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Beshear still committed on casino bill - BUT ODDS DROP IF TRACK LICENSES LEFT OUT

Posted by sara in Casino News

Gov. Steve Beshear and House leaders committed on Thursday to passing casino legislation even if it doesn’t set aside licenses for racetracks.But that concession might cost the bill several Democratic votes and any possible Republican votes, leaving it far short of the 60 needed to pass the House.

“We’re at a point now to where we do have a bill out and beginning to move. I believe all five of the House leadership and I are committed to continuing this process, beginning to count votes, and to move this along,” Beshear told reporters in his office after he met with Speaker Jody Richards and the other four House Democratic leaders.

Both Beshear and Richards promised to allay horsemen’s concerns about the draft.

“I want to be very clear that the horse industry is a very important part of this whole process. They’re part of the reason I am pushing so strongly to get an amendment like this on the ballot,” the governor said.

Two other Democratic House leaders — Speaker Pro Tem Larry Clark and Whip Rob Wilkey — had fought to make five licenses available only to tracks, with four for free-standing casinos.

Up to this point, racetracks, horsemen and breeders have supported that draft.

But the bill that will go to the House floor for a vote, possibly next week, would allow open competition for all nine licenses. That has the horse industry fretting that tracks could get shut out.

Last night, the Kentucky Equine Education Project issued a carefully worded statement expressing a reluctant willingness to allow the bill to pass the House because lawmakers and Beshear have pledged their support to horsemen.

“We have not yet seen that sentiment manifested in a constitutional amendment bill,” the statement said. But “because of the strong statements of support for our industry we are willing to see this bill move forward.”

Some legislators alienated

Still, the current version has turned off potential supporters of the casino proposal on both sides of the aisle. So the proposal starts many votes shy of the necessary 60 to pass the House, as a bipartisan bloc holds out to see whether the horse industry will reluctantly embrace it or whether someone can come up with a compromise.

Clark, D-Louisville, said horse industry support is crucial to passing any casino bill.

“I think if the industry is not satisfied in some way, no version of the bill will pass,” Clark said. “I think they have that much influence on the vote count. I think you’ve got to get at least 10 Republicans, and maybe 12, to get to 60.”

Republican Floor Leader Jeff Hoover of Jamestown said that is “not going to happen.” In fact, he said the “several” Republicans most likely to support a casino bill are unhappy with the way the current bill leaves out tracks.

Rep. David Osborne, R-Prospect, is a horse owner who was one of a handful of House Republicans interested in approving casinos. But he said he’s so concerned about the current version’s language that he’s not sure he could vote for it even if the horse industry didn’t protest.

“To take something that was motivated by helping the industry and turning it into something that can be detrimental to the industry is a little beyond me,” he said.

Rep. Ruth Ann Palumbo, D-Lexington, said she had planned to support the bill but assumed it would specifically include provisions for racetracks to get licenses.

“If it doesn’t, I’ve got a problem with that,” she said, adding that she would “probably” vote against it.

However, Richards said that although he hasn’t seen a head count, he thinks those willing to approve the measure number “in the 50s.”

Promises of changes

The horse industry has two main avenues for convincing lawmakers to address tracks: change the proposal on the House floor, or wait to see whether the Senate or future legislation will designate licenses for racetracks.

Beshear and Richards both said they’ll work with the horse industry to develop accompanying legislation that will lay out the details of establishing and regulating casinos. But neither man would guarantee that any tracks would get licenses.

“Any enabling legislation that does not give protection to the horse industry, I will veto,” promised Beshear, who campaigned on expanding gambling. The governor could not veto the constitutional amendment, which would go instead to voters for ratification in November.

Wilkey, D-Scottsville, said some might be willing to vote for the current language “just to keep it moving.”

He said he’ll propose an amendment on the House floor that, like his earlier drafts, would designate five licenses for tracks and four for free-standing casinos.

Rep. Carl Rollins, D-Midway, introduced a floor amendment Thursday that says the “number of free-standing casinos shall not exceed the number of casinos authorized” for tracks. That way, he said, the horse industry wouldn’t be outnumbered by free-standing gambling houses, which he views as competition to tracks.

Settling down?

The last week of debate over casinos has spawned a series of unusual legislative maneuvers that have only seemed to heighten uncertainty among lawmakers.

Most notably, Richards replaced Rep. Dottie Sims, D-Horse Cave, on the committee handling the casino bill with two members who agreed with Richards’ version. The next day, that draft flew through the committee.

Hoover, the GOP leader, said such controversial maneuvers have given lawmakers who may have been on the fence an excuse to vote “No.”

“I think anybody — Republican or Democrat — who may have been thinking of voting for the constitutional amendment can clearly see … what a zoo this situation has become,” he said.

Beshear acknowledged that the bitter wrangling to get the bill through committee has made it harder to come up with votes.

“We’re just at the point where we’ve got to move on,” he said. “As tempers cool, and as people begin thinking again about the substance of the amendment, hopefully we can overcome that and pull together the necessary votes to pass that.”

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Casinos feel U.S. downturn as gamblers pinch nickels

Posted by sara in Casino News

NEW YORK: Casinos, generally seen as recession-proof, are beginning to feel the pain of the slowing U.S. economy.

The gambling industry has expanded rapidly in recent years, as more U.S. states allowed casinos and existing gaming parlors expanded. Casino gambling revenue, the amount lost by players, doubled between 1995 and 2006 to $32 billion, according to the American Gaming Association.

But with the U.S. economy slowing, there are signs that Americans, especially patrons of local casinos, are not in a betting mood.

Their weaker earnings come a day after Pinnacle Entertainment, which operates casinos in regional U.S. markets, posted a wider fourth-quarter loss, mainly because of costs related to opening a new casino. The company said progress on other projects hinged on improved access to credit financing.

Harrah’s, which operates Las Vegas Strip resorts like Caesars Palace and the Flamingo, posted a fourth-quarter loss, burdened by impairment charges and losses at its properties in Illinois and Indiana.

Gary Loveman, Harrah’s chief executive, said during a conference call that results at regional casinos were “mixed,” while in Las Vegas “the gaming business has held up well, but room rates are off a bit.”

Boyd Gaming, which owns and operates 17 casinos in seven states, posted a 45 percent drop in fourth-quarter profit.

Boyd, which is building a casino resort called Echelon on the Las Vegas Strip, said net income fell to $31.2 million, or 35 cents per share, from $56.3 million, or 64 cents per share, a year earlier. Revenue fell 8.1 percent to $478.6 million, Boyd said.

The chief executive of Boyd, Keith Smith, said that the company experienced “some softness or weaknesses in the business” in late November through January, but that trends improved in February and that the company was “cautiously optimistic” for this quarter.

Fourth-quarter earnings at its downtown Las Vegas properties, aimed at tourists, posted a 13.8 percent profit drop, while profit fell 13.2 percent at Boyd casinos in the U.S. Midwest and South, as its Blue Chip casino in Michigan City, Indiana, suffered from new competition.

At the same time, profit from Borgata in Atlantic City, New Jersey, a joint venture with MGM Mirage, was essentially flat as it faced competition from video lottery terminals added in nearby Pennsylvania and New York.

Boyd’s earnings at its casinos catering to Las Vegas locals rose 3.3 percent as the company overcame a 1.5 percent dip in revenue.

Harrah’s, which was acquired last month by the private equity funds Apollo Global Management and TPG Capital, posted a net loss of $47.8 million, compared with a profit of $47.6 million in the same quarter a year earlier.

 

“Competitive pressures in several markets do not appear likely to lessen in the near term,” Oppenheimer analyst David Katz said in a report released Wednesday.

Harrah’s Entertainment, the world’s largest casino company, and Boyd Gaming both posted weaker quarterly earnings Wednesday and both described the economic environment as “challenging.”

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Mohawk tribe expanding casino in northern NY

Posted by sara in Casino News

ST. REGIS INDIAN RESERVATION, N.Y. - The St. Regis Mohawk tribe is expanding its casino, adding 1,000 more slot machines to the gaming operation on the U.S.-Canada border in northern New York.

Tribal officials say the $75 million project at the Akwesasne (ahk-wuh-SAHZ’-nee) Mohawk Casino will also include construction of an eight-story, 220-room hotel. Other plans call for adding an entertainment complex and conference rooms to the casino.

The casino already has 1,200 slot machines in operation. The new slots all will be up and running within the next year.

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CASINO SECURITY: Counting a legend

Posted by sara in Casino News

Author of seminal book on blackjack math draws big crowd

Card counting for Edward Thorp was about proving a mathematical formula, not making money.

When he authored “Beat the Dealer” in 1962, the first widely published book with a proven system for card counting, Thorp was a mathematician at the Massachusetts Institute of Technology trying to improve a theory.

“I never did imagine I would make money at this,” said Thorp, who was the keynote speaker at last week’s World Game Protection Conference, a two-day gathering of casino surveillance professionals from the United States and 10 countries. “I thought it was a great mathematical problem.”

A standing-room-only crowd of approximately 380 people packed a ballroom at Paris Las Vegas to hear the 75-year-old mathematics professor discuss the events surrounding his book.

“This is like going back in time and seeing Babe Ruth to me,” said Bill Zender, a casino security consultant for Last Resort Consulting. “Here’s the man who started it all.”

While the conference included such dry-sounding topics as “Information Integration” and “Broadening Your Surveillance Intelligence,” Thorp’s speech created buzz.

Jessie Beaudoin, a surveillance property manager for American Casino & Entertainment Properties, said Thorp’s book still fundamentally influences the way casino surveillance watches and monitors blackjack.

“Edward Thorp is completely instrumental to the gaming industry, period,” Beaudoin said. “You’re looking at 50 years later and people are just now using it the way you would of thought 30 years ago.”

“Beat the Dealer” has sold nearly 600,000 copies, Thorp calculates, and has never been out of print.

Following his talk, many surveillance professionals approached Thorp to ask him to sign well-worn copies of his book. One even extracted his copy from its protective bubble wrap.

Today’s wide acceptance of the book and Thorp is a far cry from the book’s original reception among casinos nearly 46 years ago.

Zender, a former Nevada gaming control agent and former Aladdin casino manager, said the book upset casinos.

“The reason is because if you use the strategies (the casinos) had a game that was totally beatable,” he said.

The book, however, helped increase the popularity of blackjack among players who believed they could come to Las Vegas and beat the casino using their brains.

The book’s history began in 1958 when Thorp was teaching mathematics at the University of California, Los Angeles and he ran across an academic paper in a statistics journal written by four male college graduates enlisted in the Army.

Their paper provided a strategy for playing blackjack that didn’t beat the game, but provided a probability outline for when players should stand or take a hit.

Thorp, intrigued by the mathematics in the paper, headed to Nevada to try the strategy for himself.

Holding the formula on a note card in one hand — which was not illegal then — Thorp drew attention to himself when he hit a seven-card 21.

Playing with small amounts, Thorp realized that the casinos “didn’t understand this game very well.”

Thorp then contacted the journal article’s authors and asked them to send him their supporting work.

After Thorp moved to MIT in 1959, he began working on various systems before honing in on a single system that would have wide public appeal.

The mathematician presented his basic strategy findings in 1961 at an abstract mathematics conference in Washington, D.C.

After presenting his talk to the “most diverse crowd I’ve seen at a mathematics presentation,” Thorp said he tossed a stack of five-page handouts toward the surging crowd and headed for the back door.

Soon, MIT received 20,000 letters and Thorp got offers from financial backers willing to take him to Nevada to make money.

The publishing of “Beat the Dealer” in November 1962 caused a sensation among players and heightened concern among gaming regulators. It led to publicity that included an article in Sports Illustrated.

In early 1964, casino owners and operators met to discuss strategies to counter the book. The meeting led to changes including the adoption of multiple-deck blackjack and the elimination of many betting options.

Despite his book, Thorp said the most he ever made playing blackjack was $11,000 in 20 hours of play at a Lake Tahoe casino during spring break from MIT.

Thorp soon moved on to other pursuits, applying his mathematical knowledge to the stock market. But he still receives offers to speak at gatherings similar to Tuesday’s a couple of times a year.

“The thing I didn’t know at the time was how long this would last, five years or 50 years,” Thorp said. “Obviously, it’s 50 years.”

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