Title: The Market Potential of the Four Gaming Zones of Kansas
1 The Market Potential ofthe Four Gaming Zonesof
Kansas
- Presentation to Kansas Lottery Gaming Facility
Review Board - by Will Cummings / Cummings Associates
- June 3, 2008
1
2Overview
- Cummings background
- Gravity model methodology
- Comparisons / Power Ratings
- What is Potential?
- Northeast . . . Southeast . . .
- South-Central . . . Southwest
- Summary / Statewide
2
3Will E. Cummings Cummings Associates
3
4Will Cummings
- Graduate of MITs Sloan School of Management
- Has directed studies of leisure and entertainment
businesses in more than forty states, provinces
and foreign countries, with particular focus on
gaming and wagering - Extensive experience with casinos in Iowa, rest
of Midwest, Northeast, and Canada
4
5Gravity Model / Casino Analyses
- Iowa
- New York
- New England
- Pennsylvania
- Michigan
- Indiana
- South Dakota
- New Mexico
- The Caribbean
- . . . and many more
5
6Govt Agencies / Regulatory Bodies
- Iowa Racing and Gaming Commission
- South Dakota Commission on Gaming
- Horse Racing Alberta
- New Jersey Casino Control Commission
- Connecticut Division of Special Revenue
- many State Racing Commissions
- Massachusetts State Lottery
- Virginia State Lottery
- Connecticut Lottery Corporation
- Atlantic Lottery Corporation
6
7Why Gravity Model?
7
88
99
1010
11Gravity Models Overview
- Location
- Location
- Size
- Everything Else
11
12Location I The Closer, the Better
12
13Las Vegas Visitation/Distance
13
14Las Vegas slope of the curve
14
15Mississippi steeper slope
15
16Laughlin much steeper slope
16
17Casino X isolated market
17
18Casino Y competition afar
18
19Casino Y less competition close
19
20Location I The Closer, the Better Friction
20
21Location II Reillys Law
21
22Reillys Law
- ms S/d2
- Where
- ms market share
- S size of each trade center
- d distance
22
23Newtons Law
- F m/d2
- Where
- F gravitational force
- m mass (of each body)
- d distance
23
24Reillys Law
- ms S/d2
- Where
- ms market share
- S casino size (capacity)
- d distance
24
25Newtons Law
- F m/d2
- Where
- F gravitational force
- m mass (of each body)
- d distance
25
26Reillys Law
- ms S/d2
- Where
- ms market share
- S casino size (capacity)
- d distance / travel time
26
27Size Matters
27
28Reillys Law
- ms S/d2
- Where
- ms market share
- S size of each trade center
- d distance
28
29More Slots, More Spending
29
30Calculations
30
3131
3232
33Other Things Matter, Too
33
34Other Things that REALLY Matter
- Micro-Access
- Spaciousness
- Slot Mix
- Fit Finish
- Management
- Marketing / Player Rewards
34
35Useful Assets
- Hotel
- Structured Parking
- Variety of Dining Choices
- Retail
- Entertainment
- Players Club
35
36Comparisons / Power Ratings
36
3737
38How Do They Do?
38
3939
40What is Potential?
40
41Potential involves . . .
- Examining more than just one representative
location - Assume average performance?
- Or something better?
- My Upside reasonable, not sky-high
41
42Northeast Zone
42
4343
4444
4545
4646
4747
4848
4949
5050
5151
52Summaries
52
53Kansas Speedway Site
- 150/s/d 4,000 slots
- Downside 158.1 x
- Baseline 245.5 246.0
- Upside 341.3 x
- (all in 2007 million)
53
54KCK Stateline Site
- 150/s/d 4,000 slots
- Downside 273.2 x
- Baseline 396.6 311.8
- Upside 518.4 x
- (all as was, in 2007 million)
54
55KCK Middle Site
- 150/s/d 4,000 slots
- Downside 320.1 282.1
- Baseline 424.2 331.3
- Upside 530.4 380.2
- (all in 2007 million)
55
5656
5757
5858
5959
6060
61Southeast Zone
61
6262
63Cherokee Corner Site
- 600 slots 1,200 slots
- Downside 20.5 x
- Baseline 29.3 46.1
- Upside 35.9 x
- (all in 2007 million)
- win/slot/day less than 150, but minimum
critical mass
63
64Cherokee Galena Site
- 600 slots 1,200 slots
- Downside 22.8 32.7
- Baseline 32.9 51.3
- Upside 49.3 60.9
- (all in 2007 million)
- win/slot/day less than 150, but minimum
critical mass
64
6565
66South-Central Zone
66
6767
68Sumner Mulvane Site
- 150/s/d 3,000 slots
- Downside 165.4 162.7
- Baseline 188.9 187.5
- Upside 205.4 202.4
- (all in 2007 million)
68
69Sumner Wellington Site
- 150/s/d 3,000 slots
- Downside 103.2 x
- Baseline 133.1 142.4
- Upside 151.1 x
- (all in 2007 million)
69
7070
71Southwest Zone
71
7272
73Dodge City Site
- 150/s/d 800 slots
- Downside 30.5 32.5
- Baseline 34.7 36.5
- Upside 38.6 39.8
- (all in 2007 million)
73
7474
75Conclusions
75
7676
77All Four(?) Zones
- Downside 536mn
- Baseline 669mn
- Upside 797mn
- (all excluding facilities whose viability is in
doubt)
77
78Will E. Cummings Cummings Associates
- 135 Jason Street
- Arlington, MA 02476
- (781) 641-1215
- cummingsw_at_aol.com
78
79 The Market Potential ofthe Four Gaming Zonesof
Kansas
- Presentation to Kansas Lottery Gaming Facility
Review Board - by Will Cummings / Cummings Associates
- June 3, 2008
79