Casinos 2014: Expansion, Absorption and Impacts NCLGS 2014 Winter Meeting January 10-12, 2014 0.

Casinos 2014: Expansion, Absorption and Impacts

NCLGS 2014 Winter MeetingJanuary 10-12, 2014

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AGENDA

The Innovation Group – Company Overview

State of the Industry

Year of Expansion and Absorption

Casino Tax Revenue Uses

Commercial Casino Industry Impact

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AGENDA






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THE INNOVATION GROUP OF COMPANIES

THE INNOVATION GROUPFeasibility Studies, Due Diligence, Economic Impact Analyses, Strategy, Site Analysis

INNOVATION CAPITALFinancial Advisory Services, Equity and Debt Placement

INNOVATION PROJECT DEVELOPMENTConstruction Project Management, Owner Representation, Capital Costing

INNOVATION MARKETINGMarketing Research, Strategic Marketing Plans, Agency Services

INNOVATION MANAGEMENT SERVICESProperty Management, Operations Analysis, Crisis Management

INNOVATION FOOD & BEVERAGE / INNOVATION SPORTS & ENTERTAINMENTDedicated amenity advisory practices supporting all of the TIGOC affiliates

THE INNOVATION GROUP

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AlgeriaAntigua

ArgentinaAruba

AustraliaBahamasBarbados

BelizeBermudaCambodia

CanadaChileChina

ColombiaCosta Rica

CroatiaCyprus

Czech RepublicEgypt

El SalvadorEstoniaFrance

GermanyGreeceGuam

Guatemala

HungaryIndia

IrelandIsle of Man

IsraelItaly

JamaicaJapanJordan

KazakhstanKorea

KurdistanLaos

LatviaLebanonMacauMexico

MicronesiaMonaco

MongoliaMoroccoNicaragua

NigeriaN. Mariana Islands

PanamaPeru

PhilippinesPoland

Puerto RicoRussia

ScotlandSingapore

Slovak RepublicSouth Africa

SpainSri LankaSt. CroixSt. Lucia

SwitzerlandTaiwan

TanzaniaTrinidadTunisiaTurkey

Turks and CaicosUkraine

United KingdomUnited States

UruguayVenezuelaVietnam

Virgin Islands

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AGENDA






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STATE OF THE INDUSTRY – Casino Gaming

Gross Gaming Revenue• Commercial casino revenue rose 4.8% in 2012 to $37.3 billion

Gaming Taxes• Contributed $8.6 billion in direct gaming taxes, an increase of 8.5%

Employment• Over 330,000 people employed, $13.2 billion in wages• Equipment Manufacturers: 31,200 workers, $2.3 billion in wages

Source: 2013 State of the States: The AGA Survey of Casino Entertainment

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AGENDA






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Expansion and Absorption

Absorption• Maryland – Strong start with additional developments pending• Ohio – Midwestern market impacts• Michigan, Oklahoma, California, other Tribes

Expansion• New York – RFP for additional licenses in three zones• Pennsylvania, Florida, Illinois – Studying additional licenses• Iowa – Ad hoc redistribution and additional licenses

New Emerging Markets• Massachusetts – 4 licenses with possible Tribal approvals• New Hampshire – RFP process under development

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Northeast Casino Absorption

Period Total NE Casino Revenue ($ Mil.)

New Jersey

Connecticut Rhode Island

Delaware New York

Maine Pennsylvania Maryland

2000 $6,305 68.2% 20.7% 3.3% 7.7%

2001 $6,485 66.3% 21.6% 3.9% 8.1%

2002 $6,766 64.8% 22.5% 4.4% 8.4%

2003 $6,910 65.0% 22.9% 4.8% 7.3%

2004 $7,582 63.4% 21.7% 5.1% 7.3% 2.5%

2005 $7,988 62.8% 21.1% 5.1% 7.3% 3.7% 0.1%

2006 $8,468 61.3% 20.4% 4.8% 7.7% 5.0% 0.4%

2007 $9,533 51.4% 17.6% 4.7% 6.4% 8.6% 0.5% 10.9%

2008 $9,743 46.4% 16.0% 4.9% 6.0% 9.7% 0.5% 16.5%

2009 $9,401 41.7% 15.3% 4.9% 6.0% 10.8% 0.6% 20.8%

2010 $9,601 37.0% 14.3% 4.9% 5.8% 11.3% 0.6% 25.7%

2011 $10,084 32.5% 13.3% 5.1% 5.2% 11.9% 0.6% 29.8% 1.5%

2012 $10,657 28.4% 11.4% 4.9% 4.7% 16.8% 0.9% 29.4% 3.5%

Northeast Casino Revenue Market Share by State

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AGENDA






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CASINO GAMING TAX REVENUE USES

Proceeds dedicated to a wide range of uses, including:

• Education• Economic development• The environment• Programs for senior citizens• Health care• Sports facilities• Capital construction projects• Cultural activities• Tax relief• Other

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COMMERCIAL CASINO TAX REVENUE USES

Source: AGA 2013 State of States: Survey of Casino Entertainment

*Tax Revenues placed in the General Fund column are not specified and disbursed throughout different funds & programs in the budget

States StatesColorado x x x xDelaware xFlorida xIllinois x xIndiana x xIowa x x x x xKansas x x x xLouisiana x x x x xMaine x x x x xMaryland x x xMichigan x x xMississippi x xMissouri x x xNevada x x x xNew Jersey x xNew Mexico x xNew York x xOhio x x x xOklahoma xPennsylvania x x x xRhode Island xSouth Dakota x x xWest Virginia x x x

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COMMERCIAL CASINO INDUSTRY IMPACT

Source: 2013 State of States: Survey of Casino Entertainment; The Innovation Group

States' Tax Rates

0%

10%

20%

30%

40%

50%

60%

70%

Rhode

Islan

d

Mary

land

Penns

ylvania

New Y

ork

Main

e

Wes

t Virg

inia

Delaware

Florida

Illinois

Ohio

India

na

Kansas

Miss

ouri

New M

exico

Louisi

ana

Iowa

Mich

igan

Oklahom

a

South D

akota

Colorad

o

Miss

issipp

i

New Je

rsey

Nevad

a

States

Eff

ecti

ve T

ax R

ate a

bcde

Tax Rates

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Types of Gaming Taxation Ranges

Tax Rates on GGR 8% - 63%

Admissions Tax $2 - $3 per head

Tax on handle 1%

Licenses & fees Varies by state

Source: 2013 State of States: Survey of Casino Entertainment*Outlier: Nevada GGR $10.9 billion Tax Revenue $868.6 million

Gross Gaming Revenues and Gaming Tax Revenues ($M)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Penns

ylva

nia

New Je

rsey

India

na

Louisian

a

Miss

issip

pi

New Y

ork

Miss

ouri

Illin

ois

Iowa

Mich

igan

Wes

t Virg

inia

Colorad

o

Rhode I

sland

Delawar

eOhi

o

Florid

a

Mar

yland

Kansa

s

New M

exico

Oklah

oma

South D

akota

Main

e

States

GG

R &

Tax

Rev

enue

($M

)

Gaming Tax Revenue GGR

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National Association of State Budget Officers, 2013 State of States: Survey of Casino Entertainment*Outlier: Nevada Gaming Tax Revenue is 27.1% of General Fund

Gaming Tax Revenue Percentage of General Fund

0%1%2%3%4%5%6%7%8%9%

10%

States

Per

cent

age

of G

F

Percent of GF

Casinos 2014: Expansion, Absorption and Impacts

NCLGS 2014 Winter MeetingJanuary 10-12, 2014

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Casinos 2014: Expansion, Absorption and Impacts NCLGS 2014 Winter Meeting January 10-12, 2014 0.

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