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February 4, 2013

FBI Looking Into Okada-Pagcor Deal

Filed under: Casino — Tags: — OCE News @ 3:13 am

It has been reported that FBI agents are now in Manila with the task of investigating alleged illegal payments that may amount to millions given by Universal Entertainment Japan. The funds are alleged to have gone to a former Philippine gaming regulator consultant and are said to be in relation Universal Entertainment Japan’s Manila casino project.

On Jan 12, it was reported that FBI agents from Las Vegas have been investigating alleged bribes. The agents had been looking into the matter along with the NBI (National Bureau of Investigation), a law enforcement agency of the Philippines. The FBI had started its investigation in the United States. The agency decided that it needed to widen and expand its probe due to what it said was the slowness of the NBI’s investigation.

During their week in the Philippines, FBI agents are said to have visiting several locations along with NBI officials. These locations are said to be, among others, properties that belong to Efraim Genuino who is a former chairperson for Philippine Amusement and Gaming Corporation which is also known as Pagcor. They have also visited properties owned by Rodolfo Soriano who was a Pagcor consultant. The current investigation is said to be focusing on an estimated $40-million transfer that went to Soriano while Universal was trying to get (and did get) key concessions associate with its Manila Bay casino. The transfer took place in 2010.

It was also reported that Malacañang says it had now idea that FBI agents were visiting. According to a Palace spokeswoman, the Palace does not have any information as to whether or not the FBI is looking into the matter. If the bribes did take place, it may lead to the entire project being halted.

Kazuo Okada, who founded Universal and is a majority owner, along with his son, deny any wrongdoing and say that they carried out their dealings in the Philippines in a lawful manner. The project in Manila Bay broke ground in Jan 2012. Cristino Naguiat, who is the chair for Pagcor, has already said that they will revoke Universal’s license if it is shown that bribery took place.

Benigno Aquino III, Philippine President said back in November that they had opened an official investigation into the matter to see if any bribes had been paid in order to secure the needed license. The estimated value of the resort casino is said to be $2-billion.

In it defense, Universal has said that 3 of its former employees had paid an estimated $15 million of the alleged $40 million and that they did so without any authorization from the Universal board. They also said that they have since taken the former employees to Tokyo court to settle the matter. That Tokyo trial is ongoing and its outcome is uncertain at this time. It was also reported that the Japanese firm is planning to begin its own investigation which it says will be conducted by various experts who do not work for the firm. No other details were given about this investigation or when it is expected to begin.

February 2, 2013

Atlantic City Loses Alliance Chairman Marrandino

Filed under: Casino — Tags: , — OCE News @ 3:12 am

It has been reported that Don Marrandino has stepped down as chairman of the Atlantic City Alliance. This occurred when he left Caesars Entertainment Corp. The Alliance is said to be temporarily without a chairman but plans to name a new one on 22 January when the seven-member board meets again. The board is composed exclusively of casino executives, and the board is tasked with a variety of high-profile jobs that focus on promoting Atlantic City and the casinos and resorts that are in the city. It is also tasked with providing public information on occasion.

As Marrandino departed, the four Caesars Entertainment casinos that are located in Atlantic City are reported to be represented by John Smith who is Harrah Resort general manager. According to the president of the alliance, Liza Cartmell, the chairman is responsible for overseeing board meetings and also is tasked with acting as spokesman for the Alliance. However, the chairman does not have any more power than other board members.

Cartmell went on to say that even with Marrandino leaving she is confident that the board will be capable of meeting its 2013 mission statement goals. As of this writing, Marrandino’s replacement is not known but, as mentioned above, it has been suggested that the board will begin finding a new chair at is upcoming meeting. No further details were given as to who might be the forerunner.

It was reported, however, that two of the board members, Bob Griffin and Tony Rodio, are busy with other duties associated with the casino sector and are not expected to take on the ACA chairmanship. While the chairmanship does not require full time attention, it is a position that can take up a lot of time of the person holding the chair.

Tony Rodio is Tropicana Casino and Resort chief executive officer. He serves as well as the president of the Casino Association of New Jersey, which is a notable industry trade group. Bob Griffin is the CEO of Trump Entertainment Resorts. He also acts as one of the gambling industry representatives that serve on the state Casino Reinvestment Development Authority board.

Some $30 million a year is contributed by the various casinos to the Alliance. This is used for advertising, marketing, promotional events and a variety of other projects, all which are aimed at benefiting Atlantic City. As a private, nonprofit organization the alliance operates to promote tourism in Atlantic City. Cartmell gave Marrandino much praise saying that he had been a staunch supporter of the alliance and had made a major impact on its early-days success. He was known for recognizing the potential of the alliance in terms of promoting AC as well as helping to expand its growing visitor and customer base.

For three years, Marrandino served as the president for Showboat, Bally’s, Caesars, and Harrah’s Resort, all of which are owned by the Caesars Entertainment. It was reported that he departed in order to look into new opportunities. No other details were given.

January 31, 2013

Ohio County Schools Get $350,892 From Casino Taxes

Filed under: Casino — Tags: , — OCE News @ 3:11 am

Ohio’s Columbiana County school districts got some good news when they received some $350,892 in casino tax revenue in a recent statewide distribution. The total of that distribution statewide hit $38 million. The Ohio Department of Taxation distributed the money which represents only the initial payment that state schools are due. Casinos only began to open in Ohio last summer.

According the plan, these tax revenues are to be handed out two times each year and they are based on a per-pupil formula. It works out to about $20 per Ohio student. 88 percent of the money went to traditional schools in the county and the remainder will go to adjoining counties that are schooling local students. Online and charter schools will also get some money. Even though there are some 612 traditional Ohio school districts, 1019 schools are to get some of the casino tax revenue.

While the money is certainly welcomed, it is not enough to offset the losses that were seen by state funding cuts that the school districts have seen over the last few years. Some school officials have already voiced concerns that the Ohio legislature may start treating these casino tax revenues as they do state lottery profits. Those profits were supposed to be used for education purposes. While a part of these profits are being directed to schools, it does not offset what cuts in education funding have already done to school budgets.

It should be noted that as these new casinos get their footing, their profits may increase. This, of course, would mean more money to Ohio school districts, both traditional and charter. This would be seen as a good thing by most residents of the state.

This new money is generated from state taxes that are currently being imposed on three casinos in Ohio. Another casino, to be located in Cincinnati, is planning to open its doors sometime in March. Of the money that is brought in, school districts are supposed to get 34 percent. 15 percent is then to be divided among the largest cities in Ohio, and the remaining 51 percent is to be paid out to counties each quarter.

In July of 2012, Columbiana Commissioners got casino tax payments that totaled more than $93,000. They received more than $187,000 in October. It has been reported that they are to receive more than $249,000 in January. This will bring this one county’s total to more than $530,000.

While the current school budget is still in trouble, these disbursements of casino tax revenues do show that casinos can be profitable for local governments and school districts. This could help to make it easier for new casinos in other states to get approval. It is no secret that many local authorities are struggling with their budgets, and this type of added revenue. Casinos also bring in new jobs, both temporary (construction) and permanent, both of which help boost local economies.

It is somewhat certain that more local and state agencies will be watching to see how casino tax revenues continue to help or hinder local economies.

January 29, 2013

Six Down Years for Atlantic City Casinos

Filed under: Casino — Tags: — OCE News @ 3:11 am

Revenues numbers for 2012 show that Atlantic City casinos had their sixth year of decreased revenues. The casinos took in a little more than $3 billion during the year.

Back in 2006, the city’s casinos raked in a record $5.2 billion, since that time, however, AC has seen a decrease of its gambling revenues of more than 41 percent. It has also seem the loss of thousands of jobs. The city is steadily losing ground as the second-largest gambling and casino market in the US.

Superstorm Sandy did not help matters at all, causing the casinos to close up. This was the second shut down the city had to endure in the last year or so. Casinos were not damaged, but the storm was definitely responsible for keeping people away. The storm did damage many of the homes of those who would normally be visiting the casinos and that, too, caused a loss of revenue.

The storm is blamed for the city’s hard-hit November numbers which showed a staggering 27.9 percent decline. This was the biggest monthly decrease ever. The numbers for December were better but were not enough to pull the yearly average up significantly.

It was reported that the local casinos (12 of them) brought in $3.05 billion during 2012. This is down some 8 percent from the year 2011. Of those casinos, 11 of them reported annual declines. Only the Golden Nugget Atlantic City was up, and it was up by only 4 percent, coming in at $130 million.

Some believe that the city’s problems began back in 2007 when casinos in Pennsylvania began to spring up. This was followed by the near collapse of the national economy and high unemployment numbers that soon followed. Some experts suggest that if the weather stays calm in 2013 the city may see a rebound.

Of the losers for 2012, Trump Plaza Hotel and Casino led the pack, falling some 25 percent to hit $102.5 million. Second in line was Bally’s Atlantic City. It was down almost 22 percent, hitting $296 million. The Trump Taj Mahal Casino Resort reported that is was down be some 15.3 percent, hitting $295.4 million. This was followed by the Resorts Casino Hotel which decreased by 15.2 percent, to $130.8 million. The Showboat Casino Hotel reported that is was down by some 12.7 percent, coming in at $225 million. Caesars Atlantic City said it was off by 11.1 percent coming in at $358.5 million.

Also down 11.1 percent for the year was the Atlantic Club Casino Hotel, which has drawn interest from an online gambling company interested in buying it. The casino won just over $127 million from gamblers. The Tropicana Casino and Resort was down nearly 10 percent for the year, to just under $250 million, and Harrah’s Resort Atlantic City was down 9.1 percent to just over $399 million. For Borgata Hotel Casino the numbers show that it had a loss of 6 percent, and the other casinos showed the same losses in general. One can only hope that 2013 will be better.

January 27, 2013

New Report Suggests Less Revenue for Toronto

Filed under: Casino — Tags: , — OCE News @ 3:08 am

Toronto was recently notified that the revenues it had been told earlier were actually going to be much less. The new report estimates that the city can only expect a provincial hosting fee somewhere in the neighborhood of $100 million a year from a proposed downtown resort and casino. This amount is less than what earlier consultant’s from the casino proponents had suggested. They had said that the city could expect around $200 million per year.

The Ontario Lottery and Gaming Corporation has now confirmed that the new estimate of $100 million (or less) for the city was compiled and is now ready for public consultation concerning the future of the new project. Public meetings are expected to start within the next few weeks. The new data could mean problems for this project and will certainly make it harder to get a deal when the council meets.

Toronto Mayor Rob Ford and his executive committee approved back in November of 2012 to have the consultations after it had received an Ernst & Young report that suggested that the Canadian province could see up to (and possibly more than) $200 million per year from the project. At that time, the committee directed the city manager to refine those estimates before the proposal was given for public consultation. As one might image, the local government was happy to see that so much money might be finding its way into the city’s coffers. This new data has put a damper on that.

Mayor Ford has said in the last that he supports a new casino if it brings in job and money to the city which is in a looming crisis. According to the city manager, the original numbers suggested by the Ernst and Young study would have gone a long way in helping to get the city budget back on track. The lowered estimate came about when potential site fees and casino operation costs were reanalyzed. The actual amount of fees that Toronto would see would depend on the actual size of the capital cost for the project building. In other words, the more the facility would cost the more Toronto would get.

The public will receive information on the new data and will then vote yes or no for the casino. The vote will take place on March 20. Afterwards, in April, the city council has its own vote on the project. Some council members have already expressed concern over the new numbers stating that they may not be reliable either. Two major obstacles to the project are increased traffic and a lack of adequate parking in the area.

As of this writing, the debate continues and it is not at all certain that this project will move forward given several members of the city council had already opposed it. And this was before the news of decreased revenues was brought to light. It is not clear at this point how the local residents feel about the new casino and resort. That should become more evident once the public vote takes place in March.

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