GOVERNMENT GAMBLING PROGRAMS COULD LEAD TO INCREASE IN GAMBLING ADDICTS
The recent increase in online gambling options may spell trouble for many individuals who might have never opted to drive to a casino. The accessibility of online gambling makes it appealing for a portion of the population for whom convenience is an important factor in decision-making.
Several provinces in Canada have introduced the idea of implementing government-run online gambling establishments. The concept has had mixed reception across the national population. A recent study by researchers at the University of Calgary indicates that there is reason for concern when introducing state-run gambling online.
Led by professor David Hodgins, the study examined the effects of gambling using online sites. The study determined that the introduction of increased online gambling could result in higher rates of gambling addiction in Canada.
Hodgins explains that online gambling provides a new way for people to access gambling in way that is extremely convenient. The result is that many people who would never gamble otherwise may be introduced to the activity.
To support this idea, Hodgins says that there is already evidence of increased gambling addictions where there is increased accessibility to gambling. For instance, provinces that have Video Lottery Terminals in drinking establishments exhibit a higher level of addiction than those provinces that do not allow the terminals. Accessibility is one of the main factors involved in the development of a pathological gambling problem.
Accessibility may be even further emphasized through the use of phone applications that give gamblers the ability to visit their favorite sites at any time, and at any place.
Hodgins is also concerned that the nature of a government-run gambling program adds to its perception as a normal activity. Online accessibility to gambling in general has already increased the normalizing of gambling, but government-run sites may add to the problem.
British Columbia and Quebec have already introduced government gambling programs online, but other provinces have held back. There have been reports that the expected social consequences associated with gambling addiction have caused the provinces to opt out of a government-sponsored gambling program.
Hodgins’ study indicates that pathological gamblers are found to have an increased risk for other addiction problems, such as those related to alcohol and drugs. In addition, those with pathological gambling disorder were also more likely to be diagnosed with other mental illnesses such as depression or anxiety.
Most Canadian provinces have programs in place to treat those with a gambling addiction, but Hodgins warns that government-run online gaming may introduce an epidemic and provinces may not have the resources to treat the high number of individuals needing help.
Showing posts with label Cannery. Show all posts
Showing posts with label Cannery. Show all posts
Friday, December 30, 2011
Sunday, November 22, 2009
Crown defers Cannery deal
Crown Defers Deal For U.S. Casinos
James Packer's Australian gaming empire postpones the completion of its deal to acquire U.S. Cannery Casino Resorts.
Since a casino boss is probably better than anyone at gauging odds, James Packer's decision to pay $370 million upfront to postpone for up to two years and to rewrite the deal that his firm, Crown, signed to buy into Cannery Casino Resorts of the United States can be seen as a calculated gamble that the gaming sector may bottom out in the interim.
In its original plan to expand into Las Vegas and western Pennsylvania, Crown , Australia’s largest casino operator, in December 2007 agreed to spend $1.75 billion to acquire Cannery Casino Resorts. (See "Crown Bets $1.8B On Las Vegas's Cannery Casino.") The privately held Cannery Casino Resorts currently owns and operates two casino-hotel complexes in North Las Vegas, as well as the Meadows Racetrack and Casino in Pittsburgh. The deal would have provided a way for Packer, who owns 38% of Crown, to move closer to achieving his ambition of building up a global casino empire through acquisitions in the United States, Canada and Europe.
However, Packer’s expansion plans have been thwarted by the global credit crunch and slowdown. Crown warned last month that the earnings generated by Cannery will be up to 30% lower than previously anticipated. Regulatory snags have dogged the deal as well.
Crown announced Friday that it would break the original agreement for a termination fee of $50 million. At the same time, it agreed to pay $320 million for nonparticipating shares that can be converted into a 24.5% stake. Crown was granted an option for two years to complete its purchase of the company's remaining shares for $1.4 billion.
The new accord also would allow Crown to pull the plug, wiping out the initial investment, by paying an additional termination fee of $200 million and investing $40 million for a 4.1% nonvoting stake in Cannery, if the Australian suitor failed to receive the necessary official approvals in the United States within 60 days. In other words, Crown would have to pay a total of $290 million to withdraw its acquisition.
The revised deal, which reduces Crown's potential exposure to downside risk, got preliminary support from the company’s investors. Shares of Crown closed 70 Australian cents (46 cents), or 13.5%, higher, at 5.90 Australian dollars ($3.86), on Friday after the announcement.
The new agreement as well will end a potential lawsuit between the Packer family and Millennium Gaming, the major shareholder in Cannery Casino Resorts, with a 58% holding. Millennium Gaming last month threatened to sue Gretel Packer, James Packer's sister, over her alleged lack of cooperativeness in the license application, which it maintained was endangering the deal.
Crown’s acquisition of Cannery Casino Resorts needed approval from regulatory authorities in Nevada and Pennsylvania. The Nevada Gaming Commission greenlighted the deal in late January, whereas the Pennsylvania Gaming Control Board has yet to give it the nod. Gretel Packer, who is also a shareholder of Crown, suddenly wanted to withdraw from the probity process being conducted by the Pennsylvania regulator last month, citing privacy concerns. Yet, it has not escaped notice that these concerns were expressed after the U.S. casino market took a deep plunge amid the recessionary climate. Crown posted a net loss of 409.7 million Australian dollars ($268.1 million) for the six months ending in December on write-downs of its U.S., Canadian and U.K. businesses.
James Packer's Australian gaming empire postpones the completion of its deal to acquire U.S. Cannery Casino Resorts.
Since a casino boss is probably better than anyone at gauging odds, James Packer's decision to pay $370 million upfront to postpone for up to two years and to rewrite the deal that his firm, Crown, signed to buy into Cannery Casino Resorts of the United States can be seen as a calculated gamble that the gaming sector may bottom out in the interim.
In its original plan to expand into Las Vegas and western Pennsylvania, Crown , Australia’s largest casino operator, in December 2007 agreed to spend $1.75 billion to acquire Cannery Casino Resorts. (See "Crown Bets $1.8B On Las Vegas's Cannery Casino.") The privately held Cannery Casino Resorts currently owns and operates two casino-hotel complexes in North Las Vegas, as well as the Meadows Racetrack and Casino in Pittsburgh. The deal would have provided a way for Packer, who owns 38% of Crown, to move closer to achieving his ambition of building up a global casino empire through acquisitions in the United States, Canada and Europe.
However, Packer’s expansion plans have been thwarted by the global credit crunch and slowdown. Crown warned last month that the earnings generated by Cannery will be up to 30% lower than previously anticipated. Regulatory snags have dogged the deal as well.
Crown announced Friday that it would break the original agreement for a termination fee of $50 million. At the same time, it agreed to pay $320 million for nonparticipating shares that can be converted into a 24.5% stake. Crown was granted an option for two years to complete its purchase of the company's remaining shares for $1.4 billion.
The new accord also would allow Crown to pull the plug, wiping out the initial investment, by paying an additional termination fee of $200 million and investing $40 million for a 4.1% nonvoting stake in Cannery, if the Australian suitor failed to receive the necessary official approvals in the United States within 60 days. In other words, Crown would have to pay a total of $290 million to withdraw its acquisition.
The revised deal, which reduces Crown's potential exposure to downside risk, got preliminary support from the company’s investors. Shares of Crown closed 70 Australian cents (46 cents), or 13.5%, higher, at 5.90 Australian dollars ($3.86), on Friday after the announcement.
The new agreement as well will end a potential lawsuit between the Packer family and Millennium Gaming, the major shareholder in Cannery Casino Resorts, with a 58% holding. Millennium Gaming last month threatened to sue Gretel Packer, James Packer's sister, over her alleged lack of cooperativeness in the license application, which it maintained was endangering the deal.
Crown’s acquisition of Cannery Casino Resorts needed approval from regulatory authorities in Nevada and Pennsylvania. The Nevada Gaming Commission greenlighted the deal in late January, whereas the Pennsylvania Gaming Control Board has yet to give it the nod. Gretel Packer, who is also a shareholder of Crown, suddenly wanted to withdraw from the probity process being conducted by the Pennsylvania regulator last month, citing privacy concerns. Yet, it has not escaped notice that these concerns were expressed after the U.S. casino market took a deep plunge amid the recessionary climate. Crown posted a net loss of 409.7 million Australian dollars ($268.1 million) for the six months ending in December on write-downs of its U.S., Canadian and U.K. businesses.
Monday, November 16, 2009
Fall in gaming revenue slows, too early to call bottom
Report: Fall in gaming revenue slows, too early to call bottom
High unemployment nationwide continues to hinder the gaming industry's recovery from the recession, analysts at Moody's Investors Service say.
While recent statistics suggest the drop in U.S. gaming revenue caused by the recession continues to ease, it's still too early to say gaming revenue has hit bottom, Moody's said in a report Friday.
"On a weighted average basis, the percentage change in gaming revenues decelerated materially across the major U.S. markets in September," Moody's Vice President and Senior Credit Officer Peggy Holloway said in the report. "However, October results so far are less encouraging considering easy comparisons to October 2008."
Moody's said October gaming figures are important because it was the first full month with a comparison to the sharp drop in U.S. consumer spending prompted by the failure of several Wall Street financial institutions in September 2008.
Moody's said it expected more deceleration of negative trends in October, though it's analysis doesn't include Nevada's October numbers since they have not been released yet.
Nevada casinos won $911 million in September, down 8.99 percent from September 2008. For the July-September period, Nevada gaming win was down 10.28 percent.
Moody's noted Las Vegas Strip results in September indicated a significant deceleration of negative trends and that with visitor volume to the city increasing 4.3 percent in September, "The September results may be a harbinger that a bottom is near for the Las Vegas Strip."
Around the country in October, Illinois, Iowa and Michigan showed continued deceleration of negative trends -- though Moody's found the results in Iowa and Illinois were not as robust as suggested by the numbers on a same-store basis.
Louisiana's positive year-to-year increase likely reflected in part the 2008 hurricanes that disrupted casino operations there, Moody's said.
New Jersey reported a second month of single-digit declines after seven consecutive months of double-digit drops, as Indiana and Missouri reported consecutive monthly gains in gaming revenue.
"It appears that state gaming revenues are headed towards a bottom and so stabilization in the gaming industry may be near. However, true stabilization in gaming revenues will require a few more consecutive months of moderating declines. Although U.S. GDP has started to grow, unemployment remains stubbornly high (10.2 percent nationwide) and we believe this will keep pressure on gaming budgets and the nascent recovery in gaming revenues that appears to be emerging," Moody's report said.
"When we believe that gaming revenues will not materially erode during the next 12-18 months, we will be more confident in calling the bottom. The moderation of monthly gaming revenue declines across many states through the remainder of 2009 is needed before we are comfortable saying industry conditions have stabilized," Moody's said.
Even as conditions improve in Las Vegas and around the country, analysts remain concerned that gaming companies exposed to the Las Vegas Strip and the Las Vegas locals market will be challenged by increased supply and the slow economy in Las Vegas.
Las Vegas Strip leader MGM Mirage predicts visitation to Las Vegas next year will grow 7 percent to 38.1 million people, outpacing the projected capacity increase of 5 percent.
But analysts at CreditSights said in a report last week: "We agree that the overall Las Vegas market is likely to improve next year, but we are more cautious on the ability of operators to grow demand faster than capacity."
Even before CityCenter opens next month, MGM Mirage and competitors have had to lower room rates.
This in part was how MGM Mirage maintained its 95 percent occupancy rate on the Las Vegas Strip in the third quarter.
MGM Mirage said that for the third quarter, daily revenue per available room on the Strip fell from $129 in the 2008 quarter to $100 in the 2009 quarter.
And even as visitation to Las Vegas fell 4.7 percent this year through September, the city's room count grew 2.5 percent from a year ago to 141,190.
That number is projected to grow to 149,156 by the end of the year and to 153,149 by the end of 2010.
Recent and planned expansions and openings included in the numbers involve CityCenter, with 4,004 rooms at its Aria hotel-casino alone; along with Planet Hollywood Towers by Westgate, the Cosmopolitan, the Hard Rock and the Golden Nugget.
And in part reflecting the Las Vegas economy with its 13.9 percent unemployment rate, Moody's on Thursday downgraded Cannery Casino Resorts LLC's "corporate family" and "probability of default" debt ratings to Caa1 from B2.
This change moves the Cannery debt from "speculative" and "subject to high default risk" to "of poor standing" and "subject to very high default risk."
Moody's assigned a negative outlook to the debt in "anticipation of continued weak operating performance and near-term loan covenant compliance concerns."
Moody's said the downgrade reflects the slower than expected ramp up at Cannery's two new casinos: the Meadows near Pittsburgh, which opened in April; and Eastside Cannery on Boulder Highway in Las Vegas, which opened in August 2008.
"The East Side Cannery and two other Las Vegas casinos are ... performing well below original expectations and will continue to struggle in the foreseeable future along with the entire Las Vegas locals market," Moody's said.
Cannery Casino Resorts also owns the Cannery hotel-casino in North Las Vegas and runs the casino at the JW Marriott resort in Summerlin.
Moody's said its primary concern with Cannery is that the Las Vegas company will need to seek loan covenant relief, which could significantly boost its interest costs at a time when operating conditions remain challenged.
High unemployment nationwide continues to hinder the gaming industry's recovery from the recession, analysts at Moody's Investors Service say.
While recent statistics suggest the drop in U.S. gaming revenue caused by the recession continues to ease, it's still too early to say gaming revenue has hit bottom, Moody's said in a report Friday.
"On a weighted average basis, the percentage change in gaming revenues decelerated materially across the major U.S. markets in September," Moody's Vice President and Senior Credit Officer Peggy Holloway said in the report. "However, October results so far are less encouraging considering easy comparisons to October 2008."
Moody's said October gaming figures are important because it was the first full month with a comparison to the sharp drop in U.S. consumer spending prompted by the failure of several Wall Street financial institutions in September 2008.
Moody's said it expected more deceleration of negative trends in October, though it's analysis doesn't include Nevada's October numbers since they have not been released yet.
Nevada casinos won $911 million in September, down 8.99 percent from September 2008. For the July-September period, Nevada gaming win was down 10.28 percent.
Moody's noted Las Vegas Strip results in September indicated a significant deceleration of negative trends and that with visitor volume to the city increasing 4.3 percent in September, "The September results may be a harbinger that a bottom is near for the Las Vegas Strip."
Around the country in October, Illinois, Iowa and Michigan showed continued deceleration of negative trends -- though Moody's found the results in Iowa and Illinois were not as robust as suggested by the numbers on a same-store basis.
Louisiana's positive year-to-year increase likely reflected in part the 2008 hurricanes that disrupted casino operations there, Moody's said.
New Jersey reported a second month of single-digit declines after seven consecutive months of double-digit drops, as Indiana and Missouri reported consecutive monthly gains in gaming revenue.
"It appears that state gaming revenues are headed towards a bottom and so stabilization in the gaming industry may be near. However, true stabilization in gaming revenues will require a few more consecutive months of moderating declines. Although U.S. GDP has started to grow, unemployment remains stubbornly high (10.2 percent nationwide) and we believe this will keep pressure on gaming budgets and the nascent recovery in gaming revenues that appears to be emerging," Moody's report said.
"When we believe that gaming revenues will not materially erode during the next 12-18 months, we will be more confident in calling the bottom. The moderation of monthly gaming revenue declines across many states through the remainder of 2009 is needed before we are comfortable saying industry conditions have stabilized," Moody's said.
Even as conditions improve in Las Vegas and around the country, analysts remain concerned that gaming companies exposed to the Las Vegas Strip and the Las Vegas locals market will be challenged by increased supply and the slow economy in Las Vegas.
Las Vegas Strip leader MGM Mirage predicts visitation to Las Vegas next year will grow 7 percent to 38.1 million people, outpacing the projected capacity increase of 5 percent.
But analysts at CreditSights said in a report last week: "We agree that the overall Las Vegas market is likely to improve next year, but we are more cautious on the ability of operators to grow demand faster than capacity."
Even before CityCenter opens next month, MGM Mirage and competitors have had to lower room rates.
This in part was how MGM Mirage maintained its 95 percent occupancy rate on the Las Vegas Strip in the third quarter.
MGM Mirage said that for the third quarter, daily revenue per available room on the Strip fell from $129 in the 2008 quarter to $100 in the 2009 quarter.
And even as visitation to Las Vegas fell 4.7 percent this year through September, the city's room count grew 2.5 percent from a year ago to 141,190.
That number is projected to grow to 149,156 by the end of the year and to 153,149 by the end of 2010.
Recent and planned expansions and openings included in the numbers involve CityCenter, with 4,004 rooms at its Aria hotel-casino alone; along with Planet Hollywood Towers by Westgate, the Cosmopolitan, the Hard Rock and the Golden Nugget.
And in part reflecting the Las Vegas economy with its 13.9 percent unemployment rate, Moody's on Thursday downgraded Cannery Casino Resorts LLC's "corporate family" and "probability of default" debt ratings to Caa1 from B2.
This change moves the Cannery debt from "speculative" and "subject to high default risk" to "of poor standing" and "subject to very high default risk."
Moody's assigned a negative outlook to the debt in "anticipation of continued weak operating performance and near-term loan covenant compliance concerns."
Moody's said the downgrade reflects the slower than expected ramp up at Cannery's two new casinos: the Meadows near Pittsburgh, which opened in April; and Eastside Cannery on Boulder Highway in Las Vegas, which opened in August 2008.
"The East Side Cannery and two other Las Vegas casinos are ... performing well below original expectations and will continue to struggle in the foreseeable future along with the entire Las Vegas locals market," Moody's said.
Cannery Casino Resorts also owns the Cannery hotel-casino in North Las Vegas and runs the casino at the JW Marriott resort in Summerlin.
Moody's said its primary concern with Cannery is that the Las Vegas company will need to seek loan covenant relief, which could significantly boost its interest costs at a time when operating conditions remain challenged.
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