Spring 2010 issue of Horizons

Raise Your Expectations CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS

Continued Growth in Regional Gaming

Within the last few years, the following regional legislative acts have been passed or approved by voters, resulting in an impact to regional gaming: • Kansas legalized commercial gaming in 2007 and opened its first state-regulated casino on December 16, 2009. • Proposition A passed in Missouri in the fall of 2008, eliminating the $500 loss limit and capping the number of casino licenses at 13. • Illinois imposed a smoking ban within casinos in 2007. • Illinois began accepting bids to reissue its 10th license in 2008. • Illinois legalized video gaming terminals in locations beyond casinos in July 2009. The increased legalization of commercial gaming will present new challenges to existing commercial and tribal casinos as they are faced with more competition while striving to enhance revenue. While the scenarios differ by property, jurisdiction and tribe, properties that succeed will share three common traits: 1. Strong patron loyalty through services and reward programs that exceed patron expectations 2. Leaders of technological innovation that improve the patron experience and reduce expenses incurred by the property 3. Commitment to a philosophy of continuous improvement of internal processes while complying with stringent regulatory oversight

By Daniel Holmes, CPA

The recent recession and regional legislative efforts have shifted the focus of gaming within the United States from Las Vegas to regional markets. In 2007, Las Vegas was the center of growth for the hospitality and gaming industry, with increasing gaming revenues and hotel occupancies in excess of 95 percent. Today, the majority of the construction projects in Las Vegas sit incomplete and under bankruptcy protection or on an indefinite suspension. In contrast, casinos within the Midwest have seen continued growth and benefits from the recession. Capital projects continue, as shown by the opening of a new casino in downtown St. Louis, significant capital investments in adjoining hotels and other amenities in several Missouri and Illinois properties, and the projected opening of a new casino in St. Louis County during the first quarter of 2010. In addition, revenues have increased because travelers are choosing to stay closer to home instead of traveling to bigger destinations.

STRENGTHENING PATRON LOYALTY

In order to strengthen patron loyalty, casino operators need to develop programs that distinguish themselves from neighboring competitors and establish personalized interactions with patrons.

34 u spring 2010 issue