Cummings ks slides 1201

979 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
979
On SlideShare
0
From Embeds
0
Number of Embeds
498
Actions
Shares
0
Downloads
13
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Cummings ks slides 1201

  1. 1. Gaming Revenue Projections for South-Central Kansas Presentation to Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates December 1, 2010 1
  2. 2. Will E. Cummings Cummings Associates 2
  3. 3. Questions, Please! - at any time - 3
  4. 4. Overview  Methodology (in brief) . . . Distance Matters . . .  Projections: Global Gaming / WinSpirit Peninsula / Kansas Star 4
  5. 5. Methodology  “Gravity Models”  Residents  “Near” Neighbors  Traffic Intercept  14-15,000 vehicles / day 5
  6. 6. Gravity Models – Overview  Location  Location  Size  Everything Else 6
  7. 7. Gravity Models – Overview  Location  Location  Size  Everything Else 7
  8. 8. “Everything Else” 1  Micro-Access  Spaciousness  Slot Mix  Fit & Finish  Management  Marketing / Player Rewards 8
  9. 9. “Everything Else” 2  Hotel  Structured Parking  Variety of Dining Choices  Retail  Entertainment  “Brand” 9
  10. 10. “Everything Else” = “Power Ratings” 10
  11. 11. 11 Exhibit A-13: Gaming-Device Spending Ratios in Major US Markets (Total Annual Spending on Slots and/or VLTs Per "Distance-Adjusted" Adult in FY2010) Northeastern Medium to Large Rural Markets US Markets Midwest (+/-) Markets West & Midwest Deadwood, SD $909 e S Dakota Indian avg. (8) $873 e Upstate Michigan avg. $840 e Kansas Natives avg. $818 e Mississippi / Louisiana $809 e (average of MANY facilities) Diamond Jo N'wood, IA $793 Iowa Natives average $784 e Terribles Lakeside. IA $773 Upstate Wisconsin avg. $770 e Emmetsburg, IA $765 Colorado (2) $762 Horseshoe / Bluffs Run, IA $749 Dodge City, KS $747 Dubuque Mystique, IA $743 Dubuque Diamond Jo, IA $741 Riverside, IA $740 Harrahs NKCMO $734 IOC Boonville, MO $735 o Niagara (NY) casino $729 e Albuquerque, NM avg. $729 e IOC Marquette, IA $730 o Ameristar Council Bluffs, IA $727 Other New Mexico avg. $718 e Atlantic City, NJ avg. $719 Mt. Pleasant, MI $718 e IOC Waterloo, IA $715 Wisconsin Dells $715 e Argosy Riverside, MO $707 Midwest Standard +10%
  12. 12. 12 Iowa Natives average $784 e Terribles Lakeside. IA $773 Upstate Wisconsin avg. $770 e Emmetsburg, IA $765 Colorado (2) $762 Horseshoe / Bluffs Run, IA $749 Dodge City, KS $747 Dubuque Mystique, IA $743 Dubuque Diamond Jo, IA $741 Riverside, IA $740 Harrahs NKCMO $734 IOC Boonville, MO $735 o Niagara (NY) casino $729 e Albuquerque, NM avg. $729 e IOC Marquette, IA $730 o Ameristar Council Bluffs, IA $727 Other New Mexico avg. $718 e Atlantic City, NJ avg. $719 Mt. Pleasant, MI $718 e IOC Waterloo, IA $715 Wisconsin Dells $715 e Argosy Riverside, MO $707 Ameristar KCMO $698 Michigan City, IN $694 Harrahs W St Louis $690 Harrahs Council Bluffs, IA $689 Prairie Meadows, IA $685 Mohegan Sun, CT $670 o Ameristar St Chas, MO $668 Jumers Rock Island, IL $668 Clinton, IA $668 Harrahs Joliet, IL $665 o Belterra, Florence, IN $665 Argosy Sioux City, IA $664 o St Jo MO $662 o Metropolis, IL/KY $663 o Catfish Bend Burlington, IA $660 Salamanca, NY casino $656 e Mark Twain, MO $655 o Foxwoods, CT $649 o East St Louis, IL (2 boats) $651 o Dover Downs, DE $640 IOC Bettendorf, IA $640 o Charles Town, WV $638 Tioga Downs, NY $636 Ameristar, E Chicago IN $631 o Midwest Standard +10% "Midwest Standard"
  13. 13. 13 Exhibit A-14: Gaming-Device "Power Ratings" (Total Annual Spending versus benchmark of $700) Northeastern Medium to Large Rural Markets US Markets Midwest (+/-) Markets West & Midwest Deadwood, SD 129.9 S Dakota Indian avg. (8) 124.7 e Upstate Michigan avg. 120.0 e Kansas Natives avg. 116.9 e Mississippi / Louisiana 115.5 (average of MANY facilities) Diamond Jo Northwood, IA 113.3 Iowa Natives average 112.0 e Terribles Lakeside. IA 110.4 Upstate Wisconsin avg. 110.0 e Emmetsburg, IA 109.3 Colorado (2) 108.9 Horseshoe / Bluffs Run, IA 107.0 Dodge City, KS 106.7 Dubuque Mystique, IA 106.1 Dubuque Diamond Jo, IA 105.9 Riverside, IA 105.7 Harrahs NKCMO 104.9 IOC Boonville, MO 105.0 o Niagara (NY) casino 104.1 e Albuquerque, NM avg. 104.2 e IOC Marquette, IA 104.3 o Ameristar Council Bluffs, IA 103.9 Mt. Pleasant, MI 102.6 e Atlantic City, NJ avg. 102.7 Other New Mexico avg. 102.5 e IOC Waterloo, IA 102.1 Wisconsin Dells 102.1 e Argosy Riverside, MO 101.0 Ameristar KCMO 99.7 Michigan City, IN 99.1 Harrahs W St Louis 98.6 Harrahs Council Bluffs, IA 98.4 Prairie Meadows, IA 97.9 Mohegan Sun, CT 95.7 o Ameristar St Chas, MO 95.4 Jumers Rock Island, IL 95.4 Clinton, IA 95.4 Midwest Standard +10% "Midwest Standard"
  14. 14. 14 Exhibit 5: Projected Power Ratings, etc. Peninsula / Kansas Star Global / WinSpirit 2012 2014 2016 Full Build 2012 2014 2016 Full Build Slot Machines 1,310 1,500 2,000 2,000 1,300 1,550 1,800 2,000 Table Games (not inc. poker) 32 42 50 50 30 40 40 40 Total Gaming Positions ( " " ) 1,502 1,752 2,300 2,300 1,480 1,790 2,040 2,240 Baselines for Slots: Midwest Standard 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Distance from Major Population Center 1.00 1.00 1.00 1.00 9.00 9.00 9.00 9.00 Temporary Facility (if applicable) (5.00) Bricks & Mortar $ / Gaming Position (in $100ks) 0.94 1.15 1.13 1.13 0.93 0.83 0.92 1.00 Casino Square Footage / Gaming Position (x .02) 0.59 0.54 0.55 0.55 0.99 0.86 0.89 0.92 Hotel Rooms / Gaming Position (x 2) 0.17 0.26 0.26 0.11 0.09 0.08 0.18 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total Power Rating 97.52 102.86 102.94 102.94 111.02 110.78 110.89 111.10 "Reach" (miles before extra decline with distance) 120 200 200 200 200 200 200 200 Compare: Last year at this location 102.78 N/C Note: 100 = "Midwest Standard" power rating. Latest major facilities in Iowa range from 102 to 107. Boot Hill today = 106.7. Slot power ratings at the "Big Three" KCMO facilities currently range from 100 to 106; table ratings 100 to 105. I have assumed 103 for tables at both facilities (the "3" reflects poker).
  15. 15. Gravity Models – Overview  Location  Location  Size  Everything Else 15
  16. 16. “Size” = Number of Slots WinSpirit Kansas Star 2012 1,300 1,310 2014 1,550 1,500 2016 1,800 2,000 Full Build 2,000 2,000 16
  17. 17. Gravity Models – Overview  Location I  Location II  Size  Everything Else 17
  18. 18. Location II: Competition 18
  19. 19. Location II: Reilly’s Law 19
  20. 20. Reilly’s Law: ms ~ S/d2 Where ms : market share S : outlet size (capacity) d : distance 20
  21. 21. Newton’s Law: F = m/d2 Where F : gravitational force m : mass (of each body) d : distance 21
  22. 22. Reilly’s Law: ms ~ S/d2 Where ms : market share S : casino size (capacity) d : distance 22
  23. 23. 23 Midwest Market Projections Average Distances: State County ZIP Spdway KStar WinSpirPark C DodgeCKC7thS Wh Cl Horton Mayetta Powhat Argosy IOC Harrahs KS ALLEN 66732 99 128 138 117 266 106 155 142 122 147 110 109 KS ALLEN 66748 109 114 124 102 251 117 154 134 113 139 120 120 KS ALLEN 66749 100 121 131 106 255 108 146 127 106 132 112 111 KS ALLEN 66751 98 125 136 111 260 105 145 130 110 135 109 108 KS ALLEN 66755 90 135 145 120 269 97 146 134 114 139 101 100 KS ALLEN 66772 103 126 135 118 265 110 159 146 126 151 114 113 KS ANDERSON 66014 67 156 167 140 287 73 132 121 102 127 77 76 KS ANDERSON 66015 89 130 141 114 262 97 135 118 97 123 101 101 KS ANDERSON 66032 71 147 158 129 276 79 121 107 88 113 82 82 KS ANDERSON 66033 61 157 169 139 285 69 117 106 87 111 72 72 KS ANDERSON 66039 79 143 154 127 275 86 136 123 104 129 89 89 KS ANDERSON 66091 80 138 150 121 269 88 128 113 93 118 92 91 KS ANDERSON 66093 87 129 141 112 260 96 131 110 89 114 99 99 KS ATCHISON 66002 42 226 240 205 341 50 35 31 44 37 47 52 KS ATCHISON 66016 44 214 227 193 329 53 36 27 32 33 51 56 KS ATCHISON 66023 52 207 221 186 321 61 39 20 24 26 59 64 : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : KS WYANDOTTE 66106 9 216 228 196 337 7 84 79 65 85 10 11 KS WYANDOTTE 66109 7 216 229 196 337 10 76 70 57 76 10 13 KS WYANDOTTE 66111 7 216 228 196 337 7 82 76 63 82 10 11 KS WYANDOTTE 66112 7 216 229 196 337 7 79 73 60 79 10 11 KS WYANDOTTE 66118 13 223 235 203 344 7 86 81 69 87 7 7 Total KS
  24. 24. 24
  25. 25. Projected Market Shares (Share of Sedgwick County Spending) Kansas Star 2016 91% Global Gaming 2016 80% 25
  26. 26. Gravity Models – Overview  Location I  Location II  Size  Everything Else 26
  27. 27. Location I: The Closer, the Better 27
  28. 28. Location I: The Closer, the Better =“Friction” 28
  29. 29. Las Vegas Visitation/Distance 0.0 5.0 10.0 15.0 20.0 25.0 0 500 1,000 1,500 2,000 2,500 LasVegasVisitors/000adults Distance (miles)
  30. 30. Mississippi Visitors/Day/000 0.0 4.0 8.0 12.0 16.0 20.0 0 100 200 300 400 500 600 700 MississippiVisitors/Day/000adults Distance (miles)
  31. 31. Casino X / players’ club data $0 $200 $400 $600 $800 $1,000 0 50 100 150 200 250 300 350 400 AverageAnnualSpending/Adult Distance from Casino X (miles)
  32. 32. Casino Y: players’ club data $0 $100 $200 $300 $400 $500 0 20 40 60 80 100 120 AverageAnnualSpending/Adult Distance from Casino Y (miles)
  33. 33. 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 ln(distance) ln(LasVegasvisitors/0000) 33 Las Vegas Visitation [ log-log ]
  34. 34. Las Vegas: slope of the curve y = -1.0082x + 10.75 R2 = 0.9631 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 ln(distance) ln(LasVegasvisitors/0000) 34
  35. 35. Mississippi: steeper slope y = -1.4088x + 11.25 R2 = 0.9353 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 ln(distance) ln(Mississippivisitors/day/0000) 35
  36. 36. Laughlin: much steeper slope y = -1.9121x + 16.299 R² = 0.9552 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 ln(Laughlinvisitors/0000) ln(distance) 36
  37. 37. Casino X: isolated market y = -0.8982x + 7.8944 R² = 0.6804 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 ln(adjustedannualspending/adult) ln(distance from Casino X) 37
  38. 38. Casino Y: competitors afar 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 ln(annualspending/adult) ln(distance from Casino Y) 38
  39. 39. Casino Y: less competition close y = -0.886x + 8.0919 R² = 0.8505 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 ln(annualspending/adult) ln(distance from Casino Y) 39
  40. 40. 40 (1.00) 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 ln(spendingperadult) ln(distance) Exhibit A-9: Slot Spending Declines With Distance at Casino Z per model per club per W-2s
  41. 41. 41 (1.00) 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50 ln(spendingperadult) ln(drive time) Exhibit A-10: Slot Spending Declines With Travel Time at Casino Z per model per club per W-2s
  42. 42. 42 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 0 5 10 15 20 25 30 0-10 miles 10-20 miles 20-30 miles 30-40 miles 40-50 miles 50-70 miles 70-100 miles 100-150 miles 150- 300(±) miles > 300(±) miles AnnualVisits(and$Win)PerPlayer Exhibit A-11: Rates of Visitation (and Win) vs. Distance at Casino Z Trips / Play $ Win / Pla
  43. 43. Model vs. Real World 43
  44. 44. 44 Projection / Source Actual / Source Facility / Market: Zia Park / Hobbs, NM $53.7 (1) $68.9 (2) Emmetsburg / Iowa $23.4 (3) $26.4 (4) Northwood / Iowa $34.2 (3) $67.5 (4) Riverside / Iowa $82.0 (3) $85.8 (4) IOC Waterloo / Iowa $96.8 (3) $76.9 (4) $30.2 $49.9 Hoosier Park / Indiana $275 (7) $201 (8) Indiana Live / Shelbyville $261 (7) $228 (8) Wild Rose Clinton / Iowa $48.2 (9) $39.2 (10) DBQ Diamond Jo / Iowa $61.9 (9) $68.4 (10) Jumers Rock Island / Illinois $89.7 (9) $75.2 (11) Dodge City / Kansas $40.7 (12) $37.7 (13) Tioga Downs / NY (5) (6)$42.2
  45. 45. Global Gaming / WinSpirit Casino 45
  46. 46. 46
  47. 47. 47 Exhibit A: Summary of Projections (all in then-year $) Global / WinSpirit 2012 2014 2016 Full Build Slot Machines 1,300 1,550 1,800 2,000 Table Games (not inc. poker) 30 40 40 40 Total Gaming Positions ( " " ) 1,480 1,790 2,040 2,240 Slot Power Rating 111.0 110.8 110.9 111.1 Total Gaming Revenues ($million): (6 mos) With no Local Competition $62.1 $141.2 $155.8 $160.5 With Competitor in Park City $46.8 $111.7 $127.3 $109.1 Total Annual Visitation (000): (6 mos) With no Local Competition 716 1,583 1,684 1,760 With Competitor in Park City 578 1,316 1,434 1,278 Annual "Tourist" Visitation (000): (6 mos) With no Local Competition 67 173 187 198 With Competitor in Park City * 68 175 189 197
  48. 48. 48 $50 $100 $150 $200 $250 2011 2012 2013 2014 2015 2016 Full Build TotalGamingWin($mn) Note: Cummings projections are for "stabilized operations" Exhibit B: Cummings Projections Compared to Global Gaming's Global Cummings
  49. 49. Peninsula Gaming / Kansas Star Casino 49
  50. 50. 50
  51. 51. 51 Exhibit A: Summary of Projections (all in then-year $) Peninsula / Kansas Star 2012 2014 2016 Full Build Slot Machines 1,310 1,500 2,000 2,000 Table Games (not inc. poker) 32 42 50 50 Total Gaming Positions ( " " ) 1,502 1,752 2,300 2,300 Slot Power Rating 97.5 102.9 102.9 102.9 Total Gaming Revenues ($million): With no Local Competition $159.1 $192.1 $213.4 $213.4 With Competitor in Park City $109.3 $143.7 $169.4 $141.0 Total Annual Visitation (000): With no Local Competition 1,741 1,997 2,248 2,248 With Competitor in Park City 1,329 1,620 1,886 1,634 Annual "Tourist" Visitation (000): With no Local Competition 70 121 144 144 With Competitor in Park City * 70 122 145 142
  52. 52. 52 $50 $100 $150 $200 $250 2011 2012 2013 2014 2015 2016 = Full Build TotalGamingWin($mn) Note: Cummings projections are for "stabilized operations" Exhibit C: Cummings Projections Compared to Peninsula's Peninsula Cummings
  53. 53. The Difference Between the Two: 53
  54. 54. 54 $50 $100 $150 $200 $250 2011 2012 2013 2014 2015 2016 Full Build TotalGamingWin($mn) Note: Cummings projections are for "stabilized operations" Exhibit B: Cummings Projections Compared to Global Gaming's Global Cummings
  55. 55. 55 $50 $100 $150 $200 $250 2011 2012 2013 2014 2015 2016 = Full Build TotalGamingWin($mn) Note: Cummings projections are for "stabilized operations" Exhibit C: Cummings Projections Compared to Peninsula's Peninsula Cummings
  56. 56. 56
  57. 57. 57
  58. 58. 58 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 0 5 10 15 20 25 30 0-10 miles 10-20 miles 20-30 miles 30-40 miles 40-50 miles 50-70 miles 70-100 miles 100-150 miles 150- 300(±) miles > 300(±) miles AnnualVisits(and$Win)PerPlayer Distance Matters Trips / Play $ Win / Pla
  59. 59. Will E. Cummings Cummings Associates 135 Jason Street Arlington, MA 02476 (781) 641-1215 cummingsw@aol.com 59
  60. 60. Gaming Revenue Projections for South-Central Kansas Presentation to Lottery Gaming Facility Review Board by Will Cummings / Cummings Associates December 1, 2010 60

×