Newport Grand Jai Alai

1
The Dynamic Business of Gaming
Presented to The Special House Commission to
Study Gaming
Diane S. Hurley October 15, 2002
2
The History of Newport Jai Alai

• A family-run business since 1976
• Corporate responsibility
• 200 employees
• Community support
• Industry economic trends
• Despite 5 million NJA loss (over 17 years), RI
  received 20 million in revenue

3
Newport Jai Alai Loss Vs. State Revenue 1976-1992
(Millions)
(Year)
4
The Demise of the Pari-Mutuel Industry in CT

• 1992 Foxwoods Casino opens (no slots)
• 1993 Foxwoods CT reach agreement for
  slots Pari-Mutuels excluded
• 1996 Mohegan Sun opens

5
Connecticut Pari-Mutuel Revenue Decline
(Millions)
Hartford CLOSED
Milford CLOSED
(Year)
6
The Revival of Newport Jai Alai

• 1992 General Assembly approves VLTs
• 1993 Lottery Commission approves
• Reel Games
• 1996 Major renovations begin

7
Newport Jai Alai Becomes Newport Grand Jai Alai
8
NGJA Investment

• Rebranding marketing
• Capital Property transformation
• People Stable loyal workforce
• Newport Grand grows

9
NGJA Revenue Climbs 1992-2001
(Millions)
New addition completed(776 VLTs)
More renovations(580 VLTs)
5 million renovation completed(426 VLTs)
(Year)
10
State Revenue Vs. NGJA Net Income

• Partnership established in 1992
• State revenue Paid off the top
• NGJA net income After expenses taxes
• RI revenue nearly 10 times NGJA net income

11
NGJA Earned Income Vs. State Revenue
1993-2001 (After Expenses Taxes)
(Millions)
VLT Revenue
(Year)
12
VLT Percentage Revenue Division 1992-2006

• State share increases as all others decrease
• State share from NGJA has grown 23
• NGJA share has decreased 14
• Trend discourages investment

13
State Share Increase Vs. VLT Revenue Division
1992-2006
(Percentage)
59
State (Newport)
48
55
State (Lincoln)
38
NGJA/Lincoln Park
33
29
18
VLT Vendors
11
10
Kennel Owners
4
1
City (Newport/Lincoln)
1
(Year)
14
Video Lottery Terminal Regulatory Structure

• Most highly regulated industry
• Safeguards protect states interest
• Employee licensing
• Security oversight
• Strong fiscal control
• NGJA Impeccable track record

15
NGJA VLT Performance 1993-2002

• Highly competitive vendors
• RI Lottery Annual Performance Review
• State-of-the-art VLT technology
• Over 10 years, state revenue per machine grew
  from 6,055 to 48,512

16
NGJA VLT Revenue Per Machine

• 1993
• 6,055
• 426
• Machines

• 2002
• 48,512
• 776
• Machines

17
RI State Revenue Growth from NGJA

• RI profits grew 15 times in the last 10 years
• Gradual initial growth
• Renovations spur steady increase
• Additional machines trigger impressive growth
• Saturation imminent

18
RI State Revenue Growth from NGJA 1993-2002
(Millions)
(Year)
19
NGJA Weekly VLT Usage Report Week Ending
5/4/02 (776 VLTs)
Source Rhode Island Lottery
20
Newport Grand Jai Alai is

• A state-of-the-art gaming facility
• A good corporate citizen
• Highly competitive
• Willing to invest

21

• Incentive Investment Results

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