Federal solution to online gaming debate preferred – iGaming North America

By Chris Sieroty
Posted: Feb. 22, 2013 | 2:29 a.m.

For legislator Bobby Moak, getting his bill to legalize online gaming through Mississippi’s Legislature and signed by its governor is only part of the difficulty.

Moak, a Democrat and House minority leader, introduced the legislation for the second consecutive year, and a hearing on the new bill likely will take place in a committee that rejected it last year.

But Moak told gaming executives and regulators Thursday that he’d prefer a federal solution. He spoke at a panel discussion on issues facing state legislatures at the 2013 iGaming North America Conference at Planet Hollywood Resort.

He warned that without a federal bill legalizing online gaming, it would create “a patchwork quilt of laws” in each state.

Moak said his bill has the support of the state’s land-based casinos, and he’s hopeful it will attract bipartisan support. But any gaming bills face opposition, he said, from religious groups and those focused on morality.

Still, he added, “You have to have those conversations. We can get through those issues.”

Mississippi is home to 30 land-based or riverboat casinos and three tribal casinos, according to the American Gaming Association.

Besides Moak, lawmakers in California, Hawaii, Illinois and Iowa have introduced online gaming bills this year. And Jonathan Griffin, policy analyst with the National Conference of State Legislatures, expects more to be introduced.

Griffin said efforts by Nevada, New Jersey and Delaware to legalize complete online casino gambling are motivating other states to consider similar measures. New Jersey’s updated bill should be unveiled by the end of the month, he said.

Meanwhile, Delaware expects to launch online gambling by Sept. 30, and lawmakers in Nevada are expected to remove the final restrictions preventing online gambling’s full arrival in 30 days.

Iowa Democratic state Sen. Jeff Danielson said his state needs to be aware of trends that could affect its gaming industry. He called it “an economic issue as much as a gaming issue.”

The two-day conference hosted a series of panel discussions on topics such as online marketing, customer service and responsible gaming, expanded sports wagering and Internet lotteries.

Danielson doesn’t expect a divided Congress to take up online gaming.

Caesars Interactive Entertainment CEO Mitch Garber said Thursday during a panel discussion on online gaming’s future that he expects federal legislation in five years.

Joel Leonoff, president and CEO of Optical Payments, said the growth of online gaming on a state level will create a need for a federal bill.

A lot of eyes are on Nevada and New Jersey, he said, to see if they’ll be successful.

Contact reporter Chris Sieroty at csieroty@reviewjournal .com or 702-477-3893. Follow @sierotyfeatures on Twitter.


AGA’s CEO Frank Fahrenkopf expects federal poker bill to be revived

By Chris Sieroty
Posted: Feb. 20, 2013 | 2:54 p.m.

Frank Fahrenkopf, who will step down in June after 18 years as president and CEO of the American Gaming Association, said Wednesday he believes a comprehensive federal bill legalizing online poker will be brought back to Capitol Hill this year.

Fahrenkopf expects Rep. Joe Barton, R-Texas, to reintroduce an Internet poker-only bill in the House. Barton has tried before but failed to garner enough support in the House to pass an online poker bill.

Senate Majority Leader Harry Reid, D-Nev., and former Sen. Jon Kyl, R-Ariz., were working on a bill last year, but it never materialized, much to the disappointment of Fahrenkopf and other gaming industry leaders.

“I wouldn’t be surprised if a new bill was introduced in this session,” Fahrenkopf told gaming regulators and executives during a question-and-answer session at the 2013 iGaming North America Conference at Planet Hollywood Resorts.

He said the association was “still hopeful something will get done,” but with Kyl’s retirement they are working to “find a conservative Republican from a nongaming state” to support a federal bill legalizing online poker.

When asked by Sue Schneider, founder of eGamingBrokerage.com, why the U.S. has lagged in online gaming, Fahrenkopf responded, “Puritanism.”

He said some far-right Republicans, who normally want government out of peoples’ lives, opposes any gaming for religious reasons. He said some on the far left believe people aren’t smart enough to make decisions for themselves and need government to be involved.

“It’s a strange marriage between left and right,” Fahrenkopf said.

Fahrenkopf, 73, has led the Washington-based gaming industry lobbying group since it was formed in 1995. His resignation takes effect June 30.

Despite efforts by Nevada, Delaware and New Jersey to legalize online gaming, Fahrenkopf believes a federal bill would be the best option for casinos, operators and technology companies.

He said online gaming companies had to establish consumer protections to protect the integrity of the game, implement to prevent underage gambling, and implement programs to help the 1 percent of the population that can’t gamble responsibly.

Fahrenkopf, a Reno native and former chairman of the Republican National Committee, warned that state compacts brokered to create liquidity for online states – that is, add enough players to make the venture profitable – would force Congress to block the partnerships.

“When you are talking about wagering, I wouldn’t be surprised if Congress holds hearings,” Fahrenkopf said.

He said federal approval for state deals in other industries has not been needed in recent years. But those deals didn’t involve real-money online gaming, he said.

In taped remarks to iGaming North America attendees, Republican Gov. Brian Sandoval noted that Nevada was first state to implement online poker regulations.

Sandoval said his administration would continue to push for interstate online gaming compacts. He said he expected lawmakers to pass a bill in 30 days that removes the final restrictions preventing online gambling’s full arrival.

“It’s important to pass this legislation,” the governor said.

New Jersey and Delaware are proceeding with efforts to legalize online gaming.

New Jersey Gov. Chris Christie said Tuesday he would sign an Internet gaming bill if lawmakers make the changes he wants to the legislation. Christie wants a 10-year trial period on Internet gambling and higher taxes on the casinos’ online winnings.

In Delaware, Lottery officials issued requests for proposals seeking bids from vendors to operate the state’s centralized online gaming system with the strict stipulation that it would be up and running by Sept. 30.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.

Kazuo Okada resigns from Wynn Resorts board of directors

By Chris Sieroty
Posted: Feb. 21, 2013 | 1:25 p.m.

Kazuo Okada, co-founder and one-time largest shareholder in Wynn Resorts Ltd., resigned Thursday from the gaming company’s board of directors, just one day before a shareholder vote likely would have removed him.

“I no longer believe it is appropriate for me to serve on the board of directors of a company that is behaving in a manner that I deeply believe to be unethical, and that has refused my reasonable requests to promptly investigate what appears to me to be misconduct by Steve Wynn, and thus is under the dictatorship of Mr. Wynn and fails to fulfill its original function,” Okada said in a six-page letter announcing his resignation to shareholders and media.

Okada, chairman of Tokyo-based Universal Entertainment Corp., said he will still fight Wynn Resorts’ in­voluntary redemption of his nearly 20 percent ownership. The Las Vegas-based company seized Okada’s shares at a 30 percent discount last year, giving the Japanese billionaire a 10-year promissory note valued at $1.9 billion.

Okada said his resignation from the board “will not impede me from protecting my good name and reputation as Universal and Aruze USA forcefully prosecute the claims made against Wynn Resorts in Nevada State Court.”

Okada and Aruze USA, a subsidiary of Universal Entertainment, invested $260 million in November 2000 for a 50 percent stake in Valvino Lamore LLC, the predecessor to Wynn Resorts.

The fight between the former business partners began when Okada questioned a $135 million donation Wynn Resorts made to the University of Macau Development Foundation.

That was followed by an internal investigation by Wynn Resorts and allegations that Okada’s company, Universal, had violated U.S. anti-corruption laws through payments it had made to gaming regulators in the Philippines.

Wynn Resorts shares fell $1.03, or 0.88 percent, to $115.53 Thursday on the Nasdaq Global Select Market.

A Wynn Resorts’ statement Thursday said preliminary results received so far show that 99.7 percent of early share­holder votes favored Okada’s removal.

The company will hold its special shareholder meeting as planned today , according to the statement.

“We greatly appreciate the overwhelming support from our stock­holders for this important action to protect the company’s business and the interests of stockholders,” said Wynn, the 71-year-old company CEO and chairman, in the statement.

He said the preliminary vote count “clearly illustrates that our stock­holders understand that removing an unsuitable person from the board is vital to the continuing success of the company.”

Okada, 70, failed last week to have a federal judge in Las Vegas halt today’s special shareholder meeting. Wynn Resort shareholders will also vote today on a proposal to reduce the company’s board from 12 to eight directors, including six independent directors.

In 2011, Okada was removed as a director of Wynn Macau Ltd., a subsidiary of Wynn Resorts, which operates Wynn Las Vegas and Encore on the Strip, and Wynn Macau. The company recently began building a $3.5 billion property in Cotai.

Wynn and his ex-wife Elaine control more than 18 percent of the company after Okada’s shares were redeemed.

Okada said in his letter that he will continue to focus his efforts on managing Universal.

And he reminded Wynn that he supported him “during some of his darkest days” and helped get the company off the ground, and also that he invested another $120 million as it entered Macau:

“When Mr. Wynn needed my money, I was more than good enough for him and the company.”

Contact reporter Chris Sieroty at csieroty@reviewjournal .com or 702-477-3893. Follow @sierotyfeatures on Twitter.


Nevada business owners take a class in exporting

By Chris Sieroty
Posted: Feb. 15, 2013 | 2:48 p.m.

International exports might not be at the top of the list for businesses in Southern Nevada, but a Las Vegas-based marketing expert would argue that without thinking globally, businesses are limiting their potential growth and profitability by focusing locally.

“The world loves American brands and you want your far share,” Jay Dash, CEO of Jay Dash International, told company executives and government officials at an ExporTech seminar at the University of Nevada, Las Vegas.

Dash said he would recommend to any company to export their goods and services. He recommended local companies focus their efforts on the so-called BRIC nations – Brazil, Russia, India and China.

“All of them like American goods, want to live like Americans, and are four countries that have a growing middle class,” Dash said.

China is building 12 cities with 1 million residents in each, he said.

“Those are your future clients,” Dash said. The five companies participating in the three-month program are Phoenix Industries, Tate Snyder Kimsey, Brock Racing Enterprises, Sable Systems and Pictograpichs.

Companies that participate in ExporTech attend three daylong seminars through April. In between, each company works on developing their export plan with the support of a coach, project manager from Nevada Industry Excellence, and a UNLV intern.

The second session on March 13 focuses on finances, export controls, legal issues, intellectual property and finding representatives or distributor partners. On April 17, a panel of experts on exports will analyze each of the company’s plans before they begin to implement their export strategies.

“Nevada is recognized for this program and the collaboration that occurs here,” said Terry Culp, deputy director of Nevada Industry Excellence. “Companies that graduate from our program begin exporting within six months.”

Participants spent most the first session Wednesday designing an export strategy and trying to define the obstacles and risks of exporting their products. The seminar also included group and individual discussion on market research, targeting market selection, and manufacturing and growth challenges.

Culp said between sessions the five companies will develop an export plan and strategies to go the market.

Nevada’s exports in 2012 totaled $10.2 billion, while 2,504 companies exported their goods or services, according to figures from the U.S. Department of Commerce.

The Silver State’s largest market is Switzerland with exports topping $3.7 billion, followed by India ($1.8 billion), Canada ($1.4 billion), China ($561 million), and Mexico ($330 million).

“We are at the very beginning of getting out to the world,” said Frederico Bastos, sales director with Phoenix Industries. “We don’t want to mess it up.”

Based in North Las Vegas, Phoenix Industries designs, manufacturers and installs recycling facilities, including recycling tires into asphalt and other products. Bastos said the firm exported a few products late last year to Brazil, Russia and Great Britain.

“They were one-offs,” he said. “We are here because we need to get a plan together and too learn what exists out there for us.”

At Tate Snyder Kimsey Architects taking part in ExporTech is about growing their business overseas. Among its business overseas, the company designed the Bay Technology High-Rise Towers in Shenzhen, China.

“We are here because we are still in the infancy stage of doing global work,” said J. Windom Kimsey, president of the Henderson-based firm. “We are not a very large company. This will help us understand how to get our message out.”

Kimsey said in five years he wants to double his firm’s business overseas to 40 percent.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.

Downtown Grand marks latest step in its redevelopment

By Chris Sieroty
Posted: Feb. 12, 2013 | 4:38 p.m.
Updated: Feb. 13, 2013 | 10:13 a.m.

Zachary Conine stood among employees, reporters and curious onlookers Tuesday wearing a blue pinstripe suit and bow tie as he cheered the latest step in the two-year redevelopment of the Downtown Grand, formerly the Lady Luck.

The project, which is well under construction with an opening date later this year, displayed two of its new hotel rooms, and an upcoming advertising campaign called “Make Your Move,” which features a 95-foot by 44-foot outdoor sign featuring the King of Downtown.

Conine said a companion Queen of Downtown sign will be up later this week.

“It’s a deliberate act,” said Conine, the Downtown Grand’s chief operating officer and chief business development officer with Fifth Street Gaming. “There are more parts of the ad campaign to come.”

Fifth Street Gaming is overseeing the project, which is the centerpiece of Downtown3rd, a walkable district featuring restaurants and shops between Stewart and Ogden avenues. CIM Group is investing more than $100 million in the project.

The 743-room Lady Luck closed in February 2006 and the building has been vacant ever since. CIM acquired the property in 2007.

Conine said all that remains of the old Lady Luck are walls, ceilings and structural steel. The hotel-casino taking its place will have 650 rooms, 600 slot machines, 30 table games and a 35,000-square-foot rooftop pool area.

And the property will offer gaming al fresco.

“It’s a private street so we can do gaming in the middle of Third Street,” Conine said. “We will be doing gaming outside.”

The Downtown Grand will employ 750 people, he said.

Conine said the hotel will offer about 102 King Casino Block rooms, designed with wool chocolate-cherry carpet, custom red paint, striated sheets and full blackout draperies, as well as solid maple furniture and custom-made lounge chairs. Rooms feature a 46-inch high-definition television sets and extra outlets to charge smartphones and tablet computers.

The standard room features greens, blues, golds and maplewood elements. The model standard room on display had custom green paint, two queen beds, a wall-to-wall art mural, and custom maple-veneer armoire.

The room also offers an overstuffed winged lounge chair finished with Citron velvet fabric, as well as a 40-inch HDTV.

The Downtown Grand will also have about a dozen penthouse suites.

“We think these are some of the finest rooms in downtown Las Vegas,” Conine said. “Our rooms will be priced at about $69.”

The hotel will include a sports book and deli; a diner and bistro called Stewart & Ogden; The Commissary – a food court that converts into a club three nights a week – and a yet-to-be-named “coffee and desert” space.

“We have no intention of being Strip light,” Conine said. “Our intention is to be the Downtown Grand.”

The Downtown Grand’s Asian restaurant is still being developed. He said the hotel-casino will market itself to the Asian communities in Las Vegas and California’s Inland Empire, which is something relatively new for a downtown gaming property.

Conine said through a partnership with Las Vegas-based Viva Tours, the Downtown Grand is “actively selling the brand in Asia.”

Mob Bar will move from its location on Third Street to the bottom floor of the hotel’s east tower, across the street from the Mob Museum. He said Triple George Grill will occupy the space until it’s leased to a new restaurant.