Gamers not deterred by Katrina

Sep 6, 2005 6:37 AM

The effects of Katrina will be overcome and they won’t deter gaming operators from proceeding with their long-range plans.

That’s the promise of Bobby Baldwin, Mirage Resorts division president who oversees both the mid-Strip development project known as CityCenter and the storm-ravaged Beau Rivage in Biloxi, Mississippi.

That’s also the tone of top executives at Harrah’s Entertainment, which finds nearly 8,000 of its employees out of work — at least temporarily — from New Orleans to Biloxi.

Baldwin says he is assembling "another team" to give the Beau Rivage all the attention it needs to reopen as he works toward an expected mid-September press conference when MGM Mirage will lift the curtain on a number of the CityCenter developments.

Along the hurricane-ravaged Gulf Coast, the first order of business —as far as the Beau Rivage is concerned — requires an extensive effort to determine the welfare of the casino’s 3,400 employees, who are suddenly scattered across several states.

"Some of them do not have homes to return to," Baldwin said, a sentiment echoed by executives at other companies

It’s also unclear how quickly casinos will try to re-open because getting the resort business jump-started involves much more than simply getting buildings ready to receive visitors.

Local, regional and family infrastructures have been suddenly smashed, utilities and transportation systems are crippled and the bodies are still being counted.

Some of the housing situations that affected work-related decisions have probably changed forever, says Barry Shier, the former Mirage Resorts senior executive who opened the Beau Rivage.

This, he insists, is the big story that will dictate the tone and texture of the future in cities such as Gulfport, Bay St. Louis and Biloxi, as crews clear streets of debris, turn the lights and phones back on and take care of the dead and dying.

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Once again, participation slot machines are rubbing some casino executives the wrong way. These games are licensed by a manufacturer such as IGT, who shares in the revenue with the casino, which leases rather than buys the machine.

Often times this involves the manufacturer’s most popular games. It’s a fine arrangement if the casino doesn’t have the cash to buy all the hot new games. The policy is not so popular with casino companies perfectly able to buy whatever game deserves a place on the floor.

Lately, some casino executives have expressed a desire that other manufacturers increase their market share, offering alternatives to leased games.

"I think a lot of us would like that," says a gaming executive who would rather not be identified. "Those guys have some good games."

Some companies take the position that more investment is required of participation games because of the revenue going out the door to the manufacturer.

"When a player wins, I have a chance of getting that money back, but I haven’t any chance when the money is going to IGT," said a veteran executive speaking on the condition he not be identified.

The issue was so divisive a few years ago that the late Arthur Goldberg, who was then the chairman at Park Place Entertainment (which became Caesars before it was bought by Harrah’s), led an effort to enact legislation that would have curbed some of the IGT licensing demands on casinos.

But the legislative effort faded after IGT decided to take a more active role in listening to its clients.

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Is Station Casinos looking at property in downtown Las Vegas? I called CFO Glenn Christensen who declined to answer the question directly but said, "We’ve looked at so much property. If I talked about one I’d have to talk about them all."

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The stage is being set for a special session in Florida that could result in the Seminoles getting the slots they want. The Seminoles appear to have the law on their side. They’ve also got two nicely located Hard Rock casinos, one just outside Tampa and the other on the densely populated lower East Coast.