Perhaps it would be a good idea to just give Illinois racetracks the slots that have been regularly proposed for them.
That’s the view of Penn National Chairman Peter Carlino, who heads one of the three casino companies locked in a battle with the state over a proposed 3 percent tax on casinos winning at least $200 million a year.
Let the market forces decide what will work and what will not work, although in this case Carlino feels there is plenty of business for everyone.
Penn, Harrah’s and MGM recently won a first round in their battle with the state when the tax was declared unconstitutional by a circuit judge who said the state cannot tax one legal business for the benefit of another.
Revenue generated by the 3 percent has been earmarked for hard-pressed tracks which have been struggling since the arrival of casinos in the state.
But Carlino believes this picture represents a warped view of reality because, "The fact is fewer people have an interest in going to the tracks to watch races."
Carlino maintains that if the state wants to reap the benefits of expanded gambling then it should let it expand and not merely raise taxes on a limited number of casinos.
Moreover, he says, racetracks when combined with slots are an "exceptional economic engine."
Australian gaming giant PBL’s agreement to pay $250 million for a 19.6 percent stake in the proposed Fontainebleau resort near the north end of the Strip looks like a first step on the way to something bigger.
"Probably what it wants is to test the Nevada licensing process, get approved and then see what the next logical step is," explained a source with a good feel for the attitude of regulators who spoke only with the promise of anonymity.
Licensing the company headed by the son of the late Kerry Packer, a legend in his own time as a Las Vegas high-roller, would raise some of the same issues that came up during the hearings that resulted in Macau gaming mogul Stanley Ho’s daughter being approved as a joint venture partner for MGM.
It would raise the same questions because PBL’s Macau partner is Melco, a company headed by Lawrence Ho, another of Stanley’s children.
PBL would almost certainly be asked whether it intends to bring its Melco partnership to Nevada in one form or another.
That’s probably not likely in the near term because PBL and Melco appear to have their hands full, what with soaring construction costs related to their several Macau casino projects.
But Nevada gaming officials must necessarily take a long term view of any prospective licensee’s potential impact.
A 19.6 percent stake in a gaming project that seems likely to have a cost somewhere north of $2 billion would not mean much to a company like PBL that is accustomed to making a big splash wherever it does business.
Private funding for
Cannery Resorts broke ground this week on its Eastside Cannery hotel and casino in Las Vegas this week. The $250 million project represents a continuing evolution of the brand introduced by principal owners Bill Wortman and Bill Paulos at their first Cannery in North Las Vegas about four years ago.
Cannery is also another example of a company benefiting from an infusion of private capital money. In this case the investment came from Oaktree Capital which has been licensed by the state to own about 42 percent of Cannery. Paulos and Wortman, through their Millennium Gaming, own the remaining 58 percent.
The Eastside Cannery is being built behind and to the south of Boulder Highway’s Nevada Palace, one of the holdings that Wortman brought to Cannery. Once the new hotel and casino with its largely locals market orientation is complete, the existing Nevada Palace structure will disappear.
Cannery will open with about 2,000 slots, a few more than 300 hotel rooms and the usual restaurants and entertainment areas
Wortman and Paulos are successful veterans of the casino business. Wortman came into gaming as a chief financial officer at Caesars Palace. Paulos opened several of the resorts opened by Circus Circus Enterprises during the 1980s and 1990s. Their Millennium was also the first operator of the Greektown Casino in Detroit.