If Illinois lawmakers listen to their constituents, there won’t be any additional gaming licenses issued.
In a recent poll conducted by the Chicago Tribune and television station WGN, 56% of registered voters said they oppose increasing the number of casinos within the state. Only 25% of those surveyed said they favored the idea of expanding gaming while 19% said they had no opinion.
For several months, state legislators have been proposing and studying various plans that would permit the issuance of anywhere from two to five additional casino licenses that the state could auction off to prospective operators. Also considered was a plan to permit the state’s racetracks to install slot machines. All the plans were proposed to raise money to assist the state in balancing its budget.
Although the several plans are still being debated, it wasn’t known whether the two sides could find something they could agree on.
Meanwhile, no action has been taken on the license that winning bidder Isle of Capri (ISLE) planned to utilize in the Chicago suburb of Rosemont.
New York overhaul
In a move seen as strongly benefiting Magna Entertainment Corporation (MECA), New York Gov. George Pataki has called for a complete overhaul of racing and gaming administration.
Pataki’s plan calls for the elimination of the N.Y. State Racing and Wagering Board and affiliated boards and the creation of the N.Y. Gaming Commission whose responsibilities would include both racing and gaming activities in the state.
Observers called Pataki’s plan a major blow to the New York Racing Association, whose franchise to operate Belmont, Aqueduct and Saratoga is set to expire in 2007. NYRA officials have been lobbying the legislature to extend the franchise by two or three years in order to give it an opportunity to amortize the $140 million expense for the installation of video lottery machines at Aqueduct over a longer period.
When the legislature passed a law to permit certain New York racetracks to become racinos, it specified Aqueduct as the only NYRA track to have VLTs. Subsequently, NYRA ran afoul of state authorities, thus causing reluctance on the part of NYRA’s partner in the racino, MGM MIRAGE Inc. (MGG), to build the slot machine facility. Because of the delay, there still are no slots operating at Aqueduct, although three upstate tracks have begun their slots operation.
Taking advantage of the problems at NYRA was Frank Stronach, chairman of Magna Entertainment, the company that has become the largest operator of racetracks in North America. He has proposed a partnership with NYRA. If that doesn’t work, he said he is prepared to take over the franchise and return New York to its leadership position in the industry.
Although talks are taking place between the two organizations, no agreement appeared imminent.
NYRA Chairman Barry Schwartz said that he hopes to get the gaming machines up and running as quickly as possible. "At least we can start to build our casino, and then we still have almost three years left on the franchise."
Little Rhody brouhaha
As Harrah’s Entertainment Inc. (HET) makes headway for its casino partnership with the Narragansett Indians in West Warwick, R.I., the cries of concern from the two existing slot operators grow louder.
And much of the argument centers on taxes.
Currently, Lincoln Greyhound Park and New Grand Jai-Alai pay a 60% tax on the revenues generated by their slot machines.
Should the Harrah’s/Narragansett casino get approved, the plan calls for a 25% tax rate on its revenues.
"We very strongly believe," said Harrah’s president and CEO Gary Loveman, "(that) Newport and Lincoln will continue to prosper." He was addressing a Senate panel that is considering the Harrah’s plan.
Loveman called his casino plan a boon to the state that will create more than 3,200 direct jobs and will generate some $150 million in state and local taxes in its first year of operation.
Harrah’s has promised to make up any lost state revenue from the competition with the two pari-mutuel operations.
But Lincoln Park officials disagreed, pointing to an in-house survey which showed the vast majority of Lincoln Park patrons would gamble at a new West Warwick casino.
A year ago, Aristocrat Leisure Ltd., the world’s second largest manufacturer of gaming machines, was in disarray, struggling to find leadership after its chief executive officer and other top executives were fired, and to stem the flow of red ink.
But a year later, the company, with new leadership, has returned to being a profit making operation. And much of that success has been attributed to "Daruma-Neko" a new game that has become the rage of Japan.
Sales numbers for the new game are expected to be between 42,000 to 45,000 units during the company’s first half of the fiscal year. Assuming the company meets sales projections, the net profit for the six months ending on June 30 will be in the range of between $35 million and $42 million.
Still pending, however, is a lawsuit filed by the company’s former CEO Des Randall, who claims his contract was breached.