This document provides gaming revenue projections for "Harrah's Mulvane" casino in Kansas under a "Baseline" or most likely future scenario. It projects total annual gaming revenues for Harrah's Mulvane of $174 million by 2027, higher than the $130.2 million and $123.5 million projected for two other proposed casinos near Wellington. The document includes exhibits providing details on the revenue projections and comparisons to projections made by Harrah's.
Under a baseline scenario, the document projects that Penn Sumner's proposed casino in Wellington, Kansas ("Penn Wellington") would generate total annual gaming revenues of $123.5 million once operations reach maturity. This is lower than projections for a competing proposed casino near Mulvane, Kansas ("Harrah's Mulvane") which is projected to generate $174 million. The document provides exhibits with details on the revenue projections, sources of consumer spending, and projected visitation for Penn Wellington and other existing and proposed casinos in Kansas.
The document provides projections for the likely gaming revenues of Penn Cherokee casino in Kansas. It includes exhibits showing baseline projections under a scenario with representative new gaming facilities in Kansas. The baseline projects Penn Cherokee will obtain $32 million in annual gaming revenues from 900 slot machines. Comparisons are made to Penn National's projections, which are higher, and lower and higher projection scenarios are also presented. Sources of consumer spending and visitation are broken down by location.
This document summarizes a presentation by Will Cummings to the Kansas Lottery Gaming Facility Review Board on projections for gaming revenue in the Southeast Gaming Zone of Kansas. Cummings presents his own projections, which are lower than those of Penn National due to differences in assumptions around how spending decreases with distance. Cummings' projections are based on gravity models showing that spending falls off sharply with increased distance from a casino, while Penn National's assume more consistent spending across distance. Charts show the significant differences between the two sets of projections, particularly regarding out-of-state counties.
This document compares two proposed casino locations in Sumner County, Kansas - the PENN proposal near Exit 19 on I-35 and the Mulvane proposal near Exit 33. According to traffic studies, the PENN location would have a 7.95 minute shorter drive time for southbound customers on I-35. Demographic data estimates the PENN location would generate $1.1 million more in annual gaming taxes due to its larger potential market capture area. The PENN location is also projected to generate nearly $1 million more in annual hotel taxes due to offering 75 more hotel rooms.
The document provides gaming revenue projections for Marvel Gaming LLC's proposed casino ("Marvel Wellington") in Kansas. It projects Marvel Wellington will generate total annual gaming revenues of $130.2 million, lower than the $174 million projected for Harrah's Mulvane casino. The document also compares the source of consumer spending and visitation at each Kansas casino. It finds Harrah's Mulvane location would elicit more consumer spending due to being 11 minutes closer to the population center. Overall, the document projects lower revenues for Marvel Wellington than Marvel's own projections or other competitors.
The document provides gaming revenue projections for Marvel Gaming LLC's proposed casino ("Marvel Wellington") in Kansas. It projects Marvel Wellington will generate total annual gaming revenues of $130.2 million, lower than the $174 million projected for Harrah's Mulvane casino. The document also compares the source of consumer spending and visitation at each Kansas casino. It finds Harrah's Mulvane location would elicit more consumer spending due to being 11 minutes closer to the population center. Overall, the document projects lower revenues for Marvel Wellington than Marvel's own projections or other competitors.
The document provides projections for the performance of two proposed new gaming facilities in Kansas - Kansas Entertainment at the Kansas International Speedway and Chisholm Creek in south-central Kansas. Projections are provided under three scenarios for each facility: an initial phase, an alternative minimum scenario, and a fully built-out scenario. The projections are based on a gravity model that analyzes demographic data and gaming revenues from comparable existing facilities. The document summarizes that for Kansas Entertainment's initial phase, total gaming revenues are projected at $203 million compared to the applicant's projection of $220 million. For Chisholm Creek's initial phase, revenues are projected at $163 million compared to the applicant's $121 million. At full build
The document provides an update to methodology for projecting gaming revenues in Kansas. It refines analyses of other Midwest gaming facilities' performance and zeroes in on proposed Kansas sites. Exhibits show annual spending on slots and tables at other facilities, ranked by "power ratings" to estimate proposed Kansas facilities' likely performance based on location, size, and investment. The methodology focuses on local residents but assumes some facilities can attract more distant customers. Intangibles like branding and management are difficult to model but could impact projections.
Under a baseline scenario, the document projects that Penn Sumner's proposed casino in Wellington, Kansas ("Penn Wellington") would generate total annual gaming revenues of $123.5 million once operations reach maturity. This is lower than projections for a competing proposed casino near Mulvane, Kansas ("Harrah's Mulvane") which is projected to generate $174 million. The document provides exhibits with details on the revenue projections, sources of consumer spending, and projected visitation for Penn Wellington and other existing and proposed casinos in Kansas.
The document provides projections for the likely gaming revenues of Penn Cherokee casino in Kansas. It includes exhibits showing baseline projections under a scenario with representative new gaming facilities in Kansas. The baseline projects Penn Cherokee will obtain $32 million in annual gaming revenues from 900 slot machines. Comparisons are made to Penn National's projections, which are higher, and lower and higher projection scenarios are also presented. Sources of consumer spending and visitation are broken down by location.
This document summarizes a presentation by Will Cummings to the Kansas Lottery Gaming Facility Review Board on projections for gaming revenue in the Southeast Gaming Zone of Kansas. Cummings presents his own projections, which are lower than those of Penn National due to differences in assumptions around how spending decreases with distance. Cummings' projections are based on gravity models showing that spending falls off sharply with increased distance from a casino, while Penn National's assume more consistent spending across distance. Charts show the significant differences between the two sets of projections, particularly regarding out-of-state counties.
This document compares two proposed casino locations in Sumner County, Kansas - the PENN proposal near Exit 19 on I-35 and the Mulvane proposal near Exit 33. According to traffic studies, the PENN location would have a 7.95 minute shorter drive time for southbound customers on I-35. Demographic data estimates the PENN location would generate $1.1 million more in annual gaming taxes due to its larger potential market capture area. The PENN location is also projected to generate nearly $1 million more in annual hotel taxes due to offering 75 more hotel rooms.
The document provides gaming revenue projections for Marvel Gaming LLC's proposed casino ("Marvel Wellington") in Kansas. It projects Marvel Wellington will generate total annual gaming revenues of $130.2 million, lower than the $174 million projected for Harrah's Mulvane casino. The document also compares the source of consumer spending and visitation at each Kansas casino. It finds Harrah's Mulvane location would elicit more consumer spending due to being 11 minutes closer to the population center. Overall, the document projects lower revenues for Marvel Wellington than Marvel's own projections or other competitors.
The document provides gaming revenue projections for Marvel Gaming LLC's proposed casino ("Marvel Wellington") in Kansas. It projects Marvel Wellington will generate total annual gaming revenues of $130.2 million, lower than the $174 million projected for Harrah's Mulvane casino. The document also compares the source of consumer spending and visitation at each Kansas casino. It finds Harrah's Mulvane location would elicit more consumer spending due to being 11 minutes closer to the population center. Overall, the document projects lower revenues for Marvel Wellington than Marvel's own projections or other competitors.
The document provides projections for the performance of two proposed new gaming facilities in Kansas - Kansas Entertainment at the Kansas International Speedway and Chisholm Creek in south-central Kansas. Projections are provided under three scenarios for each facility: an initial phase, an alternative minimum scenario, and a fully built-out scenario. The projections are based on a gravity model that analyzes demographic data and gaming revenues from comparable existing facilities. The document summarizes that for Kansas Entertainment's initial phase, total gaming revenues are projected at $203 million compared to the applicant's projection of $220 million. For Chisholm Creek's initial phase, revenues are projected at $163 million compared to the applicant's $121 million. At full build
The document provides an update to methodology for projecting gaming revenues in Kansas. It refines analyses of other Midwest gaming facilities' performance and zeroes in on proposed Kansas sites. Exhibits show annual spending on slots and tables at other facilities, ranked by "power ratings" to estimate proposed Kansas facilities' likely performance based on location, size, and investment. The methodology focuses on local residents but assumes some facilities can attract more distant customers. Intangibles like branding and management are difficult to model but could impact projections.
This group of experienced regional casino developers and operators proposes to build Kansas Crossing casino and hotel in southeast Kansas. The development is expected to generate $69 million in initial construction spending, create hundreds of jobs, and generate $10 million annually for state and local governments through taxes. As the largest entertainment venue in the region, Kansas Crossing aims to boost tourism by attracting out-of-state visitors and partnering with local organizations to promote southeast Kansas.
This document summarizes Douglas Walker's presentation on forecasting economic impacts and competitive impacts of casinos in southeast Kansas. Some key points:
- Walker estimates that a new casino would result in a 9.9% increase in employment, 3.4% increase in average weekly wages, and 1.7% increase in the number of establishments in the county. Crawford County is estimated to see larger gains due to its larger population.
- 14 casinos in northeast Oklahoma located within 25 miles of the Kansas border could competitively impact the proposed southeast Kansas casinos. Walker uses a model of competition among Missouri casinos to analyze these competitive effects.
- Location and distance between casinos may impact competition based on Hot
The document provides an analysis of the potential fiscal impacts of three proposed gaming facilities - Camptown Casino, Kansas Crossing Casino, and Castle Rock Casino - in southeast Kansas. It summarizes the methodology used, including adjustments made to the revenue estimates provided by the applicants. Revenue estimates over 5 years are provided for the state of Kansas, local counties and cities, school districts, and other impacted entities. Estimated costs to local and state governments to provide services to each facility are also summarized. The analysis finds differences between the revenue and cost estimates provided by EEC and the original numbers submitted by the applicants.
Civic Economics (Dan Houston, Matt Cunningham)krgc
The document analyzes the potential economic impacts of three proposed gaming facility projects in Kansas: Camptown, Kansas Crossing, and Castle Rock. It finds that Castle Rock would have the largest economic impact during construction, supporting over 900 jobs and contributing $134.2 million to total economic output. During operations in 2019, Castle Rock is estimated to support 584 jobs and contribute $72.9 million to economic output, more than the other two proposals. The analysis examines impacts from construction spending, facility operations, gaming revenues, and local resident spending.
Union Gaming Analytics was commissioned by the Kansas Lottery Gaming Facility Review Board to evaluate three applicants for a gaming license in southeast Kansas. The analysis included projections for gross gaming revenue, visitation numbers, tax revenue, and economic impacts for each applicant. The methodology involved examining demographic data within drive time radii of the proposed sites, establishing a theoretical gaming market, and applying proprietary capture rates to project revenues and visitation from local, near-local, and regional populations. Consultants then evaluated the economic and fiscal impacts, amenities, and financial suitability of each applicant.
The document analyzes and evaluates the financial suitability of three applicants for a gaming license in Southeast Kansas: Frontenac Development, Castle Rock Casino Resort, and Kansas Crossing Casino. For each applicant, it summarizes the ownership structure, project budget, proposed financing sources, and Union Gaming's analysis and conclusion on their financial viability and ability to fund the projects. While Frontenac and Kansas Crossing were deemed sufficiently capitalized, Castle Rock's ability to obtain the required debt financing was called into question due to uncertainties around land valuation and high projected leverage.
The three proposed casino projects in Kansas Southeast Zone are similar in their Phase 1 concepts, having a minimum critical mass to win the bid but also achieve initial success. Camptown and Kansas Crossing propose smaller local casinos, while Castle Rock proposes a larger regional destination. All have similar potential for Phase 1 success despite different strengths and weaknesses. The key decision is whether to prefer two smaller local casinos or one larger regional casino. The regional casino has the greatest revenue potential but also the least room for error. The owner/team's ability to adapt may be more important than initial plans. However, the tax rate difference between Kansas and Oklahoma gives Oklahoma casinos an advantage in any marketing war.
This document provides an overview and analysis of projections for new casinos proposed in southeastern Kansas. It discusses the use of gravity models to project gaming revenues and financial performance based on location, size, competition and other factors. Specifically, it examines how spending declines with distance from a casino based on players' club and other data. Bigger casinos are generally better due to economies of scale. The presentation compares various existing casinos' "power ratings" which reflect their overall attractiveness based on revenues adjusted for location.
Camptown Casino will be located in Frontenac, Kansas. It will include 750 slot machines, 20 table games, a 62-room hotel, and Gilley's Saloon entertainment venue. Phil Ruffin, an experienced casino operator, will personally finance the $84 million project. It is projected to create 300 jobs and attract nearly 1 million visitors annually from Missouri, Kansas, and other nearby states. Camptown aims to open sooner than competing proposals and will donate $50,000 annually to the local school district.
2015 LGFRB Presentation Castle Rock Casino Resort krgc
This document provides details about the proposed Castle Rock Casino Resort development project. It outlines the developers, architects, management company, contractors, and legal consultants involved. It also provides information on the size and amenities of the casino, hotel, meeting space, and other facilities. Projected revenues, taxes, employment, and visitation are presented. The management and development experience of the casino operator, American Casino and Entertainment Company, is summarized.
Global Gaming KS, LLC presented to the Kansas Lottery Gaming Facility Review Board on their proposal for a gaming facility. They argued that their selected Exit 19 site is clean with infrastructure, has community support, and avoids legal issues. Their planned 260,000 square foot facility with hotel would open fully within 14 months. While an interim facility lacks appeal, their permanent destination-quality development would include restaurants, entertainment, and gaming expansion over time. They believe revenue differences between Exit 19 and 33 sites are negligible and addressed counterarguments.
The document discusses two proposed casino projects in Kansas - Kansas Star and WinSpirit. Kansas Star promises to invest $260 million, build amenities sooner including a 100,000 square foot event center and $25 million equestrian complex, and generate more gaming revenue, taxes, and jobs for the state. It argues Kansas Star's management team has more experience building and operating successful casino projects on time and on budget and will spend more on advertising to drive higher revenue. The document positions Kansas Star as the best and most lucrative choice for Kansas.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can calm the mind and help prevent worrying thoughts. Meditation lowers stress levels in the body by reducing blood pressure and cortisol levels.
Dean Macomber summarizes his analysis of Global Gaming's proposal for a race track as a tourism generator. He finds that Global's projections of attracting a "Big Event" with 50,000-100,000 visitors are speculative given the limited number of comparable racing events and competition from existing tracks. Their projections of smaller events generating the remaining 50,000 visitors also seem aggressive. In contrast, an equestrian center like Peninsula proposes could attract equine, entertainment, and convention events more reliably as a tourism generator.
peninsula plans meet or exceed drainage standardskrgc
The document is a letter from Christopher Young, a civil engineering consultant, to the chairman of the Kansas Lottery Gaming Facility Review Board regarding a proposed drainage system for a proposed Kansas Star Casino development. Young serves as the City Engineer for Mulvane, Kansas and has reviewed drainage plans submitted by the developer. He concludes that the proposed drainage improvements, including a detention pond facility, will meet or exceed the City of Mulvane's stormwater drainage policy by having outflow rates less than existing conditions for 2-, 5-, 10-, and 100-year storm events.
This document is a response from Cummings Associates to submissions from Global Gaming Solutions regarding revenue projections and the effects of distance on revenues. Cummings disagrees with some of Global Gaming's assertions, such as that the revenue differential between two proposed casino sites is mostly due to attractiveness rather than distance. Cummings also argues that survey data is not an accurate predictor of economic behavior like casino spending. Overall, Cummings believes distance has a larger impact on revenues than Global Gaming suggests, based on Cummings' analysis of casino performance data from multiple markets.
The memorandum summarizes a request from the Kansas Lottery Gaming Facility Review Board for additional information about two competing casino applications in Kansas. Specifically, it provides details about 1) drainage and flooding issues at the proposed sites, 2) local approvals and endorsements for the sites, and 3) the experience of one applicant, Peninsula Gaming, with regulatory bodies in other states where criminal charges have been filed against the company and its executives related to campaign contributions. It concludes that the significant risks associated with approving Peninsula's application, including possible disqualification or inability to finance the project, outweigh any potential benefits over the other applicant, Global.
The marketing plan outlines a soft opening period followed by a grand opening 90 days later for a new casino in Sumner County, Kansas. The $1 million budget will be used for advertising, promotions, and community events to generate awareness and excitement. Key objectives include building a local player base within 100 miles, attracting travelers on Interstate 35, and establishing the casino as a new entertainment destination through gaming, restaurants, a hotel, and live entertainment events.
This group of experienced regional casino developers and operators proposes to build Kansas Crossing casino and hotel in southeast Kansas. The development is expected to generate $69 million in initial construction spending, create hundreds of jobs, and generate $10 million annually for state and local governments through taxes. As the largest entertainment venue in the region, Kansas Crossing aims to boost tourism by attracting out-of-state visitors and partnering with local organizations to promote southeast Kansas.
This document summarizes Douglas Walker's presentation on forecasting economic impacts and competitive impacts of casinos in southeast Kansas. Some key points:
- Walker estimates that a new casino would result in a 9.9% increase in employment, 3.4% increase in average weekly wages, and 1.7% increase in the number of establishments in the county. Crawford County is estimated to see larger gains due to its larger population.
- 14 casinos in northeast Oklahoma located within 25 miles of the Kansas border could competitively impact the proposed southeast Kansas casinos. Walker uses a model of competition among Missouri casinos to analyze these competitive effects.
- Location and distance between casinos may impact competition based on Hot
The document provides an analysis of the potential fiscal impacts of three proposed gaming facilities - Camptown Casino, Kansas Crossing Casino, and Castle Rock Casino - in southeast Kansas. It summarizes the methodology used, including adjustments made to the revenue estimates provided by the applicants. Revenue estimates over 5 years are provided for the state of Kansas, local counties and cities, school districts, and other impacted entities. Estimated costs to local and state governments to provide services to each facility are also summarized. The analysis finds differences between the revenue and cost estimates provided by EEC and the original numbers submitted by the applicants.
Civic Economics (Dan Houston, Matt Cunningham)krgc
The document analyzes the potential economic impacts of three proposed gaming facility projects in Kansas: Camptown, Kansas Crossing, and Castle Rock. It finds that Castle Rock would have the largest economic impact during construction, supporting over 900 jobs and contributing $134.2 million to total economic output. During operations in 2019, Castle Rock is estimated to support 584 jobs and contribute $72.9 million to economic output, more than the other two proposals. The analysis examines impacts from construction spending, facility operations, gaming revenues, and local resident spending.
Union Gaming Analytics was commissioned by the Kansas Lottery Gaming Facility Review Board to evaluate three applicants for a gaming license in southeast Kansas. The analysis included projections for gross gaming revenue, visitation numbers, tax revenue, and economic impacts for each applicant. The methodology involved examining demographic data within drive time radii of the proposed sites, establishing a theoretical gaming market, and applying proprietary capture rates to project revenues and visitation from local, near-local, and regional populations. Consultants then evaluated the economic and fiscal impacts, amenities, and financial suitability of each applicant.
The document analyzes and evaluates the financial suitability of three applicants for a gaming license in Southeast Kansas: Frontenac Development, Castle Rock Casino Resort, and Kansas Crossing Casino. For each applicant, it summarizes the ownership structure, project budget, proposed financing sources, and Union Gaming's analysis and conclusion on their financial viability and ability to fund the projects. While Frontenac and Kansas Crossing were deemed sufficiently capitalized, Castle Rock's ability to obtain the required debt financing was called into question due to uncertainties around land valuation and high projected leverage.
The three proposed casino projects in Kansas Southeast Zone are similar in their Phase 1 concepts, having a minimum critical mass to win the bid but also achieve initial success. Camptown and Kansas Crossing propose smaller local casinos, while Castle Rock proposes a larger regional destination. All have similar potential for Phase 1 success despite different strengths and weaknesses. The key decision is whether to prefer two smaller local casinos or one larger regional casino. The regional casino has the greatest revenue potential but also the least room for error. The owner/team's ability to adapt may be more important than initial plans. However, the tax rate difference between Kansas and Oklahoma gives Oklahoma casinos an advantage in any marketing war.
This document provides an overview and analysis of projections for new casinos proposed in southeastern Kansas. It discusses the use of gravity models to project gaming revenues and financial performance based on location, size, competition and other factors. Specifically, it examines how spending declines with distance from a casino based on players' club and other data. Bigger casinos are generally better due to economies of scale. The presentation compares various existing casinos' "power ratings" which reflect their overall attractiveness based on revenues adjusted for location.
Camptown Casino will be located in Frontenac, Kansas. It will include 750 slot machines, 20 table games, a 62-room hotel, and Gilley's Saloon entertainment venue. Phil Ruffin, an experienced casino operator, will personally finance the $84 million project. It is projected to create 300 jobs and attract nearly 1 million visitors annually from Missouri, Kansas, and other nearby states. Camptown aims to open sooner than competing proposals and will donate $50,000 annually to the local school district.
2015 LGFRB Presentation Castle Rock Casino Resort krgc
This document provides details about the proposed Castle Rock Casino Resort development project. It outlines the developers, architects, management company, contractors, and legal consultants involved. It also provides information on the size and amenities of the casino, hotel, meeting space, and other facilities. Projected revenues, taxes, employment, and visitation are presented. The management and development experience of the casino operator, American Casino and Entertainment Company, is summarized.
Global Gaming KS, LLC presented to the Kansas Lottery Gaming Facility Review Board on their proposal for a gaming facility. They argued that their selected Exit 19 site is clean with infrastructure, has community support, and avoids legal issues. Their planned 260,000 square foot facility with hotel would open fully within 14 months. While an interim facility lacks appeal, their permanent destination-quality development would include restaurants, entertainment, and gaming expansion over time. They believe revenue differences between Exit 19 and 33 sites are negligible and addressed counterarguments.
The document discusses two proposed casino projects in Kansas - Kansas Star and WinSpirit. Kansas Star promises to invest $260 million, build amenities sooner including a 100,000 square foot event center and $25 million equestrian complex, and generate more gaming revenue, taxes, and jobs for the state. It argues Kansas Star's management team has more experience building and operating successful casino projects on time and on budget and will spend more on advertising to drive higher revenue. The document positions Kansas Star as the best and most lucrative choice for Kansas.
The document discusses the benefits of meditation for reducing stress and anxiety. Regular meditation practice can calm the mind and help prevent worrying thoughts. Meditation lowers stress levels in the body by reducing blood pressure and cortisol levels.
Dean Macomber summarizes his analysis of Global Gaming's proposal for a race track as a tourism generator. He finds that Global's projections of attracting a "Big Event" with 50,000-100,000 visitors are speculative given the limited number of comparable racing events and competition from existing tracks. Their projections of smaller events generating the remaining 50,000 visitors also seem aggressive. In contrast, an equestrian center like Peninsula proposes could attract equine, entertainment, and convention events more reliably as a tourism generator.
peninsula plans meet or exceed drainage standardskrgc
The document is a letter from Christopher Young, a civil engineering consultant, to the chairman of the Kansas Lottery Gaming Facility Review Board regarding a proposed drainage system for a proposed Kansas Star Casino development. Young serves as the City Engineer for Mulvane, Kansas and has reviewed drainage plans submitted by the developer. He concludes that the proposed drainage improvements, including a detention pond facility, will meet or exceed the City of Mulvane's stormwater drainage policy by having outflow rates less than existing conditions for 2-, 5-, 10-, and 100-year storm events.
This document is a response from Cummings Associates to submissions from Global Gaming Solutions regarding revenue projections and the effects of distance on revenues. Cummings disagrees with some of Global Gaming's assertions, such as that the revenue differential between two proposed casino sites is mostly due to attractiveness rather than distance. Cummings also argues that survey data is not an accurate predictor of economic behavior like casino spending. Overall, Cummings believes distance has a larger impact on revenues than Global Gaming suggests, based on Cummings' analysis of casino performance data from multiple markets.
The memorandum summarizes a request from the Kansas Lottery Gaming Facility Review Board for additional information about two competing casino applications in Kansas. Specifically, it provides details about 1) drainage and flooding issues at the proposed sites, 2) local approvals and endorsements for the sites, and 3) the experience of one applicant, Peninsula Gaming, with regulatory bodies in other states where criminal charges have been filed against the company and its executives related to campaign contributions. It concludes that the significant risks associated with approving Peninsula's application, including possible disqualification or inability to finance the project, outweigh any potential benefits over the other applicant, Global.
The marketing plan outlines a soft opening period followed by a grand opening 90 days later for a new casino in Sumner County, Kansas. The $1 million budget will be used for advertising, promotions, and community events to generate awareness and excitement. Key objectives include building a local player base within 100 miles, attracting travelers on Interstate 35, and establishing the casino as a new entertainment destination through gaming, restaurants, a hotel, and live entertainment events.
1. Cummings Associates
Projections for the
Likely Gaming Revenues of
Sumner Gaming Joint Venture, L.C.
(“Harrah’s Mulvane”)
DRAFT
July 16, 2008
135 Jason Street, Arlington, Massachusetts 02476
Telephone: 781.641.1215 - Fax: 641.0954 - e-mail: cummingsw@aol.com
2. DRAFT
Projections for the Likely Gaming Revenues of
Sumner Gaming Joint Venture, L.C.
(“Harrah’s Mulvane”)
Exhibit 1 presents a full set of Baseline projections (“most likely future” scenario regarding
competition, including other facilities in Kansas) with Harrah’s Mulvane facility highlighted in
light yellow. I have developed these projections assuming a representative selection of facilities
in the other gaming zones so as to capture their (very modest) impacts on each property that I
examine here. I have also assumed the specific location and configuration of the casino and
ancillary facilities proposed by Harrah’s at Exit 33.
Under this scenario, Harrah’s Mulvane casino is projected to obtain total annual gaming
revenues of $174 million. (This compares with $130.2 million projected for Marvel’s Trailhead
casino near Wellington, and $123.5 million for the Penn National casino near Wellington.)
As in my previous report, these projections are presented as of “maturity,” a.k.a. “stabilized
operations,” in terms of 2007 dollars. To get to then-year dollars, I would assume escalation of
2.5% per year. This reflects nominal income growth / inflation at two percent per annum plus
adult population growth averaging 0.5% per year.
In 2013, for example, my projections would equate to $202 million in gaming win. This
compares with Harrah’s projection of $271.6 million for slot and table revenues in that year (I
have omitted the $2 million that Harrah’s projects for poker revenues from this comparison).
A new addition to this type of exhibit is presented at the bottom. On the first line are
projections for the spending of all the residents of Kansas on gaming, first at Kansas casinos, then
at casinos in other states, and finally in total. The second line indicates the estimated spending of
the residents of other states at the gaming facilities of Kansas. Kansas’s “balance of trade” can
be found by netting the diagonal entries: in this case, $195.9 million spent by Kansans in nearby
states versus $188.9 million spent by others in Kansas, resulting in a net outflow of $7 million
from the State of Kansas.1
Exhibit 2 presents detail for the sources of consumer spending at each facility in Kansas.
Exhibit 3 presents corresponding detail regarding visitation.
1
Ignoring, as before, minor amounts spent in Nevada, Atlantic City, on cruise ships, etc. For these
calculations I have also assumed that all the “drive-by” revenues at the facilities on Interstate
Highways derive from the residents of other states, though some portion will indeed likely come from
Kansans.
Cummings Associates
3. DRAFT 2
Exhibit 4 presents a graphic comparison of my projections versus those of the proponent. I
have inflated my 2007-dollar projections by the aforesaid 2.5% per year, and ignored partial years
of operation (as well as all “receipts from poker and other non-banked card games”).
Exhibit 5 is similar except that my projections have been inflated at the rate that the
proponent appears to assume for “organic” growth in the outyears. For Harrah’s, this is 3.0%, so
there is very little difference.2
Section A then provides detail regarding my analyses and projections “as was” in 2007, i.e.,
with no change in competition from that year – aside from a representative selection of gaming
facilities elsewhere in Kansas. I think most of the proponents would have assumed some such
competition (which, however, likely had less impact on their projections than it does on mine).
Section B provides further detail regarding my Baseline projections. It is from this section
that the leading Exhibits 1, 2 and 3 were extracted (duplicated here as B-3, B-3A, and B-3B,
respectively).
Comparisons of various types are presented in Section C. The three casinos proposed for
Sumner County are compared against each other at a “standard size” so as to extract the
differences due to location alone. As indicated in Exhibit C-4, this leaves Harrah’s, in Mulvane,
with a substantial advantage over the two facilities proposed near Wellington. And for each
proponent, I have matched their own projections with my model so as to determine the effective
“power rating” that they implicitly assert. As of what looks to me like the first full year of
stabilized operations, Harrahs’ slot projections weigh in at 123, Penn Wellington’s at 131, and
Marvel’s at 134. These are all unusually high. (Penn Cherokee is actually the least aggressive, at
116-126.)
Section D presents my “low” projection, and Section E my “high” (formerly “downside”
and “upside,” respectively. I changed the names so as to reduce impressions that they may
represent either a floor or ceiling.)
I then present corresponding detail from the separate slot and table models that combine to
yield my projections in total. The zone in which this disaggregation really matters is the
Southeast: I’m projecting table revenues to be relatively strong there due to the absence of craps,
roulette, and banked table games at the casinos of Oklahoma. This also has positive impacts here
2
The other proponents assume 5%, which adds up to substantial amounts over six to eight
years. I have escalated my figures at both rates in order to maximize comparability with each
applicant’s projections. I believe, however, that the 2.5% rate is most appropriate. There are
very few markets in the Midwest where total gaming receipts increased at a greater rate in the
good years prior to 2007 without substantial additions to capacity or major renovations that
improved quality. When everything else remained equal, most markets in the Midwest grew
2-3% per year in the early 00s, so I believe that is most reasonable for the future – after we
recover from the current recession.
Cummings Associates
4. DRAFT 3
in the South-Central Zone, but to a very modest extent. If Oklahoma table players always had to
pay an ante, Kansas’s games would be substantially more attractive, but as we saw at
Downstream, that’s not necessarily the case. Downstream (and at least one other Oklahoma
casino) appear to be foregoing the antes in order to build their business. I presume that the
Oklahoma casinos nearest the South-Central Zone would do likewise when faced with
competition from a new casino here.
I had also formerly assumed that the table situation in Oklahoma would reduce the power
ratings of their slots by five points when “real” table games appeared in Kansas. I’m now
assuming just two points for this effect, so there is little (added) benefit for Harrah’s here.
In sum, while my projections for Harrah’s are substantially lower than its own, they are
higher than my projections for either of the facilities proposed near Wellington. The gravity
models, based on my experience and my analyses of other markets, indicate that, other things
being equal, its location 11 minutes closer to the vast majority of the population in the market3
will indeed result in consumer spending roughly 30% greater than at the more distant location(s).
3
Shave a minute off this figure if Penn National can construct a dedicated exit ramp off the Turnpike
as it has proposed. My projections for Penn Wellington have assumed this is the case. (Penn contends
this will save two+ minutes for arriving traffic. It will not, however, speed up the return trip to
Wichita, so I consider this to average out to a one minute improvement each way.)
Cummings Associates
5. Cummings Associates
Projections for the
Likely Gaming Revenues of
Sumner Gaming Joint Venture, L.C.
(“Harrah’s Mulvane”)
Exhibits
DRAFT
July 16, 2008
135 Jason Street, Arlington, Massachusetts 02476
Telephone: 781.641.1215 - Fax: 641.0954 - e-mail: cummingsw@aol.com
6. DRAFT
List of Exhibits
Exhibit
1 Harrahs' Mulvane Baseline
2 Detail for Sources of Consumer Spending
3 Detail for Visitation by Source
4 Harrah's Projections vs. Cummings's (2.5% escalation)
5 Harrah's Projections vs. Cummings's (3% escalation)
Section A: "As Was" Projections
A-1 "As Was" 2007 -- Before Any New Facilities
A-2 "As Was" 2007 -- w Potential New Kansas Facilities Elsewhere
A-3 Harrah's "As Was" 2007 (with New Kansas Facilities)
Section B: Baseline (Likely Future) Projections
B-1 Likely Future / Baseline -- with New Facilities Elsewhere
B-2 Likely Future / Baseline -- with New Facilities Elsewhere AND KS
B-2A Detail for Sources of Consumer Spending
B-3 Harrahs' Mulvane Baseline
B-3A Detail for Sources of Consumer Spending
B-3B Detail for Visitation by Source
Section C: Comparative Projections
C-1 Harrah's Mulvane at Standard Size / Baseline Competition
C-2 Penn Wellington at Standard Size / Baseline Competition
C-3 Marvel Wellington at Standard Size / Baseline Competition
C-4 Summary: South-Central Proponents All at Standard Size
C-5 Harrah's Slots and Tables Match Harrah's Projections
Section D: "Low" Projections
D Harrah's Mulvane "Low"
Section E: "High" Projections
E Harrah's Mulvane "High"
(Similar sets of exhibits follow for slots and tables)
Cummings Associates
7. DRAFT
Exhibit 1: Gaming Revenue Projections ($mn / 2007$)
Harrah's Mulvane Baseline
# Slots Power Slot Win win/slot/day Total Win
Gaming Facility / Location: Rating ($mn) ($mn)
Woodlands 800 95 $25.3 $87 $25.3
KCK Speedway 3,000 102 $191.8 $175 $233.4
KCK Stateline
KCK Middle
Camptown 600 102 $24.1 $110 $24.1
Penn Cherokee 900 102 $26.1 $79 $32.0
Harrahs Mulvane 2,000 104 $151.3 $207 $174.2
Penn Wellington
Marvel Wellington
Dodge City 800 112 $35.1 $120 $40.0
---------- ---------- ----------
Subtotal Kansas Taxable 8,100 $453.8 $153 $529.1
KCK 7th Street 450 78 $13.8 $84 $13.8
4 Northeast KS Natives 3,293 117 $145.5 $121 $163.2
---------- ---------- ----------
Total Kansas 11,843 $613.0 $142 $706.0
memo: Northeast Zone 3,800 $217.2 $157 $258.8
memo: Southeast Zone 1,500 $50.2 $92 $56.1
memo: South Central Zone 2,000 $151.3 $207 $174.2
Argosy Riverside 1,969 97.2 $113.7 $158 $124.3
IOC KC 1,330 80.9 $56.2 $116 $60.7
Harrahs NKC 1,783 103.5 $131.2 $202 $149.0
Ameristar KC 3,012 98.6 $172.6 $157 $193.6
Sugar Creek
---------- ---------- ----------
Subtotal KCMO 8,094 $473.8 $160 $527.6
Greater KC Total 12,344 $704.7 $156 $800.1
Greater Joplin Total 9,463 $195.9 $57 $210.5
Greater Wichita Total 6,632 $231.4 $96 $257.1
Total Casino Spending: to Kansas to Others Total KS
from Kansas ($mn) $517.2 $195.9 $713.1
from Others ( " ) $188.9
Note: Totals may not add due to rounding.
Cummings Associates