Moody's puts MGM Mirage ratings on review

Las Vegas reported much larger-than-expected declines in gaming revenues in May, Moody's reported. The deteriorating market comprises about 80 percent of MGM's earnings before interest, taxes, depreciation and amortization.

http://biz.yahoo.com/ap/080718/mgm_mirage_ratings.html?.v=1

Legislators need to pay attention to the industry decline and the buildout in the northeast that impacts revenues and therefore tax projections. Massive layoffs of low and moderate income workers impacts families and the community supports that they need to survive including unemployment - if they are fortunate enough to qualify and taxpayer subsidized programs.

BTW, I am looking for information on the propensity of casinos to subcontract employment of low income workers. Thereby not having the lower paid positions on the "rolls" and being able to make statments that average earnings are in the mid $40,000. Please post if you have some fact based info. to share.

The Tank is On!

"It's on!" is one of the favorite expressions I hear from young people today.

Well, folks it's really on in the casino industry and the thing that's on is financial losses.

Here's a peek at more woes from Las Vegas...http://www.newsweek.com/id/135638

By Steve Friess Newsweek Web Exclusive
May 5, 2008 Updated: 4:29 p.m. ET May 5, 2008

"This recession is really hurting everyone."
It's even hurting the city of Las Vegas, the economy of which was once thought to be impervious to the economic swings suffered by the rest of the country. Not anymore.

Ouch!

According to the Las Vegas Convention and Visitors Authority (LVCVA), Las Vegas has seen gambling revenues fall only once since 1970: in the aftermath of the Sept. 11 terror attacks they dropped 1 percent in 2002 from 2001. So far this year they've fallen 4 percent, the number of conventions held has dropped 10.4 percent, and average daily room rates were off 3.8 percent in the first two in recent weeks the company eliminated 440 middle management jobs to save $75 million annually. "We made a structural change in our company to become more efficient and provide the same level of service, but we did have to advance that effort because we were also seeing a softening in the marketplace," says MGM Mirage spokesman Alan Feldman.
What's leaving Las Vegas more susceptible to this economic crisis than to previous ones? Diversification. Roughly 60 percent of the Las Vegas Strip's revenues now come from nongaming activities. By contrast, in 1991 and 1992, when the last comparable slowdown occurred, nongaming activities provided just 42 percent of overall revenue.

"This is different from prior downturns," says Bill Lerner, a Deutsche Bank
gaming-sector analyst. "Now that there are a lot more nongaming amenities, the
visitation mix is leaning toward nongamblers, and the consumer coming to Vegas
is different now than it was."

So, family-style gambling halls/resorts tank. It's always been about making money off gamblers and it always will be. The disney stuff was fluff.

Several annual conventions have seen fewer attendees show up and have seen those who do come stay for shorter periods. For example, last week's National Association of Broadcasters confab attracted 105,000 registrants, down from 111,000 in 2007, according to NAB executive vice president Chris Brown. Those figures could have been worse, Brown says, but advance registrations were so far down that several hotel-casinos voluntarily offered to cut room rates by $10 or more to encourage attendance. Says Brown, "That's never happened before."

Nearly 7 percent fewer cars crossed the Nevada-California border along
Interstate 15 through February, reflecting in part that record-high gasoline prices are curtailing drive-in visitors from the largest neighboring state.

Note to Governor Patrick - Destination resort casinos are tanking.

Making matters worse, three airlines with substantial service to Las Vegas—Aloha, ATA and Champion—are going out of business.

Even the mortgage mess and the subsequent credit crunch have taken a toll on Vegas. Several major construction projects on the Strip are delayed due to financing problems, including a second tower for Donald Trump's new condo-hotel. Also delayed is a plan to build a $6 billion version of New York City's famed Plaza Hotel. And while construction continues on the half-built $3 billion Cosmopolitan Resort and Casino next to the Bellagio, the project may be in jeopardy after developer Bruce Eichner's company defaulted on a $760 million loan from Deutsche Bank.

Note to Unions - diversify your mind. Get excited about the Green Construction plans of the Administration, it's the future...casinos are the past!

March's figures will likely put the year-to-date numbers in negative territory. The stock price of MGM Mirage, owner of Bellagio, Mirage and eight other Strip resorts, has halved, from $100.50 in October to about $49 on Friday. In recent weeks the company eliminated 440 middle management jobs to save $75 million annually.

Not a good investment.

Teachers Unions and Casinos Make Poor Bedfellows

Here's a look at what Massachusett's future could look like if the MTA and the ATF get what their leadership seem to think is a good idea.....expanded gambling in Massachusetts. It certainly ensures that leadership will have plenty of "make work" to report to their membership.

http://www.lasvegasnow.com/global/story.asp?s=8246794


MGM-Mirage CEO Speaks Out on Gaming Tax Hike Proposal
Updated:

"The head of the biggest gaming company on the Strip says he's in a fight to the finish with the teachers union. MGM-Mirage chairman and CEO Terry Lanni came out swinging Tuesday against the teachers proposal to boost the gaming tax, in order to pump more money into education.
Lanni sat down Las Vegas One's Jeff Gillan. What has Terry Lanni and the rest of the gaming establishment seething is the teachers union proposal to boost the tax from 6.75, to 9.75-percent. That amounts to a 44-percent tax hike.
Lanni isn't pleading poverty. But he does say the hike would cost MGM-Mirage around $90 million a year. Lanni calls it a "tax grab" and says that's money that could go to hire more workers.
"We don't make billions of dollars as a company. In 2006, we had a $648 million after-tax profit. In '07, it was much higher because we had a significant profit from the 50-percent sale of CityCenter. If you go back to comparative figures, it was about $700 million, if you exclude the profit in '07 from that," he said.
"If you raise that tax $90 million, you're going to have a lot less income. It's a significant factor on the overall income of our company. And $90 million at $38,000 per person, the average salary equates to about 2,000 plus positions in value," said Lanni.
The teachers union says the extra money would boost teacher salaries and be used to improve student performance. Lanni says the initiative comes with little accountability, but the teachers union says that's not true. It says the measure requires school districts to account for every dollar.
Asked if there's any room for compromise with the teachers union, Lanni said his focus right now is defeating the proposed initiative.
That initiative is facing two hurdles -- teachers have to gather more than 58,000 signatures by May 20 to get it on the ballot, and they have to prevail at the Nevada Supreme Court, which is hearing an appeal by gaming on July 1. "


What a mess!

Roll Call Votes on Casino Bill

http://www.boston.com/news/local/massachusetts/articles/2008/03/20/roll_call_vote_on_gov_deval_patricks_casino_bill/

Casino Bill defeated 108-46

Special appreciation to my state representative Mary S. Rogeness (R-Longmeadow) who never wavered or pandered to the casino interests. Mary will be retiring this year and I am looking for a Democrat with moxie who will stand against the insipid influences of class III casinos.

Special appreciation to state representative Todd Smola (R-Palmer) who stood in the center of the pyre and despite enormous pressure from constituents in his home town of Palmer voted against a lousy bill and a nightmare for the community he cares so deeply about. The opportunities for economic development in Palmer are there for the making.

Special appreciation to the Speaker of the House...Salvatore DiMasi.

Chairman Dan Bosley, Rep. Scibak, Rep. Story, Rep. Kocot all of western MA and members of the Emerging Technologies Committee....you are intelligent and thoughtful people. Thank you.

Reps. Gobi, Alicea, Rivera, Wagner, Petrolati, and the close to one hundred other state reps. , thank you.

It is time for the Adminstration to refocus their considerable talent and energies toward the brillant plans and proposals they have for education, energy and greener manufacturing. I look forward to supporting the Administration in these endeavors.

The DiMasi Code

Too brillant to miss!

http://gladyskravitz.blogspot.com/2008/03/dimasi-code.html

DOA - Why Governor Patrick’s Casino Bill Failed

The Legislature will hold public hearings on the casino bill submitted by Governor Patrick October 11, 2007 and others related to gambling this week. The DOA reality of the casino bill was obscured by months of media coverage of the endorsements of some unions, mayors and business associations. The suspense and drama of the casino proposal was fueled by the emerging dynamics between the Speaker of the House, Sal DiMasi (D-Boston) and Governor Patrick. Regional groups of municipal leaders formed coalitions to map their concerns about the bill and statewide anti-casino groups cobbled together what has now become a strong movement to stop class III casinos in Massachusetts.

The bill was DOA because the Administration submitted a shoddy piece of legislation that lacked transparency, accountability and most importantly from the playbook, Politics 101, lacked inclusion of stakeholders. The people who live and work in the regions that would be impacted are the real stakeholders, not Sheldon Adelson, Donald Trump, Mohegan investors, or even union officials or mayors from distant cities. It was a big mistake on the part of the Administration to not do what they had done successfully as candidates, which was to connect with people, especially their base. Had they done so, they would have learned that time and energy placed in the direction of bringing class III casinos to Massachusetts would be wasted.

The bill was DOA because the numbers don’t work. The collapse of the Administration and AFL-CIO president Bob Haynes’ claims of 30,000 construction jobs was a stake in the coffin of the decomposing casino bill. The Massachusetts Taxpayer Foundation’s report squarely refuted the Administration’s revenue projections and the venerable Boston Business Journal slammed the economic argument for casinos highlighting the negative impacts on local businesses. Local and regional task forces in the southeastern and western/central parts of the state near Middleborough and Palmer/Warren met to study the casino bill and found numerous problems with the language, proposed mitigation, structure and oversight of the Gaming Control Authority and the revenues.

The bill was DOA because Speaker DiMasi, Rep. Dan Bosley (D-North Adams) and the Economic Development and Emerging Technologies Committee majority know the numbers don’t work. They are a rather serious bunch whose job is to study economic proposals and they are more seasoned with the Legislative process than the Administration.

The majority of the citizens of the Commonwealth are not casino gamblers. However, numerous polls have shown support for casinos provided they are not located near one’s community. With the national build-out of casinos reaching saturation, the insatiable casino industry has spent millions of dollars to get Massachusetts into the stable of states to offer 24/7 exploitive slot-based gambling. Despite the lobbying money and attempts to influence power by the casino corporate complex, an interesting phenomenon occurred. Citizens of Massachusetts are well educated and have a strong sense of civic engagement. We also recognize the unique history and character of the Commonwealth. We participated in forums, debates, blogs, research and discovery on the casino issue. We found like the Legislators who have actually read and vetted the casino bill, that it is a bad idea.

It was DOA because it is wrong for Massachusetts. People have done their homework to see past the promises of temporary economic boost to the net negative impacts to families, society, environment, infrastructure and the costs of mitigation. The Commonwealth of Massachusetts offers innovation, history, education and natural beauty in a dynamic and interesting mix. Mutual prosperity has and will be found in growing and preserving those unique and precious traits.


Kathleen Conley Norbut, Selectman
Chair, Local Casino Study Committee
Member, Western MA Casino Task Force

Open Letter to Governor Patrick from Patrick Coordinators

For Immediate Release
Open Letter to Deval Patrick on Casinos from Patrick Coordinators
Monday, March 17, 2008

Press Contact: Judith Seelig, 413-259-1268

Dear Governor Patrick:

We are Democrats who share a vision of a more equal, just, and democratic society. As Deval Patrick Volunteer Coordinators we supported your candidacy wholeheartedly and worked hard to help you secure the Democratic nomination and to put you in office.

Since becoming Governor you have undertaken many initiatives that make us proud to have been part of the Deval Patrick campaign. For example, we applaud the Municipal Partnership Act,and the proposal to require telephone companies to pay their fair share of property taxes.

But your proposal for resort casino gambling does not have our support. In fact, we are unequivocally opposed to it.

Early in the gubernatorial campaign you captured the essence of the argument for tax fairness. By reminding people that the discussion about“your money” is really a conversation about “your broken schools, your broken neighborhoods,” etc., you connected the dots. Many people (including those who had previously succumbed to the taxes-are-bad propaganda) listened and learned.

Eschewing the anti-tax rhetoric and providing instead a vision of a decent society, were hallmarks of our campaign; your message was authentic and honest. In addition, it was a major factor in persuading many of us to support and promote your candidacy.

Our campaign moved forward the debate about revenue sources and, perhaps more significantly, the wider debate about the common good. Victory in 2006 could have been the springboard into a meaningful statewide discussion about refashioning taxation so that it reflects and embodies our aspirations as a Commonwealth. For a brief moment,there was a chance to talk about restoring the income tax to its 2001 levels.There was even a chance to lead a conversation about establishing a progressive income tax. With the right leadership (including, but not necessarily limited to, your own) we may be able to revive that conversation.

The debate regarding casino gambling represents an opportunity to advocate for a more equitable tax system. After suffering a clear defeat in 2002, the opponents of the income tax have reemerged, putting their question back on the ballot. So, once again, those of us who share your vision are onthe defensive, fighting a rearguard action to defend the very existence of the income tax. Instead wecould have been taking the initiative and shaping the discourse.

Given our desire to see realistic levels of public funding, why do we oppose resort casino gambling?Because we are Democrats. The platform of the Massachusetts Democratic Party commits the party to tax equity and responsible budgeting, special support for small businesses, sustainable development practices to foster economic stability for both urban and rural cities and towns, and the provision of a sustainable revenue source to finance state government that supports a healthy economy.

From what we observe in other states, casino gambling would not promote tax equity, responsible budgeting, sustainable development practices, or a sustainable revenue source,and likely would damage small businesses in Massachusetts. In short, it flies in the face of our party’s principles.

Resort casinos are a mechanism for transferring money from poor and middle class people to wealthy corporations. Any revenue that leaks out to the state via taxation along the way is far short of the amount necessary to ameliorate the social and economic damage that the industry causes.

Resort casino gambling would involve our state government in condoning and encouraging behavior that has led in far too many cases to personal financial ruin, the breakup of families, domestic violence, and child neglect. In addition to these social costs, resort casinos draw money away from local restaurants, stores, and farms, compounding the injury. So presenting resort casino gambling as a source of revenue that would benefit our communities is misleading. The academically documented experiences of other states suggest that resort casinos damage, rather than boost, local economies.

We remain committed to showing leadership in our communities and in our Democratic town, ward, and city committees. Day after day, week after week, month after month, we make the case for tax equity. We are asking you to show leadership as well, by abandoning the resort-casino proposal and focusing instead on a cause that is both more ambitious and more promising–fair and progressive taxation.

Yours sincerely,

Judith Seelig, Pelham

Pat Fiero, Leverett

Tom Hollocher, Sudbury

Jeanne Maloney, Sudbury

Kathleen Norbut, Monson

Carl Offner, Sudbury

Sharon Raymond, Shutesbury

Susan Triolo, Sunderland

Maxine Yarbrough, Sudbury

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