McKinley Death Sheds Light on Growing Problem: The Secret Life of the Gambling Addict
HANOVER, Va.
Yesterday it was revealed that Denver Broncos wide receiver Kenny McKinley suffered from a gambling problem and was deep in debt prior to committing suicide in September. McKinley's death unveils a rising problem in America: gambling addiction.
Bob Cabaniss, the founder and President of Williamsville Wellness, says suicide stemming from a serious gambling addiction and deep depression is not uncommon. McKinley's death is a tragic occurrence illustrating an increasing and alarming trend.
"Suicide as a result of gambling addiction is becoming all too common throughout the United States, as it is easily hidden from loved ones, colleagues, and close friends. Gambling addiction's warning signs are difficult to spot, and the problem often remains disguised until it's too late," he said. "Of all addiction disorders, gambling addiction leads to the highest numbers of suicides and suicide attempts."
Cabaniss, a recovered gambling addict, is an expert in his field. Williamsville Wellness is the only treatment center in the U.S. licensed to treat gambling addiction, and uses a comprehensive and individuated treatment program to help gambling addicts from around the world overcome their addictions.
"At Williamsville, we strive to provide the best care and support for our patients, so that they can conquer their addictions and life healthy, fulfilling lives," Cabaniss said. "We are saddened that Kenny McKinley represents just one of thousands of gambling addicts who take their own lives each year. We hope that his death will help those currently suffering from gambling addiction seek help and treatment. Recovery is a possibility for all."
Sunday, December 5, 2010
Fire briefly disrupts gambling at NJ casino
Fire briefly disrupts gambling at NJ casino
Officials say gambling was briefly halted at an Atlantic City, N.J., casino when a fire damaged part of the building.
The blaze broke out on the sixth floor of the Tropicana Casino and Resort just before 4:30 a.m. Saturday.
No injuries were reported. The casino floor was evacuated for about 20 minutes.
Officials say gambling was briefly halted at an Atlantic City, N.J., casino when a fire damaged part of the building.
The blaze broke out on the sixth floor of the Tropicana Casino and Resort just before 4:30 a.m. Saturday.
No injuries were reported. The casino floor was evacuated for about 20 minutes.
Woman gets jail time for $60,000 booster club theft
Woman gets jail time for $60,000 booster club theft
An Everett woman's admission of a gambling addiction isn't enough to avoid a 90-day sentence.
By Diana Hefley, Herald Writer
EVERETT — An Everett woman was commended for getting help for a gambling addiction, but it wasn't enough to keep her out of jail for stealing nearly $60,000 from Mariner High School's booster club.
Snohomish County Superior Court Judge Michael Downes on Thursday sentenced Patricia Harmon to three months in jail, the maximum under state sentencing guidelines.
Downes declined to grant Harmon a first-time offender waiver as recommend by her attorney and prosecutors. The waiver would have allowed Harmon, 52, to avoid jail. Instead, she would have been under state supervision for two years and required to continue her treatment for a gambling addiction.
Downes wasn't convinced that Harmon should slide without serving some time behind bars.
“You're not here because you have a gambling addiction. You're here because you stole almost $60,000,” Downes said. “In essence you systematically looted the bank account.”
Harmon was the treasurer for the booster club and embezzled money for nearly a decade before she reported the thefts to Snohomish County sheriff's deputies in 2009. She told authorities that she took the money to feed a gambling addiction that she'd kept a secret from her family and friends.
“I am a compulsive gambler. This addiction led me to become a liar, cheat and thief. I was taking money that was not mine to take, always in my mind with the intention of putting it back with that next big win. But I am compulsive gambler, and I now understand there would never be a win, because compulsive gamblers do not ever leave when they win, a compulsive gambler does not leave until every dollar is gone,” Harmon wrote in a letter to the judge.
Harmon hit rock bottom in August 2009 when she contemplated overdosing on her prescription medications, she wrote. Instead she spoke with a pastor and confessed that she'd been stealing from the booster club, a group she volunteered with for nearly 15 years. She reported the thefts to the police, then to the booster club president.
She also came clean with her employers and lost both her part-time jobs, she said.
Harmon said she began attending Gamblers Anonymous meetings and hasn't gambled for more than a year. She found two new part-time jobs and is eager to begin making restitution payments to the club. About 20 people attended Thursday's hearing to support Harmon, saying that she is helping other gambling addicts and has turned her life over to God.
Prosecutors said Harmon would have qualified for a diversion program and avoided prosecution all together. However, they couldn't offer her the program because Harmon was unable to pay back a large portion of the stolen money up front. They charged her with first-degree theft and recommended a first-time offender waiver.
“Imposing jail time, then, would effectively be sending the defendant to jail for not having money,” Snohomish County deputy prosecutor Laura Twitchell wrote.
Harmon's attorney Jill Malat added that her client took responsibility for her actions and made a full confession even though she wasn't under investigation.
“She has changed her life and faced her demons head-on,” Malat said.
Downes said he believes Harmon is remorseful but she'd received leniency in how the case was charged. Given the facts, prosecutors could have sought an exceptional sentence or charged Harmon with a series of crimes.
The reason she couldn't pay back the money up front is because she stole so much, Downes said. He also wasn't convinced that Harmon turned herself in because she wanted to come clean.
Bills for the club were coming due, including paying the deposit to the tour company for a student trip to France, and there wasn't enough in the account to cover those expenses.
“It appears that the game was up anyway,” Downes said.
A representative of the booster club asked Downes to send Harmon to jail. Her actions affected about 500 students, who had worked hard to raise money for their clubs.
An Everett woman's admission of a gambling addiction isn't enough to avoid a 90-day sentence.
By Diana Hefley, Herald Writer
EVERETT — An Everett woman was commended for getting help for a gambling addiction, but it wasn't enough to keep her out of jail for stealing nearly $60,000 from Mariner High School's booster club.
Snohomish County Superior Court Judge Michael Downes on Thursday sentenced Patricia Harmon to three months in jail, the maximum under state sentencing guidelines.
Downes declined to grant Harmon a first-time offender waiver as recommend by her attorney and prosecutors. The waiver would have allowed Harmon, 52, to avoid jail. Instead, she would have been under state supervision for two years and required to continue her treatment for a gambling addiction.
Downes wasn't convinced that Harmon should slide without serving some time behind bars.
“You're not here because you have a gambling addiction. You're here because you stole almost $60,000,” Downes said. “In essence you systematically looted the bank account.”
Harmon was the treasurer for the booster club and embezzled money for nearly a decade before she reported the thefts to Snohomish County sheriff's deputies in 2009. She told authorities that she took the money to feed a gambling addiction that she'd kept a secret from her family and friends.
“I am a compulsive gambler. This addiction led me to become a liar, cheat and thief. I was taking money that was not mine to take, always in my mind with the intention of putting it back with that next big win. But I am compulsive gambler, and I now understand there would never be a win, because compulsive gamblers do not ever leave when they win, a compulsive gambler does not leave until every dollar is gone,” Harmon wrote in a letter to the judge.
Harmon hit rock bottom in August 2009 when she contemplated overdosing on her prescription medications, she wrote. Instead she spoke with a pastor and confessed that she'd been stealing from the booster club, a group she volunteered with for nearly 15 years. She reported the thefts to the police, then to the booster club president.
She also came clean with her employers and lost both her part-time jobs, she said.
Harmon said she began attending Gamblers Anonymous meetings and hasn't gambled for more than a year. She found two new part-time jobs and is eager to begin making restitution payments to the club. About 20 people attended Thursday's hearing to support Harmon, saying that she is helping other gambling addicts and has turned her life over to God.
Prosecutors said Harmon would have qualified for a diversion program and avoided prosecution all together. However, they couldn't offer her the program because Harmon was unable to pay back a large portion of the stolen money up front. They charged her with first-degree theft and recommended a first-time offender waiver.
“Imposing jail time, then, would effectively be sending the defendant to jail for not having money,” Snohomish County deputy prosecutor Laura Twitchell wrote.
Harmon's attorney Jill Malat added that her client took responsibility for her actions and made a full confession even though she wasn't under investigation.
“She has changed her life and faced her demons head-on,” Malat said.
Downes said he believes Harmon is remorseful but she'd received leniency in how the case was charged. Given the facts, prosecutors could have sought an exceptional sentence or charged Harmon with a series of crimes.
The reason she couldn't pay back the money up front is because she stole so much, Downes said. He also wasn't convinced that Harmon turned herself in because she wanted to come clean.
Bills for the club were coming due, including paying the deposit to the tour company for a student trip to France, and there wasn't enough in the account to cover those expenses.
“It appears that the game was up anyway,” Downes said.
A representative of the booster club asked Downes to send Harmon to jail. Her actions affected about 500 students, who had worked hard to raise money for their clubs.
Former Camp Fire USA exec sentenced to 51 months
Former Camp Fire USA exec sentenced to 51 months for embezzlement
A former Camp Fire USA executive director will serve two consecutive sentences totaling 51 months after he pleaded guilty to stealing more than $390,000 from the nonprofit for his gambling addictions.
Michael Woodson Burney, 54, was sentenced Thursday after he pleaded guilty in September to one count of bank fraud and one count of aggravated identity theft.
He also was ordered by Judge Robert Junell to pay back the Camp Fire agency $370,987.56 and the Stonington Insurance Co. $20,000 in restitution.
Burney, who worked for the nonprofit organization from 2000 to 2009, began writing numerous checks to himself in June 2007 and signing Camp Fire board members' names to them.
He then would deposit the money into his personal checking accounts, according to the indictment.
The indictment also alleges Burney created fictitious invoices and altered the organization's monthly bank statements using Camp Fire's computer-based accounting software.
During sentencing Thursday afternoon, Burney turned to the five volunteers and staff of Camp Fire sitting in the federal courtroom and said his co-workers had treated him well during his employment.
"I hope that at sometime they'll be able to accept my apology and I hope it doesn't hurt you too badly with your stake holders," he said.
Burney, wearing an orange jumpsuit, turned to face his mother and told the court he knows she had raised him better than this.
He asked Junell to consider the 25 years he has spent working with nonprofits -- he worked with the Boys and Girls Club before joining Camp Fire -- and the time he has spent trying to reconcile with Camp Fire board members and volunteers and his friends and family, all of whom he has disappointed.
Defense attorney Spencer Dobbs, of Odessa, told the court Burney suffered from depression and his gambling addiction was the only way he could cope with it. He previously was in therapy for his addiction, but when he moved to Odessa to become director of the Boys and Girls Club, there was no local Gamblers Anonymous group to join and he fell back into old habits.
"He's extremely sorry for what he's done and eager to serve his sentence and begin paying restitution as he's able to do so," Dobbs said.
Camp Fire president Mike Morgan spoke on behalf of the victims who were affected by Burney's actions, saying that the 450 children who participate could have been in better programs "if Mr. Burney had not made the money his own.
"We ask that you send a message to those who choose to steal from nonprofits that this type of crime doesn't pay," he told Junell.
Burney was sentenced to 27 months for the bank fraud charge and 24 months for the aggravated identity theft charge. He will be sent to a prison near Fort Worth, where Junell also recommended he receive mental health treatment and counseling for gambling addictions.
Upon his release, he is ordered to continue to attend both treatment sessions and cannot open a new line of credit or take a job working with finances without consent from his probation officer.
Morgan told the Reporter-Telegram that while the West Texas Council of Camp Fire did suffer from the loss of the money Burney stole, it is not continuing to suffer. Presently, more children than ever before are enrolled in their programs.
The organization also opened two new campus sites this year in Odessa.
A former Camp Fire USA executive director will serve two consecutive sentences totaling 51 months after he pleaded guilty to stealing more than $390,000 from the nonprofit for his gambling addictions.
Michael Woodson Burney, 54, was sentenced Thursday after he pleaded guilty in September to one count of bank fraud and one count of aggravated identity theft.
He also was ordered by Judge Robert Junell to pay back the Camp Fire agency $370,987.56 and the Stonington Insurance Co. $20,000 in restitution.
Burney, who worked for the nonprofit organization from 2000 to 2009, began writing numerous checks to himself in June 2007 and signing Camp Fire board members' names to them.
He then would deposit the money into his personal checking accounts, according to the indictment.
The indictment also alleges Burney created fictitious invoices and altered the organization's monthly bank statements using Camp Fire's computer-based accounting software.
During sentencing Thursday afternoon, Burney turned to the five volunteers and staff of Camp Fire sitting in the federal courtroom and said his co-workers had treated him well during his employment.
"I hope that at sometime they'll be able to accept my apology and I hope it doesn't hurt you too badly with your stake holders," he said.
Burney, wearing an orange jumpsuit, turned to face his mother and told the court he knows she had raised him better than this.
He asked Junell to consider the 25 years he has spent working with nonprofits -- he worked with the Boys and Girls Club before joining Camp Fire -- and the time he has spent trying to reconcile with Camp Fire board members and volunteers and his friends and family, all of whom he has disappointed.
Defense attorney Spencer Dobbs, of Odessa, told the court Burney suffered from depression and his gambling addiction was the only way he could cope with it. He previously was in therapy for his addiction, but when he moved to Odessa to become director of the Boys and Girls Club, there was no local Gamblers Anonymous group to join and he fell back into old habits.
"He's extremely sorry for what he's done and eager to serve his sentence and begin paying restitution as he's able to do so," Dobbs said.
Camp Fire president Mike Morgan spoke on behalf of the victims who were affected by Burney's actions, saying that the 450 children who participate could have been in better programs "if Mr. Burney had not made the money his own.
"We ask that you send a message to those who choose to steal from nonprofits that this type of crime doesn't pay," he told Junell.
Burney was sentenced to 27 months for the bank fraud charge and 24 months for the aggravated identity theft charge. He will be sent to a prison near Fort Worth, where Junell also recommended he receive mental health treatment and counseling for gambling addictions.
Upon his release, he is ordered to continue to attend both treatment sessions and cannot open a new line of credit or take a job working with finances without consent from his probation officer.
Morgan told the Reporter-Telegram that while the West Texas Council of Camp Fire did suffer from the loss of the money Burney stole, it is not continuing to suffer. Presently, more children than ever before are enrolled in their programs.
The organization also opened two new campus sites this year in Odessa.
Gaming ban made sense in past, makes sense today
Gaming ban made sense in past, makes sense today
You can bet on some good news today.
A new state law that bans Internet sweepstakes games, the latest wrinkle in video gambling, goes into effect today after a Wake County judge dismissed a lawsuit by an amusement company trying to beat back the legislation passed by the N.C. General Assembly.
There's plenty of gambling in North Carolina. If some people want to throw their money away, hoping to beat often astronomical odds in a game of chance, there are perfectly legal opportunities galore, such as through the state lottery. In that case, proceeds from gambling go directly to the educational needs of Tar Heel schoolchildren and college students.
But as we've said before, the amounts of money that flow from unregulated gambling don't go to any worthwhile causes and too often attract criminal activity and corruption.
Former Buncombe County Sheriff Bobby Medford sits in a federal prison today, serving a 15-year sentence for shaking down video game operators for protection money. Questionable contributions from the video poker industry are what first brought a spotlight on former House Speaker Jim Black, who was just released from federal prison after serving time on corruption charges.
Industry officials argue that Internet sweepstakes games are a different animal from video poker. Customers buy Internet or phone time or offer services first with predetermined odds before playing games on a computer that reveals potential prizes on a monitor. You can largely bet the odds are stacked against winning.
The temptation for legislators facing a $3.5 billion shortfall in the state's budget is to legalize some form of video gaming operations once again, hoping for a cheap source of revenue. Some local governments have already placed taxes on local operations.
But government-sanctioned gambling has been called the “poor man's tax” with good reason. Counties with the highest poverty and unemployment rates have been shown to have the highest lottery proceeds as well. Legalizing Internet sweepstakes games only sticks the industry's hand deeper into the pockets of the people who can least afford it as we make our way out of the Great Recession.
Some officials understand the problem. “The legislature spoke loudly and clear that North Carolina does not tolerate Internet sweepstakes casinos,” said Sen. Josh Stein, D-Wake, who shepherded the ban through the Senate. “What these casinos offer is a form of video poker.”
It would be nice if North Carolina has decided this problem once and for all, but don't bet on it. The video gaming industry is likely to appeal Wake County Superior Court Judge Paul Ridgeway's decision, looking for yet another loophole.
But we agree with Mecklenburg Sheriff Chip Bailey's assessment of that risk: “Video poker in North Carolina is run by organized crime, period. It has been and will be again if they let it back in.”
But today, the law should be clear enough. It's time for the video game operators to unplug their machines and quit playing North Carolinians for suckers.
You can bet on some good news today.
A new state law that bans Internet sweepstakes games, the latest wrinkle in video gambling, goes into effect today after a Wake County judge dismissed a lawsuit by an amusement company trying to beat back the legislation passed by the N.C. General Assembly.
There's plenty of gambling in North Carolina. If some people want to throw their money away, hoping to beat often astronomical odds in a game of chance, there are perfectly legal opportunities galore, such as through the state lottery. In that case, proceeds from gambling go directly to the educational needs of Tar Heel schoolchildren and college students.
But as we've said before, the amounts of money that flow from unregulated gambling don't go to any worthwhile causes and too often attract criminal activity and corruption.
Former Buncombe County Sheriff Bobby Medford sits in a federal prison today, serving a 15-year sentence for shaking down video game operators for protection money. Questionable contributions from the video poker industry are what first brought a spotlight on former House Speaker Jim Black, who was just released from federal prison after serving time on corruption charges.
Industry officials argue that Internet sweepstakes games are a different animal from video poker. Customers buy Internet or phone time or offer services first with predetermined odds before playing games on a computer that reveals potential prizes on a monitor. You can largely bet the odds are stacked against winning.
The temptation for legislators facing a $3.5 billion shortfall in the state's budget is to legalize some form of video gaming operations once again, hoping for a cheap source of revenue. Some local governments have already placed taxes on local operations.
But government-sanctioned gambling has been called the “poor man's tax” with good reason. Counties with the highest poverty and unemployment rates have been shown to have the highest lottery proceeds as well. Legalizing Internet sweepstakes games only sticks the industry's hand deeper into the pockets of the people who can least afford it as we make our way out of the Great Recession.
Some officials understand the problem. “The legislature spoke loudly and clear that North Carolina does not tolerate Internet sweepstakes casinos,” said Sen. Josh Stein, D-Wake, who shepherded the ban through the Senate. “What these casinos offer is a form of video poker.”
It would be nice if North Carolina has decided this problem once and for all, but don't bet on it. The video gaming industry is likely to appeal Wake County Superior Court Judge Paul Ridgeway's decision, looking for yet another loophole.
But we agree with Mecklenburg Sheriff Chip Bailey's assessment of that risk: “Video poker in North Carolina is run by organized crime, period. It has been and will be again if they let it back in.”
But today, the law should be clear enough. It's time for the video game operators to unplug their machines and quit playing North Carolinians for suckers.
Gambling Addict jailed for stealing $1.5m
Man jailed for stealing $1.5m from church charity Blue Care to fund online gambling addiction
A FINANCE clerk who misappropriated $1.5 million from his employers, a major charity organisation, was jailed for seven years today.
Dinesh Enoka Abeysuriya was before the District Court in Brisbane to be sentenced for a year-long fraud which funded his online gambling addiction.
Abeysuriya stole $1.5 million from the Uniting Church's Blue Care organisation and after money found in his accounts was frozen, the value of shortfall was about $900,000.
A second charge arose because Abeysuriya would regularly use his online account with sports betting organisation Centrebet, where $1.88 million in bets was shown on his Commonwealth Bank credit card.
When Abeysuriya finally stopped gambling his credit card was overdrawn a further $223,409, the court heard.
Abeysuriya, 29, pleaded guilty to aggravated fraud as an employee with a financial advantage of $1,534,967 between March 25, 2009, and April 9 this year.
He further pleaded guilty to fraudulently obtaining $223,404 from the Commonwealth Bank between March 5 and April 9 this year.
The sentence hearing was adjourned until yesterday so that Judge Kerry O'Brien could consider various aspects, including when Abeysuriya could be deported.
Judge O'Brien said he had been asked to impose five years jail so that Abeysuriya could have a partial suspension of his sentence, allowing him to have a definite date for his deportation.
But Judge O'Brien said he could not take into account what other bodies, the parole board or immigration authorities, might do in the future when imposing a sentence.
He said despite the mitigating factors, including Abeysuriya returning to Australia under his own free will, a sentence of seven years jail was needed.
Judge O'Brien set a parole eligibility date at November 22, 2012.
Last week, prosecutor Jacob Robson told the court Sri Lankan-born Abeysuriya came to Australia from New Zealand in 2008 to work at Blue Care, where he was responsible for credit payments.
He said Abeysuriya misappropriated the money, which he used to gamble online, over a 12-month period.
Mr Robson said Abeysuriya used three methods to misappropriate the money - inflating invoices and paying the extra to himself, paying invoices twice to legitimate creditors and himself, and paying invoices to himself.
He said the frauds were uncovered when a Commonwealth Bank employee became suspicious of large amounts of money going through Abeysuriya's account.
Eventually Blue Care called in auditors who uncovered the frauds, and after being confronted, Abeysuriya fled to Sri Lanka.
Mr Robson said Abeysuriya returned to Australia and was remanded in custody in July.
He said Blue Care, one of Australia's largest non-profit organisations for health and care for the elderly, expected the outstanding money would be covered by insurance.
Barrister Steve Zillman, for Abeysuriya, said his client had been lonely when he came to Australia to work and took up gambling.
"He was young and lonely. He felt isolated and suffered from anxiety and depression," Mr Zillman said.
He said a psychiatrist's report showed Abeysuriya had a pathological addiction to sports betting.
It was backed up by statements from his Blue Care workmates who often saw Abeysuriya's computer open at sports betting sites.
Mr Zillman said Abeysuriya, who had returned to Brisbane of his own free will, was keen to be deported back to Sri Lanka once he had served his sentence.
A FINANCE clerk who misappropriated $1.5 million from his employers, a major charity organisation, was jailed for seven years today.
Dinesh Enoka Abeysuriya was before the District Court in Brisbane to be sentenced for a year-long fraud which funded his online gambling addiction.
Abeysuriya stole $1.5 million from the Uniting Church's Blue Care organisation and after money found in his accounts was frozen, the value of shortfall was about $900,000.
A second charge arose because Abeysuriya would regularly use his online account with sports betting organisation Centrebet, where $1.88 million in bets was shown on his Commonwealth Bank credit card.
When Abeysuriya finally stopped gambling his credit card was overdrawn a further $223,409, the court heard.
Abeysuriya, 29, pleaded guilty to aggravated fraud as an employee with a financial advantage of $1,534,967 between March 25, 2009, and April 9 this year.
He further pleaded guilty to fraudulently obtaining $223,404 from the Commonwealth Bank between March 5 and April 9 this year.
The sentence hearing was adjourned until yesterday so that Judge Kerry O'Brien could consider various aspects, including when Abeysuriya could be deported.
Judge O'Brien said he had been asked to impose five years jail so that Abeysuriya could have a partial suspension of his sentence, allowing him to have a definite date for his deportation.
But Judge O'Brien said he could not take into account what other bodies, the parole board or immigration authorities, might do in the future when imposing a sentence.
He said despite the mitigating factors, including Abeysuriya returning to Australia under his own free will, a sentence of seven years jail was needed.
Judge O'Brien set a parole eligibility date at November 22, 2012.
Last week, prosecutor Jacob Robson told the court Sri Lankan-born Abeysuriya came to Australia from New Zealand in 2008 to work at Blue Care, where he was responsible for credit payments.
He said Abeysuriya misappropriated the money, which he used to gamble online, over a 12-month period.
Mr Robson said Abeysuriya used three methods to misappropriate the money - inflating invoices and paying the extra to himself, paying invoices twice to legitimate creditors and himself, and paying invoices to himself.
He said the frauds were uncovered when a Commonwealth Bank employee became suspicious of large amounts of money going through Abeysuriya's account.
Eventually Blue Care called in auditors who uncovered the frauds, and after being confronted, Abeysuriya fled to Sri Lanka.
Mr Robson said Abeysuriya returned to Australia and was remanded in custody in July.
He said Blue Care, one of Australia's largest non-profit organisations for health and care for the elderly, expected the outstanding money would be covered by insurance.
Barrister Steve Zillman, for Abeysuriya, said his client had been lonely when he came to Australia to work and took up gambling.
"He was young and lonely. He felt isolated and suffered from anxiety and depression," Mr Zillman said.
He said a psychiatrist's report showed Abeysuriya had a pathological addiction to sports betting.
It was backed up by statements from his Blue Care workmates who often saw Abeysuriya's computer open at sports betting sites.
Mr Zillman said Abeysuriya, who had returned to Brisbane of his own free will, was keen to be deported back to Sri Lanka once he had served his sentence.
Kansas casino execs rolling dice
Kansas casino execs rolling dice
A gambling company executive charged in Iowa in a campaign finance case Wednesday told members of Kansas' casino review board the situation would be resolved in his favor and shouldn't influence evaluation of proposals for a casino in Sumner County.
The seven-member Kansas Lottery Gaming Facility Review Board met in Topeka to discuss details of rival casino proposals from Peninsula Gaming, based in Dubuque, Iowa ....
The board is expected to decide Dec. 15 which company should be granted the opportunity to build a casino to serve the area south of Wichita. The pick will be forwarded to the Kansas Racing and Gaming Commission for final approval in January.
Brent Stevens, president of Peninsula, was charged in October with a misdemeanor for allegedly funneling an illegal $25,000 contribution to the re-election campaign of Iowa Gov. Chet Culver. At the time, Peninsula was involved in a quest to secure a new casino license in Iowa.
"We strongly deny any wrongdoing," Stevens said. "What we think the review board needs to understand from Peninsula is: Can we and will we build what we say? If we are selected, we will."
Review board consultant William Eadington, of the University of Nevada-Reno, said the criminal case should be sorted out by Kansas officials evaluating bidders.
A gambling company executive charged in Iowa in a campaign finance case Wednesday told members of Kansas' casino review board the situation would be resolved in his favor and shouldn't influence evaluation of proposals for a casino in Sumner County.
The seven-member Kansas Lottery Gaming Facility Review Board met in Topeka to discuss details of rival casino proposals from Peninsula Gaming, based in Dubuque, Iowa ....
The board is expected to decide Dec. 15 which company should be granted the opportunity to build a casino to serve the area south of Wichita. The pick will be forwarded to the Kansas Racing and Gaming Commission for final approval in January.
Brent Stevens, president of Peninsula, was charged in October with a misdemeanor for allegedly funneling an illegal $25,000 contribution to the re-election campaign of Iowa Gov. Chet Culver. At the time, Peninsula was involved in a quest to secure a new casino license in Iowa.
"We strongly deny any wrongdoing," Stevens said. "What we think the review board needs to understand from Peninsula is: Can we and will we build what we say? If we are selected, we will."
Review board consultant William Eadington, of the University of Nevada-Reno, said the criminal case should be sorted out by Kansas officials evaluating bidders.
Increasing addiction
Australia’s Illegal $1 Billion Online Gambling Market
Despite all form of online gambling aside from sports betting and lotteries being banned in the country, Australians have still managed to wager an incredible $1 billion online this year.
Australia is currently in the grip of a ‘pokies’ or slot machine epidemic which has been causing social problems, with 15% of players or 300,000 people now considered problem gamblers.
Now, however, the Australian government is concerned that the growing illegal online gambling market could soon overshadow the country’s slot machine problem, with the government’s plans to crackdown on ‘pokies’ potentially driving gamblers online.
At a problem-gambling conference which was attended by the Federal Families Minister, Jenny Macklin recently, gambling researcher Dr Sally Gainsbury told the conference:
“It has been estimated that Australians will spend about $968 million in 2010 on illegal [overseas] sites. It is highly accessible, fast and can be played alone at home with just a credit card and unregulated sites provide few player-protection measures.”
She further added that gambling was “a very, very destructive problem” for many Australians and that the problem was likely to be compounded as global online gambling was set to increase from $21 billion in 2008 to $30 billion by 2012.
Federal Families Minister, Jenny Macklin has recently been pushing for reforms on the way slot machines are regulated, even suggesting a mandatory scheme whereby a player would register their identity and have pre-set caps on their losses. Macklin has now said she will help tackle the growing online betting problem in the coming year.
Ironically, the conference was held at the Jupiter Casino on Australia’s Gold Coast.
Despite all form of online gambling aside from sports betting and lotteries being banned in the country, Australians have still managed to wager an incredible $1 billion online this year.
Australia is currently in the grip of a ‘pokies’ or slot machine epidemic which has been causing social problems, with 15% of players or 300,000 people now considered problem gamblers.
Now, however, the Australian government is concerned that the growing illegal online gambling market could soon overshadow the country’s slot machine problem, with the government’s plans to crackdown on ‘pokies’ potentially driving gamblers online.
At a problem-gambling conference which was attended by the Federal Families Minister, Jenny Macklin recently, gambling researcher Dr Sally Gainsbury told the conference:
“It has been estimated that Australians will spend about $968 million in 2010 on illegal [overseas] sites. It is highly accessible, fast and can be played alone at home with just a credit card and unregulated sites provide few player-protection measures.”
She further added that gambling was “a very, very destructive problem” for many Australians and that the problem was likely to be compounded as global online gambling was set to increase from $21 billion in 2008 to $30 billion by 2012.
Federal Families Minister, Jenny Macklin has recently been pushing for reforms on the way slot machines are regulated, even suggesting a mandatory scheme whereby a player would register their identity and have pre-set caps on their losses. Macklin has now said she will help tackle the growing online betting problem in the coming year.
Ironically, the conference was held at the Jupiter Casino on Australia’s Gold Coast.
Dangerous roll of the dice on casino control in New Jersey
Dangerous roll of the dice on casino control in New Jersey
By Carl Zeitz
The enactment of the Casino Control Act, following the November 1976 passage of the constitutional amendment that legalized casinos, was the result of a thorough, 18-month public review. Now, without warning, it is doomsday for casino regulation in New Jersey.
In the package of major pending legislation to reinvigorate New Jersey’s principal private gambling industries, horse racing and casinos, one bill stands out for its incoherent surrender of the New Jersey casino regulatory system.
Senate measure S-12 does not simply seek further revisions in a series of amendments to the New Jersey Casino Control Act, as has been done in major omnibus reform legislation a half-dozen times since its enactment in 1977. In its 250 amendments, the bill guts the law and blows up a system recognized worldwide as the gold standard of casino regulation, which has three fundamental purposes:
• Determine the good character, honesty and integrity of everyone who owns, operates, finances, invests in, works for and sells to casinos to predict honest conduct, including the payment of all taxes due to the state;
• Verify and follow every dollar invested in casinos, the largest of all cash retail businesses, and track every dollar that leaves a casino as tax payments, salaries and benefit, returns on investment, payments to vendors, interest expenses, and payments and transfers to related companies;
• Assure gambling games on which the public wagers have uniform, clear rules, fair odds and honest management and operation.
The bill obliterates these public purposes. It destroys New Jersey’s dual agency regulatory check and balance, and eviscerates the Casino Control Commission. The bill turns over most CCC administrative, financial, auditing, rule-making and regulatory powers and duties to the Division of Gaming Enforcement, which is a zealous police agency but not a policy, fiscal or judicial organization, and upends more than 30 years of casino regulatory knowledge and experience.
For example:
• There will no longer be licensing for non-gaming casino service industries, the vendors who sell most kinds of goods and services to casinos, ignoring the reason for such licensing — in the bad old days in Nevada, casino vendors were a main pathway for organized crime, whereas similar attempts here were prevented by vendor licensing.
• There will no longer be casino employee licensing. Casino employees who deal the games, maintain and service slot machines, count the money, work the cashier counters or man the surveillance cameras or casino security will no longer be licensed, no longer be examined for honesty, integrity and good character. They’ll just all be trusted to be honest in an industry that, in Atlantic City, each year handles more than $30 billion in wagers and tallies more than $10 billion in cash in its count rooms. Thirty years of regulatory experience informs us that you can’t just trust everyone with all that money. You have to investigate and license them.
• Casinos, at the start licensed annually but now just every five years, will be excused from relicensing. In New Jersey, you have to renew an automobile driver’s license every four years, but you will never again have to renew a casino license if S-12 passes.
• Casino inspectors, who must be in the count rooms to assure an honest accounting of tax revenue and otherwise assist the public, will be gone. It was in the count rooms of bygone Las Vegas that, unwitnessed, organized crime extracted its criminal skimming of casino revenue.
• Five streams of taxes and fees paid by casinos, and now collected and audited by one experienced agency — the CCC — will be fractured, with collection and auditing assigned to four different agencies.
These are but five among 250 changes that will wreck New Jersey casino regulation and sink public trust in an honest game and honest tax collection.
Our casino regulators are not the foe of casinos and their executives. They are vouchers for their honesty. There is not a better personal recommendation than to be licensed by New Jersey. Then, why this legislation? Who is the source?
This is not deregulation, but abandonment of regulation — the one public element that has worked effectively and consistently in Atlantic City since 1978.
Carl Zeitz served as a member of the Casino Control Commission from 1980 to 1988. Now a public relations consultant, he has represented casino industry clients.
By Carl Zeitz
The enactment of the Casino Control Act, following the November 1976 passage of the constitutional amendment that legalized casinos, was the result of a thorough, 18-month public review. Now, without warning, it is doomsday for casino regulation in New Jersey.
In the package of major pending legislation to reinvigorate New Jersey’s principal private gambling industries, horse racing and casinos, one bill stands out for its incoherent surrender of the New Jersey casino regulatory system.
Senate measure S-12 does not simply seek further revisions in a series of amendments to the New Jersey Casino Control Act, as has been done in major omnibus reform legislation a half-dozen times since its enactment in 1977. In its 250 amendments, the bill guts the law and blows up a system recognized worldwide as the gold standard of casino regulation, which has three fundamental purposes:
• Determine the good character, honesty and integrity of everyone who owns, operates, finances, invests in, works for and sells to casinos to predict honest conduct, including the payment of all taxes due to the state;
• Verify and follow every dollar invested in casinos, the largest of all cash retail businesses, and track every dollar that leaves a casino as tax payments, salaries and benefit, returns on investment, payments to vendors, interest expenses, and payments and transfers to related companies;
• Assure gambling games on which the public wagers have uniform, clear rules, fair odds and honest management and operation.
The bill obliterates these public purposes. It destroys New Jersey’s dual agency regulatory check and balance, and eviscerates the Casino Control Commission. The bill turns over most CCC administrative, financial, auditing, rule-making and regulatory powers and duties to the Division of Gaming Enforcement, which is a zealous police agency but not a policy, fiscal or judicial organization, and upends more than 30 years of casino regulatory knowledge and experience.
For example:
• There will no longer be licensing for non-gaming casino service industries, the vendors who sell most kinds of goods and services to casinos, ignoring the reason for such licensing — in the bad old days in Nevada, casino vendors were a main pathway for organized crime, whereas similar attempts here were prevented by vendor licensing.
• There will no longer be casino employee licensing. Casino employees who deal the games, maintain and service slot machines, count the money, work the cashier counters or man the surveillance cameras or casino security will no longer be licensed, no longer be examined for honesty, integrity and good character. They’ll just all be trusted to be honest in an industry that, in Atlantic City, each year handles more than $30 billion in wagers and tallies more than $10 billion in cash in its count rooms. Thirty years of regulatory experience informs us that you can’t just trust everyone with all that money. You have to investigate and license them.
• Casinos, at the start licensed annually but now just every five years, will be excused from relicensing. In New Jersey, you have to renew an automobile driver’s license every four years, but you will never again have to renew a casino license if S-12 passes.
• Casino inspectors, who must be in the count rooms to assure an honest accounting of tax revenue and otherwise assist the public, will be gone. It was in the count rooms of bygone Las Vegas that, unwitnessed, organized crime extracted its criminal skimming of casino revenue.
• Five streams of taxes and fees paid by casinos, and now collected and audited by one experienced agency — the CCC — will be fractured, with collection and auditing assigned to four different agencies.
These are but five among 250 changes that will wreck New Jersey casino regulation and sink public trust in an honest game and honest tax collection.
Our casino regulators are not the foe of casinos and their executives. They are vouchers for their honesty. There is not a better personal recommendation than to be licensed by New Jersey. Then, why this legislation? Who is the source?
This is not deregulation, but abandonment of regulation — the one public element that has worked effectively and consistently in Atlantic City since 1978.
Carl Zeitz served as a member of the Casino Control Commission from 1980 to 1988. Now a public relations consultant, he has represented casino industry clients.
Siena bankruptcy sale
Siena Goes Down, but Not For Long
From reports I've seen over the last few years, the Siena Hotel Spa Casino was skating on the edge of fiscal disaster almost since it opened. When it closed the doors due to bankruptcy on October 21, it had $50 million in debt. The story could have ended there, with the Siena joining Fitzgeralds in Reno (closed in 2008) and the Silver Club in Sparks (closed in 2009) as hotel casino properties that could not weather the recession, declining tourism, and competition from California Indian casinos.
At the bankruptcy auction on November 10, Grand Siena LLC trumped two other bidders to obtain the property for $3.9 million. The purchase included all of the furnishings and equipment inside and the website, but not the $50 million debt.
From reports I've seen over the last few years, the Siena Hotel Spa Casino was skating on the edge of fiscal disaster almost since it opened. When it closed the doors due to bankruptcy on October 21, it had $50 million in debt. The story could have ended there, with the Siena joining Fitzgeralds in Reno (closed in 2008) and the Silver Club in Sparks (closed in 2009) as hotel casino properties that could not weather the recession, declining tourism, and competition from California Indian casinos.
At the bankruptcy auction on November 10, Grand Siena LLC trumped two other bidders to obtain the property for $3.9 million. The purchase included all of the furnishings and equipment inside and the website, but not the $50 million debt.
Saturday, December 4, 2010
Gambling teaches the wrong lessons
Gambling teaches the wrong lessons
By Bob Cabaniss, Hanover, Va.
Regarding the Nov. 29 Metro story “A Falls Church school gambles on using poker as an education tool”:
While I applaud George Mason High School in Falls Church for its classroom ingenuity and ability to engage its students, I worry about the long-term implications of including gambling in lesson plans. At our center, we’ve seen a marked increase in the number of young adults entering our treatment programs for gambling addiction. Although a powerful teaching tool, the gambling slope is a slippery one.
More than half of problem gamblers gamble for the first time between the ages of 10 and 17. The risk is high. It’s imperative that teachers, parents and mentors be aware of the dangers of youth and teen gambling, even if it takes place in the classroom.
Problem gambling is not an isolated illness. Often, our clinical team treats massive depressive disorders, emotional disorders and substance abuse, because they commonly occur with problem gambling. The positive outcomes of teaching with poker do not outweigh the social and mental health dangers gambling presents to America’s youth.
The writer is executive director of the Williamsville Wellness Center.
By Bob Cabaniss, Hanover, Va.
Regarding the Nov. 29 Metro story “A Falls Church school gambles on using poker as an education tool”:
While I applaud George Mason High School in Falls Church for its classroom ingenuity and ability to engage its students, I worry about the long-term implications of including gambling in lesson plans. At our center, we’ve seen a marked increase in the number of young adults entering our treatment programs for gambling addiction. Although a powerful teaching tool, the gambling slope is a slippery one.
More than half of problem gamblers gamble for the first time between the ages of 10 and 17. The risk is high. It’s imperative that teachers, parents and mentors be aware of the dangers of youth and teen gambling, even if it takes place in the classroom.
Problem gambling is not an isolated illness. Often, our clinical team treats massive depressive disorders, emotional disorders and substance abuse, because they commonly occur with problem gambling. The positive outcomes of teaching with poker do not outweigh the social and mental health dangers gambling presents to America’s youth.
The writer is executive director of the Williamsville Wellness Center.
Tropicana secondhand smoke suit settled for $4.5M
NJ Casino Secondhand Smoke Suit Settled for $4.5M
Former NJ casino dealer who said secondhand smoke caused cancer settles lawsuit for $4.5M
A former casino employee who said his lung cancer was caused by 25 years of exposure to secondhand smoke at work has settled a lawsuit against his ex-employer for $4.5 million.
Vince Rennich's lawsuit against the Tropicana Casino and Resort in Atlantic City became a rallying cry for the ultimately unsuccessful effort to ban smoking in the nation's second-largest gambling market.
"I wanted to have smoking stopped in the casinos; that was my goal," Rennich, of Somers Point, told The Associated Press on Friday. "It was never about money."
Rennich now works at Dover Downs, a smoke-free casino in Delaware. He says the atmosphere there is much better than Atlantic City, where smoking is allowed on 25 percent of the casino floor.
"I've been there six months and it's a pleasure," he said. "A lot of the guys from Atlantic City came down there to work because they couldn't stand the smoke."
The Tropicana declined to comment, noting that the 2006 lawsuit was filed before the current ownership took control of the casino. The lawsuit was settled in September.
The 52-year-old Rennich learned of his cancer in 2005 when he was hospitalized after a car accident. He had one-third of his right lung removed in September of that year, and says he is feeling well nowadays.
Rennich says he has never smoked a cigarette in his life.
He became one of the most visible faces of the movement to ban smoking in Atlantic City's 11 casinos in 2007 and 2008. The city was on the verge of banning smoking, but relented when the economy crashed and casinos worried about losing even more of their business to neighboring states that allow gamblers to smoke.
A compromise under which smoking is banned from 75 percent of the casino floor but allowed on the remaining 25 percent seems to have satisfied no one, but it has been in effect for nearly two years.
Karen Blumenfeld, executive director of the anti-smoking group Global Advisors on Smokefree Policy, said the settlement should be a wake-up call for the casino industry.
"This settlement is the least they can do, having put his life at risk and created this extremely hazardous condition that led to his lung cancer," she said. "It's a long time coming."
Blumenfeld also said Rennich's case should be a catalyst to removing a casino exemption from New Jersey's law that bans smoking inside all other public buildings.
In 2000, Kam Wong, a dealer who had worked for the Claridge Casino Hotel for 10 years, was awarded $150,000 from a workers' compensation claim for lost wages and medical expenses because of secondhand smoke exposure that contributed to her lung cancer. One of her lungs had to be removed.
"The gaming industry has knowingly harmed the health of their employees and patrons," said Stephanie Steinberg, chairwoman of Smoke-Free Gaming of America. "They tell their employees the air is safe and the ventilation is sufficient. And yet, their employees are sick and dying from the toxic, smoke-filled air. The casinos are going to be held accountable and it's going to cost them."
For the time being at least, Rennich plans to continue working at Dover Downs as a pit boss.
"I like what I'm doing down there," he said. "My goal was always to work in a smoke-free casino, and that's finally what I'm doing. Right now I'm pretty happy with my life. I'm happy just to be alive, actually."
Former NJ casino dealer who said secondhand smoke caused cancer settles lawsuit for $4.5M
A former casino employee who said his lung cancer was caused by 25 years of exposure to secondhand smoke at work has settled a lawsuit against his ex-employer for $4.5 million.
Vince Rennich's lawsuit against the Tropicana Casino and Resort in Atlantic City became a rallying cry for the ultimately unsuccessful effort to ban smoking in the nation's second-largest gambling market.
"I wanted to have smoking stopped in the casinos; that was my goal," Rennich, of Somers Point, told The Associated Press on Friday. "It was never about money."
Rennich now works at Dover Downs, a smoke-free casino in Delaware. He says the atmosphere there is much better than Atlantic City, where smoking is allowed on 25 percent of the casino floor.
"I've been there six months and it's a pleasure," he said. "A lot of the guys from Atlantic City came down there to work because they couldn't stand the smoke."
The Tropicana declined to comment, noting that the 2006 lawsuit was filed before the current ownership took control of the casino. The lawsuit was settled in September.
The 52-year-old Rennich learned of his cancer in 2005 when he was hospitalized after a car accident. He had one-third of his right lung removed in September of that year, and says he is feeling well nowadays.
Rennich says he has never smoked a cigarette in his life.
He became one of the most visible faces of the movement to ban smoking in Atlantic City's 11 casinos in 2007 and 2008. The city was on the verge of banning smoking, but relented when the economy crashed and casinos worried about losing even more of their business to neighboring states that allow gamblers to smoke.
A compromise under which smoking is banned from 75 percent of the casino floor but allowed on the remaining 25 percent seems to have satisfied no one, but it has been in effect for nearly two years.
Karen Blumenfeld, executive director of the anti-smoking group Global Advisors on Smokefree Policy, said the settlement should be a wake-up call for the casino industry.
"This settlement is the least they can do, having put his life at risk and created this extremely hazardous condition that led to his lung cancer," she said. "It's a long time coming."
Blumenfeld also said Rennich's case should be a catalyst to removing a casino exemption from New Jersey's law that bans smoking inside all other public buildings.
In 2000, Kam Wong, a dealer who had worked for the Claridge Casino Hotel for 10 years, was awarded $150,000 from a workers' compensation claim for lost wages and medical expenses because of secondhand smoke exposure that contributed to her lung cancer. One of her lungs had to be removed.
"The gaming industry has knowingly harmed the health of their employees and patrons," said Stephanie Steinberg, chairwoman of Smoke-Free Gaming of America. "They tell their employees the air is safe and the ventilation is sufficient. And yet, their employees are sick and dying from the toxic, smoke-filled air. The casinos are going to be held accountable and it's going to cost them."
For the time being at least, Rennich plans to continue working at Dover Downs as a pit boss.
"I like what I'm doing down there," he said. "My goal was always to work in a smoke-free casino, and that's finally what I'm doing. Right now I'm pretty happy with my life. I'm happy just to be alive, actually."
Delay sought in bingo corruption trial
Country Crossing owner Ronnie Gilley seeks delay in bingo corruption trial
Lawyers for Country Crossing owner Ronnie Gilley asked to delay his trial on vote-buying charges, citing a need for more time to analyze thousands of secretly recorded telephone calls.
Gilley is seeking to move the trial from April 4 to Sept. 19.
Defense lawyer Doug Jones wrote in a motion filed this week that the prosecutors have so far turned over recordings of 2,700 "pertinent" phone calls secretly taped by the FBI and nearly 200,000 pages of documents. Additionally, Jones said the discovery process had been riddled with problems.
"Given the volume of material, however, it would candidly take a herculean effort to adequately review the materials in order to meet the December 30th motions/defense discovery deadline and the April 4, 2011 trial date. To do so, given the problems and delays associated with the government's discovery is simply impossible," Jones wrote.
U.S. District Judge Myron H. Thompson gave federal prosecutors until Dec. 9 to file a response.
Gilley and 10 others were arrested last month on charges accusing them of trying to buy and sell votes for a gambling bill before legislators this past spring.
Prosecutors allege legislators were offered generous campaign contributions and other things of value in exchange for yes votes on a bill that would have allowed Gilley, VictoryLand owner Milton McGregor and a few other casino operators to offer electronic bingo machines.
The Alabama Bingo Files
Lawyers for Country Crossing owner Ronnie Gilley asked to delay his trial on vote-buying charges, citing a need for more time to analyze thousands of secretly recorded telephone calls.
Gilley is seeking to move the trial from April 4 to Sept. 19.
Defense lawyer Doug Jones wrote in a motion filed this week that the prosecutors have so far turned over recordings of 2,700 "pertinent" phone calls secretly taped by the FBI and nearly 200,000 pages of documents. Additionally, Jones said the discovery process had been riddled with problems.
"Given the volume of material, however, it would candidly take a herculean effort to adequately review the materials in order to meet the December 30th motions/defense discovery deadline and the April 4, 2011 trial date. To do so, given the problems and delays associated with the government's discovery is simply impossible," Jones wrote.
U.S. District Judge Myron H. Thompson gave federal prosecutors until Dec. 9 to file a response.
Gilley and 10 others were arrested last month on charges accusing them of trying to buy and sell votes for a gambling bill before legislators this past spring.
Prosecutors allege legislators were offered generous campaign contributions and other things of value in exchange for yes votes on a bill that would have allowed Gilley, VictoryLand owner Milton McGregor and a few other casino operators to offer electronic bingo machines.
The Alabama Bingo Files
No gaming hypocrisy
No gaming hypocrisy
The state legislature's persistent efforts to ban video poker and other forms of electronic gaming raise suspicions among cynical observers.
Some say the state is just trying to protect its own turf, making sure the N.C. Education Lottery continues to profit from a gambling monopoly.
The charge of hypocrisy isn't fair. Video gambling operations have been associated with political and law-enforcement corruption in North Carolina. They've skirted the laws and created headaches for sheriffs. They take advantage of people who find the games addictive and spend too much money playing. Stamping them out is good public policy.
Still, the state's attitude toward gambling isn't entirely consistent, to put it charitably. Gov. Bev Perdue, visiting Greensboro on Thursday, proved the point. While she supports the ban on video sweepstakes, she said, she wouldn't rule out putting some version of those games under the control of the state lottery as a source of additional revenue.
That move has been proposed before. State Sen. Julia Boseman, D-New Hanover, filed a bill in May that would have done just that; it received no support. She went on to cast the only vote in the Senate against the bill banning video sweepstakes.
Last year, state Rep. Earl Jones, D-Guilford, introduced a bill that would legalize video gaming and funnel 20 percent of gross revenue to the state. It garnered no support, and Jones also voted against the 2010 video sweepstakes ban. Neither Boseman nor Jones will return to legislative office in 2011.
Perdue should take the hint.
Yes, the governor is right to worry about a looming budget gap she pegs at $3.6 billion. Raising state revenue was the motivation behind Jones' and Boseman's efforts, too. And that's what the lottery is all about.
But the lottery puts North Carolina deep enough into the gambling industry -- more than deep enough. Lottery sales topped $1.4 billion during the 2010 fiscal year. That's a lot of money to take out of the pockets of North Carolina residents. It's money they could have spent with local businesses but gambled away instead. The state should not add to the take by further enticing them with video gaming devices that state officials themselves have said can be highly addictive.
The opportunity to raise revenue isn't a good reason to expand the state's participation in gambling. Enough is enough. Except where allowed by federal law -- meaning the Cherokee reservation -- no one should run electronic gaming in North Carolina. If it's a bad idea for private operators, it's just as bad or worse for the state.
And, surely, the state does not want to be called a hypocrite.
The state legislature's persistent efforts to ban video poker and other forms of electronic gaming raise suspicions among cynical observers.
Some say the state is just trying to protect its own turf, making sure the N.C. Education Lottery continues to profit from a gambling monopoly.
The charge of hypocrisy isn't fair. Video gambling operations have been associated with political and law-enforcement corruption in North Carolina. They've skirted the laws and created headaches for sheriffs. They take advantage of people who find the games addictive and spend too much money playing. Stamping them out is good public policy.
Still, the state's attitude toward gambling isn't entirely consistent, to put it charitably. Gov. Bev Perdue, visiting Greensboro on Thursday, proved the point. While she supports the ban on video sweepstakes, she said, she wouldn't rule out putting some version of those games under the control of the state lottery as a source of additional revenue.
That move has been proposed before. State Sen. Julia Boseman, D-New Hanover, filed a bill in May that would have done just that; it received no support. She went on to cast the only vote in the Senate against the bill banning video sweepstakes.
Last year, state Rep. Earl Jones, D-Guilford, introduced a bill that would legalize video gaming and funnel 20 percent of gross revenue to the state. It garnered no support, and Jones also voted against the 2010 video sweepstakes ban. Neither Boseman nor Jones will return to legislative office in 2011.
Perdue should take the hint.
Yes, the governor is right to worry about a looming budget gap she pegs at $3.6 billion. Raising state revenue was the motivation behind Jones' and Boseman's efforts, too. And that's what the lottery is all about.
But the lottery puts North Carolina deep enough into the gambling industry -- more than deep enough. Lottery sales topped $1.4 billion during the 2010 fiscal year. That's a lot of money to take out of the pockets of North Carolina residents. It's money they could have spent with local businesses but gambled away instead. The state should not add to the take by further enticing them with video gaming devices that state officials themselves have said can be highly addictive.
The opportunity to raise revenue isn't a good reason to expand the state's participation in gambling. Enough is enough. Except where allowed by federal law -- meaning the Cherokee reservation -- no one should run electronic gaming in North Carolina. If it's a bad idea for private operators, it's just as bad or worse for the state.
And, surely, the state does not want to be called a hypocrite.
Friday, December 3, 2010
Let's not go down that road
Let's not go down that road
Open letter to Gov. Pat Quinn from former Gov. Dan Walker
Dear Pat:
Lots of folks are having nightmares about that bill just passed by the Illinois Senate that would bring a vast cornucopia of gambling to Illinois. Please, right now, run up a big, bright red warning flag on this legislation. The sponsor, Sen. Terry Link, D-Waukegan, and his cohorts are now pushing for passage of the bill by the House, sending it to you when it reconvenes in early January and if that fails, he vows renewal in the next session commencing in February.
This audacious legislation would give Chicago a city-owned Casino Royale plus four new casinos at Waukegan, Rockford, Ford Heights and Danville.
That's just the beginning. All nine existing riverboat casinos can become greatly expanded land-based operations. The state's six horse racing tracks can be transformed into land-based "racinos" with all-in gambling sites.
In toto, the state's present 10,800 gambling positions at nine casinos will come close to 40,000 at all the casinos and racinos under the Link legislation. Add to that the estimated 45,000 legalized video poker machines at taverns, bars and restaurants scheduled to arrive next year throughout the state. The total gambling reality should also include the thousands of illegal video poker machines that I believe are run by the mob in the Chicago metropolitan area.
Pat, do you really want Illinois to become second only to Nevada in wide-open gambling? The Land of Lincoln last year earned the unfortunate sobriquet of the most corrupt state in the nation.
Surely, it shouldn't be allowed to also be known as the second-highest gambling state in the nation. And do you really expect the mob to keep its grubby fingers out of this dramatically increased gambling cash flow?
Perhaps more important, Pat, look at the flip side of the state's increased revenue from large-scale gambling. The dark side that inevitably will adversely affect the state's quality of life.
Look at what's happened to real-life people in other states with massive legalized gambling. Dramatic increases in divorce, child and spousal abuse, rape, suicide, bankruptcy, alcohol and drug addiction, prostitution, high school dropouts and the crimes that more and more addicted gamblers, men and women, resort to in order to pay gambling debts.
Your staff can get hard info on this from Anita Bedell at the Illinois Church Action on Alcohol and Addiction Problems and from crime savvy Arthur Bilek at the Chicago Crime Commission.
They will convince you that, on the state's grand balance sheet, the human debris debits from crime and social costs will over time far outweigh the revenue credits from gambling.
Pat, as you sit in that walnut-paneled library in the executive mansion where I once played poker, please look hard at that bronze bust of Honest Abe. Reflect deeply on the human cost of unrestrained gambling.
If you cannot now bring yourself to threaten veto, then I beg you to strongly adjure the legislature to deliberate long and hard about this abominable legislation. Finally, absolutely do not let it be a New Year's gift to the people of Illinois.
Dan Walker was governor for Illinois from 1973 to 1977.
Open letter to Gov. Pat Quinn from former Gov. Dan Walker
Dear Pat:
Lots of folks are having nightmares about that bill just passed by the Illinois Senate that would bring a vast cornucopia of gambling to Illinois. Please, right now, run up a big, bright red warning flag on this legislation. The sponsor, Sen. Terry Link, D-Waukegan, and his cohorts are now pushing for passage of the bill by the House, sending it to you when it reconvenes in early January and if that fails, he vows renewal in the next session commencing in February.
This audacious legislation would give Chicago a city-owned Casino Royale plus four new casinos at Waukegan, Rockford, Ford Heights and Danville.
That's just the beginning. All nine existing riverboat casinos can become greatly expanded land-based operations. The state's six horse racing tracks can be transformed into land-based "racinos" with all-in gambling sites.
In toto, the state's present 10,800 gambling positions at nine casinos will come close to 40,000 at all the casinos and racinos under the Link legislation. Add to that the estimated 45,000 legalized video poker machines at taverns, bars and restaurants scheduled to arrive next year throughout the state. The total gambling reality should also include the thousands of illegal video poker machines that I believe are run by the mob in the Chicago metropolitan area.
Pat, do you really want Illinois to become second only to Nevada in wide-open gambling? The Land of Lincoln last year earned the unfortunate sobriquet of the most corrupt state in the nation.
Surely, it shouldn't be allowed to also be known as the second-highest gambling state in the nation. And do you really expect the mob to keep its grubby fingers out of this dramatically increased gambling cash flow?
Perhaps more important, Pat, look at the flip side of the state's increased revenue from large-scale gambling. The dark side that inevitably will adversely affect the state's quality of life.
Look at what's happened to real-life people in other states with massive legalized gambling. Dramatic increases in divorce, child and spousal abuse, rape, suicide, bankruptcy, alcohol and drug addiction, prostitution, high school dropouts and the crimes that more and more addicted gamblers, men and women, resort to in order to pay gambling debts.
Your staff can get hard info on this from Anita Bedell at the Illinois Church Action on Alcohol and Addiction Problems and from crime savvy Arthur Bilek at the Chicago Crime Commission.
They will convince you that, on the state's grand balance sheet, the human debris debits from crime and social costs will over time far outweigh the revenue credits from gambling.
Pat, as you sit in that walnut-paneled library in the executive mansion where I once played poker, please look hard at that bronze bust of Honest Abe. Reflect deeply on the human cost of unrestrained gambling.
If you cannot now bring yourself to threaten veto, then I beg you to strongly adjure the legislature to deliberate long and hard about this abominable legislation. Finally, absolutely do not let it be a New Year's gift to the people of Illinois.
Dan Walker was governor for Illinois from 1973 to 1977.
Secret negotiations in D.C.
Senate Leadership Accused of Secret Plan to Legalize U.S. Online Gambling
Three U.S. House Republicans are objecting to what they call a “secretive, closed-door, undemocratic” effort in the Senate to pass legislation that would legalize and tax some Internet gambling before Congress adjourns this year.
Representatives Spencer Bachus, Dave Camp and Lamar Smith, all in line to be committee chairmen with oversight of online gambling when Republicans take control of the House in January, said they have learned that the Senate may attach a measure to “must-pass” legislation during the current lame-duck session.
“Creating a federal right to gamble that has never existed in our country’s history and imposing an unprecedented new tax regime on such activity require careful deliberation, not back- room deals,” the lawmakers said in a Dec. 1 letter to Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell of Kentucky.
Internet gambling has provoked heated debate in Congress over the past few years. Proponents say regulating online poker and other games would bring billions into federal coffers, while opponents contend that it would encourage Americans to make poor financial choices and could open the market to children.
A House committee in July approved legislation that would legalize some Internet gambling, allowing U.S. residents to place online wagers with companies the Treasury Department has licensed. It has not been taken up by the full House or in the Senate.
Processing Payments
The House measure, sponsored by Massachusetts Democrat Barney Frank, chairman of the House Financial Services Committee, would override a law designed to block such betting. That law, which was enacted in 2006 and took effect in June, bars banks from processing payments to offshore gambling websites.
The Senate legislation is similar to Frank’s bill. The House proposal requires licensed gambling companies to have safeguards to protect against underage and compulsive gambling and to prevent people from placing bets online in states that prohibit it.
Reid, of Nevada, has large gambling interests in his state. A spokesman for Reid, Jim Manley, said in an e-mail that he had no comment.
The three House opponents -- Bachus of Alabama, Camp of Michigan and Smith of Texas -- are in line to be chairmen of the Financial Services Committee, the Ways and Means Committee and the Judiciary Committee, respectively. Each panel would have some jurisdiction over the measure.
“We also are concerned that this new rush to embrace Internet casino gambling might be partially motivated by one of the gravest sins that afflicts this Congress: desperation for more tax dollars to pay for ever-increasing federal spending,” the lawmakers said in the letter. “Congress should not take advantage of the young, the weak and the vulnerable in the name of new revenues.”
Approving such controversial legislation by attaching it to another bill would be “a secretive, closed-door, undemocratic process,” they said.
Three U.S. House Republicans are objecting to what they call a “secretive, closed-door, undemocratic” effort in the Senate to pass legislation that would legalize and tax some Internet gambling before Congress adjourns this year.
Representatives Spencer Bachus, Dave Camp and Lamar Smith, all in line to be committee chairmen with oversight of online gambling when Republicans take control of the House in January, said they have learned that the Senate may attach a measure to “must-pass” legislation during the current lame-duck session.
“Creating a federal right to gamble that has never existed in our country’s history and imposing an unprecedented new tax regime on such activity require careful deliberation, not back- room deals,” the lawmakers said in a Dec. 1 letter to Senate Majority Leader Harry Reid and his Republican counterpart, Mitch McConnell of Kentucky.
Internet gambling has provoked heated debate in Congress over the past few years. Proponents say regulating online poker and other games would bring billions into federal coffers, while opponents contend that it would encourage Americans to make poor financial choices and could open the market to children.
A House committee in July approved legislation that would legalize some Internet gambling, allowing U.S. residents to place online wagers with companies the Treasury Department has licensed. It has not been taken up by the full House or in the Senate.
Processing Payments
The House measure, sponsored by Massachusetts Democrat Barney Frank, chairman of the House Financial Services Committee, would override a law designed to block such betting. That law, which was enacted in 2006 and took effect in June, bars banks from processing payments to offshore gambling websites.
The Senate legislation is similar to Frank’s bill. The House proposal requires licensed gambling companies to have safeguards to protect against underage and compulsive gambling and to prevent people from placing bets online in states that prohibit it.
Reid, of Nevada, has large gambling interests in his state. A spokesman for Reid, Jim Manley, said in an e-mail that he had no comment.
The three House opponents -- Bachus of Alabama, Camp of Michigan and Smith of Texas -- are in line to be chairmen of the Financial Services Committee, the Ways and Means Committee and the Judiciary Committee, respectively. Each panel would have some jurisdiction over the measure.
“We also are concerned that this new rush to embrace Internet casino gambling might be partially motivated by one of the gravest sins that afflicts this Congress: desperation for more tax dollars to pay for ever-increasing federal spending,” the lawmakers said in the letter. “Congress should not take advantage of the young, the weak and the vulnerable in the name of new revenues.”
Approving such controversial legislation by attaching it to another bill would be “a secretive, closed-door, undemocratic process,” they said.
College Sports Corruption
IMG’s Forstmann Gambled on College Sports, Suit Alleges
While the sports and entertainment conglomerate IMG Worldwide was representing top college coaches from 2004 to 2007, its chairman, Ted Forstmann, was betting hundreds of thousands of dollars on college football and the N.C.A.A. men’s basketball tournament, according to a lawsuit filed last month in Los Angeles County Superior Court.
The lawsuit comes at a time when the N.C.A.A. is grappling with the continuing problem of gambling among its student-athletes and those involved in college athletics.
A 2008 N.C.A.A. study of collegiate gambling, for example, found that nearly 30 percent of all male athletes admitted wagering at least once in a year’s time on college or pro sports in violation of N.C.A.A. rules.
In that same study, 0.9 percent of the responding players in Division I football and 0.6 percent of those in men’s basketball said they had accepted money or some other reward for “playing poorly” in games. One percent to 2 percent of athletes in each sport said they knew of teammates who did so, according to the study.
Through a spokesman, Forstmann said that the allegations outlined in the lawsuit were inaccurate and IMG said that he had not been involved in the firm’s representation of college coaches.
Over the years, IMG has become a significant presence in the multibillion-dollar business of college sports.
Shortly after Forstmann made scores of bets worth nearly $100,000 on the 2007 N.C.A.A. men’s basketball tournament, according to the lawsuit, IMG increased its investment significantly in collegiate athletics. In May 2007 it bought the Collegiate Licensing Company, a licensing and marketing company, and followed in November 2007 with the purchase of Host Communications, a longtime N.C.A.A. partner offering corporate sponsorships, radio and television programs, Internet, national advertising and signage sales.
Now, IMG is the licensing agency for nearly 200 collegiate properties, including the N.C.A.A., the Bowl Championship Series, the Rose Bowl and universities like the University of Kentucky.
Wally Renfro, an N.C.A.A. vice president, said the IMG provides licensing support, game programs and ancillary events production, including those surrounding the N.C.A.A. men’s basketball tournament. The suit contends that Forstmann bet more than $600,000 — in amounts from $2,000 to $23,000 — on the men’s basketball tournament from 2004 to 2007 while IMG was representing college basketball coaches.
“IMG was not representing the N.C.A.A. from 2004 to 2007,” Renfro said. “However, as almost everyone knows, the N.C.A.A. doesn’t like anyone betting on college sports.”
The alleged betting habits of Forstmann, 70, a billionaire and philanthropist, first came to light last month in the lawsuit filed by Agate Printing, which alleges fraud, interference with contract and breach of contract. In the complaint, Jim Agate, the head of Agate Printing, is seeking extensive damages for lost business that he said Forstmann had promised him.
In the suit, Agate also contended that he placed millions of dollars in bets on behalf of Forstmann — among the 70 pages of exhibits are dates, amounts and specific college and professional games wagered on, a wire transfer from Forstmann, and a transcript of a voice mail allegedly left by Forstmann on Sept. 9, 2007, confirming that he had bet $10,000 each on the Mets and the Boston Red Sox, and $20,000 on the New England Patriots.
Forstmann declined to answer questions Tuesday about the allegations or his betting history. He has acknowledged publicly that he bet through Agate, including $40,000 on one of his company’s clients, Roger Federer, in the 2007 French Open men’s final. He says he quit betting altogether in 2007. He denied, however, that suit’s charge that he raised the bet after talking to Federer and receiving inside information.
Forstmann told the Web site The Daily Beast that he had been betting on sports since college. He also indicated he was aware he might be running afoul of the N.C.A.A., saying college athletic officials “are like priests and now they’re asking me if I bet on March Madness.”
“Can you imagine that, I bet a few bucks on sports,” he was quoted as saying.
In an e-mail on Tuesday, Forstmann’s spokesman, Michael Sitrick, wrote, “First, we do not believe that the list of alleged bets by Mr. Forstmann which was attached to Agate’s complaint is accurate.”
Sitrick added: “Mr. Forstmann is not going to litigate in the media. He will say, through me as his spokesman, that allegations in the lawsuit are inaccurate and, if the case ever gets to trial, they will be proven as such.”
Gary O’Hagan, the IMG agent representing coaches in the professional and college ranks, refused to disclose the names of his clients who may have participated in the N.C.A.A. men’s basketball tournament over the years. Villanova’s Jay Wright, for example, is listed on IMG’s Web site as a client. One of Forstmann’s many bets on the 2006 N.C.A.A. men’s basketball tournament, the lawsuit asserts, was a $7,000 wager on Villanova, made on March 25, 2006.
“I have never discussed my client list with Ted Forstmann nor has Ted ever asked me to show him the list or talk about any particular client,” O’Hagan wrote in an e-mail. “I have had a couple of passing hellos with Ted over the years, but we have never discussed IMG’s coaching clients or client lists. I can also categorically state that Ted has never contacted any of IMG’s coaching clients nor have any of these clients ever contacted Ted about anything. No contact either way.”
In fact, Sitrick wrote, “to avoid any concerns or perceptual issues in the future,” IMG’s lawyers are putting together a rigorous compliance program restricting and prohibiting wagering.
He added: “This program will be more comprehensive than the applicable golf, tennis and N.C.A.A. regulations and codes of conduct. All IMG employees will be required to comply with this program.”
Found here:
This one has a few interesting ties...
A guy named Ted Forstmann, is the chairman of IMG -- and their training academy in Florida is where BU's Andrew Davis went...
But IMG also involves agents that represent athletes and coaches, and this guy who is the head of IMG is involved in hundreds of thousands of dollars in gambling on NCAA games........
so even though this is a little different from the players themselves gambling on games, it is not too much different since this guy and his outfit represent many of the players in those contests he is gambling on...so the connections are surely there to hint that he was paying money to and might have had some influence on the players and the outcome of the games he's gambling on..
http://www.nytimes.com/2010/12/01/sp...1gambling.html
While the sports and entertainment conglomerate IMG Worldwide was representing top college coaches from 2004 to 2007, its chairman, Ted Forstmann, was betting hundreds of thousands of dollars on college football and the N.C.A.A. men’s basketball tournament, according to a lawsuit filed last month in Los Angeles County Superior Court.
The lawsuit comes at a time when the N.C.A.A. is grappling with the continuing problem of gambling among its student-athletes and those involved in college athletics.
A 2008 N.C.A.A. study of collegiate gambling, for example, found that nearly 30 percent of all male athletes admitted wagering at least once in a year’s time on college or pro sports in violation of N.C.A.A. rules.
In that same study, 0.9 percent of the responding players in Division I football and 0.6 percent of those in men’s basketball said they had accepted money or some other reward for “playing poorly” in games. One percent to 2 percent of athletes in each sport said they knew of teammates who did so, according to the study.
Through a spokesman, Forstmann said that the allegations outlined in the lawsuit were inaccurate and IMG said that he had not been involved in the firm’s representation of college coaches.
Over the years, IMG has become a significant presence in the multibillion-dollar business of college sports.
Shortly after Forstmann made scores of bets worth nearly $100,000 on the 2007 N.C.A.A. men’s basketball tournament, according to the lawsuit, IMG increased its investment significantly in collegiate athletics. In May 2007 it bought the Collegiate Licensing Company, a licensing and marketing company, and followed in November 2007 with the purchase of Host Communications, a longtime N.C.A.A. partner offering corporate sponsorships, radio and television programs, Internet, national advertising and signage sales.
Now, IMG is the licensing agency for nearly 200 collegiate properties, including the N.C.A.A., the Bowl Championship Series, the Rose Bowl and universities like the University of Kentucky.
Wally Renfro, an N.C.A.A. vice president, said the IMG provides licensing support, game programs and ancillary events production, including those surrounding the N.C.A.A. men’s basketball tournament. The suit contends that Forstmann bet more than $600,000 — in amounts from $2,000 to $23,000 — on the men’s basketball tournament from 2004 to 2007 while IMG was representing college basketball coaches.
“IMG was not representing the N.C.A.A. from 2004 to 2007,” Renfro said. “However, as almost everyone knows, the N.C.A.A. doesn’t like anyone betting on college sports.”
The alleged betting habits of Forstmann, 70, a billionaire and philanthropist, first came to light last month in the lawsuit filed by Agate Printing, which alleges fraud, interference with contract and breach of contract. In the complaint, Jim Agate, the head of Agate Printing, is seeking extensive damages for lost business that he said Forstmann had promised him.
In the suit, Agate also contended that he placed millions of dollars in bets on behalf of Forstmann — among the 70 pages of exhibits are dates, amounts and specific college and professional games wagered on, a wire transfer from Forstmann, and a transcript of a voice mail allegedly left by Forstmann on Sept. 9, 2007, confirming that he had bet $10,000 each on the Mets and the Boston Red Sox, and $20,000 on the New England Patriots.
Forstmann declined to answer questions Tuesday about the allegations or his betting history. He has acknowledged publicly that he bet through Agate, including $40,000 on one of his company’s clients, Roger Federer, in the 2007 French Open men’s final. He says he quit betting altogether in 2007. He denied, however, that suit’s charge that he raised the bet after talking to Federer and receiving inside information.
Forstmann told the Web site The Daily Beast that he had been betting on sports since college. He also indicated he was aware he might be running afoul of the N.C.A.A., saying college athletic officials “are like priests and now they’re asking me if I bet on March Madness.”
“Can you imagine that, I bet a few bucks on sports,” he was quoted as saying.
In an e-mail on Tuesday, Forstmann’s spokesman, Michael Sitrick, wrote, “First, we do not believe that the list of alleged bets by Mr. Forstmann which was attached to Agate’s complaint is accurate.”
Sitrick added: “Mr. Forstmann is not going to litigate in the media. He will say, through me as his spokesman, that allegations in the lawsuit are inaccurate and, if the case ever gets to trial, they will be proven as such.”
Gary O’Hagan, the IMG agent representing coaches in the professional and college ranks, refused to disclose the names of his clients who may have participated in the N.C.A.A. men’s basketball tournament over the years. Villanova’s Jay Wright, for example, is listed on IMG’s Web site as a client. One of Forstmann’s many bets on the 2006 N.C.A.A. men’s basketball tournament, the lawsuit asserts, was a $7,000 wager on Villanova, made on March 25, 2006.
“I have never discussed my client list with Ted Forstmann nor has Ted ever asked me to show him the list or talk about any particular client,” O’Hagan wrote in an e-mail. “I have had a couple of passing hellos with Ted over the years, but we have never discussed IMG’s coaching clients or client lists. I can also categorically state that Ted has never contacted any of IMG’s coaching clients nor have any of these clients ever contacted Ted about anything. No contact either way.”
In fact, Sitrick wrote, “to avoid any concerns or perceptual issues in the future,” IMG’s lawyers are putting together a rigorous compliance program restricting and prohibiting wagering.
He added: “This program will be more comprehensive than the applicable golf, tennis and N.C.A.A. regulations and codes of conduct. All IMG employees will be required to comply with this program.”
Found here:
This one has a few interesting ties...
A guy named Ted Forstmann, is the chairman of IMG -- and their training academy in Florida is where BU's Andrew Davis went...
But IMG also involves agents that represent athletes and coaches, and this guy who is the head of IMG is involved in hundreds of thousands of dollars in gambling on NCAA games........
so even though this is a little different from the players themselves gambling on games, it is not too much different since this guy and his outfit represent many of the players in those contests he is gambling on...so the connections are surely there to hint that he was paying money to and might have had some influence on the players and the outcome of the games he's gambling on..
http://www.nytimes.com/2010/12/01/sp...1gambling.html
Thursday, December 2, 2010
Symptom of larger problem
Seized slot machines symptom of larger problem, authorities say
The recent seizure of dozens of illegal slot machines, at what appears to be an otherwise legitimate business, highlights the seedier underside of California’s billion-dollar gambling industry, according to authorities.
More than 80 illegal Japanese slot machines were seized at Ace Casino Rentals, in the 100 block of Starlite Street, in South San Francisco last month, following a three-month investigation, according to the Division of Gambling Control in the state Department of Justice. A court date has been set for next month in San Mateo County Superior Court, where Ace Casino operators Larry and Connie Hegre are expected to face charges of illegal possession of slot machines, authorities said.
"Slot machines are illegal in California," said Marty Horan, special agent in charge with the state Division of Gambling Control. California law requires slot owners to register with the state and limits them to doing business with Indian casinos or in states where gambling is legal, Horan said.
Connie Hegre referred all questions to her attorney, who didn’t return a call for comment. Ace Casino, like other casino rental companies, offers to rent everything from blackjack and baccarat tables, to roulette and card dealers for parties. The company has been operating 25 years in the Bay Area and uses "‘play money,’ no real money and chips," according to its Web site.
A similar-sized bust out of San Francisco occurred a couple of years ago when investigators encountered a vendor trying to hawk an illegal slot machine at a Cow Palace gun show, said Nathan Barankin, spokesman for the state attorney general. Authorities tracked the man back to Palmdale, where they were able to seize about 80 slots, Barankin said.
Even larger seizures of slots have occurred in Sacramento, San Joaquin and Amador counties, but the largest,by far, was 1,500 machines in Los Angeles County in December, Barankin said.
While legal gambling — largely run by Indian tribes — raked in an about $5 billion in 2004 in California, estimating the size of the state’s illegal gambling problem has so far proved impossible to get a handle on. That is largely because those who sell and run illegal slot machines, basement card rooms and private casinos, do all they can to operate in the dark, Barankin said.
Since the Division of Gambling Control began operating in 2000, seizures have held steady, with the agency tallying at least one major bust of 100 to 300 machines each year, Barankin said. "These are machines that are not destined for legal use in Indian casinos, Las Vegas or Reno," he said. "A lot of times they’re sold for personal entertainment in private homes or used to set up shadow, illegal gambling operations."
The recent seizure of dozens of illegal slot machines, at what appears to be an otherwise legitimate business, highlights the seedier underside of California’s billion-dollar gambling industry, according to authorities.
More than 80 illegal Japanese slot machines were seized at Ace Casino Rentals, in the 100 block of Starlite Street, in South San Francisco last month, following a three-month investigation, according to the Division of Gambling Control in the state Department of Justice. A court date has been set for next month in San Mateo County Superior Court, where Ace Casino operators Larry and Connie Hegre are expected to face charges of illegal possession of slot machines, authorities said.
"Slot machines are illegal in California," said Marty Horan, special agent in charge with the state Division of Gambling Control. California law requires slot owners to register with the state and limits them to doing business with Indian casinos or in states where gambling is legal, Horan said.
Connie Hegre referred all questions to her attorney, who didn’t return a call for comment. Ace Casino, like other casino rental companies, offers to rent everything from blackjack and baccarat tables, to roulette and card dealers for parties. The company has been operating 25 years in the Bay Area and uses "‘play money,’ no real money and chips," according to its Web site.
A similar-sized bust out of San Francisco occurred a couple of years ago when investigators encountered a vendor trying to hawk an illegal slot machine at a Cow Palace gun show, said Nathan Barankin, spokesman for the state attorney general. Authorities tracked the man back to Palmdale, where they were able to seize about 80 slots, Barankin said.
Even larger seizures of slots have occurred in Sacramento, San Joaquin and Amador counties, but the largest,by far, was 1,500 machines in Los Angeles County in December, Barankin said.
While legal gambling — largely run by Indian tribes — raked in an about $5 billion in 2004 in California, estimating the size of the state’s illegal gambling problem has so far proved impossible to get a handle on. That is largely because those who sell and run illegal slot machines, basement card rooms and private casinos, do all they can to operate in the dark, Barankin said.
Since the Division of Gambling Control began operating in 2000, seizures have held steady, with the agency tallying at least one major bust of 100 to 300 machines each year, Barankin said. "These are machines that are not destined for legal use in Indian casinos, Las Vegas or Reno," he said. "A lot of times they’re sold for personal entertainment in private homes or used to set up shadow, illegal gambling operations."
Nevada Judge Dismisses Bally Antitrust Claim
Judge in Nevada Dismisses Bally Antitrust Claim
Judge in Nevada dismisses antitrust claim brought by Bally against rival slot machine maker
A federal appeals court has dismissed a 6-year-old antitrust lawsuit between rival slot machine makers International Game Technology and Bally Technologies Inc.
United States District Court Judge Robert Jones of Reno issued an order Monday in favor of IGT in an antitrust claim brought by Bally.
Jones also ruled that an IGT patent was invalid, and dismissed Bally's counterclaim to invalidate another IGT patent.
IGT sued Bally in 2004, claiming its rival infringed on six IGT patents concerning bonus-wheel gambling machines.
Bally countered that IGT was attempting to monopolize the market.
Judge in Nevada dismisses antitrust claim brought by Bally against rival slot machine maker
A federal appeals court has dismissed a 6-year-old antitrust lawsuit between rival slot machine makers International Game Technology and Bally Technologies Inc.
United States District Court Judge Robert Jones of Reno issued an order Monday in favor of IGT in an antitrust claim brought by Bally.
Jones also ruled that an IGT patent was invalid, and dismissed Bally's counterclaim to invalidate another IGT patent.
IGT sued Bally in 2004, claiming its rival infringed on six IGT patents concerning bonus-wheel gambling machines.
Bally countered that IGT was attempting to monopolize the market.
Criminal case an issue in Kansas casino decision
Criminal case an issue in Kansas casino decision
TOPEKA, Kan. (AP) — A criminal case in Iowa became a complication Wednesday for a Kansas board that will pick a developer for a state-owned casino south of Wichita because misdemeanor charges are pending against two top executives in one of the two rival applicants.
But one of the executives said he and his colleague are ready to step away from their company's Kansas project if they're convicted of misdemeanor campaign finance violations in Iowa, though both men have pleaded not guilty.
The Kansas Lottery Gaming Facility Review Board is reviewing competing proposals from Peninsula Gaming, based in Dubuque, Iowa, and Global Gaming Solutions, of Ada, Okla., which is owned by the Chickasaw Nation. Kansas law allows only one casino in the Wichita area, and the review board plans to pick an applicant Dec. 15.
Supporters of Global's proposal suggest the legal problems facing two Peninsula executives in Iowa should disqualify that company. Brent Stevens, its chief executive officer, and Jonathan Swain, its chief operating officer, were charged in October with two misdemeanor counts each of violating Iowa's campaign finance laws.
"We strongly deny any wrongdoing," Stevens told the Kansas review board. "We're looking forward to a positive resolution of this matter. We're looking forward to it very, very soon."
The charges against the two executives involve accusations their company made donations in the name of others to Democratic Iowa Gov. Chet Culver's unsuccessful re-election campaign.
Each executive faces one count of making a contribution in the name of another and one count of failing to disclose a contribution. They're scheduled to go to trial Jan. 5 in Polk County District Court but have asked for a 60-day delay, with their attorney saying he needs more time to take statements and evaluate evidence.
Stevens sought to reassure the review board that even if he and Swain stepped away from the Kansas project because of the case, the company has a "very, very deep bench" that would allow it to complete the project.
"We've succeeded by doing the right thing, time and time again. We operate at the highest level," he said. "It will be built."
Kansas review board members struggled with how the criminal case should affect their decision. One consultant hired by the board said Kansas officials have to consider it in deciding whether Peninsula's project should go forward rather than Global's.
But review board Chairman Matt All said such issues are better left to the Kansas Racing and Gaming Commission, which will check the background of any successful applicant and regulate the casino.
"We just want to make it fair," All said of the selection process. "We're not qualified to take up those issues."
The rights to the new gambling and the equipment at the casino will be owned by the Kansas Lottery, and the state will receive 22 percent of the revenues.
The criminal case complicates the review board's work because, even if it picks Peninsula, the Racing and Gaming Commission, as the regulator, must sign off after conducting a background check. Consultants hired by the review board have projected that Peninsula's project would generate more revenue because its site is closer to Wichita.
Peninsula wants to build its $260 million project near Mulvane, about 18 miles south of Wichita, while Global Gaming's site for its proposed $280 million complex is near Wellington, another 14 miles to the south. The casino must be in Sumner County because voters in neighboring Sedgwick County, home to Wichita, rejected the idea.
The board's consultants suggested revenues at the Wellington site would be three-quarters or less of the revenues at the Mulvane site. But John Elliott, Global Gaming's CEO, said the analyses were flawed and questioned the assumption that the extra distance from Wichita would make more than a negligible difference.
"We refute the suggestion of a significant difference in revenue," Elliott said. "The issue here is that the distance isn't great."
Elliott didn't mention the criminal case involving Peninsula executives in Iowa, but on Tuesday, the chairman of the Sumner County Commission did in a statement praising Global's proposal, which the commission has endorsed.
TOPEKA, Kan. (AP) — A criminal case in Iowa became a complication Wednesday for a Kansas board that will pick a developer for a state-owned casino south of Wichita because misdemeanor charges are pending against two top executives in one of the two rival applicants.
But one of the executives said he and his colleague are ready to step away from their company's Kansas project if they're convicted of misdemeanor campaign finance violations in Iowa, though both men have pleaded not guilty.
The Kansas Lottery Gaming Facility Review Board is reviewing competing proposals from Peninsula Gaming, based in Dubuque, Iowa, and Global Gaming Solutions, of Ada, Okla., which is owned by the Chickasaw Nation. Kansas law allows only one casino in the Wichita area, and the review board plans to pick an applicant Dec. 15.
Supporters of Global's proposal suggest the legal problems facing two Peninsula executives in Iowa should disqualify that company. Brent Stevens, its chief executive officer, and Jonathan Swain, its chief operating officer, were charged in October with two misdemeanor counts each of violating Iowa's campaign finance laws.
"We strongly deny any wrongdoing," Stevens told the Kansas review board. "We're looking forward to a positive resolution of this matter. We're looking forward to it very, very soon."
The charges against the two executives involve accusations their company made donations in the name of others to Democratic Iowa Gov. Chet Culver's unsuccessful re-election campaign.
Each executive faces one count of making a contribution in the name of another and one count of failing to disclose a contribution. They're scheduled to go to trial Jan. 5 in Polk County District Court but have asked for a 60-day delay, with their attorney saying he needs more time to take statements and evaluate evidence.
Stevens sought to reassure the review board that even if he and Swain stepped away from the Kansas project because of the case, the company has a "very, very deep bench" that would allow it to complete the project.
"We've succeeded by doing the right thing, time and time again. We operate at the highest level," he said. "It will be built."
Kansas review board members struggled with how the criminal case should affect their decision. One consultant hired by the board said Kansas officials have to consider it in deciding whether Peninsula's project should go forward rather than Global's.
But review board Chairman Matt All said such issues are better left to the Kansas Racing and Gaming Commission, which will check the background of any successful applicant and regulate the casino.
"We just want to make it fair," All said of the selection process. "We're not qualified to take up those issues."
The rights to the new gambling and the equipment at the casino will be owned by the Kansas Lottery, and the state will receive 22 percent of the revenues.
The criminal case complicates the review board's work because, even if it picks Peninsula, the Racing and Gaming Commission, as the regulator, must sign off after conducting a background check. Consultants hired by the review board have projected that Peninsula's project would generate more revenue because its site is closer to Wichita.
Peninsula wants to build its $260 million project near Mulvane, about 18 miles south of Wichita, while Global Gaming's site for its proposed $280 million complex is near Wellington, another 14 miles to the south. The casino must be in Sumner County because voters in neighboring Sedgwick County, home to Wichita, rejected the idea.
The board's consultants suggested revenues at the Wellington site would be three-quarters or less of the revenues at the Mulvane site. But John Elliott, Global Gaming's CEO, said the analyses were flawed and questioned the assumption that the extra distance from Wichita would make more than a negligible difference.
"We refute the suggestion of a significant difference in revenue," Elliott said. "The issue here is that the distance isn't great."
Elliott didn't mention the criminal case involving Peninsula executives in Iowa, but on Tuesday, the chairman of the Sumner County Commission did in a statement praising Global's proposal, which the commission has endorsed.
Organized Crime and Casino Expansion
Casino expansion at B.C. Place may lead to increase in organized crime activity, sources say
Before it was disbanded last year, the RCMP's Integrated Illegal Gaming Enforcement Team (IIGET) gave a number of warnings about the presence of organized crime at casinos in the Province. Now, as Vancouver prepares for public hearings on the BC Place casino - set to be the province's largest - the now-defunct unit's warnings are spurring questions about a potential rise in criminal activity and the ability of police to cope.
In a 2006 report obtained by The Vancouver Sun through a Freedom of Information (FOI) request, the IIGET warned of casinos' "extreme vulnerability" to money laundering. Many investigations across Canada have found that members of organized crime use casinos for criminal purposes, the report states. A separate internal assessment, obtained by the Globe and Mail through a FOI, advised that Hells Angels members had, in some cases, succeeded in infiltrating the province’s “legitimate gaming operations."
The 12-member IIGET was dissolved on April 1, 2009 by then-Housing Minister Rich Coleman. He said the the team, which cost $1 million a year, was not cost effective. Coleman is now Solicitor General. He failed to respond to VO's repeated requests for an interview.
In an interview with Public Eye several months later, IIGET's former commander Fred Pinnock said his team should have been watching what was happening in legal gaming facilities, instead of focusing their energies on illegal operations. "For the police not to have well-resourced law enforcement units dedicated to casino environments is very short-sighted in my opinion," he said.
Pinnock's former colleague Sgt. Randy Mortensen, who now works with the Outlaw Motorcycle Gang Unit, said that a mega-casino at BC Place might lead to a rise in organized crime.
"Studies have shown that organized crime will try to infiltrate casinos in many different ways, whenever they’re expanding," Morstensen said.
The government should look at taking a portion of the revenue and putting it into policing to combat organized crime, he said.
It was "unbelievably irresponsible" for the government to disband the IIGET, a source who asked to remain anonymous told VO. "Monitoring and surveillance of organized criminal activity in casinos and illegal gambling operations is a highly specialized skill."
It involves intelligence, undercover infiltration, wiretap evidence, monitoring and investigation of suspicious "flags" and signifiers, and strong internal communications and coordination between affected police units and prosecution teams, the source explained.
As the system works now, crimes are reported to the Gaming Policy and Enforcement Branch of the Solicitor General through a reporting process in the casino and by BCLC, Morstensen said. They are referred to the police jurisdication where the crime occured.
The problem is that these jurisdictions do not have the resources to deal with this level of crime, the source claimed.
The VPD's anti-gang specialist was away at the time of publication and could not be reached for comment.
Depending on the nature of the crime, the RCMP may be called in to assist.
Sgt. Shinder Kirk of the Combined Forces Special Enforcement Unit – Gang Task Force, said that casinos do tend to attract the criminal element. His force has been called to Edgewater Casino at the Plaza of Nations, which is being relocated and expanded at BC Place.
But Sgt. Kirk said there was no way of knowing whether or not the larger casino would lead to an increase in organized crime.
"I don’t have a baseline to speak to that particular issue," he said.
Before it was disbanded last year, the RCMP's Integrated Illegal Gaming Enforcement Team (IIGET) gave a number of warnings about the presence of organized crime at casinos in the Province. Now, as Vancouver prepares for public hearings on the BC Place casino - set to be the province's largest - the now-defunct unit's warnings are spurring questions about a potential rise in criminal activity and the ability of police to cope.
In a 2006 report obtained by The Vancouver Sun through a Freedom of Information (FOI) request, the IIGET warned of casinos' "extreme vulnerability" to money laundering. Many investigations across Canada have found that members of organized crime use casinos for criminal purposes, the report states. A separate internal assessment, obtained by the Globe and Mail through a FOI, advised that Hells Angels members had, in some cases, succeeded in infiltrating the province’s “legitimate gaming operations."
The 12-member IIGET was dissolved on April 1, 2009 by then-Housing Minister Rich Coleman. He said the the team, which cost $1 million a year, was not cost effective. Coleman is now Solicitor General. He failed to respond to VO's repeated requests for an interview.
In an interview with Public Eye several months later, IIGET's former commander Fred Pinnock said his team should have been watching what was happening in legal gaming facilities, instead of focusing their energies on illegal operations. "For the police not to have well-resourced law enforcement units dedicated to casino environments is very short-sighted in my opinion," he said.
Pinnock's former colleague Sgt. Randy Mortensen, who now works with the Outlaw Motorcycle Gang Unit, said that a mega-casino at BC Place might lead to a rise in organized crime.
"Studies have shown that organized crime will try to infiltrate casinos in many different ways, whenever they’re expanding," Morstensen said.
The government should look at taking a portion of the revenue and putting it into policing to combat organized crime, he said.
It was "unbelievably irresponsible" for the government to disband the IIGET, a source who asked to remain anonymous told VO. "Monitoring and surveillance of organized criminal activity in casinos and illegal gambling operations is a highly specialized skill."
It involves intelligence, undercover infiltration, wiretap evidence, monitoring and investigation of suspicious "flags" and signifiers, and strong internal communications and coordination between affected police units and prosecution teams, the source explained.
As the system works now, crimes are reported to the Gaming Policy and Enforcement Branch of the Solicitor General through a reporting process in the casino and by BCLC, Morstensen said. They are referred to the police jurisdication where the crime occured.
The problem is that these jurisdictions do not have the resources to deal with this level of crime, the source claimed.
The VPD's anti-gang specialist was away at the time of publication and could not be reached for comment.
Depending on the nature of the crime, the RCMP may be called in to assist.
Sgt. Shinder Kirk of the Combined Forces Special Enforcement Unit – Gang Task Force, said that casinos do tend to attract the criminal element. His force has been called to Edgewater Casino at the Plaza of Nations, which is being relocated and expanded at BC Place.
But Sgt. Kirk said there was no way of knowing whether or not the larger casino would lead to an increase in organized crime.
"I don’t have a baseline to speak to that particular issue," he said.
Trump lays off 250
Trump Casinos Lay off 250 Employees
250 employees laid off at Trump Atlantic City casinos
Trump Entertainment Resorts Inc. has laid off about 250 employees at its Atlantic City casinos.
Chief Executive Officer Bob Griffin says those laid off include executives and hourly workers at Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino.
Griffin told The Press of Atlantic City that Wednesday's cuts are expected to be the last in the company's restructuring. However, he wouldn't rule out future layoffs if needed.
Trump Entertainment emerged from Chapter 11 bankruptcy protection in July under the new ownership of corporate bondholders.
250 employees laid off at Trump Atlantic City casinos
Trump Entertainment Resorts Inc. has laid off about 250 employees at its Atlantic City casinos.
Chief Executive Officer Bob Griffin says those laid off include executives and hourly workers at Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino.
Griffin told The Press of Atlantic City that Wednesday's cuts are expected to be the last in the company's restructuring. However, he wouldn't rule out future layoffs if needed.
Trump Entertainment emerged from Chapter 11 bankruptcy protection in July under the new ownership of corporate bondholders.
Fighting over crumbs
McKean Township supervisors to vote on gambling settlement tonight
McKean Township supervisors are expected to sign off tonight on a settlement that will end the legal wrangling over millions of dollars in gambling revenue from Presque Isle Downs & Casino.
The supervisors meet at 7:30 p.m. at the McKean Township Building, 9231 Edinboro Road, Supervisor Jan Dennis said. Dennis said she is confident the settlement will be approved; McKean Township is the last municipality involved to vote on the agreement.
The legal fight dealt with how the Erie County Gaming Revenue Authority, which evaluates requests for restricted funds, handled grant requests for a portion of the roughly $12 million in gambling revenues that Erie County government receives each year from Presque Isle Downs.
The Gaming Revenue Authority has also approved the settlement.
McKean Township would receive $333,000 in gambling revenue collected from the casino in 2008 and 2009 as part of the deal, as well as $165,000 in annual gambling revenue in years ahead.
Erie County government, as well as Millcreek, Greene and Waterford townships, have already approved the settlement, and the settlement stipulates they would receive those same amounts.
Summit, as the casino's host municipality, will see the biggest financial windfall from the settlement -- about $1.36 million from the more than $12 million in gambling revenue Erie County received from the casino in 2008 and 2009, as well as an estimated $675,000 annually in future years.
McKean Township supervisors are expected to sign off tonight on a settlement that will end the legal wrangling over millions of dollars in gambling revenue from Presque Isle Downs & Casino.
The supervisors meet at 7:30 p.m. at the McKean Township Building, 9231 Edinboro Road, Supervisor Jan Dennis said. Dennis said she is confident the settlement will be approved; McKean Township is the last municipality involved to vote on the agreement.
The legal fight dealt with how the Erie County Gaming Revenue Authority, which evaluates requests for restricted funds, handled grant requests for a portion of the roughly $12 million in gambling revenues that Erie County government receives each year from Presque Isle Downs.
The Gaming Revenue Authority has also approved the settlement.
McKean Township would receive $333,000 in gambling revenue collected from the casino in 2008 and 2009 as part of the deal, as well as $165,000 in annual gambling revenue in years ahead.
Erie County government, as well as Millcreek, Greene and Waterford townships, have already approved the settlement, and the settlement stipulates they would receive those same amounts.
Summit, as the casino's host municipality, will see the biggest financial windfall from the settlement -- about $1.36 million from the more than $12 million in gambling revenue Erie County received from the casino in 2008 and 2009, as well as an estimated $675,000 annually in future years.
Herbst Gaming set to emerge from bankruptcy
Herbst Gaming set to emerge from bankruptcy
The reconstituted Herbst Gaming is expected to shed its bankruptcy designation by the end of the year as new management and owners focus on operating the casino company and slot machine route operator.
The Gaming Control Board gave preliminary approval to the company's new makeup Wednesday during a hearing in Carson City. The Nevada Gaming Commission will have final say in the matter on Dec. 16.
Szony and Chief Executive Officer David Ross are overseeing day-to-day operations of the new company, which has 15 casinos and the slot routes.
Herbst operates nearly a dozen casinos in Nevada, including the off-Strip Terrible's Casino and the three Primm resorts located at the Nevada-California border. Herbst also has riverboat casinos in Iowa and Missouri and a Nevada slot machine route operation with more than 6,000 machines in more than 300 bars, taverns, convenience stores and grocery stores.
Szony said the company has already received approvals from Iowa and Missouri gaming regulators and approval by Nevada would put the bankruptcy process to rest.
"Getting approval allows us to move forward and no longer be sidelined or distracted," Szony said.
The bankruptcy, which was filed in March 2009, wiped $1.1 billion in debt off the books but left a consortium of lenders owning the business. Silver Point Capital, a Connecticut-based hedge fund that focuses on distressed properties, has a 16 percent stake in Herbst. Bondholders, who were unsecured creditors, lost an estimated $362 million.
Ross and Szony are two members of the company's six-person board of directors, which includes former Las Vegas Sands Corp. Chief Financial Officer Scott Henry, who is now CFO of bookselling chain Borders Group, and longtime casino gambling equipment company executive Mike Rumbloz.
Herbst Gaming began as a slot machine route operator, owning games in bars, taverns and restaurants throughout Nevada and sharing the revenues with the establishments' owners. The company grew substantially in 2007, spending $140 million to acquire five Northern Nevada casinos and spending $349 million to acquire Primm Valley, Buffalo Bill's and Whiskey Pete's from MGM Resorts International.
However, a voter-enacted smoking ban inside taverns and restaurants sent gamblers to casinos and damaged revenues from route operations. The troubled economy contributed to Herbst's problems and the company couldn't manage its long-term debt obligations that came about because of the casino acquisitions.
"It's disappointing because we worked hard at building an outstanding business," Former Herbst CEO Troy Herbst said in March 2009. "Even now, our casinos and our routes are generating positive cash flow. They are making money. It's just the debt that has overwhelmed us."
The original bankruptcy plan called for the company to be divided into two separate holding companies; one for the casinos owned 100 percent by Herbst lenders and a second for slot routes, which would have been owned 90 percent by the three Herbst brothers.
As the process worked its way through the court, the senior lenders were given control of the entire company.
Longtime Herbst corporate employees left the company earlier this year, including general counsel Sean Higgins and CFO Mary Beth Higgins.
The reconstituted Herbst Gaming is expected to shed its bankruptcy designation by the end of the year as new management and owners focus on operating the casino company and slot machine route operator.
The Gaming Control Board gave preliminary approval to the company's new makeup Wednesday during a hearing in Carson City. The Nevada Gaming Commission will have final say in the matter on Dec. 16.
Szony and Chief Executive Officer David Ross are overseeing day-to-day operations of the new company, which has 15 casinos and the slot routes.
Herbst operates nearly a dozen casinos in Nevada, including the off-Strip Terrible's Casino and the three Primm resorts located at the Nevada-California border. Herbst also has riverboat casinos in Iowa and Missouri and a Nevada slot machine route operation with more than 6,000 machines in more than 300 bars, taverns, convenience stores and grocery stores.
Szony said the company has already received approvals from Iowa and Missouri gaming regulators and approval by Nevada would put the bankruptcy process to rest.
"Getting approval allows us to move forward and no longer be sidelined or distracted," Szony said.
The bankruptcy, which was filed in March 2009, wiped $1.1 billion in debt off the books but left a consortium of lenders owning the business. Silver Point Capital, a Connecticut-based hedge fund that focuses on distressed properties, has a 16 percent stake in Herbst. Bondholders, who were unsecured creditors, lost an estimated $362 million.
Ross and Szony are two members of the company's six-person board of directors, which includes former Las Vegas Sands Corp. Chief Financial Officer Scott Henry, who is now CFO of bookselling chain Borders Group, and longtime casino gambling equipment company executive Mike Rumbloz.
Herbst Gaming began as a slot machine route operator, owning games in bars, taverns and restaurants throughout Nevada and sharing the revenues with the establishments' owners. The company grew substantially in 2007, spending $140 million to acquire five Northern Nevada casinos and spending $349 million to acquire Primm Valley, Buffalo Bill's and Whiskey Pete's from MGM Resorts International.
However, a voter-enacted smoking ban inside taverns and restaurants sent gamblers to casinos and damaged revenues from route operations. The troubled economy contributed to Herbst's problems and the company couldn't manage its long-term debt obligations that came about because of the casino acquisitions.
"It's disappointing because we worked hard at building an outstanding business," Former Herbst CEO Troy Herbst said in March 2009. "Even now, our casinos and our routes are generating positive cash flow. They are making money. It's just the debt that has overwhelmed us."
The original bankruptcy plan called for the company to be divided into two separate holding companies; one for the casinos owned 100 percent by Herbst lenders and a second for slot routes, which would have been owned 90 percent by the three Herbst brothers.
As the process worked its way through the court, the senior lenders were given control of the entire company.
Longtime Herbst corporate employees left the company earlier this year, including general counsel Sean Higgins and CFO Mary Beth Higgins.
NFL Kenny McKinley had gambling debts before suicide
Police report indicates Kenny McKinley had gambling debts
Gregg Rosenthal on December 1, 2010
The Associated Press reported Wednesday that Broncos wide receiver Kenny McKinley had large gambling debts before he committed suicide.
An investigative report by the the Arapahoe County Sheriff’s Department was released to the AP, which detailed the findings. McKinley’s friends and family revealed his significant gambling debts. The 23-year-old also spoke with three different friends about suicide before he took his own life on September 21.
McKinley borrowed $65,000 from former teammate Tom Brandstater, a fact which the Broncos were surprisingly aware of. Harold Chatman, the team’s team’s player development director, was asked by Brandstater’s lawyer to hold on to a contract stating McKinley would repay the loan.
Brandstater, now on Miami’s practice squad, was a close friend that tried to help McKinley quit gambling. Las Vegas casinos sent many letters to McKinley’s parents home, looking for money.
The news adds a sad postscript to a very sad story of a life lost too soon. We wish the McKinley family the best as they continue to grieve for their son.
Gregg Rosenthal on December 1, 2010
The Associated Press reported Wednesday that Broncos wide receiver Kenny McKinley had large gambling debts before he committed suicide.
An investigative report by the the Arapahoe County Sheriff’s Department was released to the AP, which detailed the findings. McKinley’s friends and family revealed his significant gambling debts. The 23-year-old also spoke with three different friends about suicide before he took his own life on September 21.
McKinley borrowed $65,000 from former teammate Tom Brandstater, a fact which the Broncos were surprisingly aware of. Harold Chatman, the team’s team’s player development director, was asked by Brandstater’s lawyer to hold on to a contract stating McKinley would repay the loan.
Brandstater, now on Miami’s practice squad, was a close friend that tried to help McKinley quit gambling. Las Vegas casinos sent many letters to McKinley’s parents home, looking for money.
The news adds a sad postscript to a very sad story of a life lost too soon. We wish the McKinley family the best as they continue to grieve for their son.
"Lucky Chances" mauls a patron then seeks protection
This video certainly appears that a patron who wasn't resisting was mauled by "Lucky Chances" employees.
Casino Sues To Keep Videos Of Patron Fights Off YouTube
COLMA, Calif. -- Representatives for a Colma card room have filed an unusual lawsuit in an attempt to stop people from posting internet videos that show people fighting at the gambling establishment.
The suit was filed over cell phone video of several fights that happened inside the Lucky Chances Casino. The exposure the videos have received on YouTube has hurt its business, according to and the casino owners.
One of the videos posted on YouTube under the name "Casino Fight 555" shows a man in a black suit wrestling with a patron at one of the card tables. Another clip titled "Casino Fight 333" shows a skirmish breaking out in one of the larger card rooms.
Company representatives wouldn't talk to KTVU about the legal action. But in the suit, the owners of Lucky Chances said the video paints their business in a negative light as a "disorderly and unsafe" place.
KTVU spoke with a regular patron outside the card room who didn't want to be identified. He said many frequent visitors like him have already seen this video.
“The way money changes hands and the way people come in here when they really can't afford to, I'm surprised this doesn't happen a lot more often,” said the man. “Anyone coming to this place is not going to be deterred by something like that, I'll tell ya."
Other patrons KTVU spoke with agreed.
“It doesn't look good,” said Joe Liu, who was visiting the card room while vacationing from Columbus, Ohio. “But I don't know who's right, or who's wrong.”
KTVU also showed the video to Golden Gate University law professor Michael Zampirini.
“My first impression is that it's not somebody taping the fight. It's someone taping the security camera taping the fight,” said Zampirini.
In the upper left-hand corner of the video, time-code is visible on the screen. In the suit, Lucky Chances claimed the people who posted this video on YouTube without their consent were essentially stealing from them.
And in an era of ubiquitous cell phone cameras and hand-held recorders, Zampirini said there will be many more lawsuits like this.
This is a big area of internet law and privacy,” said Zampirini. “If you're used to taking out your phone and just filming whatever's there, you may be filming without the authority to do so.”
A YouTube spokesperson told KTVU over the phone that they would reveal the identities of the people who posted the video if a judge ordered them to do so.
Casino Sues To Keep Videos Of Patron Fights Off YouTube
COLMA, Calif. -- Representatives for a Colma card room have filed an unusual lawsuit in an attempt to stop people from posting internet videos that show people fighting at the gambling establishment.
The suit was filed over cell phone video of several fights that happened inside the Lucky Chances Casino. The exposure the videos have received on YouTube has hurt its business, according to and the casino owners.
One of the videos posted on YouTube under the name "Casino Fight 555" shows a man in a black suit wrestling with a patron at one of the card tables. Another clip titled "Casino Fight 333" shows a skirmish breaking out in one of the larger card rooms.
Company representatives wouldn't talk to KTVU about the legal action. But in the suit, the owners of Lucky Chances said the video paints their business in a negative light as a "disorderly and unsafe" place.
KTVU spoke with a regular patron outside the card room who didn't want to be identified. He said many frequent visitors like him have already seen this video.
“The way money changes hands and the way people come in here when they really can't afford to, I'm surprised this doesn't happen a lot more often,” said the man. “Anyone coming to this place is not going to be deterred by something like that, I'll tell ya."
Other patrons KTVU spoke with agreed.
“It doesn't look good,” said Joe Liu, who was visiting the card room while vacationing from Columbus, Ohio. “But I don't know who's right, or who's wrong.”
KTVU also showed the video to Golden Gate University law professor Michael Zampirini.
“My first impression is that it's not somebody taping the fight. It's someone taping the security camera taping the fight,” said Zampirini.
In the upper left-hand corner of the video, time-code is visible on the screen. In the suit, Lucky Chances claimed the people who posted this video on YouTube without their consent were essentially stealing from them.
And in an era of ubiquitous cell phone cameras and hand-held recorders, Zampirini said there will be many more lawsuits like this.
This is a big area of internet law and privacy,” said Zampirini. “If you're used to taking out your phone and just filming whatever's there, you may be filming without the authority to do so.”
A YouTube spokesperson told KTVU over the phone that they would reveal the identities of the people who posted the video if a judge ordered them to do so.
Sports betting and corruption
Sport gambles with its own future as scandal follows where money leads
TO HAVE one sport embroiled in allegations of corruption looks like a misfortune. To have three looks like an epidemic.
However, in the last 12 months that's exactly what has happened, with the governing bodies of football, cricket and snooker all now on the offensive to prove to the paying public their players and the system are beyond reproach.
It's no easy task. The trouble began in May when snooker's world number one, John Higgins, was caught in a News of the World sting and later banned for six months for failing to tell anyone he had been approached about throwing frames.
Not long after, it emerged four men, accused of fixing 32 football matches in several European countries, had been held in custody in Germany since November 2009. Several others are expected to be charged and with nearly 300 matches in 15 countries under the spotlight, it has the potential to be the biggest fraud scandal ever to hit European football.
The summer provided little respite from stories of corruption, with the Test series between England and Pakistan overshadowed by rumours of spot-fixing. The allegations centred on the timing of three no-balls bowled during the Lords Test. It left not only the Pakistan trio of Salman Butt, Mohammad Asif and Mohammad Amir facing charges under cricket's anti-corruption code, but a nasty taste in the mouths of spectators, many of whom voted with their feet.
Add in this week's Panorama programme which accused three FIFA executive committee members of taking bribes during the 1990s and it's hardly been a golden year for sport. However, while the scandals have damaged individual reputations and sport as a whole, the revelations, particularly those surrounding the Pakistan team, came as little surprise to Ian Smith. The Professional Cricket Association's legal director since 2004, he quickly became aware of how pervasive corruption in sport could be.
"Historically, cricket was always seen as a gentleman's game, but when the Hansie Cronje match-fixing scandal broke in 2000 it shook the foundations of the sport. It made everyone involved face up to what was happening and admit they simply didn't have control of the situation," says Smith, who helped draft the sport's current anti-corruption guidelines.
"The problem was there was nothing to say what actually constituted an offence. We were working backwards and while a lot has improved in the last 10 years I think we're only just beginning to really understand and get a grip on his problem."
As part of his work with the PCA, Smith, who next week will take part in a seminar organised by Leeds law firm FrontRow Legal on the theme of "Sporting Integrity v The Lure of Money", has spoken to everyone from loan sharks to members of the Fraud Squad in an attempt to get a handle on corruption, much of which revolves around illegal betting syndicates.
"I'm not a gambler so it was a steep learning curve, but it soon became clear that cricket, like most other sports, has a deep rooted problem with gambling and addiction," he says.
"A lot of it is to do with replicating the adrenaline they experience on the field when they hit a six. It's exactly the same with footballers, and many sportsmen will tell you, betting is the only thing which comes close.
"When I first started in this role, I used to think that for a player to give up gambling was the same as giving up cigarettes. Now I realise it's as hard as giving up heroin, and once someone is hooked, those who want to corrupt the game have a very easy way in."
In the hope of stopping the problem at grassroots, each year Smith and his team do the rounds of the county grounds, making players aware of the sport's code of practice. This year, the theme was corruption and the dangers of social networking. A few weeks after they had completed their educational tour, the Pakistan scandal broke and Essex fast bowler, Mervyn Westfield, became the first cricketer to appear in court accused of offences relating to spot-fixing and charged with conspiracy to commit fraud.
"Every case of alleged cheating is shocking, but now we have the guidelines in place I do think cricket is in a position to react quickly and effectively," says Smith. "The big challenge for all sports is exposing those behind the syndicates as it's those individuals who really run the show.
"It's particularly a problem in India and Pakistan because while both nations love to gamble, there is no legal betting. The demand is inevitably filled by organised crime."
In the wake of repeated allegations, most sports have now set up anti-corruption units and many of those at the highest level have called for a zero-tolerance approach to cheating. However, while life bans and hefty fines may tick the right boxes in terms of showing the public that cheats won't be tolerated, Smith is not convinced it is a long-term solution.
"I know a lot of cricketers disagree with me and I understand why they think life bans are the only way to stop corruption escalating, but I'm not so sure," he says. "As a lawyer, to me the punishment has to be proportionate to the crime and we have to be consistent. If a player is asked by an elder in the team to, for example, bowl a no-ball and he does, but never receives a penny, should we really ban him for life?
"I'm not saying spot-betting is a victimless crime, it isn't.
"In cricket one run can decide a match, but what I am saying is that it's not a crime against humanity. It's possible to show forgiveness and understanding while still having effective deterrents."
Test Match Special's Jonathan Agnew this week called for a hotline to be set up which commentators like him could call should they witness suspicious play. It sounded like a common- sense suggestion, but according to Smith such a service already exists.
"It's existed for three years, the problem is no-one knows about it," he says. "Anyone can call the anti-corruption unit in complete confidence. The problem is that at the moment its resources and jurisdiction are limited.
"The truth is those guilty of bringing the game into disrepute need to be exposed and often a media sting is the most effective way of doing that."
While corruption and sport are not new bedfellows, the need to crackdown on cheats is a pressing one. Rick Parry, who recently chaired the Government's Sports Betting Inquiry panel, has called for a new gambling unit to be set up to investigate corruption across all sports as well as tougher sanctions on cheats.
"We have to take the toughest possible approach if we want to stamp out cheating," says Parry, who will also be speaking at the seminar. "The integrity of sport is at stake here and there can never be any room for complacency.
"The public has to believe that the sport is clean.
"I think the threat and impact of cheating is potentially as great as doping, so there is absolutely a need for everyone to be on their toes and vigilant."
Sporting Integrity v The Lure of Money, organised by FrontRow Legal will take place at Elland Road, Leeds, on December 10. For further details call 0113 390 7881 or visit www.frontrowlegal.com
TO HAVE one sport embroiled in allegations of corruption looks like a misfortune. To have three looks like an epidemic.
However, in the last 12 months that's exactly what has happened, with the governing bodies of football, cricket and snooker all now on the offensive to prove to the paying public their players and the system are beyond reproach.
It's no easy task. The trouble began in May when snooker's world number one, John Higgins, was caught in a News of the World sting and later banned for six months for failing to tell anyone he had been approached about throwing frames.
Not long after, it emerged four men, accused of fixing 32 football matches in several European countries, had been held in custody in Germany since November 2009. Several others are expected to be charged and with nearly 300 matches in 15 countries under the spotlight, it has the potential to be the biggest fraud scandal ever to hit European football.
The summer provided little respite from stories of corruption, with the Test series between England and Pakistan overshadowed by rumours of spot-fixing. The allegations centred on the timing of three no-balls bowled during the Lords Test. It left not only the Pakistan trio of Salman Butt, Mohammad Asif and Mohammad Amir facing charges under cricket's anti-corruption code, but a nasty taste in the mouths of spectators, many of whom voted with their feet.
Add in this week's Panorama programme which accused three FIFA executive committee members of taking bribes during the 1990s and it's hardly been a golden year for sport. However, while the scandals have damaged individual reputations and sport as a whole, the revelations, particularly those surrounding the Pakistan team, came as little surprise to Ian Smith. The Professional Cricket Association's legal director since 2004, he quickly became aware of how pervasive corruption in sport could be.
"Historically, cricket was always seen as a gentleman's game, but when the Hansie Cronje match-fixing scandal broke in 2000 it shook the foundations of the sport. It made everyone involved face up to what was happening and admit they simply didn't have control of the situation," says Smith, who helped draft the sport's current anti-corruption guidelines.
"The problem was there was nothing to say what actually constituted an offence. We were working backwards and while a lot has improved in the last 10 years I think we're only just beginning to really understand and get a grip on his problem."
As part of his work with the PCA, Smith, who next week will take part in a seminar organised by Leeds law firm FrontRow Legal on the theme of "Sporting Integrity v The Lure of Money", has spoken to everyone from loan sharks to members of the Fraud Squad in an attempt to get a handle on corruption, much of which revolves around illegal betting syndicates.
"I'm not a gambler so it was a steep learning curve, but it soon became clear that cricket, like most other sports, has a deep rooted problem with gambling and addiction," he says.
"A lot of it is to do with replicating the adrenaline they experience on the field when they hit a six. It's exactly the same with footballers, and many sportsmen will tell you, betting is the only thing which comes close.
"When I first started in this role, I used to think that for a player to give up gambling was the same as giving up cigarettes. Now I realise it's as hard as giving up heroin, and once someone is hooked, those who want to corrupt the game have a very easy way in."
In the hope of stopping the problem at grassroots, each year Smith and his team do the rounds of the county grounds, making players aware of the sport's code of practice. This year, the theme was corruption and the dangers of social networking. A few weeks after they had completed their educational tour, the Pakistan scandal broke and Essex fast bowler, Mervyn Westfield, became the first cricketer to appear in court accused of offences relating to spot-fixing and charged with conspiracy to commit fraud.
"Every case of alleged cheating is shocking, but now we have the guidelines in place I do think cricket is in a position to react quickly and effectively," says Smith. "The big challenge for all sports is exposing those behind the syndicates as it's those individuals who really run the show.
"It's particularly a problem in India and Pakistan because while both nations love to gamble, there is no legal betting. The demand is inevitably filled by organised crime."
In the wake of repeated allegations, most sports have now set up anti-corruption units and many of those at the highest level have called for a zero-tolerance approach to cheating. However, while life bans and hefty fines may tick the right boxes in terms of showing the public that cheats won't be tolerated, Smith is not convinced it is a long-term solution.
"I know a lot of cricketers disagree with me and I understand why they think life bans are the only way to stop corruption escalating, but I'm not so sure," he says. "As a lawyer, to me the punishment has to be proportionate to the crime and we have to be consistent. If a player is asked by an elder in the team to, for example, bowl a no-ball and he does, but never receives a penny, should we really ban him for life?
"I'm not saying spot-betting is a victimless crime, it isn't.
"In cricket one run can decide a match, but what I am saying is that it's not a crime against humanity. It's possible to show forgiveness and understanding while still having effective deterrents."
Test Match Special's Jonathan Agnew this week called for a hotline to be set up which commentators like him could call should they witness suspicious play. It sounded like a common- sense suggestion, but according to Smith such a service already exists.
"It's existed for three years, the problem is no-one knows about it," he says. "Anyone can call the anti-corruption unit in complete confidence. The problem is that at the moment its resources and jurisdiction are limited.
"The truth is those guilty of bringing the game into disrepute need to be exposed and often a media sting is the most effective way of doing that."
While corruption and sport are not new bedfellows, the need to crackdown on cheats is a pressing one. Rick Parry, who recently chaired the Government's Sports Betting Inquiry panel, has called for a new gambling unit to be set up to investigate corruption across all sports as well as tougher sanctions on cheats.
"We have to take the toughest possible approach if we want to stamp out cheating," says Parry, who will also be speaking at the seminar. "The integrity of sport is at stake here and there can never be any room for complacency.
"The public has to believe that the sport is clean.
"I think the threat and impact of cheating is potentially as great as doping, so there is absolutely a need for everyone to be on their toes and vigilant."
Sporting Integrity v The Lure of Money, organised by FrontRow Legal will take place at Elland Road, Leeds, on December 10. For further details call 0113 390 7881 or visit www.frontrowlegal.com
Wednesday, December 1, 2010
Illinois: Rolling dice on gaming expansion
Having convinced Illinois legislators that Gambling revenues are limitless and will solve all fiscal problems, consequences be damned! now try to put the brakes on.
Rolling dice on gaming expansion
By ANDREW THOMASON
Illinois Statehouse News
SPRINGFIELD - Gaming expansion in Illinois has yet to hit a jackpot, but the odds are moving in its favor.
A plan allowing four new Downstate casinos, one in Chicago and electronic gaming at six horse-racing tracks was passed out of an Illinois Senate committee Tuesday.
But the different factions of the gaming industry in Illinois have very different opinions about the legislation.
Tom Swoik, a lobbyist who represents most of the casinos in the state, said this expansion would flood an already saturated market. More gaming in the state only would serve to hurt the existing industry, which would, in turn, hurt the state's cut, Swoik said.
"It just does not make good business sense to expand an industry in a shrinking market at a time when revenues are already down almost a third," Swoik said. "We've lost over 30 percent of our business, while the surrounding states have held steady or had minimal losses."
New gaming only would exacerbate the industry's existing problems, Swoik said.
Former state Sen. Robert Molaro, representing the Hawthorne Race Course Inc., said that isn't the case, and that the state isn't close to a saturation point for gaming.
Instead, he said, the expansion would create construction and service jobs.
[Wow! Does this sound familiar?]
"This is just common sense," Molaro said. "We're going to put hundreds - if not thousands - to work."
State Sen. James Clayborne Jr. raised a concern that if a racetrack started to make more money from electronic gaming, it would make business sense to shift from a focus on racing to a focus on electronic gaming. Clayborne, an East St. Louis Democrat, has the Casino Queen in his district.
Molaro pointed to language in the legislation that requires tracks to run a minimum number of races per year.
Gaming expansion can be a hard sell, and this particular bill has yet to be considered by the full Senate (which could happen as early as Wednesday) and the House of Representatives. The legislation is Senate Bill 737.
Rolling dice on gaming expansion
By ANDREW THOMASON
Illinois Statehouse News
SPRINGFIELD - Gaming expansion in Illinois has yet to hit a jackpot, but the odds are moving in its favor.
A plan allowing four new Downstate casinos, one in Chicago and electronic gaming at six horse-racing tracks was passed out of an Illinois Senate committee Tuesday.
But the different factions of the gaming industry in Illinois have very different opinions about the legislation.
Tom Swoik, a lobbyist who represents most of the casinos in the state, said this expansion would flood an already saturated market. More gaming in the state only would serve to hurt the existing industry, which would, in turn, hurt the state's cut, Swoik said.
"It just does not make good business sense to expand an industry in a shrinking market at a time when revenues are already down almost a third," Swoik said. "We've lost over 30 percent of our business, while the surrounding states have held steady or had minimal losses."
New gaming only would exacerbate the industry's existing problems, Swoik said.
Former state Sen. Robert Molaro, representing the Hawthorne Race Course Inc., said that isn't the case, and that the state isn't close to a saturation point for gaming.
Instead, he said, the expansion would create construction and service jobs.
[Wow! Does this sound familiar?]
"This is just common sense," Molaro said. "We're going to put hundreds - if not thousands - to work."
State Sen. James Clayborne Jr. raised a concern that if a racetrack started to make more money from electronic gaming, it would make business sense to shift from a focus on racing to a focus on electronic gaming. Clayborne, an East St. Louis Democrat, has the Casino Queen in his district.
Molaro pointed to language in the legislation that requires tracks to run a minimum number of races per year.
Gaming expansion can be a hard sell, and this particular bill has yet to be considered by the full Senate (which could happen as early as Wednesday) and the House of Representatives. The legislation is Senate Bill 737.
Moody's downgrades Nevada
Moody's downgrades outlook for Nevada's finances
Moody's Investors Service has downgraded its outlook for Nevada's finances, attributing their ratings action to projected slow growth for the state's casino industry.
"Any substantial improvement in the gaming industry in Nevada remains at least a year away, with the most likely scenario after that being one of slow recovery," wrote Emily Raimes, co-author of the report and an analyst with Moody's Public Finance Group.
Moody's on Tuesday revised from stable to negative its outlook on the state's debt, citing "uncertainty around how the state will solve the (budget) gap, given the fact that the state has drawn down almost all of its reserves already."
Nevada is expected to face a $3 billion budget shortfall for its next budget cycle. The report predicted the actual shortfall to be closer to $2 billion since "approximately $1 billion of exisiting temporary revenue enhancements could be renewed.
In their report, Raimes and analyst Julius Vizner also attributed the downgrade to Nevada's weak economy, and its heavy reliance on gaming and sales tax revenues to support operations.
"Geared disproportionately towards consumer discretionary spending, Nevada's economy took a hit when global wealth evaporated during the recession," the report said. "Nevada's economy contracted 2.5 percent in 2008 and 6.4 percent in 2009, the latter being the worst among U.S. states. Nevada's unemployment rate, 14.2 percent as of October 2010, has been the highest in the country."
As economic strengths, Raimes said Nevada has a "relatively well-funded" pension system and lawmakers have a record of responding "quickly during periods of weakness and has responded to budget solutions quickly during the current downturn."
Moody's Investors Service has downgraded its outlook for Nevada's finances, attributing their ratings action to projected slow growth for the state's casino industry.
"Any substantial improvement in the gaming industry in Nevada remains at least a year away, with the most likely scenario after that being one of slow recovery," wrote Emily Raimes, co-author of the report and an analyst with Moody's Public Finance Group.
Moody's on Tuesday revised from stable to negative its outlook on the state's debt, citing "uncertainty around how the state will solve the (budget) gap, given the fact that the state has drawn down almost all of its reserves already."
Nevada is expected to face a $3 billion budget shortfall for its next budget cycle. The report predicted the actual shortfall to be closer to $2 billion since "approximately $1 billion of exisiting temporary revenue enhancements could be renewed.
In their report, Raimes and analyst Julius Vizner also attributed the downgrade to Nevada's weak economy, and its heavy reliance on gaming and sales tax revenues to support operations.
"Geared disproportionately towards consumer discretionary spending, Nevada's economy took a hit when global wealth evaporated during the recession," the report said. "Nevada's economy contracted 2.5 percent in 2008 and 6.4 percent in 2009, the latter being the worst among U.S. states. Nevada's unemployment rate, 14.2 percent as of October 2010, has been the highest in the country."
As economic strengths, Raimes said Nevada has a "relatively well-funded" pension system and lawmakers have a record of responding "quickly during periods of weakness and has responded to budget solutions quickly during the current downturn."
Mohegan Sun: Ran out of gambling addicts
If you construct your business model based on creating 'gamblers' and based on creating 'gambling addicts' of the surrounding population, don't you eventually 'run out'? How many gullible people can you find? Who thought the supply was inexhaustible?
Capital markets keep deluding themselves about 'market saturation,' competition and the recession. Maybe the capital markets are the gullible for allowing Sovereign Casinos to accumulate so much debt.
Maybe those blinded by Fools' Gold in Palmer, MA are the gullilble. Or Beacon Hill?
Mohegan Sun credit ratings lowered over financial woes
Casino still examining refinancing options, gaming authority says
Moody's Investors Service downgraded its bond ratings Tuesday on the Mohegan Tribal Gaming Authority and raised doubt about whether the authority can avoid a financial restructuring.
The agency lowered its corporate and probability-of-default ratings on the authority from "B3" to "Caa2," a designation reserved for high-risk debt.
The Moody's downgrade followed similar action last week by Standard & Poor's, another credit-rating agency, which lowered its rating on the authority from "B" to "CCC."
The gaming authority operates the Mohegan Sun casino in Uncasville and Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa.
Leo Chupaska, the authority's chief financial officer, said the downgrades were not unexpected.
"We thought it would happen," he said. "Since we announced we're working with Blackstone (a major corporate advisory firm), there's been a lot of speculation about how we're going to deal with our (debt) maturities. Right now, we're in a refinancing mode. We haven't talked about restructuring. We really haven't said anything. We're still talking about refinancing."
In a refinancing, a debtor typically negotiates better loan terms, including extending maturity dates, while a restructuring often involves a creditor receiving less money than it is owed.
In a Nov. 12 filing with the U.S. Securities and Exchange Commission, the authority announced that Blackstone Advisory Partners LP was providing help with "strategic planning and analysis in connection with its business and financial goals, including operational improvements, contemplated hotel projects and … bank and bond maturities."
Authority executives declined to elaborate on Blackstone's involvement during a Nov. 23 conference call with investors and gaming industry analysts.
During the call, Mitchell Etess, chief executive officer of the authority and of Mohegan Sun, announced that as of Jan. 1 he will turn over responsibility for the day-to-day operation of the casino to Jeffrey Hartmann, executive vice president and chief operating officer, who will succeed him as CEO of the casino. Etess said he will concentrate on developing new business opportunities as CEO of the authority.
MTGA executives also discussed the authority's financial results for the quarter and fiscal year that ended Sept. 30, reporting a net loss of $26.3 million for the quarter and a profit of $9.7 million for the fiscal year.
Standard & Poor's, which announced its ratings downgrade the day after the call, noted that the gaming authority also reported a 6.5 percent decline in adjusted EBITDA - earnings before interest, income taxes, depreciation and amortization - for the fiscal year.
"We had previously cited our expectation that EBITDA would be relatively flat in fiscal 2010," Standard & Poor's said. The agency also placed the gaming authority on "CreditWatch" with negative implications.
"The ratings downgrade and CreditWatch listing reflect weaker-than-expected operating performance in the fiscal year ended Sept. 30, 2010, in addition to substantial refinancing needs beginning in 2012, when MTGA's $675 million bank credit facility and $250 million senior subordinated notes mature," Melissa Long, a Standard & Poor's credit analyst, said in a statement.
Moody's lowered its rating on each of six layers of the authority's outstanding bonds. In announcing the downgrades late Tuesday afternoon, it said the authority could have trouble refinancing upcoming maturities "without some impairment to bondholders given its high leverage … limited near-term growth prospects for Mohegan Sun Casino, the likely continuation of weak consumer gaming demand trends in the Northeastern U.S., and the strong possibility of gaming in Massachusetts."
Moody's said its "negative ratings outlook" for the authority reflects the short time frame in which MTGA has to address "a significant capital structure issue." If the authority is unable to refinance by March 2011, its $675 million revolving bank loan will become due, Moody's said. The same holds true for the authority's $250 million senior subordinated notes if they are not refinanced by April 2011.
Moody's had placed the authority on review for a possible downgrade in September, after layoffs of hundreds of Mohegan Sun employees. Both rating agencies warned that they could lower their ratings further if the authority proceeds with a restructuring plan that results in bondholders being offered less than they are owed.
Mohegan Sun's neighboring competitor, Foxwoods Resort Casino, has been seeking to restructure more than $2 billion in debt for more than a year. It has defaulted on a $700 million revolving bank loan and a series of bond interest payments.
Casinos across the country have faced financial difficulties brought on by the recession, which has curtailed gamblers' spending and, consequently, casino revenues.
Capital markets keep deluding themselves about 'market saturation,' competition and the recession. Maybe the capital markets are the gullible for allowing Sovereign Casinos to accumulate so much debt.
Maybe those blinded by Fools' Gold in Palmer, MA are the gullilble. Or Beacon Hill?
Mohegan Sun credit ratings lowered over financial woes
Casino still examining refinancing options, gaming authority says
Moody's Investors Service downgraded its bond ratings Tuesday on the Mohegan Tribal Gaming Authority and raised doubt about whether the authority can avoid a financial restructuring.
The agency lowered its corporate and probability-of-default ratings on the authority from "B3" to "Caa2," a designation reserved for high-risk debt.
The Moody's downgrade followed similar action last week by Standard & Poor's, another credit-rating agency, which lowered its rating on the authority from "B" to "CCC."
The gaming authority operates the Mohegan Sun casino in Uncasville and Mohegan Sun at Pocono Downs in Wilkes-Barre, Pa.
Leo Chupaska, the authority's chief financial officer, said the downgrades were not unexpected.
"We thought it would happen," he said. "Since we announced we're working with Blackstone (a major corporate advisory firm), there's been a lot of speculation about how we're going to deal with our (debt) maturities. Right now, we're in a refinancing mode. We haven't talked about restructuring. We really haven't said anything. We're still talking about refinancing."
In a refinancing, a debtor typically negotiates better loan terms, including extending maturity dates, while a restructuring often involves a creditor receiving less money than it is owed.
In a Nov. 12 filing with the U.S. Securities and Exchange Commission, the authority announced that Blackstone Advisory Partners LP was providing help with "strategic planning and analysis in connection with its business and financial goals, including operational improvements, contemplated hotel projects and … bank and bond maturities."
Authority executives declined to elaborate on Blackstone's involvement during a Nov. 23 conference call with investors and gaming industry analysts.
During the call, Mitchell Etess, chief executive officer of the authority and of Mohegan Sun, announced that as of Jan. 1 he will turn over responsibility for the day-to-day operation of the casino to Jeffrey Hartmann, executive vice president and chief operating officer, who will succeed him as CEO of the casino. Etess said he will concentrate on developing new business opportunities as CEO of the authority.
MTGA executives also discussed the authority's financial results for the quarter and fiscal year that ended Sept. 30, reporting a net loss of $26.3 million for the quarter and a profit of $9.7 million for the fiscal year.
Standard & Poor's, which announced its ratings downgrade the day after the call, noted that the gaming authority also reported a 6.5 percent decline in adjusted EBITDA - earnings before interest, income taxes, depreciation and amortization - for the fiscal year.
"We had previously cited our expectation that EBITDA would be relatively flat in fiscal 2010," Standard & Poor's said. The agency also placed the gaming authority on "CreditWatch" with negative implications.
"The ratings downgrade and CreditWatch listing reflect weaker-than-expected operating performance in the fiscal year ended Sept. 30, 2010, in addition to substantial refinancing needs beginning in 2012, when MTGA's $675 million bank credit facility and $250 million senior subordinated notes mature," Melissa Long, a Standard & Poor's credit analyst, said in a statement.
Moody's lowered its rating on each of six layers of the authority's outstanding bonds. In announcing the downgrades late Tuesday afternoon, it said the authority could have trouble refinancing upcoming maturities "without some impairment to bondholders given its high leverage … limited near-term growth prospects for Mohegan Sun Casino, the likely continuation of weak consumer gaming demand trends in the Northeastern U.S., and the strong possibility of gaming in Massachusetts."
Moody's said its "negative ratings outlook" for the authority reflects the short time frame in which MTGA has to address "a significant capital structure issue." If the authority is unable to refinance by March 2011, its $675 million revolving bank loan will become due, Moody's said. The same holds true for the authority's $250 million senior subordinated notes if they are not refinanced by April 2011.
Moody's had placed the authority on review for a possible downgrade in September, after layoffs of hundreds of Mohegan Sun employees. Both rating agencies warned that they could lower their ratings further if the authority proceeds with a restructuring plan that results in bondholders being offered less than they are owed.
Mohegan Sun's neighboring competitor, Foxwoods Resort Casino, has been seeking to restructure more than $2 billion in debt for more than a year. It has defaulted on a $700 million revolving bank loan and a series of bond interest payments.
Casinos across the country have faced financial difficulties brought on by the recession, which has curtailed gamblers' spending and, consequently, casino revenues.
Resorts sale approved
NJ regulators OK sale of Resorts Atlantic City
ATLANTIC CITY, N.J. -- When it opened 32 years ago, Resorts Atlantic City was the only place in the United States you could go gamble legally outside Nevada.
On its opening day in May 1978, people stood in line for hours. Some bought access to buffets they had no intention of eating, because the tickets let them inside the casino early. Cash - more than anyone had ever seen and more than management could imagine - flooded into the counting room, to the point that it took nearly an entire day to tally it.
But casinos soon sprouted all around Atlantic City and dozens of other states, and Resorts wasn't so special anymore. Things got so bad that the casino stopped paying its mortgage in 2008. A year ago, its owners walked away, handing the keys over to the banks before they could foreclose.
On Wednesday, the New Jersey Casino Control Commission allowed veteran casino executive Dennis Gomes and New York real estate developer Morris Bailey to buy Resorts for the fire-sale price of $31.5 million. The sale is expected to close on Monday.
Resorts had been in danger of closing in recent months when its cash flow ran perilously low. That accounts in part for the price, by far the lowest ever paid for a casino in Atlantic City.
"It's been a long, hard road with a lot of obstacles we had to jump over in order to get here, a lot of stress and a lot of emotion," Gomes said. "But because I wanted to get back into the city so badly, my group and I persisted. To finally get here is a tremendous feeling of satisfaction."
As head of Atlantic City's Tropicana Casino and Resort a few years ago, he pitted a tic-tac-toe-playing chicken against customers and used billboards of Fidel Castro to hype a Cuban-themed shopping and dining mall.
His latest project presents his biggest challenge. Resorts reported a gross operating loss of $2.9 million for the third quarter compared with a gross operating profit of $706,000 a year ago. The casino took in an average of $446,011 a day in October, ranking it 10th out of Atlantic City's 11 casinos. By comparison, the Borgata Hotel Casino & Spa averaged more than $1.8 million a day the same month.
For the first 10 months of this year, Resorts has taken in $135.5 million, down 18.2 percent from the same period last year.
Gomes plans to rebrand the casino in a "Boardwalk Empire" theme from the HBO series about Prohibition-era Atlantic City. For months, Resorts has been designing and stitching about $1 million worth of 1920s-era costumes for employees.
Among the touches being planned: a strolling violinist in a zoot suit, wandering around the casino floor and lobby, playing songs from the '20s and '30s. Drinks - heavy on the whiskey that was illegal yet plentiful during Prohibition - will be served. Casino floor shows and many singers will stay faithful to the period as well.
"I've spent the last few years running back and forth to Wall Street, and at this point in time, those guys hate Atlantic City," Gomes said Wednesday. "They're completely dead wrong about this city and the potential here." [Oh? Maybe Wall Street is right.]
Atlantic City "is at its bottom," Gomes said but "when the economy gets better, it's going to improve. I think those Wall Street guys are nuts." He added, "We're going to be able to make a lot of money."
Steve Norton, an Indiana casino consultant who was Resorts' executive vice president when it opened, called Gomes brilliant.
"The big question is whether he can show enough cash to cover any possible shortfalls in the first year of operation," Norton said. "I'm hopeful he can solve that problem. I think his concept is excellent."
Resorts resides in what was originally the Chalfont-Haddon Hall Hotel, a Gilded Age building that has been shown as part of the skyline in "Boardwalk Empire." A recent interior renovation was done in 1920s style, eliminating the need for expensive construction.
Resorts employees had to re-apply for their jobs with the new company, almost all at reduced salaries. Gomes said eliminating so-called "legacy expenses" is an important part of the casino's plan to stay financially viable amid the cutthroat competition from casinos in neighboring states that is battering Atlantic City.
Chuck Urban, a specialty food server at the casino's Capriccio restaurant, has worked at Resorts for 23 years, under four different owners. He it's stressful having to reapply for a job he has excelled at (he won a Best of the Best Host award several years ago).
"Everybody's walking around on eggshells, not knowing what's going to happen," he said. "Nobody's cutting our mortgages in half, nobody's cutting our utility bills in half, yet we're being asked to take pay cuts."
Norton said such cuts are inescapable.
"The company is losing money and they've got to cut expenses, and salaries are always the biggest expense," he said. "Dennis is doing the right thing, even though it's a bitter pill for the employees to swallow. It's either take a pay cut or watch the whole thing go under."
ATLANTIC CITY, N.J. -- When it opened 32 years ago, Resorts Atlantic City was the only place in the United States you could go gamble legally outside Nevada.
On its opening day in May 1978, people stood in line for hours. Some bought access to buffets they had no intention of eating, because the tickets let them inside the casino early. Cash - more than anyone had ever seen and more than management could imagine - flooded into the counting room, to the point that it took nearly an entire day to tally it.
But casinos soon sprouted all around Atlantic City and dozens of other states, and Resorts wasn't so special anymore. Things got so bad that the casino stopped paying its mortgage in 2008. A year ago, its owners walked away, handing the keys over to the banks before they could foreclose.
On Wednesday, the New Jersey Casino Control Commission allowed veteran casino executive Dennis Gomes and New York real estate developer Morris Bailey to buy Resorts for the fire-sale price of $31.5 million. The sale is expected to close on Monday.
Resorts had been in danger of closing in recent months when its cash flow ran perilously low. That accounts in part for the price, by far the lowest ever paid for a casino in Atlantic City.
"It's been a long, hard road with a lot of obstacles we had to jump over in order to get here, a lot of stress and a lot of emotion," Gomes said. "But because I wanted to get back into the city so badly, my group and I persisted. To finally get here is a tremendous feeling of satisfaction."
As head of Atlantic City's Tropicana Casino and Resort a few years ago, he pitted a tic-tac-toe-playing chicken against customers and used billboards of Fidel Castro to hype a Cuban-themed shopping and dining mall.
His latest project presents his biggest challenge. Resorts reported a gross operating loss of $2.9 million for the third quarter compared with a gross operating profit of $706,000 a year ago. The casino took in an average of $446,011 a day in October, ranking it 10th out of Atlantic City's 11 casinos. By comparison, the Borgata Hotel Casino & Spa averaged more than $1.8 million a day the same month.
For the first 10 months of this year, Resorts has taken in $135.5 million, down 18.2 percent from the same period last year.
Gomes plans to rebrand the casino in a "Boardwalk Empire" theme from the HBO series about Prohibition-era Atlantic City. For months, Resorts has been designing and stitching about $1 million worth of 1920s-era costumes for employees.
Among the touches being planned: a strolling violinist in a zoot suit, wandering around the casino floor and lobby, playing songs from the '20s and '30s. Drinks - heavy on the whiskey that was illegal yet plentiful during Prohibition - will be served. Casino floor shows and many singers will stay faithful to the period as well.
"I've spent the last few years running back and forth to Wall Street, and at this point in time, those guys hate Atlantic City," Gomes said Wednesday. "They're completely dead wrong about this city and the potential here." [Oh? Maybe Wall Street is right.]
Atlantic City "is at its bottom," Gomes said but "when the economy gets better, it's going to improve. I think those Wall Street guys are nuts." He added, "We're going to be able to make a lot of money."
Steve Norton, an Indiana casino consultant who was Resorts' executive vice president when it opened, called Gomes brilliant.
"The big question is whether he can show enough cash to cover any possible shortfalls in the first year of operation," Norton said. "I'm hopeful he can solve that problem. I think his concept is excellent."
Resorts resides in what was originally the Chalfont-Haddon Hall Hotel, a Gilded Age building that has been shown as part of the skyline in "Boardwalk Empire." A recent interior renovation was done in 1920s style, eliminating the need for expensive construction.
Resorts employees had to re-apply for their jobs with the new company, almost all at reduced salaries. Gomes said eliminating so-called "legacy expenses" is an important part of the casino's plan to stay financially viable amid the cutthroat competition from casinos in neighboring states that is battering Atlantic City.
Chuck Urban, a specialty food server at the casino's Capriccio restaurant, has worked at Resorts for 23 years, under four different owners. He it's stressful having to reapply for a job he has excelled at (he won a Best of the Best Host award several years ago).
"Everybody's walking around on eggshells, not knowing what's going to happen," he said. "Nobody's cutting our mortgages in half, nobody's cutting our utility bills in half, yet we're being asked to take pay cuts."
Norton said such cuts are inescapable.
"The company is losing money and they've got to cut expenses, and salaries are always the biggest expense," he said. "Dennis is doing the right thing, even though it's a bitter pill for the employees to swallow. It's either take a pay cut or watch the whole thing go under."
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