RSS 2.0 FeedVol. 3, No. 5, May 2007, Global Gaming Roundup
May 2007
Kansas OKs Gaming
Four state-owned casinos, three racinos permitted
The Kansas legislature last month approved gaming in a bill that would allow four privately operated, state-owned casinos in several counties and distribute 2,200 slot machines among the state’s three racetracks: Woodlands, Wichita Greyhound Park and Camptown Greyhound Park.
The bipartisan bill would also permanently renew the state lottery, which has been subject to being brought back every few years to the legislature. Governor Kathleen Sebelius signed the bill in April.
Among those following this process closely are supporters of a casino in Wyandotte County’s Woodlands racetrack. Rep. Tom Burroughs, who represents Kansas City, was optimistic.
“This is huge,” he said. “This is the best position we’ve been in maybe ever.”
The casinos that would be authorized in four counties would be owned by the state, as required by the Kansas constitution. An earlier vote on a bill that would have moved to amend the constitution to allow commercially owned casinos was defeated. Although owned by the state, they would be run by private enterprises, which would pay a one-time fee of $25 million. The residents of the counties would have to vote to allow the casinos.
As much as $200 million could be generated, according to estimates. The state would get 22 percent of the profits from the casinos (with local stipends and fees, the effective tax rate will be 27 percent) and 40 percent of the slots revenue at racinos. This money would be earmarked for problem gambling programs, debt reduction, roads, property tax relief and state employee retirement and other long-term needs. Three percent would go to the counties where the casinos are located.
Supporters told opponents that the state’s residents are already gambling, at the state’s four Indian casinos and at casinos in Missouri and Oklahoma. “It’s Kansas money. It should stay in Kansas,” said one legislator.
Whale Plays Vegas
James Packer places big bet with Fontainebleau stake
Kerry Packer, the late Australian media baron and one of the world’s biggest gamblers, placed a number of major bets in Las Vegas in his day. His son, James, is now placing a bet on Las Vegas.
James Packer, who assumed the chairmanship of his father’s company, Melbourne-based Publishing and Broadcasting Ltd. (PBL) upon the senior Packer’s death in late-2005, last month announced PBL was entering the U.S. casino market with a $250 million stake in casino and resort developer Fontainebleau Resorts.
That investment buys PBL a 19.6 percent interest in Fontainebleau, which is developing a new casino and resort property on the Las Vegas Strip and also owns the Fontainebleau Resort at Miami Beach.
“This transaction provides PBL Gaming with a first-class entrance into the U.S. casino resort market, in particular, the renowned Las Vegas Strip,” Packer said.
Fontainebleau was co-founded in 2005 by Jeffrey Soffer, a principal of real estate developer Turnberry Associates, and Glenn Schaeffer, former president and chief financial officer of Mandalay Resort Group.
“Jeffrey Soffer’s Turnberry organization has an enviable record in America of developing some of the most exciting tourism and residential projects, whilst Glenn Schaeffer brings a wealth of casino resort experience and expertise from his successful career at Mandalay Bay,” Packer said.
Soffer welcomed PBL’s investment.
“We are extremely pleased to have such a renowned industry leader as James Packer’s PBL as our cornerstone investor,” he said. “We are excited about this strategic alliance between our two companies and are confident this partnership will lead to mutually beneficial growth opportunities.”
Fontainebleau Las Vegas, being developed on the site of the former El Rancho Hotel and Algiers Hotel properties on the north end of the Las Vegas Strip, will include a casino, luxury hotel rooms, condominium-hotel units, restaurants, nightclubs, a spa and convention facilities. It is expected to open in late 2009.
The move cements PBL’s plans to expand its casino empire beyond Australia and the Chinese province of Macau and comes after several failed attempts to enter the Singaporean and Russian gambling markets.
It follows just weeks after the company announced it had formed a joint venture with Macquarie Bank to buy Gateway’s nine Canadian casinos for $1.18 billion.
Interestingly, PBL’s first U.S. venture does not include sometimes partner Lawrence Ho and his Melco company, with which PBL is developing the Macau casino. Ho’s absence avoids any regulatory headaches, even though his sister, Pansy, was recently cleared by the Nevada regulatory authorities as a suitable partner for MGM Mirage’s Macau venture.
PBL has been on the lookout for quality gaming assets after generating $3.8 billion from the spin-off of some of its media assets into a 50-50 joint venture company with a private equity group last October.
Four state-owned casinos, three racinos permitted
The Kansas legislature last month approved gaming in a bill that would allow four privately operated, state-owned casinos in several counties and distribute 2,200 slot machines among the state’s three racetracks: Woodlands, Wichita Greyhound Park and Camptown Greyhound Park.The bipartisan bill would also permanently renew the state lottery, which has been subject to being brought back every few years to the legislature. Governor Kathleen Sebelius signed the bill in April.
Among those following this process closely are supporters of a casino in Wyandotte County’s Woodlands racetrack. Rep. Tom Burroughs, who represents Kansas City, was optimistic.
“This is huge,” he said. “This is the best position we’ve been in maybe ever.”
The casinos that would be authorized in four counties would be owned by the state, as required by the Kansas constitution. An earlier vote on a bill that would have moved to amend the constitution to allow commercially owned casinos was defeated. Although owned by the state, they would be run by private enterprises, which would pay a one-time fee of $25 million. The residents of the counties would have to vote to allow the casinos.
As much as $200 million could be generated, according to estimates. The state would get 22 percent of the profits from the casinos (with local stipends and fees, the effective tax rate will be 27 percent) and 40 percent of the slots revenue at racinos. This money would be earmarked for problem gambling programs, debt reduction, roads, property tax relief and state employee retirement and other long-term needs. Three percent would go to the counties where the casinos are located.
Supporters told opponents that the state’s residents are already gambling, at the state’s four Indian casinos and at casinos in Missouri and Oklahoma. “It’s Kansas money. It should stay in Kansas,” said one legislator.
Whale Plays Vegas
James Packer places big bet with Fontainebleau stake
Kerry Packer, the late Australian media baron and one of the world’s biggest gamblers, placed a number of major bets in Las Vegas in his day. His son, James, is now placing a bet on Las Vegas.James Packer, who assumed the chairmanship of his father’s company, Melbourne-based Publishing and Broadcasting Ltd. (PBL) upon the senior Packer’s death in late-2005, last month announced PBL was entering the U.S. casino market with a $250 million stake in casino and resort developer Fontainebleau Resorts.
That investment buys PBL a 19.6 percent interest in Fontainebleau, which is developing a new casino and resort property on the Las Vegas Strip and also owns the Fontainebleau Resort at Miami Beach.
“This transaction provides PBL Gaming with a first-class entrance into the U.S. casino resort market, in particular, the renowned Las Vegas Strip,” Packer said.
Fontainebleau was co-founded in 2005 by Jeffrey Soffer, a principal of real estate developer Turnberry Associates, and Glenn Schaeffer, former president and chief financial officer of Mandalay Resort Group.
“Jeffrey Soffer’s Turnberry organization has an enviable record in America of developing some of the most exciting tourism and residential projects, whilst Glenn Schaeffer brings a wealth of casino resort experience and expertise from his successful career at Mandalay Bay,” Packer said.
Soffer welcomed PBL’s investment.
“We are extremely pleased to have such a renowned industry leader as James Packer’s PBL as our cornerstone investor,” he said. “We are excited about this strategic alliance between our two companies and are confident this partnership will lead to mutually beneficial growth opportunities.”
Fontainebleau Las Vegas, being developed on the site of the former El Rancho Hotel and Algiers Hotel properties on the north end of the Las Vegas Strip, will include a casino, luxury hotel rooms, condominium-hotel units, restaurants, nightclubs, a spa and convention facilities. It is expected to open in late 2009.
The move cements PBL’s plans to expand its casino empire beyond Australia and the Chinese province of Macau and comes after several failed attempts to enter the Singaporean and Russian gambling markets.
It follows just weeks after the company announced it had formed a joint venture with Macquarie Bank to buy Gateway’s nine Canadian casinos for $1.18 billion.
Interestingly, PBL’s first U.S. venture does not include sometimes partner Lawrence Ho and his Melco company, with which PBL is developing the Macau casino. Ho’s absence avoids any regulatory headaches, even though his sister, Pansy, was recently cleared by the Nevada regulatory authorities as a suitable partner for MGM Mirage’s Macau venture.
PBL has been on the lookout for quality gaming assets after generating $3.8 billion from the spin-off of some of its media assets into a 50-50 joint venture company with a private equity group last October.
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