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                                   ADAMS REPORT
                                   A Review of Current Gaming Literature
                                               Volume V, Issue 1
                                               January 2001

Indian Tribes and America in Transition, and the Twenty-First Century Version of Labor versus Management.
The Changing Face of Indian Country. The tribes are changing the way they do business in mores ways than one.
Before Indian gaming, American Indian tribes and their members were out of the mainstream of American life
and out of the public eye. But things have changed, the tribes today have more money, more confidence in their
position against the states and they certainly are not out of the public eye. In particular, the tribes are entering
into the political and judicial process, well funded and ready to do battle. In every community where there are
tribes, the tribes are taking an active interest in politics, as they did in the campaign to defeat Slade Gorton in
Washington; and they are fighting every issue they believe affects their members, businesses or tribal
sovereignty. The tribes have increasingly resisted state governments and their attempts to regulate or tax tribal
casinos. Wisconsin and New Mexico have responded and are challenging the tribes.

                    Letter to Oneidas on Non-Renewal of Gaming Compact.
        Dear Chairman Danforth:
        Enclosed with this letter is a formal notice from the State of Wisconsin to the Oneida
        Tribe of Indians of Wisconsin that the State will not renew the existing Tribal-State
        Gaming Compact. The notice is the consequence of the Tribe’s repeated irresponsible
        conduct. The State will no longer tolerate such conduct.
        …The Tribe’s economic enterprises and members receive valuable services from the
        surrounding local governments, yet the Tribe consistently refuses to shoulder the
        burden of these services.
        …It is irresponsible for the Tribe to not work cooperatively with the State to
        implement regulatory measures that protect the public interest and ensure the highest
        levels of integrity.
        …To my great regret, and despite my Administration’s significant repeated attempts, I
        have seen little cooperation or regulatory responsibility of the Tribe.
        Tommy G. Thompson
        Green Bay Press-Gazette, 1-6-01

        New Mexico Tribes Appeal Federal Judge’s Decision. Santa Fe (AP) – New Mexico Indian
        tribes with casinos have appealed a federal judge’s refusal to throw out a lawsuit
        brought against them by the state attorney general. Attorney General Patricia Madrid
        sued a dozen casino-owning tribes last summer for not making payments to the state as
        required in gambling compacts signed in 1997. …The tribes argue that they have
        sovereign immunity from the state’s lawsuit and only the U. S. Congress can authorize
        such litigation. …Madrid has said if the courts rule in the state’s favor and the tribes
         still refuse to pay, they could risk having their casinos closed. The casinos will remain
         open during the litigation. Las Vegas Sun, 1-6-01
The tribes are also using their revenue from gaming to buy a bigger piece of the American pie.
The Oneida Tribe in New York is buying gas stations, so is the Oneida tribe in Wisconsin, and
on the West Coast tribes are buying power plants and managing forests, among other things.
The tribes in California are just beginning to see the benefits of the Indian Gaming Regulatory
Act and Proposition 1A. But, already some of them are openly discussing using their growing
wealth to buy a piece of the power distribution to protect themselves from the likes of the
current power crisis in California.
         Oneida Nation Opens its 10th Gas Station. The Oneida Indian Nation has purchased
         its 10th gas station and convenience store. …The Oneida Indian Nation already
         operates two SavOns and a store called the Plaza Mart in the city of Oneida. Both
         stores sell gas at prices about five cents per gallon lower than non-Indian stores. The
         nation also owns stores in Lenox, Sherrill, Verona Beach, Canastota and Verona. Michelle
         Breidenbach, Syracuse Online, 1-8-01

One thing is for certain, you haven’t heard the last of Indian tribes in America, and they aren’t
going to sit down and be quiet. Regardless of how you view American history and the
treatment of the Indians in America, this is the dawn of a new era. Every American is going to
have to learn to understand tribal sovereignty, not just the people interested in casinos. Would
you believe representatives in state legislatures or Olympic teams?
         South Dakota Lawmaker to Propose Adding Tribal Delegates to Legislature. South Dakota legislator Ron Volesky, a
         Democrat from Huron, is studying a plan that would give each of the state’s nine federally recognized tribes a
         non-voting representative in the legislature. ” American Indian Report, Vol. XVII, NO. 1, January 2001, p. 16

         Native American Olympic Team Aims For Inclusion As Sovereign Nation. …Their aspirations are higher: to compete as
         a sovereign nation in the Olympics beginning with the 2004 games in Athens, Greece. Cabazon Circle, Vol. X, Issue 1,
         January 2001, p. 8

         New Mexico’s New Indian Affairs Director Ready for Challenge. Terry Aguilar says his goal as the head of the state’s
         Office of Indian Affairs is to smooth relations between the state and New Mexico’s tribal governments.
         Communication between state and tribal officials is essential if issues such as gambling, taxation, utility
         easements, natural resources and roads are to be resolved. “If the state understands the tribe’s role and the tribe
         understands the state’s role, that is a good start,” said Aguilar, who also serves as governor of San Ildefonso
         Pueblo. Lottery, Pari-Mutuel & Casino Regulation, Vol. 12, No. 1, 1-8-01

And finally, another issue that is not going away any time soon. Las Vegas has always had a close relationship with unions.
The first legitimate source of financing for Las Vegas operators was the Teamster’s Union pension fund. With the loans
came agreements to unionize hotel and other service employees. But one area remains that has not been unionized, the
casino dealers. There have been many attempts; the most recent one beginning with the 21 st century has produced some
union representation of dealers. And, it has produced some pretty strong allegations against the casinos. The rhetoric is
reminiscent of the depression era union organizing campaigns. In this day and age, within the context of publicly traded,
billion-dollar companies, this indicates something, I am just not certain what.

         Union Election: Dealers Vote down Union. A prospective casino dealers’ union was badly beaten this weekend in the
         first round of what’s shaping up to be a 12-round bout. Officials from the Transportation Workers Union of
         America still have at least eight more opportunities to represent Las Vegas casino dealers after being voted down
         Saturday by a 3-to-1 margin by dealers at the Monte Carlo. Las Vegas Review-Journal, Trevor Hayes, 1-15-01
           Unionizing Casinos: Union vote called off at Luxor. The union hoping to represent Las Vegas casino dealers called off
           today’s representation election at the Luxor, citing threats of physical harm and property damage to the dealers at
           the Strip’s pyramid-shaped casino. …Transport Workers Director of Organization Tim Grandfield said some of
           the Luxor’s 393 dealers were threatened physically by the megaresort’s supervisors, and others were told their car
           windows would be smashed if the union won the representation election . Jeff Simpson,, Gaming Wire, Las
           Vegas Review-Journal, 1020-01

With or without the accusations there have been some successes in the recent union campaign. At this point,
the larger companies seem to be more union resistant than the smaller ones. Why one casino voted union and
another did not is not yet clear. We will just have to wait through the summer to see.
           Union Splits in Dealer Elections. The Transport Workers Union scored a second victory in its campaign to organize
           Las Vegas dealers this weekend, when dealers at the Stratosphere hotel-casino voted 116-48 to be represented by
           the union. …So far, dealers at the Tropicana and Stratosphere have voted in favor of organization, while
           dealers at the Monte Carlo, Las Vegas Hilton and MGM Grand have voted against. Once certified, the
           union still must negotiate a collective bargaining agreement with each casino it wins. Four elections are scheduled
           for February – the Riviera on Feb. 8 and 9, Bally’s Las Vegas on Feb. 10, the New York-New York on Feb. 17 and
           the New Frontier on Feb. 23. Elections at the Excalibur and Treasure Island are set for early March. Las Vegas Sun,

But that is just my opinion!

Las Vegas Casinos Bring Back Old Sex Appeal with Ad Campaign. A campaign in 1999 featured
pop-restaurateur Wolfgang Puck serving up lobster, David Cassidy in dancing shoes, and recurrent shots of golf
courses, swimming pools and the massive theme-park hotels that line the Las Vegas Strip. “We were afraid” to
promote sex and gambling, says Bill Hornbuckle, president of MGM Mirage’s MGM Grand casino hotel. “We
all kind of danced around it, talking about our four stars and our five stars.” But these days, plenty of cities offer
haute cuisine, theme parks and even casinos. So starting this week, Las Vegas is hoping to stand out with a
titillating new image that’s more like its old one – naughty, mysterious and very adult. “We’re bringing back the
sex appeal of Las Vegas. That’s part of the sizzle and the sell,” Mr. Hornbuckle says. Christina Binkley, The Wall Street
Journal, MSNBC.COM, 1-2-01

Casino Industry Facing ‘Biloxi Blues.’ The local casino industry faces two years of “Biloxi blues” during which
intense competition and a sagging national economy threaten one or two Coast gambling and lodging
companies, according to a recent report by Deutsche Bank Securities of New York. But the report predicts that
increased airline service, more conventions, a gradually improving business climate and a growing labor force
will eventually help the Coast evolve into a regional tourist resort. …“There’s definitely going to be a cooling
off period for the next two years, where nobody is going to want to move forward with additional hotel
projects,” Deutsche Bank analysts said. “Indeed, we think the next step in new development in the Gulf Coast
will be further expansion of hotel and non-gaming amenities at existing properties. But even this is probably at
least one or two years off.” Dave Palermo, Sun Herald, 1-8-01

Pitino Coming to Discuss UNLV Coaching Job. School’s president, athletic director take control of basketball
talks from boosters. [Right, the school takes over after the ‘big guys’ have done the job. How would you like to compete
against Vegas in recruiting a big name coach?] Former Boston Celtics coach Rick Pitino said Wednesday he will
come to Las Vegas to discuss with UNLV officials the possibility of becoming the university's next men’s
basketball coach. Meanwhile, university officials persuaded Desert Inn owner Steve Wynn and other UNLV
boosters to end their efforts to recruit Pitino for the coaching job, a knowledgeable source said Wednesday.
Steve Carp, Las Vegas Review-Journal, 1-11-01
Estrada Resigns, Ending Philippine Government Crisis.        Manila, Philippines (AP) – the Philippines’ new president sought
to repair the country’s deep division after her predecessor, Joseph Estrada, was swept from office Saturday as
thousands of protesters marched on his palace. …And Estrada’s future remained an open question – with no
word on whether he would leave the country or, if not, face prosecution for the corruption charges that brought
him down. …It was a stunning end to a political crisis that had thrown the country into turmoil for
three months since Estrada was accused of taking millions of dollars in illegal gambling payoffs and
tobacco tax kickbacks. Paul Alexander, Associated Press,, 1-20-01

Quicktakes: In Crime
South Carolina AG Says Internet Gambling Games Illegal.     Columbia, S. C. (AP) – New Internet gambling machines
appearing in some parts of South Carolina are illegal, state Attorney General Charlie Condon said Monday.
Players can put money into the “Touch Easy Keno” machines to log onto the Internet – or to play a game where
a computer picks numbers and winnings are paid back to them. They are not exempt from the law that banned
video gambling in July, Condon said. …
Wallace Cheves, vice president of Greenville-based First Link Inc. that owns the machines, said they were being
tested in Spartanburg, Greenville, Myrtle Beach and Rock Hill. They are no different than grocery store or
fast-food giveaways, he said. “We’re operating a completely legal Internet sweepstakes,” Cheves said. “The
consumer is only allowed to purchase Internet time as they would purchase a Coke or a Mars bar in a
sweepstakes.” Las Vegas Sun, 1-8-01

$30 Million Gambling Operation Broken Up.       New York – Eleven people were arrested and a $30 million-a-year
sports betting operation was shut down after a six-month investigation ended this weekend, Brooklyn District
Attorney’s Office announced Sunday. Authorities began investigating the betting operation in August. On
Saturday, a task force of 75 police officers raided 13 locations in Brooklyn and Staten Island. Associated Press, The
Record, 1-8-01

Former Louisiana Governor Ordered to Report to Federal Prison.                    – After two dozen
                                                                         Baton Rouge, La. (AP)
investigations, two acquittals and one mistrial, former Gov. Edwin Edwards appears headed for a federal
prison. The silver-haired gambler was sentenced Monday to 10 years in prison and fined $250,000 for extorting
payoffs from businessmen applying for riverboat casino licenses. “Let me say to friend and foe alike that this
not over with. It’s been going on for four years, and as they say in the opera, the fat lady has not yet sung,”
Edwards said. Melinda Deslatte, Associated Press, St. Louis Post-Dispatch, 1-9-01

Trial of Magistrate Accused in Video Poker Scheme Begins. Pittsburgh (AP) – A district justice charged with running
an illegal video poker machine operation in a coffee shop went on trial Tuesday. District Justice Donald Amati,
46, of Donora, and his girlfriend, Debra Vlanich, 49, of Monongahela were indicted in April on charges of
gambling, conspiracy and obstructing law enforcement. Las Vegas Sun, 1-9-01

Sports Bar Raided; slots, pool seized. A raid of a local bar during Super Bowl Sunday netted four illegal slot
machines and betting pools for several thousand dollars on the big game. Investigators with the California
Department of Alcoholic Beverage Control seized the slot machines and betting pools at Sportsman’s Bar,
located on Temescal Canyon Road in the unincorporated area of Riverside County south of Corona. According
to state law, the use, display and sale of the machines – except on Indian reservations – is illegal. Having
gambling machines at a bar is also a violation of the terms of a liquor license. C. J. Schexnayder, The Press-Enterprise, Inland
Empire Online, 1-30-01

No Comment:
Casino Denies Report Alleging Financial Woes. The owner of Binion’s Horseshoe Club is denying a report that
the downtown Las Vegas gambling hall is experiencing financial difficulty. A report in the Jan. 3 issue of the Las
Vegas Tribune, citing unmanned sources, said that Binion’s had failed to make a rental payment to its landowner
in more than a year, and owed more than $1 million. The article states that other Horseshoe landlords and the
Fremont Street Experience had also not received payments from Binion’s, “indicating that the casino may be
experiencing cash flow problems.” Las Vegas Sun, 1-19-01

Md. Senate President Calls Legal Gambling ‘Inevitable.’ Maryland’s Senate president yesterday established a
special committee to study gaming, saying it is inevitable as the economy slows and pressure to maintain state
revenue increases that gambling will have to be legalized. Daniel LeDuc, Washington Post, 1-10-01
                                                          And in Australia.
Clocks and Lights for Gaming Venues. Pokie operators will be forced to install clocks on every poker machine
and flood gaming rooms with light in a dramatic State Government reversal. Premier Steve Bracks yesterday
detailed the plan despite a senior minister claiming three weeks ago the reforms weren’t a priority. Thirty
thousand clocks will be installed on machines directly in sight of users. Brighter lighting is intended to counter
the hypnotic effect of the flashing lights of poker machines. Natural lighting to indicate night and day could also
become mandatory. …Under phase two of the government’s gaming strategy, all Victoria’s 30,000 poker
machines will be fitted with clocks from July 1. John Ferguson and Kathleen Cuthbertson, Herald Sun Quadrant, 1-31-01

Each of the following articles is a direct quote from the publication as cited. The articles in the original publications vary in length and
detail, but are always more detailed than as presented in this report. The original article should be consulted any time the issue is of
importance to you.

American Indian Report
South Dakota Lawmaker to Propose Adding Tribal Delegates to Legislature. South Dakota legislator Ron Volesky,
a Democrat from Huron, is studying a plan that would give each of the state’s nine federally recognized tribes a
non-voting representative in the legislature. Volesky, who moves to the Senate side of the legislature this
month, is gathering information on a similar law in Maine and a bill in Wisconsin to determine how to frame the
bill he will introduce in the next session. “I think this would be a positive action for the legislature and would be
good for state-tribal relations,” Volesky said. “It would offer the opportunity for both sides to understand how
they feel about each other’s issues. The legislature will have an opportunity to understand how the issues impact
reservation life and how to best address them for all of South Dakota – Indian and non-Indian.” Vol. XVII, NO. 1,
January 2001, p. 16

Pentagon Concedes on Tax Withholding Issue; Enlisted Indians Must Apply to States for Refund. The Defense
Department has agreed to stop improperly withholding state income taxes from certain Native Americans who
serve in the military. …“This decision redresses a decade of old wrongs and returns to thousands of Indians in
the military money to which they are entitled,” Rep. George Miller, D-Calif., said. “The Administration’s
decision is also an important recognition of the sovereign rights of Indian Tribes in our country.” Vol. XVII, No. 1,
January 2001, p. 11

Amusement Business
The End of College Basketball? Is betting on NCAA Basketball a Mute Issue? SFX and the NBA are close to
finalizing deals with eight cities in the Southeast for the new NBDL (NBA Developmental League). The deal
with Crown Coliseum, Fayetteville, N. C., may include SFX management of the facility. Details are still being
negotiated. Vol. 112, No. 51, 12-25-00, p. 1

Gerald Celente: Trend spotter says people want to get out of the house and spend money. Gerald Celente founded the
Trends Research Institute in Rhinebeck, N. Y., in 1980 and won acclaim seven years later when he predicted the
stock market crash of 1987. He also forecast the advent of “green marketing” and the boom in gourmet
coffees. For the 21st century, he predicts people will work closer to home or even in the home, and therefore
want to get out more and spend their hard-earned dollars on amusement. …Celente definitely has opinions
about popular culture – people want it and the industry has not been doing a very good job of providing high
quality entertainment, he said.
AB: How will fewer and fewer companies owning entertainment venues affect customers?
Celente: I’ll give you an example. With less competition, you lower the quality of the product and they’ll force
feed you what they have. So, with less diversity and less choice, it will be kind of like having a two-party political
system and getting the lesser of two evils to vote for. That’s what’s going to happen as the entertainment
industry becomes more and more consolidated. There will be less choice and more pushing of their products
on the consumer marketplace. Mary Wade Burnside, Vol. 113, No. 1, 1-8-01

Lights Out. Rising energy costs are jolting the live entertainment industry. …Heating bills for the month of
December have been as much as five times higher than the norm.         Don Muret, Vol. 113, No. 4, 1-29-01, p. 20

Arizona Daily Star
Hull Seeks to Stem Slot-Style Games. ‘Loopholes’ could spread gambling. Phoenix – Gov. Jane Hull wants to
tighten state laws on charity fund raising in an effort to keep slot machines from spreading beyond the state’s
Indian reservations. The governor said yesterday that there are “loopholes” in Arizona laws that might allow
private companies, working with charities, to set up slot machines everywhere from racetracks to grocery stores.
She said it has happened elsewhere. “We’re concerned they’re going to be all over the state like they are in
Ohio,” Hull said. Howard Fischer, 1-9-01

Atlantic City Insider
You Can’t Have It Today, Come Back Tomorrow. “The more things change, the more they remain the same,”
goes the old adage. Atlantic City’s casinos made a number of changes to their slot clubs this past year, often
eliminating positive, distinguishing features. As a result, the city’s slot clubs are more alike now than ever
before. …On the cashback scoreboard, both Trump Plaza and the Atlantic City Hilton switched to the
bounce-back cashback this year. The current score is eight to four, bounce-back versus same-day cashback.
How can Atlantic City ever become a gaming destination like Las Vegas without same-day cashback? You can
bet the Borgata will have it. …The Emperors Club [Caesars] still pays same-day cashback and comp totals
increase as you play, right on the card reader display. Plus, you can comp yourself from any slot machine and
your comp dollars remain in your account until you use them or there’s no play on your account for six months.
…Once again, the Emperors Club is the best slot club in Atlantic City, due to its combination of same-day
cashback, a simple comp formula, positive feedback that your play is being recorded, and self-comping from
any machine. Vol. 5, No. 5, January 2001

Cabazon Circle
Law Enforcement Summit Opens Channels of Communication. The Tribal and State Law Enforcement Summit
2000 in Rancho Mirage, Calif., (Nov. 27-29) brought tribal and non-tribal law enforcement stakeholders to the
table for a dialogue on public safety issues. Fifty-five California tribes and 21 county sheriffs registered for the
summit, a clear indication of the importance of this subject. Also attending were representatives from
California police departments and district attorneys’ offices, as well as tribal representatives from other states.
…the challenges for non-tribal law enforcement: understand the law as it relates to California Indian tribes,
implement the law and understand the spirit of the law. Sally Palmer, Vol. X, Issue 1, January 2001, p. 1, 3-4

Native American Olympic Team Aims For Inclusion As Sovereign Nation. The University of California-Riverside
opened its basketball season Nov. 10 with an exhibition game against the Native American Olympic Team.
Although the Native American team lost the UCR game 106-90, their aspirations are higher: to compete as a
sovereign nation in the Olympics beginning with the 2004 games in Athens, Greece. Previous efforts by
indigenous groups have been denied by the International Olympic Committee, most recently by the Catalan
region of Spain. Vol. X, Issue 1, January 2001, p. 8
Casino Crime Digest
Trend Toward Violence Seen in Vegas Casino Heists. Since September 1998, robbers have staged a string of bold
casino heists at the Treasure Island, Bellagio, New York-New York, Mandalay Bay, Desert Inn and MGM
Grand hotels. With millions of dollars in surveillance cameras and a small army of security guards, who dares
rob a casino? Las Vegas Lt. John Alamshaw told the Associated Press it takes a combination of violence and
arrogance. “It probably started happening eight or nine years ago,” he said. “Robbers have become more
blatant, people more violent. Takeover-style robberies have become popular; they started in the banks and
went to different businesses. It’s just a popular style. It’s nothing new. It’s not just here, it’s happening all
over.” Vol. 7, No. 1, January 2001, p. 1-2

Seminole Tribe Fined $3 Million by NIGC. The National Indian Gaming Commission (NIGC) has fined the
Seminole Tribe of Florida $3 million for failing to obtain regulatory approval for its management contract at its
Immokalee casino, the St. Petersburg Times reported. The NIGC, the federal agency that oversees all Indian
gambling activities in the country, also ordered the former Immokalee management company, Pan American &
Associates, to repay the tribe $2 million of income it earned at the Immokalee facility from 1994 to 1999. Vol. 7,
No. 1, January 2001, p. 2-3

Casino Executive
Safety First: Recent events are making casino security a hot-button issue. Casino patrons deserve safety but demand
security, and operators must take heed because a perceived risk of crime – whether or not it is borne out in fact
– can keep visitors at home. With two recent shootings on the floors of casinos and a spate of high-profile cage
robberies, Las Vegas offers a glimpse at how the community works to combat crime and convince travelers
they’re secure. “Travel safety is essential for a destination to retain its attractiveness,” says Don Ahl, director of
tourism and safety for the Las Vegas Convention and Visitors Authority. With problems abroad regularly
making headlines, security is on the minds of travelers, Ahl says. …Because there is gambling in Las Vegas, Ahl
says, there are bigger internal security staffs and those staffs are in regular communication with one another –
through the Las Vegas Security Chiefs Association – and the Las Vegas Metropolitan Police Department. The
inter-agency cooperation is the biggest change in casino security in Las Vegas, adds John Horton, Stardust
security chief. Trevor Hayes, Vol. 7, No. 1, January 2001, p. 13-15
                                             Other Articles of Interest
Gaming Gains with Gridlock. Congress’ proposed NCAA betting ban is seen as the sole major federal gaming
initiative for 2001. November’s election produced little change in Congress, essentially freezing in place
gaming’s legislative outlook. Nevada sports books probably will be banned from taking bets on college games,
but other major federal action appears unlikely in the face of the near-even partisan split. Tony Batt, Vol. 7, No. 1,
January 2001, p. 16-18

The Supreme Political Education. The election may be over, but here’s how to do it right next time. …Never
underestimate the importance and impact of local politics. …You need to spend as much time as possible
learning what these smiling, handshaking folks have supported and what they have opposed, as it relates to the
“entertainment” industry. Jani Cummings, Vol. 7, No. 1, January 2001, p. 27

Casino Journal
The Talented Mr. Lanni. Casino Journal presents its 2001 Lifetime Achievement Award to MGM Mirage
Chairman J. Terrence Lanni, the man who has become known as ‘the face of the gaming industry.’ MGM
Mirage Chairman Terry Lanni likened his mammoth casino business to a ranch with no fences while talking
with Casino Journal Editor Jamie McKee for this story. That attitude may be one of the reasons Lanni has been
chosen time and again to lead the troops of the most prestigious gaming companies in the industry. His
interests, professional and personal, show how he has learned to smoothly balance multiple ideas and
endeavors, for his company’s plans to develop an underserved hotel-casino market in Las Vegas to his passion
for the Internet as a resource for all kinds of business. …”My view is very simple. It’s that the Internet is the
equivalent in this century of what the industrial revolution was to the last century. It’s going to come in every
form of our lives; it’s going to affect every aspect of our lives just as the combustion engine and the industrial
revolution did…America, I think, will understand that it cannot enforce it [a ban on Internet gambling]…it will
be like the Volstead Act [enforcing prohibition]. They tried it because it made people feel good. But it didn’t
block liquor.” Vol. 14, No. 1, January 2001, p. 43-50
                                                             Other Articles of Interest
What Does the Future Hold for Gaming’s Mecca? For years, analysts have warned of a slowdown on the Las Vegas
Strip, but operators say they have high hopes for 2001 and beyond.                                Andy Holtman, Vol. 14, No. 1, January 2001, p.53-56

From Glory to Grind. A roundup look at Australia’s casinos shows all 13 faring well, often seeking more high
rollers, more Internet play and lower taxes.                    Judi Kelly, Vol. 14, No. 1, January 2001, p. 59-62

Fully Taxed. Trying to balance the need for increased revenue with sound businesses, states examine how they
tax casinos.         Janet Plume, Vol. 14, No. 1, January 2001, p. 65-68

Gaming Industry Weekly Report
In our last issue of 2000, we discussed the state of the economy and the action of the Federal Reserve Board.
With that last issue and our Gaming Sector… Yesterday, Today and Tomorrow report, we painted a picture of
the gaming industry that hinged more on the economy than many on Wall Street were predicting. …we felt that
the Federal Reserve Board had made a serious error in not cutting interest rates at the end of the year and that
with the further destruction of the Nasdaq Index, the Fed would have to immediately cut interest rates by ½ of
a point in early January. This was the only way that we felt the Fed could hold off a serious recession, which in
turn would negatively affect the casino industry. …So while the Fed did what we predicted, we are not ready to
tell you that you should throw caution to the wind. We think that the Fed has taken the first step to saving the
economy and the stock market but it may be a rocky 3 to 6 months before the happy days will be here again. Vol.
9, Issue 2, 1-8-01

Mother Nature Slams Casino Earnings. The headlines of two CIBC World Markets’ reports on gaming stocks
said it all for casino stock investors this past week. The first was “Old Man Winter Awakens From His
Slumber” and the second one was in the Isle of Capri report and it read, “Only 72 Days Until The First Day Of
Spring.” Dow Jones Newswire put out a report titled, “Bad Winter Hurts Casinos’ 4Q Results.” All of these
reports were predicted by a string of earnings warnings from so-called diversified, emerging market casino
companies. While every company mostly blamed weather in the midwest, south and east, CIBC World Markets
said that they are not entirely convinced that these earnings reports are primarily weather related. In other
words, they think that the weather is a good excuse but it may be a combination of the bad weather and a
slowdown in the economy. …As we said last week, we believe it may take 6 months for the Fed’s aggressive
interest rate cut and possible further cuts to filter into the economy. Vol. 9, Issue 3, 1-15-01

Aristocrat to Buy Casino Data Systems. Ever since it was announced that Aristocrat Leisure was filing their
application for licensing in Nevada, we have predicted that the Australian slot machine giant would make an
acquisition of a U. S. slot maker. For the last 12 months, we have predicted that this action, when finally taken,
would kick off widespread consolidation in the supplier side of the gaming industry. …This consolidation
would be necessary because there are just too many suppliers out there and not all of them are equipped to
compete. Our reason for the prediction on an Aristocrat deal was pretty simple. Aristocrat needed a company
that already had a foothold in the Nevada market and also the new California market and most importantly,
needed a wide-area progressive system to be able to put pressure on IGT. Vol. 9, Issue 4, 1-22-01

Not in Favor of Gaming in Mexico. Those who are still pinning their hopes on casinos being legalized in Mexico
probably are not feeling very friendly towards the tourism minister. Leticia Navarro, the Mexican Tourism
Minister, told the media that the nation’s congress has the responsibility of deciding whether to legalize casinos
but the view of the Tourism Ministry is that casinos and gaming should not be seen as the salvation of the
tourism industry in the country. She said casinos and gaming do not have the potential to become a
fundamental element of tourism in the country. Vol. 9, Issue 5, 1-29-01

Gaming Update Colorado Division of Gaming
Reduced Taxes, Greater Efficiency and Collaboration, a Successful Combination. …In the year 2000, the Gaming
Commission considered testimony and decided to maintain the tax structure adopted the previous year. This
structure, which incorporates a lowered tax rate for small and medium casinos, still resulted in record AGP for
the industry and record receipts for the state. The Division advocated reduced individual license fees, and the
Commission concurred. The result was a significant decrease in the fees charged for new and renewal support
applicants, which came about from efficiencies achieved by the Division staff through new processes. One of
the innovations we are most proud of is the licensing/imaging system developed and installed in 1999 but
recognized this past year. Winning the Governor’s Productivity Award honored Division staff who conceived,
implemented and operate this system. We worked collaboratively with the gaming industry, including the
promulgation and adoption of regulations that allow for new technology to be brought onto the gaming floor.
In the year ahead we look for further advances in technology. We continually look for ways to make it easier for
the industry to communicate with us and to ease regulatory burdens. As always, we strive for reasonable
regulation and enforcement of the gaming laws, rules and regulations. Tom Kitts, Vol. X., Issue 1, January 2001

Indian Country Today
The tribe was once among the poorest communities in Michigan. Seven Upper Peninsula counties are $2 million richer
this fiscal year, thanks to gambling revenues distributed by the Sault Ste. Marie Tribe of Chippewa Indians of
Michigan. The payments benefit the economy, support schools and pay for other civic endeavors, Tribal
Chairman Bernard Bouschor said. Under a 1993 gaming agreement with the state, the tribe earmarks 2 percent
of its net income from slot machines to pay local property taxes and fund community projects. …The tribe was
once among the poorest communities in Michigan. It now owns Kewadin Casino properties in Sault Ste. Marie,
Hessel, Manistique, Christmas, St. Ignace and Detroit and is the region’s largest employer with a workforce of
more than 4,000 employees. 1-9-01

International Casino Surveillance Network
$30,000 a Month for a Restaurant Cashier. A Zone 1 casino has reported a food outlet (buffet) embezzlement,
by the cashier, of a rather unique nature. …The cashier would collect the appropriate fixed amount from a
patron and issue a cash register receipt. However, the next patron would pay for their meal and the cashier
would print a duplicate cash register receipt from the previous patron. …When detained, the cashier admitted
to taking approximately $1,000 a day for the past two months. …It should be noted that the system was capable
of issuing a report showing the number of duplicate receipts printed for any given time period, however, the
property computer personnel who set up the program felt this feature was unnecessary and it was not utilized.

International Gaming & Wagering Business
Down to the Wire. After a slow start, European sports betting shops are finally going online. Technology and
sports betting are combining forces in Europe with unusual speed. The companies that long dominated the
betting shop business in the United Kingdom have finally joined the young Internet competitors online, and
both groups are moving into other areas of interactive wagering – interactive television and mobile phone. In
recent months, announcements about new Internet sports betting sites, Internet casinos, high-tech
collaborations between betting firms and cable TV and telecommunications giants, tax-driven relocations and
cross-border alliances to market betting services have become commonplace in an industry that had not
previously been know for innovation. ...One reason that most bookmakers waited so long to go online was fear
that their Internet business would cannibalize the traffic at their walk-in-betting shops, which is called the High
Street market. It turns out, however, that there is little overlap between these two business segments.       Fred Faust,
Vol. 22, No. 1, January 2001, p. 1, 18-20

                                              Other Articles of Interest
2001May See Fewer Mergers. The turn of the century may also have marked a turn of the tide of consolidation
in the gaming industry – at least for now. That’s the take of several gaming industry analysts. “I think the
industry will continue to consolidate, but most of the big obvious deals have occurred,” said Jason Ader,
managing director of Bear, Stearns & Co. …“The real question is when will the big companies come together
to create the mega-gaming companies, the $10 billion and up companies,” Ader said. “And at some point that
will happen. But I don’t think it will happen for a few more years.” Today, a few smaller targets remain, Ader
said. He cited Aztar, Argosy, Isle of Capri and WMS Gaming as companies that could be acquired. …“There
is potential for more [consolidation] given the lack of growth opportunities left in the gaming industry,” Ader
said. And, he said, the larger companies will continue being the ones doing the acquiring. Marian Green, Vol. 22, No.
1, January 2001, p. 10

Missouri Mudslinging. The Show Me State just might be the toughest jurisdiction for casino operators. Station
Casinos’ well-documented feud with the Missouri Gaming Commission and the company’s decision to
abandon the state has many in the gaming industry questioning the cost of doing business in Missouri. …I.
Nelson Rose, a gaming law professor at the Whittier Law School in California, offered an explanation for the
disparity in the enforcement of regulations among the jurisdictions: “What happens, normally, with any
regulatory system is it starts out strict and the regulators show how tough they are in keeping the industry clean.
Then, after a few years – and it doesn’t matter what the industry is, the airline industry is the same – the
regulators start becoming, in the most extreme examples, what in the law are called ‘captive regulators.’ It
doesn’t mean they’re corrupt, it simply means that, basically, the only people the regulators talk to are in the
regulated industry so they get to be friendly and to understand the business more. Rex Buntain, Vol. 22, No. 1, January
2001, p. 15, 22-25

The Journal Creates a Stir. Factory worker Michael Brown had 12 free beers while gambling at Fitzgeralds
Casino in Tunica County, Miss….he was found dead…crashed car….players-club card…in pocket, wrote the
Wall Street Journal. …Casino gambling today is a highly regulated privileged industry striving for political and
public acceptance. So when the Wall Street Journal, in October published an article critical of the industry’s
practice of giving away free alcohol to gamblers, it stung those responsible for protecting its image. …“I don’t
want to overreact to an article,” Bourland [Andrew Bourland, executive director of the Mississippi Gaming
Association] said. Dave Palermo, Vol. 22, No. 1, January 2001, p. 27

Las Vegas Review-Journal
The Strip: Developers Plan New Megaresort. A Las Vegas company has announced plans to build a south Strip
megaresort that may include a 40-story tower on 77 acres, across from Mandalay Bay. Land developers Howard
Bulloch and David Gaffin are key players in New World LLC, which has scheduled a news conference for
Thursday morning to release details of the project. Kevin Ferguson and Jeff Simpson, Gaming Wire, 1-3-01

Gambling’s Value under Scrutiny. Casino closures leave Colorado mining town no better off than it was before
legal betting. Central City, Colo. – After a decade of limited-stakes gaming, some residents now concede that
the historic mining town is in no better shape than before the pastime was made legal. “Gaming didn’t turn out
to be what we expected,” said Ann Dodson, whose family owns three casinos on Main Street. “To a certain extent,
it turned out to be nothing more than a real estate scam.” Of the 39 casinos that have opened here in the past 10 years,
32 are gone and two more are likely to close this month. Associated Press, 1-3-01

Tight Markets Make Casino Building Harder. Developers scrambling to find financing for proposed projects.
When market conditions make it difficult for Desert Inn owner Steve Wynn to raise financing to construct a
megaresort, it doesn’t bode well for casino-building newcomers, industry observers agree. …Financial analysts
say the current turmoil in the financial markets has made investors reluctant to put money into Las Vegas casino
project. …“There’re too many projects out there chasing money,” Ader said. [Jason Ader, gaming analysts for
Bear Sterns & Co.] Kevin Ferguson, 1-10-01

Ensign Fears Bet Ban’s Adoption. Sen. John Ensign, R-Nev. said Thursday he fears a full vote of the House and
Senate will lead to the adoption of a ban against college sports betting at Nevada’s casino. The reason: There’s
little opposition to the proposal outside of Nevada’s congressional delegation. Kevin Ferguson, 1-12-01

Atlantic City’s Megabucks Machines Hanging On. Atlantic City casinos are seemingly desperate to give away a
$6.4 million slot-machine jackpot. They voted one year ago to pull the plug on Megabucks, a citywide
progressive-jackpot system that boasts the biggest price [casino hold percentage] in casino gambling, as soon as
a lucky gambler hits the final jackpot. …There are only 38 Megabucks units left in Atlantic City, down from a
high of 250 in 1995. Joe Weinert, 1-12-01

Las Vegas Sun
Casinos Execs Decry NCAA’s Ads on Gambling. Millions of Americans watching college bowl games on
television are also seeing messages from student-athletes denouncing wagering on collegiate sporting events.
…NCAA officials say their message was aimed at all gamblers, from college campuses to Las Vegas sports book
customers. “The basic message is ‘Don’t waste your hard earned money betting on kids,’” NCAA
spokeswoman Jane Jankowski. David Strow, 1-3-01

Nevada Ruling Limits Promotional Internet Gaming. Nevada casinos cannot offer free gambling over the Internet
if the player receives a prize based on the outcome of a game, even if the player did not wager any money, an
Attorney General’s opinion says. Cy Ryan, 1-3-01

Prizes No Longer Offered on Website, Company Says. Park Place Entertainment Corp. said Wednesday it no
longer offers prizes to players on its “for-fun” Internet video poker site. The company offers a non-cash video
poker game through its Flamingo Las Vegas website. When the game launched in August, Park Place offered
such prizes as discounted rooms or free meals to top scorers, but these prizes were discontinued in
mid-November, officials said. The website was updated Wednesday afternoon to reflect this change. 1-4-01

Tight Budget Could Give Boost to Chances for Dockside Gambling.                   – The casino industry in Indiana
                                                                  Indianapolis (AP)
is preparing to make a big push this year for legalizing dockside gambling, something it says is needed to keep
the state’s riverboat casinos competitive. But if such an initiative is to succeed in the legislative session that
begins Monday, it seems likely that casinos will have to pony up more tax revenue to the state. 1-4-01

London Theme Promoted for Strip Land. The owners of 77 acres of land on the south end of the Strip near
Mandalay Bay said today they are considering a London-themed hotel-casino project at the site. New World
LLC officials have said they hope to develop up to three hotel-casinos at the site, located on the east side of the
Strip across from Mandalay Bay. 1-10-01
                   Does anyone remember the Bobby Kennedy Attorney General era?
Casinos Leery of Ashcroft Selection.Las Vegas (AP) – An anti-gambling speech made by Attorney General-nominee
John Ashcroft at a conference in Mississippi has the casino industry watching his confirmation hearings closely.
Ashcroft, a conservative Republican with ties to the religious right, called gambling a “cancer on the soul of our
nation” during a February 1998 speech to the Southern Republican Leadership Conference in Biloxi (MS).
Several months later in St. Louis, Ashcroft delivered another blistering attack on the industry at the convention
of the National Coalition Against Legalized Gambling, headed by the Rev. Tom Grey, one of gambling’s
fiercest enemies. 1-11-01

Rio Workers Choose Union Representation. After months of legal battles, the Rio Suites hotel-casino became a
union property Wednesday, when the Culinary Union and Harrah’s Entertainment Inc. announced the Culinary
has triumphed in a card count at the property. …With the card count complete, the Culinary becomes the
collective bargaining representative of about 2,400 Rio employees, including bartenders, food employees,
cocktail servers, change attendants, door persons, baggage handlers, wine stewards, housekeepers and suite
attendants. The two sides will immediately begin contract negotiations. 1-11-01

City, Governor Ready for Concessions, but is the Legislature? New Orleans (AP) – the state Senate appeared to be
the only roadblock to the survival of New Orleans financially troubled casino Friday after casino supporters got
good news from the governor, the mayor and the casino’s creditors. Mayor Marc Morial and Gov. Mike Foster
said they are prepared to make financial concessions to keep the Harrah’s New Orleans Casino alive. And the
casino owner, JCC Holding Co., announced it has reached a restructuring agreement that will wipe out much of
its half billion dollar debt. But a tax cut deemed crucial to the casino’s survival still faces rough going in the
Legislature, particularly in the house. 1.13-01

Lottery, Pari-Mutuel & Casino Regulation
Harrah’s New Orleans Casino Can’t Make Profit?; Louisiana Governor Doesn’t Care. The owner of the
long-troubled Harrah’s New Orleans Casino cannot make a profit even if the Legislature cuts the $100 million
tax to $60 million, Legislative Auditor Dan Kyle says. Louisiana Gov. Mike Foster said he does not care if the
casino cannot make it over the long haul. He only wants about four years of a lower tax guaranteed. After that,
the casino can fold. Vol. 12, No. 1, 1-8-01

Pennsylvania High Court Says Video Poker Can Be Prosecuted. The Pennsylvania Supreme Court has reversed a
ruling that made authorities reluctant to prosecute video poker cases, apparently reviving a 10-year-old
investigation of a family-owned company. The Supreme Court opinion overturns a 1998 Superior Court ruling
that said it was unconstitutional for state authorities to prosecute George and John Kratsas and Amusement
Supply Co. because municipal governments issue licenses and collect fees on the machines. Following the
Superior Court ruling, some prosecutors said they were reluctant to charge video poker operators, because they
felt it barred prosecution if local officials knew they were licensing machines that would be used illegally. …The
Supreme Court said that doesn’t matter because people in the gaming industry should know that video poker
gambling is illegal – even if the conduct of local officials flies in the face of the law. Vol. 12, No. 2, 1-15-01

New Jersey Racing Commission Poised to Clamp Down on Telephone Betting. The New Jersey Racing Commission,
which has already warned Internet gambling sites to quit taking horse racing bets from New Jersey, is now
poised to tell telephone betting services the same thing. The commission plans to send letters by the end of the
week advising out-of-state race tracks and other providers of telephone betting to “cease and desist,” executive
director Frank Zanzuccki said Tuesday. Vol. 12, No. 3, 1-22-01

Michigan Gaming Law Newsletter
State Releases Detroit Casino Numbers for December. Yesterday, the Michigan Gaming Control Board (the
“Board”) released December 2000 revenue figures of MotorCity Casino, MGM Grand Detroit Casino and
Greektown Casino. Future monthly revenue figures will be released following month end. This is authorized
by the enactment of Senate Bill 892, Public Act 308 of 2000. MGM Grand $29,304,545; MotorCity
$22,758,778; Greektown $17,014,267. 1-11-01

National Gaming Summary
Economy Leaves Analysts Wary of Vegas Casino Stocks. Even fourth-quarter earnings may be down as holidays
end. The holidays are over in Las Vegas, which bothers some gaming stock analysts. In fact, they worry there
won't be much to celebrate about local casino companies all year long. …At Lehman brothers, which just
resumed gaming-industry coverage, analyst Joyce Minor says, “Las Vegas is more likely to be impacted by a
softer economic climate than regional drive-to gaming markets.” 1-2-01
Park Place Gets DOE Nod for Claridge Takeover. According to a recent judgement by the Division of Gaming
Enforcement, Park Place Entertainment should be allowed to expand its Atlantic City gaming empire to the
Claridge casino-hotel, which is currently operating under Chapter 11 bankruptcy protection. Both Park Place
and corporate raider Carl Icahn have submitted plans to take over the struggling Boardwalk property, but
bondholders say they'd rather go with Park Place's cash offer than Icahn's stock offer. 1-2-01

New Year Comes, Old Fears Remain. It wasn’t just Californian Karen Beverly who was happy to be in a Nevada
casino on New Year’s Eve. At the Edgewater Casino in Laughlin, she snagged a $6.7 million MegaJackpot on a
Wheel of Fortune slot machine after feeding it just $52. Meanwhile, about 100 miles north, a $500,000
investment in a megafireworks display by the Las Vegas Convention and Visitors Authority left a throng
estimated at 350,000 cheering and satisfied on the Strip – unlike last year, when 100,000 fewer showed up,
disaffected by Y2K computer-glitch concerns and early price gouging on hotel rooms. This year, the 250,000
“staying” visitors put occupancy at 91 percent for the weekend, according to early estimates. …Seeking
close-to-home players may make sense for many casinos, in Las Vegas or not, in the slowing national economy.
Last week, the Wall Street Journal predicted that “the party is over and the hangover is about to begin.” 1-8-01

Flooding Could Damage Proposed Casino Developments. According to officials from San Diego County, an area
along the San Luis Rey River slated for casino development by several North County Indian tribes could be
drastically affected during a catastrophic flood. According to officials for San Diego County, casinos being built
on the Pala and Rincon reservations along the river could also alter the natural floodway of the river, which
could threaten protected areas downstream. Despite the county’s concern, it doesn’t have an easy way of
remedying the situation, as it doesn’t have authority over the tribes building in the area. 1-15-01, p. 5

California’s Power Crisis May Have Spreading Effect. With California’s warm persona currently overshadowed by
power struggles relating to consumption and price, casinos in the golden State may soon find themselves
grasping to find the light at the end of the tunnel. At the same time, casino operators in nearby Nevada are
bracing for the possible border-crossing ramifications of the ongoing power problems in California. In terms of
magnitude, a single blackout last year in the San Francisco Bay area that lasted only several hours actually
resulted in a small but measurable dip in the Gross National Product. Such is the dominance that the 8th largest
economy in the world has – and how vital its power is. 1-29-01

Native American Law Digest
Sovereign Immunity
Joe Doe v. Oneida Indian Nation
2000 N. Y. App. Div. LEXIS 12740 (Supreme Ct. N.Y. December 7, 2000)
Summary: Plaintiff’s action against the Oneida Indian Nation of New York (Tribe) for alleged injuries he
sustained while a guest at the Tribe’s hotel was properly dismissed for lack of subject matter jurisdiction because
the Tribe has sovereign immunity from suit. Vol. 11, No. 1, January 2001

Nevada Business
Taxing the Internet. Chairman of the Assembly Taxation Committee, David Goldwater, plans to introduce
legislation he hopes will add a virtual toll road down the Information Superhighway to eventually help Nevada
collect legitimate sales taxes generated by those in the e-commerce business. Nevada Taxpayers Association
President Carole Vilardo believes Nevada has a compelling interest in finding equitable ways to put e-commerce
companies with a physical presence in the state, “on an equal footing with Main Street retailers who pay their
fair share.” Goldwater acknowledges that collectible tax revenues are still a few years down the Information
Superhighway, but believes Nevada must begin addressing several critical issues – such as “sourcing, tax rates,
exemption administration and how technology will be incorporated into the new sales tax system.” Vol. 16, No. 1,
January 2001, p. 19
Nevada Gaming Newsletter
October Was a Weak Month in Nevada. Clark County gaming revenue grew 4.1% in October. Slots gained 9.6%
and games were up 6.7%. …The Strip was up 3.0% for the month; Downtown Las Vegas fell 0.4%, Laughlin
declined 3.3% and Boulder Strip was up 15.7%. …Washoe County’s revenues fell 4.5% in October, with Reno
down 4.4%, Sparks up 2.0%, and North Lake Tahoe off 13.8%. Vol. 15, No. 1, January 2001

Nevada’s Washington Watch
Congress Should Look at Industry’s Benefits before Penning Gaming Legislation. A few decades ago, a well-meaning
Congress passed a “luxury” tax on certain high-end items such as private aircraft. The thinking was that the
surtax would help offset budget deficits – remember them? – by collecting money from those best able to afford
it – the rich. But the law of unintended consequences came into play. The rich stopped buying private planes,
aircraft manufacturers laid off tens of thousands of wage-earning, tax-paying workers, and an embarrassed
Congress said, “Oops!” As the 107th Congress gathers in Washington, its members will consider a host of
legislative initiatives. Some of the initiatives may sound good especially those based on myths or
misperceptions about an issue or an industry. But many proposed laws will contain hidden “Oops!” factors.
…We believe if legislators are fully aware of the widespread public acceptance of, and positive contributions
made by the gaming industry, they will be far less inclined to pass punitive laws that may well contain hidden
consequences. Groucho Marx once said, “Politics is the art of looking for trouble, finding it, misdiagnosing it,
and then misapplying the wrong remedies.” As a gaming industry leader, Harrah’s Entertainment hopes the
new Congress will prove Groucho wrong. Jan Jones, Vice President Harrah’s Entertainment, Vol. 7, Issue 56, January 2001, p. 6
         Coverage of Nevada’s Washington Watch is new to the Adams Report. Based in Washington D. C., Nevada’s Washington Watch covers
         issues important to Nevadans and anyone else interested in those issues. The articles contain both a Washington and a Nevada perspective.
         To subscribe call Marilee Joyce at 202-434-8245

Observer: Michael Pollock’s Gaming Industry Observer
Showboat Must Meet Newer Demands Without Alienating Older Players. The Atlantic City Showboat, which
adopted the theme song “You Make Me Feel So Young,” has been feeling a bit older of late. Showboat, whose
core demographic shows somewhat older than the average visitor in Atlantic City, learned long ago how to
succeed in a rather tough market: It positioned itself as the capitol of quarter slot play. Its median player was a
female in her late 50s to early 60s, semi-retired, with both disposable income and time on her hands. Her games
of choice tended to be reel slot machines, with a single line. The problem for Showboat, reflected in declining
market share in recent quarters, is that the market was changing, along with the technology, but the customer
wasn’t. So, while Showboat continued to focus on quarter slot play, the Atlantic City market was moving away
from denomination-based play. The growth in slot play can be summed up in two key words: nickels and
multi-line. …The challenge for Showboat now is to hold onto that core customer who is comfortable at her
favorite machine at her favorite casino, while increasing market share among a different breed of customer who
represents the future of gaming. Since Showboat will soon demolish its once-famed but sorely underused
bowling alley, let us offer one last kegler analogy: Achieving those dual goals would be the equivalent of hitting
a 7-10 split. Vol. 6, No. 1, 1-1-01, p. 1, 6-7

Find Optimal Number of Hotel Rooms. Atlantic City is “under-roomed.” That is the conventional wisdom
within the gaming industry and on Wall Street. Linear regression analyses have long indicated a strong
relationship between rooms and profitability. Additionally, Atlantic City is filled with both occupied room
nights and anecdotal evidence about the huge, pent-up demand for even more room nights. So, logic would
seem to dictate that casino operators should build on that conventional wisdom by constructing more and more
hotel rooms. Perhaps so. But be forewarned: Building on conventional wisdom is a lot like building on wet
sand. You need to be significantly more cautious. …The analysis focuses on recent historic trends in Atlantic
City, but the same principles and findings would clearly be valuable to managers in any gaming market.
Morowitz, a strategic partner in Gaming Industry Observer, analyzed four years of data and plotted the number
of rooms by property against earnings by property. The results indicate, among other things, that profitability
tends to peak at about 1,200. …“My whole premise is that the market in Atlantic City for profitable customers
is limited,” Morowitz said. “You won’t drive reasonable returns on invested capital unless you expand that
market.” Vol. 6, No. 2, 1-29-01, p. 1, 3, 6

Press of Atlantic City
Holiday Snow Costs Casinos Big December.Atlantic City – What the calendar gave local casinos, Old Man Winter
took away. Last week’s snowstorm spoiled the extra, three-day New Year’s weekend, leading to a 1.7-percent
decline in December gross gaming revenue for the industry. Joe Weinert, 1-3-01

Trump Buys Shares of His Gaming Company. Donald Trump took advantage of near-historic lows in his gaming
company’s stock, buying 50,000 shares of Trump Hotels & Casino Resorts Inc. Trump, who is chairman and
CEO of the company, paid between $1.92 and $1.98 per share on Dec. 28 and 29. Trump Hotels’ stock price hit
an all-time low of $1.75 that week. Joe Weinert, 1-13-01

Bill Would Let A. C. Casinos Offer Net Bets. Two state assemblymen, trying to put New Jersey at the forefront
of Internet gambling in the United States, have introduced a bill that would allow Atlantic City casinos to open
online slot machines and table games. Entering waters that are legally murky at the federal level…they want to
take an activity that’s essentially banned from the United States and make it “safe, legal and legitimate.” “Right
now Internet gambling is sort of the wild, wild West. No regulations, no rules. It can do whatever it wants.” Joe
Weinert, 1-20-01

Ray Koon’s Gaming/Gram
New Board Member. Scott Scherer, who will replace DuCharme as a Board member, attended the Commission
meeting as an observer, after spending time earlier in the week at the Board offices in Carson City, where he will
be based. Scherer served three years as a deputy attorney general in the gaming division, two two-year terms as
a state assemblyman, worked for seven years as general counsel with a major gaming licensee, and since January
1999, served as Governor Kenny Guinn’s chief legal advisor, and later as chief of staff. Vol. 15, No. 12, 12-29-00, p. 8

164 Flights a Day to Las Vegas. During 2000, Southwest Airlines added fifteen daily flights at McCarran
International Airport, making it the second busiest of the 58 cities served by the carrier. Southwest in Las Vegas
now has 164 average daily departures, following Phoenix that leads with 180 daily flights. Vol. 15, No. 12, 12-29-00, p.

Reno Gazette-Journal
Gaming Board Chairman Named. Gov. Kenny Guinn on Monday tapped Nevada Gaming Control Board
member Dennis Neilander of Minden to be the board’s new chairman following the retirement of Chairman
Steve DuCharme last week. …In a phone interview, Neilander, 39 said the board’s challenge remains seeking a
balance between strict regulation and the gaming industry’s need to grow. “That’s a constant challenge,” he
said. Neilander also noted the industry’s transformation from family operations to dominance by Wall Street
companies. This change has brought with it Wall Street financial managers with rigorous standards. A big issue
in the future is Internet gambling, on which the board will have to stay closely apprised, Neilander said. …“He
is not driven by ego,” Faiss [an attorney who practices before the board] said. "He has a sense of the common
man about him, he is very considerate of people and when it is necessary for him to be firm and even to impose
discipline, he does it with a sense of not personally injuring the person in any respect. (And) his work ethic is the
mark of his performance in that he is fully prepared before he makes a decision. He acts on evidence and not
emotion. John Stearns, 1-9-01

Work on Siena Hotel Continues. The evolving Siena Hotel Spa & Casino doesn’t look like the typical hotel in
Reno with its yellowish-gold walls and green shutters surrounding each window. And that’s the effect its
operators want as they aim to create a “boutique” hotel. …Converting and equipping the skeleton of the
former Holiday Hotel Casino that closed in 1998 is expected to cost about $60 million, according to Barney Ng,
whose Wild Game Ng will own and operate the property. …“Our general client is going to be the business
client,” Ng said, noting rooms that will be equipped with high-speed Internet access and other amenities like
safes capable of holding laptop computers. “We’re also looking for the more high-end clientele who is coming
for what I would call a more upscale hotel experience. I think we are addressing a market that is not addressed
right now.” John Stearns, 1-9-01

Slot Manager
Reel-Spinning Renaissance. Video gaming machines have exploded in popularity, but creative ideas are breathing
new life into traditional slots. To paraphrase Mark Twain, reports of the death of the traditional reel-spinning
slot are an exaggeration. At a time when video slots continue to capture a greater share of the U. S. slot floor
than ever before, the reel-spinning slot, it seemed, had all but been left behind. But the traditional slot is
undergoing a resurgence as slot managers and manufacturers recognize that the reel spinner continues to have
strong appeal to the people that count – players, particularly the breed casinos love – the dollar and above slot
player. “The power of the dollar player is still extremely strong. Most operators will take a three-coin dollar
player over a 45-coin nickel player any day,” said Marcus Prater, vice president of marketing for Bally Gaming.
“Those players are very appealing to the casinos, and so to neglect them would be a mistake.” Marian Green, Winter
2001, p. 16

Strictly Slots
Rediscovering the Reels. The past year has seen a flood of amazing new video slots hit the casino floors. The
Addams Family, Fortune Cookie, Press Your Luck, Battleship, Swinging in the Green, Monkey Business, I
Dream of Jeannie…the list goes on and on. All of them feature phenomenal animated graphics, incredible
sound, and intricate bonus sequences. They are flashy and they are fun. For a while. Lately, however, I’ve been
finding that the novelty is starting to wear off. Maybe I’m getting jaded. After all, I play these things on a daily
basis. Don’t get me wrong. They are great games, with a lot of entertainment value packed into every spin. But
speaking personally, they aren’t holding my attention as long as they used to. I’m constantly looking for the next
buzz – the ultimate bonus screen, the most outrageous theme, and the catchiest musical accompaniment. And
time and time again, I hear myself complaining about the same slot issues. I’m tired, for example, of never really
knowing what it is I’m rooting for when I bet my credits. …Furthermore, I’m getting tired of wins that aren’t
actually wins. The majority of the hits you receive on these machines pay less than your original bet. That’s not
a win – it’s just less of loss. …Then there are the bonus rounds. For the most part, when I play the video slots,
that’s what I’m playing for. I want to catch a fish or sink a ship. Problem is, by the time I get to one of them,
I’m generally just making up for all the non-wins I’ve hit in the primary game. And once I’ve sunk a ship, well,
I’ve seen it, done it. The incentive to keep spinning until I get back to the bonus round just isn’t as great. Melissa
Raimondi, Managing Editor, Vol. 3, No. 2, January 2001, p. 6

Bits and Bits: From Indian Country
State Won’t Renew Tribe’s Casino Deal. Madison – The Oneida tribe failed to meet a Friday deadline for payment
of nearly $5 million in gaming revenue to the state, prompting Gov. Tommy G. Thompson to take the first step
toward ending the tribe’s gambling operations. …Shortly after the deadline, Thompson notified the tribe that
the state would not renew its gaming compact. Administration Secretary George Lightbourn labeled the tribe’s conduct
irresponsible. …However, Danforth (Tribal Chairman Gerald Danforth) said earlier that the payment was being
withheld to protest state spending of gaming revenue on such things as snowmobile programs when the money should
be used to benefit the tribe. Richard P. Hones, Milwaukee Journal-Sentinel, 1-5-01
California Indian Casino Recruiting Workers in Vegas. The Agua Caliente tribe of California, which plans to
open its second casino near Palm Springs in April, is holding a job fair in Henderson today and Tuesday. Casino
officials say they need 700 workers in a variety of positions for the Agua Caliente Casino, located in Rancho
Mirage. Workers will also be needed for the tribe’s Spa Resort and Casino in Palm Springs. “Getting good quality
candidates isn’t easy, and though we’re confident we’ll have a quality staff, this (job fair) will help us get a lot of good employees,
especially middle and upper managers, from an area with experienced (casino) employees like Las Vegas,” said Spa Resort
General Manager Tom Doyle. Las Vegas Sun, 1-8-01
Now Indians See Full Blood as a Point of Pride. Pablo, Mont. – Every year, tens of thousands of people try to sign up for tribal
membership. The Cherokees get the most applications – about 19,000 annually. If you can prove you’re related to one of
the people listed on a tribal roll competed in 1906, you too can become a Cherokee. “It’s cooler now to be an
American Indian than it was 30 years ago,” explained Mike Miller, a tribal spokesman. St. Louis Post-Dispatch, 1-11-01
One Wisconsin Tribe Sues Another to Block Casino. A Wisconsin Indian tribe filed a federal lawsuit Thursday
that it hopes will block another tribe’s plan for a casino in Kenosha. The Forrest County Potawatomi
Community contends that the U. S. Bureau of Indian Affairs erred two weeks ago when it found that the
planned casino couldn’t significantly affect the environment. …The Forest County Potawatomi Community
also fears that that the Paradise Key would siphon customers from its own Potawatomi Bingo Casino in Milwaukee. The new
competitor could cut the Potawatomi’s revenue by 27 percent – more than $50 million a year – according to the tribe’s
consultant. Michael Higgins, Chicago Tribune, 1-12-01
McCallum: No New Casinos. No new casinos in Wisconsin. Period. That was the blunt message delivered Monday by Lt.
Gov. Scott McCallum, who becomes governor if Tommy G. Thompson earns Senate confirmation as President-elect George W.
Bush’s health and human services secretary. Steve Schultze, Milwaukee Journal Sentinel, 1-15-01

The Numbers

  The Adams Report is an executive summary for busy casino industry executives and observers.
 Each month, I review the current gaming literature. Articles selected are of special importance or
  interest. My focus is on identifying significant trends. I do not report the news; there are many
                                        news sources available.

         The Adams Report is designed to serve a broad general interest. If
         your focus is more specific, research or customized reports can be
         created on a project specific basis.
                                                           Ken Adams

                                         210 Marsh Avenue, Suite 103
                                               Reno, NV 89509
                                      (775) 322-7722 Fax (775) 322-7806

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