Casinos coming to Florida?

April 29, 2013 9:15 am

Florida lawmakers are following the classic playbook to build the case for more casinos in the Sunshine State.

First use taxpayers’ money to conduct a study about gambling. Make sure study touts benefits of gambling while playing down or ignoring the social and economic costs. Use that study to support votes to allow more casinos.

Call it the Casino Confirmation Bias. The Legislature recently agreed to spend nearly $400,000 to “comprehensively examine” gambling issues. The Legislature then hired Spectrum Gaming Group to conduct the study. Spectrum specializes in promoting gambling and casinos.

As Scott Maxwell writes in the Orlando Sentinel: “Gee, I wonder what it will find.”

Maxwell says that hiring Spectrum to study gambling is like “contracting Anheuser-Busch to do a study on whether drinking beer is OK.”

Of course, the casino lobbyists are the main drivers behind more gambling in Florida. Efforts to bring Las Vegas-style casinos to Florida failed last year but they remain undeterred.

As Maxwell writes: Before he was elected, Gov. Rick Scott “promised the Baptists that he would fight gambling. Yet right after he was elected, Scott jetted off to Vegas to meet with casino magnate Sheldon Adelson, who wants to build casinos in Florida — and who later cut a $250,000 check to Scott’s campaign. And now, according to the Sunshine State News, Adelson’s lobbyists are telling legislators they should start giving casinos tax breaks and incentives.”

The casinos aren’t even legal and already the lobbyists are working on tax breaks. That should give some indication as to what Spectrum Gaming’s study will find.

Steve Wynn’s toughest hand?

April 26, 2013 10:08 am

Casino mogul Steve Wynn’s company is under investigation for violating the Federal Corrupt Practices Act stemming from its efforts to enter the Macau market. Wynn is tangled in a messy lawsuit with a former business partner in which both men have lodged bribery allegations. He once poked an elbow through a Picasso painting, which he recently sold. Wynn also and faced off with a kidnapper who took his daughter and paid a ransom before the men were caught.

But Wynn now faces his biggest battle with his ex-wife, Elaine.

Elaine Wynn filed a lawsuit in federal court seeking to sell her shares of Wynn Resorts, which she was awarded as part of their $750 million divorce. The sale of half of her 9.6 percent stake could trigger a series of events that would threaten her ex-husband’s control over the $13 billion casino company and possibly his personal fortune, reports BusinessWeek.

If Wynn’s ex-wife wins in court, that may force the company to buy back $3 billion in bonds. The company is already deep in debt and would likely have to borrow more money to finance such a buyback. That could lead to a lower credit rating and complicate the completion of a $4 billion casino project in Macau. Despite Wynn’s problems, it is tough to feel sorry for a billionaire who made his fortune stripping wealth from gamblers, many of whom can least afford to gamble.

Casinos: ‘dime a dozen’

April 22, 2013 1:53 pm

Lawmakers and casino operators tout new gambling halls as a way to attract tourists and boost the economy. But a sports columnist in Canada argues against adding a casino in Toronto because they are a “dime a dozen.”

“Where’s the uniqueness? Where’s the lure to tourists when practically every American already has a casino nearby?” writes Dave Perkins of the Toronto Star.

Perkins points out that many casinos lose money. Others are in business with gangsters. And the arguments by lawmakers are prepared by casino lobbyists.

“Despite claims a casino is a cash cow, many of them lose money,” Perkins writes. He pointed out that Caesar’s posted a fourth-quarter loss of some $500 million and MGM has a dubious history. “Do a little Internet digging and look at the way it went about trying to get into business with the notorious Stanley Ho and his daughter Pansy in Macau. Google the words ‘New Jersey special report Pansy Ho Macau’ and pull up a chair. Read it and then say you want to do business with this company.

“Locally, politicians have the debate framed for them by paid lobbyists working for casino companies who are so honest they do things like run phantom “job fairs” for positions that don’t actually exist.”

Another story out of Canada points out that officials pointed to increased crime problems from casinos a decade ago. But now new officials pushing for a casino dismiss crime issues.

 

Albany gets back to business

April 18, 2013 11:28 am

After a two-week break, New York lawmakers returned to work (for three days) amid the stench of more scandal as a handful of their colleagues were busted for a variety of corruption charges. So how do the honorable lawmakers in Albany deal with the scandal?

“Dark humor and stiff drinks,” reports The New York Times.

Apparently, the gag running through the halls of the Capitol is for lawmakers to frisk their colleagues to see if they are wearing a wire after a senator was caught on tape arranging a bribe. “You run into them, and you feel them up and down,” Assemblyman David I. Weprin, a Queens Democrat, told The Times. “You’ve got to make light of it some days.”

If that doesn’t work, start drinking. The workweek in Albany usually runs Monday to Wednesday. That explains why on a Tuesday night legislators, staffers and reporters gathered at Elda’s, a friendly bar in the Center Square neighborhood, to discuss their, ah, four-day weekend plans.

But in general it was back to business as usual. Assembly Speaker Sheldon Silver, a Manhattan Democrat, held a closed-door pep talk to tell members “a few bad apples” would not ruin their reputation. Meanwhile, one of the accused wrongdoers, attended a brief Senate session and sat in the so-called “crooked seat,” reserved near the chamber’s doors for lawmakers who are in trouble with the law. (The fact that there is a reserved seat in the corner for lawmakers in legal trouble is a sure sign that Albany’s moral compass is askew.)

Indeed, one of the top items on lawmakers’ agenda is working behind closed doors to hammer out a plan to change the state constitution in order to allow commercial casinos. That process is already off to a dubious start, considering one casino operator cut a deal with Gov. Andrew Cuomo to build a $4 billion convention center in hope of securing exclusive casino rights to New York City. That deal failed but that has not stopped the lobbyists and money from casino interests flowing into Albany. By the time the casino process ends, Albany may need more crooked seats.

For those not keeping score at home, here’s a quick update on the recent corruption arrests:

* Malcolm A. Smith, a Democratic senator from Queens, was charged with trying to bribe his way into the New York City mayor’s race.

* Assemblyman Eric A. Stevenson, a Bronx Democrat, was accused of taking bribes from developers of adult day care centers.

* Assemblyman Nelson L. Castro, also a Bronx Democrat, resigned in a deal with prosecutors under which he had secretly recorded conversations with other lawmakers to avoid prosecution on state perjury charges.

* Assemblyman William F. Boyland Jr. a Brooklyn Democrat, was indicted for bribery and other alleged crimes.

Chum in the gambling water

April 15, 2013 4:02 pm

One of the most effective gimmicks casinos use to lure in frequent gamblers is offering so-called “free play,” or gambling credits.

These are essentially gambling vouchers to get people in the door. It is the equivalent of a fisherman putting chum in the water to lure sharks. The gamblers like it because they feel special and get to play with house money. But once they burn through the voucher, most gamblers dig into their own pockets. That’s exactly what the casinos want.

This story in the Atlantic City Press details how one casino has used “free play” to dramatically boost profits. The Atlantic Club increased the amount of free play it uses to lure in gamblers to $3 million a month from $1 million. The result was a 33 percent increase in profits.

That may be good for the casino. But the end result is luring gamblers in more often and stripping more wealth from them. One Atlantic Club member said the casino gives her upt to $25 in “free play” every time she shows up. As a result, she goes to the Atlantic Club three times a week and usually on the weekends. That comes to about 200 trips to the casino a year. Talk about feeling lucky.

Illinois casinos: “an open door to political corruption and organized crime”

April 11, 2013 9:00 am

Kudos to the Chicago Tribune for accurately describing what is to come if Illinois moves forward with its latest proposal to allow casinos.

In a strongly-worded editorial, The Tribune said the plan is “Worse than we thought.” The editorial is written as an open letter to officials in charge of the casino proposal. In one paragraph, the newspaper sums up the many the problems with the measure:

“This latest immense and cannily crafted bill would allow the number of Illinois casinos to grow from 10 to 23, and perhaps 24. We understand that Sen. Cullerton is curious about Mr. Bilek’s observation in our editorial that passage of this 555-page monstrosity is ‘an open door to political corruption and organized crime.’ ”

Don’t stop reading there. The editorial goes on to detail a number of other problems with the bill. Read it here. The editorial doesn’t even get into the social and economic costs of casino gambling. But there are enough problems with the bill as written for Gov. Quinn to once again do the right thing and veto this bill.

Bribery allegations engulf Sands Casino

April 5, 2013 11:21 am

The opening arguments in a lawsuit against Las Vegas Sands offered a window into the dubious ways used by Sheldon Adelson’s casino company to win friends and influence people in order to do business in Macau, China.

If true, the allegations paint an ugly picture of the corrupt ways the Sands used bribes to pave its way into Macau.

The case centers around an allegation by Hong Kong businessman Richard Suen who alleges Las Vegas Sands agreed to him $5 million and 2 percent of net income if he could, ah, persuade Macau officials to give Adelson’s company a casino license.

Suen is seeking $98 million in past damages and $230 million in future damages based on Las Vegas Sands’s profit from its Macau casino resorts. Turns out, he isn’t the only one suing Sands for alleged bribery. Asian American Entertainment Corp. is seeking $376 million for its help in Macau.

Former Sands China CEO Steven Jacobs is also suing Adelson’s company. Jacobs alleges he was fired after refusing to engage in inappropriate conduct and use “improper leverage” against Chinese officials.

Last month, the Sands admitted in an SEC filing that it may have violated federal anti-bribery laws. The filing said “there were likely violations of the books and records and internal controls  provisions.” Federal prosecutors are investigating whether Adelson’s company violated the Foreign Corrupt Practices Act.

 

The biggest losers

April 1, 2013 3:42 pm

The competition to lure gamblers to lose money at casinos in heating up in Maryland, West Virginia and Delaware.

The largest casino in Maryland will introduce blackjack, craps, roulette and other table games next week and stay open around the clock. The moves are expected to keep many Maryland gamblers from traveling to West Virginia and Delaware.

The expanded casino in Maryland is just latest example of the increased competition for gambling dollars. As more and more states legalize casinos, they are finding there is a limited number of gamblers to go around.

The competition also shows how casinos do not attract tourists, but instead depend on repeat local gamblers. Ed Sutor, president and chief executive of Dover Downs in Delaware, said 50 percent of his business comes from Maryland residents. Many of those gamblers live near the Maryland Live casino in Maryland.

Delaware’s slots revenue is already down 25 percent from five years ago, thanks to increased competition from area states. The Maryland Live casinos threatens to hurt business even further, prompting Delaware casino operators to seek tax breaks from lawmakers.

The upshot is – as a result of increased competition – many states can’t depend on gambling as a steady or growing source of revenue. As a result, the states are being forced to reduce taxes, which reduces the amount of revenue the states take in. Like addicted gamblers, state lawmakers are being forced to chase their losses.