Cummings ne draft 0826

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Cummings ne draft 0826

  1. 1. Gaming Revenue Projections for the Northeast Gaming Zone DRAFT Presentation to Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates September 2, 2008 1
  2. 2. Will E. Cummings Cummings Associates 2
  3. 3. Questions, Please! ( at any time ) 3
  4. 4. Overview Process (briefly) Cummings Projections Location, Location and . . . Size Matters “Net Export” and Tourist Info Detail: Cummings vs. Applicants “Fair Share” Perspective 4
  5. 5. Northeast Zone 5
  6. 6. [ Map – KC Metro Area ] [ in preparation ] 6
  7. 7. [ Map – Local Area Detail ] [ in preparation ] 7
  8. 8. Gravity Model(s) Updated Separate Slot / Table Models Precise Locations Precise Sizes Everything Else . . . “Power Ratings” 8
  9. 9. Exhibit 1: Power Ratings Used in Previous Projections Harrah's Marvel Penn Penn Dodge Kansas City * Mulvane Wellington Wellington Cherokee City Slot Performance High 107.0 110.0 116.0 116.0 107.0 117.0 Baseline 102.0 104.0 110.0 110.0 102.0 112.0 Low 97.0 98.0 104.0 104.0 97.0 107.0 Table Performance High 107.0 106.0 108.0 103.0 95.0 105.0 Baseline 102.0 98.0 100.0 95.0 90.0 100.0 Total Power Rating 97.0 90.0 92.0 87.0 85.0 95.0 * Power Ratings for Northeast-Zone Applicants updated for this report in Exhibit 2. All others remain unchanged. Note: 100 = "Midwest Standard." Higher slot baselines here typical of new facilities.
  10. 10. Exhibit 2: Power Ratings Updated for Northeast Applicants Speedway/ Golden PNK Legends Cordish Gaming Kansas Sun Gaming Positions (not inc. poker): 3,840 2,980 2,660 2,360 Baselines for Slots and Tables: Midwest Standard 100.00 100.00 100.00 100.00 Synergy with Area Attractions 1.00 1.00 1.00 1.00 Bricks & Mortar $ / Gaming Position (in $100ks) 1.84 1.96 2.34 3.25 Casino Square Footage / Gaming Position (x .02) 0.66 0.88 0.74 1.12 Hotel Rooms / Gaming Position (x 2) 0.16 0.20 0.38 0.30 ---------- ---------- ---------- ---------- Total Power Rating 103.66 104.04 104.46 105.67 Note: 100 = "Midwest Standard." Latest facilities in Iowa (smaller & less expensive) range from 99 to 104. "High" and "Low" projections remain 5 points above and below these figures, respectively.
  11. 11. Summary of Projections 11 In 2007 Dollars # Slots Power Slot Win win/slot/day Total Win Gaming Facility / Location: Rating ($mn) ($mn) Northeast Zone: Speedway/Cordish 3,000 103.7 $192.4 $176 $234.2 Golden Heartland 2,500 104.0 $182.0 $199 $223.2 Pinnacle 2,300 104.5 $170.8 $204 $206.3 Legends Sun 2,000 105.7 $149.0 $204 $182.8
  12. 12. Summary of Projections 12 In 2013 Dollars ( at 2.5% per annum ) # Slots Power Slot Win win/slot/day Total Win Gaming Facility / Location: Rating ($mn) ($mn) Northeast Zone: Speedway/Cordish 3,000 103.7 $223.1 $204 $271.6 Golden Heartland 2,500 104.0 $211.1 $231 $258.8 Pinnacle 2,300 104.5 $198.1 $236 $239.2 Legends Sun 2,000 105.7 $172.8 $237 $212.0
  13. 13. Size Matters 13
  14. 14. All Same Size 14 In 2013 Dollars ( at 2.5% per annum ) # Slots Power Slot Win win/slot/day Total Win Gaming Facility / Location: Rating ($mn) ($mn) Northeast Zone: Golden Heartland 3,000 104.0 $234.5 $214 $282.3 PNK Kansas 3,000 104.0 $228.7 $209 $275.8 Speedway/Cordish 3,000 104.0 $225.8 $206 $272.2 Legends Sun 3,000 104.0 $209.2 $191 $252.6
  15. 15. At Sizes Actually Proposed 15 In 2013 Dollars ( at 2.5% per annum ) # Slots Power Slot Win win/slot/day Total Win Gaming Facility / Location: Rating ($mn) ($mn) Northeast Zone: Speedway/Cordish 3,000 103.7 $223.1 $204 $271.6 Golden Heartland 2,500 104.0 $211.1 $231 $258.8 Pinnacle 2,300 104.5 $198.1 $236 $239.2 Legends Sun 2,000 105.7 $172.8 $237 $212.0
  16. 16. All Same Size 16 In 2013 Dollars ( at 2.5% per annum ) # Slots Power Slot Win win/slot/day Total Win Gaming Facility / Location: Rating ($mn) ($mn) Northeast Zone: Golden Heartland 3,000 104.0 $234.5 $214 $282.3 PNK Kansas 3,000 104.0 $228.7 $209 $275.8 Speedway/Cordish 3,000 104.0 $225.8 $206 $272.2 Legends Sun 3,000 104.0 $209.2 $191 $252.6
  17. 17. As Proposed 3,000 slots * Speedway $271.6 $272.2 Golden $258.8 $282.3 Pinnacle $239.2 $275.8 Legends Sun $212.0 $252.6 * And 80 tables, and power rating of 104.0 17 Cummings Projections (2013$)
  18. 18. As Proposed 3,000 slots * Golden $258.8 $282.3 Pinnacle $239.2 $275.8 Speedway $271.6 $272.2 Legends Sun $212.0 $252.6 * And 80 tables, and power rating of 104.0 18 Cummings Projections (2013$)
  19. 19. As Proposed 3,000 slots * Golden $258.8 $282.3 Pinnacle $239.2 $275.8 Speedway $271.6 $272.2 Legends Sun $212.0 $252.6 * And 80 tables, and power rating of 104.0 19 Cummings Projections (2013$)
  20. 20. Location Matters -- A Little 20
  21. 21. [ Map – Local Area Detail ] [ in preparation ] 21
  22. 22. [ Map – KC Metro Area ] [ in preparation ] 22
  23. 23. [ Map – Local Area Detail ] [ in preparation ] 23
  24. 24. Intersection: 1 2 3 4 5 Golden L R Pinnacle (r) R R Speedway R R L Legends Sun (r) st st L R (r) indicates smooth merge (no stop); Pinnacle has 90º exit, Leg Sun 270º 24 “Micro” Access (from KC / J Co)
  25. 25. [ Map – Local Area Detail ] [ in preparation ] 25
  26. 26. As Proposed 3,000 slots * Golden $258.8 $282.3 Pinnacle $239.2 $275.8 Speedway $271.6 $272.2 Legends Sun $212.0 $252.6 * And 80 tables, and power rating of 104.0 26 Cummings Projections (2013$)
  27. 27. # Slots Projected Win* Speedway 3,000 $271.6 Golden 2,500 $258.8 Pinnacle 2,300 $239.2 Legends Sun 2,000 $212.0 * 2013 dollars 27 Size Matters?
  28. 28. Size Matters! y = 43.304x + 207.05 R2 = 0.8607 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 0 5 10 15 20 25 30 "Density" of Slots in Iowa Markets ( = Number of Slots / 000 Adults) SlotSpending/Adult/Year 28
  29. 29. Cummings vs. Proponents Cummings Proponent % Speedway $271.6 $367.0 135% Golden $258.8 $284.7 110% Pinnacle $239.2 $425.9 178% Legends Sun $212.0 $295.6 139% (all $ million in 2013) 29
  30. 30. Speedway / Cordish 30
  31. 31. Sources of Difference Cummings Cordish Diff. 0-100 miles $248.9 100+ miles $22.7 Drive-Bys $0.0 Hotel etc. $0.0 Total $271.6 $367.0 $95.4 (all $ million in 2013) 31
  32. 32. Golden Heartland 32
  33. 33. Sources of Difference Cummings Golden Diff. 0-100 miles $238.5 100+ miles $20.3 Drive-Bys $0.0 Hotel etc. $0.0 Total $258.8 $284.7 $25.9 (all $ million in 2013) 33
  34. 34. PNK Kansas (Pinnacle) 34
  35. 35. Sources of Difference Cummings Pinnacle Diff. 0-100 miles $220.7 100+ miles $18.5 Drive-Bys $0.0 Hotel etc. $0.0 Total $239.2 $425.9 $186.7 (all $ million in 2013) 35
  36. 36. Legends Sun 36
  37. 37. Sources of Difference Cummings Leg Sun Diff. 0-100 miles $193.9 100+ miles $18.1 Drive-Bys $0.0 Hotel etc. $0.0 Total $212.0 $295.6 $83.6 (all $ million in 2013) 37
  38. 38. “Fair Share” Perspective 38
  39. 39. “Fair Share” Perspective “Fair Share” = % Capacity x Total Market Win Example: Casino X has 2,000 gaming positions Total Market has 10,000 “Fair Share” = 20% of the market 39
  40. 40. Cummings Applicant * Speedway 112% 153% Golden 121% 129% Pinnacle 124% 188% Legends Sun 120% 168% * Applicants’ projections as interpreted by Cummings models. 40 Projected Win vs. Fair Share
  41. 41. Projections for “Net Exports” & “Tourists” 41
  42. 42. “Net Exports” “Tourist” $ * Speedway $161.6 $19.4 Golden $148.1 $17.4 Pinnacle $140.9 $15.8 Legends Sun $123.0 $15.5 * “Tourists” defined as those traveling over 100 miles ($ in million) 42 Projected Impacts on . . . (2007$)
  43. 43. Summary 43
  44. 44. # Slots Projected Win Speedway 3,000 $271.6 Golden 2,500 $258.8 Pinnacle 2,300 $239.2 Legends Sun 2,000 $212.0 44 Cummings Projections (2013$)
  45. 45. “Net Exports” “Tourist” $ * Speedway $161.6 $19.4 Golden $148.1 $17.4 Pinnacle $140.9 $15.8 Legends Sun $123.0 $15.5 * “Tourists” defined as those traveling over 100 miles. 45 Projected Impacts on . . . (2007$)
  46. 46. Conclusions Location matters . . . a little Size matters . . . a lot But anyone can build you a bigger mousetrap Key Question: Who will build you the BEST mousetrap? 46
  47. 47. Will E. Cummings Cummings Associates 135 Jason Street Arlington, MA 02476 (781) 641-1215 cummingsw@aol.com 47
  48. 48. Gaming Revenue Projections for the Northeast Gaming Zone DRAFT Presentation to Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates September 2, 2008 48

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