Casino City Newsletter: Issue 204Volume 3 Page 1



Issue 204	August 9 - 15, 2004	Volume 4	page 1

This Issue

Gaming News

Casino City Files Suit Against Department of Justice

Borgata Set to Launch $200M Expansion

Cayugas' bingo hall stays open in Union Springs

Plans for White City casino

Mikohn slot game approved by Mississippi gaming

Show Time Sting and Anne Lennox, perform in the "Sacred Love Tour" at the MGM Grand.

Column Advice for Vegas Tourists By John Grochowski

Check out our entertainment highlights & upcoming tournaments

See the lucky winners

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Casino City Files Suit Against Department of Justice to Establish its First Amendment Right to Advertise Online Casinos and Sportsbooks

Casino City, Inc. today filed a complaint against the U.S. Department of Justice in the U.S. District Court for the Middle District of Louisiana. The complaint seeks a declaratory judgment that advertising online casinos and sportsbooks is constitutionally protected commercial free speech under the First Amendment of the United States.

In June of 2003 the Department of Justice sent letters to a variety of organizations including the National Association of Broadcasters, the Magazine Publishers of America, the Independent Press Association, and the National Newspaper Association. The letters requested that the organizations warn their members that individuals accepting such advertisements might face prosecution.

Several months later the Justice Department issued subpoenas to a variety of media outlets, Internet portals, public relations firms, and other companies seeking detailed information on the purchase and placement of online casino and sportsbook advertisements.

The actions of the Department of Justice have been widely reported in the news and have had a chilling effect upon free speech. Popular Internet portals including Google and Yahoo have recently ceased accepting advertising for online casinos and sportsbooks. Many individuals in the online gambling industry view the actions of the DOJ as a form of blackmail based on the belief of a few government officials rather than established legal principles.

Casino City's parent corporation has been involved in the gaming industry for years. It created the original gaming portal site, CasinoCity.com in 1995. Today the Casino City website is operated by Casino City, Inc., and is now the most popular such site on the web covering online casinos and sportsbooks, land-based casinos, gaming strategy, and news. It is part of a network of websites including Online.CasinoCity.com devoted to online gaming, and www.CasinoCityTimes.com covering gaming news and offering visitors thousands of articles on gaming strategy.

When the Casino City website was first launched, there were no online casinos, and online advertising was virtually nonexistent. Today, however, I-gaming advertisements form an important part of Casino City's revenue. Company CEO, Michael Corfman, says "The public has the right to see the wealth of information we provide on casinos and sportsbooks, and we have the First Amendment right to advertise online gaming on the web to support its free publication."

The actions of the department of Justice have definitely had an impact on Casino City notes Corfman. "Our parent corporation had partnership plans with A&E Television Networks to promote the Breaking Vegas documentary and associated sweepstakes. Casino City was to be featured on The History Channel website and in 30 national television spots, but they cancelled the agreement after the promotion had already begun. We were told by their marketing agents that A&E felt there was an unacceptable risk the network would be viewed as aiding and abetting online gaming since it's only two clicks from our home page to an online gaming site. When you have an FCC license that must be protected to stay in business, you just can't afford to take chances with the Department of Justice…More recently, a major Las Vegas casino wanted to work with our parent corporation on a promotion but their lawyers nixed the arrangement because of our involvement with online gaming."

Casino City believes the actions taken by the Department of Justice are wrong, and that they threaten our freedom of speech in violation of the First Amendment of the United States Constitution. We also believe that matters of law such as this are properly decided by the courts, and not by government administrators interpreting laws in a way that many experts claim is flawed. Consequently, we have today asked the courts to determine our rights, and those of others similarly situated, under the United States Constitution.

Borgata Set to Launch $200M Expansion
As reported by GlobeST.com

ATLANTIC CITY, NJ -- The property is only 13 months old, but the revenues the massive, 2,010-room Borgata Hotel and Casino have been generating have prompted co-owners Boyd Gaming and MGM Mirage to launch a major expansion. That expansion had been rumored for months, and officials of Boyd Gaming, which is the operating partner in the property, have made it official.

And the price tag is massive--an estimated $200 million. For that, Boyd and MGM Mirage will add another 500,000 sf to the building, including a greatly expanded gaming area, more retail and restaurants, two more nightclubs and a larger spa.

"In many areas of the property, we simply cannot meet the strong demand for our facilities," says Robert Boughner, Borgata's CEO. "We are capacity-constrained in nearly every major product offering, and our customer research clearly signals that demand for our products is strong and growing.

"We realized early on that we needed to add supply, and we began planning and design work on an expansion of Borgata," Boughner continues.

While the expansion still requires various government and regulatory approvals, Borgata officials say they expect to break ground this coming December, and to have the expansion completed by the middle of 2006. The new portion of the sprawling complex will rise on an adjacent piece of land that is actually separately owned by partner MGM Mirage, and the Las Vegas-based Boyd Gaming will lease it from MGM Mirage, according to company officials.

And neither Boyd nor MGM Mirage anticipates putting any additional capital into the project. The cost of the expansion will come from the property's equity.

"We expect to renegotiate Borgata's bank credit facility, which has been paid down significantly from its original level, to provide funding for the project," according to Boughner.

Nor is this latest expansion likely to be the last. According to sources, a second expansion phase is already in the planning stages, a project that could add upwards to 1,000 rooms. A project boosting Borgata into the 3,000-room range would make it by far the largest hotel in the state, and the Northeast, and would propel it into Las Vegas territory in terms of sheer size.