Leg sun   lottery review board rebutal-final final
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Leg sun lottery review board rebutal-final final

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Kansas Racing & Gaming Commission

Kansas Racing & Gaming Commission
Casino Proposal
http://krgc.ks.gov/

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Leg sun   lottery review board rebutal-final final Leg sun lottery review board rebutal-final final Presentation Transcript

  • A Kansas Legend In The Making 1
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  • What is Best for Kansas Greatest Success Best x Ability to for the State of = Plan Execute Kansas and Wyandotte County 3
  • Criteria for Determining the Best Plan Exciting Destination Program Superior Location Attainable Operating Projections Realistic Capital Structure 4
  • Criteria for Determining The Applicant’s Ability to Execute Proven Destination-Gaming Track Record as a Licensed Owner and Operator History of Relationships in Kansas Current Capacity Current Operations Human Capital Bench-Strength 5
  • Legends Sun Is The Answer. 6
  • Consultants Reports Prof. William Eadington’s presentation hits the points we believe are essential Others based projections primarily on number of slots, and did not take into account the ability to execute, and therefore could not offer guidance Applicants have each presented different information they have “vetted” 7
  • Gaming Market Advisors Update Company principals have been known to gaming industry for over 20 years Completed over 200 casino feasibility studies Completed 5 separate studies in Greater Kansas City markets Updated assumptions for feasibility study 8
  • Gaming Revenues are Achievable Given Optimum Conditions: Gaming Consultant’s Independent Highest First Full Year Projections for a Wyandotte County Casino CCA $271.2 million Cummings $271.6 million GMA $272.4 million Wells $299.0 million Anything less is underachieving; anything substantially more is unrealistic. 9
  • Only the Best Facility and Best Operator Can Deliver on Those Projections: “…anyone can build you a bigger mouse trap…who will build you the best mouse trap? Cummings Associates “…the ability to drive tourism will require incorporating a ‘WOW!’ factor into the property” Probe Strategic Solutions 10
  • Our Newest “WOW” Destination Addition Casino of the Wind at Mohegan Sun Opened August 29th 11
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  • Legends Sun Management Has the Most Experience Delivering “WOW” Compared to the other applicants Compared to the competition where we currently operate Our track-record for delivering what is promised These factors weigh heavily in Prof. Eadington’s “probability for success.” 15
  • Gaming Experience of Applicants Below is a breakdown comparison of the Northeast Zone applicants’ largest properties in which they are the licensed owner-operator (as of August 2008): Pinnacle - Golden Mohegan Sun - Lumiere Pinnacle - Cordish - Gaming - Connecticut Place L'Auberge Indiana Live Mardi Gras # of Slots 6,800 2,000 1,645 1,887 725 # of Tables 346 49 62 0 9 Hotel Rooms 1,172 295 1,000 0 0 Please note that the Las Vegas Hard Rock Hotel and Casino is excluded from Golden Gaming’s portfolio for purposes of this analysis because the management agreement was terminated on February 29th, 2008. Source: Morgans Hotel Group 10-Q (August 8th, 2008). All statistics from public sources. 16
  • Gaming Experience Compared to Applicants Annual Gaming Revenue as of August 2008 Best Performing Property as Licensed Owner/Operator $1.3 Billion $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $324m $600,000,000 $41m $160m $166m $400,000,000 $200,000,000 $- Mohegan Sun - Pinnacle - Pinnacle - Cordish - Golden Gaming Connecticut Lumiere Place L'Auberge Indiana Live - Mardi Gras Lumiere Place’s annual gaming revenue is based on the first 6 full months of operation (Jan-Jun 2008.) Indiana Live’s annual gaming revenue is based on July 2008’s revenue. Golden Gaming Mardi Gras’ annual gaming revenue is based on the Colorado Black Hawk region’s WPU for FY ended June 2008. 17
  • How We Compare to Our Competition in Connecticut and Pennsylvania 18
  • The Best Slot Efficiency on the East Coast Fair Actual Win Slot Win Operator: Handle: Win: Units: Share: Share: Efficiency: Rank: Mohegan Sun $ 12,161,159,703 $ 1,045,768,835 7,366 6.94% 10.79% 155.53% 1 Philadelphia Park $ 4,320,701,669 $ 370,333,906 2,621 2.47% 3.82% 154.76% 2 Borgata $ 5,763,780,342 $ 432,312,208 3,985 3.75% 4.46% 118.85% 3 Harrah's $ 20,875,660,189 $ 1,897,734,215 18,279 17.22% 19.59% 113.72% 4 Foxwoods $ 9,087,275,723 $ 757,740,900 7,322 6.90% 7.82% 113.36% 5 Magna $ 3,285,209,290 $ 273,552,870 2,650 2.50% 2.82% 113.07% 6 Trump $ 6,082,171,544 $ 504,590,001 5,528 5.21% 5.21% 100.00% 7 Twin River $ 1,928,534,061 $ 408,846,027 4,628 4.36% 4.22% 96.78% 8 Trump Marina $ 2,003,134,442 $ 171,012,599 1,957 1.84% 1.77% 95.73% 9 Yonkers/Empire City $ 5,770,901,422 $ 470,176,372 5,396 5.08% 4.85% 95.45% 10 Isle $ 1,618,979,595 $ 126,573,939 1,500 1.41% 1.31% 92.45% 11 Delaware Park $ 3,587,364,300 $ 265,223,600 3,146 2.96% 2.74% 92.34% 12 Dover Downs $ 2,872,530,000 $ 218,683,800 2,703 2.55% 2.26% 88.61% 13 Penn National $ 6,393,541,255 $ 605,991,539 7,528 7.09% 6.25% 88.18% 14 Resorts $ 4,584,116,246 $ 390,102,194 4,923 4.64% 4.03% 86.80% 15 Tropicana $ 3,030,572,230 $ 268,657,495 3,535 3.33% 2.77% 83.26% 16 MTR Gaming $ 4,370,271,010 $ 394,127,600 5,188 4.89% 4.07% 83.21% 17 Delaware North $ 5,033,065,818 $ 440,564,519 6,015 5.67% 4.55% 80.23% 18 Harrington Raceway $ 1,493,781,300 $ 124,099,600 1,698 1.60% 1.28% 80.06% 19 Newport Grand $ 252,699,696 $ 70,599,171 1,099 1.04% 0.73% 70.40% 20 *Harrah’s includes 5 properties in Atlantic City and Pennsylvania 19
  • Compared to Competition in Connecticut Connecticut Slot Market Comparison Last Twelve Months Ended June 30, 2008 60% 60% 130% Slot Units Slot Win Slot Efficiency 7,240 120% Units 55% 55% $ 884 M 110% 100% 50% 50% 6,083 $ 760 M 90% Units 54.3% 45% 45% 80% 117.8% 53.8% 70% 45.7% 40% 40% 60% 46.2% 85.1% 50% 35% 35% 40% 30% 30% 30% Mohegan Sun Foxwoods 20
  • Compared to Competition in Pennsylvania Northeastern PA Slot Market Comparison Last Eight Months Ended June 30, 2008 100% 60% 170% Slot Units Slot Win Slot Efficiency 90% 150% 55% 80% $ 105 m $ 106 m 130% 50% 2,523 70% Units 110% 45% 60% 90% 154.2% 40% 49.8% 50.2% 50% 67.7% 70% 35% 74.2% 40% 1,203 50% Units 30% 30% 30% 32.3% MSPD Mt Airy 21
  • The Right Operator Makes All the Difference! Mohegan is able to dominate through: Commitment to the development of our employees in the pursuit of Outstanding Customer Service The Best Gaming and Non-Gaming Product Strong use of Technology and Customer Relationship Management (CRM) Systems Superior Player Reward Programs Creative, Energizing Casino Marketing, Promotions and Advertising Campaigns 22
  • How Other Northeast Zone Applicants Compete in Their Markets 23
  • Other Applicants in Their Markets Below is a slot efficiency ranking for all gaming properties in the State of Indiana for the month of July 2008 – which was the first full month of operation for Indiana Live. Slot Win # of Slot Fair Share Actual Slot Slot Win Efficiency % Machines: Slot Win: Slot WPU: Slot Win %: Win Share %: Efficiency %: Rank: Ameristar 1,797 24,240,050 435 7.85% 11.89% 151.35% 1 Horseshoe SI 1,878 23,728,979 408 8.21% 11.64% 141.77% 2 Argosy 2,529 31,720,708 405 11.05% 15.55% 140.73% 3 Casino Aztar 1,068 9,195,289 278 4.67% 4.51% 96.60% 4 Hoosier Park 1,979 16,974,911 277 8.65% 8.32% 96.24% 5 Blue Chip 1,934 14,593,710 243 8.45% 7.16% 84.67% 6 Belterra (Pinnacle) 1,692 12,518,678 239 7.39% 6.14% 83.02% 7 Indiana Live (Cordish) 1,887 13,813,058 236 8.25% 6.77% 82.13% 8 French Lick 1,049 7,657,581 235 4.58% 3.75% 81.91% 9 Horseshoe HD 3,176 22,896,934 233 13.88% 11.23% 80.89% 10 Grand Victoria 1,393 9,848,842 228 6.09% 4.83% 79.33% 11 Majestic Star 1,209 8,292,548 221 5.28% 4.07% 76.96% 12 Majestic Star II 1,291 8,452,488 211 5.64% 4.14% 73.46% 13 Total 22,882 203,933,776 287 100.00% 100.00% 100.00% Source: Indiana Gaming Commission 24
  • Other Applicants in Their markets (cont.) Below is a slot efficiency ranking for the State of Missouri in the month of May 2008. Slot Win # of Slot Fair Share Actual Slot Slot Win Efficiency % Machines: Slot Win: Slot WPU: Slot Win %: Win Share %: Efficiency %: Rank: Harrahs N. Kansas City 1,768 15,213,754 278 9.10% 11.06% 121.56% 1 Harrahs Maryland HGTS 2,825 23,819,901 272 14.54% 17.32% 119.11% 2 St. Charles 2,998 24,835,817 267 15.43% 18.06% 117.02% 3 Argosy Riverside 1,980 15,220,066 248 10.19% 11.07% 108.59% 4 Isle of Capri - Boonville 949 6,790,299 231 4.88% 4.94% 101.08% 5 Ameristar KC 3,018 21,037,642 225 15.53% 15.29% 98.47% 6 Lumiere Place (Pinnacle) 2,000 13,058,958 211 10.29% 9.49% 92.24% 7 St. Jo Frontier 556 3,093,109 179 2.86% 2.25% 78.59% 8 Isle of Capri - KC 1,328 6,468,577 157 6.83% 4.70% 68.81% 9 Mark Twain 665 2,888,110 140 3.42% 2.10% 61.35% 10 Isle of Capri - Lady Luck 614 2,448,514 129 3.16% 1.78% 56.33% 11 President (Pinnacle) 729 2,672,303 118 3.75% 1.94% 51.78% 12 Total 19,430 137,547,049 228 100.00% 100.00% 100.00% Source: Missouri Gaming Commission May was used due to the flooding of two properties in June/July. 25
  • History of Relationships in Kansas 26
  • A History of Relationships in Kansas Local Partner…Local Commitment Involved in several local charities such as the Children’s Therapeutic Learning Center Duck Derby, the American Cancer Society, and Boys & Girls Clubs Legends Sun will continue this relationship, exemplified by RED’s Title sponsorship of The Legends Reno Tahoe Open, which has given over $1.7 million to local charities 27
  • Clarification of Additional Issues from Consulting Reports 28
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  • Sources of Project Financing Casino Resort & Retail & Golf Residential Construction Construction * Sources (000's) Phase - 1(A) Phase - 1(B) Total Project Cash Infusion by Mohegan Resorts-Kansas, LLC $ 168,227 $ 30,107 $ 198,333 Cash Infusion by RED Leg Sun, LLC 84,113 15,053 99,167 Proceeds From $200 Million Bank Credit Facility - Revolver 91,073 78,548 169,622 Proceeds From $100 Million Bank Credit Facility - Term Loan 100,000 - 100,000 Proceeds From $200 Million Senior Subordinated Notes 200,000 - 200,000 Total $ 643,413 $ 123,708 $ 767,122 * Includes Structured Parking 30
  • Clarification of Additional Issues from Consulting Reports 31
  • Legends Sun Is The Answer. 32
  • A Great Plan Great Location Destination Program – Legends Sun has the best mix of amenities to gaming Attainable Operating Projections – Legends Sun’s revenue and operating projections meet analysts’ estimates Realistic Capital Structure – Legends Sun has provided evidence of their project financing sources (with market required 40% equity contribution) 33
  • Legends Sun Will Deliver RED has established history of development and outstanding relationships in Wyandotte County and delivers what it promised Of the Northeast Zone applicants, Mohegan Sun is clearly the most proven destination gaming operator The Legends Sun team has the capacity and experience to absorb the project given the strength of their current operations and existing team 34
  • What We Bring to Kansas Passion World Class Destination Respect for Employees Financial Ability Community Involvement 35
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