gaming atlantic blog

a casino gaming blog

Archive for June, 2010

Arundel Mills Casino: Win For Cordish

Posted by jkarmel on June 26, 2010

Big win for Cordish yesterday when a judge threw out the anti-casino
referendum from the “Stop Slots at Arundel Mills” group, clearing the way for the Maryland Live! casino. Expect an appeal. Both sides have a lot at stake in this battle of gaming interests: Cordish vs. MD Jockey Club/Magna Entertainment:.
Fox 45 article
Baltimore Sun article

The ruling is a bit of a twist and very good for Cordish because it nullifies the principal behind the referendum drive itself, adding a significant legal hurdle to the forces to grapple with on appeal. The judge viewed the zoning approval as an “appropriation” and therefore not even subject to a referendum, using a similar failed effort to block Oriole Park at Camden Yards in the 1980s. Now, the casino opponents must demonstrate 1-why the zoning approval really is legitimate, and 2-the signatures are valid.

Importantly, the judge also noted that the 2008 voter approval would be essentially reversed if the referendum were allowed to go through and wrong. This has been a significant point for Cordish from the beginning – that Maryland and Anne Arundel voters have already spoken via the original referendum, and that decision should stand.

I’ve written this before and again want to emphasize that this really is a battle between two gaming interests, with a little NIMBY aspect thrown in. Magna and its MD Jockey Club partners have been behind the effort from the beginning, and have capitalized on the grumblings of some local residents to make their case. This reminds me a lot of the battle over the tunnel-connector in Atlantic City in the late 1990s, really a battle between gaming titans Steve Wynn (then of Mirage) and Donald Trump – but that played out publicly as a movement led by a few local homeowners.

Advertisements

Posted in Uncategorized | Tagged: , , | Leave a Comment »

ARCHIVE – Mid-Atlantic VLT/Slot Machine Revenue

Posted by jkarmel on June 2, 2010

[ARCHIVE: originally published by GA on November 10, 2008]

Lately, I’ve been wondering about the potential revenue of the Maryland casinos and how the economic downturn has impacted slots revenue in the mid-Atlantic. So, I did a little research and came up with the following data:

The highest monthly revenue per machine was Harrah’s Atlantic City at $13,633 per slot machine in August and the lowest was Dover Downs at $5,145 for September. It’s a quick and dirty analysis that doesn’t yet include data from 2007, but the above graph does show that:

* VLT/slots revenue was relatively consistent for the two Philly-area casinos before September’s nosedive
* Atlantic City retains a seasonal effect: summertime revenues climbed more than in the other properties
* mid-Atlantic gaming is taking a hit this Fall as the economy declines, though the decline is especially steep in the ‘destination’ casinos of Atlantic City

What could this mean for Maryland casinos? Still much to be worked out, but I see the I-95 casinos (esp. Laurel & Baltimore) as fairly similar to the Philly properties in terms of location and local market as opposed to the ‘destination’ resorts of Atlantic City. This could mean that they are more recession-proof than the Atlantic City casinos, now experiencing their worse downturn in the 30-year history of gaming in south Jersey.

The DE racinos need more analysis, but at this point, the Ocean City, MD property will likely be more like one of these, sans hotels or any other amenities for that matter. The Ocean City location is legally banned from being much more than a bare-bones racino.

OK– just a few points here for now: a little speculation, nothing too scientific.

Posted in Uncategorized | Tagged: , , , , | Leave a Comment »

ARCHIVE – Studs Terkel, 1912-2008

Posted by jkarmel on June 2, 2010

The news that Studs Terkel died got swallowed up in all the election hoopla last week. But this remarkable man’s death is significant. Terkel was pivotal in the elevation of oral history as a field, well-known for his numerous interviews with common folks in Chicago (where he lived) & elsewhere. He understood the power of oral history to chronicle the real lives of people– to create history without official sanction. As a practitioner of oral history, I owe a debt to this man for his work and service to our field. So, here’s to you Studs- we’re all better for your life’s work.

Posted in Uncategorized | Tagged: , | Leave a Comment »

Atlantic City Blues (& some good news too) – ARCHIVE

Posted by jkarmel on June 2, 2010

[ARCHIVE: Originally published by GA on November 7, 2008]

Borgata just laid off 400 workers and the total number of casino employees in Atlantic City is down 799 from a year ago at 40, 124. Now, there’s always a mild seasonal effect in the coastal resort, but the Borgata constriction is relatively significant. For five years, Borgata has mainly been going gangbusters in Atlantic City: single-handedly changing the town’s casino image from downscale to hip. This is its first layoff — a rarity in a cyclical industry where layoffs are far from unknown (at least in AC). For two years, it has generally maintained strong revenues as other AC properties took big hits amidst economic decline, skyrocketing gas prices, Pennsylvania competition and the partial smoking ban.

Meanwhile, Pinnacle put its $1.5 billion, 20-acre casino development on “indefinite hold” & announced that it would listen to offers for the prime property smack dab in the middle of the Boardwalk strip. I’m guessing there may be some offers and who knows, maybe a better-capitalized firm will get that casino built sooner than Pinnacle. This news comes just after official confirmation of MGM Mirage’s ominous suspension of its $5 billion project in the Marina. It also comes amidst the tragi-comedy that is the city council’s efforts to ban smoking completely from the casino floor. Now that Maryland has legalized gaming, another competitive threat enters the AC universe, though one of the best gaming analysts around (Michael Pollack) is minimizing that particular issue. Dave Schwartz had a great snapshot from this episode a few weeks ago on the die is cast, his excellent blog.

I’ve been in Atlantic City a lot working on Gambling on the American Dream and conducting oral history over the past five years. In that time, I’ve gotten to know it well. AC has a fighting spirit and its community is adaptable and ever-forward looking. Since the mid-1980s, it has become very diverse and once-faded sections of town are now lively, interesting neighborhoods full of hard-working immigrants from all over Latin America and Asia mixed with the descendents of Irish, Italian & Jewish immigrants from the early 20th century. The city’s sizeable African-American community has a rich history and strong sense of community. For the most part, everybody gets along. Most casino patrons never see this flip side to Atlantic City, nor do they see the many new houses subsidized by casinos via New Jersey’s unique funding formula with 1.25% of the casino ‘win.’

Maybe its because I grew up in the Bronx, but AC’s diverse, gritty urban culture is appealing to me. The place has tons of character — its unique, not generic. I’m still in AC regularly as we wrap up the Atlantic City Free Public Library’s ’30 Years, 30 Voices’ oral history project and understand the problems that city and local casinos face, but I’m optimistic for it too.

The Atlantic City casino industry has been through tough times before in its casino years –such as the junk bond debt crisis of the late 1980s – and pulled through well. The casino industry, smart regulators and local leaders dealt with the new competitive threats posed by Foxwoods, Mississippi and riverboat casinos in the1990s very effectively by adjusting the regulatory code and launching a wave of casino expansion and mixed development that culminated with Borgata and the Walk retail outlet center. Many of the properties added new hotel towers, expanded their casino space and otherwise became stronger and it worked: AC was doing quite well overall until the late troubles. The Revel project is coming along steadily just east of Showboat and will likely be the Boardwalk equivalent of the Marina’s Borgata in terms of new style and glamour.

No one knows for sure what will happen — but AC’s recent problems are probably only temporary, if history is any guide.

Posted in Uncategorized | Tagged: , , | Leave a Comment »

Moving Fast in Maryland

Posted by jkarmel on June 2, 2010

[Originally published by GA on November 6, 2008]

According to the Baltimore Sun, the state is moving quickly to get its new casinos established within the two year window mandated by the law. Of course, this is necessary in order to meet a February 1, 2009 deadline for the license applications. The new commission may in fact be up and running next month (December) to start administering the application process. The Sun also pointed out that Baltimore moved quickly to make designated property available for purchase — something which will smooth the process for a potential gaming firm to make a bid.

Right now, the Cordish Company is clearly eyeing the area, along with other designated spots. The Maryland Jockey Club (parent company: Magna Entertainment) is pulling together its bid for the Laurel site even as slots opponents in Anne Arundel County declare intent to keep the fight going with a zoning battle (as I predicted in yesterday’s post).

With all the potential for sensationalized obstruction, I’m confident that Maryland officials will go about this efficiently & publicly to get things done fast. The pitfalls otherwise loom large in the charged political climate surrounding Maryland casinos. I doubt that local forces will be able to block the new casinos via zoning, but in Laurel & Ocean City, they could delay proceedings for a while. There appear to be no substantive local hurdles in Baltimore, which is good news for bidders there. From an industry standpoint, the fact that Maryland is a closed market could also be advantageous: despite the restrictions, gaming companies won’t need to constantly be concerned over competitors opening up and carving up the market.

I’m still wary of the financial commitment involved in a stalled gaming market, but also encouraged that things are moving in a more positive direction. The great locations of MD’s three I-95 corridor casinos should attract sufficient interest for viable casinos to open within the law’s 2-year timeframe. The Rocky Gap location is a big question mark right now: will its remote location hinder development?

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

Big Slots ‘Win’ in Maryland

Posted by jkarmel on June 2, 2010

[Originally published on GA on November 5, 2008]

Maryland voters made their point decisively yesterday, passing the VLT referendum by 59-41%. Support for the amendment was clear across the state, including in the Ocean City area, which had been the epicenter for opposition.

The result was no surprise, as polling has shown popular support for slots in Maryland since the subject first drew political scrutiny over a decade ago. My prediction (55% for, 45% against) was off by just a few points, though I knew that opponents had closed the gap some since the Washington Post’s last poll. Now is where it gets really interesting, as gaming firms begin the process leading to the opening of Maryland casinos, projected by GA for 18 months to 30 months from this date: approximately April 2010 – April 2011.

What’s next? The following is GA’s brief analysis of what’s to come over the next few months as gaming comes to Maryland:

* VLT commission: according to the Maryland legislation, the MD legislature will set up a commission with appointments from the Governor (3), state Senate president (2) and speaker of the state House of Delegates (2). I’ll speculate that this won’t take place until January, at least, when the legislature opens its 2009 session.

* License bidding: this is going to be fun. Of the five licenses, the spotlight will clearly be on the three along the extremely lucrative I-95 corridor: in Laurel, in Baltimore and in Cecil County. While Magna Entertainment clearly has an inside track for the biggest facility (Laurel- 4,750), the license is not yet a done deal for Magna & the Maryland Jockey Club despite the company’s $2 million contribution to the pro-slots effort. Other firms may see a great opportunity for a facility that could bring in $600-700 million in gross revenues. Baltimore is even more wide open. To date, the Cordish Company has expressed interest, but other major players may get in, including a group led by wealthy lawyer and Orioles owner Peter Angelos. Along with a few associates, Angelos contributed lots of money towards the end for the pro-slots effort. For Cecil, Penn National is more advanced with an option to some prime property in Perryville, MD for a facility. PN Gaming also has an impact study underway and plans for another of its ‘Hollywood’ casinos already in place. However, Cordish has also expressed interest in the Cecil license and may be in a very good competitive position, as may also be the case with the Angelos group.

* Legal action and/or zoning plays by the anti- side: This may still occur as more zealous slots opposition forces may just not be ready to concede defeat. They already employed the courts in trying to thwart the referendum. They may keep going with local legal challenges to new properties similar to Philadelphia casino opponents who have managed to delay that city’s casinos for two years.

* OK — this is just a start– GA will have much more on this in coming days, weeks, months….

Posted in Uncategorized | Tagged: , | Leave a Comment »

Election Day Special

Posted by jkarmel on June 2, 2010

[Originally published on GA on November 4, 2008]

I’ve been so busy with the Maryland situation for this blog that I’ve barely mentioned the national election. Both candidates have some interesting connections to gaming. As an Illinois legislator, Barack Obama came to be viewed as a gaming critic although he was somewhat ambiguous on gaming expansion when specifically asked questions about it for Illinois on questionnaires. Yet, he also played poker regularly with a group of fellow legislators whilst he served at Springfield.

John McCain is a well-known craps player with fundraising ties to Terry Lanni (MGM Mirage) & Sheldon Adelson (Las Vegas Sands). He also supported tribal gaming expansion as a former chairman of the Senate’s Indian Affairs committee, as the New York Times reported in September.

The president is relatively inconsequential on matters such as gaming legalization in a state like Maryland and casino expansion. Yet, in other ares the federal government plays a role & that brings up questions to address in the future. For example, one wonders how a new political climate and president may deal with any challenge to the Unlawful Internet Gambling Enforcement Act (UIGEA) rammed through Congress just before the 2006 election? That messy act virtually shut down American involvement in online gambling by restricting financial transfers to large online gambling operations……we’ll see (and report, of course, as it happens).

Posted in Uncategorized | Leave a Comment »

MD Slots Referendum Today!

Posted by jkarmel on June 2, 2010

[Originally published on November 4, 2008]

OK — today’s the big day: 14 years of debate culminating in a vote for legalized gaming in Maryland. Both sides have been active over the weekend, but the clear edge must go to the pro- side with signs everywhere, numerous commercials, a compelling budgetary argument and favorable recent polling (even if the gross revenue numbers are somewhat speculative).

Yet, in conversations with friends, colleagues, students and others, there are clearly still many concerns over bringing VLTs to Maryland via this referendum- both from a pro-gaming and anti-gaming perspective. Plus, there’s lots of political baggage left over from the long process in Maryland. Here’s a prediction: 55% for vs. 45% against for the final vote. But this is really just a step in the beginning of the process for Maryland gaming, regardless of what happens today. Much more to come in future postings…

(FYI — I’ve been invited to discuss the referendum on a Baltimore news channel tonight, somewhere between 9 & 9:30PM, webcast here: WMAR ch. 2 Baltimore. – jk)

Posted in Uncategorized | Tagged: , | Leave a Comment »

Casinos and Crime

Posted by jkarmel on June 2, 2010

[Originally published on November 3, 2008]

What’s wrong with this picture?

If nothing else, the Maryland referendum battle has brought forth some interesting ideas and popular notions about casino gaming. One of the most prominent is the idea oft-repeated by slots opponents that casinos lead to crime. An anti-slots ad in an Ocean City, MD newspaper highlighted a supposed connection between casinos and crime in West Virginia and Mississippi. Another opposition ad pointed out that “In the first three years of gambling in Atlantic City, New Jersey went from 50th in nation in per capita crime to 1st in the nation” – a dubious stat, lacking context and sufficient analysis.

There really is very little evidence to support this idea, and in fact, the National Gambling Impact Study Commission (1999) reported no direct connection between the two. Sure, petty crimes increase whenever you have large gatherings of people such as around stadiums, but the idea that bringing a casino into your community will inevitably lead to a crime wave just doesn’t hold up to research-based scrutiny.

So, why is this such a widely-held belief? I speculate that it may have something to do with the widely-held perceptions of the Atlantic City experience of the 1980s, when the city quadrupled its number of visitors within 3 years of Resorts’ opening and was completely unprepared for the onslaught. So AC crime spiked as the national spotlight turned to the city when it came to casino culture – before Las Vegas took off after the Mirage opened in 1989 and casinos sprouted all over the nation in the 1990s. As well, the crack epidemic hit & by the end of the 1980s AC had developed a nasty reputation as a bi-polar sort of place with glitzy casinos for tourists & desolate crime-ridden poverty for the locals.

The intense media focus on AC in the late 1970s & 1980s (its eastern monopoly years) planted a popular attitude that hasn’t faded much, despite the reality of AC’s progress in the 1990s and 2000s.

So, the connection took hold in the popular milieu– at least to many on the east coast: casinos = crime. Of course, this perception missed the reality that pre-casino AC was much worse in the 1970s. Yet, while crime spiked in Atlantic City (as it did in cities across the country), it actually went down in Atlantic County measured proportionately according to population, where most of the casino employees lived and which experienced a terrific casino-fueled boom from 1978 to 1990.

Yet, still…the perception holds and is exploited by gaming forces…alas…in politics, in life, perception is reality.

Posted in Uncategorized | Tagged: | Leave a Comment »