Casino Enterprise Management

Frank Fahrenkopf
President and CEO, American Gaming Association

As those who follow politics are well aware, 2007 brings with it a virtual sea change here in Washington. Democrats will take control of both chambers of the U.S. Congress for the first time in 12 years, and for the first time in the history of the AGA’s existence.
Looking ahead, the reshaping of Congress in the recent election could prove favorable for the gaming industry.

With several leadership roles in Congress filled by individuals hailing from gaming states, or by those having extensive experience with our industry, it is likely they will be more educated and open to industry concerns. While this certainly will not garner the industry any special favors, having lawmakers in leadership who understand our issues and the contributions we make to the communities where we operate cannot help but be a good thing.

As always, the AGA’s first priority is representing the gaming entertainment industry and protecting its interests here in Washington, and we look forward to working with the new Congress on issues like immigration reform, as well as renewing our call for an independent study to explore Internet gambling. These are two of the issues near the top of our legislative agenda for 2007.

Beyond Washington, 2007 also will usher in big changes for our G2E family events, demonstrating the AGA’s ongoing commitment to promoting business innovation and opportunity. G2E Institute, our unique workshop-style conference event that debuted last year in Las Vegas, will move to New Orleans in 2007, bringing G2E’s world-class educational content, dynamic networking events, and “by the industry, for the industry” approach to the Gulf Coast. The event is set for April 10-12, 2007 at the Wyndham New Orleans at Canal Place.

Then, in June, we’ll travel to the Eastern hemisphere for the inaugural G2E Asia event, taking place June 13-14 at the Macau Tower. Over the past few years, Macau has grown into one of the premier gaming destinations in the world, and we’re looking forward to debuting an event that takes the same “by the industry, for the industry” approach that has become the hallmark of our flagship event in Las Vegas every year. Speaking of G2E, we’re already making plans for improvements to our 2007 event in November that will bring even more value to the more than 28,000 gaming industry professionals who attend our show and conference each year.

2007 also will be a big year in responsible gaming. In fact, the year will begin with a brand new look for the National Center for Responsible Gaming (NCRG), the AGA’s affiliated charity. The new look reflects the NCRG’s proactive goals and broader focus on collaboration and on enhancing the positive impact of research in casino communities nationwide. As a function of that collaboration, the NCRG will be partnering with the AGA to promote and enhance many of the organization’s responsible gaming initiatives, most notably with the celebration this August of the AGA’s tenth anniversary of Responsible Gaming Education Week. In 2007, we will also see the broad launch of EMERGE, a new tool for training employees about responsible gaming developed by researchers at Harvard Medical School. 

The AGA will also continue to build on its commitment to diversity issues in 2007, starting with the implementation of the AGA’s new Tier II Diversity Reporting program for suppliers, which requires suppliers of participating gaming companies to submit quarterly reports detailing the amount of business they contract with minority-, women-, and disadvantaged-owned businesses. 

2007 also will see the AGA’s continued commitment to providing valuable research and information on the gaming entertainment. We will continue to release new white papers as part of our ongoing Tenth Anniversary Research Series, and May will see the publication of the ninth annual State of the States report.

Throughout these and other planned—activities, the AGA will continue to safeguard the interests of our industry and its employees—creating opportunities and developing programs to move our industry forward while ensuring the next generation of global gaming is secure.
 

Ernie Stevens Jr.
Chair, National Indian Gaming Association

As chair of the National Indian Gaming Association (NIGA) for the past five years, I am proud of the tremendous progress tribes have made through Indian Gaming. Our NIGA Tribes span the country from Connecticut to California, Mississippi to Minnesota, and from Alaska to Florida. Indian Gaming is the foundation for us to preserve our traditions while we work for better lives for our children and the generations to come.

Together, Indian Tribes preserve the basic framework of tribal self-government that is the bedrock of Indian Gaming. Over the past five years, our growth has been remarkably steady: In 2000, Indian Gaming gross revenues were $10.6 billion. By 2005, Indian Gaming had grown into a $22.6 billion industry. Jobs created by Indian Gaming increased from 300,000 to 600,000. Through Indian Gaming, tribal governments are building schools, hospitals, police and fire stations, cultural centers, roads, water and sewer systems. The jobs created by Indian Gaming are transforming the lives of Indian People. Indian Gaming is “our Native American success story.”

In 2006, Indian Gaming grew by 12.5 percent, increasing from $22.6 billion to $25.4 billion in gross revenue. Jobs created by Indian Gaming grew from 600,000 to 650,000. These jobs are so important because historically, the lack of economic growth and opportunity on Indian Reservations has been devastating. In Oklahoma, the Southwest, the Northwest, and the Great Plains, reservation unemployment rates rise as high as 60 percent, even though their states have unemployment rates of four or five percent. On remote reservations, Indian Gaming reduces these terribly high unemployment rates.

The federal taxes and budgetary savings generated by Indian Gaming grew from $3.5 billion to $8.2 billion from 2000 to 2006. That means Indian Gaming puts more dollars in the federal treasury than the United States spends on the Bureau of Indian Affairs and Indian Health Service combined. State taxes and revenue savings generated by Indian Gaming grew from $1 billion to over $2.5 billion in the same period. 

Tribal governments have worked hard to ensure that the growth of Indian Gaming is steady, sustainable, and responsive both to our tribal communities and neighbors. A big part of that is our strong system of regulation: Our 2,800 tribal gaming regulators work closely with the more than 500 state regulators and 100 federal regulators to ensure that Indian Gaming is one of the strongest industries in America. Indian Tribes spend more than $320 million each year for tribal, state, and federal regulation of Indian Gaming.

Indian Gaming is transforming and rebuilding tribal communities across the country. This trend has accelerated in the past five years, as the number of Indian Gaming facilities and tribal revenues have increased. Tribes are working very hard to improve health care and the quality of life for our people. For example, the Gila River Indian Community in Arizona has the highest rate of diabetes in the world. With Indian Gaming revenue, the Gila River Tribal Government has built a state-of-the-art diabetes clinic, recreational facilities, and a world-class cultural facility that brings the community together for outdoor dances and tribal celebrations.

The quality of education for our Indian students keeps getting better. Indian Gaming provides hope by funding the construction of new schools, after-school programs, scholarship programs, and youth centers.  For example, the Mille Lacs Band of Ojibwe in Minnesota built two schools, the Oneida Nation of Wisconsin built its Turtle School to reflect Oneida culture, and the Mescalero Apache built a new K-12 school. The Rosebud Sioux Tribe in South Dakota use gaming revenue to provide school clothes for students who need assistance at the start of each school year.

Tribal governments also use gaming revenues to provide essential services, such as police and fire protection, which serve our communities and also help to protect our neighbors. The Sycuan Fire Department, originally established in 1974 to provide full-time protection for the reservation, now helps with fire fighting and emergency medical help for the surrounding 700 square miles, as well. Sycuan fire fighters and specially trained forest fire crews have answered the call for help throughout the Southwest, including support to fight brush and wild fires throughout the region and assisting in the Columbia Space Shuttle recovery program in Texas. The Tohono O’odham Nation in Arizona uses gaming revenue to fund police patrols and 60 percent of its police budget to patrol its 75-mile stretch of the international border with Mexico. 

Neighboring communities acknowledge the economic benefits of Indian Gaming. Indian Gaming creates thousands of jobs for non-Indians, and by boosting state and local income revenues, tribes help fund neighboring public schools, hospitals, and roads. As tribal communities advance economically, our neighbors appreciate our efforts because they see growth and progress in their own communities. For example, the Sycuan Tribe donates $3.5 million annually to local community causes, and San Diego Mayor Jerry Sanders says, “Sycuan leadership and generosity positively impact the entire region.” Sycuan Chair Dan Tucker explains, “Our goal is to make lasting investments in our community that make the region a better place to live and work.”

Last week, for example, Table Mountain Rancheria, located in the Sierra Nevada foothills north of Fresno, recently donated $10 million to the new Henry Madden Library at California State University, Fresno. The gift is the largest single cash gift in the university’s history. Dr. John D. Welty,

Fresno State’s president, said: “As we move into the future, it is very important that we never lose sight of the past. We need to recognize the contribution of the entire Native American community in the San Joaquin Valley. That wisdom and connection to the land needs to be cherished, recorded and passed on to future generations.”

Tribes are also working hard to help neighboring tribes. Earlier this month, the Shakopee Sioux Tribe gave a $1 million grant and a $3 million loan to Rosebud Sioux to develop a tribal grocery store. Mike LaPointe Rosebud Tribal administrator says: “We are happy we have a chance to develop this store, to add new service to our community. It means lower prices and higher quality food for all of our people. Something we’ve looked forward to for a long time.”

In 2006, NIGA and our member tribes faced tough challenges. For example, the Justice Department challenged our Class II gaming industry with new legislation to put the National Indian Gaming Commission under its supervision. Tribal leaders rejected that effort because the Indian Gaming Regulatory Act makes the NIGC an independent agency within the Department of the Interior. Two of the three commissioners must be Native American, under IGRA, and the DOJ has no corresponding mandate. After many meetings and hours of dialogue, the DOJ heard our message and dropped its legislation.

The Senate Indian Affairs Committee also proposed sweeping changes to the Indian Gaming Regulatory Act—giving NIGC federal rule-making authority over and above tribal-state compacts for Class III gaming and making NIGC an Indian Gaming contracts “czar,” without whom Indian Gaming contracts would be void. Taking our lead from tribal governments across the country, NIGA opposed the legislation because the bill would have fundamentally undercut the existing framework of IGRA. And, we were not alone—six states opposed the legislation, as well, because it might have conflicted with existing tribal-state compacts. In the face of our clear tribal message to preserve the existing framework of the statute, the Senate decided not to pass the bill.

The House Resources Committee also sought to amend IGRA’s Section 20 concerning off-reservation gaming. We should always be clear that 99 percent of Indian Gaming is on-reservation, yet a clear majority of tribal governments objected to the legislation because it threatened the integrity of the IGRA by giving county governments authority over tribal government activity on tribal lands for the first time ever. Once again, standing united, tribal leaders’ voices were heard and Indian Country preserved the integrity of the IGRA. In the last week of the Lame Duck session, the House decided not to bring the bill to the floor. Now, this bill is clearly unnecessary because the secretary of the Interior is working on a regulation to clarify Interior’s procedures under Section 20. NIGA and our member tribes support the regulation and we do not expect legislation on this subject in the 110th Congress. 

The threats that we faced to Indian Gaming in 2006 were very real, yet tribal leaders worked hard through many meetings, long hours, and the twists and turns of the legislative process to protect the future of Indian Country. As Sitting Bull, the Lakota Chief and Spiritual Leader counseled all of us, “Let us put our minds together and see what lives we can make for the children.” This year, that is exactly what tribal leaders across the country did. On behalf of NIGA, I want to thank all of our tribal leaders for their wise counsel and support.

Anthony Miranda
Chair, California Nations Indian Gaming Association

Forecasting the future is always tricky business, and predictions can only be framed in present circumstances. If the past is a prologue, then several recent events have set the stage for 2007.

With the Democrats capturing the U.S. Senate and House of Representatives, there is a significant shift of power in Washington. Here in California, while the basic make-up of the state legislature, coupled with Gov. Schwarzenegger’s re-election, does not change the basic power structure, several new faces are now at the capitol, and it remains to be seen how they will vote on tribal issues.

The California Nations Indian Gaming Association (CNIGA) looks forward to reaching out to these new members to educate them and serve as an informational resource on tribal gaming issues, while at the same time keeping an eye on Washington to see how the new Democratic majority handle our issues nationally.

The most significant issue for us nationally will be to see what affect the new congress will have on proposed amendments to the Indian Gaming Regulatory Act, which CNIGA opposes, and was left unfinished in the previous session of congress. The amendments were introduced in two bills, one by Sen. John McCain (R-Ariz.) and the other by Rep. Richard Pombo (R-Calif.). Pombo was among the Republicans swept from office, and McCain lost the chair of the Indian Affairs Committee, making the status of both bills uncertain at the present time.

Here in California, Gov. Schwarzenegger reached out to tribes last spring and negotiated compacts with almost a half dozen tribes over the course of the summer and were delivered to the state legislature for ratification just a few days before the end of their session. A few unions, including UNITE HERE, opposed the labor language in the compacts, even though the overwhelming majority of the compacts currently in existence have identical labor language. UNITE HERE brought in a full court press on Democratic lawmakers and eventually stalled the compacts at the end of session.

The compacts will certainly come up again in early 2007. It will be interesting to see how lawmakers deal with the compacts given more time for the ratification process. It should be noted that, as an organization, CNIGA neither opposes nor supports these compacts; however, the association supports the labor language that was negotiated in 1999 with Democratic Gov. Gray Davis.

The majority of tribes operate casinos under the 1999 compact, which contain concessions to organized labor because the union has access to employees to organize workers. The agreement also allows employees to hold secret ballot elections to decide whether they want to join a union, as some tribal employees have already done. The unions, however, are attempting to insert language into the new compacts that would remove an employee’s right to vote and would prevent sovereign tribal governments from discussing labor practices with their employees. Essentially the issue is sovereignty and the principle in question is whether tribes retain their sovereign rights.

Another hot button issue in 2007 will be off-reservation gaming. While people of good faith are on both sides of this issue, there is a wide gulf of disagreement between each of the sides. Once again, CNIGA has not taken a position on this issue.

Those who favor off-reservation gaming see it as a way to increase self-reliance and opportunity for tribes who have a geographic disadvantage, such as being in an environmentally sensitive area and/or being in a remote, hard-to-reach location. While those who oppose off-reservation gaming maintain the importance of upholding the commitment tribes made to the voters of California in limiting gaming to tribal lands. 

They also worry that off-reservation gaming will lead to the erosion of tribal sovereignty and to the inevitable expansion of commercial gaming where no tribes will be able to compete due to their current locations. No matter one’s position, this is an issue that will be debated both in California and Washington D.C. in 2007.

Some California tribes are also seeking to enter into new or re-negotiated gaming compacts with the state. We hope that Gov. Schwarzenegger is interested in continuing to make the inroads he made with tribes last summer and will negotiate compacts beneficial to both the state of California and tribal governments.

Other issues will certainly emerge over the course of the next year, but with these issues already looming, this year will definitely be off to a busy start.

Peter DeRaedt
President, Gaming Standards Association

The past year’s accomplishments are suddenly dwarfed by the potential this new year holds, and I say this realizing that GSA’s accomplishments in 2006 were monumental.

In 2006, Marc McDermott joined GSA as technical director. In Australia, AGMMA named GSA’s Game-to-System (G2S) protocol as its official protocol. We released our Multicast and new S2S protocols. We also completed the developed on the Point-to-Point protocol; provided a grant to establish two professors-in-residence positions at UNLV; contracted the Open Group as our third party testing agency authority. We even welcomed 12 new members, including MGM MIRAGE as a platinum member.

Most significantly, GSA completed the G2S protocol, and it is now available for free download on GSA’s website, www.gamingstandards.com. The G2S dream was accomplished through an unprecedented industry-wide cooperation.
The final product of G2S is better than we thought, can do more than we hoped, and will have an impact that reaches further than we imagined.

Imagining, however, is what G2S allows manufacturers and operators to do. G2S has unlocked the door for innovation, and will forever change our idea of what is possible in the gaming device, or for that matter, on the gaming floor.

On tradeshow floors around the world in 2006, we saw concept after concept based on the “what if” world of tomorrow. Now we can say that tomorrow has arrived, and in 2007, we expect to walk trade show floors and be startled by the creativity that G2S (in concert with other GSA standards) will unleash. We will also walk through casino floors across the world and see innovation in action powered by GSA.

G2S is not the end for GSA; rather, it is more of the beginning of a new era. As we move forward in 2007, we will focus on two key plans: certification and education.

First, let’s talk about certification. We are actively developing a certification program, the purpose of which is to help make certain that when GSA standards are adopted their implementation is done consistently.

Key to the success of GSA protocols is ensuring consistent performance on a casino floor. To guarantee correct implementation, gaming products will be tested by one of several GSA-certified test agencies, and an independent test agency authority will evaluate the test agency in myriad ways. Additionally, test suites will be developed by third-party vendors and overseen by an independent test suite authority. This independent evaluation and testing will ensure the integrity of both the standards and their implementation.

Of course, all the protocols in the world won’t do anyone any good if people don’t know how to use them, which is why GSA will push our education programs that we funded and jointly developed with UNLV. These courses will explain in detail how GSA protocols work and how they need to be implemented.

You could say that the hard part is over—the protocols have been developed and are now available. Now the fun part can begin, and we expect great things from the industry in 2007.

William P. Rutsey
President & CEO, Canadian Gaming Association

Gaming in Canada today is made up of responsible, professional organizations and individuals delivering quality entertainment for millions of people.

The Canadian gaming entertainment industry has grown and matured over the past ten year—we have more than doubled our revenues to more than $14 billion (Cdn.) annually, and served thousands of businesses and more than 50,000 employees nationwide. Market growth has been fueled primarily by casino development, especially in western Canada with major re-development projects and expansion in First Nations casinos. We’ve also seen continued growth in racino development; we will see a number of new racino properties opening in 2007 and 2008, and electronic gaming devices will be deployed at racetracks and other aged-controlled venues.

We have upheld our goal of creating balance in the public dialogue about gaming by bringing facts to the general public, and the Canadian Gaming Association (CGA) has commissioned, and will continue to commission, reliable and informative industry-specific research.

Our first study, VLT Gaming in Canada (prepared by HLT Advisory, released March 2006), presents a comprehensive picture of well-run and regulated programs across the country that have raised billions of dollars for government programs and services, including documentation for public record that the Canadian gaming industry invests about $75 million (Cdn.) annually on problem gambling awareness, treatment, and research. Our initial national public opinion survey of Canadians’ attitudes toward gaming, the National Gaming Monitor (conducted by PMG Consulting, released April 2006), found that Canadians are responsible gamblers who self-regulate their spending and consistently play with a pre-determined limit. The research also revealed material misconceptions about gaming in Canada, particularly with respect to gaming, and the perception that little is done to address problem gambling, despite the fact that more money is spent on responsible gaming in Canada, per-capita, than anywhere else in the world.

The CGA has just commissioned a national economic impact study, the top-line results of which we intend to release at our annual Canadian Gaming Summit, which will take place in Toronto April 25 through 27. The 2007 Summit will capture emerging trends and present state-of-the-art technology together with information and expanded education relevant to all aspects of the Canadian and global gaming markets.

Looking forward, gaming in Canada (as elsewhere) faces both challenges and great opportunities—challenges posed primarily from the misinformation spread by those opposed to gaming as a valid entertainment option—and opportunities from the development of new multi-dimensional properties (primarily in western Canada and Quebec) that integrate exciting entertainment, food, beverage, and resort amenities together with gaming.

The single largest public issue facing gaming today is responsible gaming. This is a “red flag” issue for our industry. We own it and need to get out in front of it—it’s the kind of issue that you just can’t win from behind. The CGA is working with the industry in Canada to build a nationally responsible gaming message that clearly demonstrates the leadership taken on the issue. As an industry we need to communicate our concern, our programs in place, and our commitment to continuous improvement. Then, and only then, will we receive the credit we are due for all the important economic and social benefits that gaming generates. As Will Rogers so aptly put it: “People don’t care what you know until they know that you care.”

 

Michael Lipton
President, International Masters of Gaming Law                 

The International Masters of Gaming Law is an invitation-only, non-profit association dedicated to education and the advancement of the gaming law profession, and to establishing an exchange of professional information about the local and global practice and development of gaming law.

Since its inception in 2001, the IMGL has devoted considerable time, energy, and resources to its primary mission: educating its members and the general public on gaming law issues. Legal and regulatory issues are never sexy to the public at-large.

But there are few industries more heavily scrutinized or more frequently and harshly attacked than ours, making it imperative that leaders and executives in every segment of the gaming industry remain well-educated on matters of gaming law.

Nearly 60 percent of IMGL’s U.S.-based members are named in the 2007 edition of The Best Lawyers in America. Published biennially since 1983, The Best Lawyers in America is widely regarded as the preeminent referral guide to the legal profession in the United States. Our members are actively involved in solving some of the biggest challenges facing our industry, and are in the thick of the most intriguing debates:

• Our members advise on land-based growth deals with suppliers from emerging gaming jurisdictions in Eastern Europe and Russia.
• Our members advise on fantasy sports and skill-based gaming, which are exempt under the Unlawful Internet Gambling Enforcement Act.
• We have a number of members involved in Indian Gaming, which will be one of the most closely watched legal arenas over the next few years.
• The work that our members do has a direct impact on billions of dollars in the gaming industry—revenues for gaming companies, which in turn helps satisfy the thirst of state and provincial budgets.  

Ours is a truly international organization and is reflected in our choice of conference sites through the years—including Paris, Rome, Ljubljana Slovenia, New York City, New Orleans, and this year in Chicago and Cape Town. Both of our 2006 conferences attracted more than 100 gaming lawyers, regulators, and educators for two days’ worth of honest discussion and debate about legal and regulatory issues as they relate to the gaming industry.

IMGL members can always be counted on to share their expertise at seminars and conferences throughout the year. In 2006, our members presented seminars, or entire law tracks at CasinoFest and G2E, and in 2007 we’ll add Southern Gaming Summit and Canadian Gaming Institute in Canada to our outreach program.

IMGL publishes an exceptional magazine, Casino Lawyer, distributed four times a year with Casino Enterprise Management and through direct-mail. It is chock-full of stories, columns, and opinions of tremendous value to anyone who follows gaming law.

The vast majority of information on our website, www.gaminglawmasters.com, is available for public consumption. The website contains literally hundreds of papers, opinions and other resources. We’re currently in the process of overhauling the look and architecture on the site, making it much easier to navigate. Watch for the new look in early 2007.

Of all the signs of an organization’s success and value, perhaps none is more telling than the steady growth in its membership. IMGL has welcomed 25 new members since June 1, nearly half of whom are in the regulator class. We currently have 135 members from 53 jurisdictions around North America and worldwide. We signed up new members at G2E and at our winter conference in New Orleans. While our mission is primarily to educate, we also understand the value of taking time to honor the work of exceptional people. We have done so twice last fall. More than 75 people gathered at a reception at G2E in Las Vegas to honor our Regulator of the Year, Peter Dean. He served as the chair of the Gaming Board for Great Britain from July 1998 until October 2005, and will serve as the first chair of the new Gambling Commission, which was set up under the Gambling Act 2005.

At our winter conference in New Orleans, we paid tribute to our inaugural Gaming Executives of the Year award: W. Owen Nitz, an attorney and managing partner of Nitz, Walton & Heaton in Las Vegas; and Jeffrey M. Cooper, a CPA with Bradshaw Smith & Co. in Las Vegas. Together they are the co-trustees of the former Imperial Palace, now IP Hotel & Casino.

To learn more about IMGL and the great work it does, or how you can apply to become a member, visit our website, www.gaminglawmasters.com. Or email me at mdliptonqc@aol.com.

Robert W. Stocker II
Vice President, International Masters of Gaming Law

Since its inception as a nonprofit educational organization in 2002, the International Masters of Gaming Law (IMGL) has focused on 1) building and expanding an organization of members committed to contributing their skills, knowledge, and expertise to the international advancement of gaming law; 2) developing a comprehensive body of useful and scholarly gaming law resource materials and publishing these materials in a variety of mediums; 3) establishing working relationships with law schools interested in advancing gaming law scholarship; 4) conducting comprehensive gaming law seminars under the IMGL banner, and partnering with other gaming seminar venues by providing the venues with knowledgeable speakers and presentation materials on a variety of gaming-related topics; and 5) recognizing leaders in the gaming industry with Regulator of the Year and Gaming Executive of the Year awards. 

The IMGL has accomplished each of these goals through the extraordinary efforts of a focused group of highly respected gaming lawyers. As it enters calendar year 2007, the IMGL has already established substantive working relationships with several law schools and law review journals (Boyd School of Law, University of Mississippi Law School, Thomas Cooley Law School, and Tulane Law School); conducted gaming seminars throughout the United States, as well as in Rome, Paris, and Slovenia; published its own gaming law magazine (Casino Lawyer) on a quarterly basis that is distributed to over 15,000 gaming-related persons and businesses in conjunction with Casino Enterprise Management magazine; provided gaming law speakers and presentation materials to a wide variety of gaming seminar and conference venues; recognized extraordinary efforts through the IMGL Regulator of the Year Award (Peter Dean) and IMGL Gaming Executive of the Year (Owen Nitz and Jeff Cooper) and provided numerous substantive gaming law articles to a wide variety of gaming magazines, as well as the Gaming Law Review (the IMGL official legal publication). 

In addition, the membership and educational activities have expanded to the point that the IMGL has retained the services of an Executive Director, Melissa Lurie, who is well-known and highly respected within the gaming industry for her organizational skills. In 2007, the IMGL will conduct its spring gaming seminar in Chicago and has tentatively designated South Africa as the venue for its fall gaming seminar.

One of the truly exciting projects that the IMGL has sponsored in partnership with the Thomas Cooley Law School (the nation’s largest law school) is the development of a 50-state compendium of gaming statutes, regulations, and case law that is scheduled to be placed on the IMGL website (www.gaminglawmasters.com) in the spring of 2007. This data bank will outline on a state-by-state basis key gaming statutory and regulatory provisions and related case law, with Internet connections directly to the cited materials, as well as to relevant state websites. The databank will be available to all persons who access the IMGL website.

The IMGL plans to expand its website to include non-United States gaming jurisdictions later in 2007, with the ultimate goal being a worldwide gaming law and regulation databank. The IMGL databank will be supplemented by IMGL’s sponsorship of the publication of a new International Gaming Law book, the first traunch of which will be available in 2007.

Jack Bulavsky
Executive Director, Association of Gaming Equipment Manufacturers

Association of Gaming Equipment (AGEM) continues to grow its membership and establish itself as an international trade association representing manufacturers of electronic gaming devices, systems, and components for the gaming industry.

While AGEM members are at the forefront of creating and developing new and innovative gaming products soon to be found in casinos throughout the world, the challenge isn’t in just “building a better mousetrap.” The challenge also exists in developing an educational program that brings new talent into the industry.
With this in mind, Bruce Rowe of GTECH was named chair of the AGEM Education Committee. His committee includes Orrin Edidin, WMS Gaming; Walt Stowe, VendingData; Carolan Pepin, Cyberview; and Tom Jingoli, Konami Gaming. They were charged with identifying and evaluating education activities that AGEM could participate in to further the objectives of the organization. Suggested areas of focus were formal education programs, industry seminars, trade shows, scholarships, and forming a speaker’s bureau.  

“AGEM, which is now seven-years-old, has made great progress in determining who we are, where we’re going, and where we want to go,” said Rowe. “There are many issues and ideas that need to be better understood if AGEM is to develop its full potential, and one of them is preparing for the future through education.”

Most recently, AGEM awarded the Community College of Southern Nevada (CCSN) Foundation $300,000 to support and expand the CCSN applied technologies slot technician program. This contribution will be paid over a period of three consecutive years with the first donation presented this year.

The slot repair tech program was developed ten years ago at CCSN and offers students the opportunity to earn either an Associates Degree in applied science or a Certificate of Achievement. Both paths require students to complete courses in electronics, fabrication techniques, slot management, and gaming regulations.

AGEM believes the CCSN program is critical to workforce development of slot techs and slot managers in southern Nevada, and understands the need to expand to meet emerging technologies and to accommodate the industry’s explosive growth. Rowe and his committee, along with representatives from CCSN, met and developed a strategic plan on how the contribution will be used, including:

• Recruiting and hiring additional faculty.
• Supporting a technical writer to assist professors in obtaining, writing, and publishing course materials.
• Developing an online version of course(s).
• Increasing technical support to full-time lab technician.
• Developing and providing trainer workshop(s) in the third year.

The AGEM education committee is in similar discussion with the University of Nevada, Las Vegas; University of Nevada, Reno; and Atlantic Cape Community College in Atlantic City. 

Current AGEM members include: AC Coin & Slot, Aristocrat Technologies, Atronic, Bally Technologies, Cadillac Jack, Cyberview Technology, GTECH, Gaming Partners International, Gary Platt Manufacturing, IDX, International Game Technology, JCM American, Konami Gaming, KSK, MEI, Progressive Gaming International, Shuffle Master Gaming, Summit Gaming, TransAct Technologies, Unidesa, VendingData Corporation, Wells-Gardner Electronics, WMS Gaming, and 3M Touch Systems.

Wade Duty
Executive Director, Louisiana Casino Association

As this is written in mid-December, the Louisiana legislature is being called into extraordinary session to address an unexpected budget surplus in excess of $1.6 billion. The legislative agenda, set by the governor, features teacher and law enforcement pay raises, home insurance refunds to citizens, and the restoration of certain tax deductions as its major features. 

Conspicuously absent is consideration of major flood protection improvement using state instead of federal dollars. While this unexpected windfall would seem to bode well for the state’s gaming industry, some industry observers—including me—ponder the long-term sustainability of this new revenue and the effects of making recurring expenditure commitments when the revenue will not. Louisiana is momentarily flush with cash for only three reasons, none of which are encouraging for long-term fiscal stability:

• Losses to the state’s revenue stream are not as severe as originally projected following two major hurricanes.
• A one-time spike in state sales tax collections occurred as residents replaced consumer goods lost during the storms using insurance benefits and federal relief.
• A one-time spike in gaming tax collections occurred due to the fact all Mississippi coast casinos were closed for many months.

As we have seen, Louisiana gaming revenues have returned to pre-storm levels as Mississippi has reopened its coast casinos with larger land-based gaming.

At least some state political leaders, notably Attorney General Charles Foti, recognized the threat a newly renovated Gulf Coast gaming venue represented, and sought to engage the Louisiana gaming industry in a dialogue about what could be done to preserve the state’s gaming tax revenue stream. To that end, a gaming “summit” was held at the request of the state gaming association, which included the AG’s office, gaming regulators, and representatives from each gaming licensee in the state.

Many concepts were discussed including shore-based gaming, expansion of gaming space, more favorable tax treatment of marketing expenses, and tax incentives for initial or reinvestment in gaming properties. Months later, it is apparent there is no “one size fits all” solution to the widening gap in competitive ability compared to other gaming states as we compete not only for players, but we also compete with these same jurisdictions for investment or reinvestment dollars from national gaming companies. 

Some operators are understandably reluctant to invest the $55 million that a new, larger boat would cost, or the $150 million that a shore-side facility would cost (if politically feasible) in a state that is fiscally inconsistent, less than supportive of the industry, and has a high gaming tax rate.

There are operators who have an interest in additional facility development if they were afforded some tax offset, at least for non-gaming amenities, such as hotels and entertainment venues, but the tone of the governor’s office as she denounced the gaming summit leads them to question if they would be allowed to take advantage of such incentives. 

Should the political environment change following next year’s elections, the prospects of encouraging large-scale reinvestment that is needed to effectively compete with other jurisdictions may become a reality. This would help ensure Louisiana continues to receive the gaming tax revenue that is critical to its budget, and that the industry would be able to continue to offer the same quality jobs we have provided for over a decade.

Insufficient staffing of regulatory support personnel continues to be an issue, and operators have been advised it is not likely to improve as support positions are lost, and more state police assigned to the gaming division are diverted temporarily to other law enforcement functions. The association will attempt to work with the regulators in the spring fiscal legislative session to see that adequate funding is retained by the state police to service the gaming industry since they are funded by gaming tax revenues.

Pinnacle Entertainment has secured regulatory and local voter approval for its $320 million Sugar Cane Bay casino project which will be adjacent to its existing L’Auberge du Lac resort facility. By early spring, Columbia Sussex’ Amelia Belle will open near Morgan City—and with the latest Pinnacle project perhaps coming to the capital area—we could see all 15 authorized riverboats operating again by late 2008.

Sheila Morago
Executive Director, Arizona Gaming Association

As we start the new year, Arizona gaming tribes continue to be in a great place to grow their gaming business. Because our long-term compacts give tribes the ability to make sound business decisions that reflect market realities, as we move into 2007 we find that many tribes are now using their full allotment of slot machines. However, none felt compelled to rush to action because the terms and conditions in our compacts allow tribal governments and their casino executives to plan prudently and effectively.

By way of background, Arizona tribes started gaming operations in 1993, and our system has always been unique. We support limited and regulated gaming, which means that the types of games that can be played are limited, as are the numbers of machines and tables available to play. We also limit the number of casinos that will be built. This is the promise made to the citizens of Arizona via our voter, approved initiative.   

From a marketing perspective, to grow their businesses, tribal casinos will continue to add and update amenities to provide ever more value for their customers’ entertainment dollar. In the increasingly competitive urban markets, tribes are moving into full-service resort/casino destinations. In the Phoenix area for example, Fort McDowell Yavapai Nation owns the Radisson Hotel/Convention Center, Gila River Indian Community owns the Sheraton Wild Horse Pass and Spa, and the Salt River Pima-Maricopa Indian Community is designing its first full-service resort and spa.

At the same time, gaming tribes in 2007 will continue to bring the benefits of gaming to more non-gaming tribes. Our compact allows non-gaming tribes to lease their slot machines from gaming tribes who are not using their full complement of machines. Leasing benefits smaller tribes located in more remote areas of the state, like the Hualapai, whose tribal lands extend to Grand Canyon West and the Colorado River, and the Havasupai, whose tribal lands are located in the bottom of the Grand Canyon, as well as the Kaibab Paiute. Each of these tribes is leasing machines to tribes who are in more populated areas. Machine leases generate a much-needed revenue stream that smaller tribes in non-metropolitan areas use to provide and upgrade services that these governments must provide to their members, such as housing, education, and health care.

Arizona has been called a national model for tribal governmental gaming, and, as we have in the past, Arizona tribes will continue to work closely with tribal governments, the Arizona State Department of Gaming (ADOG), and the federal government. We look forward to working with the new Congress and will continue to closely monitor any proposed changes to IGRA that could impact us.

We will also continue to work closely with the state of Arizona. We are fortunate to have a very supportive governor, Janet Napolitano, who has a long history of understanding tribal needs and a commitment to working with tribes. Because of our governor, we have excellent communication with our executive branch of government. 

From a political perspective, I am pleased to report that we had more tribal members voting in this election. As we look ahead, we will continue to build on our successful “Get Out The Vote” effort.     
Looking ahead economically, we realize that we have a major advantage since our industry is located in one of the top two fastest-growing states in the nation. More people moving into Arizona translates as a potentially growing customer base. Our shared revenue program is also paying dividends for us. With Arizona tribes contributing millions of dollars to the state for education, emergency healthcare, conservation, tourism, and aide for problem gamblers, our industry continues to gain stature and support among Arizona residents. 

The bottom line: So long as our casinos maintain outstanding service, fine products, and a tradition of hospitality, I am comfortable in predicting that the Arizona Indian gaming industry will continue to prosper and grow.

Mike Smith
Executive Director, Casino Association of Indiana

After all of the exciting growth and change in Indiana’s casinos last year, the Casino Association of Indiana is looking forward to unprecedented success in 2007.

Already, 11 years of riverboat gaming has brought $4.6 billion in wagering taxes to the state of Indiana, and another $968 million in admission taxes. Our 11 casinos have created thousands of new jobs, aided hundreds of local projects through our philanthropy and operating payouts, and brought an exciting, new entertainment option to the people of Indiana.

With the tremendous growth we saw in 2006, the Casino Association of Indiana is poised for one of its biggest years yet in 2007! Three of our casinos will ring in the new year with new owners; one, the brand new $320 million French Lick Resort & Casino in Orange County, will ring in its first new year.

At Casino Aztar, the people of Evansville now have a new option for new years, at the casino’s exciting, new entertainment facility, The District at Casino Aztar!

The District is a $40 million project that includes four individual venues: Jillian’s Billiards Club, Ri-Ra’s Irish Pub, Blush Ultra-Lounge & Tapas Bar, and the luxurious boutique hotel Le Merigot. Located on seven acres adjacent to Casino Aztar, the four District venues all surround a lavish courtyard, with a spectacular view of the Ohio River.

Of course, Indiana’s other casinos aren’t just sitting back on their laurels; 2007 will see our members making unprecedented investments across the state. Argosy Casino is in the middle of a $300 million expansion, adding hundreds of new slots and table games to become the largest casino in Indiana. The Belterra Hotel & Casino has proposed a new tower on its hotel, which would make it the largest hotel in the state. Horseshoe Hammond recently announced plans for a $485 million expansion, while the Majestic Star casinos are in the midst of working out plans for an aggressive development of the Gary, Ind. waterfront.

All of these projects—as well as the re-branding of Caesars Indiana to new owner Horseshoe that will create a $100 million investment and possibly a new hotel tower—represent significant capital investment for our Indiana communities. But none of these projects come without challenges, and some actually are a way of answering challenges our casinos face.

Argosy’s expansion, in particular, comes in the face of challenge. Last year, advocates of expanded gambling in neighboring Kentucky have created an “Indiana Sucks” billboard campaign, pointing out that $600 million Kentucky dollars go to Indiana casinos each year. That’s why legislatures in both Kentucky and Ohio looked toward approving casino gambling or slots at racetracks in 2006. The Ohio measure failed at the polls; Kentucky’s plan didn’t make it that far, but legislators are expected to try again in 2007.

Soon, we may face the issue of expansion inside our own state. In 2006, Indiana legislators talked briefly about the possibility of allowing “Cherry Master” slots in the state’s bars or at racetracks. Because that year was a short legislative session, the issue never got off the ground; this year’s longer session, however, could be a different story.

Thus far, we have not taken a position on the issue, because legislators have not yet created a detailed plan. Without such a detailed plan in place, the possibility exists that this legislation could stay on the table another year.

But that doesn’t mean we will rest easy while this year’s legislature meets. As always, we will remain vigilant in opposing any tax increases, because our state has one of the highest-taxed gaming industries in the nation. In addition, we are working to obtain tax credits for myriad non-gaming investments our casinos have made in their host communities. And we will work with state gaming officials this year, to help update Indiana’s gaming rules and regulations. After 11 years of operation, many things have changed. Many things have dated; new technology has altered our industry, and has challenged us to continually rewrite the gaming rules and regulations.

Doing so will help assure that we continue to offer the people of Indiana the tax money, jobs, and fun that they’ve come to expect—in 2007, and beyond.

Wes Ehrecke, CAE
President, Iowa Gaming Association

In 2006, three new commercial casinos opened in Iowa. In the spring of 2007, two more will open bringing the total to 18. These new casinos are bringing a new generation of changes compared to 1991, when Iowa was the first in the country outside of Las Vegas and Atlantic City to offer slots and table gaming exclusively on the riverboats. To continue to be premier entertainment facilities, these new casinos are built on land and offer many other amenities including hotels, convention and meeting rooms, spas, water parks, and golf courses. Many of the existing riverboat casinos are now in the process of significant upgrades and will emerge in 2007-08 with new facilities built on land; or many facilities will maintain ongoing renovations and upgrades to their boat and adjacent facilities.

As part of the collective total; the three racetrack facilities, (one horse and two greyhound), are the first racinos in the country to offer both slots and table games. By early 2007, all three will have completed comprehensive remodeling and upgrades to their facilities to accommodate the table games and gaming floor area, plus enhanced non-gaming services and amenities.

Citizens in counties where casinos and racinos are located are still required to vote every eight years whether they want to keep gaming in their area; or they must pass a referendum for a new one to be considered. Besides the five new casino locations opening in 2006-07, there are four more counties that have passed a referendum and have expressed interest to the Iowa Racing and Gaming Commission (IRGC) for consideration of a license. The IRGC had placed a self-imposed moratorium on allowing new licenses until all the new ones they authorized were built and open. The IRGC has indicated it will begin preliminary discussions in the spring of 2007 to determine if they might allow any more. An unknown factor is whether the newly elected governor will change the makeup of the IRGC with his authority to make new appointments which could affect that timetable and decision-making.

It is estimated that collectively around 65 percent of the gaming revenue comes from out of state. The expansion of casino locations means additional growth for 2007 which equates to additional jobs (over 9,500), generating more state and local taxes (over $280 million), more purchases from Iowa-based companies as part of the Buy Iowa First program (over $185 million), and increased charitable giving (over $50 million).

One exciting component of the gaming tax revenue tied significantly to charitable giving is the newly established Endow Iowa program. It is progressing well with an annual distribution, ($67,250 in 2006) allocated from gaming tax revenue, for each of the newly created qualified community county foundations established in the 85 counties that do not have a casino. The purpose is to be a catalyst for philanthropic partnerships and 75 percent of these funds must be provided in grants each year, and the other 25 percent placed in a permanent endowment. 

It is uncertain what—if any—gaming-related issues will be addressed in the 2007 legislative session. Democrats were successful in gaining the majority in the House, Senate, and governor’s office; so new leadership, committee chairs, and assignments are now being made. The IGA and its members will continue to provide elected officials with a heightened awareness about the industry’s current gaming tax revenue allocation, responsible gaming initiatives, and aforementioned benefits: to create a better understanding of how the industry is a viable part of Iowa’s economy, and is adding significant value to the state’s entertainment and tourism industries.

Mike Winter
Executive Director, Missouri Gaming Association

Both the Missouri Gaming Association (MGA) and the Missouri Gaming Commission start with new leadership and exciting growth. Mike Ryan, our executive director since the association was formed in 1993, has retired, and I’m stepping into that role. At the Missouri Gaming Commission, Gene McNary has replaced Kevin Mullally, who led the staff for five years. 

Missouri is the only gambling jurisdiction in the world whose laws impose a loss limit of $500 per person for each “gambling excursion,” a fact reported each year in the Missouri Gaming Commission (MGC) annual report. The MGC has encouraged the legislature to look closely at the impact of the loss limit provision, which potentially is costing the state $100 million a year in additional gaming tax revenues. We expect this issue to be discussed in the 2007 legislative session.

Casino capital investments are another important story in Missouri, with total capital spending of more than $3 billion since casinos opened here in 1994. In late 2007, we expect to see the opening of the $430 million Lumiere Place, the new Pinnacle Entertainment casino resort under construction in downtown St. Louis. Ameristar Casino St. Charles will complete a $240 million casino expansion, hotel, and conference center in 2007. 

We expect our associate member ranks to grow this year through our new Cornerstone Member Program, a focused effort designed to recruit new associate members and involve them as important allies. Our association will add a new seat on the board for a Cornerstone Member, and we plan to involve Cornerstone members in grassroots efforts throughout the year.

In 2006, we published a “Report to the Community” as an insert in the Kansas City Business Journal. We plan to publish a similar report in the St. Louis Business Journal, with a focus on the central and eastern parts of the state. We’re continually expanding public awareness of the benefits the gaming industry brings to the state in the form of jobs, tax revenues, local vendor spending, and charitable contributions.

Missouri is a leader in developing responsible gaming programs, and the Missouri Gaming Association is at the forefront of these efforts. Last year, the MGA developed responsible gaming messages and layouts for the back of TITO stubs. Casinos are adding the messages to their TITO stubs as they print new stock.

Each year, the MGA sponsors the Project 21 Scholarship Contest to raise awareness among high school students about problem gambling. Students learn about the dangers of underage gambling, and then take on the challenge of informing their peers. Project 21 is open to all Missouri high school seniors who plan to attend college. Students create an essay, poster, or video that will educate their peers about the dangers of underage gambling. The MGA selects two $1,500 scholarship winners and four $1,000 scholarship winners each spring.

We will continue to fund 1-888-BETSOFF, a 24/7 statewide telephone crisis line and referral service for problem gambling. We also are a charter member of the Missouri Alliance to Curb Problem Gambling, which works to heighten public awareness of the dangers of problem gambling, develop prevention and education programs, and direct problem gamblers and their families to the 1-888-BETSOFF helpline and free treatment.

As a member of the Missouri Alliance to Curb Problem Gambling, we’ll be working with the Missouri Department of Health and Senior Services in 2007 to include three questions on gambling in the Missouri Behavioral Risk Factor Surveillance System (BRFSS) survey. This will mark the second time that gambling questions are included in the statewide health risks survey. In 2004, the study showed that 32 percent of Missouri residents had participated in gambling over the past 12 months and less than two percent claimed to have experienced financial, work, personal, or family problems as a result of gambling.

Given the new leadership, new casinos, and casino/hotel expansions, 2007 is shaping up to be an interesting and exciting year for the Missouri casino industry.

Phil Hogan
Chair, National Indian Gaming Commission

We’ve continued to foster the growth of economic development in Indian Country through gaming, by helping ensure the climate of a professional, well-regulated industry, by providing effective federal oversight of the Indian Gaming industry.

We’ve solidified the funding of our federal regulatory agency through the enactment of legislation that will permit our growth (or contraction) to be proportionate to the industry for which we provide oversight.

Throughout the year, we’ve engaged in extensive consultation with the tribes we regulate, and have factored their views and needs into our plans and actions.

We hope to conclude our effort to draw a clear distinction between gaming equipment that may be used in uncompacted Class II gaming, and that which only may be utilized pursuant to a Tribal-State Compact.

We’ll endeavor to fully adopt the planning tools called for in the Government Performance Results Act (GPRA), sharing even more information with the tribes we regulate and the pubic with respect to our programs and our budget, and to provide more and better technical assistance to gaming tribes with respect to their gaming operations and regulation. A result will be more efficient use of the fees tribes pay for the funding of NIGC.

Through the Federal Indian Gaming Working Group, we hope to improve the coordination among tribal, state and federal law enforcement efforts when fraud and theft from tribal gaming operations are discovered, and send an even louder and clearer message that theft and misappropriation of tribal assets will be dealt with quickly and effectively.

The court ruling in 2006 has raised serious challenges to the scope of NIGC’s role in the regulation of Class III gaming—the casino gaming which constitutes nearly 90 percent of the nearly $23 billion generated by the industry. Clarifying NIGC’s role in the wake of these developments is very important, and no doubt will be very demanding. Resolving these issues, and implementing clarifications to the distinctions between Class II and Class III gaming technology, will also present big challenges for the commission in 2007.

From our point of view, the industry is continuing to grow at double-digit rates. This means more resources for tribal governments, so that vital services can be provided to Indian communities. On a purely gaming note, advanced technology will play a larger role in the regulation and oversight of the industry. This will come about through improvements in digital surveillance and security devices, as well as real-time monitoring of gaming floor results and performance.

The growth will likely be across the country. For example, there are large projects proposed and under construction, in California, Oklahoma, and Michigan. Along with these larger projects there are improvements and additions all over the industry that will likely have a significant impact on overall growth.

Larry Gregory
Executive Director, Mississippi Gaming Commission

In 2006, following the disaster of Hurricane Katrina, people didn’t know if the gaming industry could return. That uncertainty has been squelched as numbers now speak volumes for the resilience of Mississippi’s people. More than 14,000 casino employees are back to work. Gross gaming revenues to the state for September and October (2006) have been the best September and October on record. As predicted, gaming has returned to the Mississippi Gulf Coast. 

At the Mississippi Gaming Commission, we see 2007 as a year of planning new projects. Ten of the 12 coast casinos operating before Hurricane Katrina have reopened and are thriving. The damaged properties took the opportunity to upgrade their gaming equipment, and currently use the latest technology. With each additional property, reopening the market has continued to grow. 

With disaster came opportunity. Government officials took time to redesign their cities. With new zoning in place, and changes in state law that now allow some onshore development, investors are taking a renewed interest in the coast gaming market. The industry has indeed come back stronger, safer, and smarter.

We expect to see one­–additional property open in 2007. The Hard Rock Hotel & Casino in Biloxi is scheduled to open July 4, 2007. Hard Rock was originally scheduled to open on Aug. 31, 2005, but due to Katrina, it was never able to open its doors. The barge was a total loss and the hotel tower received considerable damage. Once open, it will be the first new casino operator in the state since 1999.

In 2007, there will also be new projects proposed in coast cities that have not previously been involved in gaming, such as D’Iberville and Delisle. Plans are in the drawing stage now. Developers are contacting the commission as well as city planners. While these plans are made, repairs are continuing on the infrastructure of these cities. Streets and bridges damaged by Katrina should be complete in 2007. There is a tremendous interest in Harrison and Hancock counties. While 2007 is seen as a year of intense planning, 2008 will be a year of rich development. Tax incentives for the “Go Zone” will dictate an aggressive construction schedule. 

Gaming in Mississippi is not limited to the Gulf Coast. There are 27 state regulated casinos operating throughout the state. In addition to the ten on the coast, there are 17 along the Mississippi River. Gross gaming revenue for the properties along the river have been up consistently in 2006, nearly ten percent over the previous year.

With the coast properties closed, and the convention space lost for a time, many patrons visited the River County casinos for the first time. Even after the coast reopened, the upward trend has remained. We expect this increase to continue. The expanding airport in Tunica and the recent opening of Interstate 69 have made this area more accessible. New projects continue to be proposed in the Greenville, Natchez, Tunica, and Vicksburg markets.

As a regulatory agency, our job remains what it always has been: to ensure the integrity of the gaming industry in our state. Like most government agencies, we continue to face increasing workloads with decreasing budgets. 

2006 was a year of recovery and reopening. We were fortunate to have committed commissioners who gave solid leadership to the state at a critical time. The success of 2006 is due to the commitment of the gaming industry and to the people of the Mississippi Gulf Coast. And 2007 will be a year of plans and proposals for new projects, followed by a year of construction and growth.

Linda M. Kassekert
Chair, New Jersey Casino Control Commission

When you look around Atlantic City to see what the future may hold, one thing you see a lot of is cranes—construction cranes. Atlantic City has started on a new building boom that likely will continue for many years to come. Several existing operators are building new additions and several new players want to come in and build entirely new casino hotel complexes. There are also new non-casino amenities under construction that will help broaden Atlantic City’s appeal to visitors.

Work on a $325 million addition to the Borgata Hotel Casino and Spa is well under way. The billion-dollar property, which only opened in 2003, completed a $225 million expansion last year that included several new restaurants, a larger poker room, and more gaming space. The second phase, which will add 800 more hotel rooms, started right after the first phase opened and should be completed either by the end of 2007 or by early 2008.

Right next door, Harrah’s is building a 954-room addition that will be the tallest building in Atlantic City. It’s a $550 million project that will also include a 172,000 square feet retail and entertainment complex and a new high-end spa. The superstructure is already in place for a massive dome over a new pool area. The project should be completed sometime in 2008.

Over on the Boardwalk, the Trump Taj Mahal is building an 800-room tower and the casino will be re-themed to appeal to high rollers. The $250 million project will give the hotel more than 2,000 rooms and should be completed in 2008.

In 2007, we should see the demolition of the closed Sands Hotel Casino. The property, along with a lot of adjacent property, was purchased by Pinnacle Entertainment. While it hasn’t unveiled specific plans, the company is expected to build a massive new casino hotel complex on that site. We know that work won’t start on that for another year or two, but every indication is that it will be a spectacular project.

There are also plans for new casinos at opposite ends of the Boardwalk. Morgan Stanley and Revel Entertainment are looking to build a casino hotel above Showboat on the northeast end of the Boardwalk, while two private investors—former Caesars Entertainment president Wally Barr and former Casino Reinvestment Development Authority executive director Curtis Bashaw—have bought land below the Atlantic City Hilton for another casino hotel complex.

Non-casino attractions are also expanding. New stores will be opening in the outlet mall that casinos funded through the Casino Reinvestment Development Authority.

Additional shops and restaurants are also going to be opening in The Pier at Caesars. As competition increases in New York and Pennsylvania, the introduction of new hotel rooms, new entertainment opportunities, and new non-gaming attractions will help Atlantic City’s gaming industry to maintain a competitive advantage and to continue to grow as a destination resort.

On the regulatory front, the deal to acquire Aztar Corp. is scheduled to close in January, and we will be watching with interest the possible acquisition of Harrah’s Entertainment. We will also continue to focus a great deal of time and effort in the area of new technology. We have worked closely with the industry, the Division of Gaming Enforcement, and equipment manufacturers to implement server-based slot machine systems. I am confident that those systems will be available in Atlantic City casinos before the end of 2006.

We will also continue our process of reviewing our regulations to make certain that they are still needed. To the extent that we see regulations can be changed or eliminated, we will do so. And we will work closely with the administration and the New Jersey Legislature to recommend any appropriate changes to the Casino Control Act.

The casino industry in New Jersey is thriving because of the healthy regulatory climate in the state. The Casino Control Commission is committed to maintaining that healthy climate and attracting additional new investment to Atlantic City. As always, we will do that in a manner that does not, in any way, undermine the state’s strict integrity requirements.

Peter Dean
Chair, British Gambling Commission

Britain’s gambling laws are undergoing wholesale reform. We have just passed an important milestone—publishing the rules which will apply to all gambling operators from September 2007. Gambling has been regulated in Britain for many years. All developed countries which permit gambling recognize that it must be kept under strict control. Britain is no exception. 

The Gambling Act 2005 has modernized and strengthened regulation. It established the Gambling Commission as the powerful new regulator, taking over the Gaming Board of Great Britain’s responsibilities in respect to casinos, bingo, gaming machines, and lotteries. Next year, the commission will also regulate betting, arcades, and remote gambling.

The act set three clear objectives: to keep crime out of gambling; to ensure that gambling is fair and open; and to protect children and other vulnerable people from being harmed or exploited by gambling. Our prime duty is to pursue these objectives.
All gambling operators must be licensed by the commission to carry on business.

A key instrument of control will be strict license conditions and codes of practice that we will attach to licenses. We published these rules last month following extensive consultation.

The commission has formidable sanctions available to enforce compliance with its rules. They include fines—in unlimited amounts—removal of a license (putting the operator out of business), and criminal prosecution. We have made clear from the outset that we will not hesitate to use these powers as necessary. 

Gambling is controversial. Public debate has focused on the one regional casino, nicknamed “the supercasino” in the media, which the new law allows. Government will determine its location next year. This single casino will be permitted to have up to 1,250 unlimited stake/unlimited prize gaming machines: hitherto stakes and prizes on all machines in Britain have been limited.

Significant as this change is, we should see it in context. There are currently in Britain over 140 casinos, 660 society lotteries, a very large National Lottery, 657 bingo clubs, 8,800 betting shops, and over a quarter of a million gaming machines, besides hundreds of gambling sites on the Internet. The British gambling industry turns over about £53 billion a year.  The word “gambler” still has uncomfortable overtones, and most people would, I think, shy away from being so described, but we are in truth a gambling nation. News reports have underplayed the significance of the social responsibility obligations embedded in the new act. The law is less liberalizing than commentators suggest. The more enlightened operators already recognize their obligation to run their businesses in a socially responsible way, and have adopted codes of practice to that end. But under the new regime, observing the rules will no longer be optional. They will have the force of law.

The commission will require all operators to put in place policies and procedures to discharge their obligations of social responsibility. These will include: training staff to recognize and deal with problem gambling; prominently displaying where help can be found by those who need it; enabling players on the Internet to keep control by setting limits on their stakes; and providing self-exclusion from gambling premises for players who seek it. Operators will also be required to contribute to education and research about problem gambling, as well as to its treatment. The Independent Responsibility in Gambling Trust has been set up for this purpose, chaired by John Greenway MP. We are encouraging operators to contribute voluntarily. Should they fail, a compulsory levy will be imposed. 

The act does not give the commission jurisdiction over all the overseas-based Internet sites. But the new regime will allow reputable operators to apply to the commission for a license to set up business in Britain. Players in Britain will then be able to play on sites that they know to be properly regulated and safe.

Problem gambling concerns us greatly. One of our cardinal objectives is to protect vulnerable people and our new rules promote responsible gambling. We have commissioned a national study to give us an up-to-date picture, and will publish the results next year.   

In extreme cases, the effects of problem gambling are devastating for the lives of the people concerned, and those around them. Our rules will not eliminate it. But it is reasonable to expect that these rules will lead to significantly fewer problem gamblers. 

Our job is to regulate Britain’s gambling in the public interest. We believe we have made a good start.

Patrick B. Leen and Thomas C. Nelson
Principals, Gaming Regulatory Consultants, L.L.C.

The gaming industry has once again demonstrated the collective dynamic and innovative thinking that has consistently amazed and impressed the “observers” and end-users of this creative and explosive technology.

For several months preceding G2E, we were excited about the progress in server-based and downloadable games, and immensely curious to how the industry would work with the GSA to implement a universal protocol to make all this possible.

We were not disappointed by the degree of progress at the game design level, but what was really impressive (and we must admit that we did not see this coming sooner) was the collegial relationships formed by formerly bitter rivals for the gaming floor space.

The first evidence of this somewhat unprecedented truce struck us as we walked through the IGT booth during the recent G2E show. As we paused briefly between Coyote Moon and Treasures of Troy, we recognized a Williams display right there in the middle of “enemy territory.”

Certain that we had uncovered an embarrassing faux pas by the game installers, we sought out of one of our long-time friends at IGT, Connie Stafford, to advise her of this unfortunate mistake. At first she expressed amusement—actually it was more of a guffaw—at our naivete regarding the current state of game technology, but then gleefully demonstrated how IGT games could now be successfully (and immediately) downloaded to a WMS game platform and vice versa.

Needless to say, we were quite astonished. But our amazement would only increase as the day progressed. At a later breakout session, as Bally Gaming and Aristocrat Technologies described how they are working together, they pointed out that their respective game development ideologies were both compatible and complementary. They went so far as to praise the other company’s game themes, game development, and technology.

Admittedly, all of this camaraderie made us a bit nostalgic for the “good old days,” when corporate competition manifested itself in far more amusing ways. The entire scene was a far cry from conferences in the 1990s when these same companies employed CIA-style security around their respective game booths to make sure the competition kept their distance, and when their corporate representatives had to be strategically placed on panels to keep them apart. Now that was entertainment!

What we are now seeing is the dawn of a new day in gaming where competition for the gaming dollar—and therefore the success or failure of a particular game—will rest more on how it “plays on the server” than how it “plays in Peoria.”

Aside from the rapprochement among manufacturers manifested by GSA cooperation, strategic alliances and shared servers, one hardly needed a crystal ball to discern some dynamic game developments. One involves interactive game development such as Top Gun™ that was showcased by WMS. This game immerses the player in a thrilling video graphics adventure linked to a superb bonus feature that is enhanced by wraparound Bose™ speakers. The integration of synchronized movement of the player chair with the entire game platform gives the illusion of flying an actual fighter jet involved in a dog fight with the bad guys.

We gladly lined up with other show guests to repeat plays, as more and more people discovered what we already knew—you had to play this game. Though no additional confirmation was necessary, we knew WMS had a winner here when we observed company president Brian Gamache waiting in line to play his own game. There is no doubt that this type of game will have an immediate impact this year on the gaming floor.

Yet another type of game that was somewhat ubiquitous this year is the interactive electronic table game. These behemoths—including roulette, blackjack and even craps—were first introduced with a whisper several years ago and have slowly grown into a stable of the gaming show. The paring of companies such as Aristocrat and Electron„e along with IGT’s entrance into this market has spawned any number of very well-designed and crafted, automated, or partially automated, table game devices.

The increased popularity of these “mechanical” table games ensures that they will continue to expand their share of the precious gaming floor space during the next couple of years.            

Many of these new types of games, as well as downloadable technology, will still need to clear regulatory hurdles. This is likely to involve a somewhat lengthy process of regulatory rewrites, establishment of new or revised technical standards, and perhaps more refined field trial protocols.

And from our experience in the regulatory bureaucracy, navigation of the new standards and requirements will doubtless prompt some modifications and course corrections along the way.

None of this, however, will detract from the experience of seeing a WMS game at the IGT booth and listening to one of Aristocrat’s lead engineers praising the technology and creativity of Bally Gaming. It is almost tempting to say “Now we’ve seen everything!” But the expression that most aptly applies is “You ain’t seen nothing yet!”

Harry Reid
United States Senator, Nevada

Looking forward to the 110th Congress, I am eager to serve in my new role as Senate Majority Leader. In that capacity, I am committed to working in an open, bipartisan manner with my colleagues to achieve results for the American people. The gaming industry and its stakeholders expect results—the American people rightfully expect the same out of Congress. 

This year, we will continue crafting immigration policy that addresses the needs of the American economy and the gaming industry. The gaming industry relies on the efforts of its workers, many of whom are immigrants. With this in mind, I will work to develop pragmatic immigration reforms that protect our national security and acknowledge the realities of our nation’s dynamic business climate. During the coming year, I also plan on working to extend the Terrorism Risk Insurance Act (TRIA), which guarantees terrorism risk insurance remains available and affordable to policy-holders in the gaming industry. TRIA is set to expire in 2007, but the insurance markets will begin reacting to that impending expiration long before year’s end. I am hopeful that Congress will act swiftly to re-extend TRIA and during the process will consider more permanent solutions to capacity shortcomings in the secondary insurance market. 

As always, I will monitor closely all legislation in the next Congress that may affect the industry, including proposals that would affect tribal gaming or seek a congressional study on the online-gaming industry.

Robert W. Levy Sr.
Mayor, Atlantic City, N.J.

The city of Atlantic City is booming! Although we are historically known for our world- famous beach and boardwalk, tasty saltwater taffy, and life-sized peanut icons, Atlantic City is much more than a seaside summer vacation spot and gambling destination. It is a vibrant metropolis, offering visitors and residents superior life experiences.

In addition to our 12 world-class casinos, Atlantic City proudly features state of the art retail shopping facilities, gourmet dining establishments, five-star luxury hotel accommodations, and the largest entertainment selection on the east coast. Each unique service is available 24 hours a day, seven days a week. Atlantic City is truly  “always turned on.”

As mayor of this great city, my main goal is to ensure the safety, security, and comfort of all residents and visitors on a daily basis. “Safe, Clean Streets” is a promise that I made to the citizens of Atlantic City. It is a promise that I intend to keep, and in turn, it will allow our city to flourish.

In 2007, Atlantic City is looking forward to casino projects including, but not limited to: Morgan Stanley and their development of the land adjacent to the Showboat; Trump, and the addition of the new state-of-the-art Taj Mahal tower; and Pinnacle’s plans to enhance the Sands Casino property. 

As a lifelong resident of Atlantic City, I’m constantly working with various political, community, and private sector leaders to develop the city. Whether it is a residential project, multi-million dollar commercial venture, or community event, my main focus is always on delivering and ensuring superior quality of life for all residents. The city’s recent and ongoing development projects will provide residents from all wards, alongside city visitors, ample opportunities to benefit from and invest in our growing area.

If you are only in town for the weekend or have lived in Atlantic City for many years, I’m sure you’ll agree that our rich history, beach environment, proud community, and state of the art contemporary venues continually offer opportunity and excitement while accenting the beauty of life. Atlantic City’s cornucopia of advantages make it the ultimate east coast location to live, work, play, and invest.

A.J. Holloway
Mayor, Biloxi, Miss.

I used to welcome a convention to Biloxi once or twice a week, but for the past year I’ve been sort of tied up with other things, namely the short-term and long-term recovery from Hurricane Katrina. But the promising signs that we’re seeing in our local economy tell me that we’re going to be back in the swing of things in due time.

In fact, let me tell you up front what I see in the future for Biloxi and the Mississippi Gulf Coast, and you’ll see it starting to take shape in 2007, when I think we’ll be home to the largest building boom ever seen in the South.

In 2007, you’ll see a new $50 million airport terminal on the Mississippi Gulf Coast, allowing the number of annual passengers to begin its climb to reach more than 2.4 million over the next decade. You’ll see AirTran Airways, Delta, and Continental add more and larger jets, as well as a new airline or two entering the market to join the five carriers we already have.

We’ll see hotel construction pick up in 2007, making inroads toward an inventory of 30,000 rooms by 2010. You’ll see those rooms complimented by the more than 12,000 condo and condotel units we have proposed for here in Biloxi. Several of the more than two-dozen projects now under review will break ground.

You’ll see the city invest tens of millions in infrastructure—streets and drainage, parks and recreation facilities, and the resurrection of many of our cherished landmarks and museums that were ravaged by Hurricane Katrina.

You’ll see thousands of permits issued for new homes, affordable homes, and small and large businesses.

And driving it all, you’ll see more and more developers come forward with proposals in 2007 that will place Biloxi as home to between 18 and 22 casino resorts in the next five to ten years.

I can forecast these things because, the fact is, we’re seeing intense interest and intense investment in Biloxi. People realize the promising future we had before the hurricane, and now they can see unprecedented potential, buoyed by new laws that allow onshore gaming.

People see that the casino resorts operating in Biloxi have been generating record levels of gross gaming revenue.

In May 2006, three of the Biloxi casinos generated 78 percent of the revenue that nine were generating pre-Katrina. In June that figure rose to 83 percent, and in July it was 99 percent of the pre-Katrina revenue, with only five of nine casinos operating.

The biggest news: In September, seven of the nine pre-Katrina Biloxi casinos generated $95 million gross gaming revenue, the largest amount in the history of legalized gaming in Biloxi. And this is with only three of the seven operating at 100 percent of their pre-Katrina status.

The casino resort industry—and let’s not forget that word “resort” because they are more than casinos—is the engine moving the Biloxi train, but it’s not the whole story.

Pre-Katrina Biloxi had 3,100 condominium units on the drawing boards. Today, those 3,100 rooms have ballooned to more than 12,000 proposed condo units.

On the residential construction front, we expect to see activity pick up as more and more homeowner’s grants make their way to the homeowner, resolve issues with their insurance companies (wind vs. water), or consider their options. The affordable housing issue is by far the biggest challenge we face.

But everyone—homeowners and businesspeople alike—are well-served by remembering the compelling story that has been—and continues to be—Biloxi.

Biloxi was not broken before the storm. In the decade before Katrina, we were enjoying the most prosperous and productive time in our 300-plus year history. Consider:

• We saw $6 billion worth of development in Biloxi.
• Nine casino resorts created 15,000 new jobs.
• The number of hotel rooms on the coast grew from 6,000 to nearly 20,000.
• We went from a million visits a year before gaming, to between eight and ten million a year in ensuing years.
• We were home to a $45 million affordable housing community.
• Tens of millions of dollars were invested in public education, public safety, and recreation; we invested in our heritage and culture, and preserved historic neighborhoods.
• We cut our tax rate in half while we were providing our residents a much-deserved and enhanced quality of life.
• We were doubling the size of our airport and were getting ready to start on a project to double the size of our convention center.
• A Fodors survey of the nation’s leading travel agents said that the top three emerging destination resorts were Orlando, Las Vegas, and Biloxi.

Then Hurricane Katrina came along.

Katrina destroyed 6,000 homes and businesses in Biloxi—hundreds of historic homes and landmarks. Thousands of lives were interrupted; 52 were extinguished forever in Biloxi.

But despite the widespread destruction, and as difficult as it was, I knew what we were doing before the storm, and I knew we could do it again.

Katrina did not destroy our community spirit, and that’s an important asset.

As we move into the future, we’re going to use the past as our guide. We’re going to revive the Renaissance that we were enjoying before this storm.

Biloxi and the Mississippi Gulf Coast are once again going to be the places that thousands call home and millions call paradise. And we’re going to do it in a responsible fashion. We’re going to show the rest of the country that we’re doing it right.

Robert Faiss
Chair, Gaming Practice Group, Lionel Sawyer & Collins

In Nevada, the election of a new governor will not change the stability of the Nevada Gaming Control Board (NGCB), which is responsible for the day-to-day oversight of the nation’s largest gaming industry and investigation of gaming license applicants, among other demanding responsibilities.

Two of the three members of the NGCB, Chair Dennis Neilander and Mark Clayton, remain, and retiring member Bobby Siller, who served for two terms with great distinction, will be replaced by Keith Munro, who served as chief of staff for the retiring governor.

Munro is familiar with all of the major challenges met by the Nevada gaming control system in recent years, and will need little time to master his new duties. One of those duties will involve dealing with major mergers and acquisitions. The acquisition of Aztar Corporation by Columbia Sussex is expected to close in early 2007 and acquisition offers are pending for Harrah’s Entertainment, Rivera Holdings, and Station Casinos. Industry observers are busy speculating which public gaming company will be the next subject of a “go private” bid. Cantor Gaming, the first company in Nevada to be licensed to manufacture and operate wireless gaming devices in gaming resorts, is expected to unveil this new product for public play within a few months.

Pressures on the U.S. Congress to take a more realistic approach toward dealing with Internet wagering will continue to build. Officials of countries important to the United States have not been reluctant to add their voices to the discussion.

Expansion by U.S. companies headquartered in Nevada into new gaming jurisdictions outside the U.S. can be expected to continue. At the same time, foreign gaming companies are seeking licensure in Nevada. One result of this may be more standardization of gaming control throughout the world.

Gaming law education in U.S. law schools should gain greater recognition. The International Association of Gaming Attorneys in 2006 inaugurated an annual scholarship award for student papers in the field of gaming law. The award is named for the late Shannon Bybee of Nevada, who had an unmatched record as a gaming regulator, gaming chief executive, gaming attorney, and gaming law educator. Director of the award is Peter Bernhard, chair of the Nevada Gaming Commission.

Patrick Hicks
Managing Partner, Littler Mendelson

As Littler Mendelson broke the 500 attorney mark this year, an increasing number of our resources have been designated to benefiting clients in the gaming industry—from suppliers, to hotel casinos, and beyond. Looking back at 2006, it was a banner year in terms of increasing the legal protections for those in the gaming industry with the hope of allowing clients to flourish in their respective jurisdictions.

One of the primary victories greatly benefiting the industry in 2007 is the Ninth Circuit Court of Appeals reaffirmation of reasonable dress and grooming standards. In upholding the employers’ right to implement such standards in the face of sexual discrimination allegations, the court has deferred to employer’s judgment in instituting reasonable dress and grooming standards that are consistent with the industry’s needs.

While we expect similar challenges in the other parts of the country to continue, such rulings bode well for employers all over the country who find their dress and grooming standards under attack. The firm also served up front on other cutting-edge legal issues in the gaming industry, from tip distributions, to covenants to not compete, which have proven to be important tools and options for those in the gaming industry.

The court’s affirmation of reasonable employment policies on these and other areas will serve as a valuable road map for employers in the gaming industry working to protect their investments and looking to advance the interests of their employees and shareholders.

For 2007, we anticipate the following activity on the employment front: increased scrutiny from the Equal Employment Opportunity Commission, additional filings for wage and hour class actions, and continued challenges to covenants not to compete. As in the past, the most helpful action employers can take is to conduct proactive training in each of these areas.

Lloyd Levenson
Chief Executive Officer, Cooper Levenson

Like “sweet sorrow,” practicing law in the gaming industry has become an oxymoron.  As the global expanse of gaming increases, we expand our own reach to bring these new frontiers into our known worlds of practice. As gaming companies reach beyond their own geographical borders, we are or will be there to receive them; as technological advancement increases the variety, speed, and marketability of all facets of gaming, we must respond in kind to reduce complexity to manageability and to demystify this growth for the regulatory world. 

We are moving into 2007 and beyond, not in a one-dimensional manner, but more like the ever-expanding universe. Just a few years ago, it was enough to focus one’s practice on one or two areas, such as licensure and equipment approval in one’s own jurisdiction. The client was well served to be recommended to a competent practitioner in any additional jurisdictions and/or legal areas. But this approach no longer works in today’s world. The flow of information has to be instantaneous, the collection of data has to be smooth and accessible, and problem solving and expertise have to be multifaceted.

Over the years, I have defined the goals of Cooper Levenson—what it is that we believe we must accomplish for our clients to ensure their (and our) success. Those goals are threefold: 1) to get the client licensed; 2) to get their equipment approved; and 3) to get their products into the casinos.

In today’s expanded gaming world, these are still our hallmarks, but our methods and presence has greatly expanded to continue providing these results. Last year we opened our first out-of-state office in order to anticipate and accommodate the flood of applicants into Pennsylvania. In our Harrisburg office, we now facilitate the applications of our existing clients and are an established legal presence for new entrants into the jurisdiction. To accomplish all three prongs of our goal, it takes not only the legal knowledge, but our years of experience and our many relationships with government, regulators, other professionals, and gaming entities.

Now, recognizing the success and the necessity of our Pennsylvania branch, our greatest venture for 2007 is the decision to open a Nevada office. It is rare nowadays for a gaming company to restrict itself to one or two jurisdictions; as the world’s greatest gaming venue, sooner or later all of our clients will need assistance in Nevada.

We have for many years had a visible presence in Nevada due to our many international and transcontinental clients, but now we will offer full-spectrum, full-service representation. By virtue of this expansion, we will shrink the communication gap, shrink the duplication of effort, and eliminate the anxiety of sending a client to fend for him or herself in a complicated venue without their trusted relationships and confidences.

Throughout 2007, we will continue expanding our efforts, influence, and knowledge through leadership roles in major gaming industry conventions. We have been legal and regulatory advisor to G2E, the world’s largest and most diverse gaming show.

On the East Coast, we are a founder of the East Coast Gaming Conference, which, now in its 11th year, brings together key players in the numerous professions and disciplines that comprise the gaming world. We look forward to an ever-expanding stream of information and ideas in these forums.

In Atlantic City, Cooper Levenson is involved in many of the monumental projects, both gaming and non-gaming, that are reshaping the sky, shore, and bottom lines of Atlantic City. Our expansion has not just been out of state, this past year we welcomed to the firm, Nick Talvacchia, long recognized as one of New Jersey’s foremost land use practitioners, who also has a singular expertise in casino development. 

Lynne Kaufman, who assists our clientele with her skills in compliance matters and casino finance, is representing the firm as chair of the Casino Law Section of the New Jersey State Bar Association this year; we congratulate Lynne and are proud of her accomplishment.

We also continue to offer service in many other related areas of gaming law; Russell Lichtenstein is a nationally-known expert in employment and labor issues who represents gaming companies throughout the country. 

Through all of our expansion, we have made the gaming world smaller for the client—I guess the name of the game for the future is “jumbo shrimp.”

I. Nelson Rose
Professor, Whittier Law School

All lawyers try to predict the future. When I write a legal opinion, I’m really saying this is how a court would rule. When I give legal advice, I’m saying this is what you should do to avoid getting into trouble, so that we won’t have to find out how a court would rule.
Here is what I predicted one year ago, in Casino Enterprise Management, that we would see in the next few years, and what actually happened.

1) “Gaming law is booming and will continue to grow.” Absolutely true. Sales of the first casebook, Gaming Law: Cases and Materials, continue to grow, as more law schools and business schools begin offering courses in gaming law. There is so much business for gaming lawyers that there are two separate professional organizations: the International Association of Gaming Attorneys and the International Masters of Gaming Law.

2) The U.S. Supreme Court under Chief Justice John Roberts “will decide cases involving Indian, at-home, and cross- border gaming.” Not yet, but it hasn’t turned down any important cases, either.

3) “Gaming law is going to be even more international.” True, and sometimes in some interesting ways. This June, I will co-teach a class at the University of Macau. Ten years ago, no one would have thought of an American law professor teaching gaming law at a Chinese university.

4) “A major force for this international expansion is Internet gambling.” Foreign operators are obviously very concerned about executives being arrested in the U.S. and the new Unlawful Internet Gambling Enforcement Act, which I call Prohibition 2.0. But cross-border betting is becoming a hot issue everywhere, particularly in Europe. The UK, Italy, and Spain are apparently going to give in to the demands of the European Commission and High Court to end their state monopolies, but France arrested the Austrian co-CEOs of Bwin.com, for sponsoring a Monaco football club.

5) “Technology is creating other new legal issues. Linked bingo machines and pull-tab dispensers with video screens are not only hot issues on Indian land.” Machines have now been introduced into charity bingo halls in California. Surprisingly, one of the hottest new areas has been bingo halls in Mexico.

6) “State lotteries in the rest of the world are already selling a major portion of their tickets on the Internet...Every form of gambling can, and is, being played on a video screen powered by a computer.” Although mainland China still has the death penalty for gambling, a mainland state lottery in Shanghai has introduced video lottery terminals.

7) “In the coming years we might get an answer to the question: Is poker a game of skill?”  Not yet.

8) “Gaming lawyers in general stick to their narrow subspecialties.” Casino lawyers still deal almost exclusively with casinos, lottery lawyers with lotteries, etc. But, as I predicted, “with tracks opening racinos and state lotteries operating keno and quasi-slot machines everywhere, there will be more and more legal experts who understand that no matter what you call it, it is all part of gambling and the law.”    

I have one major new prediction for the next few years: Prohibition 2.0 is going to create a boom of creativity. I have given legal opinions that the new law does not make existing gambling illegal. But I have also given advice about inventive ways to run games, including poker tournaments, with a free alternative means of entry; skill games of all sorts; interstate and international bets involving state lotteries, Indian tribes, and horse racing; fantasy leagues based on poker and casino games; and Internet poker that is licensed, taxed, and regulated by a state and is limited to its residents. And some land-based casinos will become major players.

^{Forecast for 2007 © Copyright 2006, all rights reserved worldwide.  Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, Calif.}

Heidi McNeil Staudenmaier
Partner, Snell & Wilmer

With the Jack Abramoff lobbying scandal playing a prominent role in 2006, it was expected that—after many failed attempts—the Indian Gaming Regulatory Act (IGRA) would finally be amended. The implementation of significant gaming regulations also was anticipated. But, when the dust settled at year’s end, the status quo of the $23 billion tribal gaming industry remained intact. Whether such sweeping changes will come to pass in 2007 is yet to be seen.

First, let’s talk about the IGRA amendments. Republican Sen. John McCain proposed extensive revisions, including severe restrictions on “reservation shopping” (i.e., whereby tribes seek to acquire land for gaming purposes near urban centers, as opposed to the tribe’s historical lands). The McCain amendments further aimed to give more authority to the National Indian Gaming Commission (NIGC) in its regulatory oversight of hundreds of tribal casinos. The NIGC also was to be accorded greater approval powers over developers, consultants, and others doing business with the tribal casinos.
McCain’s vision for overhauling the IGRA was met with vigorous tribal opposition. Although the tribes were not always united in the reasons for their opposition, one thing was clear: The tribes had sufficient political clout to keep the legislation on “hold.”

With McCain gearing up for the 2008 presidential election, it remains unknown if anyone will take over the amendment battle in 2007. To be sure, it will not be California Rep. Richard Pombo, who also championed IGRA amendments throughout 2006. Although the Pombo Bill targeted only the “reservation shopping” issue, it died a similar death to that of the McCain proposal. Pombo will not be around in 2007 to continue his crusade, as he was one of the many Republican casualties of the 2006 mid-term elections.

In light of the foregoing, it is not likely the IGRA will see significant revisions in 2007. If there are any amendments at all, they will likely be limited to the NIGC obtaining specific authority over Class III gaming to “fix” a federal court ruling.

The reservation shopping amendments likely will remain on the shelf. Instead, the Department of Interior will pursue passage of specific regulations governing tribes’ ability to acquire lands for gaming purposes after the passage of IGRA (Oct. 1988). Depending on the substance and volume of comments received, the final regulations may be published some time in 2007.

Class II regulations will remain hot. The NIGC issued proposed regulations in mid-2006 and the tribes’ reaction (as well as gaming device manufacturers) in opposition was immediate. Notwithstanding, the NIGC will likely issue some form of Class II regulations in 2007. What form those regulations take will gauge the tribal and industry response.

Of note, the NIGC commission finally will be at full strength in 2007. Late in 2006, Norm DesRosiers, Viejas (California) Gaming Commissioner, was appointed to fill the third commissioner position which had been vacant for over a year. Based on DesRosier’s service on the Tribal Advisory Committee for the Class II regulations, it is possible his addition to the NIGC will lead to a peaceful accord of the Class II debate. If a satisfactory resolution is not reached, the tribes are likely to launch litigation.

Tribal sovereignty will continue to be an issue. Although tribes have gained more economic clout through gaming, they have seen their sovereign immunity slowly chipped away through various rulings in the courts and other tribunals. Case-in-point is the NLRB case involving the Agua Caliente Tribe where a ruling is expected in 2007.

Tribal-State Gaming Compacts will remain a critical focus. Several of the large California tribes will again seek compact amendments permitting more gaming devices. On the other coast, the Seminole Tribe of Florida will see whether the new Florida governor is willing to negotiate a Class III compact. If not, the tribe will push to obtain the publication of the interior’s Class III procedures.

More importantly, 2007 will witness tribes engaging in more non-gaming business ventures both on and off their lands, in an attempt to diversify their economic base. Such notable deals in 2006 included: the Seminole Tribe of Florida buying the Hard Rock business for $965 million, and the Mashantucket Pequot Nation’s strategic alliance with MGM MIRAGE, the nation’s second-largest casino operator. These tribes are blazing the trail for economic diversification beyond gaming, which will provide for a solid financial future for many generations to come.

Eugene Martin Christiansen
President, Christiansen Capital Advisors, LLC

In Christiansen Capital Advisors’s perspective, the most important prospective industry development in 2007 is increased institutional investment, especially by private equity and hedge funds, in the gambling sector including, but not limited to, casinos. 

Institutional interest in gaming is a function of high liquidity (too much money chasing too few deals) and low casino valuations, relative to lodging valuations. Prior to Apollo Management/Texas Pacific Group’s October 2006 offer of $81 a share for Harrah’s Entertainment, Harrah’s was trading at about 7.8x debt-adjusted 2007 (E) EBITDA; recent lodging sector acquisitions are in the 13x range. Too, the auction for Aztar, precipitated by Colony Capital with an offer of $41 a share (9.5x 2007(E) EBITDA and apparently won by Columbia Sussex with a bid of $54 a share) helped validate gaming as a suitable institutional investment and raised the sector’s profile.

A brief review of institutional investment in the domestic gambling industry (including casino gaming) may serve as a background for activity that may occur in 2007.

For several years Colony Capital, which purchased Harveys in 1999 and sold it to Harrah’s in 2001, had gaming more or less to itself due to the rigorous nature of licensing requirements. Angelo Gordon, a Manhattan fund, completed one small Nevada acquisition some years ago, but has not subsequently been active in gaming; Carl Icahn’s American Real Estate Investment Partners acquired properties in Las Vegas and Atlantic City (the latter, Atlantic City Sands and the adjoining Traymore site, was sold to Pinnacle Entertainment in September).  

In October 2003, MacAndrews and Forbes Holdings Inc. (Ronald Perelman) purchased a 24 percent interest in Scientific Games Corporation, the second largest supplier of lottery systems and supplies (including instant tickets) from DeAgostini Group, the controlling shareholder of Lottomatica S.P.A. Subsequently, in August 2006, Lottomatica merged with GTECH Corporation, the world’s largest supplier of lottery systems and supplies (including video lottery terminals or VLTs). The third largest lottery systems and supplies company, Intralot S.A., controlled by Socrates Kokkalis, is the subject of current takeover rumors. 

In October 2005, Morgan Stanley launched a $2.5 billion gaming investment initiative, Ventura Holdings, led by Michael Petrick; Morgan Stanley acquired 20 acres of Atlantic City beachfront that it subsequently swapped for a stake in Kevin DeSanctis’s Revel Entertainment, formerly president of Penn National Gaming. Until September 2006, Morgan Stanley held a 75 percent interest in a proposed casino development near Gettysburg, Penn., Crossroads Gaming Resort & Spa this 75 percent equity stake is now held by Silver Point Capital LP, a hedge fund. Morgan Stanley also holds an 18 percent interest in Trump Entertainment Resorts Inc. Goldman, Sachs’s asset management unit holds an 11.5 percent stake in Harrah’s Entertainment. 

In 2005, Bill Paulos (Millennium Gaming) and Oaktree Capital Management purchased The Meadows, a Pittsburgh, Penn. racetrack eligible for slot machines, from Magna
Entertainment. In late November, reports of a possible competing offer for Harrah’s Entertainment by Penn National Gaming and D.E. Shaw, a hedge fund, with financing from Lehman Bros. and Wachovia, surfaced.
  
In early December 2006, an investment group led by Station Casinos chair and CEO Frank J. Fertitta, Colony Partners LLC, offered $82 a share for Station, valuing the company at $4.69 billion (implied 13.4x 2007(E) EBITDA); Colony Capital is a partner in the offer. 

A number of other institutional investors, including Blackstone, have reportedly looked at gaming, but have not made bids, perhaps on the grounds that valuations are currently too high. 

A number of funds based in the United Kingdom or elsewhere offshore are invested in the gambling sector. Three funds that might be mentioned are Candover, Cinven, and Permira, which together control the U.K.’s Gala Group, which in October 2005 acquired Coral EuroBet.

Mary Lynn Palenik
Director of Development, Research and Analysis, PricewaterhouseCoopers LLP

Each year in the gaming industry, there is yet another announcement that intrigues both casino insiders and sideliners. Ever since MGM Grand made an unsolicited offer to purchase Mirage Resorts in 2000, the gaming industry has witnessed intense merger and acquisition drama. Not to be outdone by the recent merger of MGM MIRAGE and Mandalay Resort Group, as well as Harrah’s Entertainment’s acquisition of Caesars Entertainment, 2006 has also had its fair share of one-up bids.

Most notable in the fall of 2006 was the cash buyout offer for Harrah’s Entertainment made by two private-equity firms (Texas Pacific Group and Apollo Management), and then, eight weeks later, the news that Penn National Gaming and hedge fund D.E. Shaw were considering a cash and stock offer for the same company. News of these offers had speculators punctuating usual theories on potential takeover targets, which continue to generate healthy worldwide investing interest in the gaming industry.

PricewaterhouseCoopers’ Global Entertainment and Media Outlook: 2006 – 2010 (the Outlook) expects global casino revenues to reach $90.5 billion in 2006, with the greatest contribution, $57.8 billion or 63.9 percent, from the United States. Other regions contributing to global casino revenues include EMEA (Europe, Middle East, Africa) with $15 billion representing 16.6 percent of global revenues, Asia Pacific with $13.8 billion representing 15.3 percent, Latin America with $95 million representing 0.1 percent, and Canada with $3.7 billion representing 4.1 percent.

The Outlook incorporates principle drivers such as macro and micro economics, proposed legislative shifts, relaxing regulations, opening of new jurisdictions, announced developments, and historical results. Based upon these drivers, the Outlook anticipates that by 2010 global gaming revenues could exceed $125 billion.

By 2010, regional contribution rates will realign slightly as gaming revenues generated in the United States will represent 59.6 percent of global gaming revenues, down 4.3 percentage points from 2006. The U.S. will still represent the most significant source of global gaming revenues in 2010 as an expected $74.5 billion is wagered, a 28.9 percent increase over 2006. The contribution shift expected to occur by 2010 has the proportion of global gaming revenues originating from Asia Pacific and EMEA increasing 3.1 and 1.3 percentage points, respectively.

Specifically in the United States, and recalculated based upon data from the Outlook, casino gaming revenue is expected to grow at a 7.2 percent compound annual growth rate from 2006 to 2010, from $57.8 billion to $74.5 billion.

• Nevada casino revenues are expected to increase at a 9.3 percent CAGR to $17.3 billion in 2010 from $12.6 billion in 2006. Nevada casinos currently comprise 21.7 percent of total U.S. gaming revenues. This rate is expected to increase to 22.4 percent by 2010.
• Atlantic City casinos are estimated to grow from $5.2 billion in 2006 to $5.8 billion in 2010. Atlantic City casinos currently comprise 9.1 percent of total U.S. gaming revenues. This rate is expected to decrease to 8.8 percent by 2010 due to increased competition from racinos and slot parlors in neighboring Pennsylvania, and new developments in other neighboring states.
• Tribal casinos are expected to increase from $25.3 billion in 2006 to $32.5 billion in 2010. Tribal casinos currently comprise 43.8 percent of total U.S. gaming revenues. This rate is expected to increase to 44.3 percent by 2010.
• Regional casinos (casinos outside Nevada, Atlantic City, and non-tribal casinos) are expected to increase at a 7.3 percent CAGR from $14.7 billion in 2006 to $19.0 billion in 2010. Regional casinos currently comprise 25.4 percent of U.S. gaming revenues. This rate is expected to decrease to 24.5 percent by 2010.

In EMEA, casino gaming revenue is expected to grow at a 12.2 percent compound annual growth rate from 2006 to 2010.

The Gambling Act of 2005 in the United Kingdom will continue to open up the market and new casinos are expected to boost revenues in South Africa, contributing to expansion in EMEA. The lack of enough Las Vegas-style venues will prevent EMEA from becoming a major destination market.

EMEA, currently the second highest revenue-generating region, will drop back to third place by 2010 as continued development in Asia-Pacific moves this emerging region into the second position. 
In the Asia Pacific region, casino gaming revenue is expected to grow at a 16.6 percent compound annual growth rate from 2006 to 2010.

• New casinos in South Korea in the current year, including Singapore, Japan, Taiwan, Thailand, and the Philippines later in the decade, are expected to contribute to growth in the regions.
• Competition for tourists will lead to the introduction of casinos in a number of countries and sustain growth at double-digit rates through the remainder of the decade.
• Thailand is working on new legislation to permit casinos, and it is expected that legal casinos will begin operating in 2009.

As has been the case solidly for the past two decades, it continues to be an exciting time of development, mergers, and acquisitions in the gaming industry. PricewaterhouseCoopers’ Global Entertainment and Media Outlook is updated annually.

Robert R. Russell
Gaming Analyst, Fraser Trebilcock Davis & Dunlap, P.C.

Although the state of Michigan’s overall economy has been dealt a difficult blow from the continued losses by the “Big Three” American automobile manufacturers, and Tier 1 suppliers to the auto industry, the state’s gaming industry is approaching 2007 with a large number of capital infrastructure projects underway, and more in the final planning stages.  

In 2007, Michigan’s casino gaming market will expand, as casino operators in the city of Detroit begin construction of three permanent casino complexes, with a total investment of $1.2 billion. This expansion will include the addition of 75,000 sq. ft., of collective gaming space, bringing the total market floor space to 300,000 sq. ft. Each of these properties will also be adding 400 hotel rooms, along with ancillary entertainment amenities.

In addition, a number of Michigan’s nine Native American tribes, which collectively operate 17 Class III casinos, will be remodeling and enhancing their gaming complexes. Two Native American tribes with Class III state compacts have experienced numerous delays from legal and regulatory challenges, and may be able to finalize construction on their properties as early as 2007. In addition, at least one Native American tribe is expected to receive approval of its land in trust application, which would allow it to approach the state on Class III compact negotiations.

As it relates to the composition of the staff at the Michigan Gaming Control Board (MGCB), which is charged with regulating the Detroit casinos, the agency will see a new executive director take control of the reigns in 2007. At the time this forecast goes to print, Michigan’s Gov. Jennifer Granholm has yet to appoint a replacement following the resignation of Daniel Gustafson in November 2006. Another change at the board will be in the role of deputy director of licensing, as Ben McMakin will be retiring on Dec. 15, 2006. People interested in working with the Detroit casinos should familiarize themselves with the state’s licensing and registration process. Michigan is one of the commercial casino states that require licensing and disclosure of all gaming suppliers and certain non-gaming suppliers.

Although Michigan’s Native American tribal casinos are overseen by the MGCB, it does not have any regulatory responsibility over the tribal operations in the state. Rather, each tribe has its own independent gaming commission that is responsible for enforcing its licensing and regulatory processes. 

As it relates to legislative developments in Michigan, the 2006 election resulted in many political changes throughout the state. While the Democratic party took control of the house from the Republicans, the Republican party held control of the Michigan Senate. Therefore for the first time in several legislative sessions, the legislature will be divided. 

In 2006, Michigan re-elected Democratic Gov. Jennifer Granholm for a second term in office. Although there may be some general gaming related legislative matters taken up by the legislature in 2007, I do not expect to see any dramatic changes in the legislative landscape in Michigan. This is largely the result of the passage of Proposal 1 in 2004, which amended the state constitution to require the public’s vote on any casino-style gaming expansion.

In addition, because Proposal E, which authorized Detroit casinos in 1996, was passed by a voter referendum, amendments to the Michigan Gaming Control and Revenue Act require a super majority vote in both chambers of the legislature. Consequently, gathering support for any changes to the act is a difficult task, and one that is not likely with a divided legislature in 2007. 

For several years, the Michigan horseracing industry has sought to find a way to enhance its wagering offerings with video lottery terminals. The passage of Proposal 1 in 2004 was damaging to these efforts. Rumors continue to float throughout the state that the industry will gear up for another campaign to take the issue to Michigan voters. However, no official ballot petition efforts have been announced.  

At a recent Economic Club of Detroit Outlook Luncheon, David Sowerby, vice president, portfolio manager, and chief market analyst for Loomis Sayles & Co., said that Michigan continues to struggle compared with the rest of the United States. He predicted that Michigan’s economy will grow at one percent in 2007, versus a two to 2.5 percent rise in the national GDP.

Therefore, 2007 will be marked as the year that Detroit casinos make major steps towards the completion, and possible opening, of their permanent casinos. In addition, a number of the Native American properties will be enhanced, and there is the potential that two or three new Native American Class III casinos will open in the state.

Based on economic projections, it is my expectation that the Michigan casino marketplace will see relatively small revenue growth, in large part because of the troubled automotive sector upon which the state’s economy is heavily dependent. However the market is positioned to gain, as the state’s economy improves and its gaming infrastructure is improved as a result of the current capital improvements underway in Detroit and at the out-state Native American facilities.

Michael A. Tew
Principal, Capital HQ

The gaming industry is one of the most transaction-oriented industries today. Depending upon valuations, private equity investors, or the multitude of hedge funds invested in the gaming space, could look once again to privatize or strategically facilitate acquisitions of other companies.

The world of private equity has made an interesting turn in 2006 as the market flooded with cash, investments, and hedge funds. Looking to put cash to work and improve returns, companies poured money into privatizations, mainly through leveraged buyouts (LBOs). Henry Kravis, co-founder of Kohlberg, Kravis, Roberts & Co., said he had “never seen” so much capital available for leveraged buyouts as hedge funds, and other investors provided debt to finance deals.

Gaming companies are particularly attractive as buyout targets (even leveraged ones), because they generate generous free cash flow yields—some of them in the double digits—which is very attractive for acquisitive investors. There are several mitigating factors, however, that are likely to impede privatizations if valuations are not optimal for investors’ IRR thresholds. A few things to keep in mind in 2007:

• Gaming companies generally have a uniquely high percentage of insider ownership. This could impede private investors, as these “insiders” might either require an unusually high premium, or simply might be against selling their holdings.
• Some gaming companies have aggressive development pipelines already committed. This will put their free cash flow to use and would make them less attractive as an LBO candidate.
• Gaming operators not meeting the prior two criteria (there are not that many left) are trading at high multiples, or are highly leveraged, not providing the returns private investors require, particularly in an LBO situation.

If there are no further movements on the privatization front, the industry could be ripe for further consolidation as investors and companies look to increase synergies and increase multiples. 

On the Internet gaming front, the industry will be hit hard in 2007, as there is a much higher probability of bad news than good news. A few key points to keep in mind as we enter a very difficult year:

• An official legal rendering, requiring each designated payment system and all participants in processing payments to clearly identify and prohibit restricted transactions, shall be made public by the Board of Governors of the Federal Reserve and the United States Attorney General by the end of September 2007.
• There will be news about the BetonSports indictment, in which there are more than 20 defendants and multiple felony counts. We believe this case could go to trial, creating a window for movements in the stocks as news of the trial hits the market. Not to mention, whatever outcome, the trial would establish a set of case law for further prosecutions in the United States.
• Valuations are likely to stay depressed in 2007, as investors keep a close watch on management decisions and strategy developments for publicly traded operators, as well as companies servicing the industry.

Given the current circumstance, we believe investors and consumers should remain wary of the industry and its prospects for 2007. The real shakeout and consolidation has yet to occur, and moreover, the industry reaction, which includes targeting non-U.S. markets such as Asia and other international destinations, is an inconclusive strategy at this point.

Based upon our analysis, after years of consistent double-digit growth, the industry will now actually shrink beginning in 2007. We think 2006 is a wash, but believe strongly that in 2007, even though the legislation will be just taking effect, operators will begin to ban U.S. customers from their websites the world over.

Prior to the legislation and indictments, we believed the industry would conservatively grow an average of 8.7 percent per year from 2006 to 2010, to estimated annual revenues of $15 billion in 2010. Today, we estimate the industry will miraculously shrink to just $5.5 billion in revenues in 2010, down 15 percent per year from 2006 to 2010. We note that we will look to revise our estimates upward as we begin to see a more positive outlook and watch 2007 earnings reports from the publicly traded operators.

Andrew Zarnett
Gaming and Lodging Analyst, Deutsche Bank Securities Inc.

For 2007, our industry outlook is positive as we believe the casino industry will continue to experience limited jurisdictional expansion (mostly Florida and Pennsylvania) which will lead to a nominal increase in supply.

Further, cost of entry on the Las Vegas Strip ($2 billion plus) and Atlantic City (near $2 billion) will limit new development there as well.

Largely, as world demand sent construction materials such as steel, cement, and copper dramatically higher this past year, the investment, or “I,” portion of the ROI (return on investment) created an imbalance. Were it not for the limited license environment, we believe easy access to capital would lead to far greater supply adds than the market could absorb.

Nonetheless, this is not the case.

We believe demand will be driven by 1) improving macro economic trends; 2) the cheap U.S. dollar; 3) the clever combining of restaurants and nightclubs (especially in Las Vegas); 4) continued strong business and leisure travel trends; and 5) a strong 2007 convention calendar.

We believe the combination of limited supply and increasing demand will provide a robust operating environment, leading to approximate five percent revenue growth in most markets.

We continue to believe gaming companies will continue to generate strong, free cash flow in 2007, with those in our coverage universe expected to generate approximately $4.0 billion of free cash flow (after maintenance capital, interest, and cash taxes).

Preceding any acquisition transactions, we expect the majority of operators to use free cash flow to fund new projects (approximately $4.8 billion) and dividends (approximately $450 million), leading to negative free cash flow for the year. On a select company basis many issuers will generate significantly more free cash flow than the average, as much of the macro new capital will be invested in the four large capitalization companies: Harrah’s Entertainment, MGM MIRAGE, Wynn Las Vegas, and Las Vegas Sands. 

While the value of gaming assets retracted some in early 2006, the M&A activity in the later part of the year sent multiples up to historical levels, in some cases on par with lodging multiples.
And buyers, sellers, and investors alike have been asking questions such as, can these prices be sustained or go ever higher? We continue to believe gaming transactions are taking place at higher multiples due to the availability of lower cost of capital, the proven economic resiliency of the gaming industry (especially versus lodging), limited new competition, and a new investor class—that being private equity—that finds gamers extremely attractive at today’s multiples, especially when compared to many other investment opportunities they may also be considering.

Cost of capital is now near an all-time low, especially when compared to capital raises in the late 1990s and before. Attractive borrowing rates from the secured bank loan (including CMBS) and the high yield market should allow for strong Internal Rates of Return for strategic buyers.

The debt market’s insatiable demand for gaming exposure has increased their leverage (debt to cash flow) threshold for M&A related financing, a trend that we believe will persist in 2007. Further, depending on the issue, the market is willing to finance gamers today at significantly higher leverage points with lower rates than at any time in the past known to us. Today’s lower rates allow companies to increase leverage without increasing coverage and thus afford them to pay higher multiples for gaming assets.

On the recession resiliency point, the most recent recession—2001 and its aftermath—prove that the gaming industry is extremely resilient to many economic pressures. 

Whether it be continued imbalance of demand (driven by the growing baby boomer segment) versus supply, one thing is clear: gaming demand continues to be very strong.  And there is no reason to suspect that either demand will slow or that significant unforeseen supply spurts are in waiting.

This reality looks even more impressive against the lodging backdrop, which experienced significant demand contraction during the most recent recession.

In fact, leverage in lodging among select lodging names from 2000 to 2005 was up almost one turn while gaming was up less than half a turn.

Although leverage for the selected gaming companies has modestly increased from 2000 to 2005 (4.2x in 2000 and increasing to 4.4x in 2005), coverage has decreased (3.2x in 2000 decreasing to 3.1x in 2005) during the same timeframe.

Looking ahead to 2007, we estimate that leverage will remain steady at 4.2x (versus 4.4x in 2005), while coverage slightly increases to 3.3x (versus 3.1x in 2005). This does not factor in the closing on either large M&A acquisition (Harrah’s Entertainment and Station Casinos) in the market today.

We would caution, however, that while the 2001 recession had a nominal impact on gaming companies, it is difficult to predict what impact a large scale consumer recession would have on gaming companies.

Particular to Las Vegas, with ADR soaring to all-time highs attributed to increased convention business and high-end consumer demand, we believe that the risk of cyclicality has increased and operators are now more vulnerable to weakened demand due to the reliance on convention business and discretionary income growth. This dynamic coupled with an opportunity for a terrorist event remain the largest risks to Las Vegas.

What can negatively impact fundamentals and multiple expansion? 
First, we believe that as long as rates remain low, we expect transaction multiples will remain strong. Clearly, the creeping up of interest rates will begin to retrace some of the positive gains made by the lower rates. However, in many cases numerous gaming companies have locked in lower rates, which will provide some long-term benefit. Those that have not locked into lower rates, or have a higher cost of capital, may be looking to be acquired. Now more than ever, cost of capital has created a dramatic, competitive advantage. 

Overall, as long as rates stay low and companies do not increase leverage to a point where coverage decreases, values should remain high.

Nevertheless, should rates increase, fundamentals deteriorate, or there is a high impact terrorist incident, fundamentals will worsen and multiples will drop.

William S. Boyd
CEO, Boyd Gaming

We’re optimistic about the year ahead for our company and our industry. For Boyd Gaming, the last year was really about transition—with new product launches in two key markets, a new competitive landscape in another, and increased focus on exciting new development opportunities in three others.

The Las Vegas Strip continues its amazing evolution, and there’s little doubt it will positively impact our destination, our business, and the millions of people who come to Las Vegas each year. We are especially excited about our future in that market, and this year will see the very beginning of that endeavor.

In the first quarter, we will complete preparations on our Las Vegas Strip site, making way for our exciting new development, Echelon Place, which will begin construction in the second quarter of 2007 and reach completion in mid 2010.

In one of our key riverboat markets, we’re making Blue Chip even better, as we are in the very beginning stages of a $130 million expansion of that property. The project includes 300 guest rooms, a spa, fitness center, additional meeting and event space, new dining and nightlife experiences, and a more dramatic entrance and porte cochere.

Toward the end of the year we will near completion of The Water Club, a second, distinctive boutique hotel at our market-leading Borgata in Atlantic City. With the new hotel, our expansion at Borgata will be complete and will allow us to focus on making the brand the best it can be.

Looking at the industry more broadly, I believe the coming year will see a continued focus on new and developing gaming technologies on the casino floor. As we saw at Global Gaming Expo, all of the manufacturing companies are creating some dynamic products that will help us to compete in an increasingly competitive entertainment world.

And from an entertainment perspective, I believe diversification of casino entertainment will remain a focal point, as it becomes a more mainstream activity, encompassing a greater variety of entertainment options.

Overall, this is an exciting time to be part of the gaming industry for all of us—for operators, for manufacturers, and, most importantly, for our guests. Boyd Gaming will continue to strive to provide the ultimate customer experience by utilizing technology, innovations, and our vital, primary resource of hard working, dedicated employees.

Timothy Hinkley
COO, Isle of Capri

Calendar 2006 was a transitional year for Isle of Capri. Our corporate headquarters relocated to St. Louis; the Biloxi property, Lake Charles facility, and the Pompano Race Track were reopened after the hurricanes; we expanded the facility in Black Hawk, Colo. and our construction crews worked diligently to prepare new gaming facilities in Pompano Beach, Fla. and Waterloo, Iowa.

In Pittsburg, we are one of three applicants for a standalone casino and look forward to receiving a decision from the Pennsylvania Gaming Control Board. All of these ventures are exciting projects that will pave the path through 2007.

On the gaming side, we have seen a continued domination of slots and equipment. We’ve seen that the customer has still taken a real liking to the lower denomination games—the penny multi-coin, multi-line games. Also, there are always new variations of table games. Technology has grown exponentially over the last three or four years. When we started in 1990 it was a slow rise, but recently we have seen an incredible rise in technology. Customers are looking for newer and neater things. One of the real interesting trends this year will be how these games with the latest new technology are marketed to the consumer.

There is still interest in poker, but it is not as widespread in some of our markets as it once was. Customers are now looking for additional amenities: restaurants, night clubs, and spas—a total entertainment destination.

Our greatest challenge for 2007 is assuring that we maximize efforts on the capital expenses that are coming out of the ground. We continue to carefully plan for the future with projects in West Harrison County, Miss. and look forward to opening casino facilities in Pompano and Waterloo, as well as a new hotel in Bettendorf, Iowa.

Terry Lanni
Chair and CEO, MGM MIRAGE

Las Vegas has evolved to the point where we are now recognized both nationally and internationally as a fully modernized entertainment center. With the Las Vegas Strip’s “urbanization” well under way, we have turned much of our attention towards the preservation of our community’s most valuable resources. 

Thinking “green” is much more than a fleeting trend, or a buzzword, upon which the news media and conservation groups have capitalized. The need to create more sustainable means to make our community a better place to live or visit has, in this day and age, become a vital part of our reality. 

Sustainability has become a core objective in creating CityCenter—our $7 billion mixed-use development on the Strip—where we are implementing the newest technologies to maximize responsible use of water, electricity, and natural gas.

On the gaming and entertainment side of business, we never take for granted Las Vegas’ reign as America’s most desirable tourist destination, and our city’s increasing visibility on a worldwide scale. Just as the spread of domestic gaming increased gaming’s popularity and grew the entire market, the pending introduction of Las Vegas-style gaming in new markets such as Singapore and Great Britain will increase our ability to attract a greater number of international visitors to this city. 

While some have speculated that the incredible growth of gaming in Macau threatens to “cannibalize” Las Vegas tourism, quite the opposite is true. The growth of Macau and potential growth of other international gaming markets provide an unprecedented opportunity to cross-market our properties and attract more international visitors to Las Vegas than ever before.

Much of the success that MGM MIRAGE has enjoyed can be credited to our consistent focus on re-investing in, and re-inventing our properties, constantly creating new experiences for our guests. The Mirage, which holds an important place in history as the first integrated resort on the Strip, has recently undergone a major renovation and is now generating more revenue than ever. MGM Grand Las Vegas has seen a recent transformation that featured the property’s new SKYLOFTS luxury units and Joel Robuchon’s restaurant being recognized as AAA Five-Diamond status.

Not only is the resort industry using its imagination to spur change and growth, but manufacturing companies constantly introduce new technologies that may change the way that we present products to our guests. Multi-player and server-based slot machines, RFID technology, and mobile gaming are just a few technologies that offer the opportunity to further enhance the enjoyment of gaming.

Richard Waters
Sr. VP Casino Operations/Marketing,
Kerzner International Resorts

2007 will be a year of significant and exciting change for Kerzner International Resorts (Kerzner), and in particular, our flagship property, Atlantis located on Paradise Island, Bahamas. The end of the first quarter will bring the unveiling of some of the remaining products planned in our Phase III expansion project which began in 2005 with the completion of Marina Village, and an additional 198 units in our adjacent time share development, Harborside Resort at Atlantis.

The 2005 portion of Phase III introduced our guests to a tropical themed upscale shopping experience complete with five restaurants and 21 retail shops overlooking our fabulous and picturesque marina. In 2006, we welcomed the addition of two new restaurants—Nobu and Casa D’ Angelo, which takes the diner to yet another level of culinary experience. In 2007, the Phase III projects that will be introduced at Atlantis are:

• The Cove, our 600 room, all-suite hotel;
• Aquaventure, an addition which will more than double the size of the existing waterscape and will contain four new thrilling water slides, an additional one-mile river ride system complete with dynamic rapids and waves, and three new swimming pools;
• Dolphin Cay, a dolphin habitat and guest interactive experience;
• The Mandara Spa and fitness center expansions;
• Two new dining experiences, including Bobby Flay’s Mesa Grill;
• A 10,000 square feet casino expansion which will take us to 60,000 square feet, of casino area offering 1,000 slot machines, 98 table games, and a race and sports book;
• A new nightclub;
• A 100,000 square feet convention center expansion; and
• Residences at Atlantis, our 500-unit joint venture condominium-hotel project located adjacent to the Cove (expected opening December 2007).

As we enter 2007, however, our first challenge for the new year will be the United States’ passport regulations that are currently planned to take effect on Jan. 23, 2007. These regulations will require all U.S. citizens to possess a valid passport in order to travel to and from the Bahamas by air. A significant percentage of Atlantis’ customers arrive from the U.S. by air, and we are prepared to address any issues arising from this travel requirement.

In spite of this challenge, Kerzner has planned to launch an extensive marketing campaign throughout the U.S. designed to support the opening of our remaining Phase III additions. This campaign is expected to create significant demand for Atlantis and expand our product positioning extensively. The Cove specifically will enable Atlantis to broaden its markets to include a more affluent, adult audience with its all-suite configuration, location, and amenities; including an all adult pool area with private cabanas and poolside gaming.

Needless to say, our mainstay family audience will be big winners as well with the addition of Aquaventure, Dolphin Cay, and the 500-unit condo-hotel. When Phase III is completed, Atlantis will become a truly unparalleled resort destination and experience for audiences of all ages.

Technologically, Atlantis will remain shoulder-to-shoulder with all major U.S. gaming resorts in 2007. We currently offer TITO technology on all slot machines and provide the customer with the latest slot product available on the market.

In addition, we offer PowerBank technology on all of our high-denomination machines, which enables the electronic transfer of funds directly to, or from, any of these slot machines and the customer’s cage account. In 2007, we will continue to keep pace by offering poolside gaming. Server-based gaming in our cabanas at the all-adult pool area of the Cove is also planned for next year subject to gaming approval.

One of Kerzner’s core values is “good enough never is enough,” and as such the company continues to reinvest in its product to continually improve the customer experience. We anticipate the “new” Atlantis that will be unveiled in the coming year will drive the demand for the property to a new level and help us achieve very positive results in 2007.

Marianne Boyd Johnson
Vice Chair and Sr. VP, Boyd Gaming Corporation

Boyd Gaming firmly believes that embracing and cultivating diversity is the base upon which our company grows and thrives. Our founder, and my grandfather, Sam Boyd, was one of the first casino operators to break the color line in Las Vegas by hiring African-American dealers—something unheard of in the late 1950s and early 1960s. He also was the first to employ women dealers in the 1970s. The house policy was always that employees be rated on performance without regard to race, religion, or sex.

That commitment not only remains strong throughout Boyd Gaming today, but it has been taken to an even higher level. In the past year or so, we have taken proactive steps to formalize our vision and goals for further strengthening diversity within our company. Key areas of focus in our diversity initiatives include our hiring and recruiting process, diversity in management, purchasing practices, local diversity memberships, and diversity-focused internal communication.

For example, Boyd Gaming Procurement has created a convenient avenue to connect and transact commerce with both current and potential suppliers through an electronic procurement program called the Boyd Gaming e-Sourcing Tool (BeST). This gives suppliers and prospective businesses an Internet-based supplier application and maintenance form, and allows us to manage business-to-business relationships more efficiently, including the certification process for minority- and women-owned vendors.

Ensuring diversity in the construction process is another key component of our initiatives. All too often, small and new business contracting firms—including minority and women-owned contractor businesses—are forced into a disadvantaged bid situation because their insurance costs may be much higher than the larger, more established construction contractors. To help level the competitive field for the small, minority-owned and women-owned business contractor community, Boyd Gaming will directly fund workers’ compensation and general liability insurance for all contractors on our Echelon Resorts project, which is slated to begin construction on the Las Vegas Strip the second quarter of 2007.

Other efforts include: sponsorships charitable contributions, coordinated outreach to schools, social service agencies, government agencies, and organizations promoting diversity in the workforce.

Property diversity committees were also formed at each of our locations last fall. These committees have since collaborated with their respective general managers to develop and implement property diversity plans that support and strengthen the overall Boyd Gaming Diversity Mission. Yet, because our properties are so diverse themselves, each has also outlined specific goals and initiatives for the coming year based on the unique needs and characteristics of its employees and community.

As a result of our continued and focused efforts company-wide, Boyd Gaming’s employee base is growing more diverse. Since 2001, the percentage of minority managers at work in our company has increased from just 16 percent to 24 percent. In addition, roughly 55 percent of Boyd Gaming’s management and executive team is comprised of women and minority professionals.

For more than 30 years, diversity in the workplace has helped us to become stronger and richer as a company and as individuals. As Boyd Gaming continues to grow and move into the future, the continued support, vast knowledge, and rich diversity of our employees will help assure our success.

Punam Mathur
Senior VP of Corporate Diversity & Community Affairs, MGM MIRAGE

MGM MIRAGE marked another extraordinary year for diversity in 2006, and we have continued our legacy as a leader in corporate diversity among Fortune 500 companies. As the first gaming company to establish a company-wide diversity training program, we look toward 2007 with a deeper commitment for investing in a diverse labor force that strengthens our ability, as well as the country’s ability to compete in a global economy.

MGM MIRAGE’s commitment to diversity extends throughout the company and the communities in which we operate. Our newly expanded Diversity Education staff made great strides to educate employees at every level of our company. We significantly increased our signature Diversity Champion training program to ensure employee advocacy for diversity throughout the corporation. More than 2,000 mid-to-senior-level employees became Diversity Champions through a series of dynamic workshops that encourage a working environment in which our employees offer their best talents and energy to their jobs and professional relations. Our Diversity Champions have become our most effective ambassadors of diversity to our company, our guests, and our community.

Diversity Champion training was imperative in building a culture of shared values after the company’s 2005 merger with Mandalay Resort Group. The training served as a catalyst for building a unified vision and propelled team building, cohesion, and productivity, demonstrating that diversity is an integral part of our strategic business plan.

MGM MIRAGE is currently competing in the war on talent, and it is imperative that we recruit and develop a diverse workforce that will meet the needs of our growing business.

Over the next several years, our company will need to identify and hire tens of thousands of employees across the country and around the globe. In 2007, MGM MIRAGE will open the doors to its new MGM Grand hotel and casino complex in downtown Detroit, Mich. The company is also in the midst of construction on its CityCenter project in Las Vegas, currently the largest privately-funded construction project in the U.S., in addition to the company’s interest in a hotel-resort currently under construction in Macau S.A.R.

Our company is expanding both locally and globally and we are committed to keeping diversity at the forefront of our successful, high-performance culture. Our human resources teams will continue in their pursuit of best practices in diversity, such as:

• Strengthening diversity in recruitment.   
• Attracting diverse candidates through college internships.
• Implementing diverse participation in management training and professional development programs.
• Enhancing the pipeline of diverse employment candidates.

Our diversity relations team will also continue its work of building and enhancing external relationships. Through partnerships with social and civic organizations, we will work to attract the best talent that will lead our company in 2007 and beyond.

The coming year will be one of tremendous growth in our enterprise. We look forward to the opportunities that will be created and to continue making diversity an integral part of our success.

Brent Christensen
VP of Global Sales and Marketing, InfoGenesis

For the casino industry, there are some real technology challenges ahead. We’re helping casinos meet those challenges head on. Over the past year, we’ve worked with and listened to industry leaders to identify areas in which technology needs to go. Based on this, we have taken a larger integrated role to help casinos offer new and improved services. Our focus is to improve the guest experience, and as a result, increase guest spending.

We’ve used this focus to make guest-centric technology development a priority. We are currently helping companies implement guest experience management capabilities as a result. This effort has taken a tremendous amount of in-house work and third-party integration to be effective.

We’ve seen some significant success in executing on guest experience management initiatives. Our Restaurant Seating Guide is a great example. This product takes information from dining reservation and point-of-sale applications and creates a graphical representation of where there is dining availability across a property. Large display screens set up throughout a property show this information to guests, along with advertisements for on-property services. The influence this single product has had on the guest experience and on per guest spending has been impressive. Guests can find a place to eat in less time and are able to return to their gaming activities more quickly.

In addition to this success, we’re developing and integrating other technology to increase guest satisfaction and spending. Our point-of-sale (POS) product acts as a backbone in this effort. Because of this, we’ve spent a lot of time this last year on enhancing InfoGenesis POS. We’ve gained the industry’s trust with the capabilities of this product and continue to push the bounds of traditional POS with new reporting, IT control, and guest-friendly features.

Beyond this, our self-service product has come into its own over the past year. InfoGenesis Self-Service has powerful kiosk and web ordering functionality for buffet and room service environments in a casino. The most exciting change we’ve seen recently in this product line is the addition of room service ordering via IP-enabled phones. This unique functionality will enable industry leaders to set themselves apart from their competition and give them more ways to serve guests while increasing spending.

Facing the challenge of executing on the guest experience management vision also means bringing the ResPAK Restaurant Management product under our InfoGenesis Reservations line. This is a dining reservations, table, and membership management solution that is extremely full-featured and now integrates tightly with InfoGenesis POS. Critical features like VIP recognition, improved table turn times, and all-around better dining room management are easy with this solution.

The last challenge we’re facing head on is in bringing other technology vendor’s products together. The challenge comes in enhancing the guest experience and spending. Partnering with large vendors like IBM and Microsoft has always been important to us. We’ve also recently partnered with companies like Skywire and Guest Technologies in interesting ways that will improve the guest experience in the industry. With Skywire and the ResPAK product, an SMS mobile phone alert can be sent to the guest when their table is ready. An alert can also be sent to a manager when a VIP guest arrives. With Guest Technologies, we’ve integrated our POS system with their radio frequency identification (RFID) technology in a way that will have some interesting implications for the casino industry.

In short, InfoGenesis has been very busy and will continue to be tightly focused on improving the guest experience and increasing guest spending in the casino industry. Creation of new in-house technology and integration with other technology vendors is helping us create market-defining technology for leading casino companies.

George J. Levine, Executive Director Sales and Marketing, Casino Data Imaging (CDI)

In 2006, CDI once again saw record growth for both CasinoCAD© and CasinoCAD Enterprise© sales. CDI’s continued focus on casino analysis—specifically development and support—remains key to our continued success. CasinoCAD looks for the data, regardless of the data source (i.e. casino management systems, game servers, and data warehouses).

Our clients have been asking, “Can you develop a version of CasinoCAD for table games?” Today, with new technology available for live table data collection, CDI’s new table games program is in development with product releases slated for the fourth quarter 2007.

Important to the development process is collaborating with leading casino operators (domestic and international) to understand key performance indicators and the features they require. Similar to CasinoCAD Slots, CasinoCAD Table Games will provide “point-and-click” analysis via user-friendly report writing and data visualization analysis tools for both single and multi-casino enterprises.

Advances in CDI’s Internet Interactive Support Program, plus the addition of highly skilled client support specialists, allows CDI Client Support Services to keep pace with a growing client base and the ability to install and support any gaming venue worldwide. Clients enjoy personalized support directly to their workstations via CDI’s WatchMe© support program.  

Outstanding CasinoCAD and CasinoCAD Enterprise users continue to collaborate with our development team in driving great new features within the program. CasinoCAD’s report library is truly world-class, and we view our analysis formulas as slot manufacturers view their slot model math…priceless. The beauty of CasinoCAD is that the program is always expanding. 

2007 will certainly be an exciting year for CDI as we look forward to expanding and supporting our North American market share, plus new installations in Macau, and other international venues.

Jay Meilstrup
President and CEO, GameTech International

2006 really was a landmark year for GameTech International. Not only did our stock approach record highs throughout the year as a result of a total restructuring, but by the G2E show at the end of the year, we were in a position to showcase what we considered the future of electronic bingo.

It isn’t often in our careers that we get to attend the gaming show with almost an entirely new lineup of technology and products. But at G2E, GameTech had three independent wireless networks operating eight separate applications simultaneously throughout the duration of the show.

Although all the buzzwords in the industry today are two-way wireless radio frequency, downloadable server-based portable gaming devices, their future is uncertain at this point in time. GameTech is putting tremendous effort to position ourselves to be successful not only in that arena, but in all of the modern markets where technology is of high demand.

Although it’s become extremely difficult to continually satisfy the ever changing definitions of gaming in the various jurisdictions, we’ve achieved tremendous results by designing and building very flexible architecture into all of our products. This will allow them to be easily modified to fit the unique demands of any jurisdiction or market.

I believe everyone starts each year with the intention of putting all of the difficult work behind them to make the end of the year somewhat easier. It seems that as we achieve our goals set out early in the year, it only opens up new doors and increases the demands put on our company. We feel that at this point in time, we’ve positioned GameTech to meet any of the demands that the industry could throw at us in the upcoming years. 

We’re very anxious and look forward to involving ourselves in a number of emerging markets that currently don’t experience the multiple facets of gaming that bingo electronics can bring them. At the end of 2007—when we look back—we’ll probably be in a position to not only be amazed at our accomplishments, but to see how far we really have brought the company in such a short period of time.

Ina Mohan
Managing Director Hotel Casino Division,
MICROS Systems, Inc.

In 2007, we will solidify our existing and growing customer base by increasing MICROS Systems’ commitment to the hotel casino market. Five-hundred-plus man-days of specific hotel casino development have been added to our OPERA SUITE, and we are pleased to announce that we will have 20,000 rooms within one OPERA database at MGM Mirage by end of 2007.

In 2007 we will release user-driven options to simplify OPERA transactions. Marketing teams can create promotions directly with standard comp routings, and reservation deposits can be refunded automatically. We will also overhaul our popular dashboard with a new look and enhanced functionality. As customary for OPERA, users can select the dashboard style that suits their needs.

Other great features will include sub-blocks within OPERA PMS; the ability for guests to use comp points for friends and family; folio adjustments after checkout; e-mailing and faxing folios directly from OPERA; comp routings based on covers; and enhancements around our shared functionality.

The most exciting OPERA addition in late 2007 will be the new Business Intelligence Module, which will guide our customers in managing operations with confidence. Through strategic analysis applications, raw data is turned into valuable information to examine customer behavior, identify market trends, and seek growth opportunities. We have dedicated vast resources to a solution that will offer the finest business intelligence for the hospitality environment.

To complement our integrated products further, we will continue to extend our golf, leisure, and spa solutions within the OPERA enterprise. This effort will result in new levels of integration across our suite of leisure applications, and incorporate a set of Hotel Technology Next Generation specifications. In addition to sharing guest profile data, the entire integrated product suite can exchange details of activity booking such as spa, golf, and restaurant reservations, and relate them to the guest reservation in OPERA. This provides each guest with a single itinerary of all booked activities, and presents cross-selling opportunities for system users.

2007 will see the release of Simphony, the next-generation of the most widely used POS system in the leisure and entertainment market. Simphony uses a modern, services-oriented architecture to achieve vast scalability, flexible deployment options, full system resiliency, and enhanced security. Its exclusive design provides extensive deployment alternatives, ranging from multi-property configurations consisting of numerous workstations, to scaled down, single property instances. Simphony configurations of any size may be hosted by a customer, or by MICROS. The services orientation of the solution provides powerful and flexible resiliency options, a perfect fit to the various and changing requirements of casino operations. Services can be completely centralized, or discrete services may be deployed to execute business operations, such as check sharing, printing, credit card processing, and interface support.

RFID promises to emerge in 2007 as “must-have” technology in leisure and entertainment. Although the technology is relatively new, the multiple advantages it provides as a cashless payment solution are clear, and the technology is growing in popularity. Our scalable system enables clients to provide guests with an RFID card or wrist-band to pay for lodging, food, and entertainment, eliminating the need to carry cash or other forms of payment. MICROS iCare is the central engine that fuels this solution and now that OPERA is integrated with iCare, guests can take advantage of gift card perks and loyalty programs along with the cash-free experience of RFID.

As an overall trend, I see the following major developments in the hotel casino marketplace and how MICROS’ products will complement them:

• Mergers and acquisitions continue, and each merger calls for re-evaluation and system updates to support the new diversity. This marks a great opportunity for MICROS’ integrated solutions and multi property strengths.
• Hotel condo developments are mushrooming, and while not all projects materialize, surviving contenders need reliable systems to compete with neighbors. The addition of the OPERA Vacation Ownership System is the right solution at the right time for these customers.
• Casino operators gain higher stakes in emerging gaming markets like China and Europe, and require solutions that can be integrated globally. MICROS products provide multi-lingual and diverse tax law compliance features. Our customers on expansion course can rely on MICROS to be well positioned as the one-stop-shop for all their domestic and global system needs.

Richard Haddrill
CEO, Bally Technologies

Any gaming industry forecast for the new year has to start with Bally’s 75th anniversary that we will celebrate throughout 2007. We’re very proud of our 75 years of innovation, and as the new year begins, we’ve never been in a better position to serve the global gaming industry. Our overall product line-up, spanning games and systems, has generated much excitement among our customers and employees, and we’re looking forward to a very exciting year ahead.

Advancements in technology will continue to drive demand for new slot and systems products. However, we must always bear in mind that we are fundamentally in the entertainment business. Our mission is to provide our gaming clients with slot products that offer a thoroughly entertaining and exciting gaming experience.

We must also provide casino operators with gaming platforms that are cost-effective, easy to manage, and reliable. And certainly, technology plays a key role in delivering the goods to both audiences.

To that end, we are developing a new generation of machine cabinets that we call the “ALPHA Elite Series.” The widescreen format will allow for a better game presentation for players, while giving operators what they are seeking as well. These new game hardware platforms are unique because of their unprecedented flexibility and their modular design.

A common base cabinet makes it easy for operators to optimize their investment and—if desired—switch back and forth between a reel-spinner and a video slot. Operators can choose from a variety of cabinet configurations, including the V32, the V20/20 and V20 videos, and the S9C and S9E steppers. Our CineVision cabinet is also consistently outperforming in the marketplace.

With respect to the increasing interest in downloadable technology, we have developed our current gaming devices to be download-compatible, and we announced a partnership with Aristocrat Technologies.

This partnership is to jointly develop and market a common download product that manages configuration and content download in accordance with Gaming Standards Association (GSA), G2S and S2S protocols.

I believe that a significant opportunity exists in adopting open industry standards to facilitate inter-operability between manufacturers. Our gaming customers will benefit from this arrangement, as we push for open industry standards developed specifically for this exciting new phase in the gaming industry. This spirit of cooperation among two technology leaders will go a long way toward an overall download implementation that benefits both operators and players.   

Our server-based gaming is clearly being developed from a player-centric viewpoint. The Bally Live Rewards component of our plan enhances the personalized gaming experience for the customer by providing customized bonus payouts and exciting secondary games, such as tournament play, poker, and bingo on the machine’s iVIEW touch screen display. This configurable suite of bonusing solutions allow casino operators to increase player wagering and time on device while rewarding players with extra entertainment and bonus prizes. We expect Bally Live Rewards to have a strong impact in 2007, with more full-scale download applications following in 2008 and beyond.

Another important industry trend is toward the increasing “personalization” of the gaming experience. Everyone wants to feel special, and gaming customers are certainly no different. The key is to provide casino operators with the tools to accomplish this task. Our systems division is committed to utilizing the iVIEW display in conjunction with back-end technology to provide these tools and enhance the player experience.

These types of technologies are at the vanguard of a new era of gaming that will transform the casinos of today into the highly sophisticated gaming establishments of tomorrow. While the emphasis is increasingly on the benefits and capabilities that these new technologies are bringing to the gaming floor, we nevertheless should not underestimate the importance of using these advancements to enhance the player experience.

After all, the thrill of winning, the social camaraderie, and the overall entertainment value of the gaming experience are the constants that will continue to define our business now and in the future.

Brian Gamache
President, WMS Gaming

This upcoming year holds many great opportunities for WMS, as we continue to build off our momentum in the domestic marketplace and position WMS for added growth in the emerging international markets. WMS has had great early success in new domestic markets, such as Pennsylvania and Florida, and we continue to gain additional market share in existing markets.

Additionally, through our recent acquisition of Orion Gaming, we are excited about our international growth opportunities, and ways in which we can leverage our innovative game content across the world. This year also marks the successful culmination of our five-year Technology Improvement Plan that has provided WMS with the people and process to bring some of the most revolutionary products to the worldwide gaming industry. These innovative product categories—Community Gaming: “Monopoly Big Event;” Sensory Immersion Gaming: “Top Gun;” and Transmissive Reels Gaming: “Super Money Grab”—will all be launched in 2007 and are all examples of our focus on the player’s experience through the most important aspect of our business: intellectual property (IP). Over the last five years, we have been extremely active in filing and securing key intellectual property patents that will position WMS at the forefront of the industry as server-enabled gaming and other technologies continue to evolve. Many of the products deployed in 2007 are leveraged off this valuable IP in an effort to bring the “future of slots” to casino floors today.

It is without question that the WMS of today is a vastly different company that it was in 2001. We have re-engineered and restructured the company with great success and have done so with a sense of passion and pride that is easily shown through our current and upcoming product innovations. This upcoming year will bode great things for WMS, as we display our ability to provide our customers with products and services that will give them an edge in product performance and player demand.

Seamus McGill
Group CEO, Cyberview Technology

In 2007, server-based downloadable gaming systems will continue to gain importance and be viewed as driving the next replacement cycle for the industry. In the coming year Cyberview Technology will build upon its position as the initial catalyst for this new technology. During the new year, the company will continue to set the highest standards, especially in the area of security, and will also push the technology to evolve to new levels, again raising the bar. 

On the key issues of standards and security, with the coming reality of server-based, downloadable gaming, the industry faces a paradigm shift in how gaming network protection needs to be deployed in casinos. Cyberview has an end-to-end secure system that has been thoroughly tested and proven with billions of transactions running securely over its network. Many slot operation executives, especially IT department executives, are gaining awareness of how Cyberview has the critical infrastructure required for a server-based, downloadable system.   

On an equally important front, Cyberview will continue to advance the current technology by adding new functions and dimensions to its system. To cite one example, Cyberview recently introduced its new Game Development Tool Kit (GDK). This GDK provides an open source of tools and services aimed at simplifying the development of sophisticated video games. It allows Cyberview customers to source games from any content provider, and in so doing, opens the Cyberview platform to multiple types of content. With the GDK, operators will have the opportunity to expand their reach and source of content. It is just one of a growing list of new advancements to the Cyberview system designed to provide even more flexibility and cost effectiveness to the gaming floors.

For years, Cyberview has been operating its proven and flexible system and expanding into new markets. Today our systems operate in excess of 8,000 machines, across more than 2,500 sites, and are accountable for billions of transactions in secure environments. Looking to the future, we are set to intensify our efforts and bring even more flexibility, as well as cost and operational efficiencies, to the gaming floor. In 2007, we will demonstrate how operators can make the transition to this server-based, downloadable system in the easiest and most transparent manner.

Gerhard Burda, CEO, Atronic Group

As we project into the future, one of the key trends for the industry is certainly server-assisted gaming (SAG), which allows for the remote management of a gaming machine.

This remote management offers almost unlimited flexibility and customization to the operator, resulting ultimately in a richer, and more exciting gaming experience for the player. SAG will provide a powerful and efficient marketing engine for the operators, which they can use to build player loyalty in a way never realized in our industry.

However, it will take more of an evolution rather than a revolution, as manufacturers work together with operators in order to achieve a level of standardization for a common delivery vehicle.

GSA protocols are being utilized as a basis for this. However, there are still many open questions that require clarification as—for example—operators surely will not want to set up multiple servers for various manufacturers. Ultimately, the manufacturers, operators, and players will need to evolve with the technology in order to make full use of it.

Atronic is currently working on our own SAG solution with plans to fully launch it at the end of 2007. We presented our initial application called Dynamic Floor Configuration (DCF) at the 2006 G2E Las Vegas.

The delivery of content will evolve through the development of e-gaming, which includes providing games through mediums such as PDAs, Internet, and mobile phones. Delivering content for these unconventional methods will allow operators and manufacturers to reach the players in a completely new way, and also to reach and develop new player types.

The global gaming economy continues to flatten, as U.S. operators push offshore to grow into new international gaming jurisdictions. This creates stronger competition as the operators and manufacturers face the challenges to meet the requirements of the players in these emerging markets. This creates the need for decentralized game content development hubs to meet the preferences of the different global player types.

Another foreseeable trend is the formation of strategic alliances among gaming providers to find the most synergistic, and cost-effective means to meet the requirements of all the available gaming space. This will involve cooperation among the manufacturers for joint use of available intellectual property and development resources.

Atronic’s objectives in 2007 are to continue our key corporate focus on meeting our player and customer needs to provide great games with our great people. Utilizing our game development hubs around the world, Atronic will continue to produce superior games targeted towards the individual markets around the world. Trends among players include: the demand for rapid hit jackpots, interactive bonus rounds, communal play, and recognizable (licensed) titles.

Atronic has strategies and solutions in place to entice players in all of these areas.

From a content side, we plan to leverage the success of our license brands (Deal or No DealTM, The Game of LifeTM, and King Kong CashTM) with continued expansion of existing themes. In addition, we continue to look for additional branded license content that provides a great player experience. 

The future of gaming is exciting, and the industry must continue to evolve to meet the challenges. Operators are demanding more flexibility on the floor, combined with total solutions that drive the overall success and profitability of their business. In addition, players are evolving and are looking for games with recognizable branding and communal playing fun. Atronic looks forward to meeting and exceeding the expectations of our customers as the industry continues to evolve.

Greg Gronau
President, Cadillac Jack

The new year offers tremendous growth opportunities for Cadillac Jack. New gaming markets continue to open and develop throughout the world, and our innovative new technology allows casinos to better manage and optimize their operations.

Cadillac Jack will continue to build on the success that we have achieved during the past two years. We are pursuing new markets, while building upon our relationships in existing domestic and international markets. At the same time, we are excited to introduce significant new product lines which will help our customers achieve new levels of profitability.

Cadillac Jack’s recent market success can be attributed to our “localization” strategy, where we dedicate teams of employees specifically for each market. The teams enhance our products and services to the specific needs of the market. Their focus is the profitability of our clients in their markets. 

We have seen phenomenal growth in Mexico and believe that it will continue to be one of the fastest growing gaming markets for the next several years. Having already placed more than 5,000 machines in Mexico, Cadillac Jack has firmly established our position as a leading provider of games in that market. Our teams are developing and designing game themes that appeal to the Mexican player, including our new Latin-style bingo games that have had excellent player response. Cadillac Jack’s products have provided our Mexican clients with cost-effective and robust solutions to meet current and future needs.

In addition to Mexico, we have experienced a tremendous amount of positive customer interest from other parts of Latin America. We are in the process of analyzing the various markets to determine how our products best fit.

We believe the gaming industry throughout Latin American is growing and evolving, and Cadillac Jack is well positioned to grow with it.

Our domestic strategy focuses on strengthening our core markets with localized content. New themes, features, and denominations have and will continue to help us secure larger and more profitable footprints on casino floors. We continue to design high-performing new games with interesting themes for both the Class II and Class III/Compact gaming markets. Using our industry leading server-based game technology, Cadillac Jack’s games can quickly and easily be transformed from a Class II game to a Class III/Compact game format right on the casino floor. 

Cadillac Jack is more than a game provider—we are an enterprise-level gaming solutions provider. In keeping with our strategic focus, we are expanding our product pipeline. 

We are very excited about our new Wide Area Progressive, Cadillac Cash™, which rolled out in late 2006 in the state of Washington. The product has already generated a great deal of interest with our customers and players, and we will commence our global launch in January 2007 to additional U.S. markets and to Mexico. Cadillac Cash features instant cash payouts, an expected average jackpot of $250,000 and multiple game themes linked to a common progressive jackpot. 

One of our systems innovations is the Vision Yield Management System, which helps to optimize the slot floor through the analysis of game play. By using the visibility and insight provided through our server-based systems, this new web-based predictive analysis tool helps casino operators maximize profit based upon actual business analytics. The Vision Yield Management System works seamlessly with Cadillac Jack’s server-based games to optimize game performance.

Our experienced management team has a strong and balanced knowledge of the Class II and Class III markets. We believe that by listening to our customers, we can provide effective solutions and services to meet their needs. At Cadillac Jack, we are firmly committed to our mission of providing revolutionary gaming solutions to our customers by focusing on continuous improvement and developing new, innovative, and customer driven products. 

Bruce Rowe
VP of Business Strategy, Gaming Solutions,
and GM of Nevada Operations, Lottomatica/GTECH

For Lottomatica/GTECH, 2007 will be the year of integration and leverage. The Lottomatica integration will be in full swing; we will finalize the activities necessary to close our deal with Atronic, and we will fine-tune our strategies for the future. 

At the product level, we will continue to identify and execute the integration of technology and content across all of our distribution channels, in both domestic and international markets. The area of Dynamic Game Management (DGM) is very exciting to us because we have an experience set in non-casino markets that will add so much more value to our products and for our customers. 

We are looking forward to our launches this year because they will open up new markets of customers, opportunities, and learning. It is clear that the adoption of DGM technology is going to be more evolutionary than revolutionary, and will involve significant learning and patience. 

We are proud to be a contributor, both financially and with human resources, to GSA, that has paved the way for the industry to increase speed-to-market and provided more new choices of system and game functionality than ever before. This is the most exciting year in the history of our company as we leverage the talents, technology, and capabilities of Lottomatica, GTECH, Spielo—and soon—Atronic and Creative Games.

Franz Wohlfahrt
CEO, Novomatic-AGI

The Novomatic Group of Companies is a major player in the international gaming industry and the second-largest producer of high-tech gaming equipment in Europe. With subsidiaries and affiliated companies in 19 countries, Novomatic exports its state-of-the-art equipment to over 60 countries worldwide.

The group holds more than 750 patents and proprietary rights, and offers the industry’s widest range of products including reel-spinning and video slot machines, video poker devices, limited stakes gaming products, betting terminals, interactive live games, multiplayer systems, video lottery terminals (VLTs), network and online systems for casinos, and sports gaming, as well as cashless solutions.

The advantage of more than 25 years of experience as both an operator and a manufacturer, with consistent investments into research and development, and a focus on technology pioneering, together with total commitment to top quality and reliability, have gained the Novomatic Group of Companies its established position and excellent reputation in the international gaming industry.

Expansion is also a key part of company strategy when it comes to the U.S. market. Licensed in Colorado, Novomatic Colorado Inc., a wholly owned subsidiary of Novomatics Austrian Gaming Industries (AGI), was recently granted a “Slot Machine Business Temporary License” in Florida. This is a great opportunity to generate new business contacts and establish high-quality Novomatic gaming equipment across the USA.

The year 2007 and the following years will also be a challenge for the industry throughout Europe: The European commission recently has challenged national restrictions concerning cross-border gaming. Novomatic proposes a specific gaming regulation to harmonize cross-border-gaming regulations on a high level. Novomatic’s approach is: “regulation instead of prohibition, or monopolization.”

Buddy Frank
VP of Slot Operations, Viejas Casino

When was it that the PC on our desks changed?  Mine started out as a simple beige word processor, and it didn’t take too long before it transformed itself into a beige spreadsheet maker too. Nice toys for sure, but certainly nothing that I couldn’t live without. But now, I can’t imagine living a single day without some form of digital interface to my machine, even if it’s remotely from my Blackberry. When did this happen? When did they stop making them all beige?

There should be no such future questions about gaming. For the record (and for anyone doing a Google search years from now) the week the slot machine changed was the second week of November 2006. Before the ’06 G2E show there were only simple multi-game, multi-denomination, multi-bonusing, multi-“patent infringing” machines all using multiple forms of wheels. Today (or maybe tomorrow morning) we will live in a world of open standards, shared platforms, interconnectivity, and general server-based bliss. And everyone will rejoice (except the destitute intellectual property litigators).  

But even more importantly, the slot machine will have transformed itself into what one vendor described as a “guest-centric” platform. For the first time, I saw (with all deference to the stack of non-disclosure statements I had to sign) the first indications that the lowly slot machine was about to transform itself into a keystone of every guest’s entertainment experience inside the casino (it could even happen outside at the pool, but they said they’d hurt me if I talked about that). 

I made a quick note on my PDA that in the casino of the future, I would no longer need a PDA…not in Las Vegas, nor anywhere else where sales volume is called “Drop.” The slot machine would replace them all. It would be there to remind me of my 2:30 tee time, and will suggest that for just 18 more handle pulls, I could be playing with a new set of Callaways that I could win at the 2:15 drawing. My machine would look like an old reel spinner one minute, and dissolve into an X-Box video display the next. The buttons on the machines can even change to enhance guest play (“I swore that when I pushed that button it said one-credit, not max bet!”). I could send an e-mail right from the machine with photos to prove to everyone back home who didn’t make the G2E travel squad that I was really in the casino doing research instead of shopping at the Forum. The machine would let me use my extra credits to buy a Steve Wynn painting or pay off my tab at the snack bar.  

Today’s slots will be able to do everything. How about a spouse tracker built in so you can find your wife whenever she gets lost (hopefully, there’ll be a “husband blocking” feature, or these games will never make it!). The machines will virtually sell themselves; but better than that, they’ll let “outsiders” sell them too. The travel agent of the future will be pitching handle pull options right along with suite upgrades and rental cars.  Imagine the coin in you’ll gain from Expedia alone. Sit down and these machines will suggest games you might like, remember your favorite screen colors, sound, and speed presets, check your instant messages, turn a credit card into credits, and order an extra pillow.  

So write it down. The one-armed bandit turned into the two-fisted super host on Nov. 14, 2006, and most of us were there to see it.

Bill Breslo
VP of Business Development, Diamond Game

Diamond Game holds a special niche in the industry by providing machine-gaming products to markets not allowed to offer slot machine-like games. In 2006, we established an entirely new market for our slot-style, pull-tab dispensing machines in commercial bingo halls in the eastern U.S.

Our machines have brought new life to these bingo halls, attracting slot players they never had before. With a slight modification to our Lucky Tab II Triple Play Series™, which provides an almost identical playing experience to slots, we were able to bring gaming machines, and the incredible revenue they generate, to a new market that would never allow full-fledged slots. 

In 2007, we foresee an increase in historically non-gaming markets seeking approval for gaming through non-traditional means. We call these “emerging gaming markets.” There are dozens of markets that have pushed for slot machines in the past, but failed. We intend to accommodate these markets by offering slot-like playing devices that fit within their legal requirements. We have seen and anticipate more jurisdictions turning to Diamond Game for this very reason.  

Technology affects all companies in the gaming industry, but perhaps none more than companies like Diamond Game—companies that are on the forefront of creating legal alternative products for emerging gaming markets. We continue to add technological improvements to our Lucky Tab II Triple Play Series that help state lotteries, bingo halls, and tribal gaming enterprises compete for revenue in jurisdictions that do not allow full-fledged slot machines.

The demand for this technology is increasing, and the strides we are making with technology are getting larger. Our premium platform—a gaming system that replicates the look, feel, and play of the best slots in the industry—is based entirely on our patented federal court-approved ticket-dispensing device.    

The key to this technology is our patented dispensing and reading mechanism of pre-printed pre-determined tickets. We have advanced the technology so much that the gaming experience for the player is no different from a slot, but it is all based on the legal pre-printed paper result. We expect to see most of our big growth come from this product. 

We look forward to what 2007 holds for Diamond Game and the gaming industry as a whole, and plan to continue to produce quality gaming products that meet the demands of the industry and the legal requirements of each particular jurisdiction.

Laurent Gabout
Group Marketing Manager,
Gaming Partners International (GPI)

2007 should be a very promising and exciting year for Gaming Partners International. Gerard P. Charlier, president and CEO of GPI said: “In the third quarter 2006, we saw a continuation of strong year-over-year revenue growth, fuelled by the strength of our GPI-SAS subsidiary, who’s handling overseas sales for GPI, including the Macau market. Next year more casinos should open in Macau and in other Far East countries. GPI should benefit from its experience and its leadership to keep playing a strong role in this part of the world. GPI has supplied chips, jetons, and plaques to Macau for the past 40 years. Great Britain, southern Europe, as well as Chile and Argentina, should also be active markets for the GPI-SAS subsidiary.”

Charlier continued: “Our U.S. business should remain strong as well through re-racking orders from our casino partners throughout the United States. Looking ahead, we remain encouraged by the opportunities in the RFID niche, as demand for our next generation casino currency solutions is continuing to build. As mentioned previously, we expect full-year sales of our RFID gaming chips to be approximately $16 million, more than three-fold growth over 2005. RFID technology is still in its infancy particularly in the U.S. and expected to be a significant growth driver for GPI going forward. The Table ID system, a combination of technologies from IGT, Progressive Gaming International and Shuffle Master, is a comprehensive solution that should promote GPI RFID chips.”

Additionally, broader trends in the gaming market bode well for GPI’s full range of casino currency products, as GPI believes the market will be driven by new casino openings, for example in Las Vegas and on the Gulf Coast, customer re-orders necessitated by re-branding or technological obsolescence, and overall growth in the popularity of table gaming.

The G2E show is bringing very promising prospects for 2007. All our new products including the various chips available in our three brands with PGIC/Magellan 13.56MHz RFID were well received by our clients. The mini table-top reader was a success, as well as our new table range.

Charlier concluded, “As the recognized leader in the global market for casino currency and table gaming supplies, we are excited about what the future holds for the industry. Hopefully our challenge will be to keep up with the demand. That’s why we have extended our production facilities in France, the U.S., and Mexico.”

More than ever, “We make the money the world plays with.”

Lou White
Chief Executive Officer, PokerTek Inc.

What an amazing year 2006 was for PokerTek. We installed over 50 PokerProÆ tables worldwide, went public on NASDAQ, had 31 patent applications published, grew to over 60 employees, and reached an agreement with Aristocrat Technologies, Inc. to distribute our products outside the U.S. and Canada.

And we believe 2007 has the potential to be even better. The rise of Electronic Multiplayer Table games (EMTs) is reaching a tipping point in the U.S. market. After years of experimentation and research worldwide, visionary domestic operators are recognizing the power that technology can bring to their multiplayer offerings: faster play; greater flexibility on the floor; lower operating costs; much greater customer satisfaction; competitive advantage in tough markets.

Five years ago, poker rooms were shrinking and considered unimportant by operators. Televised poker and the Internet dramatically reversed that trend. Now EMTs such as PokerPro can help operators take advantage of the resurgent popularity of the game, creating increased profitability and player satisfaction among existing and new players attracted by the technology.

Along with our customers and partners, PokerTek is poised to help drive the automated poker trend to new heights in 2007.

• We’ve launched PokerPro Heads-Up, the groundbreaking two-person table that brings heads-up action to the casino floor and beyond.
• We’re making games like Omaha more profitable for operators and more fun for players by speeding up and simplifying the action.
• We will see the world’s first automated multi-table poker tournaments run on PokerPro tables. Operators will be able to offer new tournament formats and attract new types of players into their poker room.
• We expect to be licensed to operate in several new jurisdictions, bringing the excitement and fun of automated poker to millions of new players.

In May 2005, we were a ten-person private company when we dealt the world’s first hand of automated poker on PokerPro at the Seminole Hard Rock Hotel and Casino in Hollywood, Fla. Today, we’re poised to capitalize on the next poker growth wave. And we’re ready.

Mark L. Yoseloff
Chair and CEO, Shuffle Master

As the gaming industry’s leading table game technology and content provider, Shuffle Master continues to lead the way in advancements that help casinos expand the gaming options of their players.

Building on several key product accomplishments occurring in 2006, we remain well positioned to enhance the gaming experience with new and better technology, more exciting and lucrative gaming content, and multiple electronic content delivery systems.

We anticipate that 2007 will be another significant year for expanded product placements, continued growth of electronic gaming, and further expansion of the specialty table game market.

Since their introduction in 1992, automatic shufflers have become an essential tool on tables worldwide and have paved the way for additional technologies to be incorporated into the table gaming experience.

Our utility division offers high quality, reliable products that enhance the productivity, profitability, and security of table games, and we anticipate a continued increase in their use during 2007 as we benefit from the expansion of key gaming markets including Macau, where we recently shipped our single largest order of multi-deck shufflers.

Domestically, table games are enjoying a renaissance fueled by the growing popularity of proprietary games and the use of shufflers, and we will continue to support this trend by providing both the popular game content and the delivery systems that ensure secure, efficient game performance.

During 2006, we installed a record number of proprietary games and shufflers, and we expect this growth to continue as we begin marketing our new i-Deal™ single deck specialty shuffler and enhance our existing table game portfolio with new titles and progressive jackpot features.

During 2006, we also experienced substantial growth in the use of our fully-automated and semi-automated electronic content delivery systems, fueled by significant Table Master™ placements in Delaware’s three racinos and substantial Rapid RouletteÆ growth in North America.

As gaming venues worldwide continue to explore alternative ways to deliver the gaming options their players demand, we are confident that these delivery systems will become even more important components of the casino product mix as more operators realize their fiscal and operational benefits.

First, these platforms enable casinos to offer popular games at a fraction of the cost required to run a live table. Second, by increasing the number of patrons they are able to serve, multi-players also increase casino profitability by maximizing the use of prime floor space without requiring additional personnel. This factor is of particular significance in key gaming areas like Macau where dealers are becoming difficult to find. We anticipate that Macau properties will continue to utilize more multi-player terminals to offset dealer shortage.

Multi-player terminals are also able to operate in a variety of gaming environments where live table games are not allowed. Despite demand, racinos and video lottery markets in North America, arcades in Europe, and clubs throughout Australia and New Zealand do not permit live table play, but do permit use of electronic versions of popular games.

Consequently, multi-player games that offer popular content, like Three Card Poker, blackjack, and roulette can be installed to provide customers with an interactive, table-style experience within existing regulations. And, looking beyond 2007, multi-player platforms will enable casinos to offer gaming content that is too complex to be offered on a live table due to complicated betting structures, rules, and payouts.

Finally, we foresee that the number of specialty table games included in the pit will continue to grow. Over the past several years, we have witnessed the resurgence of table games popularity, and the specialty table game segment continues to be the fastest growing segment in gaming.

Games like Three Card Poker and Ultimate Texas Hold’em™ consistently appeal to a growing number of players who are interested in fun and exciting table game play combined with the opportunity to win odds for high hands.

Finally, as player demand increases and more casinos recognize the increased profitability these games bring to the table, we anticipate that the proliferation of specialty games will increase worldwide.

With the gaming industry’s continued global expansion, 2007 should be another banner year for Shuffle Master, and we look forward to contributing to the industry’s continued success.

Mark Jones
President, INAG

An exciting year for both INAG and the gaming industry as a whole, 2007 has many challenges ahead for gaming innovators and game creators, as greatly illustrated at G2E. We have become an industry that continues to clone other developer’s products instead of inventing new and unique concepts of our own. This reminds me of all the recent movie remakes—Hollywood seems to be out of new ideas.

As I walked the G2E show floor, I noticed, for example, the large number of new roulette machines. They all looked and played about the same. Not one manufacturer wanted to be unique in their game presentation. Our goal for 2007 is to continue to change this trend.
INAG started its journey as a game developer and distributor in 1999. As its president, my task was to find a different approach, whereby we could place restricted games into markets where current laws forbid them. We accomplished this by studying laws and compacts, and found ways to work within those laws by making changes to the restricted games. California was our target market and has brought success to the company.

We started with Volcanic Single-Ball Bingo and worked with Tripp Plastics and California Design Concepts to create a lottery style blower unit for roulette. We have six tables in play and the numbers generated by this game far exceed our expectation by constantly holding over 27 percent. We also attracted bingo players to the game. The state does not like our units, but the compact allows for them.

We then took the next step in game development by creating a card-mixing and selecting device that is 32 inches in diameter, and requires the dealer to pull a card from a wheel shaped device creating an action point. This made the game a house-banked card game as required under different parts of the law.

We have taken the process one step further by patenting the process of reading cards electronically and sending recorded information to a processing unit attached to individual gaming units, whereby qualifying those units as an electronic table game. This is important in markets where slot machine licenses are limited.

We have also devised a format for craps that has been approved for California card rooms—we were told this would be impossible. Our craps games are in play in California Tribal Casinos, and are the fastest and have true odds—others do not.

We are now partnering with a group from New York to bring to market a new game called craps/roulette where both games can be dealt on a roulette-style table with one dealer. What a huge savings in labor!

Our biggest challenge in 2007 is to educate table games managers to think like slot directors. Table games need a new look from time to time in order to attract new players and keep existing players. Slot directors must, on a daily basis, select new products to work into the floor mix. Table games managers try to tweak their games in hopes that they will not have to pay a lease fee, but in doing so, they often create an inferior product that won’t make anywhere near the same profit as the original game.

2007 will be a great year for the industry by the sheer fact that gaming is in a massive expansion mode. Because of this increased demand on current product, I do not see any great new innovations in the near future. That day will come and companies like INAG (if not bought out) and other companies like it will lead the way in innovative ideas. We are currently working on the development of a co-op called “Table Games ‘R’ Us” where small game developers can join together and present their products as a major showing at gaming shows. Small game developers are welcome to contact us for more information.

INAG has also been awarded the distribution rights to Unidesa Slot Machines for California and has several installations in progress. I am especially excited about the satellite games (Wild Race and Greyhounds) that are unique and will attract new players. There has never been a better time to be in this great business.

Tom Nugent
VP of Gaming, MEI

MEI’s outlook for 2007 is really quite positive. During the 2006 calendar year, we saw our own business grow by 50 percent against the previous year’s final tally. This was after double-digit growth in both 2004 and 2005.

The 2007 outlook for the global gaming market is for continued geographic expansion within Europe, South America, and Asia. At team MEI, we’ve entered 28 countries in the past 24 months and garnered significant sales in nearly half of those countries.

We expect in 2007 that North America will grow its installed base by about eight percent as the early success of new gaming jurisdictions, such as Pennsylvania and Florida drives further gaming placements in the marketplace. It is a win-win situation for all the gaming stakeholders, as other states continue to seek ways of augmenting tax revenues for their needs, and as major gaming property owners look for additional sources of income.

The interest of private equity in the market is evidence of not just the availability of capital for investment, but also evidence of the health and productivity of major players. MEI entered the private equity realm as an acquisition of Bain Capital and Advantage Partners in June of 2006, and the entire experience has been a very positive one for us. In selected cases, gaming operators may accelerate their own capital expenditures in order to increase the amount of debt on their own balance sheets, probably to avoid the prospects of less friendly LBOs.  

The global gaming industry outlook for 2007 continues to be positive in the seven percent range overall, on the heels of good growth in 2006. International casino property growth will be modest in total numbers in markets such as the Eastern European nations. Areas such as Macau and the Asian Pacific market hold forth the prospect of additional revenue growth for nearly every operator; however, as economic prosperity in China has also resulted in additions to disposable income for millions of potential gaming patrons.

There are challenges for all of us manufacturers to continue the product innovation with all the new ideas surfacing from our existing customers and new customers. Personally, we are excited by some of our own product portfolio additions, but we are also thrilled to see growth in areas such as electronic table gaming too. This seems to be a reverse idea flow from Europe to North America, as many European operators are ahead of us domestically.

New and old countries will be growing their local gaming markets in 2007.  New regulations will promote additional different gaming solutions; who would have guessed you could play on your Palmtop even three years ago? Finally, different equipment manufacturers will be entering each others’ geographic markets in search of additional revenue opportunities. A continued interest in Texas Hold ‘Em poker and shows such as Deal or No Deal has also helped further gaming revenue growth in 2007.

Seeing guys betting millions on television somehow makes it okay for us to spend two or three hundred dollars at our local casino. Let’s face it, Americans aren’t traditionally big savers and are happy to spend money in any number of ways. Gaming is just one more piece of the puzzle in promoting a healthy and vibrant economy.

Jon Berkley
Senior VP and Business Manager of Global Gaming and Lottery, TransAct Technologies Inc.

Global expansion was one of our primary goals for 2006, and we certainly accomplished some great things. In order to help us accelerate market penetration globally, TransAct partnered with industry leader JCM, the leading bill validation manufacturer, and Tovis Monitors. This alliance has given TransAct a great competitive advantage by aligning the highest quality peripheral providers in the industry to offer manufacturer direct support in a bundled solution.

Our partnerships have also allowed us expanded service and global scalability through partnerships with JCM American (the Americas), EuroCoin (Europe), Bright Group (Australia) and JCM Gold (Hong Kong and Macau). These partnerships have allowed us to execute as a global supplier to the expanding markets of gaming, while acting on a local level with our sales and service operations. The best product with the best service always proves a winning combination.

In fact, Wynn Macau recently opened with 100 percent Epic 950s with international character sets, the first full TITO slot floor in Macau. This opening was followed closely by the Star World, a Galaxy Property in Macau, which also opened with Epic950s. These premiers represent the first casinos in the world to open with Chinese characters on their gaming tickets, a technological advancement lead by TransAct.

TransAct also expanded its patent pool surrounding dual-port technology, which allows for promotional coupons on the slot floor. This technology enables real-time marketing efforts utilizing existing player-tracking system data. Going forward this patented technology will clearly put us in the driver’s seat, as more and more casinos look to enhance communication with the player at the EGM.

In the next year, TransAct will be focusing on unleashing the technological capabilities of the Epic950 and driving the growth of the Epic430 and Epic630.

As true CRM tools start to emerge through the use of server-based, downloadable, and player tracking interface solutions, TransAct will continue to lead with its patented dual-port technology. Working in conjunction with gaming and system companies around the world, TransAct looks forward to seeing expanded use of the technologies that we bring to the industry. Our leadership in this area will drive our growth, as we pivot our experience already gained through the tens of thousands of Epic950s tied to thin-client, downloadable gaming solutions in various markets of the world.

Emerging markets in amusement with prizes (AWP), skill with prizes (SWP), fixed odds betting terminals (FOBTs), and kiosks, offer great opportunities for the new Epic430 and Epic630. These emerging sectors will create new paths for business growth and will create new challenges for us in 2007.

Over the next five to seven years, printers used in slot machines will be a critical element of a player’s experience. TransAct has developed printer technology that will be integral to player enjoyment and interaction. We feel that this enhancement to the player experience will provide true competitive advantage to those operators seeking to embrace these emerging technologies.

Recently, TransAct received a second U.S. patent for its dual port printing technology. The new patent covers various methods for driving printers that can be used to provide both cash vouchers and non-cash coupons for marketing to customers while they’re at the slot machines. That will be the key to the future and TransAct’s Epic950 was designed specifically from the ground up to have that ability. We currently have several new projects underway to test its marketing capability function. Marketing at the slots in its initial tests is proving very successful, and we expect this to be a huge growth area in 2007.

Using technology to accommodate different languages across slot floors means going beyond just offering multiple character sets, and actually having the printer change languages to match that of the player. We see this happening at the printer level and expect that this enhancement will be carried to the EGM. The globalization of gaming will change everything, and the ability to communicate to the player, regardless of what language they speak, will be fundamental to enhancing their experience with the game and with the property.

Real-time marketing at the EGM, server-based gaming, and downloadable technology will be the key drivers in our business going forward. With TransAct’s patented technology solutions, we expect to be the clear leader in gaming and lottery transaction printing for the foreseeable future.

Tom Neiman
COO, JCM

If we begin a look forward with a look back, we can see that 2006 was an extremely successful year for JCM. Our alliance with TransAct Technologies and Tovis Monitors has yielded tremendous results across North America, and now, nine new casinos have been fully equipped with 100 percent JCM products. Additionally, each of the “big six” slot manufacturers continue to choose JCM as their preferred bill validator supplier.

As everyone who knows JCM understands, our commitment to ongoing customer service and training is a top priority for us, and we were very proud to announce in late 2006 that JCM became the first company in gaming, and the first company in Nevada, to achieve International Association for Continuing Education and Training (IACET) certification for our training program, joining the ranks of IACET certified companies such as GE and IBM, and universities such as MIT and Duke.

Likewise, we were thrilled to end the year on a high note, with our Intelligent Cash Box (ICB) named one of the year’s Best Productivity-Enhancement Technologies during the fourth annual Gaming & Technology Awards.

As we look to 2007, we forecast an extremely exciting year of implementation and innovation. We are thrilled with the warm reception our Trident Table Safe System has been receiving at trade shows and in field trials, and we are ready to implement this incredible time-saving and accuracy-enhancing device. We have been working diligently on design enhancements that will allow for wide-scale distribution throughout North America this year, and, whereas the Trident is an innovation without competition, we are proud to be the only company bringing real-time reporting and baseline accuracy to casino pits across the continent.

Also, we bring our innovative spirit to new applications in gaming. Over the past two years, we have had incredible success with our award-winning Nevada DMV kiosk, and in 2007, we expect to bring our kiosk knowledge and skill sets to kiosk vendors and then to casinos. We expect casinos will begin implementing a variety of kiosk programs to expand and coordinate self-service activity throughout the gaming property.

Naturally, with innovation comes new intellectual property, and JCM will continue its efforts to maintain our technology leadership position through IP, including creation of new IP, and vigorously defending our existing IP, including the IP in our Trident system.

We will also be working closely with the U.S. Bureau of Engraving and Printing in preparation for the release of the newly redesigned $5 note. Currently, the bureau is forecasting the note’s release in early 2008 with the $100 note to follow later that same year, and we will work with our customers throughout 2007 to help them prepare for a smooth transition in accepting the new notes.

From everyone at JCM, best wishes for a happy and profitable new year.

Nick Micalizzi
VP of Sales and Marketing, FutureLogic Inc.

Although ticket-in/ticket-out (TITO) technology has been widely adopted in U.S. casinos, it is still a developing market in other parts of the world. One of our challenges is to ensure that those regions receive the engineering, technical service, and regulatory support that has made FutureLogic the leader in gaming printers worldwide.
FutureLogic Europe has enjoyed significant growth over the last two years, and our market penetration has exceeded our best expectations. We have also expanded operations in Latin America and Asia, with our latest effort well underway in Macau, where we opened a new sales office last month.

Our collaboration with industry-leading game manufacturers around the world has been an important factor in our ability to improve printer functionality and develop the interfaces required for next-generation electronic games. Our new GEN2 Universal printer, for example, anticipates new standards for the hottest trend in gaming—downloadable games. Designed for compatibility with existing platforms as well as new games, the GEN2 Universal anticipates GSA standards for downloadable games and is IGT-USB compliant.

Red Rock Casino, Resort and Spa in Las Vegas opened last year with approximately 1,700 GEN2 Universal printers installed on IGT’s new Trimline™ AVPÆ games. The printers are also installed in MotorCity Casino’s new TITO operation in Detroit; and IGT has named the GEN2 Universal printer its default printer for all new and existing gaming platforms.

Player-centric bonusing and couponing is also getting a lot of attention right now, and our technology development has kept pace with that trend. By integrating TITO functions with player tracking, accounting, and management infrastructure, FutureLogic printers help casinos streamline business systems and support promotional couponing. We are currently working with a number of player tracking companies and large casino operators to implement ProMatrix™, our flexible promotional coupon solution.

ProMatrix helps casino marketers quickly create a variety of graphic templates and set up customized promotional campaigns using a wide range of triggers. A second ticket, delivered at the game, is then used to reward, retain, and recruit customers.

Although FutureLogic currently dominates the TITO market—with more installed ticket printers than all other manufacturers combined—our focus remains on developing technologies that improve reliability, add value, and expand printer functionality. We see continued growth in the cashless gaming market and are positioned to deliver the engineering expertise, local support, and exceptional customer service required to advance the evolution of cashless gaming.

Ty Silberhorn
General Manager, 3M Touch Systems

If the recent G2E is any indicator, touch screen-enabled casino games are poised to expand beyond the traditional video slot machine experience on many fronts. For the past decade, touch screens have largely provided an easy, fast, on-screen button alternative, allowing players to actually interact directly with the slot game video on the screen. All that is likely to change in the near future as players’ interests expand and companies like 3M Touch Systems provide new and innovative gaming touch technology to this industry.

On the near horizon, the early-2007 introduction of the MicroTouch™ Capacitive TouchSense™ System by 3M may do for video slot machines what the original touch screen did for mechanical slot machines—revolutionizing how game developers design their games (MicroTouch is a trademark of 3M while TouchSense is a trademark or registered trademark of Immersion Corporation).

This new user interface combines the gaming-standard MicroTouch capacitive touch screen from 3M with the emerging TouchSense haptic-response technology from Immersion Corp. The result is a touch system that provides heightened multi-sensory experiences for the player. Not only will they see and hear the game, but now they’ll feel the game via tactile feedback from their contact with the touch screen.

We have seen several exciting prototype next generation games where this technology makes them more interactive to enhance the overall player experience.

The emergence of downloadable casino games is another trend enhanced by the MicroTouch Capacitive TouchSense System. No longer limited by the static content of mechanical buttons, downloadable games can easily change button configuration, whether on the main video screen, or a smaller LCD display on the panel below, with touch screen tactile feedback.

Automated multi-player table games are an area of touch system gaming that is ready to explode. Spurred by the celebrated Texas Hold ‘Em poker game, table games are gaining popularity. Game manufacturers are responding by offering unattended table games (such as poker, roulette, or craps) involving groups of individual players using networked, touch-enabled displays in a multitude of different configurations.

3M is helping enable this gaming evolution by providing manufacturers with large-format touch screens, individual player touch screens, multi-monitor touch drivers, updateable firmware solutions, and all with the enhanced processing capabilities of the MicroTouch EX II electronics platform.

Finally, a trend for 2007 that shouldn’t go unnoticed is the traditional, video-slot games that will be getting brighter, bolder, and more eye-catching. In addition to brighter LCDs appearing in the 2007 games, the industry’s migration from MicroTouch Clear-Tek to ClearTek II touch screens adds almost four points of brightness for these gaming displays. Without compromising the durability of the ClearTek protective glass top coat, the ClearTek II touch screen sets a new standard in brightness and other optical traits valued by OEMs investing in high-end, high-brightness displays.

In the end, players’ desires and preferences drive the video gaming market, and manufacturers incorporating innovative touch technologies seem positioned to satisfy their evolving gaming taste.

Sim Bielak
VP of Sales and Marketing, Cash Code

In the last year, Cash Code has been successful in diversifying our gaming sales. We have been able to maintain a strong presence in Eastern Europe, and we’ve had initial sales in South Africa. We have also been able to establish resources for Australia.

In January of 2006, Cash Code was acquired by Crane Co., a $2 billion per year diversified manufacturer. They have also owned and acquired other complimentary businesses that are a part of Crane Payment Solutions, and that encompasses Cash Code for bill validation, NRI for coin validation, and Telequip for coin dispensing.

Our greatest challenge for 2007 would be to further grow our Class III North American gaming market, while we continue to support the Class II market segment. We’ve added resources in all of our other international gaming markets over the last year, and we’re looking to better support our North American install base, as well as our customer base.

Most OEMs are going in the direction of downloadable content, and that will be the long-term objective over the next several years. 2007 is just the beginning of that venture for OEMs. Operators will no longer have to buy new slot machines for every new title. Instead, they will be able to download software for a new title, and perhaps update the bill validators for new bills.

We see OEMs going with one standard box, downloadable games, which will be specific to geographic segment, and obviously from a peripheral standpoint, OEMs are looking for a universal solution. Furthermore, there has been a mindset change for operators in terms of what peripherals they would like to see in their machines. Previously, OEMs would dictate what peripherals they would offer on their machines, and now over the last few years, we have seen operators who are trying to standardize their different peripherals, so they have fewer parts and components to support. In kind, the OEMs have become receptive, and allow operators to specify what peripherals they want to include in their equipment—be that a printer, a bill validator, or a card reader.

Douglas L. Florence Sr., CPP
Director, Gaming Sector, NiceVision

The upcoming year will yield some new associations of existing business solutions such as point of sale, financial transactions, human behavior, and casino surveillance video systems. The development of content analysis (CA) that is specific to the gaming sector will be how the management of live and recorded video will be achieved to meet the critical needs of business solutions using digital video recording (DVR) technology now installed worldwide, replacing the antiquated VCR.

This year at G2E, gaming suppliers demonstrated sophisticated table games systems capable of real-time game supervision; player tracking that is based on actual win/loss; take and pay errors; decision making and time played to provide actual versus theoretical wins by players. This was achieved in the slot player tracking systems long ago and is now available for use on table games. 

During the CasinoFest 2 conference held in September 2006, at the Barona Valley Ranch Resort & Casino Lakeside, Calif., casino expert Max Rubin presented a few of these evolving technologies and announced that Barona was going to implement Tan Gam Gaming (www.tangamgaming.com) table games program at this successful and technology driven Indian gaming property.

These systems can and must be associated to the recorded video surveillance is managing that meets the legal challenge for; resolution of claims by regulators; the employee relations matters that are presented for “boards of review” and unemployment hearings; and for cheating and scams caught by these systems that previously went undetected. Regulators will be challenged to evaluate these systems and have a responsibility to determine their limits and to contribute to how these systems should be utilized.

RFID (radio frequency identification) technology will also gain greater acceptance to track assets; currently, gaming chips are the developing application. In the future, it could be applied to cards, dice, Pai Gow tiles, and associated equipment. This will also require regulators to consider the impact of RFID laws that have been adopted as it relates to how retailers have used RFID to track merchandise. Over a dozen states in the USA have adopted some form of regulation or law around asset tracking. Given how highly regulated the gaming industry is and how important gaming taxation is to the budgets of most states today, an exemption on how this data is collected and utilized regarding players at a gaming property while using RFID technology, it is likely that it would out weigh the legal challenges.

The camera is now considered a “sensor,” which is a video imaging device that has also continued to evolve, achieving an equivalent that is now ten times more powerful and provides digital characteristics similar to the cameras people use for photography. The mega-pixel camera is an IP (Internet Protocol) device that is slowly being adopted by gaming operations.

Many camera manufacturers that have remained in the analog world of CCTV are developing high definition (HD) cameras in answer to retrofitting existing wiring infrastructure to provide similar, but not the same capabilities. This technology is used throughout the world by IT and traditional security departments; however, adaptation in casinos will be slow because of a lack of knowledge, or a lack of infrastructure support.

Additionally, the matter of homeland security also now influences the nature and number of databases that must be reviewed to know our customers and to follow the money. Many of the issues surround theft or fraud to obtain money, money laundering, Title 31, Nevada’s Reg. 6, and the TITO scams casinos experience. The evolution of electronic fund access for players from “rewards” programs and “bounce back money” in multiple gaming operations and jurisdictions to implementing “one card” to provide electronic access of funds, can be resolved by using video imaging technology. The application of facial recognition in manifesting transactions with a “one to one” comparison to verify identity is on the horizon and will impact how we achieve this and protect assets. 

Of equal or greater importance is the ability to provide the security and surveillance operators necessary information to make an informed decision on how an immediate matter should be resolved. Game protection is also of significant importance, internal matters may involve criminal acts or substantial policy violations, but all result in management relying on facts to take the appropriate action. CA applications will contribute to the resolution of disputes and investigations for practical application in the casino environment.

Fernando Pires
VP of Marketing, Morse Watchmans

Morse Watchmans’ goal is to produce quality product for the gaming industry to help the casino administer keys in an effective, secure way. We want to offer a product that can update our customers with new technology, make them more secure, and streamline their operation as well. Besides adding many new features to
existing products, Morse Watchmans successfully developed and released the Illuminated KeyWatcher III (KWIII) system. This was a transition that we worked very hard on. It gives the end user much more flexibility and allows for more keys in each cabinet.  

We will continue developing the Illuminated KWIII by integrating new panels and adding new features. We expect to have lockers and credit card slots available for this system early in the year. 

The casino industry continues to grow and we expect to see this again in 2007. Many new casinos have specified our system from the start. Other casinos are expanding, and with that, they are adding more new technology for key control and security in general.
However, in 2007 our biggest challenge is keeping up with software and technology. Technology is constantly changing the shape of our business—it changes our internal processes, engineering, design, and communications.

Yet, we’re always keeping up with technology in the security arena, and we incorporate it with our product. We strive to provide the latest products and accessories such as biometric fingerprint solutions.

Gary Platt
Chair and Director of Sales, Gary Platt Manufacturing

G2E and all the international shows that have previously been held in Las Vegas have always given us insight into what the following months and years will hold for Gary Platt Manufacturing. I have been working casino and restaurant trade shows for 50 years and this past G2E show was the best by far. 

There seems to be much more excitement about this wonderful gaming industry from all segments of the business, both in the U.S., and increasingly from overseas locations.  People we contacted prior to the G2E show who promised to visit our display showed up and were genuinely interested in finding out how the comfort our seating provides would help them increase their profits. In fact, the casino operators everywhere are catching on to this idea.

In the past, we have received orders for furniture shipments to foreign countries, usually from U.S.-based companies that were familiar with our products. Freight and other costs had been reasons to purchase locally; now casino operators are beginning to realize that a seat that keeps players seated and playing longer dramatically offsets the cost of shipping because of the significant increase in revenue.

This change in attitude towards casino seating and international shipping has allowed us to take the first steps into the international gaming market. We recently shipped several hundred chairs and stools to a new casino in Peru. Within the last year, Gary Platt entered Mexico’s market, shipping several thousand stools to Mexico. Canada has also seen a significant increase in seating sales.

Gary Platt is taking great strides to increase our reach in the gaming industry. In 2006, the company brought on two new distributors to reach previously underserved areas of the country. Gitchi Gaming, based in Prescott, Wis., has strong ties to the Native American casino markets and is already a valuable intermediary for us. The second distributor is the nationally known TDN Money Systems. Located in Aston, Pa., TDN Money Systems will allow Gary Platt to penetrate the east coast market, whereas the company has previously focused on the western two-thirds of the U.S. 

Gary Platt’s website, www.garyplatt.com, has also seen significant changes, both aesthetically and functionally. Not only is the website more visually stimulating, it provides a vast array of information on the different seating lines and options offered by Gary Platt Manufacturing. The site’s easy-to-navigate set-up has already generated increased interest, some of which is international. This is a remarkable tool, because it allows people across the globe to see what Gary Platt has to offer without trying to figure out when the phone lines are open for inquiries. 

I am pleased to say that 2006 was the biggest year in the history of Gary Platt Manufacturing. The outlook for the future is great. I have already spent 50 years peddling furniture, and I hope the second 50 will be just as enjoyable.

John Michlovic
Marketing and Technical Manager,
HH Robertson Floor Systems/Centria

H.H. Robertson’s list of casino projects has grown dramatically over the past two years, as designers and casino operators have come to realize the benefits of Robertson’s in-floor cabling raceway systems.
Cellular Floor Systems consist of three major components, namely: composite steel floor units that support the concrete floor slab through which cables and wires are routed; trench header feeders which deliver all wiring to the floor units; and electrical outlet boxes that can be activated—without core drilling—to deliver power and data cabling to slot machines and gaming tables. Cellular Floor Systems adapt to any floor layout and can be used for on-grade applications, as well as for multi-story steel or concrete frames.

If you’re looking to economize your raceway design, a Robertson’s Cellular Floor Systems is the answer since they provide the most wiring space available for the dollar.

Most casinos allow cabling only from the floor, since ceiling spaces are usually inaccessible or off limits to wiring. Therefore, in-floor and under-floor deliver systems become the only viable options. The three available methods employed for this task are:

•   Under-Floor Duct Systems
•   Cellular Floor Systems
•   Access Floor Systems

Of these, Cellular Floor Systems are the least costly and most beneficial. Cellular deck units are composite steel units that offer a structural benefit not provided by Under-Floor Duct Systems or Access Floor Systems.

Trench headers used to feed power and data cabling to cellular floor units are covered with steel plates that, when removed, allow direct “lay-in” access to wiring for quick and convenient changes to the wiring grid.

Several casinos have now been completed with Access Floor Systems that deliver both electrical services and the supply air. These systems create a deep cavity below the panels to allow large volumes of fresh air to be supplied. However, air delivery at the floor surface can be problematic since supply air louvers must be spaced at about 5’-0” centers in each direction to deliver the required amount of breathing air. Humidity and mold formation in high humidity areas must also be considered in the selection of an HVAC system.

Under-Floor Duct Systems have a long history in casino applications. These non-composite ducts are usually fed by other ducts from the electrical closets with junction boxes at each intersection point. On-grade applications require high-chair supports for all ducts at 5’-0” centers.

Cellular floor systems require no chairs for either the on-grade application or on elevated steel or concrete frames. On elevated conditions, cellular floor systems are an easy winner. The cellular floor deck forms and reinforces the concrete slab, and then later becomes the wire and cable raceway—all done within a 5.5 to 6 inch deep floor slab.

Other wiring systems just cannot provide all the benefits of cellular floors and, of course, it is the lowest cost system available. Why use anything else?