Golden presentation

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

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Golden presentation

  1. 1. Lottery Facility Gaming Review Board Presentation August 14, 2008
  2. 2. GOLDEN HEARTLAND – OUR SITE
  3. 3. GOLDEN HEARTLAND – RIGHT LOCATION
  4. 4. GOLDEN HEARTLAND – RIGHT SIZE Over 240 acres secured.
  5. 5. GOLDEN HEARTLAND - DESIGN by Friedmutter
  6. 6. GOLDEN HEARTLAND - DESIGN by Friedmutter
  7. 7. GOLDEN HEARTLAND - DESIGN by Friedmutter 12
  8. 8. GOLDEN HEARTLAND - DESIGN by Friedmutter 14
  9. 9. GOLDEN HEARTLAND - DESIGN by Friedmutter 15
  10. 10. GOLDEN HEARTLAND - DESIGN by Friedmutter 16
  11. 11. GOLDEN HEARTLAND – RIGHT SIZE FACILITY by Friedmutter Phase I Casino 131,804 sf Hotel 272,000 sf Banquet Space 25,000 sf Restaurants 55,395 sf Bars 24,852 sf Support/BOH 117,214 sf Misc 20,425 sf Phase I Total: 646,690 sf Phase II Residential Lofts 293,689 sf Bowling 61,468 sf Other Retail 167,527 sf Restaurants 52,622 sf Phase II Total: 734,998 sf
  12. 12. GOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE Tom Watson Design 18
  13. 13. GOLDEN HEARTLAND – CHAMPIONSHIP GOLF COURSE Tom Watson Design Golf Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Greens fees $ 1,732,500 $ 1,784,475 $ 1,838,009 $ 1,893,150 $ 1,949,944 Pro Shop $ 337,500 $ 347,625 $ 358,054 $ 368,795 $ 379,859 Locker Rentals $ 100,000 $ 103,000 $ 106,090 $ 109,273 $ 112,551 Initiation Fee (Members) $ 1,687,500 $ 168,750 $ 168,750 $ 168,750 $ 168,750 Total $ 3,857,500 $ 2,403,850 $ 2,470,903 $ 2,539,968 $ 2,611,104 Average # of spectators at a PGA event 150,000 – 200,000 Average # of spectators at a “Champions” PGA event 75,000 - 150,000 Average # of rounds of golf / year* 33,750 Average green fees at our facility $ 70 *based on 25 golf days per month for 9 months
  14. 14. GOLDEN HEARTLAND - SITE PLAN Expansion Opportunities
  15. 15. GOLDEN HEARTLAND – SITE PLAN Convenient and Accessible GARAGE 21
  16. 16. GOLDEN HEARTLAND – RIGHT SIZE CASINO Proposed Game Mix Slot and Video Poker Table Games # of Games Denom % of Floor # of Games Blackjack 53 1 Cent 54.00% 1350 Craps 5 5 Cent 5.00% 125 Roulette 4 10 Cent 0.64% 16 Baccarat 3 25 Cent 27.00% 675 Pai Gow 4 50 Cent 1.60% 40 Texas Hold’em 3 $1 10.00% 250 Three/Four Card 4 $2 0.32% 8 Poker $5 1.00% 25 Let it Ride 2 $10 0.20% 5 Flop Poker 2 $25 0.16% 4 Poker Room Tables 18 $100 0.08% 2 Total 98 Total 2,500 Christiansen Capital Advisors indicated the casino market could optimally support 2,786 gaming machines in Wyandotte County.
  17. 17. GOLDEN HEARTLAND – MARKET OVERVIEW What is the RIGHT SIZE for the Market? Gaming Convention Hotel Casinos Population* # slots # tables Floor sq ft Space Rooms KC Missouri Casinos Ameristar Casino Hotel - KC 2,500,000 3,015 105 140,000 14,520 184 Argosy Riverside Casino 2,500,000 1,924 47 62,000 18,000 258 Harrah's North KC Casino 2,500,000 1,793 72 60,133 10,000 392 Isle of Capri - KC 2,500,000 1,525 32 40,000 - - Wyandotte Proposed Casinos Golden Heartland 2,500,000 2,500 98 132,000 25,000 300 Hard Rock / Speedway 2,500,000 3,000 100 171,650 77,000 300 Legends Sun 2,500,000 2,000 85 115,000 35,000 350 Pinnacle 2,500,000 2,300 85 100,000 100,000 500 *Based on total population within 100 miles.
  18. 18. GOLDEN HEARTLAND – RIGHT TEAM Management Experience Blake L. Sartini Chairman / President / Chief Executive Officer • Over 28 years of experience in the hotel, casino and gaming industry Rod S. Atamian Executive Vice President / Secretary & Treasurer • Over 15 years of gaming management experience in hotels and casinos with a focus in finance Steve A. Arcana Chief Operating Officer • Over 23 years of experience in hotels and casinos with a focus including 8 years of gaming management Matthew W. Flandermeyer Vice President / Chief Financial Officer • Over 17 years of experience in food and beverage industry
  19. 19. GOLDEN HEARTLAND – RIGHT TEAM Management Experience Christopher Abraham Vice President of Marketing • Over 18 years of experience in the hotel casino industry with 13 years of gaming management experience Sheila Pankas Director of Compliance & Community Relations • Over 13 years of gaming experience in the gaming regulatory industry. Amy Sances Corporate Counsel & Director of Business Development • Over 11 years of legal experience in litigation, governmental relations, gaming and transactional matters
  20. 20. Golden Heartland MARKETING PLAN
  21. 21. Regional and Outer Market Advertising and Promotion Player Development Regional Offices / Junkets
  22. 22. Regional Advertising/Promotion Target Cities
  23. 23. Regional Advertising / Promotion Create awareness in markets pre-disposed to gaming by conducting aggressive pre-opening and continuing regional marketing campaigns Main Focus Points Tom Watson Signature Golf Course 4-Star Resort & Spa Dining Experiences Entertainment KCK Destination Retail Amenities Regional Periodicals USA Today, Sports Illustrated, Golf Digest, People Billboards – Proximity to thoroughfares and airports Television – Travel and leisure Website – Comprehensive on-line and e-marketing campaign
  24. 24. Regional Advertising / Promotion
  25. 25. Player Development Strategically position and operate regional offices in major feeder cities for player development fulfillment Identify players that currently frequent Las Vegas and other regional gaming markets Increase visits from existing players The combination of airports, special events, retail, sporting events, entertainment and championship golf creates the exact formula necessary to ensure that our Branch and Independent Junket offices operate successfully
  26. 26. Player Development Branch Office Locations
  27. 27. Golden Heartland LOCAL MARKET
  28. 28. Local Market Direct Marketing Loyalty Programs Local Business Alliances Advertising Promotion
  29. 29. Local and Direct Marketing Utilize management experience in KC market to maximize revenue opportunities from loyal Kansas City, MO gamers Concentrate investment on new and infrequent guests to solidify their loyalty Provide superior loyalty program (i.e. player’s club) creating an incentive for gamers to choose Kansas and Golden Heartland over competing Missouri casinos
  30. 30. Local and Direct Marketing The size of a company’s national database does not dictate success or market dominance Market dominance is created by the right product, service, marketing and loyalty programs offering the very best guest experience on a consistent basis
  31. 31. Direct Mail 37
  32. 32. Local Market Promotions & Advertising Partner with local Kansas-based businesses to conduct programs and promotions creating a “sense of community” among locals in KCK Neighborhood Partners Points for Services Gas Retail Shopping Auto Department Stores Create large-scale retail promotions to generate buzz, excitement and public relations opportunities that drive additional trips and entertainment spending from Missouri gamers
  33. 33. GOLDEN HEARTLAND - VISITORS Projected volumes of tourism 1.6 million local visitors + 2.2 million visitors outside Wyandotte County = 3.9 million visitors in 2011. Over 400,000 visitors from over 100 miles away in the first year and increasing to over 485,000 by 2014. 4.6 million visitors in 2014 with the introduction of Phase II.
  34. 34. GOLDEN HEARTLAND – TOURIST SPENDING 2011 Average Total Total Spend per Average 100+Mile Average 100+ Mile Visitor per # of Visitor Spend Per Visitation Driver Visitors Day Days Spending Visitor Casino 328,790 $ 110 1.50 $54,250,283 $ 165 Hotel 67,485 $ 115 2.25 $17,461,680 $ 259 Golf 5,648 $ 310 1.50 $ 2,626,088 $ 465 TOTAL 401,922 $ 114 - $74,338,051 $ 185
  35. 35. GOLDEN HEARTLAND – PROJECTED REVENUE Year 1 Year 2 Year 3 Slot Revenue $ 186,150,000 $ 209,875,000 $ 225,387,500 Table Game Revenue $ 46,720,000 $ 49,640,000 $ 52,560,000 Poker Revenue $ 6,405,750 $ 6,570,000 $ 6,734,250 Total Gaming Revenue $ 239,275,750 $ 266,085,000 $ 284,681,750 Other Revenue $ 49,552,124 $ 52,892,143 $ 55,005,502 Total Facility Revenue $ 288,827,874 $ 318,977,143 $ 339,687,252
  36. 36. GOLDEN HEARTLAND – SUMMARY OF TAX STRUCTURE Percentage to Revenue Thresholds the State $0 - 250 million 22% over $250 - 300 million 23% over $300 - 350 million 24% over $350 - 400 million 25% over $400 - 450 million 26% over $450 - 500 million 27% over $500 million 28%
  37. 37. GOLDEN HEARTLAND – STATE REVENUE Based on lottery contract tax structure for each proposed facility $170 Legends PNK $150 Speedway Golden $130 $110 $90 $70 $50 1 2 3 4 5
  38. 38. GOLDEN HEARTLAND Total value of the lottery contracts $139.50 F e e s  (M illio n s  o f D o lla rs ) $129.50 Golden $119.50 PNK $109.50 Legends $99.50 Speedway $89.50 $79.50 $69.50 $59.50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
  39. 39. GOLDEN HEARTLAND – STATE REVENUE Incremental Tax Dollars to State over 15 yr Contract under Golden Structure 1700 Average $70 MM 1600 Competitor 1581 Golden Tax Dollars (in Millions) 1511 1500 $51 MM 1400 1378 1327 1300 $26 MM 1200 1152 1178 1100 1000 Projected + 15% +30% Christiansen Capital Projections
  40. 40. GOLDEN HEARTLAND – LOCAL IMPACT Golden Heartland will employ 1,850 team members (FTE’s). In aggregate, over 11,000 jobs will be created during the construction phase and over 8,000 during the operational phase. Total economic output from construction is $1.4 billion and $578 million from the operational phase.
  41. 41. GOLDEN HEARTLAND – LOCAL IMPACT State of Bonner Unified Benefit Item Kansas Edwardsville Springs Government Total Casino Revenue Sharing $66,484,020 $ 2,077,626 $ 193,219 $ 6,039,658 $ 74,794,523 Property Taxes $ 207,173 $ 6,985,219 $11,532,371 $19,278,023 $ 38,002,786 Sales and Use Taxes $ 4,691,904 $ 337,258 $ 959,013 $ 1,991,846 $ 7,980,021 Other Taxes $25,000,000 $ 191,033 $ 77,660 $ 1,313,477 $ 26,582,170 TOTAL $96,383,097 $ 9,591,136 $12,762,263 $28,623,004 $147,359,500
  42. 42. GOLDEN HEARTLAND – PROPOSED INVESTMENT Use Resort & Casino Golf Course Total Build-out $ 445,545,064 $ 17,717,233 $ 463,262,297 FFE 25,298,136 - $ 25,298,136 Land 13,500,000 10,000,000 $ 23,500,000 Equipment 87,838,170 - $ 87,838,170 Preopening Cost 7,000,000 - $ 7,000,000 Financial/Taxes/Legal 2,000,000 1,000,000 $ 3,000,000 Contingency 26,608,456 1,122,987 $ 27,731,443 Capitalized Interest 22,000,000 2,000,000 $ 24,000,000 TOTAL $ 629,789,826 $ 31,840,220 $ 661,630,046
  43. 43. GOLDEN HEARTLAND – CONSTRUCTION TIMELINE 2008 Sep - Selection of Lottery Gaming Facility Manager 2009 Feb - Golf Course final design Mar - Hotel foundation begins Jun - Casino foundation complete Nov - Clubhouse construction complete 2010 Jan - Roadway construction complete Mar - Casino façade complete Jun - Garage complete Oct - Hotel interior complete Dec - Hotel complete; Golf Course complete 2011 Jan - Casino interiors complete; Landscape complete Feb - Golden Casino Grand Opening
  44. 44. GOLDEN HEARTLAND – SOURCES OF FUNDING EQUITY 1. Imbedded project equity – excess land value 2. Equity from affiliates – Golden Gaming, Inc. and Golden Mardi Gras, Inc. 3. Private equity partner in the project 4. Retail / residential development partner 5. Equity from Stockholder DEBT 1. Project specific bank/bond financings 2. Bank/bond financing through affiliates 3. Loans from Stockholders
  45. 45. GOLDEN HEARTLAND – FINANCING Other Considerations None of the project infrastructure will be derived from or financed by state or local retailers’ sales tax revenues or tax increment financings. None of the land secured for any component of the project will be acquired through eminent domain.
  46. 46. GOLDEN HEARTLAND - COMPLIANCE A Responsible Manager Operating in the gaming industry is a privilege, not a right! Compliance Plan Plan contains policies to address the companies commitment to adherence to all laws, not just gaming laws Plan incorporates training of all employees on regulatory requirements specific to their position Compliance Committee Committee members include independent gaming professionals, corporate executives and facility team members
  47. 47. GOLDEN HEARTLAND – LOCAL COMMITMENT Golden Heartland is committed to the community! School Districts Police/Fire Local Hospital
  48. 48. GOLDEN HEARTLAND – THE RIGHT CHOICE • RIGHT LOCATION - Unmatched site (over 240 acres) - Opportunity for future expansion • RIGHT SIZE - World-class facility - Top quality amenities • RIGHT TEAM - Experienced operator delivering realistic promises - Tom Watson designed championship golf course - Friedmutter designed resort • MOST REVENUE - Most tax revenue to state of Kansas and municipalities
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