2007 Annual Report - Ameristar Casinos, Inc.

Should additional gaming developments occur in the Denver metropolitan area, the Black Hawk-Central Citymarket would face increased competition.JackpotThe Jackpot properties compete with four other hotels and motels (three of which also have casinos) in Jackpot.There were no major capital improvements or expansions in the Jackpot market in 2007. In 2005, a privatedevelopment company proposed to construct a 200-room casino in Jackpot. It is unclear at this time whether thedeveloper will obtain the necessary local permit approvals and secure financing for this project. We are not aware ofany other expansion plans by existing or potential competitors in Jackpot in the near future. In the State of Idaho,casinos on Native American land operate video lottery terminals (“VLTs”), which are similar to slot machines. Onecasino near Pocatello has approximately 950 VLTs and is operated by the Shoshone-Bannock Tribes. In 2006, thefederal court of appeals ruled that the Shoshone-Bannock Tribes could operate an unlimited number of VLTs at theircasino.In addition, casino gaming on Native American lands in both western Washington and northeastern Oregon hasbeen in operation for several years and casinos also operate in Alberta, Canada.OtherIn addition to the competition that our properties face from other casinos in their geographic markets, we alsocompete, to a lesser extent, with casinos in other locations, including major tourist destinations such as Las Vegas,with gaming on cruise ships and with other forms of gaming in the United States, including state-sponsored lotteries,racetracks, off-track wagering, Internet and other account wagering and card parlors.Employees and Labor RelationsAs of February 1, 2008, we employed approximately 9,000 full- and part-time employees. Approximately 263employees at our East Chicago property are employed pursuant to collective bargaining agreements. We believe ouremployee relations are good.IncorporationAmeristar was incorporated in Nevada in 1993.Government RegulationThe ownership and operation of casino gaming facilities are subject to extensive state and local regulation. Weare required to obtain and maintain gaming licenses in each of the jurisdictions in which we conduct gaming. Thelimitation, conditioning or suspension of gaming licenses could (and the revocation or non-renewal of gaminglicenses would) materially adversely affect our operations in that jurisdiction. In addition, changes in law thatrestrict or prohibit our gaming operations in any jurisdiction could have a material adverse effect on us.MissouriThe ownership and operation of riverboat and dockside gaming facilities in Missouri are subject to extensivestate and local regulation, but primarily the licensing and regulatory control of the Missouri Gaming Commission.The Missouri Riverboat Gaming Act (the “Missouri Act”) provides for the licensing and regulation of riverboat anddockside gaming operations on the Mississippi and Missouri Rivers in the State of Missouri and the licensing andregulation of persons who distribute gaming equipment and supplies to gaming licensees.The Missouri Gaming Commission has discretion to approve gaming license applications for permanentlymoored (“dockside”) casinos, powered (“excursion”) riverboat casinos and barges and to determine the number,location and type of excursion gambling boats allowed each licensee. Due to safety concerns, all gaming vessels onthe Missouri River are permitted to be moored in moats within 1,000 feet of the river. Gaming licenses are initiallyissued for two one-year periods and must be renewed every two years thereafter. The gaming licenses at Ameristar12