Saturday, January 11, 2003
Copyright © Las Vegas Review-Journal
Gaming summit identifies industry's challenges
Internet, tribal competition rising
By ROD SMITH
GAMING WIRE
From left, The Innovation Group's Steve Rittvo, Lionel Sawyer & Collins' Tony Cabot and Christiansen Capital Advisors' Sebastian Sinclair speak Friday at the American Gaming Summit in the Rio.
Photo by John Locher.
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The American Gaming Summit wrapped up Friday at the Rio with warnings that tribal gaming, racinos and Internet gambling all present challenges for the industry.
Tony Cabot, chairman of the gaming practice group at Lionel Sawyer & Collins, a Las Vegas law firm, said Internet gaming will come on strong and the only question is what form it will take, which will depend on legislators in Washington.
For the foreseeable future, however, most expansion in Internet gaming will take place outside the United States, where it is not legal and is being boycotted by major credit card companies.
Steve Rittvo, president of The Innovation Group, said budget deficits, border wars to preserve state revenues, deadlines for negotiating tribal gaming compacts and hard times in the horse racing business are driving other developments in the gaming industry.
"Budget deficits are making all this happen. Billions of dollars are crossing state lines and governors can't sit there and stand for it," he said.
Sebastian Sinclair, president of Christiansen Capital Advisors, said the competition, especially from tribal gaming, is like a tidal wave.
"When it's way out in the Pacific, it may be imperceptible. Then they hit shore and they may be miles wide and 50 feet high," he said.
Panelists agreed, however, that storm clouds are coming over the horizon with the expansion.
Rittvo said that the proliferation of slot machines and table games is so rapid in major markets that the win is falling to less than $200 per position per day.
To avoid losses and perpetuate growth, summit presenters agreed casino managers need to focus on top line growth and cost controls.
Thursday evening, Phil Satre, chairman of Harrah's Entertainment Inc., was honored at the annual industry dinner with a lifetime achievement award for his contributions to the casino business.
Deutsche Bank Securities was the exclusive investment banking sponsor of the 2003 summit.
Lionel Sawyer & Collins, GEM Communications and Casino Journal sponsored the program with the William S. Boyd School of Law at the University of Nevada, Las Vegas.
