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STATESIDE


Stateside S


Sharon Harris is looking at the numbers


pring brings two gaming events each year – the release of the annual American Gaming Association’s States of the States report and the East Coast Gaming Conference in Atlantic City. Both offer a


wealth of information; neither disappointed. Hundreds attended the day-long gaming


conference in late May. It again drew gaming luminaries who meticulously reviewed this past year while speculating on the next. Most mentioned a slight uptick in revenues since 2010, if not from gaming, then from other amenities. They agreed that convenience gaming almost everywhere within 150 miles of Atlantic City compels smart operators to “up their game” by offering more. Atlantic City has experienced the nation’s most


New Jersey Governor Chris Christie’s regulatory overhaul received much praise as it has opened up investment opportunities


dramatic gaming revenue decline. However, Harrah’s Eastern Division President Don Marrandino praised Atlantic City’s status as a premier culinary and event destination. He cited that several dining corporations rank their Atlantic City sites among their highest earners nationwide. Every casino property operates burger bars, beach and outdoor deck bars or multiple ethnic dining spots. Also, historic Boardwalk Hall is the highest grossing mid-size arena in the US. New Jersey Governor Chris Christie’s regulatory


overhaul received much praise as it has opened up investment opportunities. The legislation has introduced a two-tier designation for two new categories of casino properties. They are the small-scale (200 rooms/maximum 24,000 square foot casino) and the staged (maximum 34,000 square feet of gaming space; property must begin expansion to 500 rooms within two years of licensure, completing within five). Isle of Capri CEO Virginia McDowell described her company’s two casino brands within their 15-property portfolio: Isle of Capri sites attract regional customers; Lady Luck casinos appeal more to a locals market. She detailed their emphasis on developing


customer relationships by regularly surveying customers and employing secret shoppers to grade their properties and the competition. The Isle casinos have faced flooding and closings at several locations this spring in Mississippi and other states, but have demonstrated amazing resilience and charity within their casinos’ communities. Every operator voiced concerns over taxes and


product/property oversaturation. Delaware’s three racinos’ business is mostly out-of-state traffic. According to Dover Downs President and CEO Ed Sutor, the three operate 6,948 slots. Delaware recently legalized table games at a 35 per cent tax


10 JULY-AUGUST 2011


rate. Sutor warned legislators that expanding Delaware gaming, overtaxing and product oversaturation will prove destructive. The Wall Street guys confirmed that in Atlantic


City, a slots oversaturation without adequate sleeping rooms is a loser. Their ideal formula would be twice the current hotel rooms and half the slot totals. That will change when Revel and smaller sites open in Atlantic City. Everyone applauded Christie’s industry commitment, saying it gives “comfort to investors.” Ownerships are changing at the 11 Atlantic City


properties. Even those struggling should continue to operate at a deficit since overhead obligations remain intact even for a closed building. Kevin DeSanctis, chairman and CEO of the $2 billion Revel casino project under construction, gave an exciting 50-minute presentation. Revel’s scheduled May 2012 opening will change Atlantic City as Borgata did in 2003. Revel is currently the nation’s largest commercial development project. Of Revel’s 6.2 million square feet, less than 10 percent


– 150,000 square feet – will be gaming. The 47-story tower will house 12 restaurants, two nightclubs, two theaters, three pools, 46 shops in 75,000 square feet of retail space, a 22,000 square-foot spa. There will be 1090 sleeping rooms, ultimately reaching 1898. This surpasses anything Atlantic City has seen,


creating new business, construction jobs and 5,000 potential permanent positions. The AGA report provides statistical goodies for


data junkies like me who love charts and graphs. Last year, 21 commercial casino states employed 340,564, paying $13.3 billion in wages. These properties generated $34.60 billion in gross gaming revenues-a .09 percent increase over 2009 – remitting $7.59 billion in direct gaming taxes. Sadly, New Jersey, West Virginia, Illinois and Louisiana


fared the worst. However, I expect better numbers in New Jersey by 2012, thanks to Christie’s bold steps. Association of Gaming Equipment Manufacturers


(AGEM) Executive Director Marcus Prater reported his member companies “held their own” in 2010. He said, “Given the economy, it is a victory that revenues this year and last are flat.” In 2010, direct and indirect manufacturing


employment totaled 21,400, a decreased of 400 from 2009. Output dropped to $10.8 billion from $11.4 billion in 2009. Though we’ve learned that even gaming is not


recession proof, the industry continues to contribute huge economic benefits and entertainment to communities and customers.


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