They may like slot machines, but don’t expect busloads of seniors clutching rolls of quarters to head for Philly Park any time soon. Senior centers and tour bus operators, many of which organize regular trips to Atlantic City, say it will take a while for now-legal Pennsylvania slot machines to compete with the lure of a trip out of town – not to mention all those discounts.

“Part of it is going away,” said Emma Straccio, manager of the Lower Bucks Activity Center for Retired and Senior Citizens. “There are more things to do in Atlantic City: the boardwalk, the ocean, and there are a lot of promotions.”

At the same time, some local tour companies are making adjustments to prepare for the tide of as much as 61,000 slot machines arriving at select locations across the state, including Philadelphia Park in Bensalem.

Lion Tours, at four trips a day, six days a week, runs as many as 100 trips a month to Atlantic City, and about 80 percent of the participants are seniors, according to Richard Tisone, vice president of the Levittown company.

He said he will definitely feel the impact of the slots bill, but he added that if it’s good for the state’s economy, “as a businessman, I’m just going to develop a different market.”
It will take some time for slots in state to compete

People are finally talking about Atlantic City as a destination. Hopefully, for that city, this will force operators to invest in non-gaming attractions. In a nutshell, they have to create a south Las Vegas Strip-east rather than a Laughlin-east.

These efforts may be paying off already, because, according to the AC Press’s editorial page, “young people” now consider the resort a happening place:

Various reports in the news media this summer indicate that, lo and behold, Atlantic City is now considered hip by 21- to 35-year-olds. This is excellent news.

Trump Marina Hotel Casino started it a couple of years ago by booking acts with more appeal to young people than to the blue-haired set. Then the Borgata Hotel Casino & Spa opened and capitalized on the Marina’s early success by aggressively reaching out to younger people.

And now, in the summer of 2004, between the fresh acts and the beach bars, the shopping and the nightclubs and, oh yeah, the casinos, Atlantic City is suddenly hot among young people. “Atlantic City is so underrated,” says Alex Gilli, 22, uttering words that the resort’s marketers have longed to hear for years.
But our advice to tourism officials: Shush …

It is truly wonderful news that a younger generation is finding Atlantic City to be hip and cool. But as all truly hip and cool people know, once a place (or a clothing style or a band or a particular piece of slang) is perceived by the general public to be hip and cool, it is – by definition – no longer hip and cool.

So keep doing whatever you’re doing that’s helping a new generation rediscover Atlantic City – but don’t talk about it much.

Yes, I’m sure that Las Vegas wishes that it had kept itself a well-kept secret. Once word got out that famous people went there, the city really went downhill.

Maybe the editorial is a way of justifying AC’s attempt to become a destination without launching the kind of ad campaign that Las Vegas has.

If you were from Atlantic City, as I am, you wouldn’t be surprised at inaction being trumpeted as a civic virtue.


Gambling in Oz

No, it’s not about O’Reilly running a pool over who gets shanked next. Rather, this post concerns Australian wagering habits. They apparently gamble a lot. From The Age:

Australia’s passion for a punt continues to grow, with new figures showing a record $128.3 billion – $8,571 per adult – was wagered last financial year.

Australians lost more than $15.3 billion – an average of $1,026 per person aged 18 or over – as they pumped money into poker machines, casino games and state and territory coffers.

This equates to 3.41 per cent of the average household disposable income.

The previous year, Australians wagered about $125 billion, losing more than $15 billion – $1,016 per adult.

The figures were released by the Tasmanian Gaming Commission, which compiles the national report from data provided by all states and territories.

Northern Territorians were the biggest losers per capita, wasting an average $1,806 each on the pokies, horses, casinos, lotteries and other forms of gambling.

NSW punters followed to the tune of $1,248, while Victorians lost $1,133.

In the ACT, the average loss was $1,070, in Queensland $882, South Australia $754, and Tasmania $759.

West Australians – who have pokies in Perth’s Burswood Casino but not in pubs and clubs – fared best, losing just $460.

Of the total amount of money wagered, most was pumped into gaming machines, where more than $90 billion was spend nationwide – up almost six per cent on the previous year.

Casinos received an injection of more than $17 billion, representing a decrease of 1.4 per cent, while the TAB enjoyed a 4.5 per cent surge to a national turnover of $11.3 billion.

Government revenue from gambling topped $3.9 billion in 2002-03, a rise of about $150 million from the previous year

Aussie gambling passion grows

Even keeping in mind exchange rates (the Australian dollar is worth considerably less than its American counterpart), Australians gamble quite significantly. Anyone from down under care to comment?

Strange slots

I’m always amazed at the things that get turned into slot machines. One of the hallmarks of the slot machine is that, like the lottery, it has democratized gambling–you don’t need a big bankroll or any skill–just push “max bet” and hope for the best.

Still, this might be taking it too far.
so is losing for geniuses?
I’ve always thought that those “for dummies” books were needlessly insulting, and now, as captured in this image from a major Strip casino, it seems they have extended their franchise to slots.

Then there’s this one, which truly mystifies me.
eat up!

It just looks hideous, and the eye in the “B” and tounge sticking out of the “a” don’t help. I really think that if you were to create a parody of a casino, you would will it with slots like these.

Then there’s this, the Beverly Hillbillies, which makes perfect sense for a slot machine, because the Hillbillies lucked into sudden, life-changing wealth.
Jed Clampett
Still, the fistfulls of cash push this display perilously close to some kind of avant-garde artform.

Finally, there is a machine that is tragically unappreciated.
Herman and his family
Herman Munster simply rules. The problem with today’s world is that too many people want to be Grandpa–always making sarcastic comments and putting people down–and no one wants to be Herman. Sure, he goofs things up most of the time, but at least he tries.

It’s strange–a few years ago, the Addams Family slot was huge. I wonder why the Munsters never caught on. Probably the lack of a bonus round. It looks like a regular mechanical/electronic 3-reeler with Munsters graphics.

Super Mario slots?

No, Nintendo isn’t developing a platform slot machine/game (at least that I know of). Rather, Mario Lemieux and the Pittsburgh Penguins may soon own a slot machine license. From the Post-Gazette:

Specifics have yet to be developed, but team officials hope to convince the new state Gaming Control Board that no licensee could contribute as much to the community as the Penguins. Atop the list of what they are expected to offer is a commitment to cover all of the estimated $250 million cost of a facility to replace Mellon Arena, along with a pledge to keep the 37-year-old National Hockey League franchise in town for the long term.

For four years, the Penguins have sought a new arena funded mostly with public money. Their plan to fund it with slots profits, team officials are expected to argue, would spare state and local taxpayers the burden of replacing a multipurpose arena that opened in 1961 and is among the oldest of its size in North America….

“I think it’s a very innovative approach, and I hope the Penguins move aggressively,” said state Sen. Jack Wagner, D-Beechview. “I can tell you that I believe the Pittsburgh parlor will be the most lucrative in the state, and there are going to be funds available for the owner to do something extra to help the community. If that’s getting an arena out of the deal and keeping the Penguins in town, that’s a win-win for us. The last thing I want is for us to lose professional hockey in Pittsburgh.”

Sen. Sean Logan, R-Monroeville, who also has a spot on the city-county Sports & Exhibition Authority that owns Mellon Arena, has been vocal in his opposition to public funding for a new facility. But he was effusive in his support of awarding a slots license to the Penguins.

“I think that’s a great idea,” Logan said. “Having a venue like that, where they could have shows, hockey games and other events connected with the slots parlor … if the Penguins and Mario Lemieux are serious, that’s something we all should look into.”

Logan added that the local stature of Lemieux — the Penguins’ owner, Hall of Fame center and long-time charitable contributor to the medical community — could give him an edge over applicants whose backgrounds are not as well known.

The Penguins would be expected to produce the $50 million license fee and follow the same procedures as any other applicant, legislators said.

Although professional sports generally try to avoid any association with gambling, the NHL already has given its blessing for the Penguins to pursue a slots license. NHL Commissioner Gary Bettman said last week that he would take no issue with the team owning and operating a parlor, even if it were part of the arena. Two years ago, he granted the Calgary Flames permission to seek a gambling license.

Penguins to seek slots license, pledging profits for new arena

I guess that’s not a total reversal on the league’s part; I’m not aware of the NHL being as rabidly anti-gambling as the NFL, which won’t even allow commercials for Las Vegas during the Superbowl.

Now that slots have become a reality, things will get really interesting, as competition for the licenses heats up.