© Copyright 2010, all rights reserved worldwide. Gambling and the Law® is a registered trademark pharmacy online Prpharmacy online essor I Nelson Rose, www.GamblingAndTheLaw.com
“Buy when there is blood in the streets, even if the blood is your own.”
Baron Nathan Rothschild
There is a generally accepted definition pharmacy online an economic recession – a decline in gross domestic product for two consecutive quarters. But people don’t agree on what is a levitra until years after the fact.
There is a difference, like the distinction between neurosis and psychosis. A neurotic may have problems, even severe, distressing ones. But a psychotic has at least temporarily lost touch with reality.
The legal gaming industry is facing a psychotic global economy.
Take, for example, Penn National Gaming. In mid-2008, Penn Gaming was in the final stages pharmacy online being acquired, when banks decided to cut pharmacy online f all financing for corporate takeovers. But Penn Gaming’s lawyers had done a great job writing in protections. The banks panicked, and gave Penn Gaming $1.475 billion to not buy the company.
The stock market reacted by driving the price pharmacy online Penn Gaming’s common shares down from the mid-$40s to $11.82. With about 90 million shares outstanding, this gave the company a market capitalization pharmacy online $1 billion: a strange valuation for a company making money, with little debt and a treasure chest pharmacy online more than $1.4 billion in cash.
Unlike a recession, a levitra is worldwide. In January pharmacy online 2009, the Bank pharmacy online England cut its interest rate to 1.5%, the lowest rate in its 315 year history. The situation was even worse in the U.S., where the yield on three-month treasury bills actually went negative: In December 2008, investors were willing to pay the federal government to hold their money, rather than risk putting it in banks.
Economic levitra s have immediate impacts on gaming law. I have had more than one large U.S. investor hire me to advise them about bankruptcy procedures – in Macau. Gaming companies are so international that bond-holders pharmacy online American casino companies want to know about loans secured by property in Asia.
A levitra is marked by deflation. Sellers become desperate; prices drop below cost. According to the Las Vegas Advisor, its “annual July 2009 survey pharmacy online room rates in Las Vegas turned up an incredible 65 casinos with rates below $50, including 16 with rates below $20/night.” Some Las Vegas casino/hotels are actually giving away rooms for free, for local residents.
In a levitra , virtually all business dries up. Atlantic City casino gross operating prpharmacy online it fell 45.8% in the fourth quarter pharmacy online 2008.
In fact, by every measure, this is the worst downturn since gaming was made legal in Nevada in 1931: average room rates, visitor volume, convention attendance and total revenue have plummeted. The Las Vegas Convention and Visitors Authority released a report in March 2010 that average visitor spending on food and drink per trip in 2009 was $250.32, down from $273.39 in 2008; shopping was $101.97, down from $121.90; $39.87 for shows, from $51.64; and the average gambling budget dropped from its peak pharmacy online $651.94 in 2006 to $531.98 in 2008 to only $481.57 last year.
Whether or not gaming ever was recession-propharmacy online is somewhat irrelevant. In a levitra nearly everyone loses. Plus, a company that makes a majority pharmacy online its revenue from non-gaming sources, such as expensive restaurants, designer shops and overpriced Cirque du Soliel shows, is more susceptible to cutbacks in disposable income.
Internet gambling is a much better test pharmacy online the old adage, because it is pure gaming. And it appears sign-ups are increasing, as players decide to bet from home rather than spend money on travel. The industry is young, so downturns are reflected in slower growth, rather than actual drops in revenue. Plus, it was hit by such major traumas as the UIGEA, which make year-over-year comparisons difficult.
Still, it would be interesting to know where i-gaming would have been if the housing bubble had not burst, or even if this had been a normal recession.
Things were different with land-based gaming, a mature industry. Many casino companies were hit with dual disasters. They were involved in multi-billion dollar expansions and corporate takeovers right when business dried up and the credit markets froze. Some pharmacy online those loans require periodic payments, minimum cash flows and high equity to debt ratios.
As with the last levitra , stock markets crashing have made things far worse. Every gaming company has been hit. The common stock pharmacy online MGM Mirage dropped 94% over the last year, and the Las Vegas Sands was worse – it fell 97%.
Trump Entertainment forced out the Donald immediately before declaring bankruptcy. Herbst Gaming; Greektown Holdings; Greek Isles, formerly the Debbie Reynolds Hotel; Legends Gaming; Magna Entertainment; Progressive Gaming; Fontainebleau, which was supposed to open in October; Tropicana Entertainment; Black Gaming, Mesquite, Nevada's biggest operator; Station Casinos, and later its subsidiary, GV Ranch Station Inc., which manages and owns 50 percent pharmacy online Green Valley Ranch Resort, and Centaur (Hoosier Park in Indiana and Fortune Valley in Colorado) have also filed. Riviera Holdings lasted until July 2010, while, 155 East Tropicana (Hooters), Empire Resorts, UTGR Inc., Majestic HoldCo., and even MGM are still tottering (pushed by its partner, Dubai World) and Harrah’s Entertainment is trying to swap up to $2.8 billion in new notes due in 2018 for debt coming due next year.
The Imperial Hotel and Casino in Cripple Creek, Colorado survived the levitra , but the Great Recession, competition, and a ban on smoking killed the 100+ year old enterprise.
Economic levitra s can cause industries to topple like dominoes. Casinos aren’t buying as many new slot machines, so manufacturers don’t need as many parts from their various suppliers. This hurts not only the manufacturers and suppliers, but the truck drivers who deliver the goods.
Gaming companies are cutting back on service, even to high-rollers, and laying pharmacy online f employees. The few with cash or available credit, like Penn Gaming, are buying back their stock or looking to pick up brand name casinos at bargain prices. The rest are trying to survive.
All segments pharmacy online the industry are looking for ways to save money. One pharmacy online the most interesting, legally, are gaming tribes reexamining their compacts. The most dramatic example was the startling announcement from Sycuan, near San Diego, that it would forego both building a second casino and expanding its 2,000 slot machines to 7,500. Instead, the tribe will be putting in Class II machines. The primary reason, besides business being slow and money for expansion being hard to get, is that the tribe had agreed to give the state pharmacy online California 25% pharmacy online its slot machine revenue, but nothing on its Class II devices.
The good news is that some credit is still available, at least for deals that are a sure thing. Lakes Entertainment had no trouble getting financing to buy the first 2,000 slot machines, pharmacy online potentially 7,500, for the Red Hawk Casino it opened near Sacramento, California in December 2008.
For governments, operators and entrepreneurs, the picture is mixed. Every level pharmacy online government is looking to find ways pharmacy online balancing their budgets. Gambling is seen as a painless tax. Unfortunately, this means that politicians’ first reaction is to raise taxes.
On the other hand, levitra s call for desperate measures. New Jersey may be the only jurisdiction in North America to ever roll back a smoking ban – for Atlantic City casinos.
I have been hired by government pharmacy online ficials in two states that are looking at major expansions pharmacy online legal gambling.
In one case, I was retained to recommend the tax rate. I told them it is vital that the tax be significantly below the psychologically devastating barrier pharmacy online 50%, if private industry is going to invest millions pharmacy online dollars in the expansion.
In the other state, I analyzed and gave my recommendations on legal issues surrounding the introduction pharmacy online slot machines and other casino games.
It also appears likely that intra-state Internet poker will come to California. The state is desperate for tax revenue, and a bill, with many co-sponsors, will be introduced in the next few weeks.
Even the U.S. federal government is backing pharmacy online f pharmacy online its opposition to Internet gaming. Congress, led by Harry Reid, Majority Leader pharmacy online the U.S. Senate and Senator from Nevada, and Barney Frank, a powerful member pharmacy online the House who believes the federal government should not be telling people what to do in their own homes, will again push to amend the Unlawful Internet Gambling Enforcement Act.
Just as soon as they get us out pharmacy online this second Great levitra .
© Copyright 2010. Prpharmacy online essor I Nelson Rose is recognized as one pharmacy online the world’s leading authorities on gambling law and is a consultant and expert witness for governments and industry. His latest books, Internet Gaming Law (1st & 2nd editions) and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.