Iowa
Effective July 1, the state of Iowa will begin docking casino and racetrack jackpots to pay off debts owed by the winners. A new state law mandates that the name of any person winning $10,000 at a slot machine or horse or dog race must be checked against a government database listing outstanding debts owed for income taxes, child support, court costs and other similar payments, including those owed to city governments. The database is expected to be up and running by Aug. 1. It is the first such initiative in the nation.
Michigan
The Greektown Casino in Detroit will maintain its current ownership as it moves through the Chapter 11 process. The Michigan Gaming Control Board voted not to force the sale of the troubled casino, instead allowing the bankruptcy case to proceed uninterrupted. The property’s license was in jeopardy, as the casino failed to meet financial goals set in 2005. Its gaming revenues for May, however, were up almost 3 percent to $27.4 million, the first increase the casino has posted so far this year. Greektown’s license comes up for renewal in August.
Nevada
Budget cuts could leave gaming regulators in Nevada in a lurch. Gov. Jim Gibbons has proposed cutting the funds to all state agencies by 14 percent for the 2009–2011 general fund budget. The Nevada Gaming Control Board currently receives $34.1 million from the state, which would drop by $4.8 million, to $29.3 million. The board does bring in its own revenue through licensing fees (its fiscal year 2008 budget is $45.8 million, including those fees), but changes will still be necessary if the cuts are carried out. Although nothing is certain yet, possible outcomes could include the elimination of an estimated 40–50 staff positions, less frequent audits, longer dispute resolution time, or closing smaller state offices.
Pennsylvania
The Pennsylvania Gaming Control Board (PGCB) has approved the change of control of the Category 1 Slots Operator license held by Mountainview Thoroughbred Racing Association, owner of Hollywood Casino at Penn National Race Course in Grantville, Dauphin County, to PNG Acquisition Company.
The approval came after the board reviewed testimony submitted at an April 24, 2008, hearing where Penn National Gaming Inc., Fortress Investment Group LLC and Centerbridge Partners L.P. outlined their objectives for the facility in Dauphin County. The board made the ruling only after it was assured that the Hollywood Casino at Penn National Race Course’s slots operation is a valued undertaking or process, and that the new owners will strive to operate it in a manner beneficial to both the local community and the citizens of the commonwealth.
“As with any change of control, the board reviews the proposal to ensure it is in the best interest of Pennsylvania citizens,” said PGCB Chair Mary DiGiacomo Colins. “Even with this approval, you can be assured that we will continually monitor the new owners to ensure they follow through with promises made to the board.”
Colins added that the change of control demonstrates just how valued Pennsylvania casinos have become for investment potential and for their ability to generate revenue and tax dollars.
In addition to the approval, PNG Acquisition Company must also pay the commonwealth a $2.5 million license transfer fee. As of CEM’s press time, the sale was expected to be complete by the end of June.