Issue 286
March 6 - March 10, 2006
Volume 6
page 2
 

Racetracks could be biggest winners
As Reported by The Boston Herald

BOSTON, Massachusetts - Bay State racetrack owners would walk away with hundreds of millions of dollars in added profits under a controversial proposal for Vegas-style gambling now steadily gaining support on Beacon Hill.

Lawmakers are preparing to hand over a gold mine in the form of gambling licenses to dog and horse track owners at prices that critics say amount to bargain basement deals.

Track owners could acquire a license to operate 2,000 slot machines for about $25 million under a state Senate bill that passed last year.

The return on investment: A staggering $200 million in estimated annual revenue for each track.

The proposed $25 million buy-in is but a fraction of the hundreds of millions of dollars that huge casino operators have shelled out to operate similar slot parlors in Pennsylvania, a new study shows.

The debate comes as state lawmakers prepare to vote later this month on the slot proposal, which is seen as having the best chance in years of passing. Track owners in Revere, East Boston, Taunton and Plainville - as well as their employees - are lobbying fiercely, arguing their struggling racing venues can’t survive without slot machines.

‘‘You spend a few million on lobbying and political contributions, and you get a $300 million to $400 million license,” said Jeff Hooke, a Maryland investment banker and activist who says all gaming licenses should be auctioned to the highest bidders.

But track owners and a key State House player who crafted the Senate bill contend such criticism is off base.

The tracks have committed to making big upgrades to their properties, noted state Sen. Michael Morrissey, (D-Quincy). Gary Piontkowski, head of Plainridge Racecourse near the Rhode Island border, estimates he and his partners will spend nearly $200 million in capital improvements.

And the tracks will have to turn over as much as 60 percent of their slot machine largesse to the state - one of the highest such tax rates in the country.

‘‘At some point, it doesn’t become economically feasible if you have a $100 million license fee and the state is taking 60 percent,” says Piontkowski.

But casino companies interested in setting up shop in Pennsylvania didn’t skip a dollar in their bids for gambling licenses there, despite a similarly high tax rate.

That state has also tied slots to racetracks, charging a $50 million license fee to get into the game.

Undeterred, some of the world’s biggest gambling companies have since paid hundreds of millions to gain control of the tracks and the slot licenses - far more than the $50 million charged to the state. The winners, in these cases, were not taxpayers, but racetrack owners who benefitted hugely because the industry bid up the value of their gaming licenses.

Slot licenses in Pennsylvania have gone for sums ranging from $245 million to $442 million, with heavy hitters such as the Mohegan Tribe, owners of Mohegan Sun in Connecticut, and Harrah’s Entertainment, the nation’s largest casino company, ponying up.

Senate lawmakers, with an eye toward preventing a limitless secondary market, empower the state with strict controls over each gaming permit under the proposed legislation.

But critics say Bay State track owners would still be getting a steal.

At a State House hearing last year on expanded gambling, Hook suggested the true value of a slot machine license in Massachusetts is well over $200 million.

‘‘It’s a joke. ($25 million is) pennies on the dollar,” Hooke said. ‘‘We think the taxpayer should get a fair economic deal if slots are legalized.”

And Wayne Lemmons, head of Delaware’s state lottery system, said at the very least Bay State tracks should pay double the proposed $25 million fee.

‘‘Fifty million - they will pay that for a license. They will bitch about it, ‘poor me,’ but they will make money,” Lemmons said.

With each slot machine generating $100,000 a year, the tracks’ new slot halls will together generate upward of $800 million, estimated William Thompson, a professor at the University of Nevada at Las Vegas. ‘‘They go from being worth $10 million to $20 million to being worth $400 million to $500 million,” Hooke said of the track owners. ‘‘It’s a huge increase in their net worth.”

 

 

 

And the Oscar Goes to ... GoldenPalace.com? Internet Casino Leases Academy Award for $30,000
Press Release

LOS ANGELES, California - GoldenPalace.com, the Internet casino that has become synonymous with outrageous and unusual advertising campaigns, has leased Morris Stoloff's 1960 academy award for scoring of the musical picture "Song Without End" for 999 years. The privilege of harboring the Oscar cost the gaming site $30,000.

"We've been trying to buy an Oscar, but the academy's legal agreement clearly states that most of them can't be sold, so we had to think creatively," said casino spokesman Drew Black. "The agreement says nothing about leasing."

For years the Academy has prevented private sales and public auctions of Oscars bestowed after 1951, when winners were required to sign off that the statuettes were the property of the Academy. Leasing the Oscars however, is a different story, and has academy lawyers in a bit of a quandary.

GoldenPalace.com originally offered $100,000 to Margaret O'Brien to lease her honorary Oscar for Outstanding Juvenile Performer of 1944. She played wisecracking, doll-burying "Tootie" in "Meet Me in St. Louis."

"Many former Oscar winners have their awards sitting on a mantle collecting dust," continued Black. "Some of them may want to use their awards to make some extra cash or get themselves back into the spotlight. We're more than happy to help."

GoldenPalace.com has made headlines with their eccentric purchases before and often used their media exposure to raise awareness and money for charity.

"Being in the public eye as a result of this campaign, we feel obligated to mention the efforts of One.org," continued Black. "We aren't formally affiliated with them but we urge people to go to www.One.org and find out more about this wonderful charity that seeks to 'make poverty history.' Please take the time to check them out."

Although O'Brien's statuette was bestowed before the 1951 cut-off, which normally means its recipient may sell it, she promised the academy she wouldn't.

"It's a very rare Oscar because only a few were ever bestowed to child stars like me, Judy Garland and Shirley Temple," O'Brien said. "I have a daughter who I plan to leave it to after I go, but if she tells me she doesn't want it, and if it's OK with the academy, I may decide to lease it. We'll see. Maybe next year."

GoldenPalace.com spokesman Black added, "Our offer to Ms. O'Brien still stands and we'd like other Oscar, Grammy, Emmy and Golden Globe winners to know that we're open to leasing their statuettes, too. It's a great chance for them to lease their awards to an organization that plans to put them on public view so they can be shared with everyone."

The Stoloff award will be added to a traveling museum that the casino has developed to exhibit all their oddities and unusual purchases, including William Shatner's Kidney Stone, Britney Spears' Pregnancy Test, Virgin Mary Grilled Cheese Sandwich, and others.

Wynn sells Macau casino rights to PBL
As Reported by the Associate Press

LAS VEGAS - Casino operator Wynn Resorts Ltd. said Sunday it had agreed to sell the right to build a casino resort in Macau to Australian media and entertainment group Publishing and Broadcasting Ltd. (PBL) for $900 million.

The value of the deal, which is still subject to Macau government approval, far exceeded analysts' forecasts.

"We had expected a sale price of $200 million in our previous target," Morgan Stanley & Co. Inc. analyst Celeste Brown wrote in a research note. "The $900 million price even exceeds what we believed to be the high-end of any sale range."

The sale does not affect Wynn's plans to open casinos of its own in Macau, but prevents Las Vegas rival Harrah's Entertainment Inc., the world's largest casino operator, from breaking into the Macau gambling market without a partner, Brown said.

"What's good for Macau is good for Wynn Resorts," CEO Steve Wynn said in a statement.

Wynn's subconcession was the last available Macau license until at least 2009, she said. Wynn plans to open its Wynn Macau resort on Sept. 5.

PBL is one of Australia's largest entertainment groups and owns and operates the Crown casino in Melbourne and Burswood casino in Perth.

It said in a release it would split its economic interest 50-50 with new partner Melco International Development Ltd. for all joint casino ventures in Macau.

Melco will buy a $160 million, 40 percent stake in the subconcession purchase, while PBL was to pay $240 million. The other $500 million would be funded by debt, PBL said.

Elton John

The Colosseum at Caesars Palace: Singing, songwriting, and performing legend Elton John will be at The Colosseum at Caesars Palace January 31st through February 19th. Elton John's career has spanned more than three decades. By all measures, he is one of the world's most successful touring artists and one of the top-selling solo artists of all time. Sir Elton has sold more than 200 million records worldwide, with 29 consecutive Top 40 Hits, earning 35 gold and 25 platinum albums.

Dates: March 28 - April 9, 2006

Time: 7:30 p.m.

Ticket Price: $100 - $250

For more information: (888)-4-ELTONJ

 
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