Making the News

Sun Herald

Originally Published:Tuesday, December 4, 2007

In 2008, look for more partnerships between casinos and celebrities, more conventions at Mississippi casinos and more money invested in non-gambling attractions.



These are among the Top 21 Casino Industry Trends for the next year as identified by Spectrum Gaming Group, an independent research firm in Atlantic City, N.J.



Although the list includes global trends, "a lot of these pertain to Mississippi," said Senior Vice President Joe Weinert.

CONVENTIONS, CASINOS A GOOD FIT
Industry trends favor Mississippi

By MARY PEREZ
Sun Herald

BILOXI --

In 2008, look for more partnerships between casinos and celebrities, more conventions at Mississippi casinos and more money invested in non-gambling attractions.

These are among the Top 21 Casino Industry Trends for the next year as identified by Spectrum Gaming Group, an independent research firm in Atlantic City, N.J.

Although the list includes global trends, "a lot of these pertain to Mississippi," said Senior Vice President Joe Weinert.

Specifically mentioned in the list is the "growth of conventions in hub markets such as Las Vegas, Atlantic City and Mississippi as these markets become more aware of this segment's value." Meeting planners are looking at different markets, he said, and the concentration of casinos in Biloxi makes the area "a very attractive experience" after a day of meetings.

Another trend that fits Mississippi is the hub-and-spoke business model, Weinert said. His company sees casino properties in high tax markets developing alliances and mergers with destination properties in low tax markets such as Mississippi.

"That's where the casino operators are making big investments," he said, and even rewarding their best players in other markets "with a trip down to Biloxi." Seeing the amount of money being invested in casinos on the Coast, "that says much more than anything I could ever say," Weinert said.

Expect third-party alliances to continue, such as the recent investment of $5 billion by the country of Dubai in MGM Mirage and private-equity firms acquiring casinos such as Harrah's, owners of Grand Biloxi, and Penn National, parent company of Boomtown and Hollywood Bay St. Louis.

Weinert sees growing partnerships between celebrities and casinos. "These are becoming prominent," he said, not just in Mississippi where Jimmy Buffett is building the Margaritaville Casino in Biloxi with Harrah's and The Food Network's Paula Deen has signed to open a buffet restaurant at Harrah's Casino in Tunica, but across the industry. He said Harrah's is also seeking to team up with country music star Toby Keith, who owns bars in Las Vegas.

Spectrum Gaming sees more tribal casinos expanding into commercial casino markets, as Choctaw Chief Beasley Denson said the tribe may do after voters objected to a casino in Jackson County. "They're just like any other casino," said Weinert, with none of the tax advantages of a typical tribal casino and the same labor laws that pertain to commercial casinos. The tribes that own the Mohegan Sun and Foxwoods casinos in Connecticut now operate commercial casino slots in Pennsylvania, and "we believe the Seminole Tribe in Florida will do likewise," he said.

Top 21 Casino Industry Trends for 2008

  1. Adding more electronic table games to slots-only markets, taking advantage of new generation of electronic games.
  2. Additional joint ventures between casino companies and international investors, including arms of governments, which will be a major source of capital for the industry.
  3. Adoption of select new slot technologies originally designed for server-based gaming, including WMS's episodic "Adaptive Gaming," which allows players to interrupt, resume play at a later date.
  4. Continued conversion of racetracks to racinos, as well as non-gaming expansions to existing racinos.
  5. Development of "hybrid hubs" in which states opt for more reasonable tax rates, limited licenses in the hope of developing destination resorts.
  6. Evolution of "hub-and-spoke" business model, as properties in high-tax markets develop alliances, and mergers with destination properties occur in low-tax markets.
  7. Evolution of gaming companies into entertainment providers.
  8. Expansion of communal gaming, in which multiple players can play in same bonus round, with new generation of games that have smaller footprints.
  9. Expansion of gaming into urban markets, with the prospect of added convention business as the chief catalyst.
  10. Gaming destinations targeting gamblers, others priced out of higher-end Las Vegas properties.
  11. Growing partnership between gaming, high-end retail - and the marriage between retailing and casino loyalty programs.
  12. Growth of conventions in destination, hub markets such as Las Vegas, Atlantic City, Mississippi - as these markets become more aware of this segment's value.
  13. Hotel-room growth, use as marketing tool in both hub and spoke locations.
  14. Increasing alliance between commercial gaming operators and outside investors, as well as between commercial and tribal operators.
  15. Increasing pressure for openings, expansions of Asian markets, and growing cross-market play between Asian and Las Vegas casinos.
  16. Monetization of non-gaming assets, including on-site retail, dining and entertainment.
  17. Next generation of Las Vegas casinos, creating full-service metropolitan centers, with multiple brands at multiple price points at one location.
  18. Networking of slot systems at new casinos, with continued resistance to widespread server-based gaming at existing properties, based on pricing, other concerns.
  19. Renewed focus on stepper slots, simpler bonus rounds in new generation of slot machines.
  20. Significant expansion of gaming in central and eastern Europe, at selected resort destinations that would serve as tourism hubs, which - along with continued expansion in Asia, Latin America and elsewhere - will put added pressure on U.S. regulators to ensure that international licensing standards are adequate.
  21. Tribal gaming's expansion into commercial casino markets, and management contracts with other tribal casinos.
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