Csnadian 6ie News

Issue 43 November, 1997 Wired Gaming Deserves to be followed closely!

from paper) and, should someone residents. As one sage put it to us, some where break rank, that it could why would Nevada, with more slots bring the tidy system now in place and casinos in closer proximity to its crashing down upon itself. residents than any other jurisdiction We all know about Caribbean-based on earth, need internet gaming? No internet casinos. They'll never Nevada operator is offering internet Politicians and gaming regulators as impact upon us because the public gaming now or will likely do so until well as their offshoots - casino and will be too worried about the the Nevada gaming commission lottery executives - have for many fairness of the games and anyway, writes the regulations which it is not years taken comfort in the knowledge it's illegal for them to operate, or expected to do until the state sees that restrictive legislation, the grant accept bets in Canada and the what internet legislation Washington of licences, and government United States. passes this spring. We are told that ownership shield them from the while Nevada is lobbying to have the onslaught of competition. It's end of debate, you won, to the legislation written in a way that extent that you believe that every- permits Nevada operators to receive While some bristle at the power and one knows the law and follows it, bets from any jurisdiction which has privilege this gives to those in and that you believe governments itself approved gaming (we guess that control, it is a system which has given have the technology to catch those leaves Canada in and Utah out), this is the public a measure of protection who do not. a long shot. Watch for them to target while allowing governments and To play the devil's advocate, what Asian and other less regulated those fortunate to have licences, to jurisdictions which leaves our system benefit enormously. do we do if people start betting significant money (who would add intact but will we then want to do this Within the Canadian context, the it up or decide what 'significant' too? federal Criminal Code continues to is?) on off-shore internet casinos or Canada's lotteries have wisely kept an buttress the status quo while a international lotteries and it became eye on internet gaming since 1995. political horsetrade agreed to over a apparent to the guy on the street that Late in that year the Inter-Provincial decade ago binds the federal and the government lacked the tech- Lottery Corporation created a sub- provincial governments to one nology, as we understand is the case committee to monitor the growth and another. While the federal govern- today, to catch them? use of the internet as well as look at ment has, at times, been tempted to let We have talked with many internet legal and regulatory areas impacted by go, both fear breaking the bonds lest a casino providers - few understand internet gaming. While the sale of horde of other issues come rushing in. why anyone would want to operate lottery tickets, especially with recent It is not our intent to say that this is out of North America - and they advances in encryption technology, is about to happen. To the contrary, the have few concerns about law increasingly viable, 'in home' lottery provinces are more dependent on enforcement. Their biggest concern sales has a stigma with which their gaming revenue than ever before is to build credibility with the public governments may still be hesitant to and the feds, for now at least, have and, the flip side of this, to stay grapple. 'Rogue' state lotteries in other fish to fry. We do think, away from scandal. Sound familiar? Australia and Germany (in Australia however, that technological advances What of the likelihood of someone states have their own criminal codes in gaming (internet, wide-ban within the established gaming order and lotteries) could pose a threat to telephone lines) will soon transform breaking rank? Canada's lotteries if they start using the way in which states and the internet to sell their tickets in provinces: conduct gaming within Nevada recently agreed to allow Canada. their own jurisdictions (a move away licensed operators within that state to offer internet gaming to its This past spring a Private Member's Page 2 Canadian GAMING News Bill (Bill C-353), which would have I I amended the Criminal Code to allow I Developments to Watch . . . the federal government, either alone I or in conjunction with the provinces, Alberta As part of their response to the to conduct and manage a lottery Several months ago we wrote that surprise August RFP, respondents scheme on the internet, was we expected the Alberta Gaming were to identify new products to introduced into the House of and Liquor Commission to link supplement the existing three Commons. For the purposes of the authorized BOT games. Revised code, a 'lottery scheme' includes all some of the slots in Calgary and Edmonton casinos in a progressive security features will also attempt to forms of gaming including casino and reduce 'leakage'. While the RFP bingo. While Private Members Bills and that this would be done in rarely go anywhere (this Bill died October. This has happened with stated that one company would also when the federal election was called), four slots in each city's five casinos be selected as sole retailer, we gather C-353 is interesting for two reasons: now linked. An unexpected bonus that this has not happened and that all for the casinos was the current retailers will stay in place. First, it would have forced the federal commission's decision to also link October was a big month for Len government to take a stand on this the two cities immediately. Up until issue, if only to say it did not want the Stuart. In addition to being a major the time of the decision it was shareholder in Stuart Entertainment, bill to proceed. The feds would love expected that the linking of the two to get into gaming without appearing which owns Bazaar & Novelty, Stuart cities would come as a second step to break the deal negotiated with the is also a major player in the Star of provinces and, to this end, it is later on. Fortune group which won the right to interesting that they allowed the Bill A Mikohn Gaming wide-area own and operate 5 full time and 2 part to receive second reading. Since the progressive system is being used to time Ontario charity casinos. internet did not exist at the time of link the total of 40 slots. Four Specialty Print, owned by Jack and that agreement, the feds might have Jackpots, worth a total of Jim Johnson, pulled all the stops in its argued (if only to give themselves $73,25 1.06, have already been won. bid to win. Its initiatives included a some leverage in another area) that The largest was $39,729.59. four page supplement in The internet gaming is outside of that Financial Post and the appointment agreement. Break Open Ticket Contract Awarded of an Advisory Board. The board is While the provinces do not want the composed of two former Major- feds to enter any form of gaming, they The Alcohol and Gaming Generals, a former Chief of Police of also know that they need the federal Commission of Ontario announced Metropolitan , and a former government's support to amend the October 3 1 that Bazaar & Novelty Ontario Cabinet Minister. Criminal Code to get into internet and Specialty Print (Nevadaman) gaming themselves. Even though an have been selected to be the sole Northern Belle Casino amendment to this effect does not manufacturer of break open tickets We have not been able to get a appear to be high on the list of in Ontario for a period of five years confirmation nor a denial of a rumour provincial gaming priorities, things beginning November 3, 1997. The to the effect that Hilton Hotels Corp, could change quickly if someone companies, which are based in St. which owns the Northern Belle, has started poaching their customers. We Catharines, already have the lion's signed an option with a Detroit understand Denis Mills, the author of share of the Ontario market which proponent move the Belle to Detroit the first Bill, plans to introduce the commission estimates at two in the event the proponent wins the another. billion tickets annually. right to open a casino there. As a final point, the competition for Bazaar & Novelty will have the Despite the lack of a response, our market share is also prompting exclusive right to print tickets own understanding is that the Hilton 1 Canada's industry to intended for sale to all third party Ontario Casino Corp agreement look closely at the internet. Nevada retail locations. This will include allows the OCC to purchase the Belle race books can already accept bets all tickets sold by provincially between the 18th and 30th month of from outside of that state. In our licensed charities. Specialty Print Feature Interview this month, David the agreement for $1.00, or to require has been awarded an exclusive that Hilton buy it back for $6 million. Willmot, of the Ontario Jockey Club, contract to print tickets sold in talks about the OJC's action before As we are now at about the 25th conjunction with bingo events and the Federal Court of Canada. month of the agreement, the OCC will Depending upon what the court by charitable licensees (i.e. legions, soon have to decide its future plans decides, the door could open for hospitals) selling tickets from their for the Belle and, even though there Canadian horse racing to accept off- own premises or from a premise are other boats for rent, whether or shore bets which is exempt from registration not is wants to have the Belle cross under the Gaming Control Act 1992. the river. Canadian GAMING News Page 3 I I Feature Interview purposes? Willmot: The OJC has an option to buy back Fort Erie at a nominal price 1 David Willmot if the new owners do not operate the President, C.E.O. track for at least two years. This Ontario Jockey Club option was insisted upon to protect us from a pure land flip. Scion of a wealthyfamily which,for a Greenwood Raceway, Mohawk, time, was the second largest Garden City and Fort Erie. Sack: How about Mohawk shareholder of Molson Breweries, Racetrack? Any plans to sell David Wilt knows corporate Canada Sack: The OJC was also listed on Mohawk and concentrate all your and, as President and C.E. 0. of the the Toronto Stock Exchange at one resources on Woodbine? Ontario Jockey Club (OJC), sits in a point was it not? Willmot: No. chair once occupied by legendary Willmot: That's right. The OJC industrialist, E. P. Taylor. was listed on the TSE until 1971 Sack: Woodbine is the jewel in the crown of the Canadian horse racing David Willmot joined the OJC's when Taylor took it private and industry. What makes it special apart Board in 1984 and was appointed its made it a non-share, not-for-profit C.E. 0. in December, 1995. He jokes corporation. As such, the OJC is from the fact that it serves the large now that his appointment as C.E.O. obligated to reinvest any profits in Toronto market? was, in part, a challenge for him to the horse industry. There are at Willrnot: Woodbine is many times make good on the major changes he present 19 members of the OJC, all the size of its nearest Canadian had been advocating since joining the of whom are directors. competitor and one of the largest board. tracks in North America. It is also the Sack: What prompted the sale of only track in the world, to my Sack: The Ontario Jockey Club Greenwood Raceway several years knowledge, which is able to offer live (OJC) has been prominent in ago and Fort Erie Racetrack more Standardbred and Canadian horse racing for many recently? racing on the same day. years. Tell us a bit about the history Willmot: Greenwood, depending of the OJC. upon how the fixed overheads were Sack: Why can't other large tracks do Willmot: Over 100 years ago the allocated, was marginally profitable. this? Government of Ontario granted With the advent of other forms of Willmot: Standardbred and charters for 15-day race meets to a legal gaming, the OJC7s business Thoroughbred tracks each have number of associations so that they declined and it was decided that we different track lengths, surfaces, as could run horse races and offer were spreading our business over well as different stabling and purses. In 195 1 E.P. Taylor, owner too many fixed assets. Greenwood handling requirements. So you can't of Windfield Farms and a major horse was sold so as to consolidate our run both races on the same track. breeder and owner, consolidated the business at Woodbine. Woodbine has three separate racing industry by buying many of these Fort Erie was a different case in that surfaces with the Standardbred track charters and closing the tracks down. it had been losing money for a ringed by the longer Thoroughbred He then expanded his remaining number of years. Four years ago the track. tracks and, in so doing, offered larger government and the horsemen Our facilities at Woodbine are such purses. This, correspondingly, gave agreed to subsidize its operation. that, for the first time ever, the breeders an incentive to breed a better When the subsidy ended earlier this prestigious Breeders Cup, which quality of horse and racing improved year, and the track was still not brings together the best horses from significantly in Ontario. profitable, we sold it on the around the world, was run here in One of the charters which he bought condition that it continue to operate October of 1996. This is the first time was that for what became Greenwood as a racing track. We could have that the Breeders Cup was ever held Raceway in downtown Toronto. In shut it down, thus eliminating outside of the United States and, even those days Greenwood was called competition, and got more for it on though he is no longer with us, we Woodbine. a break-up basis, though this would have to thank Charles Taylor, E.P. Recognizing the need for a world- have been contrary to our over- Taylor's son, for helping to make this class track, Taylor built Woodbine in riding objective of promoting the possible. Few know that Charles was 1956 and renamed the downtown industry. a founder of the Breeders Cup. He track Greenwood. At the height of its brought the initiative instant size, the OJC operated five Sack: For how long must Fort credibility and international attention racetracks, namely: Woodbine, Erie's new owners operate the track by being one of the first to commit a before it could be sold for other stud fee from each of Windfield's Page 4 Canadian GAMING News stallions to fund the Breeders Cup. share from other forms of gaming. We were told, without any advance This was an incredible commitment consultation, that there will be VLTs when you consider that for a period of Sack: The OJC and the CPMA are at our tracks. The Budget stipulated time the first stud fee for Northern now before the Federal Court in that the racing industry would get 10% Dancer was $1 million. Ottawa on an issue related to this. of the revenue generated by the VLTs. What is this about? This number was so far out of line with Sack: There have been stories for Willmot: It's really us and the any other jurisdiction in North years about the OJC's debt load. Tell Department of Justice which is America that it appeared to be us about this. representing the CPMA. We are absolutely unbusinesslike and Willmot: When Taylor took the OJC there because the CPMA has told us inequitable. When we asked what private in 1971, shareholders had the that its legislation will not allow it to study and analysis had gone into the choice of converting their shares to give us permission to use the internet 10% figure, we received no answer. cash or to debentures carrying a 10% to place bets even though we can use We asked Ernst & Young to do a study coupon. $55 million worth of shares the internet to post real-time racing of other racetracks in North America ., were converted to debentures - think statistics. This makes absolutely no with slots and VLTs to see what of what that would be in today's sense to us. Why can we use a revenue sharing agreements had been dollars. We paid off the debentures in telephone line to place a bet but not arrived at to protect the racing industry 1991 and refinanced with Manulife. use a telephone line which carries an from cannibalisation and to give the Not many organizations, excluding internet signal to place this same racetracks the on track means to the government, can continue to exist bet? We have asked the Federal compete with new off track with debt financing alone and no Court to give us an interpretation of competition. They told us that the equity capital. the CPMA's regulations as they average North American split was over relate to this issue. 50% of the gross revenue going to the Sack: And how much of the $55 racing industry with this number going million remains outstanding now? Sack: When do you expect its as high as 75% at Assinaboina Downs Willmot: Approximately $40 million. decision? in Manitoba. Willmot: We expect this to be We passed copies of this study along Sack: Thinking about your recent handed down this February. to politicians and officials across the initiatives in simulcasting and the government thinking that it would give internet, and the sale of Greenwood Sack: In 1993 the OJC joined with them a better idea as to the and Fort Erie, it appears that you are ITT Corp to submit a proposal for requirements of our industry. We in the midst of a significant shift away Casino Windsor and, just recently, were shocked when the government from plant and toward wires. Is this the OJC joined with Windsor totally ignored the study and simply accurate? Raceway and Holland Casinos to bid told us that we were going to get 15% Willmot: Very much so. Today we on Ontario's charity casinos. Both of VLT gross. No one knows where bring in simulcast signal to were unsuccessful. With regard to that number came from. We were supplement our live racing the last bid, why did your group horrified when it also said that 8% of programmes. We started the lose? this was for operating costs and that distribution of these products off- Willmot: We have not yet been told we would have to reach an agreement track by opening our teletheatre why we lost. As recently as the with the horsemen for a sharing of the network in the Greater Toronto area, Ontario Horse Racing Industry remaining 7%. What kind of an which now comprises about 27 Association (OHRIA) annual agreement provides that one partner teletheatres. meeting, the minister responsible for pays for all the renovation costs and We are committed to expanding our this initiative, David Tsubouchi, expenses to earn 15% while the other distribution network by aggressively assured our industry that it would partner gets 85%? The government moving forward in the area of play a prominent role in the charity claimed that one of the reasons for interactive home wagering. Last June casino initiative and yet, when the introducing these machines to we launched Horseplayer Interactive finalists were announced, none of us racetracks was to help the racing which is a combination of live racing were anywhere to be seen. industry, but we see this a win-lose signal on wireless cable, telephone We are very frustrated by the scenario. We believe that a more account betting, and the use of the government's inability to get its act equitable revenue sharing arrangement internet to communicate the relevant together when it comes to its gaming would result in a win-win scenario and racing and handicapping data. initiatives and by its inability to would make much more sense in the accept advice. There are too many context of an overall integrated While the system is at a very early gaming policy in the Province. stage of development, we believe that different agencies involved with one not knowing what the other is doing. taking racing into the home is critical Sack: What of the OJC entering into if racing is going to claw back market One encourages you to do something while another slaps you down. an arrangement with the companies Canadian GAMING News Page 5 which did win the right to operate charity casinos to have their casinos Casino Regina Labour Agreement Signed located at your tracks? 3 Willmot: There would be a lot of irony in this given that the government did not see fit to give us the right to do this ourselves. I'm not ruling anything out though we have absolutely no interest in simply being a landlord where a third party operates a casino in our facility and poaches our existing customers. The government believes that we should be prepared to accept a small share of VL revenue because the machines will attract thousands of new people to the racetracks which we can then cross-sell and cross-promote to pari-mutuel wagering. The John Lipp, Chairman of the Saskatchewan Gaming Corporation's Labour experience in other jurisdictions Relations Committee and Nycole Tyrmel, National Vice President of the simply does not support this thinking. Public Service Alliance of Canada sign the first collective agreement to be The VLs will only make a reached between the casino and its dealers, security staff, slot attendants, and related staff. The October 20 agreement covers 300 of Casino Regina's 526 contribution to our industry if we are employees with membership in the union a condition of employment. Not allowed to utilize sufficient VL profits covered are restaurant workers, represented by the Retail, Wholesale and to invest in our facilities and purses as Department Store Union and ancillary services such as parking and cleaning tracks elsewhere in North America are staff which are contracted out to third parties. doing. There is a grave danger to our industry if we fill our parking lots A joint union management committee has also been created to ensure that the with VL players, take the risk of casino achieves 50% aboriginal employment within three years. The renovation and expenses, and receive agreement is based on progressive principals including employment and pay so little of revenue share. The equity, gender neutral classification, and a zero tolerance policy on racial and government thinks we should be sexual harassment. overjoyed to receive the machines, but we need to do so much more. we have not spoken with one expert, Sack: Thank you! participant or other government Our industry employs 30,000 people involved in gaming which believes directly and indirectly. The Final drafts of our interviews are this is either a workable or equitable government's primary concern reviewed by our guests before arrangement. appears to be to maximize its own publication returns and to keep us operating at a Sack: The Government of Ontario subsistence level so that it can avoid last spring also lowered taxes on pari- the political flack which it would Experienced mutuel betting. take if our industry went out of Pit Manager business and these jobs were lost. Willmot: Yes it did and we were Casino Pit Manager with 12 grateful that the government Beyond this, it has shown, and is recognized that for many years we had showing that it does not understand years of professional gaming been paying amongst the highest taxes our industry and that it is not experience and an extensive in North America. In the Budget of interested in encouraging its growth. background in table games may 1996 the government lowered the We are not asking for anything training is seeking an upper pari-mutuel tax from 5% to 0.5% with special. Our industry would be much better off, and we would be management position. Gaming this reduction being shared amongst experience includes Britain, the customer, the horsepeople and the creating new jobs if we simply paid tracks. This reduction enabled us to an average North American pari- Caribbean and North America. invest $8 million in improvements at mutuel tax and if we were given the For more information call: Woodbine which is a good start, but average North American split of VLT profits. (905) 855-5370 Page 6 Canadian GAMING News the good news with Nova flat and Canadian Gaming W.I.N. falling. Casino Halifax Stocks International Thunderbird, which Construction rose 64% in September on news of a On October 29 the Nova Scotia revenue sharing agreement for up to Name Gaming Corporation announced 2,000 VLTs in Guatemala, Lo that the Nova Scotia government had .- continued its winning way with a -- approved an updated timeframe and .61 0.1 1 Advance Gaming 0.1 I -45 October 15 announcement of the process for the construction of (AGTI) 3 placement of up to 5,000 VLTs in Halifax's new, $97 million casino. Brazil. It's shares moved up to .04 1.00 Applied Gaming 1.35 -23 (See also our September issue). A ? Solutions (AGC) 5 $2.25 from $2.05 last month. , portion of this will be paid by Venture Pacific Developments ! Sheraton's minority partner, Purdy's 1 which is continuing with plans for a Wharf Development Ltd. small casino on the Nevada / The new timeframes have been California border, also moved up. included in as part of a package of PlayStar Corp on the other hand amendments to the Casino Design took a bath dropping 78% to $0.62. Development Documents. Construct- We were not able to reach the ion on the new facility is now company to find out what happened. scheduled to begin in February, 1998 Gaming Lottery Corporation, with completion set for September Co (GCD) 3 expects to have its internet casino - 15, 1999. 0.80 Int'l Hospitality Inc Galaxiworld, fully operational in A contentious issue for all parties was 1 (Iw1N.u) 2 early 1998. GalaxiWorld, which is the $10,000 a day penalty which the based in the British Virgin Islands, original agreement said ITT Sheraton will offer 52 games including pari- would have to pay if the new casino mutuel and progressive jackpots, did not open as planned on September lotteries, keno, sportsbook, video 15, 1998. The government's decision slots and other casino games. to not enforce this penalty resulted in 0.25 PlayStar Corp Gaming Lottery announced a loss the resignation of NSGC Chair Ralph (PSCK) 3 1 for the quarter ending July 31 of Fiske, as we wrote last month. $3.2 million ($0.13 per share) on revenue of $458,072. A second difficulty facing the government was that, whereas most We add a new company to our list of Sheraton's original negotiating this month - Starnet of Vancouver. team is still nearby, most of its A Starnet subsidiary, World Gaming original team - Bernie Boudreau, Services, operates an internet Lazlo Lichter and Clyde Horner are gaming operation engaged in the no longer around. Where traded: business of accepting, processing, I) TSE 2) CDN Unlisted 3)VSE and managing wagers through the The corporation estimates that 4) NASD over-the-counter 5) ASE internet on international sporting construction will create 240 direct After a rebound in September, events, pari-mutuels, international and another 340 indirect jobs. Not October was once again a bad lotteries and casino games. mentioned is the fact that hiring will be nicely underway as the province month for Canadian gaming stocks World Gaming's internet casino as they resumed their decline of July goes to the polls for an expected began accepting money bets the spring election. and August. Advance Gaming, third week of October from Casino Software Corp, Castello investors based outside of North The cabinet has not yet decided upon and Dion Entertainment now all America. World Gaming Services is the casino's request that it be granted appear to have no where to go but working with the Ontario Jockej 24-hour gaming on the four days that UP. Club to develop its internet gaming it does not have it now; that it be Nova Growth and W.I.N. Gaming, initiatives. The company's internel allowed to extend credit to out-of- big winners in the Ontario charity gaming operation is based ir town players, and that it be allowed to casino race, continued to shake off Antigua. serve free liquor to club members in the high-stakes area. Canadian GAMING News Page 7 stuck to the script, we wonder to mumblings in several quarters and tc Mark Stevenson what extent the government's claims that the delay in naming : objectives are being met. finalist for Casino Niagara (ar Departs Windsor One has to question the advantage announcement expected July gained from a seasoned operator August) is due, in part at least, to tht Casino Ltd who, for whatever reason, appears fact that he is not working on the filc Mark Stevenson, who joined to have trouble retaining executives. full time. Windsor Casino Ltd slightly more A bit of corporate memory walks The OCC will not comment on thi! than a year ago as President and out of the door each time an nor on questions related to process C.E.O. is no longer with the executive leaves and there is a Our own sense is that the delay ma) corporation. He is, we understand, learning curve, with less than peek be due to the involvement of othel considering other opportunities. We performance, each time a new ministries in the evaluation process had a good relationship with Mark person joins the team. Given this, and to difficulties evaluating the and wish him well. one has to wonder where Windsor tourism components of the proposals Kevin Laforest, Executive Vice Casino Ltd's executive suite stands And then there's the Pricc President, will, for a second time, on its corporate learning-curve and Waterhouse review of costs take over as Acting President; a role to what extent lessons learned associated with the construction 01 he played prior to Stevenson's during the past three and a half years the permanent Windsor casino. arrival. It may be time to give him are available as Windsor ramps up for Detroit. As we wrote last month, then the job. minister Bill Saunderson (he has Mark Stevenson is the third person An issue very much related to this been replaced by A1 Palladini in a to hold the top Windsor job in the has to be the future ownership of realignment of the premier's three and a half years that the casino Windsor Casino Ltd. WCL is cabinet), initiated an independenl has been operating. jointly owned by Hilton and ITT review of Windsor's cost after Corp. Given the animosity between statements to the effect that they had WCL's revolving door has also the two, one has to question how included 3 Vice Presidents of gone substantially beyond original effectively they are directing WCL. estimates. In its defence, the casino Operations; 3 Vice Presidents of A further question is the impact Marketing, and 3 Vice Presidents of responds that a similar review was which a change in ownership would done on the interim casino's costs Human Resources not to mention a once again have in the executive number of management changes at (nothing was found) and that the suite. All this has to be difficult on original $380 million figure for the less senior levels. While some of morale and it would probably be to these people have used their complex is from 1993. They say this everyone's advantage if one sold out figure did not include design changes Windsor jobs as spring-boards to to the other soon. better things, other changes, as we and a larger hotel. The WCL now wrote several months ago, have One would normally assume these expects the new facility to cost resulted in acrimony and at least one developments to be a current pre- around $500 million. lawsuit being brought against the occupation of the Ontario Casino As to the OCC vacancies, the premier casino. A rumour has Stevenson's Corporation which owns both is said to have vetoed five recomm- departure linked to this though we Windsor casinos though here again endations which the executive search have heard nothing to this effect there is a vacuum. firm hired to find candidates for the ourselves. The number one and two jobs at the position of Chair made. Wood is At the time that the Government of OCC are also vacant. OCC Board said to be on the list of those being Ontario chose its 'contracting out' Chair, Gil Bennett resigned this past considered for the president's job. model for the operation of Casino February and has not been replaced. This latter decision will not be made Windsor, and subsequently its other The President and C.E.O. position, until the new chair is named and can casinos, it advanced two major held by Domenic AlJieri until the participate in the selection of the reasons for doing this. end of March, has also still not been president. filled. The first was to gain instant access For the moment, all parties concern- to the talents and abilities of a Brian Wood, an Assistant Deputy ed are fortunate that Casino Windsor seasoned operator and the second Minister with the Ministry of and the Northern Belle operate in a was to place Casino Windsor in the Economic Development, Trade and market where the money just keeps strongest position possible to Tourism is Acting in both OCC rolling in. Management consistency compete with the casinos which positions while dividing his time and performance will be substantially everyone was expecting would soon between the corporation and the more important once three large come to Detroit. While Detroit has ministry. This has lead to quiet casinos open in Detroit. Page 8 Canadian GAMING News ------. i -- 1 1 Canada's Commercial Casinos - Monthly Revenue 1 1 (October 1996 - September 1997) 1 Nov Dec Jan Feb a July

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f Casino Windsor i::

Casino Rama

3asino de Montreal

/29.3

\ 14.7 Casino de Hull

3 Winnipeg 7' casinos 9.2

Casino Halifax I 4.1 Canadian GAMING News Page 9 major casinos. The casino cites this since the city will be part of Monthly Commercial traditionally heavy Christmas traffic LAC'S review of all proposals for as the reason for a strong December. Richmond. Since no one wants to Casino Revenue It also says that going to 24-hour antagonise the Richmond, proponents We intend to prepare the chart on the gaming in early September is the will do as they as they are told. left once a year to give everyone a most likely reason for its gains in Council will then decide if it wants to better visual understanding of how the that month given declines elsewhere. go further and, if it does, a public last 12 months went for Canada's Montreal's lower July and August meeting will be held November 19. commercial casinos. figures could be explained by After this, municipal staff will competition for entertainment We were not able to include Casino prepare their recommendations for a dollars from the city's many summer Regina on our chart as it does not special meeting of council to be held festivals. release monthly statistics. Hopefully December 16. This, in case you lost this will change soon. Given their Regional Updates count, is eighteen days after the lower revenue figures, we would have province's November 28 deadline for had to narrow the gradients on our British Columbia the submission of proposals. chart in order to meaningfully follow So, what proponents are being asked trends at MePhillips, Club Regent, the Speculation continues about the Lotteries Advisory Committee to do is spend hundreds of hours and Crystal Casino, Casino Sydney and many thousands of dollars to submit a Casino de Charlevoix. While space extending its November 28 deadline for the submission of proposals to proposal to LAC which will be did not permit this, Charlevoix's incomplete because the city will not monthly gross bounced from a January build additional charity and destination casinos though LAC tells have identified all its concerns, or low of $900 thousand to a high of $4.8 even said 'yes' until December 9. million in July. us no way. The speculation, we think, has its roots in wishful In order to preserve the integrity of its As Winnipeg's three casinos are in thinking on the part of proponents RFP process and to protect itself from close proximity to one another, we who are having a difficult time having to return these submissions as have added their total revenues and identifying and addressing incomplete, LAC has given plotted them as one to see how that municipal concerns. proponents 30 days beyond market fluctuates. Sydney's gross Proponents tell us that the messages November 28 to gain municipal moved in a narrower range from a approval. This, however, changes January low of $1.8 million to an they receive from municipal officials are often quite different from those nothing from the perspective of August high of $2.8 million. proponents. They will still be they get from the councillors. The first thing one sees from the chart Equally time consuming is the need submitting proposals to LAC for is that January is the worst month for to repeat this process, and go Richmond without knowing if, after everyone. For Montreal and Halifax through the same set of dynamics December 9, the the city is even a things got a bit worse in February. with perhaps one or two site. March breaks the winter chill with neighbouring municipalities without Despite the frustrations, we still everyone making a strong showing and knowing, at the end of the day, how expect a number of proposals to be most then dropping back a bit in April. much weight LAC will attach to the submitted from those who are Montreal's April number falls back concerns they raise. For example, committed to the industry and who more significantly than most while it given the strong disagreement will simply do the best they can to has a strong June. This is a weak between the province and the City of those who, in conversations with us, month for most others. Montreal's Vancouver, how much effort and appear to have more money than July and August numbers fall back money are they expected to spend brains and will simply charge in and while others sprint ahead only to fall trying to address Vancouver's grab what they can. Whatever route back in September with Montreal and concerns? is followed, we fully expect that LAC Hull picking up. A related difficulty is an insistence will have its hands full undertaking the evaluations. While Niagara takes the prize for the by some municipalities that their best sole performance ($50.0 in time table take precedence over that And who's likely to be in the August), Rama took everyone for the of the province. running? Try Great Canadian best roller coaster ride. From an Gaming, ABS Casinos, Gateway, The City of Richmond, for example, October gross of $34.6 it tumbled to a Modern Gaming in conjunction with is a prime casino site because of its January low of $19.2 only to shoot up a German partner, the Musqueam proximity to Vancouver. Richmond again to $41.8 in August. It then First Nation, the Squamish First has set a deadline of November 3 for dropped back to $35.6 in September. Nation, ClairvestICasinos Austria, proponents to submit their proposals We asked Montreal why its numbers at Grand Casinos, and several for review even though, technically, numbered companies including one times go contrary to those of other proponents are not required to do which is proposing a riverboat for New London, and Timmins will. charity casinos. Westminster. Remote chances are With the addition of East York, all of The G-8 members, for their part, are off London Clubs, Navagente. Metro Toronto will be covered by the and running. Most are in the final Despite municipal protests, most vote and, with the exception of stages of hiring, or have already hired recently a resolution passed at the Mississauga, a good chunk of the key executives with others having Union of British Columbia Greater Toronto Area. Given that engaged architects and other planners. Municipalities ' mid-October Annual the government has said virtually There also appears to be broad Meeting, the British Columbia nothing in defence or support of its agreement to pool purchases of such Lottery Corporation, at the direction programme, it has been a very one- things as security equipment, back-of- of the government, is proceeding with sided debate (was there one?) and we house equipment, chairs and so on. the installation of slot machines, as therefore expect the 10th to be a Other requirements, such as gaming space permits, in the province's charity bloody night for Ontario gaming. table, will likely be bought casinos. With so many of the government's individually. The 19 1 machines placed in the Great charity casino sites under attack, the To provide a structure for, and Canadian Gaming Corp7s Newton group of eight companies (G-8) encourage this co-operation on a Casino, in Surrey, were the first to be which won the right to operate them ongoing basis, the group has also turned on. Word is that their WPUPD must be wondering just what they formed a defacto association. A more is exceeding $400. Nice. Other slots will have left on the 1 lth. Ottawa, formalized structure is expected to have been installed in Lake City's Kingston, Belleville, Sault Ste. emerge within the next several weeks. Kelowna Casino (155), Gateway's Marie, Sarnia and North Bay have all As we have written previously, the Mandarin Centre (1 83) and Gateway's chosen not to vote as well as several Ontario Gaming Control Commission northern tier Metro Toronto cities Royal Towers (1 70). They will not be ' has said that Ontario's Monte Carlo turned on until Mikohn Gaming has such as Markham and Richmond Hill. With so many of the other sites, operators will go out of business March completed the set-up of its 3 1, 1998. In response to this, there is management system. We understand including most of those in the coveted Toronto market, likely to go discussion within that group of a class that no more machines will be installed action suit against the government for until additional space is available. down, clearly a Plan B is going to be required. damages and loss of income resulting The slots have $0.25 and $1 .OO from this decision. No final decision denominations with the door open for Optimists within the G-8 take has been taken. larger denominations at a later date. A comfort in the fact that the slot progressive is possible though not government has said it will not be Bingo until more machines are in place. bound by the results of the referendums and that, for The Registered Gaming Suppliers of As expected, the City of Vancouver municipalities to refuse to grant Ontario (RGSO) will hold its annual passed a by-law on October 7 business licenses and zoning would meeting November 14. President restricting charity casinos in that city to be to interfere with free commerce. Gerry Root and other members of his five, restricting their size to 16,150 sq Could be, but then why were the executive are expected to be opposed ft, and permitting them to relocate referendums held and, particularly in by a group unhappy with the within areas zoned Class I. the new City of Toronto, is this not association's stance on such things as The B.C. Lottery Corp has sent the kind of cause celebre that a new Superstar Bingo and honoraria for Vancouver a letter stating its intention mayor and council would like to cut volunteers in bingo halls. to take the city to court just as it did their teeth on - particularly when it over Club Keno machines. Once the has a basis for claiming to represent In response to criticism over Superstar, court appeals are out of the way we the will of the people? the RGSO, the Ontario Lottery Corp and the Provincial Charitable expect the remainder of the province's We do not sense that the government programme to be implemented. Activities Association (PBCAA) have has a Plan B. We suspect this means met and drafted a proposal for a that, for months to come, some of the progressive jackpot which would sites are going to be in limbo. Ontario's supplement SuperStar7s nightly Referendums For its part, the Ontario Gaming jackpots. It is intended that the Control Commission is continuing progressive jackpot would grow to At last count, 43 or 44 Ontario with its in depth background checks between $100,000 and $200,000. communities will vote November 1 0 on on the G-8. No contracts have been whether or not they want charity signed or are expected to be signed The OLC will shortly begin player casinos, VLTs, a commercial casino, or until this is complete, the results of research to gauge player acceptance of a combination thereof. To update the the referendums are known, and G-8 the initiative. A big criticism of municipal table contained in our last members know the government's Superstar has been that its jackpots are issue: Mississauga will not vote on strategy to deal with designated too small to attract attention. charity casinos though East York municipalities that have said no to Canadian GAMING News Page 11 consulted extensively, they were not, Monthly Canadian Money Laundering at the time of the announcement, able In July, the Department of Finance to tell us with whom they had talked Casino Statistics in Ottawa released a draft set of in the casino industry. A follow up guidelines for the amendment of the call several days later revealed that Readers have many times told us of federal government's Proceeds of while no one within the casino the importance they attach to the Crime Regulations. industry itself had been consulted, commercial casino statistics that we they had talked with several gaming The regulations, which were put in commissions and the RCMP. provide each month, and they have place in 1993, set out record- given us advice as to how we can keeping and client identification We do not have the space here to go improve them. Thank you. requirements for financial into each of the proposed This month's issue includes many of institutions and other corporations amendments which amount to seven the suggestions that have been made. and persons who could be used to pages. However, they are available Unfortunately, we still cannot include launder money. by calling Richard Lalonde (613) monthly gross revenue figures for 995-1814 at the Department of As Canada's casino industry was Finance. charity casinos in Alberta and British very small at that time, no specific Columbia. The gaming commissions provisions were established for Lalonde and his colleagues will be in those provinces do not keep them. With this latest initiative, the considering changes to the draft until attendance figures and do not release feds are now moving to make up for mid-December whereupon they will revenue statistics on a monthly basis. lost time by requiring casinos to begin their final work with the As well, while we try to keep our maintain records in respect of changes expected to come into force statistics up-to-date, we are at times customer accounts and large cash late winter or early spring. If you hindered by the casino's own transactions of $10,000 or more. have any concerns or recommendations, now is the time to reporting requirements which results Even though the feds claim to have in some figures being late. state them or forever hold your peace.

- City Month Total Table Total Slot Gross $ Change $Win/ tables change slots change million gross Player previous previous previous previous month month month month Sheraton Casino Halifax Halifax Sept -0.5

Sheraton Casino Sydney Sydney Sept -0.7

Casino de MontrCal Montreal Sept +6.4

Casino de Charlevoix Pte au Pic Sept -0.3

Casino de Hull Hull Sept +3.1

Casino Windsor Windsor Sept -2.9

Northern Belle Casino Windsor Sept -2.4 -- -- Casino Rama Orillia Sept -0.2

Casino Niagara Viagara Falls Sept + 76 -6.4

Crystal Casino Winnipeg Sept -- -- Club Regent Winnipeg Sept none -0.4

-- -. - Winnipeg Sept none -0.3

------Saskatchewan Indian N. Battlefordl Mar Gaming Authority Prince Albert/ Yorktonl Carlyle - Casino Regina Regina Sept -0.3 Canadian Gaming Summit & Exhibition '98 Canadian Gaming Summit & Awards Dinner Nominations April 4, 1998, Le Cabaret, Casino de Montrkal Exhibition'98 Planning for the second annual When submitting nominations please follow the guidelines below: Canadian Gaming Summit & Exhibition'98, to be held April 2-4, I) You may nominate only one,personfor each of thejve awards. 1998, at the Bonaventure Hilton Hotel 2) You are not required to make a nominationfor alljve awards. in Montreal is on schedule. 3) For eachperson nominated, please fax a short statement (200 Given the rapid growth of our industry words or less) saying why you wish this person to be considered. and the demands this is placing on people and corporations, a number of 4) You must include your name, address and telephone number the April 3rd and 4th morning with each nomination. workshops will focus on Human 5) A representative panel of respected individuals not nominated Resource issues - recruitment, training, will review all nominations and select allfinalists. performance measurement, advance- ment, legal restrictions, poaching, etc. 6) The names of all nominees will be kept confidential. Nominees Lunches on both days will feature will be told of their nomination and the name of their nominator. prominent speakers. The exhibition Nominees' employers will be told of their employee's nomination. floor is open each afternoon with IGT 7) The Canadian Gaming Summit & Exhibition '98 will provide each hosting a welcoming reception for all winner and a guest with complementary registration and dinner on the exhibition floor April 2. tickets. Other expenses will be borne by the winner's employer. Thirty companies have committed to exhibit. In a first for a gaming Outstanding Contribution to the Canadian Gaming Industry Award exhibition, the first 24 exhibitors will Nominees for this award (one award) may come from any sector each have 25 minutes of workshop time (charity casino, commercial casino, horse racing, lottery) and any to talk about their latest products. position within the Canadian gaming industry (Canadian-based gaming A black tie Awards Dinner will be held corporation). The person nominated must be employed within the the evening of April 4 at Casino de industry at the time of nomination (not retired) and, through hislher MontrCal's Le Cabaret showroom. work demonstrate an extraordinary contribution and commitment to There are many people within our promoting the ideals and growth of the Canadian gaming industry. industry who are deserving of recognition. Please take a moment to of Excellence Award (Total of Four Awards) read the guidelines to the left of this One award will be made in each of the following sectors: column and send us your nomination(s). Commercial casino Charity casino Horse racing Lottery Nominees for each of these awards (total of four) may come from any position within each of the above four sectors. Each person nominated must be employed within the sector for which helshe is nominated at the time of nomination (not retired) and, through hislher work, demonstrate an extraordinary contribution and commitment to promoting the ideals and growth of that sector. Please fax your nominations to: Ivan Sack, Chair, Canadian Gaming Summit & Exhibition '98 Fax (905) 855-1869 All nominations must be received by December 15,1997 Winners' names will be published in the February issue of Canadian GAMING News

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