St. Louis casino revenue rises 4% in September to $92 million

Kelsey Volkmann

Web Editor – St. Louis Business Journal

The end of summer had people flocking to St. Louis casinos. Revenue at the six area casinos totaled $91.7 million in September, up nearly 4 percent from $88.4 million the same month last year, new numbers show.

Here’s how the local casinos stacked up, according to figures released today by the Missouri Gaming Commission and the Illinois Gaming Board.

• Pinnacle Entertainment’s River City Casino in Lemay, the area’s newest casino, which opened in March 2010, saw revenue grow 12 percent in September to $16 million compared with $14.2 million in September 2010. Pinnacle announced plans last month for an $82 million expansion at River City Casino that includes a 200-room hotel, 10,000 square-foot event center and 1,700 more parking spaces.
• Pinnacle’s Lumiere Place had revenue of $14.5 million last month, an increase of 8 percent from $13.4 million reported last September.
• Ameristar in St. Charles saw its revenue rise 4 percent in September to $22.4 million, compared with $21.6 million in the same month last year.
• Casino Queen in East St. Louis saw its revenue increase 4 percent last month to $10.9 million, compared with September 2010 revenue of $10.5 million.
• Argosy Alton saw the biggest revenue decline, dropping 5 percent to $5.9 million in September, compared with revenue of $6.2 million in the same month last year.
• Harrah’s in Maryland Heights had $22 million in revenue last month, down 2 percent compared with September 2010 revenue of $22.5 million.

Read an update on the project from Harry Rediger, Mayor of Cape Girardeau in the Southeast Missourian.

Gaming is now just the ticket

By MIKE HENDRICKS
The Kansas City Star

It was a regular Las Vegas out in west Wyandotte County that night in May. Inside the steel-sided warehouse there was poker, craps and topless dancers.

But the strippers scattered and the gamblers grabbed wads of cash when 75 FBI agents raided the illegal casino.

The year was 1987, when every form of gambling was illegal in Kansas. No one could have foreseen then that, nearly a quarter-century later, a state-owned casino would be under construction practically within eyesight of that illegal gambling den.

Nor would it have occurred to anyone at the time that not only would the state itself sponsor roulette wheels, but also that gambling revenue would become important to the state budget by 2011.

But 1987 was the turning point. The same spring as the big raid on State Avenue, the Kansas Lottery was born, one year after birth of Missouri’s lottery.

Today, games of chance that once would have drawn the attention of the vice squad are now depended upon to help bolster the balance sheets of both Kansas and Missouri.

It’s especially true in this lousy economy. Although general tax revenues are down, lottery proceeds are stable and casino revenues are up. And the pressure is on to bring in even more cash from gambling to keep crucial state programs afloat.

To meet the need, the lotteries are stepping up their game. They’re retooling their marketing and introducing new products, such as a tax-free $3 million scratch-off ticket that sells for $20 in Missouri.

“Right now, as all lotteries are doing, we’re trying to increase our player base,” said Gary Gonder, chief operating officer of the Missouri Lottery. “Our scratcher sales right now are pretty incredible.”

Likewise, the new director of the Kansas Lottery, Dennis Wilson, vows to boost lottery proceeds while preparing for the arrival of tens of millions of dollars in revenue from Kansas’ three new state-owned casinos.

Hard times are often good times for the gaming industry, as more Americans try to catch a lucky break.

“The lottery,” Gonder said, “is about the dream.”

An analysis by USA Today found that 28 of 41 state lotteries saw higher sales in the fiscal year that ended June 30. Seventeen state lotteries set records.

The Missouri Lottery was one of them, recording $1 billion in sales after several years of coming close. Gonder expects a billion-plus year in fiscal 2012, as well, with two-thirds of that coming from scratch-off games with names like “Quick Cash,” “Lifetime Riches” and “4 Million Dollar Cash Bonanza.”

“We have better-looking tickets, and all the price points are covered,” he said.

Big jackpots are key to boosting sales of online, multi-state lottery products like PowerBall and Lotto. But the secret to selling scratchers within a state’s borders is a combination of marketing and frequently rotating new themes in and out of a lottery’s product line.

Missouri, for instance, introduces dozens of new tickets each year, varying in price from $1 to $20, depending on the size of the prizes awarded. They’re sold at store counters and in vending machines that hold 24 different tickets.

“It’s like fresh bread,” Gonder said in explaining the strategy. After a while, games get stale, demand wears off and a new scratcher is introduced.

Advertising is also important. The Missouri Lottery broke that billion dollar sales barrier after its ad budget went from $1.3 million in fiscal 2010 to $8 million in the year just ended.

State lawmakers cut that back to $6.3 million for the coming year. So lottery official are counting on their ad agency, Kansas City-based Barkley, to grab people’s attention with funny commercials.

The Kansas Lottery has one-fourth the sales of Missouri’s, but its advertising budget is proportionately higher. This year it’s $2.5 million, down from $2.8 million.

“In terms of increasing sales from a marketing perspective, 2012 is the lottery’s 25th anniversary, so we have some special new games that we will launch along with promotional activities throughout the year,” said lottery spokeswoman Cara Sloan-Ramos.

Both lotteries need a marketing boost to combat increased competition, especially in Missouri. Voters in neighboring Arkansas have approved a new lottery, and next door in Illinois there’s a big gambling push.

Another challenge is the flat economy. Lower-income people, especially, are more prone to buy lottery tickets in tough times. But the challenges of the high cost of gas, rising grocery bills and fear of worse times ahead means they buy fewer than they might otherwise, depressing ticket sales.

That’s certainly been the case in Kansas, where gross sales have been flat the past several years, ranging from $236 million in fiscal 2007-2008 to $232.4 million in the year just ended. And while Missouri broke the billion-dollar barrier last year, sales were only $5 million above where they were before the recession.

Of course, the whole point of state-sponsored gambling is to boost tax revenues.

In each of the last four years, the Missouri Lottery has transferred roughly $260 million to the state, with most of that designated for education. That’s a fraction of the overall state budget of $7.2 billion last year. But the number has been constant at the same time other tax revenues have fallen.

It’s a similar story in Kansas, where most lottery revenues are designated for economic development and prisons. The lottery put $70 million into the state treasury last year, the same as in 2008.

An even more important source of revenue in Missouri is from the casinos, and the state’s share has risen in each of the last four years: $396 million in 2011, up from $345 million four years ago.

Kansas estimates that its two new casinos, set to open in Kansas City, Kan., and near Wichita in early 2012, will send $73 million to the state treasury in their first calendar year. Add to that the $8.8 million expected from Dodge City’s Boot Hill Casino, plus the authority to open one more casino in the state and things are looking up revenue-wise in the Sunflower State.

And to think that long-ago gambling raid in Wyandotte County netted 17 indictments and the political downfall of the sheriff whose deputies stood guard at the door.

It was a scandal at the time. But looking back now, the organizers seem more like men ahead of their times.

GAMBLING PROCEEDS
(From lotteries and casinos for fiscal years ending June 30)

Missouri

2008 — $612 million

2009 — $625 million

2010 — $644 million

2011 — $655 million

Kansas

2008 — $70 million

2009 — $73.5 million*

2010 — $98.5 million*

2011 — $104 million*

* Includes one-time licensing fee from operators of three casinos of $5.5 million in 2009 and $25 million in 2010 and 2011

From the Associated Press-

A Republic man pleaded guilty in federal court Wednesday to his role in a conspiracy to conduct an illegal gambling business by operating poker games in his home.

Federal prosecutors say Donald E. Bishop, 66, used his residence in Republic to operate a casino-style poker game.

According to a news release from the U. S. Attorney for the Western District of Missouri, Bishop operated two professionally-constructed poker tables, employed professional dealers and waitresses, and received payments (known in the industry as a rake) for each hand dealt.

The games played were usually Texas Hold’em or Omaha and required a $2 small blind and a $5 big blind. The house took a rake for each hand and dealt 15-20 hands an hour per table. Each table could accommodate 10 players and the games were scheduled Sunday through Thursday, beginning at 2 p.m. and sometimes lasting until the following morning, according to the news release.

On at least 14 occasions Bishop exchanged poker chips for cash in amounts up to $500 per transaction with a confidential informant and an undercover law enforcement officer in furtherance of the operation of the gambling business, according to the release.

Under the terms of today’s plea agreement, the government will recommend a sentence of probation, according to the release.

Ryan seeks to restore public faith in Pennsylvania Gaming Control Board

By Suzette Parmley

Inquirer Staff Writer

HARRISBURG – The powerful board that regulates Pennsylvania's nearly $3 billion casino industry took a hit after a grand jury report questioned whether it was too cozy with the gambling operators it was supposed to regulate and less interested with protecting the public's welfare than in boosting casino profits.

The scathing 102-page report by the state attorney general, released in late May, criticized the board's use of secret meetings and suggested the agency awarded licenses to unsuitable applicants and withheld critical information that deemed them as such. It also issued a range of recommendations on how the board should change to restore the public's trust.

William H. Ryan Jr., 62, who was second in command in the Attorney General's Office during the two-year probe, finds himself in an interesting position – he was sworn in Aug. 29 as the new chairman of the Pennsylvania Gaming Control Board.

As deputy attorney general and head of the criminal law division, Ryan believed that the seven-member gaming board should not investigate itself. He testified before the House Appropriations Committee in March that the Bureau of Investigations and Enforcement (BIE) should be moved away from the board. He hasn't wavered.

"On balance, I think it's a good idea to separate the BIE," Ryan said last week in his first interview as gaming board chair. "I think it makes sense putting it with a law enforcement agency, like the AG or the State Police."

The BIE investigates and vets casino applicants, operators, employees, and vendors.

"There is an argument on the other side that you increase efficiency by keeping it where it is," he said. "But on balance, it's safer for everybody by moving it."

The issue is before the General Assembly as Ryan starts his new job. State Rep. Curt Schroder (R., Chester), chairman of the House Gaming Oversight Committee, sponsored legislation passed by the House in February that would remove the BIE from the gaming board's jurisdiction.

The Senate has yet to take up the bill, but Schroder is hopeful that Ryan's arrival at the board will encourage the upper chamber to act on it.

Ryan's appointment, Schroder said, "signals a promising new direction at the PGCB."

Here are the Missouri Gaming Commission meeting dates for the remainder of 2011

September 28, 2011 – Jefferson City

October 26, 2011 – St. Louis

December 7, 2011 – Jefferson City

Wednesday, August 31, 2011

Workers at the Isle of Capri casino site begin pouring the concrete for the basin that will hold the floating casino floor Tuesday. Work continued throughout the night and required concrete from 40 trucks per hour, totaling 2,100 cubic yards of concrete.
(Kristin Eberts)

Truck after truck came one by one — about 40 concrete trucks every hour for nearly 12 hours — to the Isle of Capri construction site in Cape Girardeau on Tuesday night.

The trucks delivered more than 2,100 cubic yards of concrete from Delta Companies' Cape Girardeau and Jackson plants to pour the foundation for the basin that will hold Isle's land-based casino's floating gaming floor.

According to Missouri statute, the gaming floor must "float" in a basin of water at least two feet deep.

"Basically, we're building a swimming pool of roughly 41,000 square feet," said Richard Meister, Isle's vice president of design and construction. "This is the bottom of the pool. It's a 12-inch slab, but what's significant is it has to be put together in such a fashion and with the right type of concrete so that it doesn't leak."

The concrete pour was done overnight to reduce traffic congestion and to take advantage of cooler evening temperatures.

"In real hot conditions, the concrete cures at an accelerated rate of speed. We want to try to control how that rate of cure happens," said Fred Jaekle, a vice president with S.M. Wilson and Co. "Fortunately, we've got a nice cool night and the sun and moon and stars are aligning to set those conditions for success."

Cape Girardeau-based Delta Companies has 47 trucks running throughout the night and 68 employees working at its concrete plants and at the casino site, said Jason Barber, account representative with Delta Companies.

To make up the 2,300 cubic yards of concrete needed for the project, Delta Companies used 500 tons of cement, 125 tons of fly ash, 1,500 tons of sand, 2,200 tons of rock and 75,000 gallons of water, Barber said. All these materials were purchased from suppliers in Cape Girardeau and Scott counties.

A normal job for Delta crews might be 150 to 300 cubic yards, so Tuesday night's pour at the casino site was an exceptionally large task.

The 12-inch-thick basin bottom must be perfectly flat, and cannot be more than 1/8 an inch off from one end to the other.

"This is absolutely from a foundation perspective the most important step because everything keys off this. All the other footings and foundations key off the basin. We've got to get that in, get the basin walls up and then we can start with the rest of it," Meister said.

Delta Companies will be working on other portions of the casino foundation, too, and Barber expects they'll be at the casino site until at least Christmas.

"We don't have a lot of opportunities to see pours of this size, so for us to be able to produce a ready mix concrete of this nature and this size is a huge opportunity for us to have this many employees working in this kind of economy," Barber said.

About 50 people worked on the concrete pour through the night at the casino site, and about 30 of them live within a 50-mile radius, according to Isle. Companies participating in this step of the casino construction included Anderson/S.M. Wilson Joint Venture, Vee-Jay Cement, Nip Kelly Equipment, River City Mechanical, Geotechnology, Delta Companies and GLA-Structural Engineer.

The casino building will cost $68 million to construct, according to building permits filed at city hall. The new casino has a total project price tag of $125 million, including the relocation of North Main Street, property acquisition costs, furnishings and casino games. Isle's Cape Girardeau casino expected to have 1,000 slot machines, 28 table games, three restaurants, a lounge and terrace overlooking the Mississippi River and a 750-seat event center when it opens in late 2012.

Once the basin floor is finished, it will cure for several days before crews begin work on the basin walls.

The overall depth of the basin is about 9 feet, the barge floating in it will be about 7 feet deep, said Meister. Visitors to the casino will never see the water under the casino floor, but there are access points in the design so that divers can inspect the barge and basin.

"We've actually got to put divers in a couple times a year to survey the barge. This barge is being inspected by American Bureau of Shipping. There's not difference between the certification on this barge and a barge that's going up and down the river," Meister said.

LeAnn McCarthy, Public Information Coordinator with the Missouri Gaming Commission, said Missouri Gaming Commission personnel were on site Tuesday for the pour and will continue to make routine inspections during casino construction.

Meister said people can expect to see steel going up at the casino site around Thanksgiving.

From reporter Jennifer Hall of St.Joseph News-Press now.com and the St.Joseph News Press

If the river cooperates, many St. Joseph casino workers will be back on the job this fall.“We think we’re past the high river (levels) finally,” said Craig Travers, general manager of the St. Jo Frontier Casino. The local casino, which has been closed since June 27, has tentative plans to reopen Oct. 1.While the main casino floor persevered, there was extensive damage done to the rest of the building. Mr. Travers said it was completely gutted and is ready for the rebuilding process.“We’ve been green-lighted by the insurance carriers,” he said last week. “It will still be dictated by Ol’ Man River but I think we’ll start (rebuilding) next week.”River levels continue to drop and as long as they stay below 27 feet, which is based on the levee behind the casino, work will go on as planned. The levels, which reached a high of 29.97 feet in late June and have been above major flood stage all summer, are expected to go below 25 feet this week.In the meantime, casino workers have remained on the payroll and dedicated gamblers are experiencing a new way to frequent a casino. Mr. Travers said that the casino continues to schedule buses to its other facility in Osceola, Iowa. Several buses make weekly trips.“Everyone has had a wonderful time,” he said. “So we keep them as happy as possible. Groups go up daily or stay overnight.”The two-hour bus ride hasn’t deterred many. Others have opted to travel across state line to visit White Cloud, Kan., or even head south to many of the Kansas City casinos.“I miss being able to spend a nice evening in St. Joe (at the casino),” said Dolores Whittaker. “But I’ve managed to find other things to do at area places.”“They do have alternatives,” Mr. Travers said. “Just like anything else they do on a continual basis, they find an alternative. Obviously I can’t blame them. But they’re loyal enough to know they’ll come back when we reopen.”There has been a financial impact with its closing.While most casino employees stayed on the payroll, other workers affected by the flood have been able to apply for Disaster Unemployment Assistance. On Aug. 21, President Barack Obama declared six Missouri counties disaster areas. The declaration allows individuals affected by flooding in Andrew, Atchison, Buchanan, Holt, Lafayette and Platte counties to access the 26-week Disaster Unemployment Assistance program.Applicants must file a claim no later than Sept. 23.As far as revenues, the past two months have only slightly affected the city and county budgets. Since funds generated by casino gambling do not affect the operating budget, the closing only impacts one-time expenses.Based on actual fiscal year 2011 receipts for July through September, the city’s loss would come to $285,000, according to Carolyn Harrison, director of financial services. The city receives an average of $85,000 to $95,000 a month for the gaming fund. The county also receives funds.While only some projects have been put on hold or capped, most of the city’s contributions from the gaming fund will continue as planned.And with the casino possibly reopening in a little more than a month, there should be no long-term affects by its summer closing, officials said.

Public Hearings to be held on these rules in Jefferson City at the Missouri Gaming Commission Office-all hearings begin at 10 a.m.

October 19

Public Hearing

11 CSR 45-5.200 Progressive Slot Machines

November 2

Public Hearing

11 CSR 45-7.160 Emergency Medical Services

11 CSR 45-9.114 MICS Chapter N

11 CSR 45-9.117 MICS Chapter Q

11 CSR 45-17.010 DAP List

11 CSR 45-17.020 DAP Procedures to Apply

11 CSR 45-17.030 DAP Procedures for Entry of

                                     Names onto List

11 CSR 45-17.040 Confidentiality of List

11 CSR 45-17.050 Rescission—Removal from       

                                     List Prohibited

11 CSR 45-17.060 Procedure for Removal from

                                     List

11 CSR 45-17.070 Procedure to Re-Establish

                                     Placement on List

MGC Approves Proposed Rule Changes in DAP Program

Jefferson City, Missouri – The Missouri Gaming Commission has approved proposed rule changes altering the Disassociated Persons Program (DAP). The proposed changes include a five year option for those who apply and are accepted. This would allow a person just entering the program to remove themselves after a period of five years. It allows those already on the list, who have been on for five years or longer to petition the MGC to have themselves removed.

MGC Chairman James Mathewson says “A change is needed. The current program has been in existence since 1996. Missouri is one of three states with a lifetime ban and no other option for removal. It was time to modify and also approve some other housekeeping measures to the program, including streamlining the application process.”

The approved changes now become part of the State’s rulemaking process, and could become effective in March of 2012. There are currently 15,950 people on the Missouri Gaming Commission’s DAP List.

Those who are on the list are arrested for the Class B misdemeanor of trespass if found on a Missouri riverboat gaming casino floor.                           

– End –