Casino Watch - October 2003

9 October 2003
Online Casino Advertising Practices Investigated

Federal authorities in the Eastern District of Missouri launched an all-encompassing look at the industry last month and sent out subpoenas to portal sites and mainstream media outlets that accept advertising for online casinos and sports books.

Sports books and casinos are both being targeted. The Department of Justice in the subpoenas argues that advertising for online casinos and sports books is in violation of the law, something with which many legal experts in the gambling industry take issue.

Redesigns and Upgrades

Two of the leading online casinos launched new versions of their sites this month.

Australia-based Lasseters Online rolled out a new version of its site at after it teamed up with Online Gaming Systems (OGS) to produce and develop the software used on the site. The casino now features a new look, revised graphics, more promotions and 21 new games, bringing the total to 59.

Also getting an upgrade this month was InterCasino, The redesigned site offers several new features, including a winner section that celebrates its biggest winners since 1996, movie-style game previews, and Spanish, French, Italian, German, Japanese and Chinese translations. was the first to unveil a new downloadable, Flash-based casino suite with custom-designed-for-consumer specifications that was developed by Parlay Entertainment. The software package includes a flexible menu system and offers full integration of any existing gaming sites that an operator may already have up and running. The software also includes Parlay's House Edge backend system and features 21 games.

Schwarzenegger Faces Challenge from Indian Tribes

California's new governor faces some old challenges when it comes to Indian gaming. During his campaign, Governor Elect Arnold Schwarzenegger pledged to get up to $2 billion from Indian tribes that operate casinos by renegotiating their compacts. The compacts cannot be changed, however, without the tribes' consent. Outgoing governor Gray Davis was unsuccessful in getting this done.

"The tribes do not have to give any more than they have already given," says Deron Marquez, chairman of the San Manuel band with a successful casino in Highland. "We've all seen how successful Davis was in achieving his $1.5 billion. He has not even been able to engage the tribes that are most likely to provide that kind of revenue stream. I would rather close my casino than give more money to the state of California."

Davis already signed 20-year compacts with 64 tribes and only about a dozen tribes have casinos large enough to consider re-negotiating their compacts to expand.

Changes in Chile's Laws Could Create More Casinos

International Thunderbird Gaming Corp. of San Diego hopes for changes in Chile's laws to double the number of casino licenses in the South American country.

Only seven casinos operate legally in Chile, where the Martinez family controls 70 percent of the business. Each casino has estimated annual revenues of $70 million to $90 million.

"Chile is a very stable market with low risk compared to its neighbors and where the gaming market is not very developed. For that reason, there is a good opportunity to develop a growth strategy in the Southern Cone," said Peter Lesar, director of Thunderbird Chile.

Thunderbird, which owns ten operations in Panama, Nicaragua, Guatemala and Venezuela, hopes legislators will opt for 20-year licenses and a simple gaming tax of 20 percent of casino revenues. The company is also pushing for casino's to be exempt from Chile's 19 percent value-added tax.

Pinnacle Entertainment of Las Vegas is also reportedly interested in entering the Chilean casino market.

NY Mayor Interested in Gambling Expansion

New York City Mayor Michael Bloomberg on Friday said he was "honestly annoyed" that the state only allows gambling on Indian reservations, adding that the city might as well have a casino too.

The mayor made it clear that he disliked gambling because it draws the people who can least afford to lose money. He added, however, "If everybody from New York City is going across a (nearby) border, why not keep the money here?"

Bloomberg's comments, made on his weekly radio show, sharply contrasted the cold reception he gave the governor's mid-May proposal to help the city solve its fiscal crisis by installing 4,500 video poker machines in Times Square.

Both the state and city already take part in gaming, Bloomberg noted on Friday, pointing out that they both have lotteries and that the city owns Off-Track Betting Corp.

Aristocrat Inks Deal with Station

Australia-based Aristocrat Technologies, the world's second largest slot manufacturer behind IGT, signed an exclusive agreement with Station Casinos to introduce the new Jeff Foxworthy slot game in Station's 11 Las Vegas casinos. The Jeff Foxworthy slot, recently approved for distribution in Nevada by state regulators, won't be made available to other off-Strip properties for 45 days. Strip casinos, however, will be allowed to introduce the Jeff Foxworthy game within a shorter period of time.

Tiger Attack Could Hurt MGM Mirage

The indefinite closing of the Siegfried & Roy magic show (following the mauling of Roy Horn) is the second big hit absorbed in a 14-month period by The Mirage casino and hotel on the Las Vegas Strip. Last year The Mirage's parent company, MGM Mirage, was stung with a $5 million fine and harsh criticism from state gaming regulators after it failed to file thousands of federal anti-money laundering forms, the closing of the popular Strip magic show was the second severe blow for the resort in the last 14 months.

Siegfried & Roy's 13 1/2-year sellout streak at The Mirage is testament to the illusionists' continuing popularity as well as their financial contribution to the property.

The duo and their cast of 267 performed six shows weekly before capacity crowds of 1,503 paying an average of $110 each. They performed about 45 weeks per year, translating to about $44.6 million in annual pretax ticket revenue.

With Horn still in critical condition, MGM Mirage spokesman Alan Feldman said it is inappropriate to talk about the financial fallout from the show's closure.