Las Vegas Review-Journal

Nov. 25, 2010
Copyright © Las Vegas Review-Journal

New gambling experience: Mobile trading hitting casinos

Cantor Gaming uses devices to create new approach to wagering

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

Cantor Fitzgerald LP, already an established firm known for its innovations in computer-based bond brokerage, has moved far beyond the button-down world of finance and exported its trading know-how to casinos in Las Vegas.

Cantor Gaming is the brainchild of Lee Amaitis, a former executive with Cantor Fitzgerald and ex-CEO of its offshoot BGC Partners. Amaitis, who was granted a gaming license by the Nevada Gaming Commission in 2005, believed it was possible to use Cantor’s trading platform to create a more sophisticated gambling experience.

An experience, he said, that allows customers to operate more like a day trader than a traditional casino sports bettor, moving in and out of positions, looking for hedges and capitalizing on moments of inefficiencies.

“There were a lot of regulatory hurdles to go through to get us to where we are today,” said Amaitis, president and chief executive officer of Cantor Gaming. “We are here to stay. We’ve made quite an investment in Las Vegas.”

Cantor Gaming began when Amaitis was living in London. In December 2000, an online gaming platform and website for bookmakers was launched.

Amaitis, who ran the company’s European operations from London, returned to New York following the Sept. 11, 2001, terrorist attacks.

The attacks on the World Trade Center killed 658 Cantor Fitzgerald employees. Following the firm’s devastating losses, he played a key role in rebuilding its electronic trading platform know as eSpeed. In 2005, he started BGC Partners.

“I was head of the company through the first quarter of 2008 before I retired and moved to Nevada to focus full time on Cantor Gaming.”

In 2003, Amaitis launched Cantor Gaming with a simple idea — create a platform to let customers wager on sports using their mobile phones. But Nevada gaming officials rejected that proposal. So, Amaitis and Cantor Gaming created their own mobile device, called an eDeck.

The mobile tablet was granted approval by Nevada regulators in November 2008. Cantor Gaming then received a slots license the following month .

The eDeck, which is about the size of an iPad and operates as a touch-screen wireless device, can be used to play Cantor Gaming’s proprietary games, including XtraOdds Black Jack and XtraOdds Baccarat from the sports books and other public areas of the casino.

“We built Cantor Casino online and we invested in a lot of proprietary technology,” he said. XtraOdds Black Jack and XtraOdds Baccarat offer extra propositional bets that dynamically calculate odds based on the cards dealt, giving the opportunity to press or hedge a customer’s bets.

The company’s eDeck devices are used at Cantor Race and Sports Books at M Resort, and soon to be offered at the Cosmopolitan of Las Vegas, Tropicana and Hard Rock Hotel. Amaitis said the firm had leased out its device, which is called “pocketcasino” at The Venetian and Palazzo.

“We put all of our technology into M Resort when we first opened the 6,000-square-foot facility last year,” Amaitis said. “It has blown away every financial expectation we had.”

He estimated Cantor Race and Sports Books in Las Vegas would have a handle of $400 million a year based on statewide handle of $2.5 billion.

“We have over $100 million invested in Nevada,” Amaitis said. “Our new sports book at the Hard Rock, for example, represents a $5 million to $6 million investment when it’s all done.”

The Cantor Race and Sports Books are scheduled to open inside the Cosmopolitan and Hard Rock by the end of the first quarter of 2011, while the Tropicana site was expected to open by Dec. 31.

“The company just started receiving revenues (this year),” he said. “I expect to be profitable in 2011.”

The eDeck can also be used for in-running sports wagering. Cantor Gaming’s In-Running program allows customers to place wagers throughout a sporting event, including whether the Los Angeles Lakers’ Kobe Bryant will sink two crucial free throws in the fourth quarter against the Boston Celtics.

The lines change constantly depending on where the play is at any given time. At the M Resort, players can place in-running wagering in football, basketball, baseball, hockey, soccer, golf, and tennis. But in-running isn’t available for every game.

“We do it for the main football, baseball or basketball games,” said Andrew Garrood, executive director of Las Vegas Sports Consultant, a sports handicapping service owned by Cantor Gaming. “A Florida International versus Florida Atlantic college football game is not going to have many people interested, but a UCLA versus USC game attracts a lot of interest for customers in-running wagering.”

Garrood said there was nothing stopping them from offering in-running on every game, except maybe a customer’s “ability to absorb so much information.”

Cantor Gaming also introduced its new sports betting medium, called Inside Wagers. After a recent field test at the M Resort, Nevada gaming officials approved the new gaming program.

Amaitis described Inside Wagers as a line within a line. It allows a sharp bettor to wager, for example, on National Football League games — sides, totals and money lines — for less than the traditional 10 percent fee imposed on every bet.

Using the recent Green Bay Packers-Minnesota Vikings game as an example, Garrood said bookmakers might post the game Packers -7 (-103) and the Vikings +7 (+103). Not only is the commission reduced from -110 to -103 when laying the points, it’s actually a positive amount when taking the points – bet $100 to win $103.

The only other cost of the bet is a fixed fee of 2.5 cents, up to a maximum of 2.5 percent, on all Inside Wagers. In order to participate in Inside Wagers of In-Running, players must sign up for a wagering account, which will entitle them to bet into several Inside Wagers windows that are open for limited periods of time.

The account also lets players make in-game bets as well as play Cantor’s casino games.

“We want to offer more (options). The only limit to all of this is human imagination,” said Garrood, a mathematician turned derivatives trader. “We are working on other (products) as well.”

He said Cantor Gaming’s success came from understanding transactions and learning from its parent company, Cantor Fitzgerald, how to price those transactions.

Amaitis agreed, adding Cantor Gaming’s advantage was speed and the ability of its bookmakers to post odds on situations as they arise.

Cantor Gaming’s business strategy is clear. Amaitis said the company was negotiating with other hotels and casinos to establish Cantor Race and Sports Books or “license this technology to other casinos.”

Amaitis said the company’s early success has come from an understanding that “this is not about sports betting, it’s about trading.”

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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Nov. 26, 2010
Copyright © Las Vegas Review-Journal

SOUTHERN NEVADA ECONOMY: Las Vegas likely to see jump in Turkey Day tourism

Tourists expected to spend less this year

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

Las Vegas tourism officials expect the number of visitors to the city for this year’s Thanksgiving holiday weekend to increase 3.4 percent over last year.

The Las Vegas Convention and Visitors Authority said Friday that 270,000 tourists were expected to spend nearly $150 million through Sunday.

That figure excludes casino revenues, the authority said. Overall, nongaming revenues are projected to be down 2.3 percent holiday weekend to $149.8 million, compared to $153.3 million in 2009.

Hotel occupancy citywide was estimated to rise by 0.1 percent to 84 percent over the weekend because the total number of rooms has increased 3.5 percent from 141,672 in 2009 to 146,689 this year, the agency said.

Officials at McCarran International Airport also expect a busy end of the Thanksgiving holiday weekend once visitors start heading home.

The airport expects at least 110,000 daily passengers on Sunday and Monday and is urging travelers to arrive two hours before their flight, said Michael Alonzo, a spokesman with McCarran International Airport.

Alonzo said Friday that travelers should verify their flight information before heading to the airport.

Even though many families have reduced their Thanksgiving spending, AAA expects more than 3 million people in the Mountain West region, which includes Nevada and Utah, to travel home 50 miles or more on Sunday. This represents an increase of 10.7 percent compared to 2009.

The biggest increase in travel over the four-day holiday weekend compared with last year can be found on the road. AAA Nevada projects nearly 2.9 million Mountain West residents will be traveling by motor vehicle this weekend.

This represents an 11.6 percent increase compared with last year, Las Vegas-based AAA Nevada spokesman Michael Geeser said.

Geeser said as families begin to recover financially, many of them are traveling to spend time over Thanksgiving with family and friends. He said this desire to travel was what propelled “a significant increase in Thanksgiving travel.”

As with tourists to Las Vegas, residents in the Mountain West region were expected to spend less this year than they did a year ago.

An average family of four will spend an average of $235 over the holiday weekend. That’s down more than $400 from a year ago, Geeser said.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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Nov. 24, 2010
Copyright © Las Vegas Review-Journal

Sunset Station sues city over Roadhouse permit

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

Sunset Station Inc. has filed a lawsuit against the city of Henderson over the city’s approval of an operating permit for a potential competitor.

The hotel-casino, which is owned by Station Casinos Inc., also sued Robert McMackin, owner of Roadhouse Casino, and Marengo Inc. The company has been challenging Henderson officials over the city’s decision to issue a license that would allow Roadhouse to open.

The Roadhouse, at 21000 N. Boulder Highway at Sunset Road, operates with a state nonrestricted gaming license, which was grandfathered in by the state because the property doesn’t operate a hotel.

To maintain its restricted gaming license, the Roadhouse opens one day each year and operates a minimum of 16 slot machines for eight hours.

Sunset Station has come out against plans by McMackin to operate the casino with the nonrestricted license without having to invest in building and operating a hotel. Station Casinos also operates two other nearby casinos, Fiesta Henderson and Boulder Station.

According to the lawsuit, Sunset Station did not challenge the gaming license held by Roadhouse, but focused on the city license.

“We are very disappointed by the lawsuit issued by Station Casinos,” said Elizabeth Trosper, a spokeswoman with Roadhouse and Marengo in Henderson. “The city of Henderson has determined the Roadhouse’s 1998 conditional use permit rights never expired. We support their opinion.”

Henderson spokeswoman Kathy Blaha couldn’t comment because as of late Tuesday the city attorney’s office had yet to be served with the lawsuit.

Sunset Station, in its lawsuit filed on Nov. 18 in Clark County District Court, claims that on Sept. 21, McMackin and Marengo sought to amend and review conditional use rights they held under a 1988 conditional use permit for the property.

McMackin, who acquired the property in 1992, received city approval to remodel and expand the Roadhouse. But Station’s lawsuit argues that McMackin “never fully remodeled the Roadhouse and the Roadhouse never operated in the manner represented to the Henderson City Council.”

Over more than a decade, McMackin received a number of extensions to the conditional use permit until the Henderson Planning Commission denied an extension on Aug. 1, 2006, the lawsuit said.

“The Henderson City Council and McMackin fully understood that all rights would go away with the conditional use permit denial in 2006 and the applicants would have to comply with current code for any future use and development of the property,” according to the lawsuit.

Sunset Station argues in its lawsuit that city approval of the application for a city nonrestricted gaming license on Nov. 9 violated the city’s municipal code because it prohibits rights granted under the 1988 conditional use permit from ever being revived.

Sunset Station, which is represented by attorneys Todd Bice and Jarrod Rickard of the Las Vegas law firm Pisanelli Bice PLLC, claim the city exceeded its authority by approving an “application permitting nonrestricted gaming without a resort hotel or specific nonconforming use.”

Contact reporter Chris Sieroty at csieroty@reviewjournal .com or 702-477-3893.

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Nov. 11, 2010
Copyright © Las Vegas Review-Journal

Mobile gaming industry looks like safe bet

Sports wagering could be key to remote and online business

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

While still relatively underdeveloped, the mobile gaming industry should see rapid growth over the next four years, analysts say.

The market has been slow to develop, mainly due to the uncertainty about future regulation of remote gambling and online gambling. Some gaming companies, however, have begun offering mobile platforms in anticipation of growth in the segment.

“We are very bullish on mobile devices’ potential as gambling tools,” said Simon Holliday, director of H2 Gambling Capital, a consulting and research firm based in London. “A number of European companies are generating as much as 15 percent of their business from this source now, especially those with iPhone, iPad or Android applications.”

American Wagering Inc. entered the mobile arena with the launch of its first application for its Leroy’s Sports Book franchise. On Wednesday, International Game Technology said it created an online and mobile division within the company.

“We recently had our mobile wagering application approved by the Nevada Gaming Commission,” said John English, senior vice president with Las Vegas-based American Wagering. “It’s only available on the Blackberry for now.”

English said the company’s applications for Android and iPhones are still being tested and need regulatory approval. He expected them to be released early next year.

To open a mobile gaming account, English said, an applicant would have to fill out an application and bring two forms of identification to a Leroy’s location. Once the application is approved and at least $50 is deposited into an account, Leroy’s will send out a text or e-mail with a link to download the application.

“It will work anywhere inside the state,” he said. “It will absolutely not work outside of Nevada. With statewide coverage, people can place their wagers at their leisure wherever they are. ”

English declined to discuss revenue projections. He said the mobile applications could generate a “large portion” of the $2.5 billion handle at Leroy Sports Books.

“Merging our online and mobile business units under the IGT brand will solidify our position as a leader in interactive gaming,” said Gideon Bierer, IGT executive vice president and head of the interactive division.

The company’s WagerWorks and Million -2-1 groups will merge into a division and be based in San Francisco. Bierer said in the last five years in the United Kingdom alone, the Las Vegas-based company has “handled more than $10 billion in online wagers.”

“As technology advances and markets evolve, we look forward to accelerating our product innovation and significantly grow our interactive business,” he said.

In a recent report, Juniper Research projected gross wagers via mobile gaming platforms will reach $48 billion worldwide, including $10 billion in North America, by 2015. Mobile gambling is restricted in the United States for the most part by federal gambling laws.

“People have always liked gambling,” said David G. Schwartz, director of UNLV’s Center for Gaming Research. “Sports gambling is expected to benefit (the most). There has always been remote gambling going back to the illegal horse rooms … to off-track betting introduced in the 1970s. This is the latest evolution in this.”

While sports wagering was expected to benefit from the new technology, Schwartz said casino games like dice or blackjack might have a harder time attracting attention. He said the reason was as simple as “some people like the feel of dice in their hands.”

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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Nov. 08, 2010
Copyright © Las Vegas Review-Journal

Wynn president Pascal resigning, replaced by Harrah’s executive

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

Wynn Las Vegas President Andrew Pascal will be resigning from his position, the company announced Monday in a filing with the Securities and Exchange Commission.

Pascal will be replaced by Marilyn Winn Spiegel, 58, who spent the last 22 years as an executive with Harrah’s Entertainment Inc. Spiegel’s most recent position was regional president of Bally’s, Paris Las Vegas and Planet Hollywood Resort and Casino.

The change will be effective Dec. 1, the company said.

The regulatory filing did not give a reason for Pascal’s departure, but said “there are no disagreements between the company and Mr. Pascal.”

Pascal’s resignation was announced about a week after Wynn Resorts Ltd. announced a loss of $22.5 million, or 27 cents a share, for the third quarter, compared with a profit of $34.2 million for the same period last year.

Pascal has held the position of president since October 2005. Before that, he was executive vice president and chief operating officer of Wynn Las Vegas, a subsidiary of Wynn Resorts. He joined the company in 2003, serving as senior vice president of product marketing and development.

Shares of Wynn Resorts gained $3.47, or 3.07 percent, to close Monday at $116.54 on heavy volume of 5.24 million shares traded on the New York Stock Exchange. On average, Wynn trades about 2.9 million shares daily.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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Nov. 02, 2010
Copyright © Las Vegas Review-Journal

Sands, Wynn shares get Macau boost

Asian gaming enclave posts 50 percent jump in October revenues

By CHRIS SIEROTY
LAS VEGAS REVIEW-JOURNAL

Las Vegas Sands Corp. and Wynn Resorts Ltd. shares rose in active trading Monday after Macau gaming officials announced casino revenues jumped 50 percent to a record in October, boosted in part by China’s Golden Week holiday.

Las Vegas Sands gained $1.35, or 2.9 percent, to close at $47.23 on heavy volume of 34.37 million shares traded on the New York Stock Exchange. On the Nasdaq market, Wynn Resorts shares climbed $2.10, or 1.96 percent, to close at $109.26 on moderate volume of 2.25 million shares traded.

Total gambling revenue for casino operators in the former Portuguese colony increased to $2.4 billion last month from $1.6 billion a year earlier, according to figures released Monday by Macau’s Gaming Inspection and Coordination Bureau.

On a year-to-date basis, gaming revenues in Macau are up nearly 60 percent, Bill Lerner, an analyst with Las Vegas-based Union Gaming Group LLC, said in a research note.

“It’s encouraging to see monthly growth of this magnitude,” Lerner said. “We believe the profit story for Macau concessionaires over the next year could be significantly higher than current expectations.”

He also said the numbers were impressive because of the “remarkably limited new supply” of facilities through 2013. The research note also found Golden Week visitation to Macau increased 13 percent year over year, with about 70 percent of visitation coming from mainland China.

Golden Week combines Chinese Spring Festival and National Day and fell Oct. 1-7 this year.

The revenue figures from Macau were released a day before Wynn Resorts was scheduled to release its third-quarter earnings. In the second quarter of 2010, Wynn Resorts reported total revenues of $1.03 billion, or 52 cents per share.

Revenues were helped last quarter by a 74.1 percent revenue surge from Macau to $714.4 million from $410.4 million last year.

Analysts surveyed by Yahoo Finance expect Wynn Resorts to report third-quarter revenues today of $990.8 million, or 39 cents per share, compared with $773.07 million, or 33 cents per share, for the same period a year ago.

Las Vegas Sands on Oct. 27 reported third-quarter revenues of $1.91 billion, an increase of 67.3 percent compared with $1.14 billion in the third quarter of 2009. Sands China Ltd., a subsidiary of Las Vegas Sands, owns and operates three resorts in Macau.

The company’s net income for the third quarter was $168 million, or 21 cents per share, compared to a loss of $123 million, or 19 cents per share, for the same period a year ago.

Shares of MGM Resorts International, which owns and operates MGM Macau, lost 1 cent, or 0.09 percent, to close Monday at $10.92 on average volume of 20.1 million shares traded on the NYSE. Las Vegas-based MGM Resorts is scheduled to announce its third-quarter earnings on Wednesday.

In a preliminary report released Oct. 12, the company said MGM Macau is expected to earn operating income of $61 million in the third quarter of 2010, including a depreciation expense of $22 million, compared with operating income of $50 million for the same period last year. The 2009 third-quarter earnings included a depreciation expense of $23 million.

Overall, MGM Resorts expects to report a loss of 72 cents per share, on net revenue of $1.56 billion, in the third quarter, compared with a loss of $1.70 per share, on net revenue of $1.5 billion, for the same period last year.

Macau, the territory off Hong Kong, became the world’s biggest gambling location in terms of revenue in 2006, topping Las Vegas.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893.

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