Issue 278
January 9, 2006 - January 15, 2006
Volume 6
page 2

Gambling sites eager to roll as governor signs bill regulating Broward's slot machines
As Reported by

TALLAHASSEE, Florida - Voicing concerns that expanded gambling will hurt Florida, Gov. Jeb Bush on Wednesday reluctantly signed into law a bill that gives the green light for Las Vegas-style slots in Broward County.

"I oppose the expansion of gambling because it is detrimental to Florida's economic development and hurts Florida's families," said Bush, a staunch opponent who had tried to defeat the constitutional amendment that opened the door for slots. "However, I have a constitutional duty ... to implement the voter-approved initiative."

Owners of the county's four pari-mutuel facilities predict a boon for the area and for Florida's schools, which are expected to reap a $209 million benefit from slots tax revenues by the 2007-08 school year.

"This isn't only a boon for the county, it also now offers protection for those people who partake in gambling, whether it's regulated or not," said Dan Adkins, vice president of Hollywood Greyhound Track. He referred to nearby unregulated Indian gambling.

The state has six months to establish detailed rules of operations -- including security requirements for the machines and how money will be handled. If the state doesn't act by June, the pari-mutuels will still be able to open with temporary licenses.

"We've got to get those slots going for a number of reasons. It's good for the shareholders and horsemen. It's also good for the community and education in the state," said Dennis Mills, vice chairman of Magna Entertainment. The company owns Gulfstream Park in Hallandale Beach, where a $171 million renovation already is under way.

Mills said Gulfstream, which is building a 40,000-square-foot complex that will include restaurants and a sports bar, wants to have its machines up and running in six months. On Wednesday, opening day of the 2006 racing season, only part of the new complex was ready for business and a casino-style room packed with slot machines was still four months away.

Plans are also in the works to turn the county's other three aging pari-mutuels -- Hollywood Greyhound Track, Pompano Park harness track and Dania Jai-Alai -- into glittering entertainment complexes.

Each will be allowed to install up to 1,500 machines, which will be taxed at 50 percent -- one of the highest tax rates in the nation.

Adkins, who led the drive to get slots approved by voters statewide in 2004 and then in Broward in 2005, has scaled back his original expansion plans because of the tax rate -- opting to renovate his existing building.

"We'll see how it goes," he said. "We'll get people in because the demand is there for gambling. Once we begin operating and offer bettors a payback of 91 to 94 percent, we'll draw large crowds."

Adkins said he could have slot machines up and running "within an hour of rules being issued, as long as they are not intentionally punitive."

The Isle of Capri Casino Corporation, which owns Pompano Park, is conducting its winter meeting in Broward next week and is expected to decide the scope of its renovations.

"The original scope of the project was in the $165 million range but I anticipate that budget may be pared somewhat," said Dick Feinberg, general manager of the harness track. "But it's still going to be a major expenditure." He hopes to have 1,500 machines up and running by the end of the year.

The Florida Department of Law Enforcement is hiring 39 new agents and analysts who will be responsible for monitoring the slots operations.




Pa.'s leaving money on casino-bids table

As Reported by The Philadelphia Inquirer

PHILADELPHIA, Pennsylvania - What do actor Sylvester Stallone, musician Quincy Jones, basketball coach Dawn Staley, fitness guru Pat Croce, and ex-centerfielder Gary Maddux have in common with power lawyer Richard Sprague, builder Dan Keating, and zillionaire Donald Trump?

If you've been following the progress of Pennsylvania's long march toward gambling nirvana, you know: They're all among the crowd of celebrities, ex-pols, fixers and rainmakers hoping to help land casino licenses in Pennsylvania.

Harrisburg plans to award a mere 14 of these cash-cow franchises later this year, handing a select few operators the right to create slot-machine parlors across the state. As of late last month, when the application deadline passed, 25 investor groups had put in bids.

Actually, bids isn't technically correct. When the wise persons of our legislature set up this system, they purposely rejected suggestions that slots franchises be priced and sold through open auction.

Instead, each operator will pay a onetime license fee of $50 million. Doesn't matter whether the proposed casino is in Center City or the Western Pennsylvania outback - the same flat fee applies.

Some think this was a dumb move on Harrisburg's part. Casino properties in Pennsylvania are expected to be worth hundreds of millions of dollars - a point that was underscored recently when two of the racetracks slated to get slots licenses were sold.

One went for $225 million, up from $53 million before Pennsylvania legalized slots. The other jumped from $20 million to $280 million. In other words, the prospect of slots at each racetrack added between $172 million and $260 million to their value.
Now recall why Pennsylvania decided to legalize gambling in the first place. It wasn't to enhance the state's reputation as a wholesome family destination, but rather out of government's cold-blooded need for revenue.

Faced with mounting resistance to property- or business-tax increases, the legislature resorted to an ancient idea, known as far back as Roman times, called tax farming.

Instead of imposing taxes on the citizenry directly, the state is, in effect, outsourcing revenue collection to casino operators. They'll gently separate people from their money, keeping about half the take for themselves. (Pennsylvania plans to tax 54 percent of what gamblers leave behind.)

Forget for a moment the moral or social debate over legal gambling. Does this make business sense? It might - but not if the state leaves money on the table by charging slots operators less than full value for the privilege.

Yet that's what may be happening. In a paper issued late last year, a conservative Pittsburgh think tank estimated that an open auction for slots licenses could have netted as much as $2.1 billion in additional revenue for the state.

Of course, the architects of Pennsylvania's slots policy beg to differ. Gov. Rendell told the Pittsburgh Post-Gazette that the flat license fees were justified because of the state's high tax rate on casino winnings (a.k.a. gamblers' losses).

But the governor's argument is undercut by the very parade of hired notables accompanying the casino hopefuls to Harrisburg.
How so? If the contest of casino licenses in Pennsylvania had been run as a pure auction, a big checkbook (and a clean record) is all the players would have needed to bid.

Instead, casino hopefuls are competing by bringing athletes, movie stars, local heroes, and political insiders to the table. Trump bids Pat Croce; Foxwoods counters with Dawn Staley and Gary Maddux. I'll see your Stallone and raise you Boyz II Men.

Note that this isn't the same casino-celebrity relationship we're used to seeing in Las Vegas or Atlantic City. Quincy Jones signed up not to entertain at Foxwoods' hoped-for Philadelphia casino, but rather to wow state regulators into granting it a license.

But you have to wonder: If raising revenue was the point of slots, why is Harrisburg giving licenses away for a song?

Tribe plans to expand casino
As Reported by The Daily Herald

MIAMI, Florida - Horizon's Edge, New England's premier casino and entertainment cruise line, announced last week its launch from the Bayside Market Place in Miami. Beginning Friday, the S.S. Horizon's Edge set sail from the Miami port providing residents and visitors to South Florida with an upscale, high-quality Las Vegas-style casino experience.

Since 1999, Horizon's Edge has operated casino cruise ships from Lynn and Gloucester, Mass. Now, to take advantage of the warm year-round weather in South Florida, it has permanently moved one of its ships to sail from Miami.

"Horizon's Edge is excited to bring our unique casino cruise experience to South Florida," said David Zion, chief executive officer, Horizon's Edge Casino Cruises. "We're confident that South Floridians and visitors to Miami will find the Horizon's Edge a completely different experience than previous casino cruises based in Miami."

The S.S. Horizon's Edge is a 186-foot ship that accommodates more than 570 people including staff and crew. It will sail twice-a-day, seven days-a-week with day cruises from 11 AM to 4 PM. Evening cruises will sail from 7 PM to 12 AM Sunday through Thursday, and Friday and Saturday until 1 AM.

Passengers can enjoy an international menu of gourmet food prepared by chefs from the Culinary Institute and live entertainment and dancing every night. The casino includes more than 200 slot machines with $0.05, $0.25, $1.00 and $5.00 denominations with an average of 90 percent payouts, the highest in South Florida.

In addition, a wide variety of Las Vegas-style table games are available including Blackjack, Craps, Let-It-Ride Poker, Roulette and 3-Card Poker.

All passengers on the S.S. Horizon's Edge will have the opportunity to join the "Player's Edge Player's Club," which is a tracking system offering rewards to all players based on their level of play. All passengers will earn rewards through the program.

"Over the last six years, we've built a Las Vegas-style casino experience unparalleled by other one-day gaming ships in the U.S.," said Tom Groom, general partner, Horizon's Edge Casino Cruises. "We welcome passengers to experience the Horizon's Edge difference."

Founded in 1999 by five high-school friends, Horizon's Edge Casino Cruises has become the leading one-day gaming ship in the Northeast with 65,000 passengers sailing annually in a seasonal market. Horizon's Edge Casino Cruises is headquartered at 76 Marine Boulevard, Lynn, Mass. For more information, please call 800-LUCKYDAY or visit

EDITOR'S NOTE: A media event is planned for Thursday, January 12, 2006. Journalists will be able to tour the boat and interview executives from Horizon's Edge. Those interested will be able to stay on board for the evening cruise. More information to follow shortly.

Etta James

Orleans Showroom: The Soaring Voice of Etta James will be at The Orleans Hotel & Casino's Orleans Showroom January 20th through the 22nd. Etta James is one of the great forces in American Music. With 2 Grammy Awards and a star on the Hollywood Walk of Fame, Ms. James is a recognized master in the field of blues, R&B, jazz, and pop, crossing genres time and again, proving her notion that, “If I can feel it, I can sing it.”

Dates: January 20 - 22

Time: 8:00 p.m.

Ticket Price: from $44.95 + tax

For more information: 702-365-7075

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