Legends sun presentation (final) 8-7-08
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Transcript of Legends sun presentation (final) 8-7-08
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A Kansas Legend In The Making
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Agenda
The Partnership
Operating Philosophy & Keys to Success
Operating & Development Expertise
Project Overview
Program Elements
Marketing & Business Strategy
Financial Projections
Concluding Remarks
Questions
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The Legends Sun Partnership
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Introduction Video
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What we bring to Kansas
Passion
World Class Destination
Respect for Employees
Financial Ability
Community Involvement
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Operating Philosophy
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Keys to Success – We are Built to Last
Legends Sun Core Values - We operate with a set of essential and enduring values that will never be compromised:
Blowing Away the CustomerDeveloping Passionate and Dedicated EmployeesContinuously Striving for PerfectionBottom Line PerformanceBeing part of the fabric of the Community
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Expertise
Mohegan Sun
Uncasville, CT
Mohegan Sun at Pocono Downs
Plains Township, PA
Connecticut Sun
WNBA Franchise
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300,000 sq ft of Gaming Space
6,181 slot machines, 328 gaming tables
Asian Gaming Pit – Sunrise Square
11,000 sq ft Race Book Simulcast
1,175 Room Luxury Hotel & Spa
10,000 seat Arena
350 seat Cabaret Theatre
400 seat Wolf Den Entertainment Lounge
100,000 sq ft Convention Center
More than 60 retail, restaurant & nightlife venues
Over $2 Billion in development over the
last 10 years
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Purchased in January 2003, the Connecticut Sun became the first independently owned WNBA franchise.
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Mohegan Sun operates a 2,500 Slot Machine Casino and Harness Race Track as a commercial entity in the Commonwealth of Pennsylvania.
The facility was the first casino in Pennsylvania to open.
We take great pride in the fact that we worked tirelessly with the newly formed Pennsylvania Gaming Control Board (PGCB) to implement licensing and regulatory processes.
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2007 Consolidated Operating Highlights
$1.5 Billion in Gaming Revenues$283 Million in Non-Gaming Revenues$323 Million in Direct Gaming Taxes to CT & PA$423 Million in Direct Labor Costs$429 Million in Purchases of Goods and Services
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Competition - Connecticut
Mohegan Sun Foxwoods
Connecticut Slot Market ComparisonLast Twelve Months Ended June 30th, 2008
45.7%
54.3%
30%
35%
40%
45%
50%
55%
60%Slot Units
6,083 Units
7,240 Units
53.8%
46.2%
30%
35%
40%
45%
50%
55%
60%Slot Win
$ 884 M
$ 760 M
85.1%
117.8%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%Slot Efficiency
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Competition - Pennsylvania
MSPD Mt Airy
Northeastern PA Slot Market ComparisonLast Eight Months Ended June 30th, 2008
32.3%
67.7%
30%
40%
50%
60%
70%
80%
90%
100%
Slot Units
2,523 Units
49.8% 50.2%
30%
35%
40%
45%
50%
55%
60%
Slot Win
$ 105 m $ 106 m
74.2%
154.2%
30%
50%
70%
90%
110%
130%
150%
170%
Slot Efficiency
1,203 Units
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Recent Development Expertise
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Project Horizon
Casino of the Wind (August 2008)Jimmy Buffet’s Margaritaville Restaurant40,000 square feet of additional gaming space42 table Poker Room
919 Room Hotel TowerMore than 200 House of Blues Themed Rooms House of Blues, Entertainment Venue & Restaurant
Additional 144,000 sq ft of Retail and Restaurants
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When Project Horizon is CompletedMohegan Sun – December 31, 2010
Approximately 4.4 million sq ft
2,093 hotel rooms
More than 75 retail and restaurant outlets
More than 30 bars and lounges
Four entertainment venues
380 table games, including poker
6,812 slot machines
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$203 Million Phase II facility, Project Sunburst opened July 17, 2008 2 weeks early and under budget.
The permanent casino has 57,700 sq ft of gaming space containing 2,500 Class 3 Slot Machines
An additional 67,800 sq ft of Retail and Restaurants complements the casino with a signature buffet and fine dining choices such as Ruth’s Chris Steakhouse
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July 14, 2008
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“We are woven into the fabric of our Community”
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“We are honored to be in a position to provide assistance to so many worthy causes that work to improve the lives of people in our community and throughout the world. Sharing our good fortune with others has always been a fundamental part of Mohegan culture.”
Bruce “Two Dogs” Bozsum, Chairman of the Mohegan Tribal Council
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Charitable EventsWineFest
Share Our Strength (SOS)American Liver Foundation
Juvenile Diabetes
American Heart Walk
“Walk in the Park”Hospice Southeastern Connecticut
Boot Drive/Annual TelethonMuscular Dystrophy Association
Mohegan Sun MS Bike TourMultiple Sclerosis
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Over the last 9 Years, Mohegan Sun and its employees have contributed to the United Way and Community Heath Charities a total of:
$ 3,426,646.00
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$ 4 Million Raised
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Dedication to Problem Gaming Awareness
Current Involvement with National Council on Problem Gambling
Strong Plans implemented in CT & PA
Sincere Dedication to implement prevention measuresEmployee Awareness
Policy Initiatives
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Over 30 projects around country that are completed, under construction or in development
Totaling over 19 million square feetCurrently RED has projects in 11 states
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Completed 2.7 Million sq ft of development projects valued at $434 Million in the greater Kansas City area.
2 Million sq ft under development valued at $262 Million in the greater Kansas City area.
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City Scape, Phoenix AZMixed-use development in the center of downtown Phoenix; a focal point for urban living and community activity.
Project includes four towers with a mix of office, hospitality and residential, plus approximately 200,000 sq ft of retail, dining and entertainment.
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Community Giving
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Community Giving
Title sponsor for the Kansas City Duck Derby to benefit the Children’s TLC Organization
American Cancer Society Gala title sponsor
RED Volunteers participated in A Day For Downtown in 2007 in Phoenix that helped to rebuild and revitalize the city. In addition, the event raised $169,072 for the downtown community
Corporate Chair for the 2008 Walk to Cure Juvenile Diabetes
Title sponsor of The Legends Reno Tahoe Open. The tournament has given over $1.7 million to local charities
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Kansas Community Outreach
KCK Community College
Held Open Community Meeting for interested residents
130 Letters to Community Groups and Leaders
Met with all interested Community Groups
Informational booths at local events staffed by the ‘Sun-Squad’
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Project Overview
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Project Overview
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Casino Resort & Golf: 1(A)
World Class Casino4 Star, 350 Room Resort HotelSpa / PoolRestaurants – Michael Jordan’sConvention CenterEntertainment ShowroomLegends National Golf Club by
Robert Trent Jones II
Project Overview
Retail/Residential: 1(B)
200,000 sq. ft. Retail 200,000 sq. ft. Residential, 250 Units Structured & Surface Parking
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Job Creation
Employees are the core of our successLegends Sun Jobs
Estimated 2,650 Construction JobsIn excess of 2,250 Direct Full Time Employees
1,850 Casino and Resort Jobs400 Retail and Residential Jobs
Indirect JobsEstimated 2,715 Jobs Supporting Legends Sun
Diversity - EOE
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Location
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Project Site
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Project Site – Ability to Master Plan
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Infrastructure Improvements
Roadway Improvements
Transportation SystemRegional Transportation
Employee Transportation
Trolley System
Initial $1 Million contribution to Unified Government for additional infrastructure improvements in WyCo
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Architects
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Focused exclusively on hospitality, leisure and entertainment industries
Scripting experiences that are unique, memorable and successful
Knowledge of consumer trends, preferences and the marketplace
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450-person firm
Six decades of specialized experience
157 countries and territories
235 built projects
84,000 guestrooms
80 casinos
60 spas
34 languages
60 cultures
46% women
By the numbers
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Legends Sun
Detailed Program Elements
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Casino
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Casino
Circular, Themed Design and Flow2,000 Slot Machines
Best, Most Current ProductMix of Reel, Video
60 Table GamesBest, Most Current ProductMix of Black Jack, Roulette, etc
25 Poker TablesSignature Poker RoomTournaments
High Limit VIP Lounge
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4-Star Hotel
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4-Star Hotel
350 Elegant Hotel Rooms and Suites4-Star Rating CriteriaFitness CenterExciting Indoor –Outdoor Pool Area with BarTennis Courts
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Convention Center
Total 76,500 sq ft
40,500 sq ft dedicated meeting and convention space
36,000 sq ft event space in the Entertainment Showroom
Full food and beverage catering
Designed for hotel conventioneers and local meetings and events
Opportunity for expansion based upon future demand
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Spa & Pool Complex
Nationally Branded Spa
Fully Equipped Fitness Room
Pool Complex with Cabanas
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Entertainment & Nightlife
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Entertainment & Nightlife1,200 Seat Showroom with Convertible Event Space
36,000 sq ft
Concerts
Theatre Shows
Special Events
Meeting Space
Themed Bars and LoungesCenter Action Bar
Entertainment Lounge
Lobby Bar
Terrace & Pool Bar
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Dining
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Dining
The Casino program elements will contain a full mix of restaurants and lounges that will be integrated with and complement the 200,000 sq ft of retail space. Commitment for Michael Jordan’s Steakhouse and 23 Sports Cafe
350 Seat Themed Buffet
Fine Dining
Casual Dining
Quick Service
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Legends National Golf Club
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Legends National Golf ClubRobert Trent Jones Jr. championship caliber golf course
Serve as an additional attraction for out-of-market visitors. Provide local Wyandotte residents added recreational option
244 courses in 42 countries on 6 continents
Hosted PGA, Senior PGA, LPGA, European and Asian tour events
Will host the Ryder Cup in 2010 at its Celtic Manor (Wales) course.
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Legends National Golf Club
Course Design
Clubhouse
Golf OperationsPublicMembershipCasino VIPs
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Retail & Residential
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Marketing & BusinessStrategies
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Destination Marketing
Legends Sun will be a unique entertainment destination with a wide variety of amenities appealing to everyone, from the avid gamer to the casual shopper.
Our goal is simple, create and operate a facility that draws crowds and creates excitement.
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Demographics
Distance Adult PopulationMedian HH
Income 0 - 20 Miles 1,110,042 73,598
21 - 40 Miles 399,955 68,365 31 - 60 Miles 300,394 52,018 61 - 80 Miles 168,227 51,283
81 - 100 Miles 193,500 43,286 100 - 120 Miles 258,464 43,830 121 - 140 Miles 508,620 48,443 141 - 160 Miles 826,424 54,810 161 - 180 Miles 1,516,345 59,852
Legends Sun
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Tourist Statistics & BreakdownTourists residing more than 100 miles from Legends Sun
Leisure Business TotalMissouri 231,611 40,873 272,484 Other 180,142 31,790 211,932 Iowa 154,408 27,248 181,656 Oklahoma 128,673 22,707 151,380 Nebraska 85,782 15,138 100,920 Kansas (Outside 100 Miles) 77,204 13,624 90,828 Total 857,820 151,380 1,009,200
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Tourist Statistics and Breakdown
Tourists are divided in two categories:
Gaming and Non-Gaming
Visits %Gaming Visits 841,000 83.33%Non-Gaming Visits 168,200 16.67%Total Tourist Visits 1,009,200 100.00%
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Tourist Statistics and Breakdown
Gaming and Non-Gaming estimated spend per trip
Spend Per Visit Gaming Non-Gaming TotalTourist-Gamer 116.00$ 50.00$ 166.00$ Tourist - Non-Gamer -$ 81.20$ 81.20$
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Legends Sun Marketing Plan
We build a robust customer database and use the following tactics to drive business:
Strong use of Technology and Customer Relationship Management (CRM) Systems
Creative, Energizing Casino Marketing, Promotions and Special Event programs
Steady Volume of Bus Marketing Activity
Player Rewards programs coupled with the best Non-Gaming Amenities
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Customer Relationship Management (CRM)
Implement casino rating system to collect Player’s Club information
Utilize TeraData Warehouse to mine the data.
The integrated database can be used to foster repeat business from these activities:
Direct Marketing
Internet Marketing
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Casino Marketing and Promotions
Implement a Player’s Club Reward program
Conduct effective special events and promotions
Implement a VIP Service / Executive Host program to deliver tiered service levels
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Mohegan Sun currently operates the largest casino bus marketing program in the country.
Will build local operator relationships to capitalize on the areas of dense population.
Establish both line and charter service.
Bus Marketing
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Non-Gaming Amenity Casino Marketing Connection
There is marketing benefit to having the best Non-Gaming Amenities such as Retail and Golf.
Legends Sun Rewards (Customer Loyalty Program) drives repeat visitation.
Proven to generate higher gaming revenue.
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Projections
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Legends SunProjected Gaming Revenue
$260,000,000
$270,000,000
$280,000,000
$290,000,000
$300,000,000
$310,000,000
$320,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Year 1 Year 2 Year 3 Year 4 Year 5Slot Revenue 229,950,000$ 239,148,000$ 251,105,400$ 258,638,562$ 266,397,719$ Table Revenue 36,682,500 38,149,800 40,057,290 41,259,009 42,496,779 Poker Revenue 4,106,250 4,270,500 4,484,025 4,618,546 4,757,102 Total Gaming Revenue 270,738,750$ 281,568,300$ 295,646,715$ 304,516,116$ 313,651,600$
Gaming Taxes to State 73,099,463$ 76,023,441$ 79,824,613$ 82,219,351$ 84,685,932$
Revenue Projections
Legends SunProjected Gaming Tax
$70,000,000
$72,000,000
$74,000,000
$76,000,000
$78,000,000
$80,000,000
$82,000,000
$84,000,000
$86,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
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Community Contributions
We pledge an initial $5 Million contribution to local community, charitable organizations, and non-host school districts
Pledge an additional $750,000 annual payment that grows in proportion to gaming revenues
Projected over 15 years, these contributions total approximately $20 Million
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Project CostsSources & Uses
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Project CostsCasino Resort
& GolfRetail &
ResidentialConstruction Period - 1(A)
Construction Period - 1(B)
Total Project Costs
Hard Costs 336,741,400$ 97,625,000$ 434,366,400$ Soft Costs 159,994,071 13,596,523 173,590,594 Total Construction Costs 496,735,471 111,221,523 607,956,994
Capitalized Interest 26,977,081 6,040,301 33,017,382 Development Fees 15,153,363 4,393,125 19,546,488 Subtotal 538,865,915 121,654,949 660,520,865
Financing Fees & Costs 8,750,000 - 8,750,000 Interest Costs (Income) 7,297,578 1,633,964 8,931,542 Pre-Opening Costs & Expenses 20,000,000 419,273 20,419,273 Pre-Financing Costs & Expenses 2,500,000 - 2,500,000 Privilege Fee 25,000,000 - 25,000,000 Working Capital 35,000,000 - 35,000,000 Local Community / School Allocation 5,000,000 - 5,000,000 Local Community / Infrastructure Allocation 1,000,000 1,000,000 Total Project Costs 643,413,493$ 123,708,186$ 767,121,679$
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Sources
Casino Resort & Golf
Retail & Residential
Construction Period - 1(A)
Construction Period - 1(B) Total Project
Cash Infusion by Mohegan Resorts-Kansas, LLC 168,226,761$ 30,106,572$ 198,333,333$ Cash Infusion by RED Development 84,113,381 15,053,286 99,166,667 Proceeds From $200 Million Bank Credit Facility - Revolver 91,073,352 78,548,328 169,621,679 Proceeds From $100 Million Bank Credit Facility - Term Loan 100,000,000 - 100,000,000 Proceeds From $200 Million Senior Subordinated Notes 200,000,000 - 200,000,000 Total 643,413,493$ 123,708,186$ 767,121,679$
Sources
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UsesCasino Resort &
GolfRetail &
ResidentialConstruction Period - 1(A)
Construction Period - 1(B) Total Project
Pre-Financing Costs & Expenses 2,500,000$ -$ 2,500,000$ Privilege Fee 25,000,000 - 25,000,000 Construction Costs (Hard & Soft Costs) 496,735,471 111,221,523 607,956,994 Financing Costs & Fees 8,750,000 - 8,750,000 Interest Costs (Income) 7,297,578 1,633,964 8,931,542 Capitalized Interest 26,977,081 6,040,301 33,017,382 Local Community/School Allocation 5,000,000 - 5,000,000 Local Community/Infrastructure Allocation 1,000,000 - 1,000,000 Development Fees 15,153,363 4,393,125 19,546,488 Working Capital - Casino Bank Roll 35,000,000 - 35,000,000 Pre-Opening Costs & Expenses 20,000,000 419,273 20,419,273 Total 643,413,493$ 123,708,186$ 767,121,679$
Uses
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Project Timeline
Apr 2008 Dec 2010
Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10
September 2008Leg Sun, LLC Selected as Gaming Facility Manager
Dec 2010Legends Sun 1(A) OPENS
Sep 2008 - Apr 2009Development, Variances
Financing & DesignApril 2009 - December 2010
Construction
Sep 2011 Dec 2012
Oct-11 Jan-12 Apr-12 Jul-12 Oct-12
Nov 2011 - Dec 2012Construction
Sep 2011 - Nov 2011Planning & Design
November 2012Legends Sun 1(B) OPENS
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Feasibility of Project Financing
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Deutsche Bank Securities Inc., a subsidiary of Deutsche Bank AG, conducts investment banking and securities activities in the United States.
As one of the largest financial institutions in the world, Deutsche Bank is a leader in providing financing and advisory services to premier gaming clients.
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Deutsche Bank plays a leading role in transactions that are shaping the future landscape of the gaming and lodging industries.
Strong track record of financing clients in the gaming, lodging and leisure industries.
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What we bring to Kansas
Passion
World Class Destination
Respect for Employees
Financial Ability
Community Involvement
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