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may 03


									                           ADAMS REPORT
                              A Review of Current Gaming Literature
                                       Volume VII, Issue 5
                                            May 2003

Quick-takes: The month’s trends in a glance.
Wars and SARS are still with us, but there is some light in the tunnel. The stock market is the
highest it has been at the end of any month this year, proving that we would rather dream than
face the realities of war, disease and recession. Steven Wynn‘s stock, without a casino or any
revenue, has out paced the market. The Dow closed at 8053 in January, dropped to 7800 in
February, climbed a little to 7900 in March and jumped to 8400 in April. Wynn‘s stock
progressed steadily form $13.75 a share in January to $14.22, $15.40 and finally $17.37 and that
without a shovel in the ground. I wonder if Bush has considered Wynn for a cabinet position?
The war in Iraq was quick, gas prices are recovering, consumer confidence is on the rise and
Greenspan is going to stay on to keep mortgage rates driving the economy. The economy looks
brighter than any time this year.
        Stocks in Asia opened weaker and the dollar was steady on Wednesday, as markets began shifting
        focus to what might happen to the U.S. economy now that the war in Iraq appeared to be
        entering its final stages. …Oil prices made some gains as the possibility of an output cut from
        OPEC curbed the impact over expectations of a swift end to the war. Bill Tarrant, Reuters, Yahoo
        Business, 4-9-03

        SARS Disrupts Sporting Calendar. Sporting events worldwide are being disrupted by concerns
        over the deadly SARS virus, which has killed over 300 people and infected more than 5,000.
        Utusan Malaysia Online, 4-29-03

        Consumer confidence, which had declined for four consecutive months, improved sharply in
        April, helped by a swift outcome in the U.S.-led war in Iraq The Consumer Confidence Index rose
        to 81.0 from a revised 61.4 in March….the largest increase since March 1991…."The swift
        outcome in the Middle East has helped quell consumers' short-term concerns," said Lynn Franco,
        director of The Conference Board's Consumer Research Center. Anne D'innocenzio, Associated Press,
        Yahoo Business, 4-29-03

A person who understands the stock market and can predict its ups and downs is a rare bird
indeed. Any one with stock in a retirement fund has felt the pressure and looked for a sure thing.
The anxiety of the retiree with a diminishing retirement fund is almost palpable. Apparently it
isn‘t just the average investor that finds the market that stressful. A rash of bright young and not
so young analysts have thrown in the towel and gone to look for greener pastures. Jason Ader
said he was tired; he left the Street to marry and live happily ever after; but it is rumored he has
joined Steve Wynn, he must really believe in the dream.
        Many high-profile stock analysts are quitting their jobs amid dwindling compensation, declining
        morale and tough new rules designed to prevent more scandals. Some are taking research jobs
        with institutional investors such as mutual funds and hedge funds. Others have decided to give it
        all up, often after decades in the business. …Bear Stearns Co. gaming analyst Jason Ader gave
        notice last month, saying he was fatigued and heading for the beach. Meg Richards, Associated Press,
        Yahoo Business, 4-13-03
The economy may be on the mend, but the states‘ budget problems have not been solved:
California is still negotiating with the tribes; Wisconsin has signed 9 compacts; governors are still
thinking about raising gaming taxes; but no state has yet to approve additional gaming. As if it is
impossible to learn from the past, the governor of Illinois has suggested higher gaming taxes and
even entertained conversations about state operated casinos or a state casino in Chicago. The
results are predictable, the stock of the casinos operating in the state went down: ―Welcome to
Inhospitable Illinois‖ the sign at the Stateline says.
        As Illinois Gov. Rod Blagojevich attempts to close a gaping hole in the budget, local officials are
        outraged over his proposal to increase taxes on casinos. In his budget address Wednesday,
        Blagojevich proposed charging an extra $2 for every person who enters a casino and an
        additional 20 percent tax on the most profitable riverboats in the state — Aurora, Elgin and
        Joliet. His proposal would mean a total 70 percent tax on casino revenues above $250 million,
        up from the current maximum of 50 percent. Chicago Sun, 4-10-03

        Riverboat casino operators Argosy and Harrah's took on water Thursday after the governor of
        Illinois proposed a hefty hike in taxes and fees on the gambling business. …In a note to investors
        Thursday, UBS Warburg's Robin Farley said that "given what an inhospitable business
        environment Illinois proved to be last year, we believe that gaming stocks that could be
        impacted by this proposal will not be able to rest easy until" the legislative session ends on
        May 23. William Spain,, 4-11-03

The most interesting trend in April comes from Nevada. In the past Nevada was the center of
new casino ideas, the dream of Steve Wynn, Elvis Presley on stage, billion dollar mega casinos;
whatever the mind could imagine Las Vegas could and would build. That was before Indian
casinos in California, racinos, riverboats, Internet and all of the other manifestations of gambling
in the last few years in the United States and around the world.
This month‘s new ideas from Nevada are slightly different, some times given the history of the
state, bizarre. The mayor of Las Vegas suggested a city lottery, there was a proposal to allow
unsuccessful casinos to move to a better location, one to allow time-share resorts to have casino
licenses, another to allow ―super clubs‖ to have slot machines. In Reno a small war is developing
over relocating old licenses; as with the Las Vegas proposal, it allows for a casino without hotel
requirements and in residential districts that do not have competing casinos.
And then for those that cannot move, Treasure Island is going to hang the pirates and invite the
young and hip into a new and hip casino.
        Sen. Mike Schneider, D-Las Vegas, has a deal for small and unprofitable casino operators who
        want a fresh start at a better location. …Bill 271, which would allow casino operators in Clark
        County to relocate outside of established gaming districts to locations where business would
        improve. Las Vegas Review-Journal, 3-14-03

        State Sen. Mike Schneider is bucking big hotels with his proposal to allow wide-open gambling
        in time-share developments on the Strip. …Schneider, D-Las Vegas, told the Senate Judiciary
        Committee Tuesday the gaming market is changing across the country and large companies are
        coming to Las Vegas to build time-shares to bring in thousands of people. Cy Ryan, Las Vegas Sun, 4-9-

        Supper clubs could gain permission to operate a limited number of slot machines, but the Las
        Vegas City Council wants the authority to consider each case individually. . Michael Squires, 4-17-03

        …Nevada Casinos as the operator and holding company that will take over the unrestricted
        gaming license from the Old Reno Casino, one of the smallest casinos in the region. Thomas J.
        Walsh, 4-3-03
        The owners of the Reno Turf Club downtown are trying to relocate the club‘s unrestricted gaming
        license to an upscale neighborhood in Reno, on McCarran Boulevard just north of Fourth Street.
        …The Turf Club’s gaming license is grandfathered, exempting the Cal Neva from building a
        hotel with the new casino. Thomas J. Walsh, 4-

        …transformation of Treasure Island's exterior, changing the megaresort's look to match its
        evolution from a pirate-themed property to a hip spot with allure to value-conscious adults.
        …"We've evolved from a yo-ho-ho feel to a more sophisticated feel," Treasure Island President
        Scott Sibella said. Jeff Simpson, Gaming Wire, 4-22-03

Nevada is very pregnant with gaming. When the revenue base of the state or its major cities is
threatened by competition from other states and the Internet, one can expect a competitive
response. This is only the first round of ideas, and it bears remembering that we are really in the
first year of realization that the go-go years are gone and the future promises nothing to resemble
that growth. I wonder what will be proposed next?

Park Place Entertainment Watch
As Michael Pollock says in the April 28th issue of the Gaming Industry Observer, ―size looms
increasingly large as a decisive factor in gaming profitability.‖ The largest gaming corporations
have the best chance to enter a new jurisdiction; they can leverage their size in purchasing slot
machines, health care or recruiting top management. This month Park Place did a little of each.
One of the biggest coup d‘ `etat may have been in recruitment. Bobby Yee has had a very
successful career, but he has really honed his skills in the last couple of years, while managing
Casino Windsor, competing against Detroit‘s casinos while terrorism, SARS and a bad economy
kept the players on the southern side of the border. The move to cashless is another move that
will contribute to profitability, as current estimates put the labor reduction at 30-40 percent. Park
Place also lined up on the side of the post-Enron good guys and reduced the severance
agreements of top executives.
        Firm Offering Health Program. Park Place Entertainment Corp. and Sierra Health and Life
        Insurance Co. Inc. have signed a contract to offer a new health program for casino employees
        called "LifeStrides." …"This marks the first effort by a gaming company to offer a free
        wellness/health education program to improve the health of its employees," Park Place said.
        Las Vegas Sun, 4-25-03

        Park Place Entertainment Corp. is wrapping up its roll-out of ticket-in, ticket-out slot technology,
        with two of the company's Las Vegas casino resorts soon to be the first major Strip properties to
        fully adopt the new system. …By the end of the year, Park Place expects to have completely
        converted Caesars Palace, with nearly 1,900 slots, and the Flamingo, with more than 1,700
        slots, to the new cashless system. Rod Smith, Gaming Wire, Las Vegas Review-Journal, 4-18-03

        Park Place Entertainment Corp. today named Bobby Yee as president of the company's adjacent
        Bally's and Paris Las Vegas resorts on the Strip. Las Vegas Sun, 4-10-03

        In the aftermath of last year's corporate scandals, Park Place Entertainment Corp. illustrates the
        oft-made claim that executive pay and golden parachutes are getting plucked. When Wally Barr
        succeeded Tom Gallagher as chief executive officer Nov. 19, he landed a three-year contract
        with a million dollar a year base salary plus bonuses, but a parachute equal only to the base.
        Gallagher, by comparison, was paid $2.3 million a year and got $7 million just to leave the
        company. Las Vegas Review-Journal, 4-27-03

Size does not hurt when you hire entertainment or expand your slot club, but it might not be
enough in the confusing world of Internet gaming.
        Park Place Entertainment Corp. unveils its $95 million Coliseum theater Tuesday at Caesars
        Palace with a music and dance extravaganza led by pop diva Celine Dion. …Unlike past
        generations of attractions in Las Vegas, this venue is no loss leader. Park Place expects to reap a
        20 percent return on additional business the show will draw to the company's retail, dining and
        gambling venues. Liz Benston, Las Vegas Sun, 3-21-03

        Park Place Entertainment Corp. expects to introduce a second phase of its slot player loyalty club
        card, Connection Card, …"Connection Comps" can be spent in any of Park Place's five Las
        Vegas resorts. Las Vegas Sun, 4-24-03

        Park Place Entertainment Corp.'s Internet commerce division has been redeployed and the head of
        the division has left the company, a move that comes a few weeks after the company announced
        that it would hold off on developing an online gambling site for non-U.S. bettors. Liz Benston and
        Richard N. Velotta, Las Vegas Sun, 4-1-03

The latest and most efficient technology, the best management available, unique entertainers with
an international audience and good employment benefit programs, may not guarantee success, but
it puts Park Place and the other giants one leg up on the competition.

Internet and Interactive Gaming
It is difficult, at least for me, to get a ―handle,‖ pun intended, on Internet gambling. Bills to
prohibit it come up in each session of Congress but have yet to pass. The major banks and credits
cards have stopped processing ―gambling‖ charges. Several major groups have retreated from
licenses in the UK. Australia is reconsidering its regulations. And yet, all of the published
numbers show an industry growing dramatically. Certainly it is a maturing industry. There are
lobbyists, a formal standards group and some interesting new applications bubbling to the
surface. Somehow this feels like the Prohibition Era to me. Whatever tactics government uses
only further illustrates an underlying principle: people like to gamble; the Internet helps satisfy
that desire.
        For five years, they helped New Jersey enforce its laws on gambling at Atlantic City casinos.
        Now Frank Catania and Keith Furlong are fighting for a far less esteemed segment of the
        gambling industry. As consultants for the Interactive Gaming Council, they are pushing a highly
        skeptical Congress to give up its attempts to ban Internet gambling. Laurence Arnold, Associated
        Press, Las Vegas Sun, 4-16-03

        While the U.S. Congress considers legislation to keep Americans from using online gambling
        sites, a U.K.-based nonprofit group backed by the largest licensor of Internet casinos is organizing
        to provide "online players with high levels of assurance of fair, honest, and responsible gaming."
        E-Commerce and Online Gaming Regulation and Assurance (eCOGRA) plans to issue "seals of
        approval" to online casinos…. Roy Mark, Internet News, 4-16-03

The applications of the technology seem limitless. You can bet the lottery in Europe, participate
in the World Series of Poker or host your own Kentucky Derby party. Yahoo wants to give you
instant horse betting opportunities. Oh, what a country!
        Europeans can now satisfy their gambling urges on the spot -- with their cell phones.
        …Government-approved mobile lotteries have recently been introduced in the Netherlands and
        Sweden, and the United Kingdom is likely to follow. Douglas Heingartner, Associated Press, Las Vegas Sun,
        The 34th annual World Series of Poker at Binion's Horseshoe is expected to draw as many as
        8,000 players from around the globe as well as hundreds of tourists who will watch an event that
        has become the gambling industry's top spectator sport. For the first time this year, hundreds
        more are expected to watch the event live from their homes thanks to Internet technology
        that is less than a year old. Liz Benston, Las Vegas Sun, 4-18-03

        TVG can offer your guests a high-tech way to wager …Last year he and a buddy transformed the
        basement of his Prospect home into a miniature off-track betting parlor — featuring tables
        equipped with small TVs for unfettered viewing, and racing programs and betting slips for guests
        to track their wagers. A few days before the Kentucky Derby, Ilnick stopped at Churchill
        Downs to deposit $1,000 into his interactive wagering account with TVG, the horse-racing
        cable channel, to cover his party's bets. Grace Schneider, Louisville, Courier-Journal, 4-28-03

        Yahoo….survived dot-com disaster and crowed last week over unexpectedly strong first-quarter
        sales and profits. …Yahoo quietly added betting to its main horse-racing page in September
        through a partnership with Penn National Gaming, an operator of horse tracks and casinos.
        Mike Langberg, Mercury News, 4-21-03

Now if you think all of that sounds like fun, Kerry Packer, you remember him, the whale that
twice single handedly changed the results of an entire month for the Las Vegas Strip, has an idea
for you.
        Feel like a bet on the cricket even as you watch the game live on digital television? Think Ricky
        Ponting is heading for another ton and wouldn't mind laying a few bob on the Punter? That could
        be in the cards if Kerry Packer gets the Federal Government to change its interactive gambling
        laws. Under the Packer proposal, a message would pop up on the screen inviting viewers to bet on
        the next wicket taker or the next batsman to get out. Viewers would use their remote control to
        place the bet. Cosima Marriner, Sydney Morning Herald, 4-28-03

The United Kingdom certainly wants to be a part of this new world, though no one seems to
know exactly how or when that will happen. But this mobile thing looks to be a part of the
future, at least in the UK. Worried about the coming competition, the first Internet jurisdictions
are trying to strengthen their position with some bricks and mortar. There has been ―lots‖ of
revenue, but not much profit; that too is changing.
        The UK government is set to allow online gambling companies to set up shop in the UK proper,
        and hopes to turn the country into a global center for gambling, according to a report on IT
        news website New Media Zero. The site is reporting that a new regulatory regime will be installed
        in the UK come the winter session of parliament that will include new laws on ‗remote gambling‘
        – meaning mobile gambling as well as its internet cousin. Leigh Phillips, Europe Media, 4-28-03…today announced the grand opening of its land-based operation in the majestic
        Grand Princess Casino located in…Antigua. The new race and sports book offers
        wagering on all major sports leagues and events…24 hours a day, 7 days a week, 365 days a year.
        …"Opening a traditional sports book in a casino resort adds to the portfolio of gaming
        properties managed by while providing a distinct market advantage over
        other Internet gaming companies." PRNewswire, Yahoo Business, 4-28-03, Inc., a leader in online account wagering, today announced its financial results for the
        fourth quarter and the fiscal year ended December 31, 2002. Youbet posted record fourth quarter
        revenues of $9.1 million and its first quarter of positive operating cash flow since the
        Company's inception. Business Wire, Yahoo Finance, 4-15-03

While the NCAA tries to keep Las Vegas from taking bets on any college game and the NFL
disdains any casino advertisements, Major League Baseball seems to be willing to join the
        Popular Internet casino recently broke new ground by becoming the first cyber
        casino to sponsor a Major League Baseball team -- the Montreal Expos. "We are extremely
        grateful to for their participation and financial support in making this
        transaction a reality…," said Claude Delorme, the Expos Executive Vice President of Business
        Affairs. …"Our involvement with an American institution like Major League Baseball can
        only help solidify our place in the competitive world of online gaming," said Richard Rowe, the
        CEO of Newswire, 4-9-03

It is all very confusing for me: Where is it going? Who will regulate it? In the conventional
wisdom of casino operations, this could be the worst of all worlds: Competition moves into the
very homes of your best customers and the federal government gains an entree into national
gaming regulation.

Bit and Pieces from Indian Country
Wisconsin‘s governor has quietly worked to increase income to the state from Indian gaming.
Before going public with his needs, unlike Grey Davis, Governor Doyle negotiated a new
compact. Opposition in the state legislature twice tried to stop the process, but Doyle vetoed the
legislation. The new compact extended its life and is being called permanent, and allowed the
tribes a large variety of games and gave the state a larger percentage of the take. Now Doyle has
negotiated another seven compacts, bringing the total to nine. Wisconsin will make more from
Indian gaming than any other state, except Connecticut. One more piece of good news for the
Governor, the courts have given him a little bit of additional control over non-reservation casino
locations. All in all, Wisconsin appears to have a certain and predictable relationship with Indian
casinos in the state.
        7 More Tribes Sign Gaming Compacts. Gov. Jim Doyle and leaders of seven tribes completed
        permanent gambling agreements Friday that would abolish most limits on casinos - something
        state and tribal officials say will mean $105 million in payments to the state over two years and
        various tribal expansions. Steve Schultze, Milwaukee Journal Sentinel, 4-25-03

        Governors Can Veto Casinos, Judge Rules. A federal judge ruled Wednesday that state governors
        can veto off-reservation tribal casinos, ending a lawsuit three Wisconsin tribes filed in 2001.
        …Under the federal Indian Gaming Regulatory Act, the interior secretary can approve off-
        reservation gambling if it's in the tribe's best interest. The law also says the agreement of state
        governors must be obtained. Milwaukee Journal Sentinel, 4-25-03

        Wisconsin's expected share of tribal casino revenue under new gambling deals will exceed all but
        one other state's, at least in the short run, a review of state-tribal gambling pacts shows. The
        estimated $118 million Wisconsin could receive in casino "revenue-sharing" payments in the
        next fiscal year would outstrip gambling revenue anticipated in 21 of the 22 other states with
        formal gambling compacts, a review by the Journal Sentinel found. Only Connecticut, on tap to
        get a whopping $400 million from its two large tribal casinos in a market of 30 million people,
        beats Wisconsin's fiscal 2003 casino payment total. Steve Schultze, Milwaukee Journal Sentinel, 4-17-03

The National Indian Gaming Association had their annual meeting and trade show in April.
There are some very hot issues; war in Iraq (the first woman killed in Iraq was an enrolled tribal
member); the negative press from major publications, such as Time, The New York Times and Wall
Street Journal; the compact negotiations in California and Wisconsin and a number of cases in the
courts that will have an impact on the definitions and limits of sovereignty. Under the
circumstances it is not surprising that a war metaphor was being loosely bandied about. The
tribes are beginning a major public relations campaign to publicize the benefits of Indian gaming
to the non-Indian community.
        "Make no mistake, my friends, we are at war. Our sovereignty is under attack," Anthony
        Pico, chairman of the Viejas Band of Kumeyaay Indians in San Diego County, told the National
        Indian Gaming Association meeting in Phoenix. "But this is not a war of guns and bombs. It's a
        war of words. It's a war of perception, and it's a war for truth," Pico said. …"Gaming has opened
        a door for Indian nations," Pico said. Associated Press, Arizona Republic, 4-9-03

        Indian Leaders Discuss Benefits, Opportunities, of Gambling. Indian leaders discussed tribal
        gambling's benefits and how to promote them Monday, acknowledging Indian gambling has
        encountered some opposition even as it has grown to a $12.7 billion industry. "Indian gaming is
        working for the entire nation…," Ernest L. Stevens Jr., chairman of the National Indian Gaming
        Association, told the group's annual convention. "But we have to make that clear." To that end
        tribal leaders heard a report about a newly launched publicity campaign expected to raise $3
        million to $5 million to spread the word about the benefits of Indian gambling and attempt
        to influence opinions among the public and elected officials. Erica Werner, Associated Press, San
        Francisco Chronicle, 4-8-03

In California, the National Indian Gaming Association is not the only one using fighting
metaphors; the press finds them convenient also. As the compact negotiations progress, it appears
that there will be many adversarial relationships revealed. Unions, the state gambling
commission and some local communities are making it clear that this will not be like Wisconsin.
        Union, Tribes Clash Over Representation. Animosity between the state's largest hospitality
        employees' union and gaming tribes boiled to the surface Tuesday during an Assembly
        hearing called to explore casino workers' need for government-funded health care. Pitting
        two of the Capitol's strongest interest groups -- Indian gaming and labor -- the nearly three-hour
        exchange underscored the stakes as unions try to organize thousands of workers in the state's
        booming tribal casinos. It also comes as the state begins to renegotiate gaming compacts with
        participating tribes. Jim Miller, Press Enterprise, 4-2-03

        Gambling Commission Adopts Regulations for Indian Casinos. Against tribal opposition,
        California's gambling commission yesterday adopted the first in what is expected to be a
        series of minimum operating standards for the state's 51 Indian casinos. …For more than a
        year, the commission has attempted to persuade tribes to approve a series of regulations that set
        baselines… Tribes have rejected at least five other regulations proposed by the commission. James
        P. Sweeney, Copley News Service, San Diego Union Tribune, 4-24-03

Separate from the national public relations effort, some tribes in California are responding to the
public debate over the compacting with a spin of their own.
        A Southern California Indian tribe has launched a statewide television commercial criticizing Gov.
        Gray Davis' bid to get more revenue from tribes as negotiations begin over the agreements that
        govern Indian casinos. "Thanks to the people of California, Indian gaming is making its
        contribution to local communities….Now, some politicians in Sacramento want to take that
        money and waste it on financial problems they've created." Erica Werner, Associated Press, San Diego
        Union Tribune, 4-4-03

        …tribe launched a second statewide television commercial Sunday seeking to rally public support
        as talks with the state over slot machine limits and tribal revenue get under way. …shows
        community figures including a mayor, a fire chief and a coach talking about the benefits of Indian
        gambling. "With the troubled economy and cutbacks, cities like ours are lucky to have
        Indian gaming," says Mayor Ray Rucker of Highland, where the casino is located. Erica Werner,
        Associated Press, San Diego Union Tribune, 4-14-03

Tribes in California are not the only ones that have resorted to television advertising to make a
point. In Minnesota, where the next level of the 21st Century Indian wars is taking place, tribes
are trying to convince voters that tribes should be the only ones operating a casino.
        To counteract the success in the House of legislation for a state-sponsored casino, the Mille Lacs
        Band of Ojibwe has begun airing television advertisements emphasizing the contribution of
        Indian-owned casinos to the economy of rural Minnesota. "A lot of people think Indian casinos
        don't pay taxes," says one of the 30-second ads. "The truth is, they pay more than $81
        million in payroll taxes annually, millions in real estate taxes, and millions more are collected
        from companies that do business with casinos. "If Minnesota votes to allow non-Indian casinos
        in the Twin Cities, it will hurt the rural community that Indian casinos help to support," the ad
        continues. "It will hurt the state's ability to generate tax revenues, and as a result, will hurt all
        Minnesota. Who wins then?" David Phelps, Minneapolis Star Tribune, 4-23-03

The issue is important to the entire country. If this initiative is successful, other states may try to
follow Minnesota‘s lead. Minnesota may become the first state to authorize a non-Indian casino
to raise tax revenues. The enabling legislation still winding its way through the state legislature
provides for a casino at Canterbury Park, if the tribes do not agree to a 6 percent tax on casino
revenues. The intent of the legislation seems to be state operated slot machines and not to tax the
tribes. The location is between Minneapolis and Mystic Lake, which puts the state in direct
competition with Mystic Lake. In Washington there are several bills in the making that would
give the state slots or allow non-Indian slot operations.
        In one of the nail-biters of the legislative session, the House gave narrow approval Friday to
        a state-sponsored casino at Canterbury Park that would break tribal control of casino
        gambling in the state. …The state's cut from slot machines at Canterbury would be a projected
        $100 million over two years. In a bit of maneuvering that may have made it easier for some
        members to support it, the House approved an amendment that would stop the racino effort if
        tribes agree to pay the state 6 percent of their casino proceeds. It passed 77 to 54. David Phelps,
        Minneapolis Star Tribune, 4-26-03

        Seventy percent of adult Minnesotans support establishing a state-operated casino at the
        Canterbury Park racetrack in Shakopee, according to a new public opinion poll commissioned
        by the track's owners. Lobbyists for the track were using the poll results Wednesday to try to
        persuade a handful of undecided lawmakers to support the casino proposal in a House vote
        tentatively scheduled for today. Patrick Sweeney, Pioneer Press, 4-25-03

        Lawmakers and lobbyists are working on a yet-to-be-released plan that would allow the state
        lottery to offer more than 18,000 electronic gambling machines made to resemble slots in
        restaurants, bars and bowling alleys across the state. That's much more of an expansion than
        the once-every-four-or-five-minute keno game that the Democrats who control the state House
        detailed last week as part of their budget proposal. Kenneth P. Vogel, Tacoma News Tribune, 4-22-03

It seems logical, at least to me, that this is the next step in the expansion of gaming. The
individual states, desperate for more revenue, seek to be an operator. In some cases that may put
them in competition with Indian casinos. In others, as in the proposals in Illinois and Indiana, it
would put the state in competition with conventional casinos. In some way this is the final move
in the game. The first move took place in 1931 in Nevada; the second move took place, unless
you count the lottery movement beginning in 1960s, in Atlantic City in 1976. There have been
thousands of moves since, and many still to come, but the time seems to be coming when casinos
will be everywhere; some operated by Indian tribes, others by corporations or by the individual
states. Some may be inside your house, living in your computer, your television set or waiting in
the telephone for you to press the right buttons. By then, as northern Nevada is learning, the days
of the large casino profits and semi-monopolies will have passed into a distant memory.
But that is just my opinion.

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
Technology at Hand. Tribes are taking Internet access and other issues into their own hands.
…Many tribes have made partial commitments to technology. Some have created their own
telephone companies to improve communications services on the reservation. Others have
successfully laid the infrastructure for high-speed Internet access for tribal offices, businesses and
sometimes residents. Others have developed high-tech tribally owned businesses or successfully
recruited high-tech companies to set up shop on the rez. Washington‘s Tulalip Tribes, with its
ambitious Tulalip Technology Leap (TTL) program, has taken the total tech approach. Since its
inception in early 2001, TTL, as it is known locally, has, among other accomplishments, begun
laying a fiber-optic network for reservation based businesses and government offices, up-graded a
30-year-old telephone system; automated and computerized tribal business procedures; created
nine interactive Web sites for tribal government and tribal businesses; developed a keyboarding
font for the local Lushootseed language; and perhaps most significantly, provided 1,200
computers to tribal members and wired them to the Internet. Daniel Kraker, Vol. XIX, No. 4, April 2003, p. 12-

Biloxi Sun Herald
Casino Workers to Get Newsletter. The Mississippi Gaming Association plans to start a free
newsletter aimed at keeping the state's 33,000 casino employees informed about gambling-related
issues. The Mississippi Gaming News will begin publication in mid-June, said Andy Bourland,
executive director of the state gaming association. Bourland will be publisher of the newsletter,
which will be printed by Morris Newspaper Corp., the publishers of Jackpot! Timothy Boone, 4-8-03

Casino Crime
Man Stuffed Stolen Cash in Pants. A casino worker who was too large to wear his company-
issued pocketless uniform stole hundreds of thousands of dollars by stuffing slot cash into his
sweatpants. …Crapps was responsible for emptying the casino slot machines after closing time.
He figured out how to open the tamper-proof canisters that hold the slot machine money. With
his back to security cameras, he stuffed the money in his sweatpants. …Crapps received 12
years‘ probation and was ordered to repay nearly $200,000. Vol. 9, No. 4, April 2003, p. 3
Denver Post
Black Hawk Casino, Hyatt Agree to Divorce. The owner of Black Hawk Casino, which is in
bankruptcy reorganization, has agreed to pay Hyatt Gaming Management $18.3 million -
including a $5 million rejection fee - to end its management of the gambling resort.
…"Woodmont and Hyatt are cooperating to make sure the transition is a smooth one for our
players and, most importantly, our 450-plus employees. This settlement allows us to reposition
the casino," said Tim Rose, Windsor Woodmont president. Tom McGhee, 4-11-03
Blizzard Costly to Casinos, State Taxes. Last month's blizzard cost the state's 43 casinos at least
$6.58 million in gross revenue, and the state lost a minimum of $1.15 million in gaming taxes
when the snowstorm closed roads to Colorado's remote gaming towns. "Historically, March has
been one of the best non-summer months," said Don Burmania with the Colorado Division of
Gaming, which released casino revenues Thursday. This March was expected to be especially
fruitful, considering it offered five weekends. But Mother Nature intervened with as much as 6
feet of snow in the Black Hawk and Central City area, closing roads for almost three days and
shuttering the casinos for the first time since limited-stakes gaming was legalized in 1991.
Colorado casinos in March pulled in $57 million in adjusted gross proceeds, defined as the total
amount wagered minus payouts. That's a 10.2 percent drop from the $63.58 million posted in
March 2002 and a 2.9 percent decline from the $58.75 million in March 2001. Jason Blevins, 4-21-03

Detroit News
Casinos Offer Detroit $60 Million For Lawsuits. Detroit's three casinos have agreed to pay the
city of Detroit up to $60 million to cover liabilities arising from lawsuits over the city's
unconstitutional casino selection process and its bungled effort to acquire riverfront land for a
gambling district. …That means it's in the city's best interest to settle the cases for less than $60
million, or else taxpayers risk being on the hook for damages or settlements. Conversely,
aggrieved parties who dawdle in resolving their cases might find dollars tougher to come by once
the $60 million is depleted. Becky Yerak, 4-3-03
Detroit Casinos Log Record Month. Detroit's casino industry piled up record business in March
as border slowdowns -- real or imagined -- dissuaded gamblers from patronizing the more
established Casino Windsor in Canada. The Detroit casinos' March revenues inched up 1 percent
to $103.8 million compared with a year ago. It was only the second time in the 44-month history
of Detroit's casinos that gamblers left behind more than $100 million in one month. …
Greektown revenues climbed 6 percent to $31.2 million. It was the first time that Detroit's
newest casino soaked up more than $30 million in revenues. Its market share, however, remains
at 30 percent, just shy of last November's 31 percent. …revenues at MotorCity and MGM Grand
Detroit casinos each dipped 1 percent to $37.1 million and $35.6 million, respectively. Becky Yerak,

Greektown to Downsize Casino Hotel. Bowing to the concerns of entertainment venues such as
Ford Field, Greektown Casino plans to shrink the size of its proposed hotel, tweak its mix of
building materials and concede that its previously preferred freeway exit could snarl traffic in its
new neighborhood. Becky Yerak, 4-25-03

Gaming Industry Observer: Michael Pollock’s
Refinancing Fuels Rise in Discretionary Spending, which Benefits Casinos. Gaming Industry
Observer remains sanguine about the economic prospects for gaming throughout the remainder of
2003, and we are not deviating form our initial forecasts. Extraneous hiccoughs, ranging from
weather to war, will cause only temporary disruptions. Moreover, as history shows, discretionary
dollars that are husbanded one month tend to be disgorged the next. The reason for our
unrepentant optimism remains the home front – as in home equity values, and as in home
mortgage rates. The wave of refinancing in recent months has engulfed lenders from coast to
cost. …Since the core gaming customer tends to be older, with more of her wealth tied up in
home equity rather than the Munder NetNet Fund, she is more likely to feel confidence about her
financial prospects by watching real-estate prices than by watching CNBC. Simultaneously,
refinancing is putting actual discretionary income in her pocketbook each month. Vol. 8, No. 6, 4-6-03
Those Who Grow Larger Will Become More Efficient. Size looms increasingly large as a
decisive factor in gaming profitability. The ability to leverage economies of scale out of a single
property – or multiple properties – is the best way to boost margins. Operators have cleared three
pathways toward efficiency: Consolidation; Adding hotel rooms; Hiring smart managers. As the
maturation process continues, not all avenues will remain open. The path that appears most
attractive is the addition of hotel rooms. Harrah‘s Atlantic City, a beneficiary of all three options,
has reduced payroll costs to less than 20 percent of net revenue, and casino payroll is a scant 7.6
percent of gaming revenue. That is why Harrah‘s – with gross operating profits of $184.2 million
-- saw its gross operating profit margins rise to an eye-opening 42.4 percent. …In two phases
over the past six years, Harrah‘s has more than doubled its base of hotel rooms, adding 416 rooms
in 1996 and 452 rooms last year. The added rooms do more than serve as marketing tools; they
add enormous operational efficiencies. The number of rooms rose by 114 percent, while hotel
payroll cost rose by 86 percent over the same time periods. Vol. 8, No. 7, 4-28-03

Gaming Industry Weekly Report
Death of the Slots at Tracks Bill in Maryland. The apparent near term death of the slots at tracks
bill in Maryland gets rid of the urgency for passage of the slots at tracks bill in Pennsylvania and
removes the urgency of further gambling expansion in Delaware. We still believe the slots at
tracks bill has a good chance of passage in Pennsylvania and if passed, will probably have the
start up of operations go a lot smoother than in New York. We also think this bill will pop up
again in Maryland in the future. In the near term this is great news for Penn National Gaming as
their West Virginia racino counts Maryland as a feeder market. Of course since this would have
meant more slot capacity on the East Coast, this is good news for AC operators although slots in
Pennsylvania would probably have more of an impact than in Maryland. 4-4-03
March Gaming Revenue in Illinois Fell 2.8% to $161.6 Million. The largest decrease was by the
biggest casino in the state, the Grand Victoria in Elgin who is also the biggest taxpayer, down
8.8%. Someone should shove that in the Governor‘s face so he understands that the tax increase
based on last year‘s results would have generated another $5.4 million in taxes at the highest
amount. Instead revenues declined $3 million so the state‘s gain just evaporated. 4-11-03
Iowa March Gaming Revenues Rose 2.2% to $87.8 Million, A New Record For March. The
month was difficult for most riverboats with the Council Bluffs area actually declining 1.4%,
something we have not seen for a long time. The eastern part of the market had the biggest gain
of 4.7% led by a 12% increase at Greyhound Park in Dubuque and strong results at ISLE‘s
Rhythm City and Lady Luck casinos. 4-11-03
Missouri Casinos‘ March Gaming Revenue Rose 2.4% to $117 Million. Ameristar St. Charles led
the growth with a gain of 55.1% at the expense of Harrah‘s Maryland Heights which had a
decline of 12.8%. For the month of March, the St. Louis gaming market grew by 5.4%. In
Kansas City, total market revenues declined by 2.1%. Only Isle of Capri in KC registered a gain,
a modest one of 0.4%. 4-17-03
Indiana March Gaming Revenues Rose 11.4% to $199.2 Million. Belterra led the gaining
casinos, up 25.5% while Horseshoe was not far behind and was higher in dollar amounts, up 24%.
The Blue Chip Casino had a strong month, up 21.5%. Coming in second on a dollar basis was
Argosy in Lawrenceburg, up 13.2% and tops in the state with $37 million. Horseshoe was second
with $32.2 million. 4-25-03

Gambling Online
Strategic Changes Ahead for WWTS. WWTS is one of the most successful and most visited
sportsbooks on the net. Yet despite its size, success and considerable experience the company
decided to accept an offer brokered by a consortium of boutique Australian banks to take WWTS
and its new partners onto the Australian stock market. …Simon Noble of WWTS talks about the
background of the deal: A consortium of Australian banks that believes that the time is right in
the online gaming market for consolidation approached us last year. They, as do we, believe that
many companies in the market have reached their threshold of growth and that it is often cheaper
to acquire sportsbooks or casinos than to go out and pay to acquire their customers individually.
Billy Scott, the founder of WWTS: …Secondly this is the first time a major institution
(NASDAQ) got involved in taking a sportsbook public. This is like when the major institutions
got involved in Las Vegas and legitimized the industry, that‘s what they are doing to us. There is
a comfort level for the player to come to the site and see it as a listed company. May/June 2003, p. 104

Gaming Revenue News
Nevada: Clark County gaming revenues were up 9.4% in January. The Strip grew 13.5% for the
month; Downtown Las Vegas gained 11.5%, Laughlin was up 7.3% and Boulder Strip declined
4.2%. …Washoe County‘s revenues grew 15.6% in January, with Reno up 15.5%, Sparks up
16.8% and North Lake Tahoe down 9.3%. …South Lake Tahoe was up 23.4% in January.
Atlantic City: Atlantic City revenues declined 13.5% in February, compared to a 3.2% increase
the year before.
Colorado: Colorado revenues fell 9.0% in February, compared to a 9.9% increase the year
before. …Black Hawk declined 8.7%, Central City was down 11.4% and Cripple Creek fell
Mississippi: Mississippi revenues fell 3.7% in February. Last year‘s revenues were 4.7% ahead
2001‘s results. …For February, the Coastal region fell 4.4%, the North River areas declined 5.0%
and South River gained 2.3%. Vol. 17, No. 4, April 2003

Gaming Update: Colorado Division of Gaming
The Blizzard of 2003. By now the remnants of the ―Blizzard of 2003‖ are gone and the massive
amounts of snow that paralyzed much of the front range are just memories, but the lessons
learned about cooperation and assistance will live on. When it first became apparent that this
would not be like other spring storms, Colorado casinos began talking with out staff. The amount
of snow and the severity of the weather hit the casino towns before the problems were felt in the
Denver area, and Division personnel in Cripple Creek and Black Hawk/Central City had to deal
with situations not directly covered by gaming regulations or ICMP‘s. Working with casino
management, our staff used a common sense approach to the situation. …While the negative
effects of this storm will be felt for a long time, from the property damage to the loss of revenues
to the casino and the state, the positive memories of people working together for business and
personal reasons should always be treasured. Tom Kitts, Vol. XII, Issue 4, April 2003

Globe and Mail
Government Gambling Revenue Tops $11-Billion. Revenue from government-run gambling
outlets has quadrupled in the past decade, Statistics Canada reported Tuesday, with the overall
take topping $11 billion in 2002. More than half of that amount ultimately entered government
coffers as profit. Lotteries, casinos and video lottery terminals (VLTs) operated by Canadian
governments generated $11.3 billion in revenue in 2002, the agency reported, a 5.6 percent jump
over the previous year. After prizes and other costs, the governments realized $6 billion in profit,
a 253 percent increase over the take 10 years earlier. …Significantly more money is being
wagered by Canadians, with each adult gambling, on average, $447 in the previous year. The
number fluctuates dramatically in different parts of the country, swinging from a low of $105 per
capita in the three territories to a high of $604 in Alberta. A decade ago, the average amount per
capita was over $130. Casinos accounted for slightly more than one-third of government
gambling revenues (34 per cent), with lotteries coming second at 27 per cent, VLTs ringing in at
23 per cent and slot machines outside casinos accounting for 17 per cent. Oliver Moore, 4-22-03

Hartford Courant
Eastern Pequots Opt for Fairfield Developer over Trump. The Donald has been dumped. Casino
developer Donald Trump was dropped as a casino partner by the Eastern Pequots, who opted
instead for Fairfield Developer David Rosow, The Hartford Courant reported Saturday. Both
men had separate casino contracts with tribal factions, but the tribe unified when it received
federal recognition last summer. Trump lost out during a recent tribal vote because he was aligned
with the Paucatuck Eastern Pequots, the smaller of the two tribal groups. Associated Press, 4-14-03
Snow, War Driving Casino Gambling. A desire to escape winter and news of war helped propel
Mohegan Sun to its most prosperous month of March since it opened in 1996 and Foxwoods
Resort Casino to its second-best month since it opened four years earlier, casino officials said.
Mohegan Sun, with 6,125 slot machines, reported a net slot win of $67.5 million, compared with
a net win of $61.6 million in March 2002. …Foxwoods, with 6,595 slot machines, had a net slot
win of $67.6 million last month. The casino's best March was last year with a slot win of $70.5
million. Associated Press, 4-16-03

Indian Country Today
From Fireworks to Casinos, W. Ron Allen at Jamestown S‘Klallam. Pyrotechnics and
Independence Day have seldom gone so well together as when the Jamestown S‘Klallam Tribe
set up a fireworks stand. Though a signatory to the 1855 Point-No-Point Treaty, the tribe -
nuxsklai‘yem or "strong people" in their original Coast Salish tongue - had lost its traditional land
and status, and of course the treaty-guaranteed subsistence rights, in the ensuing 125 years. The
tribe had remained in the area, along with the Lower Elwha and Port Gamble S‘Klallam tribes,
only because a band of members had pooled funds to purchase acreage in 1874. But a cohesive
Native community it remained, witness the tribal revival meetings that took place voluntarily, in
private homes, for years before federal recognition and self-governance came around again. The
modest little fireworks stand was a major decision for the Jamestown S‘Klallam. But then it was
no more a mere fireworks stand than a church, synagogue, mosque, temple or sweat lodge is
simply a gathering place. It did more than light their way out of federal termination and historic
invisibility; it lit a fuse that has led to one enterprise after another, from land acquisition and real
estate interests to a casino, an industrial park, traditional arts and crafts outlets, construction and
excavation interests under "8A contracting" for federal projects, a recent health clinic and youth
center, an oyster farm and other initiatives including the notorious "geoducks" - that is to say
"gooey ducks," lucrative gargantuan clams that take their name from the mud-gagged quacks they
emit when wrenched up from their beds on the sandy bottoms of the Strait of Juan de Fuca and
Hoods Canal. (Actually, the word comes from the Chinook tongue, but the folk etymology is too
good to miss in this instance.) Jerry Reynolds, 4-23-03

Indianapolis Daily Star
Casinos Set to Be Top State Taxpayers. Indiana's riverboats are cruising toward becoming the
state's biggest taxpayers. By 2005, floating casinos could be paying more in taxes than all of
Indiana's major corporations -- including such giants as Eli Lilly and Anthem -- combined. In a
recent report that estimated tax collections for the coming two years, state officials predicted that
taxes on riverboat wagering would reach $607 million, $26 million more than would be generated
in corporate taxes, by the 2005 budget year. The shift means that a state that traditionally has
depended on the dollars raised through the sweat of assembly-line workers and farmers will
become increasingly reliant on the roll of the dice or the spin of a roulette wheel. Michele McNeil
Solida and Mary Beth Schneider, 4-7-03

Indian Gaming
St. Croix Chippewa of Wisconsin to Open Nightclub. A slice of Hollywood and Las Vegas is
coming to Wisconsin. The St. Croix Chippewa of Wisconsin recently announced plans for a
12,400 square foot 1920‘s style nightclub to be constructed adjacent to the St. Croix Casino in
Turtle Lake, Wisconsin. Internationally renowned Hollywood writer, director and producer Jerry
Shafer is spearheading the effort to bring this new entertainment venture to fruition. Shafer, who
has been credited with putting Las Vegas entertainment on the map in the ‗60s when he served as
the entertainment director for the Del Webb Corporation, will be bringing some of today‘s
brightest stars to Turtle Lake to perform at the new nightclub. Vol. 13, No. 4, April 2003, p. 74

International Gaming & Wagering Business
Declaration of Dependence. …Few in our post 9-11 world believe things will get back to
―normal‖ anytime soon. So the trick, if you‘re in the travel and entertainment business, is to
hedge against the predictable disruptions. And threat means cement and expand your
relationships or say goodbye to growth. In the current environment, one thing is for certain: The
logic for globalization and, by extension, consolidation in the casino business is growing stronger
as risks multiply. The events of 9-11 are not an extraordinary item on the environmental balance
sheet. Rather, 9-11 increasingly appears to be the beginning of a new era of instability that
threatens the global economy. …Even if you don‘t have the pockets or the stomach for investing
globally, events in the outside world still need to be a driving force in your strategic calculations,
especially if you‘re positioned as a destination resort operator. One of the many lessons of 9-11 is
that multi-unit operators need geographic distribution. One of the best performers in the post 9-
11 period was Harrah‘s, which is in nearly every major U. S. jurisdiction. What this period also
taught us is that people can watch the dire news on TV for only so long; eventually, they want to
get out and have some fun. The same principles will soon apply globally. The current upheaval
means international travel will take a serious hit, especially to countries that are being portrayed
as targets of terrorism. If you‘re a U. S. operator, you can either invest overseas and bring
gambling to the gambler or protect yourself through domestic diversification. Standing still is not
an option. Our butts might not belong to the world, but our businesses do. Charles Anderer, Vol. 24, No.
4, April 2003

Kansas City Star
Casino Revenues Fail to Grow at March's Usual Strong Pace. Riverboat gamblers lost a bundle
last month, as usual. But for the first time, Kansas City's March casino revenues did not surge to a
new marketplace record. It is no coincidence that this also was the first March in memory that
Kansas City did not host the Big 12 college basketball tournament, which typically draws 20,000
out-of-town, fun-seeking, free-spending fans to the metropolitan area. This year, the Big 12
played its games in Dallas, where businesses soaked up fans' estimated $20 million tournament
spending spree. The Missouri Gaming Commission said Thursday that Kansas City's four
riverboat gambling parlors pulled in $54.29 million in March. That was 2.1 percent shy of the
record $55.5 million mark set in March 2002, but still hefty enough to rank as the third highest
monthly total since the market stabilized at its current size in 1997. If the past is any guide,
however, the market should have grown from 2.1 percent to 12.8 percent -- the range of March-
over-March growth the last four years. Rick Alm, 4-11-03

Las Vegas Review-Journal
Loss of Air Seats a Threat. Air seat capacity is putting the Las Vegas gaming industry's hotel
occupancy rates in a "danger zone" a new Deutsche Bank report said Tuesday. Las Vegas air
service now is adequate only for maintaining reduced occupancy rates at around 80 percent,
Deutsche Bank analyst Marc Falcone said. …Longer term, to get Las Vegas really working
again, 6,000 to 9,000 seats a day need to be added to the market to restore occupancy to
historically normal levels in the 90 percent range, Falcone said. Rod Smith, Gaming Wire, 4-2-03
Poker Pros Hit the Decks at Bellagio. Las Vegas reclaimed its position at the center of the poker
universe Wednesday when the Five-Star World Poker Classic opened at Bellagio. The first-year
tournament begins a two-month stretch when the poker world's top pros will be in Las Vegas,
culminating with the World Series of Poker at Binion's Horseshoe. "All of the top pros will be
here in Las Vegas," said Jack McClelland, Bellagio poker host and tournament director. "It helps
our economy, not L.A.'s, not Paris' or anywhere else." Jeff Simpson, Gaming Wire, 4-3-03
Pact Will Maintain Rules on Tip Taxes. The Internal Revenue Service will leave the amount of
federal taxes withheld from Nevada casino workers for tips unchanged for the next three years,
according to an agreement reached Thursday between the agency and the gaming industry. Under
the agreement, confirmed by industry officials and Nevadans in Congress, about 200,000 workers
in 185 casinos will report tip income to the IRS according to a previously agreed upon procedure
negotiated with industry officials. In return, the IRS will not audit workers' tax returns. The
agreement takes effect July 1 and will extend through June 30, 2006. Tony Batt, Stephens Washington
Bureau, 4-11-03

City Council Willing to Allow Slot Machines in Supper Clubs. Supper clubs could gain
permission to operate a limited number of slot machines, but the Las Vegas City Council wants
the authority to consider each case individually. …The measure is being pushed by the owners of
the restaurant Houlihan's over protests from the city's tavern owners, who claim it will hurt their
businesses. Michael Squires, 4-17-03
Coast to Add Casino. Coast Casinos will begin construction by the end of the year on its fifth
casino, Coast Chairman Michael Gaughan said. Slated to be called the Southcoast, Gaughan said
he expects the locals‘ casino to be open by the spring or summer of 2005 at the southwest corner
of Silverado Ranch and Las Vegas Boulevards. Jeff Simpson, Gaming Wire, 4-17-03
Old Yo-Ho-Ho Getting Heave-Ho. MGM Mirage executives plan a transformation of Treasure
Island's exterior, changing the megaresort's look to match its evolution from a pirate-themed
property to a hip spot with allure to value-conscious adults. …"We've evolved from a yo-ho-ho
feel to a more sophisticated feel," Treasure Island President Scott Sibella said. "We want to
change the exterior to introduce the outside to what we've already done inside." Jeff Simpson, Gaming
Wire, 4-22-03

Tropicana Convention Booking Halted, Raising Speculation. The Tropicana is no longer booking
convention business past May 2004, leading many industry officials to believe the resort's owners
may be planning to redevelop the prime Strip parcel as early as next spring. Suspicions that Aztar
Corp., the Tropicana's Phoenix-based parent company, has already decided to redevelop the
property is also sparking union concerns that the resort's plans could leave 2,000 workers out of a
job. Jeff Simpson, Gaming Wire, 4-23-03

Las Vegas Sun
Regulators Consider Anti-Monopoly Rules. The state Gaming Control Board, meeting Thursday
in Carson City, discussed draft regulations that could prevent companies from owning more than
5 percent of casinos in the state and more than 50 percent of a local market area. 4-4-03
February Gaming Win Weak. …Casinos reported gross winnings of $765.1 million, up only 0.45
percent from February 2002. It was the smallest percentage gain in the last seven months. Gov.
Kenny Guinn said, "With the start of the war in Iraq and the uncertainty as to its length, I am very
concerned on how much additional pressure this will put on our fragile tourist-based economy."
Cy Ryan, 4-9-03

Vegas to Get a Boost From Song. …but Las Vegas is continuing to hold its own and will now be
served by Delta Air Lines' new low-fare carrier Song Airlines. Richard N. Velotta, 4-10-03
Gaming Chairman Reappointed. Peter C. Bernhard, a Las Vegas attorney, has been reappointed
by Gov. Kenny Guinn as chairman of the five-member state Gaming Commission that oversees
the casino industry. 4-21-03

Lafayette Advertiser
Casinos Ring Up $179.3 Million in March. Taking advantage of one of the traditionally busiest
months for the gambling business, Louisiana‘s state-licensed casinos won $179.3 million in
March, up from $171.7 million in February, state police reported Wednesday. …Most of the
jump in March came from the Shreveport-Bossier City market, which draws heavily from Texas.
Louisiana‘s 14 riverboat casinos won $142.6 million in March, up from $135.7 million in
February. Associated Press, 4-24-03

Press of Atlantic City
Trump in N.Y. Gaming Expansion. While raising one hand to stop the spread of gambling in
New York, Donald Trump has the other hand out ready to cash in. Four days after a Trump
lawyer argued before the New York Supreme Court that a law allowing six Indian casinos is
illegal, reported that Trump Hotels & Casino Resorts is a finalist to manage the
planned video lottery terminals at Aqueduct racetrack in New York City. – Joe Wienert, 4-1-03
A.C. Casino Revenue Falls 2.1% Short of Last March. A winter that began with promise for
casinos ended with a downer. Gambling revenue at the city's 11 casinos declined 2.1 percent in
March, to $376.5 million, according to unofficial results obtained Wednesday by The Press of
Atlantic City. Still, it was the industry's second-best March ever, trailing only last year's $384.5
million gross. After a good start in January, casinos finished the first quarter 4.1 percent behind
last year's pace. Joe Weinert, 4-3-03

For A.C. Casinos, 2002 Was a Record. …The 12 casinos produced gross operating profit of $1.2
billion, up 9.5 percent, on net revenue of $4.2 billion, up 2.8 percent. That means for every dollar
of net revenue, the industry retained 28.5 cents in gross operating profit. Its profit margin last
year was 26.8 percent. Joe Weinert, 4-4-03
MGM Wins Slot Control Over Trump to Run Vlts At Track. Atlantic City casinos in the near
future will face a formidable competitor in New York City: MGM Mirage. The New York Racing
Association said Thursday that it chose MGM Mirage to manage the planned slot-machine
operations at its Aqueduct racetrack, located near JFK Airport in Queens. Aqueduct plans to open
with 4,500 slots, in the form of video lottery terminals, making it the nation's largest VLT
operation. …NYRA chose MGM Mirage over New York-based Trump Hotels & Casino Resorts,
the other finalist. – Joe Weinert, 4-18-03
Favorite Playground Days to End for A.C. The resort's self-proclaimed days as "America's
Favorite Playground" are coming to an end. The Atlantic City Convention & Visitors Authority
said Thursday it is retiring the decade-old tagline because market research shows potential
visitors no longer view the city as a playground. Participants in telephone surveys and focus
groups paid for by the authority said the moniker is more relevant to cities like Orlando, Fla.
"America has plenty more playgrounds than Atlantic City," one focus group participant said. Joseph
Swavy, 4-25-03

Reno Gazette-Journal
Gaming Board Oks License Transfer to Peppermill Co-Owner. …During its monthly meeting,
the board approved an agenda item that registered Bill Paganetti and Nevada Casinos as the
operator and holding company that will take over the unrestricted gaming license from the Old
Reno Casino, one of the smallest casinos in the region. Thomas J. Walsh, 4-3-03
Turf Club Seeks New Home, Focus. The owners of the Reno Turf Club downtown are trying to
relocate the club‘s unrestricted gaming license to an upscale neighborhood in Reno, on McCarran
Boulevard just north of Fourth Street. …The Turf Club, in business since 1974 at its current
location on the corner of Commercial Row and Center Street, is set to be demolished later this
year to make way for the city‘s railroad train trench project. …The new location will be ―more
neighborhood friendly,‖ Siri said Monday, centered mainly on a family-style restaurant, with 200
to 300 slot machines. The Turf Club‘s gaming license is grandfathered, exempting the Cal Neva
from building a hotel with the new casino. Thomas J. Walsh, 4-22-03

Strictly Slots
Why Slot Payouts Vary from Region to Region. ...Not to mention bet size. From time to time
we've written about the fact that slot machine payouts differ from one region of the country to
another, and that payout amounts vary by bet size too. That's nothing new to most slot players.
But while it's one thing to keep a general awareness about geographical differences in slot
payouts hemmed inside the back of your mind, it's quite another to gather all the relevant
information and display the facts and figures on one neat little chart for all the readers of this
magazine to see, examine and think about.
… There is a systematic and virtually linear correlation between the size of your bet and the
average payback. The smaller denomination machines offer a lower rate of return. But while the
expected value resulting from your play is lessened if machines with smaller base bets are
selected, the player will not lose as much actual cash. This pattern is similar regardless of what
casino game you play. Games such as keno and the Big-6 Wheel, where the bets are typically
quite small, always offer a low expected value. In games like baccarat and craps, where the
betting is typically higher, the player generally gets a better return for his investment. … Why are
slot payouts better in Las Vegas and the rest of Nevada than in the rest of the country? That's easy.
There's more competition there, and when there's competition for a dollar that's looking to be
spent, those programmable little chips that make up the heart of today's modern slot machine are
set a bit more favorable for the player. Not only is there competition from one geographical
locale to another, there's competition within Las Vegas too, and you'll find the Glitter Gulch
casinos Downtown to be a bit more liberal than their Strip counterparts. The reason is obvious:
The Strip is all flash and glamour, while Downtown is older, dowdy, and not nearly as glamorous.
Some might even say it's tawdry. So to overcome this difference, the Downtown casinos offer a
bit more to the player. Lou Krieger & Arthur Reber, April 2003

                                               Ken Adams

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

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