The Market Potential of the Four Gaming Zones of Kansas - PowerPoint PPT Presentation

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The Market Potential of the Four Gaming Zones of Kansas

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Presentation to Kansas Lottery Gaming Facility Review Board ... Pennsylvania. Michigan. Indiana. South Dakota. New Mexico. The Caribbean . . . and many more ... – PowerPoint PPT presentation

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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
2
Overview
  • Cummings background
  • Gravity model methodology
  • Comparisons / Power Ratings
  • What is Potential?
  • Northeast . . . Southeast . . .
  • South-Central . . . Southwest
  • Summary / Statewide

2
3
Will E. Cummings Cummings Associates
3
4
Will 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
5
Gravity Model / Casino Analyses
  • Iowa
  • New York
  • New England
  • Pennsylvania
  • Michigan
  • Indiana
  • South Dakota
  • New Mexico
  • The Caribbean
  • . . . and many more

5
6
Govt 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
7
Why Gravity Model?
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Gravity Models Overview
  • Location
  • Location
  • Size
  • Everything Else

11
12
Location I The Closer, the Better
12
13
Las Vegas Visitation/Distance
13
14
Las Vegas slope of the curve
14
15
Mississippi steeper slope
15
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Laughlin much steeper slope
16
17
Casino X isolated market
17
18
Casino Y competition afar
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Casino Y less competition close
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20
Location I The Closer, the Better Friction
20
21
Location II Reillys Law
21
22
Reillys Law
  • ms S/d2
  • Where
  • ms market share
  • S size of each trade center
  • d distance

22
23
Newtons Law
  • F m/d2
  • Where
  • F gravitational force
  • m mass (of each body)
  • d distance

23
24
Reillys Law
  • ms S/d2
  • Where
  • ms market share
  • S casino size (capacity)
  • d distance

24
25
Newtons Law
  • F m/d2
  • Where
  • F gravitational force
  • m mass (of each body)
  • d distance

25
26
Reillys Law
  • ms S/d2
  • Where
  • ms market share
  • S casino size (capacity)
  • d distance / travel time

26
27
Size Matters
27
28
Reillys Law
  • ms S/d2
  • Where
  • ms market share
  • S size of each trade center
  • d distance

28
29
More Slots, More Spending
29
30
Calculations
30
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32
33
Other Things Matter, Too
33
34
Other Things that REALLY Matter
  • Micro-Access
  • Spaciousness
  • Slot Mix
  • Fit Finish
  • Management
  • Marketing / Player Rewards

34
35
Useful Assets
  • Hotel
  • Structured Parking
  • Variety of Dining Choices
  • Retail
  • Entertainment
  • Players Club

35
36
Comparisons / Power Ratings
36
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38
How Do They Do?
38
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39
40
What is Potential?
40
41
Potential involves . . .
  • Examining more than just one representative
    location
  • Assume average performance?
  • Or something better?
  • My Upside reasonable, not sky-high

41
42
Northeast Zone
42
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Summaries
52
53
Kansas 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
54
KCK 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
55
KCK 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)

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Southeast Zone
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Cherokee 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
64
Cherokee 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

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South-Central Zone
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Sumner 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
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Sumner 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)

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Southwest Zone
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Dodge 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)

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Conclusions
75
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77
All Four(?) Zones
  • Downside 536mn
  • Baseline 669mn
  • Upside 797mn
  • (all excluding facilities whose viability is in
    doubt)

77
78
Will 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
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