Kansas Lottery Gaming Facility Review Board
Presented by: Global Gaming KS, LLC
In Topeka, Kansas, December 01, 2010.
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Introduction
3
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
1. Mistakes in Estimates and Analysis
Apples and...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
1. Mistakes in Estimates and Analysis
Apples and...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
1. Mistakes in Estimates and Analysis
Global Gam...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
1. Mistakes in Estimates and Analysis
Global Gam...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
1. Mistakes in Estimates and Analysis
Global Gam...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
2. Flaws in Market Analysis
Inherent Flawed Assu...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
2. Flaws in Market Analysis
Additional Distance ...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
• The analysis ...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
• Distance assu...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
• Global Gaming...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
• Our facility ...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
4. Primary Cons...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
4. Primary Cons...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
4. Primary Cons...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
4. Primary Cons...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
4. Primary Cons...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
Presentation Ou...
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Topeka, Kansas, 01 December 2010
5. Close
25
Global Gaming KS, LLC
Kansas Lottery Gaming Facility Review Board Meeting
Upcoming SlideShare
Loading in …5
×

Global gaming ks -01december2010

744 views
705 views

Published on

Published in: Entertainment & Humor
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
744
On SlideShare
0
From Embeds
0
Number of Embeds
129
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Global gaming ks -01december2010

  1. 1. Kansas Lottery Gaming Facility Review Board Presented by: Global Gaming KS, LLC In Topeka, Kansas, December 01, 2010.
  2. 2. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 2 Introduction
  3. 3. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Introduction 3
  4. 4. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 4 Introduction
  5. 5. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 1. Mistakes in Estimates and Analysis Apples and oranges have been compared in Gaming Revenue Projections! Topeka, Kansas, 01 December 2010 5 2012 Year 1 Year 2 Year 3 Year 4 Year 5 (FBO) GGS As-Submitted 126,290,000 128,662,500 140,707,500 140,707,500 156,585,000 170,000,000 GGS with State Proposed Inflation Factor 133,981,061 140,589,514 158,366,291 163,122,205 186,978,149 202,997,000 Cummings Projection 62,100,000 (*) - 141,200,000 - 155,800,000 160,500,000 Note: Considered Year-2012 as a partial year. Gaming Revenue Projections
  6. 6. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 1. Mistakes in Estimates and Analysis Apples and oranges have been compared in Gaming Revenue Projections! Topeka, Kansas, 01 December 2010 • Time to achieve full build-out 6
  7. 7. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 1. Mistakes in Estimates and Analysis Global Gaming’s Permanent v. Peninsula Gaming’s Interim Facility Considerations Topeka, Kansas, 01 December 2010 • The Consultants appeared to assume no material Revenue differential or impact would exist between: • Global Gaming’s permanent facilities with complete amenities on Day-One v. • Peninsula Gaming’s smaller interim facility without full amenities with on-going construction impact on customers. 7 Global Gaming at Day-One Peninsula Gaming at Day-One Facility Square Footage 260,000 100,000 Casino Square Footage 73,000 44,000 Entertainment and Convention Center Square Footage 33,000 for permanent 1,400-seat premium indoor center Equestrian Center used as temporary casino Number of Restaurants and Bars 1. The Brewhouse 2. Liberty Deli 3. Las Vegas-Style Buffet 4. Bellini's Steak Seafood & Pasta 5. The Bank Lounge Bar 6. Roulettes Center Bar 50-seat snack bar & kiosks Number of Slots 1,300 1,310 Number of Tables 60 32 RV Park availability YES NO Golf Course availability YES NO Hotel YES NO
  8. 8. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 1. Mistakes in Estimates and Analysis Global Gaming’s Travel Plaza Revenue Impact Topeka, Kansas, 01 December 2010 8 2014 Incremental Gaming Revenue Visitors Travel Plaza Cummings Estimate of GGS' Travel Plaza 2.9m 20,000 Wells Gaming Research's Estimate of GGS' Travel Plaza 5.0m 100,000 Equestrian Center Wells Gaming Research's Estimate of the Peninsula Gaming Equestrian Center 2.45m 33,000
  9. 9. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 1. Mistakes in Estimates and Analysis Global Gaming’s Travel Plaza Revenue Impact Topeka, Kansas, 01 December 2010 • It is important to understand the Travel Plaza strategy! • It is important to understand all of the amenities of the Travel Plaza. • It is important to understand the Travel Plaza will not be opened until it has direct I-35 access. • It is important to understand the Travel Plaza will cater to the gaming needs of its customers via dedicated gaming space, complying with the law. • Finally, our practical experience demonstrates up to 10% incremental gaming Revenue or up to $20m. 9
  10. 10. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 10
  11. 11. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 2. Flaws in Market Analysis Inherent Flawed Assumptions in the Gravity Model Analysis – Topeka, Kansas, 01 December 2010 The Cummings Gravity Model projects a 22% difference in Revenues between proposed facilities at Exit 19 and at Exit 33. The disparity can be attributed to two broad assumptions in the Model: • Distance Assumptions • Attractiveness Assumptions 11
  12. 12. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting 2. Flaws in Market Analysis Additional Distance to a Facility Matters to Wichita Residents Topeka, Kansas, 01 December 2010 • Cummings assumes Revenue declines 38% as the distance from a primary market doubles. • Detailed of our analysis begins of p. 7 of our full report. The description of adjustments we proposed begins on p. 16. 12
  13. 13. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 • The analysis incorrectly assumes the Oklahoma border casinos have the attraction of a destination such as a grouping of casinos in Atlantic City, where in reality these border casinos do not constitute a destination because of their lack of amenities, competitive game offerings, fewer number of games per facility and lack of geographic proximity. • Even if one accepted the Oklahoma border casinos as a destination, the analysis would still not recognize the quality disparity between the Global Gaming property in Sumner County and these other facilities. For example, in Atlantic City, Borgata outperforms most other casinos as does L’Auberge in Louisiana and Wynn compared to Circus Circus in Las Vegas. 2. Flaws in Market Analysis Attractiveness Assumption 13
  14. 14. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 • Distance assumptions between Exit 19 and Exit 33 reduces the difference by a total of 10% (from 22% to 12%). • The cumulative attractiveness changes by an additional 8% (from the remaining 12% to 4%). • The remaining 4% may be attributed to other factors and partially to distance, which we do not believe is material. 2. Flaws in Market Analysis Net Result of Our Adjustments to Gaming Revenues 14
  15. 15. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 15
  16. 16. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 • Global Gaming will open a 260,000 square foot permanent destination facility with hotel, with complete amenities, on Day-One, irrespective of any market changes. • Global Gaming’s future development (20% of investment) is being phased over a number of years. However, we have clearly indicated that this can be accelerated as the market dictates. • Our management contract provides for a “time out” to review the effect of any Wyandotte development on destination plans. This is prudent for the State as it allows us to judge the right competitive response to the Wyandotte’s proposed development. • We have proven development experience in responding to competitive changes that has led us to the Number 1 position in gaming in the State of Oklahoma. 3. Global Gaming’s Conservative Development Schedule – Management Contract Provisions 16
  17. 17. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 • Our facility proposes 1,300 slots and 60 table games on Day-One, in a permanent facility. • We proposed incrementally adding to the slots capacity to a total of 2,000 in three tranches every 24 months. We have clearly stated, and state again, that this schedule will be accelerated as the market dictates. 3. Global Gaming’s Conservative Development Schedule – Deployment of Additional Slot Games 17
  18. 18. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 18
  19. 19. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 4. Primary Considerations We respectfully submit to the Review Board the following four considerations in your deliberations: I. We have financial capability and commitment that is not market dependant: financial capability is not a simple “pass/ fail” test. II. We have significant management, operational, and development capability and experience: As Management Matters. III. We are strongly committed to the Exit 19 location: As the Site matters. IV. We have a clear plan to support the Sumner County community: As strong community involvement matters. 19
  20. 20. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 4. Primary Considerations Financial Capability We have financial capability and commitment that is not market dependant: Financial capability is not a simple “pass/ fail” test. • We have a firm commitment from Jefferies for funding, not subject to market availability. This will be executed subject to obtaining the license and regulatory approvals and minor outstanding due diligence items. • We have shown to the Financial Consultant our equity capability. • We have no market debt and have shown to the Financial Consultant a highly liquid balance sheet with liquid assets of many hundreds of $millions. This reflects our substantial business operations (some 50 plus) and our conservative approach to business. • The strength of your balance sheet matters, in weathering future market changes such as downturn in the credit market or a Wyandotte development. • Finally, financial capability matters in ensuring the ability to carry out future development plans and commitments. 20
  21. 21. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 4. Primary Considerations Management, Operational and Development Capability We have significant management, operational, and development capability and experience: As Management Matters. • We currently operate 13,000 slots (or 27% of the Oklahoma market) and hold the Number 1 gaming position in Oklahoma, a densely populated and competitive gaming market (there are an estimated total of 47,000 slots in Oklahoma). • We are the Number 1 private employer in Oklahoma. • We have developed 16 gaming properties including Riverwind Casino and the adjacent gaming properties of Goldsby Gaming Center and Newcastle Gaming that collectively have $250m p.a. in gaming revenue. • We have developed four hotels including a $70m, 395 suites and rooms, four-star hotel. • We have amassed 2.3 million customers along the I-35 corridor. • We have other substantial businesses including healthcare, energy, banking and manufacturing. • We have developed a number of large scale greenfield developments of a non-gaming nature such as a new hospital in Ada, OK for over $150m. • Stan Fulton, an industry recognized leader, is a financial partner who also brings additional advisory capacity and also substantial financial capability. 21
  22. 22. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 4. Primary Considerations Commitment to Exit 19 We are strongly committed to the Exit 19 location: As the Site matters. • We had the choice of a site at Exit 33 and three separate sites at Exit 19, • We deliberately chose our current one clear site as:  Refuting suggestion of significant differential in revenue between Exit 19 and 33  Having readily available infrastructure with a 10 to 1 infrastructure and land cost advantage over Exit 33 sites (allowing substantially more of the investment to be directed to destination quality)  Having overwhelming community support  Supporting the belief that the location affords the greatest potential for economic development impact on Sumner County  Having no legal issues 22
  23. 23. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 4. Primary Considerations Strong Community Involvement Matters We have a clear plan to support the Sumner County community: As strong community involvement matters. • We have a strong track record in community development and have previously spoken of this. • A recent article in The Wichita Eagle evidenced this track record. • Global Gaming amended our Sumner County development agreement to contribute a minimum of $1.5m p.a. to education, health, and economic community development activities in Sumner County. • If selected, Sumner County will form a 501(3)(c) Sumner County Foundation to distribute the funds. This will be composed of the mayors of each of the 11 cities in Sumner County with the Chair of the Sumner County Commissioners. Some initial formulas for the distribution of funds have been established. 23
  24. 24. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 Presentation Outline 1. Mistakes in Estimates and Analysis 2. Flaws in Market Analysis 3. Global Gaming’s Conservative Development Plans 4. Primary Considerations 5. Close 24
  25. 25. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting Topeka, Kansas, 01 December 2010 5. Close 25
  26. 26. Global Gaming KS, LLC Kansas Lottery Gaming Facility Review Board Meeting

×