1. Cummings Associates
Cummings Response to
Global Gaming Solutions, LLC’s
Submissions Regarding Revenue
Projections and Distance Issues
December 13, 2010
135 Jason Street, Arlington, Massachusetts 02476
Telephone: 781.641.1215 - Fax: 641.0954 - e-mail: cummingsw@aol.com

2. Cummings Response to Global Gaming
Solutions, LLC’s Submissions Regarding
Revenue Projections and Distance Issues
I have reviewed the relevant portions of the following material submitted by Global Gaming
Solutions, LLC, as it relates to our differences regarding revenue projections and the effects of
distance (and competition) thereon:
o 20111109_Global_Gaming_Integrated_response_to_Consultant_follow_up_questions
o GlobalGamingKS_-__Lotteryreviewboard_01December2010_(final)
o KS_-_KansasRacingGamingCommission_FollowUpQuestion-ALL_07December2010
o 20101209_Global_Gaming_--_RevenueProjectionsAnalysis_08December2010
This response generally follows the last of these documents, as it appears to summarize, and
in some cases extend, the main points of the previous submissions. I quote from the Global Gaming
document(s) in blue Arial font, and my responses follow in black Times Roman.
“We would ask the Review Board to carefully consider the case of Worth County, Iowa. . .
Comparison results show that actual revenue generated was double that of the Cummings original
projections. As you will see in the attached CBRE analysis, there are stark parallels between Worth
County and Sumner County. . .”
(letter of Michael Chang to Patrick Martin, December 8, 2010, page 1)
I agree that I vastly underestimated the actual revenues of the new casino at Northwood in
Worth County, Iowa (as did the applicant, Peninsula Gaming). I also agree that there are parallels
between Worth County and Sumner County. I would argue, however, that there are also parallels
Cummings Associates

3. Cummings Response 2
December 13, 2010
with Waterloo, Iowa; Hoosier Park and Indiana Live in Indiana; and Dodge City, Kansas. These are
all markets where distance matters in which I overestimated casino revenues. I believe it is
inappropriate to cherry-pick among properties and/or markets, and I therefore base my projections on
a range of experience that is as wide as reasonably possible. This experience includes the current
performance of the Diamond Jo Northwood.
(For additional comment on the Worth County experience, see pages 18-19 below.)
“Cummings has acknowledged the following three points:
1. Our analysis on deconstructing his Gravity Model and what drives the gravity model
assumptions is accurate. . .”
(ibid., page 1)
I recall saying that CBRE “did a good job.” I would not characterize their analysis as
“accurate,” in particular with regard to the following point:
“2. If you believed CBRE’s analysis of factors in the model that drive revenue differentials, then
you would conclude as CBRE did that material differences attributable to a competitor’s
attractiveness do not exist. . .”
(ibid., page 1)
At no time have I made any statement to this effect. CBRE in fact misunderstands the effects
of “power ratings” in my gravity models. I believe that the “other things” that cumulatively add up to
“attractiveness” do matter, and are reflected appropriately in my models. There are material
differences in “attractiveness” between facilities, and these have substantial impacts in my models:
for example, the Isle of Capri Kansas City (slot power rating 86) versus the other casinos in Kansas
City, Missouri (101 to 106) – the resulting difference in win per slot per day is roughly 50%.
Cummings Associates

4. Cummings Response 3
December 13, 2010
“3. NO changes have been made to the Cummings Gravity Model since its use in the Sumner
County bids in 2007/2008.”
(ibid., page 1)
At no time have I made nor acknowledged such a statement. For this year’s models, I have:
1. Updated demographic data.
2. Updated the locations of the proposed facilities (which differ slightly from those in
2008).
3. Updated travel times to those facilities, including direct access to that proposed by
Peninsula at Exit 33.
4. Updated the “sizes” of all facilities represented in the model (numbers of slots and
tables), both in Kansas and in all surrounding states.
5. Updated the power ratings of those facilities that report gaming revenues.
6. Revised (slightly) my assessments of the power ratings that I estimate for some
competing facilities in Oklahoma based on my observations of their physical
characteristics and volumes of patronage.
7. Revised my assessments of the power ratings that I expect for the new facilities, as
documented in Exhibit 5 of my report.
The fundamental relationships regarding the impacts of distance, size, and “attractiveness”
(power ratings) remain unchanged.
Cummings Associates

5. Cummings Response 4
December 13, 2010
“This year the differential appears to be 27%, though no changes in the model have been
disclosed.”
(ibid., page 2)
This year’s differential is indeed roughly 27% – in 2014 and 2016. At “full build,” it is only
25%. I apologize for not “disclosing” updates 1 through 6 above. I thought they would obviously be
essential for the current analysis.
“Approximately half of the percentage difference can be attributed to distance (the extra 12 minutes
to Exit 19), and the other half is attributed to the relative attractiveness of the competition.”
(ibid., page 2)
I disagree. Almost all of the percentage difference can be attributed to distance. The relative
attractiveness of the competition is the same whether you are at Exit 19 or at Exit 33. (The effects of
that competition differ between Exit 19 and Exit 33, but that is largely a function of relative distance
/ travel time, not attractiveness.)
“Sometimes the common sense approach should prevail. The Cummings model assumes that
‘revenue declines by 38% as distance from the population center doubles.’ What if one casino was
1 mile from the population center and was projected to generate $100 million? Would a site one
mile further away generate only $62 million?”
(ibid., page 2 – italics in the original)
The near-quotation from my report of November 23 omits a key qualification. What I
actually state on page 2 of my Appendix regarding methodology is:
“I have analyzed such data from a wide variety of markets, other examples being presented in
Exhibits A-4 through A-11. Based on this type of data, I estimate that in general, over a reasonable
range of distances the aggregate “elasticity” of spending with respect to distance is roughly -0.7, that
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6. Cummings Response 5
December 13, 2010
is, consumers’ total spending declines in somewhat less than direct proportion to the distance to be
traveled.” (italics added)
I would not consider the difference between one and two miles to fall within such a
“reasonable range.” I do have what I consider to be ample data, a portion of which is presented in
Exhibits A-6 through A-11, to conclude that the difference between 20± and 30± miles (which is the
range most relevant here) does indeed have substantial impacts.
“Distance matters, but common sense perspective on the distance differential would produce a
much smaller percentage difference . . .”
(ibid., page 2)
“Common sense” sometimes errs. I prefer to base my analyses on data regarding actual
performance.
“There is no real world situation you can look at that provides actual data to prove the Cummings
model is accurate (or not), except possibly for Worth County.”
(ibid., page 2)
I do not understand why Worth County alone is relevant. In Exhibit A-17 of my report, I
present a comparison of my predicted versus actual results for a dozen facilities, all of which were
located in markets where distance and competition were critical in different ways. I believe this
record demonstrates the accuracy of my models in general. I would again dispute the contention that
the Worth County experience is “more parallel” to Sumner County than that of a dozen other
markets.
Cummings Associates

7. Cummings Response 6
December 13, 2010
“The distance relationship used by Cummings was created by market research (a survey) in
Mississippi. Additional analysis involved reviewing player’s club data.”
(ibid., page 2)
“The evidence that the State consultant uses to justify why the 38% rate of decline is applicable is
based on survey data it collected from Mississippi casinos and an analysis of players club data from
two anonymous casinos.”
(undated CBRE report “Disproving the Exit 33 Myth. . .,” page 7)
(page 33 of the .pdf file which begins with Mr. Chang’s letter)
The latter statement, though presented in an undated report, appears to be source of the
former, as well as several similar statements regarding the bases for the distance relationships that I
use in my models. As I quoted above from the Appendix to my report, “I have analyzed such data
from a wide variety of markets, other examples being presented in Exhibits A-4 through A-11.”
(italics added)
Including the dozen cases cited in Exhibit A-17 of my report, I have conducted roughly 52
studies which used gravity models to assess existing performance and/or develop projections for
future gaming revenues. (Most of these were proprietary, and a few for facilities that did not get
built, and so do not appear in Exhibit A-17.) These 52 studies focused on roughly 76 markets of
interest, and involved analysis of hundreds of markets containing even more hundreds of gaming
facilities. In most of these studies, I obtained some type of data (survey, players’ club, or license
plate/bus count) regarding geographic origin of play for one or more facilities. While there are some
facilities that perform spectacularly well (Worth County, or L’Auberge du Lac in Lake Charles,
Louisiana) or poorly (numerous riverboats in the Midwest), I have not seen any data which imply that
distance matters very little.
Cummings Associates

8. Cummings Response 7
December 13, 2010
“Both of those approaches require a lot of interpretation, and have some clear shortcomings.”
(Mr. Chang’s letter, page 2)
Agreed. I have spent fifteen years interpreting such data and applying it as described above.
I am confident in the results.
I would add at this point that my models are not alone in projecting a substantial difference in
likely revenues between Exit 19 and Exit 33. Wells Gaming Research, conducting a completely
independent analysis, projects a difference that is even more substantial. Though the Wells models
are proprietary, I believe that they are based upon analyses of other markets that are largely distinct
from those that I have used in developing mine. The Wells results argue that, in this particular case,
distance matters even more than I have found in my analyses.
“CBRE suggested that we get some direct market research through a poll of Wichita residents.
While it isn’t perfect, any data provides information that is valuable . . . the local market research
provides a reasonable measure of public attitude on the issue of distance and its impact on gaming
revenues. . .”
(ibid., page 2)
I would disagree as to the value of “any data:” some data is at best irrelevant, and at worst
misleading. I agree that survey data provides a reasonable measure of public attitudes, but disagree
strongly that such (survey-measured) attitudes form a reasonable basis upon which to quantify
economic behavior such as spending at casinos already in operation, let alone yet to be built. The gap
between consumers’ responses to surveys and their actual behavior is huge and highly variable.1
1
See, for example:
Rachel A. Volberg, W. Lamar Moore, Eugene M. Christiansen, Will E. Cummings and Steven M.
Banks, “Unaffordable Losses: Estimating the Proportion of Gambling Revenues Derived from Problem
Gamblers,” Gaming Law Review, Volume 2, Number 4, 1998, pp. 349-360, and
Cummings Associates

9. Cummings Response 8
December 13, 2010
As one illustration, let us take the results of the survey conducted by Jayhawk Consulting
Services on December 3. As described on page 3 of Mr. Chang’s letter, this found that 33% of
Wichita residents said they would visit a casino 30 minutes away an average of 4.65 times per year.
If we apply these results to the adult population of Sedgwick County, we get:
Adult population (21+) 322,694 (Cummings estimate)
Would visit . . . x 33% (survey result)
Times per year: x 4.65 (survey result)
----------
Total visits 495,174
I believe this severely understates likely visitation. My gravity models indicate that the
residents of Sedgwick County would make roughly 1,020,000 visits to the WinSpirit casino, more
than twice the volume suggested by the survey.
“We have also provided data from our Riverwind Casino property located on I-35 highlighting the
majority of customers travel in excess of 25 miles (or 30-minute travel time) from the metropolitan
area of Oklahoma City to this facility. This is despite the customers having closer alternatives.”
(ibid., page 4)
I do not recall seeing such data. The key parameter, however, is not “percentage of
customers” but rather rates of spending per unit of population. If 70% of their customers travel more
than 30 minutes, but provide only 50% of total (tracked) win (see below), while 80% of the total
population of the immediate market lives more than 30 minutes away, I believe this would support
my point, not theirs.
Rachel A. Volberg, Dean R. Gerstein, Eugene M. Christiansen and John Baldridge, “Assessing Self-
Cummings Associates

10. Cummings Response 9
December 13, 2010
With regard to “closer alternatives,” I believe that Riverwind is second only to Remington
Park in terms of accessibility to most of the Oklahoma City metropolitan area, far larger (2,000 slots
versus 750), and far more “attractive” (no table games at Remington Park, fewer amenities, and
casino on the second floor). My gravity models would therefore agree that Riverwind should obtain
substantial volumes of patronage from customers who live closer to Remington Park.
“Seventy percent of customers in our player tracking data base come to Riverwind Casino from
North of I-40 or farther away than 25 miles or a typical drive time of 30 minutes.”
(ibid., page 4)
Seventy percent of customers in a data base do not necessarily generate seventy percent of the
win. At my illustrative Casino Z, 56% of the customers in its data base reside more than 30 miles
away. These contribute only 24% of total tracked-player win. 76% of total tracked-player win
comes from the 44% who live within 30 miles.
A pattern that shows the reverse, or even little variation with distance, would in my
experience be truly unique.
“We also supplied CBRE’s analysis demonstrating that the relative attractiveness of Northern
Oklahoma’s tribal gaming facilities was overestimated in the Gravity Model analysis, and if adjusted
results in a significant reduction in the revenue differential between Exit 33 and Exit 19. These
adjustments were attributable to overestimating the Power Rating of slots and several other
factors.”
(ibid., page 4)
CBRE made such an assertion. I have not seen any data which “demonstrate” that assertion.
Reported Expenditures on Gambling,” Managerial and Decision Economics, Volume 22 (2001), pp. 77-96.
Cummings Associates

11. Cummings Response 10
December 13, 2010
“Essentially, Mr. Cummings is saying in his assumptions on attractiveness that the
Oklahoma tribal casinos are better than ours.”
(ibid., page 5 – bold in the original)
Not true. I have estimated a slot power rating of 110 for the First Council casino at Chilocco,
105 for Native Lights (primarily due to their rural setting), and 95 for the Kaw Southwind at Newkirk
(despite its rural setting), versus roughly 111 for WinSpirit. The majority of other “typical” casinos
in Oklahoma I have rated at 90-100. I have estimated the Oklahoma casinos’ table power ratings at
50, versus 103 for WinSpirit. (And contrary to CBRE’s surmise, a one percentage point difference in
power rating generally results in roughly 3% difference in performance, location and size being
equal.)
With these power ratings, I estimate that the three nearest casinos currently win roughly $60
million per year as a group. This is consistent with my observations of rates of play when I visited
them – twice.
I would repeat my observation that physical attractiveness is only one element, and often a
minor one, in the performance of a gaming facility. First Council and Native Lights are right on the
highway, you can park right at the door, they are clean, well-lit, offer nearly the full range of modern
Class 3 slot product, and they are taxed at a rate roughly one-third of that which WinSpirit (or Kansas
Star) will pay. They can thus offer substantial player rewards programs. First Council will in
addition soon open a hotel, if it hasn’t already. I therefore believe they will indeed compete
effectively with the new Kansas casino in the geographic areas from which they are most accessible.
My models agree with Global Gaming that their share of the Wichita market will be miniscule.
CBRE’s assertions that my assumptions regarding their attractiveness are (a) wrong and (b)
Cummings Associates

12. Cummings Response 11
December 13, 2010
responsible for a significant portion of the difference in revenues between Exits 19 and 33 are
misplaced.
“As we have discussed in great detail, we operate travel plazas as an amenity targeted to an
entirely different market which greatly enhances our total revenue picture. This causes Cummings
to make an attractiveness assumption that is inappropriately higher than justified in the market.”
(ibid., page 5)
I make my attractiveness assumptions independent of the philosophy by which Global
Gaming, or any other firm, operates its travel plazas. The “gasinos,” and some similar modest
casinos throughout Oklahoma, are packed because some customers like them. I believe that my point
is largely the same as Global Gaming’s: different strokes for different folks.
“Cummings attempts to equate customers of a travel plaza to the general population within the
area, which is an inaccurate association. As a result, he applies a higher than appropriate
attraction factor to tribal casinos in Oklahoma, which skews his assumptions in his revenue
projections.”
(ibid., page 5)
I used the Eastern Shawnee Travel Center, Peoria Gaming Center, and Little Turtle facilities
to illustrate my contention that physical attractiveness does not a high-performing casino make.
None of these are, by my observation, what I understand Global Gaming’s characterization of its
travel plaza to be: a facility located on a high-volume thoroughfare with substantial amenities for
truckers (and other travelers) who are traveling long distances and would not otherwise gamble in the
area. The “gasinos,” by contrast, are gas stations with a slot room attached, situated on rather modest
highways which serve primarily local traffic. The distribution of license plates among Oklahoma,
Missouri and Kansas when I visited was almost exactly what my gravity models predict of local
Cummings Associates

13. Cummings Response 12
December 13, 2010
residents, and the promotions that they advertised were clearly targeted toward frequent customers.
Some other facilities without gas stations attached, such as the Osage Million Dollar Elm at Ponca
City, were indistinguishable. What does distinguish my examples is that there are “nicer” casinos
next door or just down the road. My point is that “nicer” casinos are not necessarily more
“attractive” to all comers.2
“Cummings appeared to assign a travel plaza revenue adjustment of $2.9 million and 20,000
visitors. That adjustment, however, also included a deduction of $2.2 million because our project did
not include direct access. . . None of the previous exit 19 applicants proposed a travel plaza type
development.”
(ibid., page 5)
My projections for WinSpirit “Frontage Traffic” are:
2012 (no travel plaza, no direct access, annual rate): $3.7mn win 34,000 visitors
2014 (with travel plaza, no direct access, annual rate): $6.6mn win 57,000 visitors
-------------- ------------------
Effective “Travel plaza adjustment” $2.9mn win 23,000 visitors
Note, however, that a portion of the $2.9 million increment in win is due to inflation.
I do not fully understand the comment about “a deduction of $2.2 million.” I suspect it is
related to Global Gaming’s perception of “incremental value” discussed below.
2
To amplify this point further, there are many gaming facilities in the Northeast that look just fine and
offer all the usual amenities, but demonstrate (by my analyses) slot power ratings in the 80s. These are
almost all located in states that tax them quite heavily, leaving little for the operators to spend on player
rewards.
Cummings Associates

14. Cummings Response 13
December 13, 2010
“This was a change in the methodology used in the previous round. The methodology change
means the actual incremental value Cummings placed on the travel plaza was actually $700,000 in
revenues.”
(ibid., page 5)
I did not change the methodology. I still include a contribution from “frontage traffic.” That
contribution changed only slightly from my projections for the facilities in 2008 that did not include a
travel plaza, resulting in what Global Gaming perceives as an “incremental value” of just $700,000.
I would rather characterize the incremental value as $2.35 million in 2010 dollars, or $2.9 million in
then-year dollars, which is the assumption that creates the projections presented above.
I reviewed the performance of facilities that I would consider comparable (see my final point
below), and decided that I had been overly generous at Exit 19 in 2008. As a result, despite the
addition of Global Gaming’s travel plaza, the resulting projection for the contribution from frontage
traffic is identical to that for the same exit in 2008. The $700,000 difference is due entirely to
inflation (in 2008, I presented results in 2007$. In my current report, I present them in then-year
dollars).
I would observe at this point that none of my projections for WinSpirit include direct access
from the Turnpike, with or without a travel plaza. None of the plans submitted by Global Gaming
prior to the Board Meeting on December 1 showed such direct access.
“This means approximately 8 million people in cars and trucks drive by Exit 19 every year.
That population base is larger than Dallas-Fort Worth.”
(ibid., page 6 – emphasis in the original)
The traffic counts (see my final point below) indicate 14-15,000 vehicles cross the Kansas-
Oklahoma border each day. At 1.5 passengers per vehicle, this amounts to roughly 8 million passers-
Cummings Associates

15. Cummings Response 14
December 13, 2010
by. I would not, however, equate this to a “population.” On any given day, there are only 20,000±
more people in the area than the number that live there.3 If these people are all adults, and were to
visit and spend money gambling at the rate that local residents do (roughly $800 per year at
“Midwest Standard” rates with less than ten miles to a casino), they would add roughly $16 million
to total win.
In contrast, the roughly 4.5 million adults in the Dallas-Fort Worth metropolitan area (total
population = 6.5 million) would spend approximately $3.6 billion under the same conditions.
Annual counts of people (or vehicles) passing by do not equate to population.
“It is also a population base that the gravity model will never successfully predict.”
(ibid., page 6 – emphasis in the original)
Agreed, though as described above I would characterize it as a “source of customers,” not as
a “population base.” That is why I add a contribution from drive-by traffic to the gravity-model
calculations which are based on location of residence. We disagree as to the likely magnitude of that
contribution.
3
This is an aggressive estimate because some of the 20,000± passers-by do live in the area, and are
therefore already represented in the gravity models’ projections for local residents.
Cummings Associates

16. Cummings Response 15
December 13, 2010
“. . . using our projected daily win per patron, the 300 trucks that are already stopping in the
immediate area would be the equivalent of $7 million in gaming revenues.”
(ibid., page 6)
I do not agree that each of these truckers will spend, on average, $64 each time they stop in
this area (300 x $64 x 365 = $7 million). While I concur that truckers are indeed a high-value
market, not all gamble, and those that do will not gamble at every stop.
“In addition, for each 100 cars representing 150 patrons (1.5 passengers per car) would account for
an additional $3.5 million in gaming revenue in its own right.”
(ibid., page 6)
We agree on the proposition that 100 cars that stop to gamble represent substantial amounts
of gaming revenue. In Global Gaming’s view, this equates to roughly $9,600 in likely gaming win
per day, or $3.5 million over the course of a year. My number is somewhat higher, at roughly
$15,000 per day (in 2010$), or $5.6 million over the course of a year (those high-value truckers!)
Where we disagree more substantially is on the number that will stop and gamble. My
projection is for roughly 110 vehicles per day, or somewhat less than 1% of the passing traffic. To
obtain its projection of $10 million+, Global Gaming expects 3% or more to stop. I believe that
projection is aggressive.
“Difference (as predicted by Cummings’ Gravity Model): 27% (Reported as 22% in 2007/2008
analysis with same assumptions. Why?)”
(ibid., within table on page 7)
As described on page 3, the underlying relationships that the gravity models embody are the
same in 2010 as they were in 2008. Many specific parameters, however, have changed, though most
Cummings Associates

17. Cummings Response 16
December 13, 2010
to a very minor degree. The demographics are different, travel times have changed, the sizes of the
facilities have changed (more with respect to tables than to slots), and the competition from
Oklahoma (and other) facilities has changed.
Despite these modest updates (or rather, due to the fact that they are indeed modest), I would
view my current projections as very similar to those I produced in 2008:
2008 Proj’ns (in 2016$) 2010 Proj’ns (in 2016$)
(at Full Build)
Exit 33 Harrahs: $220 million Kansas Star: $213 million
Marvel: $165 million
Exit 19 WinSpirit: $160 million
Penn: $156 million
“In effect, the Gravity Model says that gaming revenue declines by $3.6 million for each
mile, or $200,000 per 100 yards (the length of a football field). This prediction is not
supported by market research or by actual consumer behavior.”
(ibid., within table on page 7 – emphasis in the original)
I agree that $3.6 million per mile strikes us all as a high figure. It is, however, supported by
the market research and casino players’ club data that I have seen elsewhere, and by the performance
of my gravity models in the other applications that I have described. It will perhaps appear less
extreme when characterized as “2.6% per minute,” as I would prefer to view it, rather than in terms
of dollars per mile. In some other markets (admittedly with greater competition as a contributing
factor), I have observed gaming revenues to decline by as much as five percent per minute of travel
time.
Cummings Associates

18. Cummings Response 17
December 13, 2010
“First, we would note that about 1 in 5 (21%) residents of Wichita attended a casino to gamble
within the past year. We have no frame of reference or recent past experience to know if that is
low, high or about the average for a Kansas community.”
(Jayhawk “Report of Public Opinion Survey: August 27 and 28, 2010,” page 3)
(page 13 of the .pdf file which begins with Mr. Chang’s letter)
“First, we found that, among the general public, about 18% had been to a casino within the last
year. In other casino polling we have done around the state of Kansas, we would note that a
participation rate of about 20% is very typical of a Kansas community.”
(Jayhawk “Report of Public Opinion Survey: December 3, 2010,” page 3)
(page 18 of the .pdf file which begins with Mr. Chang’s letter)
I am curious as to the experience that Jayhawk obtained between August and December
which enabled that firm to characterize 20% as “very typical of a Kansas community” in its second
report.
I would moreover contrast these findings of 18-21% “within the past year” with those from
other jurisdictions. The American Gaming Association’s “2010 State of the States: the AGA Survey
of Casino Entertainment” reports that across the U.S. as a whole, 28% of adults had visited a casino
to gamble within the past year. For counties in which casinos were located, 42% had done so.
(These findings are essentially identical to those of all recent-past such surveys of which I am aware.)
These results speak clearly to me that distance matters, and Wichita is currently on the far end of the
spectrum.
Cummings Associates

19. Cummings Response 18
December 13, 2010
“. . . the Worth County casino competes with 19 tribal casinos across the border in neighboring
Minnesota.”
(“CBRE’s Analysis of: Cummings & Associates Track Record . . .,”
page 22 of the .pdf file which begins with Mr. Chang’s letter)
I disagree with this characterization. The map presented on page 25 of the .pdf file shows
only 11 casinos in the (large) portion of Minnesota that it depicts (the rest are in the far Northwest),
and two of these are irrelevant (Canterbury Park and the “Riverboat Bingo Hall” offer no slot
machines). The vast majority of Minneapolis-Saint Paul casino patronage goes to just four gaming
facilities: Mystic Lake (just south of Minneapolis, with 4,000 slots), Treasure Island in Red Wing,
and the Grand Casinos at Hinckley and Mille Lacs.
On the other hand, the map does not show many casinos in Wisconsin nor a few in Iowa with
which the Diamond Jo Worth competes. All this competition is at some distance, however, so I
ultimately agree with CBRE (and Global Gaming) that this market shares significant similarities with
South-Central Kansas in that there is essentially a monopoly of the central “core” with greater
competition at a distance. Where South-Central Kansas differs is in the presence of roughly 322,000
adults at 20± versus 30± miles, where my data indicate that distance matters very substantially.
“After speaking with experts familiar with the situation in Iowa, it is likely that much of the revenue
disparity between Cummings’ projections and the actual result is due to significantly greater
amounts of gaming spend from residents of Minneapolis-St. Paul and neighboring cities in
Minnesota and those driving by the facility on I-35. Spending from these customer groups were not
fully accounted for in the Cummings’ projection.”
(ibid., same page)
I agree that spending from Minneapolis-St. Paul and drive-bys were not fully accounted for in
my projections for Worth County. In particular, my projections at that time did not include a
Cummings Associates

20. Cummings Response 19
December 13, 2010
significant contribution from drive-by traffic. (They now do, though Global Gaming argues that they
are overly conservative.)
After speaking with other experts, however, and re-analyzing the market myself, I believe
that these elements make only modest contributions to the exceptional performance of the Diamond
Jo Worth casino. Peninsula testified at the October 28 hearing, for example, that the Twin Cities area
contributed on the order of ten percent of its gaming revenues. My understanding is that nearby rural
areas and middle-sized towns contribute substantially higher volumes of business than I (or anyone
else) initially projected, as well as the nearest “major” city, Rochester, from which the Diamond Jo is
nearly equal in terms of travel time as its two closest competitors.
My current analyses of Iowa markets indicate that the Diamond Jo Worth demonstrates a slot
power rating of 113, which is only slightly higher than that which I estimate for the WinSpirit casino
at Exit 19 (111). I therefore believe that the defects of my 2005 projection for Worth County, Iowa
have been rectified as they might apply to Sumner County, Kansas.
“The State consultant’s assumption is that a facility of the kind proposed in Sumner County was
next door to one of the Oklahoma Border Casinos (with the same number of slots) that the Sumner
Casino would only generate 22.2% more revenue than the typical Oklahoma Border Casino.”
(undated CBRE report “Disproving the Exit 33 Myth. . .,” page 9)
(page 35 of the .pdf file which begins with Mr. Chang’s letter)
This is approximately correct, although CBRE’s understanding of the way in which my
power ratings work is rudimentary. I would emphasize again: physical appearance often makes only
a small contribution to the performance of a casino.
Cummings Associates

21. Cummings Response 20
December 13, 2010
“The newer, $370 million L’Auberge du Lac generates nearly three times the win per slot machine
than the older Isle of Capri . . . Quite clearly, the estimated 22.1% difference in revenue (assuming
no difference in location) between a new destination casino with excellent access in Sumner County
and the typical Oklahoma border casino is at odds with numerous real world situations.”
(ibid., pages 9-11)
(page 36 of the .pdf file)
The Lake Charles market in which L’Auberge du Lac and the Isle of Capri are located
provides the most extreme example of divergence between two comparably-situated facilities of
which I am aware. I have not had occasion to conduct a gravity-model analysis of this market, but
would guess that if I did so, Isle’s power rating at Lake Charles would be far worse than its facility in
Kansas City (86), and that of L’Auberge du Lac somewhat superior to those of the “Big Three” in
Kansas City (101-106). (The resulting range in slot win per day in Kansas City is from $169 to $262,
a factor of 1.55. In Lake Charles, it is roughly 2.8.)
I would nevertheless dispute CBRE’s conclusion. The “excellent access” for the new
destination casino in Sumner County is irrelevant – the gravity model adjusts for such access. I
would argue that neither WinSpirit nor Kansas Star is likely to duplicate the truly exceptional success
of L’Auberge du Lac, which has a grossly underserved market 2.5 hours away in Houston that the
Isle facility evidently has great difficulty tapping into. On the other side of the coin, I do not believe
that the relevant Oklahoma border casinos are nearly as “bad” as the Isle property in Lake Charles – it
consists of two old-style riverboats, which quite commonly have miserable power ratings. The
difference between the facilities in South-Central Kansas and those on the Oklahoma border will in
my opinion be much less extreme than L’Auberge du Lac versus the Isle Lake Charles.
And varying the relative “attractiveness” of the Oklahoma border casinos, as measured by
power ratings or otherwise, has little impact on my results. With the Kansas Star casino at Exit 33,
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22. Cummings Response 21
December 13, 2010
the border casinos’ share of Sedgwick County slot spending is projected at roughly 5%. With
WinSpirit at Exit 19, that share is projected at roughly 8%. (With either alternative in Kansas, table
spending in Oklahoma would be negligible.) If you were to reduce these estimates to zero, the
difference that my models project in total revenues for Exit 19 versus Exit 33 would decline by only
a few percentage points.
“Traffic Volume Map,” provided by Wilson & Company
(page 62 of the .pdf file which begins with Mr. Chang’s letter)
The data on this map are consistent with those I obtained from the Kansas and Oklahoma
Departments of Transportation and used to develop my estimates for frontage visitation. The traffic
counts of 14,000-15,000 per day on the Turnpike are very similar to those on I-35 in Iowa where it
passes by the casinos at Lakeside and Northwood (Worth County). Lakeside has a full-scale travel
plaza; the Diamond Jo Worth has a gas station plus parking for truckers. I am very familiar with
these casinos (as well as the one at Prairie Meadows, where traffic counts are higher due to local
commuters, and several travel plazas are slightly down the road) and have factored my assessment of
their capture of drive-by traffic into my projections for Sumner County.
I am also familiar with the Acoma and Laguna casinos in New Mexico on I-40, and the San
Felipe casino on I-25 between Albuquerque and Santa Fe, and have analyzed New Mexico markets
in detail. The Acoma and Laguna facilities attract very high volumes of drive-by traffic; the San
Felipe casino relatively little. I believe that the success of the Acoma and Laguna casinos is due to
the fact that there is no competition for such business for long stretches of I-40 to the east (Texas)
and west (only the new Navaho casino near Gallup, then nothing on I-40 in Arizona). They are
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23. Cummings Response 22
December 13, 2010
therefore not appropriate parallels for South-Central Kansas, where long-distance traffic will pass
numerous casinos in Oklahoma to the south, and in Kansas City and Iowa to the north.
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