Lotteries and Gambling No Longer Recession Proof

It seems that lottery revenue, including bingo revenue for nonprofit organizations, is no longer recession proof, if in fact it ever was. Below is an excerpt from an interesting article regarding the gambling industry's and the state lotteries' struggles of late.

"All bets are off for the gambling industry. As rising joblessness forces Americans to wager less, revenues for state lotteries and casinos are dropping. The decline defies the old notion that gambling is recession proof – or an easy ticket to riches and cheap entertainment.

Now, if only this fading delusion of a "lady luck" could be turned into a lasting desire to make an honest buck.

For an industry that doesn't create wealth but simply transfers it – mostly from the poor to the already rich – the future is not rosy. More people are now acutely aware of financial risks from subprime mortgages to shaky stocks to lottery scratch tickets.

State governments are scrambling to make up for an average 2 percent dip in lottery revenues in the third quarter compared with the previous year. Companies that run casinos saw their stock prices drop by more than 60 percent in 2008, while on the Las Vegas Strip, gambling revenues have fallen nearly 10 percent.

Nevada, in fact, faces a sobering moment about the risk of risk. Not only is its gaming industry suffering, but the state has the highest rate of home foreclosures. It seems the gambling mentality extended to buying homes, on the assumption that prices would always go up. That belief – nationwide – is now as dubious as the pull of a slot machine.

This drop in gambling is unusual considering that the Great Depression saw a gambling boom."

For the complete story, please see the Monitor's Editorial Board, Lottery's lure lost, The Christian Science Monitor, December 30, 2008.

Smart Cards Spreading Across Gaming Industry

New technology is slowly rolling across the globe that will not only make cashless gaming systems more secure, but also add features that will improve the customer experience in casinos – provided casinos are willing to pay the extra cost.

The technology is the Smart Card which, already being used in casinos in Europe and elsewhere, and has begun to appear in North America, goes one better the mag-stripe card still used in many casinos worldwide.

“The main difference between the two cards is how they store information,” said Roger Bushong, sales account manager with CardLogix, Irvine, Calif.

“Mag-stripe cards maintain customer information on a backend computer, with which the card must link in order to make a transaction. Smart Cards have an embedded microchip in which all data is stored and thus can facilitate transactions even when there is no link to a backend computer,” he noted.

The initial use of Smart Card technology in U.S. casinos will be in player tracking cards, Bushong said. While enabling customers to play slot machines and other games in a cashless environment, the smart player cards also will store information about the guest – including his favorite games and wagering patterns – which casinos can use to promote future visits.

Such a card is currently being introduced in the U.S. market by IGT Network Systems, Las Vegas.

For the complete story, please see James Hodl, Now That’s Smart! IGWB, December 2, 2008.

New Wynn Casino Faces Uphill Battle During Las Vegas Slump

Steve Wynn towers over the Las Vegas Strip in commercials for his new Encore resort, but the recessionary slump in business along the fabled gambling corridor could soon bring the casino mogul down to earth.

Wynn Resorts Ltd is on Monday slated to open the $2.3 billion, 2,000-room Encore, a curved tower of bronze glass that nearly mirrors the adjacent Wynn Las Vegas, the company's three-year-old luxury casino hotel.

Meanwhile, shares of Wynn Resorts have fallen about 66 percent since February as the casino industry has grappled with tight credit markets and a downturn in gambling demand.

For the complete story, please see Deena Beasley, New Wynn Casino faces unprecedented Las Vegas slump, London South East, December 21, 2008.

Gaming Initiatives Win Most Battles on Election Day

For the most part, gaming initiatives across the country were successful in one form or another.

From IGWB:

"Nov. 4 was a banner day for the gaming industry, with referenda to expand casinos and other gambling being approved everywhere except Ohio and Maine. In those states, referendums sought to create a single (and first) resort casino within the state. But elsewhere saw several firsts, including the first slot machines in Maryland, the first casino in West Virginia and the first lottery in Arkansas."

For the complete story, please see Jame J. Hodl, Gaming Initiatives Win BIG on Election Day, IGWB, December 1, 2008.

More on the Failed Passage of the Smoking Ban

There’ll be no statewide ban on smoking in public places -- for now.

State lawmakers failed to reach agreement on a ban early this morning, leaving antismoking advocates bitterly disappointed and a new Legislature to grapple in 2009 with an issue that has wide public support.


The defeat left smoking ban proponents talking of a 2010 ballot proposal to accomplish it if lawmakers can't.

For the complete story, please see Chris Christoff, Public smoking ban fizzles, Detroit Free Press, December 19, 2008.

Bingo Smoking Ban Fails for 2008

The smoking ban bill HB-4163 has failed and is dead. Smoking will continue to be allowed in bingos and casinos for now.

The House and Senate could not reach a compromise on their differences. As you may recall the Senate version of the bill exempted no one, while the House version exempted, bingos, casinos, and smoke shops.

There is no chance of the bill coming back this year. The bill will have to be reintroduced next year and start all over again through the legislative process.

Last Day for Potential Smoking Ban

Today is the final session day for the Michigan Legislature.

The conference committee on HB-4163 (the statewide smoking ban) has met twice with no result. They will meet again this morning at 8:45am.

The rumor that we are hearing is that there will be no compromise so the House has to vote on a total ban (which would include a ban on casinos and bingo) or nothing. The House tried and failed earlier this fall with only 50 votes. They will need 56 to pass the measure.

We will keep you posted.

Bingo Callers Need to Call With Consistency

One of the biggest problems a bingo caller may run into is getting in the habit of calling at a different pace during a game. Callers really need to make sure that their time between calls remains the same so that bingo players will understand how many bingo cards they can manage.

For the complete story, please see Bingo Caller Speed Can Be Helped With a Timer, Wholesale Bingo Supplies Articles Page, December, 2008.

Bingos Not the Only Fundraiser in Town

While bingo has been around for awhile in the fundraising community, Texas Hold 'Em has grown increasingly popular. In fact,
many organizations that raise revenue through bingo smartly hold poker fundraisers a few times each year as well.

Below is an article that profiles a charitable poker hall in the Flint area and explains a little bit about how area nonprofits are benefitting.

Please see Sally York, Poker Palace Room in Burton deals a helping hand for families dealing with tragedy, The Flint Journal via Mlive.com, December 9, 2008.

Is Poker a Game of Luck or Skill?

The debate has raged for some time whether or not poker is a game of luck or skill. While, as anyone who's ever suffered through a "bad beat" will tell you, luck obviously plays a major factor. However, who can argue that certain people aren't better poker players than others?

With charitable poker booming in this state, we thought it would be interesting to present to you a well-written gambling article that argues that poker is more skill than chance.

For the complete story, please see Shari Geller, Evidence in: Poker game of skill, PokerListings.com, December 10, 2008.

More on the End of Big Money Bingo

As we mentioned earlier this week, Scientific Games will be ending the statewide linked progressive jackpot known as Big Money Bingo by December 31, 2008. However, some issues still remain as to how exactly some things will be wrapped up. Bingo equipment needs to be picked, the final jackpot needs to be rewarded, etc.

For the complete story, please see Big Money Bingo Final Details Wholesale Bingo Supplies Articles Page, December 12, 2008.

Also, you may visit the Charitable Gaming website Big Money Bingo Page

Raceway Closes After Years of Decline

Jackson Harness Raceway ended its run this last Thursday. Many feel that allowing slot machines or other legalized gambling devices would haved saved the business. And, they have a point.

However, the question isn't whether allowing slots would increase revenues for businesses like racetracks, but whether or not the people want more gambling in their neighborhoods. And, the 2004 ballot proposal that passed in Michigan pretty much said no to expansion, and signalled the beginning of the end for the raceway.

For the complete story, please see Brad Flory, Jackson raceway could have been saved, Mlive.com, The Bradosphere, December 7, 2008.

Bailout for Casinos? Unlikely

The debate over the proposed federal bailout of Detroit’s Big Three automakers raises some intriguing comparisons with the industry behind our own company town.

Las Vegas has been called the “last Detroit.” And the Strip is indeed a modern union success story.

The U.S. automakers say the failure of the country’s largest remaining manufacturing base could spark a depression.

Job cuts and lost wages mean less money to buy goods and services, which results in fewer car sales, continuing a vicious cycle, says the Center for Automotive Research, a Michigan-based nonprofit that receives taxpayer and industry funding.

The same could be said of gaming and Las Vegas, which, like Detroit, has been hard hit by the downturn. Casino layoffs and reduced work hours are affecting nearly every sector of the local economy, including forcing the state, with 50 percent of general fund tax revenue coming from casinos, to cut one-third of its budget.

Before the economic decline, both car and casino companies had a bigger-is-better mentality. When gas was cheap, Americans flocked to gas-guzzlers and carmakers responded with more SUVs and large trucks. In Las Vegas, developers loaded up on cheap debt from Wall Street to create larger, more elaborate properties preferred by well-to-do hordes.

For the complete story, please see Liz Benston, Bailout for casinos? Don’t bet on it, Las Vegas Sun, December 8, 2008.

Big Money Bingo Officially to End.

If you haven't heard it's official, Big Money Bingo (the statewide progressive jackpot) is officially coming to an end with either the next jackpot or December 31st, whichever comes first.

Big Money Bingo was met with mixed results from the beginning,and as it shrunk in popularity, it simply became economically unfeasible for Scientific Games to continue on with it. We feel that should another company decide to attempt a linked progressive game, many lessons can be learned from Big Money Bingo's mistakes.

For the complete story, please see Big Money Bingo to Call It Quits, Wholesale Bingo Supplies Articles Page, December 9, 2008.

Nonprofit Casino? It Could Happen.

Gambling in Iowa could be a model for the Carson Nugget if the downtown casino is managed as a nonprofit by its potential new owner.

The oldest casino in Carson City could be bought by a new owner who wants to redevelop downtown under a plan that could make the current casino owners, the Adams family, managers of a nonprofit operating the casino, Nugget managers said in November.

Nugget General Manager Kevin Beaton confirmed the casino is still in negotiations with a possible developer, but said he couldn’t name the developer or say how the casino will be managed under the new owner.

“This is all in motion,” he said.

But if the casino is managed as a nonprofit, it wouldn’t be the first. Nonprofits must hold gaming licenses for casinos by law in Iowa.

Gaming companies usually run the casinos after negotiating what percent of the gross revenue that will go to the nonprofit, generally between 4 and 6 percent. Two Iowa casinos, however, are operated by the nonprofits that hold their gaming licenses.

For the complete story, please see Dave Frank, Nugget of a nonprofit, Nevada Appeal, December 7, 2008.

Romulus Casino Still Under Consideration

Romulus officials hope a year-long moratorium regarding the expansion of Indian gaming that was put into place by the U.S. Bureau of Indian Affairs will be lifted, or at least more flexible, under a Barack Obama administration.

City officials met with a representative from the Hannahville Indians last week, and all involved said they felt they would receive more consideration for the tribal request to build a casino in Romulus.

“I think that once there’re more Democrats in Washington, and more people who are interested in helping Michigan, we will turn this around,” said Romulus Mayor Alan Lambert.

For the complete story, please see Molly Tippen, Casino support could change, The Journal Newspapers, December 3, 2008.

Smoking Ban to Exempt Bingos, Casinos?

On Wednesday the House failed to pass the Senate version of the Michigan smoking ban, HB 4163, which called for a complete smoking ban.

The bill now goes into a Conference Committee where only the differences between the two bills are up for negotiations. As you may recall, the differences between the bills are that the Senate version exempts no one, while the House version exempts casinos, bingos, and smoke shops.

The members of the conferences will meet later this month. If they can’t come to an agreement, the bill dies on 12/31/08.

Encore Casino to Open Despite Gambling Downturn

The $2.3 billion Encore will open Dec. 22 in the middle of what many have called the worst economic crisis ever to hit the Strip and the gaming industry.

But don't expect Wynn Resorts Ltd. to change its style.

Encore, with 2,034 hotel rooms, is attached to Wynn Las Vegas. The resort will open at 8 p.m., three days before Christmas, with 72,000 square feet of casino space, five restaurants, 11 retail outlets, a nightclub and a luxury spa.

On Wednesday, Encore began selling tickets for entertainer Danny Gans, who will perform in the resort's theater beginning Feb. 10.

Deutsche Bank gaming analyst Bill Lerner doesn't think Encore's opening will grow the market in an environment hampered by a slow economy and reduced consumer spending. On the Strip, gaming revenues have declined more than 6 percent in 2008 through September.

Lerner said Encore will probably take some business from Wynn Las Vegas and draw customers from neighboring Strip resorts. But he doubts Wynn Resorts Chairman Steve Wynn will hold back on the property's grand opening extravaganza.

"It's not going to change the way he opens the property," Lerner said. "There won't be discounted rates or reduced price points. If you do that, it's tough to get them back when the market improves."

For the complete story, please see Howard Stutz, ENCORE OPENING: WYNN DEFYING THE DOWNTURN, ReviewJournal.com, December 4, 2008.

Casinos Consider Slot Strategy in Tight Market

Now that the G2E dust has settled, industry experts have had a chance to evaluate and assess the impact of new casino offerings – notably slot products – on an industry in decline.

Most experts view the latest, high-tech slot machines as "innovative" and "competitive" from a creative and technological perspective, but none of the major manufacturers unveiled a "game changer" that would significantly alter their market share dynamics.

"Ultimately, the critical driver for the suppliers in the next year will be the willingness and ability of casino operators to upgrade slots with limited capital," said analyst David Katz of Oppenheimer & Co. Inc. "The key question remains … how conservative casino operators will be."

The limited number of new casino openings and expansions over the next 12 months will make it even more critical for slot manufacturers to expand the replacement market for existing casinos, Katz said.

That might not be easy, given the current cut back in spending budgets, Katz said, adding, "The purchasing strategies in the near term remain somewhat uncertain."

What is certain is that regional casino markets, as well as tribal gaming casinos, are "larger and remain stronger" than older, more entrenched markets such as Las Vegas and Atlantic City, Katz said.

For the complete story, please see David Stratton, Are slots set to pay off?, Gaming Today, December 2, 2008.

Smoking Ban Update

The latest on the statewide smoking ban proposals from our insider at the Capitol:

"The Legislature returns today for the final two weeks of session. It's our belief that they will return for a third week and finish on Friday, December 19th. The House needs 56 votes to pass HB-4163, which is the complete smoking ban bill.

The House leadership will again certainly try to pass the bill but we don’t see the measure passing. However, if they amend the bill to allow smoking in bingo halls, casinos and cigar bars then we believe the bill has a chance."

Big Money Bingo to End

Our sources in the bingo industry are telling us that the Big Money Bingo game will likely end by year's end.

The statewide linked game played on special .bingo paper never really got off to a great start as pricing issues, bingo game length, and other factors turned players and managers against it. Once downward momentum began, it was tough to stop the negative perception even after positive changes were made.

No word yet if another company might take the ball from Scientific Games and try to recast the progressive game in the future. We'll keep you posted if we hear anything.