2002 - Harness Tracks of America, Inc.

HARNESS TRACKS OF AMERICA
Executive Newsletter
A daily fax and e-mail report on racing and gaming developments in North America and beyond
Stanley F. Bergstein, Editor
9-11 OR 7-11?
Nevada casino gambling suffered a 4% drop in
the past fiscal year, the worst decline in 17 years
of record keeping for the 343 casinos operating in
the Silver State. Concerned industry leaders
turned to academe, naturally, for an explanation,
and Keith Schwer, a professor of economics at the
University of Nevada Las Vegas, told them the
decline was the result of a worldwide economic
slowdown and the post September 11 travel decline,
combined with the fact that no new flavor of
the month was available, inasmuch as no new
megaresort opened in Las Vegas in the last year,
although at least one was torn down.
Since the welfare of Nevada is tied closely to its
casinos, there was a drop in state gambling taxes
as well, the state getting $554.6 million during the
fiscal year, down $10.4 million from the $565 million
of a year earlier. Since the state had estimated
that tax collections would be up 5.9% during
the period and had budgeted accordingly, it was
left with a $40 million shortfall. Professor Schwer
pointed out that was the danger in states that rely
on cyclical revenue sources such as gambling and
sales taxes. While 9-11 can be blamed for much
of Nevada’s --and the nation’s -- woes, it is now 11
months since that disaster, and the latest figures
from Vegas show the drop is continuing. June gambling
revenues were down 8%, with Vegas strip
casinos reporting a 13.9% decline in winnings.
Some might read these figures as a trend in gambling,
rather than the result of 9-11, but others
pointed out that a $22.6 million Megabucks jackpot
won by a Bally’s slot player, combined with a
huge drop in baccarat win from $204 million to
$80.3 million, created the June losses. Whatever
the cause, there is more bad news for the casinos.
Nevada regulators are considering new
online metering systems for better control
of slots, which if mandated will cost them a
bundle.
August 14, 2002
OKIE TRACKS WANT SLOTS
Oklahoma’s racetracks, hard hit by competition
from Indian gaming, say they can’t make it without
some type of gaming, and are hoping the legislature
may give them some. Only three horse
tracks -- Remington Park, Fair Meadows and Blue
Ribbon Downs -- have applied for licenses this
year, and Fair Meadows general manager Ron
Shotts says he doesn’t see any way to make it without
slots. Will Rogers Downs in Claremore apparently
doesn’t plan to race in 2003. Shotts says
giving three tracks slots wouldn’t amount to much
of a proliferation of gambling, given the amount of
tribal gaming now going on.
YOUBET NOW A SMALLCAP
It is still UBET on the ticker symbol, but
Youbet.com has had its stock listing moved from
the Nasdaq National Market to the Nasdaq
SmallCap Market as of last Friday. The move
came after Youbet’s stock price did not stay above
$1 for 10 consecutive trading days, a requirement
for Nasdaq big board listing. The company viewed
the change with hope, saying it believed the transfer
affords it additional time to operate as a
Nasdaq-traded company and maintain liquidity for
shareholders.
MAGNANIMOUS DOINGS
Magna Entertainment president Jim McAlpine is
accumulating huge mileage points these days, flying
coast-to-coast reporting on Magna’s racing
plans. He told folks in Albany, NY, that there still
is a possibility that Magna might develop the 800
acres of land it quietly acquired two years ago in
the town of Porter in Niagara county, NY, although
it is “not a high priority.” On the west coast, he
told residents of Dixon, where Magna also owns
land, “No way did we buy the land just for the real
estate.” And in Texas, the racing commission
is reviewing plans for Magna to operate
Lone Star Park while the city retains
ownership of the property.