Economic Development: Invest in Transit

Source: www.ridemetro.org

Houston’s Light Rail, http://www.ridemetro.org

We at TMG have been working for months to statistically, economically or even anecdotally correlate good public transit to economic prosperity in a city.  Observationally, cities that support strong economies like New York, San Francisco, Seattle, Chicago, and Boston have a transit system with good coverage and high frequency.  It is unknown whether good transit attracts economic development, or if economic development demands good transit.  We are still working to develop a successful index to correlate these two factors. Here is what we do know: (more…)

At What Point Is the Casino Gaming Market Saturated?

As states such as Massachusetts, Florida, New York, New Hampshire, and Maryland enter or expand their presence in the casino gaming market, we have to ask ourselves the question: at what point will the market be saturated?

State by state, casino gaming has been legalized in the U.S.  In years where state and personal budgets are tight, the pace of legalization accelerates as lawmakers search for sources of jobs and for revenues to fund state services and programs.  With each state that has entered the fray, gaming revenues have risen.  The growing American population and the growing acceptance of gaming have fueled the casinos nationwide.  However, established gaming centers such as Atlantic City have suffered, as the majority of the nation’s population is now within a drive or short flight of a casino.

Over the past 8 years or so, I have been analyzing gaming markets across the U.S.  Most recently, I’ve been assessing the potential for expanded gaming in Florida and the Northeast/Mid-Atlantic/New England markets.  What I’m seeing and forecasting is this:  the marketplace can absorb the casinos that are currently proposed, but too much additional supply above and beyond these proposals could saturate the market.  The additions of proposed supply will certainly make competition tougher and will likely have a negative impact on existing gaming operators that don’t step up to the plate.  This competition will be great for gamers – they’ll have more options, and will be able to pick and choose where to spend their gaming dollars.

All of this makes the jobs of those in the gaming industry harder, but potentially more rewarding.  The vast potential for gaming in the United States has not been tapped completely, and smart players in the game will benefit.  In addition to building and operating facilities that gamers will like, gaming firms must consider location.  Capturing gaming dollars will largely be a function of finding the right location – build too far from the population or too close to competition, and revenues could suffer; build in an inaccessible location or one that the community is not in favor of, and no one will come; ignore the potential for synergy with other entertainment options (including other casinos!) and you might be turning away revenues.  Thorough analysis, site evaluation, and thoughtful site selection can help make the difference between building a casino that performs on-par with the market, or one that not only is a market leader, but has the ability to grow the market.

So, the answer to the question of saturation isn’t that simple.  Are we at saturation?  No.  Are we getting close?  Mabye?  Will smart gaming operators be able to grow the market?  We’ve seen it before, why not again?

Contributed by:

Suzanne P. Leckert

Director of Gaming, Feasibility & Land Use Analysis

suzanneleckert@tmg-consulting.net  or (504)569-9239 x 33

Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

G2E Conference Summary: iGaming Congress

This year’s G2E was as exciting and enlightening as any before it.  As an industry, gaming has been steadily recovering from the dramatic declines of 2008 and 2009, and new growth opportunities are presenting themselves.  Possibly the greatest potential for growth exists in the igaming sector. This blog post is a quick summary of the discussions and conclusions of igaming and legal experts on this emerging market.

How Big is the Market?

The worldwide online gaming market is currently around $32 billion annually, with approximately $13 billion generated in Europe, $9 billion from Asia, and the remainder from North America and the rest of the world.  Legalization in the United States will undoubtedly grow the total pot, but there is no widespread agreement on what those revenues will be.  Some experts have estimated that the U.S. poker market could result in tax revenues of $6-15 billion annually, creating 60,000 jobs in our economy.

Path to Legalization

Online gaming is flourishing worldwide, however poker is the most palatable game for legalization in the United States right now.  Much as last year, industry experts disagree on the route for its legalization – whether it will happen on the federal level, or whether individual states will take action first.  Were online gaming legalized on the federal level, a new regulatory body would likely have to be created.  If it were legalized on a state-by-state basis, existing gaming commissions cold oversee the operators.  This year’s panelists and experts believe that New Jersey will have online casino gaming soon, not just poker, and that Iowa could be the next state to legalize Internet poker.

Who Will Get Licenses?

Much discussion at this year’s G2E centered on who the potential licenses will go to – to those companies based outside of the U.S., or those that are U.S. based.  The general consensus was that U.S. based companies have a greater chance for licenses, but that European-based companies will play a key role in providing software and support for the legal sites.

What Can Licensees Expect?

Gaming operators and legislators are currently in negotiations on the details of any bills, but the gaming companies represented at G2E expect to pay around a 16% tax on net deposits or similar fees in exchange for the ability to advertise their sites.

Contributed by:

Suzanne P. Leckert

Director of Gaming, Feasibility & Land Use Analysis

suzanneleckert@tmg-consulting.net

Next G2E blog post:  Summary of new opportunities for land-based gaming in the U.S. and Asia

Disclaimer
The views, interpretations, or strategies expressed are those of the authors, and do not necessarily reflect the position of TMG Consulting. This site is meant for educational purposes only and does not constitute professional advice. TMG Consulting makes no representation as to accuracy, completeness, or suitability of any information on this site and will not be liable for damages arising from its display or use.

PA Gaming Control Board to Award Final Resort Casino License

Last Month, the Pennsylvania Gaming Control Board held licensing hearings for the state’s final Category 3 resort casino license. TMG supported Isle of Capri in its bid for this license with Nemacolin Woodlands Resort by performing a series of analyses and making revenue, visitation, cannibalization, and socioeconomic impact projections for our client. Dr. Anthony Mumphrey, President of TMG Consulting, served as a key expert witness before the Board, testifying that “as a true resort casino [Lady Luck at Nemacolin] will be a superior location and generate and maintain more visitors, permanent jobs, income and taxes for the Commonwealth than the other Applicants”. The plans for the Lady Luck at Nemacolin casino were very well received by the Board and widely praised in the press. The PGCB is expected to announce the winning applicant for the license in January 2011.

TMG Consulting Gaming Division Contact:
Suzanne Leckert, suzanneleckert@tmg-consulting.net, or 504.569.9239 Ex. 33.