GOVERNOR’S COMMENTS THREATEN GENTING SINGAPORE’S SOUTH KOREA CASINO PROJECT

The future of Genting Singapore’s $2.2b South Korea resort casino project is in doubt after recent comments by the governor of the island on which the property is to be built. On Monday, Korea Bizwire quoted Won Hee-ryong (pictured), governor of the Jeju Special Self-Governing Province, saying there had been no mention of any casino in the development application filed by Genting and its Hong Kong partner, Landing International Development Ltd., and thus no authorization to build a casino had been granted.

Genting and Landing Intl., acting under the joint venture banner of Ramjung Jeju Development Corporation, had announced their project with great fanfare in February, but that was before Won took office in early June. Later that month, the planned groundbreaking was delayed at the last minute over what Genting said was their need to bring Won up to speed on the project. Genting tentatively rescheduled the groundbreaking for sometime in the third quarter, but that now appears overly optimistic.

Speaking on a radio talk show last Thursday, Won said he wasn’t “opposed to the gambling industry in principle.” But Won noted that there were already eight smaller casinos on the island and measures to properly manage the casinos’ “side effects” needed to be developed, and this will take time. Won said his administration needed to work with the central government to “create a supervisory body for casino operations in the province.” Won estimated this would take “at least six months or one year.” Only then would Won be able to decide “whether to give permission to [Genting’s] casino application.”

Won also questioned the feasibility of the project, which, barring any change to the law preventing Koreans from entering any casino that isn’t Kangwon Land, will rely on a steady stream of Chinese tourists to keep the lights on. Won suggested that “calling for economic revival through more casino businesses without legal and institutional change is like looking for pie in the sky.”

Won’s position was echoed by his deputy governor Park Jung-ha, who said the province earned “only 3% to 7%” of casino gambling revenue via taxes due to “sales figure manipulations.” Park said there was “no point in welcoming more operators” unless the province could design “an institutional device to keep strict control of the casinos in their finances.”

Won’s comments aren’t likely to sit well with the central government, which only days before had announced it was looking to lower regulatory hurdles for international casino developers, not put fresh roadblocks in their paths.

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AC OKAYS SHOWBOAT SHUTDOWN, REVEL GETS CASH CARELESS, POL PROPOSES RACINOS

The state of the casino biz in the state of New Jersey can charitably described as ‘active.’ Monday brought word that the owners of the bankrupt Revel Casino Hotel, which is slated to close its doors in the early morning of Sept. 2, had originally asked state regulators for permission to close Aug. 18. Revel’s owners told the Division of Gaming Enforcement (DGE) that it was losing $1m per week but the DGE insisted the casino’s proposed timeline was too short to ensure an ‘orderly’ shutdown of the property, which cost $2.4b to build before opening in early 2012.

As if Revel’s brief life wasn’t fiscally embarrassing enough, Tuesday brought word that a bag containing $21k of the casino’s cash had been lost after a guard forgot it on top of an armored car. According to an incident report viewed by the Press of Atlantic City, a casino surveillance video shows a GardaWorld armored car driving away from the property with the bag o’ cash still on its roof. Neither GardaWorld nor Revel apparently have any clue at what point the bag may have fallen off the truck and (hopefully) really made some local bum’s day.

Late Monday, the DGE authorized Caesars Entertainment to shut its Showboat casino property as of 4pm on Aug. 31. In June, Caesars announced its intention to close the property – one of four casinos Caesars currently operates in AC – and while it has insisted it’s open to offers from buyers, Caesars is believed to be insisting on deed restrictions that would prevent any future owner from operating a casino on the site. The Trump Plaza is set to close on Sept. 16, which will reduce AC’s complement of casinos to eight from 12 at the start of the year.

That number could drop even further by 2017, according to a report by analysts at Deutsche Bank. The German number crunchers are predicting that Resorts Atlantic City and the Trump Taj Mahal will “join the list of shuttered properties” within two or three more years. That would leave Caesars owning half of AC’s six remaining casino gaming options – Caesars, Harrah’s and Bally’s.

On Tuesday, New Jersey state Senator Joe Pennachhio proposed a constitutional amendment that would authorize the operation of slot machines at the state’s four horseracing tracks. Pennachhio, who feels there’s “an inevitability to racetrack casinos,” envisions having a consortium of AC casino operators running the machines with the profits split between the casinos and the state. If lawmakers approve the proposal, the state’s voters would have to give the plan their blessing via a ballot referendum.

As if that wasn’t enough to handle, Tuesday also saw backers of casino expansion outside AC unveil further details of their plans for the Meadowlands region. The group is proposing a $1.2b project that would include four casino gaming areas encompassing 325 gaming tables and 8k slots, two hotels, a convention center and a monorail to shuffle people from one attraction to the other. Meadowlands Regional Chamber of Commerce CEO Jim Kirkos said the region had the necessary infrastructure “to build the best casino in the world.” Like the track-slots plan, expanding gaming outside AC would require voter approval.

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HOKKAIDO GOV TOURS RESORTS WORLD SENTOSA; RESORTS WORLD BAYSHORE TIMETABLE ANNOUNCED; RESORTS WORLD MANILA EXPANSION PLANS SET

Hokkaido Governor Harumi Takahashi went to Singapore on Monday with the sole objective of learning the ins and outs of running an integrated resort and casino.

Hokkaido gov tours Resorts World Sentosa; Resorts World Bayshore timetable announced; Resorts World Manila expansion plans setTakahashi visited Resorts World Sentosa where she was briefed on how to properly run and manage a casino, including the process of exchanging cash for tokens. She also met with Jerry See, CEO of Singapore’s Casino Regulatory Authority, to discuss the steps taken by the government body in preventing gambling addiction and controlling the number of casino-related crimes in Singapore. Details of that conversation weren’t disclosed but the Kyodo News Agency reported that See was very accommodating of Takahashi’s questions, even pointing out that Singapore has a law that requires its residents to pay casinos SGD$100 as an entrance fee to get inside their gambling joints.

The Hokkaido governor’s fact-finding mission comes at a time when Japan is on the cusp of finally legalizing casinos in the country. Hokkaido has been one of Japan’s prominent locations that has aggressively pushed for a casino to be built in its area. Governor Takahashi’s trip to Singapore paints a positive picture on Hokkaido’s legitimate interest, which could help in its chances of landing in the good graces of the Diet once the latter begins determining the cities where casinos will be allowed.

Over in the Philippines, Travellers Hotel Group Inc. announced its plan to break ground on Resorts World Bayshore within the year, making it the last of the four integrated resorts to start construction in Pagcor’s Entertainment City. “We will start construction very, very soon. Hopefully within this year,” Resorts World Manila COO Steven Reilly told reporters during the fifth anniversary celebration of Resorts World Manila.

The company doesn’t see being the last resort to open in Entertainment City as an impediment, opting to view it as a chance to create something that can put its rivals on notice. “When you’re the last mover, everybody else has opened their hands,” Reilly explained. “It’s like a deck of cards. We’re seeing the best they can do and of course we’re going to come in and do something bigger and better.”

A big part of that confidence comes from the belief that the Philippine gaming market is on the precipice of becoming a major regional player. “We wouldn’t be here today if we never had that confidence and we wouldn’t be planning all of our expansion unless we knew things were ripe, it was the right time and the Philippines was ready to host this kind of sizes of entertainment resource.”

In addition, Travellers also announced its plan to expand Resorts World Manila to cater to the meetings, incentives, conferences and exhibits (MICE) market. The second phase involves the expansion of the Marriott to include additional rooms and a grand ballroom by the end of 2015. Once it’s completed, the third phase kicks in with the development of a new gaming area, more retail options, an extension of Maxims and the opening of the Hilton Manila and the Sheraton Hotel Manila with a target date of completion by the last quarter of 2017.

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CROUPIER CHARGED OVER LUCKY NUMBER; CASINO FINE RULED UNCONSTITUTIONAL

It’s been a bad summer if you’re a casino cheat. On Tuesday, 40-year-old Cleveland native Vaughan Perry was indicted on charges he’d engaged in sketchy activity on 139 separate occasions at Horseshoe Casino Cleveland. The Ohio Casino Control Commission said Perry was caught cheating at the Horseshoe’s blackjack tables in May, but a subsequent review of surveillance camera footage showed Perry had been punking the ‘Shoe for some time. The most serious of Perry’s charges, a single count of grand theft, alleges that he gained over $8k in illegal winnings. Perry is set to be arraigned on Sept. 3.

Over in Connecticut, a 55-year-old man has pled guilty to marking cards with invisible ink at the Mohegan Sun casino. Last September, New Jersey resident Bruce Koloshi was caught doctoring cards at the Mohegan poker tables, following a similar incident at the L’Auberge Casino in Mississippi the previous month. In exchange for agreeing to cooperate with authorities in the Mississippi case and to steer clear of Connecticut casinos for three years, Koloshi was sentenced to time served.

WHEN IS CHEATING NOT CHEATING?
In Pennsylvania, a former roulette dealer at the Meadows Casino has been charged with conspiracy for daring to tell a gambler his lucky number. In what may be an industry first, Robert Valle was arrested in June and charged with conspiracy and ‘using illegal methods to win a bet’ after he told a gambler that his (Valle’s} lucky number was four and that he’d tried to aim the ball to make it more likely that it would land on four.

Court documents say a confidential informant recorded Valle making the claim but Valle has since stated that he was only trying to establish a rapport with the gamblers at his table and that he had no ability to make any number come up lucky. “If I could do something like that, I’d have everybody and my brother coming in.” Triblive.com reported that Valle’s co-workers held a ‘4 Freedom’ fundraiser for him on Aug. 10 to help pay his legal bills.

MANDATORY FINES FOR CASINO THIEVES UNCONSTITUTIONAL
It wasn’t all bad news for those who flout the rules. A former dealer at Pennsylvania’s Rivers Casino is smiling after the state Supreme Court declared the mandatory $75k fine imposed on casino thieves to be unconstitutional. Back in 2010, Matthew Eisenberg was caught pocketing $200 worth of chips from the casino table at which he was working, leading to him being charged with misdemeanor theft under the state’s Gaming Act. He pled guilty the following year and was given a year of probation and a $75k fine, the amount of which was automatically imposed under the terms of the Act.

Eisenberg’s attorney argued that the Act’s mandatory fine was way out of proportion to the scale of his client’s misdeeds and argued that the Legislature had “placed the casino above everybody else in Pennsylvania.” Eisenberg appealed on the grounds that the fine was “irrational and unreasonable.” On Tuesday, the Supreme Court unanimously agreed, calling the fine “strikingly disproportionate to the manner in which other crimes are punished in Pennsylvania.” Chief Justice Ronald Castille noted that a $200 theft from a non-casino business wouldn’t result in anything near Eisenberg’s fine and stated that the mandatory nature of the fine “merely exacerbates the disproportion.”

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ISRAELI BOMB SHELTER CONVERTED INTO CASINO, MARIJUANA GROW-OP

The latest casualty in the ongoing skirmish between the Israelis and Palestinians is an underground (literally) casino in southern Israel. On Thursday, police announced they’d uncovered an illegal gambling den operating out of a bomb shelter south of Tel Aviv that had been converted for less protective but far more lucrative usage.

Police spokeswoman Luba Samri told AFP the shelter – originally constructed as a neighborhood refuge from the deluge of Katyusha rockets fired into Israel from Gaza – contained ‘gaming boards and chips’ and documentation listing gambling debts, which led police to conclude the shelter was “a working gambling house.” Police in the city of Ashdod uncovered a similarly converted shelter in July.

In response to the rain of Katyushas, the Israel Defense Forces Home Front Command had issued instructions to areas in the line of fire to ensure that their local shelters were properly equipped in case they needed to host a large number of residents for an extended period of time. Police in Kiryat Gat, 20km from the Gaza border, subsequently received a tip that a local shelter had strayed from its original function.

A Border Police K9 unit was dispatched and found the shelter door locked, a violation of IDF instructions. Police broke the door down, discovered the incriminating evidence and arrested a 50-something farmer who owned the land on which the shelter/casino resides. The Jerusalem Post reported that the man told police all the equipment in the shelter belonged to his son.

The shelter also featured a minor marijuana growing operation hidden behind a wall of sheetrock. Police found a small number of plants, a kilo of ready-to-smoke pot, cigarette packs containing “fingers” of hashish plus scales, irrigation tubes, pesticides and other tools of the reefer trade. Samri marveled at the fact that local residents might have gone to the shelter to seek refuge only to find it was now “a casino and clandestine drugs lab.” Although you have to admit, it would definitely help pass the time…

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GAMBLING THREATENS CHINA’S ARMY, PUBLIC OFFICIALS AND ONE NAKED BLUE DUDE

China’s leadership is increasingly worried about the effect gambling is having on the combat readiness of its military forces. It’s been about 18 months since President Xi Jinping launched his crackdown on both ‘tigers’ and ‘flies’ who engage in activities on which China’s leaders frown. China’s elites have responded by avoiding conspicuous consumption that might attract unwanted scutiny, like partying it up in Macau.

But high-profile scandals among the People’s Liberation Army (PLA) top brass continue to shake China’s confidence in its institutions. Two generals were sacked after having earned billions of yuan by selling promotions to underlings, who make their bribes back by engaging in graft with contractors. The practice is reportedly commonplace, leading a retired PLA officer to tell Reuters that corruption was stifling the army’s development.

The PLA’s crisis of confidence comes just as China’s government ratchets up regional tensions over seabed ownership disputes. The Study Times, a state-sponsored weekly paper, cited gambling as one of the corruptive elements that precipitated the collapse of the Qing dynasty, with the implicit understanding that the same fate could well await today’s leadership.

You can look, but there’s no Macau casino scene in The Last Emperor. But if we can imagine old Puyi in a Macau casino, we can make it happen (pictured). That was the genesis of the scam run by an intrepid blackmailer on the Chinese mainland, who Photoshopped the faces of of Communist Party officials into images depicting all manner of forbidden activities, including porn shoots and gambling games.

The media reports take pain to mention the quality of images the man produced using just a Lenovo computer and an Epson digital printer, which makes us suspect the story is simply clever native advertising. Regardless, the blackmailer, identified by China media sources only as Mr. Zhang, convinced around 50 Party officials to cough up a combined RMB 2.1m (US $340k) rather than allow the doctored images to be distributed.

But Zhang’s jig was up after an official in Sichuan province called the blackmailer’s bluff and alerted the cops, leading to Zhang’s arrest last Christmas and sentencing this week to 13 years in prison. A similar scam in Hunan province was busted last year after earning RMB 4.5m from gullible officials and businessmen.

Finally, these pictures below aren’t Photoshopped. According to a Shanghaiist post, this is Beijing artist Li Binyuan running through the streets wearning nothing but luminous blue paint. Why, you ask? Well, it’s art, and art is what the artist says it is. Li says he was inspired by a recent spate of gambling losses. (As you do…) What’s the blowup doll for? Uh… representing the baccarat dealer that screwed him over, maybe?

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PACHINKO’S IMAGE TAKES A HIT FOLLOWING JAPAN GAMBLING ADDICTION SURVEY

Supporters of Japan’s push to legalize casino gambling took a collective kick to the groin this week after government researchers released a report claiming the rate of the country’s gambling addicts was already five times higher than other countries. The Health, Labor and Welfare Ministry claims some 5.4m Japanese adults, roughly 5% of the adult population, are addicted to gambling.

Addiction researcher Susumu Higuchi says the figure compares unfavorably with rates in other developed countries, which he claimed hover around the 1% mark. While that’s true for the numbers of pathological gamblers, the ranks of those who demonstrate less severe problem gambling behavior can range as high as 5%, leaving open the possibility that the survey’s figures are entirely in line with international norms. Then again, the same Japanese survey also claimed over 4m Japanese citizens were ‘addicted’ to the internet, so the devil’s in the definitions.

The results came from a July 2013 survey of over 4k randomly chosen Japanese adults. Extrapolating from the sample, Higuchi told the Kyodo news agency that around 4.4m men (8.7% of the population) and 980k women (1.8%) are believed to be struggling with gambling addiction. Higuchi said the results proved that “the development of a treatment environment is swiftly needed” and that legislators may wish to reconsider their casino plans. But legislators would do well to consult similar research in Singapore, which found that local rates of gambling addiction were unaffected by the introduction of the city-state’s two integrated resort casinos in 2010.

While legislators are expected to pass their casino study bill sometime in the fall session of the Diet, the survey is raw meat to anti-casino activists. Japan currently allows betting on racing (horse, bicycle, motorcycle and motorboat) as well as the pseudo gambling available in Japan’s ubiquitous pachinko parlors.

Ah, yes… Pachinko. With 12k parlors offering the pinball-style game nationwide, the industry is still staggeringly vast but it’s facing the same kind of existential crisis as the slots-focused US casino industry: their players are dying. Dynam Japan Holdings, which operates 371 pachinko parlors, says more than half of its customers are over 50 years old, while just 9% are under 30.

Morgan Stanley says the pachinko industry generates annual revenue of ¥19t (US $185b) but that’s down from ¥31t two decades ago. Downturns in the overall Japanese economy haven’t helped, but the main problem is an inability to encourage younger players – who prefer gaming on their phones – to park their butts in a pachinko seat. The high-profile headlines generated by Japan’s new gambling survey likely won’t help boost pachinko’s image.

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WILL NEVADA EVER SEE SMOKE-FREE CASINOS?

She smiles at me broadly, a queen of hearts hurtling my way, photos of happy gamblers drinking and winning as they always do in these things. But this wasn’t just any old casino ad. “NEW! SMOKE-FREE 2ND FLOOR CASINO NOW OPEN,” it bellowed from a full-page in poker magazine Bluff, of all places.

“You asked for it and we listened!” the ad exclaimed. The casino in question? MGM’s Gold Strike—in Tunica, Mississippi.

Mississippians and Tennesseans are clamoring for non-smoking areas? Apparently yes. In fact, so much so that this is the first and only MGM property in the U.S. to provide a full-fledged, truly separate non-smoking section. Even more surprising: MGM views it as a competitive marketing advantage—in states that, according to the Centers for Disease Control, have a high proportion of smokers, both around 25 percent versus the national average of 18 percent.

How is it possible, then, at this late hour in the anti-smoking movement there remains not a single Vegas casino that is either non-smoking or even provides a serious non-smoking section? Why Mississippi and not Nevada?

The official answer: Because they can. The second-floor casino at Gold Strike is new, a formerly non-gaming space with physical distance from the original casino area. And, of course, “You asked for it and we listened!” Which is kind.

The long-standing claim in Las Vegas has always been that gamblers are smokers, and that the activities literally go hand-in-hand for an important population. Those claims are starting to lose their credibility, though, as casino gambling has become both popular and socially acceptable while smoking has become unpopular and socially offensive. There have been a few case studies promulgated by the casino industry’s lobby, the American Gaming Association, suggesting that casinos forced by local law to go smoke-free have suffered financially with reduced profits and customers defecting to casinos in smoker-friendly locales. However, most of those studies don’t take into account other factors such as, say, a devastating recession or the debut of a new, competing resort.

What we do know is that pretty much every poker room in Las Vegas has been smoke-free for years without issue. Aria just made its sports book non-smoking as well, a first.

Around the city, there are some smoke-free bingo parlors or sections of bingo parlors, and a Las Vegas Advisor website that tracks non-smoking offerings indicates that there are supposedly smoke-free banks of slot machines and non-smoking table games here and there, though the signage is frequently hard to spot and enforcement is modest at best. MGM spokesman Alan Feldman added that if a gambler sidles up to an empty table at MGM casinos in Vegas and asks for it to be non-smoking, it will be deemed thus for however long that player remains there, though Feldman acknowledged he didn’t know how guests would know about that rule.

Feldman and I have been discussing smoking in casinos for many years. In 2008, as the Nevada Clean Indoor Air Act was kicking in with its casino-floor exemption, he predicted that smoking would disappear from casinos within a decade because the social shift would inevitably force it. Now he’s not so sure.

“I don’t see a time where, absent federal law, everyone goes smoke-free,” he said.

Meanwhile, in Macau, the law requires half the gaming areas to be non-smoking. Legislators there are even pushing a full ban, according to the Macau Business Daily, because “workers’ health should be given a priority given the dangers of secondhand smoke.” In Vegas, some of the same gambling operators have gone to court to defend against dealers suing over unhealthy working conditions.

Feldman said there is another prospect that could alter the status quo: customers insisting on a change. But, he added, there aren’t many complaints about smoking in the casino.

That’s intriguing. You’d think the cross-section of Middle America that comes to Vegas would speak up the way, say, the fine folks of Mississippi and Tennessee evidently did. As a Gold Strike spokesman said on TV just after the new area opened, “We do a lot of customer research, and for us, it was pretty obvious that customers wanted an alternative, wanted an opportunity to gamble in a smoke-free environment.”

Feldman believes someone in Vegas may give a totally non-smoking casino a try. The last time it was attempted was the Silver Slipper, which closed in 1988.

Today, I suspect the time is right. I get that Vegas is the place where you can do all those transgressive things. But so were clubs in New York and California—and they got over it.

As in Tunica, though, it might require you to ask for it. Maybe then they’ll listen.

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SLS Las Vegas officially opens with party, fireworks

The Moroccan-themed Sahara casino that once hosted the Rat Pack and the Beatles is opening as the SLS Las Vegas after a complete transformation.
The property will officially welcome the public at the stroke of midnight, after a party Friday night that includes rapper Iggy Azalea and a fireworks show.
Owner SBE Entertainment Group spent $415 million gutting the casino, renovating it and stuffing it with trendy restaurants the company has been cultivating in Southern California.
SLS Las Vegas is the first major resort to open on the Las Vegas Strip since 2010. It’s expected to breathe new life into the north end of the boulevard, which is better known for empty lots and stalled casino projects.
An Asian-themed resort and an open-air festival venue are in the works nearby.

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REFORMS ON NATIVE AMERICAN RECOGNITION COULD OPEN UP THE POSSIBILITY FOR MORE TRIBAL CASINOS

New rules proposed by the Obama administration could see a dramatic rise in recognized Native American tribes in the US, opening the opportunity for more tribes to secure rights to operate a casino.

Reforms on Native American recognition could open up the possibility for more tribal casinosThe proposed federal acknowledgement reform will make it easier for tribes to gain federal recognition as an active tribe. The new reforms have received huge backing from large tribal groups but it hasn’t come without any controversy, especially for those who saw the rules as too lenient and rigged with ‘gaming incentives’.

It was a phrase used by Cheryl Schmit, Director of Stand Up for California, a state organization opposed to the opening of more casinos in the Golden State.

Schmit argues that these new rules could open up the possibility of gaming investors hooking up with these tribes and helping them finance their recognition. Once tribes are recognized, they will become eligible to make a run at opening a casino. California has 71 tribal gaming facilities, the highest of any state in the US. If these reforms get approved, there’s a possibility that at least two dozen new casinos could open up in the state alone, not even counting tribes in other states with similar plans.

The Bureau of Indian Affairs explained that while the changes are long overdue, it doesn’t mean that newly recognized tribes will have an easier path to obtaining casino licenses. “Whether to grant federal recognition and whether a tribe is eligible for Indian gaming are two wholly separate questions, governed by wholly separate standards and evaluated under wholly different processes,” Bureau of Indian Affairs Spokeswoman Nedra Darling told the McClatchy Tribune.

The existing regulations governing federal recognition of Indian tribes were originally put in place in 1978 and have been updated just once in 1994. Under the proposed regulations, tribes would only need to document political influence or authority since 1934, a far cry from earlier provisions stating influence or authority dated 1789. The National Congress of American Indians, the nation’s largest organization of tribal governments, said in a resolution that the current rules had seriously deteriorated and that the new ones arrive as a matter of long-overdue justice and fairness. The new regulations will not only provide uniform standards for recognized tribes, but will also establish specific criteria tribes need to meet before being deemed eligible for Indian gaming.

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