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August 31, 2013

Spinoff for Caesars Gets the OK

Filed under: Casino — Tags: , — OCE News @ 11:10 am

Recently, the Nevada gaming commissioners gave its approval for Caesars Entertainment Inc to spinoff its Planet Hollywood Resort, as well as its interactive gaming business, along with a planned Baltimore casino, all into a new and separate company which will be owned by Caesars Entertainment.

According to company officials the new transaction may be able to close by fall of this year. Even so, the new restructuring plan still requires approval from both the SEC (Securities and Exchange Commission) as well as the Maryland gaming regulators.

Caesars now controls over 50 casinos and hotels which are located throughout the U.S. It has said that the new plan will give the company potential growth investments as well improve its balance sheet. The company also runs 10 casinos and other businesses that are either on the Strip in Las Vegas or just off the strip. As one might expect, Caesars is considered a major player in the Vegas area.

According to Caesars officials, the newly formed Caesars Acquisition will be known as Caesars Growth Partners. It will include Caesars Interactive Entertainment, Planet Hollywood, and will also include the Horseshoe Casino Baltimore which is under development and expected to open in 2015.

The company reported in a SEC filing they plan to raise an estimated $1.18 billion through selling stock which will be under the new public entity name. Additional funding will come through private equity groups, Apollo Global Management and TPG Global.

It was also reported that up to 70 percent of the new company may be owned by Caesars Entertainment and TPG Global and Apollo Global Management. The latter two are private equity groups and they are expected to invest approximately $500 million into the new venture. It was also reported that Caesars will be allowed to bring the businesses back into CE Inc after a five year period. No information was released on just how that might occur or if Caesars is planning to move forward with that plan in the short or long term future. For those who enjoy these venues, on terms of business operations, nothing is expected to be changed and customers will find the same quality service that they now experience.

For those who may not know, Caesars Interactive operates the social gaming Playtika as well as the very popular World Series of Poker (WSOP) and it considered by many industry experts to have a huge potential for the company. It is considered one of the company’s most attractive and lucrative operations. In addition, it has been announced that Caesars is planning to launch regulated and legal World Series of Poker websites located in both New Jersey and Nevada. This may prove to be a real boon for the company as the WSOP is now a globally known brand.

In addition, it was announced that Caesars Growth Partners will also be able to earn management fees from the very popular Planet Hollywood. Also fees can be earned from the new Horseshoe Baltimore which is expected to open sometime in 2015.

August 29, 2013

Galaxy Gaming Reports Quarterly Profit

Filed under: Casino — Tags: , — OCE News @ 11:08 am

On 15 August, Galaxy Gaming Inc. Reported a modest profit for its quarter. This comes even though a California judge has upheld a gaming commission decision that the company’s CEO is not fit to do business in the state. The CEO in question is Robert Saucier.

According to reports, the Galaxy second-quarter net income came in at $85,000 which equates to zero cents per share. This compares with $62,000 for the same reporting period last year. Revenue was reported at $1.94 million, and this compares to $1.79 million for the second quarter reported in 2012. Company shares are sold on the OTC market and were unchanged at 27 cents.

In a statement made by Saucier, he said that even though the company is facing hard economic times, they will continue to lead, grow, and innovate. Galaxy is based in Las Vegas.

Galaxy manufacturers table games which also includes side bets. These can be played with games such as blackjack. In addition, the company distributes an automated table game where players can play blackjack without a aid of a live dealer. This is called TableMax.

On July 11 of this year, the California Gambling Control Commission upheld the ruling made by an administrative law judge that described Mr. Saucier as being unsuitable to do this type of business in the state of California.

Saucier defended himself during a recent conference call saying that Galaxy had been open and transparent. He went on to say that much of the information that had been used against him had been inaccurate and inconsistent. He also added that the company is licensed in California by individual tribes and that the company has only faced a revocation of its licenses from two tribes. According to Saucier, the company earns approximate 3 percent of overall revenues in California.

According to Saucier, the company plans to continue doing its business with the tribes and has promised to keep interested parties informed as to what is happening. He stated that so far there has been no fallout from other business interests in other locations or jurisdictions.

It was also reported that Galaxy is planning to file for a non-restricted gaming license in the state of Nevada. It was determined back in July of this year by the Nevada Gaming Commission and Control Board that Galaxy needed to go ahead and make its application for the Nevada license. There has been no word yet from the Nevada commission as to what this current problem in California may have on their decision.

The investigation that led up to the decision took three years. It involved looking into Saucier’s business license applications as well as personal history. He was formally accused of withholding (or in some cases misstating) important and crucial information to state officials who suggested that he had not been honest about his past criminal record, schooling, lawsuits, and certain business dealings. He has from the beginning denied these allegations. Further legal action is expected as he tries to clear his name of these charges.

August 27, 2013

California Subject of Galaxy Gaming CEO Letter

Filed under: Casino — Tags: , — OCE News @ 11:07 am

The chief executive of Las Vegas-based Galaxy Gaming Inc, Robert Saucier, recently sent out a four-page letter to company shareholders with the aim of explaining issues associated with the recent decision made by the California gaming regulators.

On July 11 of this year, the California Gambling Control Commission (made up of four members) announced that it would uphold a ruling made by an administrative law judge that said that Saucier was not suitable for doing business in California.

In his letter, Saucier wrote, “The proceedings did not directly involve Galaxy but rather a predecessor entity that ceased business operation in 2009 and dissolved. At Galaxy, it is business and usual as we continue to provide our products and services without any interruption.”

The Galaxy entity is licensed by California tribes and manufactures table games, as well as side bets which are played with blackjack and other games. In addition, Galaxy also distributes an automated blackjack game, TableMax, which allows for blackjack play without the use of a live dealer.

In his letter, Saucier made it known to the company shareholders that Galaxy’s California gaming license had not changed and that it was still in “good standing” status. He went on to write that their status in other places was unchanged as well. The company plans to find and acquire new licenses as well as add more approvals in other jurisdictions.

Even so, the company is looking at possible problems over some statements that it made to Washington state gaming regulators who are now questioning the accuracy of those statement.

This recent recommendation that was issued by the California gaming commission is the end result of an investigation that has lasted some three years. During the investigation, Saucier was said to have withheld or misstated crucial and important information to California state officials which included information about his past education, criminal record, lawsuits, and various business dealings.

According to Catherine Frink who served as the administrative law judge, “Saucier was evasive and, in some instances, intentionally dishonest and misleading in his response to questions.” She went on to say, “In a highly regulated industry such as gaming, the failure to be forthcoming with relevant information was inexcusable.”

Saucier has since denied these allegations and informed shareholders that he has been working in the industry for over ten years.

According to gaming commission official located in Sacramento, this decision will mean that Saucier is not allowed to operate within the state of California as a tribal vendor. This ruling in California, which was unanimous, may also cause him problems with the Nevada Gaming Control Board who has recently said that they may need to look into requiring Galaxy to apply for a state license. In his letter, Saucier did not comment on the Nevada gaming regulators’ licensing decision, and he did not comment on the issues associated with the Washington State Gambling Commission.

He did however criticize the media coverage that he has gotten from California media outlets saying that the media had not explained correctly the various California proceedings. He denied that he had not reported details on his business or personal life to the California regulators. He claimed that he has no criminal record.

August 25, 2013

Culinary Union Continues Cosmopolitan Pickets

Filed under: Casino — Tags: , — OCE News @ 11:06 am

The Cosmopolitan of Las Vegas is likely to experience more problems as the Culinary union promises to use picket lines more often in the hopes that the casino and hotel will allow members to unionize. There have been four protests since last January outside the $3.9 billion resort. It has been reported that the union now plans to present a picket every weekend, and that this will continue until there is a contract.

An estimated 2,000 employees of the facility have been working since December 2010, which is when the facility opened, without a labor contract.

It was also reported that these new weekly pickets will take place on Fridays and Saturdays. Officials from the Cosmopolitan say in a statement that they are planning to continue to talk with union officials in good faith. In their statement they wrote: We feel we have been making good progress on behalf of our Costars and we are hopeful that progress can continue in a positive direction. As always, our highest priority is the safety and comfort of our guests and Costars and we will continue to work with the authorities.

Most agree that negotiations between the two have more or less stalled. The Culinary union represents approximately 55,000 people who include maid, bartenders, and food servers. At issue are wages, job security, and health care. In addition, the union is also looking to get what is called a successorship clause. In essence, this would make it mandatory that the new contract be kept if the resort is sold in the future.

The Cosmopolitan of Las Vegas has seen some problems as well with its profits. It was recently reported that the facility has seen loss at is faced a 20 percent decline in its hotel and casino revenues. It reported that it lost an approximate $25.2 million for the second quarter. The company reported a loss of $18.7 million for the same quarter a year ago.

As for casino revenues, they continue to fall behind room, food, and beverage revenue. Reports for this last second quarter say the facility was able to earn $30.6 million for its casino revenues. This compares to $38.6 million for the same quarter last year. This is a decrease of about 21 percent. The facility reports that the decrease is due to a decrease in play at its table games. The facility runs more than 1370 slots and has over 100 table games.

It is not immediately known, or at least reported, just how much business has been lost due to the picket lines that have been used so far. Also, it is not known if the added lines that are planned to take place on weekends will cause a problem with the daily business that comes into the facility.

The Cosmopolitan has already reported that it plans to concentrate on improving its table and slot play. This is not new news as the facility has been working on this strategy since it opened back in late 2010. The property is a wholly owned subsidiary of Deutsche Bank. It bought the property in 2008 during a foreclosure sale. The cost was in the neighborhood $1 billion.

August 23, 2013

Congress Being Urged to Create Web Gaming Rules

Filed under: Casino — Tags: , — OCE News @ 11:04 am

About 18 months ago, the US Justice Department changed the rules concerning the Wire Act of 1961. In essence, these changes made it easier for online gaming to take place in many states. Now, it appears that many of those states that took advantage of the new changes are now facing problems with crimes such as money laundering and fraud. Because of these problems, Congress is being asked to come up with some solutions that can be used to combat those who are breaking the law, some of whom may be terrorists groups.

One of the major proponents to fixing the problems is the Fraternal Order of Police. According to their president, Chuck Canterbury, Congress needs to establish or at least update a national legal standard that can be used for online gambling. He contends that law enforcement is not able to keep with state and local crimes that are taking place. He also said that it will be years before law enforcement has the technology it needs to combat money laundering that is taking place on the state level. This is especially true when those activities occur across borders. He, and others, believe that federal action is needed.

Because much of the money laundering takes place between a state and a foreign country, the Caribbean for instance, federal laws are needed. All of this came out during a hearing that took place before the Senate’s consumer protection subcommittee. This was the first hearing on this subject this session. During the hearing, Geoff Freeman who is the current American Gaming Association President, remarked that the federal government will need to act as soon as possible. In addition, he said that Congress should at least institute minimum regulatory standards in order to help protect online gamers as well as consumers. These standards should include provisions that would exclude those who are known to be acting illegally or in bad faith. Native American tribes should also be provided with some type of regulatory framework to combat the problems that they are experiencing.

The hearing also served as to reenergize interest in establishing a federal record on the reasons Congress should begin work on new regulations for online gambling and gaming. The hearing allowed those who are interested in the subject to understand that there is a problem and that solutions are needed to fix these problems.

In addition, Sen. Harry Reid, D-Nev., is currently in Senate discussions concerning online gambling legislation. These discussions have been sought by many of the most prominent Las Vegas casino entities and corporations. The overall goal of the discussions is to come up with a national online poker market similar to that which is found in the state of Nevada.

In the US House, two bills have already been introduced. A bill brought by Rep. Joe Barton of Texas, would legalize online poker. The other bill brought by Rep. Peter King of New York would allow for more types of online games. The US Justice Department has already revised the legal opinion of the Wire Act of 1961 Wire Act which it now says only applies to sports betting.

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