Vol. 7 • No. 24 • June 29, 2009

Vol. 7 • No. 24 • June 29, 2009

GGB NEWS June 29, 2009

COVER STORY:

Kentucky Bails, Ohio Sails
A bill to add video lottery terminals to Kentucky's racetracks, pushed by the governor as necessary to save racing, died in a state Senate committee. But in Ohio, gaming got a boost from the previously anti-gaming governor, Ted Strickland, where the possibility remains for four casino complexes in the state's major cities.

FEATURED STORIES:
WEEKLY FEATURE: End Nears For Russian Casinos
The Russian government is in the process of closing down all casino and slot gaming businesses as planned (workers remove signs at one small Moscow casino). With no legal gaming options available after July 1, Russian players are expected to head for summer resorts on the Black Sea and in the Mediterranean for immediate relief. What happens come autumn is anybody's guess.

Single Candidate Emerges as Macau Leader
Not much is known about the former government official linked to the administration of the previous chief executive. Less is know on his intentions about issues of importance to the gaming industry.

MGM Not Selling Casinos; Drops Bankruptcy Warning
The Treasure Island will probably be the only Las Vegas sold by the company now that MGM Mirage CEO Jim Murren said he doesn't have any plans to sell any other casinos in Las Vegas because of low offers. And the company drops 'going concern' warnings in latest SEC filing.

August Casino Vote Set in Taiwan
Penghu County residents will go to the polls to voice their opinions on plans to bring gaming to the islands; Harrah's, MGM interested.

Taiwan Casino Referendum Planned
Taiwan is another step closer to casinos now that the central government will allow a casino referendum in Penghu County.

Tribe Hasn't Given Up On North Dakota Casino
Two years ago the Turtle Mountain Casino looked finished. But now, with economic times hard, the Turtle Mountain Band of Chippewa in North Dakota are finding more enthusiasm for a casino in Grand Forks.

Situation Fluid in Goa
With the elections and anti-casino campaign rhetoric now safely in the past, Goa politicians are getting down to the real business at hand. The casino ship situation is changing fast, and some surprises await those who thought the opposition was against all casino gaming.


ALSO:
Antigua Online Official Suspended
Report Says Macau Starting to Rebound
Monte-Carlo Feels Effects Of Global Downturn

Kentucky Bails, Ohio Sails

By Staff   Fri, Jun 26, 2009

Kentucky Bails, Ohio Sails Two neighboring states going in different directions in gaming legalization


The Ohio River separates Kentucky and Ohio, and last week it was the line of demarcation between two gaming legalization efforts. The legalization of slots at racetracks took a turn for the worse in Kentucky, but in Ohio, it got renewed life as the governor reversed his stance that previously opposed gaming.

A bill that Kentucky Governor Steve Beshear plugged as the only savior for the state’s storied racing industry has died in a state Senate committee.

A measure to add video lottery terminals to Kentucky racetracks, proposed by the governor during an emergency legislative session called to address a budget shortfall, failed to clear the Senate Appropriations and Revenue Committee, which voted 10-5 against moving the proposal forward to the Senate floor.

The Senate considered the measure after the state House passed its own bill to allow slots at racetracks under the state lottery. The Kentucky attorney general two weeks ago issued a ruling that racetrack slots are permissible under the state constitution as long as they are under the state lottery.

The majority on the Senate committee, though, opposed the bill, saying its increase of purses and breeding funds could be addressed without adding slot machines. Several lawmakers took the position that the slot revenues would be accompanied by a drop in lottery revenues.

During the committee meeting, several lawmakers had called  on committee members to allow the full Senate to vote on the issue. State Senator Tim Shaughnessy told committee members that passage of racetrack slots eventually is inevitable, and that delaying it will only damage the state’s storied racing industry further.

“We’re talking about giving them the resources, tools, and strategy to compete,” Shaughnessy told the committee. “Whether we like it or not, the market has changed.”

In the end, opponents handed the racino question the latest of several rejections, using arguments ranging from a disagreement with Attorney General Jack Conway’s opinion on the constitutionality of racetrack slots to the age-old social-cost arguments that slots would increase problems like theft and foreclosures.

The vote fell on strict party lines in the Republican-dominated committee. Of the 12 Republicans on the committee, only one voted to send the VLT issue to the Senate floor, with one other abstaining. Shaughnessy, one of the five Democrats on the panel that voted to move the bill, said after the defeat that the measure would have stood a much greater chance in the full Senate, which is 42 percent Democratic.

The bill had been pushed by the Democratic governor and the Democratic House Speaker Greg Stumbo. but Republican Senate President David Williams was squarely against the plan.

Beshear expressed disappointment at the committee’s action, but vowed to continue to seek ways to save Kentucky’s racing industry.

“It is too early to determine what steps we will take in the future to try to protect our signature business, but I will continue to work on ideas and proposals that will ensure this vital industry’s continued health,” Beshear said in a statement.
“We must now move forward.”

Track owners, meanwhile, vowed to fight another day. “We really want to thank the speaker and governor for their courage and realizing the importance of our industry,” said Keeneland Racetrack President Nick Nicholson, who serves as the horse industry’s spokesman and who had testified in favor of the legislation. “We’re not going to go away. This is not the last you’ve heard on this issue.”


Ohio Governor’s Flip-Flop

After years of opposing gaming in all of its forms, the governor of Ohio, Ted Strickland, a Methodist minister, last week said he now favors allowing the state’s seven racetracks to become racinos by adding video lottery terminals. According to the governor a conservative estimate projected that the state would bring in over $765 million in taxes, which might help plug up its projected $3.2 billion budget deficit.

He urged quick action to adopt this expansion of the state lottery and avoid raising taxes.

"It is contrary to what I thought I would have to do," he admitted last week.

It didn’t take long before some wags began comparing the governor’s change of heart to George H.W. Bush’s vow, “Read my lips, no new taxes,” followed by new taxes.

But Strickland says that the changing economy has changed his mind, citing the state’s nearly 11 percent unemployment and the loss of auto manufacturing jobs. The governor notoriously hates racing taxes, especially since he lost a reelection bid 15 years ago over that issue, so finding some other way to chip away at the debt was probably inevitable.

In April the Ohio Racing Commission proposed that the state’s racetracks divide 14,000 slot machines between them, with half of the profits being taxed. Strickland opposed the suggestion then. His spokesman said that he didn’t know at this time whether the governor was now supporting that plan or coming up with a different one. The governor’s figures are certainly different than those put forward by the commission. His estimates for state taxes are about $200 million higher than those projected by the commission.

Longtime gaming supporter Rep. Clayton Luckie quickly gave the governor thumbs up. “It’s always been a good idea…We have gambling on every side of us.”

Gaming opponents were just as quick to condemn it. Rob Walgate, a spokesman for the Ohio Roundtable, declared, "When gambling has been expanded in Ohio, gambling projections have never come to fruition… At the end of the day they can't deliver on what they promised. They're going against the wishes of millions of Ohioans."

The governor’s support comes none to soon for racetracks like Thistledown, a Cleveland racetrack that has been poised on the edge for several years now. If slots are allowed there it will give it a shot in the arm that could revive it.

But he said that wasn’t a prominent factor in his decision.

Nevertheless, it didn’t take long for the state’s racetrack interests to start lobbying the legislature to pass Strickland’s proposal, which he says he would prefer to do by a bill rather than through a vote of the people. Strickland said he hopes for action by the end of June.

Complicating that is the fact that voters will be asked in November to decide on a plan to build four destination casinos in the state’s largest cities if Ohio Jobs & Growth succeeds in collecting 400,000 signatures by the end of June.

Legislator Dennis E. Murray Jr., a state representative, said that he is introducing a bill that he says would be better than the initiative because gaming would be allowed in six locations in any of the state’s 88 counties. If Ohio Jobs & Growth succeeds in getting its initiative on the ballot in November, Murray will ask his colleagues to put his on the ballot to compete with it.

Meanwhile, in neighboring Kentucky, politicians who have been trying for several years to legalize gaming, including Governor Steve Beshear, who ran for election on the issue, sounded the alarm that Ohio might beat them to it.

A Kentucky racetrack operator, Nick Nicholson, president of Keeneland, urged the Bluegrass state’s legislators to be off and running. "It will be tragic if they get started before we do. My assumption is they will move quickly, and we should do the same."

Patrick Neely, executive director of the Kentucky Equine Education Project, added, "Kentucky racing and breeding are at a severe disadvantage. This would just further the competitive disadvantage. It sends a clear signal that other states are anxious to take our signature industry from us."

GOODS & SERVICES,

Atlantic City Casino Installs Smokeaway Table System

Fri, Jun 26, 2009

GM: System helps provide ‘comfortable entertainment experience’

TCS John Huxley has announced that Trump Taj Mahal Casino and Resort is the first Atlantic City casino to install the Smokeaway Gaming Table System.

Recognizing the importance of providing both smoking and non-smoking customers with a comfortable gaming environment, Trump Entertainment Resorts has decided to install Smokeaway in its flagship casino.

Distributed exclusively by TCS John Huxley, the Smokeaway Gaming System Air Filtration Devices were first installed at the Taj Mahal in April as part of a product awareness program for the Casino Industry and New Jersey State legislators.

Incorporating a patent-pending air filtration device, the Smokeaway system draws in air through a filter designed to remove smoke particles and improve overall air quality. Available for both slots and table games, units are comprise of discreet, flush-fitting table-top vents and built-in ashtrays for added convenience and a reduction in burns and stains on counters and carpets. All units are ergonomically designed to prevent disruption of game play.

Smokeaway is designed to protect dealers and floor staff from second-hand smoke, said Rosalind Krause, General Manager for Trump Taj Mahal. “We have a commitment to all of our guests to provide a comfortable entertainment experience while playing at our casino. We are providing options for all of our guests to make their stay an enjoyable one.”

GOODS & SERVICES,

Supreme Ventures of Jamaica Ready To Jump On Phone Betting

Fri, Jun 26, 2009

With 90 percent of people carrying cell phones, this could be big business

Jamaican gaming company Supreme Ventures Limited has positioned itself to capitalize on an amendment made by island government to facilitate phone betting.

SVL started an advertising campaign this week promoting its new telebetting feature, branded “Go Play,” which will give gamblers the option of using a telephone when placing wagers for the firm's Lotto, Pick 3 or Cash Pot lottery games.

“We are just offering customers the convenience now of being able to place their bets from wherever they are in Jamaica,” said Sonia Davidson, SVL vice-president of corporate communications, in the Jamaica Business Observer.

“Many persons have said that they don't really like standing in the lines at lottery locations and some are not able to get into the line in time to place wagers, especially for Cash Pot,” she continued. “So we have just answered the request of our players.”

Davidson said a part of the strategy is to capitalize on Jamaica's cell phone penetration, now estimated at 90 percent.

Meanwhile, the government has also announced plans to facilitate telebetting in horse racing. A bill could be enacted before the end of 2009.

GOODS & SERVICES,

New York State Lottery To Bring Electronic Table Games To Racinos

Fri, Jun 26, 2009

Don’t overestimate expected revenues, warns Lottery’s deputy director


The New York State Lottery has announced plans to install electronic table games at the state's eight racinos by mid-2010, despite the failure of the assembly during its session to approve them. A bill had already passed the Senate by a decisive 54-8 margin.

According to lottery officials, electronic versions of roulette, baccarat, blackjack and craps are legal based on prior court decisions, which means passage of a law allowing them was not necessary. However, without the law, racinos will not be allowed to expand their hours of operation. Currently, the racinos cannot stay open past 2 a.m.; some were hoping to be open 24 hours a day.

Estimates vary on how much revenue could have been generated by increased operating hours. Bill Murray, deputy director and general counsel for the New York State Lottery, said the move could have resulted in an additional $36 million statewide each year. Independent consultants have said table games could boost state coffers to the tune of an extra $250 million per year.

Murray told the Thoroughbred Times that the latter estimate is probably too optimistic, as all casinos get 85 percent to 90 percent of their income from slot machines or slot-like video lottery terminals.

“We're a little more cautious about how much it's going to add,” he told the Times.

Currently, Finger Lakes Race Track near Rochester is New York's only thoroughbred venue with expanded gaming. Plans call for putting 4,500 VLTs at Aqueduct in Queens borough. New York's other racinos are at its seven harness tracks.

Murray said the lottery does not anticipate a legal challenge to electronic table games.

“I don't think the legislation is needed to authorize electronic table games," he told 200 industry leaders at the New York Gaming Summit in Saratoga Springs. “We're moving forward. We've been moving forward since March.”

GOODS & SERVICES,

GCA May Lose Arizona License

Fri, Jun 26, 2009

Gaming regulatory authorities in Arizona have issued a notice to Las Vegas-based Global Cash Access that the agency is considering pulling the vendor’s license to provide ATMs, credit checks and other cash-access services to the state’s Indian casinos.

The notice from the Arizona Department of Gaming alleges that separate scandals involving underpayment of commissions to banks and to casinos on cash transactions indicate that the company us not suitable under the department’s standards to be licensed as a vendor to Native American casinos.

According to the report, from 1999 to 2002, GCA deliberately miscoded transactions involving Visa by disguising cash transactions as retail purchases, meaning it would pay a lower fee to banks issuing the Visa cards. The vendor allegedly made $26 million on the purchases, and was fined $384,000 by Visa, but never returned any of the extra money it made on the transactions.

The report further points out that GCA deceived regulators in Michigan in 2004 and in Arizona in 2005 by hiding information concerning the miscoding scheme.

The report also cited “ongoing matters of concern” involving GCA, which included an investigation of the murder of the wife of one of the company’s founders, Karim Maskatiya, in which he and cofounder Robert Cucinotta were both questioned but gave inconsistent statements to the police and otherwise did not cooperate with the investigation. Both men later answered “no” when Arizona regulators asked if they had ever been questioned by a law enforcement agency.

Among other issues with GCA cited in the report were a failure by GCA executives to acknowledge any wrongdoing in the miscoding affair, and continuing problems with payments of fees to casinos and payments to casino patrons.

“GCA has committed a theft, fraud and concealment,” the report said. “It has conspired in these actions with (related company) USA Payment Systems. It has demonstrated a willful disregard for compliance with gaming regulatory authorities and has misrepresented and concealed material facts, documents and information in its dealings with the department and others.

“Casino vendors providing electronic fund access must be reputable, honest, diligent and effective. GCA has proven itself to be none of these.”

GCA intends to fight the action at hearings provided under Arizona law.

“The notice provides GCA with the right to an informal settlement conference as well as a formal hearing before an administrative law judge in Arizona,” the company said in a statement. “GCA intends to seek the holding of the informal settlement conference prior to July 15, and the holding of the formal hearing, if necessary, as soon as possible thereafter. In the meantime, absent further action by the department that prohibits GCA from doing so, GCA intends to continue its operations in Arizona in the ordinary course of business.

“GCA takes the notice and the allegations made therein very seriously. GCA believes that it has taken appropriate actions during the prior 20 months that will permit GCA to fully demonstrate that it should be considered suitable for certification by the department.”

GOODS & SERVICES,

Atronic ‘Stargate’ Slot Launched In Romania

Fri, Jun 26, 2009

Slot manufacturer Atronic Group announced that its multi-progressive link “Stargate SG-1” has been launched in Romania, at Bucharest’s Casino Palace.

Based on the long-running science fiction TV series, which has gained popularity around the world, Stargate SG-1 features five distinct bonuses and four levels of progressive jackpot, all in a heavily themed merchandising package. Players make an ante wager to qualify for the multiple bonus events.

Casino Palace launched that game with an in-house promotion, a press conference and an open-house party.

“In a period of economic downturn, when many casinos in Bucharest are cutting down their offerings or are even closing down, Casino Palace is investing into the newest products,” said Andrei Frimescu, marketing and PR manager at Casino Palace. “We are confident that this European Premier has once again demonstrated our continuous commitment to offer the newest and most innovative products to our customers.”

“We are very pleased that the elegant Casino Palace has chosen our new multi-bonus progressive link Stargate SG-1 and that they are so actively promoting this new product to their players.” Said Sylvia Dietz, Atronic marketing director. “Atronic is very excited to be part of this Eastern European premier of Stargate SG-1, and we are looking forward to continue our great relationship and cooperation with Casino Palace Bucharest and Queen Investments.”

Casino officials say the launch event generated the highest monthly attendance ever recorded in the casino.

GOODS & SERVICES,

Excalibur Ditches PokerTek Tables

Fri, Jun 26, 2009

North Carolina-based PokerTek, Inc. announced that the Excalibur Hotel and Casino in Las Vegas is removing 12 PokerPro tables from the gaming floor after what was the initial field trial for the automated poker tables in Nevada.

Excalibur exercised its right under an agreement with PokerTek to terminate its relationship with the vendor after the field trial lasted at least four months. PokerPro, which incorporates 10 individual player stations on a standard-sized poker table with a video display of the deal and flop in the middle, received final approval from the Nevada Gaming Commission on March 19.

“We thoroughly enjoyed working with the Excalibur, and their partnership was critical to the success of our field trial in Nevada,” said Mark Roberson, PokerTek's acting CEO. “Over the past year, we’ve built a strong base of PokerPro players and our product is stronger than ever as a result of the field trial process. We do not expect the termination of this agreement to have a significant impact on our reported revenues or results of operations.”

It is the second time PokerPro tables have failed to sustain business in a large-scale installation in a jurisdiction where live poker also is available. Trump Plaza in Atlantic City shut down its automated poker operation earlier this year after revenues for 10 PokerPro tables fell well below projections.

GOODS & SERVICES,

BMM Receives Nod for Singapore Testing

Fri, Jun 26, 2009

Gaming authorities in Singapore have officially recognized BMM Compliance as a fully qualified testing laboratory for gaming devices in the country’s gaming industry.

Singapore’s Casino Regulatory Authority designated BMM with the status of SRTL, for Singapore-Recognized Test Lab, qualifying the organization to provide testing services for gaming equipment placed at casinos within the Singaporean jurisdiction.

The CRA granted SRTL status to BMM Australia Pty Ltd.’s test laboratories at Melbourne and Sydney effective June 5. BMM officials said they were pleased to work with CRA to achieve the certification, and the organization will now work to issue certifications for the various gaming technologies and systems to be used in Singapore in compliance with Singapore’s new gaming standards.

“BMM is excited and honored to be recognized as SRTL, and I believe that it reflects the importance BMM places on its upcoming testing and compliance services in Singapore,” said Peter Turner, managing director of BMM Australia, Asia-Pacific. “BMM is also grateful for the assistance the relevant CRA teams have provided during the recognition assessment period.”

GOODS & SERVICES,

GPI to Supply Marina Bay Sands

Fri, Jun 26, 2009

Leading table game equipment supplier Gaming Partners International Corporation announced that it has signed an agreement with the Marina Bay Sands Resort & Casino in Singapore to provide the property with all of its casino chips.

Under the agreement, GPI will provide over 2 million casino chips to the casino for its opening later this year. The chips, which are from the company's Bourgogne & Grasset line of casino currency products, will contain many state-of-the-art security features and customized designs.

The Marina Bay Sands, an affiliate of Las Vegas Sands Corporation, is currently under construction at Marina South in central Singapore. The luxury resort complex will feature a Las Vegas-style casino, complete with private gaming lounges. GPI is providing the casino chips for its nearly 1,000 gaming tables.

The order marks the third Las Vegas Sands Corporation property to open in Asia with GPI’s currency products. GPI has previously supplied casinos chips to the Sands Macao and the Venetian Macao.

“The Las Vegas Sands Corp. has long been a valued customer to GPI and we are delighted to be supplying the casino chips for its newest property in Singapore,” said Gerard Charlier, president and CEO of GPI. “With the immense popularity of table gaming in Southeast Asia, the quality and security of casino currency is of the utmost importance. Our B&G chips offer some of the best security features in the market and we are pleased the Marina Bay Sands will open with GPI products.”

The Singapore contract is the second major regional deal for GPI during the past month. The vendor supplied all of taming plaques for 550 table games at Crown Melco’s City of Dreams casino, which opened early this month.
City of Dreams purchased GPI’s B&G line of plaques fitted with high-frequency RFID microchips, in a variety of styles, shapes and color combinations.

“GPI is very proud to have been a part of the successful opening of this landmark casino,” Charlier said. “The City of Dreams’ acceptance of RFID is a testament to the advantages of this technology and our commitment in providing the best solutions for casino currency security and tracking.”

GOODS & SERVICES,

TCS John Huxley Announces Argentina, Canada Contracts

Fri, Jun 26, 2009

Table game supplier TCS John Huxley announced that it has supplied all 133 new gaming tables in an expansion and renovation of Casino Buenos Aires in Argentina. The tables were custom-designed to match the color tones of the casino interior.

Also as part of the contract, the vendor supplied 55 of its “eFX” number displays for the casino’s Saturn roulette wheels.

The casino is managed by Cirsa and Casino Club on behalf of the Argentinean National Lottery. Huxley has had a long-term relationship with the Cirsa Group.

Previously, the vendor had supplied its Chipper Champ Plus chip-sorting machines to the casino. A test of 22 leased machines convinced management that the sorters resulted in huge cost reductions, and increases in game speed. The casino recently increasing their inventory from 22 machines to 60 Chipper Champ 2 machines.

In a separate announcement, TCS officials said the company has been selected to supply a selection of eFX multimedia displays and Chipper Champ 2 sorters to the new Mont-Tremblant Resort in northern Quebec, Canada. This announcement followed another Canadian installation, of six new terminal stations running TCS John Huxley's Unity I platform at Calgary’s Stampede Casino.

GOODS & SERVICES,

IGT-U.K. Restructures Mobile Division

Fri, Jun 26, 2009

The U.K. division of leading slot manufacturer International Game Technology is restructuring its internet/mobile gaming division. IGT-UK Group announced the revamping of its mobile and internet gaming operations following its recent acquisition of mobile marketing company Million-2-1, and its integration of that company’s assets and personnel with the U.K. division of the company’s WagerWorks online slot content supplier.

As a result of the restructuring, the U.K. division of WagerWorks will take responsibility for the sale and distribution of Barcrest Group game content in remote gaming markets (interactive digital television, mobile gaming and internet gaming markets); and  IGT game content in mobile gaming markets, developed using the Million-2-1 mobile gaming platform.

WagerWorks game development strategy has been to supply a mixture of well-known consumer brands coupled with internet versions of well-known IGT brands such as Cleopatra. It will now also leverage online versions of successful game titles from Barcrest Group, offering streams of game content in interactive digital television, mobile gaming and internet gaming markets.

Million-2-1 will continue to focus on interactive services for media organizations and land-based retailers, using mobile solutions to deliver new revenue streams. This includes prize competitions, mobile marketing campaigns and lotteries for the U.K. and international markets.

GOODS & SERVICES,

Nevada Gaming Commission OKs CEO License

Fri, Jun 26, 2009

Jon D. Berkley, president and CEO of Las Vegas Gaming, Inc., was recently granted a license by the Nevada Gaming Commission after concerns that the company was deficient in compliance standards.
    
Berkley said he was not aware that the company had not bee complying with regulatory standards, and commissioners granted a one-year license in order to ensure that Berkley would actually enforce the commission’s rules.
    
Berkley said he will “make sure the company walks the line.”