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					                     The

                            ADAMS’ REPORT
                                               Ken Adams (702) 322-7722


                    A Review of Current Gaming Literature
                                              September, 1998


Editorial Perspective
Operations:
A Challenge that Will Take More than a Good Idea and a Little Money.
The story does not change from month to month. Operating a casino is getting much
more difficult. The growth into new jurisdictions has stopped.
        This year‟s Gross Annual Wager report, compiled by the research firm of Christiansen/Cummings
        & Associates, confirms how dependent the gaming industry is on new jurisdictions for growth.
        The total spent on gaming rose 6.2% to $50.9 billion in 1997 – a faster rate of growth than the
        prior year (5.6%), but still a far cry from just three years ago, when gaming grew by 11.4%.
        What‟s more, there would have been zero growth in gaming if not for the addition of VLT‟s in
        Delaware and West Virginia, new Indiana riverboats and the Mohegan Sun project in Connecticut.
        Charles Andered, International Gaming & Wagering Business, Vol. 19, No. 8, August 98, p.4

The existing markets are very quickly becoming overbuilt, if they are not already. The
competition is intense. It is usually the large operators with deep pockets that succeed. What
happens to the others, the little guys? Here is one more tale of dynamics of operating a casino in
1998.
        The Holiday Hotel-Casino, nestled along the south bank of the Truckee River in downtown Reno,
        will close Nov. 29, and all 184 full and part-time employees will be laid off. However, Holiday
        owners are negotiating a possible sale with a group of unnamed investors who plan what they say
        is an extensive renovation of the 41-year-old hotel-casino… Ken Alltucker, Reno Gazette-Journal, 9-24-98,
        p. 1A

Companies with access to inexpensive capital are building bigger and grander casinos. Others, in
some markets such as Atlantic City and Reno, are in a price war. Those operators that cannot
afford to reinvest are cutting prices. Those that cannot afford either are focusing on service or
some other intangible and hoping for a miracle.
What is the “right way, the best way to prosper?” There may not be an answer, much less a
simple one. And if there is, I certainly do not know it. This is a challenging time for small
operators, one that will take more than a good idea and a little money. The casino industry is
changing. In five years it is going to be a very different industry from the industry of five years
ago. And 10 or 15 years ago will seem like very ancient history. It is not likely the operators or
the operating methods that where successful in those ancient times will be successful in the
future. Unless the casinos, the managers and their ideas change as drastically as the times.




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Development:
A Sign of the Times: From Tribal Leader to Member of Congress.                        There is a
great story about the Shakopee Sioux tribe in Minnesota. Early in the development of Indian
gaming, the tribe operated a small casino. They needed a better road to their casino. The county
thought it might build one, sometime.
The tribe started to make more money and asked for some help building the road. The county
thought it was a good idea, maybe next year.
The tribe started to make more money and decided to build the road themselves. Today, there are
tribal members on the county planning board. And the county now goes to the tribe for help with
projects. Mystic Lake has become a very successful business.
The story may not be true. But the tribes do have more money and more influence than before
gaming. Not since colonial times have the tribes had as much ability to affect public policy. The
California referendum is just one issue in which Indian tribes are becoming active and influential
in politics.
In every state where Indian gaming exists tribes are taking an active role in local politics. In the
beginning their focus is usually on issues that directly impact tribal lands or members. But as
they make progress solving the basic problems of underdeveloped societies, tribes and individual
members are taking a larger role in state and national politics. The following quote suggests that
tribes may be a source of leadership and vision.
        Bill Anoatubby wants to do for the 3rd Congressional District of Oklahoma, what he has done for
        the Chickasaw Nation. The Chickasaw‟s governor since 1987, Anoatubby announced his
        candidacy for the seat being vacated by retiring Rep. Wes Watkins. American Indian Report, 9-98, p.6


Manufacturing:
The Times They Are A’Changin.               What did you see at the Show? What is new in gaming,
anyway? The gaming industry‟s largest and most important annual trade show, World Gaming
Congress & Expo, just ended. In the months leading up to show, the hype promised new, more
exciting, more profitable games. Just as we were promised exciting new, more exciting games
last year and the year before and the year before that. And, like previous years, the show did not
live up to the hype.
Oh, there were lots of new games. Well, sort of new, that is if a clone of last year‟s game is
something new. The major players each introduced their own version of the competitors‟ games.
“Look, look, me too!” was the spiel at almost every booth.
Even with the cloning, I think something new is clearly emerging. The “popularity cycle” of a
game is much shorter in 1998 than in previous times. In the past an operator could expect a
“good” game to produce above average revenues for 5 years or more. Very few games retain
their popularity longer than a year or two in today‟s market. Sometimes it can be measured in
months rather than years.
There is another dimension to the current market; the revenue potential of the top performing
games is far superior to games in the past. Unfortunately for the operators, the price of games
has gone up with their earning potential. The shortened life (popularity) cycle is going to force
changes in the way games are designed and sold. Casino operators need games whose
“popularity cycle” is long enough to pay for the game and produce a profit.



                                                     2
How long will a game continue to produce, to be popular? Until a competitor introduces a cuter,
glitzier or better clone? Until something new comes out? Every game is different. Game life
cycles are determined by competition. A game will last until something more exciting one enters
that niche.
At prices of $8000 or more per device, operators need games to last longer, or to be priced
differently. The solution may be in selling software not hardware. Players (gamblers) are excited
by exciting games, not pretty boxes. Short product life cycles are not new, neither is the idea of
selling software cheaply independent of the expensive hardware. But they are relatively new to
the casino gaming industry.
           Adams [Randy Adams, Anchor Gaming] and others believe gaming manufacturers are going to
           follow the example of the personal computer industry and shift their focus to software products
           away from hardware. Eventually, he expects most game creators to shed their box assembly
           operations, which are rarely profitable. These creators will write game software for a standard slot
           machine platform. That has been Anchor‟s strategy. John Edwards, Casino Journal, Vol. 11, No. 9,
           September 98, p. 82-84




But that is just my opinion!




Literature
Each of the following articles is a direct quote from the publication 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
Campaign Trail Blazing. Bill Anoatubby wants to do for the 3rd Congressional District of
Oklahoma, what he has done for the Chickasaw Nation. The Chickasaw‟s governor since 1987,
Anoatubby announced his candidacy for the seat being vacated by retiring Rep. Wes Watkins.
On a whirlwind tour of 11 cities throughout the district, the lifelong Democrat promised that he
will keep a “tight reign on federal spending, champion economic development and promote
opportunity throughout the district.” September 98, p.6


Atlantic City Insider
Hot Slots & Reel Deals: The beginning of fall means a preview of what’s in store for
Atlantic City slot floors during the coming year. And what’s coming can be summed up in one
word: fun.
Caesars: Caesars was the first in town to install the full-bonus version of Isle of Pearls, one of the
“X-Series” line of game-within-a-game bonus slots produced by A. C. Coin and Slot. …Isle of
Pearls is a three-reel quarter game with an under-sea theme. The primary game features a wild
symbol – an oyster with a pearl – that substitues for any symbol when it lands on or is within one
space of the pay line.



                                                                     3
Our Verdict: Isle of Pearls is another example of A. C. Coin‟s creativity in bonus slot games,
and one of the more enjoyable games in the company‟s “X-Series” group. ...the bonus amounts
are too small to generate much excitement in themselves. …But what makes the Isle of Pearls
really worthwhile is the hit frequency of the primary game, thanks to a wild symbol that works
anywhere within a space of the pay line.
Tropicana: The Trop is one of several Atlantic City casinos to install Boom!, the latest multi-line
video slot from Williams. It is a five-reel, five-line, 25-coin game with a backyard-barbecue
theme. The Trop has installed the game in quarter, 50-cent and dollar denominations. The
primary game incorporates a “Wild Match” symbol that pays two coins by itself and substitutes
for any symbol in winning combinations (except scatter-pays).
Our Verdict: Williams displayed its mastery of the multi-line video format last year with “Reel
„Em In” and “Filthy Rich.” The company has done it again with this totally entertaining slot.
“Boom!” features a good hit frequency in the primary game even without the wild symbol and
scatter-pay wins. With those extra features, the hit frequency makes for sustained play and a lot
of fun, even before you get to the second-screen bonus. But like other Williams video slots, the
second-screen bonus game is at the heart of this game‟s appeal. Vol. 3, No. 1, 9-98, p. 6-8


Casino Crime Digest
The “King” is Back. Boxing promoter Don King will be allowed to do business again in
New Jersey. Regulators lifted a ban, August 5th, that had prevented him from working with
casinos in New Jersey. The Casino Control commission voted 4-0 to vacate an order barring
King or his company, Don King Productions, from doing business with the gambling facilities,
according to The New York Times. Vol. 4, No. 9, September 98, p.3


Casino Executive
Theme-a-Thon: Every new casino megaresort employs theming.                                 But what
separates the successful themes from the failures and also-rans? Americans seem to have an
unquenchable thirst for being entertained, and marketers are always ready to take advantage of
that need. Have you seen the new video screens adorning gas pumps and ATMs? Apparently we
don‟t really want to pump gas or withdraw money without being entertained as well. Of course,
casinos have unabashedly endorsed an environment of self-indulgence. In Las Vegas‟
atmosphere of competition and lust for profit, vision and illusion have supplanted the carnival
barker to pull the hordes into its halls. Where smoky, dimly-lit betting houses used to be the rule,
most casinos in the game today have concluded that to remain a broad-based dispenser of
entertainment, theming is the great attractor, the sticky paper that catches the flies. What
sociologists call the rising curve of expectation, a snowball effect wherein spectacle begets
spectacle, is one force that is driving theming in our consumer culture, including innovations in
retail and entertainment, concludes Jim Frey, a professor of sociology at the University of
Nevada-Las Vegas. Another factor is differentiation. “It used to be all these casinos looked
alike, but now the market has expanded and is much more competitive, and theming is a way they
differentiate themselves from the others in an era of consumerism," says Frey.
…Most experts agree that theming has moved well past bricks, mortar, and facades, and now
encompasses a plethora of ideas, architecture, and technology that engages people emotionally
and intellectually. One of the fundamentals of theming is to make it so stimulating that it entices
customers to make repeat visits. The future may prove that theory out at Stratosphere. As the
tallest structure in Las Vegas, it is on the itinerary of first time visitors to the city. But what about
the next time they visit? Will they travel to that part of the Strip again to pay to ride up and look
out over Clark County? Not likely. Which leads to the question: What is a theme? Stratosphere
has a theme, the tower. Or is it an attraction? Monte Carlo has a theme, the elegant Riviera. Or


                                                   4
is it merely décor? The Hard Rock Hotel has a theme, but to others it‟s a sensibility. Defining
the nature, scope, and components of a successful theme is difficult.
…It‟s mildly ironic that everyone mentions Mirage Resorts when it comes to theming, because
compared to some of its competitors, its properties are not heavily themed. Marketing guru and
Casino Executive columnist Dennis Conrad, president of Reno-based Raving Consulting, says
Mirage is probably more adept than any company at attracting repeat business, or making
customers want to go back. He speculates that may have to do with the personal service and
friendliness of its employees, which isn‟t found at some properties more noted for their theming.
“I think you can say that the Mirage is themed, but really it isn‟t,” suggests Paul Alanis, president
of Horseshoe Gaming. “I mean, it has a volcano out front, but that‟s an attraction, a water
feature. The casino, in my mind, has a very pleasant atmosphere which has a tropical element
with the rain forest, but it isn‟t carried to the same extent that New York-New York and Paris is,
and even what Circus Circus did in the early years with their carnival.”
…Ultimately, as in everything else in life and business, it all comes down to execution. “We‟re going to
see more sophisticated theming, which means people going to work on story as well. I keep coming back
to the same thing; it isn‟t about dressing something to look like a place we‟ve seen in some European
marketplace. That isn‟t what theming should be about. It has to deliver a higher level,” maintains architect
Solberg. “I love the theory of putting people on a boat that‟s themed around a story and letting them set
sail…there‟s no reason you can‟t do the same thing on dry land.” Rex Buntain, Vol. 4, No. 9, Septmeber-
98, p. 51-56


Casino Journal
The Game’s The Thing. Forget the Box, Some Casino Game Makers Are
Saying. Killer software might be all that can save them in a slow-growth market where they
want more revenue from operators. Novelty games aren‟t just changing the look of casino floors.
They‟re altering the dynamics of slot-machine manufacturing, giving game makers bargaining
power over operators, and possibly even setting the stage for a manufacturing consolidation.
Innovators such as Silicon Gaming, WMS Gaming and Anchor Gaming blazed the trail for the
new breed games. But the industrial giant, International Game Technology, is creating the
biggest waves, because it has shaken its preoccupation with old-style reel-spinning slots and
video poker machines. IGT announced an arsenal of more than 60 new games in July. “All of a
sudden, they have turned around their tanks, and they‟re bombing Beirut,” says Randy Adams,
head of game design at Las Vegas-based Anchor Gaming. “When they get all the guns pointing
in the right direction, watch out.” …Small manufacturers don‟t enjoy the economies of scale that
IGT realizes at its 1 million-square-foot assembly plant in Reno, and many are losing money.
“You can only lose money so long,” Adams says. “There are going to be some manufacturers
that don‟t survive this.” Adams and others believe gaming manufacturers are going to follow the
example of the personal computer industry and shift their focus to software products away from
hardware. Eventually, he expects most game creators to shed their box assembly operations,
which are rarely profitable. These creators will write game software for a standard slot machine
platform. That has been Anchor‟s strategy. David Ehlers, chairman of Las Vegas Investment
Advisors, believes gaming manufacturers are gaining leverage over casino operators, however.
He compares the situation to the power struggle decades earlier between movie producers and
theater owners. Moviemakers won that war, and similarly, game creators will win out over
operators, he predicts. John Edwards Vol. 11, No. 9, September 98, p. 82-84


Gaming Products & Services
Tribe Hopes Expansion of Casino’s Luxuries Will Keep Gamblers Coming .
Michigan‟s highest grossing casino opened recently, a move the Saginaw Chippewa tribe


                                                     5
hopes will secure its place in the state‟s gaming market. The Soaring Eagle Casino and
Resort, about 150 miles northwest of Detroit, has received a $90-million makeover with a
518-room hotel. Features include Italian marble floors, Native American sculptures,
fireplaces, whirlpools, cigar and piano lounges and a 205,000-square-foot casino.
Changes come in the face of increased competition. A permanent casino also opened in
Windsor, Ontario, just across the Detroit River from Detroit. Three temporary Detroit
casinos could open next year and four other tribes are seeking approval to open their own
casinos. Saginaw tribal officials hope the expansion transforms their casino from a day-
trip to a destination where gamblers stay a while. 9-98, p. 28

Comstock Bank: Survey of Nevada Business & Economics
Accelerate Diversification into Conventions, Entertainment and Tourism
Commentary: …Aside from the beneficial economic effects that an improving California
economy will have on Nevada‟s gaming and tourism industry, there is also the easing of the
state‟s fiscal stress that may temper California‟s need and desire to aggressively push legalization
of casino-style gaming. Recently, California Governor Pete Wilson signed an agreement with a
number of Indian tribes with respect to the types and number of gaming devices allowed on
California‟s Indian Reservations. Other tribes, currently operating gaming devices not legalized
in California, have refused to sign this agreement and some confrontation is inevitable.
California „s Proposition 5, which puts this issue of more liberalized Indian reservation gaming
on the November ballot, is being strongly opposed by many California as well as Nevada casino
interests. If passed, this may be an important step in the eventual legalization of casino gaming in
the State of California. Even if Proposition 5 is defeated, however, the eventuality of gaming
legalization is ever present in California. Already, gaming win from California card rooms and
Indian casinos, as well as Indian casinos in Oregon and Washington and legalized casinos in
western Canada is some five times greater than the gaming win in the Reno-Sparks gaming
market. The rapid growth in these alternative gaming jurisdictions speaks to the potential
business “lost” by northern Nevada properties based on the inability of this market to clearly
differentiate its product and offer distinct and not easily replicated advantages in coming to
Nevada. The further spread of gaming to other Indian reservations, and the extension of the
product into more enticing video slot devices, will inevitably weaken northern Nevada‟s position.
This speaks clearly to the critical need to accelerate the diversification of northern Nevada‟s
gaming and tourism market‟s easily replicated gaming products into conventions, entertainment,
tourism and sightseeing offerings. Robert N. Barone, Vol. 8, No. 2, p.6-7


Indian Country Today
Arizona Governor Gives OK for Salt River Slots.               Tribal members celebrated a long-
awaited victory as Gov. Jane Hull announced the tribe can proceed with plans to offer 700 slot
machines and construct a new casino on tribal land. Brenda Norrell, 9-14-98, p. C1

Old Camp Casino Opens.           The new Burns Paiute Tribe casino has opened its doors.
Named “Old Camp Casino” for the tribal camp, which once rested on the 10-acre site, the casino
is the eighth opened in Oregon. …the casino has 75 slot machines, a poker table and bingo. Luke
Albrecht, 9-14-98, p. B9

California Tribes Challenge Nevada Gaming Interests.                    A coalition of American
Indian tribes in California has revived a challenge for a debate with Nevada casino owners, who
the tribes say are providing the bulk of funding opposing a state gaming initiative. “We are


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renewing our challenge for debates between the major funders of the campaigns for and against
Proposition 5,” said Ken Ramirez, vice-chairman of the San Manuel Band of Mission Indians and
chairman of the “YES on 5: Californians for Indian Self-Reliance” campaign. Brenda Norrell, 9-
28-98, p. A1 & 6

Nevada Gaming Interests Attack Indian Casinos.                    Los Angles (AP) – In the TV
commercial, a young couple jogging with a baby in a stroller stop, aghast. The ground rumbles
and spouts towering neon signs: “Casino-rama,” Slots Casino” and finally, “Casino California.”
The bleak landscape in the advertisement suggests that a ballot initiative to legalize outlawed
forms of gambling on Indian reservations would turn Main Street California into a tawdry
imitation of Las Vegas. The ad campaign comes from unlikely allies: churches, labor unions, law
enforcement agencies, California card clubs and Nevada casinos. They‟re locked in an ad war
with state Indian tribes who are not about to be outgunned. By the most recent reporting
deadline, tribes had raised $24.6 million to support the initiative. The opposition coalition had
spent $1.2 million fighting it, with all of their donations from gaming interests. …A report by
Bear Stearns & Co. predicts that if the initiative passes, Las Vegas casinos would lose between
6.5 percent and 7 percent of their revenues - $258 million to $300 million – during the first
year or two. The Reno-Tahoe market would lose up to 16 percent. 9-28-98, p. B8

Judge Delays Casino Closures.               U. S. District Judge J. Spencer Letts has asked
California gaming tribes for more information before issuing an injunction to halt video slot
machines and gaming in casinos that haven‟t signed the Pala Compact. Judge Letts asked several
opposing factions: “California Tribes: Yes on 5,” “Californians for Indian Self-Reliance” and
“Las Vegas/Nevada Casino Financed: No on 5,” “Californians Against Unregulated Gaming,”
and Federal Prosecutors to file briefs stating their cases by Sept. 24. “The sooner we can get this
situation clarified, the better off everyone will be,” Judge Letts said. Douglas Casgraux, 10-5-98, p.
A1


Indian Gaming
Internet Operators Arrested.           Taking bets over the Internet just got a whole lot more
risky. In March 1998, the U. S. Attorney in New York City filed criminal charges against 14
individuals involved with sports bookmaking. This is the first time the federal government has
arrested anyone for Internet gambling. …The Department of Justice has pulled off a great public
relations coup. Federal prosecutors had been criticized by state attorneys general and Congress
for not doing anything about Internet gaming. Now, by striking at only six companies (and the
safest six to go after from a law enforcement point-of-view), the U. S. Attorney General has
shown that her U. S. Attorneys and FBI agents can put the fear of God into the entire industry –
using laws already on the books. Perhaps this was the secret agenda behind these headline-
grabbing arrests. The Department of Justice has made it clear that it does not support a proposal
being consider by Congress, like the Kyl bill, which would make it a federal crime to make a bet
on the Internet. The Department of Justice has stated that it does not want to go after first-time $5
bettors. Now, it has shown that the new laws are unnecessary – at least for the easy cases.
I. Nelson Rose, 8-98, p. 14


International Gaming & Wagering Business
Share War Heats up Again. Some 92 years ago, the Spanish-American philosopher
George Santayana warned, “Those who cannot remember the past are condemned to repeat it.”
Atlantic City operators surely remember the bruising they took in 1996, when a runaway
promotions war caused a citywide gross operating profit to plunge 19%, or $190 million. Or do


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they? Coin bonus packages for bus customers as of late July reached $20. …It has become
evident that Atlantic City has growing supply and demand imbalance. Year-over-year gaming
space increased 9.6% and hotel rooms increased 13%, yet gross gaming revenue grew only 1.8%.
The problem is a stagnant market base compounded by increasing competition in Atlantic City‟s
two primary feeder markets, New York and Philadelphia. …“The current competitive situation
creates an environment for a disastrous result from a renewed 1998 marketing war [in Atlantic
City],” said Salomon Smith Barney analyst Bruce Turner. …Bus wars are but the most obvious
sign of a share war. Ads for multiple craps odds and increased cash back are commonplace on
billboards and in newspapers. One casino advertised a “Perfect 10”: 10-times odds in craps, 10-
times cash back and 10-times match play. Although he‟s no philosopher, Turner issued a
warning of his own that should be heeded in Atlantic City: “While revenue growth will likely
remain limited in this market, profitability can be salvaged with a disciplined approach to costs
and allowances. “Our message to Atlantic City casinos is clear: Just Say No.” Joe Weinert, Vol.
19, No. 9, September 98, p.96-97


Las Vegas Investment Report
A Time for Caution with the Smaller Suppliers.               Acres Gaming. The market for
suppliers of games to casinos is getting more and more competitive. WMS Industries has brought
a very successful slot game (Monopoly) to market. A couple of months ago, we didn‟t even
consider WMS a viable player. Now is a time for caution with the smaller suppliers. We
recommend waiting until the overall market gets better, the gaming stock segment gets better and
the winners and losers in the supplier segment sort themselves out. Hold Vol. 7, No. 9, 9-16-98, p. 2

CSDS’s First Sale in New Jersey.              Casino Data Systems (CSDS) announced that they
have received an order for 100 of their Bandit Series Bingo Star video slot games in Atlantic City.
This order marks two major milestones. One, it is CSDS‟s first sales into New Jersey. Two, it is
the first sale of the Bandit series of gaming devices. The Bandit series of slot machines is a new
generation of multi-media gaming devices developed to provide a higher level of player
entertainment. The machine features high-end animated graphics and CD-quality sound and
makes a nice complement to their Safe Buster line. As we are warming up to CSDS‟s future,
CSDS‟s stock price is coming down. We expect that soon the two will meet. For now, the
Market is not ready for investment in small cap gaming issues. Hold. Vol. 7, No. 9, 9-16-98, p. 3


Las Vegas Review-Journal
Silicon Gaming to Enter Progressive Slot Market.                 The struggling California slot
machine manufacturer plans to enter the crowded pooled-jackpot business. Silicon Gaming Inc.,
an innovative but struggling Palo Alto, Calif.-based slot machine maker, is breaking into the wide
-area progressive slot machine business. …Silicon plans to start field trials on The Big Win at 20
casinos in December. It also announced a strategic alliance with Alliance to distribute its
products. John G. Edwards, 9-25-98, p. 1D


Lottery, Pari-Mutuel & Casino Regulation
“Casino Watch” Urges Revocation of Kansas City, Missouri Hilton’s
Flamingo License. Mark Andrews, chairman of Casino Watch, an anti-gambling group, has
asked the Missouri Gaming Commission to revoke Hilton Hotel Corp.‟s license to operate the
Flamingo Casino here. He made that request on Wednesday in response to an agreement between
Hilton and the U. S. Attorney Stephen Hill recently announced that he deferred prosecuting



                                                 8
Hilton for making payments to former Port Authority Chairman Elbert L. Anderson after the
corporation made a $655,000 payment. …“To ask Missourians to now accept them as good
corporate citizens is too much. The only way to redeem the gaming industry‟s and Missouri‟s
reputations is to revoke the Hilton gaming license,” Anderson said. Vol. 9, No. 36, 9-7-98, p.5-6

Terms of Proposed Casino Pact with Kalispel Tribe Revealed.                            A meeting to
educate local and state of Washington officials about a proposed Indian casino near Airway
Heights drew few officials, but operators of non-Indian casinos did show up. The Washington
State Gambling Commission called the “caucus” to release a draft of a gambling compact
between the state and the Kalispel Tribe of Indians. Gov. Gary Locke in July approved the 238-
member tribe‟s plan to build a $17 million casino on land in Airway Heights, just west of
Spokane, in partnership with Miami-based Carnival Hotels and Casinos. The tribe purchased the
land, about 50 miles from its reservation, then went through a process of making the property into
tribal trust land and thus an eligible site for an Indian Casino. Vol. 9, No. 37, p. 1

Will Vote on November 3 on Proposed Dog Track Casino.                       Kenosha, Wisconsin,
voters will decide Nov. 3 whether to bar development of a tribal casino at a Kenosha dog track.
The City Council voted unanimously Wednesday night to authorize a referendum in response to a
petition signed by more than 5,000 residents. Under state law, the council‟s only two options
were to authorize a referendum or adopt an anti-casino law outright. …The Menominee Nation
has proposed putting a multimillion-dollar casino and entertainment complex at Dairyland
Greyhound Park. Vol. 9, No. 38, p. 6

Arizona Gaming Department Director Resigns.                    Arizona‟s top Indian casino
regulator has resigned a month after Gov. Jane Hull signed a pact allowing slot machines at tribal
casinos 15 miles from downtown Phoenix. Arizona Gaming Department Director Gary Husk quit
Thursday to join the lobbying firm of Jamieson and Gutierrez effective Oct. 1. Tribes were elated
at the news, noting they have repeatedly clashed with Husk over such issues as whether poker is
allowed in Arizona tribal casinos. Husk also went to court to force the Tohono O‟odham
Nation‟s Desert Diamond Casino to close, a matter still in settlement negotiations. “It is a well
known fact that Mr. Husk‟s relationship with Arizona gaming tribes was not only adversarial but
many times obstructive to the government-to-government relationship between the tribes and the
state of Arizona,” Arizona Indian Gaming Association chairman Dale Phillips said. “Mr. Husk‟s
resignation provides an opportunity for tribal gaming interests to move into a new direction of a
more cooperative atmosphere with the state.” Vol. 9, No. 39, p. 2

New Mini-Casino Surprise Washington State Lawmakers.                           Washington State
Sens. Margarita Prentice and Ray Schow thought they were helping mom-and-pop businesses
compete with big tribal casinos last year when they persuaded the Legislature to boost card
rooms. Now, Prentice, Schow and some of their colleagues are worried they unwittingly
contributed to the growth of gambling in Washington state, where the industry has mushroomed
from a $78 million enterprise to a $2 billion powerhouse in the past 25 years. There‟s already
talk about changing or reversing the card-room law next year to slow or restrict the growth of
mini casinos that are popping up around taverns, restaurants and bowling alleys. …“We have no
gambling policy in this state. It has only drifted,” said Prentice, a Seattle Democrat. “It‟s time
we define that for ourselves.” Vol. 9, No. 39, p. 8


Mississippi Gaming Newsletter
July Was a Firecracker Month in Mississippi with statewide revenues up 18.1% for
the month. This compares to last year‟s 2.8% growth in July 1997 over 1996. Slots were up


                                                 9
18.3% with all denominations again showing positive results and only $1 slots not reaching
double-digit gains.
Coastal Region: …“Other” slots and nickels continued to lead the growth, up 32.7% and 44.2%,
respectively.
North River Region: …Slots were up 27.5% for the month with all denominations showing
double-digit gains. Nickel slots had the best percentage gain at 48.5% growth, while quarters
contributed the greatest revenue increase, up nearly $7 million for the month.
South River Region: South River revenues were up 7.4% in July. Slots gained 9.0% while games
fell 0.5%. Nickel slots provided nearly all the upward momentum, up 68.1%. Vol. 1, No. 5,
October 1998, p. 1


National Gaming Summary
Horseshoe, Empress Join Forces.            The South‟s most successful gaming company
merges with one of the strongest Midwest performers. Two of the most aggressive private
gaming companies merged last week when Horseshoe Gaming and Empress Entertainment
announced a merger. Horseshoe said it will pay approximately $600 million, including debt for
Empress and its two Chicagoland riverboats. 9-7-98, p. 1 &3

Starwood Chooses C-Corp. Structure. „Paired-share REIT‟ status no longer holds tax
advantage for Caesars‟ parent. In response to federal legislation that ended the favorable tax
status of paired-share real estate investment trusts, Starwood Hotels & Resort says it will convert
to a C-corporation. The lodging and casino company, whose recent growth was largely made
possible by the benefits investors accorded its paired-share status, will make the REIT a unit of
the parent company. The company said it would “likely have been taken at some point in the
future, but was accelerated” by changes in the law governing paired-share REITs. 9-7-98, p. 5

Stakes High in California Gaming Fight.                  „California a microcosm of the rest of
country‟; says federal gambling commission head Kay James. Only seven weeks remain before
Californians vote on an initiative to legalize the state‟s Indian casinos. Proposition 5, which
would void state gaming compacts recently signed by the Pala Band of Mission Indians and 10
other tribes, already has broad but perhaps feeble support among many California voters. But,
while Proposition 5 proponents keep challenging their Nevada casino opponents to debate the
measure, tribes disturbed by the compacts‟ provisions to limit the kind and number of gaming
devices any tribe could use are considering a referendum that would allow voters to repeal the
Legislature‟s August ratification of the Pala-style compacts. Several of the pacts have been sent
to Washington for U. S. Department of the Interior review and possible approval, staving off
federal seizure of slot machines that many gaming tribes still face. 9-14-98, p. 1

Aristocrat to Apply for Nevada License.             Aristocrat Leisure Ltd., the Australian
gaming machine manufacturer, said it will file an application for a Nevada gaming license before
the end of November. It said it expected the procedure to take from nine to 18 months. 9-14-98,
p. 8

Planet Hollywood Pulls out of Aladdin Deal.                 Aladdin reportedly talking with
Virgin‟s Richard Branson about casino on Las Vegas Strip site. Planet Hollywood International‟s
financial woes have forced its withdrawal from a huge Las Vegas Strip project on the site of the
old Aladdin. Aladdin Gaming‟s chief financial officer, Cornelius Klerk, said his company is
looking for new partners in the venture, which called for the two companies to build a 1,000-
room Planet Hollywood-themed hotel casino at a cost of $250 million. 9-28-98, p. 1& 4



                                                10
Ted Binion’s Silver Ceremony.             His cowboy boots were on his casket. His $5 million
stash of silver was in police custody. Lonnie “Ted” Binion, a defrocked executive of the
Horseshoe Club in Las Vegas who was trying to get his Nevada gaming license back, continued
to create local gaming lore even after he was found dead in his Las Vegas home Sept. 17. He was
55. Within 48 hours of the time Binion was discovered with an empty bottle of prescription
sedatives beside his body, police arrested three men they say were digging up tons of silver coins
and bars from a room-sized vault buried near the entrance to the Binion ranch in Pahrump, 60
miles northwest of Las Vegas. 9-28-98, p. 6

Bellagio 40 Percent Slant-Tops.           Almost half of the $1.6 billion Bellagio resort‟s slot
machines will be waist-high slant-top units – 40 percent, compared to about 25 percent in most
Las Vegas megaresorts. The low slots won‟t block views of any restaurants inside the facility the
way 8 ft. uprights would, says Rob Oseland, slot overseer for the hotel-casino, due to open Oct.
15 on the Las Vegas Strip. 9-28-98, p. 12


Native American Law Digest
Robinson Band of Pomo Indians v. Babbitt
United States District Court (N.D. California)
1998 U. S. Dist. LEXIS 10314, 1998 W. L. 355580, May 13, 1998
Indian Law Issue: Are the plaintiff tribes entitled to a temporary restraining order (TRO) against
the United States, the Secretary of Interior Babbitt and other federal defendants, enjoining them
from filling civil or criminal enforcement proceedings against plaintiff‟s operations.
Holding: The United States Court of Appeals for the Northern District of California held that the
plaintiff tribes had not demonstrated that they would suffer “irreparable harm” if the TRO was
not granted, and therefore the plaintiff tribes were not entitled to a TRO. 8 NALD 3033, June 1998
Miami Tribe of Oklahoma v. United States
United States District Court (D. Kansas)
1998 U. S. Dist. LEXIS 8312, 1998 W. L. 293216, May 8, 1998
Indian Law Issue: Did the National Indian Gaming Commission (NIGC) abuse its discretion in
denying approval of the Miami Tribe of Oklahoma‟s Class II gaming management contract on the
ground that the proposed site for the gaming operation did not constitute “Indian Lands” where
NIGC‟s decision denying approval contains no discussion of the relevant factors?
Holding: Yes. 8 NALD 3034, June 1998


Reno Gazette-Journal
Boomtown’s Parrott Takes New Role.              Timothy Parrott, chief executive of Verdi‟s
Boomtown Hotel Casino, will be devoting more of his time to turning Boomtown into Northern
Nevada‟s largest gaming-entertainment complex. Parrott is resigning as chairman and CEO of
Boomtown Inc. in October because he said, development issues at Boomtown require his
attention. “It‟s been my baby from day one,” Parrott said. “My main passion and focus is on the
resort project.” Doris Blackerby, 9-12-98

Nevada Casinos Could Spend $20 Million to Defeat Initiative.                      Nevada casinos
could spend $20 million to try to defeat an Indian gambling initiative on California‟s ballot, a
sign of the pain passage would inflict on Nevada, a Reno lawyer and gaming lobbyist said
Tuesday. “There has never been a more serious threat to the stability of the northern Nevada
economy than this issue – period,” Harvey Whittemore said of Proposition Five on the Nov. 3



                                                11
ballot. Tribes could spend $35 million to $40 million backing Proposition Five, which is ahead in
the polls, according to Whittemore. John Stearns, 9-16-98, p. 5A

California Tribe Joined Fight to Protect its Own Agreement.                      A California
Indian tribe Tuesday for the first time joined the campaign to defeat Proposition Five, the Indian
gambling initiative. Members of the Pala Band of Mission Indians of San Diego County will
appear in a television commercial that began running statewide Tuesday criticizing the initiative
supported by most other California tribes. At a press conference, Pala chair Robert Smith said his
tribe decided to switch from a neutral position to opposing it because of fear that it would
undermine an agreement, called a compact, that Pala has negotiated with the state to open its own
casinos. Jake Henshaw, 9-16-98, p. 5A

Former Casino Exec Ted Binion Found Dead in Home.                    Former casino executive
Ted Binion was found dead in his home Thursday of an apparent prescription drug overdose,
police said. He was 55. …Binion had a history of drug use and associated with reputed mob
figures. His gaming license was suspended in March because of those associations. His license
also was suspended in May 1997 because of his admitted drug use. Angie Wagner, 9-18-98, 9D

Boomtown Buoyed by License.              The partnership of Boomtown Inc.-Hollywood Park Inc.
won Indiana‟s final riverboat gaming license this week, opening the door for construction of a
$148-million hotel-casino and golf resort across the Ohio River from Cincinnati. Approval for
the Reno-conceived project ended a long pursuit for Boomtown, which has been trying to enter
Indiana since 1993. …It was the last competitive, discretionary license awarded in the United
States for the time being, said Robert List, executive vice president for Boomtown and former
Nevada governor. He has spent most of his time the last three years working on the project. John
Stearns, 9-18-98, 1E

Judge’s Ruling Prompts Proposition 5 Debate.                   Los Angles (AP) – For several years
now, gamblers have trekked to American Indian lands across California in hopes of reaping
riches from the mesmerizing gaming machines that pack casinos on some 40 reservations. All the
while, a heated debate among state, federal and tribal officials has been raging over the legality of
the casinos. The conflict intensified Thursday as lawyers on both sides debated a federal judge‟s
ruling released just a day before declaring slot machines illegal in California. …The judge‟s
ruling was the result of a court case filed by the Rumsey Indian Rancheria of Winton Indians
against the state of California in 1992 in an attempt to prove that California‟s lottery law allowed
slot machines. “California does not permit the operation of slot machines in the form of the
state lottery or otherwise,” U. S. Eastern District Judge Garland Burrell wrote in his ruling. 9-20-
98, p. 1E

Holiday Casino to Close.          184 layoffs: Shutdown set for Nov. 29 even if the property is
sold. The Holiday Hotel-Casino, nestled along the south bank of the Truckee River in downtown
Reno, will close Nov. 29, and all 184 full and part-time employees will be laid off. However,
Holiday owners are negotiating a possible sale with a group of unnamed investors who plan what
they say is an extensive renovation of the 41-year-old hotel-casino… Ken Alltucker, 9-24-98, p. 1A.

New $20 Bill Makes Its Debut Today.                Washington (AP) – Redesigned, harder-to-
counterfeit $20 bills are entering circulation with accompanying hoopla. One bank in California
is giving away free samples. But it may be weeks before most Americans see the notes spitting
out of ATM machines. 9-24-98, p. 7A




                                                 12
Game Makers Spin Pop Culture into Slots.                 Slot machine adaptations featuring a
famous rock star, popular game show and ageless board game are among the new products
capturing shoppers‟ fancy at the World Gaming Congress & Expo here this week. And as if
Triple Play Draw Poker – the video poker game that‟s so hot in Reno-Sparks – isn‟t enough,
there‟s a Ten Play and Five Play version that ups the ante and the potential payoff for video poker
junkies. Bonus games, or secondary events, continue to be the rage this year. In addition, the
noise coming from slot machine speakers is getting louder and crisper, and the graphics are
getting more sophisticated, colorful and realistic. John Stearns, 9-25-98, p. 1E

Casino Compliance. Regulators: Be prepared or face consequences.                        If the
Year 2000 Bug bites a casino computer system and the casino can‟t post revenue, state regulators
might not be sympathetic, gaming experts warn. “We will probably have a very bad taste in our
mouth, if a casino didn‟t prepare adequately for the Year 2000,” Desmond Ladner, director of the
gaming lab of the Mississippi Gaming Commission, said during last week‟s World Gaming
Congress & Expo. In the worst-case scenario, the state could shut down the casino, which means
“lots of money flying out the door,” added James Maida, president of Gaming Laboratories
International Inc. in New Jersey. John Stearns, 9-28-98, p. 1F

Revenue from Slots Growing in Casinos.                Slot machines are increasing their share of
casino revenue and floor space in Nevada, according to a new report from Bear, Stearns & Co.
financial analyst Jason Ader. Slots generated 63 percent of Nevada gambling revenues in 1997,
up from 58 percent in 1990. …In Atlantic City in 1997, slots were 77 percent of casino revenues,
up from 58 percent seven years earlier. …“Today‟s casino players demand more technologically
sophisticated games than the traditional three-or four-wheel spinning slots,” Ader writes. “Plus
increased competition in the casino industry has prompted casino operators to bring more and
newer types of games into their operations sooner than they had historically.” Bear, Stearns
estimates U. S. gambling equipment replacement market demand at approximately 31,222 units
in 1997 – rising to 61,408 units in 2002. Demand and competition have fueled the development
of new gambling equipment, including software-based machines. 9-29-98, p. 4E


The Gaming Industry Report
Strictly Slots Will Be the First Magazine Devoted to Slot Players.                     Casino
Journal Publishing Group, Inc. also announced that we have a new magazine coming out in
December, which we feel will be a big hit. Strictly Slots will be the first magazine devoted to slot
players. As we all know and as was evidenced by the July Nevada gaming win report, slots are
more important today than they have ever been. New machines are hitting the market at a rapid
pace and will be the focus of the upcoming World Gaming Congress. Slot players, industry
executives and investors will now have a magazine that focuses on slots and we feel that this will
be our second sensational magazine for this industry. Alan Woinski, Vol. 6, Issue 37, 9-14-98, p.3

Casino in New York City?          By the close of business on Friday, the 11th, all proposals for
projects on Governors Island in NY City were expected to be presented to the Mayor‟s office.
We doubt if this was the only casino related one, but the NY Daily News reported that Starwood‟s
Caesars World unit was expected to propose a $300 to $500 million casino on the historic island.
The odds are not good that a casino could ever be built there but you never know until you try.
Everyone who has hopes for casinos in NY should watch the negotiations between the Seneca
tribe and Gov. Patski. The Senecas want a casino in Buffalo, NY and are entering into
negotiations and rumors are out that Mickey Brown is involved with them. Since Mickey
negotiated the Foxwood deal with the state of Connecticut, a deal could be put on the table where



                                                 13
the Turning Stone and Sencea casinos get a monopoly with slot machines and pay a piece to the
state. This would kill a chance for widespread casinos in NY. Alan Woinski, Vol. 6, Issue 37, 9-14-
98, p.3

Gaming Insiders Step up to the Plate.             This past Wednesday, CNBC made a big thing
that insiders of technology companies are signaling that their shares are undervalued because of
the heavy insider buying which has been occurring. If technology, a huge industry compared to
gaming, is a buy because of the heavy insider buying then gaming is a strong buy. The volume of
insiders in the gaming industry purchasing stock in the companies they work for has reached a
pace, which has never been seen before.
…In short, the insiders are putting their money where their mouths are, it may be time to roll the
dice and begin getting aggressive. The insiders of the companies feel that we have reached a
bottom in the gaming industry. The perception may change in the future to positive but then it is
up to Bellagio and the others to produce results. You can make a case that many gaming stocks
are reflecting the worst. There are less than 100 shopping days until Christmas. Are the gaming
stocks having their best sale now or will prices be slashed before Christmas? I am a buyer and I
believe all of you should be too. Alan Woinski, Vol. 6, Issue 38, 9-21-98, p. 1-2

Michael Jackson in Las Vegas?                The Aladdin Gaming/Planet Hollywood venture on the
Strip is on life support which is not any surprise since Planet Hollywood has enough problems
with their restaurants that the last thing they need is a casino. What‟s interesting are the names
which have been popping up as possible future partners on the 2nd casino on the Aladdin site.
Many of the names were entertainment names and with Michael Jackson being at the Gaming
Congress, don‟t be surprised to see his name thrown in the hat. Alan R. Woinski, 9-28-98, p. 4

David Thompson President Again.              Mikohn Gaming announced management changes at
the company. David Thompson, chairman and CEO will become president of the company again
replacing Richard Irvine who will be pursing other interests. Robert J. Smyth was named to the
newly created post of vice president of product development and marketing. Alan R. Woinski, 9-
28-98, p. 5

          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 excellent 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
                                   (702) 322-7722 Fax (702) 322-7806




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