Issue 57
October 8 - October 15, 2001
Volume 2
page 1

This Issue

Gaming News
Internet Gambling Draws
Big Bettors

Aladdin Hotel & Casino
files Chapter 11

Industry Split on Internet Gambling

Mandalay Resort Group to layoff 4,500

Desert Passage Shopping Area to Remain Open

National Airlines Offers great travel Specials to Las Vegas from Around the Country

Show Time
Gloria Estefan comes to Manadalay Bay

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Internet Gambling Draws Big Bettors As Vegas Suffers in Air-Travel Slump


LAS VEGAS -- (AP) Playboy Enterprises Inc., Microsoft Corp. and Viacom Inc. have already placed their bets on Internet gambling beating out established gambling giants like Park Place Entertainment and Harrah's Entertainment.

Those companies have already established virtual casinos outside the U.S., where Internet gambling isn't prohibited.

That means Las Vegas-based casino corporations have a tight window to get in on the game before losing out to more nongambling companies, industry experts said Thursday at the first Interactive Gaming Exposition and Conference.

"Internet gambling is inevitable. It's here. If you think time is on your side, it's not," said Sebastian Sinclair, gambling industry analyst and vice president of Christensen Capitol Advisors. "The next 12 months are it. If you don't, other companies will come to dominate this market."

Lawmakers in June approved a bill enabling Nevada to become the first state in the nation to offer Internet gambling. Federal law currently bars Internet gambling, but state officials say court challenges could change the federal government's position.

Casino executives met with technology developers of proposed online casinos, Nevada gambling regulators and Wall Street analysts to discuss the future of Internet gambling at an Internet Gaming Conference held at the Bellagio hotel-casino September 26-28. The conference, sponsored by the nonprofit Interactive Gaming Institute of Nevada and Bear Stearns,

 


MGM Mirage just recently secured a license for Internet gaming on the Isle of Man.

Sinclair said a recent survey shows 30% of all adults gamble online and they lose an average of $960 a year compared to land-based gamblers who spend $511 annually at brick-and-mortar casinos and on lotteries.

Analysts praised MGM Mirage, the largest owner of Las Vegas Strip properties, for taking the lead and being the first major gambling company to obtain an offshore gaming license on the Isle of Man, an island-nation off the coast of Great Britain that is establishing regulations for the industry

MGM Mirage spokesman Alan Feldman said it will probably be a year before the regulatory structure is established and sites are operational.

"Terry Lanni [MGM Mirage chief executive] is going to eat everyone's lunch," Mr. Sinclair said.


Aladdin Files for Bankruptcy

LOS ANGELES (Reuters) - Just over a year after making a $1.2 billion bet by opening a mega-resort on the Las Vegas Strip, Aladdin Gaming filed for bankruptcy protection on Friday, September 28 and secured new funding from creditors.

The company said the widely anticipated bankruptcy filing will allow the Aladdin Resort and Casino to stay in business while developing a plan to reorganize. A group of lenders led by Bank of Nova Scotia agreed to provide $9 million in funding to meet short-term cash needs for the casino and stood ready to loan an additional $41 million as needed, Aladdin said.

The Aladdin has struggled since opening on Aug. 18, 2000 and critics have said the massive casino was poorly designed. The problems for the highly-leveraged resort were compounded by the Sept. 11 air attacks on New York and Washington and the subsequent slump in travel, analysts said.

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