Casinos may be able to pass part of tax hike to gamblers

7/22/2003 (Judy DeHaven, The Star Ledger) Now that the dust has settled, it seems the 12 Atlantic City casinos will not fare as badly as Wall Street thought under Gov. James E. McGreevey’s tax hike.

Initially, plans called for the casinos to come up with an additional $135 million, mostly by increasing the casino revenue tax from 8 percent to 10 percent. What passed, however, was a package of taxes and fees that the state says will raise $90 million. And analysts expect only about half of that will be paid by the casino companies. The rest likely will be paid by gamblers.

While a major component of the package is a 7.5 percent tax on net profit and management fees, much of the rest includes things casinos can easily pass on to gamblers, such as higher parking and hotel charges. Already, many casinos are charging more than the $3 state fee for parking to make up for revenue lost elsewhere.

“Operators come out ahead under this plan,” Deutsche Bank Securities analyst Marc Falcone said in a recent report. “In reality, we think they will end up paying $50 million to $55 million of the $90 million, while passing the remainder along to customers.

Borgata boosts union’s ranks

Borgata didn’t just add 2,000 rooms and 3,640 slot machines to the Atlantic City market. It also will boost membership of the Hotel and Restaurant Employees International Union Local 54.

The union organized nearly 2,000 Borgata workers, including food and beverage workers, bellmen, doormen, housekeepers and public-area attendants– “by far the broadest classifications we have in the city,” said Bob McDevitt, the local’s president.

In an unusual move, the casino also allowed workers at restaurants not owned by Borgata to join the union, McDevitt said. “It was incredibly important for our union,” he said.

The additions will boost the union’s membership to 17,500, making it the second-largest local in the gambling industry outside Las Vegas, McDevitt said.…

Casinos Made Real Quarters Look Phony

12/26/2001 (Toronto Sun via RGTOnline) CANADA – “…After a 13-month investigation, RCMP experts concluded this month that a flood of seemingly fake quarters that surfaced in northern Ontario late last year are genuine.

”Investigators now believe the imperfect coins were badly worn in Manitoba casinos near the northern Ontario border, where they first turned up in vending machines.

”… Sgt. Moshe Gordon, head of the RCMP’s anti-counterfeit public education and information section for Ontario, said the Queen’s image on the front and the caribou on the backs appear softer than on real coins. But the most noticeable defect is the lack of a well-defined serrated edges.

”…But after examining more than 1,000 with different dates, most turned in one at a time by people responding to wide-spread publicity based on an RCMP alert last spring, `to date we have yet to have one that’s called a counterfeit,’ Sgt. Keith Kailik said from Thunder Bay, where people first became suspicious of the badly worn quarters in November, 2000.…

Casino Workers Win Language Discrimination Suit

7/21/2003 (Michael Riley, Denver Post Staff Writer) After being forced by an employer’s mandate to be mute on the job, Maria Fernandez can finally talk.

It is an opportunity she is not going to miss.

“When they told me not to speak Spanish, it was like telling a person who wears glasses that she can’t anymore. It’s who I am,” Fernandez said after Friday’s $1.5 million settlement of a lawsuit that challenged the English-only policy by one of Colorado’s premier casinos. Thirty-six workers will share the settlement.

Colorado Central Station casino in Black Hawk imposed the policy five years ago even though managers there knew many applicants spoke only Spanish when they were hired, workers said.

“They didn’t ask if we spoke English. All they ask was if we could clean,” Fernandez said.

The hefty settlement is meant to slow a growing number of restrictive English-only policies at businesses in Colorado, a federal official said.

“We expect employers to take a long, hard look before implementing policies that discriminate against an employee who speaks a language other than English,” said Francisco Flores, district director for the U.S. Equal Employment Opportunity Commission.

But similar policies are in effect elsewhere, said one former housekeeping manager.

Sharon Chavez, who now works at another Front Range gaming house, said managers at her new job forbid workers from speaking Spanish as they clean the cage of a parrot that sits prominently on the casino floor.

“They say they don’t want the parrot to start speaking Spanish” around customers, Chavez said.

After a federal judge approved the settlement Friday, workers described what they said were humiliating conditions at Central Station after the English-only requirement was imposed on the mostly Hispanic cleaning staff.…

Casino Industry Slowly Recovers

Nevada’s casino industry is beginning to recover from Sept 11, showing a significant increase in statewide gambling revenues. Yet analysts on Wall Street remain tentative.

Compared with last year the revenues seem healthy, but analysts are sharply aware of the toll the terrorist attacks took on the industry. The biggest indication that casinos still haven’t quite found their feet is the telling lack of high rollers. Tourist travel remains low, keeping them from returning in force. In fact since September 2001 baccarat revenues are decidedly down, sliding 32 percent statewide.

Gaming equities analyst with Deutsche Bank Securities, Marc Falcone, expresses his disappointment: “Given a fairly strong special event calendar, which included the De La Hoya-Vargas fight (at Mandalay Bay), we would have expected a stronger turnout in the market from high-end table customers, particularly against easy 9-11 comparisons.”

A comparison with September 2000 of the total amount wagered – or “total drop” – shows a decline of 6.1 per cent. This has been put down to the emphasis casinos have since put on encouraging the attendance of convention goers in an attempt to bolster occupancy and room rates. Bond analyst John Kempf, of Goldman, Sachs & co: “The convention segment is traditionally a weaker gaming customer.”

Nevertheless recovery is being made. Even Falcone has a positive outlook for the near future: “A pickup in convention activity and a strong special events calendar should improve the outlook for Las Vegas.”…

Casino industry concerns are latest obstacle for Internet gambling ban

WASHINGTON (AP) – The casino industry is opposing the latest effort to ban gambling on the Internet, adding a new obstacle for lawmakers who have tried for six years to arrest a burgeoning online activity.

The American Gaming Association, which represents commercial casinos, says a bill by Rep. Bob Goodlatte, R-Va., gives special treatment to the horse racing industry while adding unwarranted new restrictions on casinos.

Goodlatte is among a handful of lawmakers who have been trying since 1996 to crack down on the proliferation of virtual casinos, many operating outside the United States, which allow people to gamble from the comfort of their personal computer.

The lawmakers have tried to appease Indian and commercial casinos, the horse- and dog-racing industries, state lotteries, “fantasy” sports leagues and Internet service providers, all of whom have expressed concern about the impact of proposed bills.

Until now, the casino industry has not opposed any of the proposed measures. Goodlatte said he hopes to work with the industry on at least some of its objections but remains intent on not letting any sector of the gambling industry use the legislation to take advantage of another.

“Everybody wants to get a leg up on their competition,” he said. “We’ve been very careful not to let that happen.”

The Senate passed Internet gambling bans in 1998 and 1999. An earlier version of Goodlatte’s bill earned 245 votes in the House in 2000, falling short of the two-thirds majority needed for passage under rules governing the vote.

As Congress grapples with the issue, Internet gambling grows. Christiansen Capital Advisors, which studies the gambling industry, estimates that bettors worldwide wagered $2.2 billion over the Internet in 2000 and will wager more than $6 billion in 2003.

Nevada is working on regulations that would let it become the first state to allow Internet gambling. Lawmakers in New Jersey last year proposed letting gamblers wager through the Internet on “real time” games being played at Atlantic City casino tables.

The online gambling industry has urged the U.S. government, thus far without success, to regulate and tax its games rather than try to outlaw them.

The House Judiciary subcommittee on crime approved the Goodlatte bill March 12. The bill would update the 1961 Wire Communications Act, which was written to cover sports betting via telephone.

It would ban gambling businesses from accepting credit or checks, and give law enforcement broad authority to seek injunctions against intermediaries, including banks and Internet service providers, that enable gambling online.

The casino industry opposes a sentence in the bill specifying that the legislation does not prohibit any activity allowed under the Interstate Horseracing Act. That 1978 law authorized racetracks to transmit signals of their races for wagering in other jurisdictions.

Frank Fahrenkopf Jr., president of the American Gaming Association, says the Goodlatte provision would assure horse racing the right to grow via the Internet, giving it a leg up on its gambling competitors.

“Other activities such as casino gaming, Native American gaming, lotteries, dog racing, jai alai, and charitable gaming are subject to the full brunt of the prohibitions,” Fahrenkopf wrote in a March 11 letter to Goodlatte.

Jay Hickey, president of the American Horse Council, declined to address Fahrenkopf’s objections but said the horse racing industry supports the Goodlatte and Leach bills.

“Both bills take into consideration that pari-mutuel horse racing has been doing interstate wagering under federal and state law for some time,” Hickey said.

The House Financial Services Committee has approved a separate bill by Rep. Jim Leach, R-Iowa, that would prohibit anybody engaged in “unlawful Internet gambling” from accepting payment by credit card, check or electronic transfer.

That bill has its critics, too. Mark MacCarthy, senior vice president at Visa USA, told the financial services committee that credit card companies should not be given the responsibility to judge what transactions are illegal.

Goodlatte said House Republican leaders will ultimately decide which bill, if any, to bring to the floor.

Leach’s bill has seven co-sponsors; Goodlatte’s has 155. Rep. Jim Gibbons, R-Nev., was another co-sponsor of the Goodlatte bill but pulled his support when the casino industry made its objections.…

Casino Firms Vetted Over Criminal Links

THE new Macau casino operators will have to convince authorities in the United States that their local partners are free of any criminal links or face the loss of their licences in Las Vegas, a top security expert said yesterday.

For this reason, Las Vegas Sands, the driving force in the Galaxy Casino’s group, and Wynn Resorts (Macau) are expected to take pains to ensure their partners are squeaky-clean.

The Nevada Gaming Commission, which regulates the casino industry in Vegas, and can withdraw licences or impose sanctions if its strict code of practice is broken. The code forbids consortium members or staff from having any connections with underworld syndicates.

“If somebody complains to the Nevada Gaming Commission that these US companies have links to the underworld, then they could lose their licences in Nevada,” the security expert said. “They will have to demonstrate to the Nevada commission that they have done their due diligence, and can put their hand on their heart and tell the licensing authority in Nevada that there is no underworld involvement in their Macau operations.”

Galaxy Casinos and Wynn Resorts (Macau) won two of the three new licences. The other went to an offshoot of Stanley Ho’s Sociedade de Turismo e Diversoes de Macau (STDM).

The key player in Galaxy is the Las Vegas Sands, headed by casino tycoon Sheldon Adelson. His casino in the Nevada desert is the luxurious Venetian complex with an indoor waterway modelled on the Grand Canal in Venice and a Renaissance-style interior. Galaxy plans to build a$7.8 billion mini Venetian in Macau. The complex will have a 500-suite hotel, a convention centre, restaurants and a shopping mall. The centrepiece will be Venetian gondolas on a canal.

To turn this vision into reality, Las Vegas Sands is reported to have linked-up with Hong Kong property tycoon Lui Che-woo and Macau businessmen Pedro Ho On-chu. Wynn Resorts (Macau) has a similarly cosmopolitan make-up. Its bid was headed by Steve Wynn, the legendary Las Vegas casino entrepreneur. He built the 3,000-room Mirage and the US$1.6 billion (HK$12.48 billion) Bellagio complex.

Wynn’s partners are reported to include Macau businessman Wong Chi-seng and Marc Schorr, a partner for 20 years and president of the Mirage Casino in Vegas. He was also trying to entice Lan Kwai Fong Group chairman Alan Zeman to invest in the Macau project, which is rumoured to be similar to the Bellagio hotel-casino.…